THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, AND MAY BE OFFERED AND SOLD ONLY IF SO REGISTERED OR IF AN EXEMPTION
FROM REGISTRATION IS AVAILABLE.
VOID AFTER 5:00 P.M., NEW YORK TIME, ON OCTOBER 6, 2002 OR IF NOT A
BUSINESS DAY, AS DEFINED HEREIN, AT 5:00 P.M., NEW YORK TIME, ON THE NEXT
FOLLOWING BUSINESS DAY.
WARRANT TO PURCHASE
_______ Shares of Common Stock
No. ___
WARRANT TO PURCHASE
COMMON STOCK
OF
ARX, INC.
TRANSFER RESTRICTED -- SEE SECTION 6.02
This certifies that, for good and valuable consideration, Value Investing
Partners, Inc., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, and its registered,
permitted assigns (collectively, the "Warrantholder"), is entitled to purchase
from ARX, Inc. a corporation incorporated under the laws of the State of
Delaware (the "Company"), subject to the terms and conditions hereof, at any
time before 5:00 P.M., New York time, on October 6, 2002, (or, if such day is
not a Business Day, as defined herein, at or before 5:00 P.M. , New York time on
the next following Business Day), the number of fully paid and non-assessable
shares of Common Stock (par value $.10) of the Company (the "Common Stock")
stated above at the Exercise Price (as defined herein). The Exercise Price and
the number of shares purchasable hereunder are subject to adjustment as provided
in Article III hereof.
ARTICLE I
Section 1.01: Definition of Terms. As used in this Warrant, the following
capitalized terms shall have the following respective meanings:
(a) Business Day: A day other than a Saturday, Sunday or other day on which
banks in the State of New York are authorized by law to remain closed.
(b) Common Stock: Common Stock, $.10 par value per shares, of the Company.
(c) Common Stock Equivalents: Securities that are convertible into or
exercisable for shares of Common Stock.
(d) Demand Registration: See Section 7.02.
(e) Exchange Act: The Securities Exchange Act of 1934, as amended.
(f) Exercise Price: $2.70 per warrant Share, as such price may be adjusted
from time to time pursuant to Article III hereof.
(g) Expiration Date: 5:00 P.M., New York time, on October 6, 1997.
(h) Holder: A Holder of Registrable Securities.
(i) NASD: National Association of Securities Dealers, Inc.
(j) Person: An individual, partnership, joint venture, corporation, trust,
unincorporated organization or government or any department or agency thereof.
(k) Piggyback Registration: See Section 7.01.
(1) Prospectus: Any prospectus included in any Registration Statement, as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by such
Registration Statement and all other amendments and supplements to the
Prospectus, including post-effective amendments and all material incorporated by
reference in such Prospectus.
(m) Public Offering: A public offering of any of the Company's equity or
debt securities pursuant to a registration statement under the Securities Act.
(n) Registration Expenses: Any and all expenses incident to the performance
of or compliance with Article VII, including, without limitation, (i) all SEC,
stock exchange and NASD registration and filing fees; (ii) all fees and expenses
of complying with securities or blue sky laws (including reasonable fees and
disbursements of counsel for the underwriters in connection with blue sky
qualifications of the Registrable Securities); (iii) all printing, mailing,
messenger and delivery expenses; (iv) the fees and disbursements of counsel for
the Company and of its independent certified public accountants, including the
expenses of any special audits and/or "cold comfort" letters required by or
incident to such performance and compliance; and (v) any disbursements of
underwriters customarily paid by issuers or sellers of securities including
liability insurance if the Company so desires, and the reasonable fees and
expenses of any special experts retained in connection with the requested
registration, but excluding underwriting fees, discounts and commissions and
transfer taxes if any.
(o) Registrable Securities: This Warrant and Warrants in similar form
issued to Value Investing Partners, Inc. and/or its designees or transferees as
permitted under Section 6.02 and any Warrant Shares thereunder and/or other
securities that may be or are issued by the Company upon exercise of such
Warrants, including those which may thereafter be issued by the Company in
respect of any such securities by means of any stock splits, stock dividends,
recapitalizations or the like, and as adjusted pursuant to Article III hereof;
provided, however, that as to any particular security contained in Registrable
Securities, such securities shall cease to be Registrable Securities when (i) a
Registration Statement with respect to the sale of such securities shall have
become effective under the Securities Act and such securities shall have been
disposed of in accordance with such Registration Statement; or (ii) they shall
have been distributed to the public pursuant to Rule 144 (or any successor
provision) under the Securities Act; or (iii) they shall have been sold,
assigned or otherwise transferred to any Person other than those Persons
specified in Section 6.02(i) below ("6.02(i) Persons") and other than to any
spouses, lineal descendants or adopted children of a 6.02(i) Person to whom such
securities are transferred upon the death of any 6.02(i) Person by operation of
law or by bequest.
(p) Registration Statement: Any registration statement of the Company filed
or to be filed with the SEC which covers any of the Registrable Securities
pursuant to the provisions of this Agreement, including the Prospectus,
amendments and supplements to such Registration Statement including
post-effective amendments, all exhibits and all material incorporated by
reference by such registration statement.
(q) SEC: The Securities and Exchange Commission or any other federal agency
at the time administering the Securities Act or the Exchange Act.
(r) Securities Act: The Securities Act Of 1933, as amended
(s) Warrants: This Warrant, the warrants issued on the date hereof and all
other warrants that may be issued in its or their place (together evidencing the
right to purchase an aggregate of shares of the Company's Common Stock
originally issued as set forth in the definition of Registrable Securities.
(t) Warrantholder: The person(s) or entity(ies) to whom this warrant is
originally issued, or any successor in interest thereto, or any assignee or
transferee thereof, in whose name this Warrant is registered upon the books to
be maintained by the Company for that purpose.
(u) Warrant Shares: Common Stock purchasable upon exercise of the Warrants.
ARTICLE II
Duration and Exercise of Warrant
Section 2.01: Duration of Warrant. Subject to the terms contained herein,
this Warrant may be exercised at any time before 5:00 P.M., New York time, on
the Expiration Date (or, if such day is not a Business Day, at or before 5:00
P.M., New York time, on the next following Business Day). If this Warrant is not
exercised at or before 5: 00 P.M., New York time, on the Expiration Date, it
shall become void, and all rights hereunder shall thereupon cease.
Section 2.02: Exercise of Warrant. (a) The Warrantholder may exercise this
Warrant, in whole or in part, upon surrender of this Warrant with the
Subscription Form hereon duly executed, to the Company at its corporate office
at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, together with the full
Exercise Price for each Warrant Share to be purchased (i) by tendering in lawful
money of the United States, or by certified check or bank draft payable in
United States Dollars to the order of the Company; or (ii) by delivering to the
Company the number of shares of the Company's Common Stock having a value on the
date of exercise equal to such Exercise Price; or (iii) by delivering to the
Company its 7% convertible Senior Subordinated Debentures due in the principal
amount equal to such Exercise Price and upon compliance with and subject to the
conditions set forth herein.
Notwithstanding this Section 2.02 or any other provision of this Warrant to
the contrary, the Warrantholder may, upon any full or partial exercise of the
Warrants, at its election, pay the Exercise Price applicable to such exercise by
receiving from the Company upon such exercise the number of shares of Common
Stock equal to the number of shares otherwise issuable upon such exercise, less
the number of shares of Common Stock having a value on the date of exercise
equal to such Exercise Price.
For purposes of this Section 2.02, the value of shares of Common Stock on
any date shall be equal to the closing price of the Company's Common Stock on
the New York Stock Exchange (or on such national securities exchange on which
the Company's Common Stock is then primarily traded) on the immediately
preceding trading day.
(b) Upon receipt of this Warrant with the Subscription Form duly executed
and accompanied by payment of the aggregate Exercise Price for the Warrant
Shares for which this warrant is then being exercised, the Company will cause to
be issued certificates for the total number of whole shares of Common Stock for
which this Warrant is being exercised (adjusted to reflect the effect of the
anti-dilution provisions contained in Article III hereof, if any, and as
provided in Section 4.04 hereof) in such denominations as are required for
delivery to the Warrantholder, and the Company shall thereupon deliver such
certificates to the Warrantholder. If at the time this Warrant is exercised, a
registration statement is not in effect to register under the Securities Act the
Warrant Shares issuable upon exercise of this Warrant, the Company may require
the Warrantholder to make such investment intent representations, and may place
such legends on certificates representation the Warrant Shares, as may be
reasonably required in the opinion of counsel to the Company to permit the
Warrant Shares to be issued without such registration.
(c) In case the Warrantholder shall exercise this Warrant with respect to
less than all of the Warrant Shares that may be purchased under this Warrant,
the Company will execute a new warrant in the form of this Warrant for the
balance of such Warrant Shares and deliver such new warrant to the
Warrantholder.
(d) The Company covenants and agrees that it will pay when due and payable
any and all stock transfer and similar taxes which may be payable in respect of
the issue of this Warrant or in respect of the issue of any Warrant Shares. The
Company shall not, however, be required to pay any tax imposed on income or
gross receipts or any tax which may be payable in respect of any transfer
involved in the issuance or delivery of this Warrant or at the time of surrender
and, until the payment of such tax, shall not be required to issue such Warrant
Shares.
ARTICLE III
Adjustment of Shares of Common Stock
Purchasable and of Exercise Price
The Exercise Price and the number and kind of Warrant Shares shall be
subject to adjustment from time to time upon the happening of certain events as
provided in this Article III.
Section 3.01: Mechanical Adjustments. (a) If at any time prior to the full
exercise of this Warrant, the Company shall (i) pay a dividend or make a
distribution on its shares of Common Stock in shares of Common Stock (other than
cash dividends or distributions out of surplus or earnings); (ii) subdivide,
reclassify or recapitalize its outstanding Common Stock into a greater number of
shares; or (iii) combine, reclassify or recapitalize its outstanding Common
Stock into a smaller number of shares, the Exercise Price in effect at the time
of the record date of such subdivision, combination, reclassification or
recapitalization shall be proportionately adjusted so that the Warrantholder
shall be entitled to receive the aggregate number and kind of shares which, if
this warrant had been exercised in full immediately prior to such time, he would
have owned upon such exercise and been entitled to receive upon such dividend,
subdivision, combination, reclassification or recapitalization. Such adjustment
shall be made successively whenever any event listed in this paragraph 3.01(a)
shall occur.
(b) If the Company shall hereafter issue rights, options or warrants to all
holders of its outstanding Common Stock, without charge to such holders,
entitling them to subscribe for or purchase shares of Common Stock (or Common
Stock Equivalents) at a price (or having a conversion price per share) less than
the current market price of the Common Stock (as determined pursuant to
paragraph (e) of this Section 3.01) on the record date described below, the
Exercise Price shall be adjusted so that the Exercise Price shall equal the
price determined by multiplying the Exercise Price in effect immediately prior
to the date of such sale or issuance (which date in the event of distribution to
shareholders shall be deemed to be the record date set by the Company to
determine shareholders entitled to participate in such distribution) by a
fraction, the numerator of which shall be (i) the number of shares of Common
Stock outstanding on the date of such sale or issuance, plus (ii) the number of
additional shares of Common Stock which the aggregate consideration received by
the Company upon such issuance or sale (plus the aggregate of any additional
amount to be received by the Company upon the exercise of such rights or
warrants) would purchase at such current market price per share of the Common
Stock; and the denominator of which shall be (i) the number of shares of Common
Stock outstanding on the date of such issuance or sale, plus (ii) the number of
additional shares of Common Stock offered for subscription or purchase (or into
which the Common Stock Equivalents so offered are convertible). Such adjustments
shall be made successively whenever such warrants or rights are issued. To the
extent that shares of Common Stock are not delivered (or Common Stock
Equivalents are not delivered) after the expiration of such rights or warrants,
the Exercise Price shall be readjusted to the Exercise Price which would then be
in effect had the adjustments been made upon the issuance of such rights or
warrants been made upon the basis of delivery of only the number of shares of
Common Stock (or Common Stock Equivalents) actually delivered.
(c) In case the Company shall hereafter fix a record date for making a
distribution to the holders of Common Stock of assets or evidences of its
indebtedness (excluding cash dividends or distributions out of earnings and
dividends or distributions referred to in paragraph (a) of this Section 3.01) or
Common Stock subscription rights, options or warrants for Common Stock or Common
Stock Equivalents (excluding those referred to in paragraph (b) of this Section
3.01), then in each such case the Exercise Price in effect after such record
date shall be adjusted to the price determined by multiplying the Exercise Price
in effect immediately prior thereto by a fraction, the numerator of which shall
be the total number of shares of Common Stock outstanding multiplied by the
current market price per share of Common Stock (as defined in paragraph (e) of
this Section 3.01), less the fair market value (as determined by the Company's
Board of Directors) of said assets or evidences of indebtedness so distributed
or of such Common Stock subscription rights, option and warrants or of such
Common Stock Equivalents applicable to one share of Common Stock, and the
denominator of which shall be the total number of shares of Common Stock
outstanding multiplied by such current market price per share of Common Stock.
Such adjustment shall be made successively whenever the record date for such
distribution is fixed and shall become effective immediately after such record
date.
(d) Whenever the Exercise Price payable upon exercise of each Warrant is
adjusted pursuant to paragraphs (a), (b) or (c) of this Section 3.01, the
Warrant Shares shall simultaneously be adjusted by multiplying the number of
Warrant Shares initially issuable upon exercise of each Warrant by the Exercise
Price in effect on the date thereof and dividing the product so obtained by the
Exercise Price, as adjusted.
(e) For the purpose of any computation under this Section 3.01, the current
market price per share of Common Stock at any date shall be deemed to be the
average of the daily closing price for 30 consecutive Business Days commencing
45 Business Days before such date. The closing price for each day shall be the
last sale price regular way or, in case no such reported sales take place on
such day, the average of the last reported bid and asked prices regular way, in
either case on the principal national securities exchange on which the Common
Stock is admitted to trading or listed, or if not listed or admitted to trading
on such exchange, the representative closing bid price as reported by NASDAQ, or
other similar organization if NASDAQ is no longer reporting such information, or
if not so available, the fair market price as determined by the Board of
Directors.
(f) No adjustments in the Exercise Price shall be required unless such
adjustment would require an increase or decrease of at least three cents ($.03)
in such price; provided, however, that any adjustments which by reason of this
paragraph (f) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Section
3.01 shall be made to the nearest cent or to the nearest one-hundredth of a
share, as the case may be. Notwithstanding anything in this Section 3.01 to the
contrary, the Exercise Price shall not be reduced to less than the then existing
par value of the Common Stock as a result of any adjustment made hereunder.
(g) In the event that at any time, as a result of any adjustment made
pursuant to paragraph (a) of this Section 3.01, the Warrantholder thereafter
shall become entitled to receive any shares of the Company, other than Common
Stock, thereafter the number of such other shares so receivable upon exercise of
any warrant shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to the
Common Stock contained in paragraphs (a) to (g), inclusive, of this Section
3.01.
Section 3.02: Notice of Adjustment. Whenever the number of Warrant Shares
or the Exercise Price is adjusted as herein provided, the Company shall prepare
and deliver to the Warrantholder a certificate signed by its President, any Vice
President, Treasurer or Secretary, setting forth the adjusted number of shares
purchasable upon the exercise of this Warrant and the Exercise Price of such
shares after such adjustment, setting forth a brief statement of the facts
requiring such adjustment and setting forth the computation by which adjustment
was made.
Section 3.03: No Adjustment for Dividends. Except as provided in Section
3.01 of this Agreement, no adjustment in respect of any cash dividends shall be
made during the term of this Warrant or upon the exercise of this Warrant.
Section 3.04: Form of Warrant After Adjustments. The form of this Warrant
need not be changed because of any adjustments in the Exercise Price or the
number or kind of the Warrant Shares, and Warrants theretofore or thereafter
issued may continue to express the same price and number and kind of shares as
are stated in this Warrant, as initially issued.
Section 3.05: Preservation of Purchase Rights in Certain Transactions.
(a) In case of any consolidation of the Company with or a merger of the
Company into another corporation or in case of any sale or conveyance to another
corporation of the property of the Company as an entirety or substantially as an
entirety, upon any such consolidation, merger, sale or conveyance and the
surviving entity is a publicly traded company, the Company agrees that a
condition of such transaction will be that the Company or such successor or
purchasing corporation, as the case may be, shall execute with the Warrantholder
an agreement granting the Warrantholder the right until the Expiration Date,
upon payment of the Exercise Price in effect immediately prior to such action,
to receive upon exercise of this Warrant the kind. and amount of shares and
other securities and property which he would have owned or have been entitled to
receive after the happening of such consolidation, merger, sale or conveyance
had this Warrant been exercised immediately prior to such action. Such agreement
shall provide for adjustments, which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article Ill. The provisions
of this Section 3.05 shall similarly apply to successive consolidations,
mergers, sales or conveyances.
(b) In case of any consolidation of the Company with or a merger of the
Company into another corporation or in case of any sale or conveyance to another
corporation of the property of the Company as an entirety or substantially as an
entirety, upon any such consolidation, merger, sale or conveyance and the
surviving entity is a non-publicly traded company, the Company agrees that a
condition of such transaction will be that the Company shall mail to the
Warrantholders at the earliest applicable time (and, in any event not less than
20 days before any record date or other date set for definitive action) written
notice of the record date for such transaction to take place. Such notice shall
also set forth facts as shall indicate the effect of such action (to the extent
such effect may be known at the date of such notice) on the Exercise Price of
and the kind and amount of the shares of stock and other securities and property
deliverable upon exercise of this Warrant.
ARTICLE IV
Other Provisions Relating
to Rights of Warrantholders
Section 4.01: No Rights as Shareholders: Notice to Warrantholders. Nothing
contained in this Warrant shall be construed as conferring upon the
Warrantholder or his or its transferees the right to vote or to receive
dividends or to consent or to receive notice as a shareholder in respect of any
meeting of shareholders for the election of directors of the Company or of any
other matter or any rights whatsoever as shareholders of the Company.
Section 4.02: Lost, Stolen, Mutiliated or Destroyed Warrants.. If this
Warrant is lost, stolen, mutilated or destroyed, the Company may, on such terms
as to indemnity or otherwise as it may in its discretion impose (which shall, in
the case of a mutilated Warrant, include the surrender thereof), issue a new
Warrant of like denomination and tenor as, and in substitution for, this
Warrant.
Section 4.03: Reservation of Shares.
(a) The Company covenants and agrees that at all times it shall reserve and
keep available for the exercise of this Warrant such number of authorized shares
of Common Stock as are sufficient to permit the exercise in full of this
Warrant.
(b) Prior to the issuance of any shares of Common Stock upon exercise of
this Warrant, the Company shall use its best efforts to secure the listing of
such shares of Common Stock upon the securities exchange or automated quotation
system, if any, upon which shares of Common Stock are then listed.
(c) The Company covenants that all shares of Common Stock issued on
exercise of this Warrant will be validly issued, fully paid, non-assessable and
free of preemptive rights.
Section 4.04: No Fractional Shares. Anything contained herein to the
contrary notwithstanding, the Company shall not be required to issue any
fraction of a share in connection with the exercise of this warrant, and in any
case where the Warrantholder would, except for the provisions of this Section
4.04, be entitled under the terms of this Warrant to receive a fraction of a
share upon exercise of this Warrant and receipt of the Exercise Price, issue the
larger number of whole shares purchasable upon exercise of this Warrant. The
Company shall not be required to make any cash or other adjustment in respect of
such fraction of a share to which the Warrantholder would otherwise be entitled.
ARTICLE V
Treatment of Warrantholder
Prior to due presentment for registration or transfer of this Warrant, the
Company may deem and treat the Warrantholder as the absolute owner of this
Warrant (notwithstanding any notation of ownership or other writing hereon) for
the purpose of any exercise hereof and for all other purposes of the Company
shall not be affected by any notice to the contrary.
ARTICLE VI
Split-Up, Combination
Exchange and Transfer of Warrants
Section 6.01: Split-up, Combination, Exchange and Transfer of Warrants.
Subject to and limited by the provisions of Section 6.02 hereof, this Warrant
may be split up, combined or exchanged for another Warrant or Warrants
containing the same terms to purchase a like aggregate number of Warrant Shares.
If the Warrantholder desires to split up, combine or exchange this Warrant, he
or it shall make such request in writing delivered to the Company and shall
surrender to the Company this Warrant and any other Warrants to be so split up,
combined or exchanged. Upon any such surrender for a split-up, combination or
exchange, the Company shall execute and deliver to the person entitled thereto a
Warrant or Warrants, as the case may be, as so requested. The Company shall not
be required to effect any split-up, combination or exchange which will result in
the issuance of a warrant entitling the warrantholder to purchase upon exercise
a fraction of a share of Common Stock or a fractional Warrant. The Company may
require such Warrantholder to pay a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any split-up,
combination or exchange of Warrants.
Section 6.02: Restrictions on Transfer. This Warrant may not be sold,
hypothecated exercised, assigned or transferred (a "Transfer'*), except (i) to
Value Investing Partners, Inc., any successor to the business of such company,
or any officer or employee of such company, or (ii) to any underwriter in
connection with a Public Offering of the Company's Common Stock, provided (as to
(ii)) that this Warrant is exercised immediately upon such Transfer and the
Common Stock issued upon such exercise is sold by such underwriter as part of
such Public Offering and, as to (i) and (ii), only in accordance with and
subject to the provisions of the Securities Act and the rules and regulations
promulgated thereunder. if at the time of such a Transfer a Registration
Statement is not in effect to register this Warrant under the Securities Act,
the Company may. require the Warrantholder to make such representations, and may
place such legends on certif icates representing this Warrant, as may be
reasonably required in the opinion of counsel to the Company to permit such a
Transfer without such registration.
ARTICLE VII
Registration Under the Securities Act of 1.933
Section 7.01: Piggyback Registration.
(a) Right to Include Registrable Securities. If at any time prior to the
Expiration Date the Company proposes to register any class of debt or equity
security or any Common Stock Equivalent under the Securities Act on any form for
the registration of securities under such Act, whether or not for its own
account (other than a registration form relating to (i) a registration of a
stock option, stock purchase or compensation or incentive plan or of stock
issued or issuable pursuant to any such plan, or a dividend investment plan;
(ii) a registration of securities proposed to be issued in exchange for
securities or assets of, or in connection with a merger or consolidation with,
another corporation; or (iii) a registration of securities proposed to be issued
in exchange for other securities of the Company) in a manner which would permit
registration of Registrable Securities for sale to the public under the
Securities Act (a "Piggyback Registration"), it will at such time give prompt
written notice to all Holders of Registrable Securities of its intention to do
so and of such Holders' rights under this Section 7.01. Such rights are referred
to hereinafter as "Piggyback Registration Rights". Upon the written request of
any such Holder made within 20 days after the giving of any such notice (which
request shall specify the Registrable Securities intended to be disposed of by
such Holder and the intended method of disposition thereof), the Company will
include in the Registration Statement the Registrable Securities which the
Company has been so requested to register by the Holders thereof provided that
the Company need not include any such Registrable Securities in Registration
Statements filed after the Expiration Date.
(b) Withdrawal of Piggyback Registration by Company. If, any time after
giving written notice 'of its intention to register any securities in a
Piggyback Registration but prior to the effective date of the related
Registration Statement filed in connection with such Piggyback Registration, the
Company shall determine for any reason not to register such securities, the
Company will give written notice of such determination to each Holder and
thereupon shall be relieved of its obligation to register any Registrable
Securities in connection with such Piggyback Registration. All best efforts
obligations of the Company pursuant to Section 7.02 shall cease if the Company
determines to terminate any registration where Registrable Securities are being
registered pursuant to this Section 7.01.
(c) Piggyback Registration of Underwritten Public Offering. If a Piggyback
Registration requested pursuant to this Section 7.01 involves an underwritten
offering, then, (i) all Holders requesting to have their Registrable Securities
included in the Company's registration must sell their Registrable Securities to
the underwriters selected by the Company on the same terms and conditions as
apply to other selling shareholders; and (ii) any Holder requesting to have his
or its Registrable Securities included in such registration may elect in
writing, not later than 3 Business Days prior to the effectiveness of the
Registration Statement filed in connection with such registration, not to have
his or its Registrable Securities so included in connection with such
registration.
(d) Payment of Registration Expenses for Piggyback Registration. The
Company will pay all Registration Expenses in connection with each registration
of Registrable Securities requested pursuant to a Piggyback Registration Right
contained in this Section 7.01, except for the fees and disbursements of any
counsel retained by the Holders of the Registrable Securities being so
registered.
(e) Priority in Piggyback Registration. if a Piggyback Registration
involves an underwritten offering and the managing underwriter advises the
Company in writing that, in its opinion, the number or kind of Registrable
Securities requested to be included in such Piggyback Registration would have a
material adverse effect on such offering, including a significant decrease in
the price at which such securities can be sold, then the Registrable Securities
to be offered for the accounts of Holders pursuant to a Piggyback Registration
Right shall be eliminated entirely or reduced pro rata as to all requesting
Holders on the basis of the relative number of Registrable Securities to be
included in such offering to the amount recommended by such managing
underwriter; provided, however, that no securities may be offered in such
registration for the account of persons other than the Company by virtue of
their also having "piggyback" registration rights, or otherwise, unless the
Registrable Securities requested to be included in such registration are so
included on a pro rata basis (by percentage of each class of securities) as to
such other persons holding "piggyback" rights and the Holders requesting
registration.
(f) Expiration of Piggyback Registration Rights. The Piggyback
Registration Rights shall survive the -exercise o the Warrant or the
transactions or events pursuant to which such Registrable Securities were
issued, but all such rights will terminate in all events on the Expiration Date.
Section 7.02: Demand Registration.
(a) Request for Registration. Subject to the limitations set forth below in
this Section 7.02, any Holder or Holders who hold in the aggregate 25% or more
of the then outstanding Registrable Securities may after October 6, 1993 from
time to time but prior to nine (9) months after the Expiration Date make written
requests for the registration under the Securities Act of all or part of their
Registrable Securities (a "Demand Registration") and the Company shall use its
best efforts to effect such Demand Registration. The Holders, as a group, shall
be limited to one Demand Registration and thereafter may not make any further
written requests for registration.
(b) Limitations on Demand Registration. The Company shall not be required
to effect a Demand Registration sooner than (i) for a 120 day period
following the effective date of a registration statement pertaining to an
underwritten Public Offering for the account of the Company; (ii) if the
Company, in its reasonable judgment, determines that registration at the time
requested by the Holders would materially adversely affect the Company, by,
among other things, requiring disclosure of, any litigation or transactions at
an inopportune time, in which case the obligation of the Company to register any
Registrable Securities shall be delayed until the reason for such adverse affect
has ceased to exist; or (iii) if the timing of the Demand Registration is such
that a special audit of the Company would be required in connection with the
preparation of financial statements for the registration.
Section 7.03 Registration Procedures. If and whenever the Company is
required to use its best efforts to effect or cause the registration of any
Registrable Securities under the Securities Act as provided in this Article VII,
the Company will, as expeditiously as practicable:
(a) notify the selling Holders of Registrable Securities and the managing
underwriters, if any, promptly, and (if requested by any such Person) confirm
such- advice in writing, (i) when a Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to a Registration
Statement or any post-effective amendment, when the same has become effective;
(ii) of any request by the SEC for amendments or supplements to a Registration
Statement or related Prospectus or for additional information; (iii) of the
issuance by the SEC of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that purpose;
(iv) if at any time the representations and warranties of the Company
contemplated by paragraph (n) below ceases to be true and correct; (v) of the
receipt by the Company of any notification with respect to the suspension of the
qualification of any of the Registrable Securities for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose, and (vi) of
the happening of any event that makes any statement made in the Registration
Statement, the Prospectus or any document incorporated therein by reference
untrue or which requires the making of any changes in the Registration Statement
or Prospectus so that they will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading;
(b) make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement at the earliest
possible moment;
(c) if reasonably requested by the managing underwriters, immediately
incorporate in a Prospectus supplement or post-effective amendment such
information as the managing underwriters believe (on advice of counsel) should
be included therein as required by applicable law relating to such sale of
Registrable Securities, including, without limitation, information with respect
to the purchase price being paid for the Registrable Securities by such
underwriters and with respect to any other terms of the underwritten (or
"best-efforts" underwritten) offering; and make all required filings of such
Prospectus supplement or post-effective amendment as soon as notified of the
matters to be incorporated in such Prospectus supplement or post-effective
amendment;
(d) furnish to each selling Holder of Registrable Securities and each
managing underwriter, without charge, at least one signed copy of the
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules, all documents incorporated therein by
reference and all exhibits (including those incorporated by reference);
(e) deliver to each selling Holder of Registrable Securities and the
underwriters, if any, without charge, as many copies of the Prospectus or
Prospectuses (including each preliminary Prospectus) and any amendment or
supplement thereto as such Persons may reasonably request; the Company consents
to the use of such Prospectus of any amendment or supplement thereto by each of
the selling Holders of Registrable Securities and the underwriters, if any, in
connection with the offering and sale of the Registrable Securities covered by
such Prospectus or any amendment or supplement thereto;
(f) prior to any public offering of Registrable securities, cooperate with
the selling Holders of Registrable Securities, the underwriters, if any, and
their respective counsel in connection with the registration or qualification of
such Registrable Securities for offer and sale under the securities or Blue Sky
laws of such jurisdictions within the United States as any seller or underwriter
reasonably requests in writing, keep each such registration or qualification
effective during the period such Registration Statement is required to be kept
effective and to any and all other acts or things necessary or advisable to
enable the disposition in such jurisdictions of the Registrable Securities
covered by the applicable Registration Statement; Provided that the Company will
not be required to qualify generally to do business in any jurisdiction where it
is not then so qualified or to take any action which would subject the Company
to general service of process in any jurisdiction where it is not at the time so
subject;
(g) cooperate with the selling Holders of Registrable Securities and the
managing underwriters, if any, to facilitate the timely preparation and delivery
of certificates representing Registrable Securities to be sold and not bearing
any restrictive legends; and enable such Registrable Securities to be in such
denominations and registered in such names as the managing underwriters may
request at least two Business Days prior to any sale of Registrable Securities
to the underwriters;
(h) use its best efforts to cause the Registrable Securities covered by the
applicable Registration Statement to be registered with or approved by such
other governmental agencies or authorities within the United States as may be
necessary to enable the seller or sellers thereof or the underwriters, if any,
to consummate the disposition of such Registrable Securities.
(i) upon the occurrence of any event contemplated by paragraph (c)(vi)
above, prepare a supplement or post-effective amendment to the applicable
Registration Statement or related Prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Securities being sold thereunder,
such Prospectus will not contain an untrue statement or a material fact or omit
to state any material fact necessary to make the statements therein not
misleading;
(j) with respect to each issue or class of Registrable Securities, use its
best efforts to cause all Registrable Securities covered by the Registration
Statements to be listed on each securities exchange, if any, on which similar
securities issued by the Company are then listed if requested by the Holders of
a majority of such issue or class of Registrable Securities;
(k) except as otherwise provided in this Agreement, the Company shall have
sole control in connection with the Preparation, filing, withdrawal, amendment
or supplementing of each Registration Statement, the selection of underwriters,
and the distribution of any preliminary prospectus included in the Registration
Statement, and may include within the coverage thereof additional shares of
Common Stock or other securities for its own account or for the account of one
or more of its other security holders;
(1) Holders of Registrable Securities shall have no registration rights
hereunder in respect of any proposed transfer of such securities if, in the
opinion of recognized securities counsel to the Company (A) registration under
the Securities Act is not required for the transfer of the Registrable
Securities in the manner provided by such Holder and that there are no further
Securities Act resale restrictions on the Registrable Securities or (B) a
post-effective amendment to an existing registration statement would be legally
sufficient for such transfer.
The Company may require each seller of Registrable Securities as to which
any registration is being effected to furnish to the Company such information
regarding the distribution of such securities and such other information as may
otherwise be required by the Securities Act to be included in such Registration
Statement, as the Company may from time to time reasonably request in writing.
Each Holder of Registrable Securities agrees by acquisition of such
Registrable Securities that, upon receipt of any notice from the Company of the
happening of any event of the kind described in paragraphs (a) or (b) hereof,
such Holder will forthwith discontinue disposition of such Registrable
Securities covered by such Registration Statement or Prospectus until such
▇▇▇▇▇▇'s receipt of the copies of the supplemented or amended Prospectus
contemplated by paragraph (i) hereof, or until it is advised in writing by the
Company that the use of the applicable Prospectus may be resumed, and has
received copies of any additional or supplemental filings which are incorporated
by reference in such Prospectus, and, if so directed by the Company, such holder
will deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in such Holder's possession, of the Prospectus
covering such Registrable Securities current at the time of receipt of such
notice.
Section 7.04: Indemnification.
(a) Indemnification by Company. The Company agrees to indemnify and hold
harmless, to the full extent permitted by the law, each Holder, its officers,
directors and agents and each Person who controls such Holder or agents (within
the meaning of the Securities Act) against all losses, claims, damages,
liabilities and expenses caused by any untrue or alleged untrue statement of a
material fact contained in any Registration Statement, Prospectus or preliminary
prospectus or any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as the same are contained in any information
furnished in writing to the Company by such Holder expressly for use therein; vi
however, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage, liability or expense arises out of or in
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any preliminary prospectus if (i) such Holder failed to
send or deliver a copy of the Prospectus with or prior to the delivery of
written confirmation of the sale of Registrable Securities and (ii) the
Prospectus would have corrected such untrue statement or omission; and provided,
further, that the Company shall not be liable in any such case to the extent
that any such loss claim, damage, liability or expense arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission in the Prospectus, if such untrue statement or untrue statement,
omission or alleged omission is corrected in an amendment or supplement to the
Prospectus and if, having previously been furnished by or on behalf of the
Company with copies of the Prospectus as so amended or supplemented, such Holder
thereafter fails to deliver or cause to be delivered such Prospectus as so
amended or supplemented, prior to or concurrently with the sale of a Registrable
Security to the person asserting such loss, claim, damage, liability or expense
who purchased such Registrable Security from such Holder. The Company will also
indemnify underwriters, selling brokers, dealer managers, and similar securities
industry professionals participating in the distribution their officers and
directors and each person who controls such Persons (within the meaning of the
Securities Act) to the same extent as provided above with respect to the
indemnification of the Holders of Registrable Securities, if requested.
(b) Indemnification by Holder of Registrable Securities. In connection with
any registration, each Holder will furnish to the Company in writing such
information and affidavits as the Company reasonably requests for use in
connection with any Registration Statement or Prospectus and agrees to
indemnify, to the same extent as the indemnification provided by the Company in
Section 7.04(a), the Company, its directors and officers and each Person who
controls the Company (within the meaning of the Securities Act) against all
losses, claims, damages, liabilities and expenses caused by any untrue statement
of a material fact or any omission of a material fact required to be stated in
any Registration Statement or Prospectus or preliminary prospectus or necessary
to make the statements therein not misleading, to the extent, but only to the
extent, that such untrue statement or omission is contained in or based upon any
information or affidavit so furnished in writing by such Holder to the Company
specifically for inclusion in such Registration Statement or Prospectus. In no
event shall the liability of any selling Holder of Registrable Securities
hereunder be greater in amount than the dollar amount of the net proceeds
received by such Holder upon the sale of the Registrable Securities giving rise
to such indemnification obligation. The Company shall be entitled to receive
indemnities from underwriters, selling brokers, dealer managers, and similar
securities industry professionals participating in the distribution, to the same
extent as provided above with respect to information so furnished in writing by
such Persons specifically for inclusion in any. prospectus or Registration
Statement.
(c) Conduct of Indemnification Procedure. Any party that proposes to assert
the right to be indemnified hereunder will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in respect of
which a claim is to be made against an indemnifying party or parties under this
Section, notify each such indemnifying party of the commencement of such action,
suit or proceeding, enclosing a copy of all papers served, No indemnification
provided for hereunder shall be available to any party who shall fail to give
notice as provided in this Section 7.04(c) if the party to whom notice was not
given was unaware of the proceeding to which such notice would have related and
was prejudiced by the failure to give such notice but the omission so to notify
such indemnifying party of any such action, suit or proceeding shall not relieve
it from any liability that it may have to any indemnified party for contribution
or otherwise than under this Section. In case any such action, suit or
proceeding shall be brought against any indemnified party and it shall notify
the indemnifying party of the commencement thereof, the indemnifying party shall
be entitled to participate in, and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party, and after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof and the approval by the indemnifying party to such
indemnified party of its election so to assume the defense thereof and the
approval by the indemnified party of such counsel, the indemnifying party shall
not be liable to such indemnified party for any legal or other expenses, except
as provided below and except for the reasonable costs of investigation
subsequently incurred by such indemnified party in connection with the defense
thereof. The indemnified party shall have the right to employ its counsel in any
such action, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the employment of counsel by such
indemnified party has been authorized in writing by the indemnifying parties,
(ii) the indemnified party shall have reasonably concluded that there may be a
conflict of interest between the indemnifying parties and the indemnified party
in the conduct of the defense of such action' (in which case the indemnifying
parties shall not have the right to direct the defense of such action on behalf
of the indemnified party) or (iii) the indemnifying parties shall not have
employed counsel to assume the defense of such action within a reasonable time
after notice of the commencement thereof, in each of which cases the fees and
expenses of counsel shall be at the expense of the indemnifying parties. An
indemnifying party shall not be liable for any settlement of any action, suit,
proceeding or claim effected without its written consent.
Section 7.05: Restrictions on Public Sale by Holder of Registrable
Securities. Each holder of Registrable Securities whose Registrable Securities
are covered by a Registration Statement filed pursuant to Article VII hereof
agrees, if requested by the managing underwriters in any underwritten
offering, not to effect any public sale or distribution of any securities of
the Company of the same class as the securities included in such Registration
Statement, including a sale pursuant to rule 144 under the Securities Act
(except as part of such underwritten registration) , during the ten-day period
prior to, and during the period the officers and directors of the Company are
similarly restricted in the sale or distribution of any securities of the
Company pursuant to such Registration Statement, to the extent timely
notified in writing by the managing underwriters.
The foregoing provisions shall not apply to any Holder if such Holder is
prevented by applicable statute or regulation from entering any such agreement.
However, any such Holder shall undertake, in its request to participate in any
such underwritten offering, not to effect any public sale or distribution of the
applicable Registrable Securities unless it has provided 45 days prior written
notice of such sale or distribution to the underwriter or underwriters.
ARTICLE VIII
Other Matters
Section 8.01: Expenses of Transfer. The Company will from time to time
promptly pay, subject to the provisions of Section 6.01 and paragraph (d) of
Section 2.02, all taxes and charges that may be imposed upon the Company in
respect to the issuance or delivery of Warrant Shares upon the exercise of this
Warrant by the Warrantholder.
Section 8.02: Successors and Assigns. All the covenants and provisions of
this Warrant by or for the benefit of the Company shall bind and inure to the
benefit of its successors and assigns hereunder.
Section 8.03: No Inconsistent Agreements. The Company will not on or after
the date of this Warrant enter into any agreement with respect to its securities
which is inconsistent with the rights granted to the Holders in this Warrant or
otherwise conflicts with the provisions hereof. The Company has not previously
entered into any agreement with respect to its securities granting any
registration rights to any Person, except for the holders of the shares issued
upon the acquisition of Comstron Corporation. The rights granted to the Holders
hereunder do not in any way conflict with and are not inconsistent with the
rights granted to the holders of the Company's securities under said agreement
Section 8.04: Amendments and Waivers. The provisions of this Warrant,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waiver or consents to departures from the provisions hereof
may not be given unless the Company has obtained the written consent of holders
of at least a majority of the outstanding Registrable Securities. Holders shall
be bound by any consent authorized by this Section whether or not certificates
representing such Registrable Securities have been marked to indicate such
consent.
Section 8.05: Counterparts. This Warrant may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
so executed shall be deemed to be an original and all of , which taken together
shall constitute one and the same agreement.
Section 8.06: Governing Law. This Warrant shall be governed by and
construed in accordance with the laws of the State of New York.
Section 8.07: Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provisions in every other respect and of the
remaining provisions contained herein shall not be affected or impaired thereby.
Section 8.08: Integration/Entire Agreement. Warrant is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein with respect to the registration rights granted by the Company with
respect to the warrants sold pursuant to the Warrant. This Warrant supersedes
all prior agreements and understandings between the parties with respect to such
subject matter.
Section 8.09: Attorney's Fees. In any action or proceeding brought to
enforce any provisions of this Warrant to purchase, or where any provisions
hereof or thereof is validly asserted as a defense, the successful party shall
be entitled to recover reasonable attorneys' fees and disbursements in addition
to its costs and expenses and any other available remedy.
Section 8.10: Computations of Consent. Whenever the consent or approval of
Holders of a specified percentage of Registrable Securities is required
hereunder, Registrable Securities held by the Company or its affiliates (other
than the Warrantholder or subsequent Holders if they are deemed to be such
affiliates solely by reason of their holdings of such Registrable Securities)
shall not be counted in determining whether such consent or approval was given
by the Holders of such required percentage.
Section 8.11: Notices. Notice or demand pursuant to this Warrant to be
given or made by the Warrantholder to or on the Company shall be sufficiently
given or made if sent by first class mail, postage prepaid, to the Warrantholder
or the Holder of Registrable Securities at his or its last known address as it
shall appear on the books of the Company.
Section 8.12: Headings. The Article headings herein are for convenience
only and are not part of this Warrant and shall not affect the interpretation
thereof.
IN WITNESS WHEREOF, this Warrant has been duly executed by the Company
under its corporate seal as of the lst day of December, 1992.
ARX, INC.
By:_________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇, President
(Corporate Seal)
ATTEST:
__________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Secretary
ASSIGNMENT
(To be executed only upon assignment of Warrant Certificate)
For value received, hereby sells, assigns and transfers unto the within
Warrant Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint attorney, to transfer said
Warrant Certificate on the books of the within-named Company with respect to the
number of Warrants set forth below, with full power of substitution in the
premises:
Name(s) of
Assignee(s) Address No. of Warrants
------------- -------- -----------------
And if said number of Warrants shall not be all the Warrants represented by the
Warrant Certificate, a new Warrant Certificate is to be issued in the name of
said undersigned for the balance remaining of the Warrants represented by said
Warrant Certificate.
Dated:
-----------------------------------
Note: The above signature should
correspond exactly with the
name on the face of this
Warrant Certificate.
SUBSCRIPTION FORM
(To be executed upon exercise of Warrant) ARX, Inc.
The undersigned hereby irrevocably elects to exercise the right of purchase
represented by the within Warrant Certificate for, and to purchase thereunder,
shares of Common Stock, as provided for therein, and tenders herewith payment of
the purchase price in full in the form of cash or a certified or official bank
check in the amount of $
Please issue a certificate or certificates for such common Shares in the
name of, and pay any cash for any fractional share to:
Name___________________________________
(Please Print Name, Address
and Social Security No.)
Signature______________________________
Note: The above signature
should correspond
exactly with the
name on the first
page of this Warrant Certificate
or with the name of the assignee
appearing in the assignment form below.
And if said number of shares shall not be all the shares purchasable under
the within Warrant Certificate, a new Warrant Certificate is to be issued in the
name of said undersigned for the balance remaining of the shares purchasable
thereunder less any fraction of a share paid in cash.