EXHIBIT 4.10
THIS WARRANT IS NOT TRANSFERABLE EXCEPT IN COMPLIANCE HEREWITH AND WITH
APPLICABLE SECURITIES LAWS. ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT FILED UNDER SUCH ACT OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER SUCH ACT.
▇▇▇▇▇▇▇.▇▇▇, INC.
SERIES C PREFERRED STOCK PURCHASE WARRANT
WHEREAS, ▇▇▇▇▇▇▇.▇▇▇, INC., a Delaware corporation (the "Company") is
entering into Enterprise License Agreement of even date herewith (the
"Agreement") with GENERAL ELECTRIC COMPANY (including each successor or assign,
the "Warrantholder"); and
WHEREAS, the Company desires to grant to Warrantholder, in consideration
for such Agreement and other valuable consideration the sufficiency and receipt
of which is hereby acknowledged, the right to purchase shares of its Series C
Preferred Stock;
NOW, THEREFORE, in consideration of the Warrantholder executing and
delivering such Agreement and in consideration of mutual covenants and
agreements contained herein, the Company and Warrantholder agree as follows:
1. Grant of the Right To Purchase Series C Preferred Stock.
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This certifies that, for good and valuable consideration the Company,
hereby grants to the Warrantholder, the right to subscribe for and purchase from
the Company, subject to adjustment as provided in Section 9, 119,167 validly
issued, fully paid and nonassessable shares (the "Warrant Shares") of the
Company's Series C Preferred Stock (the "Preferred Stock"), at the purchase
price of $18.00 per share (the "Exercise Price"). This Warrant shall be
exercisable at any time and from time to time during the period (the "Exercise
Period") commencing on the date hereof and ending on August 2, 2002. In
conjunction with the Company's initial public offering, if any, in the event the
Company's outstanding Series C Preferred Stock is converted into Common Stock,
then the right to subscribe for and purchase from the Company Series C Preferred
Stock shall automatically convert to the right to subscribe for and purchase
from the Company the number of shares of Common Stock into which the number of
shares of Series C Preferred Stock issuable hereunder are convertible, assuming
for the calculation that the Warrant had been exercised in full on the date
hereof, and a replacement warrant having substantially the same terms as those
herein, except for changes requested to give effect to the Warrant Shares being
Common Stock, shall be issued to the Warrantholder by the Company upon request.
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2. Exercise of Warrant; Limitation on Exercise; Payment of Taxes.
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2.1 Exercise of Warrant.
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(a) Cash Exercise. This Warrant may be exercised by the Warrantholder, in
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whole or in part, by (i) the surrender of this Warrant to the Company, with a
duly executed Exercise Form specifying the number of Warrant Shares to be
purchased, during normal business hours on any Business Day during the Exercise
Period and (ii) the delivery of payment to the Company, for the account of the
Company, by cash, wire transfer of immediately available funds to a bank account
specified by the Company, or by certified or bank cashier's check, of the
Exercise Price for the number of Warrant Shares specified in the Exercise Form
in lawful money of the United States of America. The Company agrees that such
Warrant Shares shall be deemed to be issued to the Warrantholder as the record
holder of such Warrant Shares as of the close of business on the date on which
this Warrant shall have been surrendered and payment made for the Warrant Shares
as aforesaid. A stock certificate or certificates for the Warrant Shares
specified in the Exercise Form shall be delivered to the Warrantholder as
promptly as practicable, and in any event within 10 days, thereafter. The stock
certificate or certificates so delivered shall be in denominations of 100 shares
each or such lesser or greater denominations as may be reasonably specified by
the Warrantholder in the Exercise Form. If this Warrant shall have been
exercised only in part, the Company shall, at the time of delivery of the stock
certificate or certificates, deliver to the Warrantholder a new Warrant
evidencing the rights to purchase the remaining Warrant Shares, which new
Warrant shall in all other respects be identical with this Warrant. No
adjustments shall be made on Warrant Shares issuable on the exercise of this
Warrant for any cash dividends paid or payable to holders of record of Preferred
Stock prior to the date as of which the Warrantholder shall be deemed to be the
record holder of such Warrant Shares.
(b) Net Issue Exercise. In lieu of exercising this Warrant pursuant to
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Section 2.1(a), this Warrant may be exercised by the Warrantholder by the
surrender of this Warrant to the Company, with a duly executed Exercise Form
marked to reflect net issue exercise and specifying the number of Warrant Shares
to be purchased, during normal business hours on any Business Day during the
Exercise Period. The Company agrees that such Warrant Shares shall deemed to be
issued to the Warrantholder as the record holder of such Warrant Shares as of
the close of business on the date on which this Warrant shall have been
surrendered as aforesaid. Upon such exercise, the Warrantholder shall be
entitled to receive shares equal to the value of this Warrant (or the portion
thereof being canceled) by surrender of this Warrant to the Company together
with notice of such election in which event the Company shall issue to
Warrantholder a number of shares of the Company's Preferred Stock computed as of
the date of surrender of this Warrant to the Company using the following
formula:
X = Y(A-B)
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A
Where X = the number of shares of Preferred Stock to be issued to
Warrantholder under this Section 2.1(b);
Y = the number of shares of Preferred Stock as to which this
Warrant is being exercised (at the date of such calculation);
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A = the fair market value of one share of the Company's Preferred
Stock (at the date of such calculation);
B = the Exercise Price (as adjusted to the date of such
calculation).
(c) Fair Market Value. For purposes of Section 2.1(b) and Section 9, fair
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market value of one share of the Company's Preferred Stock shall be
calculated based on the number of shares of common stock into which the
Preferred Stock may be converted and shall mean:
(i) the closing price per share of the Company's Common Stock, on
the principal national securities exchange on which the Common Stock is
listed or admitted to trading, or
(ii) if not listed or traded on any such exchange, the average
last reported sales price per share on the Nasdaq National Market or the
Nasdaq Small-Cap Market (collectively, "Nasdaq"), or
(iii) if not listed or traded on any such exchange or Nasdaq, the
average of the bid and asked price per share as reported in the "pink
sheets" published by the National Quotation Bureau, Inc. (the "pink
sheets") in each of cases (i), (ii) and (iii) determined over a twenty-day
trading period ending two days prior to determination, or
(iv) if such quotations are not available, the fair market value
per share of the Company's Preferred Stock, on the date such notice was
received by the Company as reasonably determined by the Board of Directors
of the Company. If the Warrantholder shall object to any determination by
the Board of Directors of the fair market value per share, the fair market
value per share of the Preferred Stock shall be determined by an
independent appraiser retained by the Company at its expense and
reasonably acceptable to the Warrantholder.
2.2 Payment of Taxes. The issuance of certificates for Warrant Shares
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shall be made without charge to the Warrantholder for any stock transfer or
other issuance tax in respect thereto; provided, however, that the Warrantholder
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shall be required to pay any and all taxes which may be payable in respect of
any transfer involved in the issuance and delivery of any certificate in a name
other than that of the then Warrantholder as reflected upon the books of the
Company.
2.3 Information. Upon receipt of a written request from a
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Warrantholder, the Company agrees to deliver promptly to such Warrantholder a
copy of its current publicly available financial statements and to provide such
other information and access to its personnel concerning the business and
operations of the Company as such Warrantholder may reasonably request in order
to assist the Warrantholder in evaluating the merits and risks of exercising the
Warrant and to make an informed investment decision in connection with such
exercise; provided however, that the Company need not provide any proprietary or
competitively sensitive information to Warrantholder if such information is not
required to be provided to other investors or holders of the Company's
convertible securities.
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3. Restrictions on Transfer; Restrictive Legends.
---------------------------------------------
3.1 Restrictions on Transfer; Compliance with Securities Laws. The
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Warrant Shares issued upon the exercise of the Warrant may not be transferred or
assigned in whole or in part without compliance with all applicable federal and
state securities laws by the transferor and transferee (including the delivery
of investment representation letters and legal opinions relating to compliance
with applicable federal and state securities laws, in form and substance
reasonably satisfactory to the Company, if such are requested by the Company).
The Warrantholder, by acceptance hereof, acknowledges that this Warrant and the
Warrant Shares to be issued upon exercise hereof are being acquired solely for
the Warrantholder's own account and not as a nominee for any other party, and
for investment, and that the Warrantholder will not offer, sell or otherwise
dispose of any Warrant Shares to be issued upon exercise hereof except under
circumstances that will not result in a violation of the Securities Act or any
state securities laws.
3.2 Restrictive Legends. Each Warrant issued in substitution for this
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Warrant issued pursuant to Sections 1, 2, 6, 7 or 9 shall be stamped or
otherwise imprinted with the legend set forth on the first page hereof. Except
as otherwise permitted by this Section 3, each stock certificate for Warrant
Shares issued upon the exercise of any Warrant and each stock certificate issued
upon the direct or indirect transfer of any such Warrant Shares shall be stamped
or otherwise imprinted with a legend in substantially the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT FILED
UNDER SUCH ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH
ACT."
Notwithstanding the foregoing, the Warrantholder may require the Company to
issue a stock certificate for Warrant Shares without a legend if (i) such
Warrant Shares, as the case may be, have been registered for resale under the
Securities Act or sold pursuant to Rule 144 under the Securities Act (or a
successor rule thereto) or (ii) the Warrantholder has received an opinion of
counsel reasonably satisfactory to the Company that such registration is not
required with respect to such Warrant Shares.
4. Representations and Covenants of the Company.
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4.1 Reservation and Registration of Shares, Etc. The Company covenants
-------------------------------------------
and agrees that all Warrant Shares which are issued upon the exercise of this
Warrant will, upon issuance, be validly issued, fully paid and nonassessable and
free from all taxes, liens, security interests, charges and other encumbrances
with respect to the issue thereof, other than taxes in respect of any transfer
occurring contemporaneously with such issue. The Company further covenants and
agrees that, during the Exercise Period and until delivery of the Warrant Shares
as required under this Warrant, the Company will at all times have authorized
and reserved, a sufficient number of shares of Series C Preferred Stock or, in
the event the Series C Preferred Stock has been converted into Common Stock or
Common Stock is otherwise issuable as provided herein, Common Stock, to provide
for the exercise of the rights represented by this Warrant. Warrantholder
acknowledges that the Company does not currently have Series C Preferred Stock
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available for issuance hereunder. The Company covenants that such Series C
Preferred Stock will be available within two weeks from the date hereof. In the
event such Series C Preferred Stock is not available within two weeks of the
date hereof, this Warrant shall become exercisable for the number of shares of
Common Stock into which the number of shares of Series C Preferred Stock that
would have been issuable hereunder (taking into account adjustments that are
provided for in Section 9) would have been convertible. In such case, a
replacement warrant reflecting such change will be issued which warrant will
have substantially the same terms as those herein except as appropriate to
reflect that the Warrant Shares shall be Common Stock.
4.2 Company Organization and Standing. The Company is a corporation
---------------------------------
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has all the requisite corporate power and authority to
carry on its business as now conducted and proposed to be conducted. The
Company is duly qualified to transact business in each jurisdiction in which the
failure so to qualify would have a material adverse effect upon the Company.
Exhibit D attached hereto contains a true and complete list of all capital stock
of the Company that is authorized at the time of this Agreement and all capital
stock that is issued and outstanding at the time of this Agreement. Except as
set forth on Exhibit D, the Company has issued no options, warrants, or other
rights to acquire any capital stock of the Company or any securities convertible
into capital stock of the Company.
4.3 Due Authorization. The Company has full corporate power and
-----------------
authority to execute, deliver and perform this Warrant and any other agreements
to which it is to be a party in connection herewith, , and to take, perform and
execute all procedures, acts and instruments required by it to otherwise fulfill
its obligations under this Warrant and such other agreements.
4.4 Corporate Action. All corporate and legal action on the part of the
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Company, its officers and directors necessary for the sale and issuance of the
Warrant Shares pursuant hereto, the issuance of the Common Stock issuable upon
the conversion of the Warrant Shares and the performance of the Company's
obligations hereunder has been taken, except that the consent of the Company's
stockholders to authorize the Series C Preferred Stock to be issued hereunder
has not yet been obtained. There has not been and the Company covenants that
there will not be any change in the par value of the Series C Preferred Stock
from that set forth in the Company's Certificate of Incorporation.
4.5 Binding Agreement. This Agreement constitutes the legal, valid and
-----------------
binding obligation of the Company, enforceable against it in accordance with its
terms, except to the extent that (a) such enforcement may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and (b) the remedy
of specific performance or injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought.
4.6 Rule 144. The Company covenants and agrees to take commercially
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reasonable efforts to facilitate sales of the Warrant Shares under Rule 144 of
the Securities Act of 1933, as amended, at such time as Rule 144 is available to
Warrantholder and the holding period applicable to Warrantholder's proposed
transaction has lapsed.
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4.7 Offering. Subject to the truth and accuracy of the Warrantholder's
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representations set forth in this Warrant, the offer, sale and issuance of this
Warrant and the Series C Preferred Stock issuable upon exercise hereof, and the
issuance of the Common Stock upon conversion of the Series C Preferred Stock or
as otherwise provided herein, are exempt from the registration requirements of
the Securities Act of 1933, as amended, and neither the Company nor any
authorized agent acting on its behalf will take any action hereafter that would
cause the loss of such exemption.
4.8 Qualified IPO. The Company believes that it will effectuate a
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Qualified IPO as defined in that certain Amended and Restated Shareholders
Agreement dated as of February __, 2000 (the "Shareholders Agreement") within
three (3) months of the date hereof. In the event the Company effectuates a
Qualified IPO, the Shareholders Agreement shall terminate.
5. Representations and Covenants of Warrantholder.
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This Warrant has been entered into by the Company in reliance upon the
following representations and covenants of the Warrantholder.
5.1 Investment Purpose. The right to acquire the Warrant Shares will be
------------------
acquired for investment and not with a view to the sale or distribution of any
part thereof in violation of any federal or state securities laws, and the
Warrantholder has no present intention of selling or engaging in any public
distribution of the same except pursuant to a registration or exemption.
5.2 Private Issue. The Warrantholder understands (i) that the Warrant
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Shares issuable upon exercise of this Warrant are not registered under the 1933
Act or qualified under applicable state securities laws on the ground that the
issuance contemplated by this Warrant will be exempt from the registration and
qualifications requirements thereof, and (ii) that the Company's reliance on
such exemption is predicated on the representations set forth in this Section 5.
5.3 Financial Risk. The Warrantholder has such knowledge and experience
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in financial and business matters as to be capable of evaluating the merits and
risks of its investment, and has the ability to bear the economic risks of its
investment.
5.4 Indefinite Holding Period. The Warrantholder understands that it
-------------------------
may be required to hold the Warrant Shares for an indefinite period, subject to
its ability in the future to sell such Shares under a registration statement or
Rule 144. The Warrantholder also understands that any sale of its rights as the
Warrantholder to purchase the Warrant Shares which might be made by it in
reliance upon Rule 144 under the 1933 Act may be made only in accordance with
the terms and conditions of that Rule.
5.5 Accredited Investor. Warrantholder is an "accredited investor"
-------------------
within the meaning of the Securities and Exchange Rule 501 of Regulation D, as
presently in effect.
5.6 Market Stand-off Agreement. The Warrantholder hereby agrees that,
--------------------------
during the period of one-hundred and eighty (180) days following the effective
date of a registration statement of the Company filed under the Securities Act
of 1933, as amended, in connection with an underwritten offering, it shall not,
to the extent requested by the Company and such underwriter, sell or otherwise
transfer or dispose of (other than to transferees who agree to be
-6-
similarly bound) any Warrant Shares held by it except shares included in such
registration; provided, however, that:
(a) such agreement shall be applicable only to a registration
statement initiated by the Company which covers shares of Common Stock or other
securities of the Company to be sold on its behalf to the public in an
underwritten offering; and
(b) all officers and directors of the Company, all other Persons with
registration rights (whether or not pursuant to this Agreement) and all holders
of two percent (2%) or more of the Company's stock (determined on an as-
converted, and fully diluted basis), enter into similar agreements and the
Company does not waive the market standoff agreements applicable to any such
Person.
The Warrantholder shall sign a lock-up agreement in the form attached
hereto as Exhibit C upon receipt hereof, it being understood that the Company
has obtained lock-up agreements with substantially the same terms from all
persons who hold at least the same number of shares as are issuable hereunder,
and in the event the Company modifies any such agreement to reduce the
restrictions or waives such restrictions for any reason, Warrantholder shall be
so notified and shall be entitled to the same treatment.
6. Transfers
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Subject to the terms and conditions contained in Section 3 hereof, this
Warrant Agreement and all rights hereunder and the Registration Rights Agreement
referred to in Sections 12.4 are transferable in whole or in part by the
Warrantholder and any successor transferee. The transfer shall be recorded on
the books of the Company upon receipt by the Company of a notice of transfer in
the form attached hereto as Exhibit B (the "Transfer Notice"), at its principal
offices and the payment to the Company of all transfer taxes and other
governmental charges imposed on such transfer.
7. Exchange, Loss or Destruction of Warrant.
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Upon receipt by the Company of evidence satisfactory to it of the loss,
theft, destruction or mutilation of this Warrant and, in the case of loss, theft
or destruction, of such bond or indemnification as the Company may require, and,
in the case of such mutilation, upon surrender and cancellation of this Warrant,
the Company will execute and deliver a new Warrant of like tenor. The term
"Warrant" as used in this Agreement shall be deemed to include any Warrants
issued in substitution or exchange for this Warrant.
8. Ownership of Warrant.
--------------------
Unless the Company has received notice of transfer of ownership in the form
of Exhibit B hereto, the Company may deem and treat the person in whose 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.
9. Certain Adjustments.
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9.1 The number of Warrant Shares purchasable upon the exercise of this
Warrant and the Exercise Price shall be subject to adjustment as follows:
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(a) Stock Dividends and Splits. If at any time prior to the exercise of
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this Warrant in full (i) the Company shall fix a record date for the issuance of
any stock dividend payable in shares of Preferred Stock or Common Stock or (ii)
the number of shares of Preferred Stock or Common Stock shall have been
increased by a subdivision or split-up of shares of Preferred Stock or Common
Stock, then, on the record date fixed for the determination of holders of
Preferred Stock or Common Stock entitled to receive such dividend or immediately
after the effective date of subdivision or split-up, as the case may be, the
number of shares of Preferred Stock or Common Stock to be delivered upon
exercise of this Warrant will be increased so that the Warrantholder will be
entitled to receive the number of shares of Preferred Stock or Common Stock that
such Warrantholder would have owned immediately following such action had this
Warrant been exercised immediately prior thereto, and the Exercise Price will be
adjusted as provided below in paragraph (h).
(b) Combination of Stock. If at any time prior to the exercise of this
--------------------
Warrant in full the number of shares of Common Stock outstanding shall have
been decreased by a combination of the outstanding shares of Common Stock, then,
immediately after the effective date of such combination, the number of shares
of Common Stock to be delivered upon exercise of this Warrant will be decreased
so that the Warrantholder thereafter will be entitled to receive the number of
shares of Common Stock that such Warrantholder would have owned immediately
following such action had this Warrant been exercised immediately prior thereto,
and the Exercise Price will be adjusted as provided below in paragraph (h).
(c) Reorganization, etc. If at any time prior to the exercise of this
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Warrant in full any capital reorganization of the Company, or any
reclassification of the Preferred Stock or Common Stock, or any consolidation
of the Company with or merger of the Company with or into any other person or
any sale, lease or other transfer of all or substantially all of the assets of
the Company or of the person formed by such consolidation or resulting from
such merger or which acquires such assets the Warrantholder shall be
entitled thereafter to exercise this Warrant for the kind and amount of
securities, cash, and other property receivable upon such consolidation,
merger, sale or transfer by a holder of shares of Preferred Stock or Common
Stock for which this Warrant may have been exercised immediately prior to
such consolidation, merger, sale or transfer, assuming (i) such holder of
Preferred Stock or Common Stock is not a Person with which the Company
consolidated or into which the Company merged or which merged into the
Company or to which such sale or transfer was made, as the case may be
("constituent Person"), or an Affiliate of a constituent Person and (ii) in
the case of a consolidation merger, sale or transfer which includes an
election as to the consideration to be received by the holders, such holder
of Preferred Stock or Common Stock, as applicable, failed to exercise its
rights of election, as to the kind or amount of securities, cash and other
property receivable upon such consolidation, merger, sale or transfer
(provided that if the kind or amount of securities, cash and other property
receivable upon such consolidation, merger, sale or transfer is not the
same for each share of Preferred Stock or Common Stock, as applicable, held
immediately prior to such consolidation, merger, sale or transfer by other
than a constituent Person or an Affiliate thereof and in respect of which such
rights of election shall not have been exercised ("non-electing share"), then
for the purpose of this Section 9.1(c) the kind and amount of securities, cash
and other property receivable upon such consolidation, merger, sale or transfer
by each non-electing share shall be deemed to be the kind and amount so
receivable per share by a plurality of the non-electing shares). Adjustments for
events subsequent to the effective date of such a
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consolidation, merger and sale of assets shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Warrant. In any such event,
effective provisions shall be made in the certificate or articles of
incorporation of the resulting or surviving corporation, in any contract of
sale, conveyance, lease or transfer, or otherwise so that the provisions set
forth herein for the protection of the rights of the Warrantholder shall
thereafter continue to be applicable; and any such resulting or surviving
corporation shall expressly assume the obligation to deliver, upon exercise,
such shares of stock, other securities, cash and property. The provisions of
this Section 9.1(c) shall similarly apply to successive consolidations, mergers,
sales, leases or transfers.
(d) Issuance of Convertible Securities. In case the Company shall issue
----------------------------------
rights, options or warrants entitling the holders thereof to subscribe for or
purchase Common Stock or Preferred Stock (or securities convertible into
shares of Common Stock or Preferred Stock) or shall issue convertible
securities, and the price per share of Common Stock or Preferred Stock of
such rights, options, warrants or convertible securities (including, in the
case of rights, options or warrants, the price at which they may be
exercised) is less than the Fair Market Value per Warrant Share, the
maximum number of shares of Common Stock or Preferred Stock issuable upon
exercise of such rights, options or warrants or upon conversion of such
convertible securities shall be deemed to have been issued and outstanding
as of the date of such sale or issuance, and the Exercise Price shall be
adjusted pursuant to Section 9(h) hereof as though such maximum number of
shares of Common Stock or Preferred Stock had been so issued for an
aggregate consideration equal to the aggregate consideration paid for such
rights, options, warrants or convertible securities and the aggregate
consideration payable by the holders of such rights, options, warrants or
convertible securities prior to their receipt of such shares of Common
Stock or Preferred Stock. Notwithstanding the foregoing, no adjustment shall be
made hereunder for issuances of any securities which are excluded from the
definition of "Additional Shares of Common Stock" pursuant to Sections
4(e)(v)(1), (2) or (3) or the Company's Amended and Restated Certificate as of
the date hereof. In case any portion of such consideration shall be in a form
other than cash, the Fair Market Value of such noncash consideration shall be
determined as set forth in Section 2.1(c) hereof. Such adjustment shall be made
successively whenever such rights, options, warrants or convertible securities
are issued; and in the event that such rights, options or warrants expire
unexercised, or in the event of a change in the number of shares of Common Stock
or Preferred Stock to which the holders of such rights, options, warrants or
convertible securities are entitled, the Exercise Price shall again be adjusted
to be the Exercise Price which would then be in effect if such rights, options,
warrants or convertible securities had not been issued, in the former event, or
the Exercise Price which would then be in effect if such holders had initially
been entitled to such changed number of shares of Common Stock, in the latter
event. No adjustment of the Exercise Price shall be made pursuant to this
Section 9(d) to the extent that the Exercise Price shall have been adjusted
pursuant to Section 9(h) upon the setting of any record date relating to such
rights, options, warrants or convertible securities and such adjustment fully
reflects the number of shares of Common Stock or Preferred Stock to which the
holders of such rights, options, warrants or convertible securities are entitled
and the price payable therefor.
(e) Distributions. In case the Company shall fix a record date for the
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making of a distribution to holders of Common Stock or Preferred Stock
(including any such distribution made in connection with a consolidation or
merger in which the Company is the continuing
-9-
corporation) of evidences of indebtedness, assets or other property (other than
dividends payable in Common Stock or Preferred Stock or rights, options or
warrants referred to in, and for which an adjustment is made pursuant to,
Sections 9.1(a) or (c) hereof), the Exercise Price to be in effect after such
record date shall be determined by multiplying the Exercise Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the Fair Market Value per share on such record date, less the fair
market value (determined as set forth in Section 2.1(c) hereof) of the portion
of the assets, other property or evidence of indebtedness so to be distributed
which is applicable to one share of Common Stock, and the denominator of which
shall be such Fair Market Value per share. Such adjustments shall be made
successively whenever such a record date is fixed; and in the event that such
distribution is not so made, the Exercise Price shall again be adjusted to be
the Exercise Price which would then be in effect if such record date had not
been fixed.
(f) Fractional Shares. No fractional shares of Preferred Stock or
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scrip shall be issued to any Warrantholder in connection with the exercise of
this Warrant. Instead of any fractional shares of Preferred Stock that would
otherwise be issuable to such Warrantholder, the Company will pay to such
Warrantholder a cash adjustment in respect of such fractional interest in an
amount equal to that fractional interest of the then current Fair Market Value
per share of Preferred Stock.
(g) Carryover. Notwithstanding any other provision of this Section 9, no
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adjustment shall be made to the number of shares of Preferred Stock to be
delivered to the Warrantholder (or to the Exercise Price) if such adjustment
represents less than 1% of the number of shares to be so delivered, but any
lesser adjustment shall be carried forward and shall be made at the time and
together with the next subsequent adjustment which together with any adjustments
so carried forward shall amount to 1% or more of the number of shares to be so
delivered.
(h) Exercise Price Adjustment. Whenever the number of Warrant Shares
-------------------------
purchasable upon the exercise of the Warrant is adjusted, as herein provided,
the Exercise Price payable upon the exercise of this Warrant shall be adjusted
by multiplying such Exercise Price immediately prior to such adjustment by a
fraction, of which the numerator shall be the number of Warrant Shares
purchasable upon the exercise of the Warrant immediately prior to such
adjustment, and of which the denominator shall be the number of Warrant Shares
purchasable immediately thereafter.
(i) No Duplicate Adjustments. Notwithstanding any other provision of this
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Warrant, no adjustment shall be made under any subsection of this Section 9 to
the number of Warrant Shares issuable hereunder or to the Exercise Price with
respect to which and to the extent an adjustment having the same effect has been
made at such time under another subsection of this Section 9. If an adjustment
is made to the Series C Conversion Price or to the number of shares of Common
Stock issuable upon conversion of the Preferred pursuant to the Company's
Amended and Restated Certificate of Incorporation and Warrantholder actually
receives the full effect of such adjustment upon exercise of this Warrant, then
no duplicative adjustment to the number of Warrant Shares or the Exercise Price
shall be made under this Section 9.
9.2 No Adjustment for Dividends. Except as provided in Section 9.1, no
---------------------------
adjustment in respect of any dividends shall be made during the term of the
Warrant or upon the exercise of this Warrant. For purposes of any computation
under this Section 9, the number of shares of
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Preferred Stock and Common Stock outstanding at any given time shall not include
shares owned or held by or for the account of the Company.
9.3 Notice of Adjustment. Whenever the number of Warrant Shares or the
--------------------
Exercise Price of such Warrant Shares is adjusted, as herein provided, the
Company shall promptly mail by first class, postage prepaid, to the
Warrantholder, notice of such adjustment or adjustments and a certificate of the
chief financial officer of the Company setting forth the number of Warrant
Shares and the Exercise Price of such Warrant Shares after such adjustment,
setting forth a statement of the facts requiring such adjustment and setting
forth the computation by which such adjustment was made together with supporting
documentation reasonably requested by Warrantholder. The Company shall
cooperate with the Warrantholder in the event the Warrantholder disagrees with
or requests more information regarding such adjustment.
10. Notices of Corporate Action.
---------------------------
In the event of
(a) any taking by the Company of a record of the holders of any class of
securities for the purpose of determining the holders thereof who are entitled
to receive any dividend or other distribution, 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) any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any Change of Control,
or
(c) any voluntary or involuntary dissolution, liquidation or winding-up
of the Company, or
(d) the receipt of a request for registration of Registrable Securities by
Investors under the Registration Rights Agreement or the Company determines
to file a registration statement giving rise to the Investors' rights under
such Agreement
the Company will mail to the Warrantholder a notice specifying (i) the date or
expected date on which any such record is to be taken for the purpose of such
dividend, distribution or right and the amount and character of any such
dividend, distribution or right, (ii) the date of receipt of a request for
registration from Investors or the Company's notice to Investors as referred to
in clause (d), and (iii) the date or expected date on which any such
reorganization, reclassification, recapitalization, Change of Control,
dissolution, liquidation or winding-up is to take place and the time, if any
such time is to be fixed, as of which the holders of record of Preferred Stock
(or other securities) shall be entitled to exchange their shares of Preferred
Stock (or other securities) for the securities or other property deliverable
upon such reorganization, reclassification, recapitalization, Change of Control,
dissolution, liquidation or winding-up. Such notice shall be mailed at least 20
days prior to the date therein specified, in the case of any date referred to in
the foregoing subdivision (i), and at least 20 days prior to the date therein
specified, in the case of the date referred to in the foregoing subdivision
(ii).
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11. Definitions.
-----------
As used herein, unless the context otherwise requires, the following terms
have the following respective meanings:
Affiliate: shall have the meaning given to such term in Rule 12b-2
---------
promulgated under the Exchange Act.
Business Day: any day other than a Saturday, Sunday or a day on which
------------
national banks are authorized by law to close.
Change of Control: shall mean (i) the acquisition of the Company pursuant
-----------------
to a consolidation of the Company with or merger of the Company with or into any
other person in which the Company is not the surviving corporation (other than a
reincorporation), (ii) the sale of all or substantially all of the assets of the
Company to any other person or (iii) any sale or transfer of any capital stock
of the Company after the date of this Agreement, following which fifty percent
(50%) or more of the Company's outstanding voting stock is transferred to
holders different than those who held the stock immediately prior to such sale
or transfer. For purposes of this definition, "group" shall have the meaning as
such term is used in Section 13(d)(1) under the Exchange Act.
Company: ▇▇▇▇▇▇▇.▇▇▇, Inc., a Delaware corporation.
-------
Exchange Act: the Securities Exchange Act of 1934, as amended, or any
------------
successor federal statute, and the rules and regulations of the SEC thereunder,
all as the same shall be in effect at the time. Reference to a particular
section of the Securities Exchange Act of 1934, as amended, shall include a
reference to a comparable section, if any, of any successor federal statute.
Exercise Form: an Exercise Form in the form annexed hereto as Exhibit A.
-------------
Exercise Price: the meaning specified on the cover of this Warrant, as
--------------
such price may be adjusted pursuant to Section 9 hereof.
Investors: has the meaning assigned to it in the Registration Rights
---------
Agreement.
Nasdaq: the meaning specified in Section 3.1(c)(ii).
------
SEC: the Securities and Exchange Commission or any other federal agency at
---
the time administering the Securities Act or the Exchange Act, whichever is the
relevant statute for the particular purpose.
Securities Act: the Securities Act of 1933, as amended, or any successor
--------------
federal statute, and the rules and regulations of the Commission thereunder, all
as the same shall be in effect at the time. Reference to a particular section of
the Securities Act of 1933, as amended, shall include a reference to the
comparable section, if any, of any successor federal statute.
Warrantholder: the meaning specified on the cover of this Warrant.
-------------
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Warrant Shares: the meaning specified on the cover of this Warrant,
--------------
subject to the provisions of Sections 4.1 and 9.
12. Miscellaneous.
-------------
12.1 Entire Agreement. This Warrant constitutes the entire agreement
----------------
between the Company and the Warrantholder with respect to this Warrant.
12.2 Binding Effects; Benefits. This Warrant shall inure to the benefit
-------------------------
of and shall be binding upon the Company and the Warrantholder and their
respective successors and assigns. Nothing in this Warrant, expressed or
implied, is intended to or shall confer on any person other than the Company and
the Warrantholder, or their respective successors, any rights, remedies,
obligations or liabilities under or by reason of this Warrant.
12.3 Amendments and Waivers. This Warrant may not be modified or amended
----------------------
except by an instrument or instruments in writing signed by the Company and the
Warrantholder. Either the Company or the Warrantholder may, by an instrument in
writing, waive compliance by the other party with any term or provision of this
Warrant on the part of such other party hereto to be performed or complied with.
The waiver by any such party of a breach of any term or provision of this
Warrant shall not be construed as a waiver of any subsequent breach.
12.4 Registration Rights. At its election, the Warrantholder shall
-------------------
become a party with the same rights as each Investor thereunder, to that certain
Amended and Restated Investors Rights Agreement a draft of which has been
provided to Warrantholder ("Registration Rights Agreement
12.5 Section and Other Headings. The section and other headings
--------------------------
contained in this Warrant are for reference purposes only and shall not be
deemed to be a part of this Warrant or to affect the meaning or interpretation
of this Warrant.
12.6 Further Assurances. Each of the Company and the Warrantholder shall
------------------
do and perform all such further acts and things and execute and deliver all such
other certificates, instruments and documents as the Company or the
Warrantholder may, at any time and from time to time, reasonably request in
connection with the performance of any of the provisions of this Agreement and
the other agreements referred to herein to which the Company and Warrantholder
are parties.
12.7 Notices. All notices and other communications required or permitted
-----------
to be given under this Warrant shall be in writing and shall be deemed to have
been duly given if delivered personally or sent by United States mail, postage
prepaid, to the parties hereto at the following addresses or to such other
address as any party hereto shall hereafter specify by notice to the other party
hereto:
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(a) if to the Company, addressed to:
▇▇▇▇▇▇▇.▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Pillsbury Madison & Sutro LLP
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ del ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to the Warrantholder, addressed to:
General Electric Company
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
General Electric Company
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Except as otherwise provided herein, all such notices and communications shall
be deemed to have been received on the date of delivery thereof, if delivered
personally, or on the fifth Business Day after the mailing thereof.
12.8 Counterparts. This Warrant may be executed in any number of
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
12.9 Separability. Any term or provision of this Warrant which is
------------
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the terms and provisions of this Warrant or
affecting the validity or enforceability of any of the terms or provisions of
this Warrant in any other jurisdiction.
12.10 Governing Law. This Warrant shall be deemed to be a contract made
-------------
under the laws of the State of Delaware.
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12.11 No Rights or Liabilities as Stockholder. Until and unless this
---------------------------------------
Warrant shall have been exercised in accordance with the terms hereof, nothing
contained in this Warrant shall be deemed to confer upon the Warrantholder any
rights as a stockholder of the Company or to impose any liabilities on the
Warrantholder to purchase any securities whether such liabilities are asserted
by the Company or by creditors or stockholders of the Company or otherwise.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its
duly authorized officer.
Dated: February 17, 2000.
GENERAL ELECTRIC COMPANY ▇▇▇▇▇▇▇.▇▇▇, INC.
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
------------------------ ------------------------
Title Mgr, Technology Title President & CEO
------------------------ ------------------------
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Exhibit A
---------
EXERCISE FORM
-------------
(To be executed upon exercise of this Warrant)
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant, to purchase Warrant Shares and (check one):
herewith tenders payment for _______ of the Warrant Shares to the
[ ] order of ▇▇▇▇▇▇▇.▇▇▇, Inc. in the amount of $_________ in
accordance with the term this Warrant; or
herewith tenders this Warrant for _______ Warrant Shares pursuant
[ ] to the Net Issue Exercise provisions of Section 2.1(b) of this
Warrant
The undersigned requests that a certificate (or certificates) for such Warrant
Shares be registered in the name of the undersigned and that such certificate
(or certificates) be delivered to the undersigned's address below.
In exercising this Warrant, the undersigned hereby confirms and
acknowledges that the Warrant Shares are being acquired solely for the account
of the undersigned and not as a nominee for any other party, or for investment,
and that the undersigned will not offer, sell or otherwise dispose of any such
Warrant Shares except under circumstances that will not result in a violation of
the Securities Act of 1933, as amended, or any state securities laws.
Dated: ___________________.
_______________________________________
(Signature)
_______________________________________
(Print Name)
_______________________________________
(▇▇▇▇▇▇ ▇▇▇▇▇▇▇)
_______________________________________
(City) (State) (Zip Code)
If said number of shares shall not be all the shares purchasable under the
within Warrant, a new Warrant is to be issued in the name of said undersigned
for the balance remaining of the shares purchasable thereunder.
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Exhibit B
---------
TRANSFER NOTICE
(To transfer or assign the foregoing Warrant Agreement execute this form and
supply required information. Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant Agreement and all rights
evidenced thereby are hereby transferred and assigned to
___________________________________________________________________
(Please Print)
whose address is___________________________________________________
___________________________________________________________________
Dated:___________________________________
Holder's Signature:______________________
Holder's Address:________________________
__________________________________________
Signature Guaranteed: __________________________________________
NOTE: The signature to this Transfer Notice must correspond with the name
as it appears on the face of the Warrant Agreement, without alteration
or enlargement or any change whatever. Officers of corporations and
those acting in a fiduciary or other representative capacity should file
proper evidence of authority to assign the foregoing Warrant Agreement.
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