Exhibit 10.26
NEITHER THIS WARRANT, NOR THE COMMON STOCK TO BE ISSUED UPON EXERCISE HEREOF,
HAS BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
QUALIFIED UNDER THE APPLICABLE SECURITIES LAWS OF ANY OTHER JURISDICTION (THE
"LAW"), AND THIS WARRANT HAS BEEN, AND THE COMMON STOCK TO BE ISSUED UPON
EXERCISE HEREOF WILL BE, ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR FOR
RESALE IN CONNECTION WITH, ANY DISTRIBUTION THEREOF. NO SUCH SALE OR OTHER
DISPOSITION MAY BE MADE WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
ACT AND QUALIFICATION UNDER THE LAW RELATED THERETO OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY (AS THAT TERM IS DEFINED BELOW) AND ITS COUNSEL,
THAT SAID REGISTRATION AND QUALIFICATION ARE NOT REQUIRED UNDER THE ACT AND LAW,
RESPECTIVELY.
XXXXXX.XXX LTD.
April 28, 1999 1,535,624 Shares
of Common Stock
Warrant for Common Stock
This certifies that Communicade, Inc. whose address is 000 Xxxxxxx
Xxxxxx, Xxx Xxxx, XX 00000 (the "HOLDER") is entitled to subscribe for and
purchase, subject to Section 1.4 below, during the period commencing on April
28, 1999, and ending at 5:00 P.M., New York local time, on March 31, 2019, One
Million Five Hundred Thirty Five Thousand Six Hundred Twenty Four (1,535,624)
shares of fully paid and nonassessable Common Stock, $.001 par value per share
("COMMON STOCK"), of Xxxxxx.Xxx Ltd., a New York corporation (the "COMPANY").
The purchase price of each such share shall be the amount set forth in Section
1.3 herein (the "WARRANT PRICE"). This Warrant shall not be assignable, and
shall only be exercisable, by the Holder.
1. EXERCISE; PAYMENT
1.1. PAYMENT. The purchase rights under this Warrant may be exercised by
Holder, in whole or in part, by the surrender of this Warrant at the principal
office of the Company located at 000 Xxxxxxxx, Xxx Xxxx, XX 00000, and by the
payment to the Company, by certified, cashier's or other check acceptable to the
Company, of an amount equal to the aggregate Warrant Price of the shares being
purchased.
1.2. STOCK CERTIFICATES. In the event of any exercise of the rights to
acquire Common Stock granted under this Warrant, certificates for the shares of
Common Stock so purchased shall be delivered to Holder within a reasonable time
and, unless this Warrant has been fully exercised or has expired, a new Warrant
representing the shares with respect to which this Warrant shall not have been
exercised shall also be issued to Holder within such time.
1.3. WARRANT PRICE. The purchase price for the shares of Common Stock to be
issued upon exercise of this Warrant shall be $0.01 per share, subject to
adjustment as provided in Section 3 herein (the "WARRANT PRICE").
1.4. RESTRICTIONS ON EXERCISE. Notwithstanding anything to the contrary set
forth in this Warrant, exercise of this Warrant shall be restricted as follows:
1.4.1. If the Holder and Omnicom Group Inc. beneficially own in the
aggregate less than 50% of the outstanding shares of Common Stock of the Company
at the time of exercise, the Holder shall be entitled to exercise this Warrant
only to the extent that the number of shares of Common Stock beneficially owned
in the aggregate by the Holder and Omnicom Group Inc. after such exercise does
not exceed 50% of such outstanding shares.
1.4.2. If the Holder and Omnicom Group Inc. beneficially own in the
aggregate 50% or more of the outstanding shares of Common Stock of the Company
at the time of exercise, this Warrant shall be exercisable in full.
2. STOCK FULLY PAID; RESERVATION OF SHARES
The Company covenants and agrees that all securities which may be
issued upon the exercise of the rights represented by this Warrant will, upon
issuance, be fully paid and nonassessable and free from all taxes, liens and
charges with respect to the issuance thereof (excluding taxes based on the
income of Holder). The Company further covenants and agrees that during the
period within which the rights represented by this Warrant may be exercised, the
Company will at all times have authorized and reserved for issuance a sufficient
number of shares of its Common Stock or other securities as would be required
upon the full exercise of the rights represented by this Warrant.
3. ADJUSTMENT
The kind of securities purchasable upon the exercise of this Warrant,
the number of shares under this Warrant and the Warrant Price shall be subject
to adjustment from time to time upon the happening of certain events, as
follows:
3.1. RECLASSIFICATION, CONSOLIDATION OR MERGER. In case of: (i) any
reclassification or change of outstanding securities issuable upon exercise of
this Warrant; (ii) any consolidation or merger of the Company with or into
another corporation (other than a merger with another corporation in which the
Company is a continuing corporation and which does not result in any
reclassification, change or exchange of outstanding securities issuable upon
exercise of this Warrant); or (iii) any sale or transfer to another corporation
of all, or substantially all, of the property of the Company, then, and in each
such event, the Company or such successor or purchasing corporation, as the case
may be, shall execute a new Warrant which will provide that Holder shall have
the right to exercise such new Warrant and purchase upon such exercise, in lieu
of each share of Common Stock theretofore issuable upon exercise of this
Warrant, the kind of securities, money and property receivable upon such
reclassification, change, consolidation, merger, sale or transfer by a holder of
Common Stock issuable upon exercise of this Warrant had this Warrant been
considered exercised immediately prior to such reclassification, change,
consolidation, merger, sale or transfer. Such new Warrant shall provide for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided in this Section 3 and the provisions of this Section 3 and
the provisions of this Section 3.1 shall similarly apply to successive
reclassifications, changes, consolidations, mergers. sales and transfers.
3.2. SUBDIVISIONS OR COMBINATION OF SHARES. If the Company at any time
while this Warrant remains outstanding and unexercised, in whole or in part, (i)
shall divide its Common
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Stock, the Warrant Price shall be proportionately reduced and the number of
shares under this Warrant shall be proportionately increased; or (ii) shall
combine shares of its Common Stock, the Warrant Price shall be proportionately
increased and the number of shares under this Warrant shall be proportionately
reduced.
3.3. STOCK DIVIDENDS. If the Company, at any time while this Warrant is
outstanding and unexpired, shall pay a dividend payable in, or make any other
distribution to shareholders of, its capital stock (except any distribution
described in Sections 3.1 and 3.2 hereof), then and in each case, this Warrant
shall represent the right to acquire, in addition to the number of shares of the
security receivable upon exercise of this Warrant, and without payment of any
additional consideration therefor, the amount of such additional stock of the
Company which such holder would hold on the date of such exercise had it been
the holder of record of the security receivable upon exercise of this Warrant on
the date hereof and had thereafter, during the period from the date hereof to
and including the date of such exercise, retained such shares and/or all other
additional stock available by it as aforesaid during such period, giving effect
to all adjustments called for during such period by the provisions of this
Section 3.
3.4. TIME OF ADJUSTMENTS. All adjustments, unless otherwise specified
herein, shall be effective as of the earlier of:
3.4.1. the date of issuance of the security causing the adjustment;
3.4.2. the effective date of a division or combination of shares;
3.4.3. the record date of any action of holders of the Company's
capital stock of any class taken for the purpose of dividing or combining shares
or entitling shareholders to receive a distribution or dividends payable in the
Company's capital stock.
3.5. NOTICE OF ADJUSTMENTS. In each case of an adjustment the Company, at
its expense, shall cause the Chief Financial Officer (or other such similar
officer) of the Company to compute such adjustments and prepare a certificate
setting forth such adjustments and showing in detail the facts upon which such
adjustment is based. The Company shall promptly mail a copy of each such
certificate to Holder pursuant to Section 13 hereof.
4. FRACTIONAL SHARES
No fractional share of Common Stock will be issued in connection with
any exercise hereof, but in lieu of a fractional share upon complete exercise
hereof, Holder may purchase a whole share at the then effective Warrant Price.
5. SHAREHOLDER RIGHTS
Holder shall not, solely by virtue hereof, be entitled to any rights
of a shareholder of the Company. Holder shall have all rights of a shareholder
with respect to securities purchased upon exercise hereof at the time the
exercise price for such securities is delivered pursuant to Section 1 hereof and
this Warrant is surrendered.
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6. NO TRANSFER; EXCHANGE
6.1. TRANSFER. This Warrant shall not be transferable by the Holder.
6.2. SECURITIES LAWS. The Holder, by acceptance hereof, agrees that, absent
an effective registration statement under the Act and qualification under the
Securities Act of 1933, as amended, covering the disposition of Common Stock
issued or issuable upon exercise hereof, Holder will not sell or transfer any or
all of such Common Stock, without first providing the Company with an opinion of
counsel reasonably acceptable to the Company and its counsel to the effect that
such sale or transfer will be exempt from the registration requirements of the
Act and the qualification requirements of the Securities Act of 1933, as
amended, and Holder consents to the Company making a notation on its records in
order to implement such restriction on transferability.
6.3. EXCHANGE. This Warrant is exchangeable at the principal office of the
Company for Warrants to purchase the same aggregate number of shares of Common
Stock purchasable hereunder, each new Warrant to represent the right to purchase
such number of shares as Holder shall designate at the time of such exchange.
7. LOSS OR MUTILATION
Upon receipt by the Company of evidence satisfactory to it of the
ownership of, and the loss, theft, destruction or mutilation of, this Warrant
and (in the case of loss, theft or destruction) of indemnity satisfactory to it,
and (in the case of mutilation) upon surrender and cancellation hereof, the
Company will execute and deliver in lieu hereof a new Warrant.
8. GOVERNING LAWS
The internal laws of the State of New York (irrespective of its choice
of law principles) shall govern the validity of this Warrant, the construction
of its terms, and the interpretation and enforcement of the rights and duties of
the parties hereto.
9. BINDING UPON SUCCESSORS AND ASSIGNS
Subject to, and unless otherwise provided in, this Warrant, each and
all of the covenants, terms, provisions, and agreements contained herein shall
be binding upon, and inure to the benefit of the permitted successors,
executors, heirs, representatives, administrators and assigns of the parties
hereto.
10. SEVERABILITY
If any provision of this Warrant, or the application hereof, shall for
any reason and to any extent, be invalid or unenforceable, the remainder of this
Warrant and application of such provisions to other persons or circumstances
shall be interpreted so as best to reasonably effect the intent of the parties
hereto. The parties further agree to replace such void or unenforceable
provisions of this Warrant with valid or enforceable provisions which will
achieve, to the extent possible, the economic, business and other purposes of
the void or unenforceable provisions.
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11. AMENDMENT
This Warrant may be amended upon the written consent of the Company
and the Holder.
12. NO WAIVER
The failure of any party to enforce any of the provisions hereof shall
not be construed to be a waiver of the right of such party thereafter to enforce
such provisions.
13. NOTICES
Whenever any party hereto desires or is required to give any notice,
demand, or request with respect to this Warrant, each such communication shall
be in writing and shall be effective only if it is delivered by personal service
or mailed, United States certified mail, postage prepaid, return receipt
requested, addressed as follows:
Company: Address set forth in Section 1 hereof
Attn: Chief Executive Officer
Holder: Address as set forth in paragraph 1 hereof
Attn: Secretary
Such communications shall be effective when they are received by the addresses
thereof; but if sent by certified mail in the manner set forth above, they shall
be effective five (5) days after being deposited in the United States mail. Any
party may change its address for such communications by giving notice thereof to
the other party in conformity with this Section.
14. CONSTRUCTION OF AGREEMENT
A reference in this Warrant to any Section shall include a reference
to every Section the number of which begins with the number of the Section to
which reference is specifically made. The titles and headings herein are for
reference purposes only and shall not in any manner limit the construction of
this Warrant which shall be considered as a whole.
15. NO ENDORSEMENT
Holder understands that no federal or state securities administrator
has made any finding or determination relating to the fairness of investment in
the Company or purchase of the Common Stock hereunder and that no federal or
state securities administrator has recommended or endorsed the offering of
securities by the Company hereunder.
16. PRONOUNS
All pronouns and any variations thereof shall be deemed to refer to
the masculine, feminine or neuter, singular or plural, as the identity of the
person, persons, entity or entities may require.
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17. FURTHER ASSISTANCE
Each party agrees to cooperate fully with the other parties and to
execute such further instruments, documents and agreements and to give such
further written assurances, as may be reasonably requested by any other party to
better evidence and reflect the transactions described herein and contemplated
hereby, and to carry into effect the intents and purposes of this Warrant.
XXXXXX.XXX, LTD.
/s/ Chan X. Xxx
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By: Chan X. Xxx
Chairman and Chief Executive Officer
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FORM OF WARRANT EXERCISE
(TO BE SIGNED ONLY ON EXERCISE OF WARRANT)
TO
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The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise this Warrant for, and to purchase thereunder, _____ shares of
Common Stock of Xxxxxx.Xxx Ltd., a New York corporation, and herewith makes
payment of $__________ therefor, and requests that the certificates for such
shares be issued in the name of, and delivered to _________, whose address is
____________________.
Dated:
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(Signature must conform to the name of holder as
specified on the face of the Warrant)
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(Address)
Tax Identification Number:
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XXXXXX.XXX LTD.
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
August 12, 1999
Communicade Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Gentlemen:
Reference is made to the Warrant dated April 28, 1999 (the "Warrant") which
allows you to purchase shares of XXXXXX.XXX LTD. Capitalized terms used
herein without a definition shall have the meaning assigned to such terms in
the Warrant.
Section 1.4.1 of the Warrant is hereby amended to read as follows:
"1.4.1 If the Holder and Omnicom Group Inc. beneficially own in the
aggregate less than 50% of the outstanding shares of Common Stock of the
Company at the time of exercise, the Holder shall be entitled to
exercise this Warrant only to the extent that the number of shares of
Common Stock beneficially owned in the aggregate by the Holder and
Omnicom Group Inc. after such exercise is less than 50% of such
outstanding shares."
Please sign in the space provided below whereupon this will become a binding
agreement between us.
XXXXXX.XXX LTD.
By: /s/ Xxxxxxx Xxxxx
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ACCEPTED AND AGREED:
COMMUNICADE INC.
By: /s/ Xxxxx Xxxxxxx
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