EXHIBIT 10.21
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE HEREUNDER HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NO TRANSFER, SALE, OR
OTHER DISPOSITION OF THIS WARRANT OR ANY SECURITIES ISSUED HEREUNDER MAY BE MADE
UNLESS A REGISTRATION STATEMENT WITH RESPECT TO THIS WARRANT OR SUCH SECURITIES,
AS THE CASE MAY BE, HAS BECOME EFFECTIVE UNDER SAID ACT, OR THE ISSUER HAS BEEN
FURNISHED WITH AN OPINION OF COUNSEL, SATISFACTORY TO THE ISSUER IN FORM AND
SUBSTANCE, THAT SUCH REGISTRATION IS NOT REQUIRED.
IN ADDITION, BOTH THIS WARRANT AND THE SECURITIES ISSUABLE HEREUNDER ARE
SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND OTHER RESTRICTIONS SET FORTH IN
A UNANIMOUS SHAREHOLDERS' AGREEMENT DATED AS OF APRIL 1, 1997, BY AND AMONG THE
ISSUER OF THIS WARRANT, THE HOLDER HEREOF (OR SUCH HOLDER'S PREDECESSOR-IN-
INTEREST), AND CERTAIN OTHERS, AS SUCH AGREEMENT MAY BE AMENDED AND/OR RESTATED
AND IN EFFECT FROM TIME TO TIME. THE ISSUER WILL FURNISH A COPY OF SUCH
AGREEMENT TO THE REGISTERED HOLDER OF THIS WARRANT UPON WRITTEN REQUEST AND
WITHOUT CHARGE.
STOCK PURCHASE WARRANT
NO. W-2 APRIL 1, 1997
RoweCom Inc. (the "Company"), a Delaware corporation, hereby certifies that
subject to the terms and conditions set forth herein, Xxxxxx Xxxxx is entitled
on any one occasion before 5:00 p.m. (Boston time) on the fifth anniversary of
the date hereof, to purchase from the Company up to 40,322 fully paid and non-
assessable shares of the class of the Company's capital stock determined in
accordance with the following paragraphs A-C, for a purchase price of $2.48 per
share (such purchase price, subject to adjustment as provided herein, the
"Exercise Price").
A. The type and number of shares of capital stock purchasable pursuant to
this Warrant and the Exercise Price payable therefor shall be determined as
follows. Reference is made to the Unanimous Shareholders' Agreement dated as of
April 1, 1997, by and among the Company and the "Shareholder" parties thereto,
as such agreement may be amended and/or restated and in effect from time to time
(the "Shareholders' Agreement"), and capitalized terms used and not otherwise
defined in the following paragraphs B and C have the respective meanings set
forth in the Shareholders' Agreement. For purposes of this Warrant, "Stock"
means the
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type of stock purchasable hereunder, as determined in accordance with the
following paragraphs B and C.
B. If prior to the time of exercise, WV has not exercised its Exchange
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Option, then the shares purchasable pursuant to this Warrant will be shares of
the Company's Class A Preferred Stock, $0.01 par value per share.
C. If prior to the time of exercise, WV has exercised its Exchange
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Option, then the shares purchasable pursuant to this Warrant will be shares of
the Company's Common Stock, $0.01 par value per share.
1. EXERCISE OF WARRANT.
(A) MECHANICS OF EXERCISE. This Warrant may be exercised by the registered
holder hereof by surrender to the Company of this Warrant, with the attached
form of subscription agreement duly executed by such holder, accompanied by
payment, by check payable to the order of the Company or by wire transfer to its
account, in an amount equal to the product of (i) the number of shares of Stock
for which this Warrant is then being exercised (such shares, the "Exercise
Shares") multiplied by (ii) the Exercise Price.
Notwithstanding the foregoing or any other provision hereof, this Warrant
shall be and be deemed to have been exercised in full, automatically and without
further action by the holder hereof, upon the closing of the first public
offering of securities of the Company registered in an effective registration
statement filed under the Securities Act of 1933, as amended; provided, that in
such case, the holder shall pay and be deemed to have paid the aggregate
Exercise Price for the Exercise Shares by surrendering its rights to receive a
portion of the Exercise Shares having a fair market value (determined by
reference to the price at which a share of the Company's Common Stock, $0.01 par
value, is initially offered to the public in such offering, as set forth on the
cover of the final prospectus in connection with such offering; such price, the
"Public Offering Price") equal to such aggregate Exercise Price, and shall
receive upon such exercise the excess of (i) the number of Exercise Shares to
which such holder would otherwise be entitled upon such exercise, minus (ii) the
number of Exercise Shares so surrendered.
(B) WARRANT AGENT. In the event that a bank or trust company is appointed
as trustee for the holder of this Warrant pursuant to Section 3(b) hereof, such
bank or trust company shall have all the powers and duties of a warrant agent
appointed pursuant to Section 8 hereof and shall accept, in its own name for the
account of the Company or such successor entity as
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may be entitled thereto, all amounts otherwise payable to the Company or such
successor, as the case may be, upon exercise of this Warrant.
(C) EXPIRATION. This Warrant and the holder's rights hereunder shall
expire as of 5:00 p.m. (Boston time), on the fifth anniversary of the date
hereof.
2. DELIVERY OF STOCK CERTIFICATES; FRACTIONAL SHARES.
(A) DELIVERY OF STOCK CERTIFICATES. As soon as is practicable after any
exercise of this Warrant, the Company, at its own expense shall deliver to the
registered holder hereof a stock certificate representing the shares of Stock,
other securities, cash, and/or property to which such holder is entitled in
respect of such exercise.
(B) FRACTIONAL SHARES. In the event that any exercise of this Warrant
would, but for the provisions of this Section 2(b), result in the issuance of
any fractional share of Stock, then in lieu of such fractional share the
registered holder hereof shall be entitled to cash equal to the fair market
value of such fractional share, as determined in good faith by the Company's
Board of Directors.
3. ADJUSTMENT FOR REORGANIZATIONS, CONSOLIDATIONS, MERGERS, ETC.
(A) CERTAIN ADJUSTMENTS. In case at any time or from time to time prior
to the exercise of this Warrant, the Company shall (i) effect a capital
reorganization, reclassification, or recapitalization, (ii) consolidate with or
merge with or into any other person or entity, or (iii) transfer all or
substantially all of its properties or assets to any other person or entity
under any plan or arrangement contemplating the dissolution of the Company, then
in each such case, the registered holder of this Warrant, upon exercise hereof
at any time after or simultaneously with the consummation of such
reorganization, recapitalization, consolidation, or merger or the effective date
of such dissolution, as the case may be, shall receive, in lieu of the shares of
Stock issuable upon such exercise before such consummation or effective date,
the other securities, cash, and/or property to which such holder would have been
entitled upon such consummation or in connection with such dissolution, as the
case may be, if such holder had exercised this Warrant immediately prior
thereto, all subject to further adjustment thereafter as provided herein.
(B) APPOINTMENT OF TRUSTEE FOR WARRANT HOLDERS UPON DISSOLUTION. In the
event of any dissolution of the Company, the Company, prior to such dissolution,
shall, at its expense, deliver or cause to be
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delivered the stock, other securities, property, and/or cash receivable by the
registered holder of this Warrant after the effective date of such dissolution
pursuant to this Section 3 to a bank or trust company having its principal
office in Boston, Massachusetts, as trustee for the registered holder of this
Warrant.
(C) CONTINUATION OF TERMS. Upon any reorganization, consolidation,
merger, or transfer (and any dissolution following any transfer) referred to in
this Section 3, this Warrant shall continue in full force and effect and the
terms hereof shall be applicable to the shares of Stock, other securities, cash,
and/or property receivable on the exercise of this Warrant after or
simultaneously with the consummation of such reorganization, consolidation, or
merger or the effective date of dissolution following any such transfer, as the
case may be, and shall be binding upon the issuer of any such stock or other
securities, including, in the case of any such transfer, the person or entity
acquiring all or substantially all of the properties or assets of the Company,
whether or not such person or entity shall have expressly assumed the terms of
this Warrant as provided in Section 5 hereof.
4. ADJUSTMENTS FOR STOCK SPLITS, ETC. If at any time or from time to
time there shall occur any stock split, stock dividend, reverse stock split, or
other combination or subdivision of the Stock (a "Stock Event"), then the number
of shares of Stock issuable upon exercise hereof shall be appropriately adjusted
such that the proportion of the number of shares issuable hereunder immediately
after such Stock Event to the total number of shares of Stock of the Company
outstanding immediately after such Stock Event is equal to the proportion of the
number of shares of Stock issuable hereunder immediately before such Stock Event
to the total number of shares of Stock of the Company outstanding immediately
before such Stock Event. The Exercise Price shall be proportionately decreased
or increased upon the occurrence of any Stock Event.
5. NO DILUTION OR IMPAIRMENT. The Company shall not, by amendment of its
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities, or any other
action, avoid or seek to avoid the observance or performance of any of the terms
of this Warrant, but shall at all times in good faith assist in the carrying out
of all such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the registered holder of this
Warrant against dilution. Without limiting the generality of the foregoing, the
Company (i) shall not increase the par value of any shares of stock receivable
on the exercise of this Warrant above the amount payable therefor on such
exercise, (ii) shall take all such action as may be necessary or appropriate in
order that the
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Company may validly and legally issue fully paid and non-assessable shares of
stock upon exercise of this Warrant from time to time, and (iii) shall not
transfer all or substantially all of its properties and assets to any other
person or entity or consolidate into or merge with or into any other person or
entity (if the Company is not the surviving entity), unless such other person or
entity shall expressly agree in writing (naming the registered holder hereof, as
such, as an intended third-party beneficiary) to assume and be bound by all the
terms of this Warrant applicable to the Company.
6. NOTICES OF RECORD DATE, ETC. In the event from time to time of any
proposed or contemplated:
(a) taking by the Company of a record of the holders of any class of
securities for the purpose of determining the holders thereof who are
entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase, or otherwise acquire any shares of stock of any
class or any other securities or property, or to receive any other right;
or
(b) capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company, or any transfer of
all or substantially all the assets of the Company to, or any consolidation
or merger of the Company with or into, any other person or entity; or
(c) voluntary or involuntary dissolution, liquidation, or winding-up
of the Company;
then, and in each such event, the Company shall mail or cause to be mailed to
the registered holder of this Warrant a notice specifying (i) the date on which
any such record is to be taken for the purpose of such dividend, distribution,
or right, and stating the amount and character of such dividend, distribution,
or right, or (ii) the date on which any such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation, or
winding-up is anticipated to take place, and the time, if any is to be fixed, as
of which the holders of record of Stock shall be entitled to exchange their
shares of Stock for securities, cash, and/or other property deliverable on such
reorganization, reclassification, recapitalization, transfer, consolidation,
merger, dissolution, liquidation, or winding-up. Such notice shall be mailed at
least thirty days prior to the earliest date specified in such notice on which
any such action or transaction is to be taken or consummated.
7. RESERVATION OF STOCK ISSUABLE ON EXERCISE OF WARRANT. The Company at
all times and from time to time shall reserve and keep
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available, solely for issuance and delivery on the exercise of this Warrant, a
number of shares of Stock equal to the aggregate number of shares of Stock from
time to time issuable upon exercise of this Warrant. If at any time the Company
does not have sufficient authorized shares to comply with the foregoing
sentence, the Company promptly shall take all steps necessary to amend its
Certificate of Incorporation to provide a reserved number of shares of Stock
sufficient to effect the exercise in full of this Warrant.
8. WARRANT AGENT. The Company may, by written notice to the registered
holder of this Warrant, appoint an agent having an office in Boston,
Massachusetts for the purpose of issuing Stock upon exercise of this Warrant,
exchanging or replacing this Warrant, or any of the foregoing, and thereafter
any such issuance, exchange, or replacement, as the case may be, shall be made
at such office by such agent.
9. CAPTIONS. The captions of sections or subsections of this Warrant are
for reference only and shall not affect the interpretation or construction of
this Warrant.
10. EQUITABLE RELIEF. The Company hereby acknowledges that any breach by
it of its obligations under this Warrant would cause substantial and irreparable
damage to the registered holder hereof, and that money damages would be an
inadequate remedy therefor, and accordingly, acknowledges and agrees that, in
addition to any other rights and remedies to which the registered holder hereof
may be entitled in respect of any breach of such obligations, such holder shall
be entitled to an injunction, specific performance, and/or other equitable
relief to prevent the breach of such obligations.
11. WAIVERS. No waiver of any breach or default hereunder shall be valid
unless in a writing signed by the registered holder hereof. No failure or other
delay by the registered holder hereof exercising any right, power, or privilege
hereunder shall be or operate as a waiver thereof, nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power, or privilege.
12. GOVERNING LAW. This Warrant shall be governed by and interpreted and
construed in accordance with the internal laws of the State of Delaware (without
reference to principles of conflicts or choice of law).
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IN WITNESS WHEREOF, the Company has executed and delivered this Warrant as
of the date first above written.
ROWECOM INC.
By __________________________
Name:
Title:
FORM OF SUBSCRIPTION
(To be signed only on exercise of
Stock Purchase Warrant)
TO: ROWECOM INC.
The undersigned, the Holder of the enclosed Stock Purchase Warrant, hereby
irrevocably elects to exercise such Warrant for, and to purchase thereunder
____________ shares of Stock of RoweCom Inc. and herewith makes payment of
$______________ therefor,/2/ and requests that the certificates for such shares
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be issued in the name of, and delivered to _____________________________, whose
address is __________________________________.
Dated ____________________ _____________________________________
(Signature must conform in all
respects to name of Holder as
specified on the face of the
Warrant)
_____________________________________
(Address)
_____________________
/2/ Appropriate changes to be made in the case of a "cashless" exercise of the
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Warrant pursuant to Section 1(a) hereof.
FORM OF ASSIGNMENT
(To be signed only on transfer of Warrant)
For value received, the undersigned hereby sells, assigns, and transfers to
___________________ the "Assignee") the rights represented by the enclosed Stock
Purchase Warrant of RoweCom Inc. (the "Company"), a Delaware corporation, and
appoints _________________ as the undersigned's attorney to transfer such rights
on the books of the Company, with full power of substitution in the premises.
Dated ________________________ ________________________________
(Signature must conform in all
respects to name of Holder as
specified on the face of the
Warrant)
________________________________
(Address)
