Exhibit 10.1
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD OR OFFERED FOR SALE EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT AND ANY
APPLICABLE STATE SECURITIES LAW OR AN APPLICABLE EXEMPTION FROM SUCH
REGISTRATION REQUIREMENTS.
SERIES B WARRANT
EXERCISABLE ON OR BEFORE OCTOBER 17, 2007
VOID AFTER 5:00 P.M. NEW YORK CITY TIME ON OCTOBER 17, 2007
NO. W. B1 75,000 Shares
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WARRANTS TO PURCHASE SHARES OF COMMON STOCK OF
HEARTLAND TECHNOLOGY, INC.
This Warrant Certificate certifies that EDWIN JACOBSON, or
registered assigns, is the registered holder (the "Holder") of warrants (the
"Warrants") to purchase shares of Common Stock, par value $.01 (the "Common
Stock"), of Heartland Technology, Inc., a Delaware corporation (the "Company").
Each Warrant entitles the holder to purchase from the Company at any time on or
before 5:00 p.m. New York City time on October 17, 2007 (the "Exercise Period")
one fully paid and nonassessable share of Common Stock of the Company at an
exercise price of Four Dollars ($4.00) per full share (the "Exercise Price")
upon surrender of this Warrant Certificate and payment of the Exercise Price at
the office of the Company maintained for that purpose in Chicago, Illinois, or
elsewhere, but only subject to the conditions set forth herein. As used herein,
"Shares" refers to the Common Stock of the Company and, where appropriate, to
the other securities or property issuable upon exercise of a Warrant as provided
for herein upon the happening of certain events. The Exercise Price and the
number of Shares purchasable upon exercise of the Warrants are subject to
adjustment upon the occurrence of certain events as set forth below. No
fractional shares of Common Stock shall be issued upon exercise of any Warrant.
In lieu thereof, cash will be paid in an amount equal to the current market
value of such fractional shares.
1. Exercise Period; Exercise Price. Subject to and in compliance
with the terms hereof, the Holder hereof is entitled, at its option, at any time
and from time to time before the fourth anniversary of the Disbursement Date to
exercise this Warrant Certificate, in whole or in part, and purchase from the
Company one fully paid and non-assessable share of Common Stock of the Company,
as said shares shall be constituted on the date of exercise, at the Exercise
Price, subject to adjustment as set forth below for each Warrant.
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2. Exercise. In order to exercise a Warrant, the Holder shall
surrender the Warrant to the Company on any business day at the principal
business office maintained by the Company in Chicago, Illinois or such other
location upon notice to the Holder, accompanied by the form of election to
purchase attached hereto duly completed and signed and by payment of the
exercise price. Payment of the Exercise Price shall be made in United States
dollars in cash, by certified or official bank check in immediately available
funds payable to the order of the Company or by wire transfer. As promptly as
practicable (but in no event later than five (5) business days thereafter) after
the receipt of (a) the form of election to purchase, (b) the Exercise Price and
(c) this Warrant as described above, the Company shall issue and deliver, at its
principal business office in Chicago, Illinois or such other location, or cause
the Company's transfer agent to issue and deliver at Harris Bank, a certificate
or certificates for the number of full shares of Common Stock issuable upon such
exercise.
3. Net Exercise Provision. The Holder, in lieu of exercising a
Warrant for a specified number of shares of Common Stock (the "Exercised
Shares") and paying the aggregate Exercise Price therefor, may elect, at any
time on or before the expiration of the Warrant, to receive a number of shares
of Common Stock equal to the number of Exercised Shares minus a number of shares
of Common Stock having an aggregate market value on such day of election equal
to the Exercise Price. After any such election, the number of shares of Common
Stock covered by the Holder's Warrant shall be deemed automatically reduced by
the number of Exercised Shares.
4. Effect of Exercise. Exercise shall be deemed to have been
effected at the time at which the form of election to purchase and the exercise
price shall have been received by the Company and this Warrant shall have been
duly surrendered, and the person or persons in whose name or names any
certificate or certificates for shares of Common Stock shall be issuable upon
such exercise shall be deemed to have become on that date the holder or holders
of record of the shares of Common Stock represented thereby; except that if the
stock transfer books of the Company shall be closed on the date of such
surrender, the date of exercise shall be deemed to be the date upon which such
transfer books shall be reopened.
5. Balance of Warrant Certificate. Upon exercise of a Warrant
Certificate in part rather than in whole, the Company shall execute and
deliver to or to the order of the Holder, a new Warrant Certificate
evidencing the number of Warrants remaining unexercised.
6. Adjustment to Exercise Price; Number of Warrants. The exercise
price per share shall be subject to adjustment as follows; provided, however,
that if approval of such adjustment by the Company's stockholders is required
under applicable rules of the American Stock Exchange, such approval shall be
obtained prior to adjustment:
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(1) In case the Company shall (i) pay a dividend or make a
distribution to all holders of its Common Stock in shares of its capital stock
(whether shares of Common Stock or of capital stock of any other class), (ii)
subdivide its outstanding shares of Common Stock, (iii) combine its outstanding
shares of Common Stock into a smaller number of shares; or (iv) issue by
reclassification of its shares of Common Stock any shares of capital stock of
the Company, the exercise price in effect immediately prior to such action shall
be adjusted so that the holder of a Warrant thereafter surrendered for exercise
shall be entitled to receive the number of shares of capital stock of the
Company that such Warrant Holder would have owned immediately following such
action had the Warrant been converted immediately prior thereto. An adjustment
made pursuant to this paragraph shall become effective retroactively immediately
after the record date in the case of a dividend or distribution and shall become
effective immediately after the effective date in the case of a subdivision,
combination or reclassification. If, as a result of an adjustment made pursuant
to this paragraph, the holder of this Warrant thereafter surrendered for
exercise shall become entitled to receive shares of two or more classes of
capital stock of the Company, the Board of Directors of the Company shall
determine the allocation of the adjusted exercise price between or among shares
of such classes of capital stock.
(2) In case the Company shall issue rights or warrants to all
holders of its Common Stock entitling them to subscribe for or purchase shares
of Common Stock at a price per share less than the current market price per
share on the record date set for the issuance of such rights or warrants, the
Exercise Price shall be adjusted so that the same shall equal the price
determined by multiplying the Exercise Price in effect immediately prior to the
date of issuance of such rights or warrants 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 or warrants plus the number of shares which the
aggregate offering price of the total number of shares so offered would purchase
at such current market price, and the denominator shall be the number of shares
of Common Stock outstanding on the date of issuance of such rights or warrants
plus the number of additional shares of Common Stock offered for subscription or
purchase. Such adjustment shall become effective retroactively immediately after
the record date for the determination of shareholders entitled to receive such
rights or warrants.
(3) In case the Company shall distribute to all holders of its
Common Stock evidence of its indebtedness or assets (excluding any cash dividend
paid from retained earnings of the Company) or rights or warrants to subscribe
to securities of the Company or owned by the Company, then in each such case the
Exercise Price shall be adjusted so that the same shall equal the price
determined by multiplying the Exercise Price in effect immediately prior to the
date of such distribution by a fraction of which the numerator shall be the
current market price per share of the Common Stock on the record date mentioned
below less the then fair market value (as determined by the Board of Directors
of the Company) of the portion of the evidence of indebtedness or assets so
distributed or of such subscription rights or warrants applicable to one share
of Common Stock, and the denominator shall be such current market price per
share of the Common Stock. Such adjustment shall become effective retroactively
immediately after the record date for the determination of shareholders entitled
to receive such distribution.
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(4) No adjustment in the exercise price shall be required
unless such adjustment would require an increase or decrease of at least 1% in
such price, provided, however, that any adjustments which by reason of this
paragraph are not required to be made shall be carried forward and taken into
account in any subsequent adjustment; and provided further, that adjustment
shall be required and made in accordance with the provisions hereof (other than
this paragraph) not later than such time as may be required in order to protect
the tax-free nature of a distribution to the holders of Warrants or Common
Stock. All calculations hereunder shall be made to the nearest cent or to the
nearest one-hundredth of a share, as the case may be. Anything herein to the
contrary notwithstanding, the Company shall be entitled to make such reductions
in the Exercise Price, in addition to those required hereby, as it in its
discretion shall determine to be advisable in order that any such dividends,
subdivision of shares, distribution of rights to purchase stock or securities,
or distribution of securities convertible into or exchangeable for stock
hereafter made by the Company to its shareholders shall not be taxable.
(5) Whenever the Exercise Price is adjusted as herein
provided, the Company shall promptly mail or cause to be mailed a notice of such
adjustment to the Holder at its last address as it shall appear upon the
Company's records.
(6) In the event that at any time as a result of an adjustment
made pursuant hereto, the Holder of a Warrant thereafter surrendered for
exercise shall become entitled to purchase any shares of capital stock of the
Company other than shares of its Common Stock, then the exercise price of such
other shares so receivable upon exercise of a Warrant shall be subject to the
same adjustments as those contained in subparagraphs (1) through (5) hereof.
(7) Whenever the Exercise Price is adjusted pursuant to the
provisions set forth herein, the number of shares of Common Stock purchasable
upon exercise of the Warrant shall simultaneously be adjusted by multiplying the
number of shares initially issuable upon exercise of the Warrant by the exercise
price in effect on the date of issuance of the Warrant and dividing the product
so obtained by the exercise price as adjusted.
(8) For purposes of this Section, the phrase "current market
price" means, as of the date of determination, (i) if the Common Stock is at the
time traded on a securities exchange registered with the Securities and Exchange
Commission under Section 6(a) of the Securities Exchange Act of 1934, as amended
(a "National Securities Exchange"), the average of the last reported sales price
per share regular way or, in case no such reported sales have taken place on any
such date, the last reported bid price per share regular way, on the five
trading days immediately preceding the date of determination (ii) if the Common
Stock is at the time being traded on Nasdaq and not on a National Securities
Exchange, the average of the last reported sales price per share regular way or,
in the case no such reported sales have taken place on any such date, the
closing bid price per share regular way, on the five trading days immediately
preceding such date of determination, or (iii) if the Common Stock is not listed
for trading on a National Securities Exchange or traded on Nasdaq, an amount
equal to the fair market value of a share of Common Stock (as determined by the
Company=s Board of Directors) as of such date of determination as determined by
the Chief Financial Officer of the Company using any reasonable method of
valuation.
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7. Merger, Etc. If either of the following shall occur: (a) any
consolidation or merger to which the Company is a party, other than a
consolidation or a merger in which the Company is a continuing corporation and
which does not result in any reclassification of, or change (other than a change
in par value or from par value to no par value or from no par value to par
value, or as a result of a subdivision or combination) in, outstanding shares of
the Common Stock; or (b) any sale or conveyance to another corporation of the
property of the Company as an entirety or substantially as an entirety; then the
holder of each Warrant then outstanding shall have the right to pay the exercise
price for such Warrant and receive the same consideration receivable upon such
consolidation, merger, sale or conveyance by a holder of the number of shares of
Common Stock issuable upon exercise of such Warrant immediately prior to such
consolidation, merger, sale, or conveyance. The provisions of this paragraph
shall similarly apply to successive consolidations, mergers, sales or
conveyances.
8. Reservation of Shares. The Company covenants that it will at all
times reserve and keep available, free from preemptive rights, solely for the
purpose of issue upon exercise of the Warrants, such number of shares of Common
Stock as shall be issuable upon the exercise of all outstanding Warrants,
provided, that nothing contained herein shall be construed to preclude the
Company from satisfying its obligations in respect of the exercise of the
Warrants by delivery of shares of Common Stock which are held in the treasury of
the Company.
9. Registration Rights.
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9.1 Demand Registration.
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9.1.1 Request for Registration.
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9.1.1.1 Long Form. If, at any time that the Company or any
successor to the Company is a registrant entitled to use a Form S-1
under the Securities Act of 1933 as amended (the "Securities Act")
and any other form promulgated after the date of this Agreement
applicable in circumstances substantially comparable to that form,
regardless of its designation (a "Long Form") to register Common
Stock of the Company and any successor to the Company, issued in
exchange for the Series B Warrants (the "Registrable Securities"),
the Company or its successor receives from a holder or holders of
Series B Warrants (the "Warrant Holder" or "Warrant Holders") of
more than 51% of the outstanding Registrable Securities a written
request that the Company effect a registration with respect to an
offering of at least 50% of its outstanding Registrable Securities,
the Company shall: (i) within ten (10) days, give written notice of
the proposed registration to all Warrant Holders and (ii) as soon as
practicable, but in any event within one hundred twenty (120) days
after receipt of the request of the Warrant Holder, use its best
efforts to effect such registration of the Registrable Securities of
the Warrant Holder together with all or such portion of the
Registrable Securities of any other Warrant Holder who has given
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written notice to the Company within twenty (20) days after
receiving such written notice from the Company pursuant to clause
(i) above on the Long Form specified in the notice. Such obligation
shall include, without limitation, the execution of an undertaking
to file post-effective amendments and to effect appropriate
registrations or qualifications under applicable blue sky or other
state securities laws and appropriate compliance with exemptive
regulations issued under the Securities Act and any other
governmental requirements or regulations. The Company shall have the
right, exercisable one time only, to delay the effectiveness of such
request of the Warrant Holders until up to one hundred eighty (180)
days after delivery of the request if the Board of Directors of the
Company have determined in good faith that such a registration would
be seriously detrimental to the Company at such time. No further
delays after such one hundred eighty (180) days shall be permitted.
The Warrant Holders making the request may withdraw the request
during such one hundred eighty (180) day period, in which event such
Warrant Holders shall not be deemed to have made the request. The
Company shall not be obligated to take any action to effect any
registration pursuant to this Section 9.1.1.1 (i) after the closing
of the sale of Registrable Securities resulting from any previous
registration effected pursuant to requests under this Section
9.1.1.1 or (ii) in the event the Registrable Securities constitute
less than 5% of the outstanding shares of Common Stock of the
Company.
9.1.1.2 Short Form. If, at any time that the Company or any
successor to the Company is a registrant entitled to use a Form S-3
under the Securities Act and any other form promulgated after the
date of this Agreement applicable in circumstances substantially
comparable to that form, regardless of its designation (a "Short
Form") to register Registrable Securities, the Company or its
successor receives from the Warrant Holder or Warrant Holders of
more than 51% of the outstanding Registrable Securities a written
request that the Company effect a registration with respect to an
offering of at least 50% of its outstanding Registrable Securities,
the Company shall: (i) within ten (10) days, give written notice of
the proposed registration to all Warrant Holders and (ii) as soon as
practicable, but in any event within one hundred twenty (120) days
after receipt of the request of the Warrant Holder, use its best
efforts to effect such registration of the Registrable Securities of
the Warrant Holder together with all or such portion of the
Registrable Securities of any other Warrant Holder who has given
written notice to the Company within twenty (20) days after
receiving such written notice from the Company pursuant to clause
(i) above on the Short Form specified in the notice. Such obligation
shall include, without limitation, the execution of an undertaking
to file post-effective amendments and to effect appropriate
registrations or qualifications under applicable blue sky or other
state securities laws and appropriate compliance with exemptive
regulations issued under the Securities Act and any other
governmental requirements or regulations. The Company shall have the
right, exercisable one time only, to delay the effectiveness of such
request of the Warrant Holders until up to one hundred eighty (180)
days after delivery of the request if the Board of Directors of the
Company have determined in good faith that such a registration would
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be seriously detrimental to the Company at such time. No further
delays after such one hundred eighty (180) days shall be permitted.
The Warrant Holders making the request may withdraw the request
during such one hundred eighty (180) day period, in which event such
Warrant Holders shall not be deemed to have made the request. The
Company shall not be obligated to take any action to effect any
registration pursuant to this Section 9.1.1.2 (i) after the closing
of the sale of Registrable Securities resulting from two previous
registrations effected pursuant to requests under this Section
9.1.1.2 or (ii) in the event the Registrable Securities constitute
less than 5% of the outstanding shares of Common Stock of the
Company.
For the purposes of this Agreement, securities subject to this
Agreement shall cease to be Registrable Securities when (i) they have been
registered under the Securities Act, the registration statement in
connection therewith has been declared effective, and they have been
disposed of pursuant to such registration statement, or (ii) they are
distributed to the public pursuant to Rules 144 or 144A (or any similar
provision then in force) under the Securities Act.
9.1.2 Underwriting. If any Warrant Holder making a demand intends to
use an underwriter to distribute the Registrable Securities covered by its
request, it shall so advise the Company in its request and the Company
shall include such information in its written notice to other Warrant
Holders. In such event, the right of any Warrant Holder to registration
pursuant to this Section 9.1 shall be conditioned upon such Warrant
Holder's participation in such underwriting and the inclusion in the
underwriting of all of the Registrable Securities covered by the request
of such Warrant Holder. The Company shall enter into an underwriting
agreement in customary form with an underwriter selected by the Warrant
Holders of a majority of the Registrable Securities proposed to be
included in the underwriting, but subject to the approval of the Company
which shall not be unreasonably withheld. The underwriting agreement may
contain provisions regarding indemnification and contribution from the
Company. Notwithstanding any other provision of this Section 9.1, if the
underwriter advises the Warrant Holders and the Company in writing that
marketing factors require a limitation of the number of shares of Common
Stock to be included in the underwriting, then all shares in the
underwriting shall be excluded from such registration to the extent
required by such underwriting limitation on a pro rata basis and the
Company shall so advise all Warrant Holders of Registrable Securities that
would otherwise be included in such underwriting and registration and the
number of shares included in such underwriting and registration shall be
allocated among the Warrant Holders of Registrable Securities requesting
registration in proportion, as nearly as practicable, to the total number
of Registrable Securities held by such Warrant Holders at the time of the
filing of the registration statement. If the number of shares of
Registrable Securities so excluded exceeds twenty percent (20%) of the
number of shares of Registrable Securities which the Warrant Holders have
requested to be included in such registration, then the Warrant Holders
shall be entitled either (i) to require that the registration be deferred
for such period of time as the Warrant Holders, the Company and the
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underwriter may mutually agree upon, but in no event for more than ninety
(90) days from delivery of a written notice of the Warrant Holders to the
Company requesting such delay or (ii) to withdraw the registration
request, provided that it shall count as one of the Warrant Holders'
demand registration unless such Warrant Holder reimburses the Company for
its pro rata share of the out-of-pocket expenses incurred by the Company
in connection with such withdrawn registration request. For purposes of
the preceding sentence a Warrant Holder's "pro rata share" shall mean a
fraction the numerator of which is the number of Registrable Securities of
such Warrant Holder which were to have been registered in such
registration and the denominator of which is the total number of shares
which were to have been registered in such registration. If any Warrant
Holder of Registrable Securities disapproves of the terms of the
underwriting, such Warrant Holder may elect to withdraw therefrom by
written notice to the Company, the underwriter and the other Warrant
Holders delivered at least seven (7) days prior to the Company's execution
of an underwriting agreement with respect to the registration. The
Registrable Securities so withdrawn also shall be withdrawn from
registration.
9.2 Piggyback Registration.
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9.2.1 If at any time the Company or any successor to the Company
proposes to register any of its securities under the Securities Act,
whether or not for sale for its own account, on a form and in a manner
which would permit registration of Registrable Securities for sale to the
public under the Securities Act and intends to include in such
registration any of its securities owned by Warrant Holders, it will each
such time give prompt written notice to the Warrant Holder of its
intention to do so, describing such securities and specifying the form and
manner and the other relevant facts involved in such proposed
registration, and upon the written request of the Warrant Holder delivered
(which shall not be deemed a request for a Demand Registration) to the
Company within 30 days after the giving of any such notice (which request
shall specify the Registrable Securities intended to be disposed of by the
Warrant Holder and the intended method of disposition thereof), the
Company will effect the registration under the Securities Act of all
shares of Common Stock which the Company has been so requested to register
by the Warrant Holder which are in the same proportion to total number of
shares of Common Stock as the other shares to be sold by Warrant Holders
in the registration to the extent requisite to permit the disposition (in
accordance with the intended methods thereof as aforesaid) of the shares
so to be registered, provided that:
(a) if, at any time after giving written notice of its
intention to register any of its securities and prior to
the effective date of the registration statement filed in
connection with such registration, the Company shall
determine for any reason not to register such securities,
the Company may, at its election, give written notice of
such determination to the Warrant Holder and thereupon
shall be relieved of its obligation to register any
Registrable Securities in connection with such registration
(but not from its obligation to pay the Registration
Expenses already incurred in connection therewith as
provided in subdivision (b) of this Section 9.2);
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(b) The Company shall not be obligated to effect any registration
of shares under this Section 9.2 incidental to the
registration of any of its securities in connection with
mergers, acquisitions, exchange offers, dividend reinvestment
plans, employee stock ownership plans or stock option plans,
thrift plans, pension plans or other employee benefit plans;
and
(c) The Company shall not be obligated to effect any registration
of Registrable Securities to the extent such shares are
validly excluded from an underwritten distribution pursuant to
Section 9.3.2 of this Agreement.
9.2.2 The Company will pay all Registration Expenses in connection
with each registration of shares requested by the Warrant Holder pursuant
to this Section 9.2 or Section 9.1, whether or not such registration has
become effective. The term "Registration Expenses" shall mean all expenses
incident to the Company's performance of or compliance with this Section
including, without limitation, all registration and filing fees; all fees
and expenses of complying with securities or blue sky laws; all printing
expenses; the fees and disbursements of counsel for the Company and of its
independent public accountants, including the expenses of any special
audits required by or incident to such performance and compliance; and the
reasonable fees and disbursements of one counsel for all of the Warrant
Holders. In no event shall Registration Expenses include underwriter's
fees, expenses, sales commissions and/or discounts with respect to the
Registrable Securities.
9.3 Registration Procedures.
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9.3.1 When the Company is required to use its best efforts to effect
the registration of any Registrable Securities as provided in Section 9.1
or Section 9.2, the Company will as expeditiously as possible:
(a) with respect to registrations under Section 9.1 only,
prepare and (in any event within 90 days after the end of
the period within which requests for registration may be
delivered to the Company) file with the Securities and
Exchange Commission (the "Commission") a registration
statement on the appropriate form with respect to such
Registrable Securities and use reasonable efforts to cause
such registration statement to become effective as promptly
as practicable;
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(b) 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 shares of Common Stock
covered by such registration statement until the earlier
of: (a) such time as all of such shares have been disposed
of in accordance with the intended methods of disposition
by the seller thereof set forth in such registration
statement; or (b) the expiration of nine months after such
registration statement becomes effective;
(c) furnish to the seller of such Registrable Securities 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 included in such registration statement
(including each preliminary prospectus and any summary
prospectus), in conformity with the requirements of the
Securities Act, such documents incorporated by reference in
such registration statement or prospectus, and such other
documents, as the seller may reasonably request;
(d) use reasonable efforts to register or qualify all
Registrable Securities covered by such registration
statement under such other securities or blue sky laws of
such jurisdictions within the United States and its
territories as the seller shall reasonably request with
concurrence of the managing underwriter, if any, and do any
and all other acts and things which may be necessary or
advisable to enable the seller to consummate the
disposition in such jurisdictions of its Registrable
Securities covered by such registration statement, 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 is not so
qualified, or to subject itself to taxation in any such
jurisdiction, or to consent to general service of process
in any such jurisdiction;
(e) immediately notify the 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, of 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, and at the request of the
seller prepare and furnish to the seller 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 Registrable 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
then existing; and
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(f) otherwise use reasonable efforts to comply with all
applicable rules and regulations of the Commission, and
make available to its securities 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 month of the
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.
9.3.2 If the Company at any time proposes to register any of its
securities under the Securities Act whether or not for sale for its own
account as contemplated by Section 9.2, and such securities are to be
distributed by or through one or more underwriters, the Company shall, if
requested by the Warrant Holder who requests incidental registration of
shares in connection therewith pursuant to Section 9.2, arrange for such
underwriters to include such shares among those securities to be
distributed by or through such underwriters; provided, however, that if
the Company and the underwriters shall jointly determine as provided in
Section 9.3.3 that the inclusion of all or a specified portion of such
shares would adversely affect such offering, the Warrant Holder requesting
incidental registration shall have its shares excluded or cut-back from
such underwritten offering as provided in Section 9.3.3. The Warrant
Holder on whose behalf such shares are to be distributed by such
underwriters shall be a party to any such underwriting agreement and the
representations and warranties by, and the other agreements on the part
of, the Company to and for the benefit of such underwriters, shall also be
made to and for the benefit of Warrant Holder.
9.3.3 If the Warrant Holder has requested registration of shares
pursuant to Section 9.1, such shares shall have priority for inclusion in
an underwritten offering on a pro rata basis with all other Warrant
Holders of Registrable Securities, notwithstanding (i) any contractual
right to "demand," "piggyback," or "other right to cause incidental"
registration now existing or hereafter arising and (ii) the shares the
Company has requested to be included in the registration. If the Warrant
Holder has requested inclusion of shares in an underwritten offering
pursuant to Section 9.2, such shares may be excluded or the number of
shares included shall be cut-back if the managing underwriter shall have
determined (and shall have advised the Company in writing) that, in its
opinion, the registration and distribution of all or a specified portion
of the shares as part of the proposed distribution of securities by the
underwriters will materially and adversely affect the distribution of such
securities (such opinion to state the specific reasons therefor). Any
cut-back as provided herein shall be pro rata among all owners of shares
(other than the Company) to be sold through such underwritten offering in
the same proportion to total share ownership as the other shares sold by
other share owners in the underwritten offering.
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9.3.4 If any registration pursuant to Section 9.2 shall be in
connection with an underwritten public offering in which a Warrant Holder
participates, such Warrant Holder agrees, if so timely required in writing
by the managing underwriters, not to effect any public sale or
distribution of shares of Common Stock (other than as part of such
underwritten public offering) within the period commencing seven days
prior to the effective date of such registration statement and ending no
later than one hundred eighty (180) days after the effective date of such
registration statement.
9.4 Indemnification.
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9.4.1 In the event of any registration of any securities of the
Company under the Securities Act pursuant to this Section 9, the Company
will, and hereby does, indemnify and hold harmless Warrant Holder selling
any Registrable Securities covered by such registration statement, its
managers, directors and officers, and each other person, if any, who
controls such Warrant Holder within the meaning of the Securities Act,
against any losses, claims, damages, liabilities and expenses (including
reasonable legal fees and expenses and costs of investigation), joint or
several, to which such Warrant Holder or any such manager, director or
officer or controlling person may become subject under the Securities Act
or otherwise, insofar as such losses, claims, damages, liabilities or
expenses (or actions or proceedings in respect thereof) arise out of or
are based upon (i) any untrue statement or alleged 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 included therein, or
any amendment or supplement thereto, or any document incorporated by
reference therein, or (ii) 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
Warrant Holder, and each such manager, officer, 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 to such an
indemnified person in any such case to the extent (but only 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 or any documents
incorporated by reference in any of the above in reliance upon and in
conformity with written information furnished by such indemnified person
to the Company and designated by such person to be for use in the
preparation thereof. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such Warrant
Holder or any such manager, officer, or controlling person and shall
survive the transfer of such securities by the Warrant Holder.
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9.4.2 The Company shall require, as a condition to including any
shares of Commons Stock in any registration statement filed pursuant to
this Section 9, that the Company shall have received an undertaking
reasonably satisfactory to it from the Warrant Holder, to indemnify and
hold harmless (in the same manner and to the same extent as set forth in
Section 9.4.1) the Company, each director of the Company, each officer of
the Company who shall sign such registration statement and each other
person, if any, who controls the Company within the meaning of the
Securities Act, with respect to any statement in or omission from such
registration statement, any preliminary prospectus, final prospectus or
summary prospectus included therein, or any amendment or supplement
thereto or any documents incorporated by reference in any of the above, if
such statement or omission was made in reliance upon and in conformity
with written information furnished to the Company by such Warrant Holder
designating that it is for use in the preparation of such registration
statement, preliminary prospectus, final prospectus, summary prospectus,
amendment or supplement. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of the Company
or any such member, officer or controlling person and shall survive the
transfer of such securities by such Warrant Holder; provided however, that
to the extent permitted by law, a seller's liability hereunder shall not
exceed the aggregate net offering proceeds received by the Warrant Holder
from the sale of such shares.
9.4.3 If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party in
respect of any losses, claims, damages, liabilities, expenses or action in
respect thereof referred to herein, then the indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, liabilities, expenses or actions
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand, and the indemnified party on the
other, in connection with the statement or omissions which resulted in
such losses, claims, damages, liabilities, expenses or actions as well as
any other relevant equitable considerations, including the failure to give
the notice required hereunder. The relative fault of indemnifying party
and the indemnified party shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact
relates to information supplied by the indemnifying party or the
indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The Company and the Warrant Holder agree that it would not be
just and equitable if contributions pursuant to this Section were
determined by pro rata allocation or by any other method of allocation
which did not take account of the equitable considerations referred to
above. The amount paid or payable to an indemnified party as a result of
the losses, claims, damages, liabilities or action in respect thereof,
referred to above, shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
contribution provisions of this Section, in no event shall the amount
contributed by any seller of shares exceed the aggregate net offering
proceeds received by such seller from the sale of such shares. No person
guilty of fraudulent misrepresentations (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any
person who is not guilty of such fraudulent misrepresentation.
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9.4.4 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 subdivisions of this Section, 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 subdivisions of this Section unless and to
the extent that the indemnifying party is prejudiced by such failure or
delay. In case any such action is brought against an indemnified party,
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 it 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; provided, however, that
if the indemnified party or parties reasonably determine that there may be
a conflict between the positions of the indemnifying party or parties and
of the indemnified party or parties in conducting the defense of such
action or proceeding or that there may be legal defenses available to such
indemnified party or parties different from or in addition to those
available to the indemnified party or parties such that (and solely to the
extent that) joint representation would be inappropriate under applicable
ethical considerations published by the State Bar of the state applicable
to such counsel, then counsel for the indemnified party or parties shall
be entitled to conduct the defense to the extent reasonably determined by
such counsel to be necessary to protect the interests of the indemnified
party or parties (and the indemnifying party or parties shall bear the
reasonable legal and other expenses incurred in connection therewith). No
indemnifying party will consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a full
and final release from all liability in respect to such claim or
litigation.
9.4.5 Indemnification similar to that specified in the preceding
subdivisions of this Section (with appropriate modifications) shall be
given by the Company and each seller of shares of Common Stock with
respect to any required registration or other qualification of such
Registrable Securities under any federal or state law or regulation of
governmental authority other than the Securities Act.
10. Legality of Issue. The Company covenants that all shares of
Common Stock which shall be issued upon exercise of the Warrants will upon issue
be fully paid and non-assessable and free from all taxes, liens, charges and
security interests with respect to the issue thereof.
11. Transfer Taxes. The issuance of certificates of Common Stock
upon exercise of Warrants shall be made without charge for any stamp or other
similar tax in respect of such issuance. However, if any such certificate is to
be issued in a name other than that of the holder of the Warrant converted, the
person or persons requesting the issuance thereof shall pay to the Company the
amount of any tax which may be payable in respect of any transfer involved in
such issuance or shall establish to the satisfaction of the Company that such
tax has been paid.
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12. Notice to Warrant Holders. In case: (a) the Company shall take
any action which would require an adjustment in the Exercise Price; or (b) the
Company shall authorize the granting to the holders of its Common Stock of
rights or warrants to subscribe for or purchase any shares of stock of any class
or of any other rights and notice thereof shall be given to holders of Common
Stock; or (c) there shall be any capital reorganization or reclassification of
the Common Stock (other than a subdivision or combination of the outstanding
Common Stock and other than a change in par value or from par value to no par
value or from no par value to par value of the Common Stock), or any
consolidation or merger to which the Company is a party and for which approval
of any shareholders of the Company is required, or any sale or transfer of all
or substantially all of the assets of the Company; or (d) there shall be a
voluntary or involuntary dissolution, liquidation or winding-up of the Company;
then the Company shall cause to be given to the Holder at least 10 days prior to
the applicable date hereinafter specified, a notice stating (i) the date on
which a record is to be taken for the purpose of any distribution or grant to
holders of Common Stock, or, if a record is not to be taken, the date as of
which the holders of Common Stock of record to be entitled to such distribution
or grant are to be determined or (ii) the date on which such reorganization,
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding-up is expected to become effective, and the date as of
which it is expected that holders of Common Stock of record shall be entitled to
exchange their shares of Common Stock for securities or other property
deliverable upon such reorganization, reclassification, consolidation, merger,
sale, transfer, dissolution, liquidation or winding-up. Failure to give such
notice or any defect therein shall not affect the legality or validity of the
proceedings described in clauses (a), (b), (c) or (d) of this paragraph. The
notice requirements of this paragraph shall be deemed met if the Company
notifies the Holder at the time and in the manner it shall notify the holders of
its Common Stock.
IN WITNESS WHEREOF, Heartland Technology, Inc. has caused this
Warrant Certificate to be duly executed under its corporate seal.
DATED: As of October 17, 2000
HEARTLAND TECHNOLOGY, INC.
ATTEST:
_______________________ By: ___________________________________
Title: Title:
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FORM OF ELECTION TO PURCHASE
(To be executed upon exercise of Warrant.)
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase _____________ Shares and
herewith tenders in payment for such shares in United States dollars in cash or
by certified or official bank check in immediately available funds payable to
the order of Heartland Technology, Inc., all in accordance with the terms
hereof. The undersigned requests that the certificate for such Shares be
registered in the name of ____________________________________ whose address is
_____________________________ and that such certificate shall be delivered to
__________________________________________ whose address is
_________________________________________. If said number of Shares is less than
all of the Shares purchasable hereunder, the undersigned requests that a new
Warrant Certificate representing the right to purchase the remaining balance of
the Shares be registered in the name of __________________________________ whose
address is __________________________________________________ and that such
Warrant Certificate be delivered to ___________________________ whose address is
___________________________________.
DATED: ___________________________
(Insert Social Security or
Other Identifying Number of
Holder): ______________________
Signature_______________________________
(Signature must conform in all respect
to name of holder as specified on the
face of the Warrant.)
Signature Guarantee:
(required if an assignment of Shares
acquired on exercise, or an assignment
of Warrants remaining after exercise,
is made upon exercise):
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[FORM OF ASSIGNMENT]
(To be executed by the registered holder if such holder desires to
transfer the Warrant Certificate.)
FOR VALUE RECEIVED the undersigned hereby sells, assigns, and transfers unto
______________________________________________________________________________
this Warrant Certificate, together with all right, title, and interest therein,
and does hereby irrevocably constitute and appoint _____________________________
Attorney, to transfer the within Warrant Certificate on the books of the
within-named Company, with full power of substitution.
DATED: _____________________
(Insert Social Security or
Other Identifying Number of
Holder): ______________________
Signature Guarantee: Signature_______________________________
(Signature must conform in all respect
to name of holder as specified on the
face of the Warrant.)
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