DRAFT 072196A
THE SECURITIES REPRESENTED HEREBY AND ISSUABLE UPON EXERCISE HEREOF HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, PURSUANT TO A
REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
HOWEVER, NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED OR
SOLD EXCEPT PURSUANT TO (i) A POST-EFFECTIVE AMENDMENT TO SUCH REGISTRATION
STATEMENT, (ii) A SEPARATE REGISTRATION STATEMENT UNDER SUCH ACT, OR (iii) AN
EXEMPTION FROM REGISTRATION UNDER SUCH ACT.
THE TRANSFER OF THIS WARRANT IS RESTRICTED AS DESCRIBED HEREIN.
THIS WARRANT IS NOT EXERCISABLE PRIOR TO ___________, 1997.
VOID AFTER 5:00 P.M. NEW YORK CITY LOCAL TIME, ___________, 2001.
IMAGE GUIDED TECHNOLOGIES, INC.
WARRANTS FOR THE PURCHASE
OF
120,000 SHARES OF COMMON STOCK, NO PAR VALUE
NO. IPO-1
THIS CERTIFIES that, for receipt in hand of $120.00 and other value
received, HAMPSHIRE SECURITIES CORPORATION (the "Holder") is entitled to
subscribe for, and purchase from, IMAGE GUIDED TECHNOLOGIES, INC., a Colorado
corporation (the "Company"), upon the terms and conditions set forth herein,
at any time or from time to time after 12:00 A.M., New York City local time
___________, 1997 until 5:00 P.M. New York City local time on ___________,
2001 (the "Exercise Period"), up to an aggregate of 120,000 shares of common
stock, no par value (the "Common Stock"). This Warrant is initially
exercisable at $________ per share; provided, however, that upon the
occurrence of any of the events specified in Section 5 hereof, the rights
granted by this Warrant, including the exercise price and the number of
shares of Common Stock to be received upon such exercise, shall be adjusted
as therein specified. The term "Exercise Price" shall mean, depending on the
context, the initial exercise price (as set forth above) or the adjusted
exercise price per share.
This Warrant is the Representative's Warrant or one of the
Representative's Warrants (collectively, including any Representative's
Warrant issued upon the exercise or transfer of any such Representative's
Warrants in whole or in part, the "Warrants") issued pursuant to the
Underwriting Agreement, dated __________, 1996 (the "Underwriting
Agreement"), between the Company and Hampshire Securities Corporation, as
the representative (the "Representative") of the several underwriters (the
"Underwriters"). As used herein, the term "this Warrant" shall mean
and include this Warrant and any Warrant or Warrants hereafter issued as a
consequence of the exercise or transfer of this Warrant in whole or in part.
This Warrant may not be sold, transferred, assigned, or hypothecated until
______________, 1997, except that it may be transferred, in whole or in part,
to (i) one or more officers or partners of the Holder (or the officers or
partners of any such partner); (ii) any other underwriting firm or member of
the selling group which participated in the public offering of shares of
Common Stock which commenced on __________, 1996 (or the officers or partners
of any such firm); (iii) a successor to the Holder, or the officers or
partners of such successor; (iv) a purchaser of substantially all of the
assets of the Holder; or (v) by operation of law. The term the "Holder" as
used herein shall include any transferee to whom this Warrant has been
transferred in accordance with the above.
Each share of Common Stock issuable upon the exercise hereof shall be
hereinafter referred to as a "Warrant Share".
1. This Warrant may be exercised during the Exercise Period, either in
whole or in part, by the surrender of this Warrant (with the election at the
end hereof duly executed) to the Company at its office at 5710-B Flatiron
Parkway, Boulder, Colorado 80301, or at such other place as is designated in
writing by the Company, together with a certified or bank cashier's check
payable to the order of the Company in an amount equal to the product of the
Exercise Price and the number of Warrant Shares for which this Warrant is
being exercised.
2. Upon each exercise of the Holder's rights to purchase Warrant
Shares, the Holder shall be deemed to be the holder of record of the Warrant
Shares, notwithstanding that the transfer books of the Company shall then be
closed or certificates representing the Warrant Shares with respect to which
this Warrant was exercised shall not then have been actually delivered to the
Holder. As soon as practicable after each such exercise of this Warrant, the
Company shall issue and deliver to the Holder a certificate or certificates
representing the Warrant Shares issuable upon such exercise, registered in
the name of the Holder or its designee. If this Warrant should be exercised
in part only, the Company shall, upon surrender of this Warrant for
cancellation, execute and deliver a Warrant evidencing the right of the
Holder to purchase the balance of the aggregate number of Warrant Shares
purchasable hereunder as to which this Warrant has not been exercised or
assigned.
3. Any Warrants issued upon the transfer or exercise in part of this
Warrant shall be numbered and shall be registered in a warrant register (the
"Warrant Register") as they are issued. The Company shall be entitled to
treat the registered holder of any Warrant on the Warrant Register as the
owner in fact thereof for all purposes, and shall not be bound to recognize
any equitable or other claim to, or interest in, such Warrant on the part of
any other person, and shall not be liable for any registration of transfer of
Warrants which are registered or to be registered in the name of a fiduciary
or the nominee of a fiduciary unless made with the actual knowledge that a
fiduciary or nominee is committing a breach of trust in requesting such
registration or transfer, or with the knowledge of such facts that its
participation therein amounts to bad faith. This Warrant shall be
transferable on the books of the Company only upon delivery thereof duly
endorsed by the Holder or by his duly authorized attorney or representative,
or accompanied by proper evidence of
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succession, assignment, or authority to transfer. In all cases of transfer
by an attorney, executor, administrator, guardian, or other legal
representative, duly authenticated evidence of his, her, or its authority
shall be produced. Upon any registration of transfer, the Company shall
deliver a new Warrant or Warrants to the person entitled thereto. This
Warrant may be exchanged, at the option of the Holder thereof, for another
Warrant, or other Warrants of different denominations, of like tenor and
representing in the aggregate the right to purchase a like number of Warrant
Shares (or portions thereof), upon surrender to the Company or its duly
authorized agent. Notwithstanding the foregoing, the Company shall have no
obligation to cause Warrants to be transferred on its books to any person if,
in the opinion of counsel to the Company, such transfer does not comply with
the provisions of the Securities Act of 1933, as amended (the "Securities
Act"), and the rules and regulations thereunder.
4. The Company shall at all times reserve and keep available out of its
authorized and unissued Common Stock, solely for the purpose of providing for
the exercise of the Warrants, such number of shares of Common Stock as shall,
from time to time, be sufficient therefor. The Company represents that all
shares of Common Stock issuable upon exercise of this Warrant are duly
authorized and, upon receipt by the Company of the full payment for such
Warrant Shares, will be validly issued, fully paid, and nonassessable,
without any personal liability attaching to the ownership thereof and will
not be issued in violation of any preemptive or similar rights of
stockholders.
5. (a) The Exercise Price for the Warrants in effect from time to time,
and the number of shares of Common Stock issuable upon exercise of the
Warrants, shall be subject to adjustment, as follows:
(i) In the event that the Company shall at any time after the date
hereof (A) declare a dividend on the outstanding Common Stock payable in
shares of its capital stock, (B) subdivide the outstanding Common Stock, (C)
combine the outstanding Common Stock into a smaller number of shares, or (D)
issue any shares of its capital stock by reclassification of the Common Stock
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing corporation), then, in each
case, the Exercise Price per Warrant Share in effect at the time of the
record date for the determination of stockholders entitled to receive such
dividend or distribution or of the effective date of such subdivision,
combination, or reclassification shall be adjusted so that it shall equal the
price determined by multiplying such Exercise Price by a fraction, the
numerator of which shall be the number of shares of Common Stock outstanding
immediately prior to such action, and the denominator of which shall be the
number of shares of Common Stock outstanding after giving effect to such
action. Such adjustment shall be made successively whenever any event listed
above shall occur and shall become effective at the close of business on such
record date or at the close of business on the date immediately preceding
such effective date, as applicable.
(ii) In the event that the Company shall fix a record date for the
determination of stockholders entitled to receive issuance of rights or
warrants to be issued to all holders of Common Stock entitling such
stockholders to subscribe for or purchase shares of Common Stock (or
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securities convertible into Common Stock) at a price (the "Subscription
Price") (or having a conversion price per share) less than the then Current
Market Price (as hereinafter defined) per share of Common Stock on such
record date, the Exercise Price in effect at the time of such record date
shall be adjusted so that the same shall equal the price determined by
multiplying such Exercise Price in effect immediately prior to such record
date by a fraction, the numerator of which shall be the sum of the number of
shares of Common Stock outstanding on such record date and the number of
additional shares of Common Stock which the aggregate offering price of the
total number of shares of Common Stock so offered (or the aggregate
conversion price of the convertible securities so offered) would purchase at
such Current Market Price per share of the Common Stock, and the denominator
of which shall be the sum of the number of shares of Common Stock outstanding
on such record date and the number of additional shares of Common Stock
offered for subscription or purchase (or into which the convertible
securities so offered are convertible). Such adjustment shall be made
successively whenever such rights or warrants are issued and shall become
effective immediately after the record date for the determination of
stockholders entitled to receive such rights or warrants.
(iii) In the event the Company shall fix a record date for the
determination of stockholders entitled to receive (including any such
distribution made to the stockholders of the Company in connection with a
consolidation or merger in which the Company is the continuing corporation in
a distribution to all holders of Common Stock) evidences of its indebtedness,
cash, or assets (other than distributions and dividends payable in shares of
Common Stock), or rights, options, or warrants to subscribe for or purchase
shares of Common Stock, or securities convertible into, or exchangeable for,
shares of Common Stock (excluding those referred to in paragraph (ii) above)
in a distribution to all holders of Common Stock, then, in each case, the
Exercise Price in effect at the time of such record date shall be adjusted by
multiplying the Exercise Price in effect immediately prior to such record
date by a fraction, the numerator of which shall be the Current Market Price
per share of Common Stock on such record date, less the fair market value (as
determined in good faith by the board of directors of the Company, whose
determination shall be conclusive absent manifest error) of the portion of
the evidences of indebtedness or assets so to be distributed, or of such
rights, options, or warrants, or convertible or exchangeable securities, or
the amount of such cash, applicable to one share of Common Stock, and the
denominator of which shall be such Current Market Price per share of Common
Stock on such record date. Such adjustment shall be made successively
whenever any event listed above shall occur and become effective at the close
of business on such record date.
(iv) In case the Company shall issue shares of Common Stock for a
consideration per share (the "Offering Price") less than the Current Market
Price per share of Common Stock on the date the Company fixes the offering
price of such additional shares, the Exercise Price shall be adjusted
immediately thereafter so that it shall equal the price determined by
multiplying such Exercise Price by a fraction, the numerator of which shall
be the sum of the number of shares of Common Stock outstanding immediately
prior to the issuance of such additional shares and the number of shares of
Common Stock which the aggregate consideration received (determined as
provided in Subsection (i) below) for the issuance of such additional shares
would purchase at such Current Market Price per share of Common Stock, and
the denominator of which shall be the
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number of shares of Common Stock outstanding immediately after the issuance
of such additional shares. Such adjustment shall be made successively
whenever such an issuance is made. Notwithstanding anything herein to the
contrary, no adjustment pursuant to this paragraph (a)(iv) of Section 5 shall
take place as a result of this issuance of shares of Common Stock pursuant to
an employee, officer, or director securities ownership or compensation plan
duly adopted by the Board of Directors of the Company, including, but not
limited to, any employee stock option plan duly adopted by the Board of
Directors of the Company.
(v) In case the Company shall issue any securities convertible into, or
exchangeable for, Common Stock (excluding securities issued in transactions
described in Subsections (ii) and (iii) above) for a consideration per share
of Common Stock (the "Conversion Price") initially deliverable upon
conversion or exchange of such securities (determined as provided in
Subsection (i) below) less than the Current Market Price per share of Common
Stock in effect immediately prior to the issuance of such securities, the
Exercise Price in effect immediately prior to the date of such issuance shall
be adjusted immediately thereafter so that it shall equal the price
determined by multiplying such Exercise Price by a fraction, the numerator of
which shall be the sum of the number of shares of Common Stock outstanding
immediately prior to the issuance of such securities and the number of shares
of Common Stock which the aggregate consideration received (determined as
provided in Subsection (i) below) for such securities would purchase at such
Current Market Price per share of Common Stock, and the denominator of which
shall be the sum of the number of shares of Common Stock outstanding
immediately prior to such issuance and the maximum number of shares of Common
Stock deliverable upon conversion of, or in exchange for, such securities at
the initial conversion or exchange price or rate. Such adjustment shall be
made successively whenever such an issuance is made. Notwithstanding
anything herein to the contrary, no adjustment pursuant to this paragraph
(a)(v) of Section 5 shall take place as a result of the issuance of
securities convertible into, or exchangeable for, shares of Common Stock
pursuant to an employee, officer, or director securities ownership or
compensation plan duly adopted by the Board of Directors of the Company,
including, but not limited to, any employee stock option plan duly adopted by
the Board of Directors of the Company.
(b) The Current Market Price per share of Common Stock on any date
shall be deemed to be the average of the daily closing prices for the 30
consecutive trading days immediately preceding the date in question. The
closing price for each day shall be the last reported sales price regular way
or, in case no such reported sale takes place on such day, the closing bid
price regular way, in either case on the principal national securities
exchange (including, for purposes hereof, the Nasdaq National Market) on
which the Common Stock is listed or admitted to trading or, if the Common
Stock is not listed or admitted to trading on any national securities
exchange, the highest reported bid price for the Common Stock as furnished by
the National Association of Securities Dealers, Inc. through the Nasdaq
SmallCap Market or a similar organization if the Nasdaq SmallCap Market is no
longer reporting such information. If, on any such date, the Common Stock is
not listed or admitted to trading on any national securities exchange and is
not quoted on the Nasdaq SmallCap Market or any similar organization, the
Current Market Price shall be deemed to be the fair value of a share of
Common Stock on such date, as determined in good faith by the Board of
Directors of the Company, absent manifest error.
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(c) All calculations under this Section 5 shall be made to the nearest
cent or to the nearest one-hundredth of a share, as the case may be.
(d) In any case in which this Section 5 shall require that an
adjustment in the number of Warrant Shares be made effective as of a record
date for a specified event, the Company may elect to defer, until the
occurrence of such event, issuing to the Holder, if the Holder exercised this
Warrant after such record date, the Warrant Shares, if any, issuable upon
such exercise over and above the number of Warrant Shares issuable upon such
exercise on the basis of the number of shares of Common Stock outstanding or
in effect prior to such adjustment; provided, however, that the Company shall
deliver to the Holder a due bill or other appropriate instrument evidencing
the Holder's right to receive such additional shares of Common Stock upon the
occurrence of the event requiring such adjustment.
(e) Whenever there shall be an adjustment as provided in this Section
5, the Company shall within 15 days thereafter cause written notice thereof
to be sent by registered or certified mail, postage prepaid, to the Holder,
at its address as it shall appear in the Warrant Register, which notice shall
be accompanied by an officer's certificate setting forth the number of
Warrant Shares issuable and the Exercise Price thereof after such adjustment
and setting forth a brief statement of the facts requiring such adjustment
and the computation thereof, which officer's certificate shall be conclusive
evidence of the correctness of any such adjustment absent manifest error.
(f) The Company shall not be required to issue fractions of shares of
Common Stock or other capital stock of the Company upon the exercise of this
Warrant. If any fraction of a share of capital stock would be issuable on
the exercise of this Warrant (or specified portions thereof), the Company
shall purchase such fraction for an amount in cash equal to the same fraction
of the Current Market Price of such share of Common Stock on the date of
exercise of this Warrant.
(g) No adjustment in the Exercise Price per Warrant Share shall be
required if such adjustment is less than $.05; provided, however, that any
adjustments which by reason of this Section 5 are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
(h) Whenever the Exercise Price payable upon exercise of this Warrant
is adjusted pursuant to Subsections (a)(i), (a)(ii), (a)(iii), (a)(iv), or
(a)(v) above, the number of Warrant Shares issuable upon exercise of this
Warrant shall simultaneously be adjusted by multiplying the number of Warrant
Shares theretofore issuable upon exercise of this Warrant by the Exercise
Price in effect on _________, 1996 and dividing the product so obtained by
the Exercise Price, as adjusted.
(i) For purposes of any computation respecting consideration received
pursuant to Subsections (a)(iv) and (a)(v) above, the following shall apply:
(i) in the case of the issuance of shares of Common Stock for cash, the
consideration shall be the amount of such cash, provided that in no
case shall any deduction be
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made for any commissions, discounts, or other expenses incurred by
the Company for any underwriting of the issue or otherwise in
connection therewith;
(ii) in the case of the issuance of shares of Common Stock for a
consideration in whole or in part other than cash, the consideration
other than cash shall be deemed to be the fair market value thereof as
determined in good faith by the Board of Directors of the Company
(irrespective of the accounting treatment thereof), the determination
of which shall be a conclusive absent manifest error; and
(iii) in the case of the issuance of securities convertible into, or
exchangeable for, shares of Common Stock, the aggregate consideration
received therefor shall be deemed to be the consideration received by
the Company for the issuance of such securities plus the additional
minimum consideration, if any, to be received by the Company upon the
conversion or exchange thereof (the consideration in each case to be
determined in the same manner as provided in clauses (i) and (ii) of
this Subsection (i)).
(j) Notwithstanding anything herein to the contrary, if any adjustment
under this Section 5 of the Exercise Price or the number of shares of Common
Stock or other securities issuable upon exercise of this Warrant shall be
determined by the National Association of Securities Dealers, Inc. (the
"NASD") to violate either or both of Section 44(c)(6)(B)(vi)(7) or Section
44(c)(6)(B)(vi)(8) of Article III of the Rules of Fair Practice of the NASD,
and such determination shall not be subject to further appeal or review, the
violative provisions or provisions shall be deemed to be amended to the
minimum extent necessary to cause each such provision to comply with the
applicable violated paragraph of Section 44 of the NASD Rules of Fair
Practice.
6. (a) In case of any capital reorganization, other than in the cases
referred to in Section 5(a) hereof, or the consolidation or merger of the
Company with or into another corporation (other than a merger or
consolidation in which the Company is the continuing corporation and which
does not result in any reclassification of the outstanding shares of Common
Stock or the conversion of such outstanding shares of Common Stock into
shares of other stock or other securities or property), or in the case of any
sale, lease, or conveyance to another corporation of the property and assets
of any nature of the Company as an entirety or substantially as an entirety
(such actions being hereinafter collectively referred to as
"Reorganizations"), there shall thereafter be deliverable upon exercise of
this Warrant (in lieu of the number of Warrant Shares theretofore
deliverable) the number of shares of stock or other securities or property to
which a holder of the respective number of Warrant Shares which would
otherwise have been deliverable upon the exercise of this Warrant would have
been entitled upon such Reorganization if this Warrant had been exercised in
full immediately prior to such Reorganization. In case of any
Reorganization, appropriate adjustment, as determined in good faith by the
Board of Directors of the Company, shall be made in the application of the
provisions herein set forth with respect to the rights and interests of the
Holder so that the provisions set forth herein shall thereafter be
applicable, as nearly as possible, in relation to any shares or other
property thereafter deliverable upon exercise of this Warrant. Any such
adjustment shall be made by, and set forth in, a supplemental agreement
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between the Company, or any successor thereto, and the Holder, with respect
to this Warrant, and shall for all purposes hereof conclusively be deemed to
be an appropriate adjustment. The Company shall not effect any such
Reorganization unless, upon or prior to the consummation thereof, the
successor corporation, or, if the Company shall be the surviving corporation
in any such Reorganization and is not the issuer of the shares of stock or
other securities or property to be delivered to holders of shares of the
Common Stock outstanding at the effective time thereof, then such issuer,
shall assume by written instrument the obligation to deliver to the Holder
such shares of stock, securities, cash, or other property as such holder
shall be entitled to purchase in accordance with the foregoing provisions.
In the event of sale, lease, or conveyance or other transfer of all or
substantially all of the assets of the Company as part of a plan for
liquidation of the Company, all rights to exercise this Warrant shall
terminate 30 days after the Company gives written notice to the Holder and
each registered holder of a Warrant that such sale or conveyance or other
transfer has been consummated.
(b) In case of any reclassification or change of the shares of Common
Stock issuable upon exercise of this Warrant (other than a change in par
value or from a specified par value to no par value, or as a result of a
subdivision or combination, but including any change in the shares into two
or more classes or series of shares), or in case of any consolidation or
merger of another corporation into the Company in which the Company is the
continuing corporation and in which there is a reclassification or change
(including a change to the right to receive cash or other property) of the
shares of Common Stock (other than a change in par value, or from no par
value to a specified par value, or as a result of a subdivision or
combination, but including any change in the shares into two or more classes
or series of shares), the Holder or holders of this Warrant shall have the
right thereafter to receive upon exercise of this Warrant solely the kind and
amount of shares of stock and other securities, property, cash, or any
combination thereof receivable upon such reclassification, change,
consolidation, or merger by a holder of the number of Warrant Shares for
which this Warrant might have been exercised immediately prior to such
reclassification, change, consolidation, or merger. Thereafter, appropriate
provision shall be made for adjustments which shall be as nearly equivalent
as practicable to the adjustments in Section 5.
(c) The above provisions of this Section 6 shall similarly apply to
successive reclassifications and changes of shares of Common Stock and to
successive consolidations, mergers, sales, leases, or conveyances.
7. In case at any time the Company shall propose:
(a) to pay any dividend or make any distribution on shares of Common
Stock in shares of Common Stock or make any other distribution (other than
regularly scheduled cash dividends which are not in a greater amount per
share than the most recent such cash dividend) to all holders of Common
Stock; or
(b) to issue any rights, warrants, or other securities to all holders
of Common Stock entitling them to purchase any additional shares of Common
Stock or any other rights, warrants, or other securities; or
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(c) to effect any reclassification or change of outstanding shares of
Common Stock or any consolidation, merger, sale, lease, or conveyance of
property, as described in Section 6; or
(d) to effect any liquidation, dissolution, or winding-up of the
Company; or
(e) to take any other action which would cause an adjustment to the
Exercise Price per Warrant Share;
then, and in any one or more of such cases, the Company shall give written
notice thereof by registered or certified mail, postage prepaid, to the
Holder at the Holder's address as it shall appear in the Warrant Register,
mailed at least 20 days prior to (i) the date as of which the holders of
record of shares of Common Stock to be entitled to receive any such dividend,
distribution, rights, warrants, or other securities are to be determined,
(ii) the date on which any such reclassification, change of outstanding
shares of Common Stock, consolidation, merger, sale, lease, conveyance of
property, liquidation, dissolution, or winding-up is expected to become
effective and the date as of which it is expected that holders of record of
shares of Common Stock shall be entitled to exchange their shares for
securities or other property, if any, deliverable upon such reclassification,
change of outstanding shares, consolidation, merger, sale, lease, conveyance
of property, liquidation, dissolution, or winding-up, or (iii) the date of
such action which would require an adjustment to the Exercise Price per
Warrant Share.
8. The issuance of any shares or other securities upon the exercise of
this Warrant and the delivery of certificates or other instruments
representing such shares or other securities shall be made without charge to
the Holder for any tax or other charge in respect of such issuance. The
Company shall not, however, be required to pay any tax which may be payable
in respect of any transfer involved in the issue and delivery of any
certificate in a name other than that of the Holder, and the Company shall
not be required to issue or deliver any such certificate unless and until the
person or persons requesting the issue thereof shall have paid to the Company
the amount of such tax or shall have established to the satisfaction of the
Company that such tax has been paid.
9. (a) If, at any time during the seven-year period commencing on
___________, 1997, the Company shall file a registration statement (other
than on Form S-4, Form S-8 or any successor form) with the Securities and
Exchange Commission (the "Commission") while any Registrable Securities (as
hereinafter defined) are outstanding, the Company shall give all the then
holders of any Registrable Securities (the "Eligible Holders") at least 45
days prior written notice of the filing of such registration statement. If
requested by any Eligible Holder in writing within 30 days after receipt of
any such notice, the Company shall, at the Company's sole expense (other than
the fees and disbursements of counsel for the Eligible Holders and the
underwriting discounts, if any, payable in respect of the Registrable
Securities sold by any Eligible Holder), register or qualify all or, at each
Eligible Holder's option, any portion of the Registrable Securities of any
Eligible Holders who shall have made such request, concurrently with the
registration of such other securities, all to the extent requisite to permit
the public offering and sale of the Registrable Securities, and will use its
best efforts through its officers, directors, auditors, and counsel to cause
such registration statement to become effective as promptly as practicable.
Notwithstanding the
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foregoing, if the managing underwriter of any such offering shall advise the
Company in writing that, in its opinion, the distribution of all or a portion
of the Registrable Securities requested to be included in the registration
concurrently with the securities being registered by the Company would
materially adversely affect the distribution of such securities by the
Company for its own account, then any Eligible Holder who shall have
requested registration of his, her, or its Registrable Securities shall delay
the offering and sale of such Registrable Securities (or the portions thereof
so designated by such managing underwriter) for such period, not to exceed 90
days (the "Delay Period"), as the managing underwriter shall request,
provided that no such delay shall be required as to any Registrable
Securities if any securities of the Company are included in such registration
statement and eligible for sale during the Delay Period for the account of
any person other than the Company and any Eligible Holder unless the
securities included in such registration statement and eligible for sale
during the Delay Period for such other person shall have been reduced pro
rata to the reduction of the Registrable Securities which were requested to
be included and eligible for sale during the Delay Period in such
registration. As used herein, "Registrable Securities" shall mean the
Warrants and the Warrant Shares which, in each case, have not been previously
sold pursuant to a registration statement or Rule 144 promulgated under the
Securities Act.
(b) If, on any two occasions during the four-year period commencing on
________, 1996, the Company shall receive a written request from Eligible
Holders who in the aggregate own (or upon exercise of all Warrants or
Warrants then outstanding would own) a majority of the total number of shares
of Common Stock then included (or upon such exercises would be included) in
the Registrable Securities (the "Majority Holders"), to register the sale of
all or part of such Registrable Securities, the Company shall, as promptly as
practicable, prepare and file with the Commission a registration statement
sufficient to permit the public offering and sale of the Registrable
Securities and will use its best efforts through its officers, directors,
auditors, and counsel to cause such registration statement to become
effective as promptly as practicable; provided, that the Company shall only
be obligated to file one such registration statement pursuant to this Section
9(b) for which all expenses incurred in connection with such registration
(other than the fees and disbursements of counsel for the Eligible Holders
and underwriting discounts, if any, payable in respect of the Registrable
Securities sold by the Eligible Holders) shall be borne by the Company.
Within five business days after receiving any request contemplated by this
Section 9(b), the Company shall give written notice to all the other Eligible
Holders, advising each of them that the Company is proceeding with such
registration and offering to include therein all or any portion of any such
other Eligible Holder's Registrable Securities, provided that the Company
receives a written request to do so from such Eligible Holder within 30 days
after receipt by him, her, or it of the Company's notice.
(c) In the event of a registration pursuant to the provisions of this
Section 9, the Company shall use its best efforts to cause the Registrable
Securities so registered to be registered or qualified for sale under the
securities or blue sky laws of such jurisdictions as the Holder or such
holders may reasonably request; provided, however, that the Company shall not
be required by reason of this Section 9(c) to register or qualify the
Registrable Securities in any jurisdiction where, as a result thereof, the
Company would be subject to service of general process or to taxation as a
foreign corporation doing business in such jurisdiction to which the Company
is not then subject.
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(d) The Company shall keep effective any registration or qualification
contemplated by this Section 9 and shall from time to time amend or supplement
each applicable registration statement, preliminary prospectus, final
prospectus, application, document, and communication for such period of time as
shall be required to permit the Eligible Holders to complete the offer and sale
of the Registrable Securities covered thereby. The Company shall in no event be
required to keep any such registration or qualification in effect for a period
in excess of nine months from the date on which the Eligible Holders are first
free to sell such Registrable Securities; provided, however, that, if the
Company is required to keep any such registration or qualification in effect
with respect to securities other than the Registrable Securities beyond such
period, the Company shall keep such registration or qualification in effect as
it relates to the Registrable Securities for so long as such registration or
qualification remains or is required to remain in effect in respect of such
other securities.
(e) In the event of a registration pursuant to the provisions of this
Section 9, the Company shall furnish to each Eligible Holder such number of
copies of the registration statement and of each amendment and supplement
thereto (in each case, including all exhibits), such reasonable number of copies
of each prospectus contained in such registration statement and each supplement
or amendment thereto (including each preliminary prospectus), all of which shall
conform to the requirements of the Securities Act and the rules and regulations
thereunder, and such other documents as any Eligible Holder may reasonably
request to facilitate the disposition of the Registrable Securities included in
such registration.
(f) In the event of a registration pursuant to the provisions of this
Section 9, the Company shall furnish each Eligible Holder of any Registrable
Securities so registered with an opinion of its counsel (reasonably acceptable
to the Eligible Holders) to the effect that (i) the registration statement has
become effective under the Securities Act and no order suspending the
effectiveness of the registration statement, or preventing or suspending the use
of the registration statement, any preliminary prospectus, any final prospectus
or any amendment or supplement thereto, has been issued, nor, to the knowledge
of such counsel, has the Commission or any securities or blue sky authority of
any jurisdiction instituted or threatened to institute any proceedings with
respect to such an order, (ii) the registration statement and each prospectus
forming a part thereof (including each preliminary prospectus), and any
amendment or supplement thereto, complies as to form with theSecurities Act and
the rules and regulations thereunder, and (iii) such counsel has no knowledge of
any material misstatement or omission in such registration statement or any
prospectus, as amended or supplemented. Such opinion shall also state the
jurisdictions in which the Registrable Securities have been registered or
qualified for sale pursuant to the provisions of Section 9(c).
(g) In the event of a registration pursuant to the provision of this
Section 9, the Company shall enter into a cross-indemnity agreement and a
contribution agreement, each in customary form, with each underwriter, if any,
and, if requested, enter into an underwriting agreement containing conventional
representations, warranties, allocation of expenses, and customary closing
conditions, including, without limitation, opinions of counsel and accountants'
cold comfort letters, with any underwriter who acquires any Registrable
Securities.
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(h) The Company agrees that until all the Registrable Securities have been
sold under a registration statement or pursuant to Rule 144 under the Securities
Act, it shall keep current in filing all reports, statements, and other
materials required to be filed with the Commission to permit holders of the
Registrable Securities to sell such securities under Rule 144 under the
Securities Act.
10. (a) Subject to the conditions set forth below, the Company agrees to
indemnify and hold harmless each Eligible Holder, its officers, directors,
partners, employees, agents, and counsel, and each person, if any, who controls
any such person within the meaning of Section 15 of theSecurities Act or Section
20(a) of the Securities ExchangeSecurities Act of 1934, as amended (the
"Exchange Act"), from and against any and all loss, liability, charge, claim,
damage, and expense whatsoever (which shall include, for all purposes of this
Section 10, without limitation, attorneys' fees and any and all expense
whatsoever incurred in investigating, preparing, or defending against any
litigation, commenced or threatened, or any claim whatsoever, and any and all
amounts paid in settlement of any claim or litigation), as and when incurred,
arising out of, based upon, or in connection with, (i) any untrue statement or
alleged untrue statement of a material fact contained in (A) any registration
statement, preliminary prospectus, or final prospectus (as from time to time
amended and supplemented), or any amendment or supplement thereto, relating to
the offer and sale of any of the Registrable Securities, or (B) any application
or other document or communication (in this Section 10, referred to collectively
as an "application") executed by, or on behalf of, the Company or based upon
written information furnished by, or on behalf of, the Company filed in any
jurisdiction in order to register or qualify any of the Registrable Securities
under the securities or "blue sky" laws thereof or filed with the Commission or
any securities exchange; or any omission or alleged omission to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, unless such statement or omission was made in reliance upon, and
in conformity with, written information furnished to the Company with respect to
such Eligible Holder by, or on behalf of, such person expressly for inclusion in
any registration statement, preliminary prospectus or final prospectus, or any
amendment or supplement thereto, or in any application, as the case may be, or
(ii) any breach of any representation, warranty, covenant, or agreement of the
Company contained in this Warrant. The foregoing agreement to indemnify shall
be in addition to any liability the Company may otherwise have, including
liabilities arising under this Warrant.
If any action is brought against any Eligible Holder or any of its
officers, directors, partners, employees, agents, or counsel, or any controlling
persons of such person (an "indemnified party") in respect of which indemnity
may be sought against the Company pursuant to the foregoing paragraph, such
indemnified party or parties shall promptly notify the Company in writing of the
institution of such action (but the failure so to notify shall not relieve the
Company from any liability other than pursuant to this Section 10(a)) and the
Company shall promptly assume the defense of such action, including, without
limitation, the employment of counsel reasonably satisfactory to such
indemnified party or parties) and payment of expenses. Such indemnified party
or parties shall have the right to employ its or their own counsel in any such
case, but the fees and expenses of such counsel shall be at the expense of such
indemnified party or parties unless the employment of such counsel shall have
been authorized in writing by the Company in connection with the defense of such
action or the Company shall not have promptly employed counsel
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reasonably satisfactory to such indemnified party or parties to have charge
of the defense of such action or the named parties to such action include
both the indemnified and the indemnifying parties and such indemnified party
or parties shall have reasonably concluded that there may be one or more
legal defenses available to it or them or to other indemnified parties which
are different from, or in addition to, those available to the Company, which,
for reasons of conflict of interest or otherwise, counsel to the Company is
not in a position to assert, in any of which events such reasonable fees and
expenses shall be borne by the Company and the Company shall not have the
right to direct the defense of such action on behalf of the indemnified party
or parties. Anything in this Section 10 to the contrary notwithstanding, the
Company shall not be liable for any settlement of any such claim or action
effected without its written consent, which consent shall not be unreasonably
withheld. The Company shall not, without the prior written consent of each
indemnified party that is not released as described in this sentence, settle
or compromise any action, or permit a default or consent to the entry of
judgment in, or otherwise seek to terminate, any pending or threatened
action, in respect of which indemnity may be sought hereunder (whether or not
any indemnified party is a party thereto), unless such settlement,
compromise, consent, or termination includes an unconditional release of each
indemnified party from all liability in respect of such action. The Company
agrees promptly to notify the Eligible Holders of the commencement of any
litigation or proceedings against the Company or any of its officers or
directors in connection with the sale of any Registrable Securities or any
preliminary prospectus, prospectus, registration statement, or amendment or
supplement thereto, or any application relating to any sale of any
Registrable Securities.
(b) Each Eligible Holder severally agrees to indemnify and hold harmless
the Company, each director of the Company, each officer of the Company who shall
have signed any registration statement covering Registrable Securities held by
such Eligible Holder, each other person, if any, who controls the Company within
the meaning of Section 15 of theSecurities Act or Section 20(a) of the Exchange
Act, and its or their respective counsel, to the same extent as the foregoing
indemnity from the Company to the Eligible Holders in Section 10(a), but only
with respect to statements or omissions, if any, made in any registration
statement, preliminary prospectus, or final prospectus (as from time to time
amended and supplemented), or any amendment or supplement thereto, or in any
application, in reliance upon, and in conformity with, written information
furnished to the Company with respect to any Eligible Holder by, or on behalf
of, such Eligible Holder expressly for inclusion in any such registration
statement, preliminary prospectus, or final prospectus, or any amendment or
supplement thereto, or in any application, as the case may be. If any action
shall be brought against the Company or any other person so indemnified based
on any such registration statement, preliminary prospectus, or final prospectus,
or any amendment or supplement thereto, or any application, and in respect of
which indemnity may be sought against any Eligible Holder pursuant to this
Section 10(b), such Eligible Holder shall have the rights and duties given to
the Company, and the Company and each other person so indemnified shall have
the rights and duties given to the indemnified parties, by the provisions of
Section 10(a).
(c) To provide for just and equitable contribution, if (i) an indemnified
party makes a claim for indemnification pursuant to Section 10(a) or 10(b)
hereof (subject to the limitations thereof), but it is found in a final judicial
determination, not subject to further appeal, that such
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indemnification may not be enforced in such case, even though this Warrant
expressly provides for indemnification in such case, or (ii) any indemnified
or indemnifying party seeks contribution under the Securities Act, the
Exchange Act, or otherwise, then the Company (including for this purpose any
contribution made by, or on behalf of, any director of the Company, any
officer of the Company who signed any such registration statement, any
controlling person of the Company, and its or their respective counsel), as
one entity, and the Eligible Holders of the Registrable Securities included
in such registration in the aggregate (including for this purpose any
contribution by, or on behalf of, an indemnified party), as a second entity,
shall contribute to the losses, liabilities, claims, damages, and expenses
whatsoever to which any of them may be subject, on the basis of relevant
equitable considerations such as the relative fault of the Company and such
Eligible Holders in connection with the facts which resulted in such losses,
liabilities, claims, damages, and expenses. The relative fault, in the case
of an untrue statement, alleged untrue statement, omission, or alleged
omission, shall be determined by, among other things, whether such statement,
alleged statement, omission, or alleged omission relates to information
supplied by the Company or by such Eligible Holders, and the parties'
relative intent, knowledge, access to information, and opportunity to correct
or prevent such statement, alleged statement, omission, or alleged omission.
The Company and the Eligible Holders agree that it would be unjust and
inequitable if the respective obligations of the Company and the Eligible
Holders for contribution were determined by pro rata or per capita allocation
of the aggregate losses, liabilities, claims, damages, and expenses (even if
the Eligible Holders and the other indemnified parties were treated as one
entity for such purpose) or by any other method of allocation that does not
reflect the equitable considerations referred to in this Section 10(c). In
no case shall any Eligible Holder be responsible for a portion of the
contribution obligation imposed on all Eligible Holders in excess of its pro
rata share based on the number of shares of Common Stock owned (or which
would be owned upon exercise of all Registrable Securities) by it and
included in such registration as compared to the number of shares of Common
Stock owned (or which would be owned upon exercise of all Registrable
Securities) by all Eligible Holders and included in such registration. No
person guilty of a fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who is not guilty of such fraudulent misrepresentation. For
purposes of this Section 10(c), each person, if any, who controls any
Eligible Holder within the meaning of Section 15 of the Securities Act or
Section 20(a) of the Exchange Act and each officer, director, partner,
employee, agent, and counsel of each such Eligible Holders or control person
shall have the same rights to contribution as such Eligible Holder or control
person and each person, if any, who controls the Company within the meaning
of Section 15 of the Securities Act or Section 20(a) of the Exchange Act,
each officer of the Company who shall have signed any such registration
statement, each director of the Company, and its or their respective counsel
shall have the same rights to contribution as the Company, subject in each
case to the provisions of this Section 10(c). Anything in this Section 10(c)
to the contrary notwithstanding, no party shall be liable for contribution
with respect to the settlement of any claim or action effected without its
written consent. This Section 10(c) is intended to supersede any right to
contribution under the Securities Act, the Exchange Act, or otherwise.
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11. Unless registered pursuant to the provisions of Section 9 hereof, the
Warrant Shares issued upon exercise of the Warrants shall be subject to a stop
transfer order and the certificate or certificates representing the Warrant
Shares shall bear the following legend:
THE SECURITIES REPRESENTED HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES
LAWS AND MAY NOT BE OFFERED, SOLD, PLEDGED, ASSIGNED, OR OTHERWISE
TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS
EFFECTIVE UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES
LAWS, OR (2) THE COMPANY RECEIVES AN OPINION OF COUNSEL TO THE HOLDER
HEREOF, WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO THE
COMPANY, THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED, OR
OTHERWISE TRANSFERRED IN THE MANNER CONTEMPLATED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR APPLICABLE STATE
SECURITIES LAWS.
12. Upon receipt of evidence satisfactory to the Company of the loss,
theft, destruction, or mutilation of any Warrant (and upon surrender of any
Warrant if mutilated), and upon receipt by the Company of reasonably
satisfactory indemnification, the Company shall execute and deliver to the
Holder thereof a new Warrant of like date, tenor, and denomination.
13. The Holder of any Warrant shall not have, solely on account of such
status, any rights of a stockholder of the Company, either at law or in equity,
or to any notice of meetings of stockholders or of any other proceedings of the
Company, except as provided in this Warrant.
14. This Warrant shall be construed in accordance with the laws of the
State of New York applicable to contracts made and performed within such State,
without regard to principles of conflicts of law.
15. The Holder and the Company irrevocably consent to the jurisdiction of
the courts of the State of New York and of any federal court located in such
State in connection with any action or proceeding arising out of, or relating
to, this Warrant, any document or instrument delivered pursuant to, in
connection with, or simultaneously with, this Warrant, or a breach of this
Warrant or any such document or instrument. In any such action or proceeding,
the Holder or the Company, as applicable, waives personal service of any
summons, complaint, or other process and agrees that service thereof may be made
in accordance with Section 12 of the Underwriting Agreement. Within 30 days
after such service, or such other time as may be mutually agreed upon in writing
by the attorneys for the parties to such action or proceeding, the Company shall
appear
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to answer such summons, complaint, or other process. Should the Company so
served fail to appear or answer within such 30-day period or such extended
period, as the case may be, the Company shall be deemed in default and judgment
may be entered against the Company for the amount as demanded in any summons,
complaint, or other process so served.
Dated: _________, 1996
IMAGE GUIDED TECHNOLOGIES, INC.
BY:
-------------------------------
PAUL L. RAY
PRESIDENT
[Seal]
- ----------------------
Secretary
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FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer the
attached Warrant.)
FOR VALUE RECEIVED, ______________________ hereby sells, assigns, and
transfers unto _________________ a Warrant to purchase __________ shares of
Common Stock, no par value, of Image Guided Technologies, Inc., a Colorado
corporation (the "Company"), and does hereby irrevocably constitute and appoint
___________ attorney to transfer such Warrant on the books of the Company, with
full power of substitution.
Dated:
-----------------
Signature
-----------------------
NOTICE
The signature on the foregoing Assignment must correspond to the name as
written upon the face of this Warrant in every particular, without alteration
or enlargement or any change whatsoever.
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ELECTION TO EXERCISE
To: Image Guided Technologies, Inc.
5710-B Flatiron Building
Boulder, Colorado 80301
The undersigned hereby exercises his, her, or its rights to purchase shares
of Common Stock, no par value ("the Common Stock"), of Image Guided
Technologies, Inc., a Colorado corporation (the "Company"), covered by the
within Warrant and tenders payment herewith in the amount of $____________ in
accordance with the terms thereof, and requests that certificates for the
securities constituting such shares of Common Stock be issued in the name of,
and delivered to:
(Print Name, Address, and Social Security
or Tax Identification Number)
and, if such number of shares of Common Stock shall not constitute all such
shares of Common Stock covered by the within Warrant, that a new Warrant for the
balance of the shares of Common Stock covered by the within Warrant shall be
registered in the name of, and delivered to, the undersigned at the address
stated below.
Dated: Name
------------------ ------------------------
(Print)
Address:
-------------------------------
(Signature)
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