NEITHER THIS WARRANT NOR THE SHARES OF COMMON
STOCK ISSUABLE UPON EXERCISE HEREOF HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR ANY APPLICABLE STATE
SECURITIES LAW AND NEITHER MAY BE SOLD OR
OTHERWISE TRANSFERRED UNTIL (I) A
REGISTRATION STATEMENT UNDER SUCH SECURITIES
ACT AND SUCH APPLICABLE STATE SECURITIES LAWS
SHALL HAVE BECOME EFFECTIVE WITH REGARD
THERETO, OR (II) THE COMPANY SHALL HAVE
RECEIVED A WRITTEN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY TO THE EFFECT THAT
REGISTRATION UNDER SUCH SECURITIES ACT AND
SUCH APPLICABLE STATE SECURITIES LAWS IS NOT
REQUIRED IN CONNECTION WITH SUCH PROPOSED
TRANSFER.
CAMBEX CORPORATION
ATTACHED REPRICING WARRANT
Warrant No. SCA/RPW-4 __,000 shares
Original Issue Date: February 9, 2000
THIS CERTIFIES THAT, FOR VALUE RECEIVED, SOVCAP EQUITY
PARTNERS LTD. or its assigns (the "Holder") is entitled
to purchase, on the terms and conditions hereinafter
set forth, on the Repricing Date but not thereafter, a
number of shares of the Common Stock, par value $.10
(the "Common Stock"), of CAMBEX CORPORATION, a
Massachusetts corporation (the "Company"), determined
in accordance with Section 2 hereof, at a price of $.10
per share (the "Exercise Price"). Each share of Common
Stock as to which this Repricing Warrant is exercisable
is a "Repricing Share" and all such shares are
collectively referred to as the "Repricing Shares."
This Repricing Warrant shall remain attached to the
Series 1 Bridge Financing Note issued to Holder on the
Original Issue Date (the "Bridge Note"), until
conversion of the Bridge Note, at which time it shall
automatically detach.
Section 1. Definitions.
The following capitalized terms are not defined
elsewhere in this Repricing Warrant, and are used
herein with the meanings thereafter ascribed:
"Average Market Price" means, the greater of (a)
arithmetic mean of the Closing Bid Prices of the Common
Stock for each trading day in a ninety (90) day period
which commences on the Conversion Date or (b) the
Repricing Floor. For purposes of this Agreement, the
term " Repricing Floor" shall mean the lesser of (x)
$1.65 or (y) if the Repricing Event occurs, the average
Closing Bid Price of the common stock for the thirty
(30) day period immediately prior to the Maturity Date.
For purposes of this Repricing Warrant, the "Repricing
Event" will occur in the event that the Company suffers
a 10% or greater decline in gross revenues per fiscal
quarter for two consecutive quarters relative to the
4th quarter of fiscal 1999, beginning with the 1st
quarter of 2000 (assuming for this purpose that the
Company is on a 12/31 fiscal year).
"Closing Bid Price" means, the last closing bid price
of the Common Stock on the NASDAQ National Market (the
"NASDAQ-NM") as reported by Bloomberg Financial Markets
("Bloomberg"), or, if the NASDAQ-NM is not the
principal trading market for the Common Stock, the last
closing bid price of the Common Stock on the principal
securities exchange or trading market where the Common
Stock is listed or traded as reported by Bloomberg, or
if the foregoing do not apply, the last closing bid
price of the Common Stock in the over-the-counter
market on the pink sheets or bulletin board for the
Common Stock as reported by Bloomberg, or, if no
closing bid price is reported for the Common Stock by
Bloomberg, the last closing trade price of the Common
Stock as reported by Bloomberg. If the Closing Bid
Price cannot be calculated for the Common Stock on such
date on any of the foregoing bases, the Closing Bid
Price of the Common Stock on such date shall be the
fair market value as reasonably determined in good
faith by the Board of Directors of the Company (all as
appropriately adjusted for any stock dividend, stock
split, or other similar transaction during such
period);
"Conversion Date" means the date of issuance of common
stock issued upon any conversion of the Bridge Note.
"Conversion Price" means $6.0875, the conversion price
of the Bridge Note.
"Conversion Shares" means the number of shares of
Common Stock issued upon conversion of the Bridge Note
that are sold on or before the Expiration Date at a
price less than 120% of the Conversion Price.
"Expiration Date" means the ninetieth (90th) day after
the Conversion Date.
"Repricing Date" means the ninety-first (91st) day
after the Conversion Date.
Section 2. Determination of Number of Repricing
Shares.
The number of Repricing Shares issuable upon exercise
of this Repricing Warrant shall be determined on the
Repricing Date. The number of Repricing Shares shall
be equal to: the number of Conversion Shares multiplied
by a fraction, (a) the numerator of which is the
Conversion Price minus the Average Market Price and (b)
the denominator of which is the Average Market Price.
Holder shall be required to submit copies of trade
confirmations establishing the sales price for all
Conversion Shares in the event of any exercise of this
Warrant under Section 3, below. In the case of a
dispute as to the determination of the Average Market
Price or the arithmetic calculation of the Exercise
Price, the Company shall promptly issue to such
Holder(s) the number of shares of Common Stock that is
not disputed and shall submit the disputed
determinations or arithmetic calculations to the holder
via facsimile within three (3) business days of receipt
of such holder's Conversion Notice. If such Holder(s)
and the Company are unable to agree upon the
determination of the Average Market Price or arithmetic
calculation of the Exercise Price within two (2)
business days of such disputed determination or
arithmetic calculation being submitted to the holder,
then the Company shall within one (1) business day
submit via facsimile (A) the disputed determination of
the Average Market Price to an independent, reputable
investment bank or (B) the disputed arithmetic
calculation of the Exercise Price to its independent,
outside accountant. The Company shall cause the
investment bank or the accountant, as the case may be,
to perform the determinations or calculations and
notify the Company and such Holders of the results no
later than forty-eight (48) hours from the time it
receives the disputed determinations or calculations.
Such investment bank's or accountant's determination or
calculation, as the case may be, shall be binding upon
all parties absent manifest error. In the event that
the Average Market Price is greater than the Conversion
Price on the Repricing Date then this Repricing Warrant
shall expire and be of no further force and effect.
Section 3. Exercise of Warrant; Conversion of
Warrant; Election to Pay Cash.
(a) This Warrant may, at the option of the
Holder, be exercised in whole, but not in
part, on the Repricing Date by delivery to
the Company at its office at 360 Second
Avenue, Waltham, Massachusetts 02451,
Attention: Executive Vice President, or to
any transfer agent for the Common Stock, on
or before 5:00 p.m., Eastern Time, on the
Repricing Date, (i) a written notice of such
registered Holder's election to exercise this
Warrant (the "Exercise Notice"), which notice
may be in the form of the Notice of Exercise
attached hereto, properly executed and
completed by the registered Holder or an
authorized officer thereof, (ii) a check
payable to the order of the Company, in an
amount equal to the product of the Exercise
Price multiplied by the number of Repricing
Shares specified in the Exercise Notice, and
(iii) this Warrant (the items specified in
(i), (ii), and (iii) are collectively the
"Exercise Materials").
(b) This Warrant may, at the option of the
Holder, be converted into Common Stock in
whole but not in part, if and only if the
Value of one share of Common Stock on the
Effective Date (as defined in Section 1(c)
hereof) is greater than the Exercise Price,
by delivery to the Company at the address
designated in Section 1(a) above or to any
transfer agent for the Common Stock, on or
before 5:00 p.m. Eastern Time on the
Repricing Date, (i) a written notice of
Holder's election to convert this Warrant
(the "Conversion Notice"), properly executed
and completed by the registered Holder or an
authorized officer thereof, and (ii) this
Warrant (the items specified in (i) and (ii)
are collectively the "Conversion
Materials"). The number of shares of Common
Stock issuable upon conversion of this
Warrant is equal to the quotient of (x) the
product of the number of Repricing Shares
then issuable upon exercise of this Warrant
(assuming an exercise for cash) multiplied by
the difference between (A) the Average Market
Price minus (B) the then effective Exercise
Price divided by (y) the Average Market
Price. Any fraction resulting from the
calculation of the number of Repricing Shares
then issuable in a conversion of this
Repricing Warrant shall be truncated.
(c) Upon timely receipt of the Exercise
Materials or Conversion Materials (whichever
is applicable), the Company shall, as
promptly as practicable, and in any event
within ten (10) business days after its
receipt of the Exercise Materials or
Conversion Materials, execute or cause to be
executed and delivered to Holder a
certificate or certificates representing the
number of Repricing Shares specified in the
Exercise Notice or if Holder delivered a
Conversion Notice, the number of shares of
Common Stock issuable upon conversion of this
Warrant (whichever is applicable), together
with cash in lieu of any fraction of a share
and, (x) if the Warrant is exercised in full,
a copy of this Warrant marked "Exercised," or
(y) if the Warrant is converted, a copy of
this Warrant marked "Converted." The stock
certificate or certificates shall be
registered in the name of the registered
Holder of this Warrant or such other name or
names as shall be designated in the Exercise
Notice or Conversion Notice. The date on
which the Warrant shall be deemed to have
been exercised or converted (the "Effective
Date"), and the date the person in whose name
any certificate evidencing the Common Stock
issued upon the exercise or conversion hereof
is issued shall be deemed to have become the
holder of record of such shares, shall be the
date the Company receives the Exercise
Materials or Conversion Materials,
irrespective of the date of delivery of a
certificate or certificates evidencing the
Common Stock issued upon the exercise or
conversion hereof, except that, if the date
on which the Exercise Materials or Conversion
Materials are received by the Company is a
date on which the stock transfer books of the
Company are closed, the Effective Date shall
be the date the Company receives the Exercise
Materials or Conversion Materials, and the
date such person shall be deemed to have
become the holder of the Common Stock issued
upon the exercise or conversion hereof shall
be the next succeeding date on which the
stock transfer books are open. All shares
of Common Stock issued upon the exercise or
conversion of this Warrant will, upon
issuance, be fully paid and nonassessable and
free from all taxes, liens, and charges with
respect thereto.
(d) If the Company shall fail to issue to
Holder within ten (10) business days
following the date of receipt by the Company
or the Transfer Agent of the Exercise
Materials or the Conversion Materials, a
certificate for the number of shares of
Common Stock to which such holder is entitled
upon such holder's exercise or conversion of
this Warrant, in addition to all other
available remedies which such holder may
pursue hereunder and under this Warrant and
the Series 1 Bridge Note Purchase Agreement
between the Company and the initial holder of
the Warrant (the "Securities Purchase
Agreement") including indemnification
pursuant to Section 7.18 thereof, the Company
shall pay additional damages to such holder
on each day after the Effective Date, an
amount equal to 1.0% of the product of (A)
the number of Repricing Shares not issued to
Holder and to which Holder is entitled
multiplied by (B) the Closing Bid Price of
the Common Stock on the Effective Date. Such
damages shall be computed daily and are due
and payable daily.
(e) The Company may, in lieu of issuing the
Repricing Shares pay Holder an amount equal
to the number of Repricing Shares issuable on
the Effective Date multiplied by the Average
Market Price (the "Payment Amount"). In such
event, the Company shall be obligated to
deliver the Payment Amount to Holder within
ten (10) business days following the
Effective Date. If the Company shall fail to
deliver the Payment Amount within ten (10)
business days after the Effective Date, in
addition to all other available remedies
which Holder may pursue at law or equity,
including indemnification pursuant to Section
7.18 of the Securities Purchase Agreement,
the Company shall pay additional damages to
Holder on each day after the Effective Date,
until the Payment Amount has been paid, an
amount equal to 1.0% of the Payment Amount.
Such damages shall be computed daily and are
due and payable daily.
Section 4. Adjustments to Repricing Shares.
The number of Repricing Shares issuable upon the
exercise hereof shall be subject to adjustment as
follows:
(a) In the event the Company is a party to a
consolidation, share exchange, or merger, or
the sale of all or substantially all of the
assets of the Company to, any person, or in
the case of any consolidation or merger of
another corporation into the Company in which
the Company is the surviving corporation, and
in which there is a reclassification or
change of the shares of Common Stock of the
Company, this Warrant shall after such
consolidation, share exchange, merger, or
sale be exercisable for the kind and number
of securities or amount and kind of property
of the Company or the corporation or other
entity resulting from such share exchange,
merger, or consolidation, or to which such
sale shall be made, as the case may be (the
"Successor Company"), to which a holder of
the number of shares of Common Stock
deliverable upon the exercise (immediately
prior to the time of such consolidation,
share exchange, merger, or sale) of this
Warrant would have been entitled upon such
consolidation, share exchange, merger, or
sale; and in any such case appropriate
adjustments shall be made in the application
of the provisions set forth herein with
respect to the rights and interests of the
registered Holder of this Warrant, such that
the provisions set forth herein shall
thereafter correspondingly be made
applicable, as nearly as may reasonably be,
in relation to the number and kind of
securities or the type and amount of property
thereafter deliverable upon the exercise of
this Warrant. The above provisions shall
similarly apply to successive consolidations,
share exchanges, mergers, and sales. Any
adjustment required by this Section 2 (a)
because of a consolidation, share exchange,
merger, or sale shall be set forth in an
undertaking delivered to the registered
Holder of this Warrant and executed by the
Successor Company which provides that the
Holder of this Warrant shall have the right
to exercise this Warrant for the kind and
number of securities or amount and kind of
property of the Successor Company or to which
the holder of a number of shares of Common
Stock deliverable upon exercise (immediately
prior to the time of such consolidation,
share exchange, merger, or sale) of this
Warrant would have been entitled upon such
consolidation, share exchange, merger, or
sale. Such undertaking shall also provide
for future adjustments to the number of
Repricing Shares and the Exercise Price in
accordance with the provisions set forth in
Section 2 hereof.
(b) In the event the Company should at any
time, or from time to time after the Original
Issue Date, fix a record date for the
effectuation of a stock split or subdivision
of the outstanding shares of Common Stock or
the determination of holders of Common Stock
entitled to receive a dividend or other
distribution payable in additional shares of
Common Stock, or securities or rights
convertible into, or entitling the holder
thereof to receive directly or indirectly,
additional shares of Common Stock
(hereinafter referred to as "Common Stock
Equivalents") without payment of any
consideration by such holder for the
additional shares of Common Stock or the
Common Stock Equivalents (including the
additional shares of Common Stock issuable
upon exercise or exercise thereof), then, as
of such record date (or the date of such
dividend, distribution, split, or subdivision
if no record date is fixed), the number of
Repricing Shares issuable upon the exercise
hereof shall be proportionately increased and
the Exercise Price shall be appropriately
decreased by the same proportion as the
increase in the number of outstanding Common
Stock Equivalents of the Company resulting
from the dividend, distribution, split, or
subdivision. Notwithstanding the preceding
sentence, no adjustment shall be made to
decrease the Exercise Price below $.10 per
Share.
(c) In the event the Company should at any
time or from time to time after the Original
Issue Date, fix a record date for the
effectuation of a reverse stock split, or a
transaction having a similar effect on the
number of outstanding shares of Common Stock
of the Company, then, as of such record date
(or the date of such reverse stock split or
similar transaction if no record date is
fixed), the number of Repricing Shares
issuable upon the exercise hereof shall be
proportionately decreased and the Exercise
Price shall be appropriately increased by the
same proportion as the decrease of the number
of outstanding Common Stock Equivalents
resulting from the reverse stock split or
similar transaction.
(d) In the event the Company should at any
time or from time to time after the Original
Issue Date, fix a record date for a
reclassification of its Common Stock, then,
as of such record date (or the date of the
reclassification if no record date is set),
this Warrant shall thereafter be convertible
into such number and kind of securities as
would have been issuable as the result of
such reclassification to a holder of a number
of shares of Common Stock equal to the number
of Repricing Shares issuable upon exercise of
this Warrant immediately prior to such
reclassification, and the Exercise Price
shall be unchanged.
(e) The Company will not, by amendment of
its Articles of Organization or through
reorganization, consolidation, merger,
dissolution, issue, or sale of securities,
sale of assets or any other voluntary action,
void or seek to avoid the observance or
performance of any of the terms of the
Warrant, but will at all times in good faith
assist in the carrying out of all such terms
and in the taking of all such actions as may
be necessary or appropriate in order to
protect the rights of the Holder against
dilution or other impairment. Without
limiting the generality of the foregoing, the
Company (x) will not create a par value of
any share of stock receivable upon the
exercise of the Warrant above the amount
payable therefor upon such exercise, and (y)
will take all such action as may be necessary
or appropriate in order that the Company may
validly and legally issue fully paid and non-
assessable shares upon the exercise of the
Warrant.
(f) When any adjustment is required to be
made in the number or kind of shares
purchasable upon exercise of the Warrant, or
in the Exercise Price, the Company shall
promptly notify the Holder of such event and
of the number of shares of Common Stock or
other securities or property thereafter
purchasable upon exercise of the Warrants and
of the Exercise Price, together with the
computation resulting in such adjustment.
(g) The Company covenants and agrees that
all Repricing Shares which may be issued
will, upon issuance, be validly issued, fully
paid, and non-assessable. The Company
further covenants and agrees that the Company
will at all times have authorized and
reserved, free from preemptive rights, a
sufficient number of shares of its Common
Stock to provide for the exercise of the
Warrant in full.
Section 5. No Stockholder Rights.
This Warrant shall not entitle the Holder hereof to any
voting rights or other rights as a stockholder of the
Company.
Section 6. Transfer of Securities.
(a) This Warrant and the Repricing Shares
and any shares of capital stock received in
respect thereof, whether by reason of a stock
split or share reclassification thereof, a
stock dividend thereon, or otherwise, shall
not be transferable except upon compliance
with the provisions of the Securities Act of
1933, as amended (the "Securities Act") and
applicable state securities laws with respect
to the transfer of such securities. The
Holder of this Warrant, by acceptance of this
Warrant, agrees to be bound by the provisions
of Section 4 hereof and to indemnify and hold
harmless the Company against any loss or
liability arising from the disposition of
this Warrant or the Repricing Shares issuable
upon exercise hereof or any interest in
either thereof in violation of the provisions
of this Warrant.
(b) Each certificate for the Repricing
Shares and any shares of capital stock
received in respect thereof, whether by
reason of a stock split or share
reclassification thereof, a stock dividend
thereon or otherwise, and each certificate
for any such securities issued to subsequent
transferees of any such certificate shall
(unless otherwise permitted by the provisions
hereof) be stamped or otherwise imprinted
with a legend in substantially the following
form:
Legend for Repricing Shares or other shares of capital
stock:
NEITHER THIS WARRANT NOR THE SHARES OF COMMON
STOCK ISSUABLE UPON EXERCISE HEREOF HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR ANY APPLICABLE STATE
SECURITIES LAW AND NEITHER MAY BE SOLD OR
OTHERWISE TRANSFERRED UNTIL (I) A
REGISTRATION STATEMENT UNDER SUCH SECURITIES
ACT AND SUCH APPLICABLE STATE SECURITIES LAWS
SHALL HAVE BECOME EFFECTIVE WITH REGARD
THERETO, OR (II) THE COMPANY SHALL HAVE
RECEIVED A WRITTEN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY TO THE EFFECT THAT
REGISTRATION UNDER SUCH SECURITIES ACT AND
SUCH APPLICABLE STATE SECURITIES LAWS IS NOT
REQUIRED IN CONNECTION WITH SUCH PROPOSED
TRANSFER.
Section 7. Miscellaneous.
(a) The terms of this Warrant shall be
binding upon and shall inure to the benefit
of any successors or assigns of the Company
and of the holder or holders hereof and of
the Common Stock issued or issuable upon the
exercise hereof.
(b) Except as otherwise provided herein,
this Warrant and all rights hereunder are
transferable by the registered holder hereof
in person or by duly authorized attorney on
the books of the Company upon surrender of
this Warrant, properly endorsed, to the
Company. The Company may deem and treat the
registered holder of this Warrant at any time
as the absolute owner hereof for all purposes
and shall not be affected by any notice to
the contrary.
(c) Notwithstanding any provision herein to
the contrary, Holder hereof may not exercise,
sell, transfer, or otherwise assign this
Warrant unless the Company is provided with
an opinion of counsel satisfactory in form
and substance to the Company, to the effect
that such exercise, sale, transfer, or
assignment would not violate the Securities
Act or applicable state securities laws.
(d) This Warrant may be divided into
separate Warrants covering one share of
Common Stock or any whole multiple thereof,
for the total number of shares of Common
Stock then subject to this Warrant at any
time, or from time to time, upon the request
of the registered holder of this Warrant and
the surrender of the same to the Company for
such purpose. Such subdivided Warrants shall
be issued promptly by the Company following
any such request and shall be of the same
form and tenor as this Warrant, except for
any requested change in the name of the
registered holder stated herein.
(e) All notices, requests, demands, and
other communications required or permitted
under this Warrant and the transactions
contemplated herein shall be in writing and
shall be deemed to have been duly given,
made, and received when personally delivered
the day after deposited with a recognized
national overnight delivery service prior to
its dead-line for receiving packages for next
day delivery or upon the fifth day after
deposited in the United States registered or
certified mail with postage prepaid, return
receipt requested, in each case addressed as
set forth below:
If to the Company:
Cambex Corporation
360 Second Avenue
Waltham, Massachusetts 02451
Attention: Peter Kruy,
Executive Vice President
Tel: (781) 890-6000
Fax: (781) 890-2899
If to the Holder hereof, to the address of
such Holder appearing on the books of the
Company.
(f) This Agreement and each Warrant Certificate
hereunder shall be governed by and construed in
accordance with the laws of the Commonwealth of
Massachusetts, irrespective of the choice of law
provisions thereof. The parties agree that any action
brought by one party against the other shall be in any
appropriate state court or any federal Court located in
the County where the party against whom the action is
brought is principally located, and both parties agree
that such courts shall have exclusive jurisdiction of
such case or controversy arising under or in connection
with this Agreement and shall be a proper forum in
which to adjudicate such case or controversy. The
parties consent to the jurisdiction of such courts.
[Signatures on the following page]
SIGNATURE PAGE
TO
COMPANY
ATTACHED REPRICING WARRANT
IN WITNESS WHEREOF, the Company, has caused this
Warrant to be executed in its name by its duly
authorized officers under its corporate seal, and to be
dated as of the date first above written.
CAMBEX CORPORATION
By: /s/ Peter Kruy
Peter Kruy,
Executive Vice
President
ATTEST:
/s/ Arthur L. Ziskend
Secretary/Assistant Secretary
[CORPORATE
SEAL]
