March 6, 1991
THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE OR CONVERSION HEREOF
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. (AS AMENDED THE
"ACT"). NEITHER THIS WARRANT NOR THE COMMON STOCK MAY BE SOLD, TRANSFERRED,
PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS COVERED BY AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT, PURSUANT TO RULE 144 UNDER THE ACT, IF
AVAILABLE, OR AN OPINION IS OBTAINED FROM COUNSEL TO THE HOLDER, REASONABLY
SATISFACTORY TO COUNSEL TO THE COMPANY THAT AN EXEMPTION FROM REGISTRATION IS
AVAILABLE UNDER THE ACT.
VOID AFTER 5:00 P.M. CALIFORNIA TIME ON MARCH 5, 1996, OR, IF NOT A BUSINESS
DAY, AT 5:00 P.M. CALIFORNIA TIME, ON THE NEXT FOLLOWING BUSINESS DAY, UNLESS
EXTENDED BY THE COMPANY.
WARRANT TO PURCHASE 7,333
SHARES OF COMMON STOCK OF
DATA DIMENSIONS, INC.
TRANSFER RESTRICTED
This certifies that, in consideration for (I) entering into the Note and Warrant
Purchase Agreement dated March 6, 1991, with Data Dimensions, Inc., a Delaware
corporation (the "Company"), (ii) the purchase of a Note thereunder and (iii)
for payment of Seventy-Three and 33/XXX ($73.33) BPIV (the "Warrant Holder"), is
entitled to purchase from the Company at any time before 5:00 p.m., California
time, on March 5,1996 (or, if that day is not a Business Day, as defined below,
at or before 5:00 p.m., California time, on the next following Business Day)the
number of fully paid and nonassessable shares of Common Stock of the Company
(the "Stock") stated above at the Purchase Price (as defined below). The
Purchase Price and the number of shares which may be purchased on exercise of
this Warrant are subject to adjustment as provided below.
(Revised January 23, 1992)
ARTICLE I
DEFINITIONS
SECTION 1.01.
(1) The term "Warrant Holder" as used in this Warrant means the
person or entity named above, or any subsequent transferee.
(2) The term "Business Day" as used in this Warrant means a day other
than a Saturday, Sunday or any other day on which banks in the State of
California are authorized by law to remain closed.
(3) Except as otherwise provided herein, the term "Purchase Price" as
used in this Warrant initially means $0.24 per share.
(4) The term "Expiration Date" as used in this Warrant means the
earlier of 5:00 p.m., California time on (a) March 5, 1996 (or if that day is
not a Business Day, on the next following Business Day) and (b) the date of the
closing of an acquisition of the Company as a result of a merger or sale of
assets.
(5) The term "Warrant Shares" as used in this Warrant means the
shares of Common Stock or other securities deliverable upon exercise or
conversion of this Warrant.
ARTICLE II
DURATION AND EXERCISE OR CONVERSION OF WARRANT
SECTION 2.01. This Warrant may be exercised or converted at any time
before 5:00 p.m., California time, on the Expiration Date. If this Warrant is
not exercised or converted at or before 5:00 p.m., California time, on the
Expiration Date, it will become void, and all rights under this Warrant will
cease at that time.
SECTION 2.02.
(1) This Warrant may be exercised in whole or part by the Warrant
Holder by the surrender of the Warrant, together with a duly executed copy of
the Notice of Exercise or Conversion attached hereto as EXHIBIT A, at the
principal office of the Company, accompanied by payment of the Purchase Price
for the number of Warrant Shares for which purchase rights hereunder are being
exercised. This 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
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purposes as the holder of such 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 same 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.
(2) In lieu of exercising this Warrant or any portion hereof, the
Warrant Holder shall have the right to convert this Warrant or any portion
hereof into shares of Common Stock without payment of additional consideration
by executing and delivering to the Company at its principal office this Warrant
and the Notice of Exercise or Conversion attached hereto as EXHIBIT A,
specifying the portion of the Warrant to be converted. The number of Warrant
Shares to be issued upon such conversion shall be computed using the following
formula:
X = (P)(Y)(A-B)/A
where X = the number of Warrant Shares to be issued to the Warrant
holder for the portion of the Warrant being converted.
P = the portion of the Warrant being converted.
Y = the total number of Warrant Shares issuable upon exercise of
the Warrant in full.
A = the fair market value of one share of Common Stock as
determined by the average of the closing ask price and bid
price for the Company's Common Stock on the most recent date
upon which the Company's Stock was traded, or if no trade
occurred in the previous thirty days, as determined in good
faith by the Company's Board of Directors, and
B = the Purchase Price on the date of receipt by the Company of
the notice of conversion.
The portion of this Warrant represented by the variable "P" above shall be
immediately cancelled.
(3) In the event the purchase rights evidenced by this Warrant are
exercised or converted in whole or in part, one or more certificates for the
purchased shares shall be issued as soon as practicable thereafter to the person
exercising or converting such rights. Such person shall also be issued at such
time a new Warrant representing the number of shares (if any) for which the
purchase rights under this Warrant remain unexercised or unconverted and in
continuing force and effect.
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ARTICLE III
ADJUSTMENT OF PURCHASE PRICE
NUMBER OF SHARES OR NUMBER OF WARRANTS
SECTION 1.01. The Purchase Price, the number and type of securities
issuable on exercise of this Warrant, and the number of Warrants outstanding,
are subject to adjustment as follows:
If the Company (I) pays a dividend or makes a distribution on its
Common Stock in Common Stock, (ii) subdivides or reclassifies the
outstanding shares of its Common Stock into a greater number of shares, or
(ii) combines or reclassifies the outstanding shares of its Common Stock
into a smaller number of shares, at the close of business on the record
date for that corporate action the Purchase Price will be proportionately
reduced or increased.
SECTION 3.02. Upon each adjustment of the Purchase Price as a result of
calculations make in Section 3.01 above, this Warrant will after such adjustment
evidence the right to purchase, at the adjusted Purchase Price, the number of
Warrant Shares obtained by (i) multiplying (A) the number of Warrant Shares
issuable on exercise of this Warrant immediately prior to the adjustment by (B)
the Purchase Price in effect immediately prior to the adjustment and (ii)
dividing the resulting product by the Purchase Price in effect immediately after
the adjustment. However, the Company will not be required to issue a fractional
share or to make any payment in lieu of issuing a fractional share.
SECTION 3.03. Whenever the Purchase Price or the number of shares or type
of securities issuable on exercise of this Warrant is adjusted as provided in
this Article III, the Company (i) will compute the adjusted Purchase Price and
the adjusted number of Warrant Shares and (ii) will prepare a certificate signed
by its Chairman, President, Vice President, Treasurer or Secretary setting forth
the adjusted Purchase Price and the adjusted number of Warrant Shares and
showing in reasonable detail the facts upon which the adjustments were based,
and (ii) will mail a copy of that certificate to the Warrant Holder.
SECTION 3.04. If at any time when this Warrant is outstanding the Company
(a) declares a dividend (or authorizes any other distribution) on its
Common Stock payable otherwise than in cash out of its undistributed net income:
(b) authorizes the granting to the holders of its Common Stock of
rights to subscribe for or purchase any shares of Common Stock, or other equity
securities, or other assets:
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(c) authorizes a reclassification of its Common Stock (other than a
subdivision or combination of its outstanding Common Stock), or a consolidation
or merger to which the Company is a party, or a sale or transfer of all or
substantially all the assets of the Company; or
(d) authorizes as voluntary or involuntary dissolution, liquidation
or winding up of the Company,
the Company will mail to the Warrant Holder at least 20 days (or 10 days in an
instance specified in clause (a) or (b) prior notice of the record date, or
other date, for determining the shareholders entitled to receive the dividend,
distribution or rights, or the securities or other property deliverable as a
result of the reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up.
SECTION 3.05. The form of this Warrant need not be changed because of any
changes in the Purchase Price or in the number of Warrant Shares and Warrants
issued after that change may continue to describe the Purchase Price and the
number of Warrant Shares which were described in this Warrant as initially
issued.
ARTICLE IV
OTHER PROVISIONS RELATING TO
RIGHTS OF WARRANT HOLDER
SECTION 4.01. If this Warrant is exercised, the Warrant Holder will for
all purposes be deemed to become the holder of record of the Common Stock into
which this Warrant is exercisable, and the certificate will be dated the date
this Warrant is surrendered for exercise, except that if that is a date when
the stock transfer books of the Company are closed, the Warrant Holder will
be deemed to become the record holder of the shares on and the certificate
will be dated, the next succeeding Business Day when the stock transfer books
of the Company are open. Until this Warrant is exercised the Warrant Holder,
as such, will not be entitled to any of the rights of a shareholder of the
Company, including the right of vote, to receive dividends or other
distributions or to exercise preemptive rights (if any), and will not be
entitled to receive notice of any proceedings of the Company, except as
provided in this Warrant.
SECTION 4.02. The Company covenants and agrees that:
(1) at all times it will reserve and keep available for the exercise
of this Warrant a sufficient number of authorized but unissued shares of Common
Stock to permit the exercise in full of this Warrant;
(2) all shares of Common Stock issued on exercise of this Warrant
will be validly issued, fully paid, nonassessable and free of preemptive rights.
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SECTION 4.03. Notices to the Warrant Holder relating to this Warrant will
be effective on the third business day after mailing and will be sufficiently
given or made if personally delivered or if sent by first class mail (which may
be certified or registered), postage prepaid, addressed to the Warrant Holder at
the address shown on the books of the Company.
ARTICLE V
TREATMENT OF WARRANT HOLDER
SECTION 5.01. Prior to the presentation of this Warrant for registration
of transfer, the Company may treat the Warrant Holder for all purposes as the
owner of this Warrant and the Company will not be affected by any notice to the
contrary.
ARTICLE VI
COMBINATION, EXCHANGE AND TRANSFER OF WARRANTS
SECTION 6.01. This Warrant may be divided or combined with other Warrants
which carry the same rights upon presentation of them at the principal office of
the Company together with a written notice signed by the Warrant Holder,
specifying the names and denominations in which new Warrants are to be issued.
SECTION 6.02. Upon receipt by the Company of evidence satisfactory to it
of the loss, theft, destruction or mutilation of this Warrant, and, in the case
of loss, theft or destruction. of reasonably satisfactory indemnification. Or,
in the case of mutilation, upon surrender of the mutilated Warrant, the Company
will execute and deliver a new Warrant bearing the same terms and date as the
lost, stolen or destroyed Warrant, which will thereupon become void.
ARTICLE VII
RESTRICTION ON SALE OR OTHER DISPOSITION OF WARRANT SHARES
SECTION 7.01. The Warrant and Warrant Shares may not be sold or otherwise
disposed of except in a transaction registered under the Act, or which, in the
opinion of counsel to the Warrant Holder, acceptable to the Company, is exempt
from the registration requirements of the Act.
SECTION 7.02. All certificates evidencing the Warrant Shares shall bear
the following legend:
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THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") AND MAY NOT
BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF
UNLESS (i) COVERED BY AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
ACT, (ii) THE DISPOSITION IS MADE PURSUANT TO RULE 144 UNDER THE ACT,
IF AVAILABLE, OR (iii) AN OPINION IS OBTAINED FROM COUNSEL TO THE
HOLDER, REASONABLY SATISFACTORY TO COUNSEL TO THE COMPANY, THAT AN
EXEMPTION FROM REGISTRATION IS AVAILABLE UNDER THE ACT.
ARTICLE VIII
OTHER MATTERS
SECTION 8.01. The Company will from time to time promptly pay all taxes
and charges that may be imposed upon the Company in respect of the issuance or
delivery of Warrant Shares upon the exercise of this Warrant by the Warrant
Holder.
SECTION 8.02. All the covenants and provisions of this Warrant by or for
the benefit of the Company and the Warrant Holder will bind and inure to the
benefit of their successors and assigns.
SECTION 8.03. All notices and other communications under this Warrant must
be in writing. Any notice or communication to the Company will be effective
upon the earlier of actual receipt and the third business day after mailing by
first-class mail (which may be certified or registered), as postage prepaid,
addressed (until another address is designated by the Company) as follows:
Data Dimensions, Inc.
00000 X. Xxxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Any notice or demand authorized by this Warrant to be given or made by the
Company to or on the Warrant Holder must be given in accordance with Section
4.03.
SECTION 8.04. The validity, interpretation and performance of this Warrant
will be governed by the laws of the State of California.
SECTION 8.05. Nothing in this Warrant will give any person or corporation
other than the Company and the Warrant Holder any right or claim under this
Warrant, and all agreements in this Warrant will be for the sole benefit of the
Company and its
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successors and assigns and of the Warrant Holder and its respective successors
and assigns.
SECTION 8.06. The Article headings in this Warrant are for convenience
only, are not part of this Warrant, and will not affect the interpretation of
its terms.
SECTION 8.07. The provisions of Article VII shall survive the exercise or
termination of this Warrant.
IN WITNESS WHEREOF, this Warrant has been duly executed by the Company as
of the 6th day of March, 199 /.
DATA DIMENSIONS, INC.
By /s/ Xxxxx Xxxxxx
--------------------------------
Title President
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EXHIBIT A
NOTICE OF EXERCISE OR CONVERSION
Date: ________, 19__
Data Dimensions, Inc.
00000 X. Xxxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Ladies and Gentlemen:
/ / The undersigned hereby elects to exercise the warrant issued to
it by Data Dimensions, Inc. (The "Company"), dated March 6, 199_
(the "Warrant") and to purchase thereunder________ shares of the
Common Stock of the Company (the "Shares") at a purchase price of
_______ Dollars ($______) per Share or an aggregate purchase price
of ________ Dollars ($______) (the "Purchase Price").
Pursuant to the terms of the Warrant the undersigned has
delivered the Purchase Price herewith in full in cash or by
certified check or wire transfer.
/ / The undersigned hereby elects to convert _______ percent (__%) of
the value of the Warrant at a purchase price of ________ Dollars
($_____) per share.
Very truly yours.
By
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Receipt Acknowledged:
DATA DIMENSIONS, INC.
By
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