THIS WARRANT AND THE SHARES OF STOCK OF XXXXX.XXX, INC. TO BE ISSUED UPON ANY
EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY
STATE SECURITIES LAWS AND ANY SALE, TRANSFER, PLEDGE OR OTHER DISPOSITION
THEREOF MAY BE MADE ONLY (i) IN A REGISTRATION UNDER SAID ACT OR (ii) IF AN
EXEMPTION FROM REGISTRATION UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS
IS AVAILABLE AND THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL TO THAT EFFECT
REASONABLY SATISFACTORY TO IT.
XXXXX.XXX, INC.
COMMON STOCK PURCHASE WARRANT
TO PURCHASE__________ SHARES OF THE COMMON STOCK
OF XXXXX.XXX, INC.
This Warrant Expires __________, 2005
Warrant No. _________
THIS CERTIFIES that, subject to the terms and conditions set forth in this
Warrant, ________________________ (the "Holder") is entitled to purchase from
XXXXX.XXX, INC., a Delaware corporation (the "Company"), at any time or from
time to time during the Exercise Period (as defined in Section 15 below) the
number of fully paid and non-assessable shares of common stock, par value $.01
per share, of the Company (the "Shares") as provided herein upon surrender of
this Warrant at the principal office of the Company, and, at the election of the
Holder, upon payment of the purchase price at said office in cash or by
cashier's check or by the wire transfer of funds in a dollar amount equal to the
purchase price of the Shares for which the consideration is being given.
This Warrant shall be exercisable for that number of Shares as set forth
above.
1. Purchase Price.
--------------
The purchase price of one share of Common Stock (or such securities as may
be substituted for one share of Common Stock pursuant to the provisions set
forth below) (the "Warrant Price") shall be Seventy-Five Cents ($0.75).
2. Adjustment of Warrant Price and Number of Shares.
------------------------------------------------
The number and kind of securities issuable upon the exercise of this
Warrant shall be subject to adjustment from time to time upon the happening of
certain events as follows:
(a) Adjustment for Dividends in Stock. If, at any time on or after the
date hereof, the holders of the Common Stock of the Company (or any shares of
stock or other securities at the time receivable upon the exercise of this
Warrant) shall have received, or, on or after the record date fixed for the
determination of eligible stockholders, shall have become entitled to receive,
without payment therefor, other or additional stock of the Company by way of
dividend (other than as provided for in Section 2(b) below), then and in each
such case, upon the exercise of this Warrant, the Holder shall be entitled to
receive, in addition to the number of shares of Common Stock receivable and
without payment of any additional consideration, the amount of such other or
additional stock of the Company which the Holder would receive on the date of
such exercise had it been the holder of record of such Common Stock on the date
hereof and had thereafter, during the period from the date hereof to and
including the date of such exercise, retained such shares and/or all other
additional stock receivable by it during such period and given effect to all
adjustments called for during such period by this Section 2.
(b) Adjustment for Changes in Common Stock. In the event of changes in
the outstanding Common Stock of the Company by reason of split-ups,
recapitalizations, reclassifications, mergers, consolidations, combinations or
exchanges of shares, separations, reorganizations, liquidations, or the like,
the number and class of shares available under the Warrant in the aggregate and
the Warrant Price shall be correspondingly adjusted by the Board of Directors of
the Company. The adjustment shall be such as will give the Holder, upon exercise
for the same aggregate Warrant Price, the total number, class, and kind of
shares as the Holder would have owned had the Warrant been exercised prior to
the event and had the Holder continued to hold such shares until after the event
requiring adjustment.
3. No Fractional Shares.
----------------------
No fractional shares of Common Stock will be issued in connection with any
subscription under this Warrant. In lieu of any fractional shares which would
otherwise be issuable, the Company shall pay cash equal to the product of such
fraction multiplied by the fair market value of one share of Common Stock on the
date of exercise as determined in good faith by the Company's Board of
Directors.
4. No Stockholder Rights.
----------------------
This Warrant shall not entitle its holder to any of the rights of a
stockholder of the Company prior to its exercise.
5. Reservation of Stock.
--------------------
The Company covenants that during the period this Warrant is exercisable,
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 the
exercise of this Warrant. The Company agrees that its issuance of this Warrant
shall constitute full authority to its officers who are charged with the duty of
executing stock certificates to execute and issue the necessary certificates for
shares of Common Stock upon the exercise of this Warrant.
6. Exercise of Warrant.
-------------------
This Warrant may be exercised by the Holder or its registered assigns, in
whole or in part, by the surrender of this Warrant at the principal office of
the Company, together with the attached form of subscription, duly executed, and
accompanied by payment in full of the amount of the Warrant Price in the form
described in this Warrant. Upon partial exercise of this Warrant, a new warrant
or warrants containing the same date and provisions as this Warrant shall be
issued by the Company to the Holder for the number of shares of Common Stock
with respect to which this Warrant shall not have been exercised. A 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 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 shares, 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.
7. Certificate of Adjustment.
---------------------------
Whenever the Warrant Price is adjusted as provided in Section 2, the
Company shall promptly deliver to the record holder of this Warrant a
certificate of an officer of the Company setting forth the relevant Warrant
Price or number of shares after such adjustment and setting forth a brief
statement of the facts requiring such adjustment.
8. Compliance With Securities Act.
---------------------------------
The Holder, by acceptance of this Warrant, agrees that this Warrant and the
shares of Common Stock to be issued upon its exercise (or shares of any security
into which such Common Stock may be converted) (the "Shares") are being acquired
for investment and that the Holder will not offer, sell, or otherwise dispose of
this Warrant and any shares of Common Stock to be issued upon its exercise (or
shares of any security into which such Common Stock may be converted) except
under circumstances which will not result in a violation of the Securities Act
of 1933, as amended (the "Securities Act"). Upon exercise of this Warrant, the
Holder shall, if requested by the Company, confirm in writing its investment
purpose and acceptance of the restrictions on transfer of the Shares.
9. Registration Rights.
-------------------
Piggy-Back Registration Rights. If, at any time after the five (5)
month anniversary of the Issuance Date and ending ten (10) years thereafter, the
Company shall determine to register under the Securities Act any shares of
Common Stock to be offered for cash by it or others, pursuant to a registration
statement on Form S-3 or its equivalent (the "Registration Statement"), the
Company will (i) promptly give written notice to Holder of its intention to file
such Registration Statement and (ii) at the Company's expense (which shall
include, without limitation, all registration and filing fees, printing
expenses, fees and disbursements of counsel and independent accountants for the
Company, and fees and expenses incident to compliance with state securities law,
but shall not include fees and disbursements of counsel for Holder) include
among the securities covered by the Registration Statement such portions of the
Shares then held by Holder as shall be specified in a written request to the
Company within thirty (30) days after the date on which the Company gave the
notice described in (i) above.
Upon receipt of such written request and of the Shares specified in
the request (any shareholder requesting registration being individually called a
"Selling Shareholder"), the Company shall (i) use its reasonable best efforts to
effect the registration, qualification or compliance of the Shares under the
Securities Act and under any other applicable federal law and any applicable
securities or blue sky laws of jurisdictions within the United States; (ii)
furnish each Selling Shareholder such number of copies of the prospectus
contained in the Registration Statement filed under the Securities Act
(including preliminary prospectus) in conformity with the requirements of the
Securities Act, and such other documents as the Selling Shareholder may
reasonably request in order to facilitate the disposition of the Shares covered
by the Registration Statement; (iii) notify each Selling Shareholder, at any
time when a prospectus relating to the Shares covered by such Registration
Statement is required to be delivered under the Securities Act, of the happening
of any event as a result of which the prospectus forming a part of such
Registration Statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading; and (iv) at the
request of the Selling Shareholder, prepare and furnish to the Selling
Shareholder any reasonable number of copies of any supplement to or amendment of
such prospectus as may be necessary so that, as thereafter delivered to
purchasers of the Shares, such prospectus shall not include an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
(a) Registration of Underwritten Offering. If the offering of Common
Stock to be registered by the Company pursuant to the Registration Statement is
underwritten, each Selling Shareholder shall sell the Shares to or through the
underwriter(s) of the Common Stock being registered for the account of the
Company or others upon the same terms applicable to the Company or others. If
the managing underwriter(s) reasonably determine that all or any portion of the
Shares held by the Selling Shareholder should not be included in the
Registration Statement, then notwithstanding anything to the contrary in this
Section, the determination of such underwriter(s) shall be conclusive; provided,
however, that if such underwriter(s) determine that some but not all of the
Shares of the Selling Shareholder shall be included in the Registration
Statement, the number of Shares owned by each Selling Shareholder to be included
in the Registration Statement will be proportionately reduced in accordance with
the respective written requests given as provided above.
(b) Indemnification. In the event that the Shares are included in a
Registration Statement under this Section 9, the Company will indemnify and hold
harmless each Selling Shareholder and each other person, if any, who controls
such Selling Shareholder within the meaning of Section 15 of the Securities Act
against any losses, claims, damages or liabilities, joint or several, to which
such Selling Shareholder or controlling person may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Registration Statement pursuant to which the Shares were registered, any
preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereto, or arise out of or are based upon the omission or alleged
omission to state a material fact required to be stated therein or necessary to
make the statements not misleading, or arise out of or are based upon the
failure by the Company to file any amendment or supplement to the Registration
Statement that was required to be filed under the Securities Act, and will
reimburse such Selling Shareholder and each such controlling person for any
legal or any other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action.
Notwithstanding the foregoing, the Company will not be liable in any
such case to a Selling Shareholder to the extent that any such loss, claim,
damage, or liability arises out of or is based upon an untrue statement or
omission made in such Registration Statement, preliminary prospectus, final
prospectus or amendment or supplement in reliance upon and in conformity with
written information furnished to the Company through an instrument duly executed
by or on behalf of that Selling Shareholder specifically for use in the
preparation of such Registration Statement, preliminary prospectus, final
prospectus, or amendment or supplement. It shall be a condition precedent to the
obligation of the Company to take any action pursuant to this Section that the
Company shall have received an undertaking satisfactory to it from each Selling
Shareholder to indemnify and hold harmless the Company (in the same manner and
to the same extent as set forth in this Section), each director of the Company,
each officer who shall sign such Registration Statement, and any persons who
control the Company within the meaning of the Securities Act, with respect to
any statement or omission from such Registration Statement, preliminary
prospectus, or any final prospectus contained therein, or any amendment or
supplement thereto, if such statement or omission was made in reliance upon and
in conformity with written information furnished to the Company through an
instrument duly executed by the indemnifying party specifically for use in the
preparation of such Registration Statement, preliminary prospectus, final
prospectus, or amendment or supplement.
Promptly following receipt by an indemnified party of notice of the
commencement of any action involving a claim referred to above in this Section
9(c), such indemnified party will, if a claim in respect thereof is to be made
against an indemnifying party, give written notice to the latter of the
commencement of such action; provided, however, that any failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
hereunder to the extent it is not materially prejudiced as a result and in any
event shall not relieve it from any liability which it may have otherwise on
account of this indemnity agreement. An indemnifying party may participate at
its own expense in the defense of any such action; provided, however, that
counsel to the indemnifying party shall not (except with the consent of the
indemnified party) also be counsel to the indemnified party. In no event shall
the indemnifying parties be liable for fees and expenses of more than one
counsel (in addition to any local counsel) separate from their own counsel for
all indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances. No indemnifying party shall, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which indemnification or
contribution could be sought under this Section 9 or Section 10 below (whether
or not the indemnified parties are actual or potential parties), unless such
settlement, compromise or consent (i) includes an unconditional release of each
indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
(c) Binding Provisions. The provisions of this Section 9 shall be
binding on the successors of the Company.
(d) Conflicts. To the extent that the Company's compliance with the
obligations set forth in Sections 9(a) through 9(d) above would conflict with or
otherwise cause a breach of or default under any of its existing obligations
pursuant to any agreements to which it currently is a party, the Company's
failure to comply with those obligations shall not be deemed a breach of this
agreement.
(e) Transfer of Registration Rights. The rights to cause the Company
to register the Shares granted to the Holder by the Company under this Section 9
may be assigned by the Holder to a transferee or assignee of this Warrant or any
of the Shares, provided that the Company is given written notice by the Holder
at the time of or within a reasonable time after said transfer, stating the name
and address of the transferee or assignee and identifying the Shares with
respect to which the registration rights are being assigned.
10. Contribution.
-------------
(a) If the indemnification provided for in Section 9 above is for any
reason unavailable or insufficient to hold harmless an indemnified party in
respect of any losses, liabilities, claims, damages or expenses referred to in
Section 9, then each indemnifying party shall contribute to the aggregate amount
of such losses, liabilities, claims, damages and expenses incurred by such
indemnified party (i) in such proportion as is appropriate to reflect the
relative benefits received by the Selling Shareholder on the one hand and the
Company on the other hand from the offer and sale of the Purchase Shares
pursuant to this Agreement, or (ii) if the allocation provided by clause (i) is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Selling Shareholder on the one hand and of the Company on
the other hand in connection with the statements or omissions which resulted in
such losses, liabilities, claims, damages or expenses, as well as any other
relevant equitable considerations.
(b) The relative fault of the Company on the one hand and the Selling
Shareholder on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Selling Shareholder and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
(c) The Company and the Selling Shareholder agree that it would not be
just and equitable if a contribution pursuant to this Section 10 were determined
by pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to above. The aggregate amount
of losses, liabilities, claims, damages and expenses incurred by an indemnified
party and referred to above in this Section 10 shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
(d) No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(e) For purposes of this Section 10, each person, if any, who controls
the Selling Shareholder within the meaning of Section 15 of the Securities Act
or Section 20 of the Securities Exchange Act of 1934 ("1934 Act") shall have the
same rights to contribution as such Selling Shareholder, and each director of
the Company, each officer of the Company, and each person, if any, who controls
the Company within the meaning of Section 15 of the Securities Act or Section 20
of the 1934 Act shall have the same rights to contribution as the Company.
11. Subdivision of Warrant.
---------------------
At the request of the holder of this Warrant in connection with a transfer
or exercise of a portion of the Warrant and upon surrender of this Warrant for
such purpose to the Company, the Company at its expense (except for any transfer
tax payable) will issue in exchange warrants of like tenor and date representing
in the aggregate the right to purchase such number of shares of Common Stock as
shall be designated by such holder at the time of such surrender; provided,
however, that the Company's obligations to subdivide securities under this
Section shall be subject to and conditioned upon the compliance of any such
subdivision with applicable state securities laws and with the Securities Act.
12. Notices of Record Date. In case:
----------------------
(a) the Company shall take a record of the holders of its Common Stock
(or other stock or securities at the time receivable upon the exercise of the
Warrant) for the purpose of entitling them to receive any dividend or other
distribution, or any rights to subscribe for or purchase any shares of stock of
any class or any other securities, or to receive any other right, or
(b) of any capital reorganization of the Company, any reclassification
of the capital stock of the Company, any consolidation or merger of the Company
with or into another corporation, or any conveyance of all or substantially all
of the assets of the Company to another corporation, or
(c) of any voluntary dissolution, liquidation or winding-up of the
Company; then, and in each such case, the Company will mail or cause to be
mailed to each holder of a Warrant at the time outstanding a notice specifying,
as the case may be, (i) the date on which a record is to be taken for the
purpose of such dividend, distribution or right, and stating the amount and
character of such dividend, distribution or right, or (ii) the date on which
such reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding-up is to take place, and the time, if any is
to be fixed, as of which the holders of record of Common Stock or such other
stock or securities at the time receivable upon the exercise of the Warrant
shall be entitled to exchange their shares of Common Stock (or such other stock
or securities) for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding-up. Such notice shall be mailed at least 30
days prior to the date therein specified.
13. Loss, Theft, Destruction, or Mutilation of Warrant.
--------------------------------------------------
Upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction, or mutilation of this Warrant, and in the case of
loss, theft, or destruction, receipt of indemnity or security reasonably
satisfactory to it and reimbursement to the Company of all reasonable expenses
incidental thereto, and in the case of mutilation, upon surrender and
cancellation of this Warrant, the Company will make and deliver a new Warrant of
like tenor and dates as of such cancellation, in lieu of this Warrant.
14. Miscellaneous.
-------------
This Warrant shall be governed by the laws of the State of California. The
headings in this Warrant are for purposes of convenience and reference only and
shall not be deemed to constitute a part of this Warrant. Neither this Warrant
nor any term included may be changed, waived, discharged, or terminated orally
but only by an instrument in writing signed by the Company and the registered
holder. All notices and other communications from the Company to the Holder
shall be by telecopy or expedited courier service to the address furnished to
the Company in writing by the last holder of this Warrant who shall have
furnished an address to the Company in writing.
15. Exercise Period.
---------------
The Exercise Period shall mean the period commencing on _____________, 2000
and ending on ____________, 2005.
ISSUED this ____ day of __________, 2000.
XXXXX.XXX, INC.
a Delaware corporation
By:
------------------------------------
Xxxx Xxxxxxx
President and Chief Executive Officer
FORM OF ASSIGNMENT
XXXXX.XXX, INC.
FOR VALUE RECEIVED the undersigned registered owner of this Warrant
hereby sells, assigns, and transfers unto the Assignee named below all of the
rights of the undersigned under the within Warrant, with respect to the number
of shares of Common Stock set forth below:
Name of Assignee Address Number of Shares
----------------- -------- -----------------
The undersigned does hereby irrevocably constitute and appoint _______________
_______________________ Attorney to make such transfer on the books of
XXXXX.XXX, INC. maintained for the purpose, with full power of substitution in
the premises.
Dated:______________________
----------------------------------------
Name of Warrant Holder
Signature:
-----------------------------------
Witness:
---------------------------
SUBSCRIPTION FORM
XXXXX.XXX, INC.
(To be executed only upon exercise of Warrant)
The undersigned registered owner of this Warrant irrevocably exercises
this Warrant for and purchases ________________ of the number of shares of
Common Stock of XXXXX.XXX, INC. purchasable with this Warrant, and herewith
makes payment therefor, all at the price and on the terms and conditions
specified in this Warrant.
Dated:_____________________
------------------------------------
(Signature of Registered Owner)
------------------------------------
(Street Address)
-----------------------------------
(City) (State) (Zip Code)
