THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED FOR SALE, SOLD
OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
FILED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER SUCH ACT.
VOID AFTER 5:00 P.M., NEW YORK TIME, ON NOVEMBER 26, 2002 OR IF NOT A BUSINESS
DAY, AS DEFINED HEREIN, AT 5:00 P.M., NEW YORK TIME, ON THE NEXT FOLLOWING
BUSINESS DAY.
WARRANT TO PURCHASE
25,000 SHARES OF COMMON STOCK
NO. 1
WARRANT TO PURCHASE
COMMON STOCK
OF
UNIDIGITAL INC.
TRANSFER RESTRICTED -- SEE SECTION 5.02
This certifies that, for good and valuable consideration of
$250, CIBC Oppenheimer Corp. and its registered, permitted assigns
(collectively, the "Warrantholder"), is entitled to purchase from Unidigital
Inc., a Delaware corporation (the "Company"), subject to the terms and
conditions hereof, at any time on or after 9:00 A.M., New York time, on November
26, 1998, and before 5:00 P.M., New York time, on November 26, 2002 (or, if such
day is not a Business Day, at or before 5:00 P.M., New York time, on the next
following Business Day), the number of fully paid and non-assessable shares of
Common Stock stated above at the Exercise Price. The Exercise Price and the
number of shares purchasable hereunder are subject to adjustment from time to
time as provided in Article III hereof.
ARTICLE I
Section 1.01: Definition of Terms: As used in this Warrant, the
following capitalized terms shall have the following respective meanings:
(a) Business Day: A day other than a Saturday, Sunday or
other day on which banks in the State of New York are authorized by law to
remain closed.
(b) Common Stock: ommon Stock, $.01 par value per share, of
the Company.
(c) Common Stock Equivalents: Securities that are
convertible into or exercisable for shares of Common Stock.
(d) Demand Registration: See Section 6.02.
(e) Exchange Act: The Securities Exchange Act of 1934, as
amended.
(f) Exercise Price: $8.25 per Warrant Share, as such price
may be adjusted from time to time pursuant to Article III hereof.
(g) Expiration Date: 5:00 P.M., New York time, on November
26, 2002 or if such day is not a Business Day, the next succeeding day which is
a Business Day.
(h) 25% Holders: At any time as to which a Demand
Registration is requested, the Holder and/or the holders of any other Warrants
and/or the holders of Warrant Shares who have the right to acquire or hold, as
the case may be, not less than 25% of the combined total of Warrant Shares
issuable and Warrant Shares outstanding at the time such Demand Registration is
requested.
(i) Holder: A Holder of Registrable Securities.
(j) NASD: National Association of Securities Dealers, Inc.,
and NASDAQ: NASD Automatic Quotation System.
(k) Person: An individual, partnership, joint venture,
corporation, trust, unincorporated organization or government or any department
or agency thereof.
(l) Piggyback Registration: See Section 6.01.
(m) Prospectus: Any prospectus included in any Registration
Statement, as amended or supplemented by any prospectus supplement, with respect
to the terms of the offering of any portion of the Registrable Securities
covered by such Registration Statement and all other amendments and supplements
to the Prospectus, including post-effective amendments and all material
incorporated by reference in such Prospectus.
(n) Public Offerings: A public offering of any of the
Company's equity or debt securities pursuant to a registration statement under
the Securities Act.
(o) Registration Expenses: Any and all expenses incurred in
connection with any registration or action incident to performance of or
compliance by the Company with Article VI, including, without limitation, (i)
all SEC, national securities exchange and NASD registration and filing fees; all
listing fees and all transfer agent fees; (ii) all fees and expenses of
complying with state securities or blue sky laws (including the fees and
disbursements of counsel for the underwriters in connection with blue sky
qualifications of the Registrable Securities; (iii) all printing, mailing,
messenger and delivery expenses and (iv) all fees and disbursements of counsel
for the Company and of its accountants, including the expenses of any special
audits and/or "cold comfort" letters required by or incident to such performance
and compliance, but excluding underwriting discounts and commissions, brokerage
fees and transfer taxes, if any, and fees of counsel or accountants retained by
the holders of Registrable Securities to advise them in their capacity as
Holders of Registrable Securities.
(p) Registrable Securities: Any Warrant Shares issued to
CIBC Oppenheimer Corp. and/or its designees or transferees as permitted under
Section 5.02 and/or other securities that may be or are issued by the Company
upon exercise of this Warrant, including those which may thereafter be issued by
the Company in respect of any such securities by means of any stock splits,
stock dividends, recapitalizations, reclassifications or the like, and as
adjusted pursuant to Article III hereof.
2
(q) Registration Statement: Any registration statement of
the Company filed or to be filed with the SEC which covers any of the
Registrable Securities pursuant to the provisions of this Agreement, including
all amendments (including post-effective amendments) and supplements thereto,
all exhibits thereto and all material incorporated therein by reference.
(r) SEC: The Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act or the
Exchange Act.
(s) Securities Act: The Securities Act of 1933, as amended.
(t) Transfer: See Section 5.02.
(u) Warrants: This Warrant, all other warrants issued on
the date hereof and all other warrants that may be issued in its or their place
(together evidencing the right to purchase an aggregate of 25,000 shares of
Common Stock), originally issued as set forth in the definition of Registrable
Securities.
(v) Warrantholder: The person(s) or entity(ies) to whom
this Warrant is originally issued, or any successor in interest thereto, or any
assignee or transferee thereof, in whose name this Warrant is registered upon
the books to be maintained by the Company for that purpose.
(w) Warrant Shares: Common Stock, Common Stock Equivalents
and other securities purchased or purchasable upon exercise of the Warrants.
ARTICLE II
Duration and Exercise of Warrant
Section 2.01: Duration of Warrant. Subject to the limitations specified
in ss.2.02.(a)(ii) regarding a Cashless Exercise, the Warrantholder may exercise
this Warrant at any time and from time to time after 9:00 A.M., New York time,
on November 26, 1998, and before 5:00 P.M., New York time, on the Expiration
Date. If this Warrant is not exercised on or prior to the Expiration Date, it
shall become void, and all rights hereunder shall thereupon cease.
Section 2.02.: Exercise of Warrant.
(a) The Warrantholder may exercise this Warrant, in whole
or in part, as follows:
(i) By presentation and surrender of this Warrant
to the Company at its principal executive offices or at the office of its
stock transfer agent, if any, with the Subscription Form annexed hereto
duly executed and accompanied by payment of the full Exercise Price for
each Warrant Share to be purchased; or
(ii) By presentation and surrender of this Warrant to
the Company at its principal executive offices with a Cashless Exercise
Form annexed hereto duly executed (a "Cashless Exercise"). In the event of
a Cashless Exercise, the Warrantholder shall
3
exchange its warrant for that number of shares of Common Stock determined
by multiplying the number of Warrant Shares by a fraction, the numerator of
which shall be the amount by which the then current market price per share
of Common Stock exceeds the Exercise Price, and the denominator of which
shall be the then current market price per share of Common Stock. For
purposes of any computation under this Section 2.02(a)(ii), the then
current market price per share of Common Stock at any date shall be deemed
to be the average closing price of the Common Stock for the five business
days prior to the date of the Cashless Exercise or, in case no such
reported sales take place on such day, the average of the last reported bid
and asked prices of the Common Stock on such day, in either case on the
principal national securities exchange on which the Common Stock is
admitted to trading or listed, or if not listed or admitted to trading on
any such exchange, the representative closing bid price of the Common Stock
as reported by NASDAQ, or other similar organization if NASDAQ is no longer
reporting such information, or if not so available, the fair market price
of the Common Stock as determined by the Board of Directors.
(b) Upon receipt of this Warrant, in the case of Section
2.02 (a) (i), with the Subscription Form duly executed and accompanied by
payment of the aggregate Exercise Price for the Warrant Shares for which this
Warrant is then being exercised, or, in the case of Section 2.02 (a) (ii), with
the Cashless Exercise Form duly executed, the Company shall cause to be issued
certificates for the total number of whole shares of Common Stock for which this
Warrant is being exercised (adjusted to reflect the effect of the anti-dilution
provisions contained in Article III hereof, if any, and as provided in Section
2.04 hereof) in such denominations as are requested for delivery to the
Warrantholder, and the Company shall thereupon deliver such certificates to the
Warrantholder. The Warrantholder 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 Company shall then be closed or that certificates
representing such shares of Common Stock shall not then be actually delivered to
the Warrantholder. If at the time this Warrant is exercised, a Registration
Statement is not in effect to register under the Securities Act the Warrant
Shares issuable upon exercise of this Warrant, the Company may require the
Warrantholder to make such representations, and may place such legends on
certificates representing the Warrant Shares, as may be reasonably required in
the opinion of counsel to the Company to permit the Warrant Shares to be issued
without such registration.
(c) In case the Warrantholder shall exercise this Warrant
with respect to less than all of the Warrant Shares that may be purchased under
this Warrant, the Company shall execute a new warrant in the form of this
Warrant for the balance of such Warrant Shares and deliver such new warrant to
the Warrantholder.
(d) The Company shall pay any and all stock transfer and
similar taxes which may be payable in respect of the issue of this Warrant or in
respect of the issue of any Warrant Shares.
Section 2.03: Reservation of Shares. The Company hereby agrees that at
all times there shall be reserved for issuance and delivery upon exercise of
this Warrant such number of shares of Common Stock or other shares of capital
stock of the Company from time to time issuable upon exercise of this Warrant.
All such shares shall be duly authorized, and when issued upon such exercise,
shall be validly issued, fully paid and nonassessable, free and clear of all
liens, security interests, charges and other encumbrances or
4
restrictions on sale and free and clear of all preemptive rights (except the
restrictions imposed by the legend appearing at the top of Page 1 of this
Warrant).
Section 2.04: Fractional Shares. The Company shall not be required to
issue any fraction of a share of its capital stock in connection with the
exercise of this Warrant, and in any case where the Warrantholder would, except
for the provisions of this Section 2.04, be entitled under the terms of this
Warrant to receive a fraction of a share upon the exercise of this Warrant, the
Company shall, upon the exercise of this Warrant and tender of the Exercise
Price (as adjusted to cover the balance of the share), issue the larger number
of whole shares purchasable upon exercise of this Warrant. The Company shall not
be required to make any cash or other adjustment in respect of such fraction of
a share to which the Warrantholder would otherwise be entitled.
Section 2.05: Listing. Prior to the issuance of any shares of Common
Stock upon exercise of this Warrant, the Company shall secure the listing of
such shares of Common Stock upon each national securities exchange or automated
quotation system, if any, upon which shares of Common Stock are then listed
(subject to official notice of issuance upon exercise of this Warrant) and shall
maintain, so long as any other shares of Common Stock shall so be listed, such
listing of all shares of Common Stock from time to time issuable upon the
exercise of this Warrant; and the Company shall so list on each national
securities exchange or automated quotation system, and shall maintain such
listing of, any other shares of capital stock of the Company issuable upon the
exercise of this Warrant if and so long as any shares of the same class shall be
listed on such national securities exchange or automated quotation system.
ARTICLE III
Adjustment of Shares of Common Stock
Purchasable and of Exercise Price
The Exercise Price and the number and kind of Warrant Shares
shall be subject to adjustment from time to time upon the happening of certain
events as provided in this Article III.
Section 3.01: Mechanical Adjustments. (a) If at any time prior to the
exercise of this Warrant in full, the Company shall (i) declare a dividend or
make a distribution on the Common Stock payable in shares of its capital stock
(whether shares of Common Stock or of capital stock of any other class); (ii)
subdivide, reclassify or recapitalize outstanding Common Stock into a greater
number of shares; (iii) combine, reclassify or recapitalize its outstanding
Common Stock into a smaller number of shares; or (iv) issue any shares of its
capital stock by reclassification of its Common Stock (including any such
reclassification in connection with a consolidation or a merger in which the
Company is the continuing corporation), the Exercise Price in effect at the time
of the record date of such dividend, distribution, subdivision, combination,
reclassification or recapitalization shall be adjusted so that the Warrantholder
shall be entitled to receive the aggregate number and kind of shares which, if
this Warrant had been exercised in full immediately prior to such event, he
would have owned upon such exercise and been entitled to receive by virtue of
such dividend, distribution, subdivision, combination, reclassification or
recapitalization. Any adjustment required by this paragraph 3.01(a) shall be
made successively immediately after the record date, in the case of a dividend
or distribution, or the effective date, in the case of a subdivision,
combination, reclassification or recapitalization to allow the purchase of such
aggregate number and kind of shares.
5
(b) If at any time after November 26, 1997 and prior to the
exercise of this Warrant in full, the Company shall (i) issue or sell any Common
Stock or Common Stock Equivalents without consideration or for consideration per
share (in cash, property or other assets) less than the current market price per
share on the date of such issuance or sale as defined in Section 3.01 (f) (other
than the issuance of any Common Stock or Common Stock Equivalents pursuant to
the acquisition of Kwik International Color, Ltd., any options, warrants, rights
or other agreements in effect prior to November 26, 1997, or any options,
warrants or rights issued pursuant to any employee benefit plans approved by the
Board or shareholders) (ii) fix a record date for the issuance of subscription
rights, options or warrants to all holders of Common Stock entitling them to
subscribe for or purchase Common Stock (or Common Stock Equivalents) at a price
(or having an exercise or conversion price per share) less than the current
market price of the Common Stock (as determined pursuant to Section 3.01 (f)) on
the record date described below, the Exercise Price shall be adjusted so that
the Exercise Price shall equal the price determined by multiplying the Exercise
Price in effect immediately prior to the date of such sale or issuance (which
date in the event of distribution to shareholders shall be deemed to be the
record date set by the Company to determine shareholders entitled to participate
in such distribution) by a fraction, the numerator of which shall be (i) the
number of shares of Common Stock outstanding on the date of such sale or
issuance, plus (ii) the number of additional shares of Common Stock which the
aggregate consideration received by the Company upon such issuance or sale (plus
the aggregate of any additional amount to be received by the Company upon the
exercise of such subscription rights, options or warrants) would purchase at
such current market price per share of the Common Stock; and the denominator of
which shall be (i) the number of shares of Common Stock outstanding on the date
of such issuance or sale, plus (ii) the number of additional shares of Common
Stock offered for subscription or purchase (or into which the Common Stock
Equivalents so offered are exercisable or convertible). Any adjustments required
by this paragraph 3.01 (b) shall be made immediately after such issuance or sale
or record date, as the case may be. Such adjustments shall be made successively
whenever such event shall occur. To the extent that shares of Common Stock (or
Common Stock Equivalents) are not delivered in connection with such subscription
rights, options or warrants, the Exercise Price shall be readjusted to the
Exercise Price which would then be in effect had the adjustments made upon the
issuance of such rights, options or warrants been made upon the basis of
delivery of only the number of shares of Common Stock (or Common Stock
Equivalents) actually delivered.
(c) If at any time prior to the exercise of this Warrant in
full, the Company shall fix a record date for the issuance or making a
distribution to all holders of Common Stock (including any such distribution to
be made in connection with a consolidation or merger in which the Company is to
be the continuing corporation) of evidences of its indebtedness, any other
securities of the Company or any cash, property or other assets (excluding a
combination, reclassification or recapitalization referred to in Section 3.01
(a), regular cash dividends or cash distributions paid out of net profits
legally available therefor and in the ordinary course of business and
subscription rights, options or warrants for Common Stock or Common Stock
Equivalents (excluding those referred to in Section 3.01 (b)) (any such
nonexcluded event being herein called a "Special Dividend"), (i) the Exercise
Price shall be decreased immediately after the record date for such Special
Dividend to a price determined by multiplying the Exercise Price then in effect
by a fraction, the numerator of which shall be the then current market price of
the Common Stock (as defined in Section 3.01 (f)) on such record date less the
fair market value (as determined by the Company's Board of Directors) of the
evidences of indebtedness, securities or property, or other assets issued or
distributed in such Special Dividend applicable to one share of Common Stock or
of such subscription rights, options or warrants applicable to one share of
Common Stock and the denominator of which shall be such then current market
price per share of Common Stock (as so determined) and (ii) the number of
6
shares of Common Stock subject to purchase upon exercise of this Warrant shall
be increased to a number determined by multiplying the number of shares of
Common Stock subject to purchase immediately before such Special Dividend by a
fraction, the numerator of which shall be the Exercise Price in effect
immediately before such Special Dividend and the denominator of which shall be
the Exercise Price in effect immediately after such Special Dividend. Any
adjustment required by this paragraph 3.01 (c) shall be made successively
whenever such a record date is fixed and in the event that such distribution is
not so made, the Exercise Price shall again be adjusted to be the Exercise Price
that was in effect immediately prior to such record date.
(d) If at any time prior to the exercise of this Warrant in
full, the Company shall make a distribution to all holders of the Common Stock
of stock of a subsidiary or securities convertible into or exercisable for such
stock, then in lieu of an adjustment in the Exercise Price or the number of
Warrant Shares purchasable upon the exercise of this warrant, each
Warrantholder, upon the exercise hereof at any time after such distribution,
shall be entitled to receive from the Company, such subsidiary or both, as the
Company shall determine, the stock or other securities to which such
Warrantholder would have been entitled if such Warrantholder had exercised this
Warrant immediately prior thereto, all subject to further adjustment as provided
in this Article III, and the Company shall reserve, for the life of the Warrant,
such securities of such subsidiary or other corporation; provided, however, that
no adjustment in respect of dividends or interest on such stock or other
securities shall be made during the term of this Warrant or upon its exercise.
(e) Whenever the Exercise Price payable upon exercise of
each Warrant is adjusted pursuant to one or more of paragraphs (a), (b) and (c)
of this Section 3.01, the Warrant Shares shall simultaneously be adjusted by
multiplying the number of Warrant Shares initially issuable upon exercise of
each Warrant by the Exercise Price in effect on the date of such adjustment and
dividing the product so obtained by the Exercise Price, as adjusted.
(f) For the purpose of any computation under this Section
3.01, the current market price per share of Common Stock at any date shall be
deemed to be the average of the daily closing prices for 20 consecutive trading
days commencing 30 trading days before such date. The closing price for each day
shall be the last sale price regular way or, in case no such reported sales take
place on such day, the average of the last reported bid and asked prices regular
way, in either case on the principal national securities exchange on which the
Common Stock is admitted to trading or listed, or if not listed or admitted to
trading on any such exchange, the representative closing bid price as reported
by NASDAQ, or other similar organization if NASDAQ is no longer reporting such
information, or if not so available, the fair market price as determined by the
Board of Directors of the Company.
(g) No adjustment in the Exercise Price shall be required
unless such adjustment would require an increase or decrease of at least ten
cents ($.10) in such price; provided, however, that any adjustments which by
reason of this paragraph (g) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Section 3.01 shall be made to the nearest cent or to the nearest
one-hundredth of a share, as the case may be. Notwithstanding anything in this
Section 3.01 to the contrary, the Exercise Price shall not be reduced to less
than the then existing par value of the Common Stock as a result of any
adjustment made hereunder.
(h) In the event that at any time, as a result of any
adjustment made pursuant to Section 3.01(a), the Warrantholder thereafter shall
become entitled to receive any shares of the Company other
7
than Common Stock, thereafter the number of such other shares so receivable upon
exercise of any Warrant shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the Common Stock contained in Section 3.01(a).
(i) In the case of an issue of additional Common Stock or
Common Stock Equivalents for cash, the consideration received by the Company
therefor, after deducting therefrom any discount or commission or other expenses
paid by the Company for any underwriting of, or otherwise in connection with,
the issuance thereof, shall be deemed to be the amount received by the Company
therefor. The term "issue" shall include the sale or other disposition of shares
held by or on account of the Company or in the treasury of the Company but until
so sold or otherwise disposed of such shares shall not be deemed outstanding.
Section 3.02: Notice of Adjustment. Whenever the number of Warrant
Shares or the Exercise Price is adjusted as herein provided, the Company shall
prepare and deliver forthwith to the Warrantholder a certificate signed by its
President, and by any Vice President, Treasurer or Secretary, setting forth the
adjusted number of shares purchasable upon the exercise of this Warrant and the
Exercise Price of such shares after such adjustment, a brief statement of the
facts requiring such adjustment and the computation by which adjustment was
made.
Section 3.03: No Adjustment for Dividends. Except as provided in
Section 3.01 of this Agreement, no adjustment in respect of any cash dividends
paid by the Company shall be made during the term of this Warrant or upon the
exercise of this Warrant.
Section 3.04: Preservation of Purchase Rights in Certain Transactions.
In case of any reclassification, capital reorganization or other change of
outstanding shares of Common Stock (other than a subdivision or a combination of
the outstanding Common Stock and other than a change in the par value of the
Common Stock or in case of any consolidation or merger of the Company with or
into another corporation (other than a merger with a subsidiary in which the
Company is the continuing corporation and said merger does not result in any
reclassification, capital reorganization or other change of outstanding shares
of Common Stock of the class issuable upon exercise of this Warrant)) or in case
of any sale, lease, transfer or conveyance to another corporation of the
property and assets of the Company as an entirety or substantially as an
entirety, the Company shall, as a condition precedent to such transaction, cause
such successor or purchasing corporation, as the case may be, to execute with
the Warrantholder an agreement granting the Warrantholder the right thereafter,
upon payment of the Exercise Price in effect immediately prior to such action,
to receive upon exercise of this Warrant the kind and amount of shares and other
securities and property which he would have owned or have been entitled to
receive after the happening of such reclassification, change, consolidation,
merger, sale or conveyance had this Warrant been exercised immediately prior to
such action. Such agreement shall provide for adjustments in respect of such
shares of stock and other securities and property, which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Article
III. In the event that in connection with any such reclassification, capital
reorganization, change, consolidation, merger, sale or conveyance, additional
shares of Common Stock shall be issued in exchange, conversion, substitution or
payment, in whole or in part, for, or of, a security of the Company other than
Common Stock, any such issue shall be treated as an issue of Common Stock
covered by the provisions of Article III. The provisions of this Section 3.04
shall similarly apply to successive reclassification, capital reorganizations,
consolidations, mergers, sales or conveyances.
8
Section 3.05: Form of Warrant After Adjustments. The form of this
Warrant need not be changed because of any adjustments in the Exercise Price or
the number or kind of the Warrant Shares, and Warrants theretofore or thereafter
issued may continue to express the same price and number and kind of shares as
are stated in this Warrant, as initially issued.
Section 3.06: Treatment of Warrantholder. Prior to due presentment for
registration of transfer of this Warrant, the Company may deem and treat the
Warrantholder as the absolute owner of this Warrant (notwithstanding any
notation of ownership or other writing hereon) for all purposes and shall not be
affected by any notice to the contrary.
ARTICLE IV
Other Provisions Relating
to Rights of Warrantholder
Section 4.01: No Rights as Shareholders; Notice to Warrantholders.
Nothing contained in this Warrant shall be construed as conferring upon the
Warrantholder or his or its transferees the right to vote or to receive
dividends or to consent to or receive notice as a shareholder in respect of any
meeting of shareholders for the election of directors of the Company or any
other matter, or any other rights whatsoever as shareholders of the Company. The
Company shall give notice to the Warrantholder by registered mail if at any time
prior to the expiration or exercise in full of the Warrants, any of the
following events shall occur:
(a) the Company shall authorize the payment of any dividend
upon shares of Common Stock payable in any securities or authorize the making of
any distribution (other than a cash dividend subject to the parenthetical set
forth in Section 3.01(c)) to all holders of Common Stock;
(b) the Company shall authorize the issuance to all holders
of Common Stock of any additional shares of Common Stock or Common Stock
Equivalents or of rights, options or warrants to subscribe for or purchase
Common Stock or Common Stock Equivalents or of any other subscription rights,
options or warrants;
(c) a dissolution, liquidation or winding up of the Company
(other than in connection with a consolidation, merger, or sale or conveyance of
the property of the Company as an entirety or substantially as an entirety); or
(d) a capital reorganization or reclassification of the
Common Stock (other than a subdivision or combination of the outstanding Common
Stock and other than a change in the par value of the Common Stock) or any
consolidation or merger of the Company with or into another corporation (other
than a consolidation or merger in which the Company is the continuing
corporation and that does not result in any reclassification or change of Common
Stock outstanding) or in the case of any sale or conveyance to another
corporation of the property of the Company as an entirety or substantially as an
entirety.
Such giving of notice shall be initiated (i) at least 10 Business Days prior to
the date fixed as a record date or effective date or the date of closing of the
Company's stock transfer books for the determination of the shareholders
entitled to such dividend, distribution or subscription rights, or for the
determination of the shareholders entitled to vote on such proposed merger,
consolidation, sale, conveyance, dissolution,
9
liquidation or winding up. Such notice shall specify such record date or the
date of closing the stock transfer books, as the case may be. Failure to provide
such notice shall not affect the validity of any action taken in connection with
such dividend, distribution or subscription rights, or proposed merger,
consolidation, sale, conveyance, dissolution, liquidation or winding up.
Section 4.02: Lost, Stolen, Mutilated or Destroyed Warrants. If this
Warrant is lost, stolen, mutilated or destroyed, the Company may, on such terms
as to indemnity or otherwise as it may in its discretion impose (which shall, in
the case of a mutilated Warrant, include the surrender thereof), issue a new
Warrant of like denomination and tenor as and in substitution for this Warrant.
ARTICLE V
Split-Up, Combination
Exchange and Transfer of Warrants
Section 5.01: Split-Up, Combination, Exchange and Transfer of Warrants.
Subject to the provisions of Section 5.02 hereof, this Warrant may be split up,
combined or exchanged for another Warrant or Warrants containing the same terms
to purchase a like aggregate number of Warrant Shares. If the Warrantholder
desires to split up, combine or exchange Warrants, he or it shall make such
request in writing delivered to the Company and shall surrender to the Company
any Warrants to be so split up, combined or exchanged. Upon any such surrender
for a split up, combination or exchange, the Company shall execute and deliver
to the person entitled thereto a Warrant or Warrants, as the case may be, as so
requested. The Company shall not be required to effect any split up, combination
or exchange which will result in the issuance of a Warrant entitling the
Warrantholder to purchase upon exercise a fraction of a share of Common Stock or
a fractional Warrant. The Company may require such Warrantholder to pay a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any split up, combination or exchange of Warrants.
Section 5.02: Restrictions on Transfer. Neither this Warrant nor the
Warrant Shares may be disposed of or encumbered (any such action, a "Transfer"),
except (i) to CIBC Oppenheimer Corp., any successor to the business of such
company, or any officer of such company, or (ii) to any underwriter in
connection with a Public Offering of the Common Stock, provided (as to (ii))
that this Warrant is exercised upon such Transfer and the shares of Common Stock
issued upon such exercise are sold by such underwriter as part of such Public
Offering and, as to both (i) and (ii), only in accordance with and subject to
the provisions of the Securities Act and the rules and regulations promulgated
thereunder. If at the time of a Transfer, a Registration Statement is not in
effect to register this Warrant or the Warrant Shares, the Company may require
the Warrantholder to make such representations, and may place such legends on
certificates representing this Warrant, as may be reasonably required in the
opinion of counsel to the Company to permit a Transfer without such
registration.
10
ARTICLE VI
Registration Under the Securities Act of 1933
Section 6.01: Piggyback Registration.
(a) Right to Include Registrable Securities. If at any time
or from time to time after November 26, 1998 and prior to the Expiration Date,
the Company proposes to register any of its securities under the Securities Act
on any form for the registration of securities under such Act, whether or not
for its own account (other than by a registration statement on Form S-8 or other
form which does not include substantially the same information as would be
required in a form for the general registration of securities or would not be
available for the Registrable Securities) (a "Piggyback Registration"), it shall
as expeditiously as possible give written notice to all Holders of its intention
to do so and of such Holders' rights under this Section 6.01. Such rights are
referred to hereinafter as "Piggyback Registration Rights." Upon the written
request of any such Holder made within 20 days after receipt of any such notice
(which request shall specify the Registrable Securities intended to be disposed
of by such Holder), the Company shall include in the Registration Statement the
Registrable Securities which the Company has been so requested to register by
the Holders thereof and the Company shall keep such registration statement in
effect and maintain compliance with each Federal and state law or regulation for
the period necessary for such Holder to effect the proposed sale or other
disposition (but in no event for a period greater than 120 days).
(b) Withdrawal of Piggyback Registration by Company. If, at
any time after giving written notice of its intention to register any securities
in a Piggyback Registration but prior to the effective date of the related
Registration Statement, the Company shall determine for any reason not to
register such securities, the Company shall give written notice of such
determination to each Holder and, thereupon, shall be relieved of its obligation
to register any Registrable Securities in connection with such Piggyback
Registration. All best efforts obligations of the Company pursuant to Section
6.04 shall cease if the Company determines to terminate prior to such effective
date any registration where Registrable Securities are being registered pursuant
to this Section 6.01.
(c) Piggyback Registration of Underwritten Public
Offerings. If a Piggyback Registration involves an offering by or through
underwriters, then, (i) all Holders requesting to have their Registrable
Securities included in the Company's Registration Statement must sell their
Registrable Securities to the underwriters selected by the Company on the same
terms and conditions as apply to other selling shareholders and (ii) any Holder
requesting to have his or its Registrable Securities included in such
Registration Statement may elect in writing, not later than five Business Days
prior to the effectiveness of the Registration Statement filed in connection
with such registration, not to have his or its Registrable Securities so
included in connection with such registration.
(d) Payment of Registration Expenses for Piggyback
Registration. The Company shall pay all Registration Expenses in connection with
each registration of Registrable Securities requested pursuant to a Piggyback
Registration Right contained in this Section 6.01.
(e) Priority in Piggyback Registration. If a Piggyback
Registration involves an offering by or through underwriters, the Company shall
not be required to include Registrable Shares therein if and to the extent the
underwriter managing the offering reasonably believes in good faith and advises
each
11
Holder requesting to have Registrable Securities included in the Company's
Registration Statement that such inclusion would materially adversely affect
such offering; provided that (i) if other selling shareholders who are
employees, officers, directors or other affiliates of the Company have requested
registration of securities in the proposed offering, the Company will reduce or
eliminate such other selling shareholders' securities before any reduction or
elimination of Registrable Securities; (ii) any such reduction of elimination
(after taking into account the effect of clause (i)) shall be pro rata to all
other holders of the securities of the Company exercising "piggyback
registration rights" similar to those set forth herein in proportion to the
respective number of shares they have requested to be registered, and (iii) in
such event, such Holders may delay any offering by them of all Registrable
Shares requested to be included (or that portion of such Registrable Shares
eliminated for such period, not to exceed 60 days, as the managing underwriter
shall request) and the Company shall file such supplements and post-effective
amendments and take such other action necessary under Federal and state law or
regulation as may be necessary to permit such Holders to make their proposed
offering for a period of 90 days following such period of delay.
Section 6.02: Demand Registration.
(a) Request for Registration. If, at any time subsequent to
November 26, 1997 and prior to the Expiration Date, any 51% Holders request that
the Company file a registration statement under the Securities Act, the Company
as soon as practicable shall use its best efforts to file a registration
statement with respect to all Warrant Shares that it has been so requested to
include and obtain the effectiveness thereof, and to take all other action
necessary under any Federal or state law or regulation to permit the Warrant
Shares that are then held and/or that may be acquired upon the exercise of the
Warrants specified in the notices of the Holders or holders thereof to be sold
or otherwise disposed of, and the Company shall maintain such compliance with
each such Federal and state law and regulation for the period necessary for such
Holders or holders to effect the proposed sale or other disposition (but in no
event for more than 120 days); provided, however, the Company shall be entitled
to defer such registration for a period of up to 60 days if and to the extent
that its Board of Directors shall determine that such registration would
interfere with a pending corporate transaction. The Company shall also promptly
give written notice to the Holder and the holders of any other Warrants and/or
the holders of any Warrant Shares who or that have not made a request to the
Company pursuant to the provisions of this subsection (a) of its intention to
effect any required registration or qualification and shall use its best efforts
to effect as expeditiously as possible such registration or qualification of all
other such Warrant Shares that are then held and/or that may be acquired upon
the exercise of the Warrants, the Holder or holders of which have requested such
registration or qualification, within 15 days after such notice has been given
by the Company, as provided in the preceding sentence. The Company shall be
required to effect a registration or qualification pursuant to this subsection
(a) on one occasion only.
(b) Payment of Registration Expenses for Demand
Registration. The Company shall pay all Registration Expenses in connection with
the Demand Registration.
(c) Selection of Underwriters. If any Demand Registration
is requested to be in the form of an underwritten offering, CIBC Oppenheimer
Corp. shall be a managing underwriter and the other managing underwriters (if
any) and the independent pricer required under the rules of the NASD (if any)
shall be selected and obtained by the Holders of a majority of the Warrant
Shares to be registered. Such selection shall be subject to the Company's
consent, which consent shall not be unreasonably withheld. All fees and expenses
(other than Registration Expenses otherwise required to be paid) of any managing
12
underwriter, any co-manager or any independent underwriter or other independent
pricer required under the rules of the NASD shall be paid for by such
underwriters or by the Holders or holders whose shares are being registered. If
CIBC Oppenheimer Corp. should decline to serve as managing underwriter, the
Holders of a majority of the Warrant Shares to be registered may select and
obtain one or more managing underwriters. Such selection shall be subject to the
Company's consent, which consent shall not be unreasonably withheld.
Section 6.03: Buy-outs of Registration Demand. In lieu of carrying out
its obligations to effect a Piggyback Registration or Demand Registration of any
Registrable Securities pursuant to this Article VI, the Company may carry out
such obligation by offering to purchase and purchasing such Registrable
Securities requested to be registered at an amount in cash equal to 95% of the
difference between (a) the last sale price of the Common Stock on the day the
request for registration is made and (b) the Exercise Price in effect on such
day.
Section 6.04: Registration Procedures. If and whenever the Company is
required to use its best efforts to take action pursuant to any Federal or state
law or regulation to permit the sale or other disposition of any Warrant Shares
that are then held or that may be acquired upon exercise of the Warrants, in
order to effect or cause the registration of any Registrable Securities under
the Securities Act as provided in this Article VI, the Company shall, as
expeditiously as practicable:
(a) furnish to each selling Holder of Registrable
Securities and the underwriters, if any, without charge, as many copies of the
Registration Statement, the Prospectus or the Prospectuses (including each
preliminary prospectus) and any amendment or supplement thereto as they may
reasonably request;
(b) enter into such agreements (including an underwriting
agreement) and take all such other actions reasonably required in connection
therewith in order to expedite or facilitate the disposition of such Registrable
Securities and in such connection, if the registration is in connection with an
underwritten offering (i) make such representations and warranties to the
underwriters in such form, substance and scope as are customarily made by
issuers to underwriters in underwritten offerings and confirm the same if and
when requested; (ii) obtain opinions of counsel to the Company and updates
thereof (which counsel and opinions in form, scope and substance shall be
reasonably satisfactory to the underwriters) addressed to the underwriters and
the Holders covering the matters customarily covered in opinions requested in
underwritten offerings and such other matters as may be reasonably requested by
such underwriters; (iii) obtain "cold comfort" letters and updates thereof from
the Company's accountants addressed to the underwriters such letters to be in
customary form and to cover matters of the type customarily covered in "cold
comfort" letters to underwriters and the Holders in connection with underwritten
offerings; (iv) set forth in full, in any underwriting agreement entered into,
the indemnification provisions and procedures of Section 6.05 hereof with
respect to all parties to be indemnified pursuant to said Section; and (v)
deliver such documents and certificates as may be reasonably requested by the
underwriters to evidence compliance with clause (i) above and with any customary
conditions contained in the underwriting agreement or other agreement entered
into by the Company; the above shall be done at each closing under such
underwriting or similar agreement or as and to the extent required thereunder;
(c) make available for inspection by one or more
representatives of the Holders of Registrable Securities being sold, any
underwriter participating in any disposition pursuant to such
13
registration, and any attorney or accountant retained by such Holders or
underwriter, all financial and other records, pertinent corporate documents and
properties of the Company, and cause the Company's officers, directors and
employees to supply all information reasonably requested by any such
representatives in connection with such;
(d) otherwise use its best efforts to comply with all
applicable Federal and state regulations; and take such other action as may be
reasonably necessary or advisable to enable each such Holder and each such
underwriter to consummate the sale or disposition in such jurisdiction or
jurisdiction, in which any such Holder or underwriter shall have requested that
the Registrable Securities be sold.
Except as otherwise provided in this Agreement, the Company shall have sole
control in connection with the preparation, filing, withdrawal, amendment or
supplementing of each Registration Statement, the selection of underwriters, and
the distribution of any preliminary prospectus included in the Registration
Statement, and may include within the coverage thereof additional shares of
Common Stock or other securities for its own account or for the account of one
or more of its other security holders;
Each seller of Registrable Securities as to which any
registration is being effected shall furnish to the Company such information
regarding the distribution of such securities and such other information as may
otherwise be required by the Securities Act to be included in such Registration
Statement.
Section 6.05: Indemnification.
(a) Indemnification by Company. In connection with each
Registration Statement relating to disposition of Registrable Securities, the
Company shall indemnify and hold harmless each Holder and each underwriter of
Registrable Securities and each Person, if any, who controls such Holder or
underwriter (within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act) against any and all losses, claims, damages and
liabilities, joint or several (including any reasonable investigation, legal and
other expenses incurred in connection with, and any amount paid in settlement of
any action, suit or proceeding or any claim asserted), to which they, or any of
them, may become subject under the Securities Act, the Exchange Act or other
Federal or state law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement, Prospectus or preliminary prospectus or any amendment
thereof or supplement thereto, or arise out of or are based upon any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading; provided, however,
that such indemnity shall not inure to the benefit of any Holder or underwriter
(or any Person controlling such Holder or underwriter within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act) on account
of any losses, claims, damages or liabilities arising from the sale of
Registrable Securities if such untrue statement or omission or alleged untrue
statement or omission was made in such Registration Statement, Prospectus or
preliminary prospectus, or such amendment or supplement, in reliance upon and in
conformity with information furnished in writing to the Company by the Holder or
underwriter specifically for use therein. The Company shall also indemnify
selling brokers, dealer managers and similar securities industry professionals
participating in the distribution, their officers and directors and each Person
who controls such Persons (within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act) to the same extent as provided above with
respect to the indemnification of the Holders of Registrable
14
Securities, if requested. This indemnity agreement shall be in addition to any
liability which the Company may otherwise have.
(b) Indemnification by Holder. In connection with each
Registration Statement, each Holder shall indemnify, to the same extent as the
indemnification provided by the Company in Section 6.05(a), the Company, its
directors and each officer who signs the Registration Statement and each Person
who controls the Company (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act) but only insofar as such losses, claims,
damages and liabilities arise out of or are based upon any untrue statement or
omission or alleged untrue statement or omission which was made in the
Registration Statement, the Prospectus or preliminary prospectus or any
amendment thereof or supplement thereto, in reliance upon and in conformity with
information furnished in writing by such Holder to the Company specifically for
use therein. In no event shall the liability of any selling Holder of
Registrable Securities hereunder be greater in amount than the dollar amount of
the gross proceeds received by such Holder upon the sale of the Registrable
Securities giving rise to such indemnification obligation. The Company shall be
entitled to receive indemnities from underwriters, selling brokers, dealer
managers and similar securities industry professionals participating in the
distribution, to the same extent as provided above, with respect to information
so furnished in writing by such Persons specifically for inclusion in any
Prospectus, Registration Statement or preliminary prospectus or any amendment
thereof or supplement thereto.
(c) Conduct of Indemnification Procedure. Any party that
proposes to assert the right to be indemnified hereunder will, promptly after
receipt of notice of commencement of any action, suit or proceeding against such
party in respect of which a claim is to be made against an indemnifying party or
parties under this Section, notify each such indemnifying party of the
commencement of such action, suit or proceeding, enclosing a copy of all papers
served. No indemnification provided for in Section 6.05(a) or 6.05(b) shall be
available to any party who shall fail to give notice as provided in this Section
6.05(c) if the party to whom notice was not given was unaware of the proceeding
to which such notice would have related and was prejudiced by the failure to
give such notice, but the omission so to notify such indemnifying party of any
such action, suit or proceeding shall not relieve it from any liability that it
may have to any indemnified party for contribution or otherwise than under this
Section. In case any such action, suit or proceeding shall be brought against
any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
in, and, to the extent that it shall wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel
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
and the approval by the indemnifying party to such indemnified party of its
election so to assume the defense thereof and the approval by the indemnified
party of such counsel, the indemnifying party shall not be liable to such
indemnified party for any legal or other expenses, except as provided below and
except for the reasonable costs of investigation subsequently incurred by such
indemnified party in connection with the defense thereof. The indemnified party
shall have the right to employ its counsel in any such action, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless (i) the employment of counsel by such indemnified party has been
authorized in writing by the indemnifying parties, (ii) the indemnified party
shall have reasonably concluded that there may be a conflict of interest between
the indemnifying parties and the indemnified party in the conduct of the defense
of such action (in which case the indemnifying parties shall not have the right
to direct the defense of such action on behalf of the indemnified party) or
(iii) the indemnifying parties shall not have employed counsel to assume the
defense of such action within a reasonable time after notice of the commencement
thereof, in each of
15
which cases the fees and expenses of counsel shall be at the expense of the
indemnifying parties. An indemnifying party shall not be liable for any
settlement of any action, suit, proceeding or claim effected without its written
consent.
(d) Contribution. In connection with each Registration
Statement relating to the disposition of Registrable Securities, if the
indemnification provided for in subsection (a) hereof is unavailable to an
indemnified party thereunder in respect of any losses, claims, damages or
liabilities referred to therein, then the Company shall, in lieu of indemnifying
such indemnified party, contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities.
The amount to be contributed by the Company hereunder shall be an amount which
is in the same proportionate relationship to the total amount of such losses,
claims, damages or liabilities as the total net proceeds from the offering
(before deducting expenses) of the Registrable Securities bears to the total
price to the public (including underwriters' discounts) for the offering of the
Registrable Securities covered by such registration.
(e) Specific Performance. The Company and the Holder
acknowledge that remedies at law for the enforcement of this Section 6.05 may be
inadequate and intend that this Section 6.05 shall be specifically enforceable.
ARTICLE VII
Other Matters
Section 7.01: Amendments and Waivers. The provisions of this Warrant,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waiver or consents to departures from the provisions hereof
may not be given unless the Company has obtained the written consent of holders
of at least a majority of the outstanding Registrable Securities. Holders shall
be bound by any consent authorized by this Section whether or not certificates
representing such Registrable Securities have been marked to indicate such
consent.
Section 7.02: Counterparts. This Warrant may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
Section 7.03: Governing Law. This Warrant shall be governed by and
construed in accordance with the laws of the State of New York.
Section 7.04: Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provisions in every other respect and of the
remaining provisions contained herein shall not be affected or impaired thereby.
Section 7.05: Attorneys' Fees. In any action or proceeding brought to
enforce any provisions of this Warrant, or where any provisions hereof or
thereof is validly asserted as a defense, the successful party
16
shall be entitled to recover reasonable attorneys' fees and disbursements in
addition to its costs and expenses and any other available remedy.
Section 7.06: Computations of Consent. Whenever the consent or approval
of Holders of a specified percentage of Registrable Securities is required
hereunder, Registrable Securities held by the Company or its affiliates (other
than the Warrantholder or subsequent Holders if they are deemed to be such
affiliates solely by reason of their holdings of such Registrable Securities)
shall not be counted in determining whether such consent or approval was given
by the Holders of such required percentage.
Section 7.07: Notice. Any notices or certificates by the Company to the
Holder and by the Holder to the Company shall be deemed delivered if in writing
and delivered in person or by registered mail (return receipt requested) to the
Holder addressed to him or her in care of CIBC Oppenheimer Corp., CIBC
Oppenheimer Tower, World Financial Center, New York, New York 10281 or, if the
Holder has designated, by notice in writing to the Company, any other address,
to such other address, and if to the Company, addressed to it at 545 West 45th
Street, New York, NY 10036. The Company may change its address by written notice
to the Holder and the Holder may change his or its address by written notice to
the Company.
IN WITNESS WHEREOF, this Warrant has been duly executed by the
Company under its corporate seal as of the 26th day of November, 1997.
UNIDIGITAL INC.
By:/s/ William E. Dye
-------------------------------------
William E. Dye
President and Chief Executive Officer
Attest:
-------------------------------------
Secretary
ASSIGNMENT
(To be executed only upon assignment of Warrant Certificate)
For value received, hereby sells, assigns
and transfers unto the within Warrant Certificate, together
with all right, title and interest therein, and does hereby irrevocably
constitute and appoint attorney, to transfer said Warrant
Certificate on the books of the within-named Company with respect to the number
of Warrants set forth below, with full power of substitution in the premises:
Name (s) of
Assignees (s) Address No. of Warrants
------------- ------- ---------------
And if said number of Warrants shall not be all the Warrants represented by the
Warrant Certificate, a new Warrant Certificate is to be issued in the name of
said undersigned for the balance remaining of the Warrants represented by said
Warrant Certificate
Dated: , 19
--------------------- ---
----------------------------------------
Note: The above signature should
correspond exactly with the name on
the face of this Warrant Certificate.
SUBSCRIPTION FORM
(To be executed upon exercise of Warrant
pursuant to Section 2.02 (a) (i))
The undersigned hereby irrevocably elects to exercise the
right of purchase represented by the within Warrant Certificate for, and to
purchase thereunder shares of Common Stock, as provided for therein, and
tenders herewith payment of the purchase price in full in the form of cash or a
certified or official bank check in the amount of $ .
Please issue a certificate or certificates for such Common
Stock in the name of:
Name
-----------------------------------------------------
(Please Print Name, Address and Social Security
Number)
Signature
NOTE: The above signature should respond exactly with the name on the first
page of this Warrant Certificate or with the name of the assignee
appearing in the assignment form below.
And if said number of shares shall not be all the shares purchasable
under the within Warrant Certificate, a new Warrant Certificate is to be issued
in the name of said undersigned for the balance remaining of the shares
purchasable thereunder rounded up to the next higher number of shares.
CASHLESS EXERCISE FORM
(To be executed upon exercise of Warrant
pursuant to Section 2.02 (a) (ii))
The undersigned hereby irrevocably elects to Exchange its
Warrant for such shares of Common Stock pursuant to the Cashless Exercise
provisions of the within Warrant Certificate, as provided for in Section 2.02
(a) (ii) of such Warrant Certificate.
Please issue a certificate or certificates for such Common
Stock in the name of:
Name
-----------------------------------------------------
(Please Print Name, Address and Social Security
Number)
Signature
------------------------------------------------
NOTE: The above signature should correspond exactly with the name on the
first page of this Warrant Certificate or with the name of the
assignee appearing in the assignment form below.
And if said number of shares shall not be all the shares exchangeable
or purchasable under the within Warrant Certificate, a new Warrant Certificate
is to be issued in the name of the undersigned for the balance remaining of the
shares purchasable rounded up to the next higher number of shares.