EXHIBIT 10.18
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY
NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS IT HAS BEEN REGISTERED UNDER
THAT ACT OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
THIS SECURITY IS SUBJECT TO RESTRICTIONS ON TRANSFER AND MAY NOT BE SOLD,
EXCHANGED, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT IN
ACCORDANCE WITH AND SUBJECT TO ALL THE TERMS AND CONDITIONS OF A CERTAIN
STOCKHOLDERS AGREEMENT DATED AS OF MARCH 8,1999, A COPY OF WHICH THE COMPANY
WILL FURNISH TO THE HOLDER OF THIS SECURITY UPON REQUEST AND WITHOUT CHARGE.
Right to Purchase
52,541 Shares
of Series B Convertible Preferred
Stock of Arctic, Inc.
No. B-2
ARCTIC, INC.
SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE WARRANT
Arctic, Inc., a Delaware corporation (the "Company"), hereby certifies
that, for value received, Battery Investment Partners IV, LLC (the "Holder"), or
its successors or registered assigns, is entitled, subject to the terms set
forth below, to purchase from the Company at any time or from time to time
before 5:00 p.m., Boston, Massachusetts time, on the Expiration Date (as
hereinafter defined), Fifty-Two Thousand Five Hundred Forty-One fully paid and
nonassessable shares of Series B Convertible Preferred Stock, par value $.01 per
share, of the Company (the "Preferred Stock), at a purchase price per share of
$1.82 (the "Purchase Price). The number of such shares of Preferred Stock and
the Purchase Price are subject to adjustment as provided in this Warrant.
This Warrant is issued pursuant to a certain Preferred Stock and
Preferred Stock Warrant Purchase Agreement (the "Agreement"), dated as of
February 25, 1999, by and among the Company and the persons named therein, a
copy of which is on file at the principal office of the Company and the holder
of this Warrant shall be entitled to the benefits of the Agreement, as provided
therein. This Warrant is one of several warrants (the Purchaser Warrants)
representing the right to purchase up to an aggregate of 7,005,495 shares of
Series B Convertible Preferred Stock issuable pursuant to the Agreement.
As used herein the following terms, unless the context otherwise
requires, have the following respective meanings:
(a) The term "Company" shall include Arctic, Inc., a Delaware
corporation, and any corporation that shall succeed to or assume the obligations
of Arctic, Inc. hereunder.
(b) The term "Expiration Date" refers to the earlier of March 8, 2004
or the date on which the Company consummates an "Initial Public Offering" (as
defined in, Section 50 of the Company's Certificate of Designations filed with
the Secretary of State of the State of Delaware on February 26, 1999 (the
"Certificate of Designations")).
(c) The term "Stockholders Agreement" shall mean that certain
Stockholders Agreement of the Company dated March 8, 1999, and attached to the
Agreement as EXHIBIT 2.03F.
1. (a) EXERCISE OF WARRANT. This Warrant may be exercised in full or in
part at any time or from time to time until the Expiration Date by the holder
hereof by surrender of this Warrant and the subscription form annexed hereto
(duly executed) by such holder, to the Company at its principal office,
accompanied by payment, in cash or by certified or official bank check payable
to the order of the Company in the amount obtained by
multiplying (a) the number of shares of Preferred Stock designated by the holder
in the subscription form by (b) the Purchase Price then in effect (or in
accordance with the provisions of Section I (b) below). On any partial exercise,
the Company at its expense will forthwith issue and deliver to or upon the order
of the holder hereof a new Warrant or Warrants of like tenor, in the name of the
holder hereof or as such holder (upon payment by such holder of any applicable
transfer taxes and subject to applicable securities laws) may request, providing
in the aggregate on the face or faces thereof for the number of shares of
Preferred Stock for which such Warrant or Warrants may still be exercised.
(b) NET ISSUE ELECTION. The Holder may elect to receive, without
the payment by the Holder of any additional consideration, shares equal to the
value of this Warrant or any portion hereof by the surrender of this Warrant or
such portion to the Company, with the net issue election notice annexed hereto
duly executed, at the office of the Company. Thereupon, the Company shall issue
to the Holder such number of fully paid and nonassessable shares of Preferred
Stock as is computed using the following formula:
Y(A-B)
X = --------
A
where X = the number of shares to be issued to the Holder pursuant
to this Section 1(b).
Y = the number of shares covered by this Warrant in respect of
which the net issue election is made pursuant to this Section
1(b).
A = the Fair Market Value (as hereinafter defined) of one share
of Series B Preferred Stock, as at the time the net issue
election is made pursuant to this Section 1(b).
B = the Purchase Price in effect under this Warrant at the time
the net issue election is made pursuant to this Section l(b).
The Board shall promptly respond in writing to an inquiry by the Holder as to
the fair market value of one share of Series B Preferred Stock.
2. DELIVERY OF STOCK CERTIFICATES, ETC. ON EXERCISE. As soon as
practicable after the exercise of this Warrant, and in any event within 10 days
thereafter, the Company at its expense (including the payment by it of any
applicable issue or stamp taxes) will cause to be issued in the name of and
delivered to the holder hereof, or as such holder (upon payment by such holder
of any applicable transfer taxes and subject to applicable securities laws) may
direct, a certificate or certificates for the number of fully paid and
nonassessable shares of Preferred Stock to which such holder shall be entitled
on such exercise, in such denominations as may be requested by such holder,
plus, in lieu of any fractional share to which such holder would otherwise be
entitled, cash equal to such fraction multiplied by the then current market
value (as determined in good faith by the Board of Directors) of one full share,
together with any other stock or other securities and property (including cash,
where applicable) to which such holder is entitled upon such exercise pursuant
to Section I or otherwise.
3. COVENANTS AS TO PREFERRED STOCK AND COMMON STOCK. The Company
covenants and agrees that all shares of Preferred Stock which may be issued upon
the exercise of this Warrant, and all shares of Common Stock, par value $.01 per
share (the "Common Stock"), of the Company, which may be issued upon the
conversion of the Preferred Stock, will, upon issuance, be validly issued, fully
paid and non-assessable and free from all taxes, liens and charges with respect
to the issue thereof. Without limiting the generality of the foregoing, the
Company covenants that it will from time to time take all such actions as may be
requisite to assure that the stated or par value per share of Preferred Stock is
at all times equal to or less than the then effective Purchase Price per share
of Preferred Stock issuable upon exercise of this Warrant. The Company further
covenants and agrees that the Company will at all times have authorized and
reserved, free from preemptive rights, a sufficient number of shares of its
Preferred Stock to provide for the exercise of this Warrant and shares of Common
Stock to provide for the conversion of the Preferred Stock. If and so long as
the Preferred Stock issuable upon the exercise of this Warrant or the Common
Stock issuable upon conversion of the Preferred Stock is listed on any national
securities exchange,
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the Company will, if permitted by the rules of such exchange, list and keep
listed on such exchange, upon official notice of issuance, all such shares of
capital stock that are so listed.
4. AMENDMENT OF CERTIFICATE OF INCORPORATION; ETC. The Company shall
not, without the written consent of the holders of at least a majority in
interest of the Purchaser Warrants, (i) amend, alter or repeal the provisions of
the Certificate of Designations as in existence on the date hereof, insofar as
they relate to the rights, preferences and privileges of the Preferred Stock, or
(ii) authorize or effect any stock dividend payable in shares of Preferred Stock
or any other class or series of preferred stock of the Company or any
subdivision, split-up or combination of any outstanding shares of Preferred
Stock or any other class or series of preferred stock of the Company.
5. NO STOCKHOLDER RIGHTS. This Warrant shall not entitle the holder
hereof to any voting rights or other rights as a stockholder of the Company.
6. RESTRICTIONS ON TRANSFER, RIGHTS UNDER PURCHASE AGREEMENT; ETC. The
holder of this Warrant by acceptance hereof agrees that the transfer of this
Warrant, the shares of Preferred Stock issuable upon the exercise of all or any
portion of this Warrant and the shares of Common Stock issuable upon conversion
of such shares of Preferred Stock are subject to the provisions of the
Agreement, the Stockholders. Agreement and this Warrant, the shares of Preferred
Stock issuable upon exercise of all or any portion of this Warrant, and the
shares of Common Stock issuable upon conversion of such shares of Preferred
Stock shall be entitled to all rights and benefits accorded thereto in the
Agreement and the Stockholders Agreement, and the applicable provisions of the
Agreement and the Stockholders Agreement are hereby incorporated herein by
reference.
7. TRANSFER OF WARRANT. Subject to the provisions of the Stockholders
Agreement and subject to applicable securities laws, this Warrant and all rights
hereunder are transferable, in whole or in part, at the agency or office of the
Company referred to in Section 1, by the holder hereof in person or by duly
authorized attorney, upon surrender of this Warrant properly endorsed. Subject
to the provisions of the Stockholders Agreement and subject to applicable
securities laws, each taker and holder of this Warrant, by taking or holding the
same, consents and agrees that this Warrant, when endorsed, in blank, shall be
deemed negotiable, and, when so endorsed the holder hereof may be treated by the
Company and all other persons dealing with this Warrant as the absolute owner
hereof for any purposes and as the person entitled to exercise the rights
represented by this Warrant, or to the transfer hereof on the books of the
Company, any notice to the contrary notwithstanding; but until each transfer on
such books, the Company may treat the registered holder hereof as the owner
hereof for all purposes.
8. REORGANIZATIONS, ETC. In case of any capital reorganization, of any
reclassification of the stock of the Company (other than a change in par value
or from par value to no par value or from no par value to par value or as a
result of a stock dividend or subdivision, split-up or combination of shares),
or the consolidation or merger of the Company with or into another corporation
(other than a consolidation or merger in which the Company is the continuing
corporation and which does not result in any change in the Preferred Stock) or
of the sale of all or substantially all the properties and assets of the Company
as an entirety to any other corporation, this Warrant shall, after such
reorganization, reclassification, consolidation, merger or sale, be exercisable
for the kind and number of shares of stock or other securities or property of
the Company or of the corporation resulting from such consolidation or surviving
such merger or to which such properties and assets shall have been sold or of
such other person to which such holder would have been entitled if he had held
the Preferred Stock issuable upon the exercise hereof immediately prior to such
reorganization, reclassification, consolidation, merger or sale.
9. EXCHANGE OF WARRANT. This Warrant is exchangeable upon the surrender
hereof by the holders hereof at the office or agency of the Company designated
in Section I hereof, for new Warrants of like tenor representing in the
aggregate the rights to subscribe for and purchase the number of shares which
may be subscribed for and purchased hereunder, each of such new Warrants to
represent the right to subscribe for and purchase such number of shares as shall
be designated by said holders hereof at the time of such surrender.
10. LOST, STOLEN, MUTILATED OR DESTROYED WARRANT. If this Warrant is
lost, stolen, mutilated or destroyed, the Company may, on such terms as to
indemnity or otherwise as it may in its discretion impose (which
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shall, in the case of a mutilated Warrant, include the surrender thereof), issue
a new Warrant of like denomination and tenor as the Warrant so lost, stolen,
mutilated or destroyed. Any such new Warrant shall constitute a contractual
obligation of the Company, whether or not the allegedly lost, stolen, mutilated
or destroyed Warrant, shall be at any time enforceable by anyone.
11. MISCELLANEOUS. This Warrant and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. This Warrant shall be governed by and construed in accordance with
the General Corporation Law of the State of Delaware as to matters within the
scope thereof, and as to all other matters shall be governed by, and construed
in accordance with, the internal laws of the State of Connecticut. The headings
in this Warrant are for purposes of reference only, and shall not limit or
otherwise affect any of the terms hereof. This Warrant is being executed as an
instrument under seal. The invalidity or unenforceability of any provision
hereof shall in no way affect the validity or enforceability of any other
provision.
12. NOTICE PRIOR TO PUBLIC OFFERING. The Company shall give each Holder
at least twenty (20) days prior written notice of the effectiveness of any
registration statement filed with the Securities and Exchange Commission under
the Securities Act of 1933, as amended.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, this Warrant has been executed this 12th day of March, 1999.
ARCTIC, INC.
[Corporate Seal]
Attest:
By: /s/ XXXX XXXXXXX By: /s/ XXXX XXXXXXX
------------------------- -------------------------
Title: Title:
---------------------- ----------------------
FORM OF SUBSCRIPTION
(To be signed only on exercise of Warrant)
TO ARCTIC, INC.
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise this Warrant for, and to purchase thereunder, ___________
shares of Series B Convertible Preferred Stock of ARCTIC, INC. and herewith
makes payment of $____________________ therefor in cash, or elects to surrender
the right to purchase _____ shares of Series B Convertible Preferred Stock
pursuant to Section 1(b) of this Warrant, and requests that the certificates for
such shares be issued in the name of, and delivered to __________________ whose
address is _____________________________________________________________.
Dated: __________________________ (Signature must conform to name of holder as
specified on the face of the Warrant)
_________________________________________
_________________________________________
(Address)
_________________________________________
FORM OF ASSIGNMENT
(To be signed only on transfer of Warrant)
For value received, the undersigned hereby sells, assigns, and transfers unto
________________ the right represented by the within Warrant to purchase
___________ shares of Series B Convertible Preferred Stock of ARCTIC, INC. to
which the within Warrant relates, and appoints _____________________________as
its Attorney to transfer such right on the books of ARCTIC, INC. with full power
of substitution in the premises.
Dated: __________________________ (Signature must conform to name of holder as
specified on the face of the Warrant)
_________________________________________
_________________________________________
Signed in the presence of:
________________________________
