Pre-Effective Amendment to Registration of Securities by a Small-Business Issuer — Form SB-2
Filing Table of Contents
Document/Exhibit Description Pages Size
1: SB-2/A Pre-Effective Amendment to Registration of 142 740K
Securities by a Small-Business Issuer
2: EX-1 Underwriting Agreement 54 225K
3: EX-4.2 Instrument Defining the Rights of Security Holders 31 107K
4: EX-4.3 Instrument Defining the Rights of Security Holders 38 141K
5: EX-4.4 Instrument Defining the Rights of Security Holders 9 46K
6: EX-5 Opinion re: Legality 3 14K
7: EX-9.1 Voting Trust Agreement 6 27K
8: EX-9.2 Voting Trust Agreement 1 10K
9: EX-9.3 Voting Trust Agreement 1 10K
10: EX-9.4 Voting Trust Agreement 1 10K
11: EX-10.1 Material Contract 17 57K
12: EX-10.2 Material Contract 16 57K
13: EX-10.3 Material Contract 13 47K
14: EX-10.35 Material Contract 12 55K
15: EX-10.36 Material Contract 12 55K
16: EX-10.37 Material Contract 12 55K
17: EX-10.38 Material Contract 11 45K
18: EX-10.39 Material Contract 10 40K
19: EX-10.40 Material Contract 1 10K
20: EX-10.41 Material Contract 23 81K
21: EX-10.42 Material Contract 6 22K
22: EX-10.43 Material Contract 5 23K
23: EX-10.44 Material Contract 6 25K
24: EX-10.45 Material Contract 7 30K
25: EX-10.46 Material Contract 2 11K
26: EX-23.1 Consent of Experts or Counsel 1 8K
EX-4.3 — Instrument Defining the Rights of Security Holders
Exhibit Table of Contents
PROOF OF MAY 1, 1996
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SOUND SOURCE INTERACTIVE, INC.
THE BOSTON GROUP, L.P.
JOSEPH AND STEVENS & COMPANY, L.P.
REPRESENTATIVES' WARRANT AGREEMENT
Dated as of ____________, 1996
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REPRESENTATIVES' WARRANT AGREEMENT
THIS REPRESENTATIVES' WARRANT AGREEMENT (the "Agreement"), dated as of
_________ __, 1996, is made and entered into by and between SOUND SOURCE
INTERACTIVE, INC., a Delaware corporation (the "Company"), and THE BOSTON GROUP,
L.P. and JOSEPH STEVENS & CO., L.P. ("the Representatives").
The Company agrees to issue and sell to the Representatives and the
Representatives agree to purchase from the Company, for the price of $50,
warrants, as hereinafter described (the "Warrants" and together with any
warrants subsequently issued hereunder, the "Warrants"), to purchase (a) up to
240,000 shares, as may be adjusted from time to time as set forth herein, of the
Company's common stock, no par value (the "Common Stock") and (b) up to 120,000
Redeemable Warrants (as defined below), as adjusted from time to time as set
forth herein or in the Warrant Agreement dated ____________, 1996 between the
Company and Corporate Stock Transfer Corporation (the "Redeemable Warrant
Agreement"). This Warrant is being issued in connection with a public offering
(the "Offering") by the Company of 2,400,000 shares of Common Stock and
1,200,000 warrants to purchase Common Stock subject to the terms of the
Redeemable Warrant Agreement (the "Redeemable Warrants"), pursuant to an
underwriting agreement (the "Underwriting Agreement"), dated as of ___________,
1996, by and between the Company, Vincent Bitetti, Eric H. Winston, the several
Underwriters named therein and the Representatives. The shares of Common Stock
purchasable upon exercise of these Warrants, and the shares of Common Stock
issuable upon exercise of the Redeemable Warrants that may be purchased under
this Warrant are hereinafter referred to as the "Warrant Stock" and "Redeemable
Warrants." Redeemable Warrants are identical to the Redeemable Warrants issued
pursuant to the Underwriting Agreement. The Warrants shall be issued pursuant
to this Agreement on the Closing Date, as such term is defined in the
Underwriting Agreement.
In consideration of the foregoing and for the purpose of defining the
terms and provisions of the Warrants, the Warrant Stock, the Redeemable Warrants
and the respective rights and obligations thereunder, the Company and the
Representatives, for value received, hereby agree as follows:
SECTION 1. TRANSFERABILITY AND FORM OF WARRANTS.
1.1 REGISTRATION. All Warrants shall be numbered and shall be
registered on the books of the Company when issued.
1.2 TRANSFER. The Warrants shall be transferable only on the books
of the Company maintained at its principal office, wherever its principal office
may then be located, upon delivery thereof duly endorsed by a Warrant holder (a
"Warrantholder") or by its duly authorized attorney or representative and with
the signatures properly guaranteed, accompanied by proper evidence
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of succession, assignment or authority to transfer. Upon any registration of
transfer, the Company shall execute and deliver a new certificate evidencing
each such Warrant to each person entitled thereto.
1.3 LIMITATIONS ON TRANSFER OF THE WARRANTS. Warrants, Warrant
Stock, and Redeemable Warrants (collectively the "Securities") shall not be
sold, transferred, assigned or hypothecated by the Representatives until 9:00
a.m., Pacific time, on ______________, 1997 [ONE YEAR AFTER THE EFFECTIVE DATE]
and appropriate legends shall be placed on the Securities, except that Warrants
may be transferred before such date: (i) to one or more officers or partners of
any Warrantholder, and the officers or partners of any such partner; (ii) to any
other member of the National Association of Securities Dealers, Inc. which
participated in the Offering and the officers or partners of any such member;
(iii) to successors to a Warrantholder or the officers or partners of any such
successor; (iv) to a purchaser of all or substantially all of the assets of a
Warrantholder; or (v) by will, pursuant to the laws of descent or distribution
or by operation of law. The Warrants may be divided or combined, upon request
to the Company by a Warrantholder, into a certificate or certificates
representing the right to purchase the same aggregate number of Warrant Stock.
Unless the context indicates otherwise, the term "Warrantholder" shall include
the Representatives and any transferee or transferees of the Warrants pursuant
to this subsection 1.3 and as otherwise permitted by this Agreement, and the
term "Warrants" shall include any and all Warrants outstanding pursuant to this
Agreement, including those evidenced by a certificate or certificates issued
upon division, exchange, substitution or transfer pursuant to this Agreement.
1.4 FORM OF WARRANTS. The text of the Warrants and of the form of
election to purchase Warrant Stock and/or Redeemable Warrants shall be
substantially as set forth in Exhibit A attached hereto. The aggregate number
of shares of Common Stock and Redeemable Warrants issuable upon exercise of the
Warrants is subject to adjustment upon the occurrence of certain events, all as
hereinafter or therein provided. The Warrants shall be executed on behalf of
the Company by its Chief Executive Officer or its President and attested to by
its Chief Financial Officer or its Secretary. A Warrant bearing the signature
of an individual who was at any time the proper officer of the Company shall
bind the Company, notwithstanding that such individual shall have ceased to hold
such office prior to the delivery of such Warrant or did not hold such office on
the date of this Agreement or at any time thereafter.
The Warrants shall be dated as of the date of signature thereof
by the Company either upon initial issuance or upon division, exchange,
substitution or transfer.
1.5 LEGENDS. Each certificate for any of the Securities and the
Common Stock underlying the Warrants shall
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bear the following legend, unless, at the time of issuance such Security or
Common Stock is subject to a currently effective Registration Statement under
the Securities Act of 1933, as amended (the "Act"):
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE SOLD,
EXCHANGED, HYPOTHECATED OR TRANSFERRED IN ANY MANNER EXCEPT IN
COMPLIANCE WITH SECTION 11 OF THE REPRESENTATIVES' WARRANT
AGREEMENT PURSUANT TO WHICH THEY WERE ISSUED."
Any certificate issued at any time in exchange or substitution
for any certificate bearing such legend (except a new certificate issued upon
completion of a public distribution pursuant to an effective registration
statement under the Act, of the securities represented thereby) shall also bear
the above legend unless, in the opinion of the Company's counsel, the securities
represented thereby need no longer be subject to such restrictions.
SECTION 2. EXCHANGE OF WARRANT CERTIFICATE. Any Warrant certificate may
be exchanged for another certificate or certificates entitling the Warrantholder
to purchase a like aggregate number of shares of Warrant Stock or Redeemable
Warrants as the certificate or certificates surrendered then entitled such
Warrantholder to purchase. Any Warrantholder desiring to exchange a Warrant
certificate shall make such request in writing delivered to the Company, and
shall surrender, properly endorsed, the certificate evidencing the Warrant to be
so exchanged. Thereupon, the Company shall execute and deliver to the person
entitled thereto a new Warrant certificate or certificates as so requested.
SECTION 3. TERM OF WARRANTS; EXERCISE OF WARRANTS.
3.1 EXERCISE OF WARRANTS. Subject to the terms of this Agreement,
the Warrantholder shall have the right, at any time until 5:00 p.m., Pacific
Time, on _____________, 2001 [FOUR YEARS AFTER THE EFFECTIVE DATE] (the
"Termination Date"), to purchase from the Company up to the number of fully paid
and nonassessable shares of Warrant Stock and Redeemable Warrants to which the
Warrantholder may at the time be entitled to purchase pursuant to this
Agreement, upon surrender to the Company, at its principal office, of the
certificate evidencing the Warrants to be exercised, together with the purchase
form on the reverse thereof duly completed and executed, and upon payment to the
Company of the respective Warrant Price (as defined in and determined in
accordance with the provisions of this Section 3 and Sections 7 and 8 hereof)
for the number of shares of Warrant Stock and/or Redeemable Warrants in respect
of which such Warrants are then exercised, but in no event for less than 100
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shares of Warrant Stock or 100 Redeemable Warrants (unless less than an
aggregate of 100 shares of Warrant Stock or Redeemable Warrants, respectively,
are then purchasable under all outstanding Warrants held by such Warrantholder).
This Warrant may be exercised from time to time in whole or in part.
3.2 PAYMENT OF WARRANT PRICE. Payment of the Warrant Price shall be
made in cash, by certified or official bank check in Los Angeles Clearing House
funds (next day funds), or any combination thereof.
3.3 CASHLESS EXERCISE. In addition to the method of payment set
forth in Section 3.2 above and in lieu of any cash payment required thereunder,
unless otherwise prohibited by law, the Warrantholders shall have the right at
any time and from time to time to exercise the Warrants in full or in part (i)
by receiving from the Company the number of shares of Warrant Stock or
Redeemable Warrants, as the case may be, equal to the number of shares of
Warrant Stock or Redeemable Warrants, respectively, otherwise issuable upon such
exercise less the number of shares of Warrant Stock or Redeemable Warrants,
respectively, having an aggregate value on the date of exercise equal to the
respective Warrant Price multiplied by the number of shares of Warrant Stock or
Redeemable Warrants, respectively, for which this Warrant is being exercised
and/or (ii) by delivering to the Company the number of shares of Common Stock or
Redeemable Warrants, respectively, having an aggregate value on the date of
exercise equal to the respective Warrant Price multiplied by the number of
shares of Warrant Stock or Redeemable Warrants, respectively, for which this
Warrant is being exercised.
Upon surrender of the Warrants and payment of the respective
Warrant Price as aforesaid, the Company shall issue and cause to be delivered
with all reasonable dispatch to or upon the written order of the Warrantholder,
and in such name or names as the Warrantholder may designate, certificates for
the number of full shares of Warrant Stock or Redeemable Warrants so purchased
upon such exercise of the Warrant, together with cash, as provided in Section 9
hereof, in respect of any fractional shares or Redeemable Warrants otherwise
issuable upon such surrender. Such certificate or certificates, to the extent
permitted by law, shall be deemed to have been issued and any person so
designated to be named therein shall be defined to have become a holder of
record of such securities as of the date of surrender of the Warrants and
payment of the respective Warrant Price, as aforesaid, notwithstanding that the
certificate or certificates representing such securities shall not actually have
been delivered or that the stock transfer books or Redeemable Warrants books of
the Company shall then be closed. The Warrants shall be exercisable, at the
election of the Warrantholder, either in full or from time to time in part for
Common Stock or Redeemable Warrants, or both, and, in the event that a Warrant
is exercised in respect of less than all of the shares of Warrant Stock or
Redeemable Warrants specified therein at any time prior to the
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Termination Date, a new Warrant evidencing the remaining shares of the Warrant
Stock or Redeemable Warrants purchasable by such Warrantholders hereunder shall
be issued by the Company to such Warrantholders.
3.4 SOLICITATION FEE. The Company hereby appoints the
Representatives as the exclusive solicitation agents for the Warrants, and
hereby agrees to pay the Representatives a commission equal to five percent (5%)
of the exercise price of the Warrants, payable on the date of the exercise
thereof. The Company will not solicit the exercise of the Warrants other than
through the Representatives.
SECTION 4. VALIDITY; PAYMENT OF TAXES. All securities delivered upon
exercise of a Warrant shall be duly and validly issued and non-assessable. The
Company shall pay all documentary stamp taxes, if any, attributable to the
initial issuance of the Warrants and the shares of Warrant Stock and Redeemable
Warrants issuable upon the exercise of the Warrants; provided, however, the
Company shall not be required to pay any tax which may be payable in respect of
any secondary transfer of the Warrants, the Warrant Stock or Redeemable
Warrants.
SECTION 5. MUTILATED OR MISSING WARRANTS. In case the certificate or
certificates evidencing the Warrants shall be mutilated, lost, stolen or
destroyed, the Company shall, at the request of the Warrantholder, issue and
deliver in exchange and substitution for and upon cancellation of the mutilated
certificate or certificates, or in lieu of and substitution for the certificate
or certificates lost, stolen or destroyed, a new Warrant certificate or
certificates of like tenor and representing an equivalent right or interest, but
only upon receipt of evidence reasonably satisfactory to the Company of such
loss, theft or destruction of such Warrant.
SECTION 6. RESERVATION OF SHARES. The Company represents and warrants to
the Warrantholder that there has been reserved, and the Company shall at all
times keep reserved so long as the Warrants and Redeemable Warrants remain
outstanding, out of its authorized Common Stock, such number of shares of Common
Stock as shall be subject to purchase under the Warrants and Redeemable
Warrants. Every transfer agent for the Common Stock and other securities of the
Company issuable upon the exercise of the Warrants shall be irrevocably
authorized and directed at all times to reserve such number of authorized shares
and other securities as shall be requisite for such purpose. The Company shall
keep a copy of this Agreement on file with every transfer agent for the Common
Stock and other securities of the Company issuable upon the exercise of the
Warrants. The Company shall supply every such transfer agent with duly executed
stock and other certificates, as appropriate, for such purpose and shall provide
or otherwise make available any cash which may be payable in lieu of the
issuance of fractional shares, as provided in Section 9 hereof.
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SECTION 7. WARRANT PRICE. The price per share at which shares of Warrant
Stock shall be purchasable upon the exercise of the Warrants shall be 120% of
the initial public offering price of Common Stock in the Offering, subject to
adjustment pursuant to Section 8 hereof (as so adjusted from time to time, the
"Purchase Price"). The price per Redeemable Warrant at which Redeemable
Warrants shall be purchasable upon the exercise of the Warrants shall be 120% of
the initial public offering price of Redeemable Warrants sold in the Offering,
subject to adjustment pursuant to Section 8 hereof (as so adjusted from time to
time, the "Redeemable Warrant Price"). (The "Purchase Price" and "Redeemable
Warrant Price" are herein referred to as the respective "Warrant Price".)
SECTION 8. ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES OF COMMON
STOCK DELIVERABLE.
8.1 ADJUSTMENT OF PURCHASE PRICE.
(a) Except as hereinafter provided, in the event the Company
shall, at any time or from time to time after the date hereof, sell any shares
of Common Stock for a consideration per share less than the Purchase Price or
issue any shares of Common Stock as a stock dividend to the holders of Common
Stock, or subdivide or combine the outstanding shares of Common Stock into a
greater or lesser number of shares (any such sale, issuance, subdivision or
combination being herein called a "Change of Shares"), then, and thereafter upon
each further Change of Shares, the Purchase Price for the Warrants in effect
immediately prior to such Change of Shares shall be changed to a price
(including any applicable fraction of a cent to the nearest cent) determined by
dividing (A) the sum of (x) the total number of shares of Common Stock
outstanding immediately prior to such Change of Shares, multiplied by the
Purchase Price in effect immediately prior to such Change of Shares, and (y) the
consideration, if any, received by the Company upon such sale, issuance,
subdivision or combination by (B) the total number of shares of Common Stock
outstanding immediately after such Change of Shares; PROVIDED, HOWEVER, that in
no event shall the Purchase Price be adjusted pursuant to this computation to an
amount in excess of the Purchase Price in effect immediately prior to such
computation, except in the case of a combination of outstanding shares of Common
Stock.
For the purposes of any adjustment to be made in accordance with this
Section 8.1(a) the following provisions shall be applicable:
(i) In case of the issuance or sale of shares of Common Stock
(or of other securities deemed hereunder to involve the issuance or sale of
shares of Common Stock) for a consideration part or all of which shall be cash,
the amount of the cash portion of the consideration therefor deemed to have been
received by the Company shall be (i) the subscription price, if
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shares of Common Stock are offered by the Company for subscription, or (ii) the
public offering price (before deducting therefrom any compensation paid or
discount allowed in the sale, underwriting or purchase thereof by underwriters
or dealers or others performing similar services, or any expenses incurred in
connection therewith), if such securities are sold to underwriters or dealers
for public offering without a subscription offering, or (iii) the gross amount
of cash actually received by the Company for such securities, in any other case.
(ii) In case of the issuance or sale (otherwise than as a
dividend or other distribution on any stock of the Company, and otherwise than
on the exercise of options, rights or warrants or the conversion or exchange of
convertible or exchangeable securities) of shares of Common Stock (or of other
securities deemed hereunder to involve the issuance or sale of shares of Common
Stock) for a consideration part or all of which shall be other than cash or as
part of a unit, the amount of the consideration therefor other than cash deemed
to have been received by the Company or the amount received per share as part of
a unit shall be the value of such consideration as determined in good faith by
the Board of Directors of the Company on the basis of a record of values of
similar property, services or securities.
(iii) Shares of Common Stock issuable by way of dividend or other
distribution on any stock of the Company shall be deemed to have been issued
immediately after the opening of business on the day following the record date
for the determination of shareholders entitled to receive such dividend or other
distribution and shall be deemed to have been issued without consideration.
(iv) The reclassification of securities of the Company other
than shares of Common Stock into securities including shares of Common Stock
shall be deemed to involve the issuance of such shares of Common Stock for a
consideration other than cash immediately prior to the close of business on the
date fixed for the determination of security holders entitled to receive such
shares, and the value of the consideration allocable to such shares of Common
Stock shall be determined as provided in Section 8.1(a)(ii) hereof.
(v) The number of shares of Common Stock at any one time
outstanding shall be deemed to include the aggregate maximum number of shares
issuable (subject to readjustment upon the actual issuance thereof) upon the
exercise of options, rights or warrants and upon the conversion or exchange of
convertible or exchangeable securities.
(b) Upon each adjustment of the Purchase Price pursuant to this
Section 8, the number of shares of Common Stock purchasable upon the exercise of
each Warrant shall be the number derived by multiplying the number of shares of
Common Stock
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purchasable immediately prior to such adjustment by the Purchase Price in effect
prior to such adjustment and dividing the product so obtained by the applicable
adjusted Purchase Price.
8.2 ADJUSTMENTS FOR OPTIONS, ETC. In case the Company shall at any
time after the date hereof issue options, rights or warrants to subscribe for
shares of Common Stock, or issue any securities convertible into or exchangeable
for shares of Common Stock, for a consideration per share (determined as
provided in Section 8.1(a) hereof and as provided below) less than the Purchase
Price in effect immediately prior to the issuance of such options, rights or
warrants, or such convertible or exchangeable securities, or without
consideration (including the issuance of any such securities by way of dividend
or other distribution), the Purchase Price in effect immediately prior to the
issuance of such options, rights or warrants, or such convertible or
exchangeable securities, as the case may be, shall be reduced to a price
determined by making the computation in accordance with the provisions of
Section 8.1(a) hereof, provided that:
(a) The aggregate maximum number of shares of Common Stock, as
the case may be, issuable or that may become issuable under such options, rights
or warrants (assuming exercise in full even if not then currently exercisable or
currently exercisable in full) shall be deemed to be issued and outstanding at
the time such options, rights or warrants were issued, for a consideration equal
to the minimum purchase price per share provided for in such options, rights or
warrants at the time of issuance, plus the consideration, if any, received by
the Company for such options, rights or warrants; PROVIDED, HOWEVER, that upon
the expiration or other termination of such options, rights or warrants, if any
thereof shall not have been exercised, the number of shares of Common Stock
deemed to be issued and outstanding pursuant to this subsection (a) (and for the
purposes of Section 8.1(a)(v) hereof) shall be reduced by the number of shares
as to which options, warrants and/or rights shall have expired, and such number
of shares shall no longer be deemed to be issued and outstanding, and the
Purchase Price then in effect shall forthwith be readjusted and thereafter be
the price that it would have been had adjustment been made on the basis of the
issuance only of the shares actually issued plus the shares remaining issuable
upon the exercise of those options, rights or warrants as to which the exercise
rights shall not have expired or terminated unexercised.
(b) The aggregate maximum number of shares of Common Stock
issuable or that may become issuable upon conversion or exchange of any
convertible or exchangeable securities (assuming conversion or exchange in full
even if not then currently convertible or exchangeable in full) shall be deemed
to be issued and outstanding at the time of issuance of such securities, for a
consideration equal to the consideration received by the Company for such
securities, plus the minimum consideration, if any,
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receivable by the Company upon the conversion or exchange thereof; PROVIDED,
HOWEVER, that upon the termination of the right to convert or exchange such
convertible or exchangeable securities (whether by reason of redemption or
otherwise), the number of shares of Common Stock deemed to be issued and
outstanding pursuant to this subsection (b) (and for the purposes of Section
8.1(a)(v) hereof) shall be reduced by the number of shares as to which the
conversion or exchange rights shall have expired or terminated unexercised, and
such number of shares shall no longer be deemed to be issued and outstanding,
and the Purchase Price then in effect shall forthwith be readjusted and
thereafter be the price that it would have been had adjustment been made on the
basis of the issuance only of the shares actually issued plus the shares
remaining issuable upon conversion or exchange of those convertible or
exchangeable securities as to which the conversion or exchange rights shall not
have expired or terminated unexercised.
(c) If any change shall occur in the price per share provided
for in any of the options, rights or warrants referred to in Section 8.2(a)
hereof, or in the price per share or ratio at which the securities referred to
in Section 8.2(b) hereof are convertible or exchangeable, such options, rights
or warrants or conversion or exchange rights, as the case may be, to the extent
not theretofore exercised, shall be deemed to have expired or terminated on the
date when such price change became effective in respect of shares not
theretofore issued pursuant to the exercise or conversion or exchange thereof,
and the Company shall be deemed to have issued upon such date new options,
rights or warrants or convertible or exchangeable securities.
(d) In case of any reclassification or change of outstanding
shares of Common Stock issuable upon exercise of the Warrants (other than a
change in par value, or from par value to no par value, or from no par value to
par value or as a result of a subdivision or combination), or in case of any
consolidation or merger of the Company with or into another corporation (other
than a merger with a Subsidiary in which merger the Company is the continuing
corporation and which does not result in any reclassification or change of the
then outstanding shares of Common Stock or other capital stock issuable upon
exercise of the Warrants), or in case of any sale or conveyance to another
corporation of the property of the Company as an entirety or substantially as an
entirety, then, as a condition of such reclassification, change, consolidation,
merger, sale or conveyance, the Company, or such successor or purchasing
corporation, as the case may be, shall make lawful and adequate provision
whereby the Registered Holder of each Warrant then outstanding shall have the
right thereafter to receive on exercise of such Warrant the kind and amount of
securities and property receivable upon such reclassification, change,
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consolidation, merger, sale or conveyance by a holder of the number of
securities issuable upon exercise of such Warrant immediately prior to such
reclassification, change, consolidation, merger, sale or conveyance and shall
forthwith file at the Corporate Office of the Warrant Agent a statement signed
by its Chairman of the Board, President or a Vice President and by its Treasurer
or an Assistant Treasurer or its Secretary or an Assistant Secretary evidencing
such provision. Such provisions shall include provision for adjustments which
shall be as nearly equivalent as may be practicable to the adjustments provided
for in Sections 8.1 and 8.2 hereof. The above provisions of this Section 8.2(d)
shall similarly apply to successive reclassifications and changes of shares of
Common Stock and to successive consolidations, mergers, sales or conveyances.
(e) Irrespective of any adjustments or changes in the Warrant
Price or the number of shares of Common Stock or Redeemable Warrants purchasable
upon exercise of the Warrants, no changes shall be necessary to the face of the
Warrant Certificates theretofore and thereafter issued.
(f) After each adjustment of the Purchase Price and the Warrant
Exercise Price pursuant to this Section 8, the Company will promptly prepare a
certificate signed by the Chairman of the Board, President, or a Vice President
and by the Treasurer or an Assistant Treasurer or the Secretary or an Assistant
Secretary of the Company setting forth: (i) the Purchase Price and Warrant
Exercise Price, as so adjusted, (ii) the number of shares of Common Stock
purchasable upon exercise of each Warrant, after such adjustment, and (iii) a
brief statement of the facts accounting for such adjustment. The Company will
promptly file such certificate with the Company's Transfer Agent and cause a
brief summary thereof to be sent by ordinary first class mail to each Registered
Holder at his last address as it shall appear on the registry books of the
Warrant Agent. No failure to mail such notice nor any defect therein or in the
mailing thereof shall affect the validity thereof except as to the holder to
whom the Company failed to mail such notice, or except as to the holder whose
notice was defective. The affidavit of an officer of the Warrant Agent or the
Secretary or an Assistant Secretary of the Company that such notice has been
mailed shall, in the absence of fraud, be prima facie evidence of the facts
stated therein.
(g) No adjustment of the Purchase Price shall be made as a
result of or in connection with (i) the issuance or sale of shares of Common
Stock pursuant to options, warrants, stock purchase agreements and convertible
or exchangeable securities outstanding or in effect on the date hereof, (ii) the
issuance or sale of shares of Common Stock upon the exercise of any "incentive
stock options" (as such term is defined in the Internal Revenue Code of 1986, as
amended), or any non-qualified stock options to non-employee directors of the
Company pursuant to the Company's 1995 Stock Option Plan, whether or not such
options were outstanding on the date hereof, or (iii) the issuance or sale of
shares of Common Stock if the amount of said
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adjustment shall be less than ten cents ($.10); PROVIDED, HOWEVER, that in such
case, any adjustment that would otherwise be required then to be made shall be
carried forward and shall be made at the time of and together with the next
subsequent adjustment that shall amount, together with any adjustment so carried
forward, to at least ten cents ($. 10). In addition, Registered Holders shall
not be entitled to cash dividends paid by the Company prior to the exercise of
any Warrant or Warrants held by them.
8.3 ADJUSTMENT OF REDEEMABLE WARRANT PRICE. Upon each adjustment of
the Purchase Price pursuant to this Section 8, the Redeemable Warrant Price
shall be adjusted by multiplying the number of Redeemable Warrants immediately
prior to such adjustment by the Purchase Price in effect prior to such
adjustment and dividing the product so obtained by the applicable adjusted
Purchase Price. Upon any exercise of this Warrant, the Redeemable Warrants
issued shall reflect all anti-dilution changes made in such Redeemable Warrants
since the Warrant Agreement for the Redeemable Warrants was entered into.
8.4 PRESERVATION OF PURCHASE RIGHTS UPON RECLASSIFICATION,
CONSOLIDATION, ETC. In case of any consolidation of the Company with or merger
of the Company into another corporation or other entity or in case of any sale,
lease, conveyance or other transfer to another corporation, person or other
entity of the property, assets or business of the Company as an entirety or
substantially as an entirety, the Company or such successor or purchasing
corporation, person or other entity, as the case may be, shall execute with the
Warrantholder, and the agreements governing such consolidation, merger, sale,
lease, conveyance or other transfer shall require such execution of, an
agreement that the Warrantholder shall have the right thereafter upon payment of
the Warrant Price in effect immediately prior to such event, upon exercise of
the Warrants, to receive the kind and amount of shares and other securities and
property which it would have owned or have been entitled to receive after the
happening of such consolidation, merger, sale, lease, conveyance or other
transfer had the Warrants (and each underlying security) been exercised
immediately prior to such action. The Company shall promptly mail to each
Warrantholder by first class mail, postage prepaid, notice of the execution of
any such agreement. In the event of a merger described in Section 368(a)(2)(E)
of the Internal Revenue Code of 1986, in which the Company is the surviving
corporation, the right to purchase shares of Warrant Stock under the Warrants
shall terminate on the date of such merger and thereupon the Warrants shall
become null and void, but only if the controlling corporation shall agree to
substitute for the Warrants its warrant which entitles the holder thereof to
purchase upon its exercise the kind and amount of shares and other securities
and property which it would have owned or been entitled to receive had the
Warrants been exercised immediately prior to such merger. Any such agreements
referred to in this Section 8.4 shall provide for adjustments, which shall be as
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nearly equivalent as may be practicable to the adjustments provided for in
Section 8 hereof, and shall provide for terms and provisions at least as
favorable to the Warrantholder as those contained in this Agreement. The
provisions of this Section 8.4 shall similarly apply to successive
consolidations, mergers, sales, leases, conveyances or other transfers.
8.5 PAR VALUE OF SHARES OF COMMON STOCK. Before taking any action
which would cause an adjustment effectively reducing the portion of the Warrant
Price allocable to each share of Warrant Stock below the then par value per
share, if any, of the Warrant Stock issuable upon exercise of the Warrants, the
Company shall take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and legally issue
fully paid and nonassessable Warrant Stock upon exercise of the Warrants.
8.6 INDEPENDENT PUBLIC ACCOUNTANTS. The Company may retain Corbin &
Wertz (or such other accounting firm qualified to practice in front of the
Securities and Exchange Commission (the "Commission") as is reasonably
acceptable to the Representative) to make any computation required under this
Section 8, and a certificate signed by such firm shall be conclusive evidence of
the correctness of any computation made under this Section 8.
SECTION 9. FRACTIONAL SHARES; CURRENT MARKET PRICE. The Company shall not
be required to issue fractional shares of Common Stock or Redeemable Warrants on
the exercise of a Warrant. If any fraction of a share of Common Stock or
Redeemable Warrants would, except for the provisions of this Section 9, be
issuable upon the exercise of a Warrant (or specified portion thereof), the
Company shall in lieu thereof pay an amount in cash equal to the then Current
Market Price multiplied by such fraction (less the applicable Redeemable Warrant
Price for a Redeemable Warrant). For purposes of this Agreement, the term
"Current Market Price" shall mean (i) if the Common Stock is traded on the
Nasdaq National Market ("NNM") or on a national securities exchange, the per
share closing price of the Common Stock in the NNM or on the principal stock
exchange on which it is listed, as the case may be, on the date of exercise of
the Warrant or, with respect to any adjustment pursuant to Section 8.1 hereof,
on the date immediately preceding the announcement of the event causing such
adjustment or (ii) if the Common Stock is traded in the over-the-counter market
and not in the NNM or on any national securities exchange, the average of the
per share closing bid prices of the Common Stock on the thirty (30) consecutive
trading days immediately preceding the date in question, as reported by The
Nasdaq Small Cap Market (or an equivalent generally accepted reporting service
if quotations are not reported on The Nasdaq Small Cap Market). The closing
price referred to in clause (i) above shall be the last reported sale price or,
in the case no such reported sale takes place on such day, the average of the
reported closing bid and asked prices, in either case in the NNM or on the
principal stock exchange on which the Common Stock is
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then listed. For purposes of clause (ii) above, if trading in the Common Stock
is not reported by The Nasdaq Small Cap Market, the bid price referred to in
said clause shall be the lowest bid price as reported in the Nasdaq Electronic
Bulletin Board or, if not reported thereon, as reported in the "pink sheets"
published by National Quotation Bureau, Incorporated, and, if such Common Stock
is not so reported, shall be the price of a share of Common Stock determined by
the Company's Board of Directors in good faith.
SECTION 10. NO RIGHTS AS STOCKHOLDER; NOTICES TO WARRANTHOLDER. Except as
expressly provided herein, nothing contained in this Agreement or in the
Warrants shall be construed as conferring upon the warrantholder or its
transferees any rights as a shareholder of the Company, including the right to
vote, receive dividends, consent or receive notices as a shareholder in respect
of any meeting of shareholders for the election of directors of the Company or
any other matter. if, however, at any time prior to the expiration of the
Warrants and prior to their exercise, any one or more of the following events
shall occur:
(a) any action which would require an adjustment pursuant to
Section 8 hereof;
(b) an issuance by the Company of rights, options, warrants or
convertible securities to all or substantially all holders of its Common Stock,
without any charge to such holders, containing the right to subscribe for or
purchase Common Stock; or
(c) a dissolution, liquidation or winding up of the Company
(other than in connection with a consolidation, merger or sale of its property,
assets and business as an entirety or substantially as an entirety) shall be
proposed;
then the Company shall give notice in writing of such event to the
Warrantholder, as provided in Section 13 hereof, at least 20 days prior to the
date fixed as a record date or the date of closing the transfer books for the
determination of the stockholders entitled to any relevant dividend,
distribution or other rights or for the determination of stockholders entitled
to vote on such proposed dissolution, liquidation or winding up. Such notice
shall specify such record date or the date of closing the transfer books, as the
case may be.
SECTION 11. RESTRICTIONS ON TRANSFER; REGISTRATION RIGHTS; OBLIGATION'S IN
REGISTRATION.
11.1 NOTICE OF TRANSFER. The Warrantholder agrees that prior to
making any disposition of the Securities, other than to persons or entities
identified in the first sentence of Section 1.3, the Warrantholder shall give
written notice to the Company describing briefly the manner in which any such
proposed
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disposition is to be made; and no such disposition shall be made unless the
Warrantholder has notified, or currently with such disposition notifies, the
Company that in the opinion of counsel reasonably satisfactory to the Company a
registration statement, application or other notification, filing or post-
effective amendment or supplement thereto (hereinafter collectively a
"Registration Statement") under the Act or the state securities or "blue sky"
laws of any applicable jurisdiction is not required with respect to such
disposition and no such Registration Statement has been filed by the Company
with, and declared effective, if necessary, by, the Commission or state
securities commission or agency. The Warrantholder agrees that it shall use its
reasonable best efforts to obtain from any transferee who acquires any Warrants
in a private transaction with the Warrantholder an agreement by such transferee
that it agrees to be bound by any transfer restrictions set forth in this
subsection 11(a) then applicable to such transferees.
11.2 REGISTRATION OF SECURITIES. The Company shall be obligated to
prepare and file a registration statement, and amendments thereto, with the
Commission for the registration of the Securities under the Act and shall be
obligated to cause such registration statement, and amendments thereto, to be
declared effective by the Commission on or prior to ______________, 199_ [ONE
YEAR AFTER WARRANT ISSUED]. The Company shall be obligated to the registered
holders of the Securities to continually maintain, at the Company's own expense,
the currency and effectiveness of such registration statement of the Company,
including the filing of any and all applications and other notifications,
filings and post-effective amendments and supplements (collectively, the
"Current Registration Statement"), as may be necessary, so as to permit the
resale of the Securities until the earlier of the time that all shares of
Securities have been sold pursuant to the Current Registration Statement or the
Termination Date.
11.3 FURTHER RIGHTS OF WARRANT HOLDERS. If at any time after the date
hereof the Current Registration Statement is no longer in effect other than
because all Securities have been sold pursuant to the Current Registration
Statement or because the Termination Date has already occurred, the Company
shall be obligated to the registered holders of the Securities as follows:
(a) Whenever during the period beginning on ____________, 1997
[ONE YEAR AFTER THE EFFECTIVE DATE] and ending on _____________, 2004 [SEVEN
YEARS AFTER THE EFFECTIVE DATE], the Company proposes to file with the
Commission a Registration Statement (other than as to securities issued pursuant
to an employee benefit plan or as to a transaction subject to Rule 145
promulgated under the Act), it shall, at least thirty (30) days prior to each
such filing, give written notice of such proposed filing to each holder of the
Securities at their respective addresses as they appear on the records of the
Company, and shall offer to include and shall include in such filing any
proposed
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disposition of the Securities upon receipt by the Company, not more than twenty
(20) days following the receipt of such notice, of a request therefor setting
forth the facts with respect to such proposed disposition and all other
information with respect to such person reasonably necessary to be included in
such Registration Statement. In the event that such registration statement
relates to an underwritten offering on a "firm commitment" basis and the
managing underwriter for said offering advises the Company in writing that the
inclusion of such Securities in the offering would be materially and
substantially detrimental to the completion of the offering, such Securities
shall nevertheless be included in the Registration Statement, provided that the
Warrantholder and each holder of Securities desiring to have such Securities
included in the Registration Statement agrees in writing for a period of ninety
(90) days following such offering not to sell or otherwise dispose of such
Securities pursuant to such Registration Statement, which Registration Statement
the Company shall keep effective for a period of at least nine (9) months
following the expiration of such ninety (90) day period.
(b) In addition to any Registration Statement pursuant to
subparagraph (i) above, during the four-year period beginning on _____________,
1997 [ONE YEAR AFTER THE EFFECTIVE DATE] and ending on the Termination Date, the
Company will, as promptly as practicable (but in any event within sixty (60)
days), after written request (the "Request") by the Representative, or by a
person or persons holding (or having the right to acquire by virtue of holding
the Warrants) at least sixty percent (60%) of the shares of Warrant Stock which
have been (or may be) issued upon exercise of the Warrants and Redeemable
Warrants underlying the Warrants, prepare and file at the Company's expense a
Registration Statement with the Commission and such applications or other
filings as required under applicable state securities or blue sky laws
sufficient to permit the public offering of the Securities, and shall use its
reasonable best efforts at its own expense through its officers, directors,
auditors and counsel, in all matters necessary or advisable, to cause such
Registration Statement to become effective as promptly as practicable and to
maintain such effectiveness so as to permit resale of the Securities covered
by the Request until the earlier of the time that all such Securities have been
sold or the expiration of ninety (90) days from the effective date of the
Registration Statement; provided, however, that the Company shall only be
obligated to file one such Registration Statement under this Section 11.3(b).
Notwithstanding the foregoing, once and only once during the period the Company
would have an obligation to register the Securities pursuant to this Section
11.3(b), the Company shall not be obligated to effect a registration pursuant to
this Section 11.3(b) during the three (3) month period starting with the date
thirty (30) days prior to the Company's estimated date of filing of an
underwritten public offering of securities solely for the account of the
Company; provided that the Company is
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actively employing in good faith all reasonable efforts to cause such
registration statement to become effective and that the Company's estimate of
the date of filing such registration statement is made in good faith; provided
further, that the Company shall furnish to the Warrantholder and each holder of
Securities a certificate signed by the managing underwriter stating that it
would be seriously detrimental to the Company or its shareholders for the
registration statement to be filed in the near future.
(c) All fees, disbursements and out-of-pocket expenses (other
than the Warrantholder's brokerage fees and commissions and legal fees of
counsel to the Warrantholder, if any) in connection with the filing of any
Registration Statement or maintaining the currency and effectiveness of the
Current Registration Statement (or obtaining the opinion of counsel and any no-
action position of the commission with respect to sales under Rule 144) and in
complying with applicable federal securities and state securities and blue sky
laws shall be borne by the Company. The Company at its expense shall supply any
holder of the Securities with copies of such Registration Statement and the
prospectus included therein and other related documents and any opinions and no-
action letters in such quantities as may be reasonably requested by such holder
of the Securities.
(d) The Company shall not be required by this Section 11 to file
such Registration Statement if, in the opinion of counsel for the
Representative, which counsel shall be reasonably satisfactory to the Company,
or in the opinion of another counsel experienced in securities law matters
acceptable to counsel for such holders, the proposed public offering or other
transfer as to which such Registration Statement is requested is exempt from
applicable federal securities and state securities and blue sky laws and would
result in all purchasers or transferees obtaining securities which are not
"restricted securities," as defined in Rule 144 under the Act.
(e) The provisions of this Section 11 and of Section 12 hereof
shall apply to the extent provided herein if the Company chooses to file an
Offering Statement under Regulation A promulgated under the Act.
(f) Notwithstanding the other provisions of this Section 11, the
Company may, in full satisfaction of its obligations under this Section 11,
register the Securities with the Commission pursuant to the Act on any form then
available to it so as to allow the unrestricted sale of the Securities to the
public from time to time commencing at 9:00 a.m. Pacific time on _____________,
199_ and ending at 5:00 p.m. Pacific time on ____________, 200_ (the
"Registration Period"). If the Company elects to so satisfy its obligations
under this Section 11, the Company shall also file such applications and other
documents necessary to permit the sale of the Securities to the public
-16-
during the Registration Period in those states in which the Securities was
qualified for sale in the offering or such other states as the holders of the
Securities reasonably request. In order to comply with the provisions of this
Section 11.3(f), the Company may, but is not required to, file more than one
Registration Statement. The Company shall file such post-effective amendments
and supplements as may be necessary to maintain the currency of such
Registration Statement(s) during the period of its (their) use. In addition, if
the holders of the Securities participating in such registration are advised by
counsel that such Registration Statement, in their opinion, is deficient in any
material respect, the Company shall use its best efforts to cause such
Registration Statement to be amended to eliminate the concerns raised.
(g) The Company agrees that until all the Securities have been
sold under a Registration Statement or pursuant to Rule 144 under the Act, it
shall keep current in filing all materials required to be filed with the
Commission in order to permit the holders of such securities to sell the same
under Rule 144.
(h) In the event any holder of Securities timely elects to
participate in an offering by including Securities in a Registration Statement
pursuant to Section 11.3 hereof, the Company shall use its reasonable best
efforts to effect such registration to permit the sale of Securities in
accordance with the intended method or methods of disposition thereof, and
pursuant thereto, the Company shall, as expeditiously as possible:
(i) Prepare and file with the Commission a Registration
Statement or Registration Statements on a form available for the sale of the
Securities, and to cause any such Registration Statement filed under the Act
pursuant to Section 11.3 hereof to become effective at the earliest possible
date after the filing thereof and remain effective as provided herein and to
comply with all applicable rules and regulations of the Commission (the "Rules
and Regulations") in connection therewith, provided, however, that before filing
a Registration Statement or prospectus or any amendments or supplements thereto,
including documents which would be incorporated or deemed to be incorporated by
reference in the Registration Statement after the initial filing of any
Registration Statement, the Company will furnish to the Representatives and the
holders of the Securities, their respective counsel, and the underwriters, if
any, to be engaged in connection with the offering and sale by the Company (for
purposes of this Section 11.3(f), the "Public Underwriter"), copies of all such
documents proposed to be filed, which documents will he subject to the review of
the Representatives and such holders of the Securities, their respective counsel
and the Public Underwriter, if any, and the Company will not file any
Registration Statement, amendment thereto, any prospectus or any supplement
thereto (including such documents incorporated or deemed to be incorporated by
reference) to which the
-17-
Representatives or the Public Underwriter, if any, shall reasonably object;
(ii) Prepare and promptly file with the Commission such
amendments and post-effective amendments to a Registration Statement as may be
necessary to keep such Registration Statement continuously effective for a
period of twelve (12) months; 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 Act; and comply with the provisions of the Act
with respect to the disposition of all Securities covered by such Registration
Statement during the applicable period in accordance with the intended methods
of disposition as set forth in such Registration Statement or supplement to such
prospectus; the Company shall not be deemed to have used its reasonable best
efforts to keep a Registration Statement effective during the applicable period
if it intentionally or voluntarily takes any action that would result in the
Representatives or such Warrantholders not being able to sell such Securities;
(iii) As soon as the Company is advised or obtains knowledge
thereof, advise the Representatives and confirm the same in writing (1) when the
Registration Statement, as amended, becomes effective and when any post-
effective amendment to the Registration Statement becomes effective, (2) of the
issuance by the Commission or any State or other regulatory body of any stop
order or other order, or of the initiation or the threat or contemplation of any
proceeding, the outcome of which may result in the suspension of the
effectiveness of the Registration Statement or the issuance of any order
preventing or suspending the use of any preliminary prospectus or the
prospectus, or any amendment or supplement thereto, or the institution of any
proceedings for that purpose, (3) of the issuance by the Commission or any State
or other regulatory body of any proceedings for the suspension of the
qualification of any of the Securities for offering or sale in any jurisdiction
or of the initiation or the threat or contemplation of any proceeding for that
purpose, (4) of the receipt of any comments from the Commission and (5) of any
request by the Commission for any amendment to the Registration Statement or any
amendment or supplement to the prospectus related thereto or for additional
information; if the commission or any State or other regulatory body shall enter
a stop order or other order suspending the effectiveness of the Registration
Statement or preventing or suspending the use of any preliminary prospectus or
the prospectus, or any amendment or supplement thereto, or suspend such
qualification at any time, make every effort to obtain promptly the lifting of
such order or suspension;
(iv) If requested by the Public Underwriter, if any, or the
Representative, or any holder of Securities (1) immediately incorporate in a
prospectus supplement or post-effective amendment such information as the
Representatives or
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such Warrantholder and the Public Underwriter, if any, agree should be included
therein relating to such sale and distribution of the Securities, including,
without limitation, information with respect to the number of Securities being
sold to such Public Underwriter, the purchase price being paid therefor by such
Public Underwriter and with respect to any other terms of the underwritten
offering of the Securities to be sold in such offering; (2) make all required
filings of such prospectus supplement or post-effective amendment as soon as
notified of the matters to be so incorporated in such prospectus supplement or
post-effective amendment; and (3) supplement or amend any Registration Statement
if requested by the Representative, the holders of Securities or any underwriter
of Securities;
(v) Furnish to the Representative, each of the holders of
Securities and their respective counsel, without charge and at such place as the
Representatives may designate, copies of each preliminary prospectus, the
Registration Statement and any pre-effective or post-effective amendments
thereto (two of which will be signed and will include all financial statements
and exhibits, one for the Representatives and one for the Representatives'
Counsel), the Prospectus, and all amendments and supplements thereto, including
any prospectus prepared after the effective date of the Registration Statement
and any term sheet, in each case as soon as available and in such quantities as
the Representatives and each holder of the Securities may request;
(vi) During the time when a prospectus is required to be
delivered under the Act, shall comply with all requirements imposed upon it by
the Act and the Exchange Act, 1934, as amended (the "Exchange Act"), as now and
hereafter amended, and by the Rules and Regulations, as from time to time in
force, so far as necessary to permit the continuance of sales of or dealings in
the Securities in accordance with the provisions hereof and the prospectus, or
any amendments or supplements thereto; if at any time when a prospectus relating
to the Securities is required to be delivered under the Act, any event shall
have occurred as a result of which, in the opinion of the Company or counsel for
the Company or the Representatives or counsel for the Representatives, the
prospectus, as then amended or supplemented, would include an 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, in the light of the
circumstances in which they were made, not misleading, or if it is necessary at
any time to amend or supplement the Prospectus to comply with the Act, notify
the underwriter and prepare and file, at the Company's expense, with the
Commission an appropriate amendment or supplement to the Registration Statement
or an amendment or supplement to the prospectus which will correct such
statement or omission, or effect such compliance, each such amendment or
supplement to be reasonably satisfactory to the Representatives and the counsel
for the Representative; and furnish to the Representatives copies of such
-19-
amendment or supplement as soon as available and in such quantities as the
Representatives may request;
(vii) As soon as practicable, but in any event not later
than forty-five (45) days after the end of the twelve (12) month period
beginning after the effective date of the Registration Statement occurs, make
generally available to its security holders, in the manner specified in Rule
158(b) promulgated under the Act, and to the Representative, an earnings
statement which will comply with the provisions of Section 11(a) of the Act and
Rule 158(a) promulgated under the Act;
(viii) Deliver to the Representatives and each of the
holders of Securities, their respective counsel and the Public Underwriter, 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 any such
prospectus or any amendment or supplement thereto by the Representatives, the
holders of Securities and the Public Underwriter, if any, in connection with the
offering and sale of the Securities covered by such prospectus or any amendment
or supplement thereto;
(ix) Prior to any public offering of Securities, use its
best efforts, at or prior to the time the Registration Statement becomes
effective, to qualify the Shares for offering and sale under the securities or
"blue sky" laws of such jurisdictions as the Representatives may reasonably
designate to permit the continuance of sales and dealings therein for as long as
may be necessary to complete the distribution, and make such applications, file
such documents and furnish such information as may be required for such purpose;
provided, however, the Company shall not be required to qualify as a foreign
corporation or to execute a general consent to service of process in any such
jurisdiction; in each jurisdiction where such qualification shall be effected,
use its best efforts to file and make such statements or reports at such times
as are or may be required by the laws of such jurisdiction to continue such
qualification;
(x) Cooperate with the Representatives, the holders of the
Securities and the Public Underwriter, if any, to facilitate the timely
preparation and delivery of certificates representing Securities to be sold,
which certificates shall not bear any restrictive legends; and enable such
Securities to be in such denominations and registered in such names as the
Public Underwriter, if any, may request at least two (2) business days prior to
any sale of Securities;
(xi) Use its reasonable best efforts to cause the
Securities covered by the Registration Statement to be registered with or
approved by such other governmental bodies, agencies or authorities as may be
necessary to enable the
-20-
Representatives, the holders of the Securities or the Public Underwriter, if
any, to consummate the disposition of such Securities;
(xii) Make every reasonable effort to cause all Securities
covered by such Registration Statement to be (1) listed on each securities
exchange, if any, in which equity securities issued by the Company are then
listed or (2) authorized to be quoted on the NNM if the Company's Common Stock
is then authorized to be quoted on the NNM;
(xiii) Enter into such agreements (including, without
limitation, if applicable, an underwriting agreement, in form, scope and
substance as is customary in underwritten offerings) and take all such other
actions in connection therewith in order to expedite or facilitate the
disposition of such Securities and, in such connection, whether or not an
underwriting agreement is entered into and whether or not the registration is an
underwritten registration, (1) make such representations and warranties to the
Representatives and the holders of the Securities with respect to the business
of the Company and its subsidiaries and the Public Underwriter, if any, the
Registration Statement, the prospectus, the prospectus supplement (if any) and
documents, if any, incorporated or deemed to be incorporated by reference in the
Registration Statement, in each case in such form, substance and scope as are
customarily made by issuers to underwriters in underwritten offerings and
confirm the same if and when requested; (2) 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 Representatives and the
holders of the Securities), addressed to the Representatives and the holders of
the Securities with respect to the matters referred to in the preceding clause
in such form, scope and substance as are customarily rendered to underwriters in
underwritten offerings and such other matters as may be reasonably requested by
counsel to the Representatives, the holders of the Securities or the Public
Underwriter, if any; (3) obtain "cold comfort" letters and updates thereof from
the independent certified public accountants of the Company (and, if necessary,
any other independent certified public accountants of any subsidiary of the
Company or of any business acquired by the Company for which financial
statements and financial data is, or is required to be, included in the
Registration Statement) addressed to the Representatives, the holders of the
Securities and each of the Public Underwriters, if any, such letters to be in
customary form and covering matters of the type customarily covered in "cold
comfort" letters to underwriters in connection with underwritten offerings; (4)
if an underwriting agreement is entered into, the same shall set forth in full
the indemnification and contribution provisions and procedures of Section 12
hereof (or such other provisions and procedures as shall be acceptable to the
Representatives, the holders of the Securities and to the Public Underwriter of
such underwritten offering) with respect to all
-21-
parties to be indemnified pursuant to said section; and (5) deliver such
documents and certificates as may be reasonably requested by the
Representatives, the holders of the Securities and the Public Underwriter, if
any, to evidence the continued validity of the representations and warranties
made pursuant to clause (1) above and to evidence compliance 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;
(xiv) Make available for inspection by a representative of
the Representatives or the holders of the Securities or any Public Underwriter
participating in any disposition pursuant to such Registration Statement, and
any attorney or accountant retained by the Representatives or the holders of the
Securities or such Public Underwriter, all financial and other records,
pertinent corporate documents and properties and assets of the Company and its
subsidiaries and cause the officers, directors, agents and employees of the
Company and its subsidiaries to supply all information reasonably requested by
any such representative, Public Underwriter, attorney or accountant in
connection with any registration of the Securities; provided, however, that any
records, information or documents that are designated by, the Company in writing
at the time of delivery of such records, information or documents as
confidential shall be kept confidential by such persons unless (1) disclosure of
such records, information or documents is required by court or administrative
order or is necessary to respond to inquiries of governmental or regulatory
bodies, agencies or authorities, (2) disclosure of such records, information or
documents is, in the opinion of counsel to the Representatives or the holders of
the Securities or to any Public Underwriter, required by law regulations or
legal process, (3) such records, information or documents are otherwise publicly
available or (4) such records, information or documents become available to such
person from a source other than the Company, and such source is not bound by a
confidentiality agreement;
(xv) If the Company, in the exercise of its reasonable
judgment, objects to any change reasonably requested by the Representatives, the
holders of the Securities or the Public Underwriter, if any, to any Registration
Statement or prospectus or any amendments or supplements thereto (including
documents incorporated or deemed to be incorporated therein by reference) as
provided for in this Section 11.3(h), the Company shall not be obligated to make
any such change and the Representatives or the holders of the Securities may
withdraw Securities from such registration, in which event the Company shall pay
all registration expenses (including, without limitations, attorneys' fees and
expenses) incurred by the Representatives and the holders of the Securities in
connection with such Registration Statement or prospectus or any amendment
thereto or supplement thereof; provided, that if the Company
-22-
provides the Representatives and the holders of the Securities, as applicable,
with a written opinion of independent counsel (which counsel may be the
Company's regular outside counsel), upon which the Representatives and such
holders of the Securities may rely, that the change so requested is not required
in order that the Registration Statement comply with all applicable securities
laws (including any rules and regulations promulgated thereunder), the
Representatives and such holders of the Securities may withdraw Securities from
such registration but the Company shall not be obligated to pay any registration
expenses incurred by the Representatives and the holders of the Securities; and
(xvi) Pay all costs and expenses incident to the
performance of or compliance with the Company's obligations under Section 11.2
hereof and under this Section 11.3 (collectively, "Registration Expenses")
whether or not any Registration Statement is filed or becomes effective,
including, without limitation, the fees and disbursements of the Company's
auditors, legal counsel, special legal counsel, legal counsel responsible for
qualifying the Securities under blue sky laws, all filing fees and printing
expenses, all expenses in connection with the transfer and delivery of the
Securities, and all expenses in connection with the qualification of the
Securities under applicable blue sky laws; provided, however, that the Company
shall not bear the Public Underwriter's discount or commission with respect to,
or any transfer taxes imposed on, the Securities or the fees and expenses of
counsel to the Representatives or the holders of the Securities; provided,
further, however, that the Representatives shall not be responsible in any way
for any fees or expenses of the Company's counsel, except, in each case, as
provided in this Section 11.3.
(xvii) For purposes of this Section 11, a holder of
Securities shall include any holder of the Securities which have not been
offered in the public.
SECTION 12. INDEMNIFICATION AND CONTRIBUTION.
12.1 INDEMNIFICATION OF WARRANTHOLDERS. The Company agrees to
indemnify and hold harmless the Warrantholders and any Holder of Securities (for
purposes of this Section 12, "Holder" shall include such individuals and the
officers, directors, partners, employees, agents and counsel of a Warrantholder
or a holder of Securities), and each person, if any, who controls a Holder
("controlling person") within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act, from and against any and all losses, claims, damages,
expenses (including, without limitation, reasonable attorneys' fees and
expenses) or liabilities and all actions, suits, proceedings, injuries,
arbitrations, investigations, litigation or governmental or other proceedings
(in this Section 12, collectively, "actions") in respect thereof, whatsoever
(including, without limitation, any and all expenses whatsoever reasonably
incurred in investigating
-23-
preparing or defending against any action, commenced or threatened, or any claim
whatsoever), as such are incurred, to which a Holder or such controlling person
may become subject under the Act, the Exchange Act or any other statute or at
common law or otherwise, arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained (i) in any preliminary
prospectus, the Current Registration Statement, the Registration Statement or
any prospectus (as from time to time amended and supplemented); (ii) in any
post-effective amendment or amendments or any new registration statement and
prospectus in which is included securities of the Company issued or issuable
upon exercise of the Warrants; or (iii) in any application or other document or
written communication (in this Section 12, collectively, "application") executed
by the Company or based upon written information furnished by the Company in any
jurisdiction in order to qualify the Securities under the securities or blue sky
laws thereof or filed with the Commission, any state securities commission or
agency, the National Association of Securities Dealers, Inc. (the "NASD") or the
NNM or any other securities exchange; or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to make
the statements therein not misleading (in the case of any prospectus, in light
of the circumstances in which they were made), unless such statement or omission
was made in reliance upon and in conformity with written information furnished
to the Company with respect to a Holder by or on behalf of such Holder expressly
for use in any preliminary prospectus, the registration statement or any
prospectus, or any amendment thereof or supplement thereto, or in any
application, as the case may be. In addition to its other obligations under
this Section 12.1, the Company agrees that, as an interim measure during the
pendency of any action arising out of or based upon any untrue statement or
omission, or alleged untrue statement or alleged omission as described in this
Section 12.1, it shall reimburse the Holders (and, to the extent applicable,
each controlling person) on a monthly basis for all reasonable legal or other
expenses incurred in connection with investigating or defending any such action
notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the Company's obligations to reimburse the Holders (and, to
the extent applicable, each controlling person) for such expenses and the
possibility that such payments might later be held to have been improper by a
court of competent jurisdiction. To the extent that any such interim
reimbursement is so held to have been improper as to the Company, the Holders
(and, to the extent applicable, each controlling person) shall promptly return
it to the Company, together with interest compounded daily, based on the
"reference rate" announced from time to time by Bank of America NTSA (the "Prime
Rate"). Any such interim reimbursement payments which are not made to the
applicable Holder within thirty (30) days of a request for reimbursement shall
bear interest at the Prime Rate from the date of such request.
-24-
The indemnity agreement in this subsection 12.1 shall be in
addition to any liability which the Company may have at common law or otherwise.
12.2. INDEMNIFICATION OF COMPANY. Each Holder severally agrees to
indemnify and hold harmless the Company (for purposes of this Section 12,
"Company" shall include the officers, directors, partners, employees, agents and
counsel of the Company) and each other person, if any, who controls the Company
("controlling person") within the meaning of the Act, to the same extent as the
foregoing indemnity from the Company to the Holders, but only with respect to
statements or omissions, if any, made in any preliminary prospectus, the Current
Registration Statement, the Registration Statement or any prospectus or any
amendment thereof or supplement thereto or in any application made in reliance
upon, and in strict conformity with, written information furnished to the
Company with respect to such Holder by or on behalf of such Holder expressly for
use in any preliminary prospectus, the Current Registration Statement, the
Registration Statement or any prospectus or any amendment thereof or supplement
thereto or in any application, provided that such written information or
omissions only pertain to disclosures in any preliminary prospectus, the Current
Registration Statement, the Registration Statement or any prospectus directly
relating to the transactions in connection with the offering contemplated
hereby. In addition to its other obligations under this Section 12.2, each
Holder severally agrees that, as an interim measure during the pendency of any
action arising out of or based upon any untrue statement or omission, or alleged
untrue statement or alleged omission as described in this Section 12.2, it shall
reimburse the Company (and, to the extent applicable, each controlling person)
on a monthly basis for all reasonable legal or other expenses incurred in
connection with investigating or defending any action with respect to such
Holder notwithstanding the absence of a judicial determination as to the
propriety and enforceability of such Holder's obligations to reimburse the
Company (and, to the extent applicable, each controlling person) for such
expenses and the possibility that such payments might later be held to have been
improper by a court of competent jurisdiction. To the extent that any such
interim reimbursement is so held to have been improper as to such Holder, the
Company (and, to the extent applicable, each controlling person) shall promptly
return it to such Holder, together with interest compounded daily, based on the
Prime Rate. Any such interim reimbursement payments which are not made to the
company within thirty (30) days of a request for reimbursement shall bear
interest at the Prime Rate from the date of such request. Notwithstanding the
provi-
-25-
sions of this Section 12.2, in connection with a registration that includes
Securities pursuant to Section 11.3(a) hereof, no such Holder shall be required
to indemnify or hold harmless the Company or any controlling person for any
amounts in excess of the net proceeds (before deducting expenses) applicable to
the Securities sold by such Holder pursuant to the Registration Statement.
Notwithstanding the provisions of this Section 12.2, in connection with a
registration that includes that Holder's Securities pursuant to Sections 11.2 or
11.3, no such Holder shall be required to indemnify and hold harmless the
Company or any controlling person for any amounts in excess of that portion of
all expenses as to which indemnification is properly claimed under this
Agreement equal to such Holder's relevant proportion of all net proceeds (before
deduction of expenses) applicable to all securities sold pursuant to the Current
Registration Statement or the Registration Statement, as applicable.
12.3. NOTICE OF CLAIM. Promptly after receipt by an indemnified party
under this Section 12 of notice of the commencement of any action, such
indemnified party shall notify each party against whom indemnification is to be
sought in writing of the commencement thereof (but the failure to so notify an
indemnifying party shall not relieve it from any liability which it may have
under this Section 12 except to the extent that it has been materially
prejudiced by such Failure). In case any such action is brought against any
indemnified party, and it notifies an indemnifying party or parties of the
commencement thereof, the indemnifying party or parties shall be entitled to
participate therein, and to the extent it or they may elect by written notice
delivered to the indemnified party or parties promptly after receiving the
aforesaid notice from such indemnified party or parties, to assume the defense
thereof with counsel reasonably satisfactory to such indemnified party.
Notwithstanding the foregoing, an indemnified party shall have the right to
employ its own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of such indemnified party unless (i) the
employment of such counsel shall have been authorized in writing by the
indemnifying party or parties in connection with the defense of such action at
the expense of the indemnifying party or parties, (ii) the indemnifying party or
parties shall not have employed counsel reasonably satisfactory to such
indemnified party to have charge of the defense of such action within a
reasonable time after notice of commencement of the action or (iii) such
indemnified party shall have reasonably concluded that there may be one or more
defenses available to it which are different from or additional to those
available to one or all of the indemnifying parties (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 parties), in any of which events
such fees and expenses of one additional counsel (in addition to appropriate
local counsel) shall be borne by the indemnifying parties. In no event shall
the indemnifying parties be liable for fees and expenses of more than one
counsel (in addition to appropriate local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. Anything in this Section 12 to
the contrary notwithstanding, an indemnifying party shall not be liable for any
settlement of any
-26-
claim or action effected without its written consent; provided, however, that
such consent may not be unreasonably withheld.
12.4. CONTRIBUTION. In order to provide for just and equitable
contribution in any case in which (i) an indemnified party makes a claim for
indemnification pursuant to this Section 12, but it is judicially determined (by
the entry of a final judgment or decree by a court of competent jurisdiction and
the expiration of time to appeal or the denial of the last right of appeal) that
such indemnification may not be enforced in such case notwithstanding the fact
that the express provisions of this Section 12 provide for indemnification in
such case or (ii) contribution under the Act may be required on the part of any
indemnified party, then each indemnifying party shall contribute to the amount
paid as a result of such losses, claims, damages, expenses or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative fault of each of the contributing parties, on the one hand, and the
party to be indemnified, on the other hand, in connection with the statements or
omissions that resulted in such losses, claims, damages, expenses or liabilities
(or actions in respect thereof), as well as any other relevant equitable
considerations. Relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by such Holder, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The amount paid by an indemnified party as a
result of the losses, claims, damages, expenses or liabilities (or actions in
respect thereof) referred to in the first sentence of this Section 12.4 shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 12.4, in a
registration that includes a Holder's Securities pursuant to Sections 11.2 or
11.3 hereof, no Holder shall be required to contribute any amount in excess of
the net proceeds (before deducting expenses) applicable to the Securities sold
by such Holder pursuant to such registration statement and prospectus. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act and the cases and promulgations thereunder) shall be entitled
to contribution from any person who was not guilty of such fraudulent
misrepresentation. Any party entitled to contribution will, promptly after
receipt of notice of commencement of any action against such party in respect to
which a claim for contribution may be made against another party or parties
under this Section 12.4, notify such party or parties from whom contribution may
be sought, but the omission to so notify such party or parties shall not relieve
the party or parties from whom contribution may be sought from any obligation it
or they may have hereunder or otherwise than under this Section 12.4 except to
the extent it has been materially prejudiced by such failure. The contribution
-27-
agreement set forth above shall be in addition to any liabilities which any
indemnifying party may have at common law or otherwise.
SECTION 13. NOTICES. All notices and communications hereunder, except as
herein otherwise specifically provided, shall be in writing and shall be deemed
to have been duly given if mailed, delivered by hand or transmitted by any
standard form of telecommunication. Notices to the Warrantholders or a holder
of Securities shall be directed to The Boston Group, L.P. at 1999 Avenue of the
Stars, Suite 2550, Los Angeles, California 90067, Attention: Mr. Robert A.
DiMinico, with a copy to Jeffer, Mangels, Butler & Marmaro LLP, 2121 Avenue of
the Stars, 10th Floor, Los Angeles, California 90067, Attention: Steven J.
Insel, Esq. Notices to the Company shall be directed to the Company at 2985
East Hillcrest Drive, Suite A, Westlake Village, California 91362, Attention:
Mr. Vincent J. Bitetti and Mr. Eric H. Winston, with a copy to McDermott, Will &
Emery, 1850 K Street N.W., Suite 500, Washington, D.C. 20006, Attention: Robert
Kalik, Esq.
SECTION 14. PARTIES. This Agreement shall inure solely to the benefit of
and shall be binding upon, the Representative, the Company and the
Warrantholders and the holders of Securities and the controlling persons,
officers, directors and others referred to in Section 12 hereof, and their
respective successors, legal representatives and assigns, and no other person
shall have or be construed to have any legal or equitable right, remedy or claim
under or in respect of or by virtue of this Agreement or any provisions herein
contained.
SECTION 15. MERGER OR CONSOLIDATION OF THE COMPANY. The Company shall not
merge or consolidate with or into any other corporation or sell all or
substantially all of its property to another corporation, unless the provisions
of Section 8.4 hereof are complied with.
SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All statements
contained in the Underwriting Agreement, any schedule, exhibit, certificate or
other instrument delivered by or on behalf of the parties hereto, or in
connection with the transactions contemplated by this Agreement, shall be deemed
to be representations and warranties hereunder. Notwithstanding any
investigations made by or on behalf of the parties to this Agreement, all
representations, warranties and agreements made by the parties to this Agreement
or pursuant hereto shall survive the termination of this Agreement and the
issuance, sale and delivery of the Warrant and the Securities.
SECTION 17. CONSTRUCTION. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of California,
without giving effect to conflict of laws principles thereof.
SECTION 18. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to
-28-
be an original, and all of which taken together shall be deemed to be one and
the same instrument.
SECTION 19. ENTIRE AGREEMENT, AMENDMENTS. This Agreement and the
Underwriting Agreement constitute the entire agreement of the parties hereto
concerning the subject matter hereof and supersede all prior written or oral
agreements, understandings and negotiations with respect to the subject matter
hereof. This Agreement may not be amended, modified or altered except in a
writing signed by the Representatives and the Company.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed, all as of the day and year first above written.
SOUND SOURCE INTERACTIVE, INC.
By:
----------------------------
Name:
Title:
THE BOSTON GROUP, L.P.
By:
----------------------------
Name:
Title:
JOSEPH STEVENS & COMPANY, L.P.
By:
----------------------------
Name:
Title:
-29-
THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD,
EXCHANGED, HYPOTHECATED OR TRANSFERRED IN ANY MANNER EXCEPT IN
COMPLIANCE WITH SECTION 1.3 OF THE REPRESENTATIVES' WARRANT
AGREEMENT PURSUANT TO WHICH THEY WERE ISSUED.
WARRANT CERTIFICATE NO.
---
WARRANT TO PURCHASE
-------
SHARES OF COMMON STOCK AND
REDEEMABLE WARRANTS
----------
VOID AFTER 5:00 P.M.
PACIFIC TIME, ON , 2001
-----------------
SOUND SOURCE INTERACTIVE, INC.
INCORPORATED UNDER THE LAWS
OF THE STATE OF DELAWARE
This certifies that, for value received, THE BOSTON GROUP, L.P., the
registered holder hereof or assigns (the "Warrantholder"), is entitled to
purchase from SOUND SOURCE INTERACTIVE, INC. (the "Company"), at any time during
the period commencing at 9:00 am., Pacific time, on ________________, 199_, and
before 5:00 p.m., Pacific time, on ________________, 200_, at the purchase price
per share of Common Stock of $___________ (the "Purchase Price"), _______ shares
of Common Stock of the Company (the "Warrant Stock") and __________ Redeemable
Warrants. The number of shares of Common Stock of the Company purchasable upon
exercise of each Warrant or exercise price of such shares and Redeemable
Warrants evidenced hereby shall be subject to adjustment from time to time as
set forth in the Representatives' Warrant Agreement, dated as of ___________,
199_, by and between the Company and the Representatives (the "Representatives'
Warrant Agreement").
The Warrants evidenced hereby are issued under and in accordance with the
Representatives' Warrant Agreement and a Warrant Agreement dated ____________,
1996 between the Company and Corporate Stock Transfer Corporation, as warrant
agent (the "Redeemable Warrant Agreement"), and are subject to the terms and
provisions contained in the Representatives' Warrant Agreement and the
Redeemable Warrant Agreement, to all of which the Warrantholder by acceptance
hereof consents.
The Warrants evidenced hereby may be exercised in whole or in part by
presentation of this Warrant Certificate with the Purchase Form attached hereto
duly executed (with a signature guarantee as provided hereon) and simultaneous
payment of the respective Warrant Price at the principal office of the Company.
Payment of such price shall be made at the option of the Warrantholder in any
manner allowed in the Representatives' Warrant Agreement.
-30-
Upon any partial exercise of the Warrants evidenced hereby, there shall be
signed and issued to the Warrantholder a new Warrant Certificate in respect of
the shares of Warrant Stock and Redeemable Warrants as to which the Warrants
evidenced hereby shall not have been exercised. These Warrants may be exchanged
at the office of the Company by surrender of this Warrant Certificate properly
endorsed for one or more new Warrants of the same aggregate number of shares of
Warrant Stock or Redeemable Warrants as evidenced by the Warrant or Warrants
exchanged. No fractional securities shall be issued upon the exercise of rights
to purchase hereunder, but the Company shall pay the cash value of any fraction
upon the exercise of one or more Warrants. These Warrants are transferable at
the office of the Company in the manner and subject to the limitations set forth
in the Warrant Agreement.
This Warrant Certificate does not entitle any Warrantholder to any of the
rights of a shareholder of the Company.
SOUND SOURCE INTERACTIVE, INC.
By:
----------------------------
Name: Eric H. Winston
Title: President
Dated: , 1996
-------------
ATTEST: [Seal]
-----------------------------
Name: Ulrich Gottschling
Title: Chief Financial Officer
-31-
SOUND SOURCE INTERACTIVE, INC.
PURCHASE FORM
SOUND SOURCE INTERACTIVE, INC. (the "Company")
2985 E. Hillcrest Drive, Suite A
Westlake Village, CA 91362
Attention: President
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 of the Company (the "Warrant Stock") and/or
________ Redeemable Warrants provided for therein, and requests that
certificates for the Warrant Stock and/or Redeemable Warrants be issued in the
name of:
--------------------------------------------------------
(Please print or Type Name, Address and Social Security Number)
--------------------------------------------------------
--------------------------------------------------------
and, if said number of shares of Warrant Stock and Redeemable Warrants shall not
be all the Warrant Stock and Redeemable Share purchasable hereunder, that a new
Warrant Certificate for the balance of the Warrant Stock and Redeemable Share
purchasable under the within Warrant Certificate be registered in the name of
the undersigned Warrantholder or his Assignee as below indicated and delivered
to the address stated below.
Dated:
-----------------
Name of Warrantholder
or Assignee:
-------------------------
(Please Print)
Address:
-------------------------
-------------------------
Signature:
-------------------------
Note: The above signature must correspond with the name as it appears upon the
face of this Warrant Certificate in every particular, without alteration or
enlargement or any change whatever, unless these Warrants have been assigned.
Signature Guaranteed:
-----------------------------
(Signature must be guaranteed by a bank or trust company having an office or
correspondent in the United States or by a member firm of a registered
securities exchange of the National Association of Securities Dealers, Inc.)
-32-
ASSIGNMENT
(To be signed only upon assignment of Warrants)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers the
right to purchase _____ shares of Warrant Stock represented by the within
Warrant Certificate unto, and requests that a certificate for such Warrant be
issued in the name of:
--------------------------------------------------------
(Name and Address of Assignee Must be Printed or Typewritten)
--------------------------------------------------------
--------------------------------------------------------
hereby irrevocably constituting and appointing _______________ Attorney to
transfer said Warrants on the books of the Company, with full power of
substitution in the premises and, if said number of warrant Stock shall not be
all of the Securities purchasable under the within Warrant Certificate, that a
new Warrant Certificate for the balance of the Securities purchasable under the
within Warrant Certificate be registered in the name of the undersigned
Warrantholder and delivered to such Warrantholder's address as then set forth on
the Company's books.
Dated:
--------------- -----------------------------------
Signature of Registered Holder
Note: The above signature must correspond with the name as it appears upon the
face of this Warrant Certificate in every particular, without alteration or
enlargement or any change whatever.
Signature Guaranteed:
----------------------------------
(Signature must be guaranteed by a bank or trust company having an office or
correspondent in the United States or by a member firm of a registered
securities exchange or the National Association of Securities Dealers, Inc.
-33-
THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD,
EXCHANGED, HYPOTHECATED OR TRANSFERRED IN ANY MANNER EXCEPT IN
COMPLIANCE WITH SECTION 1.3 OF THE REPRESENTATIVES' WARRANT
AGREEMENT PURSUANT TO WHICH THEY WERE ISSUED.
WARRANT CERTIFICATE NO.
---
WARRANT TO PURCHASE
-------
SHARES OF COMMON STOCK AND
REDEEMABLE WARRANTS
----------
VOID AFTER 5:00 P.M.
PACIFIC TIME, ON , 2001
-----------------
SOUND SOURCE INTERACTIVE, INC.
INCORPORATED UNDER THE LAWS
OF THE STATE OF DELAWARE
This certifies that, for value received, JOSEPH STEVENS & COMPANY, L.P.,
the registered holder hereof or assigns (the "Warrantholder"), is entitled to
purchase from SOUND SOURCE INTERACTIVE, INC. (the "Company"), at any time during
the period commencing at 9:00 am., Pacific time, on ________________, 199_, and
before 5:00 p.m., Pacific time, on ________________, 200_, at the purchase price
per share of Common Stock of $___________ (the "Purchase Price"), _______ shares
of Common Stock of the Company (the "Warrant Stock") and __________ Redeemable
Warrants. The number of shares of Common Stock of the Company purchasable upon
exercise of each Warrant or exercise price of such shares and Redeemable
Warrants evidenced hereby shall be subject to adjustment from time to time as
set forth in the Representatives' Warrant Agreement, dated as of ___________,
199_, by and between the Company and the Representatives (the "Representatives'
Warrant Agreement").
The Warrants evidenced hereby are issued under and in accordance with the
Representatives' Warrant Agreement and a Warrant Agreement dated ____________,
1996 between the Company and Corporate Stock Transfer Corporation, as warrant
agent (the "Redeemable Warrant Agreement"), and are subject to the terms and
provisions contained in the Representatives' Warrant Agreement and the
Redeemable Warrant Agreement, to all of which the Warrantholder by acceptance
hereof consents.
The Warrants evidenced hereby may be exercised in whole or in part by
presentation of this Warrant Certificate with the Purchase Form attached hereto
duly executed (with a signature guarantee as provided hereon) and simultaneous
payment of the respective Warrant Price at the principal office of the Company.
Payment of such price shall be made at the option of the Warrantholder in any
manner allowed in the Representatives' Warrant Agreement.
-34-
Upon any partial exercise of the Warrants evidenced hereby, there shall be
signed and issued to the Warrantholder a new Warrant Certificate in respect of
the shares of Warrant Stock and Redeemable Warrants as to which the Warrants
evidenced hereby shall not have been exercised. These Warrants may be exchanged
at the office of the Company by surrender of this Warrant Certificate properly
endorsed for one or more new Warrants of the same aggregate number of shares of
Warrant Stock or Redeemable Warrants as evidenced by the Warrant or Warrants
exchanged. No fractional securities shall be issued upon the exercise of rights
to purchase hereunder, but the Company shall pay the cash value of any fraction
upon the exercise of one or more Warrants. These Warrants are transferable at
the office of the Company in the manner and subject to the limitations set forth
in the Warrant Agreement.
This Warrant Certificate does not entitle any Warrantholder to any of the
rights of a shareholder of the Company.
SOUND SOURCE INTERACTIVE, INC.
By:
----------------------------
Name: Vincent J. Bitetti
Title: Chief Executive Officer
Dated: , 199
------------- -
ATTEST: [Seal]
-----------------------------
Name: Ulrich Gottschling
Title: Chief Financial Officer
-35-
SOUND SOURCE INTERACTIVE, INC.
PURCHASE FORM
SOUND SOURCE INTERACTIVE, INC. (the "Company")
2985 E. Hillcrest Drive, Suite A
Westlake Village, CA 91362
Attention: President
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 of the Company (the "Warrant Stock") and/or
________ Redeemable Warrants provided for therein, and requests that
certificates for the Warrant Stock and/or Redeemable Warrants be issued in the
name of:
--------------------------------------------------------
(Please print or Type Name, Address and Social Security Number)
--------------------------------------------------------
--------------------------------------------------------
and, if said number of shares of Warrant Stock and Redeemable Warrants shall not
be all the Warrant Stock and Redeemable Share purchasable hereunder, that a new
Warrant Certificate for the balance of the Warrant Stock and Redeemable Share
purchasable under the within Warrant Certificate be registered in the name of
the undersigned Warrantholder or his Assignee as below indicated and delivered
to the address stated below.
Dated:
-----------------
Name of Warrantholder
or Assignee:
-------------------------
(Please Print)
Address:
-------------------------
-------------------------
Signature:
-------------------------
Note: The above signature must correspond with the name as it appears upon the
face of this Warrant Certificate in every particular, without alteration or
enlargement or any change whatever, unless these Warrants have been assigned.
Signature Guaranteed:
-----------------------------
(Signature must be guaranteed by a bank or trust company having an office or
correspondent in the United States or by a member firm of a registered
securities exchange of the National Association of Securities Dealers, Inc.)
-36-
ASSIGNMENT
(To be signed only upon assignment of Warrants)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers the
right to purchase _____ shares of Warrant Stock represented by the within
Warrant Certificate unto, and requests that a certificate for such Warrant be
issued in the name of:
--------------------------------------------------------
(Name and Address of Assignee Must be Printed or Typewritten)
--------------------------------------------------------
--------------------------------------------------------
hereby irrevocably constituting and appointing _______________ Attorney to
transfer said Warrants on the books of the Company, with full power of
substitution in the premises and, if said number of warrant Stock shall not be
all of the Securities purchasable under the within Warrant Certificate, that a
new Warrant Certificate for the balance of the Securities purchasable under the
within Warrant Certificate be registered in the name of the undersigned
Warrantholder and delivered to such Warrantholder's address as then set forth on
the Company's books.
Dated:
--------------- -----------------------------------
Signature of Registered Holder
Note: The above signature must correspond with the name as it appears upon the
face of this Warrant Certificate in every particular, without alteration or
enlargement or any change whatever.
Signature Guaranteed:
----------------------------------
(Signature must be guaranteed by a bank or trust company having an office or
correspondent in the United States or by a member firm of a registered
securities exchange or the National Association of Securities Dealers, Inc.
-37-
Dates Referenced Herein and Documents Incorporated by Reference
| Referenced-On Page |
|---|
| This ‘SB-2/A’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| Filed on: | | 5/9/96 | | | | | | | None on these Dates |
| | 5/1/96 | | 1 |
| List all Filings |
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