EXHIBIT 10.39
WARRANT AGREEMENT
This WARRANT AGREEMENT (this "Agreement") is made and entered into as of
the 1st day of June, 1994, by and between Tag-It, Inc., a California
corporation (the "Company"), and Xxxxxxxx Xxxxxxxx ("Holder"). In
consideration of these premises and the mutual covenants and agreements
hereinafter set forth, and other good and valuable consideration the receipt
and sufficiency of which are hereby acknowledged, the Company and Holder
agree as follows:
1. GRANT OF WARRANT.
In consideration of the sum of $100, the Company hereby grants to Holder
the right and option (the "Warrant"), upon the terms and subject to the
conditions set forth in this Agreement, to purchase all or any portion of 14
shares of the Common Stock of the Company (the "Warrant Shares") at an
exercise price of $2,000 per share (the "Exercise Price").
2. TERM OF WARRANT.
The Warrant shall terminate and expire at 5:00 p.m., Los Angeles time, on
December 31, 2002 (the "Warrant Expiration Date"), unless sooner terminated
as provided herein.
3. VESTING.
(a) The Warrant is immediately exercisable with respect to all
Warrant Shares.
(b) Notwithstanding anything to the contrary contained in this
Agreement, the Warrant may not be exercised, in whole or in part, unless and
until any then-applicable requirements of all state and federal laws and
regulatory agencies shall have been fully complied with to the satisfaction
of the Company and its counsel.
4. EXERCISE OF WARRANT.
There is no obligation to exercise the Warrant, in whole or in part. The
Warrant may be exercised, in whole or in part, only by delivery to the
Company of:
(a) written notice of exercise in form and substance identical to
Exhibit "A" attached to this Agreement stating the number of Warrant Shares
then being purchased (the "Purchased Shares"); and
(b) payment of the Exercise Price of the Purchased Shares in cash,
by check, or by wire transfer.
Upon receipt of the foregoing, the Company shall promptly issue in the
name of the Holder a stock certificate evidencing the Purchased Shares by
such exercise and deliver such certificate to the Holder.
5. RESTRICTIONS ON PURCHASED SHARES.
(a) Each certificate for Purchased Shares initially issued upon the
exercise of the Warrants, shall be stamped or otherwise imprinted with a
legend in substantially the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
THE CONDITIONS SPECIFIED IN A CERTAIN WARRANT AGREEMENT
DATED JUNE 1, 1994. NO TRANSFER, SALE, PLEDGE,
HYPOTHECATION, ENCUMBRANCE OR OTHER DISPOSITION OF THE
SHARES REPRESENTED BY THIS CERTIFICATE SHALL BE VALID OR
EFFECTIVE UNTIL REGISTERED OR THE COMPANY HAS RECEIVED AN
OPINION OF COUNSEL, SATISFACTORY TO IT, THAT THE TRANSACTION
IS EXEMPT FROM REGISTRATION, AND UNTIL SUCH CONDITIONS AS
ARE CONTAINED IN THE WARRANT AGREEMENT HAVE BEEN FULFILLED.
A COPY OF THE FORM OF THE WARRANT AGREEMENT IS ON FILE AT
THE OFFICES OF TAG-IT, INC. THE HOLDER OF THIS CERTIFICATE,
BY ACCEPTANCE OF THIS CERTIFICATE, AGREES TO BE BOUND BY THE
PROVISIONS OF THE WARRANT AGREEMENT."
If the Purchased Shares are no longer subject to the transfer
restrictions imposed by applicable state and Federal securities law because
either (i) the Purchased Shares or the resale of the Purchased Shares has
been registered on a registration statement declared effective by the
Commission, or (ii) in the reasonable opinion of counsel for the Company, or
the opinion of counsel for Holder, which opinion is reasonably satisfactory
to counsel for the Company, all future dispositions of any of the Purchased
Shares by the contemplated transferee would be exempt from or would satisfy
the registration and prospectus delivery requirements of the Securities Act
and the qualification requirements of the applicable state securities laws,
then the restrictions on transfer of such securities contained in this
Section 5(a) shall not apply to any subsequent transfer thereof and the
Company shall, promptly upon request by Holder, remove the legend set forth
above and shall promptly issue, in exchange for the certificate bearing such
legend, a certificate without such legend to Holder.
(b) HOLDER AGREES THAT THE WARRANT MAY NOT BE TRANSFERRED, SOLD,
ASSIGNED OR HYPOTHECATED EXCEPT (i) TO ITS SUCCESSORS IN A MERGER OR
CONSOLIDATION OR OTHER BUSINESS COMBINATION; (ii) TO PURCHASERS OF ALL OR
SUBSTANTIALLY ALL OF ITS ASSETS; OR (iii) BY OPERATION OF LAW. HOLDER
FURTHER AGREES THAT THE COMPANY SHALL HAVE NO OBLIGATION TO EFFECT ANY
TRANSFER OF THE WARRANTS DURING THE TIME PERIOD REFERRED TO ABOVE, UNLESS THE
TRANSFEREE, PURCHASER, ASSIGNEE OR PLEDGEE, AS THE CASE MAY BE, SHALL HAVE
EXECUTED AN AGREEMENT OBLIGATING THE TRANSFEREE TO COMPLY WITH ALL TERMS AND
CONDITIONS OF THIS AGREEMENT APPLICABLE TO THE TRANSFEROR.
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(c) Prior to any exercise of the Warrants or any transfer or
attempted transfer of any of the Warrants or Warrant Shares, the Holder shall
give the Company written notice of Holder's intention so to do, describing
briefly the manner of any such proposed exercise, sale or transfer. The
Holder may effect such exercise or transfer, provided that such exercise or
transfer is not prohibited by this Section 5 and such exercise or transfer
complies with all applicable federal and state securities laws and
regulations. If in the reasonable opinion of counsel for the Company,
notwithstanding the opinion of counsel to a Holder to the contrary, if any,
the proposed transfer of such Warrant Shares or the Warrant may not be
effected without registration thereof under the Securities Act and such
registration has not been accomplished, the Company shall, as promptly as
practicable, so notify the Holder and the Holder shall not consummate the
proposed transfer.
6. ADJUSTMENTS UPON RECAPITALIZATION.
(a) In the event the Company should at any time or from time to
time after the date of this Warrant (the "Issuance Date") fix a record date
for the effectuation of a split or subdivision of the outstanding shares of
Common Stock or the determination of holders of Common Stock entitled to
receive a dividend or other distribution payable in additional shares of
Common Stock or other securities or rights convertible into, or entitling the
holder thereof to receive, directly or indirectly, additional shares of
Common Stock (hereinafter referred to as "Common Stock Equivalents") without
payment of any consideration by such holder for the additional shares of
Common Stock or the Common Stock Equivalents (including the additional shares
of Common Stock issuable upon conversion or exercise thereof), then, as of
such record date (or the date of such dividend distribution, split or
subdivision if no record date is fixed), the Exercise Price shall be
appropriately decreased (i.e., the per share Exercise Price shall be adjusted
such that the aggregate exercise price for all Warrant Shares issuable upon
exercise of the Warrants in full, as adjusted, shall remain the same) and the
number of Warrant Shares shall be increased in proportion to such increase in
the aggregate number of shares of Common Stock outstanding and those issuable
with respect to such Common Stock Equivalents.
(b) If the number of shares of Common Stock outstanding at any time
after the Issuance Date is decreased by a combination of the outstanding
shares of Common Stock, then, following the record date of such combination,
the Exercise Price shall be appropriately increased (i.e., the per share
Exercise Price shall be adjusted such that the aggregate exercise price for
all Warrant Shares issuable upon exercise of the Warrants in full, as
adjusted, shall remain the same) and the number of Warrant Shares shall be
decreased in proportion to such decrease in the aggregate number of shares of
Common Stock outstanding and those issuable with respect to such Common Stock
Equivalents.
(c) In case of any capital reorganization, any reclassification of
the Common Stock (other than a change in par value or a recapitalization
described in Section 6(a) or 6(b) of this Agreement), or the consolidation of
the Company with, or a sale of substantially all of the assets of the Company
to (which sale is followed by a liquidation or dissolution of the
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Company), or merger of the Company with, another person, the Holder shall
thereafter be entitled upon exercise of the Warrant to purchase the kind and
number of shares of stock or other securities or the amount or value of any
cash, assets or other property receivable upon such event by a holder of the
number of shares of the Common Stock which the Warrant entitles the holder of
the Warrant to purchase from the Company immediately prior to such event; and
in any such case, appropriate adjustment shall be made in the application of
the provisions set forth in this Agreement with respect to the Holder's
rights and interests thereafter, to the end that the provisions set forth in
this Agreement (including the specified changes and other adjustments to the
Exercise Price) shall thereafter be applicable in relation to any shares or
other property thereafter purchasable upon exercise of the Warrant.
(d) In the event the Company should at any time or from time to
time after the Issuance Date fix a record date for the determination of
holders of Common Stock entitled to receive a dividend or other distribution
payable in securities or rights convertible into, or entitling the holder
thereof to receive, directly or indirectly, additional shares of Common Stock
or the securities or such rights of any other corporation (other than Common
Stock Equivalents covered be Section 6(a) hereof), the Holder shall
thereafter be entitled upon exercise of the Warrant to receive, in addition
to the Purchased Shares being purchased upon such exercise, the securities or
rights convertible into securities receivable upon such event by a holder of
the number of shares of the Common Stock which the Holder is purchasing upon
such exercise.
(e) If it is expected that there will occur any event described in
Section 6(c) or 6(d) hereof, the Company shall give the holder of the
Warrants notice thereof, which notice shall be given at such time or times as
notice is given to the holders of the Company's Common Stock.
(f) The provisions of this Section 6 are intended to be exclusive,
and the holder of the Warrant shall have no rights other than as set forth in
this Agreement (and the rights of a stockholder upon exercise of the Warrant)
upon the occurrence of any of the events described in this Section 6.
(g) The grant of the Warrant shall not affect in any way the right
or power of the Company to make adjustments, reclassifications,
reorganizations or changes in its capital or business structure, or to merge,
consolidate, dissolve or liquidate, or to sell or transfer all or any part of
its business or assets.
7. REPRESENTATIONS AND WARRANTIES OF HOLDER.
Holder makes the following representations and warranties:
(a) Holder is acquiring the Warrants for its own account with the
present intention of holding such securities for investment purposes only and
not with a view to, or for sale in connection with, any distribution of such
securities (other than a distribution in compliance with all applicable
federal and state securities laws).
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(b) Holder is an experienced and sophisticated investor and has
such knowledge and experience in financial and business matters that it is
capable of evaluating the relative merits and the risks of an investment in
the Warrants and in the Warrant Shares and of protecting its own interests in
connection with this transaction.
(c) Holder is willing to bear and is capable of bearing the
economic risk of an investment in the Warrants and the Warrant Shares.
(d) The Company has made available, prior to the date of this
Agreement, to Holder the opportunity to ask questions of the Company and its
officers, and to receive from the Company and its officers information
concerning the terms and conditions of the Warrants and this Agreement and to
obtain any additional information with respect to the Company, its business,
operations and prospects, as reasonably requested by Holder.
(e) Holder is an "accredited investor" as that term is defined
under Rule 501(a) of Regulation D promulgated by the Securities and Exchange
Commission under the Act.
(f) For purposes of the application of federal and state securities
laws, Holder acknowledges that the offer and sale of the Warrants to such
Holder occurred in the State of California and that such Holder is a resident
of the State of California.
8. LEGEND ON STOCK CERTIFICATES.
Holder agrees that all certificates representing the Purchased Shares
will be subject to such stock transfer orders and other restrictions as the
Company may deem advisable under the rules, regulations and other
requirements of the Securities and Exchange Commission (the "Commission"),
any stock exchange upon which the Common Stock is then listed and any
applicable federal or state securities laws, and the Company may cause the
following legend to be put on such certificates to make appropriate reference
to such restrictions:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
TRANSFERRED OR OTHERWISE HYPOTHECATED WITHOUT REGISTRATION UNDER SUCH
ACT OR PURSUANT TO AN EXEMPTION THEREFROM.
9. NO RIGHTS AS STOCKHOLDER.
Holder shall have no rights as a stockholder of the Company with respect
to the Warrant Shares until the date of the issuance to Holder of a stock
certificate or stock certificates evidencing such Warrant Shares. Except as
may be provided in Paragraph 6 of this Agreement, no adjustment shall be made
for dividends (ordinary or extraordinary, whether in cash, securities or
other property) or distributions or other rights for which the record date is
prior to the date such stock certificate is issued.
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10. MODIFICATION.
The Board or a committee thereof may modify, extend or renew the Warrant
or accept the surrender of, and authorize the grant of a new option in
substitution for, the Warrant (to the extent not previously exercised). No
modification of the Warrant shall be made without the consent of Holder which
would alter or impair any rights of Holder under the Warrant.
11. COVENANTS OF HOLDER AND THE COMPANY.
(a) DEMAND REGISTRATION.
i) At the later to occur of (i) one year following the closing of
any initial public offering of the Company's securities, and (ii) that date
upon which the Company is eligible to register the Warrant Shares for resale
on a Form S-3, the Holder may deliver a written request (the "Notice")
executed by the Holder and requesting registration of the resale by Holder of
all of the Purchased Shares. As soon as practicable after receipt of the
Notice, the Company shall at its sole cost and expense file a registration
statement with the Commission on Form S-3 or any successor form, under the
Securities Act, covering the issuance of the Warrant Shares issuable to the
Holder upon exercise of the Warrant or the resale of the Warrant Shares
issuable upon exercise of the Warrant by the Holder. The Company will use
its best efforts to have such registration statement declared effective as
soon as possible thereafter, and shall keep such registration statement
current and effective until such time as the Warrant Shares issuable upon
exercise of the Warrant may be sold by the Holder at any time without
restriction or pursuant to the provisions of Rule 144(k) of the Commission or
until such earlier date as all of the Purchased Shares registered pursuant to
such registration statement shall have been sold or otherwise transferred by
the Holder to a third party. The Company shall also prepare and file with
the Commission such amendments and supplements to such registration statement
(and the prospectus used in connection therewith) as may be necessary to
update and keep such registration statement (and the prospectus used in
connection therewith) current and effective for such three-year period and to
comply with the provisions of the Securities Act with respect to the sale of
all securities covered by such registration statement.
ii) The Company shall not be required to effect a registration
pursuant to this Section 11(a): (i) after the Company has effected one (1)
registration pursuant to this Section 11(a), and such registration has either
(A) been declared or ordered effective or (B) the request for such
registration has been subsequently withdrawn by the Holder (and such
withdrawal is not based on materially adverse information concerning the
Company of which the Holder was not reasonably aware at the time of such
request); or (ii) if the Warrant Shares issuable upon exercise of the Warrant
may be sold by the Holder at any time without restriction or pursuant to the
provisions of Rule 144(k); or (iii) if Form S-3 (or a successor or similar
form) is not available for such offering by the Holder; or (iv) if the
Company shall furnish to the Holder following receipt of his written request
for registration, a certificate signed on behalf of the Board of Directors by
the Chairman of the Board stating that in the good faith judgment of the
Board of Directors of the Company, it would be seriously detrimental to the
Company and its
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shareholders for such registration statement to be filed and it is therefore
essential to defer the filing of such registration statement, in which event
the Company shall have the right to defer such filing for a period of not
more than one hundred eighty (180) days after receipt of the Holder's request
for registration.
(b) PIGGYBACK REGISTRATION OF WARRANT SHARES. If, at any time
during the period commencing on the date that is 180 days from the date upon
which any initial public offering ("IPO") is declared effective by the
Commission and on or before December 31, 2002, the Company shall propose to
register any shares of Common Stock (but excluding any shares or securities
being registered pursuant to Form S-8 or Form S-4 or any successor form
thereto), the Company shall (i) give the Holder written notice, or
telegraphic, telecopy or telephonic notice followed as soon as practicable by
written confirmation thereof, of such proposed registration at least 20
business days prior to the filing of such registration statement and, (ii)
upon written notice, or telegraphic or telephonic notice followed as soon as
practicable by written confirmation thereof, given to the Company by the
Holder within 15 days after the giving of such written confirmation or
written notice by the Company, the Company shall include or cause to be
included in any such registration statement all or such portion of the
Warrant Shares as the Holder may request; PROVIDED, HOWEVER, that the Company
may at any time withdraw or cease proceeding with any such registration if it
shall at the same time withdraw or cease proceeding with the registration of
the Common Stock originally proposed to be registered; and PROVIDED FURTHER,
that in connection with any registered public offering involving an
underwriting, the managing underwriter may (if in its reasonable opinion
marketing factors so require) limit the number of securities (including any
Warrant Shares) included in such offering (other than securities of the
Company). In the event of any such limitation, the total number of Warrant
Shares to be offered for the account of the Holder in the registration shall
be reduced in proportion to the respective number of shares requested to be
included therein by all holders of the Company's Common Stock (other than the
Company) entitled to include shares of Common Stock in the registration to
the extent necessary to reduce the total number of shares proposed to be
registered to the number of shares recommended by the managing underwriter.
(c) COMPANY'S OBLIGATIONS IN REGISTRATION. The following
provisions shall also be applicable at the sole cost and expense of the
Company in the case of registrations under Section 11:
i) Following the effective date of such registration statement,
the Company shall, upon the request of the Holder, forthwith supply such
number of prospectuses meeting the requirements of the Securities Act as
shall be requested by the Holder to permit it to make a public distribution
of all of its Warrant Shares, provided that the Holder shall from time to
time furnish the Company with such appropriate information (relating to the
intentions of the Holder) in connection therewith as the Company shall
request in writing.
ii) the Company shall bear the entire cost and expense of the
registration of securities provided for in this Section (but not the selling
expenses of the Holder).
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iii) the Company shall indemnify and hold harmless the Holder from
and against any and all losses, claims, damages and liabilities (including
reasonable fees and expenses of counsel) arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained in
any registration statement or any prospectus included therein required to be
filed or furnished by reason of this Section or otherwise or in any
application or other filing under, the Securities Act or any other applicable
Federal or state securities law, or arising out of or based upon any omission
or alleged omission to state therein a material fact required to be stated
therein (i.e., in any such registration statement, prospectus, application or
other filing) or necessary to make the statements therein not misleading, to
which such person may become subject, or any violation or alleged violation
by the Company to which such Person may become subject, under the Securities
Act, the Exchange Act, or other Federal or state laws or regulations, at
common law or otherwise, except to the extent that such losses, claims,
damages or liabilities are caused by any such untrue statement or alleged
untrue statement or omission or alleged omission based upon and in strict
conformity with written information furnished to the Company by such person
expressly for use therein; PROVIDED HOWEVER, that the Holder shall at the
same time indemnify the Company, its directors, each officer signing the
related registration statement, and each person, if any, who controls the
Company within the meaning of the Securities Act, from and against any and
all losses, claims, damages and liabilities (including reasonable fees and
expenses of counsel) arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in any registration
statement or any prospectus included therein required to be filed or
furnished by reason of this Section, or otherwise or in any application or
other filing under, the Securities Act or any other applicable Federal or
state securities law, or arising out of or based upon any omission or alleged
omission to state therein a material fact required to be stated therein
(i.e., in any such registration statement, prospectus, application or other
filing) or necessary to make the statements therein not misleading, to which
such person may become subject, or any violation or alleged violation by the
Holder to which the Company, its directors, each officer signing the related
registration statement, and each person, if any, who controls the Company
within the meaning of the Securities Act, may become subject, under the
Securities Act, the Exchange Act, or other Federal or state laws or
regulations, at common law or otherwise, to the extent that such losses,
claims, damages or liabilities are caused by any such untrue statement or
alleged untrue statement or omission or alleged omission based upon and in
strict conformity with written information furnished to the Company by the
Holder expressly for use therein.
(d) In the event any person entitled to indemnification hereunder
receives in writing a complaint, claim or other written notice of any loss,
claim, damage, liability or action giving rise to a claim for indemnification
under Section 11(c)(iii), the person claiming indemnification under Section
11(c)(iii) shall promptly notify the person or persons against whom
indemnification is sought (the "Indemnitor") of such complaint, notice, claim
or action, and the Indemnitor shall have the right to investigate and defend
any such loss, claim, damage, liability or action. The person claiming
indemnification shall have the right to employ separate counsel in any such
action and to participate in the defense thereof but the fees and expenses of
such counsel shall not be at the expense of the Indemnitor. In no event
shall the Indemnitor be
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obligated to indemnify any person for any settlement of any claim or action
effected without the Indemnitor's consent, which consent shall not be
unreasonably withheld.
12. DISPUTES.
(a) ARBITRATION. All disputes arising in connection with this
Agreement shall be finally settled by arbitration in Los Angeles, California, in
accordance with the rules of the American Arbitration Association (the "Rules of
Arbitration") and judgment on the award rendered by the arbitration panel (the
"Arbitration Panel") may be entered in any court or tribunal of competent
jurisdiction.
(b) Any party which desires to initiate arbitration proceedings as
provided in Section 11(a) above may do so by delivering written notice to the
other party (the "Arbitration Notice") specifying (A) the nature of the dispute
or controversy to be arbitrated, (B) the name and address of the arbitrator
appointed by the party initiating such arbitration and -C- such other matters as
may be required by the Rules of Arbitration.
(c) The Parties shall appoint a single arbitrator who shall constitute
the Arbitration Panel hereunder. Should the parties not agree upon the
appointment of the arbitrator within 30 days of delivery of the Arbitration
Notice, the Arbitrator shall be appointed in accordance with the Rules of
Arbitration.
(d) In any arbitration proceeding conducted pursuant to the provisions
of this Section 11, both parties shall have the right to discovery, to call
witnesses and to cross-examine the opposing party's witnesses, either through
legal counsel, expert witnesses or both.
(e) FINALITY OF DECISION. All decisions of the Arbitration Panel
shall be final, conclusive and binding on all parties and shall not be subject
to judicial review. The arbitrator shall divide all costs (other than fees of
counsel) incurred in conducting the arbitration proceeding and the final award
in accordance with what they deem just and equitable under the circumstances.
(f) LIMITATIONS. Notwithstanding anything to the contrary contained
in Sections 11(a) and 11(b) above, any claim by either party for injunctive or
other equitable relief, including specific performance, may be brought in any
court of competent jurisdiction and any judgment, order or decree relating
thereto shall have precedence over any arbitral award or proceeding.
13. GENERAL PROVISIONS.
(a) FURTHER ASSURANCES. Holder shall promptly take all actions and
execute all documents requested by the Company which the Company deems to be
reasonably necessary to effectuate the terms and intent of this Agreement.
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(b) NOTICES. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be given to
the parties hereto as follows:
If to the Company, to:
Tag-It, Inc.
0000 Xxxxx Xxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Executive Officer
If to Holder, to the address set
forth in the records of the Company,
or at such other address or addresses as may have been furnished by either party
in writing to the other party hereto. Any such notice, request, demand or other
communication shall be effective (i) if given by mail, two days after such
communication is deposited in the mail by first-class certified mail, return
receipt requested, postage prepaid, addressed as aforesaid, or (ii) if given by
any other means, when delivered at the address specified in this subparagraph
(b).
(c) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA APPLICABLE TO CONTRACTS
MADE IN, AND TO BE PERFORMED WITHIN, THAT STATE. JURISDICTION AND VENUE OVER
ANY LEGAL ACTION BROUGHT HEREUNDER SHALL RESIDE EXCLUSIVELY IN THE COUNTY OF LOS
ANGELES, STATE OF CALIFORNIA. EACH OF THE PARTIES HERETO WAIVE THEIR RIGHT TO A
JURY TRIAL WITH RESPECT TO ANY SUCH LEGAL ACTIONS.
(d) ATTORNEYS' FEES. In the event that any action, suit or
arbitration or other proceeding is instituted upon any breach of this Agreement,
the prevailing party shall be paid by the other party thereto an amount equal to
all of the prevailing party's costs and expenses, including attorneys' fees
incurred in each and every such action, suit or proceeding (including any and
all appeals or petitions therefrom). As used in this Agreement, "attorneys'
fees" shall mean the full and actual cost of any legal services actually
performed in connection with the matter involved calculated on the basis of the
usual fee charged by the attorney performing such services and shall not be
limited to "reasonable attorneys' fees" as defined in any statute or rule of
court.
(e) AMENDMENT; WAIVER. This Agreement shall be binding upon and
inure to the benefit of the parties to this Agreement and their respective
successors, heirs and personal representatives. No provision of this Agreement
may be amended or waived unless in writing signed by all of the parties to this
Agreement. Waiver of any one provision of this Agreement shall not be deemed to
be a waiver of any other provision.
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(f) NO FINDERS. The parties each agree to indemnify and hold
harmless the other against any expense incurred by reason of any consulting,
brokerage commission or finder's fee alleged to be payable to any person in
connection with the transactions contemplated hereby because of any act,
omission or statement of indemnifying party or any dealings by the indemnifying
party with any consultant, broker or finder.
(g) EXPENSES. Each of the parties shall pay its own expenses
incurred in connection with the preparation of this Agreement and the
consummation of the transactions contemplated hereby.
(h) SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be or become
prohibited or invalid under applicable law, such provision shall be ineffective
to the extent of such prohibition or invalidity without invalidating the
remainder of such provision or the remaining provisions of this Agreement.
(i) COUNTERPARTS. This Agreement may be executed in several
counterparts, all of which together shall constitute one agreement binding on
all parties hereto, notwithstanding that all of the parties have not signed the
same counterpart.
(j) ENTIRE AGREEMENT. This Agreement constitutes and embodies the
entire understanding and agreement of the parties hereto relating to the subject
matter hereof and there are no other agreements or understandings, written or
oral, in effect between the parties relating to such subject matter except as
expressly referred to herein.
(k) MISCELLANEOUS. Titles and captions contained in this Agreement
are inserted for convenience of reference only and do not constitute a part of
this Agreement for any other purpose. Except as specifically provided herein,
neither this Agreement nor any right pursuant hereto or interest herein shall be
assignable by any of the parties hereto without the prior written consent of the
other party hereto.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
TAG-IT, INC.
By: /s/ XXXXX XXXX
------------------------------------
Xxxxx Xxxx
Its: President
/s/ XXXXXXXX XXXXXXXX
---------------------------------------
Xxxxxxxx Xxxxxxxx
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EXHIBIT "A"
NOTICE OF EXERCISE
(TO BE SIGNED ONLY UPON EXERCISE OF THE WARRANT)
TO: Tag-It, Inc.
The undersigned hereby irrevocably elects (to the extent indicated herein)
to exercise the purchase right represented by the Warrant granted to the
undersigned on June 1, 1994 and to purchase thereunder ___________ shares of
Common Stock of Tag-It, Inc., a California corporation (the "Company"). The
closing of the exercise of the purchase right shall take place at _____ on
_________________, ____ at the principal executive office of the Company located
at 0000 Xxxxx Xxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000.
HOLDER
_______________________________
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