THE TRANSFER OF THIS WARRANT IS SUBJECT TO RESALE RESTRICTIONS
UNDER THE SECURITIES ACT OF 1933, AS AMENDED AND APPLICABLE
STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED
WITHOUT REGISTRATION OR AN EXEMPTION THEREFROM
COMMON STOCK WARRANT
To Purchase 185,000
Shares of Common Stock of
Kurzweil Applied Intelligence, Inc.
April 14, 1997
THIS CERTIFIES THAT, in consideration for the commitment of Lernout &
Hauspie Speech Products USA, Inc. ("L&H USA"), a Delaware corporation and wholly
owned subsidiary of Lernout & Hauspie Speech Products N.V., a Belgian
corporation (said parent corporation being referred to herein as "L&H") to lend
up to $1,500,000 to Kurzweil Applied Intelligence, Inc. (the "Company"), a
Delaware corporation, pursuant to a Loan Agreement (the "Loan Agreement") of
even date herewith between L&H USA and the Company, L&H USA or its registered
assigns is entitled to subscribe for and purchase from the Company at any time
after the date hereof to and including the Expiration Date (as defined in
Section 1 hereof), One Hundred Eighty-Five Thousand (185,000) fully paid and
nonassessable shares of the Company's common stock $.01 par value, at a price of
$3.21 per share of common stock.
This Warrant is subject to the following provisions, terms and conditions:
1. Expiration: Exercise; Transferability.
--------------------------------------
(a) This Warrant may be exercised in whole or in part, at any time
after the date hereof to and including the Expiration Date; provided, however,
that the holder's right to exercise this Warrant shall expire immediately upon
the failure of L&H USA to make the loan as required under the Loan Agreement and
the termination by the Company of that certain Agreement and Plan of Merger
dated the date hereof among the Company, L&H and a wholly owned subsidiary of
L&H (the "Merger Agreement"), pursuant to Section 6.3 of the Merger Agreement;
and provided further that the Holder may not exercise this Warrant for so long
as L&H USA is in default of its obligation to loan funds in accordance with the
terms of the Loan Agreement and such default is continuing. As used herein
"Expiration Date" shall mean April 14, 2002 or the Effective Date (as defined
under the Merger Agreement).
(b) The rights represented by this Warrant may be exercised by the
holder hereof in whole or in part (but not as to a fractional share of stock),
by written notice of exercise
-1-
delivered to the Company ten (10) days prior to the intended date of exercise
and by the surrender of this Warrant (properly endorsed if required) at the
principal office of the Company and upon payment to it by certified or bank
check or wire transfer of the purchase price for such shares.
(c) This Warrant may be transferred without restriction, but subject
to the opinion of counsel as provided by paragraph 7 herein that such transfer
is not in violation of federal or state securities laws.
2. Issuance of Shares.
-------------------
The Company agrees that the shares issuable under this Warrant shall
be and are deemed to be issued to the record holder hereof as of the close of
business on the date on which this Warrant shall have been exercised by
surrender of the Warrant and payment for the shares. Subject to the provisions
of the next succeeding paragraph, certificates for the shares of stock so
purchased shall be delivered to the holder hereof within a reasonable time, not
exceeding ten (10) days after the rights represented by this Warrant shall have
been so exercised and the shares paid for, and, unless this Warrant has expired,
a new Warrant representing the number of shares, if any, with respect to which
this Warrant shall not then have been exercised shall also be delivered to the
holder hereof within such time.
Notwithstanding the foregoing, however, the Company shall not be
required to deliver any certificate for shares of stock upon exercise of this
Warrant, except in accordance with the provisions, and subject to the
limitations, of paragraph 7 hereof.
3. Covenants of Company.
---------------------
The Company covenants and agrees that all shares issued upon the
exercise of the rights represented by this Warrant will, upon issuance, be duly
authorized and issued, fully paid, nonassessable, and, without limiting the
generality of the foregoing, the Company covenants and agrees that it will from
time to time take all such action as may be required to assure that the par
value per share of the common stock is at all times equal to or less than the
then effective purchase price per share of the common stock issuable pursuant to
this Warrant. The Company further covenants and agrees that, during the period
within which the rights represented by this Warrant may be exercised, the
Company will at all times have authorized, and reserved for the purpose of issue
or transfer upon exercise of the subscription rights evidenced by this Warrant,
a sufficient number of shares of its common stock to provide for the exercise of
the rights represented by this Warrant.
4. Anti-Dilution Adjustments.
--------------------------
The above provisions are, however, subject to the following:
(a) In case the Company shall at any time hereafter subdivide or
combine the outstanding shares of common stock or declare a dividend payable in
common stock, the exercise price of this Warrant in effect immediately prior to
the subdivision, combination or record date for such dividend payable in common
stock shall forthwith be proportionately increased, in the
2
case of combination, or decreased, in the case of subdivision or dividend
payable in common stock. Upon each adjustment of the exercise price, the holder
of this Warrant shall thereafter be entitled to purchase, at the exercise price
resulting from such adjustment, the number of shares obtained by multiplying the
exercise price immediately prior to such adjustment by the number of shares
purchasable pursuant hereto immediately prior to such adjustment and dividing
the product thereof by the exercise price resulting from such adjustment.
(b) No fractional shares of common stock are to be issued upon the
exercise of this Warrant, but the Company shall pay a cash adjustment in respect
of any fraction of a share which would otherwise be issuable in an amount equal
to the same fraction of the market price per share of common stock on the day of
exercise as determined in good faith by the Company.
(c) If any capital reorganization or reclassification of the capital
stock of the Company, or consolidation or merger of the Company with another
corporation, or the sale of all or substantially all of its assets to another
corporation shall be effected in such a way that holders of common stock shall
be entitled to receive stock, securities or assets with respect to or in
exchange for common stock, then, as a condition of such reorganization,
reclassification, consolidation, merger or sale, lawful and adequate provision
shall be made whereby the holder hereof shall thereafter have the right to
purchase and receive, upon the basis and upon the terms and conditions specified
in this Warrant and in lieu of the shares of common stock of the Company
immediately theretofore purchasable and receivable upon the exercise of the
rights represented hereby, such stock, securities or assets as may be issued or
payable with respect to or in exchange for a number of outstanding shares of
such common stock equal to the number of shares of such stock immediately
theretofore purchasable and receivable upon the exercise of the rights
represented hereby had such reorganization, reclassification, consolidation,
merger or sale not taken place, and in any such case appropriate provisions
shall be made with respect to the rights and interests of the holder of this
Warrant to the end that the provisions hereof (including without limitation
provisions for adjustments of the Warrant purchase price and of the number of
shares purchasable upon the exercise of this Warrant) shall thereafter be
applicable, as nearly as may be, in relation to any shares of stock, securities
or assets thereafter deliverable upon the exercise hereof. The Company shall not
effect any such consolidation, merger or sale unless prior to the consummation
thereof the successor corporation (if other than the Company) resulting from
such consolidation or merger, or the corporation purchasing such assets, shall
assume by written instrument executed and mailed to the registered holder hereof
at the last address of such holder appearing on the books of the Company, the
obligation to deliver to such holder such shares of stock, securities or assets
as, in accordance with the foregoing provisions, such holder may be entitled to
purchase.
Notwithstanding any language to the contrary set forth in this
paragraph 4(c), if an occurrence or event described herein shall take place in
which the shareholders of the Company receive cash for their shares of common
stock of the Company and a successor corporation or corporation purchasing
assets shall survive the transaction then, at the election of the record holder
hereof, such corporation shall be obligated to purchase this Warrant (or the
unexercised part hereof) from the record holder without requiring the holder to
exercise all or part of the Warrant. If such corporation refuses to so purchase
this Warrant then the Company shall purchase the Warrant for cash. In either
case the purchase price shall be the amount per share that
3
shareholders of the outstanding common stock of the Company shall receive as a
result of the transaction multiplied by the number of shares covered by the
Warrant, minus the aggregate exercise price of the Warrant. Such purchase shall
be closed within 60 days following the election of the holder to sell this
Warrant.
(d) Upon any adjustment of the Warrant purchase price, then, and in
each such case, the Company shall give written notice thereof, by first class
mail, postage prepaid, addressed to the registered holder of this Warrant at the
address of such holder as shown on the books of the Company, which notice shall
state the Warrant purchase price resulting from such adjustment and the increase
or decrease, if any, in the number of shares purchasable at such price upon the
exercise of this Warrant, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based.
(e) If any event occurs as to which in the good faith determination of
the Board of Directors of the Company the other provisions of this paragraph 4
are not strictly applicable or if strictly applicable would not fairly protect
the purchase rights of the holder of this Warrant in accordance with the
essential intent and principles of such provisions, then the Board of Directors
shall make an adjustment in the application of such provisions, in accordance
with such essential intent and principles, so as to protect such purchase rights
as aforesaid.
5. Common Stock.
-------------
As used herein, the term "common stock" shall mean and include the
Company's presently authorized shares of common stock and shall also include any
capital stock of any class of the Company hereafter authorized which shall not
be limited to fixed sum or percentage in respect of the rights of the holders
thereof to participate in dividends or in the distribution, dissolution or
winding up of the Company; provided that the shares purchasable pursuant to this
Warrant shall include shares designated as common stock of the Company on the
date of original issue of this Warrant or, in the case of any reclassification
of the outstanding shares thereof, the stock, securities or assets provided for
in Section 4 above.
6. No Voting Rights.
-----------------
This Warrant shall not entitle the holder hereof to any voting rights
or other rights as a stockholder of the Company.
7. Transfer of Warrant or Resale of Shares.
----------------------------------------
In the event the holder of this Warrant desires to transfer this
Warrant or any common stock issued upon the exercise hereof, the holder shall
provide the Company with a written notice describing the manner of such transfer
and an opinion of counsel (reasonably acceptable to the Company) that the
proposed transfer may be effected without registration or qualification (under
any Federal or State law), whereupon such holder shall be entitled to transfer
this Warrant or to dispose of shares of common stock received upon the previous
exercise hereof in accordance with the notice delivered by such holder to the
Company; provided, that an appropriate legend
4
may be endorsed on this Warrant or the certificates for such shares respecting
restrictions upon transfer thereof necessary or advisable in the opinion of
counsel satisfactory to the Company to prevent further transfers which would be
in violation of Section 5 of the Securities Act of 1933.
If, in the opinion of counsel referred to in this paragraph 7,
the proposed transfer or disposition described in the written notice given
pursuant to this paragraph 7 may not be effected without registration or
qualification of this Warrant or the shares of common stock issued upon the
exercise hereof, the Company shall promptly give written notice thereof to the
holder hereof, and such holder will limit its activities in respect to such
proposed transfer or disposition as, in the opinion of such counsel, are
permitted by law.
8. Registration Rights.
--------------------
(a) If the Company proposes to claim an exemption under Section 3(b)
for a public offering of any of its securities or to register under the
Securities Act of 1933, as amended (the "Securities Act") (except by a claim of
exemption or registration statement on a form that does not permit the inclusion
of shares by its security holders) any of its securities, it will give written
notice to all registered holders of Warrants, and all registered holders of
shares of common stock acquired upon the exercise of Warrants (the "Common
Shares"), of its intention to do so and, on the written request of any such
registered holders given within twenty (20) days after receipt of any such
notice, the Company will use its best efforts to cause all Common Shares which
such holders shall have requested the registration or qualification thereof, to
be included in such notification or registration statement proposed to be filed
by the Company; provided, however, that nothing herein shall prevent the Company
from, at any time, abandoning or delaying any such registration initiated by it.
If any such registration shall be underwritten in whole or in part, the Company
may require that the shares requested for inclusion pursuant to this Section be
included in the underwriting on the same terms and conditions as the securities
otherwise being sold through the underwriters. In the event that, in the good
faith judgment of the managing underwriter of such public offering, the
inclusion of all of the shares originally covered by a request for registration
would reduce the number of shares to be offered by the Company or interfere with
the successful marketing of the shares of stock offered by the Company, the
number of shares otherwise to be included pursuant to this Section in the
underwritten public offering may be reduced. Those shares which are thus
excluded from the underwritten public offering shall be withheld from the market
for a period, not to exceed 90 days, which the managing underwriter reasonably
determines is necessary in order to effect the underwritten public offering. All
expenses of such offering, except the fees of special counsel to such holders
and brokers' commissions or underwriting discounts payable by such holders,
shall be borne by the Company.
(b) Further, on one occasion only upon request by the holders of
Warrants and/or the holders of shares issued upon the exercise of the Warrants
who collectively (i) have the right to purchase at least 50% of the shares
subject to the Warrants, (ii) hold directly at least 50% of the shares purchased
hereunder, or (iii) have the right to purchase or hold directly an aggregate of
at least 50% of the shares purchasable or purchased hereunder, the Company will
promptly take all necessary steps, at the option of such holders, to register or
qualify the sale of
5
the Warrants or such shares by the holders thereof, or to register the issuance
by the Company of shares upon the exercise of Warrants, under the Securities Act
(and, upon the request of such holders, under Rule 415 thereunder) and such
state laws as such holders may reasonably request; provided that (i) such
request must be made no earlier than August 15, 1997 and no later than the
Expiration Date; and (ii) the Company may delay the filing of any registration
statement requested pursuant to this section to a date not more than ninety (90)
days following the date of such request if in the opinion of the Company's
principal investment banker at the time of such request such a delay is
necessary in order not to adversely affect financing efforts then underway at
the Company or if in the opinion of the Company such a delay is necessary or
advisable to avoid disclosure of material nonpublic information. The costs and
expenses directly related to any registration requested pursuant to this
section, including but not limited to legal fees of the Company's counsel, audit
fees, printing expense, filing fees and fees and expenses relating to
qualifications under state securities or blue sky laws incurred by the Company
shall be borne entirely by the Company; provided, however, that the persons for
whose account the securities covered by such registration are sold shall bear
the expenses of underwriting commissions applicable to their shares and fees of
their legal counsel. If the holders of Warrants and the holders of shares of
common stock underlying the Warrants are the only persons whose shares are
included in the registration pursuant to this section, such holders shall bear
the expense of inclusion of audited financial statements in the registration
statement which are not dated as of the Company's normal fiscal year or are not
otherwise prepared by the Company for its own business purposes. The Company
shall keep effective and maintain any registration, qualification, notification
or approval specified in this paragraph for such period as may be necessary for
the holders of the Warrants and such common stock to dispose thereof, and from
time to time shall amend or supplement, at the holder's expense, the prospectus
or offering circular used in connection therewith to the extent necessary in
order to comply with applicable law.
If at the time any written request for registration is received by the
Company pursuant to this Section 8(b), the Company has determined to proceed
with the actual preparation and filing of a registration statement under the
Securities Act in connection with the proposed offer and sale for cash of any of
its securities by it or any of its security holders, such written request shall
be deemed to have been given pursuant to Section 8(a) hereof rather than this
Section 8(b), and the rights of the holders of Warrants and or shares issued
upon the exercise of the Warrants covered by such written request shall be
governed by Section 8(a) hereof.
The managing underwriter of an offering registered pursuant to this
Section 8(b), if any, shall be selected by the holders of a majority of the
Warrants and/or shares issued upon the exercise of the Warrants for which
registration has been requested and shall be reasonably acceptable to the
Company. Without the written consent of the holders of a majority of the
Warrants and/or shares issued upon the exercise of the Warrants for which
registration has been requested pursuant to this Section 8(b), neither the
Company nor any other holder of securities of the Company may include securities
in such registration if in the good faith judgment of the managing underwriter
of such public offering the inclusion of such securities would interfere with
the successful marketing of the Warrants and/or shares issued upon the exercise
of the Warrants or require the exclusion of any portion of the Warrants and/or
shares issued upon the exercise of the Warrants to be registered. Subject to the
preceding sentence, shares to be
6
excluded from an underwritten public offering shall be selected in the manner
provided in Section 8(a) hereof.
(c) If and whenever the Company is required by the provisions of
Sections 8(a) or 8(b) hereof to effect the registration of Warrants and/or
shares issued upon the exercise of the Warrants under the Securities Act, the
Company will:
(i) Prepare and file with the Commission a registration statement
with respect to such securities, and use its best efforts to cause
such registration statement to become and remain effective for such
period as may be reasonably necessary to effect the sale of such
securities;
(ii) prepare and file with the Commission such amendments to such
registration statement and supplements to the prospectus contained
therein as may be necessary to keep such registration statement
effective for such period as may be reasonably necessary to effect the
sale of such securities;
(iii) furnish to the security holders participating in such
registration and to the underwriters of the securities being
registered such reasonable number of copies of the registration
statement, preliminary prospectus, final prospectus and such other
documents as such underwriters may reasonably request in order to
facilitate the public offering, of such securities;
(iv) use its best efforts to register or qualify the securities
covered by such registration statement under such state securities or
blue sky laws of such jurisdictions as such participating holders may
reasonably request in writing within 30 days following the original
filing of such registration statement, except that the Company shall
not for any purpose be required to execute a general consent to
service of process or to qualify to do business as a foreign
corporation in any jurisdiction wherein it is not so qualified;
(v) notify the security holders participating in such
registration, promptly after it shall receive notice thereof, of the
time when such registration statement has become effective or a
supplement to any prospectus forming a part of such registration
statement has been filed;
(vi) notify such holders promptly of any request by the
Commission for the amending or supplementing of such registration
statement or prospectus or for additional information;
(vii) prepare and file with the Commission, promptly upon the
request of any such holders, any amendments or supplements to such
registration statement or prospectus which, in the opinion of counsel
for such holders (and concurred in by counsel for the Company), is
required under the Securities Act or the rules and regulations
thereunder in connection with the distribution of the Warrants or
shares by such holder;
7
(viii) prepare and promptly file with the Commission and promptly
notify such holders of the filing of such amendment or supplement to
such registration statement or prospectus as may be necessary to
correct any statements or omissions if, at the time when a prospectus
relating to such securities is required to be delivered under the
Securities Act, any event shall have occurred as the result of which
any such prospectus or any other prospectus as then in effect would
include an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light
of the circumstances in which they were made, not misleading;
(ix) advise such holders, promptly after it shall receive notice
or obtain knowledge thereof of the issuance of any stop order by the
Commission suspending the effectiveness of such registration statement
or the initiation or threatening of any proceeding for that purpose
and promptly use its best efforts to prevent the issuance of any stop
order or to obtain its withdrawal if such stop order should be issued;
(x) not file any amendment or supplement to such registration
statement or prospectus to which a majority in interest of such
holders 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, after having been furnished with a copy thereof at least
five business days prior to the filing thereof, unless in the opinion
of counsel for the Company the filing of such amendment or supplement
is reasonably necessary to protect the Company from any liabilities
under any applicable federal or state law and such filing will not
violate applicable law; and
(xi) at the request of any such holder, furnish on the effective
date of the registration statement and, if such registration includes
an underwritten public offering, at the closing provided for in the
underwriting agreement: (i) opinions, dated such respective dates, of
the counsel representing the Company for the purposes of such
registration, addressed to the underwriters, if any, and to the holder
or holders making such request, covering such matters as such
underwriters and holder or holders may reasonably request; and (ii)
letters, dated such respective dates, from the independent certified
public accountants of the Company, addressed to the underwriters, if
any, and to the holder or holders making such request, covering such
matters as such underwriters and holder or holders may reasonably
request, in which letter such accountants shall state (without
limiting the generality of the foregoing) that they are independent
certified public accountants within the meaning of the Securities Act
and that in the opinion of such accountants the financial statements
and other financial data of the Company included in the registration
statement or the prospectus or any amendment or supplement thereto
comply in all material respects with the applicable accounting
requirements of the Securities Act.
8
(d) The Company hereby indemnifies the holder of this Warrant and of
any common stock issued or issuable hereunder, its officers and directors, and
any person who controls such Warrant holder or such holder of common stock
within the meaning of Section 15 of the Securities Act, against all losses,
claims, damages and liabilities caused by any untrue statement of a material
fact contained in any registration statement, prospectus, notification or
offering circular (and as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) or any preliminary prospectus
or caused by any omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading except
insofar as such losses, claims, damages or liabilities are caused by any untrue
statement or omission contained in information furnished in writing to the
Company by such Warrant holder or such holder of common stock expressly for use
therein, and each such holder by its acceptance hereof severally agrees that it
will indemnify and hold harmless the Company and each of its officers who signs
such registration statement and each of its directors and each person, if any,
who controls the Company within the meaning of Section 15 of the Securities Act
with respect to losses, claims, damages or liabilities which are caused by any
untrue statement or omission contained in information furnished in writing to
the Company by such holder expressly for use therein.
9. Additional Right to Convert Warrant.
------------------------------------
(a) The holder of this Warrant shall have the right to require the
Company to convert this Warrant (the "Conversion Right") at any time prior to
its expiration into shares of common stock as provided for in this Section 9.
Upon exercise of the Conversion Right, the Company shall deliver to the holder
(without payment by the holder of any Exercise Price) that number of shares of
common stock equal to the quotient obtained by dividing (x) the value of the
Warrant at the time the Conversion Right is exercised (determined by subtracting
the aggregate Exercise Price for the Warrant Shares in effect immediately prior
to the exercise of the Conversion Right from the aggregate Fair Market Value for
the Warrant Shares immediately prior to the exercise of the Conversion Right) by
(y) the Fair Market Value of one share of common stock immediately prior to the
exercise of the Conversion Right.
(b) The Conversion Right may be exercised by the holder, at any time
or from time to time, prior to its expiration, on any business day by delivering
a written notice in the form attached hereto (the "Conversion Notice") to the
Company at the offices of the Company exercising the Conversion Right and
specifying (i) the total number of shares of common stock the Warrantholder will
purchase pursuant to such conversion and (ii) a place and date not less than one
nor more than 20 business days from the date of the Conversion Notice for the
closing of such purchase.
(c) At any closing under Section 9(b) hereof, (i) the holder will
surrender the Warrant and (ii) the Company will deliver to the holder a
certificate or certificates for the number of shares of common stock issuable
upon such conversion, together with cash, in lieu of any fraction of a share,
and (iii) the Company will deliver to the holder a new warrant representing the
number of shares, if any, with respect to which the warrant shall not have been
exercised.
9
(d) "Fair Market Value" means, with respect to the Company's common
stock, as of any date:
(i) if the common stock is listed or admitted to unlisted trading
privileges on any national securities exchange or is not so listed or
admitted but transactions in the common stock are reported on the
Nasdaq National Market; the reported closing price of the common stock
on such exchange or by the Nasdaq National Market as of such date (or,
if no shares were traded on such day, as of the next preceding day on
which there was such a trade), or
(ii) if the common stock is not so listed or admitted to unlisted
trading privileges or reported on the Nasdaq National Market, and bid
and asked prices therefor in the over-the-counter market are reported
by the Nasdaq or National Quotation Bureau, Inc. (or any comparable
reporting service), the mean of the closing bid and asked prices as of
such date, as so reported by the Nasdaq System, or, if not so reported
thereon, as reported by National Quotation Bureau, Inc. (or such
comparable reporting service); or
if the common stock is not so listed or admitted to unlisted trading
privileges, or reported on the Nasdaq National Market, and such bid and asked
prices are not so reported by the Nasdaq System or National Quotation Bureau,
Inc. (or any comparable reporting service), such price as the Company's Board of
Directors determines in good faith in the exercise of its reasonable discretion.
10
10. Lost Warrants or Stock Certificates.
------------------------------------
The Company covenants to the holder hereof that upon receipt of
evidence reasonably satisfactory to the Company of the loss, theft, destruction,
or mutilation of this Warrant or any stock certificate issued upon exercise
hereof and, in the case of any such loss, theft or destruction, upon receipt of
an indemnity reasonably satisfactory to the Company, or in the case of any such
mutilation upon surrender and cancellation of such Warrant or stock certificate,
the Company will make and deliver a new Warrant or stock certificate, of like
tenor, in lieu of the lost, stolen, destroyed or mutilated Warrant or stock
certificate.
11
IN WITNESS WHEREOF, Kurzweil Applied Intelligence, Inc. has caused this
Warrant to be executed by its duly authorized officers and this Warrant to be
dated as of April 14, 1997.
KURZWEIL APPLIED INTELLIGENCE, INC.
By
---------------------------------------
12
EXERCISE FORM
(TO BE SIGNED ONLY UPON EXERCISE OF WARRANT)
KURZWEIL APPLIED INTELLIGENCE, INC.
The undersigned, the holder of the attached Warrant, hereby irrevocably
elects to exercise the purchase right represented by such warrant for, and to
purchase thereunder _____________ shares of the Common Stock, $.01 par value, of
Kurzweil Applied Intelligence, Inc. and herewith makes payment of
$______________ therefor, and requests that the certificates for such shares be
issued in the name of _________________________________________ and be delivered
to ________________________________________ whose address is ______________
_________.
LERNOUT & HAUSPIE SPEECH PRODUCTS N.V.
Dated: By:
--------------------------------- ----------------------------------
(Address)
(City - State - Zip)
13
ASSIGNMENT FORM
(TO BE SIGNED ONLY UPON TRANSFER OF THE WARRANT)
For value received, the undersigned hereby sells, assigns and transfers
unto those individuals listed on Exhibit A, attached hereto, the right
represented by the attached Warrant to purchase the number of shares opposite
their names on the attached Exhibit A of Common Stock, $.01 par value, of
Kurzweil Applied Intelligence, Inc. to which the within warrant relates, and
appoints ____________________________ attorney to transfer said right on the
books of Kurzweil Applied Intelligence, Inc.
Dated: LERNOUT & HAUSPIE SPEECH PRODUCTS N.V.
By:
-----------------------------------
In the presence of:
- ------------------------------
- ------------------------------
14
CONVERSION NOTICE
(TO BE SIGNED ONLY UPON EXERCISE OF CONVERSION RIGHT
SET FORTH IN SECTION 9 OF THE WARRANT)
TO KURZWEIL APPLIED INTELLIGENCE, INC.:
The undersigned, the holder of the attached Warrant, hereby irrevocably
elects to exercise the Conversion Right set forth in Section 9 of such Warrant
and to purchase ___________________ shares of the Common Stock, of Kurzweil
Applied Intelligence, Inc. The closing of this conversion shall take place at
the offices of the undersigned on ____________________________. Certificates for
the shares ____________________________________ to be delivered at the closing
shall be issued in the name of ________________________________ whose address is
- ------------------------------.
Dated:
--------------------------- -----------------------------------------
(Signature must "conform in all respects
to the name of holder as specified on
the face of the Warrant)
(Address)
(City - State - Zip)