THIS WARRANT AND THE SHARES OF COMMON STOCK PURCHASABLE HEREUNDER HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). SUCH
WARRANTS AND SHARES MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR
HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT
TO SUCH SECURITIES UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED.
SCOOP, INC.
(formerly Xxxxxxxx-XxxXxx Communications, Inc.)
WARRANT
DATED: June __, 1996
----------------
Holder:
Number of Warrants: 66,667
----------------
THIS CERTIFIES THAT Holder is the owner of the number of Warrants (the
"Warrants") set forth above of SCOOP, INC., a California corporation formerly
known as Xxxxxxxx-XxxXxx Communications, Inc. (hereinafter called the
"Company"). Each Warrant entitles the registered holder to purchase for $2.55
in cash one share of Common Stock of the Company ("Common Stock"). This Warrant
is issued in connection with an offering by the Company of Warrants to purchase
200,000 shares of the Company's Common Stock to an aggregate of three
consultants pursuant to the provisions of those certain Corporate Development
Agreements, of even date herewith, between the Company and each of the Holder
and such two other consultants (the "Offering").
For purposes of this Warrant, the term "Holder Affiliate" means: (i)
Holder or any entity controlled by or under common control with Holder; or (ii)
a grantor trust established by or on behalf of Holder. For purposes hereof, a
person shall be deemed to have "control" of an entity if such person is the
owner of a majority voting interest in such entity.
For purposes of this Warrant, the term "Majority of the Warrant
Shares" means the record holders of more than 50% of the Warrant Shares
originally underlying this Warrant and all other Warrants issued in connection
with the Offering (assuming the exercise in full of all such Warrants).
For purposes of this Warrant, the term "Public Offering" means a
firmly underwritten offering of Common Stock by the Company that is registered
on Form S-1 or Form SB-2 under the Act.
For purposes of this Warrant, the term "Warrant Shares" means the
shares of Common Stock purchasable hereunder.
1. RIGHT TO EXERCISE WARRANTS. The rights represented by this
Warrant may be exercised at any time commencing as of the date hereof (the
"Initial Exercise Date"), and terminating at 5:00 p.m., Los Angeles time, sixty
(60) months after the Initial Exercise Date.
2. EXERCISE OF WARRANTS. Subject to Section 1 and the other
provisions of this Warrant, the rights represented by this Warrant may be
exercised by: (i) surrender of this Warrant (with the purchase form at the end
hereof properly executed) at the principal executive office of the Company (or
such other office or agency of the Company as it may designate by notice in
writing to Holder at the address of Holder appearing on the books of the
Company); and (ii) payment by means of a personal check to the Company of the
exercise price for the number of shares specified in the above-mentioned
purchase form together with applicable stock transfer taxes, if any. This
Warrant shall be deemed to have been exercised immediately prior to the close of
business on the date the Warrant is surrendered and payment is made in
accordance with the foregoing provisions of this Section 2, and the person or
persons in whose name or names the certificates for shares of Common Stock shall
be issuable upon such exercise shall become the holder or holders of record of
such Common Stock at that time and date. The certificates for the Common Stock
so purchased shall be delivered to Holder within a reasonable time, not
exceeding ten (10) business days, after the rights represented by this Warrant
shall have been so exercised, and shall bear a legend substantially similar to
the following restrictive legend:
"This security has not been registered under the Securities Act
of 1933, as amended, and may not be sold or offered for sale
unless registered under said Act and any applicable state's
securities laws or unless the Company has received an opinion of
counsel satisfactory to the Company that such registration is not
required."
3. ASSIGNMENT. This Warrant may be transferred, sold, assigned or
hypothecated, only pursuant to a valid and effective registration statement or
if the Company has received from counsel to the Company (or from counsel to the
Holder that is reasonably acceptable to the Company) a written opinion, in a
form reasonably acceptable to the Company, to the effect that registration of
the Warrant or the Common Stock underlying the Warrant is not necessary in
connection with such transfer, sale, assignment or hypothecation. Any such
assignment shall be effected by Holder by: (i) executing the form of assignment
at the end hereof;
(ii) surrendering the Warrant for cancellation at the office or agency of the
Company referred to in Section 1 hereof, accompanied by the opinion of counsel
to the Company referred to above; and (iii) delivery to the Company of a
statement by the transferee Holder (in a form acceptable to the Company and its
counsel) that such Warrant is being acquired by such Holder for investment and
not with a view to its distribution or resale; whereupon the Company shall
issue, in the name or names specified by Holder (including Holder) new Warrants
representing in the aggregate rights to purchase the same number of Warrant
Shares as are purchasable under the Warrant surrendered. The term "Holder"
shall be deemed to include any person to whom this Warrant is transferred in
accordance with the terms hereof.
4. REGISTRATION RIGHTS. The Holder will have the following
registration rights with respect to the Warrant Shares:
a. DEMAND REGISTRATION. At any time commencing on the day
following the day on which the Company completes an initial Public Offering in
which the Holder is not entitled to participate as a selling shareholder by the
underwriter thereof and expiring two (2) years thereafter, record holders of at
least a Majority of the Warrant Shares shall have the right (which right is in
addition to the registration rights under Section 4b. hereof), exercisable by
written notice to the Company, to have the Company prepare, file and use its
best efforts to have declared effective by the Securities and Exchange
Commission (the "Commission"), on one occasion, a registration statement and
such other documents, including a prospectus, as may be necessary in the opinion
of both counsel for the Company and counsel for such holders, if any, in order
to comply with the provisions of the Act and any applicable blue sky laws, so as
to permit the public sale by the holders of the Warrant Shares owned and held of
record by such holders at the time of exercise of such registration rights for a
period of twelve (12) consecutive months. The Company covenants and agrees to
give written notice of any registration request under this Section 4a. by any
holders of a Majority of the Warrant Shares to all other registered holders of
Warrant Shares within ten (10) days from the date of the receipt of any such
registration request.
b. PIGGY-BACK REGISTRATION. If at any time the Company
proposes to register any of its securities under the Act (other than in
connection with a merger, acquisition, exchange offer, redemption or pursuant to
Form S-8 or a successor form) it will give written notice (the "Filing Notice")
by certified mail, return receipt requested, at least twenty (20) days prior to
the filing of each such registration statement to each holder of any Warrants or
Warrant Shares of its intention to do so. Upon the written request of any
record holder of any outstanding Warrants or Warrant Shares given within ten
(10) days after receipt of the Filing Notice to include any Warrant Shares owned
by such holder in such proposed registration statement, the Company shall afford
such holder the opportunity to have such Warrant Shares registered under such
registration. The "piggy-back" registration rights described in this Section
4b. shall terminate at such time as the Warrant
Shares are saleable in one or more transactions pursuant to Rule 144 of the
Securities Act. Any sales of Warrant Shares pursuant to such registration
statement shall be effected through the underwriter of such registered offering,
if any, and the holder of such Warrant Shares shall compensate the underwriter
in accordance with such underwriter's customary compensation practices.
Notwithstanding anything to the contrary contained in the
provisions of this Section 4b., the Company shall have the right at any time
after it shall have given written notice pursuant to this Section 4b.
(irrespective of whether a written request for inclusion of any such securities
shall have been made) to elect not to file any such proposed registration
statement, or to withdraw the same after the filing but prior to the effective
date thereof.
c. LIMITATION ON REGISTRATION RIGHTS.
(1) Notwithstanding anything to the contrary contained in
this Agreement: (A) the Company shall not be obligated to effect a registration
pursuant to Section 4 of this Agreement during the period starting with the date
ninety (90) days prior to the Company's estimated date of filing of, and ending
on a date ninety (90) days following the effective date of, a registration
statement pertaining to a Public Offering, provided that the Company is actively
employing in good faith all reasonable efforts to cause such registration
statement to become effective and that the Company's estimate of the date of
filing such registration statement is made in good faith; and (B) if the Company
shall furnish Holder a certificate signed by the President of the Company
stating that in the good faith judgment of the Board of Directors of the Company
it would be seriously detrimental to the Company or its shareholders for a
registration statement to be filed in the near future, then the Company's
obligations to use its best efforts to file a registration statement on demand
by the Holder shall be deferred for a period not to exceed ninety (90) days;
provided, however, that the Company shall not obtain such a deferral more than
once in any twelve (12) month period.
d. INDEMNIFICATION.
(1) The Company shall indemnify and hold harmless the
Holder from and against any and all losses, claims, damages and liabilities
caused by any untrue statement of a material fact contained in any registration
statement filed by the Company under the Act by reason of this Section 4, any
post-effective amendment to such registration statement, or any prospectus
included therein, or caused by any 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 or liabilities are
caused by any such untrue statement or omission based upon information furnished
or required to be furnished in writing to the Company by the Holder (or the
authorized representatives or agents of the Holder) expressly for use therein,
which indemnification shall include each person, if any, who controls the Holder
within the meaning of the
Act and each officer, director, employee and agent of the Holder; provided,
however, that the indemnification in this Section 5d. with respect to any
prospectus shall not inure to the benefit of the Holder (or to the benefit of
any person controlling the Holder) on account of any such loss, claim, damage or
liability arising from the sale of Warrants or Warrant Shares by the Holder, if
a copy of a subsequent prospectus correcting the untrue statement or omission in
such earlier prospectus was provided to the Holder by the Company prior to the
subject sale and the subsequent prospectus was not delivered or sent by the
Holder to the purchaser of such securities prior to such sale; and provided
further, that the Company shall not be obligated to so indemnify the Holder or
any other person referred to above unless the Holder or other person, as the
case may be, shall at the same time indemnify the Company, its directors, each
officer signing the Registration Statement and each person, if any, who controls
the Company within the meaning of the Act, from and against any and all losses,
claims, damages and liabilities caused by any untrue statement of a material
fact contained in any registration statement or any prospectus required to be
filed or furnished by reason of this Agreement or caused by any omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, insofar as such losses, claims, damages
or liabilities are caused by any untrue statement or omission based upon
information furnished in writing to the Company by the Holder expressly for use
therein.
(2) If for any reason the indemnification provided for in
the preceding subparagraph is held by a court of competent jurisdiction to be
unavailable to an indemnified party with respect to any loss, claim, damage,
liability or expense referred to therein, then the indemnifying party, in lieu
of indemnifying such indemnified party thereunder, shall contribute to the
amount paid or payable by the indemnified party as a result of such loss, claim,
damage or liability in such proportion as is appropriate to reflect not only the
relative benefits received by the indemnified party and the indemnifying party,
but also the relative fault of the indemnified party and the indemnifying party,
as well as any other relevant equitable considerations.
e. EXPENSES OF REGISTRATION; PROSPECTUS DELIVERY.
(1) All expenses, filing fees and other costs incurred by
the Company in connection with any registration of securities pursuant to this
Section 4 (exclusive of underwriting discounts and selling commissions
applicable to any sale of registered securities) shall be borne by the Company.
(2) In the case of each registration effected by the
Company pursuant to this Section 4, the Company will: (i) furnish to the holders
of the Warrant Shares such numbers of copies of a prospectus, including a
preliminary prospectus, in conformity with the requirements of the Act, and such
other documents as such holders may reasonably request in order to facilitate
the disposition of the Warrant Shares owned by them, and (ii) notify each
holder of Warrant Shares covered by such registration statement at any time when
a prospectus relating thereto is required to be delivered under the Act of the
happening of any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances then existing.
f. SALES ONLY THROUGH UNDERWRITER. Notwithstanding anything to
the contrary contained in this Warrant, Holder acknowledges and agrees that,
with the exception of private sales or transfers which are not effected through
a broker-dealer, neither Holder nor any Holder Affiliate or any transferees or
assignees of Holder or any Holder Affiliate will sell, pledge, assign or
otherwise transfer or hypothecate any of the Warrant Shares through any person
or other entity other than such entity which is or shall be the Company's
underwriter in a Public Offering, in which event such underwriter is to be
compensated by the Holder, Holder Affiliate or such transferee or assignee in
accordance with the underwriter's customary compensation practices.
5. COMMON STOCK. The Company covenants and agrees that all shares
of Common Stock which may be issued upon exercise of this Warrant will, upon
issuance, be duly and validly issued, fully paid and nonassessable and no
personal liability will attach to the holder thereof. The Company further
covenants and agrees that, during the periods 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 for issuance upon exercise of this
Warrant and all other Warrants.
6. NO STOCKHOLDER RIGHTS. This Warrant shall not entitle Holder to
any voting rights or other rights as a stockholder of the Company.
7. ADJUSTMENT OF RIGHTS. In the event that the outstanding shares
of Common Stock of the Company are at any time increased or decreased or changed
into or exchanged for a different number or kind of share or other security of
the Company or of another corporation through reorganization, merger,
consolidation, liquidation, recapitalization, stock split, combination of shares
or stock dividends payable with respect to such Common Stock, appropriate
adjustments in the number, kind and price of such securities then subject to
this Warrant shall be made effective as of the date of such occurrence so that
the position of Holder upon exercise will be the same as it would have been had
he owned immediately prior to the occurrence of such event the number of shares
of Common Stock subject to this Warrant. Such adjustment shall be made
successively whenever any event listed above shall occur and the Company will
notify Holder of the Warrant of each such adjustment. Any fraction of a share
resulting from any adjustment shall be eliminated and the price per share of the
remaining shares subject to this Warrant adjusted accordingly.
8. NOTICES. Unless applicable law requires a different method of
giving notice, any and all notices, demands or other communications required or
desired to be given hereunder by any party shall be in writing. Assuming that
the contents of a notice meet the requirements of the specific Section of this
Warrant which mandates the giving of that notice, a notice shall be validly
given or made to another party if served either personally or if mailed, postage
prepaid, or if transmitted by telegraph, telecopy or other electronic written
transmission device or if sent by overnight courier service, and if addressed to
the applicable party as set forth below. If such notice, demand or other
communication is served personally, service shall be conclusively deemed made at
the time of such personal service. If such notice, demand or other
communication is given by mail, service shall be conclusively deemed given upon
the earlier of receipt or seventy-two (72) hours after the deposit thereof in
the United States mail, postage pre-paid. If such notice, demand or other
communication is given by overnight courier, or electronic transmission, service
shall be conclusively made at the time of confirmation of delivery. The
addresses for Holder and the Company are as follows:
If to Holder:
If to the Company: Scoop, Inc.
0000 Xxxx 00xx Xxxxxx
Xxxxx 000
Xxxxx Xxxx, XX 00000
Attn: Chief Executive Officer
Any party hereto may change his or its address for the purpose of receiving
notices, demands and other communications as herein provided by a written notice
given in the aforesaid manner to the other party hereto.
9. GOVERNING LAW. This Warrant shall be governed by and construed
in accordance with the internal laws of California.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed
by its duly authorized officer, and to be dated as of the date set forth above.
SCOOP, INC. (formerly Xxxxxxxx-
XxxXxx Communications, Inc.)
By:
--------------------------------
Xxxx Xxxxxxxx, President and
Chief Executive Officer
ACKNOWLEDGED, AGREED TO AND ACCEPTED:
------------------------------
PURCHASE FORM
(To be signed only upon exercise of Warrant)
The undersigned, the holder of the foregoing Warrant, hereby
irrevocably elects to exercise the purchase rights represented by such Warrant
to exercise _________ Warrants for, and to the purchase thereunder, __________
shares of Common Stock and herewith makes payment of $__________ therefor, and
requests that the certificates for shares of Common Stock be issued in the
name(s) of, and delivered to, _______________ whose address(es) is (are)
_________________________.
Dated: ____________, ____
------------------------------
Name of Holder
------------------------------
Number and Street
------------------------------
City, State and Zip Code
TRANSFER FORM
(To be signed only upon transfer of Warrant)
For value received, the undersigned hereby sells, assigns, and
transfers unto ___________________ the right to purchase shares of Common Stock
represented by the attached Warrant in respect of _________ Warrants, and
appoints _________________________ attorney to transfer such rights on the books
of Scoop, Inc., with full power of substitution in the premises.
Dated: ____________, ____
------------------------------
Name of Holder
------------------------------
Number and Street
------------------------------
City, State and Zip Code
In the presence of:
------------------------------
