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EXHIBIT 4.N.3
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SERIES A WARRANT
to Purchase Common Stock of
NORAND CORPORATION
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Warrant No. A - 3
Original Issue
Date: November 20, 1996
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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. Transfer 14
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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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 - 3
SERIES A WARRANT
NORAND CORPORATION
THIS IS TO CERTIFY THAT FLEET NATIONAL BANK, 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"), Forty-three Thousand Five Hundred Fifty-four (43,554) 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
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the 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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31
(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, except
upon 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 Fleet National Bank 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:_________________________
Name:
Title:
[SEAL]
Attest:
By:___________________________
Name:
Title:
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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.