EXHIBIT 4.5
THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR UNLESS OFFERED, SOLD, PLEDGED OR HYPOTHECATED PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS, AND THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THESE SECURITIES REASONABLY SATISFACTORY TO THE COMPANY STATING THAT SUCH OFFER, SALE, PLEDGE OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
▇▇▇▇▇▇.▇▇ INC.
AMENDED AND RESTATED WARRANT TO PURCHASE COMMON STOCK
No. CSW-[__] Originally Issued December 16, 2021
Amended and Restated October [___], 2023
Void After December 16, 2031
This Certifies That, for value received, [________________] or its assigns (the “Holder”), is entitled to subscribe for and purchase at the Exercise Price (as defined below) from ▇▇▇▇▇▇.▇▇ Inc., a Delaware corporation, with its principal office at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (the “Company”) a number of fully paid and non-assessable shares of Common Stock (as defined below) equal to the Warrant Coverage (as defined below), subject to adjustment pursuant to the terms herein, including but not limited to adjustment pursuant to Section 6 below.
This Amended and Restated Warrant to Purchase Common Stock (this “Warrant”) amends and restates the Warrant to Purchase Common Stock originally issued on December 16, 2021, as amended July 12, 2022, pursuant to the terms of that certain Loan and Security Agreement, dated December 16, 2021, by and among the Company, the lenders from time to time party thereto (including the Holder) (the “Lenders”) and Alter Domus (US) LLC, as administrative and collateral agent for Lenders (as amended through the date hereof, the “Agreement”). This Warrant amended and restated the original warrant to make certain revisions in connection with the Otonomo Acquisition. Each capitalized term used but not defined in this Warrant has the meaning given to such term in the Agreement.
1.Definitions. As used herein, the following terms shall have the following respective meanings:
(a)“Certificate of Incorporation” shall mean the Company’s Amended and Restated Certificate of Incorporation filed with the Delaware Secretary of State on July 12, 2022. (b)“Commission” shall mean the United States Securities and Exchange Commission.
(c) “Exercise Period” shall mean the period commencing December 16, 2021 and ending December 16, 2031, unless sooner terminated as provided below.
(d)“Exercise Price” shall mean $0.01 per share, subject to adjustment pursuant to Section 6 below.
(e)“Fully Diluted Capitalization” shall mean, as of the time any determination is made, the issued and outstanding capital stock of the Company on a fully diluted basis after giving effect to (i) the exercise, conversion and exchange of all options, warrants and all other securities convertible into, or exercisable or exchangeable for, shares of Common Stock, and (ii) the issuance of all shares of capital stock reserved under any incentive plan; provided that, in the event that the Warrant is exercised pursuant to the application of Section 8.2, the Fully Diluted Capitalization shall exclude (x) the conversion of any 2022 Notes (as defined in the Otonomo Acquisition Agreement) that remain outstanding following the 2022 Note Conversions (as defined in the Otonomo Acquisition Agreement) and are not being converted in connection with the Otonomo Acquisition and (y) shares of Common Stock reserved, but neither issued nor the subject of outstanding awards, under the Company’s 2023 Equity Incentive Plan and the Company’s 2023 Employee Stock Purchase Plan.
(f)“Warrant Coverage” shall mean (i) if the Otonomo Exercise Conditions have not been satisfied, [____]% of the Fully Diluted Capitalization of the Company calculated at the time the Warrant is exercised and (ii) if the Otonomo Exercise Conditions have been satisfied, a number of shares of Common Stock equal to [____]% of the Fully Diluted Capitalization of the Company calculated as of immediately prior to the last to occur of the Otonomo Exercise Conditions (but, to avoid doubt, after giving effect to the Note Conversions (as defined in the Otonomo Acquisition Agreement)), and without including any shares of Common Stock issued to stockholders of Otonomo in the Otonomo Acquisition.
2.1Cash Exercise. The rights represented by this Warrant may be exercised in whole or in part at any time during the Exercise Period, by delivery of the following to the Company at its address set forth above (or at such other address as it may designate by notice in writing to the Holder):
(a)An executed Notice of Exercise in the form attached hereto;
(b)Payment of the Exercise Price either (i) in cash, by check or by wire transfer of immediately available funds, or (ii) by cancellation of indebtedness; and
Upon the exercise of the rights represented by this Warrant, a certificate or certificates for the Common Stock so purchased, registered in the name of the Holder or persons affiliated with the Holder, if the Holder so designates, shall be issued and delivered to the Holder as soon as practicable and in any event within two (2) business days after the rights represented by this Warrant shall have been so exercised. In the event that this Warrant is being exercised for less than all of the then-current number of shares of Common Stock purchasable hereunder, the Company shall, concurrently with the issuance by the Company of the number of shares of Common Stock for which this Warrant is then being exercised, issue a new Warrant exercisable for the remaining number of shares of Common Stock purchasable hereunder.
The person in whose name any certificate or certificates for Common Stock are to be issued upon exercise of this Warrant shall be deemed to have become the holder of record of such shares on the date on which this Warrant was surrendered and (in the case of exercises pursuant to Section 2.1) payment of the Exercise Price was made, irrespective of the date of delivery of such certificate or certificates, except that, if the date of such surrender and any such payment is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the stock transfer books are open.
2.2Net Exercise. Notwithstanding any provisions herein to the contrary, if the Fair Market Value per Share (as defined below) is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash, the Holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) in exchange for the surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula:
X = (Y x (A-B))
A
Where X = the number of shares of Common Stock to be issued to the Holder
Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation)
A = the Fair Market Value per Share (at the date of such calculation)
B = Exercise Price (as adjusted to the date of such calculation)
For purposes of Section 2.2, the “Fair Market Value per Share” as of any date shall mean (i) if the Common Stock is then traded on a nationally recognized securities exchange (a “Trading Market”), the closing price or last sale price of a share of the Common Stock reported for the trading day immediately before the date on which Holder delivers this Warrant together with its Notice of Exercise to the Company and (ii) if the Common Stock is not then traded on a Trading Market, an amount per share of Common Stock issued or issuable pursuant to this Warrant equal to the Fair Market Value (as defined below) of the Company as of such date divided by the Fully Diluted Capitalization as of such date.
For purposes of this Section 2.2, the Board of Directors of the Company shall determine the “Fair Market Value” in good faith and taking into account the Company’s most recent valuation; provided, however, that in the event that this Warrant is exercised pursuant to this Section 2.2 in connection with the Company’s IPO, the Fair Market Value shall be the per share offering price to the public in the IPO multiplied by the Fully Diluted Capitalization as of the date of the IPO; provided, further, that, if the Direct Listing is effectuated in connection with the Otonomo Acquisition, then the Fair Market Value shall be the lesser of (1) $271,000,000, plus the Company’s cash-on-hand and cash equivalents, minus the aggregate outstanding Indebtedness owed to the Structural Lenders under the Structural Loan Documents, the Lenders under the Loan Agreement, and other outstanding borrowed money indebtedness of the Company incurred outside of the ordinary course of business, in each case, measured immediately prior to the consummation of the Otonomo Acquisition, and (2) the definition of Aggregate Valuation in the Otonomo Acquisition Agreement.
2.3Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates (including any investment vehicle, including, any funds, feeder funds or managed accounts, currently, or from time to time after the date hereof, directly or indirectly managed or advised by the Holder’s investment manager or any of its affiliates or principals (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other Common Stock equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 2.3, beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2.3 applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2.3, in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent of the Company setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within one trading day confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 9.90% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2.3, provided that the Beneficial Ownership Limitation in no event exceeds 9.90% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2.3 shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2.3 to correct this paragraph (or any portion
hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.
3.Covenants of the Company.
3.1Covenants as to Common Stock. The Company covenants and agrees that all Common Stock that may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be validly issued and outstanding, fully paid and nonassessable, and free from all taxes, liens and charges with respect to the issuance thereof. The Company further covenants and agrees that the Company will at all times during the Exercise Period, have authorized and reserved, free from preemptive rights, a sufficient number of shares of Common Stock to provide for the exercise of the rights represented by this Warrant. If at any time during the Exercise Period the number of authorized but unissued shares of Common Stock shall not be sufficient to permit exercise of this Warrant, the Company will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes.
(a)In the event of 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, the Company shall mail to the Holder, at least ten (10) business days prior to the date specified herein, a notice specifying the date on which any such record is to be taken for the purpose of such dividend or distribution.
(b)The Company shall provide written notice to the Holder at least ten (10) business days prior to (i) the date of filing of a registration statement for an IPO or (ii) the date that the Company proposes to consummate an Acquisition (defined below), which notice shall, in each case, contain: (A) a brief description of the proposed transaction; and (B) the date upon which such proposed transaction is to take place.
3.3Taxes. No charge shall be made to the Holder for any exercise or registration of transfer of this Warrant, and the Company shall pay all costs and expenses in connection with, and all documentary, recordation or registration or similar taxes that may be imposed with respect to the delivery, execution or performance of this Warrant or the issuance of Common Stock upon exercise of this Warrant.
4.Representations of the Company
4.1Due Organization and Qualification. The Company is a Delaware corporation duly formed and existing under the laws of its state of formation and qualified and licensed to do business in any state in which the conduct of its business or its ownership of property requires that it be so qualified, except where the failure to do so could not reasonably be expected to cause a Material Adverse Effect. 4.2Authority. The execution, delivery, and performance of this Warrant is within the Company’s powers, has been duly authorized, and is not in conflict with nor constitute a breach of any provision of the Company’s certificate of incorporation. All corporate action required to be taken by the Company’s Board of Directors and stockholders to authorize the issuance of the Common Stock upon exercise of the Warrants, has been taken.
4.3Valid Issuance of Common Stock. The Common Stock issuable upon exercise of this Warrant have been duly reserved for issuance, and upon issuance in accordance with the terms of the
Certificate of Incorporation, will be validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under applicable federal and state securities laws. The Common Stock issuable upon exercise of this Warrant will be issued in compliance with all applicable federal and state securities laws.
4.4Capitalization. The authorized capital stock of the Company consists of: (i) 600,000,000 shares of common stock, $0.001 par value per share (the “Common Stock”), 154,791 shares of which are issued and outstanding; and (ii) 160,000 shares of preferred stock, $0.001 par value per share (the “Preferred Stock”), all of which are issued and outstanding. All of the outstanding shares of Common Stock and Preferred Stock have been duly authorized, are fully paid and nonassessable and were issued in compliance with all applicable federal and state securities laws and are not subject to any pre-emptive or similar rights. The rights, privileges and preferences of the Preferred Stock are as stated in the Certificate of Incorporation and as provided by the Delaware General Corporation Law. All of the issued shares of capital stock, partnership interests or membership interests, as applicable, of each Subsidiary have been duly and validly authorized and issued, are fully paid and nonassessable and are owned directly or indirectly by the Company, free and clear of all Liens. 4.5Stock Plans. 771,680 shares of Common Stock have been reserved for issuance to officers, directors, employees and consultants of the Company pursuant to its 2013 Equity Incentive Plan duly adopted by the Board of Directors and approved by the Company stockholders (the “Stock Plan”). Of such reserved shares of Common Stock, 1,506 shares have been issued pursuant to the exercise of stock options and not repurchased, options to purchase 43,913 shares have been granted and are currently outstanding, and 726,261 shares of Common Stock remain available for issuance to officers, directors, employees and consultants pursuant to the Stock Plan. No other compensatory plans providing for the issuance of Common Stock or Preferred Stock have been authorized or approved by the Board of Directors of the Company as of the date hereof.
4.6Conflict with Other Instruments, etc. Neither the execution and delivery of this Warrant nor the consummation of the transactions herein contemplated nor compliance with the terms, conditions and provisions hereof will (a) conflict with or result in a breach of any material law or any material regulation, order, writ, injunction or decree of any court or governmental instrumentality or (b) result in the creation or imposition of any Lien on any assets of the Company or any Subsidiary, other than Permitted Liens and Liens granted to Agent under the Agreement.
4.7Enforceability. This Warrant has been duly executed and delivered by the Company, and constitute legal, valid and binding obligations of the Company, enforceable in accordance with its terms, except as the enforceability hereof may be limited by bankruptcy, insolvency or other similar laws of general application relating to or affecting the enforcement of creditors’ rights or by general principles of equity.
5.Representations of Holder.
5.1Acquisition of Warrant for Personal Account. The Holder confirms, that this Warrant and the Common Stock issuable upon exercise of this Warrant have been and will be, as the case may be, acquired for investment for the Holder’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and that the Holder has no present intention of selling, granting any participation in, or otherwise distributing the same. By executing this Agreement, the Holder further represents that the Holder does not presently have any contract, undertaking, agreement or arrangement with any Person to sell, transfer or grant participations to such Person or to any third Person, with respect to this Warrant or the Common Stock issuable upon exercise of this Warrant.
5.2Securities Are Not Registered.
(a)The Holder understands that this Warrant and the Common Stock issuable upon exercise of this Warrant have not been registered under the Securities Act of 1933, as amended (the “Act”) in reliance upon Section 4(a)(2) of the Act.
(b)The Holder recognizes that the Warrant and the Common Stock issuable upon exercise of this Warrant must be held indefinitely unless they are subsequently registered under the Act or an exemption from registration is available. The Holder recognizes that the Company has no obligation to register the Warrant or the Common Stock issuable upon exercise of this Warrant, or to facilitate any subsequent exemption from such registration.
(c)The Holder is aware that neither the Warrant nor the Common Stock issuable upon exercise of this Warrant may be sold pursuant to Rule 144 adopted under the Act unless certain conditions are met, including, among other things, the availability of certain current public information about the Company and the required holding period under Rule 144 being satisfied. Holder is aware that any such sale made in reliance on Rule 144, if Rule 144 is available, may be made only in accordance with the terms of Rule 144.
5.3Disposition of Warrant and Common Stock.
(a)The Holder further agrees not to make any disposition of all or any part of the Warrant or Common Stock issuable upon exercise of this Warrant unless:
(i)The Company shall have received a letter secured by the Holder from the Commission stating that no action will be recommended to the Commission with respect to the proposed disposition;
(ii)There is then in effect a registration statement under the Act covering such proposed disposition and such disposition is made in accordance with said registration statement; or
(iii)The Holder effects a sale or other disposition pursuant to a transaction not requiring registration under the Act.
(b)Except as set forth in Section 8.2, the Holder understands and agrees that all certificates evidencing the Common Stock issuable upon exercise of this Warrant may bear the following legend:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR UNLESS OFFERED, SOLD, PLEDGED OR HYPOTHECATED PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS, AND THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THESE SECURITIES REASONABLY SATISFACTORY TO THE COMPANY STATING THAT SUCH OFFER, SALE, PLEDGE OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
(c)At the Holder’s request, the Company shall promptly remove any such legend from certificates evidencing the Common Stock upon being advised by the Holder that it intends to sell or dispose of all or any part of the Warrant or Common Stock issuable upon exercise of this Warrant pursuant to a transaction not requiring registration under the Act; provided that, if reasonably requested by the Company, the Holder shall furnish the Company with an opinion of counsel, reasonably satisfactory to the Company, to the effect that such offer, sale or other disposition may be effected without registration under the Act.
6.Adjustment of Common Stock and Price.
6.1Reclassification or Merger. In case of any reclassification, change or conversion of securities in the class issuable upon exercise of this Warrant (other than a transaction resulting in early termination of this warrant pursuant to Section 8, or a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination), or in case of any merger of the Company with or into another corporation (other than a merger with another corporation in which the Company is a continuing corporation and which does not result in any reclassification or change of outstanding securities issuable upon exercise of this Warrant), or in case of any sale or transfer of all or substantially all of the assets of the Company, unless this Warrant shall have been exercised or terminated in accordance with its terms, Holder of this Warrant shall have the right to exercise this Warrant and upon such exercise to receive, in lieu of the shares of Common Stock theretofore issuable upon exercise of this Warrant, the kind and amount of consideration, including but not limited to shares of stock, other securities, money and property receivable upon such reclassification, change, conversion, merger, sale or transfer as would have been received if this Warrant had been exercised in full immediately prior to such event. The provisions of this subparagraph shall similarly apply to successive reclassifications, changes, conversions, mergers, sales or transfers.
6.2Subdivisions or Combination of Shares. If at any time while this Warrant remains outstanding and unexpired the Company shall subdivide or combine its Common Stock, the Exercise Price and the number of shares of Common Stock issuable upon exercise hereof shall be proportionately adjusted; provided that no adjustment hereunder shall be made on account of any reverse stock split consummated prior to the satisfaction of the Otonomo Exercise Conditions.
6.3Stock Dividends. If at any time while this Warrant is outstanding and unexpired the Company shall pay a dividend payable in shares of Common Stock (except any distribution specifically provided for in the foregoing subparagraphs 6.1 and 6.2), then the Exercise Price shall be adjusted, from and after the date of determination of stockholders entitled to receive such dividend or distribution, to that price determined by multiplying the Exercise Price in effect immediately prior to such date of determination by a fraction (a) the numerator of which shall be the total number of shares of Common Stock outstanding immediately prior to such dividend or distribution, and (b) the denominator of which shall be the total number of shares of Common Stock outstanding immediately after such dividend or distribution and the number of shares of Common Stock subject to this Warrant shall be proportionately adjusted.
6.4Notice of Adjustments. Whenever the Exercise Price shall be adjusted pursuant to the provisions hereof, the Company shall within ten (10) calendar days of such adjustment deliver a certificate signed by its chief financial officer to Holder setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, and the number of shares of Common Stock subject to this Warrant and the Exercise Price therefor, as applicable, after giving effect to such adjustment.
7.Fractional Shares. No fractional shares Common Stock shall be issued upon the exercise of this Warrant as a consequence of any adjustment pursuant hereto. All Common Stock (including
fractions) to be issued upon exercise of this Warrant shall be aggregated for purposes of determining whether the exercise would result in the issuance of any fractional share. If, after aggregation, the exercise would result in the issuance of a fractional share, the Company shall, in lieu of issuance of any fractional share, pay the Holder otherwise entitled to such fraction a sum in cash equal to the product resulting from multiplying the then current Fair Market Value per Share by such fraction.
8.Early Termination / Exercise.
8.1Early Exercise Upon IPO, Deemed Liquidation Event or SPAC Transaction. In the event that, at any time during the Exercise Period, the Company proposes to enter into, and delivers a notice to the Holder, pursuant to Section 3.2(b), of (a) an IPO, (b) a Deemed Liquidation Event (defined in the Company’s Certificate of Incorporation) or (c) a SPAC Transaction (each of the transactions described in clauses (b) and (c), an “Acquisition”), then the Holder may exercise its right during the period beginning on the date of Holder’s receipt of such notice and ending on the date that is two (2) business days prior to the date upon which such proposed IPO or Acquisition is to take place (the “Early Termination Period”), if the Fair Market Value per Share is then greater than the Exercise Price, to exercise its right, in accordance with all applicable conditions of exercise set forth in this Warrant, subject to the provisions of Section 2.3, to purchase all of the shares of Common Stock that ▇▇▇▇▇▇ is entitled to purchase hereunder. If Holder fails to so exercise such right to purchase the shares of Common Stock hereunder, then this Warrant shall be deemed exercised under Section 2.2 immediately prior to closing of the IPO or Acquisition if the Fair Market Value per Share (as defined in Section 2.2 and calculated based on the consummation of the IPO or Acquisition) is then greater than the Exercise Price, subject to the provisions of Section 2.3. In the event of an Acquisition in which the Fair Market Value per Share is determined to be less than the Exercise Price (at the date of calculation as set forth in Section 2.2), this Warrant shall terminate immediately prior to the consummation of such Acquisition. In no event will the Otonomo Acquisition be treated as an IPO or Acquisition for purposes of this Section 8.1.
8.2Early Exercise in connection with the Otonomo Acquisition. Immediately prior to, but subject to the completion of, the last to occur of (i) the consummation of the Otonomo Acquisition pursuant to the Otonomo Acquisition Agreement on or prior to October 31, 2023 and without any amendment, restated supplement, waiver or modification of any provision contained in the Otonomo Acquisition Agreement that is adverse to the Holder in any respect on or prior to the consummation of the Otonomo Acquisition and (ii) the completion of the Direct Listing occurring substantially concurrently with the Otonomo Acquisition (collectively, the “Otonomo Exercise Conditions”), and assuming the Fair Market Value per Share (determined as set forth below) is greater than the Exercise Price, this Warrant shall be deemed exercised under Section 2.2. Notwithstanding anything in this Warrant to the contrary, all shares of Common Stock issued upon a deemed exercise under Section 2.2 pursuant to the application of this Section 8.2 shall be issued without restrictive legend or other limitation on transfer (and without any requirement for the delivery of a legal opinion in connection therewith) and shall be freely transferrable by the Holder pursuant to either (1) one or more effective registration statements registering the resale of such shares of Common Stock by the Holder (and having plan of distribution disclosure reasonably acceptable to the Holder) or (2) Rule 144 without regard to the limitations on the manner of sale, filing of notices, volume limitations or current public information specified therein. Any exercise of this Warrant pursuant to the application of this Section 8.2 shall be subject to the provisions of Section 2.3.
9.Piggyback Registration Rights. In the event of: (a) an IPO, the Holder shall have the right, but not the obligation, to participate as a selling stockholder and include all or any portion of the Common Stock issuable upon exercise of this Warrant in the IPO registration statement and any subsequent registration statements on a pari passu basis with the Company; (b) a SPAC Transaction where the Holder receives SPAC securities in exchange for Common Stock, the Holder shall have the right, but not the obligation, to participate as a selling stockholder and include all or any portion of such SPAC securities in
any subsequent registration statements filed by the SPAC on a pari passu basis with the SPAC (including, for the avoidance of doubt, participating as a selling securityholder in any registration statement filed with respect to any private placement of equity securities consummated in connection with the SPAC Transaction); and (c) a Direct Listing, the Holder shall have the right, but not the obligation, to participate as a selling stockholder and include all or any portion of the Common Stock issuable upon exercise of this Warrant in the initial registration statement filed in connection with the Direct Listing and any subsequent registration statements on a pari passu basis with all other Company stockholders including shares of capital stock in such registration statement. This Section 9 shall survive any exercise of this Warrant.
10.No Stockholder Rights. This Warrant in and of itself shall not entitle the Holder to any voting rights or other rights as a stockholder of the Company.
11.Transfer of Warrant. Subject to applicable laws, and the restriction on transfer set forth on the first page of this Warrant, this Warrant and all rights hereunder are transferable, by the Holder in person or by duly authorized attorney, upon delivery of this Warrant and the form of assignment attached hereto to any transferee designated by ▇▇▇▇▇▇.
12.Lost, Stolen, Mutilated or Destroyed Warrant. If this Warrant is lost, stolen, mutilated or destroyed, the Company may, on such terms as to indemnity or otherwise as it may reasonably impose (which shall, in the case of a mutilated Warrant, include the surrender thereof), issue a new Warrant of like denomination and tenor as the Warrant so lost, stolen, mutilated or destroyed. Any such new Warrant shall constitute an original contractual obligation of the Company, whether or not the allegedly lost, stolen, mutilated or destroyed Warrant shall be at any time enforceable by anyone.
13.Notices. All notices required or permitted hereunder shall be given in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by confirmed email or facsimile if sent during normal business hours of the recipient, if not, then on the next business day, (c) five (5) business days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) business day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the address of the respective party listed on the signature page of this Warrant or at such other address as the Company or Holder may designate by ten (10) business days’ advance written notice to the other party.
14.Acceptance. Receipt of this Warrant by the Holder shall constitute acceptance of and agreement to all of the terms and conditions contained herein.
15.Amendment. Any term of this Warrant may only be amended or waived by the written consent of the Company and the Holder.
16.Governing Law. This Warrant shall be governed as to validity, interpretation, construction, effect and all other respects by the laws of the State of Delaware without regard to the principals and conflict of laws. [Signature Page(s) Follow]
In Witness Whereof, the Company has caused this Warrant to be executed by its duly authorized officer as of the date first set forth above.
▇▇▇▇▇▇.▇▇ Inc.
By:
Name:
Title:
Address:
In Witness Whereof, the Holder has caused this Warrant to be executed by its duly authorized officer as of the date first set forth above.
Holder
By:
Name:
Title:
Address:
NOTICE OF EXERCISE
TO: ▇▇▇▇▇▇.▇▇ Inc.
(1) The undersigned hereby elects to purchase ________ shares of the Common Stock of ▇▇▇▇▇▇.▇▇ Inc. (the “Company”) pursuant to the terms of the attached Warrant.
The undersigned hereby elects to purchase ________ shares of the Common Stock of ▇▇▇▇▇▇.▇▇ Inc. (the “Company”) pursuant to the terms of the net exercise provisions set forth in Section 2.2 of the attached Warrant.
(2) Please issue a certificate or certificates representing said shares of Common Stock in the name of the undersigned or in such other name as is specified below:
________________________
(Name)
________________________
________________________
(Address)
(3) The undersigned represents that (i) the aforesaid shares of Common Stock are being acquired for the account of the undersigned for investment and not with a view to, or for resale in connection with, the distribution thereof and that the undersigned has no present intention of distributing or reselling such shares in violation of the Securities Act of 1933, as amended (the “Securities Act”); (ii) the undersigned is aware of the Company’s business affairs and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision regarding its investment in the Company; (iii) the undersigned is experienced in making investments of this type and has such knowledge and background in financial and business matters that the undersigned is capable of evaluating the merits and risks of this investment and protecting the undersigned’s own interests; (iv) the undersigned understands that the shares of Common Stock issuable upon exercise of this Warrant have not been registered under the Securities Act by reason of a specific exemption from the registration provisions of the Securities Act, and, because such securities have not been registered under the Securities Act, they must be held indefinitely unless subsequently registered under the Securities Act or an exemption from such registration is available; (v) the undersigned is aware that the aforesaid shares of Common Stock may not be sold pursuant to Rule 144 adopted under the Securities Act unless certain conditions are met, including, among other things, the availability of certain current public information about the Company and the required holding period under Rule 144 being satisfied; and (vi) the undersigned agrees not to make any disposition of all or any part of the aforesaid shares of Common Stock unless and until there is then in effect a registration statement under the Securities Act covering such proposed disposition and such disposition is made in accordance with said registration statement, or in a transaction exempt from the registration requirements of the Securities Act.
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(Signature) (Print name) |
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)
For Value Received, the foregoing Warrant and all rights evidenced thereby are hereby assigned to
Name:
(Please Print)
Address:
(Please Print)
Dated: __________, 20__
Holder’s
Signature:
Holder’s
Address:
NOTE: The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, 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.