THIS WARRANT AND THE SHARES OF STOCK OF XXXXX.XXX, INC. TO BE ISSUED UPON ANY
EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY
STATE SECURITIES LAWS AND ANY SALE, TRANSFER, PLEDGE OR OTHER DISPOSITION
THEREOF MAY BE MADE ONLY (i) IN A REGISTRATION UNDER SAID ACT OR (ii) IF AN
EXEMPTION FROM REGISTRATION UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS
IS AVAILABLE AND THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL TO THAT EFFECT
REASONABLY SATISFACTORY TO IT.
XXXXX.XXX, INC.
COMMON STOCK PURCHASE WARRANT
TO PURCHASE 200,000 SHARES OF THE COMMON STOCK
OF XXXXX.XXX, INC.
This Warrant Expires February 8, 2005
Warrant No. AB00014
THIS CERTIFIES that, subject to the terms and conditions set forth in
this Warrant, ARCHERY CAPITAL LLC (the "Holder") is entitled to purchase from
XxXxx.xxx, Inc., a Delaware corporation (the "Company"), at any time or from
time to time during the Exercise Period (as defined in Section 14 below) the
number of fully paid and non-assessable shares of common stock, par value $.01
per share, of the Company (the "Shares") as provided herein upon surrender of
this Warrant at the principal office of the Company, and, at the election of the
Holder, upon payment of the purchase price at said office in cash or by
xxxxxxx's check or by the wire transfer of funds in a dollar amount equal to the
purchase price of the Shares for which the consideration is being given.
This Warrant shall be exercisable for that number of Shares as set forth
above.
1. PURCHASE PRICE. The purchase price of one share of Common Stock
(or such securities as may be substituted for one share of Common Stock pursuant
to the provisions set forth below) (the "Warrant Price") shall be One Dollar
Eighty Seven and One Half Cents ($1.875).
2. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SHARES. The number and
kind of securities issuable upon the exercise of this Warrant shall be subject
to adjustment from time to time upon the happening of certain events as follows:
(a) ADJUSTMENT FOR DIVIDENDS IN STOCK. If, at any time on or
after the date hereof, the holders of the Common Stock of the Company (or any
shares of stock or other securities at the time receivable upon the exercise of
this Warrant) shall have received, or, on or after the record date fixed for the
determination of eligible stockholders, shall have become entitled to receive,
without payment therefor, other or additional stock of the Company by way of
dividend (other than as provided for in Section 2(b) below), then and in each
such case, upon the
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exercise of this Warrant, the Holder shall be entitled to receive, in addition
to the number of shares of Common Stock receivable and without payment of any
additional consideration, the amount of such other or additional stock of the
Company which the Holder would receive on the date of such exercise had it been
the holder of record of such Common Stock on the date hereof and had thereafter,
during the period from the date hereof to and including the date of such
exercise, retained such shares and/or all other additional stock receivable by
it during such period and given effect to all adjustments called for during such
period by this Section 2.
(b) ADJUSTMENT FOR CHANGES IN COMMON STOCK. In the event of
changes in the outstanding Common Stock of the Company by reason of split-ups,
recapitalizations, reclassifications, mergers, consolidations, combinations or
exchanges of shares, separations, reorganizations, liquidations, or the like,
the number and class of shares available under the Warrant in the aggregate and
the Warrant Price shall be correspondingly adjusted by the Board of Directors of
the Company. The adjustment shall be such as will give the Holder, upon
exercise for the same aggregate Warrant Price, the total number, class, and kind
of shares as the Holder would have owned had the Warrant been exercised prior to
the event and had the Holder continued to hold such shares until after the event
requiring adjustment.
3. NO FRACTIONAL SHARES. No fractional shares of Common Stock will
be issued in connection with any subscription under this Warrant. In lieu of
any fractional shares which would otherwise be issuable, the Company shall pay
cash equal to the product of such fraction multiplied by the fair market value
of one share of Common Stock on the date of exercise as determined in good faith
by the Company's Board of Directors.
4. NO STOCKHOLDER RIGHTS. This Warrant shall not entitle its holder
to any of the rights of a stockholder of the Company prior to its exercise.
5. RESERVATION OF STOCK. The Company covenants that during the
period this Warrant is exercisable, the Company will reserve from its authorized
and unissued Common Stock a sufficient number of shares to provide for the
issuance of Common Stock upon the exercise of this Warrant. The Company agrees
that its issuance of this Warrant shall constitute full authority to its
officers who are charged with the duty of executing stock certificates to
execute and issue the necessary certificates for shares of Common Stock upon the
exercise of this Warrant.
6. EXERCISE OF WARRANT. This Warrant may be exercised by the Holder
or its registered assigns, in whole or in part, by the surrender of this Warrant
at the principal office of the Company, together with the attached form of
subscription, duly executed, and accompanied by payment in full of the amount of
the Warrant Price in the form described in this Warrant. Upon partial exercise
of this Warrant, a new warrant or warrants containing the same date and
provisions as this Warrant shall be issued by the Company to the Holder for the
number of shares of Common Stock with respect to which this Warrant shall not
have been exercised. A Warrant shall be deemed to have been exercised
immediately prior to the close of business on the date of its surrender for
exercise as provided above, and the person entitled to receive the shares of
Common Stock issuable upon such exercise shall be treated for all purposes as
the holder of such
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shares of record as of the close of business on such date. As promptly as
practicable on or after such date, the Company shall issue and deliver to the
person or persons entitled to receive the shares, a certificate or certificates
for the number of full shares of Common Stock issuable upon such exercise,
together with cash in lieu of any fraction of a share as provided above.
7. CERTIFICATE OF ADJUSTMENT. Whenever the Warrant Price is adjusted
as provided in Section 2, the Company shall promptly deliver to the record
holder of this Warrant a certificate of an officer of the Company setting forth
the relevant Warrant Price or number of shares after such adjustment and setting
forth a brief statement of the facts requiring such adjustment.
8. COMPLIANCE WITH SECURITIES ACT. The Holder, by acceptance of this
Warrant, agrees that this Warrant and the shares of Common Stock to be issued
upon its exercise (or shares of any security into which such Common Stock may be
converted) (the "Shares") are being acquired for investment and that the Holder
will not offer, sell, or otherwise dispose of this Warrant and any shares of
Common Stock to be issued upon its exercise (or shares of any security into
which such Common Stock may be converted) except under circumstances which will
not result in a violation of the Securities Act of 1933, as amended (the
"Securities Act"). Upon exercise of this Warrant, the Holder shall, if
requested by the Company, confirm in writing its investment purpose and
acceptance of the restrictions on transfer of the Shares.
9. REGISTRATION RIGHTS.
(a) Rights to Registration. If, at any time during the period
after the date of issuance of this Warrant and ending ten (10) years thereafter,
the Company shall determine to register under the Securities Act of 1933, as
amended, any shares of Stock to be offered for cash by it or others, pursuant to
a registration statement on Form S-I, S-2 or S-3 (or their equivalent), the
Company will (i) promptly give written notice to the holder of this Warrant of
its intention to file such registration statement and (ii) at the Company's
expense (which shall include, without limitation, all registration and filing
fees, printing expenses, fees and disbursements of counsel and independent
accountants for the Company, and fees and expenses incident to compliance with
state securities law, but shall not include fees and disbursements of counsel
for the holder of this Warrant) include among the securities covered by the
registration statement such portions of the Shares then held by the holder of
this Warrant as shall be specified in a written request to the Company within
thirty (30) days after the date on which the Company gave the notice described
in (a)(i) above. Upon receipt of such written request and of the Shares
specified in the request (any shareholder requesting registration being
individually called a "Selling Shareholder"), the Company shall (i) use its
reasonable best efforts to effect the registration, qualification or compliance
of the Shares under the Securities Act and under any other applicable federal
law and any applicable securities or blue sky laws of jurisdictions within the
United States; (ii) furnish each Selling Shareholder such number of copies of
the prospectus contained in the registration statement filed under the
Securities Act (including preliminary prospectus) in conformity with the
requirements of the Securities Act, and such other documents as the Selling
Shareholder may reasonably request in order to facilitate the disposition of the
Shares covered by the registration statement; (iii) notify each Selling
Shareholder, at any time when a prospectus relating to the Stock covered by such
registration statement is required to be delivered under the Securities Act,
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of the happening of any event as a result of which the prospectus forming a part
of such registration statement, as then in effect, includes an untrue statement
of a material fat or omits to state any material fact required to be stated
therein or necessary to make the statements therein not misleading; and (iv) at
the request of the Selling Shareholder, prepare and furnish to the Selling
Shareholder any reasonable number of copies of any supplement to or amendment of
such prospectus as may be necessary so that, as thereafter delivered to the
holder of this Warrant, such prospectus shall not include an untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading.
(b) Registration of Underwritten Offering. If the offering of
securities to be registered by the Company is underwritten, each Selling
Shareholder shall sell the Shares to or through the underwriter(s) of the
securities being registered for the account of the Company or others upon the
same terms applicable to the Company or others.
(c) Indemnification. In the event that Shares purchased
pursuant to this Agreement are included in a registration statement under this
Section 9, the Company will indemnify and hold harmless each Selling Shareholder
and each other person, if any, who controls such Selling Shareholder within the
meaning of the Securities Act, against any losses, claims, damages or
liabilities, joint or several, to which such Selling Shareholder or controlling
person may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities ( or actions in respect thereof) arise
out of are based upon any untrue statement or alleged untrue statement of any
material fact contained, on the effective date thereof, in any registration
statement pursuant to which the Shares were registered under the Securities Act,
any preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, or arise out
of or are based upon the failure by the Company to file any amendment or
supplement thereto that was required to be filed under the Securities Act, and
will reimburse such Selling Shareholder and each such controlling person for any
legal or any other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action.
Notwithstanding the foregoing, the Company will not be liable in any such case
to the extent that any such loss, claim, damage, or liability arises out of or
is based upon an untrue statement or omission made in such registration
statement, preliminary prospectus, final prospectus or amendment or supplement
in reliance upon and in conformity with written information furnished to the
Company through an instrument duly executed by or on behalf of any Selling
Shareholder specifically for use in the preparation of sch registration
statement, preliminary prospectus, final prospectus, or amendment or supplement.
It shall be a condition precedent to the obligation of the Company to take any
action pursuant to this Section that the Company shall have received an
undertaking satisfactory to it from each Selling Shareholder to indemnify and
hold harmless the Company (in the same manner and to the same extent as set
forth in this Section), each director of the Company, each officer who shall
sign such registration statement, and any persons who control the Company within
the meaning of the Securities Act, with respect to any statement or omission
from such registration statement, preliminary prospectus, or any final
prospectus contained therein, or any amendment or supplement thereto, if such
statement or omission was made in reliance upon and
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in conformity with written information furnished to the Company through an
instrument duly executed by the indemnifying party specifically for use in the
preparation of such registration statement, preliminary prospectus, final
prospectus, or amendment or supplement. Promptly following receipt by an
indemnified party of notice of the commencement of any action involving a claim
referred to above in this Section 9, such indemnified party will, if a claim in
respect thereof is to be made against an indemnifying party, give written notice
to the latter of the commencement of such action. In case any such action is
brought against an indemnified party, the indemnifying party will be entitled to
participate in and to assume the defense thereof, jointly with any other
indemnifying party similarly notified, to the extent that it may wish, with
counsel reasonably satisfactory to such indemnified party, and after notice from
.the indemnifying party to such indemnified party of its election to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party for any legal or other expenses subsequently incurred by the latter in
connection with the defense thereof.
(d) Binding Provisions. The provisions of this Section 9 shall
be binding on the successors of the Company.
(e) Transfer of Registration Rights. The rights to cause the
Company to register the securities granted to the holder of this Warrant by the
Company under Section 9 may be assigned by the holder of this Warrant to a
transferee or assignee of any of the holder of this Warrant's Shares, provided
that the Company is given written notice by the holder of this Warrant at the
time of or within a reasonable time after said transfer, stating the name and
address of said transferee or assignee and indemnifying the securities with
respect to which such registration rights are being assigned.
10. SUBDIVISION OF WARRANT. At the request of the holder of this
Warrant in connection with a transfer or exercise of a portion of the Warrant
and upon surrender of this Warrant for such purpose to the Company, the Company
at its expense (except for any transfer tax payable) will issue in exchange
warrants of like tenor and date representing in the aggregate the right to
purchase such number of shares of Common Stock as shall be designated by such
holder at the time of such surrender; provided, however, that the Company's
obligations to subdivide securities under this Section shall be subject to and
conditioned upon the compliance of any such subdivision with applicable state
securities laws and with the Securities Act.
11. NOTICES OF RECORD DATE. In case:
(a) the Company shall take a record of the holders of its
Common Stock (or other stock or securities at the time receivable upon the
exercise of the Warrant) for the purpose of entitling them to receive any
dividend or other distribution, or any rights to subscribe for or purchase any
shares of stock of any class or any other securities, or to receive any other
right, or
(b) of any capital reorganization of the Company, any
reclassification of the capital stock of the Company, any consolidation or
merger of the Company with or into another corporation, or any conveyance of all
or substantially all of the assets of the Company to another corporation, or
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(c) of any voluntary dissolution, liquidation or winding-up of
the Company;then, and in each such case, the Company will mail or cause to be
mailed to each holder of a Warrant at the time outstanding a notice specifying,
as the case may be, (i) the date on which a record is to be taken for the
purpose of such dividend, distribution or right, and stating the amount and
character of such dividend, distribution or right, or (ii) the date on which
such reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding-up is to take place, and the time, if any is
to be fixed, as of which the holders of record of Common Stock or such other
stock or securities at the time receivable upon the exercise of the Warrant
shall be entitled to exchange their shares of Common Stock (or such other stock
or securities) for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding-up. Such notice shall be mailed at least 30
days prior to the date therein specified.
12. LOSS, THEFT, DESTRUCTION, OR MUTILATION OF WARRANT. Upon receipt
by the Company of evidence reasonably satisfactory to it of the loss, theft,
destruction, or mutilation of this Warrant, and in the case of loss, theft, or
destruction, receipt of indemnity or security reasonably satisfactory to it and
reimbursement to the Company of all reasonable expenses incidental thereto, and
in the case of mutilation, upon surrender and cancellation of this Warrant, the
Company will make and deliver a new Warrant of like tenor and dates as of such
cancellation, in lieu of this Warrant.
13. MISCELLANEOUS. This Warrant shall be governed by the laws of the
State of California. The headings in this Warrant are for purposes of
convenience and reference only and shall not be deemed to constitute a part of
this Warrant. Neither this Warrant nor any term included may be changed,
waived, discharged, or terminated orally but only by an instrument in writing
signed by the Company and the registered holder. All notices and other
communications from the Company to the Holder shall be by telecopy or expedited
courier service to the address furnished to the Company in writing by the last
holder of this Warrant who shall have furnished an address to the Company in
writing.
14. EXERCISE PERIOD. The Exercise Period shall mean the period
commencing on February 8, 2000 and ending on February 8, 2005.
ISSUED this 8th day of February, 2000.
XXXXX.XXX, INC.
By: /s/ XXXX XXXXXX
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FORM OF ASSIGNMENT
XXXXX.XXX, INC.
FOR VALUE RECEIVED the undersigned registered owner of this Warrant
hereby sells, assigns, and transfers unto the Assignee named below all of the
rights of the undersigned under the within Warrant, with respect to the number
of shares of Common Stock set forth below:
NAME OF ASSIGNEE ADDRESS NUMBER OF SHARES
The undersigned does hereby irrevocably constitute and appoint _______________
_______________________ Attorney to make such transfer on the books of
XXXXX.XXX, INC. maintained for the purpose, with full power of substitution in
the premises.
Dated:
------------------------
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Name of Warrant Holder
Signature:
------------------------------
Witness:
----------------------
SUBSCRIPTION FORM
XXXXX.XXX, INC.
(To be executed only upon exercise of Warrant)
The undersigned registered owner of this Warrant irrevocably exercises
this Warrant for and purchases ________________ of the number of shares of
Common Stock of XXXXX.XXX, INC. purchasable with this Warrant, and herewith
makes payment therefor, all at the price and on the terms and conditions
specified in this Warrant.
Dated:
---------------------
---------------------------------
(Signature of Registered Owner)
---------------------------------
(Street Address)
---------------------------------
(City) (State) (Zip Code)
