EXHIBIT 4.9
GRAPHON CORPORATION
(Incorporated under the laws of the State of Delaware)
Void after 5:00 p.m., New York City time, on December 31, 2000
Dated: October 12, 1999 Warrant to Purchase
300,000 Shares of
STH-1 Common Stock
FOR VALUE RECEIVED, GRAPHON CORPORATION, a Delaware corporation (the
"Corporation"), hereby certifies that SUPER TECH HOLDINGS LIMITED (the "Holder")
is entitled, subject to the provisions of this warrant (the "Warrant"), to
purchase from the Corporation during the period commencing on the day hereof and
expiring at 5:00 p.m. New York City local time, on December 31, 2000 up to
300,000 fully paid and non-assessable shares of Common Stock of the Corporation
at a price of U.S.$8.50 per share (such exercise price per share being
hereinafter referred to as the "Exercise Price").
The term "Common Stock" means shares of Common Stock, par value $0.0001 per
share, of the Corporation as constituted on October 12, 1999 (the "Base Date"),
together with any other equity securities that may be issued by the Corporation
in addition thereto or in substitution therefor. The number of shares of Common
Stock to be received upon the exercise of this Warrant may be adjusted from time
to time as hereinafter set forth. The shares of Common Stock deliverable upon
such exercise, and as adjusted from time to time, are hereinafter sometimes
referred to as "Warrant Stock".
Upon receipt by the Corporation of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of this Warrant, and (in the case
of loss, theft or destruction) of reasonably satisfactory indemnification, and
upon surrender and cancellation of this Warrant, if mutilated, the Corporation
shall execute and deliver a new Warrant of like tenor and date. Any such new
Warrant executed and delivered shall constitute an additional contractual
obligation on the part of the Corporation, whether or not this Warrant so lost,
stolen, destroyed or mutilated shall be at any time enforceable by anyone.
The Holder agrees with the Corporation that this Warrant is issued, and all
the rights hereunder shall be held, subject to all of the conditions,
limitations and provisions set forth herein.
1. Exercise of Warrant.
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1.1 Manner of Exercise. Subject to the provisions of Section 1.2,
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this Warrant may be exercised in whole, or in part from time to time, to the
extent of 300,000 shares of Common Stock, prior to adjustment as herein
provided, up to and through 5:00
p.m. New York City local time on December 31, 2000 or, if any such day is a day
on which banking institutions in the City of New York are authorized by law to
close, then on the next succeeding day that shall not be such a day, by
presentation and surrender hereof to the Corporation at its principal office, or
at the office of its stock transfer agent, if any, with the Warrant Exercise
Form attached hereto duly executed and accompanied by payment (either in cash or
by certified or official bank check, payable to the order of the Corporation) of
the Exercise Price for the number of shares specified in such Form and
instruments of transfer, if appropriate, duly executed by the Holder or its duly
authorized attorney. If this Warrant should be exercised in part only, the
Corporation shall, upon surrender of this Warrant for cancellation, execute and
deliver a new Warrant evidencing the rights of the Holder thereof to purchase
the balance of the shares purchasable hereunder. Upon receipt by the Corporation
of this Warrant, together with the Exercise Price, at its office, or by the
stock transfer agent of the Corporation at its office, in proper form for
exercise, the Holder shall be deemed to be the holder of record of the shares of
Common Stock issuable upon such exercise, notwithstanding that the stock
transfer books of the Corporation shall then be closed or that certificates
representing such shares of Common Stock shall not then be actually delivered to
the Holder. The Corporation shall pay any and all documentary stamp or similar
issue taxes payable in respect of the issue or delivery of shares of Common
Stock on exercise of this Warrant.
1.2 Limitations Upon Exercise. The Warrant, together with all other
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warrants of the same series as this Warrant, may not be exercised at any one
time with respect to less than an aggregate of 100,000 shares of Common Stock
(or that lesser number of shares of Common Stock then subject to purchase under
all then outstanding Warrants, if less than 100,000 shares) or for any
fractional shares.
2. Reservation of Shares. The Corporation will at all times reserve for
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issuance and delivery upon exercise of this Warrant all shares of Common Stock
or other shares of capital stock of the Corporation (and other securities and
property) from time to time receivable upon exercise of this Warrant. All such
shares (and other securities and property) shall be duly authorized and, when
issued upon such exercise, shall be validly issued, fully paid and non-
assessable and free of all preemptive rights.
3. Registration under Securities Act of 1933.
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3.1 No Registration of Warrant. This Warrant is not and will not be
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registered under the Act.
3.2 Restrictions Upon Transferability. The Warrant Stock and the
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Warrant may be sold or otherwise disposed only in accordance with the provisions
of Sections 4 and 5 of the Registration Rights Schedule.
3.3 Registration Commitment. The shares of Common Stock issuable
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upon exercise of this Warrant shall be registered under the Securities Act of
1933, as amended (the "Act"), as soon as practicable after the date hereof in
accordance with the
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provisions of Schedule 3.1 attached hereto (the "Registration Rights Schedule").
4. Fractional Shares. No fractional shares or scrip representing
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fractional shares shall be issued upon the exercise of this Warrant, but the
Corporation shall issue one additional share of its Common Stock in lieu of each
fraction of a share otherwise called for upon any exercise of this Warrant.
5. Exchange, Transfers, Assignment of Warrant. This Warrant is not
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registered under the Act nor under any applicable state securities law or
regulation. This Warrant cannot be exchanged, transferred or assigned, except in
accordance with the provisions of Sections 3.2 and 10 hereof. Upon such event
and upon surrender of this Warrant to the Corporation, with the Assignment Form
annexed hereto duly executed and funds sufficient to pay any transfer tax, the
Corporation 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 cancelled.
6. Rights of the Holder. The Holder shall not, by virtue hereof, be
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entitled to any rights of a stockholder of the Corporation, either at law or in
equity, and the rights of the Holder are limited to those expressed in this
Warrant.
7. Redemption. This Warrant is not redeemable by the Corporation.
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8. Anti-Dilution Provisions.
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8.1 Adjustment for Dividends in Other Securities, Property, Etc.;
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Reclassification, Etc. In case at any time or from time to time after the Base
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Date the holders of Common Stock (or any other securities at the time receivable
upon the exercise of this Warrant) shall have received, or on or after the
record date fixed for the determination of eligible stockholders, shall have
become entitled to receive without payment therefor: (a) other or additional
securities or property (other than cash) by way of dividend, (b) any cash paid
or payable except out of earned surplus of the Corporation at the Base Date as
increased (decreased) by subsequent credits (charges) thereto (other than
credits in respect of any capital or paid-in surplus or surplus created as a
result of a revaluation of property) or (c) other or additional (or less)
securities or property (including cash) by way of stock-split, spin-off, split-
up, reclassification, combination of shares or similar corporate rearrangement,
then, and in each such case, the Holder of this Warrant, upon the exercise
thereof as provided in Section 1, shall be entitled to receive the amount of
securities and property (including cash in the cases referred to in clauses (b)
and (c) above) which such Holder would hold on the date of such exercise if on
the Base Date it had been the holder of record of the number of shares of Common
Stock (as constituted on the Base Date) subscribed for upon such exercise as
provided in Section 1 and had thereafter, during the period from the Base Date
to and including the date of such exercise, retained such shares and/or all
other additional (or less) securities and property (including
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cash in the cases referred to in clauses (b) and (c) above) receivable by it as
aforesaid during such period, giving effect to all adjustments called for during
such period by Section 8.2.
8.2 Adjustment for Reorganization, Consolidation, Merger, Etc. In
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case of any reorganization of the Corporation (or any other corporation, the
securities of which are at the time receivable on the exercise of this Warrant)
after the Base Date or in case after such date the Corporation (or any such
other corporation) shall consolidate with or merge into another corporation or
convey all or substantially all of its assets to another corporation, then, and
in each such case, the Holder of this Warrant upon the exercise thereof as
provided in Section 1 at any time after the consummation of such reorganization,
consolidation, merger or conveyance, shall be entitled to receive, in lieu of
the securities and property receivable upon the exercise of this Warrant prior
to such consummation, the securities or property to which such Holder would have
been entitled upon such consummation if such Holder had exercised this Warrant
immediately prior thereto, all subject to further adjustment as provided in
Section 8.1; in each such case, the terms of this Warrant shall be applicable to
the securities or property receivable upon the exercise of this Warrant after
such consummation.
8.3 Impairment. The Corporation will not, by amendment of its
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Certificate of Incorporation or through reorganization, consolidation, merger,
dissolution, issue or sale of securities, sale of assets or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
of the Warrant, but will at all times in good faith assist in the carrying out
of all such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Holder of this Warrant against
dilution or other impairment. Without limiting the generality of the foregoing,
while any Warrant is outstanding, the Corporation (a) will not permit the par
value, if any, of the shares of stock receivable upon the exercise of this
Warrant to be above the amount payable therefor upon such exercise, (b) will
take all such action as may be necessary or appropriate in order that the
Corporation may validly and legally issue or sell fully-paid and non-assessable
stock upon the exercise of all Warrants at the time outstanding, (c) will not
issue or sell any stock of any class which is preferred as to dividends or as to
the distribution of assets upon voluntary or involuntary dissolution,
liquidation or winding-up, unless the rights of the holders thereof shall be
limited to a fixed sum or percentage of par value in respect to participation in
dividends and in any such distribution of assets and (d) will take no action to
amend its Certificate of Incorporation which would change to the detriment of
the holders of Common Stock the dividend or voting rights of the Corporation's
Common Stock (as constituted on the Base Date).
8.4 Certificate as to Adjustments. In each case of an adjustment in
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the number of shares of Common Stock (or other securities or property)
receivable on the exercise of the Warrant, the Corporation at its expense will
promptly compute such adjustment in accordance with the terms of the Warrant and
prepare a certificate setting forth such adjustment and showing in detail the
facts upon which such adjustment is based. The Corporation will forthwith mail a
copy of each such certificate to each holder of the Warrant.
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8.5 Notices of Record Date, Etc.
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In case:
(a) the Corporation shall take a record of the holders of its
Common Stock (or other securities at the time receivable upon the exercise of
the Warrant) for the purpose of entitling them to receive any dividend (other
than a cash dividend) or other distribution, or any right to subscribe for,
purchase or otherwise acquire any shares of stock of any class or any other
securities, or to receive any other right; or
(b) of any capital reorganization of the Corporation (other than
a stock split or reverse stock split), any reclassification of the capital stock
of the Corporation, any consolidation or merger of the Corporation with or into
another corporation (other than a merger for purposes of change of domicile) or
any conveyance of all or substantially all of the assets of the Corporation to
another corporation; or
(c) of any voluntary or involuntary dissolution, liquidation or
winding-up of the Corporation, then, and in each such case, the Corporation
shall mail or cause to be mailed to each holder of the Warrant at the time
outstanding a notice specifying, as the case may be, (i) the date on which a
record is to be taken for the purpose of such dividend, distribution or right,
and stating the amount and character of such dividend, distribution or right, or
(ii) the date on which such reorganization, reclassification, consolidation,
merger, conveyance, dissolution, liquidation or winding-up is to take place, and
the time, if any, is to be fixed, as to which the holders of record of Common
Stock (or such other securities at the time receivable upon the exercise of the
Warrant) shall be entitled to exchange their shares of Common Stock (or such
other securities) for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding-up. Such notice shall be mailed at least
twenty (20) days prior to the date therein specified and the Warrant may be
exercised prior to said date during the term of the Warrant no later than five
days prior to said date.
9. Applicable Law. This Warrant is issued under and shall for all
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purposes be governed by and construed in accordance with the laws of the State
of New York.
10. Assignment. This Warrant is not assignable without the prior consent
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of the Corporation, except to executive officers, directors or other principals
of the Holder.
11. Notice. Notices and other communications to be given to the Holder of
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the Warrant evidenced by this certificate shall be deemed to have been
sufficiently given, if delivered or mailed, addressed in the name and at the
address of such owner appearing on the records of the Corporation, and if
mailed, sent registered or certified mail, postage prepaid. Notices or other
communications to the Corporation shall be deemed to have been sufficiently
given if delivered by hand or mailed, by registered or certified mail, postage
prepaid, to the Corporation at 150 Harrison Avenue, Campbell, California 95008,
Attn: President, or at such other address as the Corporation shall have
designated by
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written notice to such registered owner as herein provided. Notice by mail shall
be deemed given when deposited in the United States mail as herein provided.
IN WITNESS WHEREOF, the Corporation has caused this Warrant to be signed on
its behalf, in its corporate name, by its duly authorized officer, all as of the
day and year first above written.
GRAPHON CORPORATION
By:__________________________________
Name: Walter Keller
Title: President
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WARRANT EXERCISE FORM
The undersigned hereby irrevocably elects to exercise the within Warrant to
the extent of purchasing ________________________ Common Shares of GRAPHON
CORPORATION and hereby makes payment at the rate of U.S.$8.50 per share, or an
aggregate of $__________________, in payment therefor.
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Name of Registered Holder
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Signature
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Date
INSTRUCTIONS FOR ISSUANCE OF STOCK
(if other than to the registered Holder of the within Warrant)
Name
(Please typewrite or print in block letters)
Address
Social Security or Taxpayer Identification Number
ASSIGNMENT FORM
(See Sections 5 and 11 for terms of Assignment)
The Holder hereby assigns and transfers unto
Name
(Please typewrite or print in block letters)
Address
the right to purchase Common Shares of GRAPHON CORPORATION represented by this
Warrant to the extent of _________________________ shares as to which such
right is exercisable and does hereby irrevocably constitute and appoint
__________________________________________________ Attorney, to transfer the
same on the books of GRAPHON CORPORATION with full power of substitution in the
premises.
DATED:______________________,
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Name of Registered Holder
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Signature
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Schedule 3.1
REGISTRATION RIGHTS, PROCEDURES
AND
RESTRICTIONS UPON TRANSFER
1. Restriction on Transfer. The Restricted Securities (as hereinafter
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defined), and any shares of capital stock received in respect thereof, whether
by reason of a stock split or share reclassification thereof, a stock dividend
thereon or otherwise, shall not be transferable except upon the conditions
specified in this Schedule, which conditions are intended to insure compliance
with the provisions of the Securities Act in respect of the transfer thereof.
2. Definitions. As used in this Schedule, the following terms shall have
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the following respective meanings:
"Commission" shall mean the Securities and Exchange Commission, or any
other Federal agency at the time administering the Securities Act.
"Corporation" shall mean GRAPHON CORPORATION, a Delaware corporation,
and its successors and assigns.
"Person" shall mean and include an individual, a corporation, a
partnership, a trust, an unincorporated organization and a government or any
department, agency or political subdivision thereof.
"Purchaser" shall mean the registered holder of the Warrants, or such
Purchaser's permitted successors or assigns.
"Restricted Securities" shall mean (i) the Warrants, and (ii) the
shares of Common Stock of the Corporation issuable upon exercise of the
Warrants.
"Restricted Shares" shall mean the shares of Common Stock of the
Corporation constituting Restricted Securities.
"Securities Act" shall mean the Securities Act of 1933, as amended, or
any similar Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Transfer" shall include any disposition of Restricted Securities or
of any interest therein which would constitute a sale thereof within the meaning
of the Securities Act.
"Warrant" shall mean that common stock purchase warrant to which this
Schedule is attached, initially pertaining to the purchase of up to an aggregate
of 300,000 shares of Common Stock of the Corporation, and any common stock
purchase warrants issued in replacement or substitution therefor.
3. Restrictive Legend. Each certificate evidencing Restricted Shares and
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any shares of capital stock received in respect thereof, whether by reason of a
stock split or share reclassification thereof, a stock dividend thereon or
otherwise, and each certificate for any such securities issued to subsequent
transferees of any such certificate shall (unless otherwise permitted by the
provisions of Sections 4 or 11 hereof) be stamped or otherwise imprinted with
the following legend:
"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 Corporation is obtained stating that such
disposition is in compliance with an available exemption
from such registration."
4. Notice of Transfer. The holder of any Restricted Securities, by
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acceptance thereof, agrees, prior to any transfer of any Restricted Securities,
to give written notice to the Corporation of such holder's intention to effect
such transfer and to comply in all other respects with the provisions of this
Section 4, and with those provisions of Section 3.2 and 10 of the Warrant to
which this Schedule refers. Each such notice shall describe the manner and
circumstances of the proposed transfer and shall be accompanied by (a) the
written opinion, addressed to the Corporation, of counsel for the holder of
Restricted Securities, as to whether in the opinion of such counsel (which
opinion shall be satisfactory to counsel for the Corporation) such proposed
transfer involves a transaction requiring registration of such Restricted
Securities under the Securities Act, and (b) in the case of Restricted Shares,
if in the opinion of such counsel such registration is required, a written
request addressed to the Corporation by the holder of Restricted Securities,
describing in detail the proposed method of disposition and requesting the
Corporation to effect the registration of such Restricted Shares pursuant to the
terms and provisions of Section 5 hereof; provided, however, that no such
opinion shall be required in connection with a transaction complying with the
requirements of Rule 144 (as amended from time to time) promulgated under the
Securities Act (or successor Rule thereto). If in the opinion of such counsel
(if such opinion is required hereunder) and counsel for the Corporation, the
proposed transfer of Restricted Securities may be effected without registration
under the Securities Act, the holder of Restricted Securities shall thereupon be
entitled to transfer Restricted Securities in accordance with the terms of the
notice delivered by it to the Corporation. Each certificate or other instrument
evidencing the securities issued upon the transfer of any Restricted Securities
(and each certificate or other instrument evidencing any untransferred balance
of such securities) shall bear the legend
described in Section 3 hereof unless (a) in the opinion of such counsel and
counsel for the Corporation registration of future transfer is not required by
the applicable provisions of the Securities Act or (b) the Corporation shall
have waived the requirement of such legend; provided, however, that such legend
shall not be required on any certificate or other instrument evidencing the
securities issued upon such transfer in the event such transfer shall be made in
compliance with the requirements of Rule 144 (as amended from time to time)
promulgated under the Securities Act (or successor Rule thereto). The holder of
Restricted Securities shall not transfer such Restricted Securities until such
opinion of counsel has been given to the Corporation (unless waived by the
Corporation or unless such opinion is not required in accordance with the
provisions of this Section 4) or until registration of the Restricted Shares
involved in the above-mentioned request has become effective under the
Securities Act.
5. Registration. (a) As soon as practicable after the issuance date of
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the Warrant to which this Schedule refers, the Corporation shall file a
registration statement on Form S-1 under the Securities Act covering the
Restricted Shares and shall thereafter use its best efforts to cause such
registration statement to be declared effective by the Commission at the
earliest practicable date so as to permit offer and the sale or other
disposition by the prospective seller or sellers of the Restricted Shares so
registered.
(b) Anything contained herein to the contrary notwithstanding, with
respect to the registration statement contemplated by this Section 5, the
Corporation may include in such registration statement for its own account any
authorized but unissued securities of the Corporation and/or for the account of
others any issued and outstanding securities of the Corporation.
6. Preparation and Filing. The Corporation shall, as expeditiously as
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practicable:
(a) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective for at least nine months and to comply with the
provisions of the Securities Act with respect to the sale or other
disposition of all Restricted Shares covered by such registration statement
and will furnish to each selling stockholder prior to the filing thereof a
copy of any amendment or supplement to such registration statement or
prospectus and shall not file any such amendment or supplement to which any
such selling stockholder shall have reasonably objected on the grounds that
such amendment or supplement does not comply in all material respects with
the requirements of the Securities Act or the rules and regulations
thereunder;
(b) furnish to each selling stockholder such number of copies of the
registration statement and of each such amendment or supplement thereto (in
each case including all exhibits) a summary prospectus or other prospectus,
including a preliminary prospectus, in conformity with the requirements of
the Securities Act, and such other documents as such seller may reasonably
request in order to facilitate the public sale or other disposition of such
Restricted Shares;
(c) use its best efforts to register or qualify the Restricted Shares
covered by such registration statement under the securities or blue sky
laws of such jurisdictions as each such seller shall reasonably request but
in no event more than three states in the aggregate (provided, however,
that the Corporation shall not be required to consent to general service of
process for all purposes in any jurisdiction where it is not then
qualified) and do any and all other acts or things which may be necessary
or advisable to enable such seller to consummate the public sale or
disposition in such jurisdictions of such securities;
(d) notify each seller of Restricted Shares covered by such
registration statement, at any time when a prospectus relating thereto
covered by such registration statement is required to be delivered under
the Securities Act, of the happening of any event as a result of which the
registration statement, the prospectus or any document incorporated therein
by reference, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading and at the request of such seller,
prepare and furnish to such seller a post-effective amendment or supplement
to the registration statement or the related prospectus or any document
incorporated therein by reference or file any other required document so
that, as thereafter delivered to the purchasers of such shares, such
prospectus shall not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading;
(e) otherwise use its best efforts to comply with all applicable rules
and regulations of the Commission, and make generally available to its
securities holders, as soon as reasonably practicable, an earnings
statement covering the period of at least twelve months, but not more than
eighteen months, beginning with the first month of the first fiscal quarter
after the effective date of such registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the Securities
Act; and
(f) notify each selling stockholder, promptly, and confirm such advice
in writing;
(A) when the registration statement, any pre-effective amendment,
the prospectus or any prospectus supplement or post-effective
amendment to the registration statement has been filed, and, with
respect to the registration statement or any post-effective amendment,
when the same has become effective;
(B) of the issuance by the Commission of any stop order
suspending the effectiveness of the registration statement or the
initiation of any proceedings for that purpose;
(C) of the receipt by the Corporation of any qualification of the
Restricted Shares for sale under the securities or "Blue Sky" laws of
any jurisdiction or the initiation or threatening of any proceeding
for such purpose; and
(D) of the existence of any fact which results in the
registration statement, the prospectus or any document incorporated
therein by reference containing an untrue statement of material fact
or omitting to state a material fact required to be stated therein or
necessary to make the statements therein not misleading.
(g) make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of the registration statement at the earliest
possible moment; and
(h) use its best efforts to cause all Restricted Shares covered by the
registration statement to be listed on each securities exchange on which
the Corporation's Common Stock is listed, if any.
7. Underwritten Offerings. [Intentionally Omitted].
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8. Preparation; Reasonable Investigation. In connection with the
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preparation and filing of the registration statement contemplated by Section 5
hereof, the Corporation will give the holders of Restricted Shares on whose
behalf such Restricted Shares are to be so registered and their respective
counsel and accountants the opportunity to participate in the preparation of
such registration statement, each prospectus included therein or filed with the
Commission, each document incorporated by reference therein and each amendment
thereof or supplement thereto, and will give each of them such opportunities to
discuss the business of the Corporation with its officers as shall be necessary,
in the opinion of such holders or their respective counsel, to conduct a
reasonable investigation within the meaning of the Securities Act.
9. Expenses. All expenses incurred by the Corporation in complying with
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Sections 5 and 6 hereof, including, without limitation, all registration and
filing fees, fees and expenses of complying with securities and blue sky laws,
printing expenses and fees and disbursements of both counsel and the independent
certified public accountants of the Corporation shall be paid by the
Corporation; provided, however, that all underwriting discounts and selling
commissions and stock transfer taxes applicable to the Restricted Shares covered
by the registration effected pursuant to Section 5 hereof shall be borne by the
seller or sellers thereof, in proportion to the number of Restricted Shares sold
by such seller or sellers shall be borne by such holders.
10. Indemnification.
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(a) In the event of any registration of any Restricted Shares under
the Securities Act pursuant to this Schedule or registration or qualification of
any Restricted Shares pursuant to Section 6(c) hereof, the Corporation shall
indemnify and hold harmless the seller of such shares, each underwriter of such
shares, if any, each broker or any other person acting on behalf of such seller
and each other person, if any, who controls any of the foregoing persons, within
the meaning of the Securities Act, against any losses, claims, damages or
liabilities, joint or several, to which any of the foregoing persons may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any registration statement under which such Restricted Shares were
registered under the Securities Act, any preliminary prospectus or final
prospectus contained therein, any document incorporated by reference therein or
any amendment or supplement thereto, or any document prepared and/or furnished
by the Corporation incident to the registration or qualification of any
Restricted Shares pursuant to Section 6(d) hereof, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading
or, with respect to any prospectus, necessary to make the statements therein in
light of the circumstances under which they were made, not misleading, or any
violation by the Corporation of the Securities Act or state securities or blue
sky laws applicable to the Corporation and relating to action or inaction
required of the Corporation in connection with such registration or
qualification under such state securities or blue sky laws; and shall reimburse
such seller, such underwriter, broker or other person acting on behalf of such
seller and each such controlling person for any legal or any other expenses
reasonably incurred by any of them in connection with investigating or defending
any such loss, claim, damage, liability or action; provided, however, that the
Corporation shall not be liable in any such case to the extent that such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in said
registration statement, said preliminary prospectus or said prospectus or said
amendment or supplement or any document incident to the registration or
qualification of any Restricted Shares pursuant to Section 6(d) hereof in
reliance upon and in conformity with written information furnished to the
Corporation through an instrument duly executed by such seller or such
underwriter specifically for use in the preparation thereof.
(b) Before Restricted Shares held by any prospective seller shall be
included in any registration pursuant to this Schedule, such prospective seller
and any underwriter acting on its behalf shall have agreed to indemnify and hold
harmless (in the same manner and to the same extent as set forth in the
preceding paragraph (a) of this Section 10) the Corporation, each director of
the Corporation, each officer of the Corporation who shall sign such
registration statement and any person who controls the Corporation within the
meaning of the Securities Act, with respect to any untrue statement or omission
from such registration statement, any preliminary prospectus or
final prospectus contained therein, or any amendment or supplement thereto, if
such untrue statement or omission was made in reliance upon and in conformity
with written information furnished to the Corporation through an instrument duly
executed by such seller or such underwriter specifically for use in the
preparation of such registration statement, preliminary prospectus, final
prospectus or amendment or supplement; provided, however, that the maximum
amount of liability in respect of such indemnification shall be limited, in the
case of each prospective seller of Restricted Shares, to an amount equal to the
gross proceeds actually received by such prospective seller from the sale of
Restricted Shares effected pursuant to such registration.
(c) Promptly after receipt by an indemnified party of notice of the
commencement of any actions involving a claim referred to in paragraph (a) or
(b) of this Section 10, such indemnified party will, if a claim in respect
thereof is made against an indemnifying party, give written notice to the latter
of the commencement of such action. In case any such action is brought against
an indemnified party, the indemnifying party will be entitled to participate in
and to assume the defense thereof, jointly with any other indemnifying party
similarly notified to the extent that it may wish, with counsel reasonably
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be responsible for any legal or other
expenses subsequently incurred by the indemnified party in connection with the
defense thereof; provided, however, that if any indemnified party shall have
reasonably concluded that there may be one or more legal defenses available to
such indemnified party which are differed from or additional to those available
to the indemnifying party, or that such claim or litigation involves or could
have an effect upon matters beyond the scope of the indemnity agreement provided
in this Section 10, the indemnifying party shall reimburse such indemnified
party for that portion of the fees and expenses of any counsel retained by the
indemnified party which are reasonably related to the matters covered by the
indemnity agreement provided in this Section 10.
(d) The failure to notify an indemnifying party promptly of the
commencement of any such action, if materially prejudicial to the ability of the
indemnifying party to defend such action, shall relieve such indemnifying party
of any liability to the indemnified party under this Section 10, but the
omission so to notify the indemnifying party will not relieve the indemnifying
party of any liability that it may have to any indemnified party otherwise than
under this Schedule.
The indemnifying party shall not make any settlement of any claims
indemnified against hereunder without the written consent of the indemnified
party or parties, which consent shall not be unreasonably withheld.
(e) If the indemnification provided for in Section 10 is unavailable
to or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, each indemnifying party shall
contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is appropriate
to reflect the relative benefits received from the offering by the Corporation,
the holders of Restricted Shares and any underwriter; but if such allocation is
not permitted by applicable law or if the indemnified party failed to give the
notice required under paragraph (c) above, each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportions as are appropriate to reflect not only such relative benefits but
also relative fault of the Corporation, the holders of Restricted Securities and
any underwriter in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities (or actions in respect thereof), as
well as any other relevant equitable considerations. The parties agree that the
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged untrue statement of a material fact relates to information supplied by
the Corporation, the holders of Restricted Shares or underwriter and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission; that it would not be just and
equitable if contribution pursuant to such agreement were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable consideration referred to above in this paragraph (e); that the
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof), referred to
above in this paragraph (e) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim; that the holders of
Restricted Shares shall not be required to contribute any amount in excess of
the dollar amount by which the proceeds to be received by such holders from the
sale of their respective Restricted Shares exceeds the amount of damages such
holders of Restricted Shares would have otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission, and
no underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the shares or securities underwritten
by it and distributed to the public were offered to the public exceeds the
amount of any damages which such underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission; and that no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
11. Removal of Legends, Etc. Notwithstanding anything to the contrary
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herein, the restrictions imposed by this Schedule upon the transferability of
any Restricted Shares shall cease and terminate when any such Restricted Shares
are registered under the Act as contemplated by Section 5 hereof. Whenever the
restrictions imposed by this Schedule shall terminate, as herein provided, the
holder of any Restricted Shares as to which such restriction has terminated
shall be entitled to receive from the Corporation, without expense, a new
certificate not bearing the restrictive legend referred to in Section 3 hereof
and not containing any other reference to the restrictions imposed by this
Schedule.