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EXHIBIT 4.N.1
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SERIES A WARRANT
to Purchase Common Stock of
NORAND CORPORATION
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Warrant No. A - 1
Original Issue
Date: November 20, 1996
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NEITHER THE WARRANTS REPRESENTED BY THIS CERTIFICATE NOR ANY OF THE
SECURITIES ISSUABLE UPON EXERCISE THEREOF HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES
LAW. NO TRANSFER OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE OR OF THE
SECURITIES ISSUABLE UPON EXERCISE THEREOF SHALL BE VALID OR EFFECTIVE
UNLESS (A) SUCH TRANSFER IS MADE PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT OR (B) THE HOLDER OF THE SECURITIES PROPOSED TO BE
TRANSFERRED SHALL HAVE DELIVERED TO THE COMPANY EITHER A NO-ACTION LETTER
FROM THE SECURITIES AND EXCHANGE COMMISSION OR AN OPINION OF COUNSEL
EXPERIENCED IN SECURITIES MATTERS AND REASONABLY ACCEPTABLE TO THE COMPANY
TO THE EFFECT THAT SUCH PROPOSED TRANSFER IS EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE ACT OR (C) SUCH TRANSFER IS PURSUANT TO RULE 144 OR
RULE 144A UNDER THE ACT AND SUCH HOLDER(S) SHALL HAVE DELIVERED TO THE
COMPANY A CERTIFICATE SETTING FORTH THE BASIS FOR APPLYING SUCH RULE TO THE
PROPOSED TRANSFER.
Warrant No. A - 1
SERIES A WARRANT
NORAND CORPORATION
THIS IS TO CERTIFY THAT THE FIRST NATIONAL BANK OF CHICAGO, or registered
assigns, is entitled, at any time after May 31, 1997 and prior to the
Expiration Date (such term, and certain other capitalized terms used herein
being hereinafter defined), to purchase from NORAND CORPORATION, a Delaware
corporation (the "Company"), Eighty-eight Thousand Eight Hundred Fifty-seven
(88,857) shares of the Common Stock of the Company (subject to adjustment as
provided herein), at a purchase price of $21.15 per share (the initial
"Exercise Price", subject to adjustment as provided herein), all on the terms
and conditions and pursuant to the provisions hereinafter set forth.
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1. DEFINITIONS
As used in this Warrant, the following terms have the respective
meanings set forth below:
"Affiliate" of any Person means a Person (a) which directly or
indirectly through one or more intermediaries controls, or is controlled
by, or is under common control with such Person, (b) which beneficially
owns or holds more than ten percent of the outstanding shares of any class
of voting stock of such Person and has the power to vote such shares or (c)
more than ten percent of the outstanding shares of any class of voting
stock (or, in the case of a Person which is not a corporation, more than
ten percent of the equity interest) of which is beneficially owned or held
by such Person and such Person has the power to vote such shares or equity
interest. The term "control" as used with respect to any Person means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through
the ownership of voting securities, by contract or otherwise.
"After-Tax Basis", when referring to a payment that is required
hereunder (the "target amount"), shall mean a total payment (the "total
amount") that, after deduction of all federal, state and local taxes that
are required to be paid by the recipient in respect of the receipt or
accrual of such total amount, is equal to the target amount.
"Agreed Rate" shall mean a rate per annum equal to the corporate base
rate of interest announced by The First National Bank of Chicago from time
to time, changing when and as said corporate base rate changes.
"Appraised Value" per share of Common Stock as of a date specified
herein shall mean the value of such share as of such date as determined by
an investment bank of nationally recognized standing selected by the
Majority Warrant Holders from Schedule B (or any successor of any such
entity), it being understood that the Majority Warrant Holders shall use
commercially reasonable efforts to select one of the first three listed
entities subject to arriving at reasonably acceptable terms and conditions
for the
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appraisal. The Company shall pay the costs and fees of such investment
bank, and the decision of the investment bank making such determination of
Appraised Value shall be final and binding on the Company and all affected
holders of Warrants or Warrant Stock. Such Appraised Value shall be
determined as a pro rata portion of the value of the Company taken as a
whole, based on the higher of (A) the value derived from a hypothetical
sale of the entire Company as a going concern by a willing seller to a
willing buyer (neither acting under any compulsion) and (B) the liquidation
value of the entire Company. No discount shall be applied on account of
(i) any Warrants or Warrant Stock representing a minority interest, (ii)
any lack of liquidity of the Common Stock or the Warrants, (iii) the fact
that the Warrants or Warrant Stock may constitute "restricted securities"
for securities law purposes or (iv) the existence of any call option.
"Bank Holding Company Act" shall mean the Bank Holding Company Act of
1956, as amended.
"Business Day" shall mean any day that is not a Saturday or Sunday or a
day on which banks are required or permitted to be closed in the State of
Illinois.
"Call" shall have the meaning set forth in Section 13 hereof.
"Call Notice" shall have the meaning set forth in Section 13 hereof.
"Commission" shall mean the Securities and Exchange Commission or any
other federal agency then administering the Securities Act and other
federal securities laws.
"Common Stock" shall mean (except where the context otherwise
indicates) the Common Stock of the Company, par value $.01 per share, as
constituted on the Original Issue Date, and any capital stock into which
such Common Stock may thereafter be changed, and shall also include (i)
capital stock of the Company of any other class (regardless of how
denominated) issued to the holders of shares of any Common Stock upon any
reclassification thereof which is also not preferred as to dividends or
liquidation over any other
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class of stock of the Company and which is not subject to redemption and
(ii) shares of common stock of any successor or acquiring corporation (as
defined in Section 4.5 hereof) received by or distributed to the holders of
Common Stock of the Company in the circumstances contemplated by Section
4.5 hereof.
"Company" means Norand Corporation, a Delaware corporation, and any
successor corporation.
"Company Default" means (a) the breach of any warranty or the
inaccuracy in any material respect at the time when made of any
representation made by the Company herein or (b) the failure by the Company
to comply in any material respect with any covenant of the Company
contained herein.
"Continuously Effective", with respect to a specified registration
statement, shall mean that it shall not cease to be effective and available
for Transfers of Warrant Stock thereunder for the longer of either (i) any
ten consecutive Business Days, or (ii) an aggregate of fifteen Business
Days during the period specified in the relevant provision of Section 9
hereof.
"Convertible Securities" shall mean evidences of indebtedness, shares
of stock or other securities that are convertible into or exchangeable for,
with or without payment of additional consideration in cash or property,
shares of Common Stock, either immediately or upon the occurrence of a
specified date or a specified event.
"Credit Agreement" means the Second Amended and Restated Credit
Agreement dated as of January 25, 1996, as thereafter from time to time
amended, supplemented, restated or modified, among the Company, the Lenders
party thereto and The First National Bank of Chicago, as agent.
"Current Market Price" shall mean as of any specified date the average
of the daily market prices of the Common Stock of the Company for the
shorter of (x) the twenty consecutive Business Days immediately preceding
such date or (y) the period commencing on the Business Day next following
the first public announcement of any event giving rise to an adjustment of
the Exercise Price pursuant to Section 4 below
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and ending on such date. The "daily market price" for each such Business
Day shall be: (i) if the Common Stock is then listed on a national
securities exchange or is listed on NASDAQ and is designated as a National
Market System security, the last sale price, regular way, on such day on
the principal stock exchange or market system on which such Common Stock is
then listed or admitted to trading, or, if no such sale takes place on such
day, the average of the closing bid and asked prices for the Common Stock
on such day as reported on such stock exchange or market system or (ii) if
the Common Stock is not then listed or admitted to trading on any national
securities exchange or designated as a National Market System security on
NASDAQ but is traded over-the-counter, the average of the closing bid and
asked prices for the Common Stock as reported on NASDAQ or the Electronic
Bulletin Board or in the National Daily Quotation Sheets, as applicable.
"Demand Registration" shall have the meaning set forth in Section
9.2(a) hereof.
"Demanding Holders" shall have the meaning set forth in Section 9.2(a)
hereof.
"Designated Office" shall have the meaning set forth in Section 11
hereof.
"Equity" shall mean equity capital (not including the equity capital
attributable to the Settlement Stock, and any mandatory redemption terms of
which equity capital are acceptable to the Majority Warrant Holders) raised
by and/or contributed to the Company subsequent to the Original Issue Date
or new Indebtedness (as defined in the Credit Agreement) subordinated to
the Obligations (as defined in the Credit Agreement), provided the terms of
such Indebtedness (including, without limitation, maturity, amortization,
covenants, defaults, remedies and subordination provisions) are acceptable
to the Majority Warrant Holders.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any similar federal statute, and the rules and regulations of
the Commission thereunder, all as the same shall be in effect from time to
time.
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"Exercise Notice" shall have the meaning set forth in Section 2.1
hereof.
"Exercise Period" shall mean the period during which this Warrant is
exercisable pursuant to Section 2.1 hereof.
"Exercise Price" shall mean, in respect of a share of Common Stock at
any date herein specified, the initial Exercise Price set forth in the
preamble of this Warrant as adjusted from time to time pursuant to Section
4 hereof.
"Expiration Date" shall mean August 31, 2002, unless extended under the
circumstances contemplated by Section 9.2(d) hereof.
"Fair Value" per share of Common Stock as of any specified date shall
mean (A) if the Common Stock is publicly traded on such date, the Current
Market Price per share or (B) if the Common Stock is not publicly traded on
such date, (1) the fair market value per share of Common Stock as
determined in good faith by the Board of Directors of the Company and set
forth in a written notice to each Holder or (2) if the Majority Warrant
Holders object in writing to such price as determined by the Board of
Directors within thirty days after receiving notice of same, the Appraised
Value per share as of such date.
"Fully Diluted Outstanding" shall mean, when used with reference to
Common Stock, at any date as of which the number of shares thereof is to be
determined, all shares of Common Stock Outstanding on such date and all
shares of Common Stock issuable in respect of (x) the Warrants outstanding
on such date, (y) any Convertible Securities outstanding on such date and
(z) any other Stock Purchase Rights outstanding on such date, in each case
regardless of whether or not the conversion, exchange, subscription or
purchase rights associated with such Convertible Securities or Stock
Purchase Rights are presently exercisable.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as from time to time in effect.
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"▇▇▇▇▇-▇▇▇▇▇▇▇▇ Act" shall mean Section 24 (Seventh), Section 78,
Section 377 and Section 378 of Title 12 (12 U.S.C. Section Section 24
(Seventh) 78, 377, 378), or any similar federal legislation.
"Holder" shall mean (a) with respect to this Warrant, the Person in
whose name the Warrant set forth herein is registered on the books of the
Company maintained for such purpose and (b) with respect to any other
Warrant or shares of Warrant Stock, the Person in whose name such Warrant
or Warrant Stock is registered on the books of the Company maintained for
such purpose.
"Insolvency Event" shall mean any proceeding being instituted by or
against the Company seeking a declaration or order for relief, or entailing
a finding, that the Company is insolvent or bankrupt, or seeking
reorganization, liquidation, dissolution, winding-up, charter revocation or
other similar relief with respect to the Company or any of its properties,
assets or debts, or seeking the appointment of a receiver, trustee,
custodian, liquidator, sequestrator or similar official for the Company or
any of its properties or assets, or the Company becoming insolvent or
bankrupt or generally unable to pay its debts as they become due, or the
Company voluntarily suspending its business or making a general assignment
for the benefit of creditors; provided that an Insolvency Event shall not
be deemed to have occurred on account of any such proceeding which is
involuntary on the part of the Company unless same shall not have been
dismissed or stayed within 60 days.
"Lien" shall mean any mortgage or deed of trust, pledge, hypothecation,
assignment, deposit arrangement, lien, charge, claim, security interest,
easement or encumbrance, or preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any lease or title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, and the filing of, or agreement to give, any financing statement
perfecting a security interest under the Uniform Commercial Code or
comparable law of any jurisdiction).
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"Majority Warrant Holders", with respect to a given determination,
shall mean the Holders of Warrants and/or Warrant Stock representing at
least seventy-six percent (76%) of all Warrants and/or Warrant Stock (with
any such Warrants being deemed to represent, for the purposes of such
calculation, the shares of Warrant Stock then issuable upon exercise
thereof) directly affected by such determination.
"Majority Selling Holders" shall mean those Selling Holders whose
Warrants and/or Warrant Stock included in a registration under Section 9
hereof represents a majority of the Warrants and/or Warrant Stock (with any
such Warrants being deemed to represent, for the purposes of such
calculation, the shares of Warrant Stock then issuable upon exercise
thereof) included therein by all Selling Holders.
"NASD" shall mean the National Association of Securities Dealers, Inc.,
or any successor corporation thereto.
"NASDAQ" shall mean the NASDAQ quotation system, or any successor
reporting system.
"Notes" shall mean any of the promissory notes issued by the Company
under the Credit Agreement.
"Opinion of Counsel" means a written opinion of counsel experienced in
Securities Act or bank regulatory matters, as the case may be, chosen by
the Holder of this Warrant or Warrant Stock issued upon the exercise hereof
and reasonably acceptable to the Company.
"Original Issue Date" shall mean the date on which the Original
Warrants were issued, as set forth on the cover page of this Warrant.
"Original Warrants" shall mean the Warrants originally issued by the
Company on the Original Issue Date to each of The First National Bank of
Chicago, Fleet Bank of Massachusetts, N.A., The Daiwa Bank, Limited,
Norwest Bank Iowa, National Association and Caisse Nationale de Credit
Agricole.
"Other Property" shall have the meaning set forth in Section 4.5
hereof.
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"Outstanding" shall mean, when used with reference to Common Stock, at
any date as of which the number of shares thereof is to be determined, all
issued shares of Common Stock, except shares then owned or held by or for
the account of the Company or any Subsidiary thereof, and shall include all
shares issuable in respect of outstanding scrip or any certificates
representing fractional interests in shares of Common Stock. "Outstanding",
when used with respect to Warrant Stock for the purposes of Section 9
hereof shall have the meaning set forth in Section 9.1(d) hereof.
"Person" shall mean any individual, sole proprietorship, partnership,
limited liability company, joint venture, trust, incorporated organization,
association, corporation, institution, public benefit corporation, entity
or government (whether federal, state, county, city, municipal or
otherwise, including, without limitation, any instrumentality, division,
agency, body or department thereof).
"Piggyback Registration" shall have the meaning set forth in Section
9.3(a) hereof.
"Register", "registered" and "registration" shall refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act, and the declaration
or ordering by the Commission of effectiveness of such registration
statement or document.
"Registration Expenses" shall have the meaning set forth in Section
9.6(a) hereof.
"Restricted Common Stock" shall mean shares of Common Stock which are,
or which upon their issuance on the exercise of this Warrant would be,
evidenced by a certificate bearing the restrictive legend set forth in
Section 8.2(a) hereof.
"Securities Act" shall mean the Securities Act of 1933, as amended, 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.
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"Selling Holders" shall mean, with respect to a specified registration
under Section 9 hereof, WS Holders whose Registrable Securities are
included in such registration.
"Series A Warrants" shall mean all of the Series A Warrants to Purchase
Common Stock of Norand Corporation, issued concurrently with, and having
the same terms (other than the number of shares purchasable upon the
exercise thereof) as, this Warrant.
"Series B Warrants" shall mean all of the Series B Warrants to Purchase
Common Stock of Norand Corporation issued concurrently with this Warrant.
"Settlement Stock" shall mean the shares of Common Stock contemplated
to be issued in settlement of the pending shareholders' claims against the
Company with respect to the litigation styled In re Norand Corporation
Securities Litigation, Master File No. C95-323, pending in the United
States District Court for the Northern District of Iowa, Cedar Rapids
Division.
"Share Withholding Option" has the meaning set forth in Section 2.1(c)
hereof.
"Shelf Registration" shall have the meaning set forth in Section 9.2(a)
hereof.
"Stock Purchase Rights" shall mean any options, warrants or other
securities or rights to subscribe to or exercisable for the purchase of
shares of Common Stock or Convertible Securities, whether or not
immediately exercisable, other than the options, warrants or other rights
described in Schedule A hereto.
"Subsequent Issuance" shall mean any sale or issuance by the Company of
Common Stock, Convertible Securities or Stock Purchase Rights after the
Original Issue Date other than:
(i) Any issuance of Warrant Stock upon exercise of the
Warrants and any issuance of Common Stock, Convertible Securities or
Stock Purchase Rights (and
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any issuance of Common Stock pursuant to the conversion,
exchange or exercise of any such Convertible Securities or Stock
Purchase Rights) deemed to have been issued as of the Original Issue
Date pursuant to the definition of Fully Diluted Outstanding.
(ii) Any issuance of Common Stock pursuant to the exercise of
the options and warrants described in Schedule A hereto, provided,
however, that the exercise price of any such option or warrant (other
than warrants granted to ▇▇▇ ▇▇▇▇ and Associates and to ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ for up to the respective number of shares set forth on Schedule
A) granted or issued after the Original Issue Date shall not be less
than the "daily market price" (as that term is defined in the
definition of Current Market Price) of the Common Stock on the date of
grant or issue of the option or warrant.
(iii) The issuance of the Settlement Stock.
(iv) The issuance of Common Stock or Convertible Securities
directly related to the Company's receipt of Equity if, and only if,
the aggregate Equity actually received by the Company between the
Original Issue Date and August 31, 1997 equals or exceeds $20 million
(otherwise, after August 31, 1997, all such issuances, both prior to
and after August 31, 1996, shall be considered a Subsequent Issuance
for purposes of Section 4 hereof).
(v) Any other issuance of Common Stock, Convertible Securities
or Stock Purchase Rights with respect to which the Majority Warrant
Holders shall have waived application of the provisions of Section 4
below.
"Subsidiary" means any corporation or association (a) more than 50% (by
number of votes) of the voting stock of which is at the time owned by the
Company or by one or more Subsidiaries or by the Company and one or more
Subsidiaries, or any other business entity in which the Company or one or
more Subsidiaries or the Company and one or more Subsidiaries own more than
a 50% interest either in the
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profits or capital of such business entity or (b) whose net earnings, or
portions thereof, are consolidated with the net earnings of the Company
and are recorded on the books of the Company for financial reporting
purposes in accordance with GAAP.
"Transfer" shall mean any disposition of any Warrant or Warrant Stock
or of any interest in either thereof, which would constitute a "sale"
thereof within the meaning of the Securities Act.
"Triggering Event" shall mean the repayment in full of all indebtedness
under the Credit Agreement.
"Violation" has the meaning set forth in Section 9.7(a) hereof.
"Warrant Price" shall mean an amount equal to (i) the number of shares
of Common Stock being purchased upon exercise of this Warrant pursuant to
Section 2.1 hereof, multiplied by (ii) the Exercise Price as of the date of
such exercise.
"Warrants" shall mean the Original Warrants and all warrants issued
upon transfer, division or combination of, or in substitution for, such
Original Warrants or any other such Warrant. All Warrants shall at all
times be identical as to terms and conditions and date, except as to the
number of shares of Common Stock for which they may be exercised.
"Warrant Stock" generally shall mean the shares of Common Stock issued,
issuable or both (as the context may require) upon the exercise of Warrants
until such time as such shares of Common Stock have either been (i)
Transferred in a public offering pursuant to a registration statement filed
under the Securities Act or (ii) Transferred in a transaction exempt from
the registration and prospectus delivery requirements of the Securities Act
under Section 4(1) thereof with all transfer restrictions and restrictive
legends with respect to such Common Stock being removed in connection with
such transaction. "Warrant Stock", for the purposes of Section 9 hereof,
shall have the meaning set forth in Section 9.1(b) hereof.
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"▇▇ ▇▇▇▇▇▇" shall have the meaning set forth in Section 9.1(a) hereof.
2. EXERCISE OF WARRANT
2.1. Manner of Exercise. (a) From and after May 31, 1997 and
until 5:00 P.M., Chicago time, on the Expiration Date, the Holder of this
Warrant may from time to time exercise this Warrant, on any Business Day, for
all or any part of the number of shares of Common Stock purchasable hereunder
(as determined pursuant to Section 2.2 below). In order to exercise this
Warrant, in whole or in part, the Holder shall (i) deliver to the Company at
the Designated Office a written notice of the Holder's election to exercise
this Warrant (an "Exercise Notice"), which Exercise Notice shall be irrevocable
and specify the number of shares of Common Stock to be purchased, together with
this Warrant and (ii) pay to the Company the Warrant Price (the date on which
both such delivery and payment shall have first taken place being hereinafter
sometimes referred to as the "Exercise Date"). Such Exercise Notice shall be
in the form of the subscription form appearing at the end of this Warrant as
Annex A, duly executed by the Holder or its duly authorized agent or attorney.
(b) Upon receipt of such Exercise Notice, Warrant and payment, the
Company shall, as promptly as practicable, and in any event within five
Business Days thereafter, execute (or cause to be executed) and deliver (or
cause to be delivered) to the Holder a certificate or certificates representing
the aggregate number of full shares of Common Stock issuable upon such
exercise, together with cash in lieu of any fraction of a share, as hereafter
provided. The stock certificate or certificates so delivered shall be, to the
extent possible, in such denomination or denominations as the exercising Holder
shall reasonably request in the Exercise Notice and shall be registered in the
name of the Holder or such other name as shall be designated in the Exercise
Notice. This Warrant shall be deemed to have been exercised and such
certificate or certificates shall be deemed to have been issued, and the Holder
or any other Person so designated to be named therein shall be deemed to have
become a holder of record of such shares for all purposes, as of the Exercise
Date.
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(c) Payment of the Warrant Price shall be made at the option of the
Holder by one or more of the following methods: (i) by delivery of a certified
or official bank check in the amount of such Warrant Price, (ii) by instructing
the Company to withhold a number of shares of Warrant Stock then issuable upon
exercise of this Warrant with an aggregate Current Market Price equal to such
Warrant Price (the "Share Withholding Option"), (iii) by surrendering to the
Company shares of Common Stock previously acquired by the Holder with an
aggregate Current Market Price equal to such Warrant Price or(iv) by delivery
of a Note, duly endorsed by or accompanied by appropriate instruments of
transfer duly executed by the Holder or by the Holder's attorney duly
authorized in writing. In the event of any withholding of Warrant Stock or
surrender of Common Stock pursuant to clause (ii) or (iii) above where the
number of shares whose Current Market Price is equal to the Warrant Price is
not a whole number, the number of shares withheld by or surrendered to the
Company shall be rounded up to the nearest whole share and the Company shall
make a cash payment to the Holder based on the incremental fraction of a share
being so withheld by or surrendered to the Company in an amount determined in
accordance with Section 2.3 hereof. For the purpose of making payment of the
Warrant Price, any Note surrendered to the Company shall be deemed to have a
value equal to 100% of the principal amount thereof plus any interest accrued
but unpaid thereon. If the Holder delivers a Note with a deemed value that
exceeds the Warrant Price, the Company shall reissue to the Holder a new Note
identical in all respects to the surrendered Note except that the principal
amount of such new Note shall be equal to the principal amount that, together
with any interest accrued but unpaid thereon, is equal to the deemed value of
the surrendered Note less the Warrant Price.
(d) If this Warrant shall have been exercised in part, the Company
shall, at the time of delivery of the certificate or certificates representing
the shares of Common Stock being issued, deliver to the Holder a new Warrant
evidencing the rights of the Holder to purchase the unpurchased shares of Common
Stock called for by this Warrant. Such new Warrant shall in all other respects
be identical with this Warrant.
2.2. Payment of Transfer Taxes. All shares of Common Stock issuable
upon the exercise of this Warrant pursuant to the terms hereof shall be validly
issued, fully paid and nonassess-
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able, issued without violation of any preemptive rights and free and clear of
all Liens (other than any created by actions of the Holder). The Company shall
pay all expenses in connection with, and all taxes and other governmental
charges that may be imposed with respect to, the issue or delivery thereof,
unless such tax or charge is imposed by law upon the Holder, in which case such
taxes or charges shall be paid by the Holder and the Company shall reimburse
the Holder therefor on an After-Tax Basis.
2.3. Fractional Shares. The Company shall not be required to issue a
fractional share of Common Stock upon exercise of any Warrant. As to any
fraction of a share that the Holder of one or more Warrants, the rights under
which are exercised in the same transaction, would otherwise be entitled to
purchase upon such exercise, the Company shall pay a cash adjustment in respect
of such final fraction in an amount equal to the same fraction of the Current
Market Price of one share of Common Stock on the Exercise Date, if the Common
Stock is then publicly traded.
2.4. Continued Validity and Application. (a) A Holder of shares of
Warrant Stock issued upon the exercise of this Warrant, in whole or in part,
including any transferee of such shares (other than a transferee in whose hands
such shares no longer constitute Warrant Stock as defined herein), shall
continue, with respect to such shares, to be entitled to all rights and to be
subject to all obligations that are applicable to such Holder by the terms of
this Warrant under Section 9 hereof. The Company shall, at the time of any
exercise of this Warrant or any transfer of Warrant Stock, upon the request
of the Holder of the shares of Warrant Stock issued in connection with such
exercise or transfer, acknowledge in writing, in a form reasonably satisfactory
to such Holder, its continuing obligation to afford to such Holder such rights
referred to in this Section 2.4; provided, however, that if such Holder shall
fail to make any such request, such failure shall not affect the continuing
obligation of the Company to afford to such Holder all such rights.
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2.5. Limitation on Regulated Holder's Exercise. Notwithstanding
anything in this Warrant to the contrary, the Holder of this Warrant, if
subject to the Bank Holding Company Act or any provision of the ▇▇▇▇▇-▇▇▇▇▇▇▇▇
Act, may exercise this Warrant only if the Notice of Exercise is accompanied by
an Opinion of Counsel of such Holder to the effect that, as of the date of
delivery of such opinion, no federal or state regulatory clearances are
required for such Holder to exercise this Warrant or, in the event any such
federal or state regulatory clearances are required prior to the exercise of
this Warrant, to the effect that all such clearances have been obtained or, if
not then obtained, that no statute or regulation or regulatory policy or
guidelines known to such counsel would by their terms preclude the obtaining of
such clearances or make it unlikely that such clearances would be obtained or
make it likely that such clearances would, if obtained, contain material
conditions adverse to such Holder. In the event that federal or state
regulatory clearances are required prior to the exercise of this Warrant by the
Holder hereof, the Company shall reasonably cooperate with such Holder in
providing such information to any regulatory agency as such agency may
reasonably require. In the event any such regulatory clearance is withheld or
denied, such Holder may continue to hold this Warrant until its expiration or
may sell or otherwise transfer this Warrant in accordance with the terms
hereof.
3. TRANSFER, DIVISION AND COMBINATION
3.1. Transfer. Subject to compliance with Section 8 hereof, each
transfer of this Warrant and all rights hereunder, in whole or in part, shall
be registered on the books of the Company to be maintained for such purpose,
upon surrender of this Warrant at the Designated Office, together with a
written assignment of this Warrant in the form of Annex B hereto duly executed
by the Holder or its agent or attorney. Upon such surrender and delivery, the
Company shall, subject to Section 8, execute and deliver a new Warrant or
Warrants in the name of the assignee or assignees and in the denominations
specified in such instrument of assignment, and shall issue to the assignor a
new Warrant evidencing the portion of this Warrant not so assigned and this
Warrant shall promptly be canceled. A Warrant, if properly assigned in
compliance with Section 8, may be exercised by the new Holder for the purchase
of shares of Common Stock without having a new Warrant issued.
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3.2. Division and Combination. Subject to compliance with the
applicable provisions of this Warrant, this Warrant may be divided or combined
with other Warrants upon presentation hereof at the Designated Office, together
with a written notice specifying the names and denominations in which new
Warrants are to be issued, signed by the Holder or its agent or attorney.
Subject to compliance with the applicable provisions of this Warrant as to any
transfer which may be involved in such division or combination, the Company
shall execute and deliver a new Warrant or Warrants in exchange for the Warrant
or Warrants to be divided or combined in accordance with such notice.
3.3. Expenses. The Company shall prepare, issue and deliver at its
own expense any new Warrant or Warrants required to be issued under this
Section 3.
3.4. Maintenance of Books. The Company agrees to maintain, at the
Designated Office, books for the registration and transfer of the Warrants.
4. ANTIDILUTION PROVISIONS
The number of shares of Common Stock for which this Warrant is
exercisable and the Exercise Price shall be subject to adjustment from time
to time as set forth in this Section 4.
4.1. Stock Dividends, Subdivisions and Combinations. If at any time
the Company shall:
(i) take a record of the holders of its Common Stock for the purpose of
entitling them to receive a dividend payable in, or other distribution of,
additional shares of Common Stock,
(ii) subdivide its outstanding shares of Common Stock into a larger
number of shares of such Common Stock, or
(iii) combine its outstanding shares of Common Stock into a smaller
number of shares of such Common Stock,
then the Exercise Price shall be adjusted to equal the product of the Exercise
Price in effect immediately prior to such event multiplied by a fraction the
numerator of which is equal to the
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number of shares of Common Stock Outstanding immediately prior to the
adjustment and the denominator of which is equal to the number of shares of
Common Stock Outstanding immediately after such adjustment.
4.2. Issuance of Additional Shares of Common Stock. (a) If at any
time the Company shall issue or sell any shares of Common Stock in a Subsequent
Issuance for a consideration per share that is less than the Exercise Price in
effect immediately prior to such issuance or sale, then, forthwith upon such
issuance or sale, the Exercise Price shall be reduced to a price calculated by
dividing (1) an amount equal to the sum of (x) the number of shares of Common
Stock Outstanding immediately prior to such Subsequent Issuance multiplied by
the then existing Exercise Price, plus (y) the aggregate consideration
(determined in accordance with the provisions of Section 4.6 hereof), if any,
received by the Company in connection with such Subsequent Issuance, by (2) the
total number of shares of Common Stock Outstanding immediately after such
Subsequent Issuance.
(b) The provisions of this Section 4.2 shall not apply to (i) any
issuance of Common Stock for which an adjustment is provided for under Section
4.1 or (ii) any issuance or sale of Common Stock pursuant to the exercise of
any Stock Purchase Rights or Convertible Securities to the extent that an
adjustment shall have been previously made hereunder in connection with the
issuance of such Stock Purchase Rights or Convertible Securities pursuant to
the provisions of Section 4.3 hereof.
4.3. Issuances of Stock Purchase Rights and Convertible Securities.
(a) In the event that the Company shall at any time issue, sell or grant any
Stock Purchase Rights to any Person in a Subsequent Issuance, then, for the
purpose of Section 4.2 above, the Company shall be deemed to have issued at
that time a number of shares of Common Stock equal to the maximum number of
shares of Common Stock (without giving effect to any antidilution provisions in
such Stock Purchase Rights) that are or may become issuable upon exercise of
such Stock Purchase Rights (or upon exercise of any Convertible Securities
issuable upon exercise of such Stock Purchase Rights) for a consideration per
share equal to (i) the aggregate consideration per share (determined in
accordance with the provisions of Section 4.6 hereof) received by the Company
in connection with the issuance, sale or grant of such Stock Purchase Rights
plus (ii) the minimum
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amount of such consideration per share receivable by the
Company in connection with the exercise of such Stock Purchase Rights (and the
exercise of any Convertible Securities issuable upon exercise of such Stock
Purchase Rights).
(b) In the event that the Company shall at any time issue or sell any
Convertible Securities to any Person in a Subsequent Issuance, then, for the
purposes of Section 4.2 above, the Company shall be deemed to have issued at
that time a number of shares of Common Stock equal to the maximum number of
shares of Common Stock that are or may become issuable upon the exercise of the
conversion or exchange rights associated with such Convertible Securities for a
consideration per share equal to (i) the aggregate consideration per share
(determined in accordance with the provisions of Section 4.6 hereof) received
by the Company in connection with the issuance or sale of such Convertible
Securities plus (ii) the minimum amount of such consideration per share
receivable by the Company in connection with the exercise of such conversion or
exchange rights.
(c) If, at any time after any adjustment of the Exercise Price shall
have been made hereunder as the result of any issuance, sale or grant of any
Stock Purchase Rights or Convertible Securities, the maximum number of shares
issuable upon exercise of such Stock Purchase Rights or of the rights of
conversion or exchange associated with such Convertible Securities shall
increase, or the minimum amount of consideration per share receivable in
connection with such exercise shall decrease, whether by operation of any
antidilution rights pertaining to such Stock Purchase Rights or Convertible
Securities, by agreement of the parties or otherwise, the Exercise Price then
in effect shall first be readjusted to eliminate the effects of the original
issuance, sale or grant of such Stock Purchase Rights or Convertible Securities
on such Exercise Price and then readjusted as if such Stock Purchase Rights or
Convertible Securities had been issued on the effective date of such increase
in number of shares or decrease in consideration, but only if the effect of
such two-step readjustment is to reduce the Exercise Price below the Exercise
Price in effect immediately prior to such increase or decrease.
(d) If, at any time after any adjustment of the Exercise Price shall
have been made hereunder as the result of any issuance, sale or grant of any
Stock Purchase Rights or
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Convertible Securities, any of such Stock Purchase Rights or the rights of
conversion or exchange associated with such Convertible Securities shall expire
by their terms or any of such Stock Purchase Rights or Convertible Securities
shall be repurchased by the Company or a Subsidiary thereof for a consideration
per underlying share of Common Stock not exceeding the amount of such
consideration received by the Company in connection with the issuance, sale or
grant of such Stock Purchase Rights or Convertible Securities, the Exercise
Price then in effect shall forthwith be increased to the Exercise Price that
would have been in effect if such expiring Stock Purchase Rights or rights of
conversion or exchange or such repurchased Stock Purchase Rights or Convertible
Securities had never been issued. Similarly, if at any time after any such
adjustment of the Exercise Price shall have been made pursuant to Section 4.2
(i) any additional consideration is received or becomes receivable by the
Company in connection with the issuance or exercise of such Stock Purchase
Rights or Convertible Securities or (ii) there is a reduction in the conversion
ratio applicable to such Convertible Securities so that fewer shares of Common
Stock will be issuable upon the conversion or exchange thereof or there is a
decrease in the number of shares of Common Stock issuable upon exercise of such
Stock Purchase Rights, the Exercise Price then in effect shall be forthwith
readjusted to the Exercise Price that would have been in effect had such
changes taken place at the time that such Stock Purchase Rights or Convertible
Securities were initially issued, granted or sold. In no event shall any
readjustment under this Section 4.3(d) affect the validity of any shares of
Warrant Stock issued upon any exercise of this Warrant prior to such
readjustment, nor shall any such readjustment have the effect of increasing the
Exercise Price above the Exercise Price that would have been in effect if the
related Stock Purchase Rights or Convertible Securities had never been issued.
4.4. Adjustment of Number of Shares Purchasable. Upon any adjustment
of the Exercise Price as provided in Section 4.1, 4.2 or 4.3 hereof, the Holder
hereof shall thereafter be entitled to purchase upon the exercise of this
Warrant, at the Exercise Price resulting from such adjustment, the number of
shares of Common Stock (calculated to the nearest 1/100th of a share) obtained
by multiplying the Exercise Price in effect immediately prior to such
adjustment by the number of shares of Common Stock issuable on the exercise
hereof immediately prior to such
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adjustment and dividing the product thereof by the Exercise Price resulting
from such adjustment.
4.5. Reorganization, Reclassification, Merger, Consolidation or
Disposition of Assets. In case the Company shall reorganize its capital,
reclassify its capital stock, consolidate or merge with or into another
corporation (where the Company is not the surviving corporation or where there
is any change whatsoever in, or distribution with respect to, the Outstanding
Common Stock of the Company), or sell, transfer or otherwise dispose of all or
substantially all of its property, assets or business to another corporation
and, pursuant to the terms of such reorganization, reclassification, merger,
consolidation or disposition of assets, (i) shares of common stock of the
successor or acquiring corporation or of the Company (if it is the surviving
corporation) or (ii) any cash, shares of stock or other securities or property
of any nature whatsoever (including warrants or other subscription or purchase
rights) in addition to or in lieu of common stock of the successor or acquiring
corporation ("Other Property") are to be received by or distributed to the
holders of Common Stock of the Company who are holders immediately prior to
such transaction, then the Holder of this Warrant shall have the right
thereafter to receive, upon exercise of this Warrant, the number of shares of
common stock of the successor or acquiring corporation or of the Company, if it
is the surviving corporation, and Other Property receivable upon or as a result
of such reorganization, reclassification, merger, consolidation or disposition
of assets by a holder of the number of shares of Common Stock for which this
Warrant is exercisable immediately prior to such event. In such event, the
aggregate Exercise Price otherwise payable for the shares of Common Stock
issuable upon exercise of this Warrant shall be allocated among the shares of
common stock and Other Property receivable as a result of such reorganization,
reclassification, merger, consolidation or disposition of assets in proportion
to the respective fair market values of such shares of common stock and Other
Property as determined in good faith by the Board of Directors of the Company.
In case of any such reorganization, reclassification, merger, consolidation or
disposition of assets, the successor or acquiring corporation (if other than
the Company) shall expressly assume the due and punctual observance and
performance of each and every covenant and condition of this Warrant to be
performed and observed by the Company and all the obligations and liabilities
hereunder, subject to such modi-
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fications as may be reasonably deemed appropriate (as determined by resolution
of the Board of Directors of the Company) in order to provide for adjustments
of any shares of the common stock of such successor or acquiring corporation
for which this Warrant thus becomes exercisable, which modifications shall be
as equivalent as practicable to the adjustments provided for in this Section 4.
For purposes of this Section 4.5, "common stock of the successor or acquiring
corporation" shall include stock of such corporation of any class that is not
preferred as to dividends or assets over any other class of stock of such
corporation and that is not subject to redemption and shall also include any
evidences of indebtedness, shares of stock or other securities that are
convertible into or exchangeable for any such stock, either immediately or upon
the arrival of a specified date or the happening of a specified event and any
warrants or other rights to subscribe for or purchase any such stock. The
foregoing provisions of this Section 4.5 shall similarly apply to successive
reorganizations, reclassifications, mergers, consolidations or disposition of
assets.
4.6. Determination of Consideration. For purposes of Sections 4.2,
4.3 and 4.4 hereof, the consideration received and/or receivable by the Company
in connection with the issuance, sale, grant or exercise of additional shares
of Common Stock, Stock Purchase Rights or Convertible Securities, irrespective
of the accounting treatment of such consideration, shall be valued as follows:
(1) Cash Payment. In the case of cash, the net amount received by
the Company after deduction of any accrued interest or dividends, expenses
incurred or any underwriting commissions or concessions paid or allowed by
the Company.
(2) Securities or Other Property. In the case of securities or other
property, the fair market value thereof as of the date immediately
preceding such issuance, sale, grant or exercise as determined in good
faith by the Board of Directors of the Company.
(3) Allocation Related to Common Stock. In the event shares of
Common Stock are issued or sold together with other securities or other
assets of the Company for a consideration which covers both, the
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consideration received (computed as provided in (1) and (2) above) shall be
allocable to such shares of Common Stock as determined in good faith by the
Board of Directors of the Company.
(4) Allocation Related to Stock Purchase Rights and
Convertible Securities. In case any Stock Purchase Rights or Convertible
Securities shall be issued or sold together with other securities or other
assets of the Company, together comprising one integral transaction in
which no specific consideration is allocated to the Stock Purchase Rights
or Convertible Securities, the consideration allocable to such Stock
Purchase Rights or Convertible Securities shall be determined in good faith
by the Board of Directors of the Company.
(5) Dividends in Securities. In case the Company shall declare a
dividend or make any other distribution upon any stock of the Company
payable in either case in Common Stock or Convertible Securities, such
Common Stock or Convertible Securities, as the case may be, issuable in
payment of such dividend or distribution shall be deemed to have been
issued or sold without consideration.
(6) Merger, Consolidation or Sale of Assets. In case any shares of
Common Stock, Stock Purchase Rights or Convertible Securities shall be
issued in connection with any merger or consolidation in which the Company
is the surviving corporation, the amount of consideration therefor shall be
deemed to be the fair value on the date of issuance of such security of
such portion of the assets and business of the non-surviving corporation
attributable to such Common Stock, Stock Purchase Rights or Convertible
Securities, as is determined in good faith by the Company's Board of
Directors.
(7) Challenge to Good Faith Determination. Whenever the Board of
Directors of the Company shall be required to make a determination in good
faith of the fair value of any item under this Section 4, such
determination may be challenged in good faith by the
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Majority Warrant Holders, and any dispute shall be resolved by an
investment banking or appraisal firm of recognized national standing
selected by the Company and reasonably acceptable to the Majority Warrant
Holders and whose decision shall be binding on the Company and all holders
of Warrants. The fees and expenses of such firm shall be paid by the party
or parties whose position is not chosen by such firm.
4.7. Other Dilutive Events. In case any event shall occur as to which
the other provisions of this Section 4 are not strictly applicable but as to
which 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 hereof (including, without limitation, the issuance of securities
other than Common Stock which have the right to participate in distributions to
the holders of Common Stock, the granting of "phantom stock" rights or "stock
appreciation rights" or the repurchase of outstanding shares of Common Stock,
Convertible Securities or Stock Purchase Rights for a purchase price exceeding
the fair market value thereof), then, in each such case, the Majority Warrant
Holders may select an independent investment banking firm of nationally
recognized standing and reasonably acceptable to the Company to make a
determination as to the adjustment, if any, required to be made on a basis
consistent with the essential intent and principles established herein as a
result of such event in order to preserve the purchase rights represented by
the Warrants. If the investment bank selected by the Majority Warrant Holders
is not reasonably acceptable to the Company, and the Company and the Majority
Warrant Holders cannot agree on a mutually acceptable investment bank, then the
Company and the Majority Warrant Holders shall each choose one such investment
bank and the respective chosen firms shall jointly select a third investment
bank, which shall make the determination. The Company shall pay the costs and
fees of each such investment bank (including any such investment bank selected
by the Majority Warrant Holders), and the decision of the investment bank
making such determination shall be final and binding on the Company and all
affected holders of Warrants or Warrant Stock. Promptly after receipt of the
opinion of such investment bank as to any such required adjustments, the
Company shall take any actions necessary to implement same.
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4.8. Other Provisions Applicable to Adjustments Under this Section.
The following provisions shall be applicable to the adjustments provided for
pursuant to this Section 4:
(a) When Adjustments To Be Made. The adjustments required by this
Section 4 shall be made whenever and as often as any specified event
requiring such an adjustment shall occur. For the purpose of any such
adjustment, any specified event shall be deemed to have occurred at the
close of business on the date of its occurrence.
(b) Record Date. In case the Company shall take a record of the
holders of the Common Stock for the purpose of entitling them (i) to
receive a dividend or other distribution payable in Common Stock,
Convertible Securities or Stock Purchase Rights or (ii) to subscribe for
or purchase Common Stock, Convertible Securities or Stock Purchase Rights,
then all references in this Section 4 to the date of the issuance or sale
of such shares of Common Stock, Convertible Securities or Stock Purchase
Rights shall be deemed to be references to such record date.
(c) Fractional Interests. In computing adjustments under this Section
4, fractional interests in Common Stock shall be taken into account to the
nearest 1/100th of a share.
(d) When Adjustment Not Required. If the Company shall take a record
of the holders of its Common Stock for the purpose of entitling them to
receive a dividend or distribution to which the provisions of Section 4.1
would apply, but shall, thereafter and before the distribution to
stockholders thereof, legally abandon its plan to pay or deliver such
dividend or distribution, then thereafter no adjustment shall be required
by reason of the taking of such record and any such adjustment previously
made in respect thereof shall be rescinded and annulled.
(e) Maximum Exercise Price. Except as provided in Section 4.1 above,
at no time shall the Exercise Price per share of Common Stock exceed the
amount set forth in the first paragraph of the preamble of this Warrant.
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(f) Certain Limitations. Notwithstanding anything herein to the
contrary, the Company agrees not to enter into any transaction that, by
reason of any adjustment under Section 4.1, 4.2 or 4.3 above, would cause
the Exercise Price to be less than the par value of the Common Stock, if
any, unless the Company first reduces the par value of the Common Stock
to be less than the Exercise Price that would result from such transaction.
(g) Notice of Adjustments. Whenever the number of shares of Common
Stock for which this Warrant is exercisable or the Exercise Price shall be
adjusted pursuant to this Section 4, the Company shall forthwith prepare a
certificate to be executed by the President or chief financial officer of
the Company setting forth, in reasonable detail, the event requiring the
adjustment and the method by which such adjustment was calculated,
specifying the number of shares of Common Stock for which this Warrant is
exercisable and (if such adjustment was made pursuant to Section 4.5)
describing the number and kind of any other shares of stock or Other
Property for which this Warrant is exercisable, and any related change in
the Exercise Price, after giving effect to such adjustment or change. The
Company shall promptly cause a signed copy of such certificate to be
delivered to each Holder in accordance with Section 15.2. The Company
shall keep at its principal office or at the Designated Office, if
different, copies of all such certificates and cause the same to be
available for inspection at said office during normal business hours by any
Holder or any prospective transferee of a Warrant designated by a Holder
thereof.
(h) Independent Application. Except as otherwise provided herein, all
subsections of this Section 4 are intended to operate independently of one
another (but without duplication). If an event occurs that requires the
application of more than one subsection, all applicable subsections shall
be given independent effect without duplication.
5. NO IMPAIRMENT
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The Company shall not by any action, including, without limitation,
amending its charter documents or through any reorganization, reclassification,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other similar 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 actions as may be necessary or reasonably appropriate to
protect the rights of the Holder against impairment. Without limiting the
generality of the foregoing, the Company shall take all such action as may be
necessary or reasonably appropriate in order that the Company may validly and
legally issue fully paid and nonassessable shares of Common Stock upon the
exercise of this Warrant, free and clear of all Liens, and shall use all
commercially reasonably efforts to obtain all such authorizations, exemptions
or consents from any public regulatory body having jurisdiction thereof as may
be necessary to enable the Company to perform its obligations under this
Warrant.
6. RESERVATION AND AUTHORIZATION OF COMMON STOCK
From and after the Original Issue Date, the Company shall at all
times reserve and keep available for issuance upon the exercise of the Warrants
such number of its authorized but unissued shares of Common Stock as will be
sufficient to permit the exercise in full of all outstanding Warrants. All
shares of Common Stock issuable pursuant to the terms hereof, when issued upon
exercise of this Warrant with payment therefor in accordance with the terms
hereof, shall be duly and validly issued and fully paid and nonassessable, not
subject to preemptive rights and shall be free and clear of all Liens.
7. NOTICE OF CORPORATE ACTIONS; TAKING OF RECORD; TRANSFER BOOKS
7.1. Notices of Corporate Actions. In the event of: (a) 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 or other disposition of all or
substantially all the assets of the Company to another Person or
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(b) any amendment of the Certificate of Incorporation of the Company, the
Company shall mail to each Holder of a Warrant in accordance with the
provisions of Section 14.2 hereof a notice specifying the date or expected date
on which any such reorganization, reclassification, recapitalization,
consolidation, merger, transfer or disposition is to take place, the time, if
any such time is to be fixed, as of which the holders of record of Common Stock
shall be entitled to exchange their shares of Common Stock for the securities
or Other Property deliverable upon such reorganization, reclassification,
recapitalization, consolidation, merger, transfer or disposition, and a
description in reasonable detail of the transaction. Such notice shall be
mailed to the extent practicable at least thirty, but not more than ninety,
days prior to the date therein specified; provided, that, in no event shall the
Company be required to give the Holders notice of material non-public
information prior to the time such information is made available to the holders
of its Common Stock. In the event that the Company at any time sends any other
notice to the holders of its Common Stock, it shall concurrently send a copy of
such notice to each Holder of a Warrant.
7.2 Closing of Transfer Books. The Company shall not at any time,
exceptupon dissolution, liquidation or winding up of the Company, close its
stock transfer books or Warrant transfer books so as to result in preventing or
delaying the exercise or transfer of any Warrant.
8. TRANSFER RESTRICTIONS
The Holder, by acceptance of this Warrant, agrees to be bound by the
provisions of this Section 8.
8.1. Restrictions on Transfers. Neither this Warrant nor any shares
of Restricted Common Stock issued upon the exercise hereof shall be Transferred
other than pursuant to an effective registration statement under the Securities
Act or an exemption from the registration provisions thereof. No Transfer of
this Warrant or any such shares of Restricted Stock, other than pursuant to
such an effective registration statement, shall be valid or effective unless
(a) the holder of the securities proposed to be transferred shall have
delivered to the Company either a no-action letter from the Commission or an
Opinion of
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Counsel to the effect that such proposed Transfer is exempt from the
registration requirements of the Securities Act or (b) such Transfer is being
made pursuant to Rule 144 or Rule 144A under the Securities Act and such holder
shall have delivered to the Company a certificate setting forth the basis for
applying such Rule to the proposed Transfer. Each certificate, if any,
evidencing such shares of Restricted Common Stock issued upon any such
Transfer, other than in a public offering pursuant to an effective registration
statement, shall bear the restrictive legend set forth in Section 8.2(a), and
each Warrant issued upon such Transfer shall bear the restrictive legend set
forth in Section 8.2(b), unless the Holder delivers to the Company an Opinion
of Counsel to the effect that such legend is not required for the purposes of
compliance with the Securities Act. Holders of the Warrants or the Restricted
Common Stock, as the case may be, shall not be entitled to Transfer such
Warrants or such Restricted Common Stock except in accordance with this Section
8.1.
8.2. Restrictive Legends. (a) Except as otherwise provided in this
Section 8, each certificate for Warrant Stock initially issued upon the
exercise of this Warrant, and each certificate for Warrant Stock issued to any
subsequent transferee of any such certificate, shall be stamped or otherwise
imprinted with two legends in substantially the following forms:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE
SECURITIES LAW. NO TRANSFER OF THE SHARES REPRESENTED BY THIS CERTIFICATE
SHALL BE VALID OR EFFECTIVE UNLESS (A) SUCH TRANSFER IS MADE PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR (B) THE HOLDER OF THE
SECURITIES PROPOSED TO BE TRANSFERRED SHALL HAVE DELIVERED TO THE COMPANY
AN OPINION OF COUNSEL EXPERIENCED IN SECURITIES MATTERS AND REASONABLY
ACCEPTABLE TO THE COMPANY TO THE EFFECT THAT SUCH PROPOSED TRANSFER IS
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE ACT OR (C) SUCH TRANSFER
IS PURSUANT TO RULE 144 OR RULE 144A UNDER THE ACT AND SUCH HOLDER(S) SHALL
HAVE DELIVERED TO THE COMPANY A CERTIFICATE SETTING FORTH THE BASIS FOR
APPLYING SUCH RULE TO THE PROPOSED TRANSFER."
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"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE ENTITLED TO THE BENEFIT
OF AND ARE SUBJECT TO CERTAIN OBLIGATIONS SET FORTH IN THE WARRANT PURSUANT
TO THE EXERCISE OF WHICH SUCH SHARES WERE ISSUED. A COPY OF SUCH WARRANT IS
AVAILABLE AT THE EXECUTIVE OFFICES OF THE COMPANY."
(b) Except as otherwise provided in this Section 8, each Warrant shall be
stamped or otherwise imprinted with a legend in substantially the following
form:
"NEITHER THE WARRANTS REPRESENTED BY THIS CERTIFICATE NOR ANY OF THE
SECURITIES ISSUABLE UPON EXERCISE THEREOF HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES
LAW. NO TRANSFER OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE OR OF THE
STOCK ISSUABLE UPON EXERCISE THEREOF SHALL BE VALID OR EFFECTIVE UNLESS (A)
SUCH TRANSFER IS MADE PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE ACT OR (B) THE HOLDER OF THE SECURITIES PROPOSED TO BE TRANSFERRED
SHALL HAVE DELIVERED TO THE COMPANY EITHER A NO-ACTION LETTER FROM THE
SECURITIES AND EXCHANGE COMMISSION OR AN OPINION OF COUNSEL EXPERIENCED IN
SECURITIES MATTERS AND REASONABLY ACCEPTABLE TO THE COMPANY TO THE EFFECT
THAT SUCH PROPOSED TRANSFER IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF
THE ACT OR (C) SUCH TRANSFER IS PURSUANT TO RULE 144 OR RULE 144A UNDER THE
ACT AND SUCH HOLDER SHALL HAVE DELIVERED TO THE COMPANY A CERTIFICATE
SETTING FORTH THE BASIS FOR APPLYING SUCH RULE TO THE PROPOSED TRANSFER."
8.3. Termination of Securities Law Restrictions. Notwithstanding the
foregoing provisions of this Section 8, the restrictions imposed by Section
8.1(b) upon the transferability of the Warrants and the Restricted Common Stock
and the legend requirements of Section 8.2 shall terminate as to any particular
Warrant or shares of Restricted Common Stock when the Company shall have
received from the Holder thereof an Opinion of Counsel to the effect that such
legend is not required in order to ensure compliance with the Securities Act.
Whenever the restrictions imposed by Sections 8.1(b) and 8.2 shall terminate as
to this Warrant, as hereinabove provided, the Holder hereof shall be entitled
to receive from the Company, at the expense of the
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Company, a new Warrant bearing the following legend in place of the
restrictive legend set forth hereon:
"THE RESTRICTIONS ON TRANSFERABILITY OF THE WITHIN WARRANT CONTAINED IN
SECTIONS 8.1(b) AND 8.2 HEREOF TERMINATED ON ______________, 19__, AND ARE
OF NO FURTHER FORCE AND EFFECT."
All Warrants issued upon registration of transfer, division or combination of,
or in substitution for, any Warrant or Warrants entitled to bear such legend
shall have a similar legend endorsed thereon. Wherever the restrictions
imposed by this Section shall terminate as to any share of Restricted Common
Stock, as hereinabove provided, the Holder thereof shall be entitled to receive
from the Company, at the Company's expense, a new certificate representing such
Common Stock not bearing the restrictive legend set forth in Section 8.2(a).
9. REGISTRATION RIGHTS
9.1. Certain Definitions. For the purposes of this Section 9:
(a) The Holders of Warrants and the Series B Warrants and the holders
of Warrant Stock (as defined in Section 9.1(b)) are collectively referred
to as "WS Holders".
(b) "Warrant Stock" shall deemed to include (i) the shares of Common
Stock issued, issuable or both (as the context may require) upon the
exercise of Warrants and the Series B Warrants until such time as such
shares of Common Stock have either been (a) Transferred in a public
offering pursuant to a registration statement filed under the Securities
Act or (b) Transferred in a transaction exempt from the registration and
prospectus delivery requirements of the Securities Act under Section 4(1)
thereof with all transfer restrictions and restrictive legends with respect
to such Common Stock being removed in connection with such transaction,(ii)
any other securities issued as (or issuable upon the conversion or exercise
of any warrant, right or other security which is issued as) a dividend or
other distribution with respect to, or in exchange by the Company generally
for, or in replacement by the Company generally
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of, any shares of Warrant Stock and (iii) any securities issued in
exchange for any such Warrant Stock in any merger or reorganization of the
Company, but in the cases of clauses (ii) and (iii) only so long as such
securities have not been registered and Transferred pursuant to the
Securities Act or Transferred in a transaction exempt from the registration
and prospectus delivery requirements of the Securities Act under Section
4(1) thereof so that all transfer restrictions and restrictive legends with
respect to such securities are removed in connection with such Transfer.
(c) Each ▇▇ ▇▇▇▇▇▇ shall be deemed to "hold", as of any specified
date, the aggregate of (i) the number of shares of Warrant Stock held by
such ▇▇ ▇▇▇▇▇▇ as of such date plus (ii) the number of shares of Warrant
Stock issuable upon exercise of any Warrants and Series B Warrants held by
such ▇▇ ▇▇▇▇▇▇ as of such date.
(d) The total number of shares of Warrant Stock deemed "outstanding"
as of a specified date will be equal to (i) the total number of shares of
Warrant Stock Outstanding as of such date plus (ii) the number of shares of
Warrant Stock issuable upon exercise of all outstanding Warrants and Series
B Warrants as of such date.
(e) "Registrable Securities" shall mean any Warrants, any Series B
Warrants and/or any shares of Warrant Stock.
9.2. Demand Registration. (a) In the event the Company receives at
any time after August 31, 1997 a written request from one or more WS Holders
holding in the aggregate at least seventy-six percent of the number of shares
of Warrant Stock then outstanding (the "Demanding Holders") that the Company
file a registration statement under the Securities Act for the sale or other
disposition of at least a majority of the Registrable Securities (a "Demand
Registration"), the Company shall promptly give written notice of such request
to each other ▇▇ ▇▇▇▇▇▇ and each such ▇▇ ▇▇▇▇▇▇ may elect, by giving written
notice of such election to the Company within ten (10) Business Days after
receipt of the Company's notice, to have some or all of the Registrable
Securities held by it included in such registration. At the option of the
Demanding Holders, such request may specify that the requested registration
will be for
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an offering on a delayed or continual basis pursuant to Rule 415 under the
Securities Act (a "Shelf Registration").
(b) Following receipt of such a request for a Demand Registration, the
Company shall:
(1) File the requested registration statement with the Commission as
promptly as practicable, and shall use all commercially reasonable efforts
to have the registration declared effective under the Securities Act as
soon as reasonably practicable, in each instance giving due regard to the
need to prepare and file current financial statements, conduct due
diligence and complete other actions that are reasonably necessary to
effect a registered public offering; and
(2) Use all commercially reasonable efforts to keep the such
registration statement Continuously Effective (x) if a Demand Registration,
for up to 90 days or until such earlier date as of which all Registrable
Securities covered by such registration statement shall have been disposed
of in the manner described in the registration statement, and (y) if a
Shelf Registration, for 270 days. Notwithstanding the foregoing, if for any
reason the effectiveness of a Demand Registration is suspended or postponed
as permitted by Subsection (d) below, the foregoing period shall be
extended by the aggregate number of days of such suspension or
postponement.
(c) The Company shall not be required to effect a registration of
Registrable Securities pursuant to a Demand Registration on more than one
occasion. For purposes of this Subsection (c), registration shall not be
deemed to have been effected (i) unless a registration statement with respect
thereto has become effective, (ii) if after such registration statement has
become effective, such registration or the related offer, sale or distribution
of Registrable Securities thereunder is interfered with by any stop order,
injunction or other order or requirement of the Commission or other
governmental agency or court for any reason not attributable to the Selling
Holders and such interference is not thereafter eliminated or (iii) if the
conditions to closing specified in the underwriting agreement, if any, entered
into in connection with such registration are not
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satisfied or waived, other than by reason of a failure on the part of the
Selling Holders. If the Company shall have complied with its obligations under
this Section 9, a right to demand a registration pursuant to this Section 9.2
shall be deemed to have been satisfied (i) if a Demand Registration other than
a Shelf Registration, upon the earlier of (x) the date as of which all of the
Registrable Securities included therein shall have been disposed of pursuant to
the registration statement and (y) the date as of which such Demand
Registration shall have been Continuously Effective for a period of 90 days,
and (ii) if a Shelf Registration, upon the effective date of a Shelf
Registration, provided no stop order or similar order, or proceedings for such
an order, is thereafter entered or initiated.
(d) The Company shall be entitled to postpone for up to 90 days the
filing of any Demand Registration statement otherwise required to be prepared
and filed pursuant to this Section 9.2 or suspend any such Demand Registration
for up to 90 days, if the Board of Directors of the Company determines, in its
good faith reasonable judgment that such registration and the Transfer of
Warrant Stock contemplated thereby would materially interfere with, or require
premature disclosure of, any financing, acquisition or reorganization involving
the Company or any of its wholly owned subsidiaries and the Company promptly
gives the Demanding Holders notice of such determination; provided, however,
that the Company shall not have postponed pursuant to this Subsection (d) the
filing of any other Demand Registration statement otherwise required to be
prepared and filed pursuant to this Section 9.2, or suspended any such Demand
Registration, during the 12 month period ended on the date of the relevant
request pursuant to Subsection (a) above and provided further, that the
Expiration Date shall be extended by the period of any such postponement or
suspension.
(e) A registration pursuant to this Section 9.2 shall be on such
appropriate registration form of the Commission available to the Company as
shall (i) be selected by the Company and be reasonably acceptable to the
Majority Selling Holders and (ii) permit the disposition of the Warrant Stock
in accordance with the intended method or methods of disposition specified in
the request made pursuant to Subsection (a) above. If any registration
pursuant to this Section 9.2 involves an underwritten offering (whether on a
"firm", "best efforts" or
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"all reasonable efforts" basis or otherwise), or an agented offering, the
Majority Selling Holders shall have the right to select the underwriter or
underwriters and manager or managers to administer such underwritten offering
or the placement agent or agents for such agented offering from among the
entities listed in Schedule B hereto (or any successors of any such entities),
it being understood that the Majority Selling Holders shall use commercially
reasonable efforts to select one or more of the first three listed entities
subject to arriving at reasonably acceptable terms and conditions for the
offering.
(f) The Company may elect to include shares of Common Stock to be sold
for its account in any such Demand Registration (including a Shelf
Registration); provided, however, if the managing underwriter shall advise the
Demanding Holders in writing (with a copy to the Company) that, in its opinion,
the number of shares of Common Stock requested to be included in such Demand
Registration would adversely affect such offering or the price to be realized
therefor, or the timing thereof, then the number of shares proposed to be
included in such Demand Registration by the Company shall be reduced, to such
number that the Demanding Holders are advised can be sold without such effect
in such Demand Registration.
9.3. Piggyback Registration. (a) If at any time the Company
proposes to register (including for this purpose a registration effected by
the Company for shareholders of the Company other than the WS Holders) equity
securities under the Securities Act in connection with the public offering
solely for cash on Form ▇-▇, ▇-▇ or S-3 (or any replacement or successor
forms), the Company shall promptly give each ▇▇ ▇▇▇▇▇▇ written notice of such
registration (a "Piggyback Registration"). Upon the written request of each ▇▇
▇▇▇▇▇▇ given within 20 days following the date of such notice, the Company
shall cause to be included in such registration statement and use its best
efforts to be registered under the Securities Act all the Registrable
Securities that each such ▇▇ ▇▇▇▇▇▇ shall have requested to be registered. The
Company shall have the absolute right to withdraw or cease to prepare or file
any registration statement for any offering referred to in this Section 9.3
without any obligation or liability to any ▇▇ ▇▇▇▇▇▇.
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(b) If the managing underwriter shall advise the Company in writing
(with a copy to each Selling Holder) that, in its opinion, the amount of
Registrable Securities requested to be included in such registration would
materially adversely affect such offering, or the timing thereof, then the
Company will include in such registration, to the extent of the amount and
class which the Company is so advised can be sold without such material adverse
effect in such offering: first, all securities proposed to be sold by the
Company for its own account; and second, the Warrant Stock requested to be
included in such registration by WS Holders and all other securities requested
to be included in such registration by Persons other than the Company and WS
Holders, the securities covered by this clause second to be included pro rata
based on the estimated gross proceeds from the sale thereof.
(c) Each ▇▇ ▇▇▇▇▇▇ shall be entitled to have its Registrable
Securities included in an unlimited number of Piggyback Registrations pursuant
to this Section 9.3.
9.4. Registration Procedures. Whenever required under Section 9.2 or
Section 9.3 hereof to effect the registration of any Registrable Securities,
the Company shall, as expeditiously as practicable:
(a) Prepare and file with the Commission a registration statement with
respect to such Warrant Stock and use the Company's best efforts to cause
such registration statement to become effective; provided, however, that
before filing a registration statement or prospectus or any amendments or
supplements thereto, including documents incorporated by reference after
the initial filing of the registration statement and prior to effectiveness
thereof, the Company shall furnish to one firm of counsel for the Selling
Holders (selected by Majority Selling Holders) copies of all such documents
in the form substantially as proposed to be filed with the Commission at
least four Business Days prior to filing for review and comment by such
counsel, which opportunity to comment shall include an absolute right to
control or contest disclosure if the applicable Selling Holder reasonably
believes that it may be subject to controlling person liability under
applicable securities laws with respect thereto.
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(b) Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to comply
with the provisions of the Securities Act and rules thereunder with respect
to the disposition of all securities covered by such registration
statement. If the registration is for an underwritten offering, the
Company shall amend the registration statement or supplement the prospectus
whenever required by the terms of the underwriting agreement entered into
pursuant to Section 9.4(e). Subject to Rule 415 under the Securities Act,
if the registration statement is a Shelf Registration, the Company shall
amend the registration statement or supplement the prospectus so that it
will remain current and in compliance with the requirements of the
Securities Act for 270 days or after its effective date, and if during such
period any event or development occurs as a result of which the
registration statement or prospectus contains a misstatement of a material
fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, the Company shall
promptly notify each Selling Holder, amend the registration statement or
supplement the prospectus so that each will thereafter comply with the
Securities Act and furnish to each Selling Holder of Registrable Securities
such amended or supplemented prospectus, which each such Holder shall
thereafter use in the Transfer of Warrant Stock covered by such
registration statement. Pending such amendment or supplement each such
Selling Holder shall cease making offers or Transfers of Registerable
Securities pursuant to the prior prospectus. In the event that any
Registrable Securities included in a registration statement subject to, or
required by, this Warrant remain unsold at the end of the period during
which the Company is obligated to use its best efforts to maintain the
effectiveness of such registration statement, the Company may file a
post-effective amendment to the registration statement for the purpose of
removing such Registrable Securities from registered status.
(c) Furnish to each Selling Holder of Registrable Securities, without
charge, such number of copies of the registration statement, any
pre-effective or post-effective amendment thereto, the prospectus,
including each
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preliminary prospectus and any amendments or supplements thereto, in
each case in conformity with the requirements of the Securities Act and the
rules thereunder, and such other related documents as any such Selling
Holder may reasonably request in order to facilitate the disposition of
Registrable Securities owned by such Selling Holder.
(d) Use all commercially reasonable efforts (i) to register and qualify
the securities covered by such registration statement under such other
securities or Blue Sky laws of such states or jurisdictions as shall be
reasonably requested by the managing underwriter (as applicable, or if
inapplicable, the Majority Selling Holders), and (ii) to obtain the
withdrawal of any order suspending the effectiveness of a registration
statement, or the lifting of any suspension of the qualification (or
exemption from qualification) of the offer and transfer of any of the
Registrable Securities in any jurisdiction, at the earliest possible
moment; provided, however, that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do business or
to file a general consent to service of process in any such states or
jurisdictions.
(e) In the event of any underwritten or agented offering, enter into
and perform the Company's obligations under an underwriting or agency
agreement (including indemnification and contribution obligations of
underwriters or agents), in usual and customary form, with the managing
underwriter or underwriters of or agents for such offering. The Company
shall also cooperate with the Majority Selling Holders and the managing
underwriter for such offering in the marketing of the Warrant Stock,
including making available the Company's officers, accountants, counsel,
premises, books and records for such purpose, but the Company shall not be
required to incur any material out-of-pocket expense pursuant to this
sentence.
(f) Promptly notify each Selling Holder of any stop order issued or
threatened to be issued by the Commission in connection therewith (and take
all reasonable actions required to prevent the entry of such stop order or
to remove it if entered.
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(g) Make generally available to the Company's security holders copies
of all periodic reports, proxy statements, and other information referred
to in Section 9.9(a) and an earnings statement satisfying the provisions of
Section 11(a) of the Securities Act no later than 90 days following the end
of the 12-month period beginning with the first month of the Company's
first fiscal quarter commencing after the effective date of each
registration statement filed pursuant to this Section 9.
(h) Make available for inspection by any Selling Holder, any
underwriter participating in such offering and the representatives of such
Selling Holder and underwriter (but not more than one firm of counsel to
such Selling Holders), all financial and other information as shall be
reasonably requested by them, and provide the Selling Holder, any
underwriter participating in such offering and the representatives of such
Selling Holder and underwriter the opportunity to discuss the business
affairs of the Company with its principal executives and independent public
accountants who have certified the audited financial statements included in
such registration statement, in each case all as necessary to enable them
to exercise their due diligence responsibility under the Securities Act;
provided, however, that information that the Company determines, in good
faith, to be confidential and which the Company advises such Person in
writing, is confidential shall not be disclosed unless such Person signs a
confidentiality agreement reasonably satisfactory to the Company or the
related Selling Holder of Registrable Securities agrees to be responsible
for such Person's breach of confidentiality on terms reasonably
satisfactory to the Company.
(i) Use the Company's best efforts to obtain a so-called "comfort
letter" from its independent public accountants, and legal opinions of
counsel to the Company, in customary form and covering such matters of the
type customarily covered by such letters, and in a form that shall be
reasonably satisfactory to the Majority Selling Holders. The Company shall
furnish to each Selling Holder a signed counterpart of any such comfort
letter or legal opinion. Delivery of any such opinion or comfort letter
shall be subject to the recipient furnishing such written representations
or acknowledgments as are customarily
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provided by selling shareholders who receive such comfort letters or
opinions.
(j) Provide and cause to be maintained a transfer agent and registrar
for all Registrable Securities covered by such registration statement from
and after a date not later than the effective date of such registration
statement.
(k) Use all reasonable efforts to cause the Registrable Securities
covered by such registration statement (i) if the Common Stock is then
listed on a securities exchange or included for quotation in a recognized
trading market, to continue to be so listed or included for a reasonable
period of time after the offering, and (ii) to be registered with or
approved by such other United States or state governmental agencies or
authorities as may be necessary by virtue of the business and operations
of the Company to enable the Selling Holders of Registrable Securities to
consummate the disposition of such Registrable Securities.
(l) Use the Company's reasonable efforts to provide a CUSIP number for
the Common Stock prior to the effective date of the first registration
statement including Registrable Securities.
(m) Take such other actions as are reasonably required in order to
expedite or facilitate the disposition of Registrable Securities included
in each such registration.
9.5. Selling Holders' Obligations. (a) It shall be a condition
precedent to the obligations of the Company to take any action pursuant to
this Section 9 with respect to the Registrable Securities of any Selling Holder
that such Selling Holder shall:
(i) Furnish to the Company such information regarding such Selling
Holder, the number of Registrable Securities owned by it, and the intended
method of disposition of such securities as shall be required to effect the
registration of such Selling Holder's Registrable Securities, and to
cooperate with the Company in preparing such registration; and
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(ii) Agree to sell their Registrable Securities to the underwriters at
the same price and on substantially the same terms and conditions as the
Company or the other Persons on whose behalf the registration statement was
being filed have agreed to sell their securities, and to execute the
underwriting agreement agreed to by the Majority Selling Holders (in the
case of a registration under Section 9.2) or the Company and the Majority
Selling Holders (in the case of a registration under Section 9.3).
(b) Each Selling Holder shall notify the Company of any sales of such
Selling Holder's shares registered for sale pursuant to this Section 9;
provided, however, it is understood that any failure so to notify the
Company shall not be deemed a default hereunder or to subject any Selling
Holder to any claim for damages or expenses whatsoever.
9.6. Expenses of Registration. Expenses incurred in connection with
registrations under this Section 9 shall be allocated and paid as follows:
(a) With respect to each Demand Registration (including any Shelf
Registration), the Company shall bear and pay all reasonable expenses
incurred in connection with any registration, filing, or qualification of
Registrable Securities with respect to such Demand Registration for each
Selling Holder, including all registration, filing and NASD fees, all fees
and expenses of complying with securities or blue sky laws, all word
processing, duplicating and printing expenses, messenger and delivery
expenses, the reasonable fees and disbursements of counsel for the Company,
and of the Company's independent public accountants, including the expenses
of "cold comfort" letters required by or incident to such performance and
compliance, and the reasonable fees and disbursements of one firm of
counsel for the Selling Holders of Registrable Securities (the
"Registration Expenses"), but excluding underwriting discounts and
commissions relating to Registrable Securities (which shall be paid on a
pro rata basis by the Selling Holders) provided, however, that the Company
shall not be required to pay for any expenses of any registration
proceeding begun pursuant to Section 9.2 if the registration is
subsequently withdrawn at the request of the Majority Selling Holders (in
which case all Selling Holders shall bear such expense),
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unless WS Holders whose Registrable Securities constitutes a majority of
the Registrable Securities then outstanding agree that such withdrawn
registration shall constitute the exercise of their one demand registration
under Section 9.2 hereof. The counsel for the Selling Holders shall be
selected by Demanding Holders owning a majority of the Registrable
Securities owned by Demanding Holders to be included in a Demand
Registration and, in the case of a Piggyback Registration, by Selling
Holders owning a majority of the Registrable Securities to be included in
such registration; provided that in the case of a Piggyback Registration,
the Selling Holders shall use one firm of counsel to represent all such
holders and shall endeavor in good faith, with any other holders of
securities to be included in such registration, to select one firm of
counsel to represent all such selling securities holders.
(b) The Company shall bear and pay all Registration Expenses incurred
in connection with any Piggyback Registrations pursuant to Section 9.3 for
each Selling Holder, but excluding underwriting discounts and commissions
relating to Registrable Securities (which shall be paid on a pro rata
basis by the Selling Holders of Registrable Securities).
(c) Any failure of the Company to pay any Registration Expenses as
required by this Section 9.6 shall not relieve the Company of its
obligations under this Section 9.
9.7. Indemnification; Contribution. If any Registrable Securities are
included in a registration statement under this Section 9:
(a) To the extent permitted by applicable law, the Company shall
indemnify and hold harmless each Selling Holder, each Person, if any, who
controls such Selling Holder within the meaning of the Securities Act, and
each officer, director, partner, and employee of such Selling Holder and
such controlling Person, against any and all losses, claims, damages,
liabilities and expenses (joint or several), including attorneys' fees and
disbursements and expenses of investigation, incurred by such party
pursuant to any actual or threatened action, suit, proceeding or
investigation, or to which any of the foregoing Persons may
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become subject under the Securities Act, the Exchange Act or other
federal or state laws, insofar as such losses, claims, damages, liabilities
and expenses arise out of or are based upon any of the following
statements, omissions or violations pursuant to a final non-appealable
order (collectively a "Violation"):
(i) any untrue statement or alleged untrue statement of a
material fact contained in such registration statement, including any
preliminary prospectus or final prospectus contained therein, or any
amendments or supplements thereto;
(ii) the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make the
statements therein not misleading; or
(iii) any violation or alleged violation by the Company of the
Securities Act, the Exchange Act, any applicable state securities law
or any rule or regulation promulgated under the Securities Act, the
Exchange Act or any applicable state securities law;
provided, however, that the indemnification required by this Section
9.7(a) shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or expense if such settlement is effected without
the consent of the Company (which consent shall not be unreasonably
withheld), nor shall the Company be liable in any such case for any such
loss, claim, damage, liability or expense to the extent that it is
determined by a court of competent jurisdiction by a final non-appealable
order to have solely arisen out of or be based upon a Violation which
occurred in reliance upon and in conformity with written information
furnished to the Company by the indemnified party expressly for use in
connection with such registration; provided, further, that the indemnity
agreement contained in this Section 9.7(a) shall not apply to any
underwriter to the extent that any such loss is based on or arises out of
an untrue statement or alleged untrue statement of a material fact, or an
omission or alleged omission to state a material fact, contained in or
omitted from any preliminary prospectus if the final prospectus shall
correct such untrue statement or
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alleged untrue statement, or such omission or alleged omission, and a
copy of the final prospectus has not been sent or given to such person at
or prior to the confirmation of sale to such person if such underwriter was
under an obligation to deliver such final prospectus and failed to do so.
The Company shall also indemnify underwriters, selling brokers, dealer
managers and similar securities industry professionals participating in the
distribution, their officers, directors, agents and employees and each
person who controls such persons (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) to the same extent as
provided above with respect to the indemnification of the Selling Holders.
(b) To the extent permitted by applicable law, each Selling Holder
shall indemnify and hold harmless the Company, each of its directors, each
of its officers and employees, each Person, if any, who controls the
Company within the meaning of the Securities Act, any other Selling Holder,
any controlling Person of any such other Selling Holder and each officer,
director, partner, and employee of such other Selling Holder and such
controlling Person, against any and all losses, claims, damages,
liabilities and expenses (joint and several), including attorneys' fees and
disbursements and expenses of investigation, incurred by such party
pursuant to any actual or threatened action, suit, proceeding or
investigation, or to which any of the foregoing Persons may otherwise
become subject under the Securities Act, the Exchange Act or other federal
or state laws, insofar as such losses, claims, damages, liabilities and
expenses are determined by a court of competent jurisdiction by a final
non-appealable order to have solely arisen out of or be based upon a
Violation that occurred in reliance upon and in conformity with written
information furnished by such Selling Holder expressly for use in
connection with such registration; provided, however, that (x) the
indemnification required by this Section 9.7(b) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or expense if
settlement is effected without the consent of the relevant Selling Holder
of Registrable Securities, which consent shall not be unreasonably
withheld, and (y) in no event shall the amount of any indemnity under this
Section 9.7(b) exceed the net
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proceeds from the applicable offering received by such Selling Holder.
(c) Promptly after receipt by an indemnified party under this Section
9.7 of notice of the commencement of any action, suit, proceeding,
investigation or threat thereof made in writing for which such indemnified
party may make a claim under this Section 9.7, such indemnified party shall
deliver to the indemnifying party a written notice of the commencement
thereof and the indemnifying party shall have the right to participate in,
and, to the extent the indemnifying party so desires, jointly with any
other indemnifying party similarly noticed, to assume the defense thereof
with counsel mutually satisfactory to the parties; provided, however, that
an indemnified party shall have the right to retain its own counsel, with
the fees and disbursements and expenses to be paid by the indemnifying
party, if representation of such indemnified party by the counsel retained
by the indemnifying party would be inappropriate due to actual or potential
differing interests between such indemnified party and any other party
represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time following
the commencement of any such action, if prejudicial to its ability to
defend such action, shall relieve such indemnifying party of any liability
to the indemnified party under this Section 9.7 but shall not relieve the
indemnifying party of any liability that it may have to any indemnified
party otherwise than pursuant to this Section 9.7. Any reasonable fees and
expenses incurred by the indemnified party (including any fees and expenses
incurred in connection with investigating or preparing to defend such
action or proceeding) shall be paid to the indemnified party, as incurred,
within thirty (30) days of written notice thereof to the indemnifying party
(regardless of whether it is ultimately determined that an indemnified
party is not entitled to indemnification hereunder). Any such indemnified
party shall have the right to employ separate counsel in any such action,
claim or proceeding and to participate in the defense thereof, but the fees
and expenses of such counsel shall be the expenses of such indemnified
party unless (i) the indemnifying party has agreed to pay such fees and
expenses or (ii) the indemnifying party shall have failed to promptly
assume the
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defense of such action, claim or proceeding or (iii) the named parties
to any such action, claim or proceeding (including any impleaded parties)
include both such indemnified party and the indemnifying party, and such
indemnified party shall have been advised by counsel that there may be one
or more legal defenses available to it which are different from or in
addition to those available to the indemnifying party and that the
assertion of such defenses would create a conflict of interest such that
counsel employed by the indemnifying party could not faithfully represent
the indemnified party (in which case, if such indemnified party notifies
the indemnifying party in writing that it elects to employ separate counsel
at the expense of the indemnifying party, the indemnifying party shall not
have the right to assume the defense of such action, claim or proceeding on
behalf of such indemnified party, it being understood, however, that the
indemnifying party shall not, in connection with any one such action, claim
or proceeding or separate but substantially similar or related actions,
claims or proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys (together with
appropriate local counsel) at any time for all such indemnified parties,
unless in the reasonable judgment of such indemnified party a conflict of
interest may exist between such indemnified party and any other of such
indemnified parties with respect to such action, claim or proceeding, in
which event the indemnifying party shall be obligated to pay the fees and
expenses of such additional counsel or counsels). No indemnifying party
shall be liable to an indemnified party for any settlement of any action,
proceeding or claim without the written consent of the indemnifying party,
which consent shall not be unreasonably withheld.
(d) If the indemnification required by this Section 9.7 from the
indemnifying party is unavailable to an indemnified party hereunder in
respect of any losses, claims, damages, liabilities or expenses referred to
in this Section 9.7:
(i) The indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute
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to the amount paid or payable by such indemnified party as a result of
such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative fault of the
indemnifying party and indemnified parties in connection with the
actions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The
relative fault of such indemnifying party and indemnified parties
shall be determined by reference to, among other things, whether any
Violation has been committed by, or relates to information supplied
by, such indemnifying party or indemnified parties, and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such Violation. The amount paid or payable by a
party as a result of the losses, claims, damages, liabilities and
expenses referred to above shall be deemed to include, subject to the
limitations set forth in Section 9.7(a) and Section 9.7(b), any
reasonable legal or other fees or expenses reasonably incurred by such
party in connection with any investigation or proceeding.
(ii) The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 9.7(d) were
determined by pro rata allocation or by any other method of allocation
which does not take into account the equitable considerations referred
to in Section 9.7(d)(i) above. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who
was not guilty of such fraudulent misrepresentation.
(e) If indemnification is available under this Section 9.7, the
indemnifying parties shall indemnify each indemnified party to the full
extent provided in this Section 9.7 without regard to the relative fault of
such indemnifying party or indemnified party or any other equitable
consideration referred to in Section 9.7(d) above.
(f) The indemnification required by this Section 9.7 shall be made by
periodic payments of the amount thereof during the course of the
investigation or defense, as and
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when bills are received or expense, loss, damage or liability is
incurred. In the event that it shall be subsequently determined that the
recipient of any such periodic payment shall not be entitled to
indemnification hereunder, such recipient promptly shall repay such
payments, together with interest thereon at the Agreed Rate from the date
of original receipt to the date of repayment.
(g) The obligations of the Company and the Selling Holders of
Registrable Securities under this Section 9.7 shall survive the completion
of any offering of Registrable Securities pursuant to a registration
statement under this Section 9, and otherwise.
9.8. Holdback. Each ▇▇ ▇▇▇▇▇▇ entitled pursuant to this Section 9 to
have Registrable Securities included in a registration statement prepared
pursuant to this Section 9, if so requested by the managing underwriter in
connection with an offering of any Registrable Securities, shall not effect any
public sale or distribution of shares of Common Stock, Convertible Securities
or Stock Purchase Rights (excluding any sale pursuant to Rule 144 or Rule 144A
under the Securities Act and any sale as part of such underwritten or agented
registration), during the 5-day period prior to, and during the 45-day period
beginning on, the date such registration statement is declared effective under
the Securities Act by the Commission, provided that such ▇▇ ▇▇▇▇▇▇ is timely
notified of such effective date in writing by the Company or such managing
underwriter.
9.9. Additional Covenants of the Company. The Company hereby agrees
and covenants as follows:
(a) The Company shall file as and when applicable, on a timely basis,
all reports required to be filed by it under the Exchange Act. If the
Company is not required to file reports pursuant to the Exchange Act, upon
the request of any ▇▇ ▇▇▇▇▇▇, the Company shall make publicly available the
information specified in subparagraph (c)(2) of Rule 144 of the Securities
Act, and take such further action as may be reasonably required from time
to time and as may be within the reasonable control of the Company, to
enable the WS Holders to Transfer Warrants or Registrable Securities
without registration under the Securities Act within the limitation of the
exemptions provided by Rule 144 under the
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Securities Act or any similar rule or regulation hereafter adopted by the
Commission. In addition, promptly upon the request of any ▇▇ ▇▇▇▇▇▇, the
Company shall provide such ▇▇ ▇▇▇▇▇▇ with such publicly available financial
statements, reports and other information as may be required to permit such
▇▇ ▇▇▇▇▇▇ to Transfer shares of Registrable Securities to Qualified
Institutional Investors pursuant to Rule 144A of the Securities Act.
(b) The Company shall not, and shall not permit its majority owned
subsidiaries to, effect any public sale or distribution of any shares of
Common Stock, Convertible Securities or Stock Purchase Rights during the 5
Business Days prior to, and during the 90-day period beginning on, the
commencement of a public distribution of Registrable Securities pursuant to
any registration statement prepared pursuant to this Section 9 (other than
by the Company pursuant to such registration if the registration is
pursuant to Section 9.3 or by the Company pursuant to any dividend
reinvestment plan offered by it to its stockholders). The Company shall
not effect any registration of its securities (other than on Form ▇-▇, ▇▇▇▇
▇-▇, or any successor forms to such forms or pursuant to such other
registration rights agreements as may be approved in writing by the
Majority Selling Holders) or effect any public or private sale or
distribution of any of its securities, including a sale pursuant to
Regulation D under the Securities Act, whether on its own behalf or at the
request of any holder or holders of such securities from the date of a
request for a Demand Registration pursuant to Section 9.2 until 90 days
following the effective date of such Demand Registration statement, unless
the Company shall have previously notified in writing all Selling Holders
of the Company's desire to do so, and the Majority Selling Holders or the
managing underwriter, if any, shall have consented thereto in writing.
(c) Any agreement entered into on or after August 31, 1997 pursuant to
which the Company or any of its majority owned subsidiaries issues or
agrees to issue any Common Stock (including, without limitation, any
employee stock option, stock purchase agreement, merger agreement or other
agreement) shall contain a provision whereby any holder receiving such
Common Stock who will hold more than one
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percent (1%) of the amount of such Common Stock then outstanding shall
agree not to effect any public sale or distribution of any such Common
Stock during the periods described in the second sentence of Section
9.9(b), in each case including a sale pursuant to Rule 144 under the
Securities Act (unless such Person is prevented by applicable statute or
regulation from entering into such an agreement).
(d) Subject to Section 13, the Company shall not, directly or
indirectly, (x) enter into any merger, consolidation or reorganization in
which the Company shall not be the surviving corporation or (y) Transfer or
agree to Transfer all or substantially all the Company's assets, unless
prior to such merger, consolidation, reorganization or asset Transfer, the
surviving corporation or the Transferee, respectively, shall have agreed in
writing to assume the obligations of the Company under this Agreement, and
for that purpose references hereunder to "Registrable Securities" shall be
deemed to include the securities which the WS Holders would be entitled to
receive in exchange for Registrable Securities pursuant to any such merger,
consolidation or reorganization.
10. LOSS OR MUTILATION
Upon receipt by the Company from any Holder of evidence reasonably
satisfactory to it of the ownership of and the loss, theft, destruction or
mutilation of this Warrant and an indemnity reasonably satisfactory to it (it
being understood that the written indemnification agreement of or affidavit of
loss of The First National Bank of Chicago shall be a sufficient indemnity)
and, in case of mutilation, upon surrender and cancellation hereof, the Company
will execute and deliver in lieu hereof a new Warrant of like tenor to such
Holder; provided, however, in the case of mutilation, no indemnity shall be
required if this Warrant in identifiable form is surrendered to the Company for
cancellation.
11. OFFICE OF THE COMPANY
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As long as any of the Warrants remain outstanding, the Company shall
maintain an office or agency, which may be the principal executive offices of
the Company (the "Designated Office"), where the Warrants may be presented for
exercise, registration of transfer, division or combination as provided in this
Warrant. Such Designated Office shall initially be the office of the Company
at Cedar Rapids, Iowa. The Company may from time to time change the Designated
Office to another office of the Company or its agent within the United States
by notice given to all registered holders of Warrants at least ten Business
Days prior to the effective date of such change.
12. FINANCIAL AND BUSINESS INFORMATION
Until the Expiration Date, the Company shall deliver to each Holder of
Warrants or of Warrant Stock one copy of each of the following items:
(i) promptly after filing thereof, copies of all regular and periodic
reports, proxy statements (other than preliminary) and registration
statements (other than registration statements on Forms S-3 (relating to
debt securities) and S-8) which the Company may file with the Securities
and Exchange Commission or any governmental agency substituted therefor.
(ii) promptly upon their becoming available, copies of all financial
statements, reports, notices and proxy statements sent or made available by
the Company to the holders of any class of its securities generally or by
any Subsidiary of the Company to the holders of any class of its securities
generally; and
(iii) with reasonable promptness, such other public information
relating to the Company and its Subsidiaries as the Holder may, from time
to time, reasonably request.
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13. REPURCHASE BY THE COMPANY OF WARRANTS
The Company shall have the right (the "Call"), upon written notice (the
"Call Notice") to the Holders of all outstanding Warrants given at any time on
or after the date of the occurrence of the Triggering Event and before May 31,
1997, to repurchase on the date specified in the notice from each Holder of a
Warrant all of such Warrant for an amount equal to the result (rounded to the
nearest cent) obtained by multiplying One Dollar ($1.00) by a fraction, the
numerator of which shall be the aggregate number of shares for which this
Warrant may be exercised and the denominator of which shall be the aggregate
number of shares for which all outstanding Series A Warrants may be exercised,
and in all events not more than One Dollar ($1.00) for all Series A Warrants.
On the date of any repurchase of this Warrant pursuant to this Section 13, the
Holder shall assign to the Company such Warrant without any representation or
warranty (except as to title and the absence of Liens), by the surrender of
this Warrant at the Designated Office against payment of the repurchase price
therefor.
14. MISCELLANEOUS
14.1. Nonwaiver. No course of dealing or any delay or failure to
exercise any right hereunder on the part of the Company or the Holder shall
operate as a waiver of such right or otherwise prejudice the rights, powers or
remedies of such Person.
14.2. Notice Generally. Any notice, demand, request, consent,
approval, declaration, delivery or communication hereunder to be made pursuant
to the provisions of this Warrant shall be sufficiently given or made if in
writing and either delivered in person with receipt acknowledged or sent by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
(a) if to any Holder of this Warrant or of Warrant Stock issued upon
the exercise hereof, at its last known address appearing on the books of
the Company maintained for such purpose;
(b) if to the Company, at its Designated Office;
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or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Every notice, demand, request,
consent, approval, declaration, delivery or other communication hereunder shall
be deemed to have been duly given or served on the date on which personally
delivered, with receipt acknowledged, or three Business Days after the same
shall have been deposited in the United States mail, or one Business Day after
the same shall have been delivered to Federal Express or another overnight
courier service.
14.3. Indemnification. If the Company fails to make, when due, any
payments provided for in this Warrant, the Company shall pay to the Holder
hereof (a) interest at the Agreed Rate on any amounts due and owing to such
Holder from the date due until the date of payment and (b) such further amounts
as shall be sufficient to cover any costs and expenses including, but not
limited to, reasonable attorneys' fees and expenses incurred by such Holder in
collecting any amounts due hereunder. The Company shall indemnify, save and
hold harmless the Holder hereof and the Holders of any Warrant Stock issued
upon the exercise hereof from and against any and all liability, loss, cost,
damage, reasonable attorneys' and accountants' fees and expenses, court costs
and all other out-of-pocket expenses incurred in connection with or arising
from a Company Default. This indemnification provision shall be in addition to
the rights of such Holder or Holders to bring an action against the Company for
breach of contract based on such Company Default.
14.4. Limitation of Liability. No provision hereof, in the absence of
affirmative action by the Holder to purchase shares of Common Stock, and no
enumeration herein of the rights or privileges of the Holder hereof, shall give
rise to any liability of such Holder to pay the Exercise Price for any Warrant
Stock other than pursuant to an exercise of this Warrant or any liability as a
stockholder of the Company, whether such liability is asserted by the Company
or by creditors of the Company.
14.5. Remedies. Each Holder of Warrants and/or Warrant Stock, in
addition to being entitled to exercise its rights granted by law, including
recovery of damages, shall be entitled to specific performance of its rights
provided under this War-
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rant. The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the
provisions of this Warrant and hereby agrees, in an action for specific
performance, to waive the defense that a remedy at law would be adequate.
14.6. Successors and Assigns. Subject to the provisions of Sections
3.1, 8.1 and 8.2, this Warrant and the rights evidenced hereby shall inure to
the benefit of and be binding upon the successors of the Company and the
permitted successors and assigns of the Holder hereof. The provisions of this
Warrant are intended to be for the benefit of all Holders from time to time of
this Warrant and, in the case of Section 9, all Holders of shares of Warrant
Stock issued upon the exercise hereof (including transferees), and shall be
enforceable by any such Holder.
14.7. Amendment. This Warrant and all other Warrants may be modified
or amended or the provisions hereof waived with the written consent of the
Company and the Majority Warrant Holders, provided that no such Warrant may be
modified or amended to reduce the number of shares of Common Stock for which
such Warrant is exercisable or to increase the price at which such shares may
be purchased upon exercise of such Warrant (before giving effect to any
adjustment as provided therein) without the written consent of the Holder
thereof.
14.8. Severability. Wherever 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 shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Warrant.
14.9. Headings. The headings used in this Warrant are for the
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.
14.10. GOVERNING LAW; JURISDICTION. IN ALL RESPECTS, INCLUDING ALL
MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS WARRANT AND THE
OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS APPLICABLE TO CONTRACTS
MADE AND
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PERFORMED IN SUCH STATE, EXCEPT WITH RESPECT TO THE VALIDITY OF THIS
WARRANT, THE ISSUANCE OF WARRANT STOCK UPON EXERCISE HEREOF AND THE RIGHTS AND
DUTIES OF THE COMPANY WITH RESPECT TO REGISTRATION OF TRANSFER, WHICH SHALL BE
GOVERNED BY THE LAWS OF DELAWARE. THE COMPANY HEREBY CONSENTS AND AGREES THAT
THE STATE OR FEDERAL COURTS LOCATED IN CHICAGO, ILLINOIS, SHALL HAVE, EXCEPT AS
SET FORTH BELOW, EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR
DISPUTES BETWEEN THE COMPANY AND THE HOLDER OF THIS WARRANT PERTAINING TO THIS
WARRANT OR TO ANY MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT,
PROVIDED, THAT IT IS ACKNOWLEDGED THAT ANY APPEALS FROM THOSE COURTS MAY HAVE
TO BE HEARD BY A COURT LOCATED OUTSIDE OF CHICAGO, ILLINOIS.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed and its corporate seal to be impressed hereon and attested by its
Secretary or an Assistant Secretary.
NORAND CORPORATION
By: N. ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
Name: N. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chairman, President and
Chief Executive Officer
[SEAL]
Attest:
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Secretary and General Counsel
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ANNEX A
SUBSCRIPTION FORM
[To be executed only upon exercise of Warrant]
The undersigned registered owner of this Warrant irrevocably exercises
this Warrant for the purchase of ______ shares Common Stock of Norand
Corporation and herewith makes payment therefor, all at the price and on the
terms and conditions specified in this Warrant and requests that certificates
for the shares of Common Stock hereby purchased (and any securities or other
property issuable upon such exercise) be issued in the name of and delivered to
_________________ whose address is
___________________________________________________ and, if such shares of
Common Stock shall not include all of the shares of Common Stock issuable as
provided in this Warrant, that a new Warrant of like tenor and date for the
balance of the shares of Common Stock issuable hereunder be delivered to the
undersigned.
_______________________________
(Name of Registered Owner)
_______________________________
(Signature of Registered Owner)
_______________________________
(Street Address)
_______________________________
(City) (State) (Zip Code)
NOTICE: The signature on this subscription must correspond with the name as
written upon the face of the within Warrant in every particular, without
alteration or enlargement or any change whatsoever.
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ANNEX B
ASSIGNMENT FORM
FOR VALUE RECEIVED the undersigned registered owner of this Warrant hereby
sells, assigns and transfers unto the Assignee named below all of the rights of
the undersigned under this Warrant, with respect to the number of shares of
Common Stock set forth below:
No. of Shares of
Name and Address of Assignee Common Stock
and does hereby irrevocably constitute and appoint ________ _____________
attorney-in-fact to register such transfer onto the books of Norand Corporation
maintained for the purpose, with full power of substitution in the premises.
Dated:___________________ Print Name:___________________
Signature:____________________
Witness:______________________
NOTICE: The signature on this assignment must correspond with the name as
written upon the face of the within Warrant in every particular,
without alteration or enlargement or any change whatsoever.
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TABLE OF CONTENTS
1. DEFINITIONS 1
2. EXERCISE OF WARRANT 11
2.1. Manner of Exercise 11
2.2. Payment of Transfer Taxes 12
2.3. Fractional Shares 12
2.4. Continued Validity and Application 13
2.5. Limitation on Regulated Holder's Exercise 13
3. TRANSFER, DIVISION AND COMBINATION 14
3.1. Transfer14
3.2. Division and Combination. 14
3.3. Expenses. 14
3.4. Maintenance of Books 14
4. ANTIDILUTION PROVISIONS 14
4.1. Stock Dividends, Subdivisions and Combinations 14
4.2. Issuance of Additional Shares of Common Stock 15
4.3. Issuances of Stock Purchase Rights and
Convertible Securities 15
4.4. Adjustment of Number of Shares Purchasable. 17
4.5. Reorganization, Reclassification, Merger, Consolidation or
Disposition of Assets 17
4.6. Determination of Consideration. 18
4.7. Other Dilutive Events 20
4.8. Other Provisions Applicable to Adjustments Under
this Section 21
5. NO IMPAIRMENT 22
6. RESERVATION AND AUTHORIZATION OF COMMON STOCK 23
7. NOTICE OF CORPORATE ACTIONS; TAKING OF RECORD; TRANSFER BOOKS 23
7.1. Notices of Corporate Actions 23
7.2 Closing of Transfer Books 23
8. TRANSFER RESTRICTIONS 24
8.1. Restrictions on Transfers 24
8.2. Restrictive Legends 24
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8.3. Termination of Securities Law Restrictions 25
9. REGISTRATION RIGHTS 26
9.1. Certain Definitions 26
9.2. Demand Registration 27
9.3. Piggyback Registration 29
9.4. Registration Procedures 30
9.5. Selling Holders' Obligations 34
9.6. Expenses of Registration 34
9.7. Indemnification; Contribution 35
9.8. Holdback. 40
9.9. Additional Covenants of the Company 40
10. LOSS OR MUTILATION 42
11. OFFICE OF THE COMPANY 42
12. FINANCIAL AND BUSINESS INFORMATION 43
13. REPURCHASE BY THE COMPANY OF WARRANTS 43
14. MISCELLANEOUS 43
14.1. Nonwaiver 43
14.2. Notice Generally 44
14.3. Indemnification 44
14.4. Limitation of Liability 44
14.5. Remedies 45
14.6. Successors and Assigns 45
14.7. Amendment. 45
14.8. Severability 45
14.9. Headings. 45
14.10. GOVERNING LAW; JURISDICTION 45
ANNEX A
SUBSCRIPTION FORM 48
ANNEX B
ASSIGNMENT FORM 49
SCHEDULE A RESERVED SHARES OF COMMON STOCK
SCHEDULE B UNDERWRITERS AND AGENTS
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