WARRANT AGREEMENT
This WARRANT AGREEMENT (this "Agreement") is made and entered into as of
the 26th day of November, 1997, by and between Tag-It Pacific, Inc., Inc., a
Delaware corporation (the "Company"), and Troop Xxxxxxxxx Xxxxxxx & Xxxxxx, LLP
("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 $10.00, 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 such
number of shares of Common Stock of the Company (the "Warrant Shares") as is
equal to the quotient of (i) 120% of the actual fees, costs and disbursements
billed by Holder to the Company and its affiliates in connection with the
Company's initial public offering, divided by (ii) an amount equal to 90% of the
greater of $7.50 or the actual initial issuance price of a share of the
Company's Common Stock in its initial public offering, at an exercise price per
share equal to 90% of the actual initial issuance price of a share of the
Company's Common Stock in the initial public offering (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 NOVEMBER 26,
1997. 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 PACIFIC, 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) THE HOLDER 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
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OBLIGATING THE TRANSFEREE TO COMPLY WITH ALL TERMS AND CONDITIONS OF THIS
AGREEMENT APPLICABLE TO THE TRANSFEROR.
(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.
(d) The Holder agrees to enter into a lock-up agreement with the
underwriters of the initial public offering of the Company's common stock (the
"IPO") pursuant to which Holder agrees not to sell the Warrant Shares for such
period of time from and after the effective date of such public offering as may
be requested by such underwriters; provided that the term of the lock-up
agreement shall not exceed the term of similar lock-up agreements executed in
favor of the underwriter by the senior officers of the Company.
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
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(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 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
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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).
(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:
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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.
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
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(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 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 an
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.
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(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).
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,
8
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 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.
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(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.
(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 Pacific, 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
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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.
(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 PACIFIC, INC.
By: \s\ Xxxxx Xxxx
----------------------------------
Xxxxx Xxxx
Its: President
TROOP XXXXXXXXX XXXXXXX & XXXXXX LLP
By: /s/ Xxxxxx Xxxxxxxx
----------------------------------
Xxxxxx Xxxxxxxx
Its: Partner
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EXHIBIT "A"
NOTICE OF EXERCISE
(TO BE SIGNED ONLY UPON EXERCISE OF THE WARRANT)
TO: Tag-It Pacific, 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 November 26, 1997 and to purchase thereunder ___________ shares
of Common Stock of Tag-It Pacific, Inc., a Delaware 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
By:
-------------------------------
Its:
-------------------------------
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