THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS.
THEY MAY NOT BE SOLD OR OFFERED FOR SALE EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN
APPLICABLE EXEMPTION FROM SUCH REGISTRATION
REQUIREMENTS.
No. 1 ___________
FORM OF
6% CONVERTIBLE DEBENTURE DUE AUGUST 27, 1999
THIS CONVERTIBLE DEBENTURE ("Debenture") is one of a
duly authorized issue of Debentures of Oncor, Inc., a corporation
duly organized and existing under the laws of the State of
Maryland and having its principal address at 209 Perry Parkway,
Gaithersburg, Maryland 20877 (the "Company"), designated as its
6% Convertible Debentures Due August 27, 1999 (as such date may
be extended pursuant to Section 5(a)(ii) below) in an aggregate
amount not exceeding Five Million U.S. Dollars (U.S. $5,000,000)
(the "Debentures").
FOR VALUE RECEIVED, the Company promises to pay to
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the holder hereof, or its order (the "Holder"), the principal sum
of Two Hundred Fifty Thousand United States Dollars (U.S.
$250,000) on August 27, 1999 (as adjusted from time to time as
provided herein and in the Registration Rights Agreement, the
"Maturity Date") and to pay interest on the principal sum
outstanding under this Debenture ("Outstanding Principal
Amount"), at the rate of 6% per annum due and payable
semi-annually in arrears on the 27th day of February and August
of each year (each an "Interest Payment Date"), with the first
such payment due on February 27, 1997. Accrual of interest shall
commence on the first business day to occur after the date hereof
and shall continue until payment in full of the principal sum has
been made. The interest so payable will be paid to the person in
whose name this Debenture is registered on the records of the
Company regarding registration and transfers of the Debentures
(the "Debenture Register"); provided, however, that the Company's
obligation to a transferee of this Debenture arises only if the
transfer, sale or other disposition is made in accordance with
the terms and conditions of the Subscription Agreement, dated as
of August 27, 1996, between the Company and the Holder (as
amended from time to time and in effect, the "Subscription
Agreement"). The principal of and interest on this Debenture are
payable in United States Dollars at the address last appearing on
the Debenture Register of the Company as designated in writing by
the Holder hereof from time to time; provided, however, that, in
lieu of paying such interest in United States Dollars, the
Company may, at its option, pay interest on this Debenture for
any Interest Payment Date by adding the amount of such interest
to the Outstanding Principal Amount due under this Debenture
("PIK Interest") pursuant to a statement in the form of Exhibit A
hereto ("PIK Statement") delivered by the Company to the Holder
on or prior to the applicable Interest Payment Date. If the cash
interest due hereunder is not paid to the Holder by the
applicable Interest Payment Date, then the Holder shall be
entitled to the addition of PIK Interest hereunder and to the
delivery of a PIK Statement with respect thereto. Any PIK
Interest when so added to the Outstanding Principal Amount due
under this Debenture shall, for all purposes of this Debenture,
be deemed to have been part of the principal indebtedness
originally evidenced by this Debenture including, without
limitation, for purposes of determining interest thereafter
payable hereunder and amounts thereafter convertible into Common
Stock hereunder. Subject to the conversion hereof, in whole or
in part, on or before the Maturity Date pursuant to Paragraph 5
hereof, the Company will pay the principal of and all accrued and
unpaid interest due upon this Debenture on the Maturity Date, to
the Holder of this Debenture as of the tenth (10th) day prior to
the Maturity Date and addressed to such Holder at the last
address appearing on the Debenture Register.
This Debenture is subject to the following additional
provisions:
1. Exchange. The Debentures are exchangeable for an
equal aggregate principal amount of Debentures of different
denominations, of not less than $100,000 (or the total principal
amount, if less than $100,000) each as requested by the Holder
surrendering the same. No service charge will be made for such
exchange.
2. Transfers. This Debenture has been issued subject
to investment representations of the original purchaser hereof
and may be transferred or exchanged in the United States only in
compliance with the Securities Act of 1933, as amended (the
"Act") and applicable state securities laws and in accordance
with other applicable provisions hereof. Prior to due
presentment for transfer of this Debenture, the Company may treat
the person in whose name this Debenture is duly registered on the
Company's Debenture Register as the owner hereof for the purpose
of receiving payment as herein provided and all other purposes,
whether or not this Debenture is then overdue, and the Company
shall not be affected by notice to the contrary.
3. Definitions. For purposes hereof, the following
terms shall have the following meanings:
"Closing Date" shall mean the date of original
issuance of this Debenture.
"Common Stock" shall mean the Common Stock, par
value $.01 per share, of the Company.
"Conversion Date Market Price" shall mean, at any
Holder Conversion Date, an amount that is equal to the percentage
set forth in the table below (the "Applicable Percentage")
opposite the period in which the Holder Conversion Date shall
have occurred of the average Market Price for Shares of Common
Stock for the five trading days immediately preceding the Holder
Conversion Date, subject to adjustment from time to time as set
forth in Paragraph 7 hereof and, if applicable, in Section 6 and
9 of the Registration Rights Agreement.
Holder Conversion Date Applicable Percentage
---------------------- ---------------------
0 to 75 days after First Closing Date 100%
76 to 105 days after First Closing Date 85%
106 to 135 days after First Closing Date 82.5%
136 days or more after First Closing Date 80%
"Conversion Deficiency" shall have the meaning set
forth in Paragraph 9(b).
"Conversion Notice" shall have the meaning set
forth in Paragraph 5(c).
"Conversion Rate" shall have the meaning set forth
in Paragraph 5(b).
"Equity Offerings" shall mean the issuance or sale
by the Company of any Common Stock or securities which are
convertible into or exchangeable for Common Stock, or any
warrants or other rights to subscribe for or to purchase, or any
options for the purchase of, Common Stock or any such convertible
or exchangeable securities (other than shares or options issued
or which may be issued pursuant to the Company's employee or
director option plans or shares issued upon exercise of options,
warrants or rights outstanding on the Closing Date and listed in
the Exchange Act Reports).
"Holder Conversion Date" shall have the meaning
set forth in Paragraph 5(c).
"Market Price for Shares of Common Stock" shall
mean the price of one share of Common Stock determined as
follows:
(i) If the Common Stock is listed
on the Exchange, the lowest sales price on the date of valuation,
excluding any sales made by the Holder or any affiliate of the
Holder, as reported in the Wall Street Journal; or
(ii) If the Common Stock is listed
on any other national securities exchange, the lowest sales price
on the dateof valuation, excluding any sales made by the Holder
or anyaffiliate of the Holder, as reported in the Wall Street
Journal; or
(iii) If neither (i) nor (ii) apply,
but the Common Stock is quoted in the over-the-counter market on
the pink sheets or bulletin board, the last "bid" price on the
date of valuation, excluding any sales made by the Holder or any
affiliate of the Holder, as reported in the Wall Street Journal;
or
(iv) If none of clause (i), (ii) or
(iii) above applies, the market value as determined by an
independent nationally recognized investment banking firm or
financial advisor retained in good faith by the Company for such
purpose, taking into consideration, among other factors, the
earnings history, book value and prospects for the Company, and
the prices at which shares of Common Stock recently have been
traded. Such determination shall be conclusive and binding on
all persons.
"Paragraph 4 Transaction" shall mean a merger,
consolidation, or other transaction referred to in Paragraph 4.
"Redemption Date" shall have the meaning set forth in
Paragraph 6(c).
"Registration Rights Agreement" shall have the meaning
set forth in the Subscription Agreement.
"Subscription Agreement" shall mean the Subscription
Agreement, dated August 27, 1996, between the Company and the
Subscriber to the original issue of the Debentures and the
Warrants, as such Subscription Agreement may be amended from time
to time.
"Warrants" shall have the meaning set forth in the
Subscription Agreement.
Other terms defined in the Subscription Agreement and
not otherwise defined herein shall have the same meanings herein
as are set forth for such terms in the Subscription Agreement.
4. Merger; Consolidation. If at any time there occurs
any consolidation or merger of the Company with or into any other
corporation or other entity or person (whether or not the Company
is the surviving corporation) or any other corporate
reorganization or similar transaction or series of related
transactions in which greater the 50% of the Company's voting
power is transferred (a "Paragraph 4 Transaction"), the Holder of
this Debenture, to the extent then outstanding shall participate
in any such transaction as a class with common stockholders of
the Company on the same basis as if this Debenture had been
converted one day prior to the record date or effective date of
such Paragraph 4 Transaction; provided, however, that if a
Paragraph 4 Transaction or the record date for determination of
the Company's stockholders entitled to participate in such
Paragraph 4 Transaction shall occur at any time before the first
anniversary of the effectiveness of the Registration Statement
contemplated by the Registration Rights Agreement, then, at the
option of the Holder of this Debenture, such Holder may treat the
effective date of such Paragraph 4 Transaction as a Redemption
Date and shall be entitled to receive the redemption price with
respect to such Redemption Date as is provided in Paragraph 6.
Such Holder shall be entitled to make such election at any time
up to ten (10) trading days after the closing date of the
Paragraph 4 Transaction. Nothing in this Section 4 shall
prohibit the Holder from converting any part or all of this
Debenture in accordance with the terms hereof, up to and
including the closing date of the Paragraph 4 Transaction.
5. Conversion. This Debenture is subject to
conversion as follows:
(a) (i) Holder's Right to Convert. This Debenture
shall be convertible at any time and from time to time, in whole
or in part, but not in an amount less than $100,000 of the
Outstanding Principal Amount of this Debenture (unless such
amount represents the entire Outstanding Principal Amount), at
the option of the Holder hereof, into fully paid, validly issued
and nonassessable shares of Common Stock.
(ii) Automatic Conversion. At maturity
of this Debenture, the principal indebtedness then outstanding
hereunder (including without limitation all PIK Interest then
included therein) shall automatically be converted into fully
paid, validly issued and nonassessable shares of Common Stock
and, except for the Holder's right to receive the Common Stock
into which this Debenture is automatically so converted, this
Debenture shall be deemed to have been canceled whether or not
surrendered upon such automatic conversion. The maturity date
set forth on the face page of this Debenture shall be extended by
that number of days equal to twice the number of days for which
the Holder shall be subject to any market stand-off pursuant to
Section 9 of the Registration Rights Agreement.
(iii) Accrued But Unpaid Interest.
Notwithstanding anything in this Debenture to the contrary, the
Outstanding Principal Amount of this Debenture on any Holder
Conversion Date shall include, without limitation, all accrued
but unpaid interest under this Debenture.
(b) Conversion Price for Holder Converted Shares. The
Outstanding Principal Amount of this Debenture that is converted
into shares of Common Stock shall be convertible into the number
of shares of Common Stock determined in accordance with the
following formula:
P + I
----------------------------
Conversion Date Market Price
P = principal amount of this Debenture submitted for
conversion
I = accrued but unpaid interest on the principal
amount of this Debenture submitted for
conversion as of the Holder Conversion Date
The number of shares of Common Stock into which the
Outstanding Principal Amount of this Debenture, and interest
accrued but unpaid thereon, may be converted pursuant to this
paragraph is hereafter referred to as the "Conversion Rate".
(c) Mechanics of Conversion. In order to convert this
Debenture (in whole or in part) into full shares of Common Stock,
the Holder shall surrender this Debenture, duly endorsed, by
either overnight courier or 2-day courier, to the Company, and,
in case of any conversion pursuant to Section 5(a) (i), shall
give written notice in the form of Exhibit B hereto (the
"Conversion Notice") by facsimile (with the original of such
notice forwarded with the foregoing courier) to the Company that
the Holder elects to convert the principal amount of this
Debenture specified therein, which notice and election shall be
irrevocable by the Holder; provided, however, that the Company
shall not be obligated to issue certificates evidencing the
shares of the Common Stock issuable upon conversion unless (i)
this Debenture evidencing the principal amount of this Debenture
to be converted is delivered to the Company as provided above, or
the Holder notifies the Company that this Debenture has been
lost, stolen or destroyed and promptly executes an agreement
reasonably satisfactory to the Company to indemnify the Company
from any loss incurred by it in connection with this Debenture,
and (ii) the Company is provided with a replacement Debenture
whichrepresents the portion of the principal amount of this
Debenture which is not being submitted for conversion; and
provided, further, that each Conversion Notice shall provide for
the Holder's election to convert either (A) at least $100,000 of
the Outstanding Principal Amount of this Debenture, or (B) if
such Outstanding Principal Amount shall then be less than
$100,000, the entire Outstanding Principal Amount.
Upon receipt of any Conversion Notice, the Company
shall immediately verify the Holder's calculation of the
Conversion Rate. In the case of any Conversion Notice given by
the Holder or in the case of automatic conversion pursuant to
Paragraph 5(a)(ii), the Company shall use its best efforts to
issue and deliver within two (2) business days after delivery to
the Company of the Debenture, or after receipt of such agreement
and indemnification, to such Holder or to its designee, a
certificate or certificates for the number of shares of Common
Stock to which the Holder shall be entitled, together with a
Debenture for the principal amount not submitted for conversion,
the form of which shall have been provided to the Company prior
to the Company's delivery of a certificate or certificates for
the number of shares of Common Stock to which the Holder shall be
entitled. The date on which the Conversion Notice is given (the
"Holder Conversion Date") shall be deemed to be the date the
Company received by facsimile the Conversion Notice. The person
or persons entitled to receive the shares of Common Stock
issuable upon conversion shall be treated for all purposes as the
record holder or holders of such shares of Common Stock on the
Holder Conversion Date or on the Maturity Date, as the case may
be.
(d) Limitations on Conversion. In connection
with a conversion of this Debenture effected pursuant to the
terms of this Section 5, in no event shall the Company issue to
the Holder more than that number of shares of Common Stock which,
together with the Common Stock (i) theretofore issued upon
conversion of Debentures and exercise of Warrants and
(ii) reserved for issuance upon exercise of then unexercised
Warrants, would exceed 4,631,495 shares of Common Stock, as such
number is adjusted from time to time pursuant to the provisions
hereof (the "Maximum Share Amount"). Once the Maximum Share
Amount has been issued, the remaining Outstanding Principal
Amount shall be immediately due and payable by the Company to the
Holder in immediately available funds at an amount equal to the
Redemption Price.
6. Redemption. The Company shall have the following
redemption obligations.
(a) Company's Obligation To Redeem. Any portion
of this Debenture which, at any time on or before the Maturity
Date, shall become eligible for redemption under any provision of
this Agreement shall, at the Holder's option expressed by
notification to the Company (a "Redemption Notice"), be redeemed
by the Company in accordance with this Section 6.
(b) Redemption Price. The redemption price for
the portion of this Debenture being redeemed shall equal the
greater of (i) the closing market price on the Exchange on the
day on which the Redemption Notice was delivered to the Company,
multiplied by the number of shares into which such portion of
this Debenture could have been converted on such day pursuant to
Section 5, and (ii) 110% of the Outstanding Principal Amount of
this Debenture being so redeemed, plus accrued but unpaid
interest on such amount to the date of redemption (such greater
price being referred to as the "Redemption Price").
(c) Mechanics of Redemption. In the event the
Company shall be required to redeem any part or all of the
Outstanding Principal Amount of the Debentures, the Company shall
send by either overnight courier or 2-day courier (with a copy
sent by facsimile) notice of such determination to the record
Holders of the Debentures being redeemed (the "Redemption
Debentures"). If the Company shall not have the funds available
to pay the aggregate Redemption Price of all Redemption
Debentures, then, without limiting the Company's obligation to
redeem all Redemption Debentures, such redemption shall be made
from each Holder, pro rata according to the portion of the total
Outstanding Principal Amount of all Redemption Debentures then
held by each Holder. The notice shall provide that the
redemption shall occur on a date (the "Redemption Date") that is
no later than seven (7) business days after the date such notice
was sent by confirmed facsimile to such record Holders. On the
Redemption Date the Redemption Debentures shall be redeemed
automatically without any further action by the Holders of such
Debentures and whether or not the Debentures are surrendered to
the Company; provided, that the Company shall be obligated to pay
the cash consideration due to a Holder of such Debentures upon
redemption when such Debentures are either delivered to the
principal office of the Company or the Holder notifies the
Company that such Debentures have been lost, stolen or destroyed
and executes an agreement reasonably satisfactory to the Company
to indemnify the Company from any loss incurred by it in
connection with such Debenture. Thereupon, there shall be
promptly issued and delivered to such Holder, within seven (7)
business days after the Redemption Date and delivery to the
Company of such Debentures, or after receipt of such agreement
and indemnification, at the address of such Holder on the books
of the Company, payment in immediately available funds to the
name as shown on the books of the Company in the amount of the
redemption price as calculated as set forth in Paragraph 6(b).
(d) Suspension of Redemption. If the Company is
unable to pay the aggregate Redemption Price for any redemption
of Debentures required by Section 5(d), the Company may, by
notice to the Holder, suspend such redemption for a period of up
to 60 days if the Company (i) decides to seek approval of its
stockholders of the issuance of such additional number of shares
of its Common Stock as will enable full conversion of all the
Debentures into Common Stock at all times on or before the
Maturity Date in accordance with the terms thereof, (ii) pursues
such approval with all due diligence during such suspension and
(iii) obtains such approval within such 60 days. Upon receipt of
such approval, the Company will immediately cause to be delivered
to the Holder the greater of (A) the number of shares of Common
Stock issuable upon conversion of the outstanding portion of the
Debentures as if converted on the original conversion date, or
(B) the number of shares of Common Stock issuable upon conversion
of the outstanding portion of the Debentures as of the date of
such approval.
7. Stock Splits: Dividend, Adjustments,
Reorganizations.
(a) Stock Splits and Combinations. The Company
shall not effect or fix a record date for any stock split,
subdivision or combination with an effective date within five (5)
trading days of a Redemption Date, the receipt of a Conversion
Notice, or the effective date of a Paragraph 4 Transaction.
(b) Certain Dividends and Distributions. The
Company shall not make, or fix a record date for the
determination of holders of Common Stock entitled to receive, a
dividend or other distribution payable in additional shares of
Common Stock, with an effective date within five (5) trading days
of a Redemption Date, the receipt of a Conversion Notice, or the
effective date of a Paragraph 4 Transaction.
(c) Subdivisions, Combinations, etc. If the
Company shall subdivide its outstanding Common Stock, by
split-up, spin-off, or otherwise, or combine its outstanding
Common Stock, then the Conversion Rate in effect as of the date
of such subdivision, split-up, spin-off or combination shall
forthwith be proportionately adjusted.
(d) Adjusted for Dividends and Distributions. In
the event the Company at any time or from time to time after the
Closing Date makes, or fixes a record date for the determination
of holders of Common Stock entitled to receive, a dividend or
other distribution payable in securities of the Company other
than shares of Common Stock (including, without limitation,
rights to acquire Common Stock or such other securities), then
and in each such event provision shall be made so that the
Holders of Debentures shall receive upon conversion thereof
pursuant to Paragraph 5 hereof, in addition to the number of
shares of Common Stock receivable thereupon, the amount of such
other securities of the Company to which a Holder on the relevant
record or payment date, as applicable, of the number of shares of
Common Stock so receivable upon conversion would have been
entitled, plus any dividends or other distributions which would
have been received with respect to such securities, had such
Holder thereafter, during the period from the date of such event
to and including the Holder Conversion Date, retained such
securities, subject to all other adjustments called for during
such period under this Paragraph 7 with respect to the rights of
the Holders of the Debentures. For purposes of this Paragraph
7(d), the number of shares of Common Stock so receivable upon
conversion by the Holder shall be deemed to be that number which
the Holder would have received upon conversion of the entire
Outstanding Principal Amount hereof if the Holder Conversion Date
had been the day preceding the date upon which the Company
announced the making of such dividend or other distribution.
(e) Adjustment for Merger, Reorganization; etc.
In the event that at any time or from time to time after the
First Closing Date, the Common Stock issuable upon conversion of
the Debentures is changed into the same or a different number of
shares of any class or classes of stock, whether in connection
with a merger or consolidation, by recapitalization,
reclassification, reorganization or otherwise (other than a
subdivision or combination of shares or stock dividend or
reorganization provided for elsewhere in this Paragraph 7 or a
merger or consolidation provided for in Paragraph 4), then and in
each such event each Holder of Debentures shall have the right
thereafter to convert such Debenture into the kind of securities
receivable upon such merger, recapitalization, reclassification
or other change, all subject to further adjustment as provided
herein. In such event, the formulae set forth herein for
conversion and redemption shall be equitably adjusted to reflect
such change in number of shares or, if shares of a new class of
stock are issued, to reflect the market price of the class or
classes of stock (applying the same factors used in determining
the Market Price for Shares of Common Stock) issued in connection
with the above described transaction.
(f) Conversion Price Adjustment. In the event
that the Company issues or sells any Common Stock or securities
which are convertible into or exchangeable for its Common Stock,
or any warrants or other rights to subscribe for or to purchase,
or any options for the purchase of, its Common Stock or any such
convertible securities (other than the issuance of the Warrants
and shares of Common Stock pursuant to the exercise thereof,
shares or options issued or which may be issued pursuant to the
Company's employee or director option plans or shares issued upon
exercise of options, warrants or rights outstanding on the
Closing Date and listed in the Exchange Act Reports, but
including, without limitation, any such issuance in a Paragraph 4
Transaction) at an effective purchase price per Common Share
which is less than the Conversion Date Market Price then in
effect, then the Conversion Date Market Price shall thereafter be
equal to the lesser of (i) the lowest effective purchase price
per Common Share in such offering or sale, and (ii) the
Conversion Date Market Price determined as set forth in the
definition thereof. For purposes of the foregoing, the amount of
consideration received by the Company for any such issuance or
sale, other than cash, shall be the fair market value thereof as
determined by the Company's Board of Directors or, at the option
of the Holders of Debentures evidencing 50% or more of the
principal indebtedness then evidenced thereby, by an investment
banker or other appraiser selected by such Holders and reasonably
acceptable to the Company.
(g) Disputes. In the event of a reasonable, good
faith dispute between a Holder of Debentures and the Company with
respect to the adjustments required by Paragraphs 7(c), (d), (e)
or (f), then, at the option of either the Holders of Debentures
evidencing 50% or more of the principal indebtedness evidenced by
all Debentures held by Holders involved in such dispute or the
Company, the dispute shall be submitted to the American
Arbitration Association for resolution according to the then
applicable rules thereof. The cost of such proceeding shall be
shared 50% by the Holder or Holders involved in the dispute and
50% by the Company, except that each party shall bear its own
legal and other expenses.
8. Fractional Shares. No fractional shares of Common
Stock or scrip representing fractional shares of Common Stock
shall be issuable hereunder. The number of shares of Common
Stock that are issuable upon any conversion shall be rounded up
or down to the nearest whole share.
9. Reservation of Stock Issuable Upon Conversion.
(a) Reservation Requirement. The Company has
reserved and the Company shall continue to reserve and keep
available at all times, free of preemptive rights, shares of
Common Stock for the purpose of enabling the Company to satisfy
any obligation to issue shares of its Common Stock upon
conversion of the Debentures or upon exercise of Warrants;
provided, however, that the number of shares so reserved shall at
all times be at least 4,631,495 shares, of which 250,000 shares
shall be so reserved, first, for issuance upon exercise of the
Warrants and, second, for issuance upon conversion of Debentures
if all or a portion of the Warrants expire unexercised. The
numbers of shares so reserved may be reduced by the number of
shares actually delivered pursuant to conversion of Debentures
and exercise of Warrants (provided, that in no event shall the
number of shares so reserved be less than the maximum number
required to satisfy remaining conversion rights on the
unconverted Debentures and remaining exercise rights under any
Warrants) and the number of shares so reserved shall be increased
or decreased proportionally to reflect stock splits, stock
dividends, distributions or subdivisions or combinations of
Common Stock.
(b) Conversion Deficiency. If the Company does
not have a sufficient number of shares of Common Stock available
to satisfy the Company's obligations to a Holder of Debentures
upon receipt of a Conversion Notice or automatic conversion on
the Maturity Date, each Holder of the Debentures shall have the
right to demand from the Company immediate redemption of any
portion of the Debentures with respect to which the Company does
not have a sufficient number of shares available to satisfy such
conversion obligations, in cash at the Redemption Price pursuant
to Section 6 hereof.
10. No Impairment. The Company shall not
intentionally take any action which would impair the contractual
rights and privileges of the Debentures set forth herein or of
the Holders thereof.
11. Holder's Rights if Shares are Delisted or if
Trading in Common Stock is Suspended. In the event that at any
time on or after the date hereof and prior to the third
anniversary of the Closing Date, trading in the shares of the
Company's Common Stock is suspended on the Exchange for a period
of five consecutive trading days, other than as a result of the
suspension of trading in securities in general, or if such Shares
are delisted and not relisted within twenty (20) days thereafter,
then, at a Holder's option, the Company shall redeem such
Holder's Debentures on a Redemption Date designated by such
Holder, and at the Redemption Price and in accordance with
Section 6 hereof.
12. Limitations on Holder's Obligation to Convert.
Notwithstanding anything to the contrary contained herein, no
Holder shall be required to convert any part of this Debenture in
excess of the portion then convertible into that number of shares
of Common Stock specified in the Holder's representation to the
Company that, after giving effect to the shares of the Company's
Common Stock to be issued pursuant to such Conversion Notice, the
total number of shares of Common Stock deemed beneficially owned
by the Holder, together with all shares of the Company's Common
Stock deemed beneficially owned by the Holder's "affiliates" as
defined in Rule 144 of the Act, would exceed 4.9% of the total
issued and outstanding shares of the Company's Common Stock.
13. Rights of First Refusal. Except as otherwise set
forth below, the Holders shall have a right of first refusal pro
rata according to the Holders' ownership of Debentures on the
date on which the Company's notice pursuant to this Paragraph 13
is given on any Equity Offerings for a period of one (1) year
from the date hereof, so long as the Holders still hold any
Debentures and provided such Equity Offerings are made pursuant
to an exemption from the registration requirements of the
Securities Act of 1933, as amended. The Company shall give the
Holders written notice of its proposal to make such an Equity
Offering and shall provide with such notice copies of the
documentation, with the economic terms of the transaction
specified, pursuant to which the Equity Offering is to be
effected. Such Holders shall have ten (10) business days from
receipt of such notice to deliver a written notice to the Company
that such Holders wish to exercise their right of first refusal
with respect to the entire Equity Offering or a part thereof.
Failure by such Holders to respond within such period shall be
deemed an irrevocable waiver of their right of first refusal with
respect to such Equity Offering, provided that such offering is
completed upon such terms and with such documentation within
thirty (30) calendar days after said ten (10)-day period. If
such Holders exercise their right of first refusal with respect
to any Equity Offering, they must close the transactions
contemplated by the proposed issuance within ten (10) business
days of the exercise of their right hereunder on the same
economic terms and using the same documentation provided in the
Company's notice to the Holders. If the Holders fail to close
the transaction for any reason other than a breach by the Company
of its obligations hereunder, such Holders' right of first
refusal shall irrevocably terminate with respect to such Equity
Offering.
The right of first refusal described in this Section 13
shall not apply to any Equity Offering that is part of a "bona
fide corporate partnering arrangement" (as defined in the
Subscription Agreement) entered into by the Company; provided,
that the Company shall prohibit any Common Stock issued in
connection with such Equity Offering (and of Common Stock
issuable upon exercise or conversion of any debentures, warrants,
options or other similar securities issued in connection with
such Equity Offering) from being sold or otherwise transferred by
the recipient thereof for at least 180 days after the closing
date of such corporate partnering arrangement.
14. Obligations Absolute. No provision of this
Debenture, other than conversion as provided herein, shall alter
or impair the obligation of the Company, which is absolute and
unconditional, to pay the principal of, and interest on, this
Debenture at the time, place and rate, and in the manner, herein
prescribed.
15. Waivers of Demand, Etc. The Company hereby
expressly waives demand and presentment for payment, notice of
nonpayment, protest, notice of protest, notice of dishonor,
notice of intent to accelerate, prior notice of bringing of suit
and diligence in taking any action to collect amounts called for
hereunder and will be directly and primarily liable for the
payments of all sums owing and to be owing hereon, regardless of
and without any notice (except as required by law), diligence,
act or omission as or with respect to the collection of any
amount called for hereunder.
16. Replacement Debentures. In the event that the
Holder notifies the Company that its Debenture has been lost,
stolen or destroyed, a replacement Debenture identical in all
respects to the original Debenture (except for registration
number and Outstanding Principal Amount, if different than that
shown on the original Debenture) shall be issued to the Holder,
provided that the Holder executes and delivers to the Company an
agreement reasonably satisfactory to the company to indemnify the
Company from any loss incurred by it in connection with the
Debenture and provided that the Company is provided a form of
Debenture for such replacement purposes.
17. Payment of Expenses. The Company agrees to pay
all debts and expenses, including reasonable attorneys' fees,
which may be incurred by the Holder in enforcing the provisions
of this Debenture and/or collecting any amount due under this
Debenture, the Subscription Agreement or the Registration Rights
Agreement.
18. Defaults. If one or more of the following events
(hereinafter called "Events of Default") shall occur:
(a) The Company shall default in the payment
(whether in cash or by the issuance of a PIK
Statement) of interest on this Debenture, and
such default shall continue for five (5)
business days after the due date thereof; or
(b) Any of the representations or warranties made
by the Company herein, in the Subscription
Agreement, or in any certificate, financial
statements or press releases of the Company
heretofore or hereafter furnished by or on
behalf of the Company in connection with the
execution and delivery of this Debenture or
the Subscription Agreement shall be false or
(when taken together with other information
furnished by or on behalf of the Company,
including Exchange Act Reports) misleading in
any material respect at the time made; or
(c) The Company shall fail to perform or observe
any covenant or agreement in the Subscription
Agreement, the Registration Rights Agreement
or the Warrant, or any other covenant, term,
provision, condition, agreement or obligation
of the Company under this Debenture
(including without limitation any failure to
make any payments upon redemption of this
Debenture and any failure to issue shares of
Common Stock upon conversion of this
Debenture), and such failure shall continue
uncured for a period of ten (10) business
days after notice from the Holder of such
failure; or
(d) The Company shall (i) become insolvent;
(ii) admit in writing its inability to pay
its debts generally as they mature;
(iii) make a general assignment for the
benefit of creditors or commence proceedings
for its dissolution; or (iv) apply for or
consent to the appointment of a trustee,
liquidator or receiver for it or for a
substantial part of its property or business;
or
(e) A trustee, liquidator or receiver shall be
appointed for the Company or for a
substantial part of its property or business
without its consent and shall not be
discharged within forty-five (45) days after
such appointment; or
(f) Any governmental agency or any court of
competent jurisdiction shall assume custody
or control of the whole or any substantial
portion of the properties or assets of the
Company and shall not be dismissed within
forty-five (45) days thereafter, or
(g) Any money judgment, writ or warrant of
attachment or similar process in excess of
Five Hundred Thousand Dollars ($500,000) in
the aggregate shall be entered or filed
against the Company or any of its properties
or other assets and shall remain unpaid,
unvacated, unbonded and unstayed for a period
of forty-five (45) days or in any event later
than ten (10) days prior to the date of any
proposed sale thereunder; or
(h) Bankruptcy, reorganization, insolvency or
liquidation proceedings or other proceedings,
or relief under any bankruptcy law or any law
for the relief of debt shall be instituted by
or against the Company and, if instituted
against the Company, shall not be dismissed
within forty-five (45) days after such
institution, or the company shall by any
action or answer approve of, consent to, or
acquiesce in any such proceedings or admit to
any material allegations of, or default in
answering a petition filed in, any such
proceeding;
then, or at any time thereafter prior to the date on which all
continuing Events of Default have been cured, and in each and
every such case, unless such Event of Default shall have been
waived in writing by the Holder (which waiver shall not be deemed
to be a waiver of any subsequent default) at the option of the
Holder and in the Holder's sole discretion, the Holder may, by
notice to the Company declare this Debenture immediately due and
payable, and the Holder may immediately, and without expiration
of any period of grace, enforce any and all of the Holder's
rights and remedies provided herein or any other rights or
remedies afforded by law. In such event, the Debenture shall be
redeemed at a redemption price per Debenture equal to the
redemption price provided in Paragraph 6(b).
19. Savings Clause. In case any provision of this
Debenture is held by a court of competent jurisdiction to be
excessive in scope or otherwise invalid or unenforceable, such
provision shall be adjusted rather than voided, if possible, so
that it is enforceable to the maximum extent possible, and the
validity and enforceability of the remaining provisions of this
Debenture will not in any way be affected or impaired thereby.
20. Entire Agreement. This Debenture and the
agreements referred to in this Debenture constitute the full and
entire understanding and agreement between the Company and the
Holder with respect to the subject hereof. Neither this
Debenture nor any term hereof may be amended, waived, discharged
or terminated other than by a written instrument signed by the
Company and a majority-in-interest of the Holders.
21. Assignment, Etc. The Holder may, subject to
compliance with the Subscription Agreement, without notice,
transfer or assign this Debenture or any interest herein (but in
no event in an amount less than $100,000 in Outstanding Principal
Amount or, if less than $100,000, the total Outstanding Principal
Amount hereof) and may mortgage, encumber or transfer any of its
rights or interest in and to this Debenture or any part hereof,
and each assignee, transferee and mortgagee (which may include
any affiliate of the Holder) shall have the right to so transfer
or assign its interest; provided, however, that (i) without the
Company's consent, neither the Holder nor any such assignee,
transferee or mortgagee may transfer or assign this Debenture or
any part hereof to any direct competitor of the Company, and
(ii) before the Registration Statement contemplated by the
Registration Rights Agreement becomes effective, Holder will
furnish the Company with an opinion of counsel to the effect that
such assignment, transfer, mortgage or other encumbrance is
exempt from the registration requirements under the Securities
Act. Each such assignee, transferee and mortgagee shall have all
of the rights and obligations of the Holder under this Debenture.
The Company agrees that, subject to compliance with the
Subscription Agreement, after receipt by the Company of written
notice of assignment from the Holder or from the Holders'
assignee, all principal, interest, and other amounts which are
then due and thereafter become due under this Debenture shall be
paid to such assignee at the place of payment designated in such
notice. This Debenture shall be binding upon the Company and its
successors and shall inure to the benefit of the Holder and its
successors and assigns.
22. No Waiver. No failure on the part of the Holder
to exercise, and no delay in exercising, any right, remedy or
power hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise by the Holder of any right, remedy or
power hereunder preclude any other or future exercise of any
other right, remedy or power. Each and every right, remedy or
power hereby granted to the Holder or allowed it by law or other
agreement shall be cumulative and not exclusive of any other, and
may be exercised by the Holder from time to time.
23. Miscellaneous. Unless otherwise provided herein,
any notice or other communication to a party hereunder shall be
sufficiently given if in writing and personally delivered or
mailed to said party by certified mail, return receipt requested,
at its address set forth herein or such other address as either
may designate for itself in such notice to the other and
communications shall be deemed to have been received when
delivered personally or, if sent by mail or facsimile, when
actually received by the party to whom it is addressed. Whenever
the sense of this Debenture requires, words in the singular shall
be deemed to include the plural and words in the plural shall be
deemed to include the singular. Paragraph headings are for
convenience only and shall not affect the meaning of this
document.
24. Choice of Law and Venue: Waiver of Jury Trial.
THIS DEBENTURE SHALL BE CONSTRUED UNDER THE LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW OR
CHOICE OF LAW. The Company hereby (i) irrevocably submits to the
exclusive jurisdiction of the United States District Court for
the Southern District of New York for the purposes of any suit,
action or proceeding arising out of or relating to this Debenture
and (ii) waives, and agrees not to assert in any such suit,
action or proceeding, any claim that it is not personally subject
to the jurisdiction of such court, that the suit, action or
proceeding is brought in.
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed by an officer thereunto duly authorized.
Dated: August 27, 1996
ONCOR, INC.
By:
Name: Stephen Turner
Title: Chairman
Address: 209 Perry Pkwy.
Gaithersburg, MD 20877
ATTEST:
_________________________
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1993 OR ANY STATE SECURITIES LAWS.
THEY MAY NOT BE SOLD OR OFFERED FOR SALE EXCEPT PUR-
SUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID
ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN
APPLICABLE EXEMPTION FROM SUCH REGISTRATION REQUIRE-
MENTS.
Right to Purchase ______ Shares of Common Stock of Oncor, Inc.
----------------------
Form Of Common Stock Purchase Warrant
Oncor, Inc., a Maryland corporation having an address
at 209 Perry Parkway, Gaithersburg, Maryland 20877, (the
"Company"), hereby certifies that for Ten United States Dollars
($10.00) and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged,
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
("Purchaser") or any other Warrant Holder is entitled, on the
terms and conditions set forth below, to purchase from the
Company at any time after the date hereof and ending thirty-six
(36) months after the date hereof ____________________ (______)
shares of fully paid and non-assessable shares of Common Stock,
$.01 par vale, of the Company (the "Common Stock"), at the
Purchase Price (hereinafter defined), as the same may be adjusted
pursuant to Section 5 herein.
1. Definitions.
(a) the term "Warrant Holder" shall mean the Purchase
or any assignee of all or any portion of this Warrant at any
given time who, at the time of assignment, acquired the right to
purchase at least 1,000 Warrant Shares (such number being subject
to adjustment after the date hereof pursuant to Section 5
herein.)
(b) the term "Warrant Shares shall mean the shares of
Common Stock or other securities issuable upon exercise of this
Warrant.
(c) the term "Purchase Price" shall mean Six Dollars
and Twenty-Nine Cents United States Dollars ($6.29) per share of
Common Stock.
(d) the term "Act" shall mean the Securities Act of
1933, as amended.
(e) the term "Exchange Act" shall mean the Securities
and Exchange Act of 1934, as amended.
(f) the term "SEC" or "Commission" shall mean the
Securities and Exchange Commission or any successor agency.
(g) the term "Rule 144" shall mean Rule 144
promulgated under the Act, as amended, and any successor rules
promulgated under the Act.
(h) other terms used herein which are defined in the
Subscription Agreement (the "Agreement") between the Company and
the Purchaser shall have the same meanings herein as therein.
2. Exercise of Warrant.
This Warrant may be exercised by the Warrant Holder, in
whole or in part, at any time and from time to time by surrender
of this Warrant, together with the form of subscription at the
end hereof duly executed by the Warrant Holder, and delivery of
the Purchase Price for such Warrant Shares to the Company, at the
Company's principal office. In the event that the Warrant is not
exercised in full, the number of Warrant Shares shall be reduced
by the number of such Warrant Shares for which this Warrant is
exercised, and the Company, after receipt by it of a form of
Warrant reflecting such adjusted Warrant Shares, at its expense,
shall forthwith issue and deliver to or upon the order of the
Warrant Holder a new Warrant of like tenor in the name of the
Warrant Holder or as the Warrant Holder (upon payment by the
Warrant Holder of any applicable transfer taxes) may request,
reflecting such adjusted Warrant Shares.
3. Delivery of Stock Certificates.
(a) Subject to the terms and conditions of this
Warrant, as soon as practicable after the exercise of this
Warrant in full or in part, and in any event within two (2)
business days thereafter, the Company at its expense (including
without limitation, the payment by it of any applicable issue
taxes) will cause to be issued in the name of and delivered to
the Warrant Holder, or as the Warrant Holder (upon payment by the
Warrant Holder of any applicable issue taxes) may lawfully
direct, a certificate or certificates for the number of fully
paid and non-assessable shares of Common Stock to which the
Warrant Holder shall be entitled on such exercise, together with
any other stock or other securities or property (including cash,
where applicable) to which the Warrant Holder is entitled upon
such exercise.
(b) This Warrant may not be exercised as to fractional
shares of Common Stock. In the event that the exercise of this
Warrant, in full or in part, would result in the issuance of any
fractional share of Common Stock, then the number of Warrant
Shares for which this Warrant shall have been exercised shall be
rounded up or down to the nearest whole number of Warrant Shares.
4. Covenants of the Company.
(a) The Company shall use its reasonable best efforts
to insure that a Registration Statement under the Act covering
the issuance of the Warrant Shares and the resale or other
disposition thereof by the Warrant Holder is effective as
provided in the Registration Rights Agreement.
(b) The Company shall take all necessary action and
proceedings as may be required and permitted by applicable law,
rule and regulation, including, without limitation the
notification of the National Association of Securities Dealer,
Inc., for the legal and valid issuance of this Warrant and the
Warrant Shares to the Warrant Holder under this Warrant.
(c) From the date hereof through the last date on
which this Warrant is exercisable, the Company shall take all
steps reasonably necessary and within its control to insure that
the Common Stock remains listed on the Exchange and shall not
amend its Certificate of Incorporation or Bylaws so as to
adversely affect in any material way any rights of the Warrant
Holder under this Warrant.
(d) The Company shall at all times reserve and keep
available, solely for issuance and delivery as Warrant Shares
hereunder, such shares of Common Stock as shall from time to time
be issuable as Warrant Shares.
(e) The Warrant Shares, when issued in accordance with
the terms hereof, will be duly authorized and, when issued in
accordance with the terms hereof, shall be validly issued, fully
paid and nonassessable. The Company has authorized and reserved
for issuance to the Warrant Holder the requisite number of shares
of Common Stock to be issued pursuant to this Warrant.
(f) With a view to making available to the Warrant
Holder the benefits of Rule 144 promulgated under the Act and any
other rule or regulation of the SEC that may at any time
permit the Warrant Holder to sell securities of the Company to
the public without registration, the Company agrees to use its
reasonable best efforts to:
(i) make and keep public information available, as
those terms are understood and defined in Rule 144, at all
times;
(ii) file with the SEC in a timely manner all reports
and other documents required of the Company under the Act
and the Exchange Act; and
(iii) furnish to any Warrant Holder forthwith upon
request a written statement by the Company that it has
complied with the reporting requirements of Rule 144 and of
the Act and the Exchange Act, a copy of the most recent
annual or quarterly report of the Company, and such other
reports and documents so filed by the Company as may be
reasonably requested to permit any such Warrant Holder to
take advantage of any rule or regulation of the SEC
permitting the selling of any such securities without
registration.
5. Adjustment of Exercise Price and Number of Shares. The
number of and kind of securities purchasable upon exercise of
this Warrant and the Purchase Price shall be subject to
adjustment from time to time as follows:
(a) Subdivisions, Combinations and Other Issuances.
If the Company shall at any time after the date hereof but prior
to the expiration of this Warrant subdivide its outstanding
securities as to which purchase rights under this Warrant exist,
by split-up, spin-off, or otherwise, or combine its outstanding
securities as to which purchase rights under tis Warrant exist,
the number of Warrant Shares as to which this Warrant is
exercisable as of the date of such subdivision, split-up,
spin-off or combination shall forthwith be proportionately
increased in the case of a subdivision, or proportionately
decreased in the case of a combination. Appropriate adjustments
shall be made to the purchase price payable per share, but the
aggregate Purchase Price payable for the total number of Warrant
Shares purchasable under this Warrant as of such date shall
remain the same.
(b) Stock Dividend. If at any time after the date
hereof the Company declares a dividend or other distribution on
Common Stock payable in Common Stock or other securities or
rights convertible into or exchangeable or exercisable for Common
Stock ("Common Stock Equivalents") without payment of any
consideration by holders of Common Stock for the additional
shares of Common Stock or the Common Stock Equivalents (including
the additional shares of Common Stock issuable upon exercise or
conversion thereof), then the number of shares of Common Stock
for which this Warrant may be exercised shall be increased as of
the record date (or the date of such dividend distribution if no
record date is set) for determining which holders of Common Stock
shall be entitled to receive such dividends, in proportion to the
increase in the number of outstanding shares (and shares of
Common Stock issuable upon conversion of all such securities
convertible into Common Stock) of Common Stock as a result of
such dividend, and the Purchase Price shall be adjusted so that
the aggregate amount payable for the purchase of all the Warrant
Shares issuable hereunder immediately after the record date (or
on the date of such distribution, if applicable) for such
dividend shall equal the aggregate amount so payable immediately
before such record date (or on the date of such distribution, if
applicable).
(c) Other Distributions. If at any time after the
date hereof the Company distributes to holders of its Common
Stock, other than as part of its dissolution, liquidation or the
winding up of its affairs, any shares of its capital stock, any
evidence of indebtedness or any of its assets (other than cash,
Common Stock or securities convertible into Common Stock), then
the Company shall decrease the per share Purchase Price of this
Warrant by an appropriate amount based upon the value distributed
on each share of Common Stock as determined in good faith by the
Company's Board of Directors.
(d) Merger, etc. If any time after the date hereof
there shall be a merger or consolidation of the Company with or
into or a transfer of all or substantially all of the assets of
the Company to another entity, then the Warrant Holder shall be
entitled to receive upon such transfer, merger or consolidation
becoming effective, and upon payment of the aggregate Purchase
Price then in effect, the number of shares or other securities or
property of the Company or of the successor corporation resulting
from such merger or consolidation, which would have been received
by the Warrant Holder for the shares of stock subject to this
Warrant had this Warrant been exercised just prior to such
transfer, merger or consolidation becoming effective or to the
applicable record date thereof, as the case may be.
(e) Reclassification, etc. If at any time after the
date hereof there shall be a reorganization or reclassification
of the securities as to which purchase rights under this Warrant
exist into the same or a different number of securities of any
other class or classes, then the Warrant Holder shall thereafter
be entitled to receive upon exercise of this Warrant, during the
period specified herein and upon payment of the Purchase Price
then in effect, the number of shares or other securities or
property resulting from such reorganization or reclassification,
which would have been received by the Warrant Holder for the
shares of stock subject to this Warrant had this Warrant at such
time been exercised.
(f) Purchase Price Adjustment. In the event that the
Company issues or sells any Common Stock or securities which are
convertible into or exchangeable for its Common Stock, or any
warrants or other rights to subscribe for or to purchase, or any
options for the purchase of, its Common Stock or any such
convertible or exchangeable securities (other than shares or
options issued or which may be issued pursuant to the Company's
employee or director option plans or shares issued upon exercise
of options, warrants or rights outstanding on the date of the
Agreement and listed in the Exchange Act Reports) at an effective
purchase price per share which is less than the Purchase Price
then in effect or the fair market value (as hereinabove defined)
of the Common Stock on the trading day next preceding such issue
or sale, then in each such case, the Purchase Price in effect
immediately prior to such issue or sale shall be reduced
effective concurrently with such issue or sale to an amount
determined by multiplying the Purchase Price then in effect by a
fraction, (x) the numerator of which shall be the sum of (1) the
number of shares of Common Stock outstanding immediately prior to
such issue or sale, including, without duplication, those deemed
to have been issued under any provision of the Debentures and the
Warrants, plus (2) the number of shares of Common Stock which the
aggregate consideration received by the Company for such
additional shares would purchase at such fair market value or
Purchase Price, as the case may be, then in effect; and (y) the
denominator of which shall be the number of shares of Common
Stock of the Company outstanding immediately after such issue or
sale including, without duplication, those deemed to have been
issued under any provision of the Debentures and Warrants. For
purposes of the foregoing fraction, Common Stock outstanding
shall include, without limitation, any Equity Offerings (as
defined in the Debentures) then outstanding, whether or not they
are exercisable or convertible when such fraction is to be
determined.
In the event of any such issuance for a
consideration which is less than such fair market value and also
less than the Purchase Price then in effect, then there shall be
only such adjustment by reason of such issuance, such adjustment
to be that which results in the greatest reduction of the
Purchase Price computed as aforesaid. The number of shares which
may be purchased hereunder shall be increased proportionately to
any reduction in Purchase Price pursuant to this Paragraph 5(f),
so that after such adjustments the aggregate Purchase Price
payable hereunder for the increased number of shares shall be the
same as the aggregate Purchase Price in effect just prior to such
adjustments.
6. No Impairment. The Company will not, by amendment
of its Certificate of Incorporation or through any
reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary
action, avoid or seek to avoid the observance or performance of
any of the terms of this Warrant, but will at all times in good
faith assist in the carrying out of all such terms and in the
taking of all such action as may be necessary or appropriate in
order to protect the rights of the Warrant Holder against
impairment. Without limiting the generality of the foregoing,
the Company (a) will not increase the par value of any Warrant
Shares above the amount payable therefor on such exercise, and
(b) will take all such action as may be reasonably necessary or
appropriate in order that the Company may validly and legally
issue fully paid and nonassessable Warrant Shares on the exercise
of this Warrant.
7. Notice of Adjustments; Notices. Whenever the
Purchase Price or number of shares purchasable hereunder shall be
adjusted pursuant to Section 5 hereof, the Company shall execute
and deliver to the Warrant Holder a certificate setting forth, in
reasonable detail, the event requiring the adjustment, the amount
of the adjustment, the method of which such adjustment was
calculated and the Purchase Price and number of shares
purchasable hereunder after giving effect to such adjustment, and
shall cause a copy of such certificate to be mailed (by first
class mail, postage prepaid) to the Warrant Holder.
8. Rights As Stockholder. Prior to exercise of this
Warrant, the Warrant Holder shall not be entitled to any rights
as a stockholder of the Company with respect to the Warrant
Shares, including (without limitation) the right to vote such
shares, receive dividends or other distributions thereon or be
notified of stockholder meetings. However, in the event of any
taking by the Company of a record of the holders of any class of
securities for the purpose of determining the holders thereof who
are entitled to receive any dividend (other than a cash dividend)
or other distribution, any right to subscribe for, purchase or
otherwise acquire any shares of stock of any class or any other
securities or property, or to receive any other right, the
Company shall mail to each Warrant Holder, at least 10 days prior
to the date specified therein, a notice specifying the date on
which any such record is to be taken for the purpose of such
dividend, distribution or right, and the amount and character of
such dividend, distribution or right.
9. Replacement of Warrant. On receipt of evidence
reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of the Warrant and, in the case of any
such loss, theft, or destruction of the Warrant, on delivery of
an indemnity agreement or security reasonably satisfactory in
form and amount to the Company or, in the case of any such
mutilation, on surrender and cancellation of such Warrant, the
Company, upon receipt by it of a form of Warrant reflecting the
terms of the new Warrant, at its expense will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
10. Specific Enforcement; Consent to Jurisdiction.
(a) The Company and the Warrant Holder
acknowledge and agree that irreparable damage would occur in the
event that any of the provisions of this Warrant were not
performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties
shall be entitled to an injunction or injunctions to prevent or
cure breaches of the provisions of this Warrant and to enforce
specifically the terms and provisions hereof, this being in
addition to any other remedy to which either of them may be
entitled by law or equity.
(b) Each of the Company and the Warrant Holder
(i) hereby irrevocably submits to the exclusive jurisdiction of
the United States District Court for the Southern District of New
York for the purposes of any suit, action or proceeding arising
out of or relating to this Warrant and (ii) hereby waives, and
agrees not to assert in any such suit, action or proceeding, any
claim that it is not personally subject to the jurisdiction of
such court, that the suit, action or proceeding is brought in an
inconvenient foru m or that the venue of the suit, action or
proceeding is improper. Each of the Company and the Warrant
Holder consents to process being served in any such suit, action
or proceeding by mailing a copy thereof to such party at the
address in effect for notices to it under this Warrant and agrees
that such service shall constitute good and sufficient service of
process and notice thereof. Nothing in this paragraph shall
affect or limit any right to serve process in any other manner
permitted by law.
11. Entire Agreement; Amendments. This Warrant, the
Exhibits hereto and the provisions contained in the Agreement,
the Registration Rights Agreement or the Debentures and
incorporated into this Warrant and the Warrant Shares contain the
entire understanding of the parties with respect to the matters
covered hereby and hereby and, except as specifically set forth
herein and therein, neither the Company nor the Warrant Holder
makes any representation, warranty, covenant or undertaking with
respect to such matters. No provision of this Agreement may be
waived or amended other than by a written instrument signed by
the party against whom enforcement of any such amendment or
waiver is sought.
12. Restricted Securities. Section 4.5, 5.1, 5.2 and
5.3 of the Agreement are incorporated herein by reference and
hereby made a part hereof.
13. Notices. Any notice or other communication
required or permitted to be given hereunder shall be in writing
and shall be effective (a) upon hand delivery or receipt by telex
(with correct answer back received), telecopy or facsimile at the
address or number designated below (if delivered on a business
day during normal business hours where such notice is to be
received), or the first business day following such delivery (if
delivered other than on a business day during normal business
hours where such notice is to be received), or (b) on the second
business day following the date of mailing by express courier
serviced, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The
addresses for such communications shall be:
to the Company:
Oncor, Inc.
209 Perry Parkway
Gaithersburg, Maryland 20877
Attn: President
Fax: (301) 330-3940
with copies to:
Brobeck, Phleger & Harrison LLP
1633 Broadway, 47th Fl.
New York, NY ________
Attn: Alexander D. Lynch, Esq.
Fax: (212) __________
to the Warrant Holder:
Heracles Fund
c/o Bank of Bermuda (Cayman) Limited
P.O. Box 513
Third Floor, British American Tower
Dr. Roy's Drive
Georgetown
Grand Cayman, Cayman Islands
B.W.I.
Attn: Allen J. Bernardo
Fax: (809) 949-7802
with copies to:
Promethean Investment Group, L.L.C.
40 West 57th Street
Suite 1520
New York, NY 10019
Attn: Jamie O'Brien
Fax: (212) 698-0505
Either party hereby may from time to time change its address for
notices under this Section 13 by giving at least 10 days prior
written notice of such changed address to the other party hereto.
14. Miscellaneous. This Warrant and any term hereof
may be changed, waived, discharged or terminated only by an
instrument in writing signed by the party against which
enforcement of such change, waiver, discharge or termination is
sought, This Warrant shall be construed and enforced in
accordance with and governed by the laws of the State of New
York. The headings in this Warrant are for purposes of reference
only, and shall not limit or otherwise affect any of the terms
hereof. The invalidity or unenforceability of any provision
hereof shall in no way affect the validity or enforceability of
any other provision.
15. Expiration. The right to exercise this Warrant
shall expire thirty-six (36) months after the date hereof.
[Signatures on next page.]
Dated: _________, 1996 ONCOR, INC.
By:_____________________
Title:__________________
[CORPORATE SEAL]
Attest:
By:_____________________
Its:
NAME OF INVESTOR:
________________________
By:_____________________
Title:__________________
Dated: _________, 1996 ONCOR, INC.
By:_____________________
Title:__________________
[CORPORATE SEAL]
Attest:
By:_____________________
Its:
NAME OF INVESTOR:
________________________
By:_____________________
Title:__________________
FORM OF WARRANT EXERCISE
(To be signed only on exercise of Warrant)
TO _______________________
The undersigned, the holder of the within Warrant,
hereby irrevocably elects to exercise this Warrant for, and to purchase
thereunder, ______ shares of Common Stock of Oncor, Inc., a
Maryland corporation (the "Company"), and herewith makes payment
of $__________ therefor, and requests that the certificates for such
shares be issued in the name of, and delivered to _____________,
whose address is _____________ _____________.
Dated: __________________________________
(Signature must conform to name
of holder as specified on the
face of the Warrant)
__________________________________
(Address)
Tax Identification
Number:________________
FORM OF ASSIGNMENT
(To be signed only on transfer of Warrant)
For value received, the undersigned hereby sells, assigns, and
transfers unto __________________the right represented by the
within Warrant to purchase _______ Shares of Common Stock of
Oncor,Inc., a Maryland corporation, to which the within Warrant
relates, and appoints ____________________ Attorney to transfer
such right on the books of Oncor, Inc., with full power of substitution the
premises.
Dated: __________________________________
(Signature must conform to name
of holder as specified on the
face of the Warrant)
__________________________________
(Address)
Signed in the presence of:
__________________________