March 6, 1991
THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE OR
CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, (AS AMENDED THE "ACT"). NEITHER THIS
WARRANT NOR THE COMMON STOCK MAY BE SOLD, TRANSFERRED,
PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS
COVERED BY AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT,
PURSUANT TO RULE 144 UNDER THE ACT, IF AVAILABLE, OR AN OPINION IS
OBTAINED FROM COUNSEL TO THE HOLDER, REASONABLY SATISFACTORY
TO COUNSEL TO THE COMPANY THAT AN EXEMPTION FROM
REGISTRATION IS AVAILABLE UNDER THE ACT.
VOID AFTER 5:00 P.M. CALIFORNIA TIME ON MARCH 5, 1996, OR, IF NOT A
BUSINESS DAY, AT 5:00 P.M. CALIFORNIA TIME, ON THE NEXT FOLLOWING
BUSINESS DAY, UNLESS EXTENDED BY THE COMPANY.
WARRANT TO PURCHASE 58,333
SHARES OF COMMON STOCK OF
DATA DIMENSIONS, INC.
TRANSFER RESTRICTED
This certifies that, in consideration for (i) entering into the Note and
Warrant Purchase Agreement dated March 6, 1991, with Data Dimensions, Inc., a
Delaware corporation (the "Company"), (ii) the purchase of a Note thereunder
and (iii) for payment of Five Hundred Eighty-Three and 33/XXX ($583.33) R&W
Ventures II (the "Warrant Holder"), is entitled to purchase from the Company
at any time before 5:00 P.M., California time, on March 5, 1996 (or, if that
day is not a Business Day, as defined below, at or before 5:00 P.M.,
California time, on the next following Business Day) the number of fully paid
and nonassessable shares of Common Stock of the Company (the "Stock") stated
above at the Purchase Price (as defined below). The Purchase Price and the
number of shares which may be purchased on exercise of this Warrent are
subject to adjustment as provided below.
(Revised January 23, 1992)
ARTICLE I
DEFINITIONS
SECTION 1.01.
(1) The term "Warrant Holder" as used in this Warrant means the
person or entity named above, or any subsequent transferee.
(2) The term "Business Day" as used in this Warrant means a day
other than a Saturday, Sunday or any other day on which banks in the State of
California are authorized by law to remain closed.
(3) Except as otherwise provided herein, the term "Purchase
Price" as used in this Warrant initially means $0.24 per share.
(4) The term "Expiration Date" as used in this Warrant means
the earlier of 5:00 P.M., California time on (a) March 5, 1996 (or if that
day is not a Business Day, on the next following Business Day) and (b) the
date of the closing of an acquisition of the Company as a result of a merger
or sale of assets.
(5) The term "Warrant Shares" as used in this Warrant means
the shares of Common Stock or other securities deliverable upon exercise of
conversion of this Warrant.
ARTICLE II
DURATION AND EXERCISE OF CONVERSION OF WARRANT
SECTION 2.01. This Warrant may be exercised or converted at any time
before 5:00 P.M., California time on the Expiration Date. If this Warrant is
not exercised or converted at or before 5:00 P.M., California time on the
Expiration Date, it will become void and all rights under this Warrant will
cease at that time.
SECTION 2.02.
(1) This Warrant may be exercised in whole or part by the
Warrant Holder by the surrender of this Warrant together with a duly executed
copy of the Notice of Exercise or Conversion attached hereto as EXHIBIT A, at
the pricicpal office of the Company, accompanied by payment of the Purchase
Price for the number of Warrant Shares for which purchase rights hereunder
are being exercised. This Warrant shall be deemed to have been exercised
immediately prior to the close of business on the date of its surrender for
exercise as provided above, and the person entitled to receive the shares of
Common Stock issuable upon such exercise shall be treated for all
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purposes as the holder of such shares of record as of the close of business
on such date. As promptly as practiable on or after such date, the Company
shall issue and deliver to the person or persons entitled to receive the same a
certificate or certificates for the number of full shares of Common Stock
issuable upon such exercise, together with cash in lieu of any fraction of a
share as provided above.
(2) In lieu of exercising this Warrant or any portion hereof,
the Warrant Holder shall have the right to convert this Warrant or any
portion hereof into shares of Common Stock without payment of additional
consideration by executing and delivering to the Company at its principal
office this Warrant and the Notice of Exercise or Conversion attached hereto
as EXHIBIT A, specifying the portion of the Warrant to be converted. The
number of Warrant Shares to be issued upon such conversion shall be computed
using the following formula:
X = (P)(Y)(A-B)/A
where X = the number of Warrant Shares to be issued to the Warrant
holder for the portion of the Warrant being converted.
P = the portion of the Warrant being converted,
Y = the total number of Warrant Shares issuable upon
exercise of the Warrant in full,
A = the fair market value of one share of Common Stock as
determined by the average of the closing ask price and
bid price for the Company's Common Stock on the most
recent date upon which the Company's Stock was traded,
or if no trade occurred in the previous thirty days, as
determined in good faith by the Company's Board of
Directors, and
B = the Purchase Price on the date of receipt by the Company
of the notice of conversion.
The portion of this Warrant represented by the variable "P" above shall be
immediately cancelled.
(3) In the event the purchase rights evidenced by this Warrant are
exercised or converted in whole or in part, one or more certificates for the
purchased shares shall be issused as soon as practicable thereafter to the
person exercising or converting such rights. Such person shall also be
issued at such time a new Warrant representing the number of shares (if any)
for which the purchase rights under this Warrant remain unexercised or
uncoverted and in continuing force and effect.
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ARTICLE III
ADJUSTMENT OF PURCHASE PRICE.
NUMBER OF SHARES OR NUMBER OF WARRANTS
SECTION 1.01. The Purchase Price, the number and type of securities
issuable on exercise of this Warrant and the number of Warrants outstanding,
are subject to adjustment as follows:
If the Company (i) pays a dividend or makes a distribution on
its Common Stock in Common Stock. (ii) subdivides or reclassifies the
outstanding shares of its Common Stock into a greater number of
shares, or (ii) combines or reclassifies the outstanding shares of its
Common Stock into a smaller number of shares, at the close of business
on the record date for that corporate action the Purchase Price will
be proportionately reduced or increased.
SECTION 3.02. Upon each adjustment of the Purchase Price as a result
of calculations made in Section 3.01 above, this Warrant will after such
adjustment evidence the right to purchase, at the adjusted Purchase Price, the
number of Warrant Shares obtained by (i) multiplying (A) the number of
Warrant Shares issuable on exercise of this Warrant immediately prior to the
adjustment by (B) the Purchase Price in effect immediately prior to the
adjustment and (ii) dividing the resulting product by the Purchase Price in
effect immediately after the adjustment. However, the Company will not be
required to issue a fractional share or to make any payment in lieu of
issuing a fractional share.
SECTION 3.03. Whenever the Purchase Price or the number of shares or
type of securities issuable on exercise of this Warrant is adjusted as
provided in this Article III, the Company (i) will compute the adjusted
Purchase Price and the adjusted number of Warrant Shares and (ii) will
prepare a certificate signed by its Chairman, President, Vice President,
Treasurer or Secretary setting forth the adjusted Purchase Price and the
adjusted number of Warrant Shares and showing in reasonable detail the facts
upon which the adjustments were based, and (ii) will mail a copy of that
certificate to the Warrant Holder.
SECTION 3.04. If at any time when this Warrant is outstanding the
Company
(a) declares a dividend (or authorizes any other
distribution) on its Common Stock payable otherwise than in cash out of its
undistributed net income:
(b) authorizes the granting to the holders of its Common
Stock of rights to subscribe for or purchase any shares of Common Stock or
other equity securities or other assets:
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(c) authorizes a reclassification of its Common Stock (other
than a subdivision or combination of its outstanding Common Stock), or a
consolidation or merger to which the Company is a party, or a sale or
transfer of all or substantially all the assets of the Company; or
(d) authorizes as voluntary or involuntary dissolution,
liquidation or winding up of the Company,
the Company will mail to the Warrant Holder at least 20 days (or 10 days in
an instance specified in clause (a) or (b)) prior notice of the record date,
or other date, for determining the shareholders entitled to receive the
dividend, distribution or rights, or the securities or other property
deliverable as a result of the reclassification, consolidation, merger,
sale, transfer, dissolution, liquidation or winding up.
SECTION 3.05. The form of this Warrant need not be changed because of
any changes in the Purchase Price or in the number of Warrant Shares and
Warrants issued after that change may continue to describe the Purchase Price
and the number of Warrant Shares which were described in this Warrant as
initially issued.
ARTICLE IV
OTHER PROVISIONS RELATING TO
RIGHTS OF WARRANT HOLDER
SECTION 4.01. If this Warrant is exercised. the Warrant Holder will
for all purposes be deemed to become the holder of record of the Common Stock
into which this Warrant is exercisable, and the certificate will be dated the
date this Warrant is surrendered for exercise, except that if that is a date
when the stock transfer books of the Company are closed, the Warrant Holder
will be deemed to become the record holder of the shares on, and the
certificate will be dated, the next succeeding Business Day when the stock
transfer books of the Company are open. Until this Warrant is exercised, the
Warrant Holder, as such, will not be entitled to any of the rights of a
shareholder of the Company, including the right to vote, to receive dividends
or other distributions or to exercise preemptive rights (if any), and will
not be entitled to receive notice of any proceedings of the Company, except
as provided in this Warrant.
SECTION 4.02. The Company covenants and agrees that:
(1) at all times it will reserve and keep available for the
exercise of this Warrant a sufficient number of authorized but unissued
shares of Common Stock to permit the exercise in full of this Warrant;
(2) all shares of Common Stock issued on exercise of this
Warrant will be validly issued, fully paid, nonassessable and free of
preemptive rights.
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SECTION 4.03. Notices to the Warrant Holder relating to this Warrant
will be effective on the third business day after mailing and will be
sufficiently given or made if personally delivered or if sent by first class
mail (which may be certified or registered), postage prepaid. addressed to
the Warrant Holder at the address shown on the books of the Company.
ARTICLE V
TREATMENT OF WARRANT HOLDER
SECTION 5.01. Prior to the presentation of this Warrant for
registration of transfer, the Company may treat the Warrant Holder for all
purposes as the owner of this Warrant and the Company will not be affected by
any notice to the contrary.
ARTICLE VI
COMBINATION, EXCHANGE AND TRANSFER OF WARRANTS
SECTION 6.01. This Warrant may be divided or combined with other
Warrants which carry the same rights upon presentation of them at the
principal office of the Company together with a written notice signed by the
Warrant Holder, specifying the names and denominations in which new Warrants
are to be issued.
SECTION 6.02. Upon receipt by the Company of evidence satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant, and, in
the case of loss, theft or destruction, of reasonably satisfactory
indemnification, or, in case of mutilation, upon surrender of the mutilated
Warrant, the Company will execute and deliver a new Warrant bearing the same
terms and date as the lost, stolen or destroyed Warrant, which will thereupon
become void.
ARTICLE VII
RESTRICTION ON SALE OR OTHER DISPOSITION OF WARRANT SHARES
SECTION 7.01. The Warrant and Warrant Shares may not be sold or
otherwise disposed of except in a transaction registered under the Act, or
which, in the opinion of counsel to the Warrant Holder, acceptable to the
Company, is exempt from the registration requirements of the Act.
SECTION 7.02. All certificates evidencing the Warrant Shares shall
bear the following legend:
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THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933. AS AMENDED (THE "ACT")
AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED OF UNLESS (i) COVERED BY AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT, (ii) THE DISPOSITION IS MADE PURSUANT TO
RULE 144 UNDER THE ACT, IF AVAILABLE, OR (iii) AN OPINION IS OBTAINED
FROM COUNSEL TO THE HOLDER. REASONABLEY SATISFACTORY TO COUNSEL TO
THE COMPANY. THAT AN EXEMPTION FROM REGISTRATION IS AVAILABLE UNDER
THE ACT.
ARTICLE VIII
OTHER MATTERS
SECTION 8.01. The Company will from time to time promptly pay all
taxes and charges that may be imposed upon the Company in respect of the
issuance or delivery of Warrant Shares upon the exercise of this Warrant
Holder.
SECTION 8.02. All the covenants and provisions of this Warrant by
or for the benefit of the Company and the Warrant Holder will bind and inure
to the benefit of their successors and assigns.
SECTION 8.03. All notices and other communications under this
Warrant must be in writing. Any notice or communication to the Company will
be effective upon the earlier of actual receipt and the third business day
after mailing by first-class mail (which may be certified or registered), as
postage prepaid, addressed (until another address is designated by the
Company) as follows:
Data Dimensions, Inc.
00000 X. Xxxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Any notice or demand authorized by this Warrant to be given or made
by the Company to or on the Warrant Holder must be given in accordance with
Section 4.03.
SECTION 8.04. The validity, interpretation and performance of this
Warrant will be governed by the laws of the State of California.
SECTION 8.05. Nothing in this Warrant will give any person or
corporation other than the Company and the Warrant Holder any right or claim
under this Warrant and all agreements in this Warrant will be for the sole
benefit of the Company and its
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successors and assigns and of the Warrant Holder and its respective
successors and assigns.
SECTION 8.06. The Article headings in this Warrant are for
convenience only, are not part of this Warrant, and will not affect the
interpretation of its terms.
SECTION 8.07. The provisions of Article VII shall survive the
exercise or termination of this Warrant.
IN WITNESS WHEREOF, this Warrant has been duly executed by the
Company as of the 6th day of March 1991.
DATA DIMENSIONS, INC.
By /s/ Xxxxx Xxxxxx
---------------------------
Title President
-------------------------
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EXHIBIT A
NOTICE OF EXERCISE OR CONVERSION
Date: __________, 19__
Data Dimensions, Inc.
00000 X. Xxxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Ladies and Gentlemen:
/ / The undersigned hereby elects to exercise the warrant issued to it
by Data Diminsions, Inc. (the "Company"), dated March 6, 199_ (the
"Warrant") and to purchase thereunder _______________ shares of
the Common Stock of the Company (the "Shares") at a purchase
price of __________ Dollars ($______) per Share or an aggregate
purchase price of _________ Dollars ($______) (the "Purchase Price").
Pursuant to the terms of the Warrant the undersigned has delivered
the Purchase Price herewith in full in cash or by certified check
or wire transfer.
/ / The undersigned hereby elects to convert ______ percent (_%) of the
value of the Warrant at a purchase price of __________ Dollars
($______) per Share.
Very truly yours.
By ________________________
Receipt Acknowledged:
DATA DIMENSIONS, INC.
By _________________________
Title ______________________
Date _______________________
