EXHIBIT 4.3
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS
AMENDED OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
RELATED THERETO OR AN OPINION OF COUNSEL (WHICH MAY BE COMPANY COUNSEL)
REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES
LAWS.
WARRANT AGREEMENT
To Purchase Shares of the Preferred Stock of
XxxxXxxxxx.xxx, Inc.
Dated as of November 9, 1998 (the "Effective Date")
WHEREAS, XxxxXxxxxx.xxx, Inc., a Delaware corporation (the "Company") has
entered into a Master Lease Agreement dated as of November 9, 1998, Equipment
Schedule No. VL-1, VL-2 and VL-3 dated as of November 9, 1998, and related
Summary Equipment Schedules (collectively, the "Leases") with Comdisco, Inc., a
Delaware corporation (the "Warrantholder"); and
WHEREAS, the Company desires to grant to Warrantholder, in consideration
for such Leases, the right to purchase shares of its Preferred Stock;
NOW, THEREFORE, in consideration of the Warrantholder executing and
delivering such Leases and in consideration of mutual covenants and agreements
contained herein, the Company and Warrantholder agree as follows:
1. GRANT OF THE RIGHT TO PURCHASE PREFERRED STOCK.
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The Company hereby grants to the Warrantholder, and the Warrantholder is
entitled, upon the terms and subject to the conditions hereinafter set forth, to
subscribe to and purchase, from the Company, that number of fully paid and non-
assessable shares of the Company's Preferred Stock, consisting of shares of (i)
a new series of Preferred Stock to be created in connection with the Next Round
(as hereinafter defined) or (ii) Series B Preferred Stock to be authorized if
the Next Round fails to be completed by June 30, 1999, ("Preferred Stock") equal
to $120,000 divided by the exercise price as defined below(`Exercise Price")
The Exercise Price shall be equal to sum of the price of each share sold in
the Series B Preferred Stock financing (i.e. $0.70) (the "Last Round") plus the
product of (a) the difference between the price per share of the Preferred Stock
issued in the next round of equity financing (the "Next Round") and the Last
Round, multiplied by (b) the fraction resulting from dividing (x)
the number of days from the date of closing of the Last Round to the date of
execution of the Leases, by (y) the number of days from the date of the closing
of the Last Round to the date of closing of the Next Round; provided however, if
the Next Round is not successfully completed by June 30, 1999, then the Exercise
Price shall be equal to $0.70 per share.
The number and purchase price of such shares are subject to adjustment as
provided in Section 8 hereof.
The shares of Preferred Stock subject to this Warrant have not been
authorized as of the date of this Warrant. The Company agrees that (i) such
Preferred Stock shall be shares of the new series authorized and created for use
in the Next Round if completed by June 30, 1999 and, in connection therewith,
shall authorize and reserve such shares for issuance on exercise of this
Warrant, and (ii) it will authorize, and use its best efforts to obtain
shareholder approval to authorize, additional shares of Series B Preferred Stock
and will reserve such shares for issuance on exercise of this Warrant I the Next
Round is not completed by June 30, 1998.
2. TERM OF THE WARRANT AGREEMENT.
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Except as otherwise provided for herein, the term of this Warrant Agreement
and the right to purchase Preferred Stock as granted herein shall commence on
the Effective Date and, subject to Section 1, shall be exercisable for a period
of (i) seven (7) years or (ii) three (3) years from the effective date of the
Company's initial public offering, whichever is longer.
Notwithstanding the term of this Warrant Agreement fixed pursuant to the
above paragraph, the right to purchase Preferred Stock as granted herein shall
expire, if not previously exercised immediately upon the closing of a merger or
consolidation of the Company with or into another corporation when the Company
is not the surviving corporation, or the sale of all or substantially all of the
Company's properties and assets to any other person, that results in the holders
of the Company's voting equity securities immediately prior to such event owing
less than a majority interest in the voting securities of the surviving or
successor corporation immediately following such event (the "Merger); provided
that the surviving or successor corporation so request that the Warrantholder
exercised at that time.
The Company shall notify the Warrantholder if the Merger is proposed in
accordance with the terms of 8(g) hereof, and if the Company fails to deliver
such written notice, then notwithstanding anything to the contrary in this
Warrant Agreement, the rights to purchase the Company's Preferred Stock shall
not expire until the Company complies with such notice provisions. Such notice
shall also contain such details of the proposed Merger as are reasonable in the
circumstances. If such closing does not take place, the Company shall promptly
notify the Warrantholder that such proposed transaction has been terminated, and
the Warrantholder may rescind any exercise of its purchase rights promptly after
such notice of termination of the proposed transaction if the exercise of
Warrants has occurred after the Company notified the Warrantholder that the
Merger was proposed. In the event of such recission, the Warrants will continue
to be exercisable on the same terms and conditions contained herein.
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3. EXERCISE OF THE PURCHASE RIGHTS.
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Subject to Section 1, the purchase rights set forth in this Warrant
Agreement are exercisable by the Warrantholder, in whole or in part, at any
time, or from time to time, prior to the expiration of the term set forth in
Section 2 above, by tendering to the Company at its principal office a notice of
exercise in the form attached hereto as Exhibit I (the "Notice of Exercise"),
duly completed and executed. Promptly upon receipt of the Notice of Exercise and
the payment of the purchase price in accordance with the terms set forth below,
and in no event later than twenty-one (21) days thereafter, the Company shall
issue to the Warrantholder a certificate for the number of shares of Preferred
Stock purchased and shall execute the acknowledgment of exercise in the form
attached hereto as Exhibit II (the "Acknowledgment of Exercise") indicating the
number of shares which remain subject to future purchases, if any.
The Exercise Price may be paid at the Warrantholder's election either (i)
by cash or check, or (ii) by surrender of Warrants ("Net Issuance") as
determined below. If the Warrantholder elects the Net Issuance method, the
Company will issue Preferred Stock in accordance with the following formula:
X = Y(A-B)
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A
Where: X = the number of shares of Preferred Stock to be issued to the
Warrantholder.
Y = the number of shares of Preferred Stock requested to be exercised
under this Warrant Agreement.
A = the fair market value of one (1) share of Preferred Stock.
B = the Exercise Price.
For purposes of the above calculation, current fair market value of
Preferred Stock shall mean with respect to each share of Preferred Stock:
(i) if the exercise is in connection with an initial public offering of
the Company's Common Stock, and if the Company's Registration Statement relating
to such public offering has been declared effective by the SEC, then the fair
market value per share shall be the product of (x) the initial "Price to Public"
specified in the final prospectus with respect to the offering and (y) the
number of shares of Common Stock into which each share of Preferred Stock is
convertible at the time of such exercise;
(ii) if this Warrant is exercised after, and not in connection with the
Company's initial public offering, and:
(a) if traded on a securities exchange, the fair market value shall
be deemed to be the product of (x) the average of the closing prices over a
twenty-one (21) day period ending three days before the day the current fair
market value of the securities is being determined and
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(y) the number of shares of Common Stock into which each share of Preferred
Stock is convertible at the time of such exercise; or
(b) if actively traded over-the-counter, the fair market value shall
be deemed to be the product of (x) the average of the closing bid and asked
prices quoted on the NASDAQ system (or similar system) over the twenty-one (21)
day period ending three days before the day the current fair market value of the
securities is being determined and (y) the number of shares of Common Stock into
which each share of Preferred Stock is convertible at the time of such exercise;
(iii) if at any time the Common Stock is not listed on any securities
exchange or quoted in the NASDAQ System or the over-the-counter market, the
current fair market value of Preferred Stock shall be the product of (x) the
price per share as determined in good faith by its Board of Directors as the
fair market value and (y) the number of shares of Common Stock into which each
share of Preferred Stock is convertible at the time of such exercise, unless the
Company shall become subject to a Merger as defined in Section 2, in which case
the fair market value of Preferred Stock shall be deemed to be the value
received by the holders of the Company's Preferred Stock on a common equivalent
basis pursuant to such merger or acquisition.
Upon partial exercise by either cash or Net Issuance, the Company shall
promptly issue an amended Warrant Agreement representing the remaining number of
shares purchasable hereunder. All other terms and conditions of such amended
Warrant Agreement shall be identical to those contained herein, including, but
not limited to the Effective Date hereof.
4. RESERVATION OF SHARES.
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(a) Authorization and Reservation of Shares. Subject to Section 1, during
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the term of this Warrant Agreement, the Company will at all times have
authorized and reserved a sufficient number of shares of its Preferred Stock to
provide for the exercise of the rights to purchase Preferred Stock as provided
for herein.
(b) Registration or Listing. If any shares of Preferred Stock required to
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be reserved hereunder require registration with or approval of any governmental
authority under any Federal or State law (other than any registration under the
Securities Act of 1933, as amended ("1933 Act"), as then in effect, or any
similar Federal statute then enforced, or any state securities law, required by
reason of any transfer involved in such conversion), or listing on any domestic
securities exchange, before such shares may be issued upon conversion, the
Company will, at its expense and as expeditiously as possible, use its best
efforts to cause such shares to be duly registered, listed or approved for
listing on such domestic securities exchange, as the case may be.
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5. NO FRACTIONAL SHARES OR SCRIP.
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No fractional shares or scrip representing fractional shares shall be
issued upon the exercise of the Warrant, but in lieu of such fractional shares
the Company shall make a cash payment therefor upon the basis of the Exercise
Price then in effect.
6. NO RIGHTS AS SHAREHOLDER.
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This Warrant Agreement does not entitle the Warrantholder to any voting
rights or other rights as a shareholder of the Company prior to the exercise of
the Warrant.
7. WARRANTHOLDER REGISTRY.
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The Company shall maintain a registry showing the name and address of the
registered holder of this Warrant Agreement.
8. ADJUSTMENT RIGHTS.
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The purchase price per share and the number of shares of Preferred Stock
purchasable hereunder are subject to adjustment, as follows:
(a) Merger and Sale of Assets. If at any time there shall be a capital
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reorganization of the shares of the Company's stock (other than a combination,
reclassification, exchange or subdivision of shares otherwise provided for
herein), or a merger or consolidation of the Company with or into another
corporation whether or not the Company is the surviving corporation, or the sale
of all or substantially all of the Company's properties and assets to any other
person (hereinafter referred to as a "Merger Event"), then, as a part of such
Merger Event, lawful provision shall be made so that the Warrantholder shall
thereafter be entitled to receive, upon exercise of the Warrant, the number of
shares of preferred stock or other securities of the successor corporation
resulting from such Merger Event, equivalent in value to that which would have
been issuable if Warrantholder had exercised this Warrant immediately prior to
the Merger Event. In any such case, appropriate adjustment (as determined in
good faith by the Company's Board of Directors) shall be made in the application
of the provisions of this Warrant Agreement with respect to the rights and
interest of the Warrantholder after the Merger Event to the end that the
provisions of this Warrant Agreement (including adjustments of the Exercise
Price and number of shares of Preferred Stock purchasable) shall be applicable
to the greatest extent possible.
(b) Reclassification of Shares. If the Company at any time shall, by
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combination, reclassification, exchange or subdivision of securities or
otherwise, change any of the securities as to which purchase rights under this
Warrant Agreement exist into the same or a different number of securities of any
other class or classes, this Warrant Agreement shall thereafter represent the
right to acquire such number and kind of securities as would have been issuable
as the result of such change with respect to the securities which were subject
to the purchase rights under this Warrant Agreement immediately prior to such
combination, reclassification, exchange, subdivision or other change.
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(c) Subdivision or Combination of Shares. If the Company at any time shall
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combine or subdivide its Preferred Stock, the Exercise Price shall be
proportionately decreased in the case of a subdivision, or proportionately
increased in the case of a combination.
(d) Stock Dividends. If the Company at any time shall pay a dividend
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payable in, or make any other distribution (except any distribution specifically
provided for in the foregoing subsections (a) or (b)) of the Company's Preferred
Stock, then the Exercise Price shall be adjusted, from and after the record date
of such dividend or distribution, to that price determined by multiplying the
Exercise Price in effect immediately prior to such record date by a fraction (i)
the numerator of which shall be the total number of all shares of the Company's
Preferred Stock outstanding immediately prior to such dividend or distribution,
and (ii) the denominator of which shall be the total number of all shares of the
Company's Preferred Stock outstanding immediately after such dividend or
distribution. The Warrantholder shall thereafter be entitled to purchase, at the
Exercise Price resulting from such adjustment, the number of shares of Preferred
Stock (calculated to the nearest whole share) obtained by multiplying the
Exercise Price in effect immediately prior to such adjustment by the number of
shares of Preferred Stock issuable upon the exercise hereof immediately prior to
such adjustment and dividing the product thereof by the Exercise Price resulting
from such adjustment.
(e) Right to Purchase Additional Stock. If, the Warrantholder's total cost
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of equipment leased pursuant to the Leases exceeds $3,000,000, Warrantholder
shall have the right to purchase from the Company, at the Exercise Price
(adjusted as set forth herein), an additional number of shares, which number
shall be determined by (i) multiplying the amount by which the Warrantholder's
total equipment cost exceeds $3,000,000 by 4%, and (ii) dividing the product
thereof by the Exercise Price per share referenced above.
(f) Antidilution Rights. Additional antidilution rights applicable to the
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Preferred Stock purchasable hereunder are as set forth in the Company's
Certificate of Incorporation, as amended through the Effective Date, a true and
complete copy of which is attached hereto as Exhibit -- (the "Charter). The
Company shall promptly provide the Warrantholder with any restatement,
amendment, modification or waiver of the Charter. The Company shall provide
Warrantholder with prior written notice of any issuance of its stock or other
equity security to occur after the Effective Date of this Warrant, which notice
shall include (a) the price at which such stock or security is to be sold, (b)
the number of shares to be issued, and (c) such other information as necessary
for Warrantholder to determine if a dilutive event has occurred. -
(g) Notice of Adjustments. If: (i) the Company shall declare any dividend
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or distribution upon its stock, whether in cash, property, stock or other
securities; (ii) the Company shall offer for subscription prorata to the holders
of any class of its Preferred or other convertible stock any additional shares
of stock of any class or other rights; (iii) there shall be any Merger Event;
(iv) there shall be an initial public offering: or (v) there shall be any
voluntary dissolution, liquidation or winding up of the Company; then, in
connection with each such event, the Company shall send to the Warrantholder (A)
at least twenty (20) days' prior written notice of the date on which the books
of the Company shall close or a record shall be taken for such dividend,
distribution, subscription rights (specifying the date on which the holders of
Preferred
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Stock shall be entitled thereto) or for determining rights to vote in respect of
such Merger Event, dissolution, liquidation or winding up; (B) in the case of
any such Merger Event, dissolution, liquidation or winding up, at least twenty
(20) days' prior written notice of the date when the same shall take place (and
specifying the date on which the holders of Preferred Stock shall be entitled to
exchange their Preferred Stock for securities or other property deliverable upon
such Merger Event, dissolution, liquidation or winding up); and (C) in the case
of a public offering, the Company shall give the Warrantholder at least twenty
(20) days written notice prior to the effective date thereof.
Each such written notice shall set forth, in reasonable detail, (i) the
event requiring the adjustment, (ii) the amount of the adjustment, (iii) the
method by which such adjustment was calculated, (iv) the Exercise Price, and (v)
the number of shares subject to purchase hereunder after giving effect to such
adjustment, and shall be given by first class mail, postage prepaid, addressed
to the Warrantholder, at the address as shown on the books of the Company.
(h) Timely Notice. Failure to timely provide such notice required by
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subsection (g) above shall entitle Warrantholder to retain the benefit of the
applicable notice period notwithstanding anything to the contrary contained in
any insufficient notice received by Warrantholder. The notice period shall begin
on the notice is deemed given pursuant to Section 13.(e)
9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY.
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(a) Reservation of Preferred Stock. Subject to Section 1, the Preferred
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Stock issuable upon exercise of the Warrantholder's rights will be duty
authorized and duly and validly reserved and, when issued in accordance with the
provisions of this Warrant Agreement, will be validly issued, fully paid and
non-assessable, and will be free of any taxes, liens, charges or encumbrances of
any nature whatsoever; provided, however, that the Preferred Stock issuable
pursuant to this Warrant Agreement may be subject to restrictions on transfer
under state and/or Federal securities laws. The Company has made available to
the Warrantholder true, correct and complete copies of its Charter and Bylaws,
as amended. The issuance of certificates for shares of Preferred Stock upon
exercise of the Warrant Agreement shall be made without charge to the
Warrantholder for any issuance tax in respect thereof, or other cost incurred by
the Company in connection with such exercise and the related issuance of shares
of Preferred Stock. The Company shall not be required to pay any tax which may
be payable in respect of any transfer involved and the issuance and delivery of
any certificate in a name other than that of the Warrantholder.
(b) Due Authority. The execution and delivery by the Company of this
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Warrant Agreement and the performance of all obligations of the Company
hereunder, including the issuance to Warrantholder of the right to acquire the
shares of Preferred Stock, have been duty authorized by all necessary corporate
action on the part of the Company, and the Leases and this Warrant Agreement are
not inconsistent with the Company's Charter or Bylaws, do not contravene any law
or governmental rule, regulation or order applicable to it, do not and will not
contravene any provision of, or constitute a default under, any indenture,
mortgage, contract or
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other instrument to which it is a party or by which it is bound, and the Leases
and this Warrant Agreement constitute legal, valid and binding agreements of the
Company, enforceable in accordance with their respective terms: except that, as
provided in Section 1, the Preferred Stock has not yet been authorized or
reserved for issuance on exercise of the Warrant and such authorization and
reservation will be subject to Section 1 and subject to the approval of the
shareholders in accordance with the Delaware General Business Corporation Law.
(c) Consents and Approvals. No consent or approval of, giving of notice
----------------------
to, registration with, or taking of any other action in respect of any state,
Federal or other governmental authority or agency is required with respect to
the execution, delivery and performance by the Company of its obligations under
this Warrant Agreement, except for the filing of notices pursuant to Regulation
D under the 1933 Act and any filing required by applicable state securities law,
which filings will be effective by the time required thereby.
(d) Issued Securities. All issued and outstanding shares of Common Stock,
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Preferred Stock or any other securities of the Company have been duly authorized
and validly issued and are fully paid and nonassessable. All outstanding shares
of Common Stock, Preferred Stock and any other securities were issued in full
compliance with all Federal and state securities laws. In addition:
(i) Preferred Stock. There are 12,500,000 shares of preferred stock
---------------
authorized 4,000,000 shares of which have been designated as Series A Preferred
Stock (the Series a Stock'), of which 4,000,000 shares are issued and
outstanding and 8,428,571 shares of which have been designated Series Preferred
Stock (the "Series B Stock"), of which 8,428,571 shares are issued and
outstanding.
(ii) Common Stock. There are 35,000,000 shares of Common Stock
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authorized 6,333,333 shares of which are issued and outstanding and 1,666,667
shares of which are held in the Company's treasury. Of the authorized but
unissued Common Stock, 4,000,000 shares are reserved for issuance upon the
conversion of the Series A Stock, 8,428,571 shares as reserved for issuance upon
conversion of the Series B Stock, 5,062,167 shares are reserved for issuance
under the Company's stock option plan and 1,532,833 shares are reserved for
issuance upon exercise of warrants.
(iii) Except for (a) the conversion privileges of the Series a Stock
and Series B Stock, (b) the other rights, privileges and agreements contained
tin the First Amended and Restated Investor Rights Agreement and first Amended
and Restated Rights First Refusal and co-Sale Agreement, both dated as of
September 1, 1998, between the Company and various investors, (c) Amended and
Restated Common Stockholder Agreement dated as of September 1, 1998 between the
Company and J. Xxxxxxxx Xxxxxxx, and (d) as set forth in paragraph (ii) above,
there are no outstanding options, warrants, subscriptions, rights (including
conversion or preemptive rights or first refusal rights), agreements for the
purchase or acquisition from the company or by the Company of any shares of the
Company's capital stock or securities convertible into its capital stock.
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(iv) Under the Company's Certificate of Incorporation, no shareholder
of the Company has preemptive rights to purchase new issuances of the Company's
capital stock.
(e) Insurance. The Company has in full farce and effect insurance
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policies, with extended coverage, insuring the Company and its property and
business against such losses and risks, and in such amounts, as are customary
for corporations engaged in a similar business and similarity situated and as
otherwise may be required pursuant to the terms of any other contract or
agreement.
(f) Other Commitments to Register Securities. Except as set forth in this
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Warrant Agreement or in the First Amended and Restated Investor Rights Agreement
dated as of September 1, 1998, the Company is not, pursuant to the terms of any
other agreement currently in existence, under any obligation to register under
the 1933 Act any of its presently outstanding securities or any of its
securities which may hereafter be issued.
(g) Exempt Transaction. Subject to the accuracy of the Warrantholder's
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representations in Section 10 hereof, the issuance of the Preferred Stock upon
exercise of this Warrant will constitute a transaction exempt from (i) the
registration requirements of Section 5 of the 1933 Act, in reliance upon Section
4(2) thereof, and (ii) the qualification requirements of the applicable state
securities laws.
(h) Compliance with Rule 144. At the written request of the Warrantholder,
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who proposes to sell Preferred Stock issuable upon the exercise of the Warrant
in compliance with Rule 144 promulgated by the Securities and Exchange
Commission, the Company shall furnish to the Warrantholder, within ten days
after receipt of such request, a written statement confirming the Company's
compliance with the filing requirements of the Securities and Exchange
Commission as set forth in such Rule, as such Rule may be amended from time to
time.
10. REPRESENTATIONS AND COVENANTS OF THE WARRANTHOLDER.
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This Warrant Agreement has been entered into by the Company in reliance
upon the following representations and covenants of the Warrantholder:
(a) Investment Purpose. The right to acquire Preferred Stock or the
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Preferred Stock issuable upon exercise of the Warrantholder's rights contained
herein will be acquired for investment and not with a view to the sale or
distribution of any part thereof, and the Warrantholder has no present intention
of selling or engaging in any public distribution of the same except pursuant to
a registration or exemption.
(b) Private Issue. The Warrantholder understands (I) that the Preferred
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Stock issuable upon exercise of this Warrant is not registered under the 1933
Act or qualified under applicable state securities laws on the ground that the
issuance contemplated by this Warrant Agreement will be exempt from the
registration and qualifications requirements thereof, and (ii) that the
Company's reliance on such exemption is predicated on the representations set
forth in this Section 10.
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(c) Disposition of Warrantholder's Rights. In no event will the
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Warrantholder make a disposition of any of its rights to acquire Preferred Stock
or Preferred Stock issuable upon exercise of such rights unless and until (i) it
shall have notified the Company of the proposed disposition, and (ii) if
requested by the Company, it shall have furnished the Company with an opinion of
counsel (which counsel may either be inside or outside counsel to the
Warrantholder) satisfactory to the Company and its counsel to the effect that
(A) appropriate action necessary for compliance with the 1933 Act has been
taken, or (B) an exemption from the registration requirements of the 1933 Act is
available. Notwithstanding the foregoing, the restrictions imposed upon the
transferability of any of its rights to acquire Preferred Stock or Preferred
Stock issuable on the exercise of such rights do not apply to transfers from the
beneficial owner of any of the aforementioned securities to its nominee or from
such nominee to its beneficial owner, and shall terminate as to any particular
share of Preferred Stock when (1) such security shall have been effectively
registered under the 1933 Act and sold by the holder thereof in accordance with
such registration or (2) such security shall have been sold without registration
in compliance with Rule 144 under the 1933 Act, or (3) a letter shall have been
issued to the Warrantholder at its request by the staff of the Securities and
Exchange Commission or a ruling shall have been issued to the Warrantholder at
its request by such Commission stating that no action shall be recommended by
such staff or taken by such Commission, as the case may be, if such security is
transferred without registration under the 1933 Act in accordance with the
conditions set forth in such letter or ruling and such letter or ruling
specifies that no subsequent restrictions on transfer are required. Whenever the
restrictions imposed hereunder shall terminate, as hereinabove provided, the
Warrantholder or holder of a share of Preferred Stock then outstanding as to
which such restrictions have terminated shall be entitled to receive from the
Company, without expense to such holder, one or more new certificates for the
Warrant or for such shares of Preferred Stock not bearing any restrictive
legend.
(d) Financial Risk. The Warrantholder has such knowledge and experience in
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financial and business matters as to be capable of evaluating the merits and
risks of its investment, and has the ability to bear the economic risks of its
investment.
(e) Risk of No Registration. The Warrantholder understands that if the
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Company does not register with the Securities and Exchange Commission pursuant
to Section 12 of the 1934 Act (the "1934 Act), or file reports pursuant to
Section 15(d), of the 1934 Act", or if a registration statement covering the
securities under the 1933 Act is not in effect when it desires to sell (i) the
rights to purchase Preferred Stock pursuant to this Warrant Agreement, or (ii)
the Preferred Stock issuable upon exercise of the right to purchase, it may be
required to hold such securities for an indefinite period. The Warrantholder
also understands that any sale of its rights of the Warrantholder to purchase
Preferred Stock or Preferred Stock which might be made by it in reliance upon
Rule 144 under the 1933 Act may be made only in accordance with the terms and
conditions of that Rule. (f) Accredited Investor. Warrantholder is an
"accredited investor within the meaning of the Securities and Exchange Rule 501
of Regulation 0, as presently in effect.
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11. TRANSFERS.
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Subject to the terms and conditions contained in Section 10 hereof, this
Warrant Agreement and all rights hereunder are transferable in whole or in part
by the Warrantholder and any successor transferee, provided, however, in no
event shall the number of transfers of the rights and interests in all of the
Warrants exceed three (3) transfers and all such transfers shall be limited to
affiliates of such Warrantholder. The transfer shall be recorded on the books of
the Company upon receipt by the Company of a notice of transfer in the form
attached hereto as Exhibit III (the "Transfer Notice"), at its principal offices
and the payment to the Company of all transfer taxes and other governmental
charges imposed on such transfer.
12. MISCELLANEOUS.
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(a) Effective Date. The provisions of this Warrant Agreement shall be
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construed and shall be given effect in all respects as if it had been executed
and delivered by the Company on the date hereof. This Warrant Agreement shall be
binding upon any successors or assigns of the Company.
(b) Attorney's Fees. In any litigation, arbitration or court proceeding
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between the Company and the Warrantholder relating hereto, the prevailing party
shall be entitled to attorneys' fees and expenses and all costs of proceedings
incurred in enforcing this Warrant Agreement.
(c) Governing Law. This Warrant Agreement shall be governed by and
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construed for all purposes under and in accordance with the laws of the State of
Illinois.
(d) Counterparts. This Warrant Agreement may be executed in two or more
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counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(e) Notices. Any notice required or permitted hereunder shall be given in
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writing and shall be deemed effectively given upon personal delivery, facsimile
transmission (provided that the original is sent by personal delivery, overnight
courier or mail as hereinafter set forth) or five (5) days after deposit in the
United States mail, by registered or certified mail, addressed (i) to the
Warrantholder at 0000 Xxxxx Xxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000, Attention:
Venture Lease Administration, cc: Legal Department, Attention.: General Counsel,
(and/or, if by facsimile, (847) 518-5.465 and (000)000-0000) and (ii) to the
Company at 1445 -- 000xx Xxxxxx XX, Xxxxxxxx, Xxxxxxxxxx 00000, Attention: Chief
Financial Officer (and/or if by facsimile, (000) 000-0000 or at such other
address as any such party may subsequently designate by written notice to the
other party.
(f) Remedies. In the event of any default hereunder, the non-defaulting
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party may proceed to protect and enforce its rights either by suit in equity
and/or by action at law, including but not limited to an action for damages as a
result of any such default, and/or an action for specific performance for any
default where Warrantholder will not have an adequate remedy at law and where
damages will not be readily ascertainable. The Company expressly agrees that it
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shall not oppose an application by the Warrantholder or any other person
entitled to the benefit of this Agreement requiring specific performance of any
or all provisions hereof or enjoining the Company from continuing to commit any
such breach of this Agreement.
(g) No Impairment of Rights. The Company will not, by amendment of its
-----------------------
Charter or through any other means, 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
actions as may be necessary or appropriate in order to protect the rights of the
Warrantholder against impairment.
(h) Survival. The representations, warranties, covenants and conditions of
--------
the respective parties contained herein or made pursuant to this Warrant
Agreement shall survive the execution and delivery of this Warrant Agreement.
(i) Severability. In the event any one or more of the provisions of this
------------
Warrant Agreement shall for any reason be held invalid, illegal or
unenforceable, the remaining provisions of this Warrant Agreement shall be
unimpaired, and the invalid, illegal or unenforceable provision shall be
replaced by a mutually acceptable valid, legal and enforceable provision, which
comes closest to the intention of the parties underlying the invalid, illegal or
unenforceable provision.
(j) Amendments. Any provision of this Warrant Agreement may be amended by
----------
a written instrument signed by the Company and by the Warrantholder.
(k) Additional Documents. The Company, upon execution of this Warrant
--------------------
Agreement, shall provide the Warrantholder with certified resolutions with
respect to the representations, warranties and covenants set forth in
subparagraphs (a) through (d), (f) and (g) of Section 9 above. The Company shall
also supply such other documents as the Warrantholder may from time to time
reasonably request.
IN WITNESS WHEREOF, the parties hereto have caused this Warrant Agreement
to be executed by its officers thereunto duly authorized as of the Effective
Date.
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Company: XXXXXXXXXX.XXX, INC.
By: /s/: Xxxxx Xxxxxxx
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Title: President and CEO
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Warrantholder: COMDISCO, INC.
By: /s/: Xxxx X. Xxxxxx
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Title: Senior Vice President
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