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EXHIBIT 10.22
THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE
HEREOF HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAW OF ANY STATE. THE
SECURITIES MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO A
WRITTEN OPINION OF COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.
- OPTIMARK TECHNOLOGIES, INC. -
COMMON STOCK PURCHASE WARRANT
526,000 shares (subject to adjustment)
August 27, 1996
FOR VALUE RECEIVED, the receipt and sufficiency of which are
acknowledged, this Common Stock Purchase Warrant ("this Warrant") certifies that
The Pacific Stock Exchange Incorporated, a Delaware corporation, its successors
and permitted assigns (generally, "Holder") is entitled to subscribe for and
purchase from OptiMark Technologies, Inc., a Delaware corporation (the
"Company"), up to Five Hundred Twenty Six Thousand (526,000) fully paid and
nonassessable shares (subject to potential adjustment as noted below, the
"Warrant Shares") of the common stock of the Company ("Common Stock"). This
Warrant is subject to the following terms and conditions:
1. DEFINITIONS. For purposes of this Warrant, in addition to
terms defined elsewhere herein, the following terms shall have the indicated
meanings:
(a) "Additional Shares of Common Stock" shall mean any and all
shares of Common Stock (including, without limitation, Common Stock issuable
upon exercise, conversion or exchange of Convertible Securities) issued by the
Company after the date of this Warrant, whether or not subsequently reacquired
or retired by the Company; provided, however, that the term "Additional Shares
of Common Stock" does not include (i) Warrant Shares issued or issuable upon
exercise of this Warrant, (ii) Common Stock issued or issuable upon exercise of
Outstanding Options, or (iii) Common Stock issued or issuable upon conversion of
the Series A Preferred Stock.
(b) "Affiliate" of a Holder means any natural person,
corporation or other entity that controls, is controlled by, or is under common
control with the Holder.
(c) "Common Stock" means shares of the Company's presently or
subsequently authorized Common Stock and any stock into which such Common Stock
may hereafter be exchanged or substituted.
(d) "Convertible Securities" means any rights, warrants
or options for the purchase of, or stock or other securities (including,
without limitation, evidences of
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indebtedness) convertible into, or exchangeable for, Additional Shares of
Common Stock, other than this Warrant, the Series A Preferred Stock and the
Outstanding Options.
(e) "Effective Price" when used with reference to an issue or
sale of Additional Shares of Common Stock means the quotient determined by
dividing the total number of Additional Shares of Common Stock in such issue
which were issued or sold, or deemed to have been issued or sold, by the Company
under Section 5(e) into the aggregate consideration received or deemed to have
been received by the Company for such issue or sale, or deemed issue or sale,
under Section 5(e) hereof.
(f) "Exchange" means any domestic securities exchange
registered under Section 6 of the Securities Exchange Act of 1934, including but
not limited to the Pacific Exchange, or any foreign securities exchange
registered, licensed or otherwise authorized as such under the laws of any other
country.
(g) "Exchange After-Hours Commencement Date" means the first
day on which any Exchange is making OptiMark-Securities Available with respect
to at least 50% of the total number of issues of equity securities traded on
such Exchange after its normal trading hours.
(h) "Exchange Listed Equities Commencement Date" means the
first day on which any Exchange is making OptiMark-Securities Available with
respect to at least 50% of the total number of issues of listed equity
securities traded on such Exchange during its normal trading hours.
(i) "Exchange Options Commencement Date" means the first day
on which any Exchange is making OptiMark-Securities Available with respect to at
least 50% of the total number of issues of equity options traded on such
Exchange.
(j) "Exchange UTP Commencement Date" means the first day on
which any Exchange is making OptiMark-Securities Available with respect to at
least 50% of the total number of issues of equity securities traded on such
Exchange with unlisted trading privileges (UTP).
(k) "Exercise Price" means the purchase price per Warrant
Share, as adjusted from time to time pursuant to Section 5 hereof, required
under the terms of this Warrant to exercise this Warrant and acquire Common
Stock pursuant to such exercise.
(l) "FMV" of a share of Common Stock means (i) in connection
with any effective registration under the Securities Laws and public sale of
Common Stock by the Company, the gross offering price per share to the public,
or otherwise (ii) if there exists a public market for the Common Stock, the
average of the closing bid and asked prices of the Common Stock quoted in the
Over-The-Counter Market Summary or the last reported sale price of the Common
Stock or the closing price quoted on any Exchange on which the Common Stock is
listed, as published in the Western Edition of The Wall Street Journal, for the
five (5) trading days immediately preceding the date of
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determination of FMV, or otherwise (iii) the fair market value thereof
determined in good faith by the Board of Directors of the Company.
(m) "Fully Diluted" means computed on the assumption that all
outstanding Convertible Securities (including but not limited to Outstanding
Options) that are then convertible or exercisable are converted or exercised,
without regard to whether such Convertible Securities are "in the money".
(n) "Investors" means General Atlantic Partners 35, Ltd., GAP
Coinvestment Partners, Ltd., State Street Boston Corporation, Dow Xxxxx &
Company, Inc., and Xxxxx X. Xxxxxx.
(o) "Issuance Date" means the date of this Warrant set forth
above.
(p) "IPO Effectiveness Date" means the date on which the
Company commences its initial offer for sale of shares of Common Stock pursuant
to an effective registration statement filed under the Securities Act of 1933,
as amended.
(q) Making "Available", as applied to OptiMark-Securities and
the Pacific Exchange and/or Other Exchanges, means that the necessary
communications between OptiMark-Securities and the relevant systems of the
Pacific Exchange and/or such Other Exchanges have been established such that
users have the ability to utilize OptiMark-Securities subject to entering into a
User Agreement with the Company and/or its Affiliates. Notwithstanding the use
of such phrases in this Warrant, PSE is not providing or offering to provide
OptiMark-Securities to users, either directly or indirectly.
(r) "OptiMark-Securities" means the market structuring
technology and related software which is generally described as
"OptiMark-Securities" in the PSE-OptiMark Agreement, including all derivatives,
releases and subsequent versions of such technology and software, regardless of
platform or operating media.
(s) "Outstanding Options" means (i) currently outstanding
options and warrants granted by the Company to employees and former employees to
purchase up to 320,000 shares of Common Stock, and a currently outstanding
warrant granted by the Company in favor of Xxxx X. Xxxxxx to purchase up to
50,000 shares of Common Stock, all at an exercise price of $6.00 per share (with
the number of shares and the exercise price therefor subject to potential
anti-dilution and other adjustments as currently provided therein), (ii) any
Convertible Securities issued by the Company to the current holders of such
options and warrants, with respect to the same number or fewer shares, with the
same or any greater exercise price, in substitution or replacement of any of the
foregoing, and (iii) the right of future grantees to purchase up to 491,567
shares of Common Stock reserved for issuance upon exercise of ungranted options
under the Company's Incentive Stock Option Plan (as such Plan may be amended
from time to time), at an exercise price not less than $6.00 per share, subject
to appropriate adjustment for all subdivisions and combinations.
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(t) "Pacific Exchange" means the registered national
securities exchange operated by PSE.
(u) "PSE" means The Pacific Stock Exchange Incorporated, i.e.,
the initial Holder.
(v) "PSE After-Hours Commencement Date" means the first day on
which the Pacific Exchange is making OptiMark-Securities Available with respect
to at least 50% of the total number of issues of equity securities traded on the
Pacific Exchange after hours; provided, however, that if (i) the PSE After-Hours
Commencement Date has not earlier occurred, and (ii) OptiMark-Securities and all
necessary PSE Interfaces have been completed under the PSE-OptiMark Agreement
for after-hours trading on the Pacific Exchange, then the PSE After-Hours
Commencement Date shall occur on the date on which PSE notifies the Company of
PSE's desire to make OptiMark-Securities Available for such after-hours trading,
without regard to whether the Company has allowed PSE to make
OptiMark-Securities Available for such after-hours trading.
(w) "PSE Listed Equities Commencement Date" means the first
day on which the Pacific Exchange is making OptiMark-Securities Available with
respect to at least 50% of the total number of issues of listed equity
securities traded on the Pacific Exchange during its normal trading hours.
(x) "PSE Options Commencement Date" means the first day on
which the Pacific Exchange is making OptiMark-Securities Available with respect
to at least 50% of the total number of issues of equity options traded on the
Pacific Exchange.
(y) "PSE-OptiMark Agreement" means the PSE-OptiMark
Agreement of even date between PSE and the Company.
(z) "PSE UTP Commencement Date" means the first day on which
the Pacific Exchange is making OptiMark-Securities Available with respect to at
least 50% of the total number of issues of equity securities traded on the
Pacific Exchange with unlisted trading privileges (UTP).
(aa) "Registration Rights Agreement" means the Registration
Rights Agreement of even date among the Company, PSE and the Investors.
(bb) "Revenue Sharing Agreement" means the Revenue Sharing
Agreement of even date between the Company and PSE.
(cc) "Securities Laws" means the Securities Act of 1933, as
amended, and any applicable state securities ("blue sky") laws.
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(dd) "Series A Preferred Stock" means the Company's Series A
Convertible Participating Preferred Stock issued and issuable to the Investors
under the Stock Purchase Agreement.
(ee) "Stock Purchase Agreement" means the Stock Purchase
Agreement of even date among the Company and the Investors.
(ff) "Stockholders Agreement" means the Stockholders Agreement
of even date among the Company, the Investors, the Voting Committee Members and
certain stockholders of the Company.
(gg) "Warrant Expiration Date" means the earlier to occur of
(i) December 31, 2010, or (ii) two years following the IPO Effectiveness Date;
provided, however, that the Warrant Expiration Date shall not occur until and
unless the Company has given at least thirty (30) days' prior notice to Holder
of (A) the pendency of the Warrant Expiration Date and (B) if there exists no
public market for the Common Stock, the FMV of the Common Stock; and provided
further, however, that the Warrant Expiration Date shall not occur prior to
December 31, 2005.
(hh) "Warrant Shares" means the shares of Common Stock that
are issuable by the Company from time to time upon exercise of this Warrant.
"Warrant Shares" includes the PSE Listed Equities Warrant Shares, the Exchange
Listed Equities Warrant Shares, the PSE Options Warrant Shares, the Exchange
Options Warrant Shares, the PSE UTP Warrant Shares, the Exchange UTP Warrant
Shares, the PSE After-Hours Warrant Shares, and the Exchange After-Hours Warrant
Shares (all as defined herein).
2. INITIAL EXERCISE PRICE. The Exercise Price on the Issuance Date is
Seven Dollars and Thirty-Three Cents (US $7.33) per Warrant Share.
3. EXERCISABILITY. Subject to potential adjustment with respect to the
number of Warrant Shares and the Exercise Price pursuant to Section 5 below,
this Warrant may be exercised from time to time as follows:
(a) Up to one hundred five thousand two hundred (105,200)
Warrant Shares (the "PSE Listed Equities Warrant Shares") may be purchased by
Holder under this Warrant at any time and from time to time beginning on the PSE
Listed Equities Commencement Date and ending on the Warrant Expiration Date;
provided, however, that this Warrant shall not be exercisable as to the PSE
Listed Equities Warrant Shares during such period(s) of time, if any, during
which PSE unilaterally has withdrawn OptiMark(TM) from Availability through the
Pacific Exchange for listed equity securities during normal trading hours.
(b) Up to one hundred five thousand two hundred two (105,200)
Warrant Shares (the "Exchange Listed Equities Warrant Shares") may be purchased
by Holder under this Warrant at any time and from time to time beginning on the
Exchange Listed Equities Commencement Date and ending on the Warrant Expiration
Date.
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(c) Up to fifty two thousand six hundred eleven (52,600)
Warrant Shares (the "PSE Options Warrant Shares") may be purchased by Holder
under this Warrant at any time and from time to time beginning on the PSE
Options Commencement Date and ending on the Warrant Expiration Date; provided,
however, that this Warrant shall not be exercisable as to the PSE Listed Options
Warrant Shares during such period(s) of time, if any, during which PSE
unilaterally has withdrawn OptiMark(TM) from Availability through the Pacific
Exchange for options.
(d) Up to fifty two thousand six hundred eleven (52,600)
Warrant Shares (the "Exchange Options Warrant Shares") may be purchased by
Holder under this Warrant at any time and from time to time beginning on the
Exchange Options Commencement Date and ending on the Warrant Expiration Date.
(e) Up to fifty two thousand six hundred (52,600) Warrant
Shares (the "PSE UTP Warrant Shares") may be purchased by Holder under this
Warrant at any time and from time to time beginning on the PSE UTP Commencement
Date and ending on the Warrant Expiration Date; provided, however, that this
Warrant shall not be exercisable as to the PSE UTP Warrant Shares during such
period(s) of time, if any, during which PSE unilaterally has withdrawn
OptiMark(TM) from Availability through the Pacific Exchange for equity
securities with unlisted trading privileges.
(f) Up to fifty two thousand six hundred (52,600) Warrant
Shares (the "Exchange UTP Warrant Shares") may be purchased by Holder under this
Warrant at any time and from time to time beginning on the Exchange UTP
Commencement Date and ending on the Warrant Expiration Date.
(g) Up to fifty two thousand six hundred (52,600) Warrant
Shares (the "PSE After-Hours Warrant Shares") may be purchased by Holder under
this Warrant at any time and from time to time beginning on the PSE After-Hours
Commencement Date and ending on the Warrant Expiration Date; provided, however,
that this Warrant shall not be exercisable as to the PSE After-Hours Warrant
Shares during such period(s) of time, if any, during which PSE unilaterally has
withdrawn OptiMark(TM) from Availability through the Pacific Exchange for equity
securities after normal trading hours.
(h) Up to fifty two thousand six hundred (52,600) Warrant
Shares (the "Exchange After-Hours Warrant Shares") may be purchased by Holder
under this Warrant at any time and from time to time beginning on the Exchange
After-Hours Commencement Date and ending on the Warrant Expiration Date.
Within twenty (20) days following request by Holder from time to time,
the Company shall deliver to Holder a written statement, certified as accurate
and complete by a senior officer of the Company, attesting to (i) the number and
type of Warrant Shares as to which this Warrant then is exercisable, (ii) their
respective expiration date, under this Section 3, and (iii) the Exercise Price
therefor.
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4. EXERCISE PROCEDURE.
(a) Manner of Exercise. This Warrant is exercisable at the
Exercise Price per Warrant Share payable in cash or by check payable to the
order of the Company, or by Net Issue Exercise pursuant to Section 4(b) below.
Upon surrender of this Warrant at the Company's principal executive office
together with appropriate payment of the Exercise Price for the Warrant Shares
purchased, Holder shall be entitled to receive one or more certificates for the
Warrant Shares so purchased. Any exercise of this Warrant as to fewer than all
of the Warrant Shares as to which this Warrant is then exercisable shall be
effected in even increments of one thousand (1,000) shares. In the case of the
purchase of fewer than all the Warrant Shares actually or potentially
subsequently purchasable under this Warrant, the Company shall cancel this
Warrant upon the surrender hereof and shall execute and deliver to Holder a new
Warrant of like tenor for the balance of the Warrant Shares purchasable
hereunder.
(b) Net Issue Exercise. Notwithstanding any provisions herein
to the contrary, if at any time when this Warrant is otherwise exercisable the
FMV of one share of Common Stock is greater than the Exercise Price, in lieu of
exercising this Warrant for cash, Holder may notify the Company of Holder's
election to exercise this Warrant in whole or in part by "Net Issue Exercise".
Upon delivery of such notification together with surrender of this Warrant at
the principal executive office of the Company, Holder shall receive from the
Company a number of shares of Common Stock equal to
A x (FMV - Exercise Price)
---------------------
FMV
where A = the number of Warrant Shares as to which
this Warrant is being exercised by Net Issue Exercise. An example is
set forth on Exhibit A to this Warrant.
(c) Delivery of Stock Certificates. As soon as practicable,
but not exceeding ten (10) business days, after any exercise of this Warrant,
the Company, at its expense, shall cause to be issued in the name of Holder and
delivered to Holder (or upon payment by Holder of any applicable transfer taxes,
subject to the provisions of Section 8 below, Holder's assigns) one or more
certificates for the number of Warrant Shares or such other securities or
property or combination thereof, to which Holder shall be entitled upon such
exercise, determined in accordance with Section 5 hereof. In lieu of any
fractional share, the Company shall deliver cash in proportion to the FMV of the
Common Stock. Irrespective of the date of issuance and delivery of certificates
for any Common Stock or other securities issuable upon the exercise of this
Warrant, each person in whose name any such certificates are to be issued shall
for all purposes be deemed to have become the holder of record of the Common
Stock or other securities represented thereby immediately prior to the close of
business on the date on which this Warrant and payment for the number of Warrant
Shares as to which this Warrant shall have been exercised shall have been
delivered to the Company.
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5. ADJUSTMENTS.
(a) Subdivision, Stock Split or Combination. If the Company at
any time after the Issuance Date effects a subdivision of its Common Stock
(whether by stock split or otherwise), then and in each such event the Exercise
Price then in effect immediately before the subdivision shall be proportionately
decreased. Conversely, if the Company at any time after the Issuance Date
combines the outstanding shares of Common Stock (whether by reverse stock split
or otherwise), then and in each such event the Exercise Price then in effect
immediately before the combination shall be proportionately increased. Any
adjustment under this Section 5(a) due to a subdivision of the outstanding
Common Stock shall become effective as of the record date of such subdivision.
Any adjustment under this Section 5(a) due to a combination of the outstanding
Common Stock shall become effective as of the effective date of such
combination.
(b) Common Stock Dividends and Distributions. If the Company
at any time after the Issuance Date makes or pays, or fixes a record date for
the determination of holders of Common Stock entitled to receive, a dividend or
other distribution payable in Additional Shares of Common Stock (except a
dividend or other distribution described in Sections 5(a) or 5(d)), then and in
each such event the Exercise Price then in effect shall be decreased as of the
time of such issuance or, in the event such a record date is fixed, as of the
close of business on such record date, by multiplying the Exercise Price then in
effect by a fraction of which the numerator shall be the total number of shares
of Common Stock issued and actually outstanding immediately prior to the time of
such issuance or the close of business on such record date and the denominator
of which shall be the total number of shares of Common Stock issued and actually
outstanding immediately prior to the time of such issuance or the close of
business on such record date plus the number of Additional Shares of Common
Stock issuable in payment of such dividend or distribution; provided, however,
that if such record date is fixed and such dividend is not fully paid, or if
such distribution is not fully made on the date fixed therefor, the Exercise
Price shall be recalculated to reflect that such dividend was not fully paid or
that such distribution was not fully made and thereafter the Exercise Price
shall be adjusted pursuant to this Section 5(b) as of the time of actual payment
of such dividends or distributions.
(c) Other Dividends or Distributions. If the Company at any
time after the Issuance Date makes, or fixes a record date for the determination
of holders of Common Stock entitled to receive, a dividend or other distribution
payable in cash or in securities of the Company other than Additional Shares of
Common Stock (except an event provided for in Section 5(d)), then and in each
such event lawful and adequate provision shall be made so that Holder shall
receive upon exercise of this Warrant, in addition to the number of Warrant
Shares receivable thereupon, the amount of cash or securities of the Company
which Holder would have received had this Warrant been exercised for Warrant
Shares immediately prior to the record date for such event and had Holder
thereafter, during the period from such record date to and including the date of
exercise, retained such securities receivable by it as aforesaid during such
period, subject to all
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other adjustments called for during such period under this Section 5 with
respect to the rights of Holder.
(d) Reclassification, Merger, Consolidation or Sale of Assets.
If at any time after the Issuance Date there is (i) any reclassification or
change of outstanding securities issuable upon exercise of this Warrant (except
for a subdivision or combination provided for in Section 5(a)), (ii) any merger
or consolidation of the Company with or into another corporation or other entity
(other than a merger or consolidation in which the Company is the surviving
corporation and which does not result in any reclassification, change or
exchange of outstanding securities issuable upon exercise of this Warrant), or a
reverse triangular merger in which the Company is the surviving corporation but
the shares of the Company's capital stock outstanding immediately prior to the
merger are converted by virtue of the merger into other property, whether in the
form of securities, cash or otherwise, or (iii) any sale or transfer of all or
substantially all of the Company's properties and assets to any other person
(whether or not as part of the liquidation or dissolution of the Company), then,
and in each such event, and as a part of and as a condition to the consummation
of such reclassification, merger, consolidation, sale or transfer, lawful and
adequate provision shall be made so that Holder shall thereafter be entitled to
receive, upon exercise of this Warrant, the number of shares of stock or other
securities or property of the Company or other entity resulting from such
reclassification, merger, consolidation, sale or transfer, to which a holder of
Common Stock or other securities deliverable upon the exercise of this Warrant
would have been entitled on such reclassification, change, merger,
consolidation, sale or transfer if this Warrant had been exercisable and had
been exercised immediately prior to such event. In any such case, appropriate
adjustments shall be made in the application of the provisions of this Section 5
so as to ensure that the provisions of this Section 5 applicable after such
events shall be as equivalent as possible to the provisions of this Section 5
applicable before such events.
(e) Issuance or Sale at Less than Exercise Price.
(i) If at any time or from time to time after the
Issuance Date the Company issues or sells, or is deemed by the express
provisions of this Section 5(e) to have issued or sold, Additional
Shares of Common Stock (except as a dividend or other distribution on
any class of stock as provided in Sections 5(b) or 5(c) above, or a
subdivision or combination of shares of Common Stock as provided in
Section 5(a) above), for an Effective Price that is less than the
Exercise Price in effect immediately prior to such issuance or sale (or
deemed issuance or sale), then and in each such case the Exercise Price
shall be reduced as of the opening of business on the date of such
issue or sale to a price equal to the Effective Price for such issuance
or sale.
(ii) For the purpose of making any adjustment
required under this Section 5(e), the consideration received by the
Company for any issue or sale (or deemed issue or sale) of securities
shall (A) to the extent it consists of cash, be computed at the
aggregate sales price paid, (B) to the extent it consists of property
other than cash, be computed at the fair value of the property as
determined in
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good faith by the board of directors of the Company, and (C) if
Additional Shares of Common Stock, or rights or options to purchase
Additional Shares of Common Stock, are issued or sold together with
other assets of the Company for a consideration which covers both,
be computed as the portion of the consideration so received that
may be reasonably determined in good faith by the board of
directors to be allocable to such Additional Shares of Common Stock
or rights or options.
(iii) For the purpose of the adjustments required
under this Section 5(e), if the Company issues or sells any Convertible
Securities, then in each such case, the Company shall be deemed to have
issued at the time of the issuance of such Convertible Securities the
maximum number of Additional Shares of Common Stock (determined without
regard to adjustment provisions similar to those contained in this
Section 5) issuable upon exercise or conversion thereof and to have
received as consideration for the issuance of such shares an amount
equal to the total amount of the consideration, if any, received by the
Company for the issuance of such Convertible Securities, plus the
minimum amount of consideration, if any, payable to the Company upon
exercise or conversion (other than by cancellation of liabilities or
obligations evidenced by such Convertible Securities), assuming
conversion immediately after the time of such issuance or sale. No
further adjustment of the Exercise Price, adjusted upon the issuance of
such Convertible Securities, shall be made as a result of the actual
issuance of shares of Common Stock upon exercise of such Convertible
Securities; provided, however, that if the convertibility or
exercisability feature of such Convertible Securities shall expire
prior to conversion or exercise thereof, then the Exercise Price shall
be readjusted (but to no greater extent than originally adjusted) to an
Exercise Price equal to that price which would have existed had the
expired Convertible Securities never been issued or sold.
(iv) For the purpose of the adjustments required
under this Section 5(e), if the Company issues or sells any rights or
options for the purchase of Convertible Securities, then in each such
case the Company shall be deemed to have issued at the time of the
issuance of such rights or options the maximum number of Additional
Shares of Common Stock (determined without regard to adjustment
provisions similar to those contained in this Section 5) issuable upon
conversion of the total amount of Convertible Securities covered by
such rights or options and to have received as consideration for the
issuance of such Additional Shares of Common Stock an amount equal to
the amount of consideration, if any, received by the Company for the
issuance of such rights or options, plus the minimum amount of
consideration, if any, payable to the Company upon the exercise of such
rights or options, and plus the minimum amount of consideration, if
any, payable to the Company (other than by cancellation of liabilities
or obligations evidenced by such Convertible Securities) upon exercise
of the conversion or purchase rights of such Convertible Securities,
assuming exercise or conversion immediately after the time of such
issuance or sale. No further adjustment of the Exercise Price, adjusted
upon the issuance of such rights or options, shall be made as a result
of the actual issuance of the Convertible Securities upon the exercise
of such rights or
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options or upon the actual issuance of Common Stock upon exercise of
the conversion or purchase rights of such Convertible Securities;
provided, however, that if such rights or options to purchase
Convertible Securities shall expire prior to conversion or exercise
thereof, or if the convertibility or exercisability feature of such
Convertible Securities shall expire prior to the exercise thereof,
the Exercise Price shall be readjusted to an Exercise Price equal to
that price which would have existed had the expired rights or options
to purchase Convertible Securities or such Convertible Securities
never been issued or sold.
(f) Equitable Adjustment. In case the Company, at any time or
from time to time, shall take any action affecting its Common Stock similar to
or having an effect similar to any of the actions described in this Section 5
(but not including any action described expressly in this Section 5) and the
Board of Directors in good faith determines that it would be equitable in the
circumstances to adjust the Exercise Price as a result of such action, then, and
in each such case, the Exercise price shall be adjusted in such manner and at
such time as the Board of Directors of the Company in good faith determines
would be equitable in the circumstances (such determination to be evidenced in a
resolution, a certified copy of which shall be mailed to Holder).
(g) Number of Warrant Shares. Upon each adjustment of the
Exercise Price pursuant to the provisions of this Section 5, the number of
shares of Common Stock issuable upon the exercise of this Warrant shall be
adjusted, to the nearest full share, by multiplying the Exercise Price in effect
immediately prior to such adjustment by the number of shares of Common Stock
issuable upon exercise of this Warrant immediately prior to such adjustment and
dividing the product so obtained by the adjusted Exercise Price.
(h) Accountant's Certificate. In case of any adjustment or
readjustment of the Exercise Price and/or the number of shares of Common Stock
or other securities issuable upon exercise of this Warrant, the Company at its
expense shall cause independent certified public accountants of recognized
national standing selected by the Company (who may be the independent certified
public accountants then auditing the books of the Company) to compute such
adjustment or readjustment in accordance with the provisions hereof and prepare
a certificate showing such adjustment or readjustment, and shall mail such
certificate, by first class mail, postage prepaid, to Holder at Holder's address
as shown in the Company's books. The certificate shall set forth such adjustment
or readjustment, showing in detail the facts upon which such adjustment or
readjustment is based including a statement of (i) the consideration received or
deemed to be received by the Company for any Additional Shares of Common Stock
issued or sold or deemed to have been issued or sold, (ii) the Exercise Price at
the time in effect, (iii) the number of Additional Shares of Common Stock issued
or sold or deemed to have been issued or sold, and (iv) the type and amount, if
any, of other property which at the time would be receivable upon exercise of
this Warrant.
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6. RESERVED SHARES. The Company shall at all times reserve and keep
available out of its authorized but unissued shares of Common Stock, solely for
the purpose of issuance upon exercise of this Warrant, such number of shares of
Common Stock as shall be issuable upon the exercise hereof. All Warrant Shares
that are issued upon exercise of this Warrant will be, upon issuance, duly
authorized, validly issued, fully paid and nonassessable.
7. NO RIGHTS AS A STOCKHOLDER. Unless, until and except to the extent
that this Warrant is exercised, Holder shall not be entitled to any voting
rights, dividends or other rights as a stockholder of the Company.
8. SECURITIES LAWS; TRANSFER; RIGHT OF FIRST REFUSAL.
(a) This Warrant may not be transferred in whole or in part,
unless (i) this Warrant has been registered under the Securities Laws, or (ii)
Holder provides to the Company an opinion of Howard, Rice, Nemerovski, Canady,
Xxxx & Xxxxxx, a Professional Corporation (or such other counsel to Holder,
including in-house counsel, as may be acceptable to the Company in its
reasonable discretion), or the Company is otherwise satisfied, that such
transfer is exempt from registration under the Securities Laws. This Warrant
also may not be transferred if and to the extent not then exercisable, except to
an Affiliate of PSE.
(b) If Holder ever wishes to sell or otherwise transfer this
Warrant or any Warrant Shares to any person other than an Affiliate of PSE (a
"Third Party Purchaser"), Holder first shall offer this Warrant or such Warrant
Shares to the Company by sending written notice to the Company (the "Offering
Notice"). The Offering Notice shall state (i) the identity of the Third Party
Purchaser, (ii) the portion of this Warrant and/or the number of Warrant Shares
proposed to be transferred (the "Offered Securities"), and (iii) the proposed
purchase price which Holder is willing to accept therefor (the "Offer Price").
For a period of fifteen (15) days after delivery of the Offering Notice (the
"Option Period"), the Company shall have the right and option to purchase all
(but not less than all) of the Offered Securities at a purchase price equal to
the Offer Price and upon the terms and conditions set forth in the Offering
Notice. The right of the Company to purchase any or all of the Offered
Securities under this paragraph (b) shall be exercisable by delivering written
notice of exercise to Holder, prior to expiration of the Option Period. Any
failure of the Company to respond to the Offering Notice within the Option
Period shall be deemed a waiver of the Company's rights under this paragraph
(b). The closing of any purchase of the Offered Securities by the Company under
this (b) shall be held at the principal office of the Company at 11:00 a.m.,
local time, on the 60th day following the date of delivery of the Offering
Notice. At such closing, (x) Holder shall deliver one or more certificates
representing the Offered Securities being purchased, duly endorsed for transfer,
together with all requisite transfer taxes and a written representation that
Holder is the sole beneficial and record owner of such Offered Securities, free
and clear of all liens, claims, options, charges, encumbrances and rights, (y)
the Company shall deliver the necessary payment in full for such Offered
Securities in immediately Available funds, and (z) Holder and the Company
13
shall execute and deliver such additional documents as are otherwise necessary
or appropriate. If and to the extent that the Company does not purchase the
Offered Securities under this paragraph (b), Holder may sell the Offered
Securities to the Third Party Purchaser at a price not less than the Offer Price
and on the other terms and conditions set forth in the Offering Notice at any
time within 180 days following expiration of the Option Period. The Offered
Securities in the hands of the Third Party Purchaser shall remain subject to the
Company's right of first refusal in this paragraph (b) and the other
restrictions on transfer set forth in this Section 8.
(c) No Warrant Shares shall be issued other than to PSE or an
Affiliate of PSE, and no Warrant Shares may be transferred except to an
Affiliate of PSE, unless (i) such issuance or transfer has been registered under
the Securities Laws, or (ii) Holder provides to the Company an opinion of
Howard, Rice, Nemerovski, Canady, Xxxx & Rabkin, a Professional Corporation (or
such other counsel to Holder, including in-house counsel, as may be acceptable
to the Company in its reasonable discretion), or otherwise satisfies the
Company, that the issuance or transfer is exempt from the registration
requirements of the Securities Laws. Each notice of exercise of this Warrant
automatically shall be deemed to include a representation and warranty from
Holder that Holder is acquiring the Warrant Shares for investment only, and not
with a view to the distribution thereof.
(d) Each certificate evidencing Warrant Shares shall
include a prominent legend to the following effect:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR THE SECURITIES LAWS OF ANY STATE. THE SECURITIES
MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT AND SUCH LAWS OR PURSUANT
TO A WRITTEN OPINION OF COUNSEL THAT SUCH REGISTRATION IS NOT
REQUIRED. THESE SHARES ALSO ARE SUBJECT TO A RIGHT OF FIRST
REFUSAL IN FAVOR OF THE ISSUER.
(e) Notwithstanding any provision of this Section 8 to the
contrary, the restrictions imposed by Sections 8 (a), 8(b), 8(c) and 8(d) above
shall terminate as to any particular Warrant Shares when (i) any class of Common
Stock of the Company shall have been effectively registered under the Securities
Laws, or(ii) an opinion to the effect that the restrictions imposed by Sections
8(a) and 8(c) are no longer required under the Securities Laws shall have been
received from Howard, Rice, Nemerovski, Canady, Xxxx & Xxxxxx, a Professional
Corporation (or such other counsel to Holder, including in-house counsel, as may
be acceptable to the Company in its reasonable discretion). Whenever the
restrictions imposed by this Section 8 shall terminate, each Holder of any
Warrant Shares as to which such restrictions shall have terminated shall be
entitled to receive from the Company, without expense, new certificates not
bearing the restrictive legend set forth in Section 8(d) of this Agreement.
14
(f) To transfer this Warrant, Holder shall surrender the
original Warrant to the Secretary of the Company, and the Company shall exchange
such instrument for one or more new Warrants of like tenor, of such nature and
in such denominations as may be specified by Holder, representing in the
aggregate the right to subscribe for and purchase the number of Warrant Shares
purchasable hereunder. Unless and until such transfer(s) is/are duly registered
on the books of the Company, the Company shall be entitled to treat the record
Holder as the sole and absolute owner of this Warrant for purposes of notices,
rights to exercise, rights to transfer, and for all other purposes.
9. INFORMATION.
(a) The Company shall cooperate with Holder in supplying such
information as may be reasonably necessary for Holder to complete and file any
information reporting forms presently or hereafter required by the SEC as a
condition to the Availability of an exemption from the Securities Laws for any
permitted sale or other transfer of this Warrant and/or the Warrant Shares.
(b) The Company shall provide to Holder such financial
information as the Company must supply to the Investors from time to time, as
stated in the current version of the Stockholders Agreement, regardless of any
subsequent amendment or termination thereof.
(c) Prior to any exercise or contemplated exercise of this
Warrant, Holder shall be entitled to review current financial statements of the
Company, to inquire of management as to the Company's business and financial
status and prospects, and to review other non-privileged information that may be
available from the Company without undue effort or expense.
10. PAYMENT OF TAXES. The Company shall pay all taxes and other
governmental charges that may be imposed upon the issuance or delivery of
Warrant Shares (but not on income related thereto). The Company shall not be
required, however, to pay any tax or other charge imposed in connection with any
transfer of this Warrant or the issue of any certificate for Warrant Shares in
any name other than that of Holder.
11. REPRESENTATIONS AND WARRANTIES. The Company hereby incorporates and
makes unto Holder all of the Company's representations and warranties set forth
in Section 3 of the Stock Purchase Agreement, and PSE is entitled to rely on
such representations and warranties as though PSE were an Investor under the
Stock Purchase Agreement.
12. NO IMPAIRMENT. The Company will not, by any voluntary action, avoid
or seek to avoid the observance or performance of any of the terms to be
observed or performed hereunder by the Company, but will at all times in good
faith assist in the carrying out of all the provisions of this Warrant and in
the taking of all such action as
15
may be necessary or appropriate in order to protect the rights of Holder against
impairment.
13. CONTEXT; REGISTRATION RIGHTS. This Warrant is being issued in
connection with the First Closing under the Stock Purchase Agreement and the
execution and delivery of the Stockholders Agreement, the Registration Rights
Agreement, the Revenue Sharing Agreement and the PSE-OptiMark Agreement. Holder
shall be entitled to the benefit of the registration, indemnification and other
rights set forth in the Registration Rights Agreement to the extent provided
therein.
14. LOSS. Upon receipt of evidence reasonably satisfactory to the
Company of the ownership of and the loss, theft, destruction or mutilation of
this Warrant and (in the case of loss, theft or destruction) upon delivery of an
indemnity reasonably satisfactory to the Company or (in the case of mutilation)
upon surrender and cancellation of the mutilated Warrant, the Company will
execute and deliver, in lieu thereof, a new Warrant of like tenor.
15. CANCELLATION. This Warrant is subject to cancellation in whole or
in part under certain circumstances described in the PSE-OptiMark Agreement.
16. NOTICES. All notices and other communications related to this
Warrant shall be in writing, shall be delivered by Federal Express or other
nationally recognized overnight delivery service, and shall be directed as
follows:
i) if to the Company: To the following address, or
any other address which the Company may designate by notice to Holder
from time to time:
OptiMark Technologies, Inc.
000 Xxxx Xxxxxx
Xxxxxxx, XX 00000
attn: Xxxxxxx X. Xxxxxx, Chief Executive Officer
with a copy in the same manner to:
Xxxxxx, Xxxxxxx & Xxxxxxxxxx, P.C.
0000 Xxxxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
attn: Xxxxx Xxxxxx, Esq.
ii) if to Holder: To the following address, or to any
other address which Holder may designate by notice to the Company from
time to time:
The Pacific Stock Exchange Incorporated
000 Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
attn: Xxxx X. Xxxxxxxx, Senior Vice President
& General Counsel
16
with a copy in the same manner to:
Howard, Rice, Nemerovski, Canady,
Xxxx & Rabkin, a Professional Corporation
Three Xxxxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
attn: Xxxxxxx X. XxXxxx, Esq.
17. MISCELLANEOUS.
(a) Office of the Company. As long as any part of this Warrant
remains outstanding, the Company shall maintain an office or agency (which may
be the principal executive office of the Company) where this Warrant may be
presented for exercise, registration of transfer, division or combination as
provided in this Warrant. The Company will not at any time, except upon
dissolution, liquidation or winding up of the Company, close its Common Stock
transfer books or Warrant transfer books so as to result in preventing or
delaying the exercise or transfer of this Warrant. The Company shall notify
Holder in writing prior to any change of the address of the office at which this
Warrant may be presented.
(b) Limitation of Liability. No provision hereof, and no
enumeration herein of the rights or privileges of Holder, shall give rise to any
liability of Holder for the purchase price of any Common Stock or as a
stockholder of the Company, whether such liability is asserted by the Company or
by creditors of the Company.
(c) Nonwaiver. No course of dealing or any delay or failure to
exercise any right hereunder on the part of the Company shall operate as a
waiver of such right or otherwise prejudice the Company's rights, powers or
remedies. No course of dealing or any delay or failure to exercise any right
hereunder on the part of Holder shall operate as a waiver of such right or
otherwise prejudice Holder's rights, power or remedies.
(d) Successors. All the covenants, agreements,
representations and warranties contained in this Warrant shall bind the parties
hereto and their respective heirs, executors, administrators, distributees,
successors and assigns.
(e) Change; Waiver. Neither this Warrant nor any term hereof
may be changed, waived, discharged or terminated orally but only by an
instrument in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought.
(f) Headings. The section headings in this Warrant are
inserted for purposes of convenience only and shall have no substantive effect.
17
(g) Law Governing. This Warrant shall for all purposes be
construed and enforced in accordance with, and governed by, the internal laws of
the State of California, without giving effect to principles of conflict of
laws. The exclusive venue for any litigation related to this Warrant shall be
the Superior Court in and for San Francisco County, California or, if
jurisdictionally available, the U.S. District Court for the Northern District of
California.
(h) Attorneys' Fees. In the event any party hereto initiates
any legal action or suit in connection with any dispute concerning the
interpretation of this Warrant or the enforcement of any provision hereof, the
prevailing party in such action or suit shall be entitled to recover all of its
costs of action or suit (including without limitation reasonable attorneys' and
expert witness fees) from the other party.
IN WITNESS WHEREOF, OptiMark Technologies, Inc., a Delaware
corporation, has caused this Warrant to be signed by its duly authorized
officers under its corporate seal, as of the date first set forth above.
OPTIMARK TECHNOLOGIES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
Chief Executive Officer
Attest:
/s/ Xxxxxxxxx X. Xxxxxx
Secretary
18
Exhibit A
(to PSE Warrant)
Example
Assumptions:
18. The American Stock Exchange makes OptiMark(TM) Available for listed
equities on September 1, 1997. The Pacific Exchange makes OptiMark(TM) Available
for listed equities on February 1, 1999.
19. The Pacific Exchange makes OptiMark(TM) Available for equities with
unlisted trading privileges on July 20, 1999. The Pacific Exchange permanently
unilaterally withdraws OptiMark(TM) for equities with unlisted trading
privileges on September 30, 2000.
20. The Pacific Exchange makes OptiMark(TM) Available for options on
February 15, 2001. The Pacific Exchange temporarily unilaterally withdraws
OptiMark(TM) for options on February 1, 2002, but reinstitutes OptiMark(TM) for
options trading on July 15, 2002.
21. The Pacific Exchange never makes OptiMark(TM) Available for
after-hours trading.
22. No stock exchange other than the Pacific Exchange and the American
Stock Exchange ever makes OptiMark(TM) Available. The American Stock Exchange
never makes OptiMark(TM) Available for listed options, unlisted equities, or
after-hours trading.
23. The Company's initial public offering becomes effective on December
31, 2004.
Results: As consequences of the foregoing,
(a) The Warrant Expiration Date is December 31, 2006;
(b) the Warrant is exercisable with respect to the Exchange
Listed Equities Warrant Shares at any time between September 1, 1997 and
December 31, 2006, inclusive;
(c) the Warrant is exercisable with respect to the PSE Listed
Equities Warrant Shares at any time between February 1, 1999 and December 31,
2006, inclusive;
(d) the Warrant is exercisable with respect to both the PSE
UTP Warrant Shares and the Exchange UTP Warrant Shares at any time between July
20, 1999 and September 30, 2000, inclusive; and
19
(e) the Warrant is exercisable with respect to both the PSE
Options Warrant Shares and the Exchange Options Warrant Shares at any time
between February 15, 2001 and December 31, 2006, inclusive, but excluding the
period between February 1, 2002 and July 15, 2002;
(f) the Warrant never becomes exercisable with respect to the
PSE After-Hours Warrant Shares or the Exchange After-Hours Warrant Shares.
Further Assumption: Holder exercises the Warrant as to 10,000 PSE UTP Warrant
Shares on September 30, 2000.
Result: Holder pays $73,300 to the Company and receives a certificate
for 10,000 shares. The Warrant expires at to all of the Exchange UTP Warrant
Shares and the remaining 42,600 PSE UTP Warrant Shares.
Further Assumptions:
1. On November 27, 2006, the Company duly notifies Holder of the
pending Warrant Expiration Date.
2. The FMV of the Common Stock on the Warrant Expiration Date is
$60/share.
3. On December 31, 2006, Holder exercises the Warrant (a) by Net Issue
Exercise with respect to all Exchange Listed Equities Warrant Shares and all PSE
Listed Equities Warrant Shares, and (b) for cash with respect to all Exchange
Options Warrant Shares and all PSE Options Warrant Shares.
Result: Holder pays $771,115 cash to the Company and receives a
certificate for 289,896 shares. The Warrant expires.
