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EXHIBIT 4.11
VOID AFTER 5:00 P.M., EASTERN STANDARD TIME ON NOVEMBER __, 2003
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES. THE SECURITIES REPRESENTED HEREBY MAY NOT BE OFFERED
OR SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER APPLICABLE SECURITIES LAWS, OR UNLESS
OFFERED, SOLD OR TRANSFERRED PURSUANT TO AN AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THOSE LAWS.
Right to Subscribe for ______ American Depositary Shares
Date: November __, 2000 Warrant No.: ______
INSIGNIA SOLUTIONS PLC
ADSS PURCHASE WARRANT
THIS CERTIFIES THAT, for value received, ______________________
("_______"), or its registered assigns, is entitled to subscribe for from
Insignia Solutions plc, a company organized and existing under the laws of
England and Wales (the "COMPANY"), at any time or from time to time during the
period specified in Section 2 hereof, _______ fully paid American depositary
shares (the "ADSS" or "SHARES"), each ADS representing one ordinary share of 20
pence each nominal value of the Company (the "ORDINARY SHARES"), at an exercise
price equal to the lower of (i) $6.00 per ADS (the "$6.00 EXERCISE PRICE") and
(ii) a ten percent (10%) discount to the average of the Closing Sale Price per
ADS for the ten (10) days preceding the day the holder hereof (the "HOLDER")
informs the Company of its intent to exercise this Warrant (the "MARKET EXERCISE
PRICE" and, together with the $6.00 EXERCISE PRICE, the "EXERCISE PRICE") by
delivering to the Company a form of Exercise Agreement (as hereinafter defined)
in the form of EXHIBIT A hereto; PROVIDED, that in no event shall the Exercise
Price be less than the nominal value of each Ordinary Share. This Warrant is
being issued pursuant to that certain Subscription Agreement, dated November
___, 2000 (the "SUBSCRIPTION AGREEMENT"), by and between the Company and
___________. The number of ADSs purchasable hereunder (the "WARRANT SHARES") and
the Exercise Price are subject to adjustment as provided herein.
The term "CLOSING SALE PRICE" means, for any security as of any date,
the last closing trade price for such security on the principal market as
reported by Bloomberg Financial Markets ("BLOOMBERG"), or if the principal
market begins to operate on an extended hours basis, and does not designate the
closing trade price, then the last trade price at 4:00 p.m. Eastern Standard
Time as reported by Bloomberg, or, if the foregoing do not apply, the last
closing trade price of such security in the over-the-counter market on the
electronic bulletin board for such security as
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reported by Bloomberg, or, if no last closing trade price is reported for such
security by Bloomberg, the last closing ask price of such security as reported
by Bloomberg, or, if no last closing ask price is reported for such security by
Bloomberg, the average of the lowest ask price and lowest bid price of any
market makers for such security as reported in the "pink sheets" by the National
Quotation Bureau, Inc. If the Closing Sale Price cannot be calculated as of such
date on any of the foregoing bases, the Closing Sale Price shall be the average
fair market value as reasonably determined by an investment banking firm
selected by the Company and reasonably acceptable to the Holder of this Warrant,
with the costs of the appraisal to be borne by the Company. All such
determinations to be appropriately adjusted for any share dividend, share split
or other similar transaction during such period.
This Warrant is subject to the following terms, provisions, and
conditions:
1. MECHANICS OF EXERCISE. Subject to the provisions hereof, including,
without limitation, this Warrant may be exercised as follows:
(a) MANNER OF EXERCISE. This Warrant may be exercised by the
Holder, in whole or in part, from time to time, by the surrender of this Warrant
(within three business days of delivering the Exercise Agreement and Exercise
Price) (or evidence of loss, theft, destruction or mutilation thereof in
accordance with Section 7(c) hereof), together with a completed exercise
agreement in the Form of Exercise Agreement attached hereto as EXHIBIT A (the
"EXERCISE AGREEMENT"), to the Company at the Company's principal executive
offices (or such other office or agency of the Company as it may designate by
notice to the Holder), and upon payment to the Company in cash, by certified or
official bank check or by wire transfer for the account of the Company, of the
Exercise Price for the Warrant Shares specified in the Exercise Agreement.
(b) ISSUANCE OF CERTIFICATES. Subject to Section 1(c),
certificates for the Warrant Shares to be so purchased, representing the
aggregate number of Shares specified in the Exercise Agreement, shall be
delivered to the Holder within a reasonable time, not exceeding three (3)
business days, after this Warrant shall have been so exercised (the "DELIVERY
PERIOD"). The certificates to be so delivered shall be in such denominations as
may be requested by the Holder and shall be registered in the name of Holder. If
this Warrant shall have been exercised only in part, then, unless this Warrant
has expired, the Company shall, at its expense, at the time of delivery of such
certificates, deliver to the Holder a new Warrant representing the number of
Shares with respect to which this Warrant shall not then have been exercised.
Upon delivery of this Warrant (within three business days of delivering the
Exercise Agreement and Exercise Price), the Exercise Agreement and Exercise
Price referred to in Section 1(a), the Holder of this Warrant shall be deemed
for all corporate purposes to have become the holder of record of the Warrant
Shares with respect to which this Warrant has been exercised, irrespective of
the date of delivery of this Warrant or the certificates evidencing such Warrant
Shares.
(c) EXERCISE DISPUTES. In the case of any dispute with respect to
an exercise, the Company shall promptly issue such number of ADSs as are not
disputed in accordance with this Section. If such dispute involves the
calculation of the $6.00 Exercise Price, the Company shall submit the disputed
calculations to a nationally recognized independent accounting firm (selected by
the Company and reasonably acceptable to Holder) via facsimile within three (3)
business days of receipt of the Exercise Agreement. The accounting firm shall
audit the
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calculations and notify the Company and the Holder of the results no later than
two (2) business days from the date it receives the disputed calculations. The
accounting firm's calculation shall be deemed conclusive, absent manifest error.
The Company shall then issue the appropriate number of ADSs in accordance with
this Section. The Company shall bear all reasonable expenses incurred pursuant
to this Section 1(c).
(d) FRACTIONAL SHARES. No fractional ADSs are to be issued upon
the exercise of this Warrant, but the Company shall pay a cash adjustment in
respect of any fractional Share which would otherwise be issuable in an amount
equal to the same fraction of the Exercise Price of an ADS (as determined for
exercise of this Warrant into whole ADSs); PROVIDED, that in the event that
sufficient funds are not legally available for the payment of such cash
adjustment any fractional ADSs shall be rounded up to the next whole number.
(e) RIGHT OF CANCELLATION. In connection with Section 5 of the
Subscription Agreement, during any thirty (30) consecutive trading days
following the effectiveness of the registration statement referred to in Section
5.3(a) of the Subscription Agreement (the "MEASUREMENT PERIOD"), the Closing
Sale Price of the ADSs exceeds $9.00, the Company may cancel the Warrant upon 60
days (the "NOTICE PERIOD") prior written notice (the "CANCELLATION NOTICE") to
the Holder in the form of EXHIBIT B hereto; PROVIDED, THAT on the date the
Company delivers the Cancellation Notice and during the Notice Period and the
Measurement Period (i) the registration statement covering the Warrant Shares is
effective and remains effective continuously during the Notice Period, (ii) the
ADSs are included for quotation on the Nasdaq National Market System ("NNM") or
listed for trading on a national securities exchange, (iii) the Warrant Shares
are included for quotation on NNM or listed for trading on a national securities
exchange, (iv) the exercise of all the warrants subject to the Cancellation
Notice does not, and will not, violate the rules of NNM or, if not then included
for quotation on NNM, the national securities exchange upon which the ADSs are
then listed and trading and (v) the Company has not failed to fulfill and
perform any agreement, covenant or undertaking pursuant to the Subscription
Agreement and this Warrant.
2. PERIOD OF EXERCISE. Subject to cancellation under Section 1(e),
this Warrant is exercisable at any time and from time to time on or after the
date hereof and before 5:00 P.M., Eastern Standard Time on the third (3rd)
anniversary of the date hereof (the "EXERCISE PERIOD").
3. CERTAIN AGREEMENTS OF THE COMPANY. The Company hereby covenants and
agrees as follows:
(a) SHARES TO BE FULLY PAID. All Warrant Shares and Ordinary
Shares that are represented by such Warrant Shares will, upon issuance in
accordance with the terms of this Warrant, be validly issued, fully paid and
free from all taxes, liens, claims and encumbrances and shall be entitled to the
benefits specified in the corresponding American depositary receipts ("ADRS")
and in the Deposit Agreement, dated November 17, 1995 (the "DEPOSIT AGREEMENT"),
as amended, between the Company and The Bank of New York (the "DEPOSITARY")
relating to such ADSs.
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(b) RESERVATION OF ORDINARY SHARES AND DEPOSIT OF ADSS. During the
Exercise Period, the Company shall at all times have authorized, and reserved
for the purpose of issuance upon exercise of this Warrant, a sufficient number
of Ordinary Shares, which are readily available for deposit with the Depositary
for the purpose of issuance in the form of ADSs upon exercise of this Warrant,
to provide for the exercise of this Warrant.
(c) LISTING. The Company shall promptly secure the listing of the
ADSs issuable upon exercise of this Warrant on the NNM, as required by Section
3.8 and Section 4.32 of the Subscription Agreement and on each such national
securities exchange or automated quotation system, if any, on which ADSs are
then listed or become listed and shall maintain, so long as any other ADSs shall
be so listed, such listing of all ADSs from time to time issuable upon the
exercise of this Warrant; and the Company shall so list on each national
securities exchange or automated quotation system, as the case may be, and shall
maintain such listing of any other shares of capital stock of the Company
issuable upon the exercise of this Warrant so long as any shares of the same
class shall be listed on such national securities exchange or automated
quotation system.
(d) CERTAIN ACTIONS PROHIBITED. The Company will not, by amendment
of its Memorandum of Association and Articles of Association or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities, or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed by it
hereunder, but will at all times in good faith assist in the carrying out of all
the provisions of this Warrant and in the taking of all such actions as may
reasonably be requested by the Holder of this Warrant in order to protect the
exercise privilege of the Holder of this Warrant, consistent with the tenor and
purpose of this Warrant. Without limiting the generality of the foregoing, the
Company (i) will not increase the nominal value of any Ordinary Shares
represented by ADSs receivable upon the exercise of this Warrant above the
Exercise Price then in effect, and (ii) will take all such actions as may be
necessary or appropriate in order that the Company may at all times validly and
legally issue fully paid ADSs upon the exercise of this Warrant.
4. ANTIDILUTION PROVISIONS. During the Exercise Period, the Exercise
Price and the number of Warrant Shares shall be subject to adjustment from time
to time as provided in this Section 4. In the event that any adjustment of the
Exercise Price as required herein results in a fraction of a cent, such Exercise
Price shall be rounded up or down to the nearest cent.
(a) ADJUSTMENT OF EXERCISE PRICE UPON ISSUANCE OF ORDINARY SHARES.
Except as otherwise provided in Section 4(c) and 4(e) hereof, if and whenever
after the initial issuance of this Warrant, the Company issues or sells, or in
accordance with Section 4(b) hereof is deemed to have issued or sold, any
Ordinary Shares (including in the form of ADSs) for no consideration or for a
consideration per share less than the then current Market Price (as herein
defined) on the date of issuance (a "DILUTIVE ISSUANCE"), then effective
immediately upon the Dilutive Issuance, the Exercise Price will be adjusted in
accordance with the following formula:
E' = (E)(O+P/M)/(OS)
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where:
E' = the adjusted Exercise Price;
E = the then current Exercise Price;
M = the greater of the then current Market Price and the then
current Exercise Price;
O = the number of Ordinary Shares in issue immediately prior to
the Dilutive Issuance;
P = the aggregate consideration, calculated as set forth in
Section 4(b) hereof, received by the Company upon such
Dilutive Issuance; and
OS = the total number of Ordinary Shares Deemed In Issue (as herein
defined) immediately after the Dilutive Issuance.
Notwithstanding anything to the contrary in this Section 4, in no event shall
the Exercise Price be lower than the nominal value of the Ordinary Shares
calculated at the time of exercise.
(b) EFFECT ON EXERCISE PRICE OF CERTAIN EVENTS. For purposes of
determining the adjusted Exercise Price under Section 4(a) hereof, the following
will be applicable:
(i) ISSUANCE OF RIGHTS OR OPTIONS. If the Company in any
manner issues or grants any warrants, rights or options, whether or not
immediately exercisable, to subscribe for or to purchase Ordinary Shares
(including in the form of ADSs) or other securities exercisable, convertible
into or exchangeable for Ordinary Shares (including in the form of ADSs)
("CONVERTIBLE SECURITIES"), but not to include the grant or exercise of any
stock or options which may hereafter be granted or exercised under any employee
or Director benefit plan of the Company now existing or to be implemented in the
future, so long as the issuance of such stock or options is approved by a
majority of the non-employee members of the Board of Directors of the Company or
a majority of the members of a committee of non-employee directors established
for such purpose (such warrants, rights and options to purchase Ordinary Shares
or Convertible Securities are hereinafter referred to as "OPTIONS"), and the
price per share for which Ordinary Shares are issuable upon the exercise of such
Options is less than the Market Price on the date of issuance ("BELOW MARKET
OPTIONS"), then the maximum total number of Ordinary Shares issuable upon the
exercise of all such Below Market Options (assuming full exercise, conversion or
exchange of Convertible Securities, if applicable) will, as of the date of the
issuance or grant of such Below Market Options, be deemed to be outstanding and
to have been issued and sold by the Company for such price per share. For
purposes of the preceding sentence, the price per share for which Ordinary
Shares are issuable upon the exercise of such Below Market Options is determined
by dividing (i) the total amount, if any, received or receivable by the Company
as consideration for the issuance or granting of such Below Market Options, plus
the minimum aggregate amount of additional consideration, if any, payable to the
Company upon the exercise of all such Below Market Options, plus, in the case of
Convertible Securities issuable upon the exercise of such Below Market Options,
the minimum aggregate amount of additional consideration payable upon the
exercise, conversion or exchange thereof at the time such Convertible
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Securities first become exercisable, convertible or exchangeable, by (ii) the
maximum total number of Ordinary Shares issuable upon the exercise of all such
Below Market Options (assuming full conversion of Convertible Securities, if
applicable). No further adjustment to the Exercise Price will be made upon the
actual issuance of such Ordinary Shares upon the exercise of such Below Market
Options or upon the exercise, conversion or exchange of Convertible Securities
issuable upon exercise of such Below Market Options.
(ii) ISSUANCE OF CONVERTIBLE SECURITIES.
(A) If the Company in any manner issues or sells any
Convertible Securities, whether or not immediately convertible (other than where
the same are issuable upon the exercise of Options) and the price per share for
which Ordinary Shares are issuable upon such exercise, conversion or exchange
(as determined pursuant to Section 4(b)(ii)(B) if applicable) is less than the
Market Price on the date of issuance, then the maximum total number of Ordinary
Shares issuable upon the exercise, conversion or exchange of all such
Convertible Securities will, as of the date of the issuance of such Convertible
Securities, be deemed to be in issue and to have been issued and sold by the
Company for such price per share. For the purposes of the preceding sentence,
the price per share for which Ordinary Shares issuable upon such exercise,
conversion or exchange is determined by dividing (x) the total amount, if any,
received or receivable by the Company as consideration for the issuance or sale
of all such Convertible Securities, plus the minimum aggregate amount of
additional consideration, if any, payable to the Company upon the exercise,
conversion or exchange thereof at the time such Convertible Securities first
become exercisable, convertible or exchangeable, by (y) the maximum total number
of Ordinary Shares issuable upon the exercise, conversion or exchange of all
such Convertible Securities. No further adjustment to the Exercise Price will be
made upon the actual issuances of such Ordinary Shares upon exercise, conversion
or exchange of such Convertible Securities.
(B) If the Company in any manner issues or sells any
Convertible Securities with a fluctuating conversion or exercise price or
exchange ratio (a "VARIABLE RATE CONVERTIBLE SECURITY"), then the price per
share for which Ordinary Shares are issuable upon such exercise, conversion or
exchange for purposes of the calculation contemplated by Section 4(b)(ii)(A)
shall be deemed to be the lowest price per share which would be applicable
assuming that (i) all holding period and other conditions to any discounts
contained in such Convertible Security have been satisfied and (ii) the issue
price on the date of issuance of such Convertible Security was 80% of the Market
Price on such date.
(iii) CHANGE IN OPTION PRICE OR CONVERSION RATE. Except for
the grant or exercise of any shares or options which may hereafter be granted or
exercised under any employee or Director benefit plan of the Company now
existing or to be implemented in the future, so long as the issuance of such
shares or options is approved by a majority of the non-employee members of the
Board of Directors of the Company or a majority of the members of a committee of
non-employee directors established for such purpose, if
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there is a change at any time in (i) the amount of additional consideration
payable to the Company upon the exercise of any Options; (ii) the amount of
additional consideration, if any, payable to the Company upon the exercise,
conversion or exchange or any Convertible Securities; or (iii) the rate at which
any Convertible Securities are convertible into or exchangeable for Ordinary
Shares (other than under or by reason of provisions designed to protect against
dilution), the Exercise Price in effect at the time of such change will be
readjusted to the Exercise Price which would have been in effect at such time
had such Options or Convertible Securities still outstanding provided for such
changed additional consideration or changed conversion rate, as the case may be,
at the time initially granted, issued or sold.
(iv) TREATMENT OF EXPIRED OPTIONS AND UNEXERCISED
CONVERTIBLE SECURITIES. If, in any case, the total number of Ordinary Shares
issuable upon exercise of any Options or upon exercise, conversion or exchange
of any Convertible Securities is not, in fact, issued and the rights to exercise
such option or to exercise, convert or exchange such Convertible Securities
shall have expired or terminated, the Exercise Price then in effect will be
readjusted to the Exercise Price which would have been in effect at the time of
such expiration or termination had such Options or Convertible Securities, to
the extent outstanding immediately prior to such expiration or termination
(other than in respect of the actual number of Ordinary Shares issued upon
exercise or conversion thereof), never been issued.
(v) CALCULATION OF CONSIDERATION RECEIVED. If any Ordinary
Shares, Options or Convertible Securities are issued, granted or sold for cash,
the consideration received therefor for purposes of this Warrant will be the
amount received by the Company therefor, before deduction of reasonable
commissions, underwriting discounts or allowances or other reasonable expenses
paid or incurred by the Company in connection with such issuance, grant or sale.
In case any Ordinary Shares, Options or Convertible Securities are issued or
sold for a consideration part or all of which shall be other than cash, the
amount of the consideration other than cash received by the Company will be the
fair market value of such consideration except where such consideration consists
of freely-tradeable securities, in which case the amount of consideration
received by the Company will be the Market Price thereof as of the date of
receipt. In case any Ordinary Shares, Options or Convertible Securities are
issued in connection with any merger or consolidation in which the Company is
the surviving corporation, the amount of consideration therefor will be deemed
to be the fair market value of such portion of the net assets and business of
the non-surviving corporation as is attributable to such Ordinary Shares,
Options or Convertible Securities, as the case may be. The fair market value of
any consideration other than cash or securities will be determined in the good
faith reasonable business judgment of the non-employee Board of Directors.
(vi) EXCEPTIONS TO ADJUSTMENT OF EXERCISE PRICE. No
adjustment to the Exercise Price will be made (i) upon the exercise of any
warrants, options or convertible securities issued and outstanding on the date
hereof in accordance with the terms of such securities as of such date; (ii)
upon the grant or exercise of any shares or options which
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may hereafter be granted or exercised under any employee or Director benefit
plan of the Company now existing or to be implemented in the future, so long as
the issuance of such shares or options is approved by a majority of the
non-employee members of the Board of Directors of the Company or a majority of
the members of a committee of non-employee directors established for such
purpose; (iii) upon the issuance of the Warrants in accordance with terms of the
Subscription Agreement and upon the exercise of such Warrants; and (iv) upon the
sale and issuance of ADSs, Ordinary Shares, Convertible Securities or Variable
Rate Convertible Securities for less than the Market Price to a strategic
investor (the "STRATEGIC INVESTOR"), PROVIDED, THAT such sale satisfies each of
the following conditions: (A) the Strategic Investor operates in a line of
business similar to the Company; (B) such sale occurs within 90 days of
November __, 2000; (C) the sale of such securities was approved by the
non-employee members of the Board of Directors of the Company and, in the good
faith reasonable business judgment of the non-employee members of the Board of
Directors of the Company, such sale of the Company's securities to the Strategic
Investor will further the operational business interests of the Company; (D) the
primary purpose of such sale is other than a financing arrangement; (E) the
terms and conditions of the securities to be issued to such Strategic Investor
are not more favorable than the securities purchased pursuant to the
Subscription Agreement; and (F) the aggregate purchase price of the securities
issued to the Strategic Investor is less than $4.0 million.
(c) SUBDIVISION OR PURCHASE PRICE OF SHARES. If the Company, at
any time after the initial issuance of this Warrant, subdivides (by any share
split, share dividend, recapitalization, reorganization, reclassification or
otherwise) its Ordinary Shares into a greater number of shares, then, after the
date of record for effecting such subdivision, the Exercise Price in effect
immediately prior to such subdivision will be proportionately reduced. If the
Company, at any time after the initial issuance of this Warrant, combines (by
reverse share split, recapitalization, reorganization, reclassification or
otherwise) its shares of Ordinary Shares into a smaller number of shares, then,
after the date of record for effecting such combination, the Exercise Price in
effect immediately prior to such combination will be proportionately increased.
(d) ADJUSTMENT IN NUMBER OF ADSS. Upon each adjustment of the
Exercise Price pursuant to the provisions of this Section 4, the number of ADSs
issuable upon exercise of this Warrant shall be adjusted by multiplying a number
equal to the Exercise Price in effect immediately prior to such adjustment by
the number of ADSs issuable upon exercise of this Warrant immediately prior to
such adjustment and dividing the product so obtained by the adjusted Exercise
Price.
(e) REORGANIZATION, RECLASSIFICATION, CONSOLIDATION, MERGER OR
SALE. Any recapitalization, reorganization, reclassification, consolidation,
merger, sale of all or substantially all of the Company's assets to another
person or other transaction in each case which is effected in such a way that
holders of ADSs and Ordinary Shares are entitled to receive (either directly or
upon subsequent liquidation) shares, securities or assets with respect to or in
exchange for ADSs and Ordinary Shares is referred to herein as an "ORGANIC
CHANGE." Prior to the consummation of any (i) sale of all or substantially all
of the Company's assets to an acquiring person or (ii) other Organic Change
following which the Company is not a surviving entity, the Company will secure
from the person purchasing such assets or the successor resulting from such
Organic
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Change prior to such Organic Change effective provisions so that each holder
of an ADS Warrant then outstanding shall have the right, by exercising such
Warrant, to purchase the kind and number of shares or other securities or
property receivable upon an occurrence of an Organic Change.
(f) DISTRIBUTION OF ASSETS. In case the Company shall declare or
make any distribution of its assets (or rights to acquire its assets) to holders
of its Ordinary Shares and ADSs as a dividend, by way of return of capital or
otherwise (including any dividend or distribution to the Company's shareholders
of cash or shares (or rights to acquire shares) of capital stock of a
subsidiary) (a "DISTRIBUTION"), at any time after the initial issuance of this
Warrant, then the Holder shall be entitled upon exercise of this Warrant for the
purchase of any or all of the ADSs subject hereto, to receive the amount of such
assets (or rights) which would have been payable to the Holder had such Holder
been the holder of such ADSs on the record date for the determination of holders
of Ordinary Shares and ADSs entitled to such Distribution.
(g) CERTAIN EVENTS. If any event occurs of the type contemplated
by the provisions of this Section 4 but not expressly provided for by such
provisions (including, without limitation, the granting of share appreciation
rights, phantom share rights or other rights with equity features), then the
Company's Board of Directors will make an appropriate adjustment in the Exercise
Price and the number of ADSs and Ordinary Shares obtainable upon exercise of
this Warrant so as to protect the rights of the holders of the Warrants;
PROVIDED, THAT no such adjustment pursuant to this Section 4(g) will increase
the Exercise Price or decrease the number of ADSs obtainable as otherwise
determined pursuant to this Section 4.
(h) SPECIAL ADJUSTMENT AND NOTICES OF ADJUSTMENT. Upon the
occurrence of any event which requires any adjustment of the Exercise Price,
then, and in each such case, the Company shall give notice thereof to the
Holder, which notice shall state the Exercise Price resulting from such
adjustment and the increase or decrease in the number of Warrant Shares
purchasable at such price upon exercise, setting forth in reasonable detail the
method of calculation and the facts upon which such calculation is based. Such
calculation shall be certified by the chief financial officer of the Company.
(i) MINIMUM ADJUSTMENT OF EXERCISE PRICE. No adjustment of the
Exercise Price shall be made in an amount of less than 1% of the Exercise Price
in effect at the time such adjustment is otherwise required to be made, but any
such lesser adjustment shall be carried forward and shall be made at the time
and together with the next subsequent adjustment which, together with any
adjustments so carried forward, shall amount to not less than 1% of such
Exercise Price.
(j) CERTAIN DEFINITIONS.
(i) "ORDINARY SHARES DEEMED IN ISSUE" shall mean the number
of Ordinary Shares actually in issue (including Ordinary Shares represented by
issued and outstanding ADSs), plus (x) in case of any adjustment required by
Section 4(a) resulting from the issuance of any Options, the maximum total
number of Ordinary Shares (including in the form of ADSs) issuable upon the
exercise of the Options for which the adjustment is required (including any
Ordinary Shares (including in the form of ADSs)
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issuable upon the conversion of Convertible Securities issuable upon the
exercise of such Options), and (y) in the case of any adjustment required by
Section 4(a) resulting from the issuance of any Convertible Securities, the
maximum total number of Ordinary Shares (including in the form of ADSs) issuable
upon the exercise, conversion or exchange of the Convertible Securities for
which the adjustment is required, as of the date of issuance of such Convertible
Securities, if any.
(ii) "MARKET PRICE," as of any date, (i) means the average
of the Closing Sale Prices for the ADSs as reported to NNM for the ten (10)
consecutive trading days immediately preceding such date, or (ii) if NNM is not
the principal trading market for the ADSs, the average of the last reported
closing trade prices on the principal trading market for the ADSs during the
same period, or, if there is no closing trade price for such period, the last
reported sales price for such period, or (iii) if market value cannot be
calculated as of such date on any of the foregoing bases, the Market Price shall
be the average fair market value as reasonably determined by an investment
banking firm selected by the Company and reasonably acceptable to the Holder of
this Warrant, with the costs of the appraisal to be borne by the Company. The
manner of determining the Market Price of the ADSs set forth in the foregoing
definition shall apply with respect to any other security in respect of which a
determination as to market value must be made hereunder.
(iii) "ORDINARY SHARES," for purposes of this Section 4,
includes the Ordinary Shares and any additional class of shares of the Company
having no preference as to dividends or distributions on liquidation, provided
that the Ordinary Shares represented by the ADSs purchasable pursuant to this
Warrant shall include only Ordinary Shares in respect of which this Warrant is
exercisable, or shares resulting from any subdivision or combination of such
Ordinary Shares, or in the case of any reorganization, reclassification,
consolidation, merger, or sale of the character referred to in Section 4(e)
hereof, the shares or other securities or property provided for in such Section.
(k) OTHER NOTICES. In case at any time:
(i) the Company shall declare any dividend upon the
Ordinary Shares payable in shares of any class or make any other distribution to
the holders of the Ordinary Shares and holders of ADSs;
(ii) the Company shall offer for subscription pro rata to
the holders of the Ordinary Shares and ADSs any additional shares of any class
or other rights;
(iii) there shall be any capital reorganization of the
Company, or reclassification of the Ordinary Shares, or consolidation or merger
of the Company with or into, or sale of all or substantially all of its assets
to, another corporation or entity; or
(iv) there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Company;
A-10
<PAGE>
then, in each such case, the Company shall give to the Holder (a) notice of the
date on which the books of the Company shall close or a record shall be taken
for determining the holders of Ordinary Shares and holders of ADSs entitled to
receive any such dividend, distribution, or subscription rights or for
determining the holders of Ordinary Shares entitled to vote and holders of ADSs
entitled to give voting instructions to the Depositary in respect of any such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding-up and (b) in the case of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up, notice of the date (or, if not then known, a reasonable
approximation thereof by the Company) when the same shall take place. Such
notice shall also specify the date on which the holders of Ordinary Shares and
holders of ADSs shall be entitled to receive such dividend, distribution, or
subscription rights or to exchange their Ordinary Shares and ADSs for stock or
other securities or property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation, or
winding-up, as the case may be. Such notice shall be given at least thirty (30)
days prior to the record date or the date on which the Company's books are
closed in respect thereto, but in no event earlier than public announcement of
such proposed transaction or event. Failure to give any such notice or any
defect therein shall not affect the validity of the proceedings referred to in
clauses (i), (ii), (iii) and (iv) above.
5. ISSUE TAX. The issuance of certificates for Warrant Shares upon the
exercise of this Warrant shall be made without charge to the Holder or such
shares for any tax in respect of such issue or other costs in respect thereof,
provided that the Company shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issuance and delivery of any
certificate in a name other than the Holder.
6. NO RIGHTS OR LIABILITIES AS A SHAREHOLDER. This Warrant shall not
entitle the Holder to any voting rights or other rights as a holder of the
Company's Ordinary Shares or ADSs. No provision of this Warrant, in the absence
of affirmative action by the Holder to purchase Warrant Shares, and no mere
enumeration herein of the rights or privileges of the Holder, shall give rise to
any liability of the Holder for the Exercise Price or as a holder of the
Company's Ordinary Shares or ADSs, whether such liability is asserted by the
Company or by creditors of the Company.
7. TRANSFER, EXCHANGE, AND REPLACEMENT OF WARRANT.
(a) RESTRICTION ON TRANSFER. This Warrant and the rights granted
to the Holder are transferable, subject to compliance with all applicable
federal and state securities laws, in whole or in part, upon surrender of this
Warrant, together with a properly executed assignment in the Form of Assignment
attached hereto as EXHIBIT C, at the office or agency of the Company referred to
in Section 9. Until due presentment for registration of transfer on the books of
the Company, the Company may treat the registered holder hereof as the owner and
holder hereof for all purposes, and the Company shall not be affected by any
notice to the contrary. Notwithstanding anything to the contrary contained
herein, the registration rights described in Section 8 hereof are assignable
only in accordance with the provisions of the Subscription Agreement.
A-11
<PAGE>
(b) WARRANT EXCHANGEABLE FOR DIFFERENT DENOMINATIONS. This Warrant
is exchangeable, upon the surrender hereof by the Holder at the office or agency
of the Company referred to in Section 9 below, for new Warrants, in the form
hereof, of different denominations representing in the aggregate the right to
purchase the number of ADSs which may be purchased hereunder, each of such new
Warrants to represent the right to purchase such number of ADSs as shall be
designated by the Holder of at the time of such surrender.
(c) REPLACEMENT OF WARRANT. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction, or mutilation of
this Warrant or, in the case of any such loss, theft, or destruction, upon
delivery, of an indemnity agreement reasonably satisfactory in form and amount
to the Company, or, in the case of any such mutilation, upon surrender and
cancellation of this Warrant, the Company, at its expense, will execute and
deliver, in lieu thereof, a new Warrant, in the form hereof, in such
denominations as Holder may request.
(d) CANCELLATION; PAYMENT OF EXPENSES. Upon the surrender of this
Warrant in connection with any transfer, exchange, or replacement as provided in
this Section 7, this Warrant shall be promptly canceled by the Company. The
Company shall pay all issuance taxes (other than securities transfer taxes) and
charges payable in connection with the preparation, execution, and delivery of
Warrants pursuant to this Section 7.
(e) WARRANT REGISTER. The Company shall maintain, at its principal
executive offices (or such other office or agency of the Company as it may
designate by notice to the Holder), a register for this Warrant, in which the
Company shall record the name and address of the person in whose name this
Warrant has been issued, as well as the name and address of each transferee and
each prior owner of this Warrant.
8. REGISTRATION RIGHTS. The initial holder of this Warrant (and
assignees thereof) is entitled to the benefit of such registration rights in
respect of the Warrant Shares as are set forth in the Subscription Agreement.
9. NOTICES. All notices, requests, demands and other communications
under this Agreement shall be in writing and shall be deemed to have been duly
given (i) on the day of service if served personally on the party to whom notice
is to be given; (ii) on the day of transmission if sent via facsimile
transmission to the facsimile number given below or at the facsimile number
provided by the Holder, and telephonic confirmation of receipt is obtained
promptly after completion of transmission, provided, that a copy shall be sent
via certified mail, return receipt requested, simultaneously with any such
facsimile; (iii) on the business day after delivery to Federal Express or
similar overnight courier or the Express Mail service maintained by the United
States Postal Service; or (iv) on the fifth day after mailing, if mailed to the
party to whom notice is to be given, by first class mail, registered or
certified, postage prepaid and properly addressed, to the party as follows:
If to the Company:
A-12
<PAGE>
Insignia Solutions plc
41300 Christy Street
Fremont, California 94538-3115
Telecopier: (510) 360-3702
Attention: Mr. Stephen M. Ambler
with a copy to:
Baker & McKenzie
660 Hansen Way
Palo Alto, California 94304
Telecopier: (650) 856-9299
Attention: Corinna Wong, Esq.
and if to the Holder, at such address as Holder shall have provided in writing
to the Company, or at such other address as each such party furnishes by notice
given in accordance with this Section 9.
10. GOVERNING LAW; JURISDICTION. This Warrant shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed in the State of New York. The Company
irrevocably consents to the jurisdiction of the United States federal courts
located in the State of New York in any suit or proceeding based on or arising
under this Warrant and irrevocably agrees that all claims in respect of such
suit or proceeding may be determined in such courts. The Company irrevocably
waives the defense of an inconvenient forum to the maintenance of such suit or
proceeding. The Company agrees that a final nonappealable judgment in any such
suit or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on such judgment or in any other lawful manner.
11. MISCELLANEOUS.
(a) AMENDMENTS. This Warrant and any provision hereof may only be
amended by an instrument in writing signed by the Company and the Holder.
(b) DESCRIPTIVE HEADINGS. The descriptive headings of the several
Sections of this Warrant are inserted for purposes of reference only, and shall
not affect the meaning or construction of any of the provisions hereof.
(c) ASSIGNABILITY. This Warrant shall be binding upon the Company
and its successors and assigns and shall inure to the benefit of Holder and its
successors and assigns. The Holder shall notify the Company upon the assignment
of this Warrant.
* * *
A-13
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly
authorized officer.
INSIGNIA SOLUTIONS plc
By:
---------------------------------------
Name:
Title:
<PAGE>
EXHIBIT A TO WARRANT
--------------------
FORM OF EXERCISE AGREEMENT
(To be Executed by the Holder in order to Exercise the Warrant)
The undersigned hereby irrevocably exercises the right to subscribe for
____________ of the American Depositary Shares ("ADSS") of Insignia Solutions
plc, a company organized and existing under the laws of England and Wales (the
"COMPANY"), evidenced by the attached Warrant, and herewith makes payment of the
Exercise Price with respect to such ADSs in full, all in accordance with the
conditions and provisions of said Warrant.
(i) The undersigned agrees not to offer, sell, transfer or otherwise
dispose of any ADSs obtained on exercise of the Warrant, except under
circumstances that will not result in a violation of the Securities Act of 1933,
as amended, or any state securities laws.
(ii) The undersigned requests that the American depositary receipts
for such ADSs be issued, and a Warrant representing any unexercised portion
hereof be issued, pursuant to the Warrant in the name of the Holder (or such
other person or persons indicated below) and delivered to the undersigned (or
designee(s) at the address (or addresses) set forth below:
Date:
----------------- --------------------------------------------
Signature of Holder
--------------------------------------------
Name of Holder (Print)
Address:
--------------------------------------------
--------------------------------------------
<PAGE>
EXHIBIT B TO WARRANT
--------------------
FORM OF CANCELLATION NOTICE
[Letterhead of Insignia Solutions plc]
______________ _____, 200__
[Insert Name of Holder]
[Insert Address of Holder]
Via [Federal Express] [Express Mail]
[Facsimile and Certified Mail] [First Class Mail] [Registered Mail]
[Certified Mail]
Dear_____________:
Pursuant to Section 1(e) of the Warrant, the Company hereby
notifies you that Warrant No. ___ will be canceled at 5:00 p.m. Eastern Standard
Time on _________ ____, 200__. 1/ The Company represents and warrants that all
of the terms and conditions set forth in Section 1(e) of the Warrant have been
complied with prior to and at the deliverance of this Cancellation Notice.
INSIGNIA SOLUTIONS plc
By:
-----------------------------
Name:
Title:
--------------
1/ Insert Date that is 60 days from the date notice is deemed received
pursuant to Section 9 of the Warrant.
<PAGE>
EXHIBIT C TO WARRANT
--------------------
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and
transfers all rights of the undersigned under the within Warrant, with respect
to the number of ADSs covered thereby set forth hereinbelow, to:
NAME OF ASSIGNEE ADDRESS NO. OF SHARES
---------------- ------- -------------
and hereby irrevocably constitutes and appoints _______________ as agent and
attorney-in-fact to transfer said Warrant on the books of the within-named
corporation, with full power of substitution in the premises.
Date:
------------ ----,
In the presence of
----------------------------
Name:
-------------------------------------
Signature:
--------------------------------
------------------------------------------
TITLE OF SIGNING OFFICER OR AGENT (IF ANY)
Address:
------------------------------------------
------------------------------------------
