EXHIBIT 10.6
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
("ACT"), AND THIS WARRANT CANNOT BE SOLD OR TRANSFERRED AND THE SHARES OF COMMON
STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT CANNOT BE SOLD OR TRANSFERRED
WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT RELATED THERETO OR AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY ISSUING THIS WARRANT THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE ACT.
5,564 Shares
(Subject to Adjustment)
CENTERGISTIC SOLUTIONS, INC.
COMMON STOCK PURCHASE WARRANT
September 1, 2003
This certifies that, for value received, The Bosphorous
Group, Inc. ("Warrantholder") is entitled to subscribe for and purchase from
Centergistic Solutions, Inc., a California corporation ("Company"), 5,564 shares
of the Company's Common Stock ("Warrant Stock"), at the price of $3.73 per share
("Exercise Price"), subject to the terms and conditions stated herein.
1. Exercise of Warrant.
1.1 Exercisability of Warrant. This Warrant shall become
immediately exercisable.
1.2 Manner of Exercise. Subject to Section 1.1, the
rights represented by this Warrant may be exercised in whole or in part by the
Warrantholder by the surrender of this Warrant and delivery of an executed
Subscription Agreement in the form attached hereto as Schedule A to the Company
at its principal executive office located at 0000 Xxxx Xxxxxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxx 00000, or such other place as the Company shall designate in
writing, at any time or times prior to the Expiration Date (as defined below),
accompanied by payment for the Common Stock so subscribed for (i) in cash or
certified bank or cashier's checks or (ii) at Warrantholder' s election.
1.3 Expiration Date. This Warrant shall terminate on the
date which is five (5) years from the date of this Warrant ("Expiration Date").
2. Representations and Warranties of the Company. The Company
hereby represents and warrants to the Warrantholder as follows:
2.1 Organization. The Company (i) is a corporation duly
organized, validly existing and in good standing under the laws of the State of
California and (ii) has all requisite power and authority to carry on its
business, to own and hold its properties and assets, and to issue and carry out
the provisions of this Warrant.
2.2 Authorization. The execution, delivery and
performance by the Company of this Warrant have been duly and validly authorized
by the Company's Board of Directors, and no authorization or approval of the
Company's stockholders is required in connection therewith. This Warrant
constitutes the legal, valid and binding obligation of the Company and is
enforceable against the Company in accordance with its terms, except as such
enforcement may be limited by bankruptcy, insolvency and other similar laws
affecting the enforcement of creditors' rights generally.
2.3 No Conflict. The execution, delivery and performance
by the Company of this Warrant: (i) will not conflict with, result in a breach
of or constitute a default under any material contract, agreement, indenture,
loan or credit agreement, deed of trust, mortgage, lease, security agreement or
other arrangement to which the Company is a party or by which the Company or any
of its properties or assets is bound or affected; (ii) will not cause the
Company to violate or contravene any provision of its Articles of Incorporation
or Bylaws; or (iii) will not conflict with or result in a breach of or require
any authorization, consent, approval, permit, exemption or other action by or
notice to any court or administrative or governmental body pursuant to any law,
statute, rule or regulation to which the Company is subject or any material
instrument, order, judgment or decree to which the Company is subject.
2.4 Warrant Stock. All of the shares of Common Stock
issuable upon exercise of this Warrant have been duly authorized and reserved
for issuance and, upon payment thereon and issuance thereof in accordance with
the terms of this Warrant, will be duly authorized, validly issued, fully paid
and nonassessable and free from all taxes, liens and other charges with respect
to the issue thereof. The Company further warrants and agrees that during the
period within which this Warrant may be exercised the Company will at all times
have authorized and reserved a sufficient number of shares of Common Stock to
provide for the exercise of this Warrant.
3. Restrictions on Transfer.
3.1 Restrictions on Transfer and Warrantholder
Representations. In acquiring the Warrant and the Warrant Stock (collectively,
the "Securities"), Warrantholder makes the following representations, warranties
and agreements:
(a) The Warrant is acquired for Warrantholder' s own
account for investment purposes and not with a view to any offering or
distribution, and Warrantholder has no present intention of selling or otherwise
disposing of the Warrant or the Warrant Stock in violation of applicable
securities laws. Upon exercise, Warrantholder will confirm, in respect of
securities obtained upon such exercise, that Warrantholder is acquiring such
securities for Warrantholder's own account and not with a view to any offering
or distribution in violation of applicable
securities laws. Warrantholder acknowledges that shares of Warrant Stock issued
upon exercise of this Warrant will not be registered under the Securities Act of
1933, as amended (the "Securities Act"), and will be "restricted securities" as
that term is defined in Rule 144 promulgated under the Securities Act.
(b) The Securities shall not be sold, assigned,
transferred or pledged except upon the conditions specified in this Warrant,
which conditions are intended, among other things, to ensure compliance with the
provisions of the Securities Act. The Warrantholder will cause any proposed
purchaser, assignee, transferee or pledgee of the Securities held by the
Warrantholder to agree to take and hold such Securities subject to the
provisions and upon the conditions specified in this Warrant.
(c) Warrantholder represents and warrants to the Company
the following:
(i) Warrantholder has received all the
information it considers necessary or appropriate to evaluate the risks
and merits of an investment in the Company, and has had an opportunity
to discuss the Company's business, management, financial affairs and
prospects with the Company's management.
(ii) Warrantholder is able to bear the economic
risks related to a purchase of the Securities. Warrantholder has the
capacity to protect its own interests in connection with the subject
transactions.
3.2 Restrictive Legend. Each certificate representing (i)
the shares of Warrant Stock and (ii) any other securities issued in respect of
the securities referenced in clause (i) upon any stock split, stock dividend,
recapitalization, merger, consolidation or similar event, shall be stamped or
otherwise imprinted with a legend in the following form (in addition to any
legend required under applicable state securities laws):
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED. SUCH SHARES MAY NOT
BE SOLD, TRANSFERRED OR PLEDGED IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS THE COMPANY RECEIVES AN OPINION OF
COUNSEL (WHICH MAY BE COUNSEL FOR THE COMPANY) REASONABLY
ACCEPTABLE TO IT STATING THAT SUCH SALE OR TRANSFER IS EXEMPT
FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF
SAID ACT."
Warrantholder consents to the Company making a notation on
its records and giving instructions to any transfer agent of the securities of
the Company required to bear the legend set forth above in order to implement
the restrictions on transfer established in this Section 3.
4. Adjustments. The number of shares of Common Stock for which
Warrantholder is entitled to subscribe and purchase from the Company pursuant to
this Warrant and the Exercise Price for such shares shall be subject to
adjustment from time to time only as follows:
4.1 Adjustments for Stock Splits and Combinations. If the
Company at any time or from time to time after the date hereof effects a
subdivision of the outstanding Common Stock, the number of shares of Common
Stock for which Warrantholder is entitled to subscribe and purchase from the
Company upon exercise of this Warrant shall be proportionately increased and the
Exercise Price then in effect immediately before the subdivision shall be
proportionately decreased, and conversely, if the Company at any time or from
time to time after the date hereof combines the outstanding shares of Common
Stock, the number of shares of Common Stock for which Warrantholder is entitled
to subscribe and purchase from the Company shall be proportionately decreased
and the Exercise Price then in effect immediately before the subdivision shall
be proportionately increased. Any adjustment under this subsection shall become
effective at the close of business on the date the subdivision or combination
becomes effective.
4.2 Adjustments for Certain Dividends and Distributions.
In the event the Company at any time or from time to time after the date hereof
makes, or fixes a record date for the determination of holders of Common Stock
entitled to receive, a dividend or other distribution payable in additional
shares of Common Stock, then and in each such event the number of shares of
Common Stock for which Warrantholder is entitled to subscribe and purchase from
the Company upon exercise of this Warrant shall be proportionately increased and
the Exercise Price then in effect shall be proportionately decreased as of the
time of such issuance or, in the event such a record date is fixed, as of the
close of business on such record date; provided, however, that if such record
date is fixed and such dividend is not fully paid or if such distribution is not
fully made on the date fixed therefor, the number of shares of Common Stock for
which Warrantholder is entitled to subscribe and purchase from the Company and
the Exercise Price therefor shall be recomputed accordingly as of the close of
business on such record date and thereafter the number of shares of Common Stock
then issuable on exercise of this Warrant and the Exercise Price therefor shall
be adjusted pursuant to this subsection as of the time of actual payment of such
dividends or distributions.
4.3 Adjustment for Reclassification, Exchange and
Substitution. If the Common Stock issuable upon the exercise of this Warrant is
changed into the same or a different number of shares of any class or classes of
stock, whether by reclassification, recapitalization or otherwise (other than a
subdivision or combination of shares or stock dividend or a capital
reorganization, merger, consolidation or sale of assets provided for elsewhere
in this Section 4), then and in any such event Warrantholder shall have the
right thereafter to purchase the kind and amount of stock and other securities
and property receivable upon such reclassification, recapitalization or other
change, by holders of the number of shares of Common Stock which might have been
purchased upon exercise of this Warrant immediately prior to such
reclassification, recapitalization or change, all subject to further adjustment
as provided herein.
4.4 Adjustment for Reorganizations, Mergers,
Consolidations or Sales of Assets. If at any time or from time to time there is
a capital reorganization or any merger of the Company with or into any other
corporation or corporations or a sale of all or substantially all of the assets
of the Company to any other person or any voluntary or involuntary liquidation,
dissolution or winding up of the Company (any such transaction referred to
herein as a "Reorganization") involving the Common Stock then, as a part of such
Reorganization, provision shall be made so that Warrantholder shall thereafter
be entitled to receive, upon exercise of this Warrant, the number of shares of
stock or other securities or property of the Company or of the successor
corporation resulting from such Reorganization to which a holder of Common Stock
deliverable upon exercise of this Warrant would have been entitled on such
Reorganization. In any such case, appropriate adjustment shall be made in the
application of the provisions of this Section 4 with respect to the rights of
Warrantholder after such Reorganization to the end that the provisions of this
Section 4 (including adjustments of the Exercise Price then in effect and number
of shares of stock purchasable upon exercise of this Warrant) shall be
applicable after that event and be as nearly equivalent to the provisions hereof
as may be practicable.
4.5 Notice of Adjustments. Upon any adjustments of the
Exercise Price or the amount or kind of securities or other property issuable
upon exercise of this Warrant, then and in each case the Company shall give
written notice of such adjustment by first class mail, postage prepaid,
addressed to the Warrantholder at its address registered on the books of the
Company, which notice shall state the Exercise Price resulting from such
adjustment and the amount and kind of securities purchasable at such price upon
the exercise of this Warrant, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based.
4.6 Notice of Record Date. In the event of (i) any taking
by the Company of a record of the holders of any class of Common Stock for the
purpose of determining the holders thereof who are entitled to receive any
dividend or other distribution, or (ii) any capital transaction that the Company
proposes to effect requiring adjustments pursuant to this Section 4 ("Capital
Transaction"), the Company shall mail to Warrantholder at least ten (10) days
prior to the date specified therein, a notice specifying (1) the date on which
any such record is to be taken for the purpose of such dividend or distribution
and a description of such dividend or distribution, (2) the date on which any
such Capital Transaction is expected to become effective, and (3) the time, if
any, that is to be fixed, as to when the holders of record of Common Stock shall
be entitled to exchange their shares of Common Stock for securities or other
property deliverable upon such Capital Transaction.
5. [Reserved].
6. No Voting Rights. Except as set forth herein, this Warrant
shall not entitle the Warrantholder to any voting rights or other rights as a
stockholder of the Company, and no dividend or interest shall be payable or
accrued in respect of this Warrant or the interest represented hereby or the
shares of Warrant Stock which may be purchased hereunder until and unless, and
except to the extent that, the Warrantholder has duly exercised its rights under
this Warrant.
7. Loss or Mutilation. Upon receipt by the Company of evidence
satisfactory to it in the exercise of reasonable discretion, of the ownership of
and the loss, theft, destruction or mutilation of this Warrant and, in the case
of loss, theft or destruction, of indemnity satisfactory to it in the exercise
of reasonable discretion, and, in the case of mutilation, upon surrender and
cancellation thereof, the Company will execute and deliver in lieu thereof a new
Warrant of like tenor.
8. No Impairment. The Company will not, by amendment of its
Fourth Amended and Restated Certificate of Incorporation or through
reorganization, consolidation, merger, dissolution, sale of assets or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the Warrantholder
against impairment. Without limiting the generality of the foregoing, the
Company (a) will not increase the par value of any share of stock receivable
upon the exercise of this Warrant above the amount payable therefor upon such
exercise, and (b) will take all such action as may be necessary or appropriate
in order that the Company may validly and legally issue fully paid and
nonassessable shares upon the exercise of this Warrant at the time outstanding.
9. Reports. The Company shall provide to the Warrantholder,
promptly after filing thereof, copies of all reports which the Company files
with the Securities and Exchange Commission.
10. Miscellaneous Matters.
(a) As used herein, the term "Common Stock" shall mean
the Company's presently authorized Common Stock and stock of any other class
into which such presently authorized Common Stock may hereafter have been
converted.
(b) As used herein, the word "person" shall mean an
individual or entity.
(c) This Warrant and the name and address of the
Warrantholder have been registered in a Warrant Register that is kept at the
principal office of the Company, and the Company may treat the holder so
registered as the owner of this Warrant for all purposes.
(d) This Warrant shall be governed by and interpreted in
accordance with the internal laws, and not the law of conflicts, of the State of
California.
(e) All notices under this Warrant shall be given as set
forth in this Warrant.
(f) The Company will not, at any time, except upon
dissolution, liquidation or winding up of the Company, close its stock transfer
books or Warrant transfer books so as to result in preventing or delaying the
exercise or transfer of any Warrant.
CENTERGISTIC SOLUTIONS, INC.
a California Corporation
By: __________________________________________
SUBSCRIPTION AGREEMENT
Date:
To: Centergistic Solutions, Inc.
The undersigned, pursuant to the provisions set forth in the
Centergistic Solutions, Inc. Common Stock Purchase Warrant dated as of
______________, 2003, hereby agrees to subscribe for and purchase __________
shares of the Common Stock covered by such Warrant, and makes payment herewith
in full for such Common Stock at the Exercise Price.
The undersigned represents and warrants to you that the
undersigned is acquiring the shares covered hereby for the undersigned's own
account for investment purposes and not with a view to any offering or
distribution in violation of applicable securities laws.
Signature:
Printed Name
and Title:
Address:
