EXHIBIT 99.03
EXHIBIT A TO
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SECURITIES
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PURCHASE AGREEMENT
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THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAW, AND MAY NOT BE OFFERED FOR SALE, SOLD OR
TRANSFERRED UNLESS A REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS SHALL BE EFFECTIVE WITH RESPECT THERETO, OR AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS IS
AVAILABLE IN CONNECTION WITH SUCH OFFER, SALE OR TRANSFER.
Warrant to Purchase Issue Date: October 6, 1999
___________ Shares
WARRANT TO PURCHASE COMMON STOCK
of
ASYMETRIX LEARNING SYSTEMS, INC.
THIS CERTIFIES that _________________ or any subsequent holder hereof (the
"Holder"), has the right to purchase from ASYMETRIX LEARNING SYSTEMS, INC., a
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Delaware corporation (the "Company"), up to ________________ fully paid and
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nonassessable shares of the Company's Common Stock, par value $.01 per share
(the "Common Stock"), subject to adjustment as provided herein, at a price equal
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to the Exercise Price (as defined below), at any time beginning on the date on
which this Warrant is issued (the "Issue Date") and ending at 5:00 p.m., eastern
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time, on the date that is the fifth (5/th/) anniversary of the Issue Date (the
"Expiration Date"). This Warrant is issued, and all rights hereunder shall be,
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subject to all of the conditions, limitations and provisions set forth herein
and in the Securities Purchase Agreement of even date herewith by and among the
Company and the Purchasers named therein (the "Securities Purchase Agreement").
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Capitalized terms used herein and not otherwise defined shall have the
respective meanings set forth in the Securities Purchase Agreement or the
Certificate of Designation relating to the Series A Convertible Preferred Stock
issued pursuant to the Securities Purchase Agreement ("Certificate of
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Designation").
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1. Exercise.
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(a) Right to Exercise; Exercise Price. The Holder shall have the right to
exercise this Warrant at any time and from time to time during the period
beginning on the Issue Date and ending on the Expiration Date as to all or any
part of the shares of Common Stock covered hereby (the "Warrant Shares"). The
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"Exercise Price" payable by the Holder in connection with the exercise of this
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Warrant shall be equal to $9.30 (subject to adjustment as provided herein).
(b) Exercise Notice. In order to exercise this Warrant, the Holder shall
send by facsimile transmission, at any time prior to 7:00 p.m., eastern time, on
the Business Day (as defined below) on which the Holder wishes to effect such
exercise (the "Exercise Date"), to the Company a copy of the notice of exercise
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in the form attached hereto as Exhibit A (the "Exercise Notice") stating the
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number of Warrant Shares as to which such exercise applies and the calculation
therefor. As used herein, "Business Day" shall mean any day on which the New
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York Stock Exchange (the "NYSE") and commercial banks in the city of New York
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are open for business. The Holder shall thereafter deliver to the Company the
original Exercise Notice, the original Warrant and the Exercise Price. In the
case of a dispute as to the calculation of the Exercise Price or the number of
Warrant Shares issuable hereunder (including without limitation the calculation
of any adjustment to the Exercise Price pursuant to Section 6 below), the
Company shall promptly issue to the Holder the number of Warrant Shares that are
not disputed and shall submit the disputed calculations to the Company's
independent accountant within two (2) Business Days following the Exercise Date.
The Company shall cause such accountant to calculate the Exercise Price and/or
the number of Warrant Shares issuable hereunder and to notify the Company and
the Holder of the results in writing no later than two Business Days following
the day on which such accountant received the disputed calculations. Such
accountant's calculation shall be deemed conclusive absent manifest error. The
fees of any such accountant shall be borne by the party whose calculations were
most at variance with those of such accountant.
(c) Cancellation of Warrant. This Warrant shall be canceled upon its
exercise and, if this Warrant is exercised in part, the Company shall, at the
time that it delivers Warrant Shares to the Holder pursuant to such exercise as
provided herein, issue a new warrant, and deliver to the Holder a certificate
representing such new warrant, with terms identical in all respects to this
Warrant (except that such new warrant shall be exercisable into the number of
shares of Common Stock with respect to which this Warrant shall remain
unexercised); provided, however, that the Holder shall be entitled to exercise
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all or any portion of such new warrant at any time following the time at which
this Warrant is exercised, regardless of whether the Company has actually issued
such new warrant or delivered to the Holder a certificate therefor.
(d) Expiration Upon Certain Events. Commencing on the two-year
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anniversary of the Issue Date, in the event that during any period of twenty
(20) consecutive Trading Days, the Closing Trade Price (as defined in the
Certificate of Designation) of the Common Stock exceeds an amount equal to
product of (i) the Exercise Price (subject to adjustment as provided herein)
and (ii) two and
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one-half (2.5), the Company may deliver to the Holder, as long as the Expiration
Condition (as defined below) has been satisfied, a written notice to such effect
(a "Cancellation Notice") and this Warrant shall expire on the date which is
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five (5) Trading Days following the business day on which such Cancellation
Notice is delivered to the Holder. The term "Expiration Condition" shall mean
that either (A) the Registration Statement (as defined in the Registration
Rights Agreement between the Company and the Holder) has been declared effective
and is available for the resale of (i) all of the Warrant Shares into which this
Warrant is exercisable and (ii) all of the Conversion Shares issuable upon
conversion of the Preferred Shares (each as defined in the Certificate of
Designation)(assuming the minimum applicable Conversion Price and that no
conditions to or limitations on the conversion of the Preferred Shares then
exist) or (B) the Warrant Shares may be sold pursuant to Rule 144(k) under the
Securities Act of 1933, as amended.
2. Delivery of Warrant Shares Upon Exercise. Upon receipt of a Exercise
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Notice pursuant to paragraph 1 above, the Company shall, (A) in the case of a
Cashless Exercise (as defined below), no later than the close of business on the
third (3rd) Business Day following the Exercise Date set forth in such Exercise
Notice, (B) in the case of a Cash Exercise (as defined below) no later than the
close of business on the later to occur of (i) the third (3rd) Business Day
following the Exercise Date set forth in such Exercise Notice and (ii) such
later date on which the Company shall have received payment of the Exercise
Price, and (C) with respect to Warrant Shares which are disputed as described in
paragraph 1(b) above, and required to be delivered by the Company pursuant to
the accountant's calculations described therein, the close of business on the
third (3/rd/) Business Day following the determination made pursuant to
paragraph 1(b) (the "Delivery Date"), issue and deliver or caused to be
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delivered to the Holder the number of Warrant Shares as shall be determined as
provided herein. The Company shall effect delivery of Warrant Shares to the
Holder by, as long as the Company's designated transfer agent for the Common
Stock (the "Transfer Agent") participates in the Depository Trust Company
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("DTC") Fast Automated Securities Transfer program ("FAST"), crediting the
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account of the Holder or its nominee at DTC (as specified in the applicable
Exercise Notice) with the number of Warrant Shares required to be delivered, no
later than the close of business on such Delivery Date. In the event that the
Transfer Agent is not a participant in FAST, or if Warrant Shares are not
otherwise eligible for delivery through FAST, or if the Holder so specifies in
an Exercise Notice or otherwise in writing on or before the Exercise Date, the
Company shall effect delivery of Warrant Shares by delivering to the Holder or
its nominee physical certificates representing such Warrant Shares, no later
than the close of business on such Delivery Date. Warrant Shares delivered to
the Holder shall not contain any restrictive legend as long as the resale of
such Warrant Shares is covered by an effective Registration Statement (as
defined in the Registration Rights Agreement) and such Holder represents in
writing to the Company that such Warrant Shares (i) have been or are being sold
pursuant to such registration statement or pursuant to Rule 144 under the
Securities Act of 1933, as amended, or (ii) may be made pursuant to Rule 144(k)
under the Securities Act of 1933, as amended, or any successor rule or
provision.
3. Failure to Deliver Warrant Shares.
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(a) Exercise Default. In the event that, as a result of any action
or failure to act on the part of the Company (including without limitation a
failure by the Company to have a sufficient number of shares of Common Stock
authorized and reserved for issuance pursuant to exercise of the Warrants), the
Company does not deliver to a Holder certificates representing the number of
Warrant Shares specified in the applicable Exercise Notice on or before the
Delivery Date therefor and such failure continues for ten (10) Business Days (an
"Exercise Default"), the Company shall pay to the Holder payments ("Exercise
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Default Payments") in the amount of (i) (N/365) multiplied by (ii) the aggregate
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Exercise Price for the Warrant Shares which are the subject of such Exercise
Default multiplied by (iii) the lower of twenty four percent (24%) and the
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maximum rate permitted by applicable law, where "N" equals the number of days
elapsed between the original Delivery Date for such Warrant Shares and the date
on which all of such Warrant Shares are issued and delivered to the Holder.
Amounts payable under this subparagraph 3(a) shall be paid to the Holder in
immediately available funds on or before the fifth (5th) Business Day of the
calendar month immediately following the calendar month in which such amount has
accrued.
(b) Buy-in. Nothing herein shall limit a Holder's right to pursue
actual damages for the Company's failure to issue and deliver Warrant Shares in
connection with an exercise on the applicable Delivery Date (including, without
limitation, damages relating to any purchase of shares of Common Stock by the
Holder to make delivery on a sale effected in anticipation of receiving Warrant
Shares upon exercise, such damages to be in an amount equal to (A) the aggregate
amount paid by the Holder for the shares of Common Stock so purchased minus (B)
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the aggregate amount of net proceeds, if any, received by the Holder from the
sale of the Warrant Shares issued by the Company pursuant to such exercise), and
the Holder shall have the right to pursue all remedies available to it at law or
in equity (including, without limitation, a decree of specific performance
and/or injunctive relief).
(c) Reduction of Exercise Price. In the event that, as a result of
any action or failure to act on the part of the Company (including without
limitation a failure by the Company to have a sufficient number of shares of
Common Stock authorized and reserved for issuance pursuant to exercise of the
Warrants), a Holder has not received certificates representing the Warrant
Shares by the tenth (10th) Business Day following an Exercise Default, the
Holder may, upon written notice to the Company, regain on such Business Day the
rights of a Holder of this Warrant, or part thereof, with respect to the Warrant
Shares that are the subject of such Exercise Default, and the Exercise Price for
such Warrant Shares shall be reduced by one percent (1%) for each day beyond
such 10th Business Day in which the Exercise Default continues. In such event,
the Holder shall retain all of the Holder's rights and remedies with respect to
the Company's failure to deliver such Warrant Shares (including without
limitation the right to receive the cash payments specified in subparagraph 3(a)
above).
(d) Holder of Record. Each Holder shall, for all purposes, be
deemed to have become the holder of record of Warrant Shares on the Exercise
Date of this Warrant, irrespective of the date of delivery of such Warrant
Shares. Nothing in this Warrant shall be construed as conferring upon
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the Holder hereof any rights as a stockholder of the Company prior to the
Exercise Date.
4. Exercise Limitations.
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In no event shall a Holder be permitted to exercise this Warrant, or part
thereof, with respect to Warrant Shares in excess of the number of such shares,
upon the issuance of which, (x) the number of shares of Common Stock
beneficially owned by the Holder plus (y) the number of shares of Common Stock
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issuable upon such exercise, would be equal to or exceed (z) 9.99% of the number
of shares of Common Stock then issued and outstanding. To the extent that the
limitation contained in this paragraph 4 applies, the submission of a Conversion
Notice by the Holder shall be deemed to be the Holder's representation that this
Warrant is exercisable pursuant to the terms hereof and the Company shall be
entitled to rely on such representation without making any further inquiry.
Nothing contained herein shall be deemed to restrict the right of a Holder to
exercise this Warrant, or part thereof, at such time as such exercise will not
violate the provisions of this Section 4. The limitation contained in this
Section 4 shall not apply if the original Holder hereof elected in the
Securities Purchase Agreement not to be subject to such limitation.
5. Payment of the Exercise Price. The Holder may pay the Exercise Price
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in either of the following forms or, at the election of Holder, a combination
thereof:
(a) Cash Exercise: by delivery of immediately available funds.
(b) Cashless Exercise: by surrender of this Warrant to the Company
together with a notice of cashless exercise, in which event the Company shall
issue to the Holder the number of Warrant Shares determined as follows:
X = Y x (A-B)/A
where: X = the number of Warrant Shares to be issued to the Holder.
Y = the number of Warrant Shares with respect to which this
Warrant is being exercised.
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A = the average of the Closing Bid Prices of the Common Stock for
the five (5) Trading Days immediately prior to (but not
including) the Exercise Date.
B = the Exercise Price;
provided, however, that the Holder may exercise this Warrant pursuant to a
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Cashless Exercise only if, on the Exercise Date, the resale of Warrant Shares is
not covered by an effective Registration Statement (as defined in the
Registration Rights Agreement) that is available to the Holder on such date.
For purposes of Rule 144 under the Securities Act of 1933, as amended, it is
intended, understood and acknowledged that the Warrant Shares issued in a
cashless exercise transaction shall be deemed to have been acquired by the
Holder, and the holding period for the Warrant Shares shall be deemed to have
been commenced, on the Issue Date.
6. Anti-Dilution Adjustments; Distributions; Other Events. The Exercise
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Price and the number of Warrant Shares issuable hereunder shall be subject to
adjustment from time to time as provided in this Section 6. In the event that
any adjustment of the Exercise Price or number of Warrant Shares as required
herein results in a fraction of a cent or fraction of a share, as applicable,
such exercise Price or number of Warrant Shares shall be rounded upon or down to
the nearest cent or share, as applicable.
(a) Adjustment of Exercise Price and Number of Shares upon Issuance
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of Common Stock. Except as otherwise provided in Section 6(c) and 6(e) hereof,
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if and whenever after the initial issuance of this Warrant, the Company issues
or sells, or in accordance with Section 6(b) hereof is deemed to have issued or
sold, any shares of Common Stock for no consideration (other than a stock split
or stock dividend) or for a consideration per share less than Exercise Price (as
then in effect)(other than issuances of Common Stock (i) pursuant to an employee
stock purchase plan or upon the exercise of options issued under a stock option
plan duly adopted by the Company, (ii) in connection with a merger, acquisition
or strategic investment which, in either such case, is not effected for the
primary purpose of raising equity capital or (iii) in connection with a firm-
commitment underwritten secondary offering) (a "Dilutive Issuance"), then
effective immediately upon the Dilutive Issuance, the Exercise Price will be
adjusted in accordance with the following formula:
E' = (E)(O+P/E)
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(CSDO)
where:
E' = the adjusted Exercise Price
E = the then current Exercise Price;
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O = the number of shares of Common Stock outstanding immediately
prior to the Dilutive Issuance;
P = the aggregate consideration, calculated as set forth in Section
6(b) hereof, received by the Company upon such Dilutive
Issuance; and
CSDO = the total number of shares of Common Stock Deemed Outstanding
(as herein defined) immediately after the Dilutive Issuance.
(b) Effect on Exercise Price of Certain Events. For purposes of
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determining the adjusted Exercise Price under Section 6(a) hereof, the following
will apply:
(i) Issuance of Rights or Options. If, after the date hereof,
the Company in any manner issues or grants any warrants, rights or options,
whether or not immediately exercisable, to subscribe for or to purchase Common
Stock or other securities exercisable, convertible into or exchangeable for
Common Stock ("Convertible Securities")(such warrants, rights and options to
purchase Common Stock or Convertible Securities are hereinafter referred to as
"Options"), and the price per share for which Common Stock is purchasable or
issuable upon the exercise of such Options is less than the Exercise Price (as
then in effect) on the date of issuance of such Option or direct stock grant
("Below Market Options"), then the maximum total number of shares of Common
Stock issuable upon the exercise of all such Below Market Options (assuming full
exercise, conversion or exchange of Convertible Securities, if applicable) will,
as of the date of the issuance or grant of such Below Market Options, be deemed
to be outstanding and to have been issued and sold by the Company for such price
per share. For purposes of the preceding sentence, the price per share for which
Common Stock is issuable upon the exercise of such Below Market Options is
determined by dividing (i) the total amount, if any, received or receivable by
the Company as consideration for the issuance or sale of all such Below Market
Options, plus the minimum aggregate amount of additional consideration, if any,
payable to the Company upon the exercise of all such below Market Options, plus,
in the case of Convertible Securities issuable upon the exercise of such Below
Market Options, the minimum aggregate amount of additional consideration payable
upon the exercise, conversion or exchange thereof at the time such Convertible
Securities first become exercisable, convertible or exchangeable, by (ii) the
maximum total number of shares of Common Stock issuable upon the exercise of all
such Below Market Options (assuming full conversion of Convertible Securities,
if applicable). No further adjustment to the Exercise Price will be made upon
the exercise of such Below Market Options or upon the exercise, conversion or
exchange of Convertible Securities issuable upon exercise of such Below Market
Options.
(ii) Issuance of Convertible Securities.
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(A) If the Company in any manner issues or sells any
Convertible Securities, whether or not immediately convertible (other than where
the same are issuable upon the exercise of Options) and the price per share for
which Common Stock is issuable upon such exercise, conversion or exchange (as
determined pursuant to Section 6(b)(ii)(B) if applicable) is less than the
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Exercise Price (as then in effect) on the date of issuance of such Convertible
Security, then the maximum total number of shares of Common Stock issuable upon
the exercise, conversion or exchange of all such Convertible Securities will, as
of the date of the issuance of such Convertible Securities, be deemed to be
outstanding and to have been issued and sold by the Company for such price per
share. For the purposes of the preceding sentence, the price per share for
which Common Stock is issuable upon such exercise, conversion or exchange is
determined by dividing (i) the total amount, if any, received or receivable by
the Company as consideration for the issuance or sale of all such Convertible
Securities, plus the minimum aggregate amount of additional consideration, if
any, payable to the Company upon the exercise, conversion or exchange thereof at
the time such Convertible Securities first become exercisable, convertible or
exchangeable, by (ii) the maximum total number of shares of Common Stock
issuable upon the exercise, conversion or exchange of all such Convertible
Securities. No further adjustment to the Exercise Price will be made upon the
actual issuances of such Common Stock upon exercise, conversion or exchange of
such Convertible Securities.
(B) If the Company in any manner issues or sells any
Convertible Securities with a fluctuating or re-setting conversion or exercise
price or exchange ratio (a "Variable Rate Convertible Security"), then the price
per share for which Common Stock is issuable upon such exercise, conversion or
exchange for purposes of the calculation contemplated by Section 6(b)(ii)(A)
shall be deemed to be the lowest price per share which would be applicable
assuming that (1) all holding period and other conditions to any discounts
contained in such Convertible Security have been satisfied, and (2) the Market
Price on the date of exercise, conversion or exchange of such Convertible
Security was 80% of the Market Price on the date of issuance of such Convertible
Security (the "Assumed Variable Market Price").
(iii) Change in Option Price or Conversion Rate. If there is a
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change at any time in (i) the amount of additional consideration payable to the
Company upon the exercise of any Options; (ii) the amount of additional
consideration, if any, payable to the Company upon the exercise, conversion or
exchange of any Convertible Securities; or (iii) the rate at which any
Convertible Securities are convertible into or exchangeable for Common Stock
(other than under or by reason of provisions designed to protect against
dilution), the Exercise Price in effect at such time shall be adjusted to the
Exercise Price which would have been in effect had such Options or Convertible
Securities still outstanding provided for such changed additional consideration
or changed conversion rate, as the case may be, at the time initially granted,
issued or sold.
(iv) Treatment of Expired Options and Unexercised Convertible
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Securities. If, in any case, the total number of shares of Common Stock
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issuable upon exercise of any Options or upon exercise, conversion or exchange
of any Convertible Securities is not, in fact, issued and the rights to exercise
such Option or to exercise, convert or exchange such Convertible Securities
shall have expired or terminated, the Exercise Price then in effect will be
readjusted to the Exercise Price which would have been in effect at the time of
such expiration or termination had such Options or
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Convertible Securities, to the extent outstanding immediately prior to such
expiration or termination (other than in respect of the actual number of shares
of Common Stock issued upon exercise or conversion thereof), never been issued.
(v) Calculation of Consideration Received. If any Common Stock,
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Options or Convertible Securities are issued, granted or sold for cash, the
consideration received therefor for purposes of this Warrant will be the amount
received by the Company therefor, before deduction of reasonable commissions,
underwriting discounts or allowances or other reasonable expenses paid or
incurred by the Company in connection with such issuance, grant or sale. In
case any Common Stock, Options or Convertible Securities are issued or sold for
a consideration part or all of which shall be other than cash, the amount of the
consideration other than cash received by the Company will be the fair market
value of such consideration except where such consideration consists of
freely-tradable securities, in which case the amount of consideration received
by the Company will be the Market Price thereof as of the date of receipt. The
fair market value of any consideration other than cash or securities will be
determined in the good faith reasonable business judgment of the Board of
Directors.
(vi) Exceptions to Adjustment of Exercise Price. No adjustment
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to the Exercise Price will be made (i) upon the exercise of any warrants,
options or convertible securities issued and outstanding on the date hereof in
accordance with the terms of such securities as of such date; (ii) upon the
grant or exercise of any stock or options which may hereafter be granted or
exercised under any employee, consultant or director benefit plan of the Company
now existing or to be implemented in the future, so long as the issuance of such
stock or options is approved by a majority of the non-employee members of the
Board of Directors of the Company or a majority of the members of a committee of
non-employee directors established for such purpose; (iii) upon the issuance of
the Conversion Shares (as defined in the Securities Purchase Agreement) in
accordance with terms of the Certificate of Designation relating to the
Company's Series A Preferred Stock (the "Preferred Stock"); or (iv) upon the
exercise of the Warrants.
(c) Subdivision or Combination of Common Stock. If the Company, at
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any time after the initial issuance of this Warrant, subdivides (by any stock
split, stock dividend, recapitalization, reorganization, reclassification or
otherwise) its shares of Common Stock into a greater number of shares, then
after the date of record for effecting such subdivision, the Exercise Price in
effect immediately prior to such subdivision will be proportionately reduced.
If the Company, at any time after the initial issuance of this Warrant, combines
(by reverse stock split, recapitalization, reorganization, reclassification or
otherwise) its shares of Common Stock into a smaller number of shares, then,
after the date of record for effecting such combination, the Exercise Price in
effect immediately prior to such combination will be proportionally increased In
the event of any adjustment to the Exercise Price arising from an event
specified in the subparagraph (c), the number of shares of Common Stock into
which this Warrant is exercisable will be proportionately increased or reduced,
as the case may be.
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(d) Distributions. If the Company or any of its subsidiaries shall at any
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time distribute to holders of Common Stock (or to a holder, other than the
Company, of the common stock of any such subsidiary) cash, evidences of
indebtedness or other securities or assets (other than cash dividends or
distributions payable out of earned surplus or net profits for the current or
the immediately preceding year) including any dividend or distribution in shares
of capital stock of a subsidiary of the Company (collectively, a "Distribution")
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then, in any such case, the Holder of this Warrant shall be entitled to receive,
at the same time as such assets are received by a holder of such stock, an
amount and type of such Distribution as though such Holder were a holder on the
record date therefor of a number of shares of Common Stock into which this
Warrant is exercisable as of such record date (such number of shares to be
determined at the Exercise Price then in effect and without regard to any
limitation on exercise of this Warrant that may exist pursuant to the terms
hereof or otherwise).
(e) Notice of Consolidation or Merger. In the event of a merger,
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consolidation, business combination, tender offer, exchange of shares,
recapitalization, reorganization, redemption or other similar event, as a result
of which shares of Common Stock of the Company shall be changed into the same or
a different number of shares of the same or another class or classes of stock or
securities or other assets of the Company or another entity or there is a sale
of all or substantially all the Company's assets (a "Corporate Change"), then
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this Warrant shall be exercisable into such class and type of securities or
other assets as the Holder would have received had the Holder exercised this
Warrant immediately prior to such Corporate Change; provided, however, that
Company may not effect any Corporate Change unless (i) it (or, in the case of a
tender offer, the offering party) first shall have given twenty (20) days'
notice to the Holder hereof of any Corporate Change and makes a public
announcement of such event before or at the same time that it gives such notice
(it being understood that the filing by the Company of a Form 8-K for the
purpose of disclosing the anticipated consummation of the Corporate Change shall
constitute such a notice for purposes of this provision) and (ii) it requires
the resulting successor or acquiring entity (if not the Company) to assume by
written instrument the obligations of the Company hereunder and under the
Securities Purchase Agreement and the Registration Rights Agreement.
(f) Adjustments; Additional Shares, Securities or Assets. In the event
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that at any time, as a result of an adjustment made pursuant to this paragraph
6, the Holder of this Warrant shall, upon exercise of this Warrant, become
entitled to receive securities or assets (other than Common Stock) then,
wherever appropriate, all references herein to shares of Common Stock shall be
deemed to refer to and include such shares and/or other securities or assets;
and thereafter the number of such shares and/or other securities or assets shall
be subject to adjustment from time to time in a manner and upon terms as nearly
equivalent as practicable to the provisions of this paragraph 6.
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7. Fractional Interests.
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No fractional shares or scrip representing fractional shares shall be
issuable upon the exercise of this Warrant, but on exercise of this Warrant, the
Holder hereof may purchase only a whole number of shares of Common Stock. If,
on exercise of this Warrant, the Holder hereof would be entitled to a fractional
share of Common Stock or a right to acquire a fractional share of Common Stock,
such fractional share shall be disregarded and the number of shares of Common
Stock issuable upon exercise shall be rounded up or down to the nearest whole
number of shares of Common Stock.
8. Transfer of this Warrant. The Holder may sell, transfer, assign,
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pledge or otherwise dispose of this Warrant, in whole or in part (and if in
part, in minimum denominations of 50,000 shares), as long as such sale or other
disposition is made pursuant to an effective registration statement or an
exemption to the registration requirements of the Securities Act of 1933, as
amended, and applicable state laws. Upon such transfer or other disposition,
the Holder shall deliver a written notice to Company, substantially in the form
of the Transfer Notice attached hereto as Exhibit B (the "Transfer Notice"),
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indicating the person or persons to whom this Warrant shall be transferred and,
if less than all of this Warrant is transferred or this Warrant is transferred
in parts, the number of Warrant Shares to be covered by the part of this Warrant
to be transferred to each such person. Within three (3) Business Days of
receiving a Transfer Notice and the original of this Warrant, the Company shall
deliver to the each transferee designated by the Holder a Warrant or Warrants of
like tenor and terms for the appropriate number of Warrant Shares.
Notwithstanding the foregoing, no Holder may knowingly and voluntarily sell this
Warrant (or any portion thereof) to an entity that is a competitor of the
Company.
9. Benefits of this Warrant.
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Nothing in this Warrant shall be construed to confer upon any person
other than the Holder of this Warrant any legal or equitable right, remedy or
claim under this Warrant and this Warrant shall be for the sole and exclusive
benefit of the Holder of this Warrant.
10. Loss, theft, destruction or mutilation of Warrant.
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Upon receipt by the Company of evidence of the loss, theft,
destruction or mutilation of this Warrant, and (in the case of loss, theft or
destruction) of indemnity or security reasonably satisfactory to the Company,
and upon surrender of this Warrant, if mutilated, the Company shall execute and
deliver a new Warrant of like tenor and date.
11. Notice or Demands.
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Except as otherwise provided herein, any notice, demand or request
required or permitted to be given pursuant to the terms of this Warrant shall be
in writing and shall be deemed
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given (i) when delivered personally or by verifiable facsimile transmission
(with an original to follow) on or before 5:00 p.m., eastern time, on a Business
Day or, if such day is not a Business Day, on the next succeeding Business Day,
(ii) on the next Business Day after timely delivery to a nationally-recognized
overnight courier and (iii) on the Business Day actually received if deposited
in the U.S. mail (certified or registered mail, return receipt requested,
postage prepaid), addressed as follows:
If to the Company:
Asymetrix Learning Systems, Inc.
▇▇▇ ▇▇▇/▇▇/ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Fenwick & West, LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
and if to the Holder, to such address as shall be designated by the Holder in
writing to the Company.
12. Applicable Law.
--------------
This Warrant is issued under and shall for all purposes be governed by
and construed in accordance with the laws of the state of Delaware, without
giving effect to conflict of law provisions thereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-12-
IN WITNESS WHEREOF, the undersigned has executed this Warrant as of the
6/th/ day of October, 1999.
ASYMETRIX LEARNING SYSTEMS, INC.
By: ____________________________
Name:
Title:
-13-
EXHIBIT A to WARRANT
--------------------
EXERCISE NOTICE
---------------
The undersigned Holder hereby irrevocably exercises the right to purchase
________________ of the shares of Common Stock ("Warrant Shares") of ASYMETRIX
--------------
LEARNING SYSTEMS, INC. evidenced by the attached Warrant (the "Warrant").
-------
Capitalized terms used herein and not otherwise defined shall have the
respective meanings set forth in the Warrant. Unless otherwise specified in
writing to the Company, the undersigned represents to the Company that the
shares of Common Stock covered by this notice have been or will be sold pursuant
to the terms of an effective registration statement.
1. Form of Exercise Price. The Holder intends that payment of the
Exercise Price shall be made as:
______ a Cash Exercise with respect to _________________ Warrant
-------------
Shares; and/or
______ a Cashless Exercise with respect to _________________ Warrant
-----------------
Shares.
2. Payment of Exercise Price. In the event that the Holder has elected a
Cash Exercise with respect to some or all of the Warrant Shares to be issued
pursuant hereto, the Holder shall pay the sum of $________________ to the
Company in accordance with the terms of the Warrant.
3. Delivery of Warrant Shares. The Company shall deliver to the Holder
_____________ Warrant Shares in accordance with the terms of the Warrant.
Date: ______________________
___________________________________
Name of Registered Holder
By: ______________________________
Name:
Title:
-14-
EXHIBIT B to WARRANT
--------------------
TRANSFER NOTICE
---------------
FOR VALUE RECEIVED, the undersigned Holder of the attached Warrant hereby sells,
assigns and transfers unto the person or persons named below the right to
purchase ____shares of the Common Stock of ASYMETRIX LEARNING SYSTEMS, INC.
evidenced by the attached Warrant.
Date: ______________________
___________________________________
Name of Registered Holder
By: _______________________________
Name:
Title:
Transferee Name and Address:
____________________________________________
____________________________________________
____________________________________________