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EXHIBIT 4.4
EXECUTION COPY
THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER REGULATION D PROMULGATED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT") OR OTHERWISE. THIS WARRANT SHALL NOT
CONSTITUTE AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY THE SECURITIES
IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL. THE
SECURITIES ARE "RESTRICTED" AND MAY NOT BE RESOLD OR TRANSFERRED EXCEPT AS
PERMITTED UNDER THE ACT PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.
COMMON STOCK PURCHASE WARRANT
No. W2
To Purchase Shares of $.01 Par Value Common Stock of
PLATO LEARNING, INC.
THIS CERTIFIES that, for value received, WESTGATE INTERNATIONAL, L.P.
(the "INVESTOR") is entitled, upon the terms and subject to the conditions
hereinafter set forth, at any time on or after the date hereof and on or prior
to 5:00 p.m. New York City Time on July16, 2003 (the "TERMINATION DATE"), but
not thereafter, to subscribe for and purchase from PLATO LEARNING, INC., a
Delaware corporation (the "COMPANY"), 26,709 shares of Common Stock of the
Company (the "WARRANT SHARES"). The "EXERCISE PRICE" is $16.72. The Exercise
Price and the number of shares for which the Warrant is exercisable shall be
subject to adjustment as provided herein. This Warrant is being issued in
connection with the Common Stock Investment Agreement dated July 17, 2000 (the
"AGREEMENT") entered into between the Company and the Investor.
1. Title of Warrant. Prior to the expiration hereof and subject to
compliance with applicable laws, this Warrant and all rights hereunder are
transferable, in whole or in respect of the right to purchase any part of the
Warrant Shares, at the office or agency of the Company by the holder hereof in
person or by duly authorized attorney, upon surrender of this Warrant together
with (a) the Assignment Form annexed hereto properly endorsed, and (b) any other
documentation reasonably necessary to satisfy the Company that such transfer is
in compliance with all applicable securities laws.
2. Authorization of Shares. The Company covenants that all shares of
Common Stock which may be issued upon the exercise of rights represented by this
Warrant will, upon exercise of the rights represented by this Warrant and
payment of the Exercise Price as set forth herein will be duly authorized,
validly issued, fully paid and nonassessable and free
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from all taxes, liens and charges in respect of the issue thereof (other than
taxes in respect of any transfer occurring contemporaneously with such issue or
otherwise specified herein).
3. Exercise of Warrant.
(a) Exercise of the purchase rights represented by this Warrant may be
made at any time or times, in whole or in part before the close of business on
the Termination Date, or such earlier date on which this Warrant may terminate
as provided in paragraph 11 below, by the surrender on any business day of this
Warrant and the Notice of Exercise annexed hereto duly completed and executed,
at the principal office of the Company (or such other office or agency of the
Company as it may designate by notice in writing to the registered holder hereof
at the address of such holder appearing on the books of the Company), together
with delivery to the Company by such holder of all certifications or
documentation reasonably necessary to establish, to the satisfaction of the
Company, that any such exercise has been undertaken in compliance with all
applicable federal and state securities laws, and upon payment of the full
Exercise Price of the shares thereby purchased; whereupon the holder of this
Warrant shall be entitled to receive a certificate for the number of shares of
Common Stock so purchased. Certificates for shares purchased hereunder shall be
delivered to the holder hereof within three (3) Trading Days after the date on
which this Warrant shall have been exercised as aforesaid. Payment of the
Exercise Price of the shares shall be by certified check or cashier's check or
by wire transfer (of same day funds) to an account designated by the Company in
an amount equal to the Exercise Price multiplied by the number of shares being
purchased.
(b) Alternatively, the Warrant holder may exercise this Warrant, in
whole or in part in a "cashless" or "net-issue" exercise by delivering to the
offices of the Company or any transfer agent for the Common Stock this Warrant,
together with a Notice of Exercise specifying the number of Warrant Shares to be
delivered to such Warrant holder ("DELIVERABLE SHARES") and the number of
Warrant Shares with respect to which this Warrant is being surrendered in
payment of the aggregate Exercise Price for the Deliverable Shares ("SURRENDERED
SHARES").
The number of Deliverable Shares shall be calculated as follows:
# of Deliverable Shares = # of Surrendered Shares x (Fair Market Value of Common
Stock less Exercise Price)
(Fair Market Value of Common Stock)
"FAIR MARKET VALUE" shall have the meaning specified in Section 12(c)
In the event that the Warrant is not exercised in full, the number of
Warrant Shares shall be reduced by the number of such Warrant Shares for which
this Warrant is exercised and/or surrendered, and the Company, at its expense,
shall within three (3) Trading Days issue and deliver to or upon the order of
the Warrant holder a new Warrant of like tenor in the name of Warrant holder or
as Warrant holder (upon payment by Warrant holder of any applicable transfer
taxes) may request, reflecting such adjusted Warrant Shares.
All exercises will be deemed to occur as of the date of the Notice of
Exercise, and certificates for shares of Common Stock purchased hereunder shall
be delivered to the holder hereof within three (3) Trading Days after the date
on which this Warrant shall have been exercised as aforesaid. The Warrant holder
may withdraw its Notice of Exercise under Section
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3(a) or 3(b) at any time thereafter if the Company fails to timely deliver the
applicable certificates to the Warrant holder as provided in this Agreement.
(c) In lieu of delivering physical certificates representing the Common
Stock issuable upon exercise, provided the Company's transfer agent is
participating in the Depository Trust Company ("DTC") Fast Automated Securities
Transfer ("FAST") program, upon request of the Warrant Holder, the Company shall
use its best efforts to cause its transfer agent to electronically transmit the
Common Stock issuable upon exercise to the Warrant Holder by crediting the
account of Warrant Holder's prime broker with DTC through its Deposit Withdrawal
Agent Commission ("DWAC") system. The time periods for delivery described in the
immediately preceding paragraph shall apply to the electronic transmittals
described herein.
The term "TRADING DAY" means (x) if the Common Stock is listed on the
New York Stock Exchange or the American Stock Exchange, a day on which there is
trading on such stock exchange, or (y) if the Common Stock is not listed on
either of such stock exchanges but sale prices of the Common Stock are reported
on an automated quotation system, a day on which trading is reported on the
principal automated quotation system on which sales of the Common Stock are
reported, or (z) if the foregoing provisions are inapplicable, a day on which
quotations are reported by National Quotation Bureau Incorporated.
4. No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant.
5. Charges, Taxes and Expenses. Issuance of certificates for shares of
Common Stock upon the exercise of this Warrant shall be made without charge to
the holder hereof for any issue or transfer tax or other incidental expense in
respect of the issuance of such certificate, all of which taxes and expenses
shall be paid by the Company, and such certificates shall be issued in the name
of the holder of this Warrant or in such name or names as may be directed by the
holder of this Warrant; provided, however, that in the event certificates for
shares of Common Stock are to be issued in a name other than the name of the
holder of this Warrant, this Warrant when surrendered for exercise shall be
accompanied by the Assignment Form attached hereto duly executed by the holder
hereof; and provided further, that the Company shall not be required to pay any
tax or taxes which may be payable in respect of any transfer involved in the
issuance of any Warrant certificates or any certificates for the Warrant Shares
other than the issuance of a Warrant Certificate to the Investor in connection
with the Investor's surrender of a Warrant Certificate upon the exercise of less
than all of the Warrants evidenced thereby, and the Company shall not be
required to issue or deliver such certificates unless or until the person or
persons requesting the issuance thereof shall have paid to the Company the
amount of such tax or shall have established to the satisfaction of the Company
that such tax has been paid.
6. Closing of Books. The Company will at no time close its shareholder
books or records in any manner which interferes with the timely exercise of this
Warrant.
7. No Rights as Shareholder until Exercise. Subject to Section 12 of
this Warrant and the provisions of any other written agreement between the
Company and the Investor, the Investor shall not be entitled to vote or receive
dividends or be deemed the holder of Warrant Shares or any other securities of
the Company that may at any time be issuable on the
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exercise hereof for any purpose, nor shall anything contained herein be
construed to confer upon the Investor, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action (whether upon any recapitalization,
issuance of stock, reclassification of stock, change of par value, or change of
stock to no par value, consolidation, merger, conveyance or otherwise) or to
receive notice of meetings, or to receive dividends or subscription rights or
otherwise until the Warrant shall have been exercised as provided herein.
However, at the time of the exercise of this Warrant pursuant to Section 3
hereof, the Warrant Shares so purchased hereunder shall be deemed to be issued
to such holder as the record owner of such shares as of the close of business on
the date on which this Warrant shall have been exercised.
8. Assignment and Transfer of Warrant. This Warrant may be assigned in
whole or in part by the surrender of this Warrant and the Assignment Form
annexed hereto duly executed at the office of the Company (or such other office
or agency of the Company as it may designate by notice in writing to the
registered holder hereof at the address of such holder appearing on the books of
the Company); provided, however, that this Warrant may not be resold or
otherwise transferred except (i) in a transaction registered under the
Securities Act of 1933, as amended (the "ACT"), or (ii) in a transaction
pursuant to an exemption, if available, from registration under the Act and
whereby, if requested by the Company, an opinion of counsel reasonably
satisfactory to the Company is obtained by the holder of this Warrant to the
effect that the transaction is so exempt.
9. Loss, Theft, Destruction or Mutilation of Warrant. Upon receipt by
the Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of any Warrant or stock certificate representing the
Warrant Shares, and in case of loss, theft or destruction, of indemnity
reasonably satisfactory to it, and upon reimbursement to the Company of all
reasonable expenses incidental thereto. Upon surrender and cancellation of such
Warrant or stock certificate, if mutilated, the Company will make and deliver a
new Warrant or stock certificate of like tenor and dated as of such
cancellation, in lieu of this Warrant or stock certificate.
10. Saturdays, Sundays, Holidays, etc. If the last or appointed day for
the taking of any action or the expiration of any right required or granted
herein shall be a Saturday, Sunday or a legal holiday, then such action may be
taken or such right may be exercised on the next succeeding day not a legal
holiday.
11. Effect of Certain Events. If at any time while this Warrant or any
portion thereof is outstanding and unexpired there shall be (i) a sale or
conveyance of all or substantially all of the Company's assets or (ii) a
transaction (by merger or otherwise) in which more than 50% of the voting power
of the Company is disposed of (collectively, a "SALE OR MERGER TRANSACTION"), in
which the consideration to be received by the Company or its shareholders
consists solely of cash, and in case the Company shall at any time effect a Sale
or Merger Transaction in which the consideration to be received by the Company
or its shareholders consists in part of consideration other than cash, the
holder of this Warrant shall have the right thereafter to purchase, by exercise
of this Warrant and payment of the aggregate Exercise Price in effect
immediately prior to such action, the kind and amount of shares and other
securities and
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property which it would have owned or have been entitled to receive after the
happening of such transaction had this Warrant been exercised immediately prior
thereto, subject to further adjustment as provided in Section 12.
Notwithstanding the above, a Sale or Merger Transaction shall not be deemed to
occur in the event the Company is the acquiring entity in connection with an
acquisition by the Company.
12. Adjustments of Exercise Price and Number of Warrant Shares.
The number of and kind of securities purchasable upon exercise of this
Warrant and the Exercise Price shall be subject to adjustment from time to time
as follows:
(a) Subdivisions, Combinations and other Issuances. If the Company
shall at any time after the date hereof but prior to the expiration of this
Warrant subdivide its outstanding securities as to which purchase rights under
this Warrant exist, by split-up, spin-off, or otherwise, or combine its
outstanding securities as to which purchase rights under this Warrant exist, the
number of Warrant Shares as to which this Warrant is exercisable as of the date
of such subdivision, split-up, spin-off or combination shall forthwith be
proportionately increased in the case of a subdivision, or proportionately
decreased in the case of a combination. Appropriate proportional adjustments
(decrease in the case of subdivision, increase in the case of combination) shall
also be made to the Exercise Price payable per share, so that the aggregate
Exercise Price payable for the total number of Warrant Shares purchasable under
this Warrant as of such date shall remain the same as it would have been before
such subdivision or combination.
(b) Stock Dividend. If at any time after the date hereof the Company
declares a dividend or other distribution on Common Stock payable in Common
Stock or other securities or rights convertible into Common Stock ("COMMON STOCK
EQUIVALENTS") without payment of any consideration by holders of Common Stock
for the additional shares of Common Stock or the Common Stock Equivalents
(including the additional shares of Common Stock issuable upon exercise or
conversion thereof), then the number of shares of Common Stock for which this
Warrant may be exercised shall be increased as of the record date (or the date
of such dividend distribution if no record date is set) for determining which
holders of Common Stock shall be entitled to receive such dividends, in
proportion to the increase in the number of outstanding shares (and shares of
Common Stock issuable upon conversion of all such securities convertible into
Common Stock) of Common Stock as a result of such dividend, and the Exercise
Price shall be proportionately reduced so that the aggregate Exercise Price for
all the Warrant Shares issuable hereunder immediately after the record date (or
on the date of such distribution, if applicable), for such dividend shall equal
the aggregate Exercise Price so payable immediately before such record date (or
on the date of such distribution, if applicable).
(c) Other Distributions. If at any time after the date hereof the
Company distributes to holders of its Common Stock, other than as part of its
dissolution, liquidation or the winding up of its affairs, any shares of its
capital stock, any evidence of indebtedness or any of its assets (other than
Common Stock), then the number of Warrant Shares for which this Warrant is
exercisable shall be increased to equal: (i) the number of Warrant Shares for
which this Warrant is exercisable immediately prior to such event, (ii)
multiplied by a fraction, (A) the numerator of which shall be the Fair Market
Value (as defined below) per share of Common
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Stock on the record date for the dividend or distribution, and (B) the
denominator of which shall be the Fair Market Value price per share of Common
Stock on the record date for the dividend or distribution minus the amount
allocable to one share of Common Stock of the value (as jointly determined in
good faith by the Board of Directors of the Company and the Warrant holder) of
any and all such evidences of indebtedness, shares of capital stock, other
securities or property, so distributed. For purposes of this Warrant, "FAIR
MARKET VALUE" shall equal the 10 Trading Day average closing trading price of
the Common Stock on the Principal Market for the 10 Trading Days preceding the
date of determination or, if the Common Stock is not listed or admitted to
trading on any Principal Market, the average of the closing bid and asked prices
on the over-the-counter market as furnished by any New York Stock Exchange
member firm reasonably selected from time to time by the Company for that
purpose and reasonably acceptable to the Holder, or, if the Common Stock is not
listed or admitted to trading on the Principal Market or traded over-the-counter
and the average price cannot be determined as contemplated above, the Fair
Market Value of the Common Stock shall be as reasonably determined in good faith
by the Company's Board of Directors with the concurrence of the Holder. The
Exercise Price shall be reduced to equal: (i) the Exercise Price in effect
immediately before the occurrence of any event (ii) multiplied by a fraction,
(A) the numerator of which is the number of Warrant Shares for which this
Warrant is exercisable immediately before the adjustment, and (B) the
denominator of which is the number of Warrant Shares for which this Warrant is
exercisable immediately after the adjustment.
(d) Merger, etc. If at any time after the date hereof there shall be a
merger or consolidation of the Company with or into or a transfer of all or
substantially all of the assets of the Company to another entity, then the
Warrant Holder shall be entitled to receive upon or after such transfer, merger
or consolidation becoming effective, and upon payment of the Exercise Price then
in effect, the number of shares or other securities or property of the Company
or of the successor corporation resulting from such merger or consolidation,
which would have been received by Warrant Holder for the shares of stock subject
to this Warrant had this Warrant been exercised just prior to such transfer,
merger or consolidation becoming effective or to the applicable record date
thereof, as the case may be. The Company will not merge or consolidate with or
into any other corporation, or sell or otherwise transfer its property, assets
and business substantially as an entirety to another corporation, unless the
corporation resulting from such merger or consolidation (if not the Company), or
such transferee corporation, as the case may be, shall expressly assume in
writing the due and punctual performance and observance of each and every
covenant and condition of this Warrant to be performed and observed by the
Company.
(e) Reclassification, etc. If at any time after the date hereof there
shall be a reorganization or reclassification of the securities as to which
purchase rights under this Warrant exist into the same or a different number of
securities of any other class or classes, then the Warrant Holder shall
thereafter be entitled to receive upon exercise of this Warrant, during the
period specified herein and upon payment of the Exercise Price then in effect,
the number of shares or other securities or property resulting from such
reorganization or reclassification, which would have been received by the
Warrant Holder for the shares of stock subject to this Warrant had this Warrant
at such time been exercised.
(f) Exercise Price Adjustment. In the event that the Company issues or
sells any Common Stock or securities which are convertible into or exchangeable
for its Common
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Stock or any convertible securities, or any warrants or other rights to
subscribe for or to purchase or any options for the purchase of its Common Stock
or any such convertible securities (other than shares or options issued or which
may be issued pursuant to (i) the Company's current or future employee, director
or bona fide consultant option plans or shares issued upon exercise of options,
warrants or rights outstanding on the date of the Agreement and listed in the
Company's most recent periodic report filed under the Exchange Act (ii)
strategic corporate alliances not undertaken principally for financing purposes,
(iii) arrangements with the Investor, or (iv) acquisitions of other entities by
the Company) at an effective consideration or exercise price per share which is
less than the Exercise Price then in effect, then the Exercise Price in effect
immediately prior to such issue or sale shall be reduced effective concurrently
with such issue or sale to an amount determined by multiplying the Exercise
Price then in effect by a fraction, (x) the numerator of which shall be the sum
of (1) the number of shares of Common Stock outstanding immediately prior to
such issue or sale, plus (2) the number of shares of Common Stock which the
aggregate consideration received by the Company for such additional shares would
purchase at such Exercise Price, then in effect; and (y) the denominator of
which shall be the number of shares of Common Stock of the Company outstanding
immediately after such issue or sale.
For the purposes of the foregoing adjustment, in the case of the
issuance of any convertible securities, warrants, options or other rights to
subscribe for or to purchase or exchange for, shares of Common Stock
("CONVERTIBLE SECURITIES"), the maximum number of shares of Common Stock
issuable upon exercise, exchange or conversion of such Convertible Securities
shall be deemed to be outstanding, provided that no further adjustment shall be
made upon the actual issuance of Common Stock upon exercise, exchange or
conversion of such Convertible Securities.
The number of shares which may be purchased hereunder shall be
increased proportionately to any reduction in Exercise Price pursuant to this
paragraph 12(f), so that after such adjustments the aggregate Exercise Price
payable hereunder for the increased number of shares shall be the same as the
aggregate Exercise Price in effect just prior to such adjustments.
In no event shall the Exercise Price be adjusted to a number smaller
than the par value per share of the Company's Common Stock as it exists today.
13. Voluntary Adjustment by the Company. The Company may at its option,
at any time during the term of this Warrant, reduce but not increase the then
current Exercise Price to any amount and for any period of time deemed
appropriate by the Board of Directors of the Company.
14. Notice of Adjustment. Whenever the number of Warrant Shares or
number or kind of securities or other property purchasable upon the exercise of
this Warrant or the Exercise Price is adjusted, the Company shall promptly mail
to the holder of this Warrant a notice setting forth the number of Warrant
Shares (and other securities or property) purchasable upon the exercise of this
Warrant and the Exercise Price of such Warrant Shares after such adjustment and
setting forth a brief statement of the facts requiring such adjustment.
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15. Authorized Shares. The Company covenants that during the period the
Warrant is outstanding and exercisable, it will reserve from its authorized and
unissued Common Stock a sufficient number of shares to provide for the issuance
of the Warrant Shares upon the exercise of any purchase rights under this
Warrant. The Company further covenants that its issuance of this Warrant shall
constitute full authority to its officers who are charged with the duty of
executing stock certificates to execute and issue the necessary certificates for
the Warrant Shares upon the exercise of the purchase rights under this Warrant.
The Company will take all such reasonable action as may be necessary to assure
that such Warrant Shares may be issued as provided herein without violation of
any applicable law or regulation, or of any requirements of the American Stock
Exchange or any domestic securities exchange upon which the Common Stock may be
listed.
16. 9.99% Limitation. Notwithstanding anything to the contrary
contained herein, the number of shares of Common Stock that may be acquired by
the Investor upon exercise pursuant to the terms hereof shall not exceed a
number that, when added to the total number of shares of Common Stock deemed
beneficially owned by such holder (other than by virtue of the ownership of
securities or rights to acquire securities (including the Warrant) that have
limitations on the Investor's right to convert, exercise or purchase similar to
the limitation set forth herein), together with all shares of Common Stock
deemed beneficially owned (other than by virtue of the ownership of securities
or rights to acquire securities that have limitations on the right to convert,
exercise or purchase similar to the limitation set forth herein) by the holder's
"affiliates" (as defined Rule 144 of the Act) ("Aggregation Parties") that would
be aggregated for purposes of determining whether a group under Section 13(d) of
the Securities Exchange Act of 1934, as amended, exists, would exceed 9.99% of
the total issued and outstanding shares of the Company's Common Stock (the
"Restricted Ownership Percentage"). Each Holder shall have the right (w) at any
time and from time to time to reduce its Restricted Ownership Percentage
immediately upon notice to the Company and (x) at any time and from time to
time, to increase its Restricted Ownership Percentage immediately in the event
of the announcement as pending or planned of a Major Transaction (as such term
is defined in the Investment Agreement).
(a) The Investor covenants at all times on each day (each such day
being referred to as a "Covenant Day") as follows: During the balance of such
Covenant Day and the succeeding sixty-one (61) days (the balance of such
Covenant Day and the succeeding 61 days being referred to as the "Covenant
Period") such Investor will not acquire shares of Common Stock pursuant to any
right (including the exercise of the Warrant) existing at the commencement of
the Covenant Period to the extent the number of shares so acquired by such
holder and its Aggregation Parties (ignoring all dispositions) would exceed:
(x) the Restricted Ownership Percentage of the total number of shares of
Common Stock outstanding at the commencement of the Covenant Period,
minus
(y) the number of shares of Common Stock owned by such holder and its
Aggregation Parties at the commencement of the Covenant Period.
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A new and independent covenant will be deemed to be given by the holder
as of each moment of each Covenant Day. No covenant will terminate, diminish or
modify any other covenant. The holder agrees to comply with each such covenant.
This Section 16 controls in the case of any conflict with any other provision of
the Transaction Documents.
The Company's obligation to issue Shares of Common Stock which would
exceed such limits referred to in this Section 16 shall be suspended to the
extent necessary until such time, if any, as shares of Common Stock may be
issued in compliance with such restrictions.
17. Compliance with Securities Laws. (a) The holder hereof acknowledges
that the Warrant Shares acquired upon the exercise of this Warrant, if not
registered (or if no exemption from registration exists), will have restrictions
upon resale imposed by state and federal securities laws. Each certificate
representing the Warrant Shares issued to the Holder upon exercise (if not
registered or if no exemption from registration exists) will bear the following
legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY
STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED, TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS, BASED ON AN OPINION LETTER OF COUNSEL SATISFACTORY TO THE
COMPANY OR A NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION.
(b) Without limiting the Investor's right to transfer, assign or
otherwise convey the Warrant or Warrant Shares in compliance with all applicable
securities laws, the Investor of this Warrant, by acceptance hereof,
acknowledges that this Warrant and the Warrant Shares to be issued upon exercise
hereof are being acquired solely for the Investor's own account and not as a
nominee for any other party, and that the Investor will not offer, sell or
otherwise dispose of this Warrant or any Warrant Shares to be issued upon
exercise hereof except under circumstances that will not result in a violation
of applicable federal and state securities laws. Upon exercise of this Warrant,
the Investor shall, if requested by the Company, confirm in writing, in a form
satisfactory to the Company, that the Warrant Shares of Common Stock so
purchased are being acquired solely for the Investor's own account and not as a
nominee for any other party, for investment, and not with a view toward
distribution or resale.
(c) Neither this Warrant nor any Share of Common Stock issued upon
exercise of this Warrant may be offered for sale or sold, or otherwise
transferred or sold in any transaction which would constitute a sale thereof
within the meaning of the Act, unless (i) such security has been registered for
sale under the Act and registered or qualified under applicable state securities
laws relating to the offer an sale of securities, or (ii) exemptions from the
registration requirements of the Act and the registration or qualification
requirements of all such
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state securities laws are available and the Company shall have received an
opinion of counsel that the proposed sale or other disposition of such
securities may be effected without registration under the Act, such counsel and
such opinion to be satisfactory to the Company.
(d) Investor recognizes that investing in the Warrant and the Warrant
Shares involves a high degree of risk, and Investor is in a financial position
to hold the Warrant and the Warrant Shares indefinitely and is able to bear the
economic risk and withstand a complete loss of its investment in the Warrant and
the Warrant Shares. The Investor is a sophisticated investor and is capable of
evaluating the merits and risks of investing in the Company. The Investor has
had an opportunity to discuss the Company's business, management and financial
affairs with the Company's management, has been given full and complete access
to information concerning the Company, and has utilized such access to its
satisfaction for the purpose of obtaining information or verifying information
and have had the opportunity to inspect the Company's operation. Investor has
had the opportunity to ask questions of, and receive answers from, the
management of the Company (and any person acting on its behalf) concerning the
Warrant and the Warrant Shares and the agreements and transactions contemplated
hereby, and to obtain any additional information as Investor may have requested
in making its investment decision. The initial Investor in this Warrant is an
"accredited investor", as defined by Regulation D promulgated under the Act.
18. Miscellaneous.
(a) Issue Date; Choice Of Law; Venue; Jurisdiction. The provisions of
this Warrant shall be construed and shall be given effect in all respects as if
it had been issued and delivered by the Company on the date hereof. This Warrant
shall be binding upon any successors or assigns of the Company. This Warrant
will be construed and enforced in accordance with and governed by the laws of
the State of New York, except for matters arising under the Act, without
reference to principles of conflicts of law. Each of the parties consents to the
exclusive jurisdiction of the U.S. District Court sitting in the State of City
of New York in the State of New York in connection with any dispute arising
under this Warrant and hereby waives, to the maximum extent permitted by law,
any objection, including any objection based on forum non conveniens, to the
bringing of any such proceeding in such jurisdiction. Each party hereby agrees
that if the other party to this Warrant obtains a judgment against it in such a
proceeding, the party which obtained such judgment may enforce same by summary
judgment in the courts of any country having jurisdiction over the party against
whom such judgment was obtained, and each party hereby waives any defenses
available to it under local law and agrees to the enforcement of such a
judgment. Each party to this Warrant irrevocably consents to the service of
process in any such proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to such party at its address in accordance with
Section 18(c). Nothing herein shall affect the right of any party to serve
process in any other manner permitted by law. Each party waives its right to a
trial by jury.
(b) Modification and Waiver. This Warrant and any provisions hereof may
be changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought. Any
amendment effected in accordance with this paragraph shall be binding upon the
Investor, each future holder of this Warrant and the Company. No waivers of, or
exceptions to, any term, condition or provision of this Warrant, in
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any one or more instances, shall be deemed to be, or construed as, a further or
continuing waiver of any such term, condition or provision.
(c) Notices. Any notice, request or other document required or
permitted to be given or delivered to the Investor or future holders hereof or
the Company shall be personally delivered or shall be sent by certified or
registered mail, postage prepaid, to the Investor or each such holder at its
address as shown on the books of the Company or to the Company at the address
set forth in the Agreement. All notices under this Warrant shall be deemed to
have been given when received.
A party may from time to time change the address to which notices to it
are to be delivered or mailed hereunder by notice in accordance with the
provisions of this Section 18(c).
(d) Severability. Whenever possible, each provision of this Warrant
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
the validity, legality or enforceability of any other provision of this Warrant
in such jurisdiction or affect the validity, legality or enforceability of any
provision in any other jurisdiction, but this Warrant shall be reformed,
construed and enforced in such jurisdiction as if such invalid, illegal or
unenforceable provision had never been contained herein.
(e) No Impairment. The Company will not, by amendment of its
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms 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 Warrant Holder
against impairment. Without limiting the generality of the foregoing, the
Company (a) will not increase the par value of any Warrant Shares above the
amount payable therefor on such exercise, and (b) will take all such action as
may be reasonably necessary or appropriate in order that the Company may validly
and legally issue fully paid and nonassessable Warrant Shares on the exercise of
this Warrant.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its officers thereunto duly authorized.
Dated: July 17, 2000
PLATO LEARNING, INC.
By:
-------------------------------
Name:
Title:
Agreed and Accepted
this 17th day of July, 2000
WESTGATE INTERNATIONAL, L.P.
By: ▇▇▇▇▇▇▇ INTERNATIONAL CAPITAL
ADVISORS INC.
Attorney-in-Fact
By:
-------------------------------
Name:
Title:
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NOTICE OF EXERCISE
To: PLATO LEARNING, INC.
(1) The undersigned hereby elects:
(A) to purchase shares of Common Stock of PLATO LEARNING, INC.
pursuant to the terms of the attached Warrant, and tenders herewith payment of
the Exercise Price in full, together with all applicable transfer taxes, if any.
(B) in a "cashless" or "net-issue exercise" for, and to purchase
thereunder, shares of Common Stock, and herewith makes payment therefor
with Surrendered Shares.
(2) Please issue a certificate or certificates representing said shares of
Common Stock in the name of the undersigned or in such other name as is
specified below:
-------------------------------
(Name)
-------------------------------
(Address)
-------------------------------
(3) Please issue a new Warrant for the unexercised portion of the attached
Warrant in the name of the undersigned or in such other name as is specified
below:
Other Name:
---------------------
-----------------------------------
(Name)
--------------------- -----------------------------------
(Date) (Signature)
-----------------------------------
(Address)
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ASSIGNMENT FORM
(To assign the foregoing warrant, execute
this form and supply required information.
Do not use this form to exercise the warrant.)
FOR VALUE RECEIVED, the foregoing Warrant of Plato Learning, Inc., Inc.
and all rights evidenced thereby are hereby assigned to
whose address is
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.
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Dated: ------------------,
Holder's Signature: ----------------------------------
Holder's Address: ----------------------------------
----------------------------------
Signature Guaranteed:
---------------------------------------------
NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in an fiduciary or other representative
capacity should file proper evidence of authority to assign the foregoing
Warrant.
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