EXHIBIT 10.6
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED
OR EXERCISED UNLESS AND UNTIL SUCH WARRANT AND/OR SHARES OF COMMON STOCK ARE
REGISTERED UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
IS OBTAINED TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED. THIS WARRANT
AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT ARE
SUBJECT TO THE RESTRICTIONS ON TRANSFER SET FORTH IN SECTIONS 4 AND 9 OF THIS
WARRANT.
Warrant No. LT003 Number of Shares: 750,000
(subject to adjustment)
Date of Issuance: March 28, 2002
GENERAL MAGIC, INC.
Common Stock Purchase Warrant
(Void after March 27, 2005)
General Magic, Inc., a Delaware corporation (the "Company"), for value received,
hereby certifies that InterVoice-Brite, Inc., a Texas corporation, or its
registered assigns (the "Registered Holder"), is entitled, subject to the terms
and conditions set forth below, to purchase from the Company, at any time or
from time to time on or before 5:00 p.m. (Eastern time) on March 27, 2005, Seven
Hundred Fifty Thousand (750,000) shares of Common Stock of the Company at a
purchase price of $0.26 per share (closing price on the date of issue). The
shares purchasable upon exercise of this Warrant, and the purchase price per
share, each as adjusted from time to time pursuant to the provisions of this
Warrant, are hereinafter referred to as the "Warrant Shares" and the "Purchase
Price," respectively.
1. EXERCISE.
(a) This Warrant may be exercised by the Registered Holder, in whole or
in part, by surrendering this Warrant, with the purchase form appended hereto as
Exhibit I duly executed by the Registered Holder or by the Registered Holder's
duly authorized attorney, at the principal office of the Company, or at such
other office or agency as the Company may designate, accompanied by payment in
full, in lawful money of the United States, of the Purchase Price payable in
respect of the number of Warrant Shares purchased upon such exercise.
(b) The Registered Holder may, at its option, elect to pay some or all
of the Purchase Price payable upon an exercise of this Warrant by canceling all
or
a portion of this Warrant. If the Registered Holder wishes to exercise this
Warrant by this method, the number of Warrant Shares purchasable (which shall in
no event exceed the total number of Warrant Shares purchasable under this
Warrant as set forth above), subject to adjustment under Section 2 of this
Warrant) shall be determined as follows:
X=Y[(A-B)/A]; where
X= the number of Warrant Shares to be issued to the Holder.
Y= the number of Warrant Shares with respect to which this Warrant is being
exercised.
A= the Fair Market Value of one share of Common Stock.
B= the Purchase Price of one share of Common Stock.
The Fair Market Value per share of Common Stock shall be determined as
follows:
(i) If the Common Stock is listed on a national securities
exchange, the Nasdaq National Market, the Nasdaq Small Cap Market or
another nationally recognized trading system (including, without
limitation, the OTC Bulletin Board and, if the average daily trading
volume for the preceding 10 days has been at least 100,000 shares, the
Pink Sheets) as of the Exercise Date, the Fair Market Value per share of
Common Stock shall be deemed to be the average of the closing prices of
the Common Stock of the Company on such exchange or market over the 5
business days ending immediately prior to the Exercise Date.
(ii) If the Common Stock is not listed on a national securities
exchange, the Nasdaq National Market, the Nasdaq Small Cap Market, or
another nationally recognized trading system as of the Exercise Date,
the Fair Market Value per share of Common Stock shall be deemed to be
the amount most recently determined by the Board of Directors to
represent the fair market value per share of the Common Stock; if the
Board of Directors has not made such a determination within the
three-month period prior to the Exercise Date, then (A) the Board of
Directors shall make a determination of the Fair Market Value per share
of the Common Stock within 15 days of a request by the Registered Holder
that it do so, and (B) the exercise of this Warrant pursuant to this
subsection 1(b) shall be delayed until such determination is made.
(c) Each exercise of this Warrant shall be deemed to have been effected
immediately prior to the close of business on the day on which this Warrant
shall have been surrendered to the Company as provided in subsection 1(a) above
accompanied by payment in full of the Purchase Price (the "Exercise Date"). At
such time, the person or persons in whose name or names any certificates for
Warrant Shares shall be issuable upon such exercise as provided in subsection
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1(d) below shall be deemed to have become the holder or holders of record of the
Warrant Shares represented by such certificates.
(d) As soon as practicable after the exercise of this Warrant in full or
in part, and in any event within 5 business days thereafter, the Company, at its
expense, will cause to be issued in the name of, and delivered to, the
Registered Holder, or as such Holder (upon payment by such Holder of any
applicable transfer taxes) may direct:
(i) a certificate or certificates for the number of full Warrant
Shares to which the Registered Holder shall be entitled upon such
exercise; provided, however, that the Company may deliver such shares
electronically to an account specified by such Registered Holder through
The Depository Trust Company DWAC system; and
(ii) in case such exercise is in part only, a new warrant or
warrants (dated the date hereof) of like tenor, calling in the aggregate
on the face or faces thereof for the number of remaining Warrant Shares.
2. ADJUSTMENTS.
(a) Adjustment for Stock Splits and Combinations. If the Company shall
at any time or from time to time after the date on which this Warrant was first
issued (the "Original Issue Date") effect a subdivision of the outstanding
Common Stock or issue a stock dividend in respect of the Company's Common Stock,
the Purchase Price then in effect immediately before that subdivision shall be
proportionately decreased. If the Company shall at any time or from time to time
after the Original Issue Date combine the outstanding shares of Common Stock,
the Purchase Price then in effect immediately before the combination shall be
proportionately increased. Any adjustment under this paragraph shall become
effective at the close of business on the date the subdivision or combination
becomes effective.
(b) Adjustment in Number of Warrant Shares. When any adjustment is
required to be made in the Purchase Price pursuant to subsection 2(a), the
number of Warrant Shares purchasable upon the exercise of this Warrant shall be
changed to the number determined by dividing (i) an amount equal to the number
of shares issuable upon the exercise of this Warrant immediately prior to such
adjustment, multiplied by the Purchase Price in effect immediately prior to such
adjustment, by (ii) the Purchase Price in effect immediately after such
adjustment.
(c) Mergers or Reorganizations, etc. If there shall occur any
reorganization, recapitalization, consolidation or merger involving the Company
in which the Company is not the acquiring or surviving entity in such
transaction, then this Warrant shall be deemed to be exercised immediately prior
to such reorganization, recapitalization, consolidation or merger, and the
holder of this Warrant shall, upon payment of the then applicable Exercise
Price, be entitled to
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receive the same consideration for each Warrant Share then issuable upon
exercise of this Warrant as the holders of the Company's Common Stock receive in
connection with such reorganization, recapitalization, consolidation or merger.
(d) Certificate as to Adjustments. The Company shall, upon the written
request at any time of the Registered Holder, furnish or cause to be furnished
to the Registered Holder a certificate setting forth (i) the Purchase Price then
in effect and (ii) the number of shares of Common Stock and the amount, if any,
of other securities, cash or property which then would be received upon the
exercise of this Warrant.
3. FRACTIONAL SHARES. The Company shall not be required upon the exercise of
this Warrant to issue any fractional shares.
4. REQUIREMENTS FOR TRANSFER.
(a) This Warrant and the Warrant Shares shall not be sold or transferred
unless either (i) they first shall have been registered under the Securities Act
of 1933, as amended (the "Act"), (ii) the Company first shall have been
furnished with an opinion of legal counsel, reasonably satisfactory to the
Company, to the effect that such sale or transfer is exempt from the
registration requirements of the Act, or (iii) they are sold or transferred in
compliance with the provisions of Rule 144 under the Act.
(b) Each certificate representing Warrant Shares shall bear a legend
substantially in the following form:
"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and may not be offered,
sold or otherwise transferred, pledged or hypothecated unless and until
such securities are registered under such Act or an opinion of counsel
satisfactory to the Company is obtained to the effect that such
registration is not required."
The foregoing legend shall be removed from the certificates representing any
Warrant Shares, at the request of the holder thereof, at such time as they
become eligible for resale pursuant to Rule 144(k) under the Act or if an
effective registration statement is then in effect permitting the resale of the
Warrant Shares.
(c) The Registered Holder shall have "piggyback" registration rights to
have the Warrant Shares (but not the Warrants) registered for resale on any
registration statement or registration statements which the Company files for
any purpose on a form available for such registration, after the Original Issue
Date. Such registration shall be subject to customary obligations by the
Registered Holder to provide information to the Company required to be included
in the registration statement. Prior to filing any registration statement, the
Company will provide Registered Holder with not less than 15 days prior written
notice within which the Registered Holder may elect to exercise piggyback
rights. The
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registration statement will include customary indemnification provisions by the
Company and the Registered Holder. Company will pay all costs of such
registration except that Registered Holder will pay any underwriting discounts
or commissions and the fees of any counsel, accountants or other advisors
retained by the Registered Holder.
5. NOTICES OF RECORD DATE, ETC. In the event:
(a) the Company shall take a record of the holders of its Common Stock
(or other stock or securities at the time deliverable upon the exercise of this
Warrant) for the purpose of entitling or enabling them to receive any dividend
or other distribution, or to receive any right to subscribe for or purchase any
shares of stock of any class or any other securities, or to receive any other
right; or of any capital reorganization of the Company, any reclassification of
the Common Stock of the Company, any consolidation or merger of the Company with
or into another corporation (other than a consolidation or merger in which the
Company is the surviving entity and its Common Stock is not converted into or
exchanged for any other securities or property), or any transfer of all or
substantially all of the assets of the Company; or
(b) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company,
then, and in each such case, the Company will mail or cause to be mailed to the
Registered Holder a notice specifying, as the case may be, (i) the record date
for such dividend, distribution or right, and the amount and character of such
dividend, distribution or right, or (ii) the effective date on which such
reorganization, reclassification, consolidation, merger, transfer, dissolution,
liquidation or winding-up is expected to take place, and the time, if any is
expected to be fixed, as of which the holders of record of Common Stock (or such
other stock or securities at the time deliverable upon the exercise of this
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, transfer,
dissolution, liquidation or winding-up. Such notice shall be mailed at least ten
days prior to the record date or effective date for the event specified in such
notice.
6. RESERVATION OF STOCK. The Company will at all times reserve and keep
available, solely for issuance and delivery upon the exercise of this Warrant,
such number of Warrant Shares as from time to time shall be issuable upon the
exercise of this Warrant. All Warrant Shares will be, when issued following
exercise upon the terms and conditions set forth in this Warrant, fully paid,
validly issued, non-assessable and free from preemptive rights.
7. EXCHANGE OF WARRANTS. Upon the surrender by the Registered Holder, properly
endorsed, to the Company at the principal office of the Company, the Company
will, subject to the provisions of Section 4 hereof, issue and deliver to or
upon the order of such Holder, at the Company's expense, a new Warrant or
Warrants of like tenor, in the name of the Registered Holder or as the
Registered
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Holder (upon payment by the Registered Holder of any applicable transfer taxes)
may direct, calling in the aggregate on the face or faces thereof for the number
of shares of Common Stock then issuable upon exercise of this Warrant.
8. REPLACEMENT OF WARRANTS. Upon receipt of evidence reasonably satisfactory to
the Company of the loss, theft, destruction or mutilation of this Warrant and
(in the case of loss, theft or destruction) upon delivery of an indemnity
agreement in an amount reasonably satisfactory to the Company, or (in the case
of mutilation) upon surrender and cancellation of this Warrant, the Company will
issue, in lieu thereof, a new Warrant of like tenor.
9. TRANSFERS, ETC.
(a) The Company will maintain a register containing the name and address
of the Registered Holder of this Warrant. The Registered Holder may change its
or his address as shown on the warrant register by written notice to the Company
requesting such change.
(b) Subject to the provisions of Section 4 hereof, this Warrant and all
rights hereunder are transferable, in whole or in part, upon surrender of this
Warrant with a properly executed assignment (in the form of Exhibit II hereto)
at the principal office of the Company.
(c) Until any transfer of this Warrant is made in the warrant register,
the Company may treat the Registered Holder as the absolute owner hereof for all
purposes; provided, however, that if and when this Warrant is properly assigned
in blank, the Company may (but shall not be obligated to) treat the bearer
hereof as the absolute owner hereof for all purposes, notwithstanding any notice
to the contrary.
10. REPRESENTATIONS OF THE REGISTERED HOLDER. The Registered Holder of this
Warrant represents and warrants to the Company as follows:
(a) Investment. The Registered Holder is acquiring this Warrant and the
Warrant Shares issuable upon the exercise of this Warrant, for its own account
for investment and not with a view to, or for sale in connection with, any
distribution thereof, nor with any present intention of distributing or selling
the same, except as otherwise may be permitted under applicable securities laws.
(b) Authority. The Registered Holder has full power and authority to
enter into and to perform this Warrant in accordance with its terms. The
Registered Holder has not been organized specifically for the purpose of
investing in the Company.
(c) Accredited Investor. The Registered Holder is an Accredited Investor
within the definition set forth in Rule 501(a) promulgated under the Act.
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(d) Investigation; Economic Risk. The Registered Holder has had such
opportunity as such Registered Holder has deemed adequate to obtain from
representatives of the Company such information as is necessary to permit the
Registered Holder to evaluate the merits and risks of its investment in the
company. The Registered Holder is able to bear the economic risk of holding this
Warrant or Warrant Shares as may be acquired pursuant to the exercise of this
Warrant for an indefinite period.
(e) Registration. The Registered Holder understands that the shares of
stock acquired pursuant to the exercise of this Warrant or acquired upon
conversion thereof will not be registered under the Act (except as may be
required pursuant to the piggyback registration rights granted to the Registered
Holder herein) and will be "restricted securities" within the meaning of Rule
144 under the Act and that the exemption from registration under Rule 144 will
not be available for at least one year from the date of exercise of this
Warrant, subject to the availability of tacking for any cashless exercise of
this Warrant and any special treatment by the SEC for exercise of this Warrant.
11. MAILING OF NOTICES, ETC. All notices and other communications from the
Company to the Registered Holder shall be delivered by first-class certified or
registered mail, postage prepaid, to the address last furnished to the Company
in writing by the Registered Holder or by facsimile or electronic transmission
(including email transmission) with confirmation of delivery, to the facsimile
number or electronic address last furnished to the Company in writing by the
Registered Holder. All notices and other communications from the Registered
Holder or in connection herewith to the Company shall be mailed by first-class
certified or registered mail, postage prepaid, to the Company at its principal
office set forth below or by facsimile or electronic transmission to the
attention of the General Counsel of the Company (including email transmission)
to the last facsimile number or electronic address for the General Counsel
furnished to the Registered Holder in writing by the Company. If the Company
should at any time change the location of its principal office to a place other
than as set forth below, it shall give prompt written notice to the Registered
Holder and thereafter all references in this Warrant to the location of its
principal office at the particular time shall be as so specified in such notice.
12. NO RIGHTS AS STOCKHOLDER. Until the exercise of this Warrant, the Registered
Holder shall not have or exercise any rights by virtue hereof as a stockholder
of the Company. Notwithstanding the foregoing, in the event (i) the Company
effects a split of the Common Stock by means of a stock dividend and the
Purchase Price of and the number of Warrant Shares are adjusted as of the date
of the distribution of the dividend (rather than as of the record date for such
dividend), and (ii) the Registered Holder exercises this Warrant between the
record date and the distribution date for such stock dividend, the Registered
Holder shall be entitled to receive, on the distribution date, the stock
dividend with respect to the shares of Common Stock acquired upon such exercise,
notwithstanding the fact that such shares were not outstanding as of the close
of business on the record date for such stock dividend.
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13. CHANGE OR WAIVER. Any term of this Warrant may be changed or waived only by
an instrument in writing signed by the party against which enforcement of the
change or waiver is sought.
14. SECTION HEADINGS. The section headings in this Warrant are for the
convenience of the parties and in no way alter, modify, amend, limit or restrict
the contractual obligations of the parties.
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15. GOVERNING LAW. This Warrant will be governed by and construed in accordance
with the internal laws of the State of Delaware (without reference to the
conflicts of law provisions thereof).
EXECUTED as of the Date of Issuance indicated above.
GENERAL MAGIC, INC.
By: /s/ XXXXX X. RUSSIAN
------------------------------------
Xxxxx X. Russian
Chief Financial Officer
ATTEST:
/s/ X.X. XXXXXX
-------------------------
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EXHIBIT I
PURCHASE FORM
To:_________________ Dated:____________
The undersigned, pursuant to the provisions set forth in the attached Warrant
(No. LT003), hereby irrevocably elects to purchase (check applicable box):
0 _____ shares of the Common Stock covered by such Warrant; or
0 the maximum number of shares of Common Stock covered by such Warrant
pursuant to the cashless exercise procedure set forth in Section
1(b).
The undersigned herewith makes payment of the full purchase price for such
shares at the price per share provided for in such Warrant, which is $________.
Such payment takes the form of (check applicable box or boxes):
0 $______ in lawful money of the United States; and/or
0 the cancellation of such portion of the attached Warrant as is
exercisable for a total of _____ Warrant Shares (using a Fair Market
Value of $_____ per share for purposes of this calculation); and/or
0 the cancellation of such number of Warrant Shares as is necessary, in
accordance with the formula set forth in Section 1(b), to exercise
this Warrant with respect to the maximum number of Warrant Shares
purchasable pursuant to the cashless exercise procedure set forth in
Section 1(b).
Signature:_________________________
Address:___________________________
___________________________
DWAC
Instructions:______________________
______________________
______________________
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EXHIBIT II
ASSIGNMENT FORM
FOR VALUE RECEIVED, ________________________________________ hereby sells,
assigns and transfers all of the rights of the undersigned under the attached
Warrant (No. ____) with respect to the number of shares of Common Stock covered
thereby set forth below, unto:
Name of Assignee Address No. of Shares
Dated:_____________________
Signature:________________________________
Signature Guaranteed:
By: _______________________
The signature should be guaranteed
by an eligible guarantor
institution (banks, stockbrokers,
savings and loan associations and
credit unions with membership in an
approved signature guarantee
medallion program) pursuant to
Rule 17Ad-15 under the Securities
Exchange Act of 1934.
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