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EXHIBIT 10.29
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), NOR UNDER
ANY APPLICABLE STATE SECURITIES LAWS. NEITHER THIS WARRANT NOR THE SECURITIES
ISSUABLE UPON EXERCISE HEREOF MAY BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED OF UNLESS COVERED BY AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS, THE SALE IS MADE
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 AND ALL APPLICABLE STATE
SECURITIES LAWS.
WARRANT TO PURCHASE CLASS A COMMON STOCK
OF
NEXTERA ENTERPRISES, INC.
December 31, 1998
This certifies that KNOWLEDGE UNIVERSE, INC., a Delaware Corporation
(the "Holder"), for value received, is entitled, subject to the adjustments and
to the other terms set forth below, to acquire from NEXTERA ENTERPRISES, INC., a
Delaware corporation (the "Company"), having a place of business at Xxx
Xxxxxxxxx Xxxx, Xxxxxxxxx, XX 00000, at any time from the date hereof until 5:00
P.M. (California time) on December 31, 2003 (the "Expiration Date"), at which
time this Warrant shall expire and become void, Two Hundred Fifty Thousand
(250,000) shares (the "Warrant Shares") of the Company's Class A Common Stock
(the "Class A Common Stock"), at an exercise price (the "Exercise Price") equal
to eighty percent (80%) of the price per share that shares of Class A Common
Stock are offered to the public in the Company's first underwritten public
offering of Class A Common Stock (the "IPO"); provided, however, that if the IPO
has not been completed by August 31, 2000, the Exercise Price shall be Seven
Dollars and Sixty Five Cents ($7.65).
This Warrant Certificate is subject to the following terms and
conditions:
1. EXERCISE; ISSUANCE OF CERTIFICATES; PAYMENT FOR SHARES.
1.1 DURATION OF EXERCISE OF WARRANT. This Warrant is
exercisable at the option of the Holder at any time after the Exercise Price has
been determined and until 5:00 P.M. (California time) on the Expiration Date for
all or a portion of the Warrant Shares that may be acquired hereunder. This
Warrant shall be exercised upon surrender to the Company of this Warrant
properly endorsed with a completed and executed Subscription Agreement in the
form attached hereto as Exhibit A, and upon payment of the aggregate
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Exercise Price for the number of Warrant Shares for which this Warrant is being
exercised. At the option of the Holder, the Exercise Price may be paid in any
one or a combination of the following forms: (a) by the Holder's check or wire
transfer of funds to the Company in the amount of the Exercise Price, (b) by the
surrender to the Company of shares of Class A Common Stock or other securities
or instruments of the Company and/or its subsidiaries having a Fair Value equal
to the amount of the Exercise Price, and/or (c) by the surrender to the Company
of that portion of this Warrant having a Fair Value equal to the amount of the
Exercise Price. In lieu of exercising this Warrant as provided above, the Holder
may from time to time at the Holder's option convert this Warrant, in whole or
in part, into a number of shares of Class A Common Stock determined by dividing
(A) the aggregate Fair Value of such shares otherwise issuable upon exercise of
this Warrant minus the aggregate Exercise Price of such shares by (B) the Fair
Value of one such share. The Company agrees that any Warrant Shares acquired
pursuant to this Warrant shall be deemed to be issued to Holder as the record
owner of such shares as of the close of business on the date on which this
Warrant shall have been surrendered and payment made for such Warrant Shares in
a manner permitted by the terms of this Warrant. Certificates for the Warrant
Shares so acquired, together with any other securities or property to which
Holder is entitled upon such exercise, conversion or exchange, shall be
delivered to Holder by the Company or its transfer agent at the Company's
expense within a reasonable time after the rights represented by this Warrant
have been exercised. Each stock certificate so delivered shall be in such
denominations of Class A Common Stock as may be requested by Holder and shall be
registered in the name of Holder or such other name as shall be designated by
Holder. If, upon exercise, conversion or exchange of this Warrant, fewer than
all of the Warrant Shares subject to this Warrant are acquired prior to the
Expiration Date of this Warrant, one or more new warrants substantially in the
form of, and on the terms in, this Warrant will be issued for the remaining
number of Warrant Shares not acquired upon such exercise, conversion or
exchange.
For purposes of this Warrant, (x) the Fair Value of shares of
Class A Common Stock as of a given date shall mean: (i) the average closing
price of such shares on the principal exchange (or NASDAQ NMS) on which such
shares are then trading, if any (or as reported on any composite index which
includes such principal exchange), on the ten most recent trading days
immediately prior to such date; or (ii) if such shares are not traded on an
exchange (or NASDAQ NMS) but are quoted on NASDAQ Small Cap or a successor
quotation system, the average mean between the closing bid and asked prices for
such shares, on the ten most recent trading days immediately prior to such date
as reported by NASDAQ Small Cap or such successor quotation system; or (iii) if
such shares are not publicly traded on an exchange (or NASDAQ NMS) or quoted on
NASDAQ Small Cap or a successor quotation system, the Fair Value shall mean such
amount as determined by the Board of Directors of the Company, and (y) the Fair
Value of this Warrant (or portion hereof) and any other securities or
instruments as of a given date shall mean such amount as determined by the Board
of Directors of the Company.
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2. SHARES TO BE FULLY PAID; RESERVATION OF SHARES. The Company
covenants and agrees that all Warrant Shares that may be issued upon the
exercise of the rights represented by this Warrant will, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable. The Company covenants
that it will reserve and keep available a sufficient number of shares of its
authorized but unissued Class A Common Stock for such exercise. The Company will
take all such reasonable action as may be necessary to assure that such Warrant
Shares may be issued as provided herein without violation of any applicable law
or regulation.
3. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The
Exercise Price and the number of Warrant Shares shall be subject to adjustment
from time to time upon the occurrence of certain events described in this
Section 3.
3.1 SUBDIVISION OR COMBINATION OF CLASS A COMMON STOCK AND
STOCK DIVIDEND. In the event that, after the date of this Warrant, the Company
subdivides its outstanding shares of Class A Common Stock into a greater number
of shares or declares a dividend upon its Class A Common Stock payable solely in
shares of Class A Common Stock, the Exercise Price in effect immediately prior
to such subdivision or declaration shall automatically be proportionately
reduced and the number of Warrant Shares shall automatically be proportionately
increased. Conversely, in case the outstanding shares of Class A Common Stock of
the Company shall be combined into a smaller number of shares, the Exercise
Price in effect immediately prior to such combination shall be proportionately
increased, and the number of Warrant Shares shall be proportionately reduced.
3.2 NOTICE OF ADJUSTMENT. Promptly after any adjustment of the
Exercise Price or any increase or decrease in the number of Warrant Shares, the
Company shall give written notice thereof, by first class mail, postage prepaid,
addressed to the registered holder of this Warrant at the address of such holder
as shown on the books of the Company. The notice shall be signed by the
Company's chief financial officer and shall state the effective date of the
adjustment and the Exercise Price resulting from such adjustment and the
increase or decrease, if any, in the number of Warrant Shares, setting forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based.
3.3 OTHER NOTICES. If at any time:
(a) the Company shall declare any cash dividend upon
its Class A Common Stock or Class B Common Stock;
(b) the Company shall declare any dividend upon its
Class A Common Stock or Class B Common Stock payable in stock (other than a
dividend payable solely in shares of Class A Common Stock or Class B Common
Stock) or make any special dividend or other distribution to the holders of its
Class A Common Stock or Class B Common Stock;
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(c) the Company shall offer for subscription pro rata
to the holders of its Class A Common Stock or Class B Common Stock any
additional shares of stock of any class or other rights;
(d) there shall be any capital reorganization or
reclassification of the capital stock of the Company; or consolidation or merger
of the Company with, or sale of all or substantially all of its assets to,
another corporation;
(e) there shall be a voluntary or involuntary
dissolution, liquidation or winding-up of the Company; or
(f) there shall be an initial public offering of
Company securities;
then, in any one or more of said cases, the Company shall give to the registered
holder of this Warrant, by the means specified in Section 8 herein, (i) at least
twenty (20) days' prior written notice of the date on which the books of the
Company shall close or a record shall be taken for such dividend, distribution
or subscription rights or for determining rights to vote in respect of any such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding-up, and (ii) in the case of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation,
winding-up or public offering, at least twenty (20) days' prior written notice
of the date when the same shall take place. Any notice given in accordance with
the foregoing clause (i) shall also specify, in the case of any such dividend,
distribution or subscription rights, the date on which the holders of Class A
Common Stock or Class B Common Stock shall be entitled thereto. Any notice given
in accordance with the foregoing clause (ii) shall also specify the date on
which the holders of Class A Common Stock or Class B Common Stock shall be
entitled to exchange their Common Stock for securities or other property
deliverable upon such reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation, winding-up, conversion or public offering, as
the case may be. If the Holder of the Warrant does not exercise this Warrant
prior to the occurrence of an event described above, except as provided in
Sections 3.1 and 3.4, the Holder shall not be entitled to receive the benefits
accruing to existing holders of the Class A Common Stock in such event.
3.4 CHANGES IN CLASS A COMMON STOCK. In case at any time
following the date of this Warrant, the Company shall be a party to any
transaction (including, without limitation, a merger, consolidation, public
offering of shares of the Company's Common Stock, or sale of all or
substantially all of the Company's assets or recapitalization of the Class A
Common Stock or Class B Common Stock) in which the previously outstanding Class
A Common Stock shall be changed into, converted or exchanged for Common Stock or
other securities of the Company or common stock or other securities of another
corporation or interests in a non-corporate entity or other property (including
cash) or any combination of any of the foregoing (each such transaction being
herein called a "Transaction" and the date of consummation of a Transaction
being herein called a "Consummation Date"), then, as a condition of the
consummation of such Transaction, lawful and adequate provisions shall be made
so that the Holder, upon the exercise hereof at any time on or after the
Consummation Date of such Transaction, shall be entitled to receive, and this
Warrant shall thereafter
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represent the right to receive, in lieu of the Class A Common Stock issuable
upon such exercise prior to such Consummation Date, the highest amount of
securities or other property to which the Holder would actually have been
entitled as a shareholder if the Holder had exercised this Warrant immediately
prior to the consummation of such Transaction. The provisions of this Section
3.4 shall similarly apply to successive Transactions.
4. ISSUE TAX. The issuance of certificates for Warrant Shares upon the
exercise of the Warrant shall be made without charge to the holder of the
Warrant for any issue tax in respect thereof; provided, however, that the
Company shall not be required to pay any tax that may be payable in respect of
any transfer involved in the issuance and delivery of any certificate in a name
other than that of the then holder of the Warrant being exercised.
5. NO VOTING OR DIVIDEND RIGHTS; LIMITATION OF LIABILITY. Nothing
contained in this Warrant shall be construed as conferring upon the Holder
hereof the right to vote or to consent or to receive notice as a shareholder in
respect of meetings of shareholders for the election of directors of the Company
or any other matters or any rights whatsoever as a shareholder of the Company,
until, and only to the extent that, this Warrant shall have been exercised.
Except for the adjustment to the Exercise Price pursuant to Section 3.1 in the
event of a dividend on the Class A Common Stock payable in shares of Class A
Common Stock, no dividends or interest shall be payable or accrued in respect of
this Warrant or the Warrant Shares purchasable hereunder until, and only to the
extent that, this Warrant shall have been exercised. No provisions hereof, in
the absence of affirmative action by the Holder to purchase Warrant Shares, and
no mere enumeration herein of the rights or privileges of the Holder hereof,
shall give rise to any liability of such Holder for the Exercise Price or as a
shareholder of the Company whether such liability is asserted by the Company or
by its creditors.
6. INVESTMENT REPRESENTATIONS; RESTRICTIONS ON TRANSFERABILITY OF
SECURITIES.
6.1 INVESTMENT REPRESENTATIONS. By accepting this Warrant
Certificate, Holder (or any entity for which it is acting as nominee) represents
that it is acquiring the Warrant (and will be acquiring any Warrant Shares
acquired upon exercise or conversion of this Warrant) for its own account, not
as nominee or agent, for investment and not with a view to, or for resale in
connection with, any distribution or public offering thereof in violation of the
Securities Act of 1933, as amended (the "Act").
6.2 RESTRICTIONS ON TRANSFERABILITY. This Warrant and the
Warrant Shares have not been registered under the Act and shall not be
transferable in the absence of registration under the Act, or an exemption
therefrom under said Act.
6.3 RESTRICTIVE LEGEND. Each certificate representing the
Warrant Shares or any other securities issued in respect of the Warrant Shares
shall be stamped or otherwise imprinted with a legend in substantially the
following form (in addition to any legend required under applicable state
securities laws):
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THE SHARES OF STOCK EVIDENCED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), NOR UNDER ANY APPLICABLE STATE SECURITIES LAWS.
THESE SHARES MAY NOT BE SOLD, TRANSFERRED, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS COVERED BY AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND ANY
APPLICABLE STATE SECURITIES LAWS, THE SALE IS MADE 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 AND ALL APPLICABLE STATE
SECURITIES LAWS.
7. MODIFICATION AND WAIVER. This Warrant and any provision hereof may
be changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.
8. NOTICES. Any notice, request or other document required or permitted
to be given or delivered to the Holder hereof or the Company shall be delivered
or shall be sent by certified or registered mail, postage prepaid, to the Holder
at its address as shown on the books of the Company or if to the Company at the
address indicated therefor in the first paragraph of this Warrant. If the
Holder's address is outside of the United States, Holder shall first be given
notice by telecopy, in addition to being provided with notice as set forth in
the preceding sentence.
9. BINDING EFFECT ON SUCCESSORS. This Warrant shall be binding upon any
corporation succeeding the Company by merger, consolidation or acquisition of
all or substantially all of the Company's assets. All of the obligations of the
Company relating to the Class A Common Stock issuable upon the exercise of this
Warrant shall survive the exercise and termination of this Warrant. All of the
covenants and agreements of the Company shall inure to the benefit of the
successors and assigns of the holder hereof.
10. DESCRIPTIVE HEADINGS AND GOVERNING LAW. The descriptive headings of
the several sections and paragraphs of this Warrant are inserted for convenience
only and do not constitute a part of this Warrant. This Warrant shall be
construed and enforced in accordance with, and the rights of the parties shall
be governed by, the laws of the State of Delaware.
11. LOST WARRANTS OR STOCK CERTIFICATES. The Company represents and
warrants to the Holder that upon receipt of evidence reasonably satisfactory to
the Company of the loss, theft, destruction or mutilation of this Warrant or any
stock certificate deliverable upon the exercise hereof and, in the case of any
such loss, theft or destruction, upon receipt of an indemnity and, if requested,
bond reasonably satisfactory to the Company, or in the case of
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any such mutilation, upon surrender and cancellation of this Warrant or such
stock certificate, the Company at its expense will make and deliver a new
Warrant or stock certificate, of like tenor, in lieu of the lost, stolen,
destroyed or mutilated Warrant or stock certificate.
12. FRACTIONAL SHARES. The Company shall not be required to issue
fractional shares upon exercise of this Warrant. The Company may, in lieu of
issuing any fractional share, pay the Holder entitled to such fraction a sum in
cash equal to the fair market value of any such fractional interest as it shall
appear on the public market, or if there is no public market for such shares,
then as shall be reasonably determined by the Company.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its duly authorized officer effective as of December 31, 1998.
NEXTERA ENTERPRISES, INC.
By: /s/ XXXXXXX X. XXXXX
-------------------------------
Xxxxxxx X. Xxxxx,
Secretary
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EXHIBIT A
NEXTERA ENTERPRISES, INC.
CLASS A COMMON STOCK WARRANT
FORM OF SUBSCRIPTION AGREEMENT
(To be signed and delivered
upon exercise of Warrant)
NEXTERA ENTERPRISES, INC.
Xxx Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: President
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise the [purchase/conversion] right represented by such Warrant
for, and to acquire thereunder, ________________________________ shares of Class
A Common Stock (the "Stock"), of Nextera Enterprises, Inc. (the "Company"), and
herewith makes payment of ___________________________ Dollars ($____________)
therefor in the form of:
_______________________________________________________________________________
The undersigned requests that the certificates for such shares be issued in the
name of, and delivered to, ____________________________, whose address is:
________________________________________________________________________.
If the exercise of this Warrant is not covered by a registration
statement effective under the Securities Act of 1933, as amended (the "Act"),
the undersigned represents that:
(i) the undersigned is acquiring such Stock for investment for
his, her or its own account, not as nominee or agent, and not with a view to the
distribution thereof in violation of the Act and the undersigned has not signed
or otherwise arranged for the selling, granting any participation in, or
otherwise distributing the same in violation of the Act;
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(ii) the undersigned has such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of the undersigned's investment in the Stock;
(iii) the undersigned has received all of the information the
undersigned has requested from the Company and considers necessary or
appropriate for deciding whether to acquire the shares of Stock;
(iv) the undersigned has the ability to bear the economic risks
of his, her or its prospective investment;
(v) the undersigned is able, without materially impairing its
financial condition, to hold the shares of Stock for an indefinite period of
time and to suffer complete loss on his, her or its investment;
(vi) the undersigned understands and agrees that (A) he may be
unable to readily liquidate his, her or its investment in the shares of Stock
and that the shares must be held indefinitely unless a subsequent disposition
thereof is registered or qualified under the Act and applicable state securities
or Blue Sky laws or is exempt from such registration or qualification, and that
the Company is not required to register the same or to take any action or make
such an exemption available except to the extent provided in the within Warrant
or other applicable agreement to which the Company and the undersigned are
parties, and (B) the exemption from registration under the Act afforded by Rule
144 promulgated by the Securities and Exchange Commission ("Rule 144") depends
upon the satisfaction of various conditions by the undersigned and the Company
and that, if applicable, Rule 144 affords the basis for sales under certain
circumstances in limited amounts, and that if such exemption is utilized by the
undersigned, such conditions must be fully complied with by the undersigned and
the Company, as required by Rule 144; and
(vii) the undersigned either (A) is familiar with the definition
of and the undersigned is an "accredited investor" within the meaning of such
term under Rule 501 of Regulation D promulgated under the Act, or (B) is
providing representations and warranties reasonably satisfactory to the Company
and its counsel, to the effect that the sale and issuance of Stock upon exercise
of such Warrant may be made without registration under the Act or any applicable
state securities and Blue Sky laws.
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If said number of shares shall not be all the shares exchangeable or
purchasable under the within Warrant, a new Warrant is to be issued in the name
of the undersigned for the balance remaining of the shares purchasable
thereunder.
DATED: ______________________
________________________________________
(Name of holder must conform in all
respects to name of holder as specified
on the face of the Warrant or with the
name of the assignee appearing on the
assignment form attached hereto.)
________________________________________
(signature)
________________________________________
(print name)
________________________________________
(print title)
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