APPENDIX A
WARRANT
TO PURCHASE ____________ SHARES OF
COMMON STOCK OF
DELPHI INFORMATION SYSTEMS, INC.
THIS CERTIFIES THAT, for good and valuable consideration, R. J. Steichen &
Company (the "Agent"), or its registered assigns, is entitled to subscribe for
and purchase from Delphi Information Systems, Inc., a Delaware corporation (the
"Company"), at any time after _______________, 1997, up to and including
_______________, 2002 _______________________________________________
(_________) fully paid and nonassessable shares of the Common Stock of the
Company at the price of $1.00 per share (the "Warrant Exercise Price"), subject
to the antidilution provisions of this Warrant. Reference is made to this
Warrant in the Agency Agreement dated ________________, 1996, by and between the
Company and the Agent. The shares which may be acquired upon exercise of this
Warrant are referred to herein as the "Warrant Shares." As used herein, the
term "Holder" means the Agent, any party who acquires all or a part of this
Warrant as a registered transferee of the Agent, or any record holder or holders
of the Warrant Shares issued upon exercise, whether in whole or in part, of the
Warrant; the term "Common Stock" means and includes the Company's presently
authorized common stock, $.10 par value per share, and shall also include any
capital stock of any class of the Company hereafter authorized which shall not
be limited to a fixed sum or percentage in respect of the rights of the Holders
thereof to participate in dividends or in the distribution of assets upon the
voluntary or involuntary liquidation, dissolution, or winding up of the Company;
and the term "Convertible Securities" means any stock or other securities
convertible into, or exchangeable for, Common Stock.
This Warrant is subject to the following provisions, terms and conditions:
1. EXERCISE; TRANSFERABILITY.
(a) The rights represented by this Warrant may be exercised by the Holder
hereof, in whole or in part (but not as to a fractional share of Common Stock),
by written notice of exercise (in the form attached hereto) delivered to the
Company at the principal office of the Company prior to the expiration of this
Warrant and accompanied or preceded by the surrender of this Warrant along with
a check in payment of the Warrant Exercise Price for such shares.
(b) This Warrant and the Warrant Shares are restricted from sale,
transfer, assignment and hypothecation for a period of 12 months from the
effective date of the offering, except to officers and shareholders of the
Agent, and only to the extent that the Agent determines that such transfers are
permitted by the rules, regulations and interpretations of the National
Association of Securities Dealers, Inc. Further, this Warrant
may not be sold, transferred, assigned, hypothecated or divided into two or more
Warrants of smaller denominations nor may any Warrant Shares be transferred,
except as provided in Section 7 hereof.
2. EXCHANGE AND REPLACEMENT. Subject to Sections 1 and 7 hereof, this
Warrant is exchangeable upon the surrender hereof by the Holder to the Company
at its office for new Warrants of like tenor and date representing in the
aggregate the right to purchase the number of Warrant Shares purchasable
hereunder, each of such new Warrants to represent the right to purchase such
number of Warrant Shares (not to exceed the aggregate total number purchasable
hereunder) as shall be designated by the Holder at the time of such surrender.
Upon receipt by the Company of evidence reasonably satisfactory to it of the
loss, theft, destruction, or mutilation of this Warrant, and, in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to it,
and upon surrender and cancellation of this Warrant, if mutilated, the Company
will make and deliver a new Warrant of like tenor, in lieu of this Warrant;
provided, however, that if the Agent shall be such Holder, an agreement of
indemnity by such Holder shall be sufficient for all purposes of this Section 2.
This Warrant shall be promptly canceled by the Company upon the surrender hereof
in connection with any exchange or replacement. The Company shall pay all
expenses, taxes (other than stock transfer taxes), and other charges payable in
connection with the preparation, execution, and delivery of Warrants pursuant to
this Section 2.
3. ISSUANCE OF THE WARRANT SHARES.
(a) The Company agrees that the shares of Common Stock purchased hereby
shall be and are deemed to be issued to the Holder as of the close of business
on the date on which this Warrant shall have been surrendered and the payment
made for such Warrant Shares as provided herein. Subject to the provisions of
the next section, certificates for the Warrant Shares so purchased shall be
delivered to the Holder within a reasonable time, not exceeding fifteen (15)
days after the rights represented by this Warrant shall have been so exercised,
and, unless this Warrant has expired, a new Warrant representing the right to
purchase the number of Warrant Shares, if any, with respect to which this
Warrant shall not then have been exercised shall also be delivered to the Holder
within such time.
(b) Notwithstanding the foregoing, however, the Company shall not be
required to deliver any certificate for Warrant Shares upon exercise of this
Warrant except in accordance with exemptions from the applicable securities
registration requirements or registrations under applicable securities laws.
Nothing herein shall obligate the Company to effect registrations under federal
or state securities laws, except as provided in Section 9. If registrations are
not in effect and if exemptions are not available when the Holder seeks to
exercise the Warrant, the Warrant exercise period will be extended, if need be,
to prevent the Warrant from expiring, until such time as either registrations
become effective or exemptions are available, and the Warrant shall then remain
exercisable for a period of at least 45 calendar days from the date the Company
delivers to the Holder written notice of the availability of such registrations
or exemptions. The Holder agrees to execute such documents and make such
representations, warranties, and agreements as may be required
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solely to comply with the exemptions relied upon by the Company, or the
registrations made, for the issuance of the Warrant Shares.
4. COVENANTS OF THE COMPANY. The Company covenants and agrees that all
Warrant Shares will, upon issuance and payment therefor in accordance with the
terms and conditions hereof, be duly authorized and issued, fully paid,
nonassessable, and free from all taxes, liens, and charges with respect to the
issue thereof. The Company further covenants and agrees that during the period
within which the rights represented by this Warrant may be exercised, the
Company will at all times have authorized and reserved for the purpose of issue
or transfer upon exercise of the purchase rights evidenced by this Warrant a
sufficient number of shares of Common Stock to provide for the exercise of the
rights represented by this Warrant.
5. ANTIDILUTION ADJUSTMENTS. The provisions of this Warrant are subject
to adjustment as provided in this Section 5.
(a) The Warrant Exercise Price shall be adjusted from time to time such
that in case the Company shall hereafter:
(i) pay any dividends on any class of stock of the Company payable in
Common Stock or securities convertible into Common Stock;
(ii) subdivide its then outstanding shares of Common Stock into a
greater number of shares; or
(iii) combine outstanding shares of Common Stock, by reclassification
or otherwise;
then, in any such event, the Warrant Exercise Price in effect immediately prior
to such event shall (until adjusted again pursuant hereto) be adjusted
immediately after such event to a price (calculated to the nearest full cent)
determined by dividing (a) the number of shares of Common Stock outstanding
immediately prior to such event, multiplied by the then existing Warrant
Exercise Price, by (b) the total number of shares of Common Stock outstanding
immediately after such event (including the maximum number of shares of Common
Stock issuable in respect of any securities convertible into Common Stock), and
the resulting quotient shall be the adjusted Warrant Exercise Price per share.
An adjustment made pursuant to this subsection 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, the Holder of any Warrant thereafter
surrendered for exercise 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)
shall determine the allocation of the adjusted Warrant Exercise Price between or
among shares of such classes of capital stock or shares of Common Stock and
other capital stock. All calculations under this subsection shall be made to
the nearest cent or to the nearest 1/100 of a share, as the
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case may be. In the event that at any time as a result of an adjustment made
pursuant to this subsection, the Holder of any Warrant thereafter surrendered
for exercise shall become entitled to receive any shares of the Company other
than shares of Common Stock, thereafter the Warrant Exercise Price of such
other shares so receivable upon exercise of any Warrant shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to Common Stock contained in this
Section.
(b) Upon each adjustment of the Warrant Exercise Price pursuant to
Section 5(a) above, the Holder of each Warrant shall thereafter (until another
such adjustment) be entitled to purchase at the adjusted Warrant Exercise Price
the number of shares, calculated to the nearest full share, obtained by
multiplying the number of shares specified in such Warrant (as adjusted as a
result of all adjustments in the Warrant Exercise Price in effect prior to such
adjustment) by the Warrant Exercise Price in effect prior to such adjustment and
dividing the product so obtained by the adjusted Warrant Exercise Price.
(c) 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
corporation 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), there shall be no adjustment under
subsection (a) of this Section above but the Holder of each Warrant the
outstanding shall have the right thereafter to convert such Warrant into the
kind and amount of shares of stock and other securities and property which the
Holder would have owned or have been entitled to receive immediately after such
consolidation, merger, statutory exchange, sale, or conveyance had such Warrant
been converted 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 with respect to the rights and interests
thereafter of any Holders of the Warrant, to the end that the provisions set
forth in this Section shall thereafter correspondingly be made applicable, as
nearly as may reasonably be, in relation to any shares of stock and other
securities and property thereafter deliverable on the exercise of the Warrant.
The provisions of this subsection shall similarly apply to successive
consolidations, mergers, statutory exchanges, sales or conveyances.
(d) Upon any adjustment of the Warrant Exercise Price, then and in each
such case, the Company shall give written notice thereof, by first-class mail,
postage prepaid, addressed to the Holder as shown on the books of the Company,
which notice shall state the Warrant Exercise Price resulting from such
adjustment and the increase or decrease, if any, in the number of shares of
Common Stock purchasable at such price upon the exercise of this Warrant,
setting forth in reasonable detail the method of calculation and the facts upon
which such calculation is based.
6. NO VOTING RIGHTS. This Warrant shall not entitle the Holder to any
voting rights or other rights as a stockholder of the Company.
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7. INVESTMENT INTENT; NOTICE OF TRANSFER OF WARRANT OR RESALE OF THE
WARRANT SHARES.
(a) The Holder, by acceptance hereof, represents and warrants that (i) it
is acquiring this Warrant for its own account for investment purposes and not
with a view to its resale or distribution, and (ii) it has no present intention
to resell or otherwise dispose of all or a portion of this Warrant.
(b) Subject to the sale, assignment, hypothecation, or other transfer
restrictions set forth in Section 1 hereof, the Holder, by acceptance hereof,
agrees to give written notice to the Company before transferring this Warrant or
transferring any Warrant Shares of such Holder's intention to do so, describing
briefly the manner of any proposed transfer. Promptly upon receiving such
written notice, the Company shall present copies thereof to the Company's
counsel and to counsel to the original purchaser of this Warrant. If in the
opinion of each such counsel the proposed transfer may be effected without
registration or qualification (under any federal or state securities laws), the
Company, as promptly as practicable, shall notify the Holder of such opinion,
whereupon the Holder shall be entitled to transfer this Warrant or to dispose of
Warrant Shares received upon the previous exercise of this Warrant, all in
accordance with the terms of the notice delivered by the Holder to the Company;
provided that an appropriate legend may be endorsed on the Warrant or the
certificates for such Warrant Shares respecting restrictions upon transfer
thereof necessary or advisable in the opinion of counsel and satisfactory to the
Company to prevent further transfers which would be in violation of Section 5 of
the Act and applicable state securities laws; and provided further that the
prospective transferee or purchaser shall execute such documents and make such
representations, warranties, and agreements as may be required solely to comply
with the exemptions relied upon by the Company or the Holder for the transfer or
disposition of the Warrant or Warrant Shares.
(c) If in the opinion of counsel referred to in this Section 7, the
proposed transfer or disposition of this Warrant or such Warrant Shares
described in the written notice given pursuant to this Section 7 may not be
effected without registration or qualification of this Warrant or such Warrant
Shares, the Company shall promptly give written notice thereof to the Holder.
8. FRACTIONAL SHARES. Fractional shares shall not be issued upon the
exercise of this Warrant, but in any case where the Holder would, except for the
provisions of this Section, be entitled under the terms hereof to receive a
fractional share, the Company shall, upon the exercise of this Warrant for the
largest number of whole shares then called for, pay a sum in cash equal to the
sum of (a) the excess, if any, of the Market Price of such fractional share over
the proportional part of the Warrant Exercise Price represented by such
fractional share, plus (b) the proportional part of the Warrant Exercise Price
represented by such fractional share. For purposes of this Section, the term
"Market Price" with respect to shares of Common Stock of any class or series
means the last reported sale price or, if none, the average of the last reported
closing bid and asked prices on any national securities exchange, the Nasdaq
National Market or Nasdaq Small Cap Market, or if not listed on a national
securities exchange or quoted in Nasdaq, the average of the last
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reported closing bid and asked prices as reported in the "pink sheets" or other
standard compilation of quotations by market makers in the over-the-counter
market.
9. REGISTRATION RIGHTS.
(a) If at any time after ____________, 1997 and through ____________,
2004, the Company proposes to register under the Act (except by a Form S-4 or
Form S-8 Registration Statement or any successor forms thereto) or qualify for a
public distribution under Section 3(b) of the Act, any of its equity securities,
including securities convertible into equity, it will give written notice to all
Holders of this Warrant, any Warrants issued pursuant to Section 2 or
Section 3(a) hereof, and any Warrant Shares of its intention to do so and, on
the written request of any such Holder given within twenty (20) days after
receipt of any such notice (which request shall specify the interest in this
Warrant or the Warrant Shares intended to be sold or disposed of by such Holder
and describe the nature of any proposed sale or other disposition thereof), the
Company will use all reasonable efforts to cause all such Warrant Shares, the
Holders of which shall have requested the registration or qualification thereof,
to be included in such registration statement proposed to be filed by the
Company; provided, however, that if a greater number of Warrant Shares is
offered for participation in the proposed offering than in the reasonable
opinion of the managing underwriter of the proposed offering can be accommodated
without adversely affecting the proposed offering, then the amount of Warrant
Shares proposed to be offered by such Holders for registration, as well as the
number of securities of any other selling stockholders participating in the
registration, shall be proportionately reduced to a number deemed satisfactory
by the managing underwriter.
(b) On a one-time basis, upon request made any time after the earlier of
(i) 12 months from the date of this Warrant or (ii) when the Company first
becomes eligible to use Form S-3 for the purpose of registering the Warrant
Shares, and until _____________, 2002 by a majority in interest of Warrants, or
by the Holders of a majority of the shares of the common stock issued upon
exercise thereof, the Company will, at its expense, promptly take all necessary
steps to register or qualify the Warrant Shares under Section 3(b) or Section 5
of the Act and such state laws as such Holders may reasonably request. The
Company shall keep effective and maintain any registration, qualification,
notification or approval specified in this paragraph for such period as may be
necessary for the Holders of the Warrant Shares to dispose thereof and from time
to time shall amend or supplement, at the Company's expense, the prospectus used
in connection therewith to the extent necessary in order to comply with
applicable law, provided that the Company shall not be obligated to maintain any
registration for a period of more than six (6) months after effectiveness except
that a Form S-3 Registration Statement or successor thereof shall be maintained
for up to 12 months after effectiveness.
(c) With respect to each inclusion of securities in a registration
statement pursuant to Section 9(a), the Company shall bear the following fees,
costs, and expenses: all registration, filing and NASD fees, Nasdaq fees,
printing expenses, fees and disbursements of counsel and accountants for the
Company, fees and disbursements of counsel for the underwriter or underwriters
of such securities (if the offering is underwritten and the
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Company is required to bear such fees and disbursements), all internal expenses,
the premiums and other costs of policies of insurance against liability arising
out of the public offering, and legal fees and disbursements and other expenses
of complying with state securities laws of any jurisdictions in which the
securities to be offered are to be registered or qualified. Fees and
disbursements of special counsel and accountants for the selling Holders,
underwriting discounts and commissions, and transfer taxes for selling Holders
and any other expenses relating to the sale of securities by the selling Holders
not expressly included above shall be borne by the selling Holders.
(d) The Company hereby indemnifies each of the Holders of this Warrant and
of any Warrant Shares, and the officers and directors, if any, who control such
Holders, within the meaning of Section 15 of the Act and Section 20 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), against all
losses, claims, damages, and liabilities caused by (1) any untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement or Prospectus (and as amended or supplemented if the Company shall
have furnished any amendments thereof or supplements thereto), any Preliminary
Prospectus or any state securities law filings; (2) any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages, or liabilities are caused by any untrue statement or
omission contained in information furnished in writing to the Company by such
Holder expressly for use therein; and each such Holder by its acceptance hereof
severally agrees that it will indemnify and hold harmless the Company, each of
its officers who signs such Registration Statement, and each person, if any, who
controls the Company, within the meaning of Section 15 of the Act and Section 20
of the Exchange Act, with respect to losses, claims, damages, or liabilities
which are caused by any untrue statement or omission contained in information
furnished in writing to the Company by such Holder expressly for use therein.
IN WITNESS WHEREOF, Delphi Information Systems, Inc. has caused this
Warrant to be signed by its duly authorized officer this ______ day of
_______________, 1996.
Delphi Information Systems, Inc.
By
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Its
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DELPHI INFORMATION SYSTEMS, INC.
WARRANT EXERCISE NOTICE
(TO BE SIGNED ONLY UPON EXERCISE OF WARRANT)
The undersigned, the Holder of the foregoing Warrant, hereby irrevocably
elects to exercise the purchase right represented by such Warrant for, and to
purchase thereunder, ___________________________ shares of the Common Stock of
Delphi Information Systems, Inc. to which such Warrant relates and herewith
makes payment of $____________ therefor in cash or by certified or cashier's
check and requests that the certificate for such shares be issued in the name
of, and be delivered to _________________________________________, whose address
is set forth below the signature of the undersigned. If the number of shares
purchased is less than all of the shares purchasable under the Warrant, a new
Warrant will be issued in the name of the undersigned for the remaining balance
remaining of the shares purchasable thereunder.
Name of Warrant Holder:
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(Please print)
Address of Warrant Holder:
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Tax Identification No. or
Social Security No. of Warrant Holder:
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Signature:
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NOTE: THE ABOVE SIGNATURE SHOULD
CORRESPOND EXACTLY WITH THE NAME OF THE
WARRANT HOLDER AS IT APPEARS ON THE
FIRST PAGE OF THE WARRANT OR ON A DULY
EXECUTED WARRANT ASSIGNMENT.
Dated:
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DELPHI INFORMATION SYSTEMS, INC.
WARRANT ASSIGNMENT
(TO BE SIGNED ONLY UPON TRANSFER OF WARRANT)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
___________________________________________________________, the assignee, whose
address is ___________________________________________________________________,
and whose tax identification or social security number is
_______________________, the right represented by the foregoing Warrant to
purchase ___________________ shares of the Common Stock of Delphi Information
Systems, Inc. to which the foregoing Warrant relates and appoints
_________________________________________________________________ attorney to
transfer said right on the books of Delphi Information Systems, Inc., with full
power of substitution in the premises. If the number of shares assigned is less
than all of the shares purchasable under the Warrant, a new Warrant will be
issued in the name of the undersigned for the remaining balance of the shares
purchasable thereunder.
Name of Warrant Holder/Assignor:
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(Please print)
Address of Warrant Holder/Assignor:
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Tax Identification No. or
Social Security No. of Warrant Holder/
Assignor:
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Signature:
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NOTE: THE ABOVE SIGNATURE SHOULD
CORRESPOND EXACTLY WITH THE NAME ON THE
FIRST PAGE OF THE WARRANT OR WITH THE
NAME OF THE ASSIGNEE APPEARING ON A DULY
EXECUTED ASSIGNMENT FORM.
Dated:
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