No.________ ____________, 19___
DIGITAL RIVER, INC.
WARRANT TO PURCHASE COMMON STOCK
This certifies that, for value received, the Holder is entitled to
subscribe for and purchase from the Company ______________ (___) shares of
Common Stock at the Warrant Exercise Price at any time after ________ and on
or before the Expiration Date.
This Warrant is subject to the following provisions, terms and
conditions which each Holder accepts by holding this Warrant:
ARTICLE 1
DEFINITIONS
Capitalized terms used in this Warrant shall have the meanings given to
them in this Article:
1.1 CAPITAL EVENT - shall mean any reorganization or reclassification
of the Company's capital stock, any consolidation or merger of the Company
with another corporation or any sale of all or substantially all of the
Company's assets which results in Holders of the Common Stock becoming
entitled to receive any securities or property other than shares of Common
Stock.
1.2 COMMON STOCK - shall mean the Company's sole class of Common Stock
outstanding as of the date hereof.
1.3 COMPANY - shall mean Digital River, Inc., a Delaware corporation.
1.4 EXPIRATION DATE- shall mean the fifth (5th) anniversary of the
issuance of this Warrant.
1.5 HOLDER - shall mean ______________ or any person or entity to whom
this Warrant is assigned strictly in accordance with the terms of this
Warrant.
1.6 WARRANT EXERCISE PRICE - shall mean the sum of __________ (___) per
share of Common Stock, or, if an adjustment is required to be made in
accordance with the provisions of Article 3, the price resulting from the
adjustment.
1.7 WARRANT - shall mean this Warrant and any Warrants into which this
Warrant is divided or combined and any Warrants issued upon the partial
exercise or the transfer of this Warrant.
ARTICLE 2
DESCRIPTION OF WARRANT; EXERCISE;
RESERVATION OF SHARES
2.1 WARRANT EXERCISE. The rights represented by this Warrant may be
exercised by the Holder, in whole or in part, on or before the Expiration
Date by:
(a) surrendering this Warrant at the Company's principal office,
(b) delivering a completed and duly executed Subscription and
Investment Representation Letter in the form satisfactory to the Company, and
(c) delivery of a certified check in payment of the Warrant
Exercise Price.
The shares so purchased shall be deemed to be issued to the Holder as the
record owner as of the close of business on the date on which this Warrant is
exercised as provided in this Section. No fractional shares shall be issued
upon the full or partial exercise of this Warrant.
2.2 CERTIFICATES. Certificates for the shares purchased pursuant to
Section 2.1 shall be delivered to the Holder by the Company at its expense
within ten (10) days after the Warrant is exercised. At the same time, the
Company also shall deliver to the Holder a new Warrant representing the
rights, if any, which have not been exercised. The new Warrant shall be
identical to this Warrant except in those respects necessary to reflect
exercise of the Warrant.
2.3 COVENANTS AND AGREEMENTS. The Company covenants and agrees as
follows:
(a) All Common Stock issued upon the exercise of this Warrant will
be duly authorized, validly issued, fully paid and nonassessable and free
from all taxes, liens and charges with respect to their issuance.
(b) At all times prior to the Expiration Date, the Company will
have authorized and reserved a sufficient number of shares of Common Stock to
provide for the exercise of this Warrant.
(c) The Company will not, by amendment of its Articles of
Incorporation or through reorganization, consolidation, merger, dissolution,
sale of assets or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant. The Company
will assist in carrying out all of the terms of this Warrant and will take
all actions necessary or appropriate to protect the rights of the Holder
against impairment. The Company will take all action necessary or
appropriate in order that the Company may validly and legally issue fully
paid and nonassessable stock upon exercise of the Warrant. No provision of
this Warrant, however, shall be construed to prohibit or limit the Company's
ability to issue or sell its securities for whatever purposes it deems
appropriate.
2.4 CLOSING OF BOOKS. Except as expressly provided in this Warrant,
the Company will not close its transfer books against the transfer of this
Warrant or any shares of Common
Stock issued or issuable upon exercise of this Warrant in a manner which
unreasonably interferes with the timely exercise of the Warrant.
ARTICLE 3
ADJUSTMENTS AND LIMITS
3.1 ADJUSTMENT UPON CAPITAL EVENTS. Upon the occurrence of a Capital
Event, the Company shall make lawful and adequate provisions so that the
Holder thereafter shall have the right to purchase and receive, in lieu of
the shares of the Common Stock then purchasable and receivable upon the
exercise of this Warrant, the amount of shares of stock, securities or assets
as would have been issued or paid with respect to or in exchange for that
number of shares of Common Stock then purchasable and receivable upon the
exercise of this Warrant.
3.2 PRESERVATION OF VALUE UPON CAPITAL EVENTS. In the case of any
Capital Event, appropriate provision shall be made with respect to the rights
and interests of the Holder so that all of the provisions of this Warrant
(including, without limitation, provisions for adjusting the Warrant Exercise
Price and the number of shares purchasable and receivable upon the exercise
of this Warrant) shall thereafter be applicable, as nearly as may be, in
relation to any shares of stock, securities or assets thereafter deliverable
upon the exercise of this Warrant.
3.3 OBLIGATION TO BE EXPRESSLY ASSUMED UPON CAPITAL EVENTS. The
Company shall not effect any consolidation, merger or sale of all or
substantially all of its assets, unless, prior to the consummation of the
transaction, the successor corporation (if other than the Company) or the
corporation issuing the securities being exchanged for the outstanding stock
of the Company, or the corporation purchasing the assets, assumes by written
instrument executed and delivered to the registered Holder, the obligation to
deliver to the Holder, upon exercise of this Warrant, the shares of stock,
securities or assets the Holder is entitled to purchase in accordance with
this Article.
3.4 SUBDIVISION OR COMBINATION OF STOCK. If the Common Stock is
subdivided into a greater number of shares or is combined into a lesser
number of shares, the number of shares subject to issuance upon exercise of
this Warrant shall be adjusted proportionately; that is, the number of shares
subject to issuance upon exercise of the Warrant shall be multiplied by a
fraction of which the denominator is the number of shares outstanding
immediately prior to the subdivision or combination, and the numerator of
which is the number of shares outstanding immediately after the subdivision
or combination. Upon a subdivision or combination of the Common Stock, the
Warrant Exercise Price shall be adjusted by making the following calculation:
(a) First, the number of shares of Common Stock subject to
issuance upon exercise of this Warrant just prior to the subdivision or
combination shall be multiplied by the Warrant Exercise Price in effect just
prior to the subdivision or combination;
(b) Then, the number of shares of Common Stock subject to issuance
upon exercise of this Warrant just after the subdivision or combination shall
be divided into the result of the computation in (a).
3.5 STOCK DIVIDENDS. If the Company declares and pays a dividend upon
its Common Stock payable in Common Stock, the number of shares of Common
Stock subject to issuance upon exercise of this Warrant shall be increased by
the number (and the kind) of shares which would have been issued to the
Holder of this Warrant had this Warrant been exercised immediately prior to
the dividend.
3.6 NO ADJUSTMENT. No adjustment to the Warrant Exercise Price or the
number of shares subject to issuance upon exercise of this Warrant shall be
made under any of the following circumstances:
(a) sale of any of the Company's securities, at any price, in
arms' length transactions, or
(b) issuance of stock options, or the issuance of Common Stock
pursuant to stock options, to officers, directors and employees of the
Company.
3.7 NOTICE OF ADJUSTMENT. The Company shall give notice of any
adjustment to the Holder. The notice shall state the increase or decrease,
if any, in the Warrant Exercise Price or the number of shares purchasable
upon the exercise of this Warrant and shall set forth in reasonable detail
the method of calculation.
ARTICLE 4
TRANSFER RESTRICTIONS
4.1 GENERAL RESTRICTION. This Warrant, and the rights provided hereby,
may not be transferred, either voluntarily or by operation of law, without
the consent of the Company.
4.2 SECURITIES LAW TRANSFER RESTRICTIONS. By taking and holding this
Warrant, the Holder
(a) acknowledges that neither this Warrant nor any shares of
Common Stock issuable upon the exercise of this Warrant have been registered
under the Securities Act of 1933, as amended, or any applicable state
securities or Blue Sky law (collectively, the "Acts"); and
(b) agrees not to sell, transfer or otherwise dispose of this
Warrant or shares of Common Stock (except as provided in this Article 4)
without registration unless the Holder delivers to the Company an opinion,
addressed to the Company, of counsel selected by the Holder and acceptable to
the Company and its counsel, in form and substance satisfactory to the
Company and its counsel, to the effect that the sale, transfer or disposition
can be effected without registration and in compliance with the Acts, or that
exemptions from the Act or state securities laws are available for the sale,
transfer or disposition. Any certificate for shares of Common Stock issued
upon exercise of this Warrant shall bear an appropriate legend describing the
foregoing restrictions.
4.3 PROVISION OF INFORMATION BY XXXXXX. The Holder shall make
available to the Company the written information, presented in form and
content satisfactory to the Company, as
the Company may reasonably request, from time to time, in order to make the
determination provided for in Section 4.2.
4.4 INVESTMENT REPRESENTATIONS. The Holder represents and warrants
that the Warrants are being purchased for the Holder's own account or
investment without the intention of reselling or redistributing the same,
that the Holder has made no agreement with others regarding any of such
Warrants and that the Holder's financial condition is such that it is not
likely it will be necessary to dispose of any such securities in the
foreseeable future.
ARTICLE 5
MISCELLANEOUS
5.1 HOLDER TREATED AS OWNER. The Holder shall be treated by the
Company and all other persons dealing with this Warrant as the absolute owner
of the Warrant for any purpose and as the person entitled to exercise the
rights represented by this Warrant, until the Warrant is transferred on the
Company's books.
5.2 NOTICES. Any notice or communication to be given pursuant to this
Warrant shall be in writing and shall be delivered in person or by certified
mail, return receipt requested, in the United States mail, postage pre-paid.
Notices to the Company shall be addressed to the Company's principal office.
Notices to the Holder shall be addressed to the Holder's address as reflected
in the records of the Company. Notices shall be effective upon delivery in
person or, if mailed, at midnight on the third (3rd) business day after
mailing.
5.3 NO STOCKHOLDER RIGHTS. This Warrant shall not entitle the Holder
to any voting rights or other rights as a stockholder of the Company.
5.4 GOVERNING LAW; VENUE. This Warrant shall be governed by and
construed in accordance with the laws of the State of Minnesota. Venue for
any suit brought with respect to this Agreement shall be solely in
Minneapolis, Hennepin County, Minnesota.
5.5 HEADINGS; INTERPRETATION. The section headings used herein are for
convenience of reference only and are not intended to define, limit or
describe the scope or intent of any provision of this Warrant.
5.6 SUCCESSORS. The covenants, agreements and provisions of this
Warrant shall bind the parties hereto and their respective successors and
permitted assigns.
5.7 SEVERABILITY. In the event that any one or more of the provisions
contained in this Agreement shall for any reason be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision hereof, and this
Agreement shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein.
IN WITNESS WHEREOF, the Company has caused this Warrant to be issued as
of the date first above written.
DIGITAL RIVER, INC.:
By:
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Xxxx Xxxxxxx
Its: Chief Executive Officer
