EXHIBIT 4
WAND I REGULAR WARRANT (NO. 2)
________________________________________________________
▇▇▇▇▇▇, INC.
Common Stock Purchase Warrant
Dated as of March 7, 1996
_________________________________________________________
[THIS WARRANT AND ANY SHARES ACQUIRED UPON THE
EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED
OF EXCEPT WHILE A REGISTRATION UNDER SUCH ACT IS IN
EFFECT OR PURSUANT TO AN EXEMPTION THEREFROM UNDER
SUCH ACT. THIS WARRANT AND SUCH SHARES MAY BE
TRANSFERRED ONLY IN COMPLIANCE WITH THE CONDITIONS
SPECIFIED IN THIS WARRANT.]
TABLE OF CONTENTS
1. Exercise of Warrant . . . . . . . . . . . . . . 2
1.1. Manner of Exercise . . . . . . . . . . . . 2
1.2. When Exercise Effective . . . . . . . . . 2
1.3. Delivery of Stock Certificates, etc. . . . 3
1.4. Company to Reaffirm Obligations . . . . . . 3
1.5. Payment by Application of Shares
Otherwise Issuable . . . . . . . . . . . . 3
2. Adjustment of Common Stock Issuable Upon
Exercise . . . . . . . . . . . . . . . . . . . . 4
2.1. General; Warrant Price . . . . . . . . . . 4
2.2. Adjustment of Warrant Price . . . . . . . . 5
2.2.1 Issuance of Additional Shares of
Common Stock . . . . . . . . . . 5
2.2.2 Extraordinary Dividends and
Distributions . . . . . . . . . . 5
2.3. Treatment of Options and Convertible
Securities . . . . . . . . . . . . . . . . 6
2.4. Treatment of Stock Dividends, Stock
Splits, etc. . . . . . . . . . . . . . . . 8
2.5. Computation of Consideration . . . . . . . 9
2.6. Adjustments for Combinations, etc. . . . . 10
2.7. Dilution in Case of Other Securities . . . 10
2.8. Minimum Adjustment of Warrant Price . . . . 11
3. Consolidation, Merger, etc . . . . . . . . . . . 11
3.1. Adjustments for Consolidation, Merger,
Sale of Assets, Reorganization, etc. . . . 11
3.2. Assumption of Obligations . . . . . . . . . 12
4. Other Dilutive Events . . . . . . . . . . . . . 13
5. No Dilution or Impairment . . . . . . . . . . . 13
6. Accountants' Report as to Adjustments . . . . . 14
7. Notices of Corporate Action . . . . . . . . . . 14
8. Registration of Common Stock . . . . . . . . . . 15
9. Restrictions on Transfer . . . . . . . . . . . . 16
9.1. Restrictive Legends . . . . . . . . . . . 16
10. Availability of Information . . . . . . . . . . 17
11. Reservation of Stock, etc. . . . . . . . . . . . 17
12. Registration and Transfer of Warrants, etc. . . 18
12.1. Warrant Register; Ownership of Warrants . 18
12.2. Transfer and Exchange of Warrants . . . . 18
12.3. Replacement of Warrants . . . . . . . . . 18
13. Registration Rights . . . . . . . . . . . . . . 19
14. Definitions . . . . . . . . . . . . . . . . . . 19
15. Remedies . . . . . . . . . . . . . . . . . . . . 23
16. No Rights or Liabilities as Stockholder. . . . 23
17. Notices . . . . . . . . . . . . . . . . . . . . 23
18. Amendments . . . . . . . . . . . . . . . . . . . 24
19. Expiration . . . . . . . . . . . . . . . . . . . 24
20. Descriptive Headings . . . . . . . . . . . . . . 24
21. Governing Law . . . . . . . . . . . . . . . . . 24
22. Judicial Proceedings; Waiver of Jury . . . . . . 24
EXHIBIT A . . . . . . . . . . . . . . . . . . . . . . 26
FORM OF SUBSCRIPTION . . . . . . . . . . . . . . . . 27
FORM OF ASSIGNMENT . . . . . . . . . . . . . . . . . 28
Wand I Regular Warrant (No. 2)
▇▇▇▇▇▇, INC.
Common Stock Purchase Warrant
New York, New York
No. W-Y March 7, 1996
▇▇▇▇▇▇, Inc. (the "Company"), a Delaware
corporation, for value received, hereby certifies that
Wand/▇▇▇▇▇▇ Investments L.P. ("Wand"), or registered
assigns, is entitled to purchase from the Company 225,330
duly authorized, validly issued, fully paid and
nonassessable shares of Common Stock, par value $.01 per
share (the "Common Stock"), of the Company at the
purchase price per share of $1.25 (provided, however, if
the Company has not on or before July 31, 1996 entered
into a definitive agreement with a party with which it is
currently negotiating, such agreement to contemplate an
ongoing revenue stream to the Company, based on
commercial exploitation of the Company's fraud detection
technology or intelligent character recognition
technology, and to require a non-refundable payment to
the Company upon execution of at least $500,000 (if the
transaction involves the Company's fraud detection
technology) or $1.2 million (if the transaction involves
the Company's intelligent character recognition
technology), any such payment to be not primarily in
consideration of any requirement that the Company render
services, then the purchase price shall automatically be
reduced to $.75), at any time or from time to time prior
to 5:00 P.M., New York City time, on August 1, 2004 (or
such later date as may be determined pursuant to section
19), all subject to the terms, conditions and adjustments
set forth below in this Warrant. For purposes of this
paragraph, any prepaid royalty relating to the use of the
Company's fraud-detection technology shall not be deemed
to be a refundable payment.
This Warrant is being issued by the Company in
consideration of Wand's performance of its obligations
pursuant to the Securities Purchase Agreement dated as of
March 7, 1996 by and between the Company and Wand (the
"Purchase and Exchange Agreement"). Certain capitalized
terms used in this Warrant are defined in section 14;
references to an "Exhibit" are, unless otherwise
specified, to one of the Exhibits attached to this
Warrant and references to a "section" are, unless
otherwise specified, to one of the sections of this
Warrant.
1. Exercise of Warrant.
1.1. Manner of Exercise. This Warrant may be
exercised after June 30, 1996 by the holder hereof, in
whole or in part, during normal business hours on any
Business Day, by surrender of this Warrant to the Company
at its principal office, accompanied by a subscription
substantially in the form attached to this Warrant (or a
reasonable facsimile thereof) duly executed by such
holder and accompanied by payment, in cash, by certified
or official bank check payable to the order of the
Company, or in the manner provided in Section 1.5, in the
amount obtained by multiplying (a) the number of shares
of Common Stock (without giving effect to any adjustment
thereof) designated in such subscription by (b) $1.25
(provided, however, if the Company has not on or before
July 31, 1996 entered into a definitive agreement with a
party with which it is currently negotiating, such
agreement to contemplate an ongoing revenue stream to the
Company, based on commercial exploitation of the
Company's fraud detection technology or intelligent
character recognition technology, and to require a non-
refundable payment to the Company upon execution of at
least $500,000 (if the transaction involves the Company's
fraud detection technology) or $1.2 million (if the
transaction involves the Company's intelligent character
recognition technology), any such payment to be not
primarily in consideration of any requirement that the
Company render services, then the purchase price shall
automatically be reduced to $.75), and such holder shall
thereupon be entitled to receive the number of duly
authorized, validly issued, fully paid and nonassessable
shares of Common Stock (or Other Securities) determined
as provided in sections 2 through 4. For purposes of
this paragraph 1.1, any prepaid royalty relating to the
use of the Company's fraud-detection technology shall not
be deemed to be a refundable payment.
1.2. When Exercise Effective. Each exercise
of this Warrant shall be deemed to have been effected
immediately prior to the close of business on the
Business Day on which this Warrant shall have been
surrendered to the Company as provided in section 1.1,
and at such time the Person or Persons in whose name or
names any certificate or certificates for shares of
Common Stock (or Other Securities) shall be issuable upon
such exercise as provided in section 1.3 shall be deemed
to have become the holder or holders of record thereof.
1.3. Delivery of Stock Certificates, etc. As
soon as practicable after each exercise of this Warrant,
in whole or in part, and in any event within five
Business Days thereafter, the Company at its expense
(including the payment by it of any applicable issue
taxes) will cause to be issued in the name of and
delivered to the holder hereof or, subject to section 9,
as such holder (upon payment by such holder of any
applicable transfer taxes) may direct,
(a) a certificate or certificates for the
number of duly authorized, validly issued, fully
paid and nonassessable shares of Common Stock (or
Other Securities) to which such holder shall be
entitled upon such exercise plus, in lieu of any
fractional share to which such holder would
otherwise be entitled, cash in an amount equal to
the same fraction of the Market Price per share on
the Business Day next preceding the date of such
exercise, and
(b) in case such exercise is in part only, a
new Warrant or Warrants of like tenor, calling in
the aggregate on the face or faces thereof for the
number of shares of Common Stock equal (without
giving effect to any adjustment thereof) to the
number of such shares called for on the face of this
Warrant minus the number of such shares designated
by the holder upon such exercise as provided in
section 1.1.
1.4. Company to Reaffirm Obligations. The
Company will, at the time of each exercise of this
Warrant, upon the request of the holder hereof,
acknowledge in writing its continuing obligation to
afford to such holder all rights (including, without
limitation, any rights to registration, pursuant to the
Registration Rights Agreement referred to in section 8,
of the shares of Common Stock or Other Securities issued
upon such exercise) to which such holder shall continue
to be entitled after such exercise in accordance with the
terms of this Warrant, provided that if the holder of
this Warrant shall fail to make any such request, such
failure shall not affect the continuing obligation of the
Company to afford such rights to such holder.
1.5. Payment by Application of Shares
Otherwise Issuable. Upon any exercise of this Warrant,
the holder hereof may, at its option, instruct the
Company, by written notice accompanying the surrender of
this Warrant at the time of such exercise, to apply to
the payment required by section 1.1 such number of the
shares of Common Stock otherwise issuable to such holder
upon such exercise as shall be specified in such notice,
in which case an amount equal to the excess of the
aggregate Current Market Price of such specified number
of shares on the date of exercise over the portion of the
payment required by section 1.1 attributable to such
shares shall be deemed to have been paid to the Company
and the number of shares issuable upon such exercise
shall be reduced by such specified number.
2. Adjustment of Common Stock Issuable Upon
Exercise.
2.1. General; Warrant Price. The number of
shares of Common Stock which the holder of this Warrant
shall be entitled to receive upon each exercise hereof
shall be determined by multiplying the number of shares
of Common Stock which would otherwise (but for the
provisions of this section 2) be issuable upon such
exercise, as designated by the holder hereof pursuant to
section 1.1, by the fraction of which (a) the numerator
is the price then applicable pursuant to section 1.1(b)
of this Warrant and (b) the denominator is the Warrant
Price in effect on the date of such exercise. The
"Warrant Price" shall initially be $1.25 per share,
provided, however, if the Company has not on or before
July 31, 1996 entered into a definitive agreement with a
party with which it is currently negotiating, such
agreement to contemplate an ongoing revenue stream to the
Company, based on commercial exploitation of the
Company's fraud detection technology or intelligent
character recognition technology, and to require a non-
refundable payment to the Company upon execution of at
least $500,000 (if the transaction involves the Company's
fraud detection technology) or $1.2 million (if the
transaction involves the Company's intelligent character
recognition technology), any such payment to be not
primarily in consideration of any requirement that the
Company render services, then the Warrant Price shall
automatically be reduced to $.75. The Warrant Price
shall be adjusted and readjusted from time to time as
further provided in this section 2 and, as so adjusted or
readjusted, shall remain in effect until a further
adjustment or readjustment thereof is required by this
section 2. For purposes of this paragraph 2.1, any
prepaid royalty relating to the use of the Company's
fraud-detection technology shall not be deemed to be a
refundable payment.
2.2. Adjustment of Warrant Price.
2.2.1 Issuance of Additional Shares of Common
Stock. In case the Company at any time or from time to
time after the date hereof shall issue or sell Additional
Shares of Common Stock (including Additional Shares of
Common Stock deemed to be issued pursuant to section 2.3
or 2.4) without consideration or for a consideration per
share less than the Warrant Price in effect immediately
prior to such issue or sale, then, and in each such case,
subject to section 2.8, such Warrant Price shall be
reduced, concurrently with such issue or sale, to a price
(calculated to the nearest .001 of a cent) equal to the
consideration per share paid for such Additional Shares
of Common Stock.
2.2.2 Extraordinary Dividends and
Distributions. In case the Company at any time or from
time to time after the date hereof shall declare, order,
pay or make a dividend or other distribution (including,
without limitation, any distribution of other or
additional stock or other securities or property or
Options by way of dividend or spin-off, reclassification,
recapitalization or similar corporate rearrangement) on
the Common Stock, other than a dividend payable in (a)
Additional Shares of Common Stock or (b) cash dividends
during any fiscal year of the Company that do not exceed
twenty percent (20%) of the after tax earnings per share
of the Common Stock for the immediately preceding fiscal
year of the Company, then, and in each such case, subject
to section 2.8, the Warrant Price in effect immediately
prior to the close of business on the record date fixed
for the determination of holders of any class of
securities entitled to receive such dividend or
distribution shall be reduced, effective as of the close
of business on such record date, to a price (calculated
to the nearest .001 of a cent) determined by multiplying
such Warrant Price by a fraction
(x) the numerator of which shall be the
Current Market Price in effect on such record date
or, if the Common Stock trades on an ex-dividend
basis, on the date prior to the commencement of ex-
dividend trading, less the amount of such dividend
or distribution (as determined in good faith by the
Board of Directors of the Company, subject to
confirmation by a firm of independent certified
public accountants of recognized national standing
approved by Wand/▇▇▇▇▇▇ Investments L.P.) applicable
to one share of Common Stock, and
(y) the denominator of which shall be such
Current Market Price.
2.3. Treatment of Options and Convertible
Securities. In case the Company at any time or from time
to time after the date hereof shall issue, sell, grant or
assume, or shall fix a record date for the determination
of holders of any class of securities entitled to
receive, any Options or Convertible Securities, then, and
in each such case, the maximum number of Additional
Shares of Common Stock (as set forth in the instrument
relating thereto, without regard to any provisions
contained therein for a subsequent adjustment of such
number) issuable upon the exercise of such Options or, in
the case of Convertible Securities and Options therefor,
the conversion or exchange of such Convertible
Securities, shall be deemed to be Additional Shares of
Common Stock issued as of the time of such issue, sale,
grant or assumption or, in case such a record date shall
have been fixed, as of the close of business on such
record date (or, if the Common Stock trades on an ex-
dividend basis, on the date prior to the commencement of
ex-dividend trading), provided that such Additional
Shares of Common Stock shall not be deemed to have been
issued unless the consideration per share (determined
pursuant to section 2.5) of such shares would be less
than the Warrant Price in effect on the date of and
immediately prior to such issue, sale, grant or
assumption or immediately prior to the close of business
on such record date (or, if the Common Stock trades on an
ex-dividend basis, on the date prior to the commencement
of ex-dividend trading), as the case may be, and
provided, further, that in any such case in which
Additional Shares of Common Stock are deemed to be issued
(a) no further adjustment of the Warrant Price
shall be made upon the subsequent issue or sale of
Convertible Securities or shares of Common Stock
upon the exercise of such Options or the conversion
or exchange of such Convertible Securities;
(b) if such Options or Convertible Securities
by their terms provide, with the passage of time or
otherwise, for any increase in the consideration
payable to the Company, or decrease in the number of
Additional Shares of Common Stock issuable, upon the
exercise, conversion or exchange thereof (by change
of rate or otherwise), the Warrant Price computed
upon the original issue, sale, grant or assumption
thereof (or upon the occurrence of the record date,
or date prior to the commencement of ex-dividend
trading, as the case may be, with respect thereto),
and any subsequent adjustments based thereon, shall,
upon any such increase or decrease becoming
effective, be recomputed to reflect such increase or
decrease insofar as it affects such Options, or the
rights of conversion or exchange under such
Convertible Securities, which are outstanding at
such time;
(c) upon the expiration (or purchase by the
Company and cancellation or retirement) of any such
Options which shall not have been exercised or the
expiration of any rights of conversion or exchange
under any such Convertible Securities which (or
purchase by the Company and cancellation or
retirement of any such Convertible Securities the
rights of conversion or exchange under which) shall
not have been exercised, the Warrant Price computed
upon the original issue, sale, grant or assumption
thereof (or upon the occurrence of the record date,
or date prior to the commencement of ex-dividend
trading, as the case may be, with respect thereto),
and any subsequent adjustments based thereon, shall,
upon such expiration (or such cancellation or
retirement, as the case may be), be recomputed as
if:
(i) in the case of Options for Common
Stock or Convertible Securities, the only
Additional Shares of Common Stock issued or
sold were the Additional Shares of Common
Stock, if any, actually issued or sold upon the
exercise of such Options or the conversion or
exchange of such Convertible Securities and the
consideration received therefor was the
consideration actually received by the Company
for the issue, sale, grant or assumption of all
such Options, whether or not exercised, plus
the consideration actually received by the
Company upon such exercise, or for the issue or
sale of all such Convertible Securities which
were actually converted or exchanged, plus the
additional consideration, if any, actually
received by the Company upon such conversion or
exchange, and
(ii) in the case of Options for
Convertible Securities, only the Convertible
Securities, if any, actually issued or sold
upon the exercise of such Options were issued
at the time of the issue, sale, grant or
assumption of such Options, and the
consideration received by the Company for the
Additional Shares of Common Stock deemed to
have then been issued was the consideration
actually received by the Company for the issue,
sale, grant or assumption of all such Options,
whether or not exercised, plus the
consideration deemed to have been received by
the Company (pursuant to section 2.5) upon the
issue or sale of such Convertible Securities
with respect to which such Options were
actually exercised;
(d) no readjustment pursuant to subdivision
(b) or (c) above shall have the effect of increasing
the Warrant Price by an amount in excess of the
amount of the adjustment thereof originally made in
respect of the issue, sale, grant or assumption of
such Options or Convertible Securities; and
(e) in the case of any such Options which
expire by their terms not more than 30 days after
the date of issue, sale, grant or assumption
thereof, no adjustment of the Warrant Price shall be
made until the expiration or exercise of all such
Options, whereupon such adjustment shall be made in
the manner provided in subdivision (c) above.
2.4. Treatment of Stock Dividends, Stock
Splits, etc. In case the Company at any time or from
time to time after the date hereof shall declare or pay
any dividend on the Common Stock payable in Common Stock,
or shall effect a subdivision of the outstanding shares
of Common Stock into a greater number of shares of Common
Stock (by reclassification or otherwise than by payment
of a dividend in Common Stock), then, and in each such
case, Additional Shares of Common Stock shall be deemed
to have been issued (a) in the case of any such dividend,
immediately after the close of business on the record
date for the determination of holders of any class of
securities entitled to receive such dividend, or (b) in
the case of any such subdivision, at the close of
business on the day immediately prior to the day upon
which such corporate action becomes effective.
2.5. Computation of Consideration. For the
purposes of this section 2,
(a) the consideration for the issue or sale of
any Additional Shares of Common Stock shall,
irrespective of the accounting treatment of such
consideration,
(i) insofar as it consists of cash, be
computed at the net amount of cash received by
the Company, without deducting any expenses
paid or incurred by the Company or any
commissions or compensation paid or concessions
or discounts allowed to underwriters, dealers
or others performing similar services in
connection with such issue or sale,
(ii) insofar as it consists of property
(including securities) other than cash, be
computed at the fair value thereof at the time
of such issue or sale, as determined in good
faith by the Board of Directors of the Company
(subject to confirmation by a firm of
independent certified public accountants of
recognized standing approved by Wand/▇▇▇▇▇▇
Investments L.P.), and
(iii) in case Additional Shares of Common
Stock are issued or sold together with other
stock or securities or other assets of the
Company for a consideration which covers both,
be the portion of such consideration so
received, computed as provided in clauses (i)
and (ii) above, allocable to such Additional
Shares of Common Stock, all as determined in
good faith by the Board of Directors of the
Company (subject to confirmation by a firm of
independent certified public accountants of
recognized standing approved by Wand/▇▇▇▇▇▇
Investments L.P.);
(b) Additional Shares of Common Stock deemed
to have been issued pursuant to section 2.3,
relating to Options and Convertible Securities,
shall be deemed to have been issued for a
consideration per share determined by dividing
(i) the total amount, if any, received
and receivable by the Company as consideration
for the issue, sale, grant or assumption of the
Options or Convertible Securities in question,
plus the minimum aggregate amount of additional
consideration (as set forth in the instruments
relating thereto, without regard to any
provision contained therein for a subsequent
adjustment of such consideration to protect
against dilution) payable to the Company upon
the exercise in full of such Options or the
conversion or exchange of such Convertible
Securities or, in the case of Options for
Convertible Securities, the exercise of such
Options for Convertible Securities and the
conversion or exchange of such Convertible
Securities, in each case computing such
consideration as provided in the foregoing
subdivision (a),
by
(ii) the maximum number of shares of
Common Stock (as set forth in the instruments
relating thereto, without regard to any
provision contained therein for a subsequent
adjustment of such number to protect against
dilution) issuable upon the exercise of such
Options or the conversion or exchange of such
Convertible Securities; and
(c) Additional Shares of Common Stock deemed
to have been issued pursuant to section 2.4,
relating to stock dividends, stock splits, etc.,
shall be deemed to have been issued for no
consideration.
2.6. Adjustments for Combinations, etc. In
case the outstanding shares of Common Stock shall be
combined or consolidated, by reclassification or
otherwise, into a lesser number of shares of Common
Stock, the Warrant Price in effect immediately prior to
such combination or consolidation shall, concurrently
with the effectiveness of such combination or
consolidation, be proportionately increased.
2.7. Dilution in Case of Other Securities. In
case any Other Securities shall be issued or sold or
shall become subject to issue or sale upon the conversion
or exchange of any stock (or Other Securities) of the
Company (or any issuer of Other Securities or any other
Person referred to in section 3) or to subscription,
purchase or other acquisition pursuant to any Options
issued or granted by the Company (or any such other
issuer or Person) for a consideration such as to dilute,
on a basis consistent with the standards established in
the other provisions of this section 2, the purchase
rights granted by this Warrant, then, and in each such
case, the computations, adjustments and readjustments
provided for in this section 2 with respect to the
Warrant Price shall be made as nearly as possible in the
manner so provided and applied to determine the amount of
Other Securities from time to time receivable upon the
exercise of the Warrants, so as to protect the holders of
the Warrants against the effect of such dilution.
2.8. Minimum Adjustment of Warrant Price. If
the amount of any adjustment of the Warrant Price
required pursuant to this section 2 would be less than
one percent (1%) of the Warrant Price in effect at the
time such adjustment is otherwise so required to be made,
such amount shall be carried forward and adjustment with
respect thereto made at the time of and together with any
subsequent adjustment which, together with such amount
and any other amount or amounts so carried forward, shall
aggregate at least one percent (1%) of such Warrant
Price.
3. Consolidation, Merger, etc.
3.1. Adjustments for Consolidation, Merger,
Sale of Assets, Reorganization, etc. In case the Company
after the date hereof (a) shall consolidate with or merge
into any other Person and shall not be the continuing or
surviving corporation of such consolidation or merger, or
(b) shall permit any other Person to consolidate with or
merge into the Company and the Company shall be the
continuing or surviving Person but, in connection with
such consolidation or merger, the Common Stock or Other
Securities shall be changed into or exchanged for stock
or other securities of any other Person or cash or any
other property, or (c) shall transfer all or
substantially all of its properties or assets to any
other Person, or (d) shall effect a capital
reorganization or reclassification of the Common Stock or
Other Securities (other than a capital reorganization or
reclassification resulting in the issue of Additional
Shares of Common Stock for which adjustment in the
Warrant Price is provided in section 2.2.1 or 2.2.2),
then, and in the case of each such transaction, proper
provision shall be made so that, upon the basis and the
terms and in the manner provided in this Warrant, the
holder of this Warrant, upon the exercise hereof at any
time after the consummation of such transaction, shall be
entitled to receive (at the aggregate Warrant Price in
effect at the time of such consummation for all Common
Stock or Other Securities issuable upon such exercise
immediately prior to such consummation), in lieu of the
Common Stock or Other Securities issuable upon such
exercise prior to such consummation, the highest amount
of securities, cash or other property to which such
holder would actually have been entitled as a shareholder
upon such consummation if such holder had exercised the
rights represented by this Warrant immediately prior
thereto, subject to adjustments (subsequent to such
consummation) as nearly equivalent as possible to the
adjustments provided for in sections 2 through 4.
3.2. Assumption of Obligations.
Notwithstanding anything contained in the Warrants or in
the Purchase Agreement to the contrary, the Company will
not effect any of the transactions described in clauses
(a) through (d) of section 3.1 unless, prior to the
consummation thereof, each Person (other than the
Company) which may be required to deliver any stock,
securities, cash or property upon the exercise of this
Warrant as provided herein shall assume, by written
instrument delivered to, and reasonably satisfactory to,
the holder of this Warrant, (a) the obligations of the
Company under this Warrant (and if the Company shall
survive the consummation of such transaction, such
assumption shall be in addition to, and shall not release
the Company from, any continuing obligations of the
Company under this Warrant), (b) the obligations of the
Company under the Registration Rights Agreement and (c)
the obligation to deliver to such holder such shares of
stock, securities, cash or property as, in accordance
with the foregoing provisions of this section 3, such
holder may be entitled to receive, and such Person shall
have similarly delivered to such holder an opinion of
counsel for such Person, which counsel shall be
reasonably satisfactory to such holder, stating that this
Warrant shall thereafter continue in full force and
effect and the terms hereof (including, without
limitation, all of the provisions of this section 3)
shall be applicable to the stock, securities, cash or
property which such Person may be required to deliver
upon any exercise of this Warrant or the exercise of any
rights pursuant hereto.
4. Other Dilutive Events. In case any event
shall occur as to which the provisions of section 2 or
section 3 are not strictly applicable but the failure to
make any adjustment would not fairly protect the purchase
rights represented by this Warrant in accordance with the
essential intent and principles of such sections, then,
in each such case, the Company shall appoint a firm of
independent certified public accountants of recognized
national standing (such firm to be subject to the
approval of Wand/▇▇▇▇▇▇ Investments L.P.), which shall
give their opinion regarding the adjustment, if any, on a
basis consistent with the essential intent and principles
established in sections 2 and 3, necessary to preserve,
without dilution, the purchase rights represented by this
Warrant. Upon receipt of such opinion, the Company will
promptly mail a copy thereof to the holder of this
Warrant and shall make the adjustments described therein.
5. No Dilution or Impairment. The Company
will not, by amendment of its certificate of
incorporation or through any consolidation, merger,
reorganization, transfer of assets, 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, but will at all times in good
faith assist in the carrying out of all such terms and in
the taking of all such action as may be necessary or
appropriate in order to protect the rights of the holder
of this Warrant against dilution or other impairment.
Without limiting the generality of the foregoing, the
Company (a) will not permit the par value of any shares
of stock receivable upon the exercise of this Warrant to
exceed the amount payable therefor upon such exercise,
(b) will take all such action as may be necessary or
appropriate in order that the Company may validly and
legally issue fully paid and nonassessable shares of
stock on the exercise of the Warrants from time to time
outstanding, and (c) will not take any action which
results in any adjustment of the Warrant Price if the
total number of shares of Common Stock (or Other
Securities) issuable after the action upon the exercise
of all of the Warrants would exceed the total number of
shares of Common Stock (or Other Securities) then
authorized by the Company's certificate of incorporation
and available for the purpose of issue upon such
exercise.
6. Accountants' Report as to Adjustments. In
each case of any adjustment or readjustment in the shares
of Common Stock (or Other Securities) issuable upon the
exercise of this Warrant, the Company at its expense will
promptly compute such adjustment or readjustment in
accordance with the terms of this Warrant and cause
independent certified public accountants of recognized
standing (such firm to be subject to the approval of
Wand/▇▇▇▇▇▇ Investments L.P.) selected by the Company to
verify such computation and prepare a report setting
forth such adjustment or readjustment and showing in
reasonable detail the method of calculation thereof and
the facts upon which such adjustment or readjustment is
based, including a statement of (a) the consideration
received or to be received by the Company for any
Additional Shares of Common Stock issued or sold or
deemed to have been issued, (b) the number of shares of
Common Stock outstanding or deemed to be outstanding, and
(c) the Warrant Price in effect immediately prior to such
issue or sale and as adjusted and readjusted (if required
by section 2) on account thereof. The Company will
forthwith mail a copy of each such report to each holder
of a Warrant and will, upon the written request at any
time of any holder of a Warrant, furnish to such holder a
like report setting forth the Warrant Price at the time
in effect and showing in reasonable detail how it was
calculated. The Company will also keep copies of all
such reports at its principal office and will cause the
same to be available for inspection at such office during
normal business hours by any holder of a Warrant or any
prospective purchaser of a Warrant designated by the
holder thereof.
7. Notices of Corporate Action. In the event
of
(a) any taking by the Company of a record of
the holders of any class of securities for the
purpose of determining the holders thereof who are
entitled to receive any dividend (other than a
regular periodic dividend payable in cash out of
earned surplus in an amount not exceeding the amount
of the immediately preceding cash dividend for such
period) or other distribution, or any right to
subscribe for, purchase or otherwise acquire any
shares of stock of any class or any other securities
or property, or to receive any other right, or
(b) any capital reorganization of the Company,
any reclassification or recapitalization of the
capital stock of the Company or any consolidation or
merger involving the Company and any other Person or
any transfer of all or substantially all the assets
of the Company to any other Person, or
(c) any voluntary or involuntary dissolution,
liquidation or winding-up of the Company,
the Company will mail to each holder of a Warrant a
notice specifying (i) the date or expected date on which
any such record is to be taken for the purpose of such
dividend, distribution or right, and the amount and
character of such dividend, distribution or right, and
(ii) the date or expected date on which any such
reorganization, reclassification, recapitalization,
consolidation, merger, transfer, dissolution, liquidation
or winding-up is to take place and the time, if any such
time is to be fixed, as of which the holders of record of
Common Stock (or Other Securities) shall be entitled to
exchange their shares of Common Stock (or Other
Securities) for the securities or other property
deliverable upon such reorganization, reclassification,
recapitalization, consolidation, merger, transfer,
dissolution, liquidation or winding-up. Such notice
shall be mailed at least 45 days prior to the date
therein specified.
8. Registration of Common Stock. If any
shares of Common Stock required to be reserved for
purposes of exercise of this Warrant require registration
with or approval of any governmental authority under any
federal or state law (other than the Securities Act)
before such shares may be issued upon exercise, the
Company will, at its expense and as expeditiously as
possible, use its best efforts to cause such shares to be
duly registered or approved, as the case may be. The
shares of Common Stock (and Other Securities) issuable
upon exercise of this Warrant (or upon conversion of any
shares of Common Stock issued upon such exercise) shall
constitute Registrable Securities (as such term is
defined in the Registration Rights Agreement). Each
holder of this Warrant shall be entitled to all of the
benefits afforded to a holder of any such Registrable
Securities under the Registration Rights Agreement and
such holder, by its acceptance of this Warrant, agrees to
be bound by and to comply with the terms and conditions
of the Registration Rights Agreement applicable to such
holder as a holder of such Registrable Securities. At
any such time as Common Stock is listed on any national
securities exchange, the Company will, at its expense,
obtain promptly and maintain the approval for listing on
each such exchange, upon official notice of issuance, the
shares of Common Stock issuable upon exercise of the then
outstanding Warrants and maintain the listing of such
shares after their issuance; and the Company will also
list on such national securities exchange, will register
under the Exchange Act and will maintain such listing of,
any Other Securities that at any time are issuable upon
exercise of the Warrants, if and at the time that any
securities of the same class shall be listed on such
national securities exchange by the Company.
9. Restrictions on Transfer.
9.1. Restrictive Legends. Except as otherwise
permitted by this section 9, each Warrant (including each
Warrant issued upon the transfer of any Warrant) shall be
stamped or otherwise imprinted with a legend in
substantially the following form:
"THE WARRANT REPRESENTED BY THIS
CERTIFICATE (AND THE SHARES OF COMMON STOCK OR
OTHER SECURITIES ISSUABLE UPON EXERCISE OF SUCH
WARRANT) HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE IN RELIANCE ON
CERTAIN EXEMPTIONS FROM REGISTRATION
THEREUNDER. THE SALE, PLEDGE, HYPOTHECATION OR
OTHER TRANSFER OF SUCH WARRANT (AND OF SUCH
SHARES OF COMMON STOCK OR OTHER SECURITIES) IS
SUBJECT TO COMPLIANCE WITH APPLICABLE
SECURITIES LAWS AND REGULATIONS AND CERTAIN
RESTRICTIONS AND CONDITIONS CONTAINED IN A
CERTAIN SECURITIES PURCHASE AGREEMENT AND
RELATED AGREEMENTS DATED AS OF MARCH 7, 1996.
THE HOLDER OF THIS CERTIFICATE BY ACCEPTANCE
HEREOF AGREES TO BE BOUND BY SUCH RESTRICTIONS
AND CONDITIONS. A COPY OF THE PURCHASE
AGREEMENT IS ON FILE WITH THE SECRETARY OF THE
COMPANY."
Except as otherwise permitted by this section 9, each
certificate for Common Stock (or Other Securities) issued
upon the exercise of any Warrant, and each certificate
issued upon the transfer of any such Common Stock (or
Other Securities), shall be stamped or otherwise
imprinted with a legend in substantially the following
form:
"THE SHARES OF STOCK REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE IN RELIANCE ON
CERTAIN EXEMPTIONS FROM REGISTRATION
THEREUNDER. THE SALE, PLEDGE, HYPOTHECATION OR
OTHER TRANSFER OF SUCH SHARES IS SUBJECT TO
COMPLIANCE WITH APPLICABLE SECURITIES LAWS AND
REGULATIONS AND CERTAIN RESTRICTIONS AND
CONDITIONS CONTAINED IN A CERTAIN SECURITIES
PURCHASE AND EXCHANGE AGREEMENT DATED AS OF
MARCH 7, 1996. THE HOLDER OF THIS CERTIFICATE
BY ACCEPTANCE HEREOF AGREES TO BE BOUND BY SUCH
RESTRICTIONS AND CONDITIONS. A COPY OF THE
SECURITIES PURCHASE AND EXCHANGE AGREEMENT IS
ON FILE WITH THE SECRETARY OF THE COMPANY."
10. Availability of Information. The Company
shall timely file the reports required to be filed by it
under the Securities Act and the Exchange Act (including
but not limited to the reports under sections 13 and
15(d) of the Exchange Act referred to in subparagraph (c)
of Rule 144 adopted by the Commission under the
Securities Act) and the rules and regulations adopted by
the Commission thereunder (or, if the Company is not
required to file such reports, will, upon the request of
any holder of Registrable Securities, make publicly
available other information) and will take such further
action as any holder of Registrable Securities may
reasonably request, all to the extent required from time
to time to enable such holder to sell Registrable
Securities without registration under the Securities Act
within the limitation of the exemptions provided by (a)
Rule 144 under the Securities Act, as such Rule may be
amended from time to time, or (b) any similar rule or
regulation hereafter adopted by the Commission. Upon the
request of any holder of Registrable Securities, the
Company will deliver to such holder a written statement
as to whether it has complied with the requirements of
this section 10.
11. Reservation of Stock, etc. The Company
will at all times reserve and keep available, solely for
issuance and delivery upon exercise of the Warrants, the
number of shares of Common Stock (or Other Securities)
from time to time issuable upon exercise of all Warrants
at the time outstanding. All shares of Common Stock (or
Other Securities) issuable upon exercise of any Warrants
shall be duly authorized and, when issued upon such
exercise, shall be validly issued and, in the case of
shares, fully paid and nonassessable with no liability on
the part of the holders thereof.
12. Registration and Transfer of Warrants,
etc.
12.1. Warrant Register; Ownership of Warrants.
The Company will keep at its principal office a register
in which the Company will provide for the registration of
Warrants and the registration of transfers of Warrants.
The Company may treat the Person in whose name any
Warrant is registered on such register as the owner
thereof for all other purposes, and the Company shall not
be affected by any notice to the contrary, except that,
if and when any Warrant is properly assigned in blank,
the Company may (but shall not be obligated to) treat the
bearer thereof as the owner of such Warrant for all
purposes. Subject to section 9, a Warrant, if properly
assigned, may be exercised by a new holder without a new
Warrant first having been issued.
12.2. Transfer and Exchange of Warrants. Upon
surrender of any Warrant for registration of transfer or
for exchange to the Company at its principal office, the
Company at its expense will (subject to compliance with
section 9, if applicable) execute and deliver in exchange
therefor a new Warrant or Warrants of like tenor, in the
name of such holder or as such holder (upon payment by
such holder of any applicable transfer taxes) may direct,
calling in the aggregate on the face or faces thereof for
the number of shares of Common Stock called for on the
face or faces of the Warrant or Warrants so surrendered.
12.3. Replacement of Warrants. Upon receipt
of evidence reasonably satisfactory to the Company of the
loss, theft, destruction or mutilation of any Warrant
and, in the case of any such loss, theft or destruction
of any Warrant, upon delivery of an indemnity bond in
such reasonable amount as the Company may determine or,
in the case of any such mutilation, upon the surrender of
such Warrant for cancellation to the Company at its
principal office, the Company at its expense will execute
and deliver, in lieu thereof, a new Warrant of like
tenor.
13. Registration Rights. The Purchaser or any
assignee of this Warrant shall be entitled to all rights
and benefits regarding the registration of Common Stock
and Registrable Securities set forth in the Registration
Rights Agreement.
14. Definitions. As used herein, unless the
context otherwise requires, the following terms have the
following respective meanings:
Additional Shares of Common Stock: All shares
(including treasury shares) of Common Stock issued or
sold (or, pursuant to section 2.3 or 2.4, deemed to be
issued) by the Company after the date hereof, whether or
not subsequently reacquired or retired by the Company,
other than
(a) the issuance of shares upon conversion of
the Company's Series A, Series B, Series D, Series
E, Series F, Series G and Series H Convertible
Preferred Stock,
(b) Shares issued upon the exercise of the
common stock purchase warrants and non-qualified
options listed in Exhibit A hereto, providing for
the purchase of an aggregate of 1,000,650 shares of
Common Stock (based on the current capitalization of
the Company);
(c) shares issued upon the exercise of the
Warrants,
(d) not to exceed 2,000,000 shares (subject to
equitable adjustment in the event of any
combination, reclassification, stock split, dividend
or recapitalization of the Company) issued upon the
exercise of options granted or to be granted under
the Company's stock option plans as in effect on the
date hereof or under any other employee stock
option, compensation or purchase plan or plans
adopted or assumed after such date,
(e) such additional number of shares as may
become issuable upon the exercise of any of the
securities referred to in the foregoing clauses (a)
through (d) by reason of adjustments required
pursuant to anti-dilution provisions applicable to
such securities as in effect on the date hereof, but
only if and to the extent that such adjustments are
required as the result of the original issuance of
the Warrants, and
(f) such additional number of shares as may
become issuable upon the exercise or conversion of
any of the securities referred to in the foregoing
clauses (a) through (d) by reason of adjustments
required pursuant to anti-dilution provisions
applicable to such securities as in effect on the
date hereof, in order to reflect any subdivision or
combination of Common Stock, by reclassification or
otherwise, or any dividend on Common Stock payable
in Common Stock.
Business Day: Any day other than a Saturday or
a Sunday or a day on which commercial banking
institutions in the City of New York are authorized by
law to be closed. Any reference to "days" (unless
Business Days are specified) shall mean calendar days.
Commission: The Securities and Exchange
Commission or any other federal agency at the time
administering the Securities Act.
Common Stock: As defined in the introduction
to this Warrant, such term to include any stock into
which such Common Stock shall have been changed or any
stock resulting from any reclassification of such Common
Stock, and all other stock of any class or classes
(however designated) of the Company the holders of which
have the right, without limitation as to amount, either
to all or to a share of the balance of current dividends
and liquidating dividends after the payment of dividends
and distributions on any shares entitled to preference.
Company: As defined in the introduction to
this Warrant, such term to include any corporation which
shall succeed to or assume the obligations of the Company
hereunder in compliance with section 3.
Convertible Securities: Any evidences of
indebtedness, shares of stock (other than Common Stock)
or other securities directly or indirectly convertible
into or exchangeable for Additional Shares of Common
Stock.
Current Market Price: On any date specified
herein, the average daily Market Price during the period
of the most recent 20 days, ending on such date, on which
the national securities exchanges were open for trading,
except that if no Common Stock is then listed or admitted
to trading on any national securities exchange or quoted
in the over-the-counter market, the Current Market Price
shall be the Market Price on such date.
Exchange Act: The Securities Exchange Act of
1934, or any similar federal statute, and the rules and
regulations of the Commission thereunder, all as the same
shall be in effect at the time.
Market Price: On any date specified herein,
the amount per share of the Common Stock, equal to (a)
the last sale price of such Common Stock, regular way, on
such date or, if no such sale takes place on such date,
the average of the closing bid and asked prices thereof
on such date, in each case as officially reported on the
principal national securities exchange on which such
Common Stock is then listed or admitted to trading, or
(b) if such Common Stock is not then listed or admitted
to trading on any national securities exchange but is
designated as a national market system security by the
NASD, the last trading price of the Common Stock on such
date, or (c) if there shall have been no trading on such
date or if the Common Stock is not so designated, the
average of the closing bid and asked prices of the Common
Stock on such date as shown by the NASD automated
quotation system, or (d) if such Common Stock is not then
listed or admitted to trading on any national exchange or
quoted in the over-the-counter market, the value as
determined by a firm of independent public accountants of
recognized standing selected by the Board of Directors of
the Company, and approved by Wand/▇▇▇▇▇▇ Investments
L.P., as of the last day of any month ending within 30
days preceding the date as of which the determination is
to be made.
NASD: The National Association of Securities
Dealers, Inc.
Options: Rights, options or warrants to
subscribe for, purchase or otherwise acquire either
Additional Shares of Common Stock or Convertible
Securities.
Other Securities: Any stock (other than Common
Stock) and other securities of the Company or any other
Person (corporate or otherwise) which the holders of the
Warrants 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 pursuant to section 3 or otherwise.
Person: A corporation, an association, a
partnership, an organization, a business, an individual,
a government or political subdivision thereof or a
governmental agency.
Purchase and Exchange Agreement: The
Securities Purchase and Exchange Agreement, dated as of
January 31, 1996, by and among the Company, Wand and
certain affiliates of Wand.
Registrable Securities: As defined in Section
3 of the Registration Rights Agreement.
Registration Rights Agreement: The Amended and
Restated Registration Rights Agreement dated as of
January 31, 1996, substantially in the form of Exhibit IX
to the Purchase and Exchange Agreement, as further
amended as of March 7, 1996.
Securities Act: The Securities Act of 1933, or
any similar federal statute, and the rules and
regulations of the Commission thereunder, all as the same
shall be in effect at the time.
Securities Purchase Agreement: The Securities
Purchase Agreement, dated as of March 7, 1996, by and
between Wand and the Company.
Transfer: Any sale, assignment, pledge or
other disposition of any security, or of any interest
therein, which could constitute a "sale" as that term is
defined in section 2(3) of the Securities Act.
Wand: As defined in section 1, and its
successors and assigns.
Warrant Price: As defined in section 2.1.
Warrants: (a) Those certain Common Stock
Purchase Warrants, initially providing for the
acquisition of an aggregate of 400,000 shares of Common
Stock, originally issued pursuant to the Letter of
Engagement, dated April 26, 1994, among the Company, Hill
& Partners and Wand Partners Inc. (and any warrants
issued in substitution therefor), (b) those certain
Common Stock Purchase Warrants, initially providing for
the acquisition of 1,700,000 shares of Common Stock,
originally issued to Wand/▇▇▇▇▇▇ Investments L.P. and
Wand/▇▇▇▇▇▇ Investments II L.P. as the "New Warrant" and
the "Fee Warrant" pursuant to the Revised Standby
Agreement (and any warrants issued in substitution
therefor) and (c) those certain Common Stock Purchase
Warrants, initially providing for the acquisition of
399,040 shares of Common Stock, originally issued in
connection with sale of the Series F Convertible
Preferred Stock and Series G Convertible Preferred Stock
of the Company pursuant to the Purchase and Exchange
Agreement (and any warrants issued in substitution
therefor) and the Securities Purchase Agreement (and any
warrants issued in substitution therefor).
15. Remedies. The Company stipulates that the
remedies at law of the holder of this Warrant in the
event of any default or threatened default by the Company
in the performance of or compliance with any of the terms
of this Warrant are not and will not be adequate and
that, to the fullest extent permitted by law, such terms
may be specifically enforced by a decree for the specific
performance of any agreement contained herein or by an
injunction against a violation of any of the terms hereof
or otherwise.
16. No Rights or Liabilities as Stockholder.
Nothing contained in this Warrant shall be construed as
conferring upon the holder hereof any rights as a
stockholder of the Company or as imposing any obligation
on such holder to purchase any securities or as imposing
any liabilities on such holder as a stockholder of the
Company, whether such obligation or liabilities are
asserted by the Company or by creditors of the Company.
17. Notices. All notices and other
communications under this Warrant shall be in writing and
shall be delivered, or mailed by registered or certified
mail, return receipt requested, by a nationally
recognized overnight courier, postage prepaid, addressed
(a) if to any holder of any Warrant, at the registered
address of such holder as set forth in the register kept
at the principal office of the Company, or (b) if to the
Company, to the attention of its President at its
principal office, provided that the exercise of any
Warrant shall be effective in the manner provided in
section 1.
18. Amendments. This Warrant and any term
hereof may be changed, waived, discharged or terminated
only by an instrument in writing signed by the party
against which enforcement of such change, waiver,
discharge or termination is sought.
19. Expiration. The Company will give the
holder of this Warrant not less than six weeks nor more
than two months notice of the expiration of the right to
exercise this Warrant. The right to exercise this
Warrant shall expire at 5:00 p.m., New York City time, on
August 1, 2004, unless the Company shall fail to give
such notice as aforesaid, in which event the right to
exercise this Warrant shall not expire until a date six
weeks after the date on which the Company shall give the
holder hereof notice of the expiration of the right to
exercise this Warrant.
20. Descriptive Headings. The headings in
this Agreement are for purposes of reference only and
shall not limit or otherwise affect the meaning hereof.
21. GOVERNING LAW. THIS WARRANT SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS
OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE
OF DELAWARE, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF
LAWS.
22. Judicial Proceedings; Waiver of Jury. Any
judicial proceeding brought against the Company with
respect to this Warrant may be brought in any court of
competent jurisdiction in the State of New York or of the
United States of America for the Southern District of New
York and, by execution and delivery of this Agreement,
the Company (a) accepts, generally and unconditionally,
the nonexclusive jurisdiction of such courts and any
related appellate court, and irrevocably agrees to be
bound by any judgment rendered thereby in connection with
this Warrant, subject to any rights of appeal, and (b)
irrevocably waives any objection the Company may now or
hereafter have as to the venue of any such suit, action
or proceeding brought in such a court or that such court
is an inconvenient forum. The Company hereby waives
personal service of process and consents, that service of
process upon it may be made by certified or registered
mail, return receipt requested, at its address specified
or determined in accordance with the provisions of
section 17, and service so made shall be deemed completed
on the third Business Day after such service is deposited
in the mail or, if earlier, when delivered. Nothing
herein shall affect the right to serve process in any
other manner permitted by law or shall limit the right of
any holder of any Warrant to bring proceedings against
the Company in the courts of any other jurisdiction. THE
COMPANY HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL
PROCEEDING INVOLVING, DIRECTLY, OR INDIRECTLY, ANY MATTER
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY
WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS
WARRANT OR THE RELATIONSHIP ESTABLISHED HEREUNDER.
▇▇▇▇▇▇, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇
Title: President and
Chief Executive Officer
EXHIBIT A
CURRENTLY OUTSTANDING WARRANTS
The Company has currently outstanding: (a) warrants to
Purchase 299,375 shares of the Common Stock of the
Company at $3.00 per share expiring on March 31, 1996,
(b) other warrants to purchase 105,275 shares of Common
Stock of the Company at $2.00 per share expiring in 1998,
and (c) other warrants and non-qualified options to
purchase 138,000 shares of the Common Stock of the
Company at prices between $1.20 per share and $4.625 per
share expiring in 1996, 1997 and 1999. These warrants
are issued as follows:
Underlying Exercise
Shares of Price per
Common Share of
Warrant Holders Stock Common Stock Expiration
Purchasers of Series 299,375 $3.00 August 31, 1996
B Convertible Preferred Stock
Purchasers of Series 105,275 2.00 September 28,1998
D Convertible Preferred Stock
Assignees of ▇▇▇▇▇ & Co., Inc.:
▇▇▇▇▇ ▇▇▇▇▇▇ 38,667 $1.20 June 30, 1997
▇▇▇▇ ▇▇▇▇▇▇▇ 5,800 $1.20 June 30, 1997
One Hundred Pearl Ltd. 71,533 $1.20 June 30, 1997
Hampshire Securities Corp. 2,000 $1.20 June 30, 1997
Officers and Directors of ▇▇▇▇▇▇,
Inc.:
▇▇▇ ▇▇▇▇▇▇ 10,000 $4.625 April 30, 1996
▇▇▇ ▇▇▇▇▇▇ 10,000 $1.30 February 23, 1997
TOTAL 541,850
FORM OF SUBSCRIPTION
[To be executed only upon exercise of Warrant]
To ▇▇▇▇▇▇, INC.;
The undersigned registered holder of the within Warrant
hereby irrevocably exercises such Warrant for, and
purchases thereunder, ______(1) shares of Common Stock of
▇▇▇▇▇▇, Inc. and herewith makes payment of $
therefor, and requests that the certificates for such
shares be issued in the name of, and delivered to
, whose address is .
Dated:
(Signature must conform in all
respects to name of holder as
specified on the face of
Warrant)
(Street Address)
(City)(State)(Zip Code)
___________________
1 Insert here the number of shares called for on the
face of this Warrant (or, in the case of a partial
exercise, the portion thereof as to which this
Warrant is being exercised), in either case without
making any adjustment for Additional Shares of
Common Stock or any other stock or other securities
or property or cash which, pursuant to the
adjustment provisions of this Warrant, may be
delivered upon exercise. In the case of partial
exercise, a new Warrant or Warrants will be issued
and delivered, representing the unexercised portion
of the Warrant, to the holder surrendering the
Warrant.
FORM OF ASSIGNMENT
[To be executed only upon transfer of Warrant]
For value received, the undersigned registered holder of
the within Warrant hereby sells, assigns and transfers
unto the right represented by such Warrant
to purchase shares of Common Stock of ▇▇▇▇▇▇,
Inc. to which such Warrant relates, and appoints
Attorney to make such transfer on the books of
▇▇▇▇▇▇, Inc. maintained for such purpose, with full power
of substitution in the premises.
Dated:
(Signature must conform in all
respects to name of holder as
specified on the face of
Warrant)
(Street Address)
(City)(State)(Zip Code)
Signed in the presence of: