EXHIBIT 4.6
THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THEY MAY NOT BE SOLD, OFFERED
FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO SUCH SECURITIES UNDER THE ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.
XXXX.XXX, INC.
WARRANT TO PURCHASE COMMON STOCK
No. W-3 May 13, 1999
Void After May 13, 2002
THIS CERTIFIES THAT, for value received, REEDLAND CAPITAL PARTNERS, with its
principal office at 00 Xxxxx Xxxxx Xxxx., Xxxxx 000, Xxxxx Xxxxxx, XX 00000, or
assigns (the "Holder"), is entitled to subscribe for and purchase at the
Exercise Price (defined below) from XXXX.XXX, INC., a Delaware corporation,
with its principal office at 0000 Xxxxxx Xxxx, Xxxxx Xxxx, Xx 00000 (the
"Corporation") up to one hundred twenty four thousand nine hundred ninety five
(124,995) shares of the Common Stock of the Corporation (the "Common Stock").
1. DEFINITIONS. As used herein, the following terms shall have the
following respective meanings:
(a) "Exercise Period" shall mean the period commencing with the date
hereof and ending three (3) years from the date hereof, unless sooner
terminated as provided below.
(b) "Exercise Price" shall mean $26.325 per share, subject to
adjustment pursuant to Section 5 below.
(c) "Exercise Shares" shall mean the shares of the Corporation's
Preferred Stock issuable upon exercise of this Warrant.
2. EXERCISE OF WARRANT. The rights represented by this Warrant may be
exercised in whole or in part at any time during the Exercise Period, by
delivery of the following to the Corporation at its address set forth above (or
at such other address as it may designate by notice in writing to the Holder):
(a) An executed Notice of Exercise in the form attached hereto;
(b) Payment of the Exercise Price either (i) in cash or by check, or
(ii) by cancellation of indebtedness; and
(c) This Warrant.
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Upon the exercise of the rights represented by this Warrant, a certificate
or certificates for the Exercise Shares so purchased, registered in the name of
the Holder or persons affiliated with the Holder, if the Holder so designates,
shall be issued and delivered to the Holder within a reasonable time after the
rights represented by this Warrant shall have been so exercised.
The person in whose name any certificate or certificates for Exercise
Shares are to be issued upon exercise of this Warrant shall be deemed to have
become the holder of record of such shares on the date on which this Warrant
was surrendered and payment of the Exercise Price was made, irrespective of the
date of delivery of such certificate or certificates, except that, if the date
of such surrender and payment is a date when the stock transfer books of the
Corporation are closed, such person shall be deemed to have become the holder
of such shares at the close of business on the next succeeding date on which
the stock transfer books are open.
2.1 Net Exercise. Notwithstanding any provisions herein to the
contrary, if the fair market value of one share of the Corporation's Common
Stock is greater than the Exercise Price (at the date of calculation as set
forth below), in lieu of exercising this Warrant by payment of cash, the Holder
may elect to receive shares equal to the value (as determined below) of this
Warrant (or the portion thereof being canceled) by surrender of this Warrant at
the principal office of the Company together with the properly endorsed Notice
of Exercise in which event the Company shall issue to the Holder a number of
shares of Common Stock computed using the following formula:
X = Y (A-B)
-------
A
Where X = the number of shares of Common Stock to be issued to the
Holder
Y = the number of shares of Common Stock purchasable under the
Warrant or, if only a portion of the Warrant is being
exercised, the portion of the Warrant being canceled (at the
date of such calculation)
A = the fair market value of one share of the Corporation's
Common Stock (at the date of such calculation)
B = Exercise Price (as adjusted to the date of such calculation)
For purposes of the above calculation, the fair market value of one share
of Common Stock shall be the closing bid price of the Common Stock on the
Nasdaq National Market ("Nasdaq") on the last business day immediately
preceding the date of exercise of this warrant, or if Nasdaq is not the
principal trading market for such security, the last closing bid price of such
security on the principal securities exchange or trading market where such
security is listed or traded.
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3. COVENANTS OF THE CORPORATION.
3.1 Covenants as to Exercise Shares. The Corporation covenants and
agrees that all Exercise Shares that may be issued upon the exercise of the
rights represented by this Warrant will, upon issuance, be validly issued and
outstanding, fully paid and nonassessable, and free from all taxes, liens and
charges with respect to the issuance thereof. The Corporation further
covenants and agrees that the Corporation will at all times during the Exercise
Period, have authorized and reserved, free from preemptive rights, a sufficient
number of shares of its Common Stock to provide for the exercise of the rights
represented by this Warrant. If at any time during the Exercise Period the
number of authorized but unissued shares of Common Stock shall not be
sufficient to permit exercise of this Warrant, the Corporation will take such
corporate action as may, in the opinion of its counsel, be necessary to
increase its authorized but unissued shares of Common Stock to such number of
shares as shall be sufficient for such purposes.
3.2 No Impairment. Except and to the extent as waived or consented
to by the Holder, the Corporation will 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 voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed hereunder by the Corporation, 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 may be necessary or appropriate in order to
protect the exercise rights of the Holder against impairment.
3.3 Notices of Record Date. In the event of any taking by the
Corporation 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 (other than a cash dividend which is the same as cash dividends paid
in previous quarters) or other distribution, the Corporation shall mail to the
Holder, at least ten (10) days prior to the date specified herein, a notice
specifying the date on which any such record is to be taken for the purpose of
such dividend or distribution.
4. REPRESENTATIONS OF HOLDER.
4.1 Acquisition of Warrant for Personal Account. The Holder
represents and warrants that it is acquiring the Warrant solely for its account
for investment and not with a view to or for sale or distribution of said
Warrant or any part thereof. The Holder also represents that the entire legal
and beneficial interests of the Warrant and Exercise Shares the Holder is
acquiring is being acquired for, and will be held for, its account only.
4.2 Securities Are Not Registered.
(a) The Holder understands that the Warrant and the Exercise
Shares have not been registered under the Securities Act of 1933, as amended
(the "Act") on the basis that no distribution or public offering of the stock
of the Corporation is to be effected. The Holder realizes that the basis for
the exemption may not be present if, notwithstanding its
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representations, the Holder has a present intention of acquiring the securities
for a fixed or determinable period in the future, selling (in connection with a
distribution or otherwise), granting any participation in, or otherwise
distributing the securities. The Holder has no such present intention.
(b) The Holder recognizes that the Warrant and the Exercise
Shares must be held indefinitely unless they are subsequently registered under
the Act or an exemption from such registration is available. The Holder
recognizes that, except as set forth in that certain engagement letter, dated
March 1, 1999, by and between Holder and the Corporation, the Corporation has
no obligation to register the Warrant or the Exercise Shares of the
Corporation, or to comply with any exemption from such registration.
(c) The Holder is aware that neither the Warrant nor the
Exercise Shares may be sold pursuant to Rule 144 adopted under the Act unless
certain conditions are met, including, among other things, the existence of a
public market for the shares, the availability of certain current public
information about the Company, the resale following the required holding period
under Rule 144 and the number of shares being sold during any three month
period not exceeding specified limitations. Holder is aware that the
conditions for resale set forth in Rule 144 have not been satisfied and that
the Corporation presently has no plans to satisfy these conditions in the
foreseeable future.
4.3 Disposition of Warrant and Exercise Shares.
(a) Subject to Section 9, the Holder further agrees not to
make any disposition of all or any part of the Warrant or Exercise Shares in
any event unless and until:
(i) The Corporation shall have received a letter
secured by the Holder from the Securities and Exchange Commission stating that
no action will be recommended to the Commission with respect to the proposed
disposition; or
(ii) There is then in effect a registration
statement under the Act covering such proposed disposition and such disposition
is made in accordance with said registration statement; or
(iii) The Holder shall have notified the Corporation
of the proposed disposition and shall have furnished the Corporation with a
detailed statement of the circumstances surrounding the proposed disposition,
and if reasonably requested by the Company, the Holder shall have furnished the
Corporation with an opinion of counsel, reasonably satisfactory to the Company,
for the Holder to the effect that such disposition will not require
registration of such Warrant or Exercise Shares under the Act or any applicable
state securities laws.
(b) The Holder understands and agrees that all certificates
evidencing the shares to be issued to the Holder may bear the following legend:
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THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"). THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO THE SECURITIES UNDER THE ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
(c) The Holder hereby agrees not to sell or otherwise
transfer or dispose of all or any part of this Warrant or the Exercise Shares
during a period specified by the representative of the underwriters of Common
Stock (not to exceed one hundred eighty (180) days) following the effective
date of the registration statement of the Corporation filed under the Act.
Holder further agrees that the Corporation may impose stop-transfer
instructions with respect to securities subject to the foregoing restrictions
until the end of such period.
5. ADJUSTMENT OF EXERCISE PRICE. In the event of changes in the
outstanding Common Stock of the Corporation by reason of stock dividends,
split-ups, recapitalizations, reclassifications, combinations or exchanges of
shares, separations, reorganizations, liquidations, or the like, the number and
class of shares available under the Warrant in the aggregate and the Exercise
Price shall be correspondingly adjusted to give the Holder of the Warrant, on
exercise for the same aggregate Exercise Price, the total number, class, and
kind of shares as the Holder would have owned had the Warrant been exercised
prior to the event and had the Holder continued to hold such shares until after
the event requiring adjustment; provided, however, that such adjustment shall
not be made with respect to, and this Warrant shall terminate if not exercised
prior to, the events set forth in Section 7 below. The form of this Warrant
need not be changed because of any adjustment in the number of Exercise Shares
subject to this Warrant.
6. FRACTIONAL SHARES. No fractional shares shall be issued upon the
exercise of this Warrant as a consequence of any adjustment pursuant hereto.
All Exercise Shares (including fractions) issuable upon exercise of this
Warrant may be aggregated for purposes of determining whether the exercise
would result in the issuance of any fractional share. If, after aggregation,
the exercise would result in the issuance of a fractional share, the
Corporation shall, in lieu of issuance of any fractional share, pay the Holder
otherwise entitled to such fraction a sum in cash equal to the product
resulting from multiplying the then current fair market value of an Exercise
Share by such fraction.
7. EARLY TERMINATION. In the event of, at any time during the Exercise
Period, a capital reorganization, or any reclassification of the capital stock
of the Corporation (other than a change in par value or from par value to no
par value or no par value to par value or as a result of a stock dividend or
subdivision, split-up or combination of shares), or the consolidation or merger
of the Corporation with or into another corporation (other than a merger solely
to effect a reincorporation of the Corporation into another state), or the sale
or other disposition of all or substantially all the properties and assets of
the Corporation in its entirety to any other person, the Corporation shall
provide to the Holder twenty (20) days advance written notice of such,
reorganization, reclassification, consolidation, merger or sale or other
disposition of the
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Corporation's assets, and this Warrant shall terminate unless exercised prior
to the occurrence of such reorganization, reclassification, consolidation,
merger or sale or other disposition of the Corporation's assets.
8. NO STOCKHOLDER RIGHTS. This Warrant in and of itself shall not entitle
the Holder to any voting rights or other rights as a stockholder of the
Corporation.
9. TRANSFER OF WARRANT. Neither this Warrant nor any of the rights
hereunder shall be transferable.
10. LOST, STOLEN, MUTILATED OR DESTROYED WARRANT. If this Warrant is lost,
stolen, mutilated or destroyed, the Corporation may, on such terms as to
indemnity or otherwise as it may reasonably impose (which shall, in the case of
a mutilated Warrant, include the surrender thereof), issue a new Warrant of
like denomination and tenor as the Warrant so lost, stolen, mutilated or
destroyed. Any such new Warrant shall constitute an original contractual
obligation of the Corporation, whether or not the allegedly lost, stolen,
mutilated or destroyed Warrant shall be at any time enforceable by anyone.
11. NOTICES, ETC. All notices and other communications required or
permitted hereunder shall be in writing and shall be sent by telex, telegram,
express mail or other form of rapid communications, if possible, and if not
then such notice or communication shall be mailed by first-class mail, postage
prepaid, addressed in each case to the party entitled thereto at the following
addresses: (a) if to the Corporation, to xXxx.xxx, Inc., 0000 Xxxxxx Xxxx,
Xxxxx Xxxx, XX 00000, Attention: President and Chief Executive Officer, and
(b) if to the Holder, to Reedland Capital Partners, 00 Xxxxx Xxxxx Xxxx., Xxxxx
000, Xxxxx Xxxxxx, XX 00000, Attention: Xxxxxx X. Xxxxxxx, Managing Director,
or at such other address as one party may furnish to the other in writing.
Notice shall be deemed effective on the date dispatched if by personal
delivery, telecopy, telex or telegram, two days after mailing if by express
mail, or three days after mailing if by first-class mail.
12. ACCEPTANCE. Receipt of this Warrant by the Holder shall constitute
acceptance of and agreement to all of the terms and conditions contained
herein.
13. GOVERNING LAW. This Warrant and all rights, obligations and
liabilities hereunder shall be governed by the laws of the State of California.
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IN WITNESS WHEREOF, the Corporation has caused this Warrant to be executed
by its duly authorized officer as of May 13, 1999.
XXXX.XXX, INC.
By _______________________________
Xxxx X. Xxxxx
Chief Financial Officer
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NOTICE OF EXERCISE
TO: XXXX.XXX, INC.
(1) [ ] The undersigned hereby elects to purchase 124,995 shares
of the Common Stock of xXxx.xxx, Inc. (the "Company") pursuant to the terms of
the attached Warrant, and tenders herewith payment of the exercise price in
full, together with all applicable transfer taxes, if any.
[ ] The undersigned hereby elects to purchase ________ shares
of the Common Stock of xXxx.xxx, Inc. (the "Company") pursuant to the terms of
the net exercise provisions set forth in Section 2.1 of the attached Warrant,
and shall tender payment of all applicable transfer taxes, if any.
(2) Please issue a certificate or certificates representing said
shares of Common Stock in the name of the undersigned or in such other name as
is specified below:
________________________
(Name)
________________________
________________________
(Address)
(3) The undersigned represents that (i) the aforesaid shares of Common
Stock are being acquired for the account of the undersigned for investment and
not with a view to, or for resale in connection with, the distribution thereof
and that the undersigned has no present intention of distributing or reselling
such shares; (ii) the undersigned is aware of the Company's business affairs
and financial condition and has acquired sufficient information about the
Company to reach an informed and knowledgeable decision regarding its
investment in the Company; (iii) the undersigned is experienced in making
investments of this type and has such knowledge and background in financial and
business matters that the undersigned is capable of evaluating the merits and
risks of this investment and protecting the undersigned's own interests; (iv)
the undersigned understands that the shares of Common Stock issuable upon
exercise of this Warrant have not been registered under the Securities Act of
1933, as amended (the "Securities Act"), by reason of a specific exemption from
the registration provisions of the Securities Act, which exemption depends
upon, among other things, the bona fide nature of the investment intent as
expressed herein, and, because such securities have not been registered under
the Securities Act, they must be held indefinitely unless subsequently
registered under the Securities Act or an exemption from such registration is
available; (v) the undersigned is aware that the aforesaid shares of Common
Stock may not be sold pursuant to Rule 144 adopted under the Securities Act
unless certain conditions are met and until the undersigned has held the shares
for the number of years prescribed by Rule 144, that among the conditions for
use of the Rule is the availability of current information to the public about
the Company and the Company has not made such information available and has no
present plans to do so; and (vi) the undersigned agrees not to make any
disposition of all or any part of the aforesaid shares of Common Stock unless
and until there is then in effect a registration statement under the Securities
Act covering such proposed disposition and such disposition is made in
accordance with said registration statement, or the undersigned has provided
the Company with an opinion of counsel satisfactory to the Company, stating
that such registration is not required.
_______________________ ____________________________
(Date) (Signature)
____________________________
(Print name)
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