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PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
Between
CIMNET, INC.
AND
GENERAL ELECTRIC COMPANY,
acting through its GE Power Systems business unit
Dated as of August 17, 2001
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EXHIBIT "A"
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Form of Common Stock Purchase Warrant
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EXHIBIT "B"
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Form of Registration Rights Agreement
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EXHIBIT "C"
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Form of Certificate of Designation
with respect to the
Series A Convertible Preferred Stock
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EXHIBIT "D"
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Form of Legal Opinion
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EXHIBIT "E"
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Form of Voting Agreement
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[Execution Copy]
Warrant to Purchase
Shares of Common Stock
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND NEITHER
THIS WARRANT NOR SUCH SHARES MAY BE SOLD, ENCUMBERED OR OTHERWISE TRANSFERRED
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR AN
EXEMPTION FROM SUCH REGISTRATION REQUIREMENT, AND, IF AN EXEMPTION SHALL BE
APPLICABLE, THE HOLDER SHALL HAVE DELIVERED AN OPINION OF COUNSEL ACCEPTABLE TO
THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
Void after 5:00 P.M. New York City time on the last day of the Exercise Period,
as defined in the Warrant
COMMON STOCK PURCHASE WARRANT
OF
CIMNET, INC.
This is to certify that, FOR VALUE RECEIVED, General Electric Company,
acting through its GE Power Systems business unit or its assigns ("Holder"), is
entitled to purchase, subject to the provisions of this Warrant, from Cimnet,
Inc., a Delaware corporation (the "Company"), (i) at an exercise price per share
of $1.33, subject to adjustment as provided in this Warrant, one hundred
thousand (100,000) shares of common stock, par value $0.0001 per share ("Common
Stock") and (ii) up to an additional two hundred thousand (200,000) shares of
Common Stock at an exercise price determined as set forth herein. The shares of
Common Stock deliverable upon such exercise, and as adjusted from time to time,
are hereinafter sometimes referred to as "Warrant Stock," and the exercise price
for the purchase of a share of Common Stock pursuant to this Warrant in effect
at any time and as adjusted from time to time is hereinafter sometimes referred
to as the "Exercise Price."
1. ISSUANCE OF WARRANT. This Warrant is being issued pursuant to that
certain Preferred Stock and Warrant Purchase Agreement dated as of the date
hereof between the Company and the Holder (the "Purchase Agreement").
Capitalized terms used herein and not otherwise defined shall have the meanings
ascribed thereto in the Purchase Agreement. In addition the following terms have
the meanings set forth below:
"Applicable Exercise Period" shall mean, as to any Tranche of
Warrant Stock, the period commencing on the date of issuance and ending at 5
p.m., eastern time on the day preceding the third anniversary of the applicable
date of issuance.
"Applicable Exercise Price" shall mean, as to any Tranche of
Warrant Stock, the Exercise Price applicable to such Tranche of Warrant Stock.
"Board" shall mean the board of directors of Company.
"Convertible Securities" shall mean evidences of indebtedness,
shares of stock or other securities, which are convertible into or exchangeable,
with or without payment of additional consideration in cash or property, for
shares of Common Stock, either immediately or upon the occurrence of a specified
date or a specified event.
"Permitted Issuances" shall mean (a) shares of Common Stock,
rights, options or warrants exercisable for shares of the Company's capital
stock, or any other securities convertible into shares of the Company's capital
stock (collectively, "Equity Securities") granted or awarded by the Company,
with the approval of the Board or the compensation committee thereof, to
employees, directors or consultants of the Company as compensation for service
to the Company in any such capacities; (b) the issuance of shares of Common
Stock upon the conversion of the Company's warrants (including this Warrant) and
options outstanding as of the date hereof; (c) Equity Securities issued by the
Company in connection with (i) the acquisition of tangible or intangible assets,
(ii) the acquisition of, or the exchange for, the securities of any person (by
merger or otherwise) or (iii) a financing transaction (i.e. a loan, or a private
or public sale of securities) (in each case as to the events described in (i),
(ii) and (iii) above as approved by the Company's Board of Directors); provided
however, that any issuance of Equity Securities at a price below 75% of Fair
Market Value shall not qualify as a Permitted Issuance.
"Tranche of Warrant Stock" shall mean shares of Warrant Stock
having the same issuance date.
2. EXERCISE OF WARRANT.
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(a) This Warrant may be exercised in whole or in part at any
time or from time to time from the date hereof until the end of the Applicable
Exercise Period by presentation and surrender hereof to the Company at its
principal office, or at the office of its stock transfer agent, if any, with the
Purchase Form annexed hereto duly executed and accompanied by payment of the
Exercise Price for the number of shares of Common Stock specified in such form.
If this Warrant should be exercised in part only, the Company shall, upon
surrender of this Warrant for cancellation, execute and deliver a new Warrant
evidencing the rights of the Holder hereof to purchase the balance of the shares
of Common Stock purchasable hereunder. Upon receipt by the Company of this
Warrant at its office, or by the stock transfer agent of the Company at its
office, in proper form for exercise, the Holder shall be deemed to be the holder
of record of the shares of Common Stock issuable upon such exercise,
notwithstanding that the stock transfer books of the Company shall then be
closed or that certificates representing such shares of Common Stock shall not
then be actually delivered to the Holder.
(b) At the option of Holder, this Warrant may be exercised, at
any time or from time to time, in the following "cashless exercise" transaction:
(i) Upon written notice of exercise from the Holder to
the Company that the Holder is exercising this Warrant in whole or in part and
as consideration of such exercise is authorizing the Company to withhold from
issuance a number of shares of Common Stock issuable upon exercise of this
Warrant, the Company shall deliver to the Holder (without payment by the Holder
of the aggregate Exercise Price) that number of shares of Common Stock equal to
the quotient obtained by dividing (x) the Spread Value by (y) the Fair Market
Value of one share of Common Stock immediately prior to the exercise of the
conversion right described in this Section 2. The shares withheld by the Company
shall no longer be issuable under this Warrant.
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(c) Fair Market Value of a share of Warrant Stock as of a
particular date (the "Determination Date") shall mean:
(i) If the Warrant Stock is traded on an exchange or
is quoted on the Nasdaq National Market or the Nasdaq SmallCap Market
("Nasdaq"), then the average of the closing or last sale price, respectively,
reported for the five trading days immediately preceding the Determination Date.
(ii) If the Warrant Stock is not traded on an exchange
or on Nasdaq but is traded in the over-the-counter market or other similar
organization (including the OTC Bulletin Board), then the average of the closing
bid and ask prices reported for the five trading days immediately preceding the
Determination Date.
(iii) If the Warrant Stock is not traded as provided
above, then the price shall be determined by the Board and Holder pursuant to
this subsection (iii). The Board shall first make its determination of fair
market value in good faith and provide written notice of such determination to
Holder. If Holder does not object to such determination within ten (10) days,
then such determination of fair market value shall be binding on Holder. If
Holder objects to such determination within such period by sending written
notice to the Company, then Fair Market Value shall be determined by an
independent appraiser experienced in the business of evaluating and appraising
stock and who is jointly selected by the Company and Holder. If the Company and
Holder are unable to agree upon an independent appraiser, then one shall be
selected by the New York, New York office of the American Arbitration
Association ("AAA"). The cost of the independent appraiser and AAA shall be
borne jointly by the Company and Holder. Any determination of Fair Market Value
pursuant to this subsection (iii) shall be made without (A) discount for
illiquidity or minority interest or (B) premium for controlling interest.
(iv) If the Determination Date is the date of a
liquidation, dissolution or winding up, or any event deemed to be a liquidation,
dissolution or winding up pursuant to the Company's certificate of
incorporation, then all amounts shall be payable per share to Holders of the
securities then comprising Warrant Stock pursuant to the provisions of the
certificate of incorporation regarding distributions in the event of such
liquidation, dissolution or winding up, assuming for the purposes of this clause
(iv) that all of the shares of Warrant Stock then issuable upon exercise of all
of the Warrants are outstanding at the Determination Date.
(d) The term "Spread Value" shall mean (i) the number of
shares exercised at a given time multiplied by the Fair Market Value of one
share of Common Stock, less (ii) the aggregate applicable Exercise Price for the
number of shares so exercised.
3.WARRANT STOCK. (a) The number of shares of Warrant Stock shall be
determined in accordance with the following formula, subject to appropriate
adjustment consistent with the terms of this Warrant including, without
limitation, Sections 7 and 10 hereof:
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(i) On the Effective Date, the number of shares of
Warrant Stock shall equal 100,000 (the "Initial Warrant Stock").
(ii) On January 1, 2002, this Warrant shall be
exercisable for 100,000 additional shares of Warrant Stock so long as the Holder
(or its affiliate) has satisfied the First Period Revenue Target.
(iii) On January 1, 2003, the Warrant shall be
exercisable for 100,000 additional shares of Warrant Stock so long as the Holder
(or its affiliate) has satisfied the Second Period Revenue Target.
For purposes of this Section 3 (a): "First Period Revenue Target "
shall mean Revenue through December 31, 2001 of not less than $2.25 million;
"Second Period Revenue Target " shall mean aggregate Revenue through December
31, 2002 of not less than $4.5 million; and "Revenue" shall mean the net total
dollar amount paid (less any deductions, offsets, discounts or other reductions)
to the Company by or for the benefit of Holder and its affiliates pursuant to
(i) the Cimnet, Inc. Software License, executed April 10, 2000, between Holder
and Company, (ii) the Master Services Agreement, effective November 2, 2000, by
and between Holder and Company, and any Statement of Work issued thereunder, or
(iii) any similar services or license agreement between Company and Holder or
its affiliates.
(b) The Applicable Exercise Price for the Warrant Stock
accrued pursuant to Sections 3(a)(ii) and 3(a)(iii) shall be equal to the Fair
Market Value of the Common Stock as of the date of issuance, except for the
Initial Warrant Stock which shall have an exercise price equal to $1.33
4. RESERVATION OF SHARES/FRACTIONAL SHARES. The Company hereby agrees
that at all times there shall be reserved for issuance and/or delivery upon
exercise of this Warrant such number of shares of Common Stock as shall be
required for issuance and delivery upon exercise of this Warrant. No fractional
shares or script representing fractional shares shall be issued upon the
exercise of this Warrant. Instead, the Company will round to the nearest whole
number.
5. EXCHANGE, TRANSFER, ASSIGNMENT OR LOSS OF WARRANT. This Warrant is
exchangeable, without expense, at the option of the Holder, upon presentation
and surrender hereof to the Company or at the office of its stock transfer
agent, if any, for other Warrants of different denominations entitling the
holder thereof to purchase in the aggregate the same number of shares of Common
Stock purchasable hereunder. Subject to the provisions of Section 11 of this
Warrant, upon surrender of this Warrant to the Company or at the office of its
stock transfer agent, if any, with the Assignment Form annexed hereto duly
executed and funds sufficient to pay any transfer tax, the Company shall,
without charge, execute and deliver a new Warrant in the name of the assignee
named in such instrument of assignment and this Warrant shall promptly be
canceled. This Warrant may be divided or combined with other Warrants which
carry the same rights upon presentation hereof at the office of the Company or
at the office of its stock transfer agent, if any, together with a written
notice specifying the names and denominations in which new Warrants are to be
issued and signed by the Holder hereof. The term "Warrant" as used herein
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includes any Warrants into which this Warrant may be divided or exchanged. 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 (it being agreed that
the written agreement of General Electric Company shall be sufficient
indemnity), and upon surrender and cancellation of this Warrant, if mutilated,
the Company will execute and deliver a new Warrant of like tenor. Any such new
Warrant executed and delivered shall constitute an additional contractual
obligation on the part of the Company, whether or not this Warrant so lost,
stolen, destroyed, or mutilated shall be at any time enforceable by anyone.
6. RIGHTS AND OBLIGATIONS OF THE HOLDER. The Holder shall not, by
virtue of this Warrant, be entitled to any rights of a stockholder in the
Company, either at law or equity, and the rights of the Holder are limited to
those expressed in the Warrant and are not enforceable against the Company
except to the extent set forth herein. In addition, no provision hereof, in the
absence of affirmative action by Holder to purchase shares of Common Stock, and
no enumeration herein of the rights or privileges of Holder hereof, shall give
rise to any liability of such Holder for the purchase price of any Common Stock
or as a stockholder of Company, whether such liability is asserted by Company or
by creditors of Company.
7. ANTI-DILUTION PROVISIONS. The Exercise Price in effect at any time
and the number and kind of securities purchasable upon exercise of each Warrant
shall be subject to adjustment as follows and the Company shall give each Holder
notice of any event described below which requires an adjustment pursuant to
this Section 7 at the time of such event:
(a) Stock Dividends, Subdivisions and Combinations. If at any
time Company shall:
(i) take a record of the holders of its Common Stock
for the purpose of entitling them to receive a dividend payable in, or other
distribution of, shares of Common Stock,
(ii) subdivide or reclassify its outstanding shares of
Common Stock into a larger number of shares of Common Stock, or
(iii) combine or reclassify its outstanding shares of
Common Stock into a smaller number of shares of Common Stock or otherwise effect
a reverse stock split,
then, as to each Tranche of Warrant Stock, (i) the number of shares of Common
Stock for which this Warrant is exercisable immediately after the occurrence of
any such event shall be adjusted to equal the number of shares of Common Stock
which a record holder of the same number of shares of Common Stock for which
this Warrant is exercisable immediately prior to the occurrence of such event,
or the record date therefor, whichever is earlier, would own or be entitled to
receive after the happening of such event, and (ii) the Applicable Exercise
Price(s) shall be adjusted to equal (A) the Applicable Exercise Price
immediately prior to such event multiplied by the number of shares of Common
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Stock for which this Warrant is exercisable immediately prior to the adjustment
divided by (B) the number of shares for which this Warrant is exercisable
immediately after such adjustment.
(b) Certain Other Distributions and Adjustments.
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(i) If at any time Company shall take a record of the
holders of its Common Stock for the purpose of entitling them to receive any
dividend or other distribution of:
(A) cash,
(B) any evidences of its indebtedness, any shares
of its stock or any other securities or property of any nature whatsoever (other
than Convertible Securities or shares of Common Stock), or
(C) any warrants or other rights to subscribe for
or purchase any evidences of its indebtedness, any shares of its stock or any
other securities or property of any nature whatsoever (other than Convertible
Securities or shares of Common Stock),
then Holder shall be entitled to receive such dividend or distribution as if
Holder had exercised this Warrant.
(ii) A reclassification of the Common Stock (other than
a change in par value, or from par value to no par value or from no par value to
par value) into shares of Common Stock and shares of any other class of stock
shall be deemed a distribution by Company to the holders of its Common Stock of
such shares of such other class of stock and in such event Holder shall be
entitled to receive such distribution as if Holder had exercised this Warrant
and, if the outstanding shares of Common Stock shall be changed into a larger or
smaller number of shares of Common Stock as a part of such reclassification,
such change shall be deemed a subdivision or combination, as the case may be, of
the outstanding shares of Common Stock within the meaning of Section 7(a).
(c) Issuance of Additional Shares of Common Stock.
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(i) If at any time Company shall issue or sell any shares of
Common Stock, in exchange for consideration in an amount per share of Common
Stock less than the Fair Market Value of the Common Stock on the date of
issuance, then (A) the Applicable Exercise Price as to each Tranche of Warrant
Stock shall be adjusted so that the same shall equal the price determined by
multiplying the Applicable Exercise Price in effect immediately prior to such
event with respect to such Tranche of Warrant Stock by a fraction, of which the
numerator shall be the number of shares of Common Stock outstanding on the date
of issuance plus the number of additional shares of Common Stock which the
aggregate offering price would purchase at such Fair Market Value, and of which
the denominator shall be the number of shares of Common Stock outstanding on the
date of issuance plus the number of additional shares of Common Stock issued or
issuable in such offering, and (B) the number of shares of Common Stock for
which this Warrant is exercisable (with respect to such Tranche of Warrant
Stock) shall be adjusted to equal the product obtained by multiplying the
Applicable Exercise Price in effect immediately prior to such issue or sale by
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the number of shares of Common Stock for which this Warrant is exercisable (with
respect to such Tranche of Warrant Stock) immediately prior to such issue or
sale and dividing the product thereof by the Applicable Exercise Price resulting
from the adjustment made pursuant to clause (A) above.
(ii) The provisions of paragraph (i) of this Section 7(c)
shall not apply to any issuance of shares of Common Stock for which an
adjustment is provided under Section 7(a) or 7(b). No adjustment of the number
of shares of Common Stock for which this Warrant shall be exercisable shall be
made under paragraph (i) of this Section 7(c) upon the issuance of any shares of
Common Stock which are issued pursuant to the exercise of any warrants or other
subscription or purchase rights or pursuant to the exercise of any conversion or
exchange rights in any Convertible Securities, if any such adjustment shall
previously have been made upon the issuance of such warrants or other rights or
upon the issuance of such Convertible Securities (or upon the issuance of any
warrant or other rights therefor) pursuant to Section 7(d) or Section 7(e).
(d) Issuance of Warrants or Other Rights. If at any time
Company shall take a record of the holders of its Common Stock for the purpose
of entitling them to receive a distribution of, or shall in any manner (whether
directly or by assumption in a merger in which Company is the surviving
corporation) issue or sell, any warrants or other rights to subscribe for or
purchase any shares of Common Stock or any Convertible Securities, whether or
not the rights to exchange or convert thereunder are immediately exercisable,
and the price per share for which Common Stock is issuable upon the exercise of
such warrants or other rights or upon conversion or exchange of such Convertible
Securities shall be less than the Fair Market Value of the Common Stock
immediately prior to the time of such record, issue or sale, then, as to each
such Tranche of Warrant Stock, the number of shares for which this Warrant is
exercisable and the Applicable Exercise Price shall be adjusted as provided in
Section 7(c) on the basis that the maximum number of shares of Common Stock
issuable pursuant to all such warrants or other rights or necessary to effect
the conversion or exchange of all such Convertible Securities shall be deemed to
have been issued and outstanding and Company shall be deemed to have received
all the consideration payable therefor, if any, as of the date of issuance of
such warrants or other rights. No further adjustment of the Applicable Exercise
Price(s) shall be made upon the actual issue of such Common Stock or of such
Convertible Securities upon exercise of such warrants or other rights or upon
the actual issuance of such Common Stock upon such conversion or exchange of
such Convertible Securities.
(e) Issuance of Convertible Securities. If at any time Company
shall take a record of the holders of its Common Stock for the purpose of
entitling them to receive a distribution of, or shall in any manner (whether
directly or by assumption in a merger in which Company is the surviving
corporation) issue or sell, any Convertible Securities, whether or not the
rights to exchange or convert thereunder are immediately exercisable, and the
price per share for which Common Stock is issuable upon such conversion or
exchange shall be less than the Fair Market Value of the Common Stock
immediately prior to the time of such record, issue or sale, then, as to each
such Tranche of Warrant Stock, the number of shares of Common Stock for which
this Warrant is exercisable and the Applicable Exercise Price shall be adjusted
as provided in Section 7(c) on the basis that the maximum number of shares of
Common Stock necessary to effect the conversion or exchange of all such
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Convertible Securities shall be deemed to have been issued and outstanding and
Company shall have received all of the consideration payable therefor, if any,
as of the date of issuance of such Convertible Securities. If any issue or sale
of Convertible Securities is made upon exercise of any warrant or other right to
subscribe for or to purchase any such Convertible Securities for which, as to
any Tranche of Warrant Stock, adjustments of the number of shares of Common
Stock for which this Warrant is exercisable and the Applicable Exercise Price
have been or are to be made pursuant to Section 7(d) as to such Tranche of
Warrant Stock, no further adjustment of the number of shares of Common Stock for
which this Warrant is exercisable and the Applicable Exercise Price shall be
made by reason of such record, issue or sale.
(f) Superseding Adjustment. If at any time after any
adjustment of the number of shares of Common Stock for which this Warrant is
exercisable and the Applicable Exercise Price(s) shall have been made pursuant
to Section 7(d) or Section 7(e) as the result of any issuance of warrants,
rights or Convertible Securities,
(i) such warrants or rights, or the right of conversion or
exchange in such other Convertible Securities, shall expire, and all or a
portion of such warrants or rights, or the right of conversion or exchange with
respect to all or a portion of such other Convertible Securities, as the case
may be, shall not have been exercised, or
(ii) the consideration per share for which shares of Common
Stock are issuable pursuant to such warrants or rights, or the terms of such
other Convertible Securities, shall be increased solely by virtue of provisions
therein contained for an automatic increase in such consideration per share upon
the occurrence of a specified date or event,
then for each outstanding Warrant such previous adjustment shall be rescinded
and annulled and the shares of Common Stock which were deemed to have been
issued by virtue of the computation made in connection with the adjustment so
rescinded and annulled shall no longer be deemed to have been issued by virtue
of such computation made in connection with the adjustment so rescinded and
annulled shall no longer be deemed to have been issued by virtue of such
computation. Thereupon, a recomputation shall be made of the effect of such
rights or options or other Convertible Securities on the basis of:
(A) treating the number of shares of Common Stock or other
property, if any, theretofore actually issued or issuable pursuant to the
previous exercise of any such warrants or rights or any such right of conversion
or exchange, as having been issued on the date or dates of any such exercise and
for the consideration actually received and receivable therefor, and
(B) treating any such warrants or rights or any such other
Convertible Securities which then remain outstanding as having been granted or
issued immediately after the time of such increase of the consideration per
share for which shares of Common Stock or other property are issuable under such
warrants or rights or other convertible Securities; whereupon a new adjustment
of the number of shares of Common Stock for which this Warrant is exercisable
and the Applicable Exercise Price(s) shall be made, which new adjustment shall
supersede the previous adjustment so rescinded and annulled.
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(g) No adjustment in the Exercise Price shall be required
unless such adjustment would require an increase or decrease of at least one
cent ($0.01) in such price; provided, however, that any adjustments which by
reason of this Section 7(g) are not required to be made shall be carried forward
and taken into account in any subsequent adjustment. All calculations under this
Section 7(g) shall be made to the nearest cent or to the nearest one-hundredth
of a share, as the case may be.
(h) The Company may retain a firm of independent public
accountants of recognized standing selected by the Board (who may be the regular
accountants employed by the Company) to make any computation required by this
Section 7.
(i) In the event that at any time, as a result of an
adjustment made pursuant to Section 7(a), (b) or (c) of this Warrant, the Holder
of any Warrant thereafter shall become entitled to receive any shares of the
Company, other than Common Stock, thereafter the number of such other shares so
receivable upon exercise of any Warrant shall be subject to adjustment from time
to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Common Stock contained in Sections 7(a) through
(h), inclusive, of this Warrant.
(j) Notwithstanding the foregoing, no adjustment shall be
effected due to, or as a result of, any Permitted Issuances.
(k) Other Action Affecting Common Stock. In case at any time
or from time to time Company shall take any action in respect of its Common
Stock, other than any action described in this Section 7, then, unless such
action will not have a materially adverse effect upon the rights of the Holders,
the number of shares of Common Stock or other stock for which this Warrant is
exercisable and/or the purchase price thereof shall be adjusted in such manner
as may be equitable in the circumstances.
8. OFFICER'S CERTIFICATE. Whenever the Applicable Exercise Price(s)
shall be adjusted as required by the provisions of Section 7 of this Warrant,
the Company shall forthwith file in the custody of its Secretary or an Assistant
Secretary at its principal office and with its stock transfer agent, if any, an
officer's certificate showing the adjusted Applicable Exercise Price(s) and the
adjusted number of shares of Common Stock issuable upon exercise of each
Warrant, determined as herein provided, setting forth in reasonable detail the
facts requiring such adjustment, including a statement of the number of
additional shares of Common Stock, if any, and such other facts as shall be
necessary to show the reason for and the manner of computing such adjustment.
Each such officer's certificate shall be forwarded to Holder as provided in
Section 13.
9. NOTICES TO WARRANT HOLDERS. So long as this Warrant shall be
outstanding, (1) if the Company shall pay any dividend or make any distribution
upon Common Stock, or (2) if the Company shall offer to the holders of Common
Stock for subscription or purchase by them any share of any class or any other
rights, or (3) if any capital reorganization of the Company, reclassification of
the capital stock of the Company, consolidation or merger of the Company with or
into another entity, tender offer transaction for the Company's Common Stock,
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sale, lease or transfer of all or substantially all of the property and assets
of the Company, or voluntary or involuntary dissolution, liquidation or winding
up of the Company shall be effected, or (4) if the Company shall file a
registration statement under the Securities Act of 1933, as amended (the "Act"),
on any form other than on Form S-4 or S-8 or any successor form, then in any
such case, the Company shall cause to be mailed by certified mail to the Holder,
at least fifteen days prior to the date specified in clauses (i), (ii), (iii) or
(iv), as the case may be, of this Section 9 a notice containing a brief
description of the proposed action and stating the date on which (i) a record is
to be taken for the purpose of such dividend, distribution or rights, or (ii)
such reclassification, reorganization, consolidation, merger, tender offer
transaction, conveyance, lease, dissolution, liquidation or winding up is to
take place and the date, if any is to be fixed, as of which the holders of
Common Stock or other securities shall receive cash or other property
deliverable upon such reclassification, reorganization, consolidation, merger,
conveyance, dissolution, liquidation or winding up, or (iii) such registration
statement is to be filed with the Securities and Exchange Commission.
10. RECLASSIFICATION, REORGANIZATION OR MERGER. In case of any
reclassification, capital reorganization or other change of outstanding shares
of Common Stock of the Company, or in case of any consolidation or merger of the
Company with or into another corporation (other than a merger with a subsidiary
in which merger the Company is the continuing or surviving corporation and which
does not result in any reclassification, capital reorganization or other change
of outstanding shares of Common Stock of the class issuable upon exercise of
this Warrant) or in case of any sale, lease or conveyance of all or
substantially all of the assets of the Company, the Company shall, as a
condition precedent to such transaction, cause effective provisions to be made
so that (i) the Holder shall have the right thereafter by exercising this
Warrant, to purchase the kind and amount of shares of stock and other securities
and property receivable upon such reclassification, capital reorganization and
other change, consolidation, merger, sale or conveyance by a holder of the
number of shares of Common Stock which could have been purchased upon exercise
of this Warrant immediately prior to such reclassification, change,
consolidation, merger, sale or conveyance, and (ii) the successor or acquiring
entity shall expressly assume the due and punctual observance and performance of
each covenant and condition of this Warrant to be performed and observed by
Company and all obligations and liabilities hereunder (including but not limited
to the provisions of Section 3 regarding the increase in the number of shares of
Warrant Stock potentially issuable hereunder). Any such provision shall include
provision for adjustments which shall be as nearly equivalent as possible to the
adjustments provided for in this Warrant. The foregoing provisions of this
Section 10 shall similarly apply to successive reclassifications, capital
reorganizations and changes of shares of Common Stock and to successive
consolidations, mergers, sales or conveyances. In the event that in connection
with any such capital reorganization or reclassification, consolidation, merger,
sale or conveyance, additional shares of Common Stock shall be issued in
exchange, conversion, substitution or payment, in whole in part, for a security
of the Company other than Common Stock, any such issue shall be treated as an
issuance of Common Stock covered by the provisions of Section 7 of this Warrant.
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11. TRANSFER TO COMPLY WITH THE SECURITIES ACT OF 1933.
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(a) This Warrant or the Warrant Stock or any other security
issued or issuable upon exercise of this Warrant may not be sold or otherwise
disposed of except as follows:
(i) To a person who, in the opinion of counsel for the
Company, is a person to whom this Warrant or Warrant Stock may legally be
transferred without registration and without the delivery of a current
prospectus under the Act with respect thereto and then only against receipt of
an agreement of such person to comply with the provisions of this Section 11
with respect to any resale or other disposition of such securities which
agreement shall be satisfactory in form and substance to the Company and its
counsel; or
(ii) to any person upon delivery of a prospectus then
meeting the requirements of the Act relating to such securities and the offering
thereof for such sale or disposition.
(b) This Warrant may not be transferred by the Holder to any
party other than GE Capital Corporation, GE Capital Equity Investments, Inc., or
any other subsidiary of GE Capital Corporation, without the prior written
approval of the Company. The restriction described in this Section 11(b) shall
not apply to Warrant Stock issued pursuant to the Warrant
12. GOVERNING LAW; JURISDICTION. The corporate laws of the State of
Delaware shall govern all issues concerning the relative rights of the Company
and its stockholders. All issues concerning the construction, validity,
enforcement and interpretation of this Warrant shall be governed by and
construed in accordance with the internal laws of the State of New York without
giving effect to the principles of conflicts of law thereof. The parties hereto
agree that venue in any and all actions and proceedings related to the subject
matter of this Warrant shall be in the state and federal courts in and for New
York, New York, which courts shall have exclusive jurisdiction for such purpose,
and the parties hereto irrevocably submit to the exclusive jurisdiction of such
courts and irrevocably waive the defense of an inconvenient forum to the
maintenance of any such action or proceeding. Service of process may be made in
any manner recognized by such courts.
13. NOTICES. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of (i) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile
telephone number specified in this Section prior to 6:30 p.m. (New York City
time) on a Business Day, (ii) the Business Day after the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile
telephone number specified in this Agreement later than 6:30 p.m. (New York City
time) on any date and earlier than 11:59 p.m. (New York City time) on such date,
(iii) the Business Day following the date of mailing, if sent by nationally
recognized overnight courier service, or (iv) upon actual receipt by the party
to whom such notice is required to be given. The address for such notices and
communications shall be as follows:
If to the Company: CIMNET, Inc.
000 Xxxx Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attn: Xxxx X. Xxxxxxxxxx
11
With copies to: Berlack, Israels & Xxxxxxxx LLP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attn: Xxxx X. Xxxxxx, Esq.
12
If to the Holder GE Power Systems
0000 Xxxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx Xxxxxxx-Losique
Facsimile No.: (000) 000-0000
Attn: Xxxxxx X. Xxxxx, Esq.
Facsimile No.: (000) 000-0000
With a copy to: Long Xxxxxxxx & Xxxxxx LLP
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxxxxx X. Short, Esq.
IN WITNESS WHEREOF, this Warrant has been duly executed as of August
31, 2001.
CIMNET, INC.
By: /s/Xxxx Xxxxxxxxxx
--------------------------------
Name: Xxxx Xxxxxxxxxx
Title: Chief Executive Officer
13
PURCHASE FORM
Dated: _______________, 20_____
The undersigned hereby irrevocably elects to exercise the within
Warrant to the extent of purchasing _____ shares of Common Stock and hereby
makes payment of (i) $___________ in payment of the actual exercise price
thereof and/or (ii) the surrender to the Company of _______ shares of Warrant
Stock. Schedule 1 attached hereto specifies the Tranche(s) of Warrant Stock from
which the shares of Common Stock are being purchased and the Applicable Exercise
Price(s) for such shares.
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INSTRUCTIONS FOR REGISTRATION OF STOCK
Name:___________________________________________
(Please typewrite or print in block letters)
Signature:________________________________________
Social Security or Employer Identification No.:_________________________
ASSIGNMENT FORM
FOR VALUE RECEIVED, _______________________________________ hereby
sells, assigns and transfer unto:
Name:_______________________________________________
(Please typewrite or print in block letters)
Address:_____________________________________________
Social Security or Employer Identification No.:__________________________
The right to purchase Common Stock represented by this Warrant to the extent of
shares as to which such right is exercisable and does hereby irrevocably
constitute and appoint attorney to transfer the same on the books of the Company
with full power of substitution.
Dated: _________________, 2001.
Signature:________________________________
Signature Guaranteed:
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