SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
February 7, 1997
ORYX TECHNOLOGY CORP.
(Exact name of registrant as specified in its charter)
Delaware 1-12680 22-2115841
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
47341 Bayside Parkway, Fremont, California 94538
(Address of principal executive offices)
Registrant's telephone number, including area code: (510) 249-1144
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This report on form 8-K, including all exhibits, contains ___ pages
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ITEM 9. SALES OF EQUITY SECURITIES PURSUANT TO REGULATION S
On February 7, 1997, the Registrant closed a private placement (the
"Second Closing") in which it issued and sold 910,000 shares of its common stock
to qualified institutional investors which are not "U.S. Persons" (as that term
is defined in Rule 902(o) under the Securities Act of 1933, as amended (the
"Act")) for a per share price of $1.90, raising proceeds of $1,556,100. The
transaction was intended to be exempt from the registration requirements of the
Act pursuant to Regulation S thereunder. On December 24, 1996, the Registrant
raised an additional $1,954,362 through the sale of 1,134,130 shares of its
common stock also pursuant to Regulation S under the Act (the "First Closing"),
which transaction was previously reported on a Form 8-K filed with the
Securities and Exchange Commission (the "Commission") on January 3, 1997 and on
a Form 10-Q filed with the Commission on January 14, 1997. The First Closing and
the Second Closing are hereinafter collectively referred to as the "Offering."
The Registrant has agreed to file a registration statement with the Commission
under the Act, at its own expense, within 90 days of the First Closing to
register the shares sold in the Offering, including the shares of common stock
underlying the Yorkton Warrants, as defined below, for resale by investors, and
has agreed to use its best efforts to cause such registration statement to be
declared effective by the Commission within 180 days of the First Closing.
Pursuant to an Agency Agreement dated December 4, 1996 and amended
January 23, 1997 (the "Agency Agreement"), the Registrant retained Yorkton
Securities Inc. ("Yorkton") to act on a best efforts basis as its exclusive
agent in connection with the Offering. Under the terms of the Agency Agreement,
the Registrant paid Yorkton commissions and expenses totaling $215,000 for the
First Closing, $173,000 for the Second Closing, and further issued to Yorkton
warrants to purchase a total of 163,530 shares of the Registrant's common stock
at a price of $1.90 per share (the "Yorkton Warrants").
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits.
(1) Agency Agreement between Oryx Technology Corp. and Yorkton
Securities Inc. dated as of December 4, 1996.
(1)(A) Amendment No. 1 to Agency Agreement between Oryx
Technology Corp.and Yorkton Securities Inc. dated as
of January 23, 1997.
(1)(B) Form of Warrant issued by Oryx Technology Corp. to
Yorkton Securities Inc.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
Date: February 21, 1997 ORYX TECHNOLOGY CORP. (Registrant)
By: /s/ Arvind Patel
----------------------
Arvind Patel
Chief Executive Officer
AGENCY AGREEMENT
THIS AGENCY AGREEMENT is dated for purposes of reference as of December
4, 1996, and is entered into between ORYX TECHNOLOGY CORP., a Delaware
corporation (the "Issuer"), on the one hand, and YORKTON SECURITIES INC., an
Ontario corporation (the "Agent"), on the other hand, with respect to the
following facts:
A. The Issuer proposes to make a private placement (the "Private
Placement") pursuant to Regulation S under the Securities Act of 1933, as
amended (the "1933 Act"), of shares of its $.001 par value Common Stock (the
"Shares") to raise minimum gross proceeds of $2,000,000 and maximum gross
proceeds of $4,000,000. All dollar amounts set forth in this Agreement are
denominated in U.S. dollars.
B. Solely with respect to the Private Placement, the Issuer wishes to
appoint the Agent to act as its exclusive agent for purposes of placing the
Shares, and the Agent is willing to accept such appointment on the terms and
subject to the conditions of this Agreement.
In consideration of the mutual promises contained in this Agreement,
the parties agree as follows:
1. Appointment of Agent.
1.1 On the terms and subject to the conditions of this Agreement, the
Issuer appoints the Agent as its exclusive agent for purposes of placing the
Shares in the Private Placement, and the Agent accepts the appointment and
agrees to act as the agent of the Issuer solely with respect to the Private
Placement, to use its best efforts to find and introduce to the Issuer potential
investors to purchase the Shares. For control purposes, all subscribers in the
Private Placement (the "Subscribers") shall be deemed the Agent's clients.
1.2 The Agent may associate with other qualified securities dealers and
may allow members of any such selling group such part of Agent's commission,
fees or expense reimbursement as Agent may determine; provided, however, that
each selling group member must agree in writing to comply with the requirements
of Regulation S in connection with the Private Placement.
1.3 The Private Placement shall be made on the terms and subject to the
conditions stated in this Agreement and in the subscription agreements between
the Issuer and each of the Subscribers (the "Subscription Agreements"), each of
which is dated for reference purposes December 4, 1996.
2. Terms of the Private Placement.
2.1 The Agent shall use its best efforts to raise for the benefit of
the Issuer, pursuant to the Private Placement, minimum gross proceeds of
$2,000,000 and maximum gross proceeds of $4,000,000. The closing of the Private
Placement (the "Closing") shall be governed by the terms of Section 8 of this
Agreement. As provided in Section 8, there may be up to two Closings of the
Private Placement, which, respectively, are sometimes referred to hereinafter as
the "First Closing" and the "Second Closing." The First Closing must be for
gross proceeds of between $2,000,000 and $4,000,000. If less than $4,000,000 of
gross proceeds are included in the First Closing, a Second Closing may be held
for the amount of the difference between the amount raised in the First Closing
and $4,000,000.
2.2 The price per Share issued in the Private Placement (the "Price Per
Share") shall, for purposes of the First Closing, be $1.90, and shall, for
purposes of the Second Closing, be calculated as 90% of the average closing bid
price of the Issuer's Common Stock as it trades on the Nasdaq SmallCap Market
for the 10 trading days immediately preceding the date on which the Agent
contracts with the Subscribers under the Subscription Agreements (the "Contract
Date"), provided, however, that in no event will the Price Per Share for
purposes of the Second Closing be less than $1.80. On the Contract Date, the
Agent shall notify the Issuer that it has contracted with the Subscribers and
shall confirm with the Issuer the proper calculation of the Price Per Share as
provided in the previous sentence.
2.3 The number of Shares issuable to each Subscriber shall be
determined by dividing the total purchase price paid by such Subscriber by the
applicable Price Per Share. No fractional shares shall be issued in the Private
Placement. Any fractional shares shall be rounded to the nearest whole share.
2.4 The Shares shall be issued with a restrictive legend substantially
in the form set forth in Section 10.2 of the Subscription Agreements.
2.5 The Issuer will grant to Subscribers the registration rights set
forth in Section 9 of the Subscription Agreements.
2.6 The Agent shall obtain from each Subscriber a fully completed and
executed Subscription Agreement, together with payment in full for the Shares
subscribed for thereunder.
3. Representations and Warranties of the Issuer.
The Issuer hereby represents and warrants as of the date of this
Agreement and at each Closing (with the understanding that the Agent will be
relying upon such representations and warranties in entering into this
Agreement) that, except as otherwise disclosed in the Offering Documents (as
such term is defined in Section 7.2 of the Subscription Agreements) or in
Schedule A attached hereto:
3.1 Organization. The Issuer has been duly incorporated
and organized and is validly existing in good standing under the laws of the
State of Delaware.
3.2 Good Standing. The Issuer and its subsidiaries are duly qualified
to do business as foreign corporations in good standing in those jurisdictions
which require such qualification except to the extent that failure to so qualify
would not have a material adverse effect on the Issuer.
3.3 Authority. The Issuer has corporate power and authority to enter
into and perform this Agreement, to own its own properties and assets, and to
carry on its business as it is currently being conducted. All corporate action
on the part of the Issuer, its directors and stockholders necessary for the
authorization, execution, delivery and performance of this Agreement by the
Issuer and the performance of all of the Issuer's obligations hereunder has been
duly taken.
3.4 Enforceability. This Agreement, when executed and delivered by the
Issuer and duly authorized, executed and delivered by the Agent, will be a
binding obligation on the Issuer, enforceable in accordance with its terms,
except as may be limited by principles of public policy, and subject to laws of
general application relating to bankruptcy, insolvency and the relief of debtors
and rules of law governing specific performance, injunctive relief or other
equitable remedies.
3.5 No Violation. The execution and delivery of this Agreement and the
consummation of the transactions or performance of the obligations contemplated
by this Agreement do not and will not result in a breach of any term of, or
constitute a default under, the Issuer's charter or bylaws, any statute, any
indenture, mortgage, or other agreement or instrument to which the Issuer or any
of its subsidiaries is or are a party or by which any of them is or are bound,
or any order, writ, judgment or decree.
3.6 Actions and Claims. To the best of the Issuer's knowledge, there
are no actions or proceedings of any kind whatsoever outstanding, pending,
contemplated or threatened relating to the bankruptcy or insolvency of the
Issuer or any of its subsidiaries. To the best of its knowledge, there are no
other claims, actions, suits, judgments, investigations or proceedings of any
kind whatsoever outstanding, pending or threatened against or affecting the
Issuer, its subsidiaries, or the Issuer's directors, officers or promoters, at
law or in equity or before or by any federal, state, municipal or other
governmental department, commission, board, bureau or agency of any kind
whatsoever which could materially affect its business or financial condition
and, to the best of its knowledge, there is no basis therefor.
3.7 Disclosure. The Offering Documents do not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements made therein, in light of the circumstances under which
they have been made, not misleading.
3.8 Authorized and Validly Issued Shares. The issued and outstanding
capital stock of the Issuer as of the dates set forth in the Offering Documents
is as disclosed in the Offering Documents, and the issued and outstanding shares
of Common Stock of the Issuer are fully paid and non-assessable. The Issuer has
sufficient authorized and unissued shares of Common Stock to provide for the
issuance and delivery of the Shares. The Issuer's authorized capital stock
includes 25,000,000 shares of Common Stock, par value $.001 per share, and
3,000,000 shares of Preferred Stock, par value $.001 per share (including 45,000
shares of Preferred Stock designated as "Series A Preferred," of which 7,500
shares are outstanding). The Shares, when issued in the manner contemplated by
the provisions of the Subscription Agreements, will be duly authorized and
validly issued and will be fully paid and non-assessable.
3.9 Convertible Securities. Other than the Agent's Warrant which is
issuable under this Agreement pursuant to Section 9.5 and the 40,000 common
stock purchase warrants which are issuable to JW Charles Securities Inc. in
connection with the Issuer's proposed repurchase of Underwriter's Units (as
defined in Section 8.19 of the Subscription Agreements), no securities
convertible or exchangeable into Common Stock of the Issuer or agreements,
warrants, options, rights or privileges for the purchase or other acquisition of
any unissued securities of the Issuer are outstanding. On December 19, 1996,
Oryx Power Products Corporation ("Power Products"), a wholly-owned subsidiary of
the Issuer, acquired the assets of a DC to DC power supply company in exchange
for shares of common stock of Power Products and the assumption by Power
Products of certain associated liabilities, as more fully described on Schedule
A.
3.10 Intellectual Property Rights. The Issuer or its subsidiaries own,
possess or have access to adequate rights to use all material patents, patent
rights, inventions, trademarks, service marks, trade names, copyrights and
proprietary rights necessary for the conduct of its business as described in the
Offering Documents; and the Issuer has no knowledge of any infringement of or
conflict with rights of others, or any claims thereof, with respect to any
patents, patent rights, inventions, trademarks, service marks, trade names,
copyrights or other proprietary rights, the effect of which infringement,
conflict or claims would be materially adverse to the Issuer.
3.11 Financial Statements. The financial statements incorporated by
reference in the Offering Documents (the "Financial Statements") are true and
correct in all material respects and present fairly and accurately the financial
position and results of the operations of the Issuer and its subsidiaries for
the periods shown therein, and the Financial Statements have been prepared in
accordance with accounting principles generally accepted in the United States
applied on a consistent basis except for normal year-end adjustments.
3.12 Change in Circumstances. Except as disclosed on Schedule A, since
August 31, 1996, there has not been any adverse material change of any kind
whatsoever in the financial position or condition of the Issuer or of any of its
subsidiaries, or any damage, loss or other change of circumstances of any kind
whatsoever materially affecting the business or assets of the Issuer or of any
subsidiaries or the right or capacity of the Issuer or of any subsidiaries to
carry on their business.
3.13 Defaults. Since April 30, 1996, neither the Issuer nor any of its
subsidiaries has defaulted, or is currently in default (i) with respect to the
payment of interest or principal on any material indebtedness of the Issuer or
its subsidiaries, or (ii) under any material contract to which the Issuer or any
of its subsidiaries is a party.
3.14 Stop Orders. No order prohibiting the sale of the Issuer's
securities has been issued against the Issuer or, to Issuer's knowledge, its
directors, officers or promoters, and no proceedings for this purpose have been
instituted, are pending, or, to its knowledge, contemplated or threatened.
3.15 Transfer Agent. North American Transfer Co., having its
principal office in Freeport, New York, has been duly appointed as the
transfer agent for the Issuer's Common Stock.
3.16 Reporting Company. The Issuer has a class of securities registered
pursuant to Section 12(b) or 12(g) of the United States Securities Exchange Act
of 1934, as amended (the "1934 Act") or is required to file reports pursuant to
Section 15(d) of the 1934 Act.
3.17 1934 Act Reports. At the time of commencement of the Offering, the
Issuer had filed all the material required to be filed pursuant to Section 13(a)
or 15(d) of the 1934 Act for a period of at least the twelve months immediately
prior thereto, and the Issuer has since remained, and continues to remain,
current in satisfying such filing obligations.
3.18 No Directed Selling Efforts. The Issuer, its affiliates, and
persons acting on behalf of the foregoing have not made and will not make any
Directed Selling Efforts in the United States with respect to the Shares, the
Agent's Warrant (as hereinafter defined), or the Agent's Warrant Shares (as
hereinafter defined). For purposes of this Agreement, "Directed Selling Efforts"
include any activity undertaken for the purpose of, or that could reasonably be
expected to have the effect of, conditioning the market in the United States for
the Shares, including, but not limited to, the placement of an advertisement in
a publication with a general circulation in the United States that refers to the
offering of the Shares, the mailing of promotional materials to persons located
in the United States or the holding of promotional meetings or seminars in the
United States.
3.19 Franchises. The Issuer and its subsidiaries hold all franchises,
approvals, grants, authorizations, licenses, permits, easements, consents,
certificates and orders ("franchises") from all federal, state and other
governmental agencies, except to the extent that the failure to have any such
franchise or franchises would not have a material adverse effect on the Issuer
or the business now conducted by the Issuer; and the Issuer and its subsidiaries
have not received any notice of proceedings relating to the revocation or
modification of any franchise or franchises which, singly or in the aggregate,
if the subject of any unfavorable decision, ruling or finding, would have a
material adverse effect on the conduct of the business, operations, financial
condition or income of the Issuer and its subsidiaries.
3.20 Taxes. The Issuer and its subsidiaries have filed all tax returns
required to be filed by them and have paid all taxes shown as due thereon; the
Issuer has not been notified, either orally or in writing, that any taxing
authority is conducting or intends to conduct an audit of any tax return or
report filed by the Issuer or its subsidiaries concerning their business or
properties; and the Issuer has no knowledge of any tax deficiency which has been
asserted or threatened against the Issuer or its subsidiaries; provided,
however, that the foregoing representations and warranties exclude matters which
are immaterial in respect to, or have had and will have no material adverse
effect on the business, properties, financial condition or results of operations
of the Issuer.
3.21 Dividends and Distributions. The Issuer has not, directly or
indirectly, declared or paid any dividend or declared or made any other
distribution on or of any of its Common Stock or Preferred Stock or other
securities of any class other than the ordinary semi-annual dividend paid on its
outstanding Preferred Stock, nor does the Issuer currently have any agreement or
obligation, whether directly or indirectly, to redeem, purchase or otherwise
acquire any such Common Stock, Preferred Stock or other securities of any class.
3.22 Exclusive Agent; No Finder. Other than the Agent and
its agents, there is no person, firm or corporation acting or purporting
to act at the request of the Issuer who is entitled to any brokerage or
finder's fee in connection with sales of Shares to the Agent's clients.
3.23 Labor Relations. To the Issuer's knowledge, labor relations with
employees of the Issuer and its subsidiaries are good and no labor disturbance
by the employees of the Issuer or its subsidiaries exists or is imminent which
might be expected to materially and adversely affect the conduct of the business
of the Issuer.
3.24 Insurance. The Issuer and its subsidiaries maintain insurance,
including product liability insurance, which is in full force and effect, of the
types and in the amounts which the Issuer believes are adequate for its business
and in line with insurance maintained by similar companies and businesses,
including but not limited to, insuring all personal property owned or leased by
the Issuer against theft, damage, destruction, acts of vandalism, public
liability and all other risks customarily insured against.
3.25 No Price Manipulation or Stabilization. Since October 1, 1996, the
Issuer has not taken, directly or indirectly, any action designed to constitute
or which has constituted or which might reasonably be expected to cause or
result in, the stabilization or manipulation of the price of any security issued
by the Issuer.
3.26 No Significant Proposed Transactions. Except as set forth on
Schedule A, the Issuer has not agreed, or agreed in principle, nor does the
Issuer have any current intention, to merge with or acquire any other business,
division or unit thereof or to sell the Issuer's business or any significant
part of the Issuer's assets otherwise than through transactions occurring in the
ordinary course of the Issuer's business.
3.27 Books and Records. The Issuer and its subsidiaries make and keep
accurate books and records and maintain internal accounting controls which
provide reasonable assurance that (a) transactions are executed in accordance
with management's authorization, (b) transactions are recorded as necessary to
permit preparation of financial statements and to maintain accountability for
assets, (c) access to assets is permitted only in accordance with management's
authorization and, (d) reported assets are compared with existing assets at
reasonable intervals.
4. Representations and Warranties of Agent.
The Agent represents and warrants to and for the benefit of the Issuer
that:
4.1 The Agent is a corporation duly organized, validly existing and in
good standing under the laws of the Province of Ontario. The Agent has the
requisite corporate power to carry on its business as presently conducted, and
to enter into and carry out the provisions of this Agreement and the
transactions contemplated hereby.
4.2 All corporate action on the part of the Agent, its directors and
shareholders necessary for the authorization, execution, delivery and
performance of this Agreement by the Agent and the performance of all of the
Agent's obligations hereunder has been taken. This Agreement, when executed and
delivered by the Agent, shall constitute a valid and binding obligation of the
Agent, enforceable in accordance with its terms, except as may be limited by
principles of public policy, and subject to laws of general application relating
to bankruptcy, insolvency and the relief of debtors and rules of law governing
specific performance, injunctive relief or other equitable remedies.
4.3 The execution and delivery of this Agreement and the consummation
of the transactions contemplated in this Agreement do not and will not conflict
with and do not and will not result in a breach of any of the terms of the
Agent's incorporating documents or any agreement or instrument to which the
Issuer is a party.
5. Covenants of the Issuer.
The Issuer covenants and agrees with the Agent that:
5.1 The Issuer shall furnish the Agent with copies of the Offering
Documents, and all amendments and supplements thereto, in each case as soon as
available and in such quantities as the Agent may reasonably request for its use
in connection with the Private Placement.
5.2 The Issuer covenants to comply with all applicable requirements of
Regulation S under the 1933 Act in connection with the Private Placement.
5.3 The Issuer will, upon request of the Agent, deliver to the Agent
and to its legal counsel at the time of each Closing a certificate (the
"Officer's Certificate") addressed to the Agent and dated the Closing Date for
such Closing, signed by the Chief Executive Officer or Chief Financial Officer
of the Issuer, to the effect that (i) there has not been, since the respective
dates as of which information is given in the Offering Documents, any material
adverse change (whether financial or otherwise) in the business, affairs,
operations, assets, liabilities (contingent or otherwise) or capital of the
Issuer on a consolidated basis; (ii) all of the representations and warranties
contained in Section 3 hereof are true and correct with the same force and
effect as though expressly made at and as of such Closing, after giving effect
to the transactions contemplated hereby; and (iii) the Issuer has performed and
complied in all material respects with all agreements, covenants, terms and
conditions required to be performed, complied with and satisfied by it up to the
time of such Closing.
5.4 From and including the date that this Agreement is executed through
and including the Closing Date for each Closing, the Issuer will do all such
acts and things reasonably necessary to ensure that all of the representations
and warranties of the Issuer contained in this Agreement or any Officer's
Certificate delivered by the Issuer pursuant to this Agreement remain true and
correct.
5.5 From and including the date that this Agreement is executed through
and including the Closing Date for each Closing, the Issuer will not do any act
or thing that would render any representation or warranty of the Issuer
contained in this Agreement or any Officer's Certificate delivered by the Issuer
pursuant to this Agreement untrue or incorrect except as such act or thing is
disclosed in writing to the Agent prior to such Closing.
5.6 For one year after the last Closing of the Private Placement, the
Issuer will engage and adequately compensate a public relations firm to
disseminate news and other corporate information to the North American stock
brokerage community in conformity with applicable laws and regulations.
5.7 The Issuer will reserve or set aside enough shares of its Common
Stock to issue the Shares and the Agent's Warrant Shares (as hereinafter
defined).
5.8 The Issuer will duly and punctually perform all of the obligations
to be preformed by it under this Agreement and the Subscription Agreements.
5.9 The Issuer will use its best efforts to maintain the quotation of
the Issuer's Common Stock on Nasdaq on either the SmallCap Market or the
National Market System, or to obtain and maintain the listing of the Issuer's
Common Stock for trading on a United States national securities exchange, as
such term is defined in Section 6 of the 1934 Act and rules and regulations
promulgated thereunder.
5.10 Prior to or promptly after each Closing, the Issuer will take all
actions necessary for the Shares issued in such Closing to be quoted on the
Nasdaq SmallCap Market.
6. Covenants of the Agent.
The Agent covenants and agrees with the Issuer that:
6.1 The Agent will comply with all applicable laws of each jurisdiction
in which it offers the Shares for sale on behalf of the Issuer; provided,
however, that the Issuer shall be solely responsible for making any required
filings and obtaining any required permits in respect thereto.
6.2 The Agent will comply with all applicable requirements of
Regulation S under the 1933 Act in connection with the Private Placement.
6.3 The Agent will duly and punctually perform all of its obligations
under this Agreement and the Subscription Agreements.
7. Conditions Precedent.
The following are conditions precedent to the obligations of the Agent
to complete the transactions contemplated in this Agreement:
7.1 All actions required to be taken by or on behalf of the Issuer,
including the adopting of all requisite resolutions of directors of the Issuer,
will have been taken so as to validly offer, sell, allot, issue and deliver the
Shares to the Subscribers.
7.2 No order prohibiting the offer, sale, allotment, issuance or
delivery of the Shares will have been issued and no proceedings for such
purpose, to the knowledge of the Issuer, will be pending or threatened.
7.3 The Issuer will have delivered, at the time of each Closing, all
Legal Opinions and Officer's Certificates required under this Agreement.
7.4 The Issuer will have, as of the time of each Closing, complied with
all of its covenants and agreements contained in this Agreement.
7.5 The Agent will have been entirely satisfied with
the results of its due diligence investigations.
7.6 Except as otherwise disclosed in writing by the Issuer to the
Agent, the representations and warranties of the Issuer contained in this
Agreement will, as of the time of each Closing, be true and correct as if such
representations and warranties had been made as of the time of such Closing.
8. Closing.
8.1 The First Closing shall take place on or about December 24, 1996 at
9:00 a.m. (Pacific Time) or on such other date or at such other time as the
Issuer and the Agent shall mutually agree, and the Second Closing shall take
place within thirty (30) days after the First Closing on a date and at such time
as the Issuer and the Agent shall mutually agree (each a "Closing Date");
provided, however, that the First Closing may not occur until after the Agent
has received Private Placement subscriptions equaling or exceeding the aggregate
minimum offering price of $2,000,000; and provided, further, that the First
Closing and the Second Closing, respectively, shall occur only if all other
terms and conditions of this Agreement and the Subscription Agreements have been
satisfied or waived in accordance with the terms of such agreement; and
provided, further, that the Second Closing shall be held as soon as reasonably
practicable after the Contract Date (as defined in Section 2.2 hereof). Prior to
each Closing, all subscription funds received by the Agent will be held by the
Agent in trust for the benefit of the Subscribers.
8.2 Each Closing will be held at the offices of the Agent located at
10th Floor, Bentall 4, 1055 Dunsmuir Street, Vancouver, British Columbia, Canada
V7X 1L4, and/or such other place or places as may be mutually acceptable to the
Issuer and the Agent.
8.3 Prior to each Closing, the Agent will deliver, or cause to be
delivered, to the Issuer the Subscription Agreements executed by the
Subscribers.
8.4 Prior to each Closing, after determining that all applicable
securities laws in respect of the offer and sale of the Shares have been
satisfied, the Issuer will deliver to the Agent, to be held in trust pending
such Closing, certificates representing the Shares (the "Certificates") for
delivery at such Closing. If such Closing does not occur because conditions to
the Closing have not been satisfied or waived, the Agent will promptly return
the Certificates to the Issuer and will also promptly return to the Subscribers
all subscription funds held by the Agent, without interest thereon.
8.5 At each Closing, the Issuer shall (i) upon its acceptance of the
Subscription Agreements, execute and deliver the Subscription Agreements to the
Agent, and (ii) deliver to the Agent such opinions of the Issuer's legal counsel
as the Agent reasonably requires ("Legal Opinions"); following which the Agent
will deliver, or cause to be delivered to the Issuer, by wire transfer or
account transfer in immediately available funds, an amount equal to the Net
Proceeds of the Private Placement for such Closing, subject to any written
direction given by the Issuer to the Agent and accepted by the Agent.
8.6 Upon receipt of confirmation of the wire transfer or account
transfer of the Net Proceeds of the Private Placement for each Closing, the
Certificates delivered to the Agent by the Issuer to be held in trust pending
such Closing shall be deemed to have been delivered by the Issuer to the Agent
for distribution to the Subscribers.
8.7 On the Closing Date for each Closing, the Issuer shall execute an
Agent's Warrant (as defined in Section 9.5) and within three business days of
the Closing Date for such Closing the Issuer shall deliver the executed Agent's
Warrant to the Agent.
9. Agent's Fee and Expenses.
9.1 Immediately prior to each Closing and the release of proceeds from
the sale of Shares to the Issuer, the Issuer and Agent shall identify all Shares
being sold as to which the Agent is entitled to a fee, with the gross proceeds
of the sale of such Shares being referred to herein as the "Gross Proceeds of
the Private Placement."
9.2 On the Closing Date for each Closing the Issuer will pay to the
Agent, in consideration of the services performed by the Agent under this
Agreement, a cash fee of eight percent (8%) of the Gross Proceeds of the Private
Placement (the "Placement Fee") for such Closing. The Placement Fee shall be in
addition to the reimbursement of the Agent's Expenses provided for in Section
9.3 of this Agreement.
9.3 On the Closing Date for each Closing, the Issuer shall reimburse in
full all of the Agent's non-accountable legal and out-of-pocket expenses related
to the Private Placement in an amount not to exceed two percent (2%) of the
Gross Proceeds of the Private Placement for such Closing, net of any amounts
previously advanced by the Issuer to the Agent for such purpose (the "Agent's
Expenses").
9.4 With respect to each Closing, the Gross Proceeds of the Private
Placement, less the amount of the Placement Fee and the amount of the Agent's
Expenses, shall constitute the "Net Proceeds of the Private Placement" for
purposes of this Agreement.
9.5 On the Closing Date for each Closing, the Issuer shall also grant
to the Agent, as additional consideration hereunder, a five-year transferable
warrant to buy shares of the Issuer's Common Stock in an amount equal to eight
percent (8%) of the total number of Shares issued to Subscribers in such Closing
(an "Agent's Warrant"). Each Agent's Warrant shall contain standard
anti-dilution adjustments and shall be exercisable at a price equal to the Price
Per Share for Shares issued in such Closing. With respect to the shares of
Common Stock purchasable upon exercise of the Agent's Warrant (the "Agent's
Warrant Shares"), the Issuer hereby grants to Yorkton and its successors and
assigns the same registration rights provided to Subscribers under Section 9 of
the Subscription Agreements. In connection with the offer and sale of the
Agent's Warrant to the Agent, the Agent hereby makes the Subscriber
representations and warranties to the Issuer which are set forth in Sections
7.7, 7.8 and 7.9 of the Subscription Agreements, all of which provisions are
incorporated herein by this reference and are agreed to by the Agent as if the
Agent were a Subscriber under a Subscription Agreement with the Company.
9.6 The Issuer will pay its own expenses incident to the transactions
contemplated by this Agreement. The expenses of the Issuer include, but are not
limited to (i) fees and disbursements of counsel for the Issuer; (ii) costs of
the preparation, review, printing or photocopying, and delivery of the Offering
Documents, Subscription Agreements and each amendment or supplement thereto; and
(iii) Issuer's fees and expenses which may be incurred pursuant to the
registration rights provisions referred to in Section 9.5 of this Agreement.
10. Indemnification.
10.1 The Issuer hereby covenants and agrees to protect, indemnify and
hold harmless the Agent and its directors, officers, employees, solicitors,
attorneys and agents, but specifically excluding any investor in the Private
Placement (individually, an "Indemnified Party" and, collectively, the
"Indemnified Parties") from and against all losses, claims, costs, expenses,
obligations, damages, recoveries, forfeitures or liabilities, including
interest, penalties and reasonable attorneys' fees, which they may suffer or
incur caused by or arising directly or indirectly by reason of:
10.1.1 any information or statement contained in the
Offering Documents or any other representation made by the Issuer to
the Agent or to a Subscriber or potential Subscriber in this Agreement
or the Subscription Agreements being or being alleged to be a
misrepresentation;
10.1.2 the omission or alleged omission to state in the
Offering Documents a material fact required to be stated therein or
necessary to prevent any statement made therein from being false or
misleading in light of the circumstances under which it was made;
10.1.3 the Issuer's failure to comply with any
requirement of securities laws or regulations of any jurisdiction
applicable to the Private Placement;
10.1.4 any order made or any inquiry, investigation
(whether formal or informal) or proceeding commenced or threatened by
any regulatory authority based upon an allegation that any untrue
statement or alleged omission or any misrepresentation or alleged
misrepresentation exists in the Offering Documents or in any public
statement or press release by the Issuer which prevents or restricts
the trading in or distribution of the Shares otherwise permitted;
10.1.5 the Issuer's failure to comply with any of its
obligations hereunder, through no fault of the Agent or Indemnified
Party, including any breach of or default under any representation,
warranty, covenant or agreement of the Issuer contained in this
Agreement or any other document to be delivered pursuant to this
Agreement;
10.1.6 any order made by any court or regulatory
authority setting aside the sale or issuance of any of the Shares or
underlying securities; or
10.1.7 the failure or inability of the Issuer to issue and
deliver in satisfactory form the instruments representing Shares.
Provided, however, that the Issuer will not be liable in any such case to the
extent that any such loss, claim, damage, cost, expense, obligation, recovery,
forfeiture or liability arises out of or is based upon any untrue statement or
alleged untrue statement or omission made in the Offering Documents in reliance
upon and in conformity with information furnished to the Issuer by the Agent
expressly for use therein; and provided, further that such indemnity shall not
inure to the benefit of the Indemnified Parties to the extent that any loss,
claim, damage, cost, expense, obligation, recovery, forfeiture or liability
results from the fact that the Agent failed to send or give a copy of the
Offering Documents to any person at or prior to the confirmation of the sale of
the Shares to such person or to the extent any Indemnified Party fails to comply
with the 1933 Act in connection with the sale of the Shares.
10.2 If any action or claim shall be asserted against an Indemnified
Party in respect of which indemnity may be sought from the Issuer pursuant to
the provisions hereof, or if any potential claim contemplated by this Section
shall come to the knowledge of an Indemnified Party, the Indemnified Party shall
promptly notify the Issuer in writing of the nature of such action or claim
(provided that any failure to so notify shall not affect the Issuer's liability
under this Section unless such delay has prejudiced the defense of such claim).
The Issuer will assume the defense of the action or claim, including the
employment of counsel and the payment of all expenses. The Indemnified Parties
will have the right to employ separate counsel at the expense of the Issuer in
the event of a conflict of interests between the Issuer and such Indemnified
Party or Parties; provided, however, that the Indemnified Parties shall not
unreasonably delay their exercise of this right. Neither party shall effect any
settlement of any such action or claim or make any admission of liability
without the written consent of the other party, such consent not to be
unreasonably withheld or delayed. The indemnity hereby provided for shall remain
in full force and effect and shall not be limited to or affected by any other
indemnity in respect of any matters specified in this Agreement obtained by the
Indemnified Party from any other person and will continue in full force and
effect until all possible liability of the Indemnified Parties arising out of
the transactions contemplated by this Agreement has been extinguished by the
operation of law.
10.3 To the extent that any Indemnified Party is not a party to this
Agreement, the Agent shall obtain and hold the right and benefit arising under
this Section on their behalf in trust for and on behalf of such Indemnified
Party.
10.4 The Issuer hereby consents to personal jurisdiction and service
and venue in any court in which any claim which is subject to indemnification
hereunder is brought against the Agent or any Indemnified Party and to the
assignment of the benefit of this Section to any Indemnified Party for the
purpose of enforcement; provided, that nothing herein shall limit the Issuer's
right or ability to contest the appropriate jurisdiction or forum for the
determination of any such claims.
11. Contribution.
11.1 In the event that, for any reason, the indemnity provided for in
Section 10 hereof is held to be illegal or unenforceable, the Agent and the
Issuer shall contribute to the aggregate of all losses, claims, costs, damages,
expenses or liabilities of the nature provided for in Section 10, such that the
Agent shall be responsible for that portion thereof represented by the
percentage that the Placement Fee bears to the Gross Proceeds of the Private
Placement, and the Issuer shall be responsible for the balance.
11.2 Notwithstanding Section 11.1, a person who has committed a
fraudulent misrepresentation shall not be entitled to contribution from any
other party.
11.3 Any party entitled to contribution will, promptly after receiving
notice of commencement of any claim, action, suit or proceeding against such
party in respect of which a claim for contribution may be made against another
party under this Section, notify such party from whom contribution may be
sought; provided, however, that the omission of any party to notify such other
party or parties shall not relieve the party or parties from whom contribution
is sought from any obligation hereunder to the extent such party or parties were
not adversely affected by such omission.
11.4 The right to contribution provided in this Section shall be in
addition to, and not in derogation of, any other right to contribution which the
Agent may have by statute or otherwise by law.
12. Termination of Agent's Obligations.
12.1 With respect to each Closing, the Agent may terminate its
obligations hereunder and the Subscribers' obligations under the Subscription
Agreements, by written notice to the Issuer, in the event that after the date
hereof and at or prior to the Closing Date for the such Closing:
12.1.1 any order prohibiting or restricting the
distribution of the Shares is made, or proceedings are announced,
commenced or threatened for the making of any such order, by any
securities commission or exchange or any other competent authority and
has not been rescinded, revoked or withdrawn;
12.1.2 any inquiry, action, suit or investigation (whether
formal or informal) or other proceeding in relation to the Issuer or
any of its respective directors or executive officers is announced,
commenced or threatened by any securities commission or exchange or by
any other competent authority if, in the opinion of the Agent, the
announcement, commencement or threatening thereof adversely affects the
distribution of the Shares;
12.1.3 the Issuer is in material breach of, default under,
or non-compliance with any representation, warranty, term or condition
of this Agreement;
12.1.4 the Shares cannot, in the opinion of the Agent,
be profitably marketed due to the state of the financial markets;
12.1.5 there shall have occurred any material change from
the disclosures set forth in the Offering Documents, as determined by
the Agent in its sole discretion, in the business, operations, capital
or condition (financial or otherwise) or the results of operations of
the Issuer and its subsidiaries (taken as a whole), or its properties,
assets, liabilities or obligations (absolute, accrued, contingent or
otherwise);
12.1.6 there should develop, occur or come into effect or
existence any event, action, state, condition or financial occurrence,
or any catastrophe, of national or international consequence, any
action, law or regulation, or any other occurrence of any nature
whatsoever, which, in the sole opinion of the Agent, seriously
adversely affects or involves, or may seriously adversely affect or
involve, the financial markets or the business, operations or affairs
of the Issuer and its subsidiaries (taken as a whole), the distribution
of the Shares, or a Subscriber's decision to purchase the Shares, even
if the Subscriber has already executed a Subscription Agreement for all
or a portion of the Shares offered; or
12.1.7 the Agent is not satisfied with the results of its
due diligence investigations relating to the Issuer and its
subsidiaries.
12.2 The right of the Agent to terminate its obligations under this
Agreement is in addition to such other remedies as it has or may have in respect
of any default, act or failure to act of the Issuer in respect of any of the
matters contemplated by this Agreement.
13. Garnishing Orders.
13.1 If at any time before the completion of any Closing of the Private
Placement the Agent receives a garnishing order or other form of attachment
purporting to attach or garnish a part or all of the sale price of any of the
Shares, the Agent may pay the amount purportedly attached or garnished into
court.
13.2 Any payment by the Agent into court contemplated in this Agreement
is deemed to have been received by the Issuer as payment by the Agent against
the sale price of the Shares to the extent of the amount paid, and the Issuer is
bound to issue and deliver the Shares proportionately to the amount paid by the
Agent.
13.3 The Agent is not bound to ascertain the validity of any garnishing
order or attachment, or whether in fact it attaches any monies held by the
Agent, and the Agent may act with impunity in responding to any garnishing order
or attachment by payment into court.
13.4 The Issuer shall release, indemnify and save harmless the Agent in
respect of all damages, costs, expenses or liabilities arising from any acts of
the Agent under this Section 13.
14. Notices.
14.1 Any notice required or permitted under this Agreement shall be
given in writing and shall be deemed effectively given upon personal delivery to
the party to be notified by hand or professional courier service; by telecopier
via the telefax numbers indicated below; or by international courier. Any notice
shall be addressed to the party to be notified at the addresses indicated below:
In the case of the Issuer: Oryx Technology Corp.
47341 Bayside Parkway
Fremont, California 94538, U.S.A.
Attention: Arvind Patel
Telefax: (510) 249-1150
<PAGE>
with a copy to: Wise & Shepard
3030 Hansen Way, Suite 100
Palo Alto, California 94304-1006,U.S.A.
Attention: Jerrold F. Petruzzelli,Esq.
Telefax: (415) 856-1344
In the case of the Agent: Yorkton Securities Inc.
10th Floor, Bentall 4
1055 Dunsmuir Street
Vancouver, British Columbia
Canada V7X 1L4
Attention: Gordon Keep
Telefax: (604) 640-0512
with a copy to: Miller & Holguin
1801 Century Park East
Seventh Floor
Los Angeles, California 90067, U.S.A.
Attention: J. Brad Wiggins, Esq.
Telefax: (310) 557-2205
14.2 The Issuer and the Agent may change their respective addresses for
notice by notice given in the manner referred to in this Section, upon ten (10)
days' advance notice.
15. Miscellaneous.
15.1 Survival. The representations and warranties made in this
Agreement shall be true at the time of each Closing as though they were made at
the time of such Closing, and they shall survive the completion of the
transactions contemplated under this Agreement for one year thereafter. The
provisions of this Agreement which, by their terms, require performance by a
party to this Agreement subsequent to any Closing of the Private Placement shall
survive such Closing.
15.2 Further Assurances. The parties hereto shall execute and deliver
all such further documents and instruments and do all such acts and things as a
party may, either before or after each Closing of the Private Placement,
reasonably require in order to carry out the full intent and meaning of this
Agreement.
15.3 Successors and Assigns. This Agreement will inure to the benefit
of and be binding upon the Agent, the Issuer and their respective successors,
heirs and representatives. This Agreement and its conditions and provisions are
intended to be and are for the sole and exclusive benefit of the parties to it
and their respective successors, heirs and representatives, and not for the
benefit of any other person, firm or corporation unless expressly stated
otherwise. This Agreement may not be assigned by any party hereto without the
prior written consent of both of the parties hereto.
15.4 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument.
15.5 Governing Laws. This Agreement shall in all respects
be governed by and construed in accordance with the laws of the State of
California.
15.6 Titles. The titles of the sections and subsections
of this Agreement are for the convenience of reference only and are not to
be considered in construing this Agreement.
15.7 Entire Agreement. This Agreement constitutes the entire agreement
and understanding between the parties with respect to the subject matters
herein, and supersedes and replaces any prior agreements and understandings,
whether oral or written, between them with respect to such matters. Each party
to this Agreement acknowledges that no representation, inducement, promise or
agreement, whether written or oral, has been made by any party, or anyone acting
on behalf of any party, which is not embodied herein, and that no other
agreement, statement, or promise not contained in this Agreement shall be valid
or binding.
15.8 Amendment. Any modification of this Agreement will be
effective only if it is in writing and signed by all parties to this Agreement.
15.9 Waiver. Any party to this Agreement may waive compliance by the
other with any of the terms, provisions and conditions set forth in this
Agreement; provided, however, that any such waiver must be in a writing
specifically setting forth the provisions thus waived and may not result in a
material change to any of the material terms of the Private Placement unless
such change is consented to by each Subscriber participating in the Private
Placement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year hereinabove first written.
ORYX TECHNOLOGY CORP.
By: /s/ Arvind Patel
---------------------
Arvind Patel
Title: Chief Executive Officer
YORKTON SECURITIES INC.
By: /s/ Gordon Keep
--------------------
Gordon Keep
Title: V.P. Corporate Finance
<PAGE>
SCHEDULE A
The following are the Oryx Technology Corporation ("Oryx") "Exceptions
to the Representations and Warranties of Oryx" set forth in Section 3 of that
certain Agency Agreement between Oryx and Yorkton Securities, Inc., executed on
December 24, 1996 (the "Agency Agreement"). References to the specific paragraph
numbers refer to those in Section 3 of the Agency Agreement; however, such
references are for convenience only and the exceptions set forth below shall
modify and apply to all paragraphs under Section 3 to which they are relevant.
All capitalized items not otherwise defined herein shall have the meanings
ascribed to them in the Agency Agreement.
<TABLE>
<CAPTION>
<C> <S>
Section Exception
3.12, 3.26 In November, 1996, Pitney-Bowes Corp., the Company's largest customer, informed
the Company that it does not intend to renew one of the three contracts it has
with the Company when that contract expires on December 31, 1996. The Company
expects that sales to Pitney-Bowes under that contract will represent
approximately 25% of the consolidated revenues of the Company for the 1996
calendar year.
On December 19, 1996, Oryx Power Products
Corporation ("Power Products"), a wholly-owned
subsidiary of the Company, acquired the assets
of a DC to DC power supply company in exchange
for 600,000 shares of common stock of Power
Products and the assumption by Power Products
of certain associated liabilities. The Company
expects that the revenues attributable to such
acquisition will approximately offset the loss
of revenues due to the non renewal of the
Pitney-Bowes contract.
</TABLE>
AMENDMENT NO. 1
TO AGENCY AGREEMENT DATED DECEMBER 4, 1996
THIS AMENDMENT ("Amendment") is dated for purposes of reference as of
January 23, 1997, and is entered into between ORYX TECHNOLOGY CORP., a Delaware
corporation (the "Issuer"), on the one hand, and YORKTON SECURITIES INC., an
Ontario corporation (the "Agent"), on the other hand, with respect to the
following facts:
A. The Issuer and the Agent entered into an Agency Agreement dated for
purposes of reference December 4, 1996 (the "Agreement"), pursuant to which the
Issuer appointed the Agent as its exclusive agent in a best-efforts Private
Placement of Shares of its $.001 par value Common Stock to raise minimum gross
proceeds of $2,000,000 and maximum gross proceeds of $4,000,000. Unless
otherwise defined herein, all capitalized terms used in this Amendment shall
have the meanings ascribed to them in the Agreement.
B. On December 24, 1996, the First Closing of the Private Placement was
held. At the First Closing, $2,154,847 of Gross Proceeds of the Private
Placement were received from Subscribers and 1,134,130 Shares were issued to
Subscribers at a price per share of $1.90.
C. Section 8.1 of the Agreement provides that a Second Closing may be
held within thirty (30) days after the First Closing (i.e., on or before January
23, 1997). The Issuer and the Agent wish to amend Section 8.1 to provide that a
Second Closing may be held within sixty (60) days after the First Closing (i.e.,
on or before February 22, 1997).
D. Section 2.2 of the Agreement provides that the Price Per Share, for
purposes of the Second Closing, shall be calculated as 90% of the average
closing bid price of the Issuer's Common Stock as it trades on the Nasdaq
SmallCap Market for the 10 trading days immediately preceding the date on which
the Agent contracts with the Subscribers under the Subscription Agreements (the
"Contract Date"), provided, however, that in no event will the Price Per Share
for purposes of the Second Closing be less than $1.80. The Issuer and the Agent
wish to amend Section 2.2 to provide that the Price Per Share for purposes of
the Second Closing shall be $1.90.
E. The Issuer and the Agent wish to adopt certain
additional clarifying amendments to the Agreement as it pertains to the
Second Closing.
In consideration of the premises, the parties agree to amend the
Agreement as follows:
1. Section 8.1 of the Agreement is hereby amended to provide that the
Second Closing shall take place within sixty (60) days after the First Closing
(i.e., on or before February 22, 1997) on a date and at such time as the Issuer
and the Agent shall mutually agree (which, for purposes of the Second Closing,
shall be deemed the "Closing Date").
2. Section 2.2 of the Agreement is hereby amended to provide
that the Price Per Share for purposes of the Second Closing shall be $1.90.
3. Section 3 of the Agreement is hereby amended to provide that, for
purposes of the Second Closing, the term "Schedule A" shall have reference to a
new, updated Schedule A which is current as of the date the parties sign this
Amendment, and which shall be attached as a schedule to this Amendment.
All provisions of the Agreement which are unchanged by this Amendment
shall remain in full force and effect. The Agreement, as amended hereby,
constitutes the entire agreement and understanding between the parties with
respect to the subject matters herein, and supersedes and replaces any prior
agreements and understandings, whether oral or written, between them with
respect to such matters. This Amendment may be executed in multiple
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the day and year hereinabove first written.
ORYX TECHNOLOGY CORP.
By: /s/ Arvind Patel
---------------------
Arvind Patel
Title: Chief Executive Officer
YORKTON SECURITIES INC.
By: /s/ Gordon Keep
--------------------
Gordon Keep
Title: V.P. Corporate Finance
<PAGE>
Schedule A
NONE
THIS WARRANT AND THE UNDERLYING WARRANT SHARES HAVE NOT BEEN REGISTERED UNDER
THE ACT, AND (i) THE WARRANT AND THE WARRANT SHARES MAY NOT BE EXERCISED,
OFFERED OR SOLD BY OR ON BEHALF OF U.S. PERSONS, (ii) THE WARRANT MAY NOT BE
EXERCISED IN THE UNITED STATES (EXCEPT AS PERMITTED BY REGULATION S) AND (iii)
THE SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE DELIVERED IN THE
UNITED STATES UNLESS, IN EACH CASE, THERE IS A REGISTRATION STATEMENT IN EFFECT
COVERING THE WARRANT AND WARRANT SHARES OR THERE IS AVAILABLE AN EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE ACT.
WARRANT TO PURCHASE
COMMON STOCK OF
ORYX TECHNOLOGY CORP.
FOR VALUE RECEIVED, subject to the terms and
conditions herein set forth, Yorkton Securities, Inc. ("Holder") is
entitled to purchase from Oryx Technology Corp., a Delaware corporation (the
"Company"), at a price per share as set forth in Section 1 hereof (the
"Warrant Price"), the number of fully paid and non-assessable shares of
Common Stock, as hereinafter defined, of the Company as set forth in Section 2
hereof (the "Shares").
1. Warrant Price.
The Warrant Price for each share of Common Stock purchasable hereunder
shall be One Dollar Ninety Cents ($1.90) (the "Warrant Price").
2. Number of Shares.
The number of Shares issuable upon exercise of this Warrant shall be
90,730.
3. Expiration of Warrant.
Subject to earlier termination in accordance with Section 9 below, this
Warrant shall expire and shall no longer be exercisable December 24, 2001.
4. No Fractional Shares.
This Warrant may not be exercised as to fractional shares of Common Stock
of the Company.
5. No Shareholder Rights.
This Warrant shall not entitle the Holder to any of the rights of a
stockholder of the Company.
6. Registration Rights.
(a) The Company shall prepare and file with the Securities and Exchange
Commission ("SEC") not later than March 24, 1997 a registration statement on an
appropriate form (the "Registration Statement") for registration under the
Securities Act of 1933, as amended (the "Securities Act") of the Shares issued
or issuable upon exercise of this Warrant (as adjusted in accordance with
Section 11 hereof). The Company shall use its best efforts to cause the
Registration Statement to become effective no later than June 21, 1997 (but if
the Registration Statement has not been declared effective by such time, the
Company will continue to use its best efforts to cause the Registration
Statement to become effective as soon as possible thereafter) and to keep the
Registration Statement effective thereafter until the earlier of (i) the date on
which all Shares have been resold pursuant to the Registration Statement or
otherwise have been resold pursuant to an exemption under the Securities Act in
a transaction in which the Issuer's transfer agent is instructed in an opinion
of counsel reasonable satisfactory to Issuer, to reissue certificates which do
not contain restrictive legends, or (ii) the date on which is ended the
three-year period referenced in Rule 144(k) under the Securities Act (or such
shorter period set forth in any amendment to Rule 144(k) under the Securities
Act) or any successor rule or subsection relating to the resale of "restricted
securities" by "non-affiliates" of an issuer, as such terms are defined in the
Securities Act and the rules and regulations promulgated thereunder.
(b) In connection with the preparation of the Registration Statement,
Holder shall furnish to the Company all information reasonably requested by the
Company (including, for example, Holder's intended method of disposition of the
Shares) for inclusion in the Registration Statement, to facilitate the Company's
response to the SEC's comments and questions, or to facilitate the registration
and qualification of the Shares under any state securities or Blue Sky laws.
(c) The Company shall prepare and file with the SEC such amendments and
supplements to the Registration Statement and the prospectus used in connection
with the Registration Statement as ma be necessary to comply with the provisions
of the Securities Act with respect to the disposition of the Shares. The Company
shall furnish Holder with such numbers of copies of prospectuses or prospectus
documents conforming with the requirements of the Securities Act as Holder may
reasonably request in order to facilitate the disposition of the Shares. The
Company shall use its best efforts to register and qualify the Shares under any
state securities or Blue Sky laws of such jurisdictions as Holder reasonably
requests; provided, however, that the Company shall not be required to take any
action to register or qualify the Shares in any jurisdiction in which the
Company would be required to execute a general consent to service of process in
effecting such registration or qualification unless the Company has previously
executed such a general consent in such jurisdiction.
(d) Holder agrees that, upon its receipt of any notice from the Company of
the happening of any event which makes any statement made in the Registration
Statement, the prospectus or any document incorporated therein by reference,
untrue in any material respect or which requires the making of any changes in
the Registration Statement, the prospectus or any document incorporated therein
by reference, in order to make the statements therein not misleading in any
material respect, Holder will forthwith discontinue disposition of the Shares
under the Registration Statement until the Company provides Holder with copies
of the supplemented or amended prospectus or prospectus documents, or until
Holder is advised in writing by the Company that the use of the prospectus may
be resumed. The Company agrees to provide Holder with such copies of the
supplemented or amended prospectus or prospectus documents, or notice that use
of the prospectus may be resumed, as soon as reasonably practicable.
(e) The Company covenants to use its best efforts to maintain a continuous
trading market for its Common Stock on the Nasdaq SmallCap Market or National
Market Systems or a United States national securities exchange throughout the
period that the registration rights afforded by the Section 6 remain in effect.
(f) Holder agrees that, with respect to the offering for resale of the
Shares, Holder will comply with Rules 10b-6 and 10b-7 promulgated under the
Securities Exchange Act of 1934, as amended and such other or additional
anti-manipulation rules then in effect (the "Anti-Manipulation Rules") until
such offering has been completed. The Company also agrees to comply with the
Anti-Manipulation Rules with respect to the offering for resale of the Shares
until such offering has been completed.
(g) In the event of a material breach of the terms of this Section 6 by the
Company, Holder will be entitled to enforce its rights under this Section 6
specifically (without posting a bond or other security), to recover damages by
reason of any breach of any provision hereof, and to exercise all other rights
existing in its favor. The parties hereto agree and acknowledge that money
damages may not be an adequate remedy for any breach by the Company of the
provisions hereof, and that Holder may in its sole discretion apply to a court
of competent jurisdiction for specific performance and/or injunctive relief in
order to enforce or prevent any violation of the provisions hereof. In addition,
upon the occurrence of a material breach by the Company or by Holder of this
Section 6, the breaching party shall pay all costs and expenses (including the
prevailing party's attorneys' fees and expenses) reasonably incurred in
connection with the preservation and enforcement of such party's rights
hereunder.
(h) The Company shall pay all costs and expenses of any registration
effected pursuant to this Section 6, excluding fees and expenses of counsel for
Holder and underwriting fees, discounts, commissions or expenses of Holder with
respect to the Shares.
(i) Indemnification. To the extent permitted by law, the Company agrees to
indemnify and hold harmless the Holder and its affiliates and agents, and the
Holder agrees to indemnify and hold harmless the Company and its affiliates and
agents:
(1) against any losses, claims,damages, and liabilities and any legal or
other costs and expenses reasonably incurred by such indemnified parties in
connection with investigating or defending any such loss, claims, damage,
liability, or action to which such parties may become subject under the
Securities Act or other federal or state law, insofar as such losses, claims,
damages, liabilities, costs, or expenses (or actions in respect thereof) did not
arise out of and were not based upon written information furnished by such
parties expressly for use in the Registration Statement; and
(2) for amounts paid in settlement of any such loss, claim, damages,
liability, or action if such settlement is effected by the indemnifying p arty
without the prior written consent of the other party to this Warrant, which
shall not be unreasonably withheld.
(j) Subsequent Holders. Any person who acquires any portion of this Warrant
or any of the Shares from the Holder in a transaction that is permitted under
Section 10 of this Warrant and that does not result in such person receiving
securities which are free of restrictions of transfer in the United States and
to U.S. Persons, as such terms are defined in Regulation S under the Securities
Act, shall be entitled to the benefit of all of the rights and privileges set
forth in this Section 6, provided that such person agrees in a writing to the
Company to undertake all of the obligations of the Holder under this Section 6.
7. Reservation of Stock
The Company covenants that during the period this Warrant is exercisable it
will reserve from its authorized and unissued shares of Common Stock a
sufficient number of shares to provide for the issuance of the number of shares
of Common Stock which are issuable upon the exercise of this Warrant. The
Company agrees that its issuance of this Warrant shall constitute full authority
to its officers to instruct the Company's transfer agent to issue the necessary
certificates for Shares of Common Stock upon the exercise of this Warrant.
8. Exercise of Warrant.
(a) This Warrant may be exercised by the Holder, in whole or in part, by
the surrender of this Warrant at the principal office of the Company, together
with the Subscription Form attached hereto duly completed and executed,
accompanied by payment in full of the aggregate Warrant Price for the Shares of
Common Stock being purchased upon such exercise. The Warrant shall be deemed to
have been exercised immediately prior to the close of business on the date of
its surrender for exercise as provided above, and the Holder shall be treated
for all purposes as the holder of record of such Shares as of the close of
business on such date. As promptly as practicable on or after such date, the
Company shall instruct its transfer agent to issue and deliver to the Holder a
certificate or certificates for the number of full Shares of Common Stock
issuable upon such exercise.
(b) Issuance of certificates for the Shares upon the exercise of this
Warrant shall be made without charge to the registered holder hereof for any
issue or transfer tax or other incidental expense with respect to the issuanc of
such certificates, all of which taxes and expenses shall be paid by the Company,
and such certificates shall be issued in the name of the registered holder of
this Warrant or in such name or names as may be directed by the registered
holder of this Warrant; provided, however, that in the event certificates for
the Shares are to be issued in a name other than the name of the registered
holder of this Warrant, this Warrant, when surrendered for exercise, shall be
accompanied by the Assignment Form attached hereto duly executed by the Holder
hereof, and provided further, that any such transfer shall comply with Section
10 hereof. It shall be a condition to the exercise of this Warrant that the
Holder or any transferee hereof certify to the Company, at the time of exercise,
either that he or it is not a U.S. Person (as defined in Regulation S under the
Securities Act) and this Warrant is not being exercised on behalf of a U.S.
Person, or to provide an opinion of counsel that the Warrant and the Shares to
be delivered upon exercise of this Warrant have been registered under the
Securities Act or that an exemption from the registration requirements of the
Securities Act is available. It shall be a further condition to the exericse of
this Wararant that the Warrant may not be exercised in the United States and the
Shares issuable upon exercise of this Warrant may not be delivered to the United
States absent registration under the Securities Act or an available exemption
from registration, unless otherwise permitted by Regulation S.
9. Automatic Termination.
In the event of (i) a proposed merger of the Company with another entity in
which the Company will not be a surviving entity, or (ii) the proposed sale of
all the capital stock, or substantially all the assets, of the Company, then the
Company shall give the Holder of this Warrant at least thirty (30) days notice
of the proposed effective date and terms of such offering or agreements, and if
the Warrant has not been exercised within ten (10) days before the effective
date of such offering or agreements, it shall be automatically terminated unless
during such notice period a registration statement covering the resale of the
underlying Shares is not in effect or the Holder is prohibited by the terms of
Section 6(d) from reselling the Shares.
10. Transfer or Assignment of Warrant.
(a) This Warrant, and any rights hereunder, may not be assigned or
transferred, except as provided herein and in accordance with and subject to the
provisions of (i) applicable state securities laws, and (ii) the Securities Act
of 1933, as amended, and the rules and regulations promulgated thereunder (such
Act and such rules and regulations being hereinafter collectively referred to as
the "Act"). Any purported transfer or assignment made other than in accordance
with this Section 10 shall be null and void and of no force and effect.
(b) This Warrant, and any rights hereunder, may be transferred or assigned
only with the prior written consent of the Company, which shall be granted only
upon receipt by the Company of an opinion of counsel satisfactory to the Company
that (i) the transferee is a person to whom this Warrant may be legally
transferred without registration under the Act, and (ii) such transfer will not
violate any applicable law or governmental rule or regulation, including,
without limitation, any applicable federal or state securities law. Prior to the
transfer or assignment, the assignor or transferor shall reimburse the Company
for its expenses, including transfer taxes and attorneys' fees, incurred in
connection with the transfer or assignment, and the assignee or transferee shall
agree in writing to undertake all of the obligations of Holder under this
Warrant.
(c) Any assignment permitted hereunder shall be made by surrender of this
Warrant to the Company at its principal office with the Assignment Form annexed
hereto duly executed and funds sufficient to pay any transfer tax. In such event
the Company shall, without charge, execute and deliver a new Warrant in the name
of the assignee named in such instrument of assignment and this Warrant shall be
promptly canceled.
11. Adjustments to Shares.
(a) If the Company at any time shall by split, reverse split, combination,
reclassification, exchange or subdivision of securities or otherwise, change any
of the securities as to which purchase rights under this Warrant exist into the
same or a different number of securities of any other class or classes, this
Warrant shall thereafter represent the right to acquire such number and kind of
securities as would have been issuable as the result of such change with respect
to the securities which were subject to the purchase rights under this Warrant
immediately prior to such combination, reclassification, exchange, subdivision
or other change.
(b) If the Company at any time shall combine or subdivide its Common Stock,
the Warrant Price shall be proportionately decreased in the case of a
subdivision, or proportionately increased in the case of a combination.
(c) If the Company at any time shall pay a dividend payable in, or make any
other distribution of Common Stock (except any distribution specifically
provided for in the foregoing subsection (a)), then the Warrant Price shall be
adjusted, from and after the date of determination of stockholders entitled to
receive such dividend or distribution, to that price determined by multiplying
the Warrant Price in effect immediately prior to such date of determination by a
fraction (i) the numerator of which shall be the total number of shares of
Common Stock outstanding immediately prior to such dividend or distribution, and
(ii) the denominator of which shall be the total number of shares of Common
Stock outstanding immediately after such dividend or distribution. The Holder
shall thereafter be entitled to purchase, at the Warrant Price resulting from
such adjustment, the number of shares of Common Stock (calculated to the nearest
whole share) obtained by multiplying the Warrant Price in effect immediately
prior to such adjustment by the number of shares of Common Stock issuable upon
the exercise hereof immediately prior to such adjustment and dividing the
product thereof by the Warrant Price resulting from such adjustment.
12. Loss, Theft, Destruction or Mutilation of Warrant.
Upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of this Warrant, and in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to it,
and upon reimbursement to the Company of all reasonable expenses incidental
thereto, and upon surrender and cancellation of this Warrant, if mutilated, the
Company will make and deliver a new warrant identical in tenor and date in lieu
of this Warrant.
13. General.
This Warrant shall be governed by and interpreted in accordance with the
laws of the State of California. The headings in this Warrant are for purposes
of convenience and reference only and shall not be deemed to constitute a part
hereof. Neither this Warrant nor any term hereof may be changed, waived,
discharged or terminated orally but rather only by an instrument in writing
signed by the Company and the Holder. All notices and other communications from
the Company to the Holder shall be mailed by first-class registered or certified
mail, postage pre-paid, to the address furnished to the Company in writing by
the last Holder who shall have furnished an address to the Company in writing.
14. Amendment and Waiver.
Any provisions of this Warrant (including, without limitation, termination
of exercisability) may be amended or waived; however, any and all such
amendments or waivers shall be binding upon the Holder only if approved in
writing by both the Company and the Holder.
Issued this 24th day of December, 1996.
Oryx Technology Corp.
By: /s/ Arvind Patel
---------------------
Arvind Patel
<PAGE>
SUBSCRIPTION FORM
(1) The undersigned registered owner of the Warrant which accompanies this
Subscription Form hereby irrevocably exercises such warrant for, and purchases,
______ shares of Oryx Technology Corp. Common Stock, purchasable upon the
exercise of such Warrant, and herewith makes payment therefor, all at the price
and on the terms and conditions specified in such Warrant.
(2) In exercising this Warrant the undersigned hereby confirms and
acknowledges that the Shares are being acquired solely for the account of the
undersigned and not as a nominee for any other party, for investment, and that
undersigned will not offer, sell or otherwise dispose of any such Shares except
under circumstances that will not result in a violation of the Securities Act of
1933, as amended (the "Securities Act"), including, but not limited to,
Regulation S promulgated thereunder, or any state securities laws.
(3) The undersigned hereby certifies that either (i) the undersigned is not
a U.S. Person (as such is defined in Regulation S under the Securities Act), or
(ii) the undersigned has delivered to the Company an opinion of counsel to the
effect that this Warrant and the Warrant Shares to be delivered upon exercise
thereof have been registered under the Securities Act or an exemption from such
registration is available.
(4) The undersigned further certifies that this Warrant is not being
exercised in the United State and understands and agrees that the Warrant Shares
may not be delivered to the United States, except as permitted by Regulation S,
absent registration under the Securities Act or an available exemption from such
registration.
(5) Please issue a certificate representing said Shares in the name of the
undersigned.
<PAGE>
(6) Please issue a new Warrant for the unexercised portion of the attached
Warrant in the name of the undersigned.
Dated: ____________________________
- ----------------------------------
(Signature of Registered Owner)
- -----------------------------------
(Name)
- -----------------------------------
(Street Address)
- -----------------------------------
(City, State, Zip Code)
<PAGE>
FORM OF ASSIGNMENT
(To be signed only upon assignment of Warrant)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto:
==================================
----------------------------------
(Name and address of assignee must be printed or typewritten)
___________ shares of Oryx Technology Corp. Common Stock purchasable under the
within Warrant, hereby irrevocably constituting and appointing
______________________________ Attorney to transfer said Warrant on the books of
the Company, with full power of substitution in the premises.
Dated: ___________
----------------------------
(Signature of Registered Owner)
