THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND MAY BE REOFFERED,
SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF ONLY IF REGISTERED PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS OR IF AN EXEMPTION
FROM REGISTRATION IS AVAILABLE.
VOID AFTER 5:00 P.M., NEW YORK TIME, ON ______, 2002 [5 YEARS FROM EFFECTIVE
DATE] 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 SHARES OF COMMON STOCK
OF
CELERITY SYSTEMS, INC.
TRANSFER RESTRICTED -- SEE SECTION 6.02
NO. W-1 200,000 Shares
This certifies that, for good and valuable consideration, Hampshire Securities
Corporation, and its registered, permitted assigns (collectively, the
"Warrantholder"), is entitled to purchase from Celerity Systems, Inc., a
corporation incorporated under the laws of the State of Delaware (the
"Company"), subject to the terms and conditions hereof, at any time on or after
9:00 A.M., New York time, on _____, 1998 [1 year from Effective Date], and
before 5:00 P.M., New York time, on _____, 2002 [5 years from Effective Date]
(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 (par value $0.001 per share) of the Company stated above
at the Exercise Price (as hereinafter defined). The Exercise Price and the
number of shares purchasable hereunder are subject to adjustment 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: common stock, par value $0.001 per share, of the
Company.
(c) Demand Registration: See Section 7.02.
(d) Exchange Act: The Securities Exchange Act of 1934, as amended.
(e) Exercise Price: $_____ per Warrant Share, as such price may be
adjusted from time to time pursuant to Article III hereof [165% of public
offering price].
(f) Expiration Date: 5:00 P.M., New York time, on __________, 2002
or, if such day is not a Business Day, the next succeeding day which is a
Business Day.
(g) Holder: A holder of Warrants and/or Registrable Securities.
(h) NASD: National Association of Securities Dealers, Inc.
(i) Common Stock Equivalents: Securities that are convertible into
or exercisable for Common Stock.
(j) Person: An individual, partnership, joint venture, corporation,
trust, unincorporated organization or government or any department or agency
thereof.
(k) Piggyback Registration: See Section 7.01.
(l) 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.
(m) Public Offering: A public offering of any of the Company's
equity or debt securities pursuant to a registration statement under the
Securities Act.
(n) Registrable Securities: (i) The Warrants and (ii) any Warrant
Shares issued or issuable to the Warrantholder, and/or its designees or
transferees as permitted under Section 6.02 and/or other securities that may be
or are issued by the Company upon exercise of Warrants, 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 or the like, and
as adjusted pursuant to Article III hereof; provided, however, that as to any
particular security contained in Registrable Securities, such securities shall
cease to be Registrable Securities (i) for purposes of Section 7.02
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hereof, when a Registration Statement with respect to the sale of such
securities shall have become effective under the Securities Act; or (ii) when
they shall have been sold or shall be eligible for sale pursuant to Rule 144 (or
any successor provision) under the Securities Act; or (iii) when they shall have
been sold, assigned or otherwise transferred to any Person other than those
Persons specified in Section 6.02(i) below ("6.02(i) Persons") and other than to
any spouses, lineal descendants or adopted children of a 6.02(i) Person to whom
such securities are transferred upon the death of any 6.02(i) Person by
operation of law or by bequest.
(o) Registration Expenses: Any and all expenses incident to
performance of or compliance with Article VII, including, without limitation,
(i) all SEC, stock exchange, NASD registration and filing fees, listing and
transfer agent fees; (ii) all fees and expenses of complying with 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
independent certified public 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 fees, discounts and commissions and
transfer taxes, if any, and the fees and disbursements of counsel for the
holders of the Registrable Securities.
(p) 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 Warrant, including the Prospectus,
amendments and supplements to such Registration Statement, including
post-effective amendments and all exhibits to and material incorporated by
reference by such registration statement.
(q) SEC: The Securities and Exchange Commission or any other federal
agency at the time administering the Securities Act or the Exchange Act.
(r) Securities Act: The Securities Act of 1933, as amended.
(s) Warrant Shares: Common Stock purchasable upon exercise of the
Warrants.
(t) 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.
(u) Warrants: This Warrant, the warrants issued on the date hereof
and all other warrants that may be issued in its or their place (together
initially evidencing the right to purchase an aggregate of 200,000 shares of
Common Stock).
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ARTICLE II
Duration and Exercise of Warrant
Section 2.01: Duration of Warrant. (a) Subject to the terms contained
herein, this Warrant may be exercised at any time after 9:00 A.M., New York
time, on ______, 1998 [1 year from Effective Date], and before 5:00 P.M., New
York time, on the Expiration Date. If this Warrant is not exercised on 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 corporate office at 9051 Executive Park Drive, Suite 302
Knoxville, Tennessee 37923 with the Subscription Form annexed hereto duly
executed and accompanied by payment of the Exercise Price for each Warrant
Share to be purchased. Payment for Warrant Shares shall be made in cash or
by certified or official bank check payable to the order of the Company;
or
ii) By presentation and surrender of this Warrant to the
Company at its corporate office set forth above, with a Cashless Exercise
Form annexed hereto duly executed (a "Cashless Exercise"). Such
presentation and surrender shall be deemed a waiver of the Warrantholder's
obligation to pay all or any portion of the aggregate Exercise Price. In
the event of a Cashless Exercise, the Warrantholder shall exchange its
Warrant for that number of Shares of Common Stock determined by
multiplying the number of Warrant Shares for which the Warrantholder
desires to exercise this Warrant by a fraction, the numerator of which
shall be the difference between the then current market price per share of
Common Stock and 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 for the twenty (20) consecutive Business Days immediately prior to
the Cashless Exercise of the daily closing prices of the shares of Common
Stock on the principal national securities exchange on which the shares of
Common Stock are admitted to trading or listed, or if not listed or
admitted to trading on any such exchange, the closing prices as reported
by the Nasdaq National Market, or if not then listed on the Nasdaq
National Market, the average of the highest reported bid and lowest
reported asked prices as reported by the Nasdaq SmallCap Market, or if not
then listed on the Nasdaq SmallCap Market, the average of the highest
reported bid and lowest reported asked prices as reported by the National
Association of Securities Dealers, Inc. Automated Quotations System
("Nasdaq") or if not then publicly traded, the fair market price of the
shares of Common Stock as determined in good faith by the Board of
Directors of the Company.
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(b) Upon receipt of this Warrant with the Subscription Form duly
executed and accompanied by payment of the aggregate Exercise Price or upon
receipt of this Warrant with a Cashless Exercise form duly executed, in each
case as set forth in Section 2.02(a) for the Warrant Shares for which this
Warrant is then being exercised, the Company shall cause to be issued
certificates for the total number of shares of Common Stock for which this
Warrant is being exercised or the net amount of Warrant Shares which the
Warrantholder is entitled to receive upon a Cashless Exercise (adjusted to
reflect the effect of the anti-dilution provisions contained in Article III
hereof, if any, and as provided in Section 4.04 hereof) in such denominations as
are requested for delivery to the Warrantholder, and the Company shall thereupon
deliver such certificates 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 investment intent
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. The Company shall not, however, be required
to pay any tax imposed on income or gross receipts of the Warrantholder or any
tax which may be payable in respect of any transfer involved in the issuance or
delivery of this Warrant or of Warrant Shares in a name other than that of the
Warrantholder at the time of surrender and, until the payment of such tax, shall
not be required to issue such Warrant Shares.
(e) The Company shall use its best efforts to cause all Warrant
Shares to be listed on each securities exchange, if any, on which similar
securities issued by the Company are then listed or, if not then listed, cause
such Warrant Shares to be included in a national 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.
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Section 3.01: Mechanical Adjustments. (a) If at any time prior to the
exercise of this Warrant in full, the Company shall (i) pay a dividend or make a
distribution on its shares of Common Stock, in either case in shares of Common
Stock; (ii) subdivide, reclassify or recapitalize its outstanding shares of
Common Stock into a greater number of shares; (iii) combine, reclassify or
recapitalize its outstanding shares of Common Stock into a smaller number of
shares; or (iv) issue by reclassification of its shares of Common Stock any
shares of capital stock of the Company, 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, upon exercise of this Warrant, the aggregate
number and kind of shares which, if this Warrant had been exercised in full
immediately prior to such time, he would have owned upon such exercise and been
entitled to receive upon such dividend, subdivision combination,
reclassification or recapitalization. Any adjustment required by this paragraph
3.01(a) shall be made whenever any event listed in this paragraph 3.01(a) shall
occur.
(b) If at any time prior to the exercise of this Warrant in full,
the Company shall issue or distribute generally to the holders of shares of
Common Stock evidences of its indebtedness, any other securities of the Company
or any cash, property or other assets (excluding a dividend, distribution,
combination, reclassification or recapitalization referred to in Section 3.01(a)
and cash dividends or cash distributions paid out of net profits legally
available therefor if the full amount thereof, together with the value of other
dividends and distributions made substantially concurrently therewith or
pursuant to a plan which includes payment thereof, is equivalent to not more
than 5% of the Company's net worth) (any such nonexcluded event being herein
called a "Special Dividend"), the Exercise Price shall be decreased immediately
after the effective date of 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 per share of Common Stock (as
defined in Section 3.01(e)) on such effective date less the fair market value
(as determined in good faith 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 and
the denominator of which shall be the then current market price per share of
Common Stock. Any adjustment required by this paragraph 3.01(b) shall be made
whenever the effective date of any such Special Dividend occurs.
(c) If at any time prior to the exercise of this Warrant in full,
the Company shall make a distribution to all the holders of shares of Common
Stock (other than dividends or distributions covered by Section 3.01(a) or (b))
of subscription rights, options or warrants for shares of Common Stock or Common
Stock Equivalents, then in each such case the Exercise Price in effect after the
effective date of such distribution shall be adjusted to the price determined by
multiplying the Exercise Price in effect immediately prior thereto by a
fraction, the numerator of which shall be the current market price per share of
Common Stock (as defined in Section 3.01(e)), less the fair market value (as
determined in good faith by the Company's Board of Directors) of said
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Common Stock subscription rights, options and warrants or of such Common Stock
Equivalents applicable to one share of Common Stock, and the denominator of
which shall be the current market price per share of Common Stock. Any
adjustment required by this paragraph 3.01(c) shall be made whenever the
effective date of any such distribution occurs. To the extent such shares of
Common Stock (or Common Stock Equivalents) are not delivered after the
expiration of 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
on the basis of delivery of only the number of shares of Common Stock (or Common
Stock Equivalents) actually delivered, but no such readjustment shall have the
effect of increasing the Exercise Price to an amount which exceeds the lower of
(i) the Exercise Price on the original adjustment date (prior to the original
adjustment) or (ii) the Exercise Price that would have resulted from any other
adjustments pursuant to this Article III (other than adjustments for the
issuance of subscription rights, options or warrants which expire unexercised).
(d) 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 immediately prior to the date
thereof and dividing the product so obtained by the Exercise Price, as adjusted.
(e) 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 price for the twenty (20) consecutive Business
Days commencing thirty-five (35) Business Days before such date. The closing
price for each day shall be the closing price of the shares of Common Stock as
reported by the national securities exchange upon which the shares of Common
Stock is then listed or if not listed on any such exchange, the average of the
closing prices as reported by the Nasdaq National Market, or if not then listed
on the Nasdaq National Market, the average of the highest reported bid and
lowest reported asked prices as reported by the Nasdaq SmallCap Market, or if
not then listed on the Nasdaq SmallCap Market, the average of the highest
reported bid and lowest reported asked prices as reported by Nasdaq, or if not
then publicly traded, as the fair market price as determined in good faith by
the Company's Board of Directors.
(f) No adjustment in the Exercise Price shall be required unless
such adjustment would require an increase or decrease of at least five cents
($.05) in such price; provided, however, that any adjustments which by reason of
this paragraph (f) 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.
(g) If 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
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shares of the Company other than shares of 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 shares of Common Stock
contained in this Section 3.01.
(h) In case any event shall occur as to which the other provisions
of this Article III are not strictly applicable but as to which the failure to
make any adjustment would not fairly protect the purchase rights represented by
this Warrant in accordance with the essential intent and principles hereof then,
in each such case, the Warrantholders representing the right to purchase a
majority of the Warrant Shares subject to all outstanding Warrants may appoint a
firm of independent public accountants of recognized national standing
reasonably acceptable to the Company, which shall give their opinion as to the
adjustment, if any, on a basis consistent with the essential intent and
principles established herein, necessary to preserve the purchase rights
represented by the Warrants. Upon receipt of such opinion, the Company will
promptly mail a copy thereof to the Warrantholder and shall make the adjustments
described therein. The fees and expenses of such independent public accountants
shall be borne by the Company.
(i) If, as a result of an adjustment made pursuant to this Article
III, the Warrantholder shall become entitled to receive shares of two or more
classes of capital stock or shares of Common Stock and other capital stock of
the Company, the Board of Directors (whose determination shall be conclusive and
shall be described in a written notice to the Warrantholder promptly after such
adjustment) shall determine the allocation of the adjusted Exercise Price
between or among shares or such classes of capital stock or shares of Common
Stock and other capital stock.
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 to the Warrantholder a certificate signed by its President, 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, setting forth a brief statement of the facts
requiring such adjustment and setting forth the computation by which such
adjustment was made.
Section 3.03: No Adjustment for Dividends. Except as provided in Section
3.01(b) of this Agreement, no adjustment in respect of any cash dividends 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 capital reorganization or reclassification, or any consolidation or
merger to which the Company is a party other than a merger or consolidation in
which the Company is the continuing corporation, or in case of any sale or
conveyance to another entity of the property of the Company as an entirety or
substantially as an entirety, or in the case of any statutory exchange of
securities with another corporation (including any
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exchange effected in connection with a merger of a third corporation into the
Company), this Warrantholder shall have the right thereafter to receive on the
exercise of this Warrant the kind and amount of securities, cash or other
property which the Warrantholder would have owned or have been entitled to
receive immediately after such reorganization, reclassification, consolidation,
merger, statutory exchange, sale or conveyance had this Warrant been exercised
immediately prior to the effective date of such reorganization,
reclassification, consolidation, merger, statutory exchange, sale or conveyance
and in any such case, if necessary, appropriate adjustment shall be made in the
application of the provisions set forth in this Article III with respect to the
rights and interests thereafter of the Warrantholder to the end that the
provisions set forth in this Article III shall thereafter correspondingly be
made applicable, as nearly as may reasonably be, in relation to any shares of
stock or other securities or property thereafter deliverable on the exercise of
this Warrant. The provisions of this Section 3.04 shall similarly apply to
successive reorganizations, reclassifications, consolidations, mergers,
statutory exchanges, sales or conveyances. The issuer of any shares of stock or
other securities or property thereafter deliverable on the exercise of this
Warrant shall be responsible for all of the agreements and obligations of the
Company hereunder. Notice of any such reorganization, reclassification,
consolidation, merger, statutory exchange, sale or conveyance and of said
provisions so proposed to be made, shall be mailed to the Holders of the
Warrants on the later of a date not less than thirty (30) days prior to such
event or the day following the public announcement of such event. A sale of all
or substantially all of the assets of the Company for a consideration consisting
primarily of securities shall be deemed a consolidation or merger for the
foregoing purposes.
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.
ARTICLE IV
Other Provisions Relating
to Rights of Warrantholder
Section 4.01: No Rights as Stockholders; 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 or to receive notice as a stockholder in respect of any
meeting of stockholders for the election of directors of the Company or of any
other matter, or any rights whatsoever as stockholders of the Company. The
Company shall give notice to the Warrantholder if at any time prior to the
expiration or exercise in full of the Warrants, any of the following events
shall occur:
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(a) the Company shall declare any dividend payable in any securities
upon shares of Common Stock or make any distribution (other than a cash dividend
subject to the parenthetical set forth in Section 3.01(b)) to the holders of
shares of Common Stock;
(b) the Company shall offer to the holders of shares of Common Stock
any additional shares of Common Stock or Common Stock Equivalents or any right
to subscribe thereto;
(c) a dissolution, liquidation or winding up of the Company (other
than in connection with a consolidation, merger, or sale of all, or
substantially all, of its property, assets, and business as an entirety) shall
be proposed; or
(d) any consolidation of the Company with or merger of the Company
into another corporation, 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 shall be proposed.
Such giving of notice shall be initiated (i) at least ten (10) Business Days
prior to the date fixed as a record date or the date of closing of the Company's
stock transfer books for the determination of the stockholders entitled to such
dividend, distribution, or subscription rights, or for the determination of the
stockholders entitled to vote on such proposed merger, consolidation, sale,
conveyance, dissolution, 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.
Section 4.03: Reservation of Common Stock.
(a) The Company shall at all times reserve and keep available for
the exercise of this Warrant such number of authorized shares of Common Stock as
are sufficient to permit the exercise in full of this Warrant.
(b) Prior to the issuance of any shares of Common Stock upon
exercise of this Warrant, the Company shall use its best efforts to secure the
listing of such shares of Common Stock upon the securities exchange or automated
quotation system, if any, upon which shares of Common Stock are then listed.
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(c) The Company covenants that all shares of Common Stock issued on
exercise of this Warrant will be validly issued, fully paid, nonassessable and
free of preemptive rights.
Section 4.04: No Fractional Shares. Anything contained herein to the
contrary notwithstanding, the Company shall not be required to issue any
fraction of a share in connection with the exercise of this Warrant, and in any
case where the Warrantholder would, except for the provisions of this Section
4.04, 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 receipt of the Exercise Price, issue the smaller number of
whole shares purchasable upon exercise of this Warrant and shall make a cash
adjustment in respect of such fraction of a share to which the Warrantholder
would otherwise be entitled.
ARTICLE V
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 VI
Split-Up, Combination,
Exchange and Transfer of Warrants
Section 6.01: Split-Up, Combination and Exchange of Warrants. Subject to
the provisions of Section 6.02 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 this Warrant, he or it shall make such request in
writing delivered to the Company and shall surrender to the Company this Warrant
and any other 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 transfer, split up, combination or exchange of Warrants.
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Section 6.02: Restrictions on Transfer. This Warrant may not be sold,
hypothecated, pledged, assigned or transferred (any such action, a "Transfer")
until _______, 1998 [1 year from Effective Date], except (i) to Hampshire
Securities Corporation, any successor to the business of Hampshire Securities
Corporation or any officer or partner of such company or of any successor firm,
or (ii) to any underwriter or selling group member in connection with the
initial public offering of the Common Stock, provided 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, 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.
ARTICLE VII
Registration Under the Securities Act of 1933
Section 7.01: Piggyback Registration.
(a) Right to Include Registrable Securities. If at any time after
__________, 1998 [1 year from Effective Date] and prior to ________, 2004 [7
years from Effective Date], the Company proposes to register any Common Stock or
any other class of equity security or any Common Stock Equivalent under the
Securities Act on any form for the registration of securities under such Act,
whether or not for its own account (other than (i) a registration of a stock
option, stock purchase or compensation or incentive plan or of stock issued or
issuable pursuant to any such plan, or a dividend investment plan; (ii) a
registration of securities proposed to be issued in exchange for securities or
assets of, or in connection with a merger or consolidation with, another
corporation; or (iii) a registration of securities proposed to be issued in
exchange for other securities of the Company) in a manner which would permit
registration of Registrable Securities for sale to the public under the
Securities Act (a "Piggyback Registration"), it shall not later than twenty (20)
days prior to the effective date of such registration give written notice to all
Holders of its intention to do so and of such Holders' rights under this Section
7.01. Such rights are referred to hereinafter as "Piggyback Registration
Rights". Upon the written request of such Holder made within fifteen (15) days
after the giving of any such notice (which request shall specify the Registrable
Securities intended to be disposed of by such Holder and the intended method of
disposition thereof), the Company shall include in the Registration Statement
the Registrable Securities which the Company has been so requested to register
by the Holders thereof.
(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 filed
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in connection with such Piggyback Registration, 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 7.03 shall cease if the Company determines to terminate any registration
where Registrable Securities are being registered pursuant to this Section 7.01.
(c) Piggyback Registration of Underwritten Public Offerings. If a
Piggyback Registration involves an underwritten offering, then all Holders
requesting to have Registrable Securities included in the Company's registration
must sell their Registrable Securities to the underwriters selected by the
Company on the same terms and conditions as apply to other selling stockholders.
(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 7.01.
(e) Priority in Piggyback Registration. If a Piggyback Registration
involves an underwritten offering and the managing underwriter advises the
Company in writing that, in its opinion, marketing factors require a limitation
of the number of shares to be underwritten, then the Registrable Securities to
be offered for the accounts of Holders pursuant to a Piggyback Registration
Right shall be reduced pro rata as to all requesting Holders on the basis of the
relative number of Registrable Securities each such Holder has requested to be
included in such registration, to the extent necessary to reduce the total
amount or kind of Registrable Securities to be included in such offering to the
amount advised by such managing underwriter; provided, however, that no
securities may be offered in such registration for the account of persons other
than the Company (including for this purpose any affiliate of the Company) by
virtue of their also having "piggyback" registration rights, or otherwise,
unless the Registrable Securities requested to be included in such registration
are so included on a pro rata basis (by percentage of each class of securities)
as to such other persons holding "piggyback" registration rights and the Holders
requesting registration; and provided, further, that nothing in this paragraph
(e) shall be implied to permit the Company to include in such registration
shares of any person other than persons holding "piggyback" registration rights
unless the Registrable Securities requested to be included in such registration
are so included.
(f) Expiration of Piggyback Registration Rights. The Piggyback
Registration Rights shall survive the exercise of the Warrant or the
transactions or events pursuant to which such Registrable Securities were
issued, but all such rights will terminate in all events on __________, 2004 [7
years from Effective Date].
-13-
Section 7.02: Demand Registration.
(a) Request for Registration. Subject to the limitations set forth
below in this Section 7.02, any Holder or Holders who hold in the aggregate 50%
or more of the Registrable Securities (assuming exercise of the Warrants) may
after __________, 1998 [1 year from Effective Date] but prior to the Expiration
Date make written requests for the registration under the Securities Act of all
or part of their Registrable Securities (a "Demand Registration") and the
Company shall use its best efforts to effect such Demand Registration. The
Holders, as a group, shall be limited to one Demand Registration and thereafter
may not make any further written requests for registration other than Piggyback
Registrations pursuant to Section 7.01. Any written request for registration
which is never effectuated due to Section 7.02(b)(ii) or (iii) shall not count
as the Holders' Demand Registration.
(b) Limitations on Demand Registration. The Company shall not be
required to effect a Demand Registration (i) if the Company, in its reasonable
judgment, determines that the filing of the registration statement at the time
requested would require disclosure of information not otherwise then required to
be disclosed and that such disclosure would adversely affect any material
business situation, transaction or negotiation then proposed, contemplated or
being engaged in by the Company, but in no event shall such delay exceed ninety
(90) days from the date of such request for registration; (ii) if the timing of
the Demand Registration is such that a special audit of the Company would be
required in connection with the preparation of financial statements for the
registration, but in no event shall such delay exceed 90 days from the date of
such request for registration; or (iii) within one hundred eighty (180) days
following the effective date of any Public Offering. The Company shall also not
be required to effect a Demand Registration if, within twenty (20) days after it
receives a request therefor, it or insiders who individually own more than five
percent (5%) of the Company's outstanding Common Stock agree to purchase the
Warrants and/or the underlying Warrant Shares from the requesting holders
thereof at a price, in the case of the Warrants, equal to the difference between
the Exercise Price and the then current market price of the Company's Common
Stock, and, in the case of the Warrant Shares, the current market price of the
Company's Common Stock. For purposes hereof, the current market price of the
Company's Common Stock shall be the average of the closing asked prices for the
Company's Common Stock during the twenty (20) Business Day period preceding such
request for registration.
(c) Payment of Registration Expenses for Demand Registration. The
Company shall pay all Registration Expenses in connection with the Demand
Registration as elected in the written request(s) for registration under Section
7.02(a) by the Holders of a majority of Registrable Securities (assuming
exercise of the Warrants) as to which the Demand Registration is requested. Such
Registration Expenses shall not include the fees of any counsel retained by
underwriters or any Holder and any underwriting fees or selling discounts or
commissions or transfer taxes.
-14-
(d) Procedure for Requesting Demand Registration. Any request for a
Demand Registration shall specify the aggregate number of the Registrable
Securities proposed to be sold and the intended method of disposition. Within
ten (10) Business Days after receipt of such a request, the Company shall give
written notice of such registration request to all Holders, and, subject to the
limitations of Section 7.02(b), the Company shall include in such registration
all Registrable Securities with respect to which the Company has received
written requests for inclusion therein within ten (10) Business Days after the
date on which such notice is given. Each such request shall also specify the
aggregate number of Registrable Securities to be registered and the intended
method of disposition thereof.
(e) Selection of Underwriters. If any Demand Registration is
requested to be in the form of an underwritten offering, the managing
underwriter shall be Hampshire Securities Corporation and the co-manager (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 Registrable
Securities to be registered (assuming exercise of the Warrants). Such selection
shall be subject to the Company's consent, which consent shall not be
unreasonably withheld. All fees and expenses of any managing underwriter, any
co-manager or any qualified independent underwriter or other independent pricer
(other than Registration Expenses otherwise required to be paid) required under
the rules of the NASD shall be paid for by the Holders whose shares are being
registered. If Hampshire Securities Corporation should decline to serve as
managing underwriter, the Holders of a majority of the Registrable Securities to
be registered (assuming exercise of the Warrants) may select and obtain one or
more managing underwriters. Such selection shall be subject to the Company's
consent, which shall not be unreasonably withheld.
Section 7.03: Registration Procedures. If and whenever the Company is
required to use its best efforts to effect or cause the registration of any
Registrable Securities under the Securities Act as provided in this Article VII,
the Company shall, at its expense and as expeditiously as practicable:
(a) prepare and file with the SEC, as soon as practicable within
sixty (60) days (subject to extension for up to an additional thirty (30) days
provided that the Company has not exercised its deferral right contained in
Section 7.02(b) and does not within thirty (30) days exercise such deferral
right) after the end of the period within which requests for registration may be
given to the Company (but subject to the proviso for deferral contained in
Section 7.02(b) hereof) a Registration Statement relating to the registration on
any appropriate form under the Securities Act, which form shall be available for
the sale of the Registrable Securities in accordance with the intended method or
methods of distribution thereof, and use its best efforts to cause such
Registration Statements to become effective; provided that before filing a
Registration Statement or Prospectus or any amendment or supplements thereto,
including documents incorporated by reference after the initial filing of any
Registration Statement, the Company shall furnish to the selling Holders or
their counsel pursuant to such Registration Statement and the underwriters, if
any, copies of all such
-15-
documents proposed to be filed, which documents will be subject to the review of
such Holders and underwriters;
(b) prepare and file with the SEC such amendments and post-effective
amendments to a Registration Statement as may be necessary to keep such
Registration Statement effective for a period of nine months commencing from the
date of effectiveness of the Registration Statement or such shorter period as
may be required for the sale of the Warrant Shares in the open market; cause the
related Prospectus to be supplemented by any required Prospectus supplement, and
as so supplemented, to be filed pursuant to Rule 424 under the Securities Act;
and comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such Registration Statement during such
period in accordance with the intended methods of disposition by the sellers
thereof set forth in such Registration Statement or supplement to such
Prospectus;
(c) notify the selling Holders or their counsel and the managing
underwriters, if any, promptly, and (if requested by any such Person) confirm
such advice in writing, (i) when a Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to a Registration
Statement or any post-effective amendment, when the same has become effective;
(ii) of any request by the SEC for amendments or supplements to a Registration
Statement or related Prospectus or for additional information; (iii) of the
issuance by the SEC of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that purpose;
(iv) if at any time the representations and warranties of the Company
contemplated by paragraph (l) below cease to be true and correct; (v) of the
receipt by the Company of any notification with respect to the suspension of the
qualification of any of the Registrable Securities for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose; and (vi) of
the happening of any event that makes any statement made in the Registration
Statement, the Prospectus or any document incorporated therein by reference
untrue or which requires the making of any changes in the Registration Statement
or Prospectus so that they will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading;
(d) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of a Registration Statement at the earliest
possible moment;
(e) if reasonably requested by the managing underwriters,
immediately incorporate in a prospectus supplement or post-effective amendment
such information as the managing underwriters reasonably believe (on advice of
counsel) should be included as required by applicable law relating to such sale
of Registrable Securities, including, without limitation, information with
respect to the purchase price being paid for the Registrable Securities by such
underwriters and with respect to any other terms of the underwritten (or
"best-efforts" underwritten) offering; and make all required
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filings of such prospectus supplement or post-effective amendment as soon as
notified of the matters to be incorporated in such prospectus supplement or
post-effective amendment;
(f) furnish to each managing underwriter, without charge, at least
one signed copy of the Registration Statement and any posteffective amendment
thereto, including financial statements and schedules, all documents
incorporated therein by reference and all exhibits (including those incorporated
by reference);
(g) deliver to each selling Holder and the underwriters, if any,
without charge, as many copies of the Prospectus or Prospectuses (including each
preliminary Prospectus) and any amendment or supplement thereto as such Persons
may reasonably request; the Company consents to the use of such Prospectus or
any amendment or supplement thereto by each of the selling Holders and the
underwriters, if any, in connection with the offering and sale of the
Registrable Securities covered by such Prospectus or any amendment or supplement
thereto;
(h) prior to any public offering of Registrable Securities,
cooperate with the selling Holders, the underwriters, if any, and their
respective counsel in connection with the attempt to register or qualify such
Registrable Securities for offer and sale under the securities or Blue Sky laws
of such jurisdictions within the United States as any seller or underwriter
reasonably requests in writing; keep each such registration or qualification
effective during the period such Registration Statement is required to be kept
effective and use reasonable efforts to enable the disposition in such
jurisdictions of the Registrable Securities covered by the applicable
Registration Statement; provided that the Company shall not be required to
qualify generally to do business in any jurisdiction where it is not then so
qualified or to take any action which would subject the Company to general
service of process in any jurisdiction where it is not at the time so subject or
to subject itself to taxation as doing business in any jurisdiction;
(i) cooperate with the selling Holders and the managing
underwriters, if any, to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold and not bearing any
restrictive legends; and enable such Registrable Securities to be in such
denominations and registered in such names as the managing underwriters may
request at least two Business Days prior to any sale of Registrable Securities
to the underwriters;
(j) upon the occurrence of any event contemplated by paragraph
(c)(vi) above, prepare a supplement or post-effective amendment to the
applicable Registration Statement or related Prospectus or any document
incorporated therein by reference or file any other required document so that,
as thereafter delivered to the purchasers of the Registrable Securities being
sold thereunder, such Prospectus will not contain an untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein not misleading;
-17-
(k) with respect to each issue or class of Registrable Securities,
use its best efforts to cause all Registrable Securities covered by the
applicable Registration Statement to be listed on each securities exchange, if
any, on which similar securities issued by the Company are then listed or, if
not then listed, cause such Registered Securities to be included in a national
automated quotation system;
(l) 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, if any, to
the underwriters in 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 managing underwriters) addressed to the underwriters
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 independent certified public accountants addressed to the
underwriters, if any, such letters to be in customary form and covering matters
of the type customarily covered in "cold comfort" letters obtained by
underwriters in connection with underwritten offerings; (iv) if an underwriting
agreement is entered into, the same shall set forth in full the indemnification
provisions and procedures of Section 7.04 hereof with respect to all parties to
be indemnified pursuant to said Section; and (v) the Company shall deliver such
documents and certificates as may be reasonably requested by the managing
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;
(m) provide a transfer agent and registrar and a CUSIP number for
all Registrable Securities, not later than the effective date of the applicable
Registration Statement;
(n) make available for inspection by a representative of the selling
Holders, any underwriter participating in any disposition pursuant to such
registration and any one firm of attorneys or accountants retained by such
selling Holders and any one firm of attorneys retained by the 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 representative, underwriter,
attorney or accountant in connection with such registration; provided, that any
records, information or documents that are designated by the Company in writing
as confidential shall be kept confidential by such Persons unless disclosure of
such records, information or documents is requested by court or administrative
order;
-18-
(o) otherwise use its best efforts to comply with all applicable
rules and regulations of the SEC, and make generally available to its security
holders an earnings statement, covering a period of not less than twelve (12)
months satisfying the provisions of Section 11(a) or Rule 158 of the Securities
Act not later than sixteen (16) months after the first day of the month
following the effective date of the applicable Registration Statement;
(p) use its best efforts to cause such Registrable Securities
covered by such registration statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary to enable the
sellers thereof to consummate the disposition of such Registrable Securities;
and
(q) take all such other actions as the Holders of a majority of the
Registrable Securities being sold (assuming exercise of the Warrants, as
applicable) and the underwriters, if any, reasonably request in order to
expedite or facilitate the disposition of such Registrable Securities.
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.
Holders shall have no registration rights hereunder in respect of
any proposed transfer of such securities if, in the opinion of recognized
securities counsel to the Company acceptable to the Holders, (A) registration
under the Securities Act is not required for the transfer of the Registrable
Securities in the manner provided by such Holder or (B) a post-effective
amendment to an existing registration statement would be legally sufficient for
such transfer and such post-effective amendment is filed with the SEC and
declared effective.
The provisions of subsections (a) (other than the proviso at the end
thereof), (d), (e), (h), (l), (n) and (p) above shall apply only in the event of
a Demand Registration. Expenses incurred in connection with this Section 7.03
shall be borne by the respective parties as otherwise provided in this
Agreement.
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.
-19-
Section 7.04: Indemnification.
(a) Indemnification by Company. The Company agrees to indemnify and
hold harmless each Holder, its officers, directors and agents and each Person
who controls such Holder or agents (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 any Person controlling such Holder 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 the 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
specifically for use therein. The Company shall also indemnify underwriters and
selling brokers 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, if requested.
This indemnity agreement shall be in addition to any liability which the Company
may otherwise have.
(b) Indemnification by Selling Holders. In connection with any
registration, each selling Holder will furnish to the Company in writing such
information as the Company reasonably requests for use in connection with any
Registration Statement or Prospectus and agrees to indemnify, to the same extent
as the indemnification provided by the Company in Section 7.04(a), the Company,
its directors and officers 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 hereunder be greater in amount than the dollar
amount of the net proceeds received by such Holder upon the sale of the
Registrable Securities giving rise to such indemnification obligation. The
Company
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shall be entitled to receive indemnities from underwriters and selling brokers
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 7.04(a) or 7.04(b) shall be available to
any party who shall fail to give notice as provided in this Section 7.04(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 reasonably
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be 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 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, which consent shall not be unreasonably withheld. It is understood that
the indemnifying party or parties shall not, in connection with any proceeding
or related proceedings in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm in such jurisdiction at any one time for
all such indemnified party or parties.
-21-
Section 7.05: Restrictions on Public Sale by Holder of Registrable
Securities. Each Holder whose Registrable Securities are covered by a
Registration Statement filed pursuant to Article VII hereof agrees, if requested
by the managing underwriters in an underwritten offering, not to effect any
public sale or distribution of any securities of the Company of the same class
as the securities included in such Registration Statement, including a sale
pursuant to Rule 144 under the Securities Act (except as part of such
underwritten registration), during the ten (10)-day period prior to, and during
the ninety (90)-day period beginning on, the closing date of each underwritten
offering made pursuant to such Registration Statement, to the extent timely
notified in writing by the managing underwriters.
ARTICLE VIII
Other Matters
Section 8.01: Expenses of Transfer. The Company shall from time to time
promptly pay, subject to the provisions of Section 6.01 and paragraph (d) of
Section 2.02, all taxes and charges that may be imposed upon the Company in
respect to the issuance or delivery of Warrant Shares upon the exercise of this
Warrant by the Warrantholder.
Section 8.02: Successors and Assigns. All the covenants and provisions of
this Warrant by or for the benefit of the Company shall bind and inure to the
benefit of its successors and assigns hereunder.
Section 8.03: 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 (assuming
exercise of the Warrants). 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 8.04: 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 8.05: Governing Law. This Warrant shall be governed by and
construed in accordance with the laws of the State of New York.
Section 8.06: 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
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other respect and of the remaining provisions contained herein shall not be
affected or impaired thereby.
Section 8.07: Integration/Entire Agreement. This Warrant is intended by
the parties as a final expression of their agreement and intended to be a
complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein. This Warrant
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.
Section 8.08: Attorneys' Fees. In any action or proceeding brought to
enforce any provisions of this Warrant, or where any provisions hereof are
validly asserted as a defense, the successful party shall be entitled to recover
reasonable attorneys' fees and disbursements in addition to its costs and
expenses and any other available remedy.
Section 8.09: 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 8.10: Notices. Notice or demand pursuant to this Warrant to be
given or made by the Warrantholder to or on the Company shall be sufficiently
given or made if sent by first class mail, postage prepaid, addressed, until
another address is designated in writing by the Company, as follows:
Celerity Systems, Inc.
9051 Executive Park Drive
Suite 302
Knoxville, Tennessee 37923
Any notice or demand authorized by this Warrant to be given or made by the
Company to or on the Warrantholder or a Holder of Registrable Securities shall
be sufficiently given or made if sent by first class mail, postage prepaid, to
the Warrantholder or the Holder of Registrable Securities at his or its last
known address as it shall appear on the books of the Company.
Section 8.11: Headings. The headings herein are for convenience only and
are not part of this Warrant and shall not affect the interpretation thereof.
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IN WITNESS WHEREOF, this Warrant has been duly executed by the Company
under its corporate seal as of the ____ day of _____________, 1997.
Celerity Systems, Inc.
By:
--------------------------------------
Name:
Title:
Attest:
------------------------
Secretary
The undersigned accepts this Warrant and
agrees to abide by the terms herein which
are applicable to the Warrantholder.
Hampshire Securities Corporation
-----------------------------------------
(Name of Warrantholder)
By:
--------------------------------------
(Name and title of duly authorized
officer)
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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
Assignee(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.
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SUBSCRIPTION FORM
(To be executed upon exercise of Warrant)
Celerity Systems, Inc.:
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 $____________.
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.
Please issue a certificate or certificates for such shares of Common Stock
in the name of, and pay any cash for any fractional share to:
Name:____________________________________
(Please Print Name, Address and
Social Security No.)
Address:_________________________________
_________________________________________
_________________________________________
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.
-26-
CASHLESS EXERCISE FORM
(To be executed upon exercise of Warrant
pursuant to Section 2.02(a)(ii))
The undersigned hereby irrevocably elects to surrender its Warrant for
________ shares of Common Stock pursuant to the Cashless Exercise provisions of
the within Warrant, as provided for in Section 2.02(a)(ii) of such Warrant.
If said number of shares shall not be all the shares exchangeable or
purchasable under the within Warrant, a new Warrant is to be issued in the name
of the undersigned for the balance remaining of the shares purchasable
thereunder.
Please issue a certificate or certificates for such shares of Common Stock
in the name of, and pay cash for fractional shares to:
Name:____________________________________
(Please Print Name, Address and
Social Security No.)
Address:_________________________________
_________________________________________
_________________________________________
Social Security Number:__________________
Signature:_______________________________
NOTE: The above signature should
correspond exactly with the name on the
first page of this Warrant or with the
name of the assignee appearing in the
assignment form below.
-27-