SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
SCHEDULE l3D
Under the Securities Exchange Act of 1934
(Amendment No. 1)*
REFAC TECHNOLOGY DEVELOPMENT CORPORATION
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(Name of Issuer)
Common Stock
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(Title of Class of Securities)
758655104
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(CUSIP Number)
with a copy to:
Brian Hirsch George J. Mazin
Palisade Capital Management, LLC Lowenstein, Sandler PC
One Bridge Plaza 65 Livingston Avenue
Fort Lee, NJ 07024 Roseland, New Jersey 07068
(201) 585-7733 (201) 597-2500
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(Name, Address and Telephone Number
of Person Authorized to Receive
Notices and Communications)
September 30, 1999
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(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule l3G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), (f) or (g), check the following box [ ].
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule l3d-7 for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the
Act but shall be subject to all other provisions of the Act (however, see the
Notes).
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<PAGE>
CUSIP NO. 758655104
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1) Names of Reporting Persons. I.R.S. Identification Nos. of Above Persons
(entities only):
Palisade Capital Securities, L.L.C.
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2) Check the Appropriate Box if a Member of a Group (See Instructions):
(a) (b) X
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3) SEC Use Only
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4) Source of Funds (See Instructions): WC
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5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d)
or 2(e):
Not Applicable
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6) Citizenship or Place of Organization: New Jersey
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Number of 7) Sole Voting Power: 200,000*
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Shares Beneficially 8) Shared Voting Power: 0
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Owned by
Each Reporting 9) Sole Dispositive Power: 200,000*
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Person With: 10) Shared Dispositive Power: 0
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11) Aggregate Amount Beneficially Owned by Each Reporting Person:
200,000*
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12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions):
Not Applicable
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13) Percent of Class Represented by Amount in Row (11):
5.3%**
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14) Type of Reporting Person (See Instructions): BD
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* All 200,000 shares of Refac Technology Development Corporation common stock
("Shares") beneficially owned by Palisade Capital Securities, L.L.C.
("Palisade") are issuable to Palisade upon the exercise of a warrant purchased
by Palisade from Refac. Pursuant to Rule 13d-3 of the Securities Exchange Act of
1934, Palisade is deemed to be the beneficial owner of the 200,000 Shares
issuable to it upon exercise of such warrant. See Items 5 and 6 for additional
details.
** The principals of Palisade and certain of their family members beneficially
own in the aggregate 58,600 additional Shares. Palisade does not beneficially
own nor does it have voting or dispositive power over any of such 58,600 Shares.
Palisade, its principals and such family members disclaim any membership in
a "group" for purposes of Rule 13d-5(b) of the Exchange Act. See Item 2 for
additional details.
<PAGE>
CUSIP NO. 758655104
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1) Names of Reporting Persons. I.R.S. Identification Nos. of Above Persons
(entities only):
Martin Berman
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2) Check the Appropriate Box if a Member of a Group (See Instructions):
(a) (b) X
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3) SEC Use Only
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4) Source of Funds (See Instructions):PF
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5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d)
or 2(e):
Not Applicable
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6) Citizenship or Place of Organization: United States
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Number of 7) Sole Voting Power: 40,100*
Shares Beneficially 8) Shared Voting Power: 200,000*
Owned by
Each Reporting 9) Sole Dispositive Power: 40,100*
Person With: 10) Shared Dispositive Power: 200,000*
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11) Aggregate Amount Beneficially Owned by Each Reporting Person:
240,100*
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12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions):
Not Applicable
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13) Percent of Class Represented by Amount in Row (11):
6.3%**
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14) Type of Reporting Person (See Instructions): IN
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* Martin Berman, individually, beneficially owns 40,100 Shares. Mr. Berman has
sole voting and dispositive power over such 40,100 Shares. Mr. Berman, as a
principal of Palisade, has shared voting and dispositive power over the 200,000
Shares beneficially owned by Palisade. See Item 2 for additional details.
** The principals of Palisade (other than Mr. Berman) and certain of their
family members beneficially own in the aggregate 18,500 additional Shares.
Mr. Berman does not beneficially own nor does he have voting or dispositive
power over any of such 18,500 Shares. Palisade, its principals and such family
members disclaim any membership in a "group" for purposes of Rule 13d-5(b) of
the Exchange Act. See Item 2 for additional details.
<PAGE>
CUSIP NO. 758655104
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1) Names of Reporting Persons. I.R.S. Identification Nos. of Above Persons
(entities only):
Jack Feiler
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2) Check the Appropriate Box if a Member of a Group (See Instructions):
(a) (b) X
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3) SEC Use Only
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4) Source of Funds (See Instructions):PF
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5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d)
or 2(e):
Not Applicable
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6) Citizenship or Place of Organization: United States
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Number of 7) Sole Voting Power: 7,200*
Shares Beneficially 8) Shared Voting Power: 200,000*
Owned by
Each Reporting 9) Sole Dispositive Power: 7,200*
Person With: 10) Shared Dispositive Power: 200,000*
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11) Aggregate Amount Beneficially Owned by Each Reporting Person:
207,200*
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12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions):
Not Applicable
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13) Percent of Class Represented by Amount in Row (11):
5.5%**
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14) Type of Reporting Person (See Instructions): IN
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* Jack Feiler, individually, beneficially owns 7,200 Shares. Mr. Feiler has
sole voting and dispositive power over such 7,200 Shares. Mr. Feiler, as a
principal of Palisade, has shared voting and dispositive power over the 200,000
Shares beneficially owned by Palisade. See Item 2 for additional details.
** The principals of Palisade (other than Mr. Feiler) and certain of their
family members beneficially own in the aggregate 51,400 additional Shares.
Mr. Feiler does not beneficially own nor does he have voting or dispositive
power over any of such 51,400 Shares. Palisade, its principals and such
family members disclaim any membership in a "group" for purposes of Rule
13d-5(b) of the Exchange Act. See Item 2 for additional details.
<PAGE>
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CUSIP NO. 758655104
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1) Names of Reporting Persons. I.R.S. Identification Nos. of Above Persons
(entities only):
Richard Meisenberg
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2) Check the Appropriate Box if a Member of a Group (See Instructions):
(a) (b) X
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3) SEC Use Only
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4) Source of Funds (See Instructions):PF
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5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d)
or 2(e):
Not Applicable
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6) Citizenship or Place of Organization: United States
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Number of 7) Sole Voting Power: 0
Shares Beneficially 8) Shared Voting Power: 200,000*
Owned by
Each Reporting 9) Sole Dispositive Power: 0
Person With: 10) Shared Dispositive Power: 200,000*
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11) Aggregate Amount Beneficially Owned by Each Reporting Person:
200,000*
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12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions):
Not Applicable
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13) Percent of Class Represented by Amount in Row (11):
5.3%**
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14) Type of Reporting Person (See Instructions): IN
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* Richard Meisenberg, as a principal of Palisade, has shared voting and
dispositive power over the 200,000 Shares beneficially owned by Palisade. See
Item 2 for additional details.
** The principals of Palisade (other than Mr. Meisenberg) and certain of their
family members beneficially own in the aggregate 58,600 additional Shares. Mr.
Meisenberg does not beneficially own nor does he have voting or dispositive
power over any of such 58,600 Shares. Palisade, its principals and such family
members disclaim any membership in a "group" for purposes of Rule 13d-5(b) of
the Exchange Act. See Item 2 for additional details.
<PAGE>
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CUSIP NO. 758655104
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1) Names of Reporting Persons. I.R.S. Identification Nos. of Above Persons
(entities only):
Steven Berman
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2) Check the Appropriate Box if a Member of a Group (See Instructions):
(a) (b) X
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3) SEC Use Only
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4) Source of Funds (See Instructions):PF
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5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d)
or 2(e):
Not Applicable
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6) Citizenship or Place of Organization: United States
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Number of 7) Sole Voting Power: 7,900*
Shares Beneficially 8) Shared Voting Power: 200,000*
Owned by
Each Reporting 9) Sole Dispositive Power: 7,900*
Person With: 10) Shared Dispositive Power: 200,000*
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11) Aggregate Amount Beneficially Owned by Each Reporting Person:
207,900*
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12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions):
Not Applicable
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13) Percent of Class Represented by Amount in Row (11):
5.5%**
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14) Type of Reporting Person (See Instructions): IN
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* Steven Berman, individually, beneficially owns 7,900 Shares. Mr. Berman has
sole voting and dispositive power over such 7,900 Shares. Mr. Berman, as a
principal of Palisade, has shared voting and dispositive power over the 200,000
Shares beneficially owned by Palisade. See Item 2 for additional details.
** The principals of Palisade (other than Mr. Berman) and certain of their
family members beneficially own in the aggregate 50,700 additional Shares.
Mr. Berman does not beneficially own nor does he have voting or dispositive
power over any of such 50,700 Shares. Palisade, its principals and such
family members disclaim any membership in a "group" for purposes of Rule
13d-5(b) of the Exchange Act. See Item 2 for additional details.
<PAGE>
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CUSIP NO. 758655104
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1) Names of Reporting Persons. I.R.S. Identification Nos. of Above Persons
(entities only):
Mark Hoffman
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2) Check the Appropriate Box if a Member of a Group (See Instructions):
(a) (b) X
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3) SEC Use Only
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4) Source of Funds (See Instructions):PF
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5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d)
or 2(e):
Not Applicable
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6) Citizenship or Place of Organization: United States
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Number of 7) Sole Voting Power: 1,800*
Shares Beneficially 8) Shared Voting Power: 200,000*
Owned by
Each Reporting 9) Sole Dispositive Power: 1,800*
Person With: 10) Shared Dispositive Power: 200,000*
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11) Aggregate Amount Beneficially Owned by Each Reporting Person:
201,800*
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12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions):
Not Applicable
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13) Percent of Class Represented by Amount in Row (11):
5.3%**
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14) Type of Reporting Person (See Instructions): IN
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* Mark Hoffman has sole voting and dispositive power over 1,800 Shares
held in custodial accounts for his children Russell Hoffman and Philip S.
Hoffman. Mr. Hoffman, as a principal of Palisade, has shared voting and
dispositive power over the 200,000 Shares beneficially owned by Palisade. See
Item 2 for additional details.
** The principals of Palisade (other than Mr. Hoffman) and certain of their
family members beneficially own in the aggregate 56,800 additional Shares.
Mr. Hoffman does not beneficially own nor does he have voting or dispositive
power over any of such 56,800 Shares. Palisade, its principals and such family
members disclaim any membership in a "group" for purposes of Rule 13d-5(b) of
the Exchange Act. See Item 2 for additional details.
<PAGE>
CUSIP NO. 758655104
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1) Names of Reporting Persons. I.R.S. Identification Nos. of Above Persons
(entities only):
Mark Kaplan, Trustee for the Allison Berman Lifetime Trust and the Mark K.
Berman Lifetime Income Trust
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2) Check the Appropriate Box if a Member of a Group (See Instructions):
(a) (b) X
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3) SEC Use Only
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4) Source of Funds (See Instructions):PF
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5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d)
or 2(e):
Not Applicable
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6) Citizenship or Place of Organization: United States
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Number of 7) Sole Voting Power: 1,600*
Shares Beneficially 8) Shared Voting Power: 0
Owned by
Each Reporting 9) Sole Dispositive Power: 1,600*
Person With: 10) Shared Dispositive Power: 0
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11) Aggregate Amount Beneficially Owned by Each Reporting Person:
1,600*
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12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions):
Not Applicable
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13) Percent of Class Represented by Amount in Row (11):
.04%**
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14) Type of Reporting Person (See Instructions): OO(trustee)
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* Mark Kaplan, as the trustee for the Allison Berman Lifetime Trust and the
Mark K. Berman Lifetime Income Trust, has voting and dispositive power over
1,600 Shares and pursuant to Rule 13d-3 of the Exchange Act is deemed the
beneficial owner of such Shares. Mr. Kaplan is a director of the Issuer. See
Item 2 for additional details.
** Palisade, its principals and certain of their family members beneficially own
in the aggregate 257,000 additional Shares. Mr. Kaplan does not beneficially own
nor does he have voting or dispositive power over any of such 257,000 Shares.
Palisade, its principals and such family members disclaim any membership
in a "group" for purposes of Rule 13d-5(b) of the Exchange Act. See Item 2 for
additional details.
<PAGE>
Item 1. Security and Issuer
This statement relates to the common stock, par value $.10 per share,
of Refac Technology Development Corporation ("Shares"). Refac has principal
executive offices located at 115 River Road, Edgewater, New Jersey 07020.
Item 2. Identity and Background
Palisade Capital Securities, L.L.C. ("Palisade")
(a) Palisade Capital Securities, L.L.C.
(b) One Bridge Plaza, Ft. Lee, New Jersey 07024
(c) Principal Business: broker-dealer
(d) Criminal convictions: None
(e) Civil proceedings: None
(f) Place of Organization: New Jersey
Martin Berman
(a) Martin Berman
(b) One Bridge Plaza, Ft. Lee, New Jersey 07024
(c) Investment advisor; Palisade Capital Management,
L.L.C., One Bridge Plaza, Ft. Lee, New Jersey 07024
(d) Criminal convictions: None
(e) Civil proceedings: None
(f) United States
Jack Feiler
(a) Jack Feiler
(b) One Bridge Plaza, Ft. Lee, New Jersey 07024
(c) Investment advisor; Palisade Capital Management,
L.L.C., One Bridge Plaza, Ft. Lee, New Jersey 07024
(d) Criminal convictions: None
(e) Civil proceedings: None
(f) United States
Richard Meisenberg
(a) Richard Meisenberg
(b) One Bridge Plaza, Ft. Lee, New Jersey 07024
(c) Investment advisor; Palisade Capital Management,
L.L.C., One Bridge Plaza, Ft. Lee, New Jersey 07024
(d) Criminal convictions: None
(e) Civil proceedings: None
(f) United States
Steven Berman
(a) Steven Berman
(b) One Bridge Plaza, Ft. Lee, New Jersey 07024
(c) Investment advisor; Palisade Capital Management,
L.L.C., One Bridge Plaza, Ft. Lee, New Jersey 07024
(d) Criminal convictions: None
(e) Civil convictions: None
(f) United States
Mark Hoffman
(a) Mark Hoffman
(b) One Bridge Plaza, Ft. Lee, New Jersey 07024
(c) Investment advisor; Palisade Capital Management,
L.L.C., One Bridge Plaza, Ft. Lee,
New Jersey 07024
(d) Criminal convictions: None
(e) Civil convictions: None
(f) United States
Mark Kaplan, Trustee for the Allison Berman Lifetime Trust and the Mark
K. Berman Lifetime Income Trust
(a) Mark Kaplan
(b) 919 Third Avenue, New York, New York 10022
(c) Attorney; Skadden, Arps, Slate, Meagher & Flom
LLP, 919 Third Avenue, New York, New York 10022
(d) Criminal convictions: None
(e) Civil convictions: None
(f) United States
The reporting persons are making a joint filing under Rule 13d-1(k) of
the Securities Exchange Act of 1934. Palisade beneficially owns 200,000 Shares
which are issuable to it upon the exercise of a warrant purchased by Palisade
from Refac. The principals of Palisade (Steven Berman, Martin Berman, Jack
Feiler, Richard Meisenberg and Mark Hoffman) have shared voting and dispositive
power over such 200,000 Shares.
Individually, Steven Berman, Martin Berman, Jack Feiler, Richard
Meisenberg and Mark Hoffman beneficially own 7,900, 40,100, 7,200, 0 and 1,800
Shares respectively. Each such reporting person has sole voting and dispositive
power over such person's Shares. None of such reporting persons beneficially own
or have voting or dispositive power over any of the Shares beneficially owned
(in an individual capacity) by the other reporting persons.
<PAGE>
Mark Kaplan, as the trustee of the Allison Berman Lifetime Trust and
the Mark K. Berman Lifetime Income Trust, has voting and dispositive power over
1,600 Shares. Allison Berman and Mark K. Berman are the children of Martin
Berman. Mr. Kaplan does not beneficially own or have voting or dispositive power
over any of the Shares beneficially owned by the other reporting persons.
On a combined basis the reporting persons beneficially own 258,600
Shares or 6.8% of the outstanding Shares. The reporting persons disclaim any
membership in a "group" for purposes of Rule 13d-5(b) of the Exchange Act. There
are no written or oral agreements among the reporting persons to act in concert
with respect to the Shares owned by such persons.
Item 3. Source and Amount of Funds or Other Consideration
All funds used by Palisade to purchase the warrant, which is
exercisable into Shares, were derived from the company's working capital. All
funds used by the other reporting persons to purchase the Shares beneficially
owned by such persons were derived from the personal funds of such persons. No
purchases are reported in this Amendment No. 1 to Schedule 13D.
Item 4. Purpose of Transaction
The acquisition of the Shares by the reporting persons is solely for
investment purposes. None of the reporting persons have any present plans or
intentions which relate to or would result in any of the transactions required
to be described in Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer
Based upon the information contained in Refac's 10Q for the period
ending June 30, 1999 there are issued and outstanding 3,795,261 Shares. Palisade
beneficially owns 200,000 Shares which are issuable to it upon the exercise of a
warrant purchased by Palisade from Refac. The principals of Palisade (Steven
Berman, Martin Berman, Jack Feiler, Richard Meisenberg and Mark Hoffman) have
shared voting and dispositive power over such 200,000 Shares.
Individually, Steven Berman, Martin Berman, Jack Feiler, Richard
Meisenberg and Mark Hoffman beneficially own 7,900, 40,100, 7,200, 0 and 1,800
Shares respectively. Each such reporting person has sole voting and dispositive
power over such person's Shares. None of such reporting persons beneficially own
or have voting or dispositive power over any of the Shares beneficially owned
(in an individual capacity) by the other reporting persons.
Mark Kaplan, as the trustee of the Allison Berman Lifetime Trust and
the Mark K. Berman Lifetime Income Trust, has voting and dispositive power over
1,600 Shares. Allison Berman and Mark K. Berman are the children of Martin
Berman. Mr. Kaplan does not beneficially own or have voting or dispositive power
over any of the Shares beneficially owned by the other reporting persons.
On a combined basis the reporting persons beneficially own 258,600
Shares or 6.8% of the outstanding Shares.
The following table details the transactions by the reporting persons
in the Shares in the past sixty days:
Date Quantity Price Type of Transaction
September 30, 1999 500 $4.20 Open market sale
September 30, 1999 600 4.21 Open market sale
September 30, 1999 900 4.22 Open market sale
September 30, 1999 300 4.18 Open market sale
September 30, 1999 100 4.00 Open market sale
September 30, 1999 100 4.00 Open market sale
September 30, 1999 100 4.00 Open market sale
September 30, 1999 2,000 4.23 Open market sale
September 30, 1999 1,700 4.23 Open market sale
September 30, 1999 2,800 4.24 Open market sale
September 30, 1999 900 4.22 Open market sale
October 1, 1999 2,600 4.36 Open market sale
October 4, 1999 500 4.27 Open market sale
<PAGE>
No other reporting person or entity controlled by the reporting
persons has traded Shares in the past sixty days.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer
Refac sold to Palisade, as partial payment for certain financial
advisory services performed by Palisade, a warrant to purchase 200,000 Shares
(attached hereto as Exhibit A). Palisade paid $103,320 for the warrant and the
warrant is exercisable for 200,000 Shares.
Mark Kaplan is a director of Refac.
Item 7. Material to be filed as exhibits
A. Common Stock Purchase Warrant dated April 7, 1997.
B. Joint Filing Agreement among the reporting persons.
<PAGE>
Exhibit A
REFAC TECHNOLOGY DEVELOPMENT CORPORATION
Common Stock Purchase Warrant
200,000 Shares (Subject to the
Adjustment Provisions Specified Herein)
No. W-101 April 7, 1997
REFAC Technology Development Corporation, a Delaware corporation (the
"Company"), for value received, hereby certifies that Palisade Capital
Securities, L.L.C. (the "Purchaser") or its Permitted Transferees (as defined
herein) (such Permitted Transferees, together with the Purchaser, the "Holder"),
is entitled to purchase from the Company up to 200,000 duly authorized, validly
issued, fully paid and nonassessable shares of Common Stock of the Company (the
"Common Stock", and such shares of Common Stock issuable upon exercise of this
Warrant, the "Warrant Shares") at the purchase price per share of $8.25 (the
'"Warrant Price"), subject to the terms, conditions and adjustments set forth
below. This Common Stock Purchase Warrant (the "Warrant", and together with all
other Common Stock Purchase Warrants issued in substitution therefor, the
"Warrants") is being issued pursuant to section 5 of the Letter Agreement, dated
April 7, 1997 (the "Letter Agreement"), between the Company and the Purchaser.
Certain capitalized terms used in this Warrant are defined in section 12;
references to an "Exhibit" are, unless otherwise specified, to one of the
Exhibits attached to this Warrant and references to a "section" are, unless
otherwise specified, to one of the sections of this Warrant.
1. Exercise of Warrant.
1.1. Duration and Manner of Exercise. (a) Subject to the other
provisions of this section 1.1, this Warrant shall expire on the earlier of (i)
such date as the Company, at its option, terminates the Letter Agreement, (ii)
the fifth anniversary of the date hereof and (iii) the consummation of any
transaction in which the Company is not the surviving corporation or in which
the Company and its shareholders are not the holders of a majority of the equity
securities of the surviving corporation (such date of termination being herein
referred to as the "Termination Date"). On and after the date hereof, this
Warrant may be exercised up until 12:00 p.m., New York City time on the
Termination Date for the number of Warrant Shares as follows:
(A) Subject to the provisions of clause (B) below:
(i) 75,000 Warrant Shares shall become subject to exercise
three months from the date hereof upon the payment by
the Purchaser to the Company of $38,745;
(ii) 25,000 Warrant Shares shall become subject to exercise
six months from the date hereof upon the payment by the
Purchaser to the Company of $12,915;
(iii)25,000 Warrant Shares shall become subject to exercise
nine months from the date hereof upon the payment by
the Purchaser to the Company of $12,915;
(iv) 25,000 Warrant Shares shall become subject to exercise
twelve months from the date hereof upon the payment by
the Purchaser to the Company of $12,915;
(v) 25,000 Warrant Shares shall become subject to exercise
fifteen months from the date hereof upon the payment by
the Purchaser to the Company of $12,915; and
(vi) 25,000 Warrant Shares shall become subject to exercise
eighteen months from the date hereof upon the payment
by the Purchaser to the Company of $12,915.
<PAGE>
provided, however, that if the Company, at its option, terminates the Letter
Agreement
(1) between twelve and fifteen months after the date
hereof, this Warrant shall be exercisable pursuant to
(i), (ii), (iii) and (iv) above;
(2) after fifteen months from the date hereof, this Warrant
shall be exercisable pursuant to (i), (ii), (iii), (iv)
and (v) above; and
(3) after eighteen months from the date hereof, this
Warrant shall be exercisable pursuant to (i), (ii),
(iii), (iv), (v) and (vi) above.
(B) Notwithstanding anything to the contrary contained in clause (A)
above, in the event of the consummation of any transaction (the "Transaction")
in which the Company is not the surviving corporation or in which the Company
and its shareholders are not the holders of a majority of the equity securities
of the surviving corporation, all Warrant Shares which, on the date of such
consummation, have not become subject to exercise under clause (A) above, shall
become subject to exercise on the date of, but prior to, the consummation of the
Transaction upon the payment by the Purchaser to the Company of $0.5166 per such
Warrant Share.
(b) Subject to the exercisability provisions of paragraph (a)
above and the other terms and conditions set forth herein, this Warrant may be
exercised by the Holder, in whole or in part, during normal business hours on
any Business Day, by surrender of this Warrant to the Company at its principal
office, accompanied by a subscription in substantially the form attached to this
Warrant as Exhibit A duly executed by such Holder and accompanied by payment, in
cash or by certified or official bank check payable to the order of the Company,
in the amount obtained by multiplying (x) the number of shares of Common Stock
designated in such subscription (up to the amount of shares to which such Holder
is entitled to receive at such time upon exercise of this Warrant) by (y) the
Warrant Price, and such Holder shall thereupon be entitled to receive the full
number of duly authorized, validly issued, fully paid and nonassessable shares
of Common Stock (or Other Securities) so purchased upon such exercise.
1.2. When Exercise Effective. Each exercise of this Warrant shall be
deemed to have been effected immediately prior to the close of business on the
Business Day on which this Warrant shall have been surrendered to the Company as
provided in section 1.1, and at such time the Person or Persons in whose name or
names any certificate or certificates for shares of Common Stock (or Other
Securities) shall be issuable upon such exercise as provided in section 1.3
shall be deemed to have become the Holder or Holders of record thereof.
<PAGE>
1.3. Delivery of Stock Certificates, etc. As soon as practicable after
each exercise of this Warrant, in whole or in part, and in any event within five
Business Days thereafter, the Company at its expense (including the payment by
it of any applicable issue taxes) will cause to be issued in the name of and
delivered to the Holder or, subject to section 9, as such Holder (upon payment
by such Holder of any applicable transfer taxes) may direct,
(a) a certificate or certificates for the number of duly
authorized, validly issued, fully paid and nonassessable shares of
Common Stock (or Other Securities) to which such Holder shall be
entitled upon such exercise plus, in lieu of any fractional share to
which such Holder would otherwise be entitled, cash in an amount
determined in accordance with the provisions of section 4, and
(b) in case such exercise is in part only, a new Warrant of like
tenor, calling in the aggregate on the face thereof for the number of
shares of Common Stock equal to the number of such shares which such
Holder would be entitled to receive at such time upon exercise of this
Warrant, after giving effect to such recent exercise.
2. Adjustment of Number of Shares of Common Stock Issuable Upon
Exercise. The number and kind of shares purchasable upon the exercise of this
Warrant shall be subject to adjustment from time to time as follows:
2.1. Stock Dividends; Stock Splits; Reverse Stock Splits;
Reclassifications. In case the Company shall (i) pay a dividend or make any
other distribution with respect to its Common Stock in shares of its capital
stock, (ii) subdivide its outstanding Common Stock, (iii) combine its
outstanding Common Stock into a smaller number of shares, or (iv) issue any
shares of its capital stock in a reclassification of the Common Stock (including
any such reclassification in connection with a merger, consolidation or other
business combination in which the Company is the continuing corporation) the
number of shares of Common Stock issuable upon exercise of the Warrant
immediately prior to the record date for such dividend or distribution or the
effective date of such subdivision or combination shall be adjusted so that the
holder of the Warrant shall thereafter be entitled to receive the kind and
number of shares of Common Stock or other securities of the Company that such
holder would have owned or have been entitled to receive after the happening of
any of the events described above, had such Warrant been exercised immediately
prior to the happening of such event or any record date with respect thereto. An
adjustment made pursuant to this section 2.1 shall become effective immediately
after the effective date of such event retroactive to the record date, if any,
for such event.
2.2. Rights; Options; Warrants. (a) In case the Company shall issue
rights, options, warrants or convertible or exchangeable securities (other than
a convertible or exchangeable security subject to section 2.1) to all holders of
its Common Stock, entitling them to subscribe for or purchase Common Stock at a
price per share that is lower (at the close of business on the -- Business Day
immediately prior to the record date for such issuance) than the Current Market
Value per share of Common Stock, the number of shares of Common Stock thereafter
issuable upon the exercise of all Warrants then outstanding shall be determined
by multiplying the number of shares of Common Stock theretofore issuable upon
the exercise of all Warrants then outstanding by a fraction, of which the
numerator shall be the number of shares of Common Stock outstanding on the date
of issuance of such rights, options, warrants or convertible or exchangeable
securities plus the number of additional shares of Common Stock offered for
subscription or purchase or to be issued upon conversion or exchange of such
convertible or exchangeable securities and of which the denominator shall be the
number of shares of Common Stock outstanding on the date of issuance of such
rights, options, warrants or convertible or exchangeable securities, plus the
number of shares of Common Stock which the aggregate consideration to be
received by the Company in connection with such issuance would purchase at the
then Current Market Value per share of Common Stock.
<PAGE>
(b) For purposes of this section 2.2, the consideration received
by the Company in connection with the issuance of rights, options, warrants or
convertible or exchangeable securities shall be deemed to be the consideration
received by the Company for such rights, options, warrants or convertible or
exchangeable securities, plus the consideration or premiums stated in such
rights, options, warrants or convertible or exchangeable securities to be paid
for the shares of Common Stock covered thereby. Any adjustment pursuant to this
section 2.2 shall be made whenever any such rights, options, warrants or
convertible or exchangeable securities are issued, but shall also become
effective retroactively in respect of exercises made between the record dates
for the determination of stockholders entitled to receive such rights, options,
warrants or convertible or exchangeable securities and the date such rights,
options, warrants or convertible or exchangeable securities are issued.
2.3. Issuance of Common Stock at Lower Values. (a) In case the Company
shall, in a transaction in which section 2.2 is inapplicable, issue or sell
shares of Common Stock, or rights, options, warrants or convertible or
exchangeable securities containing the right to subscribe for or purchase shares
of Common Stock, at a price per share of Common Stock (determined in the case of
such rights, options, warrants or convertible or exchangeable securities, by
dividing (A) the total amount receivable by the Company in consideration of the
sale and issuance of such rights, options, warrants or convertible or
exchangeable securities, plus the total consideration, if any, payable to the
Company upon exercise, conversion or exchange thereof, by (B) the total number
of shares of Common Stock covered by such rights, options, warrants or
convertible or exchangeable securities) that is lower than the then Current
Market Value per share of the Common Stock in effect immediately prior to such
sale or issuance, then the number of shares of Common Stock thereafter issuable
upon the exercise of all Warrants then outstanding shall be determined by
multiplying the number of shares of Common Stock theretofore issuable upon
exercise of all Warrants then outstanding by a fraction, of which the numerator
shall be the number of shares of Common Stock outstanding on the date of
issuance of such shares of Common Stock or rights, options warrants or
convertible or exchangeable securities, plus the number of additional shares of
Common Stock offered for subscription or purchase or to be issued upon
conversion or exchange of such convertible or exchangeable securities and of
which the denominator shall be the number of shares of Common Stock outstanding
on the date of issuance of such shares of Common Stock or rights, options,
warrants or convertible or exchangeable securities, plus the number of shares
which the aggregate consideration to be received by the Company in connection
with such issuance would purchase at the then Current Market Value per share of
Common Stock.
<PAGE>
(b) For the purposes of such adjustments, the shares of Common
Stock which the holder of any such rights, options, warrants or convertible or
exchangeable securities shall be entitled to subscribe for or purchase shall be
deemed to be issued and outstanding as of the date of the sale and issuance of
the rights, warrants or convertible or exchangeable securities and the
consideration received by the Company therefor shall be deemed to be the
consideration received by the Company for such rights, options, warrants or
convertible or exchangeable securities, plus the consideration or premiums
stated in such rights, options, warrants or convertible or exchangeable
securities to be paid for the shares of Common Stock covered thereby.
(c) In case the Company shall issue and sell shares of Common
Stock or rights, options, warrants or convertible or exchangeable securities
containing the right to subscribe for or purchase shares of Common Stock for a
consideration consisting, in whole or in part, of property other than cash or
its equivalent, then in determining the "price per share of Common Stock" and
the "consideration receivable by or payable to the Company for purposes of the
first sentence of this section 2.3, the Board of Directors of the Company shall
determine, in good faith, the fair value of such property. In case the Company
shall issue and sell rights, options, warrants or convertible or exchangeable
securities containing the right to subscribe for or purchase shares of Common
Stock, together with one or more other securities as part of a unit at a price
per unit, then in determining the price per share of Common Stock and the
"consideration" receivable by or payable to the Company for purposes of the
first sentence of this section 2.3, the Board of Directors of the Company shall
determine, in good faith, the fair value of the rights, options, warrants or
convertible or exchangeable securities then being sold as part of such unit.
2.4. Distributions of Debt Assets; Subscription Rights or Convertible
Securities. (a) In case the Company shall fix a record date for the making of a
distribution to all holders of shares of its Common Stock of evidences of
indebtedness of the Company, assets or securities (excluding those referred to
in section 2.2 and excluding cash dividends from current or retained earnings)
(any such evidences of indebtedness, assets or securities, the "assets or
<PAGE>
securities"), then, at the election of the Company, either (i) the number of
shares of Common Stock issuable after such record date upon exercise of the
Warrant shall be adjusted by multiplying the number of shares of Common Stock
issuable upon the exercise of such Warrant immediately prior to such record date
by a fraction, the numerator of which shall be the then Current Market Value per
share of Common Stock at the close of business on the Business Day immediately
prior to the record date for such distribution and the denominator of which
shall be the then Current Market Value per share of Common Stock at the close of
business on the Business Day immediately prior to the record date for such
distribution less an amount equal to the then fair value (as determined by the
Board of Directors of the Company acting in good faith) of the assets or
securities applicable to one share of Common Stock, or (ii) adequate provision
shall be made so that the Holder of the Warrant shall have the right to receive,
in addition to shares of Common Stock (in the event of an exercise of the
Warrants), at the election of the Company, either (A) the assets or securities
to which such holder would have been entitled as a holder of Common Stock if
such holder had exercised his Warrants immediately prior to the record date for
such distribution or (B) the cash equivalent of such assets or securities.
(b) If the Company elects to adjust the number of shares of
Common Stock issuable upon the exercise of the Warrants pursuant to section
2.4(a)(i) above, such adjustment shall be made whenever any such distribution is
made, and shall become effective on the date of distribution retroactive to
the record date for the determination of stockholders entitled to receive
such distribution; Provided that the Company shall deliver to any holder
that exercises a Warrant after any such record date, but prior to the
related distribution, a due bill or other appropriate instrument evidencing such
holders right to receive such distribution upon its occurrence.
(c) Notwithstanding the foregoing, the Company shall not elect
the adjustment provided for in paragraph (a)(i) above if the then fair value
(as determined by the Board of Directors of the Company acting in good faith) of
the assets or securities applicable to one share of Common Stock is equal to
or greater than the then Current Market Value per share of Common Stock at
the close of business on the Business Day immediately prior to the record date
for such distribution.
2.5. Expiration of Rights, Options and Conversion Privileges. Upon the
expiration of any rights, options, warrants or conversion or exchange privileges
that have previously resulted in an adjustment hereunder, if any thereof shall
not have been exercised, the number of shares of Common Stock issuable upon the
exercise of the Warrant shall, upon such expiration, be readjusted and shall
thereafter, upon any future exercise, be such as they would have been had they
been originally adjusted (or had the original adjustment not been required, as
the case may be) as if (i) the only shares of Common Stock so issued were the
shares of Common Stock, if any, actually issued or sold upon the exercise of
such rights, options, warrants or conversion or exchange rights and (ii) such
shares of Common Stock, if any, were issued or sold for the consideration
actually received by the Company upon such exercise plus the consideration, if
any, actually received by the Company for issuance, sale or grant of all such
rights, options, warrants or conversion or exchange rights whether or not
<PAGE>
exercised; provided that no such readjustment shall have the effect of
decreasing the number of shares issuable upon exercise of the Warrant by a
number, in excess of the number of the adjustment initially made in respect to
the issuance, sale or grant of such rights, options, warrants or conversion or
exchange rights.
2.6. No Adjustment for Dividends; No Adjustment of Warrant Price.
Except as otherwise provided in this section 2, no adjustment in respect of any
dividends declared and paid on Common Stock, or on any other capital stock of
the Company, shall be made during the term of a Warrant or upon the exercise of
a Warrant. Notwithstanding anything to the contrary contained in this Warrant,
in the event of any adjustments to this Warrant pursuant to this section 2,
adjustments shall be made solely to the number and kind of securities
purchasable upon the exercise of this Warrant and no adjustments shall be made
to the Warrant Price.
2.7. De Minimis Adjustments. No adjustment pursuant to this section 2
in the number of shares of Common Stock issuable hereunder shall be required
unless cumulative adjustments would require an increase or decrease of at least
two percent (2%) in the number of shares of Common Stock issuable upon the
exercise of this Warrant; provided that any adjustments which by reason of this
section 2.7 are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations shall be made to the
nearer one-thousandth of a share.
2.8. Other Adjustments. In the event that at any time, as a result of
an adjustment made pursuant to this section 2, the registered holders shall
become entitled to receive any securities of the Company other than shares of
Common Stock, thereafter the number of such other securities so receivable upon
exercise of the Warrants shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the shares of Common Stock contained in this section 2.
2.9. Notice of Adjustment. Whenever the number of shares of Common
Stock purchasable upon the exercise of the Warrant is adjusted, as herein
provided, the Company shall give notice to each Holder of such adjustment or
adjustments.
2.10. Excluded Transactions. Notwithstanding any provision in this
section 2 to the contrary but subject to the adjustment provisions of section 1,
no adjustment shall be made pursuant to this section 2 in respect of (i) the
exercise of any warrants, options or other rights to purchase Common Stock, or
the conversion of any convertible securities of the Company, in each case issued
or granted prior to the date hereof or issued or granted pursuant to or in
connection with the Letter Agreement, (ii) the issuance of Common Stock pursuant
to any dividend reinvestment plan, (iii) the issuance of shares of Common Stock
to the directors, officers or employees of, or any consultants or advisors to,
the Company, or the granting of options, stock appreciation rights or similar
rights to such persons with respect thereto, pursuant to any bona fide
management compensation plan or arrangement of the Company or any of its
subsidiaries, (iv) equity securities issued, either directly or indirectly, in
connection with the acquisition by the Company of an interest in an unaffiliated
third party (whether by merger, consolidation, sale of assets or securities, or
otherwise) and (v) the issuance of securities (including any convertible
<PAGE>
securities or options and the conversion or exercise thereof) to any third party
at fair market value as determined in good faith by the Board of Directors of
the Company.
3. Preservation of Purchase Rights Upon Merger, Consolidation, etc. In
the event of any consolidation of the Company with or merger of the Company with
or into another corporation or in case of any sale, transfer or lease to another
corporation of all or substantially all the property of the Company, if the
Company is the surviving corporation and its shareholders are the holders of a
majority of the equity securities of the surviving corporation the Acquiring
Person shall execute an agreement that each Holder shall have the right
thereafter (whether or not the Warrant is then exercisable by its terms) upon
payment of the Warrant Price in effect immediately prior to such action to
purchase upon exercise of the Warrant the kind and amount of securities, cash or
other assets which he would have owned or have been entitled to receive after
the happening of such consolidation, merger, sale, transfer or lease had such
warrant been exercised immediately prior to such action; provided that no
adjustment in respect of dividends, interest or other income on or from such
shares or other securities and property shall be made during the term of a
Warrant or upon the exercise of a Warrant. The Company shall mail by first class
mail, postage prepaid, to each Holder, notice of the execution of any such
agreement (including a copy thereof). Such agreement shall provide for
adjustments, which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this section 3. The provisions of this section 3
shall similarly apply to successive consolidations, mergers, sales, transfers or
leases. The Acquiring Person shall mail to Warrant holders a notice describing
the supplemental warrant agreement. If this section 3 applies, sections 2.1,
2.2, 2.3, 2.4 and 2.5 shall not be applicable.
4. Fractional Interests. The Company shall not be required to issue
fractional shares of Common Stock on the exercise of Warrants. If more than one
Warrant shall be presented for exercise in full at the same time by the same
Holder, the number of full shares of Common Stock which shall be issuable upon
the exercise thereof shall be computed on the basis of the aggregate number of
shares of Common Stock purchasable on exercise of the Warrants so presented. If
any fraction of shares of Common Stock would, except for the provisions of this
section 4, be issuable on the exercise of any Warrant (or specified portion
thereof), the Company shall pay an amount in cash equal to the Current Market
Value of one share of the Common Stock on the Business Day immediately preceding
the date the Warrant is presented for exercise, multiplied by such fraction less
the pro rata share of the then applicable Warrant Price.
5. No Dilution or Impairment. The Company will not, by amendment of
its articles of incorporation or through any consolidation, merger,
reorganization, transfer of assets, 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 of this 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 action as
may be reasonably necessary or appropriate in order to protect the rights of the
holder of this Warrant against dilution or other impairment. Without limiting
the generality of the foregoing, the Company (a) will not permit the par value
of any shares of stock receivable upon the exercise of this Warrant to exceed
the amount payable therefor upon such exercise, (b) will take all such action as
may be necessary or appropriate in order that the Company may validly and
legally issue fully paid and nonassessable shares of stock on the exercise of
the Warrants from time to time outstanding, and (c) will not take any action
<PAGE>
which results in any adjustment pursuant to section 2 if the total number of
shares of Common Stock (or Other Securities) issuable after the action upon the
exercise of all of the Warrants would exceed the total number of shares of
Common Stock (or Other Securities) then authorized by the Company's articles of
incorporation and available for the purpose of issue upon such exercise.
6. Notices of Corporate Action. In the event of:
(a) any taking by the Company of a record of the holders of any
class of securities for the purpose of determining the holders thereof
who are entitled to receive any dividend (other than a regular
periodic dividend payable in cash out of earned surplus in an amount
not exceeding the amount of the immediately preceding cash dividend
for such period) or other distribution, or any right to subscribe for,
purchase or otherwise acquire any shares of stock of any class or any
other securities or property, or to receive any other right, or
(b) any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the
Company or any consolidation or merger involving the Company and any
other Person or any transfer of all or substantially all the assets of
the Company to any other Person, or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company,
the Company will mail or deliver to each holder of a Warrant a notice specifying
(i) the date or expected date on which any such record is to be taken for the
purpose of such dividend, distribution or right, and the amount and character of
such dividend, distribution or right, and (ii) the date or expected date on
which any such reorganization, reclassification, recapitalization,
consolidation, merger, transfer, dissolution, liquidation or winding-up is to
take place and the time, if any such time is to be fixed, as of which the
holders of record of Common Stock (or Other Securities) shall be entitled to
exchange their shares of Common Stock (or Other Securities) for the securities
or other property deliverable upon such reorganization, reclassification,
recapitalization, consolidation, merger, transfer, dissolution, liquidation or
winding-up. Such notice shall be mailed at least 10 days or hand-delivered at
least five (5) days prior to the date therein specified. Failure to mail or
receive such notice or any defect therein or in the mailing thereof shall not
affect the validity of any action taken in connection with any of the foregoing
transactions.
7. Reservation of Stock, etc. The Company will at all times reserve
and keep available, solely for issuance and delivery upon exercise of the
Warrants, the number of shares of Common Stock (or Other Securities) from time
to time issuable upon exercise of all Warrants at the time outstanding. All
shares of Common Stock (or Other Securities) issuable upon exercise of any
<PAGE>
Warrants shall be duly authorized and, when issued upon such exercise, shall be
validly issued and, in the case of shares, fully paid and nonassessable with no
liability on the part of the Holders thereof.
8. Termination. The Company will give the Holder of this Warrant not
less than 10 days nor more than 90 days notice of the termination of the right
to exercise this Warrant. The right to exercise this Warrant shall, subject to
the provisions of section 1.1 above, expire on the Termination Date, unless the
Company shall fail to give such notice as aforesaid, in which event the right to
exercise this Warrant shall not expire until a date 10 days after the date on
which the Company shall give the Holder hereof notice of the termination of the
right to exercise this Warrant.
9. Restrictions on Transfer.
9.1. Restrictive Legends. (a) Except as otherwise permitted by this
section 9, each warrant (including each Warrant issued upon the transfer of any
Warrant) shall be stamped or otherwise imprinted with a legend in substantially
the following form:
"This Warrant and any shares acquired upon the exercise of this
Warrant have not been registered under the Securities Act of 1933, as
amended, and may not be transferred, sold or otherwise disposed of
except while a registration under such Act is in effect or pursuant to
an exemption therefrom under such Act. This Warrant and such shares
may be transferred only in compliance with the conditions specified in
this Warrant. This Warrant may not be sold, assigned or transferred
except as provided in Section 10."
(b) Except as otherwise permitted by this section 9, each certificate
for Common Stock (or Other Securities) issued upon the exercise of any
Warrant, and each certificate issued upon the transfer of any such Common
Stock (or Other Securities), shall be stamped or otherwise imprinted with a
legend in substantially the following form:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and may not
be transferred, sold or otherwise disposed of except while a
registration under such Act is in effect or pursuant to an exemption
therefrom under such Act. Such securities may be transferred only in
compliance with the conditions specified in certain Common Stock
Purchase warrants issued by REFAC Technology Development Corporation
pursuant to the Letter Agreement, dated April 7, 1997, between REFAC
Technology Development Corporation and Palisade Capital Securities,
L.L.C."
All Holders shall be bound by the requirements of such legends to the extent
that such legends are applicable. Upon registration of any shares of Common
Stock under the Securities Act of 1933, as amended (the "Securities Act"), each
certificate representing shares of Common Stock being registered and sold to the
public shall be replaced, at the expense of the Company, with certificates not
bearing the legend set forth above in this section 9.1(b).
<PAGE>
10. Registration and Transfer of Warrants, etc.
10.1. Restriction on Transfer. This Warrant may not be sold, assigned
or transferred except to an owner or an employee of Palisades Capital
Securities, L.L.C. or to any child or children or spouse of such owner or
employee or to a trust for the benefit of any one or more of such persons
("Permitted Transferees").
10.2. Transfer and Exchange of Warrants. Upon surrender of any Warrant
for registration of transfer or for exchange to the Company at its principal
office, the Company at its expense will (subject to compliance with section 9,
if applicable) execute and deliver in exchange therefor a new Warrant or
Warrants of like tenor, in the name of such holder or as such holder (upon
payment by such holder of any applicable transfer taxes) may direct, calling in
the aggregate on the face or faces thereof for the number of shares of Common
Stock called for on the face or faces of the Warrant or Warrants so surrendered.
10.3. Replacement of Warrants. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of any
Warrant and, in the case of any such loss, theft or destruction of any Warrant,
upon delivery of an indemnity bond in such reasonable amount as the Company may
determine (or, at the sole option of the Company, of an indemnity agreement
reasonably satisfactory to the Company), or, in the case of any such mutilation,
upon the surrender of such Warrant for cancellation to the Company at its
principal office, the Company at its expense will execute and deliver, in lieu
thereof, a new Warrant of like tenor.
11. Registration under the Securities Act of 1933.
11.1. Right to Include Registrable Securities. If the Company at any
time proposes to register any of its securities under the Securities Act at any
time after the date hereof and on or before five (5) years thereafter (except in
connection with an offering to employees, an exchange offer, an offer to acquire
assets, or a registration filed on Form S-4 or S-8 or any successor or similar
forms), whether or not for sale for its own account, it will each such time give
prompt written notice to all holders of Registrable Securities of its intention
to do so and of such holders' rights under this section 11. Upon the written
request of any such holder made within 30 days after the receipt of any such
notice (which request shall specify the Registrable Securities intended to be
disposed of by such holder and the intended method of disposition thereof), the
Company will, subject to the terms of this Warrant, use its best efforts to
effect the registration under the Securities Act of all Registrable Securities
which the Company has been so requested to register by the holders thereof, to
the extent requisite to permit the disposition (in accordance with the intended
methods thereof as aforesaid) of the Registrable Securities so to be registered,
by inclusion of such Registrable Securities in the registration statement which
covers he securities which the Company proposes to register, provided that if,
at any time after giving written notice of its intention to register any
securities and prior to the effective date of the registration statement filed
in connection with such registration, the Company shall determine for any reason
either not to register or to delay registration of such securities, the Company
may, at its election, give written notice of such determination to each holder
of Registrable Securities and, thereupon, (i) in the case of a determination not
to register, shall be relieved of its obligation to register any Registrable
<PAGE>
Securities in connection with such registration (but not from its obligation to
pay the Registration Expenses (as defined below) in connection therewith), and
(ii) in the case of a determination to delay registering, shall be permitted to
delay registering any Registrable Securities, for the same period as the delay
in registering such other securities.
11.2. Registration Expenses. The Company shall comply with the
requirements of section 11.1 at its own expense, and shall pay all expenses of
the registration ("Registration Expenses"); however, the Company shall not be
responsible for any part of the cost of any separate counsel engaged to review
the registration statement on behalf of or to advise the sellers of the
Registrable Securities. Registration Expenses shall include legal, accounting,
engineering, printing, filing and NASD fees, out-of-pocket expenses incurred by
Company-retained counsel, accountants, and engineers, and miscellaneous
identified expenses. Such expenses shall not include underwriting or selling
commissions, transfer taxes and underwriter's expense allowance attributable to
the Registrable Securities, all of which shall be borne by the sellers of the
Registrable Securities.
11.3. Priority in Registrations. If (i) a registration pursuant to
this section 11 involves an underwritten offering of the securities so being
registered, whether or not for sale for the account of the Company, to be
distributed (on a firm commitment basis) by or through one or more underwriters
of recognized standing under underwriting terms appropriate for such a
transaction, and (ii) the managing underwriter of such underwritten offering
shall inform the Company by letter of its belief that the distribution of all or
a specified number of such Registrable Securities concurrently with the
securities being distributed by such underwriters would interfere with the
successful marketing of the securities being distributed by such underwriters
(such writing to state the basis of such belief and the approximate number of
such Registrable Securities which may be distributed without such effect), then
the Company may, upon written notice to all holders of such Registrable
Securities, reduce pro rata (if and to the extent stated by such managing
underwriter to be necessary to eliminate such effect) the number of such
Registrable Securities the registration of which shall have been requested by
each holder of Registrable Securities so that the resultant aggregate number of
such Registrable Securities so included in such registration shall be equal to
the number of shares stated in such managing underwriter's letter.
11.4. Registration Procedures. If and whenever the Company is required
to use its best efforts to effect the registration of any Registrable Securities
under the Securities Act, the Company shall, as expeditiously as possible:
(i) prepare and (within 60 days after the end of the period
within which requests for registration may be given to the Company or in any
event as soon thereafter as possible) file with the Commission the requisite
registration statement to effect such registration and thereafter use its best
efforts to cause such registration statement to become and remain effective,
provided, however, that the Company may discontinue any registration of its
securities which are not Registrable Securities (and, under the circumstances
specified in section 11.1, its securities which are Registrable Securities) at
<PAGE>
any time prior to the effective date of the registration statement relating
thereto;
(ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective and
to comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration statement until the
earlier of such time as all of such securities have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof set forth in such registration statement and the expiration of 90 days
after such registration statement becomes effective;
(iii) furnish to each seller of Registrable Securities covered by
such registration statement and each underwriter, if any, of the securities
being sold by such seller, such number of conformed copies of such registration
statement and of each such amendment and supplement thereto (in each case
including all exhibits), such number of copies of the prospectus contained in
such registration statement (including each preliminary prospectus and any
summary prospectus) and any other prospectus filed under Rule 424 under the
Securities Act, in conformity with the requirements of the Securities Act, and
such other documents, as such seller and underwriter, if any, may reasonably
request in order to facilitate the public sale or other disposition of the
Registrable Securities owned by such seller;
(iv) use its best efforts to register or qualify all Registrable
Securities and other securities covered by such registration statement under
such other securities laws or blue sky laws of such jurisdictions as any seller
thereof and each underwriter, if any, of the securities being sold by such
seller, shall reasonably request, to keep such registrations or qualifications
in effect for so long as such registration statement remains in effect, and take
any other action which may be reasonably necessary or advisable to enable such
seller and underwriter to consummate the disposition in such jurisdictions of
the securities owned by such seller, except that the Company shall not for any
such purpose be required to qualify generally to do business as a foreign
corporation in any jurisdiction wherein it would not but for the requirements of
this subsection (iv) be obligated to be so qualified, to subject itself to
taxation in any such jurisdiction or to consent to general service of process in
any such jurisdiction;
(v) use its best efforts to cause all Registrable Securities
covered by such registration statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary to enable the
seller or sellers thereof to consummate the disposition of such Registrable
Securities;
(vi) furnish to each seller of Registrable Securities a signed
counterpart, addressed to such seller and the underwriters, if any, of:
(a) an opinion of counsel for the Company, dated the effective
date of such registration statement (or, if such registration includes
an underwritten public offering, an opinion dated the date of the
<PAGE>
closing under the underwriting agreement), reasonably satisfactory in
form and substance to such seller, and
(b) a "comfort" letter (or, in the case of such Person which does
not satisfy the conditions for receipt of a "comfort" letter specified
in Statement on Auditing Standards No. 72, an "agreed upon procedures"
letter), dated the effective date of such registration statement (and,
if such registration includes an underwritten public offering, a
letter dated the date of the closing under the underwriting
agreement), signed by the independent public accountants who have
certified the Company's financial statements included in such
registration statement, covering substantially the same matters with
respect to such registration statement (and the prospectus included
therein) and, in the case of the accountants' letter, with respect to
events subsequent to the date of such financial statements, as are
customarily covered in opinions of issuer's counsel and in
accountants' letters delivered to the underwriters in underwritten
public offerings of securities (with, in the case of an "agreed upon
procedures"' letter, such modifications or deletions as may be
required under Statement on Auditing Standards No. 35) and, in the
case of the accountants, letter, such other financial matters, and, in
the case of the legal opinion, such other legal matters, as such
seller (or the underwriters, if any) may reasonably request;
(vii) notify the holders of Registrable Securities and the managing
underwriter or underwriters, if any, promptly and confirm such advice in
writing promptly thereafter:
(a) when the registration statement, the prospectus or any
prospectus supplement related thereto or post-effective amendment to
the registration statement has been filed, and, with respect to the
registration statement or any post-effective amendment thereto, when
the same has become effective;
(b) of any request by the Commission for amendments or
supplements to the registration statement or the prospectus or for
additional information;
(c) of the issuance by the Commission of any stop order
suspending the effectiveness of the registration statement or the
initiation of any proceedings by any Person for that purpose; and
(d) of the receipt by the Company of any notification with
respect to the suspension of the qualification of any Registrable
Securities for sale under the securities or blue sky laws of any
jurisdiction or the initiation or threat of any proceeding for such
purpose;
<PAGE>
(viii) notify each seller of Registrable Securities covered by
such registration statement, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, upon the Company's discovery
that, or upon the happening of any event as a result of which, the prospectus
included in such registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances then existing under which they were made, and at the
request of any such seller promptly prepare and furnish to such seller and each
underwriter, if any, a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such securities, such prospectus shall not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were made;
(ix) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make available to its security
holders, as soon as reasonably practicable, an earnings statement covering the
period of at least twelve months, but not more than eighteen months, beginning
with the first day of the Company's first fiscal quarter after the effective
date of such registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder, and
will furnish to each such seller at least five (5) business days prior to the
filing thereof a copy of any amendment or supplement to such registration
statement or prospectus and shall not file any thereof to which any such seller
shall have reasonably objected on the grounds that such amendment or supplement
does not comply in all material respects with the requirements of the Securities
Act or of the rules or regulations thereunder;
(x) make available for inspection by any holder of Registrable
Securities, any underwriter participating in any disposition pursuant to the
registration statement and any attorney or accountant retained by such selling
holders or underwriter (each, an "Inspector"), all financial and other records,
pertinent corporate documents and properties of the Company (the "Records") as
shall be reasonably necessary to enable such Inspector to exercise its due
diligence responsibility, and cause the Company's officers, directors and
employees to supply all information reasonably requested by any such Inspector
in connection with such registration provided that the Company shall not be
required to comply with this subsection (x) if there is a reasonable likelihood,
in the judgment of the Company, that such delivery could result in the loss of
any attorney-client privilege related thereto; and provided further that Records
which the Company determines, in good faith, to be confidential and which it
notifies the Inspectors are confidential shall not be disclosed by the
Inspectors (other than to any holder of Registrable Securities) unless (x) such
Records have become generally available to the public or (y) the disclosure of
such Records may be necessary or appropriate (A) in compliance with any law,
rule, regulation or order applicable to any such Inspectors or holder of
Registrable Securities, (B) in response to any subpoena or other legal process
or (C) in connection with any litigation to which such Inspectors or any holder
of Registrable Securities is a party;
<PAGE>
(xi) provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities covered by such registration statement
from and after a date not later than the effective date of such registration
statement;
(xii) enter into such agreements and take such other actions as
sellers of such Registrable Securities holding 51% of the Registrable Securities
so to be sold shall reasonably request in order to expedite or facilitate the
disposition of such Registrable Securities;
(xiii) use its best efforts to list all Registrable Securities
covered by such registration statement on any securities exchange on which any
of the securities of the same class as the Registrable Securities are then
listed; and
(xiv) use its best efforts to provide a CUSIP number for the
Registrable Securities, not later than the effective date of the registration
statement.
The Company may require each seller of Registrable Securities as to
which any registration is being effected to furnish the Company such information
regarding such seller and the distribution of such securities as the Company may
from time to time reasonably request in writing.
Each holder of Registrable Securities agrees by acquisition of such
Registrable Securities that, upon receipt of any notice from the Company of the
occurrence of any event of the kind described in subsection (vii) of this
section 11.4, such holder will forthwith discontinue such holder's disposition
of Registrable Securities pursuant to the registration statement relating to
such Registrable Securities until such holder's receipt of the copies of the
supplemented or amended prospectus contemplated by subsection (vii) of this
section 11.4 and, if so directed by the Company, will deliver to the Company (at
the Company's expense) all copies, other than permanent file copies, then in
such holder's possession of the prospectus relating to such Registrable
Securities current at the time of receipt of such notice. In the event the
Company shall give any such notice, the period mentioned in subsection (ii) of
this section 11.4 shall be extended by the length of the period from and
including the date when each seller of any Registrable Securities covered by
such registration statement shall have received such notice to the date on which
each such seller has received the copies of the supplemented or amended
prospectus contemplated by subsection (viii) of this section 11.4.
11.5. Holdback Agreements.
(a) Each holder of Registrable Securities agrees by acquisition
of such Registrable Securities, if so required by the managing underwriter, not
to sell, make any short sale of, loan, grant any option for the purchase of,
effect any public or private sale or distribution of or otherwise dispose of any
equity securities of the Company or securities convertible into or exchangeable
or exercisable for any such securities, during the seven (7) days prior to and
the 90 days after any underwritten registration has become effective, except as
part of such underwritten registration, whether or not such holder participates
in such registration.
<PAGE>
(b) The Company agrees (x) if so required by the managing underwriter
not to sell, make any short sale of, loan, grant any option for the purchase of,
effect any public or private sale or distribution of or otherwise dispose of its
equity securities or securities convertible into or exchangeable or exercisable
for any of such securities during the seven (7) days prior to and the 90 days
after any underwritten registration has become effective, except as part of such
underwritten registration and except in connection with an offering to
employees, an exchange offer, an offer to acquire assets or pursuant to
registrations on Form S-4, S-8 or any successor or similar forms thereto, and
(y) to cause each holder of its equity securities or any securities convertible
into or exchangeable or exercisable for any of such securities, in each case
purchased from the Company at any time after the date of this Warrant (other
than in a public offering) to agree not to sell, make any short sale of, loan,
grant any option for the purchase of, effect any public or private sale or
distribution of or otherwise dispose of such securities during such period
except as part of such underwritten registration.
11.6. Participation in Underwritten Offerings. No holder of
Registrable Securities may participate in any underwritten offering hereunder
unless such holder (l) agrees to sell its securities on the basis provided in
any underwriting arrangements approved, subject to the terms and conditions
hereof, by the Company and the holders of a majority of Registrable Securities
to be included in such underwritten offering and (ii) completes and executes all
questionnaires, indemnities, underwriting agreements and other documents (other
than powers of attorney) required under the terms of such underwriting
arrangements.
11.7. Preparation; Reasonable Investigation. In connection with the
preparation and filing of each registration statement under the Securities Act
pursuant to this Warrant, the Company will give the holders of Registrable
Securities registered under such registration statement, their underwriters, if
any, and their respective counsel and accountants, the opportunity to
participate in the preparation of such registration statement, each prospectus
included therein or filed with the Commission, and each amendment thereof or
supplement thereto, and will give each of them such access to its books and
records and such opportunities to discuss the business of the Company with its
officers and the independent public accountants who have certified its financial
statements as shall be necessary, in the opinion of such holders' and such
underwriters' respective counsel, to conduct a reasonable investigation within
the meaning of the Securities Act.
11.8. Indemnification.
(a) Indemnification by the Company. In the event of any registration
of any securities of the Company under the Securities Act, the Company will, and
hereby does, indemnify and hold harmless, the holder of any Registrable
Securities covered by such registration statement, its directors and officers,
each other Person who participates as an underwriter in the offering or sale of
such securities and each other Person, if any, who controls such holder or any
such underwriter within the meaning of the Securities Act, against any losses,
claims, damages or liabilities, joint or several, to which such holder or any
such director or officer or underwriter or controlling person may become subject
under the Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon any untrue statement or alleged
<PAGE>
untrue statement of any material fact contained in any registration statement
under which such securities were registered under the Securities Act, any
preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and the Company will
reimburse such holder and each such director, officer, underwriter and
controlling person for any legal or any other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim,
liability, action or proceeding, provided that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage, liability (or
action or proceeding in respect thereof) or expense arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in such registration statement, any such preliminary prospectus,
final prospectus, summary prospectus, amendment or supplement in reliance upon
and in conformity with written information furnished to the Company through an
instrument duly executed by such holder specifically stating that it is for use
in the preparation thereof and, provided, further that the Company shall not be
liable to any Person who participates as an underwriter, in the offering or sale
of Registrable Securities or to any other Person, if any, who controls such
underwriter within the meaning of the Securities Act, in any such case to the
extent that any such loss, claim, damage, liability tor action or proceeding in
respect thereof) or expense arises out of such Person's failure to send or give
a copy of the final prospectus, as the same may be then supplemented or amended,
within the time required by the Securities Act to the Person asserting an untrue
statement or alleged untrue statement or omission or alleged omission at or
prior to the written confirmation of the sale of Registrable Securities to such
Person if such statement or omission was corrected in such final prospectus.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of such holder or any such director, officer,
underwriter or controlling person and shall survive the transfer of such
securities by such holder.
(b) Indemnification by the Sellers. The Company may require, as a
condition to including any Registrable Securities in any registration statement
filed pursuant to section 11.4, that the Company shall have received an
undertaking satisfactory to it from the prospective seller of such Registrable
Securities, to indemnify and hold harmless (in the same manner and to the same
extent as set forth in subsection (a) of this section 11.8) the Company, each
director of the Company, each officer of the Company and each other person, if
any, who controls the Company within the meaning of the Securities Act, with
respect to any statement or alleged statement in or omission or alleged omission
from such registration statement, any preliminary prospectus, final prospectus
or summary prospectus contained therein, or any amendment or supplement thereto,
if such statement or alleged statement or omission or alleged omission was made
in reliance upon and in conformity with written information furnished to the
Company through an instrument duly executed by such seller specifically stating
that it is for use in the preparation of such registration statement,
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement. Any such indemnity shall remain in full force and effect, regardless
of any investigation made by or on behalf of the Company or any such director,
officer or controlling person and shall survive the transfer of such securities
by such seller. Each such seller of the Registrable Securities also agrees to
indemnify and hold harmless the underwriter or underwriters of the Registrable
<PAGE>
Securities, their directors, officers, and each other person, if any, who
controls such underwriter or underwriters within the meaning of the Securities
Act on substantially the same basis as that of the indemnification of the
Company provided in this subsection (b) of section 11.8.
(c) Notices of Claims etc. Promptly after receipt by an indemnified
party of notice of the commencement of any action or proceeding involving a
claim referred to in the preceding subsections of this section 11 8, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party, give written notice to the latter of the commencement of
such action, provided that the failure of any indemnified party to give notice
as provided herein shall not relieve the indemnifying party of its obligations
under the preceding subsections of this section 11.8, except to the extent that
the indemnifying party is actually prejudiced by such failure to give notice. In
case any such action is brought against an indemnified party, unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist in respect of such claim, the
indemnifying party shall be entitled to participate in and to assume the defense
thereof, jointly with any other indemnifying party similarly notified, to the
extent that the indemnifying party may wish, with counsel reasonably
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified party
for any legal or other expenses subsequently incurred by the latter in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the consent of the
indemnified party, consent to entry of any judgment or enter into any settlement
of any such action which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a release from
all liability, or a covenant not to sue, in respect to such claim or litigation.
No indemnified party shall consent to entry of any judgment or enter into any
settlement of any such action the defense of which has been assumed by an
indemnifying party without the consent of such indemnifying party.
(d) Other Indemnification. Indemnification similar to that specified
in the preceding subsections of this section 11.8 (with appropriate
modifications) shall be given by the Company and each seller of Registrable
Securities with respect to any required registration or other qualification of
securities under any Federal or state law or regulation of any governmental
authority, other than the Securities Act.
(e) Indemnification Payments. The indemnification required by this
section 11.8 shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, as and when bills are received or
expense, loss, damage or liability is incurred.
(f) Contribution. If the indemnification provided for in the preceding
subsections of this section 11.8 is unavailable to an indemnified party in
respect of any expense, loss, claim, damage or liability referred to therein,
then each indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such expense, loss, claim, damage or liability (l) in such proportion
<PAGE>
as is appropriate to reflect the relative benefits received by the Company on
the one hand and the holder or underwriter, as the case may be, on the other
from the distribution of the Registrable Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and of the holder or underwriter, as the case may be, on the other in
connection with the statements or omissions which resulted in such expense,
loss, damage or liability, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the holder or underwriter, as the case may be, on the other in connection
with the distribution of the Registrable Securities shall be deemed to be in the
same proportion as the total net proceeds received by the Company from the
initial sale of the Registrable Securities by the Company to the purchasers
pursuant to any purchase agreement bear to the gain, if any, realized by the
selling holder or the underwriting discounts and commissions received by the
underwriter, as the case may be. The relative fault of the Company on the one
hand and of the holder or underwriter, as the case may be, on the other shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or omission to state a material fact relates
to information supplied by the Company, by the holder or by the underwriter and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission, provided that the foregoing
contribution agreement shall not inure to the benefit of any indemnified party
if indemnification would be unavailable to such indemnified party by reason of
the provisions contained in the first sentence of subsection (a) of this section
11.8, and in no event shall the obligation of any indemnifying party to
contribute under this subsection (f) exceed the amount that such indemnifying
party would have been obligated to pay by way of indemnification if the
indemnification provided for under subsections (a) or (b) of this section 11.8
had been available under the circumstances.
The Company and the holders of Registrable Securities agree that it
would not be just and equitable if contribution pursuant to this subsection (f)
were determined by pro rata allocation (even if the holders and any underwriters
were treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations referred
to in the immediately preceding paragraph. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages and liabilities
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth in the preceding sentence and subsection
(c) of this section 11.8, 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 subsection (f), no holder of
Registrable Securities or underwriter shall be required to contribute any amount
in excess of the amount by which (i) in the case of any such holder, the net
proceeds received by such holder from the sale of Registrable Securities or (ii)
in the case of an underwriter, the total price at which the Registrable
Securities purchased by it and distributed to the public were offered to the
public exceeds, in any such case, the amount of any damages that such holder or
underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
<PAGE>
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
12. Definitions. As used herein, unless the context otherwise
requires, the following terms have the following respective meanings:
Acquiring Person: With reference to the transactions referred to in
section 3, (i) the continuing or surviving corporation of a consolidation or
merger with the Company (if other than the Company), (ii) the transferee of
substantially all of the properties of the Company, (iii) the parent entity of
any corporation consolidating with or merging into the Company in a
consolidation or merger in connection with which the Common Stock is changed
into or exchanged for stock or other securities of any other Person (including
such parent entity) or cash or any other property if the Company becomes a
subsidiary of such entity, or (iv) in the case of a capital reorganization or
reclassification or in any case in which the Company is a surviving corporation
in a merger not described in clause (iii) above, the Company.
Business Day: Any day other than a Saturday or a Sunday or a day on
which commercial banking institutions in The City of New York are authorized by
law to be closed. Any reference to "days" (unless Business Days are specified)
shall mean calendar days.
Commission: The Securities and Exchange Commission.
Common Stock: As defined in the introduction to this Warrant, such
term to include any stock into which such Common Stock shall have been changed
or any stock resulting from any reclassification of such Common Stock.
Company: As defined in the introduction to this Warrant, such term to
include any corporation which shall succeed to or assume the obligations of the
Company hereunder in compliance with section 3.
Current Market Value: On any date specified herein, the amount per
share of the Common Stock, equal to (a) the last sale price of such Common
Stock, regular way, on such date or, if no such sale takes place on such date,
the average of the closing bid and asked prices thereof on such date, in each
case as officially reported on the principal national securities exchange on
which such Common Stock is then listed or admitted-to trading, or (b) if such
Common Stock is not then listed or admitted to trading on any national
securities exchange but is designated as a national market system security by
the NASD, the last trading price of the Common Stock on such date, or (c) if
there shall have been no trading on such date or if the Common Stock is not so
designated, the average of the closing bid and asked prices of the Common Stock
on such date as shown by the NASD automated quotation system, or (d) if such
Common Stock is not then listed or admitted to trading on any national exchange
or quoted in the over-the-counter market, the higher of (x) the book value
thereof as determined by any firm of independent public accountants of
recognized standing selected by the Board of Directors of the Company as of the
last day of an month ending within 60 days preceding the date as of which the
<PAGE>
determination is to be made or (y) the fair value thereof determined in good
faith by the Board of Directors of the Company as of a date which is within 18
days of the date as of which the determination is to be made.
NASD: The National Association of Securities Dealers, Inc.
Other Securities: Any stock (other than Common Stock) and other
securities of the Company or any other Person (corporate or otherwise) which the
Holders of the Warrants at any time shall be entitled to receive, or shall have
received, upon the exercise of the Warrants, in lieu of or in addition to Common
Stock, or which at any time shall be issuable or shall have been issued in
exchange for or in replacement of Common Stock or Other Securities pursuant to
section 3 or otherwise.
Person: A corporation, an association, a partnership, an organization,
a business, an individual, a government or political subdivision thereof or a
governmental agency.
Purchaser: As defined in the introduction to this Warrant.
Registrable Securities: (a) Any shares of Common Stock or Other
Securities issued or issuable upon exercise of this Warrant and (b) any
securities issued or issuable with respect to any securities referred to in
clause (a) above by way of stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization or otherwise. As to any particular Registrable Securities, once
issued such securities shall cease to be Registrable Securities when (a) a
registration statement with respect to the sale of such securities shall have
become effective under the Securities Act and such securities shall have been
disposed of in accordance with such registration statement, (b) they shall have
been distributed to the public pursuant to Rule 144 (or any successor provision)
under the Securities Act, (c) they shall have been otherwise transferred, new
certificates for them not bearing a legend restricting further transfer shall
have been delivered by the Company and subsequent disposition of them shall not
require registration or qualification of them under the Securities Act or any
similar state law then in force, or (d) they shall have ceased to be
outstanding.
Warrant Price: As defined in the introduction to this Warrant.
Warrants: As defined in the introduction to this Warrant.
13. No Rights or Liabilities as Shareholder. Nothing contained in this
Warrant shall be construed as (x) conferring upon the Holder hereof or any
Permitted Transferees any rights as a shareholder of the Company (including,
without limitation, any right to vote or to receive dividends or to consent or
to receive notice as a shareholder in respect of any meeting of shareholders for
the election of directors of the Company or any other matter, or any right
whatsoever as a shareholder of the Company (except for those notices and other
matters expressly set forth herein) or (y) imposing any obligation on such
Holder or any of its Permitted Transferees to purchase any securities or as
imposing any liabilities on such Holder as a shareholder of the Company, whether
<PAGE>
such obligation or liabilities are asserted by the Company or by creditors of
the Company.
14. Notices. All notices and other communications by the Company or by
any Holder to the Company under this Warrant shall be in writing and shall be
delivered in person or by facsimile transmission, or mailed by registered or
certified mail, return receipt requested, or by a nationally recognized
overnight courier, postage prepaid, addressed in each case (a) if to any Holder
of any Warrant, at the registered address of such Holder as set forth in the
register kept at the principal office of the Company, or (b) if to the Company,
to the attention of its Corporate Secretary at its principal office, provided
that the exercise of any Warrant shall be effective in the manner provided in
section 1. Each party hereto may from time to time change the address to which
notices to it are to be delivered or mailed hereunder by notice to the other
party.
15. Consent to Jurisdiction; Service of Process; Venue. Each party
hereto hereby irrevocably and unconditionally (i) consents to the submission to
the exclusive jurisdiction of the courts of the State of New York and of the
United States of America located in the State of New York, for any actions
arising out of or relating to this Warrant or the breach, termination or
validity thereof and the transactions contemplated by this Warrant, (ii) agrees
not to commence any action relating thereto except in such courts and in
accordance with the provisions of this Warrant, (iii) agrees that service of any
process, summons, notice, or document by U.S. registered mail or as otherwise
provided in this Warrant shall be effective service of process for any action
brought in any such court, (iv) waives any objection to the laying of venue of
any action arising out of this Warrant or the transactions contemplated by this
Warrant in the courts of the State of New York or the United States of America
located in the State of New York and (v) agrees not to plead or claim in any
such court that any such action brought in any such court has been brought in an
inconvenient forum.
16. Amendments. This Warrant and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought.
17. Severability. The invalidity or unenforceability of any provision
of this Warrant in any jurisdiction shall not affect the validity, legality or
enforceability of the remainder of this Warrant in such jurisdiction or the
validity, legality or enforceability of this Warrant, including any such
provision, in any other jurisdiction, it being intended that all rights and
obligations of the parties hereunder shall be enforceable to the fullest extent
permitted by law.
18. GOVERNING LAW. THIS WARRANT SHALL BF GOVERNED BY AND INTERPRETED
AND ENFORCED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK,
WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAW PRINCIPLES THEREOF.
19. Headings. Captions contained in this Warrant are inserted only as
a matter of convenience and in no way define, limit or extend the scope or
intent of this Warrant or any provision hereof.
<PAGE>
REFAC TECHNOLOGY
DEVELOPMENT CORPORATION
By:/s/ Robert L. Tuchman
Name: Robert L. Tuchman
Title: President & CEO
<PAGE>
Exhibit A
FORM OF SUBSCRIPTION
[To be executed only upon exercise of Warrant]
TO: REFAC TECHNOLOGY DEVELOPMENT CORPORATION
The undersigned registered holder of the within Warrant hereby
irrevocably exercises such Warrant for, and purchases thereunder, __________
shares of Common Stock, par value $[_______] per share, of REFAC Technology
Development Corporation, and herewith makes payment of $___________ therefor,
and requests that the certificates for such shares be issued in the name of, and
delivered to _______________, whose address is ________________
_____________________________.
Dated: _________________________ ________________________________________
(Signature must conform in all respects
to name of holder as specified on the
face of Warrant)
_______________________________________
(Street Address)
_______________________________________
(City)(State)(Zip Code)
<PAGE>
Exhibit B
FORM OF ASSIGNMENT
[To be executed only upon transfer of Warrant]
For value received, the undersigned registered holder of the within
Warrant hereby sells, assigns and transfers unto __________________________ the
right represented by such Warrant to purchase ________________ shares of Common
Stock, par value $[_______] per share, of REFAC Technology Development
Corporation to which such Warrant relates, and appoints
_________________________ as attorney to make such transfer on the books of
REFAC Technology Development Corporation maintained for such purpose, with full
power of substitution in the premises.
Dated: _________________________ _______________________________________
(Signature must conform in all respects
to name of holder as specified on the
face of Warrant)
______________________________________
(Street Address)
______________________________________
(City)(State)(Zip Code)
<PAGE>
Exhibit B
JOINT FILING AGREEMENT
The undersigned agree that this Amendment No. 1 to Schedule 13D
relating to the shares of common stock of Refac Technology Development
Corporation is filed jointly on behalf of each of the undersigned pursuant to
Rule 13d-1(k).
Dated: October 18, 1999
/s/Martin Berman
Martin Berman
PALISADE CAPITAL SECURITIES, L.L.C.
By: /s/Steve Berman
Steve Berman, Member
/s/ Jack Feiler
Jack Feiler
/s/Richard Meisenberg
Richard Meisenberg
/s/Mark Hoffman
Mark Hoffman
/s/Steven Berman
Steven Berman
/s/Mark Kaplan
Mark Kaplan, Trustee of Allison
Berman Lifetime Trust and Mark K.
Berman Lifetime Income Trust
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of the undersigned's
knowledge and belief, the undersigned hereby certify that the information set
forth in this statement is true, complete and correct.
October 18, 1999
/s/Martin Berman
Martin Berman
PALISADE CAPITAL SECURITIES, L.L.C.
By: /s/Steve Berman
Steve Berman, Member
/s/ Jack Feiler
Jack Feiler
/s/Richard Meisenberg
Richard Meisenberg
/s/Mark Hoffman
Mark Hoffman
/s/Steven Berman
Steven Berman
/s/Mark Kaplan
Mark Kaplan, Trustee of Allison
Berman Lifetime Trust and Mark K.
Berman Lifetime Income Trust
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE
FEDERAL CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001).
