Exhibit 10.25
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OR CONVERSION HEREOF
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
ANY APPLICABLE STATE LAWS, AND NO INTEREST THEREIN MAY BE SOLD,
DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT
(i) AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO, (ii) AN OPINION OF
COUNSEL FOR THE HOLDER THAT SUCH REGISTRATION IS NOT REQUIRED OR (iii)
RECEIPT OF A NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION
TO THE EFFECT THAT REGISTRATION UNDER THE ACT IS NOT REQUIRED.
NO. 2 POINTCAST INCORPORATED DECEMBER 10, 1996
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SERIES D PREFERRED STOCK PURCHASE WARRANT
This certifies that, for value received, Time Inc. New Media (together with
any registered assignee(s), the "Holder") is entitled, upon the terms and
subject to the conditions hereinafter set forth, at any time on or after the
date hereof and at or prior to 11:59 p.m. on the Expiration Date (as defined
below), but not thereafter, to acquire from PointCast Incorporated, a California
corporation (the "Company"), in whole or from time to time in part, up to
526,316 fully paid and nonassessable shares of Series D Preferred Stock of the
Company ("Warrant Stock") at a purchase price equal to $9.50 per share (the
"Exercise Price"). Such number of shares, type of security and Exercise Price
are subject to adjustment as provided herein, and all references to "Warrant
Stock" and "Exercise Price" herein shall be deemed to include any such
adjustment or series of adjustments.
1. TERM
1.1 Termination and Expiration. If not earlier exercised, the
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Warrant shall expire on the date (the "Expiration Date") that is the earlier of
(i) eighteen (18) months after the effective date of the registration statement
for an initial public offering by the Company of its capital stock with
aggregate gross proceeds to the Company of not less than $20,000,000 and with a
price per share of not less than $9.50 (a "Qualified IPO") and (ii) 60 months
after the date first set forth above.
1.2 Exceptions. Notwithstanding the foregoing, in the event the
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Company is proposed to be acquired in a bona fide transaction (i.e., not a mere
recapitalization, reincorporation for the purpose of changing corporate
domicile, or similar transaction) (the "Acquisition"), regardless of the form of
the transaction (e.g., merger, consolidation, sale or lease of assets or sale of
stock), the Company shall give the Holder not less than fifteen (15) business
days notice of the record date for determining the shareholders of the Company
entitled to vote on (or otherwise approve) the Acquisition; the Company shall
provide the Holder with all information with respect to the Acquisition that is
otherwise provided to shareholders of the Company at such time and from time to
time during the pendency of the Acquisition, including (but not limited to) the
proposed price to be paid in the proposed Acquisition; the Holder shall have the
right to exercise same on or prior to the record date of shareholders eligible
to vote (or otherwise approve) with respect to the proposed Acquisition; if the
Warrant is not exercised on or prior to such record date, the Warrant shall
expire upon the occurrence of the closing of the Acquisition.
2. EXERCISE OF WARRANT
The purchase rights represented by this Warrant are exercisable by the
registered holder hereof, in whole or in part, at any time and from time to time
at or prior to the Expiration Time by the surrender of this Warrant and the
Notice of Exercise form attached hereto duly executed to the headquarters office
of the Company at the address set forth on the signature page hereof (or such
other office or agency of the Company as it may designate by notice in writing
to the registered holder hereof at the address of such holder appearing on the
books of the Company), and upon payment of the Exercise Price for the shares
thereby purchased (by cash or by check or bank draft payable to the order of the
Company or by cancellation of indebtedness of the Company to the holder hereof,
if any, at the time of exercise in an amount equal to the purchase price of the
shares thereby purchased); whereupon the holder of this Warrant shall be
entitled to receive from the Company a stock certificate in proper form
representing the number of shares of Warrant Stock so purchased, and a new
Warrant in substantially identical form and dated as of such exercise for the
purchase of that number of shares of Warrant Stock equal to the difference, if
any, between the number of shares of Warrant Stock subject hereto and the number
of shares of Warrant Stock as to which this Warrant is so exercised.
3. CONVERSION OF WARRANT
The Holder shall have the right to convert this Warrant, in whole or in
part, at any time (including, but not limited to, the occurrence of an
Acquisition of the Company) and from time to time at or prior to the Expiration
Time by the surrender of this Warrant and the Notice of Conversion form attached
hereto duly executed to the headquarters office of the Company at the address
set forth on the signature page hereof (or such other office or agency of the
Company as it may designate by notice in writing to the Holder at the address of
such Holder appearing on the books of the Company), into shares of Warrant Stock
as provided in this Section 3. Upon exercise of this conversion right, the
Holder shall be entitled to receive that number of shares of the Company's
Preferred Stock computed by using the following formula:
X(A-B)
Y = ------
A
Y = the number of shares of Series D Preferred Stock to be
issued to the Holder.
A = the Fair Market Value (as defined below) of one share of the
Company's Series D Preferred Stock on the date of conversion
of this Warrant.
B = the Exercise Price for one share of the Company's Series D
Preferred Stock under this Warrant.
X = the number of shares of Series D Preferred Stock that the
Holder desires to purchase pursuant to complete or partial
conversion of the Warrant.
If the above calculation results in a negative number, then no shares of
Warrant Stock shall be issued or issuable upon conversion of this Warrant.
"Fair Market Value" of a share of Series D Preferred Stock shall mean:
(a) if the conversion right is being exercised in connection with
the initial public offering (the "IPO") of the Company's
Common Stock (the "Common Stock"),
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the IPO price per share (before deducting commissions,
discounts or expenses) at which the Common Stock is sold to
the public in the IPO, multiplied by the number of shares of
Common Stock into which a share of Series D Preferred Stock
is convertible at the time of the exercise of the conversion
right (the "Conversion Rate").
(b) if the conversion right is being exercised in connection with
an Acquisition, the price per share to be paid to the holders
of the Company's Series D Preferred Stock by the acquiring
entity, or, if no such price per share has been established,
the price per share to be paid to the holders of the
Company's Common Stock multiplied by the Conversion Rate.
(c) if the conversion right is being exercised after the IPO
(other than in connection with an Acquisition), then (i) if
the Company's Common Stock is listed on a national securities
exchange, the average of last sale prices for the Company's
Common Stock for the fifteen (15) trading days prior to the
date the Company receives the Warrant and duly executed
Notice of Conversion (the "Notice Receipt Date"), multiplied
by the Conversion Rate, or (ii) if the Company's Common Stock
is listed on The Nasdaq Stock Market, the average of the
average bid and ask price for each of the fifteen (15)
trading days prior to the Notice Receipt Date, multiplied by
the Conversion Rate.
(d) in all other cases, the fair value as determined in good
faith by the Company's Board of Directors.
Upon conversion of this Warrant in accordance with this Section 3, the
Holder hereof shall be entitled to receive a certificate for the number of
shares of Warrant Stock determined in accordance with the foregoing, and a new
Warrant in substantially identical form and dated as of such conversion for the
purchase of that number of shares of Warrant Stock equal to the difference, if
any, between the number of shares of Warrant Stock subject hereto and the number
of shares of Warrant Stock as to which this Warrant is so converted.
4. ISSUANCE OF SHARES; NO FRACTIONAL SHARES OR SCRIP
Certificates for shares purchased hereunder or issuable upon conversion
hereof shall be delivered to the Holder promptly after the date on which this
Warrant shall have been exercised or converted in accordance with the terms
hereof. The Company hereby represents and warrants that all shares of Warrant
Stock which may be issued upon the exercise or conversion of this Warrant will,
upon such exercise or conversion, be duly and validly authorized and issued,
fully paid and nonassessable and free from all taxes, liens and charges in
respect of the issuance thereof (other than liens or charges created by or
imposed upon the holder of the Warrant Stock). The Company agrees that the
shares so issued shall be and shall for all purposes be deemed to have been
issued to such holder as the record owner of such shares as of the close of
business on the date on which this Warrant shall have been exercised or
converted in accordance with the terms hereof. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise or conversion
of this Warrant. With respect to any fraction of a share called for upon the
exercise or conversion of this Warrant, an amount equal to such fraction
multiplied by the Fair Market Value of a share of Warrant Stock on the date of
exercise or conversion shall be paid in cash or check to the Holder.
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5. CHARGES, TAXES AND EXPENSES
Issuance of certificates for shares of Warrant Stock upon the exercise or
conversion of this Warrant shall be made without charge to the Holder for any
issue or transfer tax or other incidental expense in respect of the issuance of
such certificate, all of which taxes and expenses shall be paid by the Company,
and such certificates shall be issued in the name of the Holder or in such name
or names as may be directed by the Holder provided, however, that in the event
certificates for shares of Warrant Stock are to be issued in a name other than
the name of the Holder, this Warrant when surrendered for exercise or conversion
shall be accompanied by the Assignment Form attached hereto duly executed by the
Holder.
6. RIGHTS AS SHAREHOLDERS
No holder of this Warrant, as such, shall be entitled to vote upon any
matter submitted to shareholders at any meeting thereof, or to receive notice of
meetings, or be deemed the holder of Series D Preferred Stock until this Warrant
shall have been exercised or converted in whole or in part and the Warrant Stock
purchasable upon such exercise shall have become deliverable, as provided
herein. Thereafter, the Holder thereof shall have the rights and
responsibilities of: (i) an Investor under the Amended and Restated Investor
Rights Agreement (the "Investor Rights Agreement"), dated as of July 19, 1996,
by and among the Company, the persons set forth on the Schedule of Investors
attached thereto as Exhibit A, Lighthouse Capital Partners, L.P. and certain
officers of the Company, with each share of Warrant Stock being deemed
equivalent to one share of Registrable Securities or Shares, as the case may be,
under such Investor Rights Agreement; and (ii) a Series D Purchaser under each
of (A) the Amended and Restated Investors' Co-Sale Agreement, dated as of July
19, 1996, by and among the Company, the purchasers of the Company's Series D
Preferred Stock, the holders of the Company's other series of Preferred Stock,
and certain officers of the Company and (B) the Amended and Restated Co-Sale
Agreement of even date therewith by and among the same parties (such agreements
being referred to collectively as the "Co-Sale Agreements"), with each share of
Warrant Stock being deemed equivalent to one share of Co-Sale Securities under
such Co-Sale Agreements; in each case of (i) and (ii), as if such Holder were a
signatory to each such agreement.
7. COMPANY'S RIGHT OF FIRST REFUSAL PRIOR TO WARRANT EXERCISE
Before the Warrant may be sold or otherwise transferred by the Holder or
any transferee (including transfer by gift or operation of law), the Company or
its assignee(s) shall have a right of first refusal to purchase the Warrant on
the terms and conditions set forth in this Section (the "Right of First
Refusal").
(a) Notice of Proposed Transfer. The Holder shall deliver to the
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Company a written notice (the "Notice") stating: (i) the Holder's bona fide
intention to sell or otherwise transfer the Warrant; (ii) the name of the
proposed purchaser or other transferee ("Proposed Transferee"); and (iii) the
bona fide cash price or other consideration for which the Holder proposes to
transfer the Warrant (the "Offered Price"), and the Holder shall offer the
Warrant at the Offered Price to the Company or its assignee(s), provided that
any such assignee is a securityholder of the Company.
(b) Exercise of Right of First Refusal. At any time within 20 days
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after receipt of the Notice, the Company or its assignee(s) may, by giving
written notice to the Holder, elect to purchase the Warrant proposed to be
transferred to the Proposed Transferee, at the purchase price determined in
accordance with subsection (c) below.
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(c) Purchase Price. The purchase price ("Purchase Price") for the
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Warrant purchased by the Company or its assignee(s) under this Section shall be
the Offered Price. If the Offered Price includes consideration other than cash,
the cash equivalent value of the non-cash consideration shall be determined by
the Board of Directors of the Company in good faith.
(d) Payment. Payment of the Purchase Price shall be made in cash (by
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check) within 30 days of receipt of the Notice.
(e) Holder's Right to Transfer. If the Warrant proposed in the Notice
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to be transferred to a given Proposed Transferee is not purchased by the Company
or its assignee(s) as provided in this Section, then the Holder may sell or
otherwise transfer such Warrant to that Proposed Transferee at the Offered Price
or at a higher price, provided that such sale or other transfer is consummated
within 120 days after the date of the Notice and provided further that any such
sale or other transfer is effected in accordance with any applicable securities
laws and the Proposed Transferee agrees in writing that the provisions of this
Section shall continue to apply to the Warrant in the hands of such Proposed
Transferee. If the Warrant described in the Notice is not transferred to the
Proposed Transferee within such period, a new Notice shall be given to the
Company, and the Company or its assignees shall again be offered the Right of
First Refusal before the Warrant held by the Holder may be sold or otherwise
transferred.
(f) Exception for Certain Transfers. The Warrant may be transferred
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without the Company being offered the Right of First Refusal in the following
transactions; provided that any Transferee shall agree to the terms of this
Section 9 as to the Warrant:
(1) A Holder's transfer of the Warrant in whole or in part to
the Company or to any shareholder of the Company.
(2) A Holder's transfer of the Warrant in whole or in part to
a person who, at the time of such transfer, is an officer or director of the
Company.
(3) A Holder's transfer of the Warrant in whole or in part
pursuant to and in accordance with the terms of any merger, consolidation,
reclassification of shares or capital reorganization of the corporate
shareholder, or pursuant to a sale of all or substantially all of the stock or
assets of a corporate shareholder.
(4) A transfer by a Holder which is a limited or general
partnership to any or all of its partners or former partners or any professional
employee (or entity of which such employees are the beneficiaries) of such
partnership.
(5) A transfer by a Holder which is a corporation to any
parent company of the Holder, or any majority-owned subsidiary of such parent
company, provided that any such transferee does not derive a majority of its
revenues from products or services that compete directly with products or
services from which the Company derives a majority of its revenues.
Any such transfer shall be made upon surrender of this Warrant together
with the Assignment Form attached hereto properly endorsed.
(g) Termination of Right of First Refusal. The Right of First Refusal
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shall terminate (i) as to any Warrant Stock acquired upon the exercise or
conversion of the Warrant in whole or in part, on the effective
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date of such exercise or conversion and (ii) as to any portion of the Warrant
not previously exercised or converted, on the date 90 days after the date of the
final prospectus (the "Final Prospectus") contained in a registration statement
filed with and declared effective by the Securities and Exchange Commission
under the Securities Act of 1933, as amended (the "Securities Act") for the
initial public offering by the Company of its capital stock.
8. MARKET STAND-OFF AGREEMENT
The Holder hereby agrees that if so requested by the Company or any
representative of the underwriters in connection with any registration of the
offering of any shares of the Company under the Securities Act, the Holder shall
not sell or otherwise transfer any shares or other securities of the Company
during the 180-day period following the date of the Final Prospectus; provided,
however, that such restriction shall only apply to the first registration
statement of the Company to become effective under the Securities Act which
includes securities to be sold on behalf of the Company to the public in an
underwritten public offering under the Securities Act. The Company may impose
stop-transfer instructions with respect to securities subject to the foregoing
restrictions until the end of such 180-day period.
9. EXCHANGE AND REGISTRY OF WARRANT
This Warrant is exchangeable, upon the surrender hereof by the Holder at
the above-mentioned office or agency of the Company, for a new Warrant in
substantially identical form and dated as of such exchange. The Company shall
maintain at the above-mentioned office or agency a registry showing the name and
address of the registered holder of this Warrant. This Warrant may be
surrendered for exchange, transfer, exercise or conversion, in accordance with
its terms, at such office or agency of the Company, and the Company shall be
entitled to rely in all respects, prior to written notice to the contrary, upon
such registry.
10. LOSS, THEFT, DESTRUCTION OR MUTILATION OF WARRANT
On receipt by the Company of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant, and in
case of any such loss, theft or destruction of this Warrant, on delivery of an
indemnity agreement reasonably satisfactory in form and amount to the Company
or, in the case of any such mutilation, on surrender and cancellation of such
Warrant, the Company will execute and deliver to the Holder, in lieu thereof, a
new warrant in substantially identical form, dated as of such cancellation and
reissuance.
11. SATURDAYS, SUNDAYS AND HOLIDAYS
If the last or appointed day for the taking of any action or the expiration
of any right required or granted herein shall be a Saturday or a Sunday or shall
be a legal holiday, then such action may be taken or such right may be exercised
on the next succeeding business day.
12. ADJUSTMENT TO NUMBER AND TYPE OF SECURITIES, EXERCISE PRICE
The type and number of securities of the Company issuable upon exercise of
this Warrant and the Exercise Price are subject to adjustment as set forth
below:
(a) Adjustment for Stock Splits, Stock Dividends, Recapitalizations,
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Automatic Conversion, etc. The Exercise Price and the number and type of
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securities or other property issuable upon exercise of this Warrant shall be
appropriately and proportionately adjusted to reflect any stock dividend, stock
split, combination
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of shares, reclassification, recapitalization, automatic conversion, redemption
or other similar event affecting the number or character of outstanding shares
of Warrant Stock, other than an adjustment to the conversion price of the
Warrant Stock pursuant to the antidilution provisions set forth in the Company's
Articles, so that the number and type of securities or other property issuable
upon exercise of this Warrant shall be equal to that which would have been
issuable with respect to the number of shares of Warrant Stock subject hereto at
the time of such event, had such shares of Warrant Stock then been outstanding.
(b) Certificate as to Adjustments. In case of any adjustment in the
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Exercise Price or number and type of securities issuable on the exercise of this
Warrant, the Company will promptly give written notice thereof to the Holder in
the form of a certificate, certified and confirmed by an officer of the Company,
setting forth such adjustment and showing in reasonable detail the facts upon
which adjustment is based.
13. NOTICES OF RECORD DATE, ETC.
In the event of:
(a) any taking by the Company of a record of the holders of Warrant
Stock or securities into which the Warrant Stock is convertible for the purpose
of determining the holders thereof who are entitled to receive any dividend or
other distribution,
(b) any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company, or any transfer of all or
substantially all the assets of the Company to, or consolidation or merger of,
the Company with or into any person,
(c) any voluntary or involuntary dissolution, liquidation or winding-
up of the Company,
(d) a sale of substantially all of the outstanding capital stock of
the Company or the issuance of new shares representing the majority of the
Company's right to vote, or
(e) the initial public offering of the Company's Common Stock,
then and in each such event the Company will mail to the Holder a notice
specifying the record date for voting or the date of closing , as applicable, of
any event (a)-(e) above. Such notice shall be delivered to the Holder at least
fifteen (15) days prior to the date of the relevant event.
14. REPRESENTATIONS AND WARRANTIES
The Company hereby represents, warrants and agrees that:
(a) during the period this Warrant is outstanding, the Company will
reserve from its authorized and unissued Warrant Stock a sufficient number of
shares to provide for the issuance of Warrant Stock upon the exercise or
conversion of this Warrant;
(b) during the period this Warrant or the Warrant Stock issuable
hereunder is outstanding, 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 conversion of the Warrant Stock issuable upon exercise or
conversion of this Warrant;
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(c) the issuance of this Warrant shall constitute full authority to
the Company's officers who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates for the shares of
Warrant Stock issuable upon exercise or conversion of this Warrant;
(d) the Company has all requisite legal and corporate power to execute
and deliver this Warrant, to sell and issue the Warrant Stock hereunder, to
issue the Common Stock issuable upon conversion of the Warrant Stock and to
carry out and perform its obligations under the terms of this Warrant; and
(e) all corporate action on the part of the Company, its directors and
shareholders necessary for the authorization, execution, delivery and
performance of this Warrant by the Company, the authorization, sale, issuance
and delivery of the Warrant Stock and the Common Stock issuable upon conversion
of the Warrant Stock, the grant of registration rights as provided herein and
the performance of the Company's obligations hereunder has been taken;
(f) the Warrant Stock and the Common Stock issuable upon conversion of
the Warrant Stock, when issued in compliance with the provisions of this Warrant
and the Articles, will be validly issued, fully paid and nonassessable, and free
of any liens or encumbrances, and will be issued in compliance with all
applicable federal and state securities laws; and
(g) the issuance of the Warrant Stock and the Common Stock issuable
upon conversion of the Warrant Stock will not be subject to any preemptive
rights, rights of first refusal or similar rights.
[This space left blank intentionally]
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15. GOVERNING LAW
This Warrant shall be governed by and construed in accordance with the laws
of the State of California.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by a
duly authorized officer.
Dated: December 10, 1996. POINTCAST INCORPORATED
Signature: /s/ Xxxxxxxxxxx Xxxxxxx
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Name: Xxxxxxxxxxx Xxxxxxx
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Title: CEO
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Address: 00000 X. XxXxxx Xxxx.
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Xxxxxxxxx, XX 00000
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NOTICE OF EXERCISE
To: PointCast Incorporated
(1) The undersigned hereby elects to purchase __________ shares of Series D
Preferred Stock of PointCast Incorporated pursuant to the terms of the attached
Warrant, and tenders herewith payment of the purchase price in full.
(2) Please issue a certificate or certificates representing said shares in
the name of the undersigned or in such other name as is specified below:
______________________________
(Name)
______________________________
(Address)
(3) The undersigned represents that the aforesaid shares are being acquired
for the account of the undersigned for investment and not with a view to, or for
resale in connection with, the distribution thereof and that the undersigned has
no present intention of distributing or reselling such shares, except in
compliance with applicable federal and state securities laws.
_______________________ ____________________________
(Date)
NOTICE OF CONVERSION
To: PointCast Incorporated
(1) The undersigned hereby elects to convert that portion of the attached
Warrant representing the right to purchase ________ shares of Series D Preferred
Stock into such number of shares of Series D Preferred Stock of PointCast
Incorporated as is determined pursuant to Section 3 of such Warrant, which
conversion shall be effected pursuant to the terms of the attached Warrant.
(2) Please issue a certificate or certificates representing said shares in
the name of the undersigned or in such other name as is specified below:
______________________________
(Name)
______________________________
(Address)
(3) The undersigned represents that the aforesaid shares are being acquired
for the account of the undersigned for investment and not with a view to, or for
resale in connection with, the distribution thereof and that the undersigned has
no present intention of distributing or reselling such shares, except in
compliance with applicable federal and state securities laws.
_________________________ ______________________________
(Date)
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this form and supply required
information. Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby
are hereby assigned to
_______________________________________________________________________
(Please Print)
whose address is_______________________________________________________
(Please Print)
Dated: ___________________________________________
Holder's Signature: ______________________________
Holder's Address: ______________________________
______________________________
Guaranteed Signature: _________________________________
NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatever, and must be guaranteed by a bank or trust company. Officers of
corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.
