WARRANT TO PURCHASE COMMON STOCK OF BRIDGELINE SOFTWARE, INC.
EXHIBIT 10.65
WARRANT
TO PURCHASE COMMON STOCK
OF
------------------------------------------
This
is
to Certify That, FOR VALUE RECEIVED, ____________, or assigns
(“Holder”), is entitled to purchase, subject to the provisions of this Warrant,
from Bridgeline Software, Inc., a Delaware corporation (the “Company”), ______
fully paid, validly issued and nonassessable shares of common stock, par value
$.001 per share, of the Company (“Common Stock”) at a price per share equal to
$____ (or 150% of the initial public offering price per share) (the “Initial
Exercise Price”), which exercise may take place at any time or from time to
time, from and after __, 2007 (the “Initial Exercise Date”) to and including __,
2012 (the “Expiration Date”), and subject to the following terms and conditions
(the “Exercise Period”). The Initial Exercise Price is subject to
adjustment as set forth herein. The number of shares of Common Stock to be
received upon the exercise of this Warrant and the price to be paid for each
share of Common Stock may be adjusted from time to time as hereinafter set
forth. The shares of Common Stock deliverable upon such exercise, and
as adjusted from time to time, are hereinafter sometimes referred to as “Warrant
Shares” and the exercise price of a share of Common Stock in effect at any time
and as adjusted from time to time is hereinafter sometimes referred to as the
“Exercise Price”.
(a) EXERCISE
OF WARRANT; CANCELLATION OF WARRANT.
(1) This
Warrant may be exercised in whole or in part at any time or from time to time
during the Exercise Period; provided, however, that (i) if either such day
is a day on which banking institutions in the State of New York are authorized
by law to close, then on the next succeeding day which shall not be such a
day,
and (ii) in the event of any merger, consolidation or sale of substantially
all the assets of the Company as an entirety, which is anticipated to result
in
any distribution to the Company’s stockholders, the Holder shall have the right
to exercise this Warrant in conjunction with such transaction, into the kind
and
amount of shares of stock and other securities and property (including cash)
receivable by a holder of the number of shares of Common Stock into which this
Warrant might have been exercisable immediately prior thereto. This
Warrant may be exercised by presentation and surrender hereof to the Company
at
its principal office with the Purchase Form annexed hereto duly executed and
accompanied by payment of the Exercise Price for the number of Warrant Shares
specified in such form. As soon as practicable after each such
exercise of the Warrants, but not later than three (3) business days following
the receipt of good and available funds, the Company shall issue and deliver
to
the Holder a certificate or certificate for the Warrant Shares issuable upon
such exercise, registered in the name of the Holder or its
designee. 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 thereof to purchase
the balance of the Warrant Shares purchasable thereunder. Upon
receipt by the Company of this Warrant at its office in proper form for exercise
accompanied by payment of the Exercise Price for the number of Warrant Shares
specified in such form, 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 physically delivered
to the Holder.
(2) At
any time during the Exercise Period, the Holder may, at its option, exercise
this Warrant on a cashless basis by exchanging this Warrant, in whole or in
part
(a "Warrant Exchange"), into the number of Warrant Shares determined in
accordance with this Section (a)(2), by surrendering this Warrant at the
principal office of the Company or at the office of its stock transfer agent,
accompanied by a notice stating such Xxxxxx's intent to effect such exchange,
the number of Warrant Shares to be exchanged and the date on which the Holder
requests that such Warrant Exchange occur (the "Notice of
Exchange"). The Warrant Exchange shall take place on the date
specified in the Notice of Exchange or, if later, the date the Notice of
Exchange is received by the Company (the "Exchange
Date"). Certificates for the shares issuable upon such Warrant
Exchange and, if applicable, a new warrant of like tenor evidencing the balance
of the shares remaining subject to this Warrant, shall be issued as of the
Exchange Date and delivered to the Holder within seven (7) days following the
Exchange Date. In connection with any Warrant Exchange, this Warrant
shall represent the right to subscribe for and acquire the number of Warrant
Shares equal to (i) the number of Warrant Shares specified by the Holder in
its Notice of Exchange (the "Total Number") less (ii) the number of Warrant
Shares equal to the quotient obtained by dividing (A) the product of the
Total Number and the existing Exercise Price by (B) the current market
value of a share of Common Stock. Current market value shall have the
meaning set forth Section (c) below, except that for purposes hereof, the
date of exercise, as used in such Section (c), shall mean the Exchange
Date.
(b) RESERVATION
OF SHARES. The Company shall at all times reserve for issuance and/or
delivery upon exercise of this Warrant such number of shares of its Common
Stock
as shall be required for issuance and delivery upon exercise of the
Warrants.
(c) FRACTIONAL
SHARES. No fractional shares or script representing fractional shares
shall be issued upon the exercise of this Warrant. With respect to
any fraction of a share called for upon any exercise hereof, the Company shall
pay to the Holder an amount in cash equal to such fraction multiplied by the
current market value of a share, determined as follows:
(1) If
the Common Stock is listed on a national securities exchange or admitted to
unlisted trading privileges on such exchange or listed for trading on the Nasdaq
National Market, the current market value shall be the last reported sale price
of the Common Stock on such exchange or market on the last business day prior
to
the date of exercise of this Warrant or if no such sale is made on such day,
the
average of the closing bid and asked prices for such day on such exchange or
market; or
(2) If
the Common Stock is not so listed or admitted to unlisted trading privileges,
but is traded on the Nasdaq Capital Market, the current market value shall
be
the average of the closing bid and asked prices for such day on such market
and
if the Common Stock is not so traded, the current market value shall be the
mean
of the last reported bid and asked prices reported by the NASD Electronic
Bulletin Board on the last business day prior to the date of the exercise of
this Warrant; or
2
(3) If
the Common Stock is not so listed or admitted to unlisted trading privileges
and
bid and asked prices are not so reported, the current market value shall be
an
amount, not less than book value thereof as at the end of the most recent fiscal
year of the Company ending prior to the date of the exercise of the Warrant,
determined in such reasonable manner as may be prescribed by the Board of
Directors of the Company.
(d) 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. Upon surrender of this Warrant to the Company
at
its principal office 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 cancelled. This Warrant may be divided
or combined with other warrants which carry the same rights upon presentation
hereof at the principal 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 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, and upon surrender and cancellation
of
this Warrant, if mutilated, the Company will execute and deliver a new Warrant
of like tenor and date. 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.
The
Holder of this Warrant, by its acceptance hereof, agrees that, pursuant to
Rule
2710(g)(1) of the NASD Conduct Rules, for a period commencing on the date hereof
and ending one hundred eighty (180) days after the effective date of the
Registration Statement, it will not sell, transfer, assign, pledge or
hypothecate, or be subject of any hedging, short sale, derivative, put, or
call
transaction that would result in the effective economic disposition of the
securities by any person for a period of 180 days immediately following the
date
of effectiveness or commencement of sales of the initial public offering to
anyone other than (i) an underwriter or a selected dealer in connection with
the
Company’s initial public offering with respect to which this Warrant has been
issued, or (ii) a bona fide officer or partner of any of the
foregoing.
(e) RIGHTS
OF THE HOLDER. The Holder shall not, by virtue hereof, be entitled to
any rights of a shareholder 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.
(f) ANTI-DILUTION
PROVISIONS. Subject to the provisions of Section l hereof, the
Exercise Price in effect at any time and the number and kind of securities
purchasable upon
3
the
exercise of the Warrants shall be subject to adjustment from time to time upon
the happening of certain events as follows:
(1) In
case the Company shall hereafter (i) declare a dividend or make a
distribution on its outstanding shares of Common Stock in shares of Common
Stock, (ii) subdivide or reclassify its outstanding shares of Common Stock
into a greater number of shares, or (iii) combine or reclassify its
outstanding shares of Common Stock into a smaller number of shares, the Exercise
Price in effect at the time of the record date for such dividend or distribution
or of the effective date of such subdivision, combination or reclassification
shall be adjusted so that it shall equal the price determined by multiplying
the
Exercise Price by a fraction, the denominator of which shall be the number
of
shares of Common Stock outstanding after giving effect to such action, and
the
numerator of which shall be the number of shares of Common Stock outstanding
immediately prior to such action with an appropriate adjustment in the number
of
shares purchasable hereunder. Such adjustment shall be made successively
whenever any event listed above shall occur.
(2) Subject
to the provisions of Subsection (6) below, in case the Company shall fix a
record date for the issuance of rights or warrants to all holders of its Common
Stock entitling them to subscribe for or purchase shares of Common Stock (or
securities convertible into Common Stock) at a price (the "Subscription Price")
(or having a conversion price per share) less than the current market price
of
the Common Stock (as defined in Subsection (8) below) on the record date
mentioned below, or less than the Exercise Price on such record date, the
Exercise Price shall be adjusted so that the same shall equal the lower of
(i) the price determined by multiplying the Exercise Price in effect
immediately prior to the date of such issuance by a fraction, the numerator
of
which shall be the sum of the number of shares of Common Stock outstanding
on
the record date mentioned below and the number of additional shares of Common
Stock which the aggregate offering price of the total number of shares of Common
Stock so offered (or the aggregate conversion price of the convertible
securities so offered) would purchase at such current market price per share
of
the Common Stock (as defined in Subsection (8) below), and the denominator
of which shall be the sum of the number of shares of Common Stock outstanding
on
such record date and the number of additional shares of Common Stock offered
for
subscription or purchase (or into which the convertible securities so offered
are convertible) or (ii) in the event the Subscription Price is equal to or
higher than the current market price but is less than the Exercise Price, the
price determined by multiplying the Exercise Price in effect immediately prior
to the date of issuance by a fraction, the numerator of which shall be the
sum
of the number of shares outstanding on the record date mentioned below and
the
number of additional shares of Common Stock which the aggregate offering price
of the total number of shares of Common Stock so offered (or the aggregate
conversion price of the convertible securities so offered) would purchase at
the
Exercise Price in effect immediately prior to the date of such issuance, and
the
denominator of which shall be the sum of the number of shares of Common Stock
outstanding on the record date mentioned below and the number of additional
shares of Common Stock offered for subscription or purchase (or into which
the
convertible securities so offered are convertible). Such adjustment
shall be made successively whenever such rights or warrants are issued and
shall
become effective immediately after the record date for the determination of
shareholders entitled to receive such rights or warrants; and to the extent
that
shares of Common Stock are not delivered (or securities convertible into
4
Common
Stock are not delivered) after the expiration of such rights or warrants the
Exercise Price shall be readjusted to the Exercise Price which would then be
in
effect had the adjustments made upon the issuance of such rights or warrants
been made upon the basis of delivery of only the number of shares of Common
Stock (or securities convertible into Common Stock) actually
delivered.
(3) In
case the Company shall hereafter distribute to the holders of its Common Stock
evidences of its indebtedness or assets (excluding cash dividends or
distributions and dividends or distributions referred to in Subsection (1)
above) or subscription rights or warrants (excluding those referred to in
Subsection (2) above), then in each such case the Exercise Price in effect
thereafter shall be determined by multiplying the Exercise Price in effect
immediately prior thereto by a fraction, the numerator of which shall be the
total number of shares of Common Stock outstanding multiplied by the current
market price per share of Common Stock (as defined in Subsection (8)
below), less the fair market value (as determined by the Company's Board of
Directors) of said assets or evidences of indebtedness so distributed or of
such
rights or warrants, and the denominator of which shall be the total number
of
shares of Common Stock outstanding multiplied by such current market price
per
share of Common Stock. Such adjustment shall be made successively
whenever such a record date is fixed. Such adjustment shall be made
whenever any such distribution is made and shall become effective immediately
after the record date for the determination of shareholders entitled to receive
such distribution.
(4) Subject
to the provisions of Subsection (6) below, in case the Company shall hereafter
issue shares of its Common Stock (excluding shares issued (a) in any of the
transactions described in Subsection (1) above, (b) upon exercise of options
granted to the Company's officers, directors, consultants and employees under
its current stock option which provides for the issuance of up to 1,400,000
shares of Common Stock (subject to appropriate adjustment in the event of any
stock dividend, stock split, combination or other similar recapitalization
affecting such shares), if such shares would otherwise be included in this
Subsection (4), (c) upon exercise of options, warrants and convertible
debentures outstanding as of the date hereof or upon the issuance or exercise
of
warrants or convertible debentures issued pursuant to the offering set forth
in
the Memorandum, (d) to shareholders of any corporation which merges into
the Company in proportion to their stock holdings of such corporation
immediately prior to such merger, upon such merger, (e) issued in a bona fide
public offering pursuant to a firm commitment underwriting, but only if no
adjustment is required pursuant to any other specific subsection of this
Section (f) (without regard to Subsection (8) below) with respect to
the transaction giving rise to such rights) for a consideration per share (the
"Offering Price") less than the current market price per share (as
defined in Subsection (8) below on the date the Company fixes the offering
price of such additional shares or less than the Exercise Price, the Exercise
Price shall be adjusted immediately thereafter so that it shall equal the lower
of (i) the price determined by multiplying the Exercise Price in effect
immediately prior thereto by a fraction, the numerator of which shall be the
sum
of the number of shares of Common Stock outstanding immediately prior to the
issuance of such additional shares and the number of shares of Common Stock
which the aggregate consideration received (determined as provided in
Subsection (7) below) for the issuance of such additional shares would
purchase at such current market price per share of Common Stock (as defined
in
Subsection (8) below), and the
5
denominator
of which shall be the number of shares of Common Stock outstanding immediately
after the issuance of such additional shares or (ii) in the event the
Offering Price is equal to or higher than the current market price per share
but
less than the Exercise Price, the price determined by multiplying the Exercise
Price in effect immediately prior to the date of issuance by a fraction, the
numerator of which shall be the number of shares of Common Stock outstanding
immediately prior to the issuance of such additional shares and the number
of
shares of Common Stock which the aggregate consideration received (determined
as
provided in subsection (7) below) for the issuance of such additional
shares would purchase at the Exercise Price in effect immediately prior to
the
date of such issuance, and the denominator of which shall be the number of
shares of Common Stock outstanding immediately after the issuance of such
additional shares. Such adjustment shall be made successively whenever such
an
issuance is made.
(5) Subject
to the provisions of Subsection (6) below, in case the Company shall hereafter
issue any securities convertible into or exchangeable for its Common Stock
(excluding securities issued in transactions described in Subsections (2)
and (3) above) for a consideration per share of Common Stock (the "Conversion
Price") initially deliverable upon conversion or exchange of such securities
(determined as provided in Subsection (7) below) less than the
current market price per share (as defined in Subsection (8) below) in
effect immediately prior to the issuance of such securities, or less than the
Exercise Price, the Exercise Price shall be adjusted immediately thereafter
so
that it shall equal the lower of (i) the price determined by multiplying
the Exercise Price in effect immediately prior thereto by a fraction, the
numerator of which shall be the sum of the number of shares of Common Stock
outstanding immediately prior to the issuance of such securities and the number
of shares of Common Stock which the aggregate consideration received (determined
as provided in Subsection (7) below) for such securities would purchase at
such current market price per share of Common Stock (as defined in
Subsection (8) below), and the denominator of which shall be the sum of the
number of shares of Common Stock outstanding immediately prior to such issuance
and the maximum number of shares of Common Stock of the Company deliverable
upon
conversion of or in exchange for such securities at the initial conversion
or
exchange price or rate or (ii) in the event the Conversion Price is equal
to or higher than the current market price per share but less than the Exercise
Price, the price determined by multiplying the Exercise Price in effect
immediately prior to the date of issuance by a fraction, the numerator of which
shall be the sum of the number of shares outstanding immediately prior to the
issuance of such securities and the number of shares of Common Stock which
the
aggregate consideration received (determined as provided in subsection (7)
below) for such securities would purchase at the Exercise Price in effect
immediately prior to the date of such issuance, and the denominator of which
shall be the sum of the number of shares of Common Stock outstanding immediately
prior to the issuance of such securities and the maximum number of shares of
Common Stock of the Company deliverable upon conversion of or in exchange for
such securities at the initial conversion or exchange price or
rate. Such adjustment shall be made successively whenever such an
issuance is made.
(6) Whenever
the Exercise Price payable upon exercise of each Warrant is adjusted pursuant
to
Subsections (1), (2), (3), (4) and (5) above, the number of Shares
purchasable upon exercise of this Warrant shall simultaneously be adjusted
by
multiplying the
6
number
of
Shares initially issuable upon exercise of this Warrant by the Exercise Price
in
effect on the date hereof and dividing the product so obtained by the Exercise
Price, as adjusted.
(7) For
purposes of any computation respecting consideration received pursuant to
Subsections (4) and (5) above, the following shall apply:
(A) in
the case of the issuance of shares of Common Stock for cash, the consideration
shall be the amount of such cash, provided that in no case shall any deduction
be made for any commissions, discounts or other expenses incurred by the Company
for any underwriting of the issue or otherwise in connection
therewith;
(B) in
the case of the issuance of shares of Common Stock for a consideration in whole
or in part other than cash, the consideration other than cash shall be deemed
to
be the fair market value thereof as determined in good faith by the Board of
Directors of the Company (irrespective of the accounting treatment thereof),
whose determination shall be conclusive; and
(C) in
the case of the issuance of securities convertible into or exchangeable for
shares of Common Stock, the aggregate consideration received therefor shall
be
deemed to be the consideration received by the Company for the issuance of
such
securities plus the additional minimum consideration, if any, to be received
by
the Company upon the conversion or exchange thereof (the consideration in each
case to be determined in the same manner as provided in clauses (A) and (B)
of this Subsection (7)).
(8) For
the purpose of any computation under Subsections (2), (3), (4) and (5)
above, the current market price per share of Common Stock at any date shall
be
determined in the manner set forth in Section (c) hereof except that the current
market price per share shall be deemed to be the higher of (i) the average
of the prices for 30 consecutive business days before such date or (ii) the
price on the business day immediately preceding such date.
(9) No
adjustment in the Exercise Price shall be required unless such adjustment would
require an increase or decrease of at least five cents ($0.05) in such price;
provided, however, that any adjustments which by reason of this
Subsection (9) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment required to be made hereunder.
All calculations under this Section (f) shall be made to the nearest cent
or to the nearest one-hundredth of a share, as the case may
be. Anything in this Section (f) to the contrary
notwithstanding, the Company shall be entitled, but shall not be required,
to
make such changes in the Exercise Price, in addition to those required by this
Section (f), as it shall determine, in its sole discretion, to be advisable
in order that any dividend or distribution in shares of Common Stock, or any
subdivision, reclassification or combination of Common Stock, hereafter made
by
the Company shall not result in any Federal Income tax liability to the holders
of Common Stock or securities convertible into Common Stock (including
Warrants).
7
(10) Whenever
the Exercise Price is adjusted, as herein provided, the Company shall promptly
but no later than 10 days after any request for such an adjustment by the
Holder, cause a notice setting forth the adjusted Exercise Price and adjusted
number of Shares issuable upon exercise of each Warrant, and, if requested,
information describing the transactions giving rise to such adjustments, to
be
mailed to the Holders at their last addresses appearing in the Warrant Register,
and shall cause a certified copy thereof to be mailed to its transfer agent,
if
any. In the event the Company does not provide the Holder with such
notice and information within 10 days of a request by the Holder, the failure
of
which causes the Holder material damage, then notwithstanding the provisions
of
this Section (f), the Exercise Price shall be immediately adjusted to equal
the lowest Offering Price, Subscription Price or Conversion Price, as
applicable, since the date of this Warrant, and the number of shares issuable
upon exercise of this Warrant shall be adjusted accordingly. The
Company may retain a firm of independent certified public accountants selected
by the Board of Directors (who may be the regular accountants employed by the
Company) to make any computation required by this Section (f), and a
certificate signed by such firm shall be conclusive evidence of the correctness
of such adjustment.
(11) In
the event that at any time, as a result of an adjustment made pursuant to
Subsection (1) above, the Holder of this 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 this
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 Subsections (1) to (10), inclusive
above.
(12) Irrespective
of any adjustments in the Exercise Price or the number or kind of shares
purchasable upon exercise of this Warrant, Warrants theretofore or thereafter
issued may continue to express the same price and number and kind of shares
as
are stated in the similar Warrants initially issuable pursuant to this
Agreement.
(g) OFFICER'S
CERTIFICATE. Whenever the Exercise Price shall be adjusted as
required by the provisions of the foregoing Section, 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 Exercise Price 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 made available
at all reasonable times for inspection by the holder or any holder of a Warrant
executed and delivered pursuant to Section (a) and the Company shall,
forthwith after each such adjustment, mail a copy by certified mail of such
certificate to the Holder or any such holder.
(h) NOTICES
TO WARRANT HOLDERS. So long as this Warrant shall be outstanding,
(i) if the Company shall pay any dividend or make any distribution upon the
Common Stock or (ii) 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 (iii) if any capital reorganization of the Company,
reclassification of the capital stock of the Company,
8
consolidation
or merger of the Company with or into another corporation, sale, lease or
transfer of all or substantially all of the property and assets of the Company
to another corporation, or voluntary or involuntary dissolution, liquidation
or
winding up of the Company shall be effected, then in any such case, the Company
shall cause to be mailed by certified mail to the Holder, at least fifteen
(15)
days prior the date specified in (x) or (y) below, as the case may be,
a notice containing a brief description of the proposed action and stating
the
date on which (x) a record is to be taken for the purpose of such dividend,
distribution or rights, or (y) such reclassification, reorganization,
consolidation, merger, 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.
(i) 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 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 to another corporation of the property of
the
Company as an entirety, the Company shall, as a condition precedent to such
transaction, cause effective provisions to be made so that the Holder shall
have
the right thereafter by exercising this Warrant at any time prior to the
expiration of the 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 might have been purchased
upon exercise of this Warrant immediately prior to such reclassification,
change, consolidation, merger, sale or conveyance. Any such provision
shall include provision for adjustments which shall be as nearly equivalent
as
may be practicable to the adjustments provided for in this
Warrant. The foregoing provisions of this Section (i) 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 or in part, for a security of
the
Company other than Common Stock, any such issue shall be treated as an issue
of
Common Stock covered by the provisions of Subsection (1) of
Section (f) hereof.
(j) REGISTRATION
RIGHTS.
(1) The
Warrant and the Warrant Shares will be registered in an initial Public offering
of the Company’s securities pursuant to a registration statement filed on a
appropriate form (the “Registration Statement”) with the SEC and the Company
covenants and agrees to maintain the effectiveness of the Registration Statement
until all Warrant Shares have been sold (the “Expiration
Date”). Notwithstanding the foregoing, in the event that, prior to
the Expiration Date, the Warrant or the Warrant Shares cease to be eligible
for
inclusion in such Registration Statement to the extent necessary to permit
the
Holder to exercise the Warrant and sell the Warrant Shares without restriction
under the Act, the Company will promptly (and in any event
9
within
thirty (30) days of the date that the Warrant or any Warrant Shares cease to
be
so eligible), amend or file a new registration statement under the Act on a
form
eligible for use by the Company for the registration of such securities and
use
its best efforts to have such registration statement declared effective by
the
SEC as soon as practicable after such filing, which registration statement
shall
include such information as may be required to permit the exercise of the
Warrant and the sale of the Warrant Shares without restriction under the
Act. The Holder acknowledges and agrees that the Warrant shall be
exercisable pursuant to any such registration statement only at such times
as
the registration statement is effective or in accordance with any applicable
exemption from the registration requirements of the Act. Upon such
Registration Statement’s being declared effective by the SEC, the Company shall
use its best efforts to cause the Registration Statement to remain effective
for
a period of at least six (6) consecutive months from the date that the Holders
of the Warrants and Warrant Shares covered by such Registration Statement are
first given the opportunity to sell all of such securities. In the event that
ninety (90) days prior to the Expiration Date, the Registration Statement
registering the Warrant Shares is not effective or is withdrawn or the SEC
issues a stop order suspending the effectiveness of such Registration Statement,
the Company hereby agrees to extend the Expiration Date for (x) an additional
ninety (90) days or (y) until the Registration Statement is declared effective
by the SEC, whichever period is longer. During such time as the Warrant Shares
are registered pursuant to any registration statement under the Act, the Company
further covenants and agrees to make timely filings of all documents required
to
be filed under the Act or the Exchange Act in order to ensure that the
registration statement, including the documents incorporated by reference
therein, if any, do not contain an untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein not misleading.
(2) The
Company will, until such time as the Warrant Shares may be sold under Rule
144
without volume limitation:
(A) prepare
and file with the SEC such amendments to such registration statement and
supplements to the prospectus contained therein as may be necessary to keep
such
registration statement effective;
(B) furnish
to the Holders participating in such registration and to the underwriters of
the
securities being registered such reasonable number of copies of the registration
statement, preliminary prospectus, final prospectus and such other documents
as
such underwriters may reasonably request in order to facilitate the public
offering of such securities;
(C) use
its best efforts to register or qualify the securities covered by such
registration statement under such state securities or blue sky laws of such
jurisdictions as the Holders may reasonably request in writing within twenty
(20) days following the original filing of such registration statement, except
that the Company shall not for any purpose be required to execute a general
consent to service of process or to qualify to do business as a foreign
corporation in any jurisdiction wherein it is not so qualified or subject itself
to taxation in any such jurisdiction;
10
(D) notify
the Holders, promptly after it shall receive notice thereof, of the time when
such registration statement has become effective or a supplement to any
prospectus forming a part of such registration statement has been
filed;
(E) notify
the Holders promptly of any request by the SEC for the amending or supplementing
of such registration statement or prospectus or for additional
information;
(F) prepare
and file with the SEC, promptly upon the request of any Holders, any amendments
or supplements to such registration statement or prospectus which, in the
opinion of counsel for such Holders (and concurred in by counsel for the
Company), is required under the Act or the rules and regulations thereunder
in
connection with the distribution of Common Stock by such Holders;
(G) prepare
and promptly file with the SEC and promptly notify such Holders of the filing
of
such amendment or supplement to such registration statement or prospectus as
may
be necessary to correct any statements or omissions if, at the time when a
prospectus relating to such securities is required to be delivered under the
Act, any event shall have occurred as the result of which any such prospectus
or
any other prospectus as then in effect would include an untrue statement of
a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances in which they were made,
not misleading; and
(H) advise
the Holders, promptly after it shall receive notice or obtain knowledge thereof,
of the issuance of any stop order by the SEC suspending the effectiveness of
such registration statement or the initiation or threatening of any proceeding
for that purpose and promptly use its best efforts to prevent the issuance
of
any stop order or to obtain its withdrawal if such stop order should be
issued.
The
Company may require each Holder of Warrant Shares as to which any registration
is being effected to furnish to the Company such information regarding the
distribution of such Warrant Shares as the Company may from time to time
reasonably request in writing.
(3) All
fees, costs and expenses of and incidental to such registration, inclusion
and
public offering in connection therewith shall be borne by the Company, provided,
however, that the Holders shall bear their pro rata share of the underwriting
discount and commissions and transfer taxes. The fees, costs and expenses of
registration to be borne by the Company as provided above shall include, without
limitation, all registration, filing, and NASD fees, printing expenses, fees
and
disbursements of counsel and accountants for the Company, and all legal fees
and
disbursements and other expenses of complying with state securities or blue
sky
laws of any jurisdictions in which the securities to be offered are to be
registered and qualified (except as provided above), and, in the case of a
registration, other than such registration set forth in Section (c)(8), fees
of
one (1) counsel for the Holders of the Warrant
11
Shares. Fees
and disbursements of counsel and accountants for the Holders and any other
expenses incurred by the Holders not expressly included above shall be borne
by
the Holders.
(4) The
Company will indemnify and hold harmless each Holder of Warrant Shares which
are
included in a registration statement pursuant to the provisions of
Section (j)(1) hereof, its directors and officers, and any underwriter (as
defined in the Act) for such Holder and each person, if any, who controls such
Holder or such underwriter within the meaning of the Act, from and against,
and
will reimburse such Holder and each such underwriter and controlling person
with
respect to, any and all loss, damage, liability, cost and expense to which
such
Holder or any such underwriter or controlling person may become subject under
the Act or otherwise, insofar as such losses, damages, liabilities, costs or
expenses are caused by any untrue statement or alleged untrue statement of
any
material fact contained in such registration statement, any prospectus contained
therein or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in light
of
the circumstances in which they were made, not misleading; provided, however,
that the Company will not be liable in any such case to the extent that any
such
loss, damage, liability, cost or expenses arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
so
made in conformity with information furnished by such Xxxxxx, such underwriter
or such controlling person in writing specifically for use in the preparation
thereof.
(5) Each
Holder of Warrant Shares included in a registration pursuant to the provisions
of Section (j)(1) hereof will indemnify and hold harmless the Company, its
directors and officers, any controlling person and any underwriter from and
against, and will reimburse the Company, its directors and officers, any
controlling person and any underwriter with respect to, any and all loss,
damage, liability, cost or expense to which the Company or any controlling
person and/or any underwriter may become subject under the Act or otherwise,
insofar as such losses, damages, liabilities, costs or expenses are caused
by
any untrue statement or alleged untrue statement of any material fact contained
in such registration statement, any prospectus contained therein or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was so made in reliance upon and
in
strict conformity with written information furnished by or on behalf of such
Holder specifically for use in the preparation thereof.
(6) Promptly
after receipt by an indemnified party pursuant to the provisions of
Sections (j)(4) or (5) of notice of the commencement of any action
involving the subject matter of the foregoing indemnity provisions such
indemnified party will, if a claim thereof is to be made against the
indemnifying party pursuant to the provisions of said Sections (j)(4) or
(5), promptly notify the indemnifying party of the commencement thereof; but
the
omission to so notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than
hereunder. In case such action is brought against any indemnified
party and it notifies the indemnifying party of the commencement thereof, the
indemnifying party shall have the right to participate in, and, to the extent
that it may wish,
12
jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party, provided, however,
if counsel for the indemnifying party concludes that a single counsel cannot
under applicable legal and ethical considerations, represent both the
indemnifying party and the indemnified party, the indemnified party or parties
have the right to select separate counsel to participate in the defense of
such
action on behalf of such indemnified party or parties. After notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party will not be liable to such
indemnified party pursuant to the provisions of said Sections (j)(4) or (5)
for any legal or other expense subsequently incurred by such indemnified party
in connection with the defense thereof other than reasonable costs of
investigation, unless (i) the indemnified party shall have employed counsel
in accordance with the provisions of the preceding sentence, (ii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after the notice of the commencement of the action or (iii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party.
(7) If
the Company fails to carry out its obligations under this Section (j), the
Holder shall be entitled to tender this warrant for a sum equal to the number
of
Warrant Shares multiplied by the current market thereof less the Exercise Price
thereof and a person who has exercised this Warrant shall be entitled to tender
the Common Stock thereby purchased for the current market value, and in each
case to be paid therefor in 10 business days thereafter.
(8) If
the Warrant Shares have been included in Registration Statement filed with
the
Securities and Exchange Commission in connection with the Public Offering and
if
such Registration Statement is declared effective, and for so long as it remains
effective, the Holder shall have no rights to demand a registration under
Section (j)(1) hereof.
| BRIDGELINE SOFTWARE, INC. | |||
|
|
By:
|
/s/ | |
|
Name: Xxxxxx
Xxxxxx
|
|||
| Title: President, Chief Executive Officer | |||
Dated: ______,
2007
13
PURCHASE
FORM
|
Dated
|
The
undersigned hereby irrevocably elects to exercise the within Warrant to the
extent of purchasing shares of Common Stock and hereby makes
payment of in payment of the actual exercise price thereof _____
(check) or elects a cashless exercise with respect thereto ______ (check) as
to
a total of ___________ shares.
___________________________________
INSTRUCTIONS
FOR REGISTRATION OF STOCK
Name
(Please
typewrite or print in block letters)
Address
Signature
ASSIGNMENT
FORM
FOR
VALUE
RECEIVED, ___________________ hereby sells, assigns and transfers
unto
Name
(Please
typewrite or print in block letters)
Address
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 in the
premises.
Date
Signature
14
