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EXHIBIT 10.12
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY APPLICABLE STATE SECURITIES LAW.
Warrant to Purchase
12,800 Shares of Common Stock
Dated as of May 11, 2000
WARRANT
TO PURCHASE COMMON STOCK OF
X-XXXXXXX.XXX INC.
THIS CERTIFIES that XxXxxx De Leeuw & Co. III (Europe), L.P. (the
"Holder"), is entitled to purchase from x-Xxxxxxx.xxx Inc. (herein called the
"Company"), a corporation organized and existing under the laws of Delaware, at
any time after the date hereof and until 5:00 P.M. (Eastern Time) on the seventh
anniversary hereof, 12,800 fully paid and nonassessable shares (the "Warrant
Shares") of Class A Common Stock of the Company, $.001 par value per share (the
"Common Stock"), subject to adjustment as provided herein, at a purchase equal
to the Warrant Price (as hereafter defined).
1. Definitions. As used in this Warrant, the following terms have the
respective meanings set forth below:
"Appraised Value" means, in respect of any share of Common Stock on any
date herein specified, the value attributable to such share of Common Stock if
all of the assets of the Company and its subsidiaries were sold for the
appraised value thereof as of the last day of a fiscal month to end within 60
days prior to such date specified, and thereafter liquidated in accordance with
the terms of the Company's Certificate of Incorporation, as determined in good
faith by the Board of Directors of the Company.
"Book Value" means, in respect of any share of Common Stock on any date
herein specified, the value attributable to such share of Common Stock if all of
the assets of the Company and its subsidiaries were sold for the consolidated
book value thereof as of the last day of any month immediately preceding such
date, and thereafter liquidated in accordance with the Company's
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Certificate of Incorporation, as determined in accordance with generally
accepted accounting principles in the United States.
"Business Day" means any day that is not a Saturday or Sunday or a day
on which banks are required or permitted to be closed in the State of New York.
"Current Market Price" means, in respect of the Common Stock on any
date herein specified, the higher of (a) the Book Value per share of Common
Stock at such date and (b) the Appraised Value per share of Common Stock as at
such date, or if there shall then be a public market for the Stock, the average
of the daily market prices for 30 consecutive Business Days commencing 45 days
before such date. The daily market price for each such Business Day shall be (i)
the last sale price on such date on the principal stock exchange on which the
Common Stock is then listed or admitted to trading, (ii) if no sale takes place
on such day on any such exchange, the average of the last reported closing bid
and asked prices on such day as officially quoted on any such exchange, (iii) if
the Common Stock is not then listed or admitted to trading on any stock
exchange, the average of the last reported closing bid and asked prices on such
day in the over-the-counter market, as furnished by the National Association of
Securities Dealers Automatic Quotation System or the national Quotation Bureau,
Inc., (iv) if neither such corporation at the time is engaged in the business of
reporting such prices, as furnished by any similar firm then engaged in such
business, or (v) if there is no such firm, as furnished by any member of the
National Association of Securities Dealers, Inc. ("NASD") selected by the
Company.
"Expiration Date" means the date which is the seventh anniversary of
the date of this Warrant.
"Outstanding" means, when used with reference to Common Stock or any
class thereof, at any date as of which the number of shares thereof is to be
determined, all issued shares of Common Stock or of the relevant class, except
shares then owned or held by or for the account of the Company or any subsidiary
thereof, and shall include all shares issuable in respect of outstanding scrip
or any certificates representing fractional interests in shares of Common Stock
or of the relevant class.
"Subsequent Financing" means the sale by the Company, to one or more
third parties, of equity securities of the Company equal to or exceeding
$3,000,000 in aggregate gross proceeds to the Company.
"Warrant Price" means $2.50; provided, however, that the Warrant Price
shall be $.50 if the Subsequent Financing does not occur on or prior to June 15,
2000 and shall be $.01 if the Subsequent Financing does not occur on or prior to
August 31, 2000.
2. Exercise of Warrant. This Warrant shall be exercisable at any time
after the Closing Date until the expiration of the Warrant as provided in
Section 3 hereof, in the manner set forth in Section 4 hereof.
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3. Expiration of Warrant. This Warrant, to the extent not exercised,
shall expire and cease to be of force and effect at 5:00 P.M. (Eastern Time) on
the Expiration Date.
4. Method of Exercise. This Warrant may be exercised in whole or in
part (but not as to fractional shares) by the surrender of the Warrant, with the
Purchase Agreement attached hereto as ANNEX A properly completed and duly
executed, at the principal office of the Company or such other location which at
that time shall be the principal office of the Company (the "Principal Office"),
and upon payment to it of the Warrant Price for each Warrant Share to be
purchased upon such exercise (the aggregate of the Warrant Price for all shares
to be exercised being referred to herein as the "Purchase Price"). The Purchase
Price shall be paid by delivering either: (i) a certified check, bank draft or
wire transfer of immediately available funds to the order of the Company or (ii)
this Warrant with instructions that the Company retain as payment of the
Purchase Price such number of Warrant Shares as shall be determined under the
next sentence (a "Cashless Exercise"). In the event of a Cashless Exercise, the
Holder shall receive that number of Warrant Shares determined by multiplying the
number of Warrant Shares for which the Cashless Exercise is made by a fraction,
the numerator of which shall be the difference between the then Current Market
Price per Warrant Share and the Warrant Price, and the denominator of which
shall be the then Current Market Price per share of Common Stock. The remaining
Warrant Shares for which Cashless Exercise has been made shall be deemed to have
been paid to the Company as the Purchase Price. The Holder shall be treated for
all purposes as the holder of the Warrant Shares as of the close of business on
the date of exercise, and certificates for the Warrant Shares so purchased shall
be delivered to the person so entitled, properly endorsed for transfer or
accompanied by appropriate stock powers, within a reasonable time, not exceeding
five days, after such exercise. Unless this Warrant shall have expired, a new
Warrant of like tenor and for such number of Warrant Shares as the Holder shall
direct, representing in the aggregate the right to purchase that number of
Warrant Shares with respect to which this Warrant shall not have been exercised,
shall also be issued to the Holder within such time.
5. Certain Covenants.
(a) The Company shall cause all Warrant Shares to be listed on
each national securities exchange or securities quotation system, if any, on
which the other outstanding shares of Common Stock of the Company are then
listed or quoted.
(b) The Company shall (i) use its best efforts to comply with
the current public information requirements of Rule 144 ("Rule 144") under the
1933 Act and (ii) at all times Rule 144 is available for use by Holder, furnish
the Holder upon request with all information within the possession of the
Company required for the preparation and filing of Rule 144.
(c) The Company shall not sell, assign, transfer, give,
donate, pledge, hypothecate, create a security interest in, place in trust or
otherwise voluntarily or involuntarily dispose or otherwise encumber any of the
Warrant Shares.
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(d) The Company shall add a legend to the certificates
representing the Warrant Shares as follows:
THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT
TO THAT CERTAIN WARRANT DATED MAY 11, 2000 AND MAY NOT BE SOLD,
ASSIGNED, TRANSFERRED, GIVEN, DONATED, PLEDGED, HYPOTHECATED, PLACED IN
TRUST OR OTHERWISE VOLUNTARILY OR INVOLUNTARILY DISPOSED OF OR
OTHERWISE ENCUMBERED EXCEPT PURSUANT TO THE TERMS OF SUCH WARRANT.
(e) The Company shall cause its transfer agent to remove the
legend set forth in Section 5(d) upon delivery to the Holder of the certificates
representing the Warrant Shares pursuant to Section 4.
6. Adjustment of Purchase Price and Number of Shares. The number of
shares of Common Stock purchasable upon the exercise of this Warrant and/or the
Exercise Price shall be subject to adjustment from time to time upon the
happening of certain events as follows:
6.1 Stock Dividends, Subdivisions or Combinations. If the
Company at any time while the Warrant remains outstanding and unexpired
shall:
(a) subdivide its outstanding shares of Common Stock
into a larger number of shares of Common Stock,
(b) combine its outstanding shares of Common Stock
into a smaller number of shares of Common Stock, or
(c) pay a dividend or make a distribution in shares
of its Common Stock,
then the number of shares of Common Stock purchasable upon the exercise
of this Warrant immediately after the occurrence of any such event
shall be adjusted to equal the number of shares of Common Stock that a
record holder of the same number of shares of Common Stock represented
by this Warrant immediately prior to the occurrence of such event would
own or be entitled to receive after the happening of such event and the
Warrant Price shall be proportionately adjusted.
6.2 Certain Other Distributions. If at any time the Company
shall take a record of the holders of its Common Stock for the purpose
of entitling them to receive any dividend or other distribution of:
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(a) cash (other than a cash distribution or dividend
payable out of earnings or earned surplus legally available
for the payment of dividends under the laws of the
jurisdiction of incorporation of the Company),
(b) any evidences of its indebtedness, any shares of
its stock or any other securities or property of any nature
whatsoever (other than cash), or
(c) any warrants or other rights to subscribe for or
purchase any evidences of its indebtedness, any shares of its
stock or any other securities or property of any nature
whatsoever (other than cash).
then the number of shares of Common Stock issuable upon exercise of
this Warrant shall be adjusted to equal the product of the number of
shares of Common Stock issuable upon exercise of this Warrant
immediately prior to such adjustment by a fraction (i) the numerator of
which shall be the Current Market Price per share of Common Stock at
the date of taking such record and (ii) the denominator of which shall
be such Current Market Price per share of Common Stock minus the amount
allocable to one share of Common Stock of any such cash so
distributable and of the fair value (as determined in good faith by the
Board of Directors of the Company) of any and all such evidences of
indebtedness, shares of stock, other securities or property or warrants
or other subscription or purchase rights so distributable and the
Warrant Price shall be proportionately reduced. A reclassification of
the Common Stock (other than a change in par value, or from par value
to no par value or from no par value to par value) into shares of
Common Stock and shares of any other class of stock shall be deemed a
distribution by the Company to the holders of its Common Stock of such
shares of such other class of stock within the meaning of this Section
6.2 and, if the outstanding shares of Common Stock shall be changed
into a larger or smaller number of shares of Common Stock as a part of
such reclassification, such change shall be deemed a subdivision or
combination, as the case may be, of the outstanding shares of Common
Stock within the meaning of Section 6.1.
6.3 Reclassification, Consolidation or Merger. At any time
while this Warrant remains outstanding and unexpired, in case of any
reclassification or change of outstanding securities issuable upon
exercise of this Warrant (other than a change in par value, or from par
value to no par value, or from no par value to par value or as a result
of an event described in Sections 6.1(a) or (b) above) or in case of
any consolidation or merger of the Company with or into another
corporation (other than a merger with another corporation in which the
Company is a continuing corporation and which does not result in any
reclassification or change, other than a change in par value, or from
par value to no par value, or from no par value to par value), or in
the case of any sale or transfer to another corporation of the property
of the Company as an entirety or substantially as an entirety, the
Company shall, without payment of any additional consideration
therefor, execute a new Warrant providing that the Holder shall have
the right to exercise such new Warrant (upon terms not
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less favorable to the Holder than those then applicable to this
Warrant) and to receive upon such exercise, in lieu of each share of
Common Stock of the Company theretofore issuable upon exercise of this
Warrant, the kind and amount of shares of stock, other securities,
money or property receivable upon such reclassification, change,
consolidation, merger, sale or transfer by the Holder of one share of
Common Stock issuable upon exercise of this Warrant had this Warrant
been exercised immediately prior to such reclassification, change,
consolidation, merger, sale or transfer. Such new Warrant shall provide
for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 6. The
provisions of this Section 6.3 shall similarly apply to successive
reclassification, changes, consolidations, mergers, sales and
transfers.
6.4 Liquidating Dividends, Etc. If the Company at any time
while this Warrant remains outstanding and unexpired makes a
distribution of its assets to the holders of its Common Stock as a
dividend in liquidation or by way of return of capital or other than as
a dividend payable out of earnings or surplus legally available for
dividends under applicable law or any distribution to such holders made
in respect of the sale of all or substantially all of the Company's
assets (other than under the circumstances otherwise provided for in
this Section 6), the holder of this Warrant shall be entitled to
receive upon the exercise hereof, in addition to the shares of Common
Stock receivable upon such exercise, and without payment of any
consideration other than the Warrant Price, an amount in cash equal to
the value of such distribution per share of Common Stock multiplied by
the number of shares of Common Stock which, on the record date for such
distribution, are issuable upon exercise of this Warrant (with no
further adjustment being made following any event which causes a
subsequent adjustment in the number of shares of Common Stock issuable
upon the exercise hereof), and an appropriate provision therefor should
be made a part of any such distribution. The value of a distribution
which is paid in other than cash shall be determined in good faith by
the Company's Board of Directors.
6.5 Issuance of Securities.
(a) If at any time while this Warrant remains
outstanding and unexpired, the Company shall issue any shares
of Common Stock (otherwise than as provided in Sections 6.1,
6.2, 6.3, or 6.4) at a price per share which is less then the
Warrant Price in effect immediately prior to such issuance,
then the Warrant Price shall be reduced to such price per
share. No adjustment of the Warrant Price shall be made
pursuant to this Section 6.5, however, upon the issuance of
any shares of Common Stock which are issued pursuant to the
exercise of any warrants, options or other purchase or
subscription rights or pursuant to the exercise of any
conversion or exchange rights in any convertible securities if
any such adjustments were previously made upon the issuance of
any such warrants, options, other purchase or subscription
rights or convertible or exchangeable securities (or upon the
issuance of any warrants, options or any other rights
therefor) pursuant to Sections 6.5(b) or (c); or
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(b) If at any time while this Warrant remains
outstanding and unexpired, the Company shall issue any
warrants, options or other rights to subscribe or purchase any
shares of Common Stock (otherwise than as provided in Sections
6.1, 6.2, 6.3, or 6.4) containing an exercise or purchase
price per share of Common Stock that is less then the Warrant
Price in effect immediately prior to such issuance, then the
Warrant Price shall be reduced to such exercise or purchase
price per share; and
(c) If at any time while this Warrant remains
outstanding and unexpired, the Company shall issue any
securities convertible into or exchangeable for shares of
Common Stock (otherwise than as provided in Sections 6.1, 6.2,
6.3, or 6.4) containing a conversion or exchange price per
share of Common Stock that is less then the Warrant Price in
effect immediately prior to such issuance, then the Warrant
Price shall be reduced to such conversion or exchange price
per share. No adjustment of the Warrant Price shall be made
pursuant to this Section 6.5(c) upon the issuance of any
convertible or exchangeable securities which are issued
pursuant to the exercise of any warrants, options or other
purchase or subscription rights, if any such adjustments were
previously made upon the issuance of any such warrants,
options or other rights pursuant to Sections 6.5(b).
6.6 Other Action Affecting Common Stock. If after the date
hereof the Company shall take any action affecting the outstanding
number of shares of Common Stock, other than an action described in any
of the foregoing subsections of Section 6 hereof, inclusive, that would
have a materially adverse effect upon the rights of the Holder, the
Warrant Shares and the Warrant Price shall be adjusted in such manner
and at such time as the Company"s Board of Directors on the advice of
the Company"s independent public accountants may in good faith
determine to be equitable in the circumstances.
6.7 Other Provisions Applicable to Adjustment under this
Section. The following provisions shall be applicable to the making of
any adjustment of the number of shares of Common Stock issuable upon
exercise of this Warrant provided for in this Section 6:
(a) When Adjustments to Be Made. The adjustments
required by this Section 6 shall be made whenever and as often
as any specified event requiring an adjustment shall occur,
except that any adjustment of the number of shares of Common
Stock issuable upon exercise of the Warrant that would
otherwise be required may be postponed (except in the case of
a subdivision or combination of shares of the Common Stock, as
provided for in Section 6.1) up to, but not beyond the date of
exercise if such adjustment either by itself or with other
adjustments not previously made adds or subtracts less than 1%
of the shares of Common Stock issuable upon exercise of the
Warrant immediately prior to the making of such adjustment.
Any adjustment representing a change less than such minimum
amount (except as aforesaid) which is postponed shall be
carried forward and made as soon as
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such adjustment, together with other adjustments required by
this Section 6 and not previously made, would result in a
minimum adjustment or on the date of exercise. For the purpose
of any adjustment, any specified event shall be deemed to have
occurred at the close of business on the date of its
occurrence.
(b) Fractional Interest. In computing adjustments
under this Section 6, fractional interests in Common Stock
shall be taken into account to the nearest 1/10th of a share.
(c) When Adjustment Not Required. If the Company
shall take a record of the holders of its Common Stock for the
purpose of entitling them to receive a dividend or
distribution or subscription or purchase rights and shall,
thereafter and before the distribution to stockholders
thereof, legally abandon its plan to pay or deliver such
dividend, distribution, subscription or purchase rights, then
thereafter no adjustment shall be required by reason of the
taking of such record and any such adjustment previously made
in respect thereof shall be rescinded and annulled.
(d) Escrow of Warrant Stock. If after any property
becomes distributable pursuant to this Section 6 by reason of
the taking of any record of the holders of Common Stock, but
prior to the occurrence of the event for which such record is
taken, and the Holder exercises this Warrant, any additional
shares of Common Stock obtainable upon exercise by reason of
such adjustment shall be deemed the last shares of Common
Stock for which this Warrant is exercised (notwithstanding any
other provision to the contrary herein) and such shares or
other property shall be held in escrow for the Holder by the
Company to be transferred to the Holder upon and to the extent
that the event actually takes place, upon payment of the
Warrant Price. Notwithstanding any other provision to the
contrary herein, if the event for which such record was taken
fails to occur or is rescinded, then such escrowed shares
shall be canceled by the Company and escrowed property
returned.
7. Legend. Each certificate for shares obtained upon exercise of this
Warrant shall bear the following legend:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"1933 Act"). Such securities have been acquired for investment
and may not be sold or transferred in the absence of an
effective registration statement for such securities under the
1933 Act, unless, in the opinion (which shall be in form and
substance satisfactory to the Company) of counsel satisfactory
to the Company, such registration is not required."
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In addition, the certificate shall bear such additional legend with respect to
state securities or blue sky laws as reasonably determined by counsel to the
Company.
8. Notice of Adjustments. Whenever the number of shares of Common Stock
issuable upon exercise of this Warrant shall be adjusted pursuant to Section 6
hereof, the Company shall promptly notify the Holder in writing of such
adjustment, setting forth in reasonable detail the event requiring the
adjustment, the amount of the adjustment, the method by which such adjustment
was calculated (including a description of the basis on which the Company's
Board of Directors made any determination hereunder), and the number of shares
of Common Stock obtainable upon exercise of this Warrant after giving effect to
such adjustment. Such notice shall be mailed (by first class and postage
prepaid) to the Holder.
9. Voting. The Holder shall not have any voting rights with respect to
the Warrant Shares until the exercise of this Warrant, and thereafter, the
Holder shall have all voting rights with respect to the Warrant Shares for which
exercise is made hereunder.
10. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Holder as follows:
(a) This Warrant has been duly authorized by all necessary
corporate action on the part of the Company and has been duly executed by a duly
authorized officer of the Company and constitutes a valid and binding obligation
of the Company.
(b) Neither the execution and delivery of this Warrant, nor
the consummation of the transactions contemplated hereby, will violate or result
in any violation of or be in conflict with or constitute a default under any
term of the charter or bylaws of the Company or of any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation applicable to
the Company.
(c) Upon exercise of this Warrant and payment of the Warrant
Price by the Holder (i) the Warrant Shares will be duly issued, fully paid and
nonassessable shares of Common Stock and free from all taxes, liens and changes
with respect to the issuance thereof and (ii) the Holder shall receive valid
title to all of the Warrant Shares in all cases free and clear of all liens,
mortgages, security interests, pledges, defects of title or other claims,
charges or encumbrances of any nature.
11. Loss, Theft, Destruction or Mutilation. Upon receipt by the Company
of evidence reasonably satisfactory to it that this Warrant has been mutilated,
destroyed, lost or stolen, and in the case of any destroyed, lost or stolen
Warrant, a bond of indemnity reasonably satisfactory to the Company, or in the
case of a mutilated Warrant, upon surrender and cancellation thereof, the
Company will execute and deliver in the Holder's name, in exchange and
substitution for the Warrant
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so mutilated, destroyed, lost or stolen, a new Warrant of like tenor
substantially in the form thereof with appropriate insertions and variations.
12. Successors and Assigns. This Warrant and the rights evidenced
hereby shall inure to the benefit of and be binding upon the successors of the
Company and the Holder.
13. Amendment. This Warrant may be modified with the written consent of
the Company and the Holder.
14. Transferability. This Warrant, and any Warrant Shares issued upon
exercise of this Warrant, may be sold, pledged or otherwise transferred or
encumbered by the Holder.
15. Injunctive Relief. It is acknowledged that it will be impossible to
measure the damages that would be suffered by a party if another party fails to
comply with the provisions hereof and that in the event of any such failure,
each non-breaching party may not have an adequate remedy at law. Therefore, any
party shall be entitled to obtain specific performance of another party's
obligations hereunder and to obtain injunctive relief. No party shall argue, as
a defense to any proceeding for such specific performance or injunctive relief,
that another party has no adequate remedy at law.
16. Headings. The descriptive headings of the several sections of this
Warrant are inserted for convenience only and do not constitute a part of this
Warrant.
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17. Governing Law. This Warrant shall be governed by the laws of the
State of Delaware without regard to the provisions thereof relating to conflict
of laws.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer, attested by its duly authorized officer, on the
date of this Warrant.
X-XXXXXXX.XXX INC.
By:
-------------------------------
Name:
Title:
XXXXXX DE LEEUW & CO. III (EUROPE), L.P.
By:
-------------------------------
Name: Xxxxxx X. Xxxxxxx, Xx.
Its: General Partner
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Annex A
PURCHASE AGREEMENT
Date: ___________
TO: x-Xxxxxxx.xxx Inc.
(1) The undersigned, pursuant to the provisions set forth in the
attached Warrant, hereby irrevocably agrees to purchase _________ shares of
Common Stock covered by such Warrant, and makes payment herewith in full
therefor at the price per share of $_________ provided by this Warrant.
(2) The undersigned, pursuant to the provisions set forth in the
attached Warrant, hereby irrevocably elects to make a Cashless Exercise, as
provided for in Section 4 of such Warrant, with respect to _________ Warrant
Shares, _________ Warrant Shares of which shall be retained by the Company in
payment of the Purchase Price (as defined in the Warrant).
Signature: ___________________________
Address: ___________________________
