U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________
FORM 10-QSB
Mark one
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 2001
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the Transition period from _________ to _________
Commission File No. 1-10623
Pamet Systems, Inc.
___________________________________________________________________________
(exact name of small business issuer as specified in its charter)
Massachusetts 04-2985838
___________________________________________________________________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1000 Main Street, Acton, Massachusetts 01720
___________________________________________________________________________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code (978) 263-2060
________________________
Check whether the issurer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act during the past 12
months (or for such shorter period that the Registrant was required to file
such reports), and (2) has been subject to such filing requirements for the
past 90 days.
Yes_X___ No_____
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the close of the period covered by this report:
Title of each class Number of shares outstanding
Common stock 4,352,776
($.01 par value)
Transitional Small Business Disclosure Format
YES________ NO__X___
PAMET SYSTEMS, INC.
FORM 10-QSB TABLE OF CONTENTS
Part I Financial Information
Item 1 Financial Statements
Condensed Balance Sheets
June 30, 2001 and December 31, 2000
Condensed Statements of Operations
for the quarter ended June 30, 2001
and 2000 and six month period ended
June 30, 2001 and 2000
Condensed Statement of Cash Flows
for the six months ended June 30,
2001 and 2000
Item 2 Management's Discussion and Analysis of
Financial Condition or Plan of Operations
Part II Other Information
Item 1 Legal Proceedings
Item 2 Changes in Securities
Item 3 Defaults Upon Senior Securities
Item 4 Submission of Matters to a Vote of Security Holders
Item 5 Other Information
Item 6 Exhibits and Reports on Form 8-K
Signature(s)
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
PAMET SYSTEMS, INC.
Condensed Balance Sheets June 30, December 31,
2001 2000
--------- ------------
CURRENT ASSETS (unaudited)
Cash $ 2,447 $ 1,507
Accounts receivable, net of allowance
for doubtful accounts of $100,586 and
$175,000 and factored receivables of
$102,185 and $88,502, respectively 111,649 224,191
Accounts receivable, factored 18,747 14,770
Inventory, net of reserve of $15,000 3,595 10,151
Prepaid expenses and other current
assets 27,050 147,132
------ -------
TOTAL CURRENT ASSETS 163,488 397,751
PROPERTY AND EQUIPMENT, net 75,578 98,312
DEPOSITS 81,650 84,190
CAPITALIZED SOFTWARE DEVELOPMENT COSTS 32,610 65,221
-------- ------
TOTAL ASSETS $ 353,326 $ 645,474
========== ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES
Current portion of long-term debt 835,000 425,000
Notes payable to related parties -- 385,000
Due to factor -- 36,199
Accounts payable, trade 853,012 795,226
Accounts payable, related party 39,079 19,945
Current portion of accrued interest
payable on long-term debt 189,085 143,538
Current portion of deferred gain on
sale of land and building 42,614 42,614
Accrued expenses 977,228 766,192
Deferred software maintenance revenue 203,027 601,505
and unearned revenue
--------- ----------
TOTAL CURRENT LIABILITIES 3,139,045 3,215,219
ACCRUED INTEREST PAYABLE on long-term debt,
net of current portion 14,538 --
DERERRED GAIN on sale of land and building,
net of current portion 174,581 195,888
LONG TERM DEBT, net of current portion 1,069,150 410,000
--------- ---------
TOTAL LIABILITIES 4,397,314 3,821,107
--------- ---------
COMMITTMENTS AND CONTINGENCIES
STOCKHOLDERS' DEFICIT
Preferred stock, $.01 par value,
1,000,000 shares authorized,
none issued -- --
Common Stock, $.01 par value,
30,000,000 shares authorized;
issued and outstanding 4,352,776
shares at June 30, 2001 and
4,085,610 shares at
December 31, 2000, respectively 43,528 40,856
Additional paid-in Capital 8,611,945 8,358,593
Accumulated deficit (12,699,461) (11,575,082)
---------- ----------
TOTAL STOCKHOLDERS DEFICIT (4,043,988) (3,175,633)
--------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS DEFICIT $ 353,326 $ 645,474
========== ==========
See accompanying "Notes to Financial Statements (Unaudited)"
Item 1 - Financial Statements
PAMET SYSTEMS, INC.
Statements of Operations
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ----------------
2001 2000 2001 2000
Net sales $464,706 $668,518 $707,034 $1,064,379
Cost of product 75,075 94,734 116,379 226,496
-------- -------- -------- ---------
389,631 573,784 590,655 837,883
Operating expenses:
Personnel costs 512,218 577,410 1,032,956 1,128,752
Rent, utilities, telephone 46,396 61,554 101,222 119,774
Travel and entertainment 21,503 28,822 50,137 60,194
Professional fees 156,692 49,021 205,122 90,103
Depreciation 28,436 29,431 56,791 58,394
Research and development 20,854 71,645 105,585 295,017
Other operating expenses 17,894 101,631 65,298 181,542
-------- ------- ------- -------
Total operating expenses 803,993 919,514 1,617,111 1,933,776
------- ------- --------- ----------
Income(loss) from operations (414,362) (345,730) (1,026,456) (1,095,893)
Interest income(expense), net (50,258) 18,550 (100,325) (19,603)
Gain on Sale of Fixed Assets 2,402 -- 2,402 --
Net income(loss) $(462,218) $(327,180) $(1,124,379) $(1,115,496)
======== ======= ========= =========
Earnings(loss) per weighted
average common share $(.11) $(.08) $(.27) $(.29)
=== === === ===
Weighted average shares used
in computing earnings per
share 4,285,011 3,855,860 4,207,863 3,855,860
See accompanying "Notes to Financial Statements (unaudited)"
Item 1 - Financial Statements
PAMET SYSTEMS, INC.
Statements of Cash Flows
(Unaudited)
Six Months Ended
June 30, 2001 June 30, 2000
------------- -------------
Operating Activities:
Net loss $(1,124,379) $(1,115,496)
Adjustments to reconcile net loss to net
cash used for operating activities:
Deferred gain on sale of land and
building (21,307) (21,307)
Depreciation and amortization 56,791 58,394
Gain on sale of property and equipment (2,402) ----
Changes in operating assets and liabilities:
Accounts receivable, trade 112,542 324,397
Accounts receivable, factored (3,977) 12,920
Inventory 6,556 678
Prepaids expenses and other current
assets 120,082 55,853
Deposits 2,540 ----
Due to factor (36,199) (57,496)
Accounts payable, trade 57,786 222,060
Accounts payable, related party 19,134 10,571
Accrued interest payable on long-term
debt 60,085 (43,918)
Accrued expenses 211,036 210,976
Deferred software maintenance revenue
and unearned revenue (398,478) (276,499)
------- ------
Net cash (used for)
operating activities (940,190) (618,867)
------- -------
Investing activities:
Expenditures for property and equipment (2,904) (15,458)
Proceeds from sale of property and
equipment 3,860 ------
------ ------
Net cash provided by/(used for)
investing activities 956 (15,458)
------ ------
Item 1 - Financial Statements
PAMET SYSTEMS, INC.
Statements of Cash Flows
(Unaudited)
Six Months Ended
June 30, 2001 June 30, 2000
------------- -------------
Financing activities:
Proceeds from long-term debt-
convertible promissory notes 684,150 ----
Proceeds from related party notes ---- 160,000
Issuance of capital stock 256,024 455,598
--------- ---------
Net cash provided by financing
activities 940,174 615,598
------- -------
Net increase(decrease) in cash 940 (18,727)
Cash at beginning of period 1,507 40,207
------- -------
Cash at end of period $ 2,447 $21,480
====== =======
Supplemental disclosure of cash flows
information:
Cash paid for interest: $16,284 $75,015
======= =======
Summary of non-cash financing activities:
Conversion of convertible promissory notes
to common stock ---- $800,000
Note payable-related party converted to long
term convertible promissory note $385,000 ----
======= =======
See accompanying "Notes to Financial Statements (Unaudited)
PAMET SYSTEMS, INC.
Notes to Condensed Financial Statements
(Unaudited)
Note (1) Statement Presentation
The accompanying unaudited condensed financial statements have been prepared
based upon Securities and Exchange Commission (SEC) rules that permit reduced
disclosure for interim periods and, in the opinion of management, contain all
adjustments (consisting of only normal recurring adjustments) necessary to
present fairly the financial position as of June 30, 2001, the results of
operations for the three and month six period and changes in cash flows for
the six month period then ended. There were no material unusual charges or
credits to operations during the recently completed fiscal quarter.
The results reported for the six months ended June 30, 2001 are not
necessarily indicative of the results of operations which may be expected
for the entire year.
Note (2) Nature of Operations
Pamet Systems, Inc. (the Company), a Massachusetts corporation, was formed in
November 1987 to engage in the business of designing , developing, installing
and servicing computer software systems for the municipal market throughout
the United States, principally in the area of public safety. Credit is
granted to certain customers, most of which are municipalities. The Company
generally does not require collateral.
The Company's backlog at August 17, 2001 was approximately $970,000.
Management believes that this level of backlog and its anticipated sales, as
well as the funding described below, are adequate to sustain operations
through the end of fiscal year 2001.
However, the ultimate success of the Company is still dependent upon its
ability to secure financing adequate to meet its working capital and ongoing
product development needs. In addition, in order for the Company's operations
to be maintained and/or expanded, the Company will need to successfully market
its Microsoft Windows NT computing platform applications. If additional funds
are required beyond the related party credit facility that is available, the
current Board members are willing to seek additional equity financing, as
needed. Management believes the Company's current sources of liquidity and
funding are adequate to sustain operations. Management is also seeking to
enhance the Company's financial position by obtaining additional permanent
financing. There can be no assurance, however, that the Company's operations
will be sustained or be profitable in the future, that adequate sources of
financing will be available at all, when needed or on commercially acceptable
terms, or that the Company's product development and marketing efforts will be
successful.
Note (3) Mortgage and Subsequent Sale and Lease Back of Corporate Training,
Development and Headquarters Facility
On August 6, 1999 the Company sold its headquarters to Area Realty,
LLC for $1,150,000 and signed a lease back agreement with the buyer for 7
years. As part of the lease back agreement with the buyer of the facility, the
Company was required to place $80,000 on deposit with the buyer. The balance
on the first and second mortgages and all accrued interest were paid in full
at the time of the sale. The sale of the building resulted in a gain of
approximately $298,000 that the Company deferred and is recognizing as a
reduction to rent expense over the term of the lease. The monthly rent for
the first three years is $12,997. For years four through seven the monthly
base rent increases to $14,564. For the second through seventh year, rent may
be further increased by the percentage increase in the Consumer Price Index
for Urban Wage Earners and Clerical Workers for the preceding year up to a
maximum of three percent per annum.
Note (4) Loss Per Common Share
In 2001 and 2000, loss per common share is computed using the weighted average
number of shares of common stock outstanding during the period. Diluted per
share computations are not presented since the effect would be antidilutive.
Item 2
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations
Overview
Pamet Systems, Inc. (the "Company" or "Pamet Systems"), founded in 1987,
designs and implements broad-based information technology solutions for public
safety agencies enabling them to realize cost efficiencies and provide better
service to the public. The foundation of the Company's fully integrated suite
of products is composed of three components: PoliceServer NT, FireServer NT,
and CADServer NT. The Company also offers several companion products
including Imaging, Mobile Access, Advanced Reporting, JailServer NT,
Investigator's Tool Kit and Mapping that are integrated with the police and
fire records management and computer-aided dispatch modules. Pamet Systems
total systems approach to public safety software allows the agency to enter
information once and have it available throughout the product suite. The
Company's revenues consist primarily of sales of these software applications,
the associated hardware and systems integration, and support and update
service fees.
The Company's revenues for the three and six month periods ended June 30, 2001
decreased 30.5% and 33.6% respectively In 2001, as in the past, the Company
experienced a slower first half due to the availability of municipal funds. In
the Northeast where the Company does the largest amount of its business, the
municipal fiscal year generally begins on July 1 which is when municipal funds
become available. In addition, the slowdown in the demand which the Company
began to feel in the second half of 2000 has continued into the first half of
2001. Management believes that public safety agencies are deferring decisions
to replace aging and/or inadequate technology infrastructure and application
software until economic conditions stabilize and clear leadership emerges in
the industry. Taking its cue from advances in technology, the Company's core
products were completely rebuilt using modern design tools and databases, and
the entire suite utilizes the Windows NT 32 bit technology and a GUI interface
(graphical user interface). The Company has spent over $5.1M during the past
four years on the development of its NT-based suite of products. Management
believes that the magnitude of funding required to develop new public safety
software applications using state of the art technologies will trigger a
consolidation in the public safety marketplace, which is dominated by small,
privately held companies that will have difficulty affording the development
costs. Pamet System's NT product development effort during the past four
years positions the Company to be a leader in the marketplace.
The Company's sales and marketing efforts are being focused in several areas.
First, using data gathered from marketing mailings, sales personnel are
actively pursuing public safety agencies using the software of weak
competitors. In most cases, these competitors have product lines employing
aging technology or lacking the ability to provide a complete solution for the
customer. The Company is also broadening the focus of its sales and marketing
efforts to reach new market segments. Pamet Systems is actively marketing to
larger, more technologically demanding agencies. The Company has submitted
several major proposals and has been selected as one of two or three finalists
in most cases. In addition, the NT product is being packaged and aggressively
priced to meet the needs of smaller agencies. These efforts have resulted in
the largest pipeline of active prospects in the Company's history. The
Company includes in the pipeline prospective customers who have seen a product
demonstration, have expressed interest in the product, and expect to have
funding available.
Management continues to believe that significant market opportunities exist
for its suite of NT-based products. Subsequent to the end of the quarter
over $350,000 of new contracts have been awarded to the Company. These
include A new fire system, two new mobile installations and the second half of
a purchase of a new police system. In addition, major federal grant programs
continue to be announced that will allow agencies to update their computer
systems. In early 2001, the federal government announced COPSMore 2001, an
$81M grant program earmarked solely for public safety technology. Pamet
Systems held free grant seminars in the Northeast and Midwest to aid agencies
in understanding the grant application process and assisted approximately 200
agencies in preparing their applications, which is estimated to be about 10%
of the applications the Justice Department will receive. Management has been
informed by the Department of Justice that the CopsMore 2001 grant recipients
will be announced by September 30, 2001. The Department of Justice has also
requested an additional $200M for technology in their fiscal 2002 budget which
runs October 1, 2001 to September 30, 2002. In addition, the continuing
growth in the number of E911 centers, heightened emphasis on crime in most
communities and the awareness by municipalities that computer systems can
improve the efficiency and effectiveness of their public safety resources
support the belief that the market for the Company's products will continue to
grow. The Company has also seen increased emphasis on the coordination of
public safety systems between neighboring town, county, and state police
organizations. The Company's products are designed and marketed with the
option to be used in this type of regional application.
The primary challenges facing the Company during the year 2001 are to
capitalize on the design efforts that have resulted in a integrated suite of
NT-based products and to acquire adequate financing to fund immediate needs
and future growth. The Company has launched a major financing program with
the goal of raising $10M to $15M. The program is composed of a $1.5M private
placement to meet immediate cash needs with the remainder planned in a
secondary offering later in 2001 or in 2002. To date, the Company has secured
$750,625 of working capital from its private placement offering and converted
$385,000 plus accrued interest of $44,150 from related party lines of credit
to long term convertible promissory notes. However, there are no assurances
that the Company will be successful in completing its fund raising program, in
light of, among other things, the state of the financial markets and the
Company's historical financial performance. During 2001, the Company released
major product enhancements and extensions based, in part, on feedback from its
NT customers. These releases improve the product's ease of use and
substantially extend its capabilities. As a result, the Company has received
certification from three states for our police records system's incident-based
reporting (NIBRS) capabilities and certification from the Massachusetts Fire
Marshall for the fire records system's advanced national reporting (NIFRS 5.0)
capabilities. The Company has also developed utilities to convert customer
data files from older systems, which will ease the transition for agencies. As
a result of these improvements, the Company has a long list of current users
waiting to migrate to the NT system.
Despite what the Company believes are numerous growth opportunities, the
Company remains hampered by under capitalization and the fact that its primary
market is the government sector, which is characterized by long lead times and
political influence in the decision making process. As a consequence, the
Company is pursuing an analysis of complementary markets and adaptations for
its products.
Three Months Ended June 30, 2001 vs. Three Months Ended June 30, 2000
Net sales for the three month period ended June 30, 2001 (the 2001 period)
declined 30.5% to $464,706 from $668,518 for the three month period ended June
30, 2000 (the 2000 period). The revenues for the 2001 period reflected
increased support revenues offset by decreases in new system, mobile and
imaging sales. The revenues for the 2001 period include one PoliceServer NT
system including CADServer NT and FireServer NT, two mobile base upgrades and
eight add-on mobile units, and three new customer migrations as compared to
one PoliceServer system including CADServer NT and Mobile, one FireServer NT
system including CADServer NT, four Imaging systems, three Advanced
Reporting/Query systems, one JailServer NT system, and seven VMS customer
migrations to NT in 2000. Support revenues increased 29.4% to $224,225 for
the 2001 period from $191,049 for the 2000 period reflecting the increased
customer base and the increased rates billed for support on the NT product.
The contribution from support will continue to increase in future periods as
new customers, as well as those existing customers that migrate to the NT
product, will be charged higher support fees. Annual software support and
update service for the NT customers is 19% of the price of the software or
list price for migrating customers, an increase from the 14% of the system
software purchase price that VMS customers have historically paid.
Cost of product decreased 20.8% or $19,659 to $75,075 for the 2001 period from
$94,734 for the 2000 period. As a result, gross margin decreased from 85.8%
in the 2000 period to 83.8% in the 2001 period. A small increase in gross
margin was offset by decreases in margin on the mobile products. Margins can
be skewed by municipal purchasing decisions on computer hardware purchases,
but generally the trend toward software only sales for all products, the use
of state bid list contractors to purchase hardware and the Company's software,
and continued favorable margins on support revenues are sustaining the high
gross margins. Agencies are increasingly purchasing systems through state
bid list contractors. These contractors partner with the Company and provide
off-the-shelf hardware that combined with Pamet Systems software offers a
complete solution for the customer. This arrangement reduces total revenues
for the Company, but significantly increases margins.
Operating expenses reflected a decrease of $115,521 or 12.6% to
$803,993 for the 2001 period compared to $919,514 for the 2000 period.
Decreases in personnel spending, rent, research and development, and
uncollectible accounts were offset by consulting fees associated with the
development of a revised business plan.
Personnel costs decreased 11.3% or $65,192 to $512,218 for the 2001 period
compared to $577,410 for the 2000 period. The decrease in spending can be
attributed to attrition, the retirement of one employee, and a reduction in
commissions reflecting decreased revenues. Due to continuing working capital
constraints facing the Company, certain non-key positions are not being
immediately filled. Rent, utilities and telephone decreased 24.6% to $46,396
for the 2001 period from $61,554 for the 2000 period due to decreases in rent
and telephone expense. The Company moved the Maitland, Florida office to
smaller quarters at the end of the first quarter of 2001. In addition,
telephone expense decreased due to a reduction in rates. Travel and
entertainment expenses decreased 25.9% to $21,503 for the 2001 period from
$28,822 for the 2000 period as a result of a general spending cutback based on
working capital constraints. Professional fees increased 219.6% to $156,692
for the 2001 period from $49,021 for the 2000 period primarily due to
increased consulting expenses resulting from professional assistance with the
Company's business plan which was offset by decreases in accounting and legal
fees based on reduced usage. Depreciation expense remained constant at $28,436
for the 2001 as compared to $29,431 for the 2000 period.
External research and development costs during the 2001 period decreased
$50,791 or 70.9% to $20,854 from $71,645 in the 2000 period. However, gross
expenditures on research and development spending including the costs of
outside resources and the deployment of current staff to product development
and testing decreased only 26.2% to $206,605 in the 2001 period from $279,815
for the 2000 period. Due to cash constraints during the final stages of the
development cycle of the NT products, the Company continues to utilize outside
resources and employees hired on short-term contracts only on a selective
basis to accomplish product development goals. The Company is utilizing its
internal team of engineering and support resources to provide product
enhancements and extensions including interfaces to companion products,
utilities to migrate current customers from the VMS-based system to the
NT-based system, and advanced product capabilities.
Other operating expenses decreased 82.4% to $17,894 for the 2001 period from
$101,631 for the 2000 period. A decrease of $46,612 in the reserve for
doubtful accounts resulting from the payment of several old invoices was the
most significant reason for the decrease. Decreases in annual report
expenses also contributed to a reduction in expenses.
Net interest expense for the 2001 period was $50,258 compared to net interest
income of $18,550 for the 2000 period. The reversal of accrued interest
expense on $550,000 of convertible promissory notes converted to equity during
the 2000 period was the most significant reason for the increase in expense
from 2000 to 2001. In the 2001 period, investors chose to extend their notes
rather than convert them to equity. As specified in the convertible
promissory notes, the accrued interest was not payable since the note was
converted.
The net loss for the 2001 period was $(462,218) or $(.11) per share
compared to net loss of $(327,180) or $(.08) per share for the 2000 period.
The loss is due primarily to a shortfall in sales.
Six Months Ended June 30, 2001 vs. Six Months Ended June 30, 2000
Net sales for the six month period ended June 30, 2001 (the 2001 period)
decreased $357,345 or 33.6% to $707,034 from $1,064,379 for the six month
period ended June 30, 2000 (the 2000 period). The decrease in sales reflects
decreased revenues from new systems, mobile, imaging, and jail products offset
by increases in support revenues. During the first 6 months of 2001 the
Company has continued to feel the effects of the general economic
slowdown and the hesitance in the public safety market to invest in new
infrastructure and software until economic conditions stabilize and clear
leadership emerges in the public safety marketplace. In addition, although
federal grant programs pump significant funding into public safety, they cause
delays in the normal cycle while agencies await grant decisions. Support
revenues increased 28.4% to $477,918 in the 2001 period compared to $372,319
in the 2000 period reflecting the increase in the customer base and rates.
Support revenues accounted for 67.6% of revenues in the 2001 period. Cost of
product decreased 48.6% to $116,379 for the 2001 period from the $226,496 for
the 2000 period resulting in gross margin increases to 83.5% for the 2001
period from 78.7% for the 2000 period. The improvement in margin can be
attributed to significant increases in software only sales. Some customers
purchase their hardware directly from the state bid list thereby increasing
the higher margined software component of these sales.
Net operating expenses decreased $316,665 or 16.4% to $1,617,111 for the 2001
period compared to $1,933,776 for the 2000 period. Research and development
expenditures excluding inhouse personnel decreased 64.2% from $295,017 in the
2000 period to $105,585 in the 2001 period reflecting the completion of major
portions of the NT development effort. In addition, due to the cash
constraints the Company is experiencing, internal staff members are being
deployed to product development and testing and external resources and
employees hired on short-term contracts are being used selectively. Gross
research and development spending including internal resources decreased 28.4%
to $482,296 from $674,150. In addition to the reductions in research and
development spending, the Company has instituted broad cost-cutting
measures to help alleviate the cash flow issues resulting from reduced sales.
Offsetting the increased fees were decreases in accounting fees and legal
fees. Depreciation expense decreased 2.7% to $56,791 for the 2001 period from
$58,394 for the 2000 period reflecting reduced depreciation on aging
equipment. As discussed above, research and development expenditures
decreased due to the completion of significant portions of the NT development
and the utilization of internal resourses to provide product enhancements
and extensions including interfaces to companion products, utilities to
migrate current customers from the VMS-based system to the NT-based system,
and advanced product capabilities. Other operating expenses decreased 64.0%
to $65,298 for the 2001 period from $181,542 for the 2000 period. Decreases in
the reserve for doubtful accounts resulted from the payment of several old
invoices. In addition, the Company did not incur the cost associated with the
Annual Meeting during the first half of 2000.
Net interest expense was $100,325 for the 2001 period compared to $19,603 for
the 2000 period. This increase reflects the reversal of accrued interest
associated with the conversion of $800,000 convertible promissory notes to
equity in the 2000 period. In the 2001 period, investors chose to extend
their notes rather than convert them to equity.
The net loss for the 2001 period was $(1,124,379) or $(.27) per share
compared to a net loss of $(1,115,496) or $(.29) per share for the 2000
period. The loss for the period was attributable to a shortfall in projected
revenue.
Liquidity and Capital Resources
The Company had working capital deficit of $(2,975,557) at June 30, 2001
compared to $(2,817,468) at December 31, 2000. The most significant reason
for this deterioration is the impact on receivables from lower sales in the
first half of 2001 and a decrease in prepaid expenses.
During the 2001 period, the Company secured $200,625 of additional equity
financing and $450,000 of long term debt financing. In addition, the Company
converted $385,000 of notes payable to related party and the associated
interest of $44,150 to long-term convertible promissory notes during the
second quarter of 2001. At June 30, 2001, $1,904,150 of convertible promissory
notes and $203,623 of related interest remained outstanding as liabilities.
In general, the outstanding convertible debt funding accrues interest at
either 7% or 11%; has a two year term; carries the option of conversion of the
principal to common stock by the debt holder at conversion prices ranging from
$0.375 to $2.50 per share, or repayment of principal and accrued interest by
the Company; and has 100% warrant coverage attached that allows for the
purchase of additional shares of common stock at exercise prices ranging from
$0.37 to $2.50 per share. The Company's ability to repay the outstanding
convertible promissory notes with accrued interest on the due dates is at
risk, especially the notes due in the next twelve months.
Cash increased to $2,447 at June 30, 2001 from $1,507 at December 31, 2000.
Accounts receivable decreased to $111,649 at June 30, 2001 from $224,191 at
December 31, 2000 due to the decrease in sales during the first half of 2001
as compared to the same period in 2000. The resources necessary to fund the
enhancements and extensions to the NT product and provide working capital for
operations continue to be a major concern for the Company. In the fourth
quarter of 2000, the Company launched a $1.5M private placement financing
program to meet immediate cash needs. The Company received $750,625 during
the first six months of 2001. Late in 2000, the Company felt the effects of a
slowdown in the general economic conditions and within the public safety
marketplace. However, with the COPSMore 2001 $81M being announced by
September 30, 2001, the $370,000 of new sales subsequent to the end of the
period and the strong sales pipeline resulting from the addition of
sales and marketing resources, the Company is optimistic about revenues in the
second half of 2001. If additional funds are required, the Board of Directors
is willing to seek additional financing. Nevertheless, the Company continues
to be hampered by insufficient cash resources. As noted in the Auditor's
Report for 2000 included in the Company's Annual Report on Form 10K, there can
be no assurances that the Company will be able to generate adequate cash
either through operations or additional financing to continue as a going
concern. Failure to acquire the necessary financing could have a material
adverse effect on the Company. Backlog at August 17, 2001 was approximately
$970,000. The Company is continuing to consider projects to increase its cash
position such as activities to raise capital, mergers, acquisitions or other
business combinations.
As of June 30, 2001, the Company had accumulated approximately $12,100,000 of
federal net operating loss carryforwards that expire beginning in the year
2005. In addition, the Company has state net operating losses to carry
forward of $8,400,000 which expire between the years 2002 and 2005. Under the
Internal Revenue Code of 1986, as amended, the rate at which a corporation may
utilize its net operating losses to offset income for federal tax purposes is
subject to specified limitations during periods after the corporation has
undergone an "ownership change". It has been determined that an ownership
change did take place at the time of the Company's initial public offering.
However, the limitations on the loss carryforward exceed the accumulated loss
at the time of the "ownership change". Thus there is no restriction on its
use.
Seasonality
The majority of the Company's installed base has a fiscal year that
commences on July 1 and, therefore, the Company bills its customers for
their annual software support and update service on July 1 of each year.
Consequently, cash flow representing software support revenues has tended
to be higher in the second half of the Company's fiscal year, although
software support revenues are recognized ratably throughout the fiscal
year.
Revenue Recognition
Revenues from software license fees are recognized when a contract
has been executed, the product has been delivered, all significant
contractual obligations have been satisfied and collection of the related
receivable is probable. Maintenance revenues, including those bundled with
the initial license fee, are deferred and recognized ratably over the
service period. Consulting and training service revenues are recognized as
the services are performed.
Year 2000
The Company had no major problems reported from any of its customers
at the beginning of year 2000. Other than some minor list orientation issues,
the application functioned to specification and handled the transitions from
1999 to 2000. Internally no problems were experienced with any of the
administrative systems that the Company depends on for its operations.
Inflation
Inflation has not had a significant impact on the Company's
operations to date.
Forward Looking Statements
This Form 10-QSB contains statements that are not historical facts.
These statements may constitute "forward-looking statements" within the
meaning of the Securities Act of 1933 and the Securities and Exchange Act of
1934 as amended. Certain, but not necessarily all, of such forward-looking
statements can be identified by the use of such words as "believes",
"expects", "may", "will", "should", or "anticipates" or the negative thereof
or other variations thereon of similar terminology, and/or which include,
without limitation, statements regarding the following: competition and
consolidation in the public safety marketplace; market expectation for the NT
operating environment and customer acceptance of the Company's NT products;
ability of the NT product to meet market needs; volatility in sales and cash
flow; growth potential in the year 2001; law enforcement trends; availability
of grant funding for customers; adequacy of funding and corporate
infrastructure to support operations and anticipated growth; economic and
competitive factors affecting the public safety market; and discussions of
strategies involving risk and uncertainties that reflect management's current
views. These statements are based on many assumptions and factors and may
involve risks and uncertainties. The actual results of the Company or
industry results may be materially different from any future results expressed
or implied by such forward-looking statements because of factors such as
insufficient capital resources to operate the Company; inability to
successfully market and sell the NT product; changes in the marketplace
including variations in the demand for public safety software; and changes in
the economic and competitive environment. These factors and other information
contained in this Form 10-KSB could cause such views, assumptions and factors
and the Company's results of operations to be materially different. We
undertake no obligation to update publicly any forward-looking statements for
any reason even if new information becomes available or other events occur in
the future.
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
None
Item 2 - Changes in Securities
c. Sales of Securities
The Company issued the following securities in transactions that were
exempt from the registration requirements of the Securities Act of
1933, as amended, pursuant to the exemptions afforded by Sections
4(2) or 3(a)(9) thereof or Regulation S thereunder, because they did
not constitute sales under the Securities Act:
On April 20, 2001, the Company sold 83,333 shares of Pamet Systems
Common Stock for an aggregate price of $50,000 or $.60 per share. In
connection with this agreement, the investor was granted a five year warrant
to purchase 29,167 shares of common stock at a price of $1.50 per share.
On May 14, 2001, the Company sold 83,333 shares of Pamet Systems
Common Stock for an aggregate price of $50,000 or $.60 per share. In
connection with this agreement, the investor was granted a five year warrant
to purchase 29,167 shares of common stock at a price of $1.50 per share.
Item 3 - Defaults Upon Senior Securities
Not applicable.
Item 4 - Submission of Matters to a vote of Security Holders
None
Item 5 - Other Information
Not applicable.
Item 6 - Exhibits and Reports on Form 8-K
a. Exhibits
4.31 Convertible Note issued to West Country Partners dated
April 13, 2001.
4.32 Warrant issued to West Country Partners dated April 13, 2001
4.33 Convertible Note issued to BSI.SA dated April 13, 2001.
4.34 Warrant issued to BSI.SA dated April 13, 2001
4.35 Warrant issued to Craig Cooper dated April 20, 2001
4.36 Warrant issued to Terrence M. Finn dated April 20, 2001
4.37 Convertible Note issued to West Country Partners dated
June 23, 2001
4.38 Warrant issued to West Country Partners dated June 23, 2001
b. Reports on form 8-K
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized
Pamet Systems, Inc.
-------------------------
(Registrant)
August 17, 2001 (s) Richard C. Becker
_______________________________ ______________________
Date Richard C. Becker
Vice President
Principal Financial Officer
Exhibits
Exhbit 4.31
SECURITIES PURCHASE AGREEMENT
This SECURITIES PURCHASE AGREEMENT (the "Agreement") is made and entered
into as of April 13, 2001 by and between PAMET SYSTEMS, INC., a Massachusetts
corporation whose principal place of business is 1000 Main Street, Acton,
Massachusetts 01720 (the "Company"), and West Country Partners, a California
Limited Partnership of which James S. Schmitt is the General Partner (the
"Purchaser"), with its address at 1917 Brittany Park, Camarillo, CA 93012.
WHEREAS, the Company is desirous of selling, and the Purchaser is
desirous of acquiring, (i) a convertible promissory note in substantially the
form attached hereto as Exhibit A in the principal amount of Three Hundred
Fifty Thousand Dollars ($350,000) (the "Note") and (ii) a five-year warrant
(the "Warrant") in substantially the form attached hereto as Exhibit B to
purchase up to Nine Hundred Thirty Three Thousand Three Hundred Thirty Three
(933,333) shares ("Warrant Shares") of the common stock, par value $.01 per
share (the "Common Stock"), of the Company (the Note and the Warrant together
sometimes hereinafter are referred to as the "Securities"), on the terms and
subject to the conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the promises and of the mutual
obligations hereinafter set forth, and for such other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the Company and the Purchaser hereby agree as follows:
ARTICLE I PURCHASE AND SALE OF THE NOTES AND
WARRANTS; CLOSINGS
Section 1.01 Purchase and Sale of the Notes and Warrants.
(a) Subject to the terms and conditions set forth in this
Agreement, the Company agrees to issue and sell to the Purchaser at the
Closing, and the Purchaser agrees to purchase from the Company at the Closing,
the Note and the Warrant for an aggregate purchase price of Three Hundred
Fifty Thousand Dollars ($350,000) (the "Purchase Price").
(b) The exercise price per share of the Warrant to be issued at the
Closing shall initially be set at One Dollar and Fifty Cents ($1.50) and the
conversion price per share of the Note shall initially be set at Thirty Seven
and a Half Cents ($0.375).
Section 1.02 Closing. The sale of the Securities by the Company to
the Purchaser shall take place on April 13, 2001 at the offices of the Company
or at such other place and time as may be agreed upon by the Purchaser and the
Company (the "Closing"). At the Closing, the Company shall deliver to the
Purchaser certificates evidencing the Securities against payment of the
Purchase Price for the Securities, by certified or official bank check or wire
transfer of immediately available funds to an account designated by the
Company.
ARTICLE II REPRESENTATIONS AND
WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to, and agrees with, the
Purchaser, as of the date hereof and as of the date of each Closing, as
follows:
Section 2.01 Incorporation and Corporate Existence. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the Commonwealth of Massachusetts and has all necessary corporate
power and authority to own, operate or lease the properties and assets now
owned, operated or leased by the Company and to carry on the business of the
Company, as it is now being conducted.
Section 2.02 Authority. The Company has all necessary corporate power
and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The Company has taken all necessary
corporate action to authorize the execution, delivery and performance by it of
this Agreement and to consummate the transactions contemplated hereby. This
Agreement has been duly executed and delivered by the Company and, and
assuming due execution and delivery of the Agreement by the Purchaser, this
Agreement constitutes a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, subject to the
effect of any applicable bankruptcy, reorganization, insolvency (including,
without limitation, all laws relating to fraudulent transfers), moratorium or
similar laws affecting creditors' rights and remedies generally, subject, as
to enforceability, to the effect of general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or at
law) and subject to the effect of applicable securities laws as to rights to
indemnification.
Section 2.03 Consents and Approvals; No Conflict. The execution and
delivery of this Agreement by the Company do not, and the performance of this
Agreement by the Company will not (i) require any consent, approval,
authorization or other action by, or filing with or notification to, any
governmental or regulatory authority, except where failure to obtain such
consent, approval, authorization or action, or to make such filing or
notification, would not prevent the Company from performing any of its
material obligations under this Agreement and would not have a material
adverse effect on the Company; (ii) conflict with or violate the charter or
by-laws of the Company; or (iii) conflict with or violate any law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award
applicable to the Company, except as would not prevent the Company from
performing any of its material obligations under this Agreement and would not
have a material adverse effect on the Company.
Section 2.04 Absence of Litigation. No claim, action, proceeding or
investigation is pending, or to the best knowledge of the Company, threatened,
which seeks to delay or prevent the consummation of the transactions
contemplated hereby or which would be reasonably likely to adversely affect or
restrict the Company's ability to consummate the transactions contemplated
hereby.
Section 2.05 Brokers. No broker, finder or investment banker is
entitled to any brokerage, finders or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Company.
ARTICLE III REPRESENTATIONS AND WARRANTIES
OF THE PURCHASER
The Purchaser hereby represents and warrants to, and agrees with, the
Company, as of the date hereof and as of each Closing, as follows:
Section 3.01 Authority. The Purchaser has all necessary power and
authority to execute and deliver this Agreement, to purchase the Securities
from the Company and to consummate the transactions contemplated hereby. This
Agreement has been duly executed and delivered by the Purchaser and, and
assuming due authorization, execution and delivery of the Agreement by the
Company, this Agreement constitutes a legal, valid and binding obligation of
the Purchaser enforceable against the Purchaser in accordance with its terms,
subject to the effect of any applicable bankruptcy, reorganization, insolvency
(including, without limitation, all laws relating to fraudulent transfers),
moratorium or similar laws affecting creditors' rights and remedies generally,
subject, as to enforceability, to the effect of general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) and subject to the effect of applicable securities laws as
to rights to indemnification.
Section 3.02 Consents and Approvals; No Conflict. The execution and
delivery of this Agreement by the Purchaser do not, and the performance of
this Agreement by the Purchaser will not (i) require any consent, approval,
authorization or other action by, or filing with or notification to, any
governmental or regulatory authority, except where the failure to obtain such
consent, approval, authorization or action, or to make such filing or
notification, would not prevent the Purchaser from performing any of its
material obligations under this Agreement; or (ii) except as would not prevent
the Purchaser from performing any of its material obligations under this
Agreement, conflict with or violate any law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award applicable to the
Purchaser.
Section 3.03 Absence of Litigation. No claim, action, proceeding or
investigation is pending, or to the best knowledge of the Purchaser,
threatened, which seeks to delay or prevent the consummation of the
transactions contemplated hereby or which would be reasonably likely to
adversely affect or restrict the Purchaser's ability to consummate the
transactions contemplated hereby.
Section 3.04 Investment Purpose; Legend; Private Placement.
(a) The Purchaser is acquiring the Securities solely for the
purpose of investment and not with a view to, or for offer or sale in
connection with, any distribution thereof.
(b) The Purchaser acknowledges that neither the Securities nor the
Warrant Shares are registered under the Securities Act and that none of the
Securities or the Warrant Shares may be transferred or sold except pursuant to
the registration provisions of the Securities Act or pursuant to an applicable
exemption therefrom and subject to state securities laws and regulations, as
applicable. The Purchaser acknowledges that the certificates evidencing the
Securities and the Warrant Shares shall contain a legend substantially as
follows:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND SUCH SECURITIES
MAY NOT BE SOLD, ENCUMBERED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR AN EXEMPTION FROM SUCH
REGISTRATION REQUIREMENT, AND, IF AN EXEMPTION SHALL BE APPLICABLE, THE HOLDER
SHALL HAVE DELIVERED AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY (WHICH
ACCEPTANCE SHALL NOT BE UNREASONABLY WITHHELD) THAT SUCH
REGISTRATION IS NOT REQUIRED.
(c) The Purchaser acknowledges that the Securities involve a great
deal of risk and that there is a limited or no market for the Securities and
the Warrant Shares. The Purchaser is able to (i) bear the economic risk of
the investment in the Company, (ii) afford a complete loss of such investment,
and (iii) hold indefinitely the Securities. In reaching an informed decision
to invest in the Company, the Purchaser has sufficient information to evaluate
the merits and risks of an investment in the Securities of the Company. In
that connection, (x) the Purchaser has received (A) the Company's proxy
statement, dated July 10, 2000, for the Company's 2000 annual meeting of
stockholders, (B) the Company's Annual Report on Form 10-KSB for the year
ended December 31, 1999, as amended to date, and (C) the Company's Quarterly
Reports on Form 10- QSB for the quarters ended March 31, 2000, June 30, 2000
and September 30, 2000 and (y) representatives of the Company have (A) fully
and satisfactorily answered any questions which duly authorized
representatives of the Purchaser desired to ask concerning the Company, and
(B) furnished the Purchaser with any additional information or documents
requested to verify the accuracy of or supplement any information previously
delivered to or discussed with duly authorized representatives of the
Purchaser.
(d) The address of the Purchaser set forth on page 1 of this
Agreement is the true and correct address of the Purchaser and the Purchaser
has no present intention of becoming a resident or domiciliary of any other
state or jurisdiction.
Section 3.05 Accredited Investor. The Purchaser is an "accredited
investor" within the meaning of Rule 501 of Regulation D promulgated under the
Securities Act because (please check as appropriate):
[ ] (a) the Purchaser is an individual whose net
worth, either individually or with his spouse, exceeds
$1,000,000 on the date hereof;
[ ] (b) the Purchaser is an individual whose
individual income exceeded $200,000 in each of the two previous
years or whose joint income with his spouse exceeded $300,000
in each of the three previous years, and has a reasonable expectation of
reaching the same income level in the current year;
[ x ] (c) the Purchaser is a corporation, partnership
or Massachusetts or similar business trust, not formed for the
specific purpose of acquiring the Securities, with total assets
in excess of $5,000,000; or
[ ] (d) the investor hereby certifies that it is an
accredited investor because it is an entity in which each of
the equity owners qualifies as an accredited investor under
items (a), (b) or (c) above.
Section 3.06 Brokers. No broker, finder or investment banker is
entitled to any brokerage, finders or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Purchaser.
Section 3.07 No General Solicitation. The Securities were not offered
or sold by any form of general solicitation or general advertising.
ARTICLE IV MISCELLANEOUS
Section 4.01 Expenses. The Purchaser hereby agrees that all fees and
expenses incurred by the Purchaser in connection with this Agreement shall be
borne by the Purchaser, and the Company hereby agrees that all fees and
expenses incurred by the Company shall be borne by the Company, in each case
including without limitation all fees and expenses of such party's counsel and
accountants.
Section 4.02 Public Announcements. Except as required by law, neither
the Company nor the Purchaser shall make any public announcements in respect
of this Agreement or the transactions contemplated herein or otherwise
communicate with any news media without prior notification to the other party.
Section 4.03 Survival of Representations and Warranties. All
representations and warranties contained herein shall survive the execution
and delivery of this Agreement, the Closings and any investigation at any time
made by or on behalf of either party hereto.
Section 4.04 Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof
and supersedes any prior oral or written agreement between the parties.
Section 4.05 No Third-Party Beneficiaries; Assignment. This Agreement
is for the sole benefit of and binding upon the parties hereto and their
permitted successors and assigns and nothing herein, express or implied, is
intended to or shall confer upon any other person or entity any legal or
equitable right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement. This Agreement shall be binding upon the parties hereto
and their respective successors and assigns, and shall inure to the benefit of
and be enforceable by the parties hereof and their respective successors and
assigns.
Section 4.06 Amendment. This Agreement may be amended or modified only
by an instrument in writing signed by the Company and the Purchaser.
Section 4.07 Counterparts. This Agreement may be executed in one or
more counterparts, each of which when executed shall be deemed to be an
original but all of which taken together shall constitute one and the same
agreement.
Section 4.08 Gender and Number; Headings. Whenever used in this
Agreement, the singular number shall include the plural, the plural the
singular, and the use of any gender shall be applicable to all genders. The
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement
Section 4.09 Governing Law; Jurisdiction. This Agreement shall be
governed by, and construed in accordance with, the laws of the Commonwealth of
Massachusetts without giving effect to the principles of conflicts of laws
thereof. The Company and the Purchaser hereby consent to the jurisdiction of
the state and federal courts of the Commonwealth of Massachusetts for all
disputes arising under this Agreement.
IN WITNESS WHEREOF, the
Purchaser and the Company have caused this Agreement to be executed as of the
date first written above.
PAMET SYSTEMS, INC.
Attest:__________________________ By:_____________________________
Name: Name: David T. McKay
Title: Title: President & CEO
Corporate Seal
____________________________________
By:_____________________________
Name: James S. Schmitt
Title: General Partner,
West Country Partners
Exhibit 4.32
WARRANT
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND
NEITHER THIS WARRANT NOR SUCH SHARES MAY BE SOLD, ENCUMBERED OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
ACT OR AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENT, AND, IF AN EXEMPTION
SHALL BE APPLICABLE, THE HOLDER SHALL HAVE DELIVERED AN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY (WHICH ACCEPTANCE SHALL NOT BE UNREASONABLY
WITHHELD) THAT SUCH REGISTRATION IS NOT REQUIRED.
Void after 5:00 p.m. Eastern Standard Time, on April 12, 2006.
WARRANT TO PURCHASE COMMON STOCK
OF
PAMET SYSTEMS, INC.
FOR VALUE RECEIVED, PAMET SYSTEMS, INC. (the "Company"), a
Massachusetts corporation, hereby certifies that West Country Partners, a
California Limited Partnership of which James S. Schmitt is the General
Partner, with its address at 1917 Brittany Park, Camarillo, CA 93012, or his
permitted assigns, is entitled to purchase from the Company, at any time or
from time to time commencing April 13, 2001, and prior to 5:00 P.M., Eastern
Standard Time, on April 12, 2006, a total of Nine Hundred Thirty Three
Thousand Three Hundred Thirty Three (933,333) fully paid and nonassessable
shares of Common Stock, par value $.01 per share, of the Company for an
aggregate purchase price of One Million Four Hundred Thousand Dollars
($1,400,000) (computed on the basis of $1.50 per share). (Hereinafter, (i)
said Common Stock, together with any other equity securities which may be
issued by the Company with respect thereto or in substitution therefor, is
referred to as the "Common Stock," (ii) the shares of the Common Stock
purchasable hereunder are referred to as the "Warrant Shares," (iii) the
aggregate purchase price payable hereunder for the Warrant Shares is referred
to as the "Aggregate Warrant Price," (iv) the price payable hereunder for each
of the Warrant Shares is referred to as the "Per Share Warrant Price," (v)
this Warrant, and all warrants hereafter issued in exchange or substitution
for this Warrant are referred to as the "Warrant" and (vi) the holder of this
Warrant is referred to as the "Holder.") The number of Warrant Shares for
which this Warrant is exercisable is subject to adjustment as hereinafter
provided.
This Warrant is issued by the Company pursuant to the Securities
Purchase Agreement, dated as of the date hereof, among the Company and West
Country Partners (the "Securities Purchase Agreement"). Capitalized terms
used but not defined shall have the respective meanings ascribed to them in
the Securities Purchase Agreement.
1. Exercise of Warrant.
(a) This Warrant may be exercised, in whole at any time or in part from time
to time, commencing April 13, 2001, and prior to 5:00 P.M., Eastern Standard
Time, on April 12, 2006, by the Holder of this Warrant by the surrender of
this Warrant (with the subscription form at the end hereof duly executed) at
the address set forth in Subsection 9(a) hereof, together with proper payment
of the Aggregate Warrant Price, or the proportionate part thereof if this
Warrant is exercised in part.
(b) The Aggregate Warrant Price or Per Share Warrant Price shall be
paid in cash by certified or official bank check payable to the order of the
Company.
(c) Each exercise of this Warrant shall be deemed to have been
effected immediately prior to the close of business on the day on which the
Warrant shall have been surrendered to the Company as provided in subsection
1(a) above (an "Exercise Date"). At such time, the person or persons in whose
name or names any certificates for Warrant Shares shall be issuable upon such
exercise as provided in subsection 1(d) below shall be deemed to have become
the holder or holders of record of the Warrant Shares represented by such
certificates. (d) If this Warrant is exercised
in part, the Holder shall be entitled to receive a new Warrant covering the
number of Warrant Shares in respect of which this Warrant has not been
exercised and setting forth the proportionate part of the Aggregate Warrant
Price applicable to such Warrant Shares. Upon such surrender of this Warrant,
the Company will (a) issue a certificate or certificates in the name of the
Holder for the shares of the Common Stock to which the Holder shall be
entitled, and (b) deliver the proportionate part thereof if this Warrant is
exercised in part, pursuant to the provisions of the Warrant.
(e) No fractional shares or scrip representing fractional shares
shall be issued upon the exercise of this Warrant. With respect to any
fraction of a share called for upon any exercise hereof, the Company shall pay
to the Holder an amount in cash equal to such fraction multiplied by the fair
value of a share.
2. Reservation of Warrant Shares. The Company agrees that, prior
to the expiration of this Warrant, the Company will at all times have
authorized and in reserve, and will keep available, solely for issuance or
delivery upon the exercise of this Warrant, the shares of the Common Stock as
from time to time shall be receivable upon the exercise of this Warrant.
3. Adjustments.
(a) In case the Company shall hereafter (i) pay a dividend or make
a distribution on its capital stock in shares of Common Stock, (ii) subdivide
its outstanding shares of Common Stock into a greater number of shares, (iii)
combine its outstanding shares of Common Stock into a smaller number of shares
or (iv) issue by reclassification of its Common Stock any shares of capital
stock of the Company, the number of Warrant Shares for which this Warrant may
be exercised shall be adjusted so that if the Holder surrendered this Warrant
for exercise after such action the Holder would be entitled to receive the
number of shares of Common Stock or other capital stock of the Company which
he would have been entitled to receive had such Warrant been exercised
immediately prior to such action. An adjustment made pursuant to this
subsection (a) shall become effective immediately after the record date in the
case of a dividend or distribution and shall become effective immediately
after the effective date in the case of a subdivision, combination or
reclassification. If, as a result of an adjustment made pursuant to this
subsection (a), the Holder of this Warrant shall become entitled to receive
shares of two or more classes of capital stock or shares of Common Stock and
other capital stock of the Company, the Board of Directors (whose
determination shall be conclusive and shall be described in a written notice
to the Holder of this Warrant promptly after such adjustment) shall determine
the allocation of the adjusted Per Share Warrant Price between or among shares
of such classes of capital stock or shares of Common Stock and other capital
stock.
(b) In case of any consolidation or merger to which the Company is
a party other than a merger or consolidation in which the Company is the
continuing corporation, or in case of any sale or conveyance to another entity
of the property of the Company as an entirety or substantially as an entirety,
or in the case of any statutory exchange of securities with another
corporation (including any exchange effected in connection with a merger of a
third corporation into the Company), the holder shall have the right
thereafter to exercise this Warrant for the kind and amount of securities,
cash or other property which he would have owned or have been entitled to
receive immediately after such consolidation, merger, statutory exchange, sale
or conveyance had such Warrant been exercised immediately prior to the
effective date of such consolidation, merger, statutory exchange, sale or
conveyance and in any such case, if necessary, appropriate adjustment shall be
made in the application of the provisions set forth in this Section 3 with
respect to the rights and interests thereafter of the Holder to the end that
the provisions set forth in this Section 3 shall thereafter correspondingly be
made applicable, as nearly as may reasonably be, in relation to any shares of
stock or other securities or property thereafter deliverable on the conversion
of this Warrant. The above provisions of this subsection (b) shall similarly
apply to successive consolidations, mergers, statutory exchanges, sales or
conveyances. Notice of any such consolidation, merger, statutory exchange,
sale or conveyance and of said provisions so proposed to be made, shall be
mailed to the Holder not less than 30 days prior to such event. A sale of all
or substantially all of the assets of the Company for a consideration
consisting primarily of securities shall be deemed a consolidation or merger
for the foregoing purposes.
(c) In the event of any adjustment to the number of Warrant Shares
issuable upon exercise of this Warrant, the Per Share Warrant Price shall be
adjusted by multiplying the Per Share Warrant Price in effect immediately
prior to such adjustment by a fraction the numerator of which is the aggregate
number of Warrant Shares for which this Warrant may be exercised immediately
prior to such adjustment and the denominator of which is the aggregate number
of Warrant Shares for which this Warrant may be exercised immediately after
such adjustment.
(d) Whenever the Per Share Warrant Price is adjusted as provided in
this Warrant and upon any modification of the rights of the Holder of this
Warrant in accordance with this Section 3, the Company shall promptly prepare
a certificate of an officer of the Company, setting forth the Per Share
Warrant Price and the number of Warrant Shares after such adjustment or
modification, a brief statement of the facts requiring such adjustment or
modification and the manner of computing the same and cause a copy of such
certificate to be mailed to the Holder.
4. Fully Paid Stock; Taxes. The Company agrees that the shares of
the Common Stock represented by each and every certificate for Warrant Shares
delivered on the proper exercise of this Warrant shall, at the time of such
delivery, be validly issued and outstanding, fully paid and nonassessable, and
not subject to preemptive rights, and the Company will take all such actions
as may be necessary to assure that the par value or stated value, if any, per
share of the Common Stock is at all times equal to or less than the then Per
Share Warrant Price. Subject to Section 5(e) hereof, the Company further
covenants and agrees that it will pay, when due and payable, any and all
Federal and state stamp, original issue or similar taxes that may be payable
in respect of the issuance of any Warrant Shares or certificates therefor.
The Holder covenants and agrees that it shall pay, when due and payable, any
and all federal, state and local income or similar taxes that may be payable
in respect of the issuance of any Warrant Shares or certificates therefor.
5. Transfer
(a) Securities Laws. Neither this Warrant nor the Warrant Shares
issuable upon the exercise hereof have been registered under the Securities
Act of 1933, as amended (the "Securities Act"), or under any state securities
laws and unless so registered may not be transferred, sold, pledged,
hypothecated or otherwise disposed of unless an exemption from such
registration is available. In the event the Holder desires to transfer this
Warrant or any of the Warrant Shares issued, the Holder must give the Company
prior written notice of such proposed transfer including the name and address
of the proposed transferee. Such transfer may be made only either (i) upon
publication by the Securities and Exchange Commission (the "Commission") of a
ruling, interpretation, opinion or "no action letter" based upon facts
presented to said Commission, or (ii) upon receipt by the Company of an
opinion of counsel acceptable to the Company to the effect that the proposed
transfer will not violate the provisions of the Securities Act, the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or the rules and
regulations promulgated under either such act, or to the effect that the
Warrant or Warrant Shares to be sold or transferred have been registered under
the Securities Act of 1933, as amended, and that there is in effect a current
prospectus meeting the requirements of Subsection 11(a) of the Securities Act,
which is being or will be delivered to the purchaser or transferee at or prior
to the time of delivery of the certificates evidencing the Warrant or Warrant
Shares to be sold or transferred.
(b) Conditions to Transfer. Prior to any such proposed transfer
(including, without limitation, a transfer by will or pursuant to the laws of
descent and distribution), and as a condition thereto, if such transfer is not
made pursuant to an effective registration statement under the Securities Act,
the Holder will, if requested by the Company, deliver to the Company (i) an
investment covenant, in form and substance equivalent to that signed by the
original Holder of this Warrant, signed by the proposed transferee, (ii) an
agreement by such transferee to the restrictive investment legend set forth
herein on the certificate or certificates representing the securities acquired
by such transferee, (iii) an agreement by such transferee that the Company may
place a "stop transfer order" with its transfer agent or registrar, and (iv)
an agreement by the transferee to indemnify the Company to the same extent as
set forth in the next succeeding paragraph.
(c) Indemnity. The Holder acknowledges that the Holder understands
the meaning and legal consequences of this Section 5, and the Holder hereby
agrees to indemnify and hold harmless the Company, its representatives and
each officer and director thereof from and against any and all loss, damage or
liability (including all attorneys' fees and costs incurred in enforcing this
indemnity provision) due to or arising out of (a) the inaccuracy of any
representation or the breach of any warranty of the Holder contained in, or
any other breach by the Holder of, this Warrant, (b) any transfer of the
Warrant or (c) any untrue statement or omission to state any material fact in
connection with the investment representations or with respect to the facts
and representations supplied by the Holder to counsel to the Company upon
which its opinion as to a proposed transfer shall have been based.
(d) Transfer. Upon surrender of this Warrant to the Company or at
the office of its stock transfer agent, if any, with assignment documentation
duly executed and funds sufficient to pay any transfer tax, and upon
compliance with the foregoing provisions, the Company shall, without charge,
execute and deliver a new Warrant in the name of the assignee named in such
instrument of assignment, and this Warrant shall promptly be canceled. Any
assignment, transfer, pledge, hypothecation or other disposition of this
Warrant attempted contrary to the provisions of this Warrant, or any levy of
execution, attachment or other process attempted upon the Warrant, shall be
null and void and without effect.
(e) Legend and Stop Transfer Orders. Unless the Warrant Shares
have been registered under the Securities Act, upon exercise of any part of
the Warrant and the issuance of any of the Warrant Shares, the Company shall
instruct its transfer agent to enter stop transfer orders with respect to such
shares, and all certificates representing Warrant Shares shall bear on the
face thereof substantially the following legend, insofar as is consistent with
Massachusetts law:
"The shares of common stock represented by this
certificate have not been registered under the Securities Act of 1933, as
amended, and may not be sold, offered for sale, assigned, transferred or
otherwise disposed of unless registered pursuant to the provisions of that Act
or an opinion of counsel to the Company is obtained stating that such
disposition is in compliance with an available exemption from such
registration."
6. Loss, etc. of Warrant. Upon receipt of evidence satisfactory
to the Company of the loss, theft, destruction or mutilation of this Warrant,
and of indemnity reasonably satisfactory to the Company, if lost, stolen or
destroyed, and upon surrender and cancellation of this Warrant if mutilated,
the Company shall execute and deliver to the Holder a new Warrant of like
date, tenor and denomination.
7. Warrant Holder Not Shareholder. Except as otherwise provided
herein, this Warrant does not confer upon the Holder any right to vote or to
consent to or receive notice as a shareholder of the Company, as such, in
respect of any matters whatsoever, or any other rights or liabilities as a
shareholder, prior to the exercise hereof.
8. Communication. No notice or other communication under this
Warrant shall be effective unless the same is in writing and is mailed by
first-class mail, postage prepaid, addressed to:
(a) the Company at 1000 Main Street, Acton, Massachusetts 01720,
or such other address as the Company has designated in writing to the Holder,
or
(b) the Holder at the address contained in the first paragraph of
this Warrant, or such other address as the Holder has designated in writing to
the Company.
9. Headings. The headings of this Warrant have been inserted as a
matter of convenience and shall not affect the construction hereof.
10. Applicable Law. This Warrant shall be governed by and
construed in accordance with the law of the Commonwealth of Massachusetts
without giving effect to the principles of conflict of laws thereof.
IN WITNESS WHEREOF, PAMET SYSTEMS, INC., has caused this Warrant to
be signed by a duly authorized officer as of this 13th day of April, 2001.
ATTEST: PAMET SYSTEMS, INC.
By:_______________________ By:___________________________________
Name: Richard C. Becker Name: David T. McKay
Title: VP, Finance and Administration Title: President & CEO
SUBSCRIPTION
The undersigned, __________________________________________,
pursuant to the provisions of the foregoing Warrant, hereby agrees to
subscribe for the purchase of _________________________ shares of the Common
Stock of PAMET SYSTEMS, INC. covered by said Warrant, and makes payment
therefor in full at the price per share provided by said Warrant.
Dated __________________ Signature__________________________
Address____________________________
____________________________
ASSIGNMENT
FOR VALUE RECEIVED _________________________ hereby sells, assigns
and transfers unto _________________________ the foregoing Warrant and all
rights evidenced thereby, and does irrevocably constitute and appoint
_________________________, attorney, to transfer said Warrant on the books of
PAMET SYSTEMS, INC.
Dated __________________ Signature_________________________
Address___________________________
___________________________
PARTIAL ASSIGNMENT
FOR VALUE RECEIVED _________________________ hereby assigns and
transfers unto _________________________ the right to purchase
_________________________ shares of the Common Stock of PAMET SYSTEMS, INC. by
the foregoing Warrant, and a proportionate part of said Warrant and the rights
evidenced hereby, and does irrevocably constitute and appoint
_________________________, attorney, to transfer that part of said Warrant on
the books of PAMET SYSTEMS, INC.
Dated ___________________ Signature__________________________
Address____________________________
____________________________
Exhibit 4.33
SECURITIES PURCHASE AGREEMENT
This SECURITIES PURCHASE AGREEMENT (the "Agreement") is made and entered
into as of April 13, 2001 by and between PAMET SYSTEMS, INC., a Massachusetts
corporation whose principal place of business is 1000 Main Street, Acton,
Massachusetts 01720 (the "Company"), and BSI SA (the "Purchaser"), a
financial institution representing Mr. Pierangelo B. Bottinelli with its
address at Via Magatti 2, 6900 Lugano, Switzerland.
WHEREAS, the Company is desirous of selling, and the Purchaser is
desirous of acquiring, (i) a convertible promissory note in substantially the
form attached hereto as Exhibit A in the principal amount of One Hundred
Thousand Dollars ($100,000) (the "Note") and (ii) a five- year warrant (the
"Warrant") in substantially the form attached hereto as Exhibit B to purchase
up to Two Hundred Sixty Six Thousand Six Hundred Sixty Seven (266,667) shares
("Warrant Shares") of the common stock, par value $.01 per share (the "Common
Stock"), of the Company (the Note and the Warrant together sometimes
hereinafter are referred to as the "Securities"), on the terms and subject to
the conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the promises and of the mutual
obligations hereinafter set forth, and for such other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the Company and the Purchaser hereby agree as follows:
ARTICLE I PURCHASE AND SALE OF THE NOTES AND
WARRANTS; CLOSINGS
Section 1.01 Purchase and Sale of the Notes and Warrants.
(a) Subject to the terms and conditions set forth in this
Agreement, the Company agrees to issue and sell to the Purchaser at the
Closing, and the Purchaser agrees to purchase from the Company at the Closing,
the Note and the Warrant for an aggregate purchase price of One Hundred
Thousand Dollars ($100,000) (the "Purchase Price").
(b) The exercise price per share of the Warrant to be issued at the
Closing shall initially be set at One Dollar and Fifty Cents ($1.50) and the
conversion price per share of the Note shall initially be set at Thirty Seven
and a Half Cents (0.375).
Section 1.02 Closing. The sale of the Securities by the Company to
the Purchaser shall take place on April 13, 2001 at the offices of the Company
or at such other place and time as may be agreed upon by the Purchaser and the
Company (the "Closing"). At the Closing, the Company shall deliver to the
Purchaser certificates evidencing the Securities against payment of the
Purchase Price for the Securities, by certified or official bank check or wire
transfer of immediately available funds to an account designated by the
Company.
ARTICLE II REPRESENTATIONS AND
WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to, and agrees with, the
Purchaser, as of the date hereof and as of the date of each Closing, as
follows:
Section 2.01 Incorporation and Corporate Existence. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the Commonwealth of Massachusetts and has all necessary corporate
power and authority to own, operate or lease the properties and assets now
owned, operated or leased by the Company and to carry on the business of the
Company, as it is now being conducted.
Section 2.02 Authority. The Company has all necessary corporate power
and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The Company has taken all necessary
corporate action to authorize the execution, delivery and performance by it of
this Agreement and to consummate the transactions contemplated hereby. This
Agreement has been duly executed and delivered by the Company and, and
assuming due execution and delivery of the Agreement by the Purchaser, this
Agreement constitutes a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, subject to the
effect of any applicable bankruptcy, reorganization, insolvency (including,
without limitation, all laws relating to fraudulent transfers), moratorium or
similar laws affecting creditors' rights and remedies generally, subject, as
to enforceability, to the effect of general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or at
law) and subject to the effect of applicable securities laws as to rights to
indemnification.
Section 2.03 Consents and Approvals; No Conflict. The execution and
delivery of this Agreement by the Company do not, and the performance of this
Agreement by the Company will not (i) require any consent, approval,
authorization or other action by, or filing with or notification to, any
governmental or regulatory authority, except where failure to obtain such
consent, approval, authorization or action, or to make such filing or
notification, would not prevent the Company from performing any of its
material obligations under this Agreement and would not have a material
adverse effect on the Company; (ii) conflict with or violate the charter or
by-laws of the Company; or (iii) conflict with or violate any law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award
applicable to the Company, except as would not prevent the Company from
performing any of its material obligations under this Agreement and would not
have a material adverse effect on the Company.
Section 2.04 Absence of Litigation. No claim, action, proceeding or
investigation is pending, or to the best knowledge of the Company, threatened,
which seeks to delay or prevent the consummation of the transactions
contemplated hereby or which would be reasonably likely to adversely affect or
restrict the Company's ability to consummate the transactions contemplated
hereby.
Section 2.05 Brokers. No broker, finder or investment banker is
entitled to any brokerage, finders or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Company.
ARTICLE III REPRESENTATIONS AND WARRANTIES
OF THE PURCHASER
The Purchaser hereby represents and warrants to, and agrees with, the
Company, as of the date hereof and as of each Closing, as follows:
Section 3.01 Authority. The Purchaser has all necessary power and
authority to execute and deliver this Agreement, to purchase the Securities
from the Company and to consummate the transactions contemplated hereby. This
Agreement has been duly executed and delivered by the Purchaser and, and
assuming due authorization, execution and delivery of the Agreement by the
Company, this Agreement constitutes a legal, valid and binding obligation of
the Purchaser enforceable against the Purchaser in accordance with its terms,
subject to the effect of any applicable bankruptcy, reorganization, insolvency
(including, without limitation, all laws relating to fraudulent transfers),
moratorium or similar laws affecting creditors' rights and remedies generally,
subject, as to enforceability, to the effect of general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) and subject to the effect of applicable securities laws as
to rights to indemnification.
Section 3.02 Consents and Approvals; No Conflict. The execution and
delivery of this Agreement by the Purchaser do not, and the performance of
this Agreement by the Purchaser will not (i) require any consent, approval,
authorization or other action by, or filing with or notification to, any
governmental or regulatory authority, except where the failure to obtain such
consent, approval, authorization or action, or to make such filing or
notification, would not prevent the Purchaser from performing any of its
material obligations under this Agreement; or (ii) except as would not prevent
the Purchaser from performing any of its material obligations under this
Agreement, conflict with or violate any law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award applicable to the
Purchaser.
Section 3.03 Absence of Litigation. No claim, action, proceeding or
investigation is pending, or to the best knowledge of the Purchaser,
threatened, which seeks to delay or prevent the consummation of the
transactions contemplated hereby or which would be reasonably likely to
adversely affect or restrict the Purchaser's ability to consummate the
transactions contemplated hereby.
Section 3.04 Investment Purpose; Legend; Private Placement.
(a) The Purchaser is acquiring the Securities solely for the
purpose of investment and not with a view to, or for offer or sale in
connection with, any distribution thereof.
(b) The Purchaser acknowledges that neither the Securities nor the
Warrant Shares are registered under the Securities Act and that none of the
Securities or the Warrant Shares may be transferred or sold except pursuant to
the registration provisions of the Securities Act or pursuant to an applicable
exemption therefrom and subject to state securities laws and regulations, as
applicable. The Purchaser acknowledges that the certificates evidencing the
Securities and the Warrant Shares shall contain a legend substantially as
follows:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AND SUCH SECURITIES MAY NOT BE
SOLD, ENCUMBERED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT OR AN EXEMPTION FROM SUCH REGISTRATION
REQUIREMENT, AND, IF AN EXEMPTION SHALL BE APPLICABLE, THE HOLDER SHALL HAVE
DELIVERED AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY (WHICH ACCEPTANCE
SHALL NOT BE UNREASONABLY WITHHELD) THAT SUCH REGISTRATION IS NOT REQUIRED.
(c) The Purchaser acknowledges that the Securities involve a great
deal of risk and that there is a limited or no market for the Securities and
the Warrant Shares. The Purchaser is able to (i) bear the economic risk of
the investment in the Company, (ii) afford a complete loss of such investment,
and (iii) hold indefinitely the Securities. In reaching an informed decision
to invest in the Company, the Purchaser has sufficient information to evaluate
the merits and risks of an investment in the Securities of the Company. In
that connection, (x) the Purchaser has received (A) the Company's proxy
statement, dated July 10, 2000, for the Company's 2000 annual meeting of
stockholders, (B) the Company's Annual Report on Form 10-KSB for the year
ended December 31, 1999, as amended to date, and (C) the Company's Quarterly
Reports on Form 10- QSB for the quarters ended March 31, 2000, June 30, 2000
and September 30, 2000 and (y) representatives of the Company have (A) fully
and satisfactorily answered any questions which duly authorized
representatives of the Purchaser desired to ask concerning the Company, and
(B) furnished the Purchaser with any additional information or documents
requested to verify the accuracy of or supplement any information previously
delivered to or discussed with duly authorized representatives of the
Purchaser.
(d) The address of the Purchaser set forth on page 1 of this
Agreement is the true and correct address of the Purchaser and the Purchaser
has no present intention of becoming a resident or domiciliary of any other
state or jurisdiction.
Section 3.05 Accredited Investor. The Purchaser is an "accredited
investor" within the meaning of Rule 501 of Regulation D promulgated under the
Securities Act because (please check as appropriate):
[ ] (a) the Purchaser is an individual whose net
worth, either individually or with his spouse, exceeds
$1,000,000 on the date hereof;
[ ] (b) the Purchaser is an individual whose
individual income exceeded $200,000 in each of the two previous
years or whose joint income with his spouse exceeded $300,000
in each of the three previous years, and has a reasonable expectation of
reaching the same income level in the current year;
[ x ] (c) the Purchaser is a corporation, partnership
or Massachusetts or similar business trust, not formed for the
specific purpose of acquiring the Securities, with total assets
in excess of $5,000,000; or
[ ] (d) the investor hereby certifies that it is an
accredited investor because it is an entity in which each of
the equity owners qualifies as an accredited investor under
items (a), (b) or (c) above.
Section 3.06 Brokers. No broker, finder or investment banker is
entitled to any brokerage, finders or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Purchaser.
Section 3.07 No General Solicitation. The Securities were not offered
or sold by any form of general solicitation or general advertising.
ARTICLE IV MISCELLANEOUS
Section 4.01 Expenses. The Purchaser hereby agrees that all fees and
expenses incurred by the Purchaser in connection with this Agreement shall be
borne by the Purchaser, and the Company hereby agrees that all fees and
expenses incurred by the Company shall be borne by the Company, in each case
including without limitation all fees and expenses of such party's counsel and
accountants.
Section 4.02 Public Announcements. Except as required by law, neither
the Company nor the Purchaser shall make any public announcements in respect
of this Agreement or the transactions contemplated herein or otherwise
communicate with any news media without prior notification to the other party.
Section 4.03 Survival of Representations and Warranties. All
representations and warranties contained herein shall survive the execution
and delivery of this Agreement, the Closings and any investigation at any time
made by or on behalf of either party hereto.
Section 4.04 Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof
and supersedes any prior oral or written agreement between the parties.
Section 4.05 No Third-Party Beneficiaries; Assignment. This Agreement
is for the sole benefit of and binding upon the parties hereto and their
permitted successors and assigns and nothing herein, express or implied, is
intended to or shall confer upon any other person or entity any legal or
equitable right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement. This Agreement shall be binding upon the parties hereto
and their respective successors and assigns, and shall inure to the benefit of
and be enforceable by the parties hereof and their respective successors and
assigns.
Section 4.06 Amendment. This Agreement may be amended or modified only
by an instrument in writing signed by the Company and the Purchaser.
Section 4.07 Counterparts. This Agreement may be executed in one or
more counterparts, each of which when executed shall be deemed to be an
original but all of which taken together shall constitute one and the same
agreement.
Section 4.08 Gender and Number; Headings. Whenever used in this
Agreement, the singular number shall include the plural, the plural the
singular, and the use of any gender shall be applicable to all genders. The
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement
Section 4.09 Governing Law; Jurisdiction. This Agreement shall be
governed by, and construed in accordance with, the laws of the Commonwealth of
Massachusetts without giving effect to the principles of conflicts of laws
thereof. The Company and the Purchaser hereby consent to the jurisdiction of
the state and federal courts of the Commonwealth of Massachusetts for all
disputes arising under this Agreement.
IN WITNESS WHEREOF, the
Purchaser and the Company have caused this Agreement to be executed as of the
date first written above.
PAMET SYSTEMS, INC.
Attest:__________________________ By:_____________________________
Name: Name: David T. McKay
Title: Title: President & CEO
Corporate Seal
____________________________________
By:_____________________________
Name: Mr. A. De Angelis
Title: First Vice President
BSI SA
Securities Administration
Exhibit 4.34
WARRANT
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND
NEITHER THIS WARRANT NOR SUCH SHARES MAY BE SOLD, ENCUMBERED OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
ACT OR AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENT, AND, IF AN EXEMPTION
SHALL BE APPLICABLE, THE HOLDER SHALL HAVE DELIVERED AN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY (WHICH ACCEPTANCE SHALL NOT BE UNREASONABLY
WITHHELD) THAT SUCH REGISTRATION IS NOT REQUIRED.
Void after 5:00 p.m. Eastern Standard Time, on April 12, 2006.
WARRANT TO PURCHASE COMMON STOCK
OF
PAMET SYSTEMS, INC.
FOR VALUE RECEIVED, PAMET SYSTEMS, INC. (the "Company"), a
Massachusetts corporation, hereby certifies that BSI SA (the "Purchaser"), a
financial institution representing Mr. Pierangelo B. Bottinelli with its
address at Via Magatti 2, 6900 Lugano, Switzerland, or his permitted assigns,
is entitled to purchase from the Company, at any time or from time to time
commencing April 13, 2001, and prior to 5:00 P.M., Eastern Standard Time, on
April 12, 2006, a total of Two Hundred Sixty Six Thousand Six Hundred Sixty
Seven (266,667) fully paid and nonassessable shares of Common Stock, par
value $.01 per share, of the Company for an aggregate purchase price of Four
Hundred Thousand Dollars ($400,000) (computed on the basis of $1.50 per
share). (Hereinafter, (i) said Common Stock, together with any other equity
securities which may be issued by the Company with respect thereto or in
substitution therefor, is referred to as the "Common Stock," (ii) the shares
of the Common Stock purchasable hereunder are referred to as the "Warrant
Shares," (iii) the aggregate purchase price payable hereunder for the Warrant
Shares is referred to as the "Aggregate Warrant Price," (iv) the price payable
hereunder for each of the Warrant Shares is referred to as the "Per Share
Warrant Price," (v) this Warrant, and all warrants hereafter issued in
exchange or substitution for this Warrant are referred to as the "Warrant" and
(vi) the holder of this Warrant is referred to as the "Holder.") The number
of Warrant Shares for which this Warrant is exercisable is subject to
adjustment as hereinafter provided.
This Warrant is issued by the Company pursuant to the Securities
Purchase Agreement, dated as of the date hereof, among the Company and West
Country Partners (the "Securities Purchase Agreement"). Capitalized terms
used but not defined shall have the respective meanings ascribed to them in
the Securities Purchase Agreement.
1. Exercise of Warrant.
(a) This Warrant may be exercised, in whole at any time or in part
from time to time, commencing April 13, 2001, and prior to 5:00 P.M., Eastern
Standard Time, on April 12, 2006, by the Holder of this Warrant by the
surrender of this Warrant (with the subscription form at the end hereof duly
executed) at the address set forth in Subsection 9(a) hereof, together with
proper payment of the Aggregate Warrant Price, or the proportionate part
thereof if this Warrant is exercised in part.
(b) The Aggregate Warrant Price or Per Share Warrant Price shall be
paid in cash by certified or official bank check payable to the order of the
Company.
(c) Each exercise of this Warrant shall be deemed to have been
effected immediately prior to the close of business on the day on which the
Warrant shall have been surrendered to the Company as provided in subsection
1(a) above (an "Exercise Date"). At such time, the person or persons in whose
name or names any certificates for Warrant Shares shall be issuable upon such
exercise as provided in subsection 1(d) below shall be deemed to have become
the holder or holders of record of the Warrant Shares represented by such
certificates.
(d) If this Warrant is exercised in part, the Holder shall be
entitled to receive a new Warrant covering the number of Warrant Shares in
respect of which this Warrant has not been exercised and setting forth the
proportionate part of the Aggregate Warrant Price applicable to such Warrant
Shares. Upon such surrender of this Warrant, the Company will (a) issue a
certificate or certificates in the name of the Holder for the shares of the
Common Stock to which the Holder shall be entitled, and (b) deliver the
proportionate part thereof if this Warrant is exercised in part, pursuant to
the provisions of the Warrant.
(e) No fractional shares or scrip representing fractional shares
shall be issued upon the exercise of this Warrant. With respect to any
fraction of a share called for upon any exercise hereof, the Company shall pay
to the Holder an amount in cash equal to such fraction multiplied by the fair
value of a share.
2. Reservation of Warrant Shares. The Company agrees that, prior
to the expiration of this Warrant, the Company will at all times have
authorized and in reserve, and will keep available, solely for issuance or
delivery upon the exercise of this Warrant, the shares of the Common Stock as
from time to time shall be receivable upon the exercise of this Warrant.
3. Adjustments.
(a) In case the Company shall hereafter (i) pay a dividend or make
a distribution on its capital stock in shares of Common Stock, (ii) subdivide
its outstanding shares of Common Stock into a greater number of shares, (iii)
combine its outstanding shares of Common Stock into a smaller number of shares
or (iv) issue by reclassification of its Common Stock any shares of capital
stock of the Company, the number of Warrant Shares for which this Warrant may
be exercised shall be adjusted so that if the Holder surrendered this Warrant
for exercise after such action the Holder would be entitled to receive the
number of shares of Common Stock or other capital stock of the Company which
he would have been entitled to receive had such Warrant been exercised
immediately prior to such action. An adjustment made pursuant to this
subsection (a) shall become effective immediately after the record date in the
case of a dividend or distribution and shall become effective immediately
after the effective date in the case of a subdivision, combination or
reclassification. If, as a result of an adjustment made pursuant to this
subsection (a), the Holder of this Warrant shall become entitled to receive
shares of two or more classes of capital stock or shares of Common Stock and
other capital stock of the Company, the Board of Directors (whose
determination shall be conclusive and shall be described in a written notice
to the Holder of this Warrant promptly after such adjustment) shall determine
the allocation of the adjusted Per Share Warrant Price between or among shares
of such classes of capital stock or shares of Common Stock and other capital
stock.
(b) In case of any consolidation or merger to which the Company is
a party other than a merger or consolidation in which the Company is the
continuing corporation, or in case of any sale or conveyance to another entity
of the property of the Company as an entirety or substantially as an entirety,
or in the case of any statutory exchange of securities with another
corporation (including any exchange effected in connection with a merger of a
third corporation into the Company), the holder shall have the right
thereafter to exercise this Warrant for the kind and amount of securities,
cash or other property which he would have owned or have been entitled to
receive immediately after such consolidation, merger, statutory exchange, sale
or conveyance had such Warrant been exercised immediately prior to the
effective date of such consolidation, merger, statutory exchange, sale or
conveyance and in any such case, if necessary, appropriate adjustment shall be
made in the application of the provisions set forth in this Section 3 with
respect to the rights and interests thereafter of the Holder to the end that
the provisions set forth in this Section 3 shall thereafter correspondingly be
made applicable, as nearly as may reasonably be, in relation to any shares of
stock or other securities or property thereafter deliverable on the conversion
of this Warrant. The above provisions of this subsection (b) shall similarly
apply to successive consolidations, mergers, statutory exchanges, sales or
conveyances. Notice of any such consolidation, merger, statutory exchange,
sale or conveyance and of said provisions so proposed to be made, shall be
mailed to the Holder not less than 30 days prior to such event. A sale of all
or substantially all of the assets of the Company for a consideration
consisting primarily of securities shall be deemed a consolidation or merger
for the foregoing purposes.
(c) In the event of any adjustment to the number of Warrant Shares
issuable upon exercise of this Warrant, the Per Share Warrant Price shall be
adjusted by multiplying the Per Share Warrant Price in effect immediately
prior to such adjustment by a fraction the numerator of which is the aggregate
number of Warrant Shares for which this Warrant may be exercised immediately
prior to such adjustment and the denominator of which is the aggregate number
of Warrant Shares for which this Warrant may be exercised immediately after
such adjustment.
(d) Whenever the Per Share Warrant Price is adjusted as provided in
this Warrant and upon any modification of the rights of the Holder of this
Warrant in accordance with this Section 3, the Company shall promptly prepare
a certificate of an officer of the Company, setting forth the Per Share
Warrant Price and the number of Warrant Shares after such adjustment or
modification, a brief statement of the facts requiring such adjustment or
modification and the manner of computing the same and cause a copy of such
certificate to be mailed to the Holder.
4. Fully Paid Stock; Taxes. The Company agrees that the shares of
the Common Stock represented by each and every certificate for Warrant Shares
delivered on the proper exercise of this Warrant shall, at the time of such
delivery, be validly issued and outstanding, fully paid and nonassessable, and
not subject to preemptive rights, and the Company will take all such actions
as may be necessary to assure that the par value or stated value, if any, per
share of the Common Stock is at all times equal to or less than the then Per
Share Warrant Price. Subject to Section 5(e) hereof, the Company further
covenants and agrees that it will pay, when due and payable, any and all
Federal and state stamp, original issue or similar taxes that may be payable
in respect of the issuance of any Warrant Shares or certificates therefor.
The Holder covenants and agrees that it shall pay, when due and payable, any
and all federal, state and local income or similar taxes that may be payable
in respect of the issuance of any Warrant Shares or certificates therefor.
5. Transfer
(a) Securities Laws. Neither this Warrant nor the Warrant Shares
issuable upon the exercise hereof have been registered under the Securities
Act of 1933, as amended (the "Securities Act"), or under any state securities
laws and unless so registered may not be transferred, sold, pledged,
hypothecated or otherwise disposed of unless an exemption from such
registration is available. In the event the Holder desires to transfer this
Warrant or any of the Warrant Shares issued, the Holder must give the Company
prior written notice of such proposed transfer including the name and address
of the proposed transferee. Such transfer may be made only either (i) upon
publication by the Securities and Exchange Commission (the "Commission") of a
ruling, interpretation, opinion or "no action letter" based upon facts
presented to said Commission, or (ii) upon receipt by the Company of an
opinion of counsel acceptable to the Company to the effect that the proposed
transfer will not violate the provisions of the Securities Act, the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or the rules and
regulations promulgated under either such act, or to the effect that the
Warrant or Warrant Shares to be sold or transferred have been registered under
the Securities Act of 1933, as amended, and that there is in effect a current
prospectus meeting the requirements of Subsection 11(a) of the Securities Act,
which is being or will be delivered to the purchaser or transferee at or prior
to the time of delivery of the certificates evidencing the Warrant or Warrant
Shares to be sold or transferred.
(b) Conditions to Transfer. Prior to any such proposed transfer
(including, without limitation, a transfer by will or pursuant to the laws of
descent and distribution), and as a condition thereto, if such transfer is not
made pursuant to an effective registration statement under the Securities Act,
the Holder will, if requested by the Company, deliver to the Company (i) an
investment covenant, in form and substance equivalent to that signed by the
original Holder of this Warrant, signed by the proposed transferee, (ii) an
agreement by such transferee to the restrictive investment legend set forth
herein on the certificate or certificates representing the securities acquired
by such transferee, (iii) an agreement by such transferee that the Company may
place a "stop transfer order" with its transfer agent or registrar, and (iv)
an agreement by the transferee to indemnify the Company to the same extent as
set forth in the next succeeding paragraph.
(c) Indemnity. The Holder acknowledges that the Holder understands
the meaning and legal consequences of this Section 5, and the Holder hereby
agrees to indemnify and hold harmless the Company, its representatives and
each officer and director thereof from and against any and all loss, damage or
liability (including all attorneys' fees and costs incurred in enforcing this
indemnity provision) due to or arising out of (a) the inaccuracy of any
representation or the breach of any warranty of the Holder contained in, or
any other breach by the Holder of, this Warrant, (b) any transfer of the
Warrant or (c) any untrue statement or omission to state any material fact in
connection with the investment representations or with respect to the facts
and representations supplied by the Holder to counsel to the Company upon
which its opinion as to a proposed transfer shall have been based.
(d) Transfer. Upon surrender of this Warrant to the Company or at
the office of its stock transfer agent, if any, with assignment documentation
duly executed and funds sufficient to pay any transfer tax, and upon
compliance with the foregoing provisions, the Company shall, without charge,
execute and deliver a new Warrant in the name of the assignee named in such
instrument of assignment, and this Warrant shall promptly be canceled. Any
assignment, transfer, pledge, hypothecation or other disposition of this
Warrant attempted contrary to the provisions of this Warrant, or any levy of
execution, attachment or other process attempted upon the Warrant, shall be
null and void and without effect.
(e) Legend and Stop Transfer Orders. Unless the Warrant Shares
have been registered under the Securities Act, upon exercise of any part of
the Warrant and the issuance of any of the Warrant Shares, the Company shall
instruct its transfer agent to enter stop transfer orders with respect to such
shares, and all certificates representing Warrant Shares shall bear on the
face thereof substantially the following legend, insofar as is consistent with
Massachusetts law:
"The shares of common stock represented by this certificate have
not been registered under the Securities Act of 1933, as amended, and may not
be sold, offered for sale, assigned, transferred or otherwise disposed of
unless registered pursuant to the provisions of that Act or an opinion of
counsel to the Company is obtained stating that such disposition is in
compliance with an available exemption from such registration."
6. Loss, etc. of Warrant. Upon receipt of evidence satisfactory
to the Company of the loss, theft, destruction or mutilation of this Warrant,
and of indemnity reasonably satisfactory to the Company, if lost, stolen or
destroyed, and upon surrender and cancellation of this Warrant if mutilated,
the Company shall execute and deliver to the Holder a new Warrant of like
date, tenor and denomination.
7. Warrant Holder Not Shareholder. Except as otherwise provided
herein, this Warrant does not confer upon the Holder any right to vote or to
consent to or receive notice as a shareholder of the Company, as such, in
respect of any matters whatsoever, or any other rights or liabilities as a
shareholder, prior to the exercise hereof.
8. Communication. No notice or other communication under this
Warrant shall be effective unless the same is in writing and is mailed by
first-class mail, postage prepaid, addressed to:
(a) the Company at 1000 Main Street, Acton, Massachusetts 01720,
or such other address as the Company has designated in writing to the Holder,
or
(b) the Holder at the address contained in the first paragraph of
this Warrant, or such other address as the Holder has designated in writing to
the Company.
9. Headings. The headings of this Warrant have been inserted as a
matter of convenience and shall not affect the construction hereof.
10. Applicable Law. This Warrant shall be governed by and
construed in accordance with the law of the Commonwealth of Massachusetts
without giving effect to the principles of conflict of laws thereof.
IN WITNESS WHEREOF, PAMET SYSTEMS, INC., has caused this Warrant to
be signed by a duly authorized officer as of this 13th day of April, 2001.
ATTEST: PAMET SYSTEMS, INC.
By:_______________________ By:___________________________________
Name: Richard C. Becker Name: David T. McKay
Title: VP, Finance and Administration Title: President & CEO
SUBSCRIPTION
The undersigned, __________________________________________,
pursuant to the provisions of the foregoing Warrant, hereby agrees to
subscribe for the purchase of _________________________ shares of the Common
Stock of PAMET SYSTEMS, INC. covered by said Warrant, and makes payment
therefor in full at the price per share provided by said Warrant.
Dated __________________ Signature__________________________
Address____________________________
____________________________
ASSIGNMENT
FOR VALUE RECEIVED _________________________ hereby sells, assigns
and transfers unto _________________________ the foregoing Warrant and all
rights evidenced thereby, and does irrevocably constitute and appoint
_________________________, attorney, to transfer said Warrant on the books of
PAMET SYSTEMS, INC.
Dated __________________ Signature_________________________
Address___________________________
___________________________
PARTIAL ASSIGNMENT
FOR VALUE RECEIVED _________________________ hereby assigns and
transfers unto _________________________ the right to purchase
_________________________ shares of the Common Stock of PAMET SYSTEMS, INC. by
the foregoing Warrant, and a proportionate part of said Warrant and the rights
evidenced hereby, and does irrevocably constitute and appoint
_________________________, attorney, to transfer that part of said Warrant on
the books of PAMET SYSTEMS, INC.
Dated ___________________ Signature__________________________
Address____________________________
____________________________
Exhibit 4.35
WARRANT
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACTOF 1933, AND
NEITHER THIS WARRANT NOR SUCH SHARES MAY BE SOLD, ENCUMBERED OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
ACT OR AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENT, AND, IF AN EXEMPTION
SHALL BE APPLICABLE, THE HOLDER SHALL HAVE DELIVERED AN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY (WHICH ACCEPTANCE SHALL NOT BE UNREASONABLY
WITHHELD) THAT SUCH REGISTRATION IS NOT REQUIRED.
Void after 5:00 p.m. Eastern Standard Time, on April 19, 2006.
WARRANT TO PURCHASE COMMON STOCK
OF
PAMET SYSTEMS, INC.
FOR VALUE RECEIVED, PAMET SYSTEMS, INC. (the "Company"), a Massachusetts
corporation, hereby certifies that Craig M. Cooper (the "Purchaser"), with its
address at 1368 Berkley Street, Baldwin, NY 11510, or its permitted assigns,
is entitled to purchase from the Company, at any time or from time to time
commencing April 20, 2001, and prior to 5:00 P.M., Eastern Standard Time, on
April 19, 2006, a total of Twenty Nine Thousand One Hundred Sixty Seven
(29,167) fully paid and nonassessable shares of common stock, par value $.01
per share ("Common Stock"), of the Company for an aggregate purchase price of
Forty Three Thousand Seven Hundred Fifty Dollars ($43,750) (computed on the
basis of $1.50 per share). (Hereinafter, (i) said Common Stock, together with
any other equity securities which may be issued by the Company with respect
thereto or in substitution therefor, is referred to as the "Common Stock,"
(ii) the shares of the Common Stock purchasable hereunder are referred to as
the "Warrant Shares," (iii) the aggregate purchase price payable hereunder for
the Warrant Shares is referred to as the "Aggregate Warrant Price," (iv) the
price payable hereunder for each of the Warrant Shares is referred to as the
"Per Share Warrant Price," (v) this Warrant, and all warrants hereafter issued
in exchange or substitution for this Warrant are referred to as the "Warrant"
and (vi) the holder of this Warrant is referred to as the "Holder.") The
number of Warrant Shares for which this Warrant is exercisable is subject to
adjustment as hereinafter provided.
This Warrant is issued by the Company pursuant to the Securities Purchase
Agreement, dated as of the date hereof, among the Company and West Country
Partners (the "Securities Purchase Agreement"). Capitalized terms used but
not defined shall have the respective meanings ascribed to them in the
Securities Purchase Agreement.
1. Exercise of Warrant.
(a) This Warrant may be exercised, in whole at any time or in part from
time to time, commencing April 20, 2001, and prior to 5:00 P.M., Eastern
Standard Time, on April 19, 2006, by the Holder of this Warrant by the
surrender of this Warrant (with the subscription form at the end hereof duly
executed) at the address set forth in Subsection 9(a) hereof, together with
proper payment of the Aggregate Warrant Price, or the proportionate part
thereof if this Warrant is exercised in part.
(b) The Aggregate Warrant Price or Per Share Warrant Price shall be paid
in cash by certified or official bank check payable to the order of the
Company.
(c) Each exercise of this Warrant shall be deemed to have been effected
immediately prior to the close of business on the day on which the Warrant
shall have been surrendered to the Company as provided in subsection 1(a)
above (an "Exercise Date"). At such time, the person or persons in whose name
or names any certificates for Warrant Shares shall be issuable upon such
exercise as provided in subsection 1(d) below shall be deemed to have become
the holder or holders of record of the Warrant Shares represented by such
certificates.
(d) If this Warrant is exercised in part,
the Holder shall be entitled to receive a new Warrant covering the number of
Warrant Shares in respect of which this Warrant has not been exercised and
setting forth the proportionate part of the Aggregate Warrant Price applicable
to such Warrant Shares. Upon such surrender of this Warrant, the Company will
(a) issue a certificate or certificates in the name of the Holder for the
shares of the Common Stock to which the Holder shall be entitled, and (b)
deliver the proportionate part thereof if this Warrant is exercised in part,
pursuant to the provisions of the Warrant.
(e) No fractional shares or scrip representing fractional shares shall
be issued upon the exercise of this Warrant. With respect to any fraction of
a share called for upon any exercise hereof, the Company shall pay to the
Holder an amount in cash equal to such fraction multiplied by the fair value
of a share.
2. Reservation of Warrant Shares. The Company agrees that, prior to
the expiration of this Warrant, the Company will at all times have authorized
and in reserve, and will keep available, solely for issuance or delivery upon
the exercise of this Warrant, the shares of the Common Stock as from time to
time shall be receivable upon the exercise of this Warrant.
3. Adjustments. (a) In case the Company shall hereafter
(i) pay a dividend or make a distribution on its capital stock in shares of
Common Stock, (ii) subdivide its outstanding shares of Common Stock into a
greater number of shares, (iii) combine its outstanding shares of Common Stock
into a smaller number of shares or (iv) issue by reclassification of its
Common Stock any shares of capital stock of the Company, the number of Warrant
Shares for which this Warrant may be exercised shall be adjusted so that if
the Holder surrendered this Warrant for exercise after such action the Holder
would be entitled to receive the number of shares of Common Stock or other
capital stock of the Company which he would have been entitled to receive had
such Warrant been exercised immediately prior to such action. An adjustment
made pursuant to this subsection (a) shall become effective immediately after
the record date in the case of a dividend or distribution and shall become
effective immediately after the effective date in the case of a subdivision,
combination or reclassification. If, as a result of an adjustment made
pursuant to this subsection (a), the Holder of this Warrant shall become
entitled to receive shares of two or more classes of capital stock or shares
of Common Stock and other capital stock of the Company, the Board of Directors
(whose determination shall be conclusive and shall be described in a written
notice to the Holder of this Warrant promptly after such adjustment) shall
determine the allocation of the adjusted Per Share Warrant Price between or
among shares of such classes of capital stock or shares of Common Stock and
other capital stock.
(b) In case of any consolidation or merger to which the Company is a
party other than a merger or consolidation in which the Company is the
continuing corporation, or in case of any sale or conveyance to another entity
of the property of the Company as an entirety or substantially as an entirety,
or in the case of any statutory exchange of securities with another
corporation (including any exchange effected in connection with a merger of a
third corporation into the Company), the holder shall have the right
thereafter to exercise this Warrant for the kind and amount of securities,
cash or other property which he would have owned or have been entitled to
receive immediately after such consolidation, merger, statutory exchange, sale
or conveyance had such Warrant been exercised immediately prior to the
effective date of such consolidation, merger, statutory exchange, sale or
conveyance and in any such case, if necessary, appropriate adjustment shall be
made in the application of the provisions set forth in this Section 3 with
respect to the rights and interests thereafter of the Holder to the end that
the provisions set forth in this Section 3 shall thereafter correspondingly be
made applicable, as nearly as may reasonably be, in relation to any shares of
stock or other securities or property thereafter deliverable on the conversion
of this Warrant. The above provisions of this subsection (b) shall similarly
apply to successive consolidations, mergers, statutory exchanges, sales or
conveyances. Notice of any such consolidation, merger, statutory exchange,
sale or conveyance and of said provisions so proposed to be made, shall be
mailed to the Holder not less than 30 days prior to such event. A sale of all
or substantially all of the assets of the Company for a consideration
consisting primarily of securities shall be deemed a consolidation or merger
for the foregoing purposes.
(c) In the event of any adjustment to the number of Warrant Shares
issuable upon exercise of this Warrant, the Per Share Warrant Price shall be
adjusted by multiplying the Per Share Warrant Price in effect immediately
prior to such adjustment by a fraction the numerator of which is the aggregate
number of Warrant Shares for which this Warrant may be exercised immediately
prior to such adjustment and the denominator of which is the aggregate number
of Warrant Shares for which this Warrant may be exercised immediately after
such adjustment.
(d) Whenever the Per Share Warrant Price is adjusted as provided in this
Warrant and upon any modification of the rights of the Holder of this Warrant
in accordance with this Section 3, the Company shall promptly prepare a
certificate of an officer of the Company, setting forth the Per Share Warrant
Price and the number of Warrant Shares after such adjustment or modification,
a brief statement of the facts requiring such adjustment or modification and
the manner of computing the same and cause a copy of such certificate to be
mailed to the Holder.
4. Fully Paid Stock; Taxes. The Company agrees that the shares of the
Common Stock represented by each and every certificate for Warrant Shares
delivered on the proper exercise of this Warrant shall, at the time of such
delivery, be validly issued and outstanding, fully paid and nonassessable, and
not subject to preemptive rights, and the Company will take all such actions
as may be necessary to assure that the par value or stated value, if any, per
share of the Common Stock is at all times equal to or less than the then Per
Share Warrant Price. Subject to Section 6(e) hereof, the Company further
covenants and agrees that it will pay, when due and payable, any and all
Federal and state stamp, original issue or similar taxes that may be payable
in respect of the issuance of any Warrant Shares or certificates therefor.
The Holder covenants and agrees that it shall pay, when due and payable, any
and all federal, state and local income or similar taxes that may be payable
in respect of the issuance of any Warrant Shares or certificates therefor.
5. Transfer
(a) Securities Laws. Neither this Warrant nor the Warrant Shares
issuable upon the exercise hereof have been registered under the Securities
Act of 1933, as amended (the "Securities Act"), or under any state securities
laws and unless so registered may not be transferred, sold, pledged,
hypothecated or otherwise disposed of unless an exemption from such
registration is available. In the event the Holder desires to transfer this
Warrant or any of the Warrant Shares issued, the Holder must give the Company
prior written notice of such proposed transfer including the name and address
of the proposed transferee. Such transfer may be made only either (i) upon
publication by the Securities and Exchange Commission (the "Commission") of a
ruling, interpretation, opinion or "no action letter" based upon facts
presented to said Commission, or (ii) upon receipt by the Company of an
opinion of counsel acceptable to the Company to the effect that the proposed
transfer will not violate the provisions of the Securities Act, the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or the rules and
regulations promulgated under either such act, or to the effect that the
Warrant or Warrant Shares to be sold or transferred have been registered under
the Securities Act of 1933, as amended, and that there is in effect a current
prospectus meeting the requirements of Subsection 11(a) of the Securities Act,
which is being or will be delivered to the purchaser or transferee at or prior
to the time of delivery of the certificates evidencing the Warrant or Warrant
Shares to be sold or transferred.
(b) Conditions to Transfer. Prior to any such proposed transfer
(including, without limitation, a transfer by will or pursuant to the laws of
descent and distribution), and as a condition thereto, if such transfer is not
made pursuant to an effective registration statement under the Securities Act,
the Holder will, if requested by the Company, deliver to the Company (i) an
investment covenant, in form and substance equivalent to that signed by the
original Holder of this Warrant, signed by the proposed transferee, (ii) an
agreement by such transferee to the restrictive investment legend set forth
herein on the certificate or certificates representing the securities acquired
by such transferee, (iii) an agreement by such transferee that the Company may
place a "stop transfer order" with its transfer agent or registrar, and (iv)
an agreement by the transferee to indemnify the Company to the same extent as
set forth in the next succeeding paragraph.
(c) Indemnity. The Holder acknowledges that the Holder understands the
meaning and legal consequences of this Section 6, and the Holder hereby agrees
to indemnify and hold harmless the Company, its representatives and each
officer and director thereof from and against any and all loss, damage or
liability (including all attorneys' fees and costs incurred in enforcing this
indemnity provision) due to or arising out of (a) the inaccuracy of any
representation or the breach of any warranty of the Holder contained in, or
any other breach by the Holder of, this Warrant, (b) any transfer of the
Warrant or (c) any untrue statement or omission to state any material fact in
connection with the investment representations or with respect to the facts
and representations supplied by the Holder to counsel to the Company upon
which its opinion as to a proposed transfer shall have been based.
(d) Transfer. Upon surrender of this Warrant to the Company or at the
office of its stock transfer agent, if any, with assignment documentation duly
executed and funds sufficient to pay any transfer tax, and upon compliance
with the foregoing provisions, the Company shall, without charge, execute and
deliver a new Warrant in the name of the assignee named in such instrument of
assignment, and this Warrant shall promptly be canceled. Any assignment,
transfer, pledge, hypothecation or other disposition of this Warrant attempted
contrary to the provisions of this Warrant, or any levy of execution,
attachment or other process attempted upon the Warrant, shall be null and void
and without effect.
(e) Legend and Stop Transfer Orders. Unless the Warrant Shares have
been registered under the Securities Act, upon exercise of any part of the
Warrant and the issuance of any of the Warrant Shares, the Company shall
instruct its transfer agent to enter stop transfer orders with respect to such
shares, and all certificates representing Warrant Shares shall bear on the
face thereof substantially the following legend, insofar as is consistent with
Massachusetts law:
"The shares of common stock represented by this certificate have not
been registered under the Securities Act of 1933, as amended, and may not be
sold, offered for sale, assigned, transferred or otherwise disposed of unless
registered pursuant to the provisions of that Act or an opinion of counsel to
the Company is obtained stating that such disposition is in compliance with an
available exemption from such registration."
6. Loss, etc. of Warrant. Upon receipt of evidence satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant, and of
indemnity reasonably satisfactory to the Company, if lost, stolen or
destroyed, and upon surrender and cancellation of this Warrant if mutilated,
the Company shall execute and deliver to the Holder a new Warrant of like
date, tenor and denomination.
7. Warrant Holder Not Shareholder. Except as otherwise provided
herein, this Warrant does not confer upon the Holder any right to vote or to
consent to or receive notice as a shareholder of the Company, as such, in
respect of any matters whatsoever, or any other rights or liabilities as a
shareholder, prior to the exercise hereof.
8. Communication. No notice or other communication under this Warrant
shall be effective unless the same is in writing and is mailed by first-class
mail, postage prepaid, addressed to:
(a) the Company at 1000 Main Street, Acton, Massachusetts 01720, or
such other address as the Company has designated in writing to the Holder, or
(b) the Holder at the address contained in the first paragraph of this
Warrant, or such other address as the Holder has designated in writing to the
Company.
9. Headings. The headings of this Warrant have been inserted as a
matter of convenience and shall not affect the construction hereof.
10. Applicable Law. This Warrant shall be governed by and construed in
accordance with the law of the Commonwealth of Massachusetts without giving
effect to the principles of conflict of laws thereof.
IN WITNESS
WHEREOF, PAMET SYSTEMS, INC., has caused this Warrant to be signed by a duly
authorized officer as of this 20th day of April, 2001.
ATTEST: PAMET SYSTEMS,
INC.
_______________________
By:___________________________________
Name: David T. McKay
Title: President & CEO
SUBSCRIPTION
The undersigned, __________________________________________, pursuant to
the provisions of the foregoing Warrant, hereby agrees to subscribe for the
purchase of _________________________ shares of the Common Stock of PAMET
SYSTEMS, INC. covered by said Warrant, and makes payment therefor in full at
the price per share provided by said Warrant.
Dated __________________ Signature__________________________
Address____________________________
____________________________
ASSIGNMENT
FOR VALUE RECEIVED _________________________ hereby sells, assigns and
transfers unto _________________________ the foregoing Warrant and all rights
evidenced thereby, and does irrevocably constitute and appoint
_________________________, attorney, to transfer said Warrant on the books of
PAMET SYSTEMS, INC.
Dated __________________ Signature_________________________
Address___________________________
___________________________
PARTIAL ASSIGNMENT
FOR VALUE RECEIVED _________________________ hereby assigns and transfers
unto _________________________ the right to purchase _________________________
shares of the Common Stock of PAMET SYSTEMS, INC. by the foregoing Warrant,
and a proportionate part of said Warrant and the rights evidenced hereby, and
does irrevocably constitute and appoint _________________________, attorney,
to transfer that part of said Warrant on the books of PAMET SYSTEMS, INC.
Dated ___________________ Signature__________________________
Address____________________________
____________________________
Exhibit 4.36
WARRANT
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND
NEITHER THIS WARRANT NOR SUCH SHARES MAY BE SOLD, ENCUMBERED OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
ACT OR AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENT, AND, IF AN EXEMPTION
SHALL BE APPLICABLE, THE HOLDER SHALL HAVE DELIVERED AN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY (WHICH ACCEPTANCE SHALL NOT BE UNREASONABLY
WITHHELD) THAT SUCH REGISTRATION IS NOT REQUIRED.
Void after 5:00 p.m. Eastern Standard Time, on May 13, 2006.
WARRANT TO PURCHASE COMMON STOCK
OF
PAMET SYSTEMS, INC.
FOR VALUE RECEIVED, PAMET SYSTEMS, INC. (the "Company"), a
Massachusetts corporation, hereby certifies that Mr. Terrence M. Finn, with
its address at Edwards & Angell, LLP, 101 Federal Street, Boston, MA
02110-1800, or its permitted assigns, is entitled to purchase from the
Company, at any time or from time to time commencing May 14, 2001, and prior
to 5:00 P.M., Eastern Standard Time, on May 13, 2006, a total of Twenty Nine
Thousand One Hundred Sixty Seven (29,167) fully paid and nonassessable shares
of common stock, par value $.01 per share ("Common Stock"), of the Company for
an aggregate purchase price of Forty Three Thousand Seven Hundred Fifty
Dollars ($43,750) (computed on the basis of $1.50 per share). (Hereinafter,
(i) said Common Stock, together with any other equity securities which may be
issued by the Company with respect thereto or in substitution therefor, is
referred to as the "Common Stock," (ii) the shares of the Common Stock
purchasable hereunder are referred to as the "Warrant Shares," (iii) the
aggregate purchase price payable hereunder for the Warrant Shares is referred
to as the "Aggregate Warrant Price," (iv) the price payable hereunder for each
of the Warrant Shares is referred to as the "Per Share Warrant Price," (v)
this Warrant, and all warrants hereafter issued in exchange or substitution
for this Warrant are referred to as the "Warrant" and (vi) the holder of this
Warrant is referred to as the "Holder.") The number of Warrant Shares for
which this Warrant is exercisable is subject to adjustment as hereinafter
provided.
This Warrant is issued by the Company pursuant to the Securities
Purchase Agreement, dated as of the date hereof, among the Company and West
Country Partners (the "Securities Purchase Agreement"). Capitalized terms
used but not defined shall have the respective meanings ascribed to them in
the Securities Purchase Agreement.
1. Exercise of Warrant.
(a) This Warrant may be exercised, in whole at any time or in part from
time to time, commencing May 14, 2001, and prior to 5:00 P.M., Eastern
Standard Time, on May 13, 2006, by the Holder of this Warrant by the surrender
of this Warrant (with the subscription form at the end hereof duly executed)
at the address set forth in Subsection 9(a) hereof, together with proper
payment of the Aggregate Warrant Price, or the proportionate part thereof if
this Warrant is exercised in part.
(b) The Aggregate Warrant Price or Per Share Warrant Price shall be paid
in cash by certified or official bank check payable to the order of the
Company.
(c) Each exercise of this Warrant shall be deemed to have been effected
immediately prior to the close of business on the day on which the Warrant
shall have been surrendered to the Company as provided in subsection 1(a)
above (an "Exercise Date"). At such time, the person or persons in whose name
or names any certificates for Warrant Shares shall be issuable upon such
exercise as provided in subsection 1(d)below shall be deemed to have become
the holder or holders of record of the Warrant Shares represented by such
certificates.
(d) If this Warrant is exercised in part, the Holder shall be entitled to
receive a new Warrant covering the number of Warrant Shares in respect of
which this Warrant has not been exercised and setting forth the proportionate
part of the Aggregate Warrant Price applicable to such Warrant Shares. Upon
such surrender of this Warrant, the Company will (a) issue a certificate or
certificates in the name of the Holder for the shares of the Common Stock to
which the Holder shall be entitled, and (b) deliver the proportionate part
thereof if this Warrant is exercised in part, pursuant to the provisions of
the Warrant.
(e) No fractional shares or scrip representing fractional shares shall be
issued upon the exercise of this Warrant. With respect to any fraction of a
share called for upon any exercise hereof, the Company shall pay to the Holder
an amount in cash equal to such fraction multiplied by the fair value of a
share.
2. Reservation of Warrant Shares. The Company agrees that, prior to the
expiration of this Warrant, the Company will at all times have authorized and
in reserve, and will keep available, solely for issuance or delivery upon the
exercise of this Warrant, the shares of the Common Stock as from time to time
shall be receivable upon the exercise of this Warrant.
3. Adjustments.
(a) In case theCompany shall hereafter (i) pay a dividend or make a
distribution on its capital stock in shares of Common Stock, (ii) subdivide
its outstanding shares of Common Stock into a greater number of shares, (iii)
combine its outstanding shares of Common Stock into a smaller number of shares
or (iv) issue by reclassification of its Common Stock any shares of capital
stock of the Company, the number of Warrant Shares for which this Warrant may
be exercised shall be adjusted so that if the Holder surrendered this Warrant
for exercise after such action the Holder would be entitled to receive the
number of shares of Common Stock or other capital stock of the Company which
he would have been entitled to receive had such Warrant been exercised
immediately prior to such action. An adjustment made pursuant to this
subsection (a) shall become effective immediately after the record date in the
case of a dividend or distribution and shall become effective immediately
after the effective date in the case of a subdivision, combination or
reclassification. If, as a result of an adjustment made pursuant to this
subsection (a), the Holder of this Warrant shall become entitled to receive
shares of two or more classes of capital stock or shares of Common Stock and
other capital stock of the Company, the Board of Directors (whose
determination shall be conclusive and shall be described in a written notice
to the Holder of this Warrant promptly after such adjustment) shall determine
the allocation of the adjusted Per Share Warrant Price between or among shares
of such classes of capital stock or shares of Common Stock and other capital
stock.
(b) In case of any consolidation or merger to which the Company is a party
other than a merger or consolidation in which the Company is the continuing
corporation, or in case of any sale or conveyance to another entity of the
property of the Company as an entirety or substantially as an entirety, or in
the case of any statutory exchange of securities with another corporation
(including any exchange effected in connection with a merger of a third
corporation into the Company), the holder shall have the right thereafter to
exercise this Warrant for the kind and amount of securities, cash or other
property which he would have owned or have been entitled to receive
immediately after such consolidation, merger, statutory exchange, sale or
conveyance had such Warrant been exercised immediately prior to the effective
date of such consolidation, merger, statutory exchange, sale or conveyance and
in any such case, if necessary, appropriate adjustment shall be made in the
application of the provisions set forth in this Section 3 with respect to the
rights and interests thereafter of the Holder to the end that the provisions
set forth in this Section 3 shall thereafter correspondingly be made
applicable, as nearly as may reasonably be, in relation to any shares of stock
or other securities or property thereafter deliverable on the conversion of
this Warrant. The above provisions of this subsection (b) shall similarly
apply to successive consolidations, mergers, statutory exchanges, sales or
conveyances. Notice of any such consolidation, merger, statutory exchange,
sale or conveyance and of said provisions so proposed to be made, shall be
mailed to the Holder not less than 30 days prior to such event. A sale of all
or substantially all of the assets of the Company for a consideration
consisting primarily of securities shall be deemed a consolidation or merger
for the foregoing purposes.
(c) In the event of any adjustment to the number of Warrant Shares
issuable upon exercise of this Warrant, the Per Share Warrant Price shall be
adjusted by multiplying the Per Share Warrant Price in effect immediately
prior to such adjustment by a fraction the numerator of which is the aggregate
number of Warrant Shares for which this Warrant may be exercised immediately
prior to such adjustment and the denominator of which is the aggregate number
of Warrant Shares for which this Warrant may be exercised immediately after
such adjustment.
(d) Whenever the Per Share Warrant Price is adjusted as provided in this
Warrant and upon any modification of the rights of the Holder of this Warrant
in accordance with this Section 3, the Company shall promptly prepare a
certificate of an officer of the Company, setting forth the Per Share Warrant
Price and the number of Warrant Shares after such adjustment or modification,
a brief statement of the facts requiring such adjustment or modification and
the manner of computing the same and cause a copy of such certificate to be
mailed to the Holder.
4. Fully Paid Stock; Taxes. The Company agrees that the shares of the
Common Stock represented by each and every certificate for Warrant Shares
delivered on the proper exercise of this Warrant shall, at the time of such
delivery, be validly issued and outstanding, fully paid and nonassessable, and
not subject to preemptive rights, and the Company will take all such actions
as may be necessary to assure that the par value or stated value, if any, per
share of the Common Stock is at all times equal to or less than the then Per
Share Warrant Price. Subject to Section 6(e) hereof, the Company further
covenants and agrees that it will pay, when due and payable, any and all
Federal and state stamp, original issue or similar taxes that may be payable
in respect of the issuance of any Warrant Shares or certificates therefor.
The Holder covenants and agrees that it shall pay, when due and payable, any
and all federal, state and local income or similar taxes that may be payable
in respect of the issuance of any Warrant Shares or certificates therefor.
5. Transfer
(a) Securities Laws. Neither this Warrant nor the Warrant Shares issuable
upon the exercise hereof have been registered under the Securities Act of
1933, as amended (the "Securities Act"), or under any state securities laws
and unless so registered may not be transferred, sold, pledged, hypothecated
or otherwise disposed of unless an exemption from such registration is
available. In the event the Holder desires to transfer this Warrant or any of
the Warrant Shares issued, the Holder must give the Company prior written
notice of such proposed transfer including the name and address of the
proposed transferee. Such transfer may be made only either (i) upon
publication by the Securities and Exchange Commission (the "Commission") of a
ruling, interpretation, opinion or "no action letter" based upon facts
presented to said Commission, or (ii) upon receipt by the Company of an
opinion of counsel acceptable to the Company to the effect that the proposed
transfer will not violate the provisions of the Securities Act, the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or the rules and
regulations promulgated under either such act, or to the effect that the
Warrant or Warrant Shares to be sold or transferred have been registered under
the Securities Act of 1933, as amended, and that there is in effect a current
prospectus meeting the requirements of Subsection 11(a) of the Securities Act,
which is being or will be delivered to the purchaser or transferee at or prior
to the time of delivery of the certificates evidencing the Warrant or Warrant
Shares to be sold or transferred.
(b) Conditions to Transfer. Prior to any such proposed transfer
(including, without limitation, a transfer by will or pursuant to the laws of
descent and distribution), and as a condition thereto, if such transfer is not
made pursuant to an effective registration statement under the Securities Act,
the Holder will, if requested by the Company, deliver to the Company (i) an
investment covenant, in form and substance equivalent to that signed by the
original Holder of this Warrant, signed by the proposed transferee, (ii) an
agreement by such transferee to the restrictive investment legend set forth
herein on the certificate or certificates representing the securities acquired
by such transferee, (iii) an agreement by such transferee that the Company may
place a "stop transfer order" with its transfer agent or registrar, and (iv)
an agreement by the transferee to indemnify the Company to the same extent as
set forth in the next succeeding paragraph.
(c) Indemnity. The Holder acknowledges that the Holder understands the
meaning and legal consequences of this Section 6, and the Holder hereby agrees
to indemnify and hold harmless the Company, its representatives and each
officer and director thereof from and against any and all loss, damage or
liability (including all attorneys' fees and costs incurred in enforcing this
indemnity provision) due to or arising out of (a) the inaccuracy of any
representation or the breach of any warranty of the Holder contained in, or
any other breach by the Holder of, this Warrant, (b) any transfer of the
Warrant or (c) any untrue statement or omission to state any material fact in
connection with the investment representations or with respect to the facts
and representations supplied by the Holder to counsel to the Company upon
which its opinion as to a proposed transfer shall have been based.
(d) Transfer. Upon surrender of this Warrant to the Company or at the
office of its stock transfer agent, if any, with assignment documentation duly
executed and funds sufficient to pay any transfer tax, and upon compliance
with the foregoing provisions, the Company shall, without charge, execute and
deliver a new Warrant in the name of the assignee named in such instrument of
assignment, and this Warrant shall promptly be canceled. Any assignment,
transfer, pledge, hypothecation or other disposition of this Warrant attempted
contrary to the provisions of this Warrant, or any levy of execution,
attachment or other process attempted upon the Warrant, shall be null and void
and without effect.
(e) Legend and Stop Transfer Orders. Unless the Warrant Shares have been
registered under the Securities Act, upon exercise of any part of the Warrant
and the issuance of any of the Warrant Shares, the Company shall instruct its
transfer agent to enter stop transfer orders with respect to such shares, and
all certificates representing Warrant Shares shall bear on the face thereof
substantially the following legend, insofar as is consistent with
Massachusetts law:
"The shares of common stock represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and may not be sold,
offered for sale, assigned, transferred or otherwise disposed of unless
registered pursuant to the provisions of that Act or an opinion of counsel to
the Company is obtained stating that such disposition is in compliance with an
available exemption from such registration."
6. Loss, etc. of Warrant. Upon receipt of evidence satisfactory
to the Company of the loss, theft, destruction or mutilation of this Warrant,
and of indemnity reasonably satisfactory to the Company, if lost, stolen or
destroyed, and upon surrender and cancellation of this Warrant if mutilated,
the Company shall execute and deliver to the Holder a new Warrant of like
date, tenor and denomination.
7. Warrant Holder Not Shareholder. Except as otherwise provided
herein, this Warrant does not confer upon the Holder any right to vote or to
consent to or receive notice as a shareholder of the Company, as such, in
respect of any matters whatsoever, or any other rights or liabilities as a
shareholder, prior to the exercise hereof.
8. Communication. No notice or other communication under this
Warrant shall be effective unless the same is in writing and is mailed by
first-class mail, postage prepaid, addressed to:
(a) the Company at 1000 Main Street, Acton, Massachusetts
01720, or such other address as the Company has designated in writing to the
Holder, or
(b) the Holder at the address contained in the first
paragraph of this Warrant, or such other address as the Holder has designated
in writing to the Company.
9. Headings. The headings of this Warrant have been inserted as
a matter of convenience and shall not affect the construction hereof.
10. Applicable Law. This Warrant shall be governed by and
construed in accordance with the law of the Commonwealth of Massachusetts
without giving effect to the principles of conflict of laws thereof. _
IN WITNESS WHEREOF, PAMET SYSTEMS, INC., has caused this Warrant to be
signed by a duly authorized officer as of this 14th day of May, 2001.
ATTEST: PAMET SYSTEMS, INC.
_______________________ By:___________________________________
Name: David T. McKay Title:
President & CEO
SUBSCRIPTION
The undersigned, __________________________________________, pursuant
to the provisions of the foregoing Warrant, hereby agrees to subscribe for the
purchase of _________________________ shares of the Common Stock of PAMET
SYSTEMS, INC. covered by said Warrant, and makes payment therefor in full at
the price per share provided by said Warrant.
Dated __________________ Signature__________________________
Address____________________________
____________________________
ASSIGNMENT
FOR VALUE RECEIVED _________________________ hereby sells, assigns and
transfers unto _________________________ the foregoing Warrant and all rights
evidenced thereby, and does irrevocably constitute and appoint
_________________________, attorney, to transfer said Warrant on the books of
PAMET SYSTEMS, INC.
Dated __________________ Signature_________________________
Address___________________________
___________________________
PARTIAL ASSIGNMENT
FOR VALUE RECEIVED _________________________ hereby assigns and
transfers unto _________________________ the right to purchase
_________________________ shares of the Common Stock of PAMET SYSTEMS, INC. by
the foregoing Warrant, and a proportionate part of said Warrant and the rights
evidenced hereby, and does irrevocably constitute and appoint
_________________________, attorney, to transfer that part of said Warrant on
the books of PAMET SYSTEMS, INC.
Dated ___________________ Signature__________________________
Address____________________________
____________________________
Exhibit 4.37
SECURITIES PURCHASE AGREEMENT
This SECURITIES PURCHASE AGREEMENT (the "Agreement") is made and entered
into as of June 23, 2001 by and between PAMET SYSTEMS, INC., a Massachusetts
corporation whose principal place of business is 1000 Main Street, Acton,
Massachusetts 01720 (the "Company"), and West Country Partners, a California
Limited Partnership of which James S. Schmitt is the General Partner (the
"Purchaser"), with its address at 1917 Brittany Park, Camarillo, CA 93012.
WHEREAS, the Company is desirous of selling, and the Purchaser is
desirous of acquiring, (i) a convertible promissory note in substantially the
form attached hereto as Exhibit A in the principal amount of One Hundred
Thousand Dollars ($100,000) (the "Note") and (ii) a five- year warrant (the
"Warrant") in substantially the form attached hereto as Exhibit B to purchase
up to Two Hundred Sixty Six Thousand Six Hundred Sixty Seven (266,667) shares
("Warrant Shares") of the common stock, par value $.01 per share (the "Common
Stock"), of the Company (the Note and the Warrant together sometimes
hereinafter are referred to as the "Securities"), on the terms and subject to
the conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the promises and of the mutual
obligations hereinafter set forth, and for such other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the Company and the Purchaser hereby agree as follows:
ARTICLE I
PURCHASE AND SALE OF THE NOTES AND WARRANTS; CLOSINGS
Section 1.01 Purchase and Sale of the Notes and Warrants.
(a) Subject to the terms and conditions set forth in this
Agreement, the Company agrees to issue and sell to the Purchaser at the
Closing, and the Purchaser agrees to purchase from the Company at the Closing,
the Note and the Warrant for an aggregate purchase price of One Hundred
Thousand Dollars ($100,000) (the "Purchase Price").
(b) The exercise price per share of the Warrant to be issued at the
Closing shall initially be set at One Dollar and Fifty Cents ($1.50) and the
conversion price per share of the Note shall initially be set at Thirty Seven
and a Half Cents ($0.375).
Section 1.02 Closing. The sale of the Securities by the Company to
the Purchaser shall take place on June 23, 2001 at the offices of the Company
or at such other place and time as may be agreed upon by the Purchaser and the
Company (the "Closing"). At the Closing, the Company shall deliver to the
Purchaser certificates evidencing the Securities against payment of the
Purchase Price for the Securities, by certified or official bank check or wire
transfer of immediately available funds to an account designated by the
Company.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to, and agrees with, the
Purchaser, as of the date hereof and as of the date of each Closing, as
follows:
Section 2.01 Incorporation and Corporate Existence. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the Commonwealth of Massachusetts and has all necessary corporate
power and authority to own, operate or lease the properties and assets now
owned, operated or leased by the Company and to carry on the business of the
Company, as it is now being conducted.
Section 2.02 Authority. The Company has all necessary corporate power
and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The Company has taken all necessary
corporate action to authorize the execution, delivery and performance by it of
this Agreement and to consummate the transactions contemplated hereby. This
Agreement has been duly executed and delivered by the Company and, and
assuming due execution and delivery of the Agreement by the Purchaser, this
Agreement constitutes a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, subject to the
effect of any applicable bankruptcy, reorganization, insolvency (including,
without limitation, all laws relating to fraudulent transfers), moratorium or
similar laws affecting creditors' rights and remedies generally, subject, as
to enforceability, to the effect of general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or at
law) and subject to the effect of applicable securities laws as to rights to
indemnification.
Section 2.03 Consents and Approvals; No Conflict. The execution and
delivery of this Agreement by the Company do not, and the performance of this
Agreement by the Company will not (i) require any consent, approval,
authorization or other action by, or filing with or notification to, any
governmental or regulatory authority, except where failure to obtain such
consent, approval, authorization or action, or to make such filing or
notification, would not prevent the Company from performing any of its
material obligations under this Agreement and would not have a material
adverse effect on the Company; (ii) conflict with or violate the charter or
by-laws of the Company; or (iii) conflict with or violate any law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award
applicable to the Company, except as would not prevent the Company from
performing any of its material obligations under this Agreement and would not
have a material adverse effect on the Company.
Section 2.04 Absence of Litigation. No claim, action, proceeding or
investigation is pending, or to the best knowledge of the Company, threatened,
which seeks to delay or prevent the consummation of the transactions
contemplated hereby or which would be reasonably likely to adversely affect or
restrict the Company's ability to consummate the transactions contemplated
hereby.
Section 2.05 Brokers. No broker, finder or investment banker is
entitled to any brokerage, finders or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Company.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to, and agrees with, the
Company, as of the date hereof and as of each Closing, as follows:
Section 3.01 Authority. The Purchaser has all necessary power and
authority to execute and deliver this Agreement, to purchase the Securities
from the Company and to consummate the transactions contemplated hereby. This
Agreement has been duly executed and delivered by the Purchaser and, and
assuming due authorization, execution and delivery of the Agreement by the
Company, this Agreement constitutes a legal, valid and binding obligation of
the Purchaser enforceable against the Purchaser in accordance with its terms,
subject to the effect of any applicable bankruptcy, reorganization, insolvency
(including, without limitation, all laws relating to fraudulent transfers),
moratorium or similar laws affecting creditors' rights and remedies generally,
subject, as to enforceability, to the effect of general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) and subject to the effect of applicable securities laws as
to rights to indemnification.
Section 3.02 Consents and Approvals; No Conflict. The execution and
delivery of this Agreement by the Purchaser do not, and the performance of
this Agreement by the Purchaser will not (i) require any consent, approval,
authorization or other action by, or filing with or notification to, any
governmental or regulatory authority, except where the failure to obtain such
consent, approval, authorization or action, or to make such filing or
notification, would not prevent the Purchaser from performing any of its
material obligations under this Agreement; or (ii) except as would not prevent
the Purchaser from performing any of its material obligations under this
Agreement, conflict with or violate any law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award applicable to the
Purchaser.
Section 3.03 Absence of Litigation. No claim, action, proceeding or
investigation is pending, or to the best knowledge of the Purchaser,
threatened, which seeks to delay or prevent the consummation of the
transactions contemplated hereby or which would be reasonably likely to
adversely affect or restrict the Purchaser's ability to consummate the
transactions contemplated hereby.
Section 3.04 Investment Purpose; Legend; Private Placement.
(a) The Purchaser is acquiring the Securities solely for the
purpose of investment and not with a view to, or for offer or sale in
connection with, any distribution thereof.
(b) The Purchaser acknowledges that neither the Securities nor the
Warrant Shares are registered under the Securities Act and that none of the
Securities or the Warrant Shares may be transferred or sold except pursuant to
the registration provisions of the Securities Act or pursuant to an applicable
exemption therefrom and subject to state securities laws and regulations, as
applicable. The Purchaser acknowledges that the certificates evidencing the
Securities and the Warrant Shares shall contain a legend substantially as
follows:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AND SUCH SECURITIES MAY NOT BE
SOLD, ENCUMBERED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT OR AN EXEMPTION FROM SUCH REGISTRATION
REQUIREMENT, AND, IF AN EXEMPTION SHALL BE APPLICABLE, THE HOLDER SHALL HAVE
DELIVERED AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY (WHICH ACCEPTANCE
SHALL NOT BE UNREASONABLY WITHHELD) THAT SUCH REGISTRATION IS NOT REQUIRED.
(c) The Purchaser acknowledges that the Securities involve a great
deal of risk and that there is a limited or no market for the Securities and
the Warrant Shares. The Purchaser is able to (i) bear the economic risk of
the investment in the Company, (ii) afford a complete loss of such investment,
and (iii) hold indefinitely the Securities. In reaching an informed decision
to invest in the Company, the Purchaser has sufficient information to evaluate
the merits and risks of an investment in the Securities of the Company. In
that connection, (x) the Purchaser has received (A) the Company's proxy
statement, dated July 10, 2000, for the Company's 2000 annual meeting of
stockholders, (B) the Company's Annual Report on Form 10-KSB for the year
ended December 31, 1999, as amended to date, and (C) the Company's Quarterly
Reports on Form 10- QSB for the quarters ended March 31, 2000, June 30, 2000
and September 30, 2000 and (y) representatives of the Company have (A) fully
and satisfactorily answered any questions which duly authorized
representatives of the Purchaser desired to ask concerning the Company, and
(B) furnished the Purchaser with any additional information or documents
requested to verify the accuracy of or supplement any information previously
delivered to or discussed with duly authorized representatives of the
Purchaser.
(d) The address of the Purchaser set forth on page 1 of this
Agreement is the true and correct address of the Purchaser and the Purchaser
has no present intention of becoming a resident or domiciliary of any other
state or jurisdiction.
Section 3.05 Accredited Investor. The Purchaser is an "accredited
investor" within the meaning of Rule 501 of Regulation D promulgated under the
Securities Act because (please check as appropriate):
[ ] (a) the Purchaser is an individual whose net
worth, either individually or with his spouse, exceeds
$1,000,000 on the date hereof;
[ ] (b) the Purchaser is an individual whose
individual income exceeded $200,000 in each of the two previous
years or whose joint income with his spouse exceeded $300,000
in each of the three previous years, and has a reasonable expectation of
reaching the same income level in the current year;
[ x ] (c) the Purchaser is a corporation, partnership
or Massachusetts or similar business trust, not formed for the
specific purpose of acquiring the Securities, with total assets
in excess of $5,000,000; or
[ ] (d) the investor hereby certifies that it is an
accredited investor because it is an entity in which each of
the equity owners qualifies as an accredited investor under
items (a), (b) or (c) above.
Section 3.06 Brokers. No broker, finder or investment banker is
entitled to any brokerage, finders or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Purchaser.
Section 3.07 No General Solicitation. The Securities were not offered
or sold by any form of general solicitation or general advertising.
ARTICLE IV MISCELLANEOUS
Section 4.01 Expenses. The Purchaser hereby agrees that all fees and
expenses incurred by the Purchaser in connection with this Agreement shall be
borne by the Purchaser, and the Company hereby agrees that all fees and
expenses incurred by the Company shall be borne by the Company, in each case
including without limitation all fees and expenses of such party's counsel and
accountants.
Section 4.02 Public Announcements. Except as required by law, neither
the Company nor the Purchaser shall make any public announcements in respect
of this Agreement or the transactions contemplated herein or otherwise
communicate with any news media without prior notification to the other party.
Section 4.03 Survival of Representations and Warranties. All
representations and warranties contained herein shall survive the execution
and delivery of this Agreement, the Closings and any investigation at any time
made by or on behalf of either party hereto.
Section 4.04 Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof
and supersedes any prior oral or written agreement between the parties.
Section 4.05 No Third-Party Beneficiaries; Assignment. This Agreement
is for the sole benefit of and binding upon the parties hereto and their
permitted successors and assigns and nothing herein, express or implied, is
intended to or shall confer upon any other person or entity any legal or
equitable right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement. This Agreement shall be binding upon the parties hereto
and their respective successors and assigns, and shall inure to the benefit of
and be enforceable by the parties hereof and their respective successors and
assigns.
Section 4.06 Amendment. This Agreement may be amended or modified only
by an instrument in writing signed by the Company and the Purchaser.
Section 4.07 Counterparts. This Agreement may be executed in one or
more counterparts, each of which when executed shall be deemed to be an
original but all of which taken together shall constitute one and the same
agreement.
Section 4.08 Gender and Number; Headings. Whenever used in this
Agreement, the singular number shall include the plural, the plural the
singular, and the use of any gender shall be applicable to all genders. The
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement
Section 4.09 Governing Law; Jurisdiction. This Agreement shall be
governed by, and construed in accordance with, the laws of the Commonwealth of
Massachusetts without giving effect to the principles of conflicts of laws
thereof. The Company and the Purchaser hereby consent to the jurisdiction of
the state and federal courts of the Commonwealth of Massachusetts for all
disputes arising under this Agreement.
IN WITNESS WHEREOF, the
Purchaser and the Company have caused this Agreement to be executed as of the
date first written above.
PAMET SYSTEMS, INC.
Attest:__________________________ By:_____________________________
Name: Name: David T. McKay
Title: Title: President & CEO
Corporate Seal
____________________________________
By:_____________________________
Name: James S. Schmitt
Title: General Partner,
West Country Partners
Exhibit 4.38
WARRANT
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND
NEITHER THIS WARRANT NOR SUCH SHARES MAY BE SOLD, ENCUMBERED OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
ACT OR AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENT, AND, IF AN EXEMPTION
SHALL BE APPLICABLE, THE HOLDER SHALL HAVE DELIVERED AN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY (WHICH ACCEPTANCE SHALL NOT BE UNREASONABLY
WITHHELD) THAT SUCH REGISTRATION IS NOT REQUIRED.
Void after 5:00 p.m. Eastern Standard Time, on June 22, 2006.
WARRANT TO PURCHASE COMMON STOCK
OF
PAMET SYSTEMS, INC.
FOR VALUE RECEIVED, PAMET SYSTEMS, INC. (the "Company"), a
Massachusetts corporation, hereby certifies that West Country Partners, a
California Limited Partnership of which James S. Schmitt is the General
Partner, with its address at 1917 Brittany Park, Camarillo, CA 93012, or his
permitted assigns, is entitled to purchase from the Company, at any time or
from time to time commencing June 23, 2001, and prior to 5:00 P.M., Eastern
Standard Time, on June 22, 2006, a total of Two Hundred Sixty Six Thousand Six
Hundred Sixty Seven (266,667) fully paid and nonassessable shares of Common
Stock, par value $.01 per share, of the Company for an aggregate purchase
price of Four Hundred Thousand Dollars ($400,000) (computed on the basis of
$1.50 per share). (Hereinafter, (i) said Common Stock, together with any
other equity securities which may be issued by the Company with respect
thereto or in substitution therefor, is referred to as the "Common Stock,"
(ii) the shares of the Common Stock purchasable hereunder are referred to as
the "Warrant Shares," (iii) the aggregate purchase price payable hereunder for
the Warrant Shares is referred to as the "Aggregate Warrant Price," (iv) the
price payable hereunder for each of the Warrant Shares is referred to as the
"Per Share Warrant Price," (v) this Warrant, and all warrants hereafter issued
in exchange or substitution for this Warrant are referred to as the "Warrant"
and (vi) the holder of this Warrant is referred to as the "Holder.") The
number of Warrant Shares for which this Warrant is exercisable is subject to
adjustment as hereinafter provided.
This Warrant is issued by the Company pursuant to the Securities
Purchase Agreement, dated as of the date hereof, among the Company and West
Country Partners (the "Securities Purchase Agreement"). Capitalized terms
used but not defined shall have the respective meanings ascribed to them in
the Securities Purchase Agreement.
1. Exercise of Warrant.
(a) This Warrant may be exercised, in whole at any time or in part from time
to time, commencing June 23, 2001, and prior to 5:00 P.M., Eastern Standard
Time, on June 22, 2006, by the Holder of this Warrant by the surrender of this
Warrant (with the subscription form at the end hereof duly executed) at the
address set forth in Subsection 9(a) hereof, together with proper payment of
the Aggregate Warrant Price, or the proportionate part thereof if this Warrant
is exercised in part.
(b) The Aggregate Warrant Price or Per Share Warrant Price shall be
paid in cash by certified or official bank check payable to the order of the
Company.
(c) Each exercise of this Warrant shall be deemed to have been
effected immediately prior to the close of business on the day on which the
Warrant shall have been surrendered to the Company as provided in subsection
1(a) above (an "Exercise Date"). At such time, the person or persons in whose
name or names any certificates for Warrant Shares shall be issuable upon such
exercise as provided in subsection 1(d) below shall be deemed to have become
the holder or holders of record of the Warrant Shares represented by such
certificates.
(d) If this Warrant is exercised
in part, the Holder shall be entitled to receive a new Warrant covering the
number of Warrant Shares in respect of which this Warrant has not been
exercised and setting forth the proportionate part of the Aggregate Warrant
Price applicable to such Warrant Shares. Upon such surrender of this Warrant,
the Company will (a) issue a certificate or certificates in the name of the
Holder for the shares of the Common Stock to which the Holder shall be
entitled, and (b) deliver the proportionate part thereof if this Warrant is
exercised in part, pursuant to the provisions of the Warrant.
(e) No fractional shares or scrip representing fractional shares
shall be issued upon the exercise of this Warrant. With respect to any
fraction of a share called for upon any exercise hereof, the Company shall pay
to the Holder an amount in cash equal to such fraction multiplied by the fair
value of a share.
2. Reservation of Warrant Shares. The Company agrees that, prior
to the expiration of this Warrant, the Company will at all times have
authorized and in reserve, and will keep available, solely for issuance or
delivery upon the exercise of this Warrant, the shares of the Common Stock as
from time to time shall be receivable upon the exercise of this Warrant.
3. Adjustments.
(a) In case the Company shall hereafter (i) pay a dividend or make
a distribution on its capital stock in shares of Common Stock, (ii) subdivide
its outstanding shares of Common Stock into a greater number of shares, (iii)
combine its outstanding shares of Common Stock into a smaller number of shares
or (iv) issue by reclassification of its Common Stock any shares of capital
stock of the Company, the number of Warrant Shares for which this Warrant may
be exercised shall be adjusted so that if the Holder surrendered this Warrant
for exercise after such action the Holder would be entitled to receive the
number of shares of Common Stock or other capital stock of the Company which
he would have been entitled to receive had such Warrant been exercised
immediately prior to such action. An adjustment made pursuant to this
subsection (a) shall become effective immediately after the record date in the
case of a dividend or distribution and shall become effective immediately
after the effective date in the case of a subdivision, combination or
reclassification. If, as a result of an adjustment made pursuant to this
subsection (a), the Holder of this Warrant shall become entitled to receive
shares of two or more classes of capital stock or shares of Common Stock and
other capital stock of the Company, the Board of Directors (whose
determination shall be conclusive and shall be described in a written notice
to the Holder of this Warrant promptly after such adjustment) shall determine
the allocation of the adjusted Per Share Warrant Price between or among shares
of such classes of capital stock or shares of Common Stock and other capital
stock.
(b) In case of any consolidation or merger to which the Company is
a party other than a merger or consolidation in which the Company is the
continuing corporation, or in case of any sale or conveyance to another entity
of the property of the Company as an entirety or substantially as an entirety,
or in the case of any statutory exchange of securities with another
corporation (including any exchange effected in connection with a merger of a
third corporation into the Company), the holder shall have the right
thereafter to exercise this Warrant for the kind and amount of securities,
cash or other property which he would have owned or have been entitled to
receive immediately after such consolidation, merger, statutory exchange, sale
or conveyance had such Warrant been exercised immediately prior to the
effective date of such consolidation, merger, statutory exchange, sale or
conveyance and in any such case, if necessary, appropriate adjustment shall be
made in the application of the provisions set forth in this Section 3 with
respect to the rights and interests thereafter of the Holder to the end that
the provisions set forth in this Section 3 shall thereafter correspondingly be
made applicable, as nearly as may reasonably be, in relation to any shares of
stock or other securities or property thereafter deliverable on the conversion
of this Warrant. The above provisions of this subsection (b) shall similarly
apply to successive consolidations, mergers, statutory exchanges, sales or
conveyances. Notice of any such consolidation, merger, statutory exchange,
sale or conveyance and of said provisions so proposed to be made, shall be
mailed to the Holder not less than 30 days prior to such event. A sale of all
or substantially all of the assets of the Company for a consideration
consisting primarily of securities shall be deemed a consolidation or merger
for the foregoing purposes.
(c) In the event of any adjustment to the number of Warrant Shares
issuable upon exercise of this Warrant, the Per Share Warrant Price shall be
adjusted by multiplying the Per Share Warrant Price in effect immediately
prior to such adjustment by a fraction the numerator of which is the aggregate
number of Warrant Shares for which this Warrant may be exercised immediately
prior to such adjustment and the denominator of which is the aggregate number
of Warrant Shares for which this Warrant may be exercised immediately after
such adjustment.
(d) Whenever the Per Share Warrant Price is adjusted as provided in
this Warrant and upon any modification of the rights of the Holder of this
Warrant in accordance with this Section 3, the Company shall promptly prepare
a certificate of an officer of the Company, setting forth the Per Share
Warrant Price and the number of Warrant Shares after such adjustment or
modification, a brief statement of the facts requiring such adjustment or
modification and the manner of computing the same and cause a copy of such
certificate to be mailed to the Holder.
4. Fully Paid Stock; Taxes. The Company agrees that the shares of
the Common Stock represented by each and every certificate for Warrant Shares
delivered on the proper exercise of this Warrant shall, at the time of such
delivery, be validly issued and outstanding, fully paid and nonassessable, and
not subject to preemptive rights, and the Company will take all such actions
as may be necessary to assure that the par value or stated value, if any, per
share of the Common Stock is at all times equal to or less than the then Per
Share Warrant Price. Subject to Section 5(e) hereof, the Company further
covenants and agrees that it will pay, when due and payable, any and all
Federal and state stamp, original issue or similar taxes that may be payable
in respect of the issuance of any Warrant Shares or certificates therefor.
The Holder covenants and agrees that it shall pay, when due and payable, any
and all federal, state and local income or similar taxes that may be payable
in respect of the issuance of any Warrant Shares or certificates therefor.
5. Transfer
(a) Securities Laws. Neither this Warrant nor the Warrant Shares
issuable upon the exercise hereof have been registered under the Securities
Act of 1933, as amended (the "Securities Act"), or under any state securities
laws and unless so registered may not be transferred, sold, pledged,
hypothecated or otherwise disposed of unless an exemption from such
registration is available. In the event the Holder desires to transfer this
Warrant or any of the Warrant Shares issued, the Holder must give the Company
prior written notice of such proposed transfer including the name and address
of the proposed transferee. Such transfer may be made only either (i) upon
publication by the Securities and Exchange Commission (the "Commission") of a
ruling, interpretation, opinion or "no action letter" based upon facts
presented to said Commission, or (ii) upon receipt by the Company of an
opinion of counsel acceptable to the Company to the effect that the proposed
transfer will not violate the provisions of the Securities Act, the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or the rules and
regulations promulgated under either such act, or to the effect that the
Warrant or Warrant Shares to be sold or transferred have been registered under
the Securities Act of 1933, as amended, and that there is in effect a current
prospectus meeting the requirements of Subsection 11(a) of the Securities Act,
which is being or will be delivered to the purchaser or transferee at or prior
to the time of delivery of the certificates evidencing the Warrant or Warrant
Shares to be sold or transferred.
(b) Conditions to Transfer. Prior to any such proposed transfer
(including, without limitation, a transfer by will or pursuant to the laws of
descent and distribution), and as a condition thereto, if such transfer is not
made pursuant to an effective registration statement under the Securities Act,
the Holder will, if requested by the Company, deliver to the Company (i) an
investment covenant, in form and substance equivalent to that signed by the
original Holder of this Warrant, signed by the proposed transferee, (ii) an
agreement by such transferee to the restrictive investment legend set forth
herein on the certificate or certificates representing the securities acquired
by such transferee, (iii) an agreement by such transferee that the Company may
place a "stop transfer order" with its transfer agent or registrar, and (iv)
an agreement by the transferee to indemnify the Company to the same extent as
set forth in the next succeeding paragraph.
(c) Indemnity. The Holder acknowledges that the Holder understands
the meaning and legal consequences of this Section 5, and the Holder hereby
agrees to indemnify and hold harmless the Company, its representatives and
each officer and director thereof from and against any and all loss, damage or
liability (including all attorneys' fees and costs incurred in enforcing this
indemnity provision) due to or arising out of (a) the inaccuracy of any
representation or the breach of any warranty of the Holder contained in, or
any other breach by the Holder of, this Warrant, (b) any transfer of the
Warrant or (c) any untrue statement or omission to state any material fact in
connection with the investment representations or with respect to the facts
and representations supplied by the Holder to counsel to the Company upon
which its opinion as to a proposed transfer shall have been based.
(d) Transfer. Upon surrender of this Warrant to the Company or at
the office of its stock transfer agent, if any, with assignment documentation
duly executed and funds sufficient to pay any transfer tax, and upon
compliance with the foregoing provisions, the Company shall, without charge,
execute and deliver a new Warrant in the name of the assignee named in such
instrument of assignment, and this Warrant shall promptly be canceled. Any
assignment, transfer, pledge, hypothecation or other disposition of this
Warrant attempted contrary to the provisions of this Warrant, or any levy of
execution, attachment or other process attempted upon the Warrant, shall be
null and void and without effect.
(e) Legend and Stop Transfer Orders. Unless the Warrant Shares
have been registered under the Securities Act, upon exercise of any part of
the Warrant and the issuance of any of the Warrant Shares, the Company shall
instruct its transfer agent to enter stop transfer orders with respect to such
shares, and all certificates representing Warrant Shares shall bear on the
face thereof substantially the following legend, insofar as is consistent with
Massachusetts law:
"The shares of common stock represented by this certificate have not
been registered under the Securities Act of 1933, as amended, and may not be
sold, offered for sale, assigned, transferred or otherwise disposed of unless
registered pursuant to the provisions of that Act or an opinion of counsel to
the Company is obtained stating that such disposition is in compliance with an
available exemption from such registration."
6. Loss, etc. of Warrant. Upon receipt of evidence satisfactory
to the Company of the loss, theft, destruction or mutilation of this Warrant,
and of indemnity reasonably satisfactory to the Company, if lost, stolen or
destroyed, and upon surrender and cancellation of this Warrant if mutilated,
the Company shall execute and deliver to the Holder a new Warrant of like
date, tenor and denomination.
7. Warrant Holder Not Shareholder. Except as otherwise provided
herein, this Warrant does not confer upon the Holder any right to vote or to
consent to or receive notice as a shareholder of the Company, as such, in
respect of any matters whatsoever, or any other rights or liabilities as a
shareholder, prior to the exercise hereof.
8. Communication. No notice or other communication under this
Warrant shall be effective unless the same is in writing and is mailed by
first-class mail, postage prepaid, addressed to:
(a) the Company at 1000 Main Street, Acton, Massachusetts 01720,
or such other address as the Company has designated in writing to the Holder,
or
(b) the Holder at the address contained in the first paragraph of
this Warrant, or such other address as the Holder has designated in writing to
the Company.
9. Headings. The headings of this Warrant have been inserted as a
matter of convenience and shall not affect the construction hereof.
10. Applicable Law. This Warrant shall be governed by and
construed in accordance with the law of the Commonwealth of Massachusetts
without giving effect to the principles of conflict of laws thereof.
IN WITNESS WHEREOF, PAMET SYSTEMS, INC., has caused this Warrant to
be signed by a duly authorized officer as of this 23th day of June, 2001.
ATTEST: PAMET SYSTEMS, INC.
By:_______________________ By:___________________________________
Name: Richard C. Becker Name: David T. McKay
Title: VP, Finance and Administration Title: President & CEO
SUBSCRIPTION
The undersigned, __________________________________________,
pursuant to the provisions of the foregoing Warrant, hereby agrees to
subscribe for the purchase of _________________________ shares of the Common
Stock of PAMET SYSTEMS, INC. covered by said Warrant, and makes payment
therefor in full at the price per share provided by said Warrant.
Dated __________________ Signature__________________________
Address____________________________
____________________________
ASSIGNMENT
FOR VALUE RECEIVED _________________________ hereby sells, assigns
and transfers unto _________________________ the foregoing Warrant and all
rights evidenced thereby, and does irrevocably constitute and appoint
_________________________, attorney, to transfer said Warrant on the books of
PAMET SYSTEMS, INC.
Dated __________________ Signature_________________________
Address___________________________
___________________________
PARTIAL ASSIGNMENT
FOR VALUE RECEIVED _________________________ hereby assigns and
transfers unto _________________________ the right to purchase
_________________________ shares of the Common Stock of PAMET SYSTEMS, INC. by
the foregoing Warrant, and a proportionate part of said Warrant and the rights
evidenced hereby, and does irrevocably constitute and appoint
_________________________, attorney, to transfer that part of said Warrant on
the books of PAMET SYSTEMS, INC.
Dated ___________________ Signature__________________________
Address____________________________
____________________________