Exhibit 6
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THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR UNDER APPLICABLE STATE SECURITIES LAWS. THIS WARRANT
MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT AS TO THIS WARRANT UNDER THE ACT AND APPLICABLE
STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO XXX
XXXXXX, INC. THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO
THE PROVISIONS OF RULE 144 OF THE ACT.
WARRANT TO ACQUIRE
1,020,200 SHARES OF COMMON STOCK OR
10,202 COMMON STOCK EQUIVALENT SHARES OF
XXX XXXXXX, INC.
March 11, 1998
THIS CERTIFIES THAT XXXXXX, XXXXXXX STRATEGIC PARTNERS FUND, L.P., a
limited partnership organized under the laws of the State of Delaware (the
"Purchaser") or its registered assigns (the Purchaser or its registered
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assign(s), as applicable, is referred to herein as the "Holder") is entitled to
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purchase, on the terms and subject to the conditions hereinafter set forth, from
XXX XXXXXX, INC., a Washington corporation (the "Company"), at any time after
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the date hereof and on or before 5:00 p.m., Seattle time, on the date that is
five (5) years after the date hereof (the "Exercise Period"), that number of
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shares (the "Warrant Shares") of common stock, par value $.01 per share, of the
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Company (the "Common Stock") or the number of shares of preferred stock
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designated as common stock equivalent shares (the "Common Stock Equivalent
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Shares" or the "Common Stock Equivalents"), as set forth in Section 2.1 hereof.
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The Company issued this Warrant and a Debenture to the Purchaser pursuant to the
Debenture Purchase Agreement, dated as of March 11, 1998, by and between the
Company and the Purchaser and other parties identified therein (the "Debenture
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Purchase Agreement"). This Warrant and the Debenture are not attached and each
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may be assigned or transferred separately. Capitalized words not defined herein
shall have the meaning set forth in the Debenture Purchase Agreement.
SECTION 1
Exercise Price
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The exercise price at which this Warrant may be exercised shall be $.01 per
share of Common Stock or $1.00 per Common Stock Equivalent Share (the "Exercise
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Price"), subject to any adjustment pursuant to Section 3.3.
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SECTION 2
Exercise of Warrant, Etc.
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2.1 Number of Shares for Which Warrant is Exercisable. This Warrant
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initially shall be exercisable for 1,020,200 shares of Common Stock or 10,202
Common Stock Equivalent Shares, subject to any adjustment pursuant to Section
3.3.
2.2 Procedure for Exercise of Warrant. The Warrant may be exercised in
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whole or in part during the Exercise Period by surrendering this Warrant, with
the purchase form provided for herein duly executed by the Holder or by the
Holder's duly authorized attorney-in-fact, at the principal office of the
Company or at such other office or agency in the United States as the Company
may designate by notice in writing to the Holder accompanied by payment in full,
in cash, bank cashier's check or certified check payable to the order of the
Company, of the Exercise Price payable in respect of the Warrant Shares being
exercised.
2.3 Conversion. This Warrant is exercisable at any time during the
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Exercise Period at the option of the Holder.
2.4 Transfer Restriction Legend. Each certificate for Warrant Shares
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initially issued upon exercise of this Warrant, unless at the time of exercise
such Warrant Shares are registered under the Act, shall bear the following
legend (and any additional legend required by any securities exchange upon which
such Warrant Shares may, at the time of such exercise, be listed) on the face
thereof:
"These securities have not been registered under the Securities Act of
1933, as amended, or under any state securities laws and may be offered,
sold or transferred only if registered pursuant to the provisions of such
laws, or if in the opinion of counsel satisfactory to the Company, an
exemption from such registration is available."
2.5 Acknowledgment of Continuing Obligation. The Company will, if the
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Holder exercises this Warrant in part, upon request of the Holder, acknowledge
in writing the Company's continuing obligation to the Holder in respect of any
rights to which the Holder shall continue to be entitled after such exercise in
accordance with this Warrant; provided, that the failure of the Holder to make
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any such request shall not affect the continuing obligation of the Company to
the Holder in respect of such rights.
2.6 Termination of Warrant. If the Holder fails to exercise this Warrant
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during the Exercise Period, then this Warrant shall terminate and thereafter be
null and void. Notwithstanding the preceding sentence, in the event that the
Company repays and redeems the Debenture in full at any time during the Exercise
Period, this Warrant shall remain in full force and effect until expiration of
the Exercise Period, when it shall expire.
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SECTION 3
Ownership of this Warrant.
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3.1 Deemed Holder. The Company may deem and treat the person in whose
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name this Warrant is registered as the Holder and owner hereof (notwithstanding
any notations of ownership or writing hereon made by anyone other than the
Company) for all purposes and shall not be affected by any notice to the
contrary, until presentation of this Warrant for registration of transfer as
provided in this Section 3.
3.2 Exchange, Transfer and Replacement. Subject to applicable federal and
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state securities laws, this Warrant and all rights hereunder are transferable in
whole or in part upon the books of the Company by the Holder in person or by
duly authorized attorney, and a new Warrant shall be made and delivered by the
Company, of the same tenor as this Warrant but registered in the name of the
transferee, upon surrender of this Warrant duly endorsed at said office or
agency of the Company. Upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant, and, in case of loss, theft or destruction, an indemnity or security
reasonably satisfactory to it, and upon surrender and cancellation of this
Warrant, if mutilated, the Company will make and deliver a new Warrant of like
tenor, in lieu of this Warrant; provided, however, that if the Holder of this
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Warrant is the original Holder, an affidavit of lost Warrant shall be sufficient
for all purposes of this Section 3.2. This Warrant shall be promptly canceled
by the Company upon the surrender hereof in connection with any exchange,
transfer or replacement. The Company shall pay all reasonable expenses, taxes
(other than stock transfer taxes and income taxes) and other charges payable by
it in connection with the preparation, execution and delivery of Warrant Shares
pursuant to this Section 3.2.
3.3 Antidilution.
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(a) If at any time while all or any portion of this Warrant remains
outstanding all or any portion of this Warrant shall be exercised subsequent to
(i) any sales of shares of Common Stock or Common Stock Equivalent Shares of the
Company at a price per share less than the Exercise Price per share then
applicable to this Warrant, or (ii) any issuance of any security convertible
into shares of Common Stock or Common Stock Equivalent Shares of the Company
with a conversion price per share less than the Exercise Price per share then
applicable to this Warrant, or (iii) any issuance of any option, warrant or
other right to purchase shares of Common Stock or Common Stock Equivalent Shares
of the Company at any Exercise Price per share less than the Exercise Price per
share then applicable to this Warrant (except pursuant to an employee or
director stock option plan or similar compensation plan approved by the Board of
Directors); then in any and every such event the Exercise Price per share for
this Warrant shall be reduced and shall be equal to such lower sales, conversion
or Exercise Price per share.
(b) If all or any portion of this Warrant shall be exercised subsequent to
any stock dividend, split-up, recapitalization, merger, consolidation,
combination or exchange of shares, reorganization or liquidation of the Company
occurring after the date hereof, as a result of which
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such shares of any class shall be issued in respect of outstanding shares of
Common Stock or Common Stock Equivalent Shares of the Company (or shall be
issuable in respect of securities convertible into shares of Common Stock or
Common Stock Equivalent) or upon exercise of rights (other than this Warrant) to
purchase shares of Common Stock or Common Stock Equivalent Shares or shares of
such Common Stock or Common Stock Equivalents shall be changed into the same or
a different number of shares of the same or another class or classes, the Holder
exercising this Warrant shall receive the aggregate number and class of shares
which such Holder would have received if this Warrant had been exercised
immediately before such stock dividend, split-up, recapitalization, merger,
consolidation, combination or exchange of shares, reorganization or liquidation.
SECTION 4
Special Agreements of the Company
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The Company covenants and agrees that:
4.1 Reservation of Shares. The Company will reserve and set apart and
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have at all times, free from preemptive rights, a number of shares of authorized
but unissued Common Stock or Common Stock Equivalent Shares deliverable upon the
exercise of this Warrant or of any other rights or privileges provided for
therein sufficient to enable the Company at any time to fulfill all its
obligations thereunder.
4.2 No Impairment. The Company will not, by amendment of its Articles of
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Incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, or any other similar voluntary action, avoid or seek to
avoid the observance or performance of any of the terms of this Warrant, but
will at all times in good faith assist in the carrying out of all such terms and
in the taking of all such action as may be necessary or appropriate in order to
protect the rights of the Holder against impairment due to such event. Without
limiting the generality of the foregoing, the Company (a) will not increase the
par value of any shares of stock receivable on exercise of this Warrant above
the Exercise Price then in effect, (b) will take all action that may be
necessary or appropriate in order that the Company may validly and legally issue
fully paid and nonassessable shares of stock, free from all taxes, liens and
charges with respect to the issue thereof, on the exercise of this Warrant from
time to time, and (c) will not consolidate with or merge into any other person
or permit any such person to consolidate with or merge into the Company, unless
such other person (or, in the case of a merger or consolidation in which the
Company is the surviving entity, the person issuing the securities involved in
such merger or consolidation) shall expressly assume in writing and will be
bound by all the terms of this Warrant.
4.3 CFO's Certificate as to Adjustments. In each case of any adjustment
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or readjustment in the shares of Common Stock or Common Stock Equivalent Shares
issuable on the exercise of this Warrant, the Chief Financial Officer of the
Company will promptly compute such adjustment or readjustment in accordance with
the terms of this Warrant and prepare a
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Exhibit 6
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certificate setting forth such adjustment or readjustment, the Exercise Price
resulting therefrom, and the increase or decrease, if any, of the number of
shares purchasable at such price upon exercise of this Warrant showing in detail
the facts and computation upon which such adjustment or readjustment is based.
The Company will forthwith mail a copy of each such certificate to each
registered Holder of this Warrant, and will, on the written request at any time
of the Holder of this Warrant, furnish to such Holder a like certificate setting
forth the Exercise Price of the Warrant at the time in effect and showing how it
was calculated.
4.4 Notices of Record Date. In the event the Company (a) takes a record
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of the holders of any class of securities for the purpose of determining the
holders thereof who are entitled to receive any dividend on, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right, or (b)
consolidates or merges into, or transfers all or substantially all of its assets
to, another corporation, or (c) dissolves or liquidates (the events described in
the foregoing clauses (b) and (c) being hereinafter referred to as a
"Fundamental Change"), then and in each such event the Company will mail or
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cause to be mailed to the registered Holder of this Warrant a notice specifying
(i) the date on which any such record is to be taken for the purpose of such
dividend, distribution or right, and stating the amount and character of such
dividend, distribution or right, (ii) the date on which any such Fundamental
Change is to be effected, and the time, if any to be fixed, as of which the
holders of record of Common Stock or Common Stock Equivalent Shares shall be
entitled to exchange their shares of Common Stock or Common Stock Equivalents
for securities or other property, if any, deliverable on any Fundamental Change
and (iii) the amount and character of any stock or other securities, or rights
or options with respect thereto, proposed to be issued or granted, the date of
such proposed issue or grant and the persons or class of persons to whom such
proposed issue or grant is to be offered or made. Such notice shall also state
that the action in question or the record date is subject to the effectiveness
of a registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), or a favorable vote of stockholders, if either is required.
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Such notice shall be mailed at least 20 days prior to the date specified in such
notice on which any such action is to be taken or 20 days prior to the record
date therefor, whichever is earlier.
SECTION 5
Notices
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Any notice or other document required or permitted to be given or delivered
to the Holder or the Company shall be delivered, or sent by certified or
registered mail, to the Holder or the Company at the address as set forth in
Section 10.4 of the Debenture Purchase Agreement.
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SECTION 6
Governing Law
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This Warrant shall be governed by, and construed and enforced in accordance
with, the internal laws of the State of Delaware, without giving effect to its
conflicts of laws provisions.
SECTION 7
Binding Effect on the Company's Successor
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This Warrant shall be binding upon any corporation or entity succeeding to
the Company by merger, consolidation or acquisition of all or substantially all
of the Company's assets.
[Balance of Page Left Blank Intentionally -- Signature Page Follows]
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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer under its corporate seal, attested by its duly
authorized officer, and to be dated as of the date first hereinabove set forth.
Dated: Xxxxx 00, 0000
XXXXXX: XXX XXXXXX, INC.
___________________________________ By: _____________________________________
Xxxxxxx X. Xxxxxxxx, Xx., Secretary Name: Xxx X. Xxxxxxx
Title: President and Chief Executive
Officer
ASSIGNMENT
(TO BE EXECUTED BY THE REGISTERED HOLDER IF IT DESIRES
AND IS PERMITTED TO TRANSFER THE WARRANT OF)
XXX XXXXXX, INC.
FOR VALUE RECEIVED ___________________________________ hereby sells,
assigns and transfers unto __________________________ the right to purchase
[______%] of the number of shares of Common Stock or Common Stock Equivalent
Shares covered by the within Warrant, and does hereby irrevocably constitute
and appoint ________________________________________ Attorney to transfer the
said Warrant on the books of the Company (as defined in said Warrant) with full
power of substitution.
The undersigned represents and warrants to the Company that this assignment
has been effected in compliance with all applicable provisions of said Warrant
and any applicable provisions of the Debenture Purchase Agreement referred to in
such Warrant.
Signature: __________________________(SEAL)
Address: ________________________________
________________________________
Dated: ___________________
In the presence of
___________________________ _____________________________________
(Witness) (Signature of Witness)
NOTICE: The signature to the foregoing Assignment must correspond to the name
as written upon the face of the within Warrant in every particular,
without alteration or enlargement or any change whatsoever.
PURCHASE FORM
(TO BE EXECUTED ONLY UPON EXERCISE OF WARRANT)
The undersigned registered owner of this Warrant irrevocably exercises this
Warrant for and purchases Common Stock or Common Stock Equivalent Shares, par
value $.01 per share, of Xxx Xxxxxx, Inc., a Washington corporation, purchasable
with this Warrant, and herewith makes payment therefor: (circle the following
as applicable)
1. By cash in the amount of $________.
2. By bank cashier's check in the amount of $_________.
3. By certified check in the amount of $_________.
all at the price and on the terms and conditions specified in this Warrant and
requests that certificates for the shares of Common Stock or Common Stock
Equivalent Shares hereby purchased (and any securities or other property
issuable upon such exercise) be issued in the name of and delivered
to___________________________, whose address is
_____________________________________ and, if such shares shall not include all
of the shares issuable as provided in this Warrant that a new Warrant of like
tenor and date for the balance of the shares issuable thereunder be delivered to
the undersigned.
Dated:
___________________________________
(Signature of Registered Owner)
___________________________________
(Street Address)
___________________________________
(City) (State) (Zip Code)
