Exhibit 4.04


 


STOCK PURCHASE WARRANT


 


Neither
this Warrant nor the Warrant Shares as defined herein have been registered
under the Securities Act of 1933, as amended, or any applicable state
securities laws.  Neither this Warrant
nor the Warrant Shares may be sold or transferred in the absence of such
registration or any exemption from such registration.


 


 


 


Right to Purchase One
Hundred Fifty Thousand (150,000) Shares of Common Stock


 


Dated as of March 24,
2002


 


 


                ADAPTEC,
INC., a Delaware corporation (the “Company”), grants INTERNATIONAL
BUSINESS MACHINES CORPORATION, a New York corporation (“IBM” and each of
its successors and assigns, a “Holder”) a warrant (this “Warrant”)
to purchase the Warrant Shares at the Purchase Price.  Capitalized terms not otherwise defined have the definitions set
forth in Appendix A.


 


                1.   Exercise and Expiration of Warrant.


 


                (a)  This Warrant is immediately exercisable and
will expire upon the fifth anniversary of the date hereof.  “Exercise Period” shall mean the
period of time between the date hereof and the expiration of this Warrant in
accordance with the terms hereof.


 


                (b)  This Warrant may be exercised during the
Exercise Period by the Holder, in whole or in part, by delivering this Warrant
to the Company with payment of the Purchase Price in U.S. dollars.  In addition, in lieu of such cash payment,
the Holder may exercise the Warrant by delivery to the Company of a written
notice of an election to effect a cashless exercise for Warrant Shares pursuant
to this Section 1(b) (“Cashless Exercise”). To effect a Cashless
Exercise, the Holder will surrender this Warrant for that number of shares of
Common Stock determined by multiplying the number of Warrant Shares to which it
would otherwise be entitled by a fraction, the numerator of which shall be the
difference between (i) the then current Market Price of a share of the Common
Stock on the date of exercise and (ii) the Purchase Price, and the denominator
of which shall be the then current Market Price per share of Common Stock.  In the event that this Warrant is not
exercised in full immediately prior to the end of the Exercise Period and the
then current Market Price of a share of the Common Stock is greater than the
Purchase Price, this Warrant shall be deemed automatically exercised as to the
remaining Warrant Shares at such time by Cashless Exercise without the delivery
of any written notice from the Holder.


 


                (c)  Upon exercise of this Warrant, the Company
will issue to the Holder (i) a certificate or certificates for the number of
full Warrant Shares to which the Holder shall be entitled upon such exercise
(any fractional shares shall be rounded up to the next whole share), and (ii)
in case such exercise is in part only, a new warrant or warrants representing
the remaining Warrant Shares.


 


                (d)  Each exercise of this Warrant shall be
deemed to have been effected immediately prior to the close of business on the
day on which this Warrant shall have been surrendered pursuant to Section 1(b).


 


                2.  Representations.


 


                (a)  By the Holder.  The Holder represents and warrants to the Company as follows:


 


                                (i)  It is an “accredited investor” within the
meaning of Rule 501 of the Securities Act.  
This Warrant is acquired for the Holder’s own account for investment
purposes and not with a view to any offering or distribution within the meaning
of the Securities Act and any applicable state securities laws.  The Holder has no present intention of
selling or otherwise disposing of the Warrant or the Warrant Shares in
violation of such laws; and


 


 


1

















 


                                (ii)  The Holder has sufficient knowledge and
expertise in financial and business matters so as to be capable of evaluating
the merits and risks of its investment in the Company.  The Holder understands that this investment
involves a high degree of risk and could result in a substantial or complete
loss of its investment.  The Holder is
capable of bearing the economic risks of such investment.


 


The Holder acknowledges that the Company has indicated
that the Warrant and the Warrant Shares have not been registered under the
Securities Act by reason of their issuance in a transaction exempt from the
registration requirements thereof, and that the Warrant Shares will bear a
legend stating that such securities have not been registered under the
Securities Act and may not be sold or transferred in the absence of such
registration or an exemption from such registration.


 


 


                (b)  By the Company.  The Company represents and warrants that:


 


                                (i)  It (A) is a corporation duly organized,
validly existing and in good standing under the laws of the state of its
organization, (B) has all requisite power and authority to conduct its business
as now conducted and as presently contemplated and to consummate the transactions
contemplated hereby and (C) is duly qualified to do business and is in good
standing in each jurisdiction in which the character of the properties owned or
leased by it or in which the transaction of its business makes such
qualification necessary.


 


                                (ii)  It has outstanding as of the date hereof but
before giving effect to this Warrant approximately 109,000,000 shares of Common
Stock, calculated on a fully diluted basis, giving effect to the conversion of
all options, warrants, rights and other securities convertible into, or
exchangeable for, Common Stock.


 


                                (iii)  The execution, delivery and performance by
the Company of this Warrant (A) has been duly authorized by all necessary
corporate action, (B) does not and will not contravene the Company’s charter or
bylaws or any other organizational document, and (C) does not and will not
contravene any applicable law or any contractual restriction binding on or
otherwise affecting the Company or any of its properties or result in a default
under any agreement or instrument to which the Company is a party or by which
the Company or its properties may be subject.


 


                                (iv)  This Warrant has been duly executed and
delivered by the Company, and is a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except
as may be limited by applicable bankruptcy, insolvency, moratorium and other
laws affecting the rights of creditors generally and general principles of
equity.


 


                                (v)  Assuming the accuracy of the representations
made by the Holder in Section 2(a) hereof, no authorization, consent, approval,
license, exemption or other action by, and no registration, qualification,
designation, declaration or filing with, any governmental authority is or will be
necessary in connection with the execution and delivery by the Company of this
Warrant, the issuance by the Company of the Warrant Shares, the consummation of
the transactions contemplated hereby, the performance of or compliance with the
terms and conditions hereof, or to ensure the legality, validity, and
enforceability hereof.


 


                                (vi)  The Company has reserved solely for issuance
and delivery upon the exercise of this Warrant, such number of shares of Common
Stock to provide for the exercise in full of this Warrant.


 


                                (vii)  Neither the Company, nor any of its
Affiliates, nor any person acting on its or their behalf, has directly or
indirectly made any offers or sales of any security or solicited any offers to
buy any security under circumstances that would require registration, or the
filing of a prospectus qualifying the distribution, of this Warrant being
issued hereby under the Securities Act or cause the issuance of this Warrant to
be integrated with any prior offering of securities of the Company for purposes
of the Securities Act.


 


                3.  Certain Agreements of the Company.  The Company agrees as follows:


 


 


2

















 


                (a)  Shares to be Fully Paid.  All Warrant Shares will, upon issuance in
accordance with the terms of this Warrant, be validly issued, fully paid, and
nonassessable and free from all taxes, liens, claims and encumbrances.


 


                (b)  Authorization and Reservation of  Shares. 
During the Exercise Period, the Company shall have duly authorized a
sufficient number of shares of Common Stock, free from preemptive rights and
from any other restrictions imposed by the Company without the consent of the
Holder, to provide for the exercise in full of this Warrant.  The Company shall at all times during the
Exercise Period reserve and keep available out of such authorized but unissued
shares of Common Stock such number of shares to provide for the exercise in
full of this Warrant.


 


                (c)  Listing. 
In connection with the Holder’s exercise of Registration Rights hereunder,
the Company shall use its best efforts to promptly secure the listing of the
shares of Common Stock issuable upon exercise of this Warrant upon each
national securities exchange or automated quotation system, if any, upon which
shares of Common Stock are then listed or become listed (subject to official
notice of issuance upon exercise of this Warrant) and shall maintain such
listing for  so long as any other shares
of Common Stock shall be so listed.


 


                (d)  Certain Actions Prohibited.  The Company will not, by amendment of its
charter or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities, or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
to be observed or performed by it hereunder, but will at all times in good
faith assist in the carrying out of all the provisions of this Warrant and in
the taking of all such action as may reasonably be requested by the Holder of
this Warrant in order to protect the exercise privilege of the Holder of this
Warrant against impairment, consistent with the tenor and purpose of this
Warrant.


 


                (e)  Successors and Assigns.  Except as expressly provided otherwise
herein, this Warrant will be binding upon any entity succeeding to the Company
by merger, consolidation, or acquisition of all or substantially all of the
Company’s assets.


 


                (f)  Blue Sky Laws.  The Company shall, on or before the date of issuance of any
Warrant Shares, take such actions as the Company shall reasonably determine are
necessary to qualify the Warrant Shares for, or obtain exemption for the
Warrant Shares for, sale to the Holder of this Warrant upon the exercise
hereof  under applicable securities or
“blue sky” laws of the states of the United States, and shall provide written
evidence of any such action so taken to the Holder of this Warrant prior to
such date;  provided, however, that the
Company shall not be required to 
qualify as a foreign corporation or file a general consent to service of
process in any such jurisdiction.


 


                (g)  Rule 144 Reports.  For so long as the Company is subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act the Company shall take
all actions reasonably necessary to enable the Holder to sell the Registrable
Securities without registration under the Securities Act within the limitations
of the exemptions provided by Rule 144 under the Securities Act, as such rule
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC, including filing on a timely basis all reports required to
be filed by the Exchange Act.  Upon the
request of the Holder, the Company shall deliver to the Holder a written
statement as to whether it has complied with such requirements.


 


                4.   Antidilution Adjustments.  The Purchase Price and the number of Warrant
Shares may be adjusted from time to time as set forth in Appendix B.


 


                5.  Registration Rights.  The Warrant shall have the Registration
Rights set forth in Appendix C.


 


                6.   Treatment of Warrant in the Event of an
Acquisition Transaction.  If the
Company undertakes an Acquisition Transaction then the Company shall give
prompt notice of such transaction to the Holder and cause the Company Acquiror
to assume this Warrant and cause provision to be made so that the Holder shall
thereafter be entitled to receive, upon exercise of this Warrant, the Warrant
Shares (as such term is modified in accordance with this Section 6), whereupon
the Company shall be released from this Warrant.  This Warrant shall remain outstanding in accordance with its
terms and all references to the “Company” shall apply to the Company Acquiror
and all references to the “Warrant Shares” shall apply to the common stock of
the Company Acquiror, and appropriate


 


 


3

















 


modifications to the other terms of this Warrant,
including without limitation the amount of Warrant Shares and the Purchase
Price, shall be made to take into account the Warrant Value as of the date of
the Acquisition Transaction.


 


                7.  Transfer,  Exchange, Replacement, Underwriter’s Lockup


 


                (a)  Transferability.  (i)  The Holder covenants
not to transfer this Warrant or the Warrant Shares except in compliance with
this Section 7(a). Subject to compliance with the transfer restrictions set
forth in clause (ii) of this Section 7(a), this Warrant, the Warrant Shares and
the rights granted to the Holder hereof are freely transferable, in whole or in
part, upon surrender of this Warrant, together with an assignment form, at the
office or agency of the Company referred to in Section 8 below.


 


                                (ii)  The Holder shall not effect any transfer
except pursuant to a transaction either registered, or exempt from
registration, under the Securities Act. 
Prior to any transfer in reliance upon an exemption from such
registration other than Rule 144 of the Securities Act, the Holder shall
provide to the Company an opinion letter from counsel to the Holder (which
counsel may include in-house counsel), reasonably satisfactory to the Company,
opining that such transfer does not require registration under the Securities
Act.  The transferee, by acceptance of
this Warrant, acknowledges that it takes such warrant subject to the terms and
conditions hereof.  Until due presentment
for registration of transfer on the books of the Company, the Company may treat
the registered Holder hereof as the owner hereof  for all purposes, and the Company shall not be affected by any
notice to the contrary.


 


                (b)  Warrant Exchangeable for Different
Denominations.  This Warrant is
exchangeable, upon the surrender hereof by the Holder hereof at the office or
agency of the Company referred  to in
Section 8 below, for new warrants of like tenor of different denominations
representing in the aggregate the right to purchase the number of shares of
Common Stock which may be purchased hereunder, each of such new warrants to
represent the right to purchase such number of shares as shall be designated by
the Holder hereof at the time of such surrender.


 


                (c)  Replacement of Warrant.  Upon receipt of evidence reasonably  satisfactory to the Company of the loss,
theft, destruction, or mutilation of this Warrant and, in the case of any  such loss, theft, or destruction, upon
delivery of an indemnity agreement reasonably satisfactory in form and amount
to the Company, or, in the case of any such mutilation, upon surrender and
cancellation of this Warrant, the Company, at its expense, will execute and
deliver, in lieu thereof, a new Warrant of like tenor.


 


                (d)  Cancellation; Payment of  Expenses. 
Upon the surrender of this Warrant in connection with any transfer,
exchange, or replacement as provided in this Section 7, this Warrant shall be
promptly canceled by the Company.  The
Company shall pay all taxes (other than securities transfer taxes) and all
other expenses (other than legal expenses, if any, incurred by  the 
Holder or transferees) and charges payable in connection with the
preparation,  execution, and delivery of
warrants pursuant to this Section 8. 
The Company shall indemnify and reimburse the Holder of this Warrant for
all costs and expenses (including legal fees) incurred by such Holder in
connection with the enforcement of its rights hereunder.


 


                (e)  Warrant Register.  The Company shall maintain, at its principal executive offices
(or such other office or agency of the Company as it may designate by notice to
the Holder hereof), a register for this Warrant, in which the Company shall
record the name and address of the person in whose name this Warrant has been
issued, as well as the name and address of each transferee and each prior owner
of this Warrant.


 


                8.  Notices.  Any notices required or permitted to be given under the terms of
this Warrant shall be sent by certified or registered mail (return receipt
requested) or delivered personally or by courier or by confirmed telecopy, and
shall be effective five days after being placed in the mail, if mailed, or upon
receipt or refusal of receipt, if delivered personally or by courier, or by
confirmed telecopy, in each case addressed to a party.  The addresses for such communications shall
be:


 


 


	
  
  If to the Company:

  Adaptec, Inc.

  691 S. Milpitas Boulevard

  Milpitas, California 95035

  Attention:  Chris
  Dentiste, Director of Finance

  

   

  	
   

  	
  
  If to IBM:

  IBM Corporation

  New Orchard Road

  Armonk, New York 10504

  Attention:  David
  L. Johnson, VP, Corporate Development

  

   

  



 


 


4

















 


 


If to any other Holder, at such address as such Holder
shall have provided in writing to the Company, or at such other address as any
Holder furnishes by notice given in accordance with this Section 8.


 


                9.   Governing Law; Jurisdiction and Venue.  This Warrant shall be governed by the laws
of the State of Delaware, without regard to conflicts or choice of law rules or
principles.  Each of the Company and the
Holder submits to the exclusive jurisdiction and venue of the federal and state
courts of New York, County of Westchester, to resolve all issues that may arise
out of or relate to this Warrant. The parties waive any right to a jury trial.


 


                10.  Miscellaneous.


 


                (a)  Amendments. 
This Warrant and any provision hereof may only be amended by an
instrument in writing signed by the Company and all Holders hereof.


 


                (b)  U.S. Dollars.  All references in this Warrant to “dollars” or “$”
shall mean the U.S. dollar.


 


                (c)  Fractional Shares.  The Company shall not be required upon the exercise of this
Warrant to issue any fractional shares. 
Any fractional shares will be rounded up to the next whole share.


 


                (d)  Descriptive Headings.  The descriptive headings of the several
sections of this Warrant are inserted for purposes of reference only, and shall
not affect the meaning or construction of any of the provisions hereof.


 


                (e)  Business Day.  For purposes of this Warrant, the term “business day”
means any day, other than a Saturday or Sunday or a day on which banking
institutions in New York, New York or the city and state provided in Section 8
hereof for notices to the Company, are authorized or obligated by law,
regulation or executive order to close.


 


                (f)  Counterparts. This agreement may be executed
in counterparts, and any such executed counterpart shall be, and shall be
deemed to be, an original instrument.


 


                (g)  Severability.  If any term, provision, covenant or restriction of this Agreement
is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.


 


                (h)  Successors and Assigns.  This Agreement shall be binding on, and
shall inure to the benefit of, the parties hereto and their respective
successors and assigns, including all Holders.


 


                (i)  Survival. 
The representations, warranties and covenants made by the parties hereto
shall survive the execution and delivery of this Agreement.


 


 


 


 


 


 


 


 


5

















 


                IN
WITNESS WHEREOF, the undersigned have executed this Warrant as of the date
first written above.


 


	
  ADAPTEC, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ David Young

  	
   

  
	
   

  	
  Name:

  	
  David Young

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
  INTERNATIONAL BUSINESS MACHINES CORPORATION

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ David L. Johnson

  	
   

  
	
   

  	
  Name:

  	
  David L. Johnson

  
	
   

  	
  Title:

  	
  Vice President, Corporate Development

  
	
   

  	
   

  	
   

  
						



 


 


 


 


 


 


 


 


 


 


 


6

















 


 


 


APPENDIX A — DEFINITIONS


 


 


                “Acquisition
Transaction” shall mean (i) the sale, lease or other transfer, in one or a
series of transactions, of all or substantially all of the Company’s assets to
any person or Group, or (ii) the consummation of any transaction or series of
transactions the result of which is that any person or Group beneficially owns,
directly or indirectly, 50% or more of the voting power or the voting stock of
the Company.


 


                “Affiliate”
shall mean any entity directly or indirectly controlled by, controlling or
under common control with another entity.


 


                “Board”
shall mean the Board of Directors of the Company.


 


                “Cashless
Exercise” shall have the meaning specified in Section 1(b) of the Warrant.


 


                “Company”
shall have the meaning specified in the initial paragraph of the Warrant.


 


                “Company
Acquiror” means the person or Group (i) to whom the Company’s assets are
transferred as described in clause (i) of the definition of Acquisition
Transaction or (ii) that would beneficially own 50% or more of the voting power
or voting stock of the Company as described in clause (ii) of such definition.


 


                “Common Stock” shall mean
the common shares of the Company.


 


                “Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended.


 


                “Exercise
Period” shall have the meaning specified in Section 1(a) of the Warrant.


 


                “Group”
shall have the meaning specified in Section 13(d)(3) of the Exchange Act.


 


                “Holder”
shall have the meaning specified in the initial paragraph of the Warrant.


 


                “IBM”
shall have the meaning specified in the initial paragraph of the Warrant.


 


                “Market
Price” shall mean the following: 
(i) the average of the closing sale prices for the shares of Common
Stock as reported on the principal trading market for the Common Stock for the
five (5) consecutive trading days immediately preceding such date, or if no
sale price is so reported for such period, the last bid price for such period,
or (ii) if the foregoing does not apply, the last sale price of such security
in the over-the-counter market on the pink sheets or bulletin board for such
security on the last trading day immediately preceding such date, or if  no sale price is so reported for such
security, the average of the last bid and ask price for such security on the
last trading day immediately preceding such date, or (iii) if market value
cannot be calculated as of such date on any of the foregoing bases, the Market
Price shall be the fair market value  as
reasonably determined by an investment banking firm selected by the Company and
reasonably acceptable to the Holder, with the costs of the appraisal to be
borne by the Company, provided, however, that for purposes of
determining Warrant Value in accordance with Section 6 in the event of a Stock
Acquisition, Market Price shall have the meaning as set forth in the definition
of “Warrant Value”.


 


                “Person”
or “person” shall mean all natural persons, corporations, business
trusts, associations, companies, partnerships, joint ventures, governments,
agencies, political subdivisions and other entities.


 


                “Purchase
Price” shall mean fifteen dollars and thirty-one cents ($15.31) per share
of Common Stock, as may be adjusted from time to time pursuant to Appendix B.


 


                “Registrable
Securities” shall mean the Warrant Shares issued or issuable with respect
to the Warrant.


 


 


 


	
   

  	
  Appendix A
  – Definitions

  Appendix A – Definitions Page

  	
  1

  



 

















 


 


                “Registration
Expenses” shall mean all expenses incident to the Company’s performance of
or compliance with the registration provisions of Appendix C herein,
including without limitation (i) all fees and expenses of compliance with
federal securities and state securities laws; (ii) all U.S. Securities and
Exchange Commission and state securities laws filing fees; (iii) all printing
expenses; (iv) all fees and disbursements of counsel for the Company; and (v)
all fees and disbursements of accountants of the Company, but excluding (i)
underwriter’s discounts relating to securities sold by the Selling Holder; (ii)
filings made with the NASD and counsel fees in connection therewith; and (iii)
fees and disbursements of counsel for the Selling Holder.


 


                “Registration
Rights” shall mean the registration rights set forth in Appendix C.


 


                “Securities
Act” shall mean the Securities Act of 1933, as amended.


 


                “Selling
Holder” shall have the meaning specified in Appendix C(d)(ii) of the
Warrant.


 


                “Stock
Acquisition” shall mean an Acquisition Transaction described in clause (ii)
of the definition of Acquisition Transaction.


 


                “Warrant”
shall have the meaning specified in the initial paragraph of the Warrant.


 


                “Warrant
Shares” shall mean One Hundred Fifty Thousand (150,000) shares of Common
Stock, as may be adjusted from time to time pursuant to Appendix B.


 


                “Warrant
Value” shall mean the value of this Warrant calculated as if the Holder had
exercised this Warrant in full at such time by Cashless Exercise pursuant to
Section 1(b) hereof, except that Market Price for purposes of determining
Warrant Value in the event of a Stock Acquisition shall be equal to the per
share consideration paid in the Stock Acquisition.


 


 


 


 


 


 


 


 


	
   

  	
  Appendix A
  – Definitions

  Appendix A – Definitions Page

  	
  2

  



 

















 


 


 


APPENDIX B — ANTIDILUTION PROVISIONS


 


                (a)  [THIS PARAGRAPH (a) INTENTIONALLY OMITTED]


 


                (b)  Recapitalizations.  If outstanding shares of the Company’s Common Stock shall be
subdivided into a greater number of shares or a dividend in Common Stock shall
be paid in respect of Common Stock, the Purchase Price in effect immediately
prior to such subdivision or at the record date of such dividend shall
simultaneously with the effectiveness of such subdivision or immediately after
the record date of such dividend be proportionately reduced.


If outstanding shares of Common Stock shall be
combined into a smaller number of shares, the Purchase Price in effect
immediately prior to such combination shall, simultaneously with the
effectiveness of such combination, be proportionately increased.


 


                (c)  Mergers; Transfer of Assets.  Subject to Section 6 of the Warrant, if
there shall occur any capital reorganization or reclassification of the
Company’s Common Stock (other than a subdivision or combination as provided for
in (b) above), or any consolidation or merger of the Company with or into
another corporation, or a transfer of all or substantially all of the assets of
the Company, then, as part of any such reorganization, reclassification,
consolidation, merger or sale, as the case may be, lawful provision shall be
made so that the Holder of this Warrant shall have the right thereafter to
receive upon the exercise hereof the kind and amount of shares of stock or other
securities or property which such Holder would have been entitled to receive
if, immediately prior to any such reorganization, reclassification,
consolidation, merger or sale, as the case may be, such Holder had held the
number of shares of Common Stock which were then purchasable upon the exercise
of this Warrant.  In any such case,
appropriate adjustment (as reasonably determined in good faith by the Board)
shall be made in the application of the provisions set forth herein with
respect to the rights and interests thereafter of the Holder of this Warrant,
such that the provisions set forth in this Appendix B shall thereafter
be applicable, as nearly as is reasonably practicable, in relation to any
shares of stock or other securities or property thereafter deliverable upon the
exercise of this Warrant.


 


                (d)  Adjustment in Number of Warrant Shares.  When any adjustment is required to be made
in the Purchase Price, the number of Warrant Shares purchasable upon the
exercise of this Warrant shall be changed to the number determined by dividing
(i) an amount equal to the number of shares issuable upon the exercise of this
Warrant immediately prior to such adjustment, multiplied by the Purchase Price
in effect immediately prior to such adjustment, by (ii) the Purchase Price in
effect immediately after such adjustment.


 


                (e)  Certificate of Adjustment.  When any adjustment is required to be made
pursuant to this Appendix B, the Company shall promptly mail to the
Holder a certificate setting forth the Purchase Price after such adjustment and
setting forth a brief statement of the facts requiring such adjustment. Such
certificate shall also set forth the kind and amount of stock


or other securities or property into which this
Warrant shall be exercisable following such adjustment.


 


                (f)  Adjustments for Non-Stock Dividends and
Distributions.  In the event that the
Company shall issue or pay to holders of Common Stock a dividend or other
distribution payable other than in securities of the Company, then and in each such
event provision shall he made so that Holder shall receive upon exercise of
this Warrant, in addition to the Warrant Shares issued upon exercise, the
dividend or other distribution which Holder would have received if it had been
the holder of such Warrant Shares at the time of such dividend or other
distribution.


 


                (g)  Other Notices.  In case at any time:


 


                                (i)  the Company shall declare any dividend upon
the Common Stock payable in shares of stock of any class or make any other
distribution (other than dividends or distributions payable in cash out of
retained earnings consistent with the Company’s past practices with respect to
declaring dividends and making distributions) to the holders of the Common
Stock;


 


                                (ii)  the Company shall offer for subscription pro
rata to the holders of the Common Stock any additional shares of stock of any
class or other rights;


 


 


	
   

  	
  Appendix B
  – Antidilution Provisions

  Appendix B – Antidilution Provisions Page

  	
  1

  



 

















 


 


                                (iii)  there shall be any capital reorganization of
the Company, or reclassification of the Common Stock, or consolidation or
merger of the Company with or into, or sale of all or substantially all of its
assets to, another corporation or entity; or


 


                                (iv)  there shall be a voluntary or involuntary
dissolution, liquidation or winding-up of the Company;


 


then, in each such case, the Company shall give to the
Holder (a) notice of the date on which the books of the Company shall close or
a record shall be taken for determining the holders of Common Stock entitled to
receive any such dividend, distribution, or subscription rights or for
determining the holders of Common Stock entitled to vote in respect of any  such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding-up and (b) in
the case of any such reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation or winding-up, notice of the date (or, if not
then known, a reasonable estimate thereof by 
the Company) when the same shall take place.  Such notice shall also specify the date on which the holders of
Common Stock shall be entitled to receive such dividend, distribution, or
subscription rights or to exchange their Common Stock for stock or other
securities or property deliverable upon such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation, or winding-up, as the
case may be.  Such notice shall be given
at least thirty (30) days prior to the record date or the date on which the
Company’s books are closed in respect thereto. 
Failure to give any such notice or any defect therein shall not affect
the validity of the proceedings referred to in clauses (i), (ii), (iii) and
(iv) above.


 


                (h)  Certain 
Events.  If, at any time during
the Exercise Period, any event occurs of the type contemplated by the
adjustment  provisions of this Appendix
B but not expressly provided for by such provisions, the Company will give
notice of such event, and the Board will make an appropriate adjustment in the
Purchase Price and the number of shares of Common Stock acquirable upon
exercise of this Warrant so that the rights of the Holder shall be neither
enhanced nor diminished by such event.


 


 


	
   

  	
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APPENDIX C — REGISTRATION RIGHTS


 


                (a)  Registration.  The Company will file or cause to be filed with the Securities
and Exchange Commission on or prior to the date that is thirty (30) days after
the date hereof a registration statement on Form S-3 (or Form S-1, if a form
S-3 shelf registration is unavailable to the Company) (the “Registration
Statement”) to cover re-sales of the Registrable Shares.  The Company shall use its reasonable best
efforts to (x) cause such Registration Statement to be declared effective as
soon as practicable thereafter, (y) to keep such Registration Statement
continuously effective, supplemented
and amended to the extent necessary to comply with the provisions of the
Securities Act with respect to the disposition of all the Registrable
Securities for a period ending one year following the date hereof, and
(z) to cause such Registrable Securities to be qualified in such jurisdictions
as the Holder may reasonably request.


 


                (b)  Indemnification.


 


                                (i)  Indemnification by the Company.  The Company agrees to indemnify and hold
harmless any Holder of Registrable Securities which has included Registrable
Securities in the Registration Statement, its officers, directors and agents
and each Person, if any, who controls such Holder within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act from and against any
and all losses, claims, damages, liabilities and expenses (including reasonable
attorneys fees and costs of investigation) arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained in
any registration statement or final prospectus relating to the Registrable
Securities or in any amendment or supplement thereto or in any preliminary
prospectus, or arising out of or based upon 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, except insofar as such losses,
claims, damages, liabilities or expenses arise out of, or are based upon, any
such untrue statement or omission based upon information furnished in writing
to Company by the Holder of the Registrable Securities, or on such Holder’s
behalf, expressly for use therein; provided, that with respect to any untrue
statement or omission made in any preliminary prospectus, the indemnity
agreement contained in this paragraph shall not apply to the extent that any
such loss, claim, damage, liability or expense results from the fact that a
current copy of the prospectus was not sent or given to the person asserting
any such loss, claim, damage, liability or expense at or prior to the written
confirmation of the sale of the Registrable Securities concerned if it is
determined that it was the responsibility of the Holder of such Registrable
Securities to provide such person with a current copy of the prospectus and
such current copy of the prospectus would have cured the defect giving rise to
such loss, claim, damage, liability or expense. The Company also agrees to
indemnify any underwriters of the Registrable Securities, their officers and
directors and each person who controls such underwriters on substantially the
same basis as that of the indemnification of the Holder of such Registrable
Securities provided in this section (b).


 


                                (ii)  Indemnification by the Holder of Registrable
Securities.  The Holder of Registrable
Securities, to the extent it is selling Registrable Securities (“Selling
Holder”), agrees to indemnify and hold harmless the Company, its directors
and officers and each Person, if any, who controls the Company within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act to the same extent as the foregoing indemnity from the Company to the
Selling Holder, but only with respect to, and to the extent that, information
furnished in writing by the Selling Holder or on the Selling Holder’s behalf
expressly for use in any registration statement or final prospectus relating to
the Registrable Securities (or any amendment or supplement thereto, or any
preliminary prospectus) which contained an untrue statement or alleged untrue
statement of a material fact or omitted or allegedly omitted to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading.  Notwithstanding
anything to the contrary contained herein, the liability of the Holder
hereunder shall be limited to the proportion of any such loss, claim, damage,
liability or expense that is equal to the proportion that the public offering
price of the shares of Registrable Securities sold by the Holder bears to the
total public offering price of all securities sold in such offering.  The Selling Holder also agrees to indemnify
and hold harmless the underwriters on substantially the same basis of that of
the indemnification of the Company provided in the preceding subsection.


 


                (c)  Contribution.  If the indemnification provided for in this Appendix C is
unavailable to the Company, the Selling Holder or the underwriters in respect
of any losses, claims, damages, liabilities, expenses or judgments referred to
herein, then each such indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such


 


 


	
   

  	
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indemnified party as a result of such losses, claims,
damages, liabilities, expenses and judgments (i) as between the Company and the
Selling Holder on the one hand and the underwriters on the other, in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Selling Holder on the one hand and the underwriters on the
other from the offering of the Registrable Securities, or if such allocation is
not permitted by applicable law, in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company and the Selling Holder on the one hand and of the underwriters on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities, expenses or judgments, as well as any
other relevant equitable considerations and (ii) as between the Company on the
one hand and each Selling Holder on the other, in such proportion as is
appropriate to reflect the relative fault of the Company and of each Selling
Holder in connection with such statements or omissions, as well as any other
relevant equitable considerations.  The
relative benefits received by the Company and the Selling Holder on the one
hand and the underwriters on the other shall be deemed to be in the same
proportion as the total proceeds from the offering (net of underwriting
discounts and commissions but before deducting expenses) received by the
Company and the Selling Holder bear to the total underwriting discounts and
commissions received by the underwriters, in each case as set forth in the
table on the cover page of the prospectus. 
The relative fault of the Company on the one hand and of each Selling
Holder on the other shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by such party, and the party’s relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.


 


                The
Company and the Holder agree that it would not be just and equitable if
contribution pursuant to this section were determined by pro rata allocation or
by any other method of allocation which does not take account of the equitable
considerations referred to in the immediately preceding paragraph.  The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, liabilities, expenses or
judgments referred to in the immediately preceding paragraph shall be deemed to
include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim.  Notwithstanding the provisions of this section, no underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Registrable Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission, and no
Selling Holder shall be required to contribute any amount in excess of the
amount by which the total price at which the Registrable Securities of such
Selling Holder were offered to the public exceeds the amount of any damages
which such Selling Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.


 


                (d)  Registration Expenses and Enforcement.


 


                                (i)  Registrations Rights.  The Company shall bear all Registration
Expenses incurred in connection with the Registration Rights.


 


                                (ii)  Expenses of Registrant.  The Company shall pay its internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any annual
audit, the fees and expenses incurred in connection with any listing of the
securities to be registered on a securities exchange, and the fees and expenses
of any person, including special experts, retained by the Company.


 


                                (iii)  Enforcement of Registration Rights.  Notwithstanding anything to the contrary
contained herein, the Company hereby agrees that each Holder of Registrable
Securities shall be entitled to specific performance of the registration rights
hereunder, and that the Company shall pay any expenses, including without
limitation attorneys’ fees, in connection with the enforcement by any Holder of
such specific performance.


 


                (e)  Assignment of Registration Rights.  Any of the rights of the Holders hereunder,
including the right to have the Company register Registrable Securities
pursuant to this Agreement, may be assigned by each Holder to any transferee of
all or any portion of the Warrant or the Registrable Securities if: (i) the
Holder agrees in writing 


 


 


 


	
   

  	
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with the transferee or assignee to assign such rights,
and a copy of such agreement is furnished to the Company after such assignment,
(ii) the Company is furnished with written notice of (A) the name and address
of such transferee or assignee, and (B) the securities with respect to which
such registration rights are being transferred or assigned,  (iii) following such transfer or assignment,
the further disposition of such securities by the transferee or assignee is
restricted under the Securities Act and applicable state securities laws, and
(iv) such transfer shall have been made in accordance with the applicable
requirements of the Warrant. The transferee, by acceptance of the transfer of
any registration rights hereunder, acknowledges that it takes such rights
subject to the terms and conditions hereof. 
Upon any transfer of less than all of its Registrable Securities, the
Holder retains registration rights with respect to Registrable Securities held
by it.


 


                (f)  Exercise of Registration Rights.  Notwithstanding anything to the contrary
contained herein, the Holder agrees not to exercise any of its registration
rights set forth in this Appendix C at any time that it is able to sell
all of its Registrable Securities under Rule 144 of the Securities Act in a
single transaction without exceeding the volume limitations or being subject to
the notification requirements thereunder.


 


 


 


 


 


 


 


 


 


	
   

  	
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