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EXHIBIT 10.1
NEITHER THIS WARRANT NOR THE SHARES OF STOCK ISSUABLE UPON EXERCISE
HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR UNDER ANY STATE SECURITIES LAWS, AND HAVE BEEN TAKEN FOR
INVESTMENT PURPOSES ONLY. NO SALE, TRANSFER OR OTHER DISPOSITION OF THIS
WARRANT OR SAID SHARES MAY BE EFFECTED WITHOUT (i) AN EFFECTIVE
REGISTRATION STATEMENT RELATED THERETO, (ii) AN OPINION OF COUNSEL FOR
THE HOLDER REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION
IS NOT REQUIRED OR (iii) RECEIPT OF A NO-ACTION LETTER FROM THE
SECURITIES AND EXCHANGE COMMISSION TO THE EFFECT THAT REGISTRATION UNDER
THE ACT IS NOT REQUIRED.
Number of Shares Issuable Upon Exercise: 24,794
WARRANT TO PURCHASE
SHARES OF SERIES D PREFERRED STOCK
OF
FAIRBANKS SYSTEMS GROUP D/B/A BACKUP, INC.
Expires: January 28, 2007
THIS CERTIFIES THAT, for value received, DOMINION CAPITAL MANAGEMENT
L.L.C., a Delaware limited liability company, is entitled to subscribe for and
purchase 24,794 shares (as adjusted pursuant to the provisions hereof, the
"Shares") of the Series D Preferred Stock of FAIRBANKS SYSTEMS GROUP d/b/a
@BACKUP, INC., a California corporation (the "Company"), at a price per share of
$1.21 (as adjusted pursuant to the provisions hereof, the "Exercise Price"),
subject to the provisions and upon the terms and conditions hereinafter set
forth. As used herein, the term "Preferred Stock" shall mean the Company's
presently authorized Series D Preferred Stock, and any stock into or for which
such Series D Preferred Stock may hereafter be converted or exchanged, and the
term "Grant Date" shall mean January 28, 1999.
1. Term. This Warrant is exercisable, in whole or in part, at any time
and from time to time from and after the Grant Date and prior to the earlier of
(a) the ninth anniversary of the Grant Date or (b) the fourth anniversary of the
consummation of the Company's initial public offering of its Common Stock
pursuant to a registration statement filed under the Securities Act of 1933, as
amended (the "Securities Act"), the aggregate gross proceeds from which exceed
$10,000,000.
2. Method of Exercise; Net Issue Exercise.
2.1 Method of Exercise; Payment; Issuance of New Warrant. This Warrant
may be exercised by the holder hereof, in whole or in part and from time to
time, by either of the
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following, at the election of the holder hereof: (a) the surrender of this
Warrant (with the Notice of Exercise form attached hereto as Exhibit A-1 duly
executed) at the principal office of the Company and by the payment to the
Company, by cash, check or cancellation of indebtedness, of an amount equal to
the Exercise Price per share multiplied by the number of Shares than being
purchased; or (b) if in connection with a sale of Shares pursuant to a
registered public offering of the Company's securities, the surrender of this
Warrant (with the Notice of Exercise form attached hereto as Exhibit A-2 duly
executed), which surrender may be made contingent upon the closing of such
offering, at the principal office of the Company together with notice of
arrangements reasonably satisfactory to the Company for payment to the Company
from the proceeds of the sale of shares to be sold by the holder in such public
offering of an amount equal to the Exercise Price per share multiplied by the
number of Shares then being purchased. The person or persons in whose name(s)
any certificate(s) representing Shares shall be issuable upon exercise of this
Warrant shall be deemed to have become the holder(s) of record of, and shall be
treated for all purposes as the record holder(s) of, the Shares represented
thereby (and such Shares shall be deemed to have been issued) immediately prior
to the close of business on the date or dates upon which this Warrant is
exercised. In the event of any exercise of this Warrant, certificates for the
Shares so purchased shall be delivered to the holder hereof as soon as possible
and in any event within fifteen (15) days of receipt of such notice) and, unless
this Warrant has been fully exercised or expired, a new Warrant representing the
portion of the Shares, if any, with respect to which this Warrant shall not then
have been exercised shall also be issued to the holder hereof as soon as
possible thereafter.
2.2 Automatic Exercise. To the extent this Warrant is not previously
exercised, and if the fair market value of one share of the Company's Preferred
Stock is greater than the Exercise Price then in effect, this Warrant shall be
deemed automatically exercised pursuant to Section 2.3 below (even if not
surrendered) immediately before its expiration. For purposes of such automatic
exercise, the fair market value of one share of the Company's Preferred Stock
upon such expiration shall be determined pursuant to Section 2.3 (b) below. To
the extent this Warrant or any portion thereof is deemed automatically exercised
pursuant to this Section 2.2, the Company agrees to promptly notify the holder
hereof of the number of Shares, if any, the holder hereof is to receive by
reason of such automatic exercise.
2.3 Right to Convert Warrant into Stock: Net Issuance.
(a) In addition to and without limiting the rights of the holder
under the terms of this Warrant, the holder may elect to convert this Warrant or
any portion thereof (the "Conversion Right") into shares of Preferred Stock, the
aggregate value of which shares shall be equal to the value of this Warrant or
the portion thereof being converted. The Conversion Right may be exercised by
the holder by surrender of this Warrant at the principal office of the Company
together with notice of the holder's intention to exercise the Conversion Right,
in which event the Company shall issue to the holder a number of shares of the
Company's Preferred Stock computed using the following formula:
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Y(A-B)
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X = A
Where: X = The number of shares of Preferred Stock to be issued to the holder.
Y = The number of shares of Preferred Stock purchasable under this
Warrant subject to the exercise election.
A = The fair market value of one share of the Company's Preferred
Stock.
B = Exercise Price (as adjusted to the date of such calculations).
(b) For purposes of this Section 2.3, the "fair market value"
per share of the Company's Preferred Stock shall mean:
(i) If the Conversion Right is exercised in connection
with and contingent upon the Company's initial public offering, and if the
Company's registration statement relating to such offering has been declared
effectively by the Securities and Exchange Commission, then the initial "Price
to Public" specified in the final prospectus with respect to such offering; or
(ii) If the Conversion Right is not exercised in
connection with and contingent upon the Company's initial public offering, then
as follows:
(A) If the Preferred Stock is traded on a national securities
exchange or admitted to unlisted trading privileges on such an exchange,
or is listed on the Nasdaq National Market (the "National Market
System"), the fair market value shall be the average of the last
reported sale prices of the Preferred Stock on such exchange or on the
Nasdaq National Market on the last ten (10) trading days (or all such
trading days such Preferred Stock has been traded if fewer than 10
trading days) before the effective date of exercise of the Conversion
Right or if no such sale is made on any such day, the mean of the
closing bid and asked prices for such day on such exchange or on the
Nasdaq National Market;
(B) If the Preferred Stock is not so listed or admitted to
unlisted trading privileges, the fair market value shall be the average
of the means of the last bid and asked prices reported on the last ten
(10) trading days (or all such trading days such Preferred Stock has
been traded if fewer than 10 trading days) before the date of the
election (1) by the Nasdaq Stock Market or (2) if reports are
unavailable under clause (1) above, by the National Quotation Bureau
Incorporated; and
(C) If the Preferred Stock is not so listed or admitted to
unlisted trading privileges and bid and ask prices are not reported, the
fair market value shall be the price per share which the Company could
obtain from a willing buyer for shares sold by the
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Company from authorized but unissued shares, as such price shall be
determined by mutual agreement of the Company and the holder of this
Warrant.
3. Stock Fully Paid; Reservation of Shares. All Shares that may be
issued upon the exercise of this Warrant, and all Common Stock issuable upon
conversion of the Shares shall, upon issuance, be validly issued, fully paid and
nonassessable, and free from all taxes, liens and charges with respect to the
issue thereof. During the period within which this Warrant may be exercised, the
Company will at all times have been duly authorized and reserved, for the
purpose of issuance upon exercise of this Warrant, a sufficient number of shares
of Preferred Stock (and Common Stock issuable upon conversion thereof).
4. Adjustments to Exercise Price and Number of Shares. The number and
kind of securities purchasable upon the exercise of this Warrant and the
Exercise Price shall be subject to adjustment from time to time as set forth in
Appendix I hereto upon the occurrence of certain events described therein. The
provisions of Appendix I are incorporated by reference herein with the same
effect as if set forth in full herein.
5. Notices of Record Date. In the event of any taking by the Company of
a record of its shareholders for the purpose of determining shareholders who are
entitled to receive payment of any dividend or other distribution, any right to
subscribe for, purchase or otherwise acquire any share of any class or any other
securities or property, or to receive any other right, or for the purpose of
determining shareholders who are entitled to vote in connection with any
proposed merger or consolidation of the Company with or into any other
corporation, or any proposed sale, lease or conveyance of all or substantially
all of the assets of the Company, or any proposed liquidation, dissolution or
winding up of the Company, then, in connection with each such event, the Company
shall mail to the holder of this Warrant at least twenty (20) days prior written
notice of the date on which any such record is to be taken for the purpose of
such dividend, distribution, right(s) or vote of the shareholders. Each such
written notice shall specify the amount and character of any such dividend,
distribution or right(s), and shall set forth, in reasonable detail, the matter
requiring any such vote of the shareholders.
6. Fractional Shares. No fractional shares of Preferred Stock will be
issued in connection with any exercise hereunder, but in lieu of such fractional
shares the Company shall make a cash payment therefor based upon the per share
fair market value of the Preferred Stock on the date of exercise.
7. Compliance with Securities Act; Disposition of Warrant or Shares of
Preferred Stock.
(a) Compliance with Securities Act. The holder of this Warrant,
by acceptance hereof, agrees that this Warrant, the Shares to be issued upon
exercise hereof and the Common Stock to be issued upon conversion of such Shares
are being acquired for investment purposes only and that such holder will not
offer, sell or otherwise dispose of this Warrant or any Shares to be issued upon
exercise hereof (or Common Stock issued upon conversion of such Shares) except
under circumstances which will not result in a violation of the Securities Act.
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This Warrant and all Shares issued upon exercise of this Warrant (unless
registered under the Securities Act) shall be stamped or imprinted with a legend
in substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR UNDER ANY STATE SECURITIES LAWS, AND HAVE BEEN TAKEN FOR
INVESTMENT PURPOSES ONLY. NO SALE, TRANSFER OR DISPOSITION MAY BE
EFFECTED WITHOUT (i) AN EFFECTIVE REGISTRATION STATEMENT RELATED
THERETO, (ii) AN OPINION OF COUNSEL FOR THE HOLDER REASONABLY
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR
(iii) RECEIPT OF A NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGE
COMMISSION TO THE EFFECT THAT REGISTRATION UNDER THE ACT IS NOT
REQUIRED.
(b) Disposition of Warrant and Shares. With respect to any
offer, transfer, sale or other disposition of this Warrant or any Shares
acquired pursuant to the exercise of this Warrant (or Common Stock issued upon
conversion of such Shares) prior to registration thereof, the holder hereof and
each subsequent holder of this Warrant agrees to give written notice to the
Company prior thereto, describing briefly the manner thereof, together with a
written opinion of such holder's counsel reasonably satisfactory to the Company,
if reasonably requested by the Company, to the effect that such offer, sale or
other disposition may be effected without registration or qualification (under
the Securities Act as then in effect or any federal or state law then in effect)
of this Warrant or such Shares or Common Stock and indicating whether or not
under the Securities Act certificates for this Warrant or such Shares or Common
Stock to be sold or otherwise disposed of require any restrictive legend as to
applicable restrictions on transferability in order to insure compliance with
the Securities Act. Each certificate representing this Warrant or the Shares or
Common Stock thus transferred (except a transfer pursuant to Rule 144) shall
bear a legend as to the applicable restrictions on transferability in order to
insure compliance with the Securities Act. Each certificate representing this
Warrant or the Shares or Common Stock thus transferred (except a transfer
pursuant to Rule 144) shall bear a legend as to the applicable restrictions on
transferability in order to insure compliance with the Securities Act unless, in
the aforesaid opinion of counsel for the holder, such legend is not required in
order to insure compliance with the Securities Act. Nothing herein shall
restrict the transfer of this Warrant or any portion hereof by the initial
holder hereof to any partnership affiliated with the initial holder, or to any
partner of any such partnership provided such transfer may be made in compliance
with applicable federal and state securities laws. The Company may issue stop
transfer instructions to its transfer agent in connection with the foregoing
restrictions.
8. Rights as Shareholders; Information.
8.1 Shareholder Rights. Except as set forth herein, no holder of
this Warrant, as such, shall be entitled to vote upon any matter submitted to
shareholders at any meeting thereof, or to receive notice of meetings, or be
deemed the holder of Preferred Stock until this
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Warrant shall have been exercised and the Shares purchasable upon such exercise
shall have become deliverable, as provided herein.
8.2 [Intentionally deleted]
9. Registration Rights. The rights of the holder of this Warrant and the
obligations of the Company with respect to registration under the Securities Act
and the applicable rules and regulations thereunder shall be as set forth in
that certain Amended and Restated Investors' Rights Agreement, dated as of March
12, 1998, among the Company and certain investors in the Company's capital stock
party thereto, as amended by Amendment No. 1 to Amended and Restated Investors'
Rights Agreement, dated as of January 28, 1999 (the "Rights Agreement").
10. Additional Rights.
10.l Right of First Refusal. The rights of the holder of this
Warrant and the obligations of the Company with respect to the sale and issuance
by the Company of any shares of, or securities convertible into or exercisable
for any shares of, any class of the Company's capital stock shall be as set
forth in the Rights Agreement.
10.2 Secondary Sales. The Company agrees to assist the holder of
this Warrant in obtaining liquidity if opportunities to make secondary sales of
the Company's securities become available. To this end, the Company will
promptly provide the holder of this Warrant with notice of any offer to acquire
from the Company's securities holders more than five percent (5%) of the total
voting power of the Company and will cooperate with the holder in arranging the
sale of this Warrant, on a pro-rata basis, to the person or persons making such
offer.
10.3 Mergers. The Company agrees to provide the holder of this
Warrant with at least twenty (20) days' prior written notice of the terms and
conditions of any proposed transaction, in which the Company would (i) sell,
lease, exchange, convey or otherwise dispose of all or substantially all of its
property or business, or (ii) merge into or consolidate with any other
corporation (other than a wholly-owned subsidiary of the Company), or effect any
transaction (including a merger or other reorganization) or series of related
transactions, in which more than fifty percent (50%) of the voting power of the
Company is disposed of. The Company will cooperate with the holder in arranging
the sale of this Warrant in connection with any such transaction.
11. Representations and Warranties. This Warrant is issued and delivered
on the basis of the following:
(a) This Warrant has been duly authorized, executed and
delivered by the Company and constitutes the valid and binding obligation of the
Company, enforceable in accordance with its terms;
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(b) The Shares have been duly authorized and reserved for
issuance by the Company and, when issued in accordance with the terms hereof,
will be validly issued, fully paid and nonassessable;
(c) The rights, preferences, privileges and restrictions granted
to or imposed upon the Shares and the holders thereof are as set forth in the
Company's Articles of Incorporation, as amended (the "Charter"), a true and
complete copy of which has been delivered to the original holder of this
Warrant;
(d) The shares of Common Stock issuable upon conversion of the
Shares have been duly authorized and reserved and, when issued in accordance
with the terms of the Company's Charter, will be validly issued, fully paid and
nonassessable;
(e) As of the Grant Date, the capitalization of the Company
shall be as set forth in the Capitalization Schedule attached hereto as Appendix
II, which indicates the following: (i) the authorized capital stock of the
Company (including the authorized number of shares of Common Stock and each
series of Preferred Stock); (ii) the number of shares of Common Stock and each
series of Preferred Stock issued and outstanding; (iii) the number of shares of
Common Stock reserved for issuance upon conversion of any Preferred Stock; (iv)
the number of shares for which options have been granted under the Company's
Stock Option Plan; and (v) any other securities that are convertible into or
exchangeable for Common Stock or options to purchase or rights to subscribe for
Common Stock or such convertible or exchangeable securities, and the number of
shares of Common Stock issuable upon any conversion, exchange or exercise of
such securities, options or rights. All issued and outstanding shares of the
Company's Common Stock and Preferred Stock have been duly authorized and validly
issued, and are fully paid and nonassessable. Except as set forth in Appendix
II, there are no outstanding rights, options, warrants, conversion rights,
preemptive rights, rights of first refusal or similar rights for or
understandings relating to the purchase or acquisition form the Company of any
securities of the Company.
(f) The execution and delivery of this Warrant, the issuance of
the Shares upon exercise of this Warrant in accordance with the terms hereof and
the compliance by the Company with the provisions hereof (i) are not and will
not be inconsistent with the Company's Charter or Bylaws, (ii) do not and will
not contravene any law, governmental rule or regulation, judgment or order
applicable to the Company, and (iii) do not and will not contravene any
provision of, or constitute a default under, any indenture, mortgage, contract
or other instrument of which the Company is a party or by which it is bound or
require the consent or approval of, the giving of notice to, the registration
with or the taking of any action in respect of or by, any Federal, state or
local government authority or agency or other person.
12. Amendment of Conversion Rights. During the term of this Warrant, the
Company agrees that it shall not amend its Charter, as amended through the Grant
Date, without delivering prior written notice describing such amendment to the
holder or holders entitled to purchase a majority of the Shares upon exercise of
this Warrant. The Company shall promptly
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provide the holder of this Warrant with any restatement, amendment, modification
or waiver of the Charter promptly after the same has been made.
13. Modification and Waiver. This Warrant and any provision hereof may
be changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.
14. Notices. Any notice, payment request or other document required or
permitted to be given or delivered to the holder hereof or the Company shall be
delivered or sent to each such holder at its address as shown on the books of
the Company or to the Company at the address indicated therefor on the signature
page of this Warrant and shall be deemed received by the holder upon the earlier
of actual receipt or, if sent by certified mail (postage pre-paid), two (2) days
after deposit in the U.S. mail.
15. Binding Effect on Successors. This Warrant shall be binding upon any
corporation succeeding the Company by merger, consolidation or acquisition of
all or substantially all of the Company's assets. All of the obligations of the
Company relating to the Shares, or the Company's Common Stock issuable upon
conversion thereof, shall survive the exercise and termination of this Warrant.
All of the covenants and agreements of the Company shall inure to the benefit of
the successors and assigns of the holder hereof. The Company will, at the time
of the exercise of this Warrant, in whole or in part, upon request of the holder
hereof but at the Company's expense, acknowledge in writing its continuing
obligation to the holder hereof in respect of any rights (including, without
limitation, any right to registration of the Shares in accordance with Section
9) to which the holder hereof shall continue to be entitled after such exercise
in accordance with this Warrant; provided, that the failure of the holder hereof
to make any such request shall not affect the continuing obligation of the
Company to the holder hereof in respect of such rights.
16. Lost Warrants or Stock Certificates. The Company covenants to the
holder hereof that upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction, or mutilation of this Warrant or any
stock certificate issued upon exercise thereof and, in the case of any such
loss, theft or destruction, upon receipt of an indemnity reasonably satisfactory
to the Company, or in the case of any such mutilation upon surrender and
cancellation of such Warrant or stock certificate, the Company shall make and
deliver a new Warrant or stock certificate, or like tenor, in lieu of the lost,
stolen, destroyed or mutilated Warrant or stock certificate.
17. No Impairment. The Company will not, by amendment of its Charter or
through any reorganization, recapitalization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed hereunder by the company, but will at all times in good
faith assist in the carrying out of all the provisions of this Warrant and in
the taking of all such action as may be necessary or appropriate in order to
protect the rights of the holder of this Warrant against impairment.
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18. Descriptive Headings. The descriptive headings of the several
paragraphs of this Warrant are inserted for convenience only and do not
constitute a part of this Warrant.
19. Recovery of Litigation Costs. If any legal action or other
proceeding is brought for the enforcement of this Warrant, or because of an
alleged dispute, breach, default, or misrepresentation in connection with any of
the provisions of this Warrant, the successful or prevailing party or parties
shall be entitled to recover reasonable attorneys' fees and other costs incurred
in that action or proceeding, in addition to any other relief to which it or
they may be entitled.
20. Severability. If one or more provisions of this Warrant are held to
be unenforceable under applicable law, such provision shall be excluded from
this Warrant and the balance of this Warrant shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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20. Governing Law. THIS WARRANT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAWS OF
THE STATE OF CALIFORNIA.
Date: January 29, 1998 FAIRBANKS SYSTEMS GROUP d/b/a
@BACKUP, Inc.,
a California corporation
By: /s/ Xxxx Xxxxxx
------------------------------------
Name: Xxxx Xxxxxx
Title: Chief Executive Office
Address: 0000 Xxxxxxx Xxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000-0000
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EXHIBIT A-1
NOTICE OF EXERCISE
To: FAIRBANKS SYSTEMS GROUP d/b/a @BACKUP, INC.
(COMPANY NAME)
1. The undersigned hereby:
[ ] elects to purchase ________ shares of Series D Preferred
Stock of the Company pursuant to the terms of the attached
Warrant, and tenders herewith payment of the purchase price
of such shares in full; or
[ ] elects to exercise its net issuance rights pursuant to
Section 2.3 of the attached Warrant with respect to
___________ shares of Series D Preferred Stock.
2. Please issue a certificate or certificates representing said shares
in the name of the undersigned or in such other name or names as are specified
below:
------------------------------------
(NAME)
------------------------------------
(ADDRESS)
------------------------------------
(ADDRESS)
3. The undersigned represents that the aforesaid shares 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.
------------
(DATE)
------------------------------------
(SIGNATURE)
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EXHIBIT A-2
NOTICE OF EXERCISE
To: FAIRBANKS SYSTEMS GROUP d/b/a @BACKUP, INC.
(COMPANY NAME)
1. Contingent upon and effective immediately prior to the closing (the
"Closing") of the Company's public offering contemplated by the Registration
Statement on Form S-____, filed on _____________, 19______, the undersigned
hereby:
[ ] elects to purchase ________ shares of Series D Preferred
Stock of the Company (or such lesser number of shares as may
be sold on behalf of the undersigned at the Closing) pursuant
to the terms of the attached Warrant, or
[ ] elects to exercise its net issuance rights pursuant to
Section 2.3 of the attached Warrant with respect to
___________ shares of Series D Preferred Stock.
2. Please deliver to the custodian for the selling shareholders a stock
certificate representing such _________ shares.
3. The undersigned has instructed the custodian for the selling
shareholders to deliver to the Company $________ or, if less, the net proceeds
due the undersigned from the sale of shares in the aforesaid public offering. If
such net proceeds are less than the purchase price for such shares, the
undersigned agrees to deliver the difference to the Company prior to the
Closing.
------------
(DATE)
------------------------------------
(SIGNATURE)
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APPENDIX I
ADJUSTMENT PROVISIONS
1. Capitalized Terms. Capitalized terms used in this Appendix I that are
not otherwise defined herein shall have the respective meanings assigned to them
in the Warrant, dated as of January 28, 1999, to which this Appendix I is
attached, if therein defined.
2. [Intentionally Deleted]
3. Reclassification or Merger. In case of any reclassification, change
or conversion of securities of the class issuable upon exercise of this Warrant
(other than 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 or entity
(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 of all or substantially all of the assets of the Company, the
Company, or such successor or purchasing corporation or entity, as the case may
be, shall execute a new Warrant (in form and substance satisfactory to the
holder of this Warrant) providing that the holder of this Warrant shall have the
right to exercise such new Warrant and upon such exercise to receive, in lieu of
each share of Preferred Stock theretofore issuable upon exercise of this
Warrant, the kind and amount of shares of stock, other securities, money and
property receivable upon such reclassification, change or merger by a holder of
one share of Preferred Stock. Such new Warrant shall provide for adjustments
that shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Appendix I. The provisions of this Section 3 shall
similarly apply to successive reclassifications, changes, mergers and transfers.
4. Subdivision or Combination of Shares. If the Company at any time
while this Warrant remains outstanding and unexpired shall subdivide or combine
its Preferred Stock, the Exercise Price and the number of Shares issuable upon
exercise hereof shall be proportionately adjusted.
5. Stock Dividends. If the Company at any time while this Warrant is
outstanding and unexpired shall pay a dividend payable in shares of Preferred
Stock, then the Exercise Price shall be adjusted, from and after the date of
determination of shareholders 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 Preferred Stock outstanding immediately
prior to such dividend or distribution, and (b) the denominator of which shall
be the total number of shares of Preferred Stock outstanding immediately after
such dividend or distribution and the number of Shares subject to this Warrant
shall be proportionately adjusted.
6. Other Distributions. In the event the Company shall declare a
dividend or distribution payable in cash, securities of other persons, evidences
of indebtedness issued by the
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Company or other persons, assets or options or rights not referred to in
Sections 3,4 or 5 of this Appendix I, then, in each such case, provision shall
be made by the Company such that the holder of this Warrant shall receive upon
exercise of this Warrant a proportionate share of any such dividend or
distribution as though it were the holder of the Shares (or Common Stock
issuable upon conversion thereof) as of the record date fixed for the
determination of the shareholders of the Company entitled to receive such
dividend or distribution.
7. Notice of Adjustments. Whenever the Exercise Price shall be adjusted
pursuant to the provisions hereof, the Company shall within thirty (30) days of
such adjustment deliver a certificate signed by its chief financial officer to
the registered holder(s) hereof 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 Exercise Price after giving effect to such
adjustment.
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APPENDIX II
CAPITALIZATION SCHEDULE
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NEITHER THIS WARRANT FOR THE SHARES OF STOCK ISSUABLE UPON EXERCISE
HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR UNDER ANY STATE SECURITIES LAWS, AND HAVE BEEN TAKEN FOR
INVESTMENT PURPOSES ONLY. NO SALE, TRANSFER OR OTHER DISPOSITION OF THIS
WARRANT OR SAID SHARES MAY BE EFFECTED WITHOUT (i) AN EFFECTIVE
REGISTRATION STATEMENT RELATED THERETO, (ii) AN OPINION OF COUNSEL FOR
THE HOLDER REASONABLE SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION
IS NOT REQUIRED OR (iii) RECEIPT OF A NO-ACTION LETTER FROM THE
SECURITIES AND EXCHANGE COMMISSION TO THE EFFECT THAT REGISTRATION UNDER
THE ACT IS NOT REQUIRED.
Number of Shares Issuable Upon Exercise: 34,285
WARRANT TO PURCHASE
SHARES OF SERIES E PREFERRED STOCK
OF
FAIRBANKS SYSTEMS GROUP D/B/A @BACKUP, INC.
Expires: October 12, 2008
THIS CERTIFIES THAT, for value received, DOMINION CAPITAL MANAGEMENT
L.L.C., a Delaware limited liability company, is entitled to subscribe for and
purchase 34,285 shares (as adjusted pursuant to the provisions hereof, the
"Shares") of the Series E Preferred Stock of FAIRBANKS SYSTEMS GROUP d/b/a
@BACKUP, INC., a California corporation (the "Company"), at a price per share of
$1.75 (as adjusted pursuant to the provisions hereof, the "Exercise Price"),
subject to the provisions and upon the terms and conditions hereinafter set
forth. As used herein, the term "Preferred Stock" shall mean the Company's
presently authorized Series E Preferred Stock, and any stock into or for which
such Series E Preferred Stock may hereafter be converted or exchanged, and the
term "Grant Date" shall mean October 12, 1999.
1. Term. This Warrant is exercisable, in whole or in part, at any time
and from time to time from and after the Grant Date and prior to the earlier of
(a) the ninth (9th) anniversary of the Grant Date or (b) the (4th) anniversary
of the consummation of the Company's initial public offering of its Common Stock
pursuant to a registration statement filed under the Securities Act of 1933, as
amended (the "Securities Act"), the aggregate gross proceeds from which exceed
$10,000,000.
2. Method of Exercise; Net Issue Exercise.
2.1 Method of Exercise; Payment; Issuance of New Warrant. This
Warrant may be exercised by the holder hereof, in whole or in part and from time
to time, by either of the following, at the election of the holder hereof: (a)
the surrender of this Warrant (with the Notice
17
of Exercise form attached hereto as Exhibit A-1 duly executed) at the principal
office of the Company and by the payment to the Company, by cash, check or
cancellation of indebtedness, of an amount equal to the Exercise Price per share
multiplied by the number of Shares then being purchased; or (b) if in connection
with a sale of Shares pursuant to a registered public offering of the Company's
securities, the surrender of this Warrant (with the Notice of Exercise form
attached hereto as Exhibit A-2 duly executed), which surrender may be made
contingent upon the close of such offering, at the principal office of the
Company together with notice of arrangements reasonably satisfactory to the
Company for payment to the Company from the proceeds of the sale of shares to be
sold by the holder in such public offering of an amount equal to the Exercise
Price per share multiplied by the number of Shares then being purchased. The
person or persons in whose name(s) any certificates representing Shares shall be
issuable upon exercise of this Warrant shall be deemed to have become the
holder(s) of record of, and shall be treated for all purposes as the record
holder(s) of, the Shares represented thereby (and such Shares shall be deemed to
have been issued immediately prior to the close of business on the date or dates
upon which this Warrant is exercised. In the event of any exercise of this
Warrant, certificates for the Shares so purchased shall be delivered to the
holder hereof as soon as possible and in any event within fifteen (15) days of
receipt of such notice (or, following, the Company's initial public offering,
within five (5) days of receipt of such notice) and, unless this Warrant has
been fully exercised or expired, a new Warrant representing the portion of the
Shares, if any, with respect to which this Warrant shall not then have been
exercised shall also be issued to the holder hereof as soon as possible
thereafter.
2.2 Automatic Exercise. To the extent this Warrant is not
previously exercised, and if the fair market value of one share of the Company's
Preferred Stock is greater than the Exercise Price then in effect, this Warrant
shall be deemed automatically exercised pursuant to Section 2.3 below (even if
not surrendered) immediately before its expiration. For purposes of such
automatic exercise, the fair market value of one share of the Company's
Preferred Stock upon such expiration shall be determined pursuant to Section
2.3(b) below. To the extent this Warrant or any portion thereof is deemed
automatically exercised pursuant to this Section 2.2, the Company agrees to
promptly notify the holder hereof of the number of Shares, if any, the holder
hereof is to receive by reason of such automatic exercise.
2.3 Right to Convert Warrant into Stock: Net Issuance.
(a) In addition to and without limiting the rights of
the holder under the terms of this Warrant, the holder may elect to convert this
Warrant or any portion thereof (the "Conversion Right") into shares of Preferred
Stock, the aggregate value of which shares shall be equal to the value of this
Warrant or the portion thereof being converted. The Conversion Right may be
exercised by the holder by surrender of this Warrant at the principal office of
the Company together with notice of the holder's intention to exercise the
Conversion Right, in which event the Company shall issue to the holder a number
of shares of the Company's Preferred Stock computed using the following formula:
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18
Y(A-B)
------
X = A
Where: X = The number of shares of Preferred Stock to be issued to the holder.
Y = The number of shares of Preferred Stock purchasable under this
Warrant subject to the exercise election.
A = The fair market value of one share of the Company's Preferred
Stock.
B = Exercise Price (as adjusted to the date of such calculations).
(b) For the purposes of this Section 2.3, the "fair market
value" per share of the Company's Preferred Stock shall mean:
(i) If the Conversion Right is exercised in connection
with and contingent upon the Company's initial public offering, and if the
Company's registration statement relating to such offering has been declared
effective by the Securities and Exchange Commission, then the initial "Price to
Public" specified in the final prospectus with respect to such offering; or
(ii) If the Conversion Right is not exercised in
connection with and contingent upon the Company's initial public offering, then
as follows:
(A) If the Preferred Stock is traded on a national securities
exchange or admitted to unlisted trading privileges on such an exchange, or is
listed on the Nasdaq National Market (the "National Market System"), the fair
market value shall be the average of the last reported sale prices of the
Preferred Stock on such exchange or on the Nasdaq National Market on the last
ten (10) trading day (or all such trading days such Preferred Stock has been
traded if fewer than 10 trading days) before the effective date of exercise of
the Conversion Right or if no such sale is made on any such day, the mean of the
closing bid and asked prices for such day on such exchange or on the Nasdaq
National Market;
(B) If the Preferred Stock is not so listed or admitted to
unlisted trading privileges, the fair market value shall be the average of the
means of the last bid and asked prices reported on the last ten (10) trading
days (or all such trading days such Preferred Stock has been traded if fewer
than 10 trading days) before the date of the election (1) by the Nasdaq Stock
Market or (2) if reports are unavailable under clause (1) above, by the National
Quotation Bureau Incorporated; and
(C) If the Preferred Stock is not so listed or admitted to
unlisted trading privileges and bid and ask prices are not reported, the fair
market value shall be the price per share which the Company could obtain from a
willing buyer for shares sold by the Company from authorized but unissued
shares, as such price shall be determined by mutual agreement of the Company and
the holder of this Warrant.
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3. Stock Fully Paid; Reservation of Shares. All Shares that may be
issued upon the exercise of this Warrant, and all Common Stock issuable upon
conversion of the Shares shall, upon issuance, be validly issued, fully paid and
nonassessable, and free from all taxes, liens and charges with respect to the
issue thereof. During the period within which this Warrant may be exercised, the
Company will at all times have duly authorized and reserved, for the purpose of
issuance upon exercise of this Warrant, a sufficient number of shares of
Preferred Stock (and Common Stock issuable upon conversion thereof).
4. Adjustments to Exercise Price and Number of Shares. The number and
kind of securities purchasable upon the exercise of this Warrant and the
Exercise Price shall be subject to adjustment from time to time as set forth in
Appendix I hereto upon the occurrence of certain events described therein. The
provisions of Appendix I are incorporated by reference herein with the same
effect as if set forth in full herein.
5. Notices of Record Date. In the event of any taking by the Company of
a record of its shareholders for the purpose of determining shareholders who are
entitled to receive payment of any dividend or other distribution, any right to
subscribe for, purchase or otherwise acquire any share of any class or any other
securities or property, or to receive any other right, or for the purpose of
determining shareholders who are entitled to vote in connection with any
proposed merger or consolidation of the Company with or into any other
corporation, or any proposed sale, lease or conveyance of all or substantially
all of the assets of the Company, or any proposed liquidation, dissolution or
winding up of the Company, then, in connection with each such event, the Company
shall mail to the holder of this Warrant at least twenty (20) days prior written
notice of the date on which any such record is to be taken for the purpose of
such dividend, distribution, right(s) or vote of the shareholders. Each such
written notice shall specify the amount and character of any such dividend,
distribution or right(s), and shall set forth, in reasonable detail, the matter
requiring any such vote of the shareholders.
6. Fractional Shares. No fractional shares of Preferred Stock will be
issued in connection with any exercise hereunder, but in lieu of such fractional
shares the Company shall make a cash payment therefor based upon the per share
fair market value of the Preferred Stock on the date of exercise.
7. Compliance with Securities Act; Disposition of Warrant or Shares of
Preferred Stock.
(a) Compliance with Securities Act. The holder of this Warrant,
by acceptance hereof, agrees that this Warrant, the Shares to be issued upon
exercise hereof and the Common Stock to be issued upon conversion of such Shares
are being acquired for investment purposes only and that such holder will not
offer, sell or otherwise dispose of this Warrant or any Shares to be issued upon
exercise hereof (or Common Stock issued upon conversion of such Shares) except
under circumstances which will not result in a violation of the Securities Act.
This Warrant and all Shares issued upon exercise of this Warrant (unless
registered under the Securities Act) shall be stamped or imprinted with a legend
in substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED OR UNDER ANY STATE
4
20
SECURITIES LAWS, AND HAVE BEEN TAKEN FOR INVESTMENT PURPOSES ONLY. NO
SALE, TRANSFER OR DISPOSITION MAY BE EFFECTED WITHOUT (i) AN EFFECTIVE
REGISTRATION STATEMENT RELATED THERETO, (ii) AN OPINION OF COUNSEL FOR
THE HOLDER REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION
IS NOT REQUIRED OR (iii) RECEIPT OF A NO-ACTION LETTER FROM THE
SECURITIES AND EXCHANGE COMMISSION TO THE EFFECT THAT REGISTRATION UNDER
THE ACT IS NOT REQUIRED.
(b) Disposition of Warrant and Shares. With respect to any
offer, transfer, sale or other disposition of this Warrant or any Shares
acquired pursuant to the exercise of this Warrant (or Common Stock issued upon
conversion of such Shares) prior to registration thereof, the holder hereof and
each subsequent holder of this Warrant agrees to give written notice to the
Company prior thereto, describing briefly the manner thereof, together with a
written opinion of such holder's counsel reasonably satisfactory to the Company,
if reasonably requested by the Company, to the effect that such offer, sale or
other disposition may be effected without registration or qualification (under
the Securities Act as then in effect or any federal or state law then in effect)
of this Warrant or such Shares or Common Stock and indicating whether or not
under the Securities Act certificates for this Warrant or such Shares or Common
Stock to be sold or otherwise disposed of require any restrictive legend as to
applicable restrictions on transferability in order to insure compliance with
the Securities Act. Each certificate representing this Warrant or the Shares or
Common Stock thus transferred (except a transfer pursuant to Rule 144) shall
bear a legend as to the applicable restrictions on transferability in order to
insure compliance with the Securities Act unless, in the aforesaid opinion of
counsel for the holder, such legend is not required in order to insure
compliance with the Securities Act. Nothing herein shall restrict the transfer
of this Warrant or any portion hereof by the initial holder hereof to any
partnership affiliated with the initial holder, or to any partner of any such
partnership provided such transfer may be made in compliance with applicable
federal and state securities laws. The Company may issue stop transfer
instructions to its transfer agent in connection with the foregoing
restrictions.
8. Rights as Shareholders; Information.
8.1 Shareholder Rights. Except as set forth herein, no holder of
this Warrant, as such, shall be entitled to vote upon any matter submitted to
shareholders at any meeting thereof, or to receive notice of meetings, or be
deemed the holder of Preferred Stock until this Warrant shall have been
exercised and the Shares purchasable upon such exercise shall have become
deliverable, as provided herein.
8.2 [Intentionally Deleted]
9. Registration Rights. The rights of the holder of this Warrant and the
obligations of the Company with respect to registration under the Securities Act
and the applicable rules and regulations thereunder shall be as set forth in
that certain Amended and Restated Investors' Rights Agreement, dated as of July
30, 1999, among the Company and certain investors in the Company's capital stock
party thereto, as amended by Amendment No. 1 to Amended and
5
21
Restated Investors' Rights Agreement, dated as of August 23, 1999, as amended by
Amendment No. 2 to Amended and Restated Investor's Rights Agreement, dated as of
September 17, 1999 (the "Rights Agreement").
10. Additional Rights.
10.1 Right of First Refusal. The rights of the holder of this
Warrant and the obligations of the Company with respect to the sale and issuance
by the Company of any shares of, or securities convertible into or exercisable
for any shares of, any class of the Company's capital stock shall be as set
forth in the Rights Agreement.
10.2 Secondary Sales. The Company agrees to assist the holder of
this Warrant in obtaining liquidity if opportunities to make secondary sales of
the Company's securities become available. To this end, the Company will
promptly provide the holder of this Warrant with notice of any offer to acquire
from the Company's security holders more than five percent (5%) of the total
voting power of the Company and will cooperate with the holder in arranging the
sale of this Warrant, on a pro-rata basis, to the person or persons making such
offer.
10.3 Mergers. The Company agrees to provide the holder of this
Warrant with at least twenty (20) days' prior written notice of the terms and
conditions of any proposed transaction, in which the Company would (i) sell,
lease, exchange, convey or otherwise dispose of all or substantially all of its
property or business, or (ii) merge into or consolidate with any other
corporation (other than a wholly-owned subsidiary of the Company), or effect a
transaction (including a merger or other reorganization) or series of related
transactions, in which more than fifty percent (50%) of the voting power of the
Company is disposed of. The Company will cooperate with the holder in arranging
the sale of this Warrant in connection with any such transaction.
11. Representations and Warranties. This Warrant is issued and delivered
on the basis of the following:
(a) This Warrant has been duly authorized, executed and
delivered by the Company and constitutes the valid and binding
obligation of the Company, enforceable in accordance with its terms;
(b) The Shares have been duly authorized and reserved for
issuance by the Company and, when issued in accordance with the terms
hereof, will be validly issued, fully paid and nonassessable,
(c) The rights, preferences, privileges and restrictions granted
to or imposed upon the Shares and the holders thereof are as set forth
in the Company's Articles of Incorporation, as amended (the "Charter"),
a true and complete copy of which has been delivered to the original
holder of this Warrant;
(d) The shares of Common Stock issuable upon conversion of the
Shares have been duly authorized and reserved and, when issued in
accordance with the terms of the Company's Charter, will be validly
issued, fully paid and nonassessable;
6
22
(e) As of the Grant Date, the capitalization of the Company
shall be as set forth in the Capitalization Schedule attached hereto as
Appendix II which indicates the following: (i) the authorized capital
stock of the Company (including the authorized number of shares of
Common Stock and each series of Preferred Stock); (ii) the number of
shares of Common Stock and each series of Preferred Stock issued and
outstanding, (iii) the number of shares of Common Stock reserved for
issuance upon conversion of any Preferred Stock; (iv) the number of
shares for which options have been granted under the Company's Stock
Option Plan; and (v) any other securities that are convertible into or
exchangeable for Common Stock or options to purchase or rights to
subscribe for Common Stock or such convertible or exchangeable
securities, and the number of shares of Common Stock issuable upon any
conversion, exchange or exercise of such securities, options or rights.
All issued and outstanding shares of the Company's Common Stock and
Preferred Stock have been duly authorized and validly issued, and are
fully paid and non-assessable. Except as set forth in Appendix II, there
are no outstanding rights, options, warrants, conversion rights,
preemptive rights, rights of first refusal or similar rights for or
understandings relating to the purchase or acquisition from the Company
of any securities of the Company.
(f) The execution and delivery of this Warrant, the issuance of
the Shares upon exercise of this Warrant in accordance with the terms
hereof and the compliance by the Company with the provisions hereof (i)
are not and will not be inconsistent with the Company's Charter or
Bylaws, (ii) do not and will not contravene any law, governmental rule
or regulation, judgment or order applicable to the Company, and (iii) do
not and will not contravene any provision of, or constitute a default
under, any indenture, mortgage, contract or other instrument of which
the Company is a party or by which it is bound or require the consent or
approval of, the giving of notice to, the registration with or the
taking of any action in respect of or by, any Federal, state or local
government authority or agency or other person.
12. Amendment of Conversion Rights. During the term of this Warrant, the
Company agrees that it shall not amend its Charter, as amended through the Grant
Date, without delivering prior written notice describing such amendment to the
holder or holders entitled to purchase a majority of the Shares upon exercise of
this Warrant. The Company shall promptly provide the holder of this Warrant with
any restatement, amendment, modification or waiver of the Charter promptly after
the same has been made.
13. Modification and Waiver. This Warrant and any provision hereof may
be changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.
14. Notices. Any notice, payment request or other document required or
permitted to be given or delivered to the holder hereof or the Company shall be
delivered or sent to each such holder at its address as shown on the books of
the Company or to the Company at the address indicated therefor on the signature
page of this Warrant and shall be deemed received by the holder upon the earlier
of actual receipt or, if sent by certified mail (postage pre-paid), two (2) days
after deposit in the U.S. mail.
7
23
15. Binding Effect on Successors. This Warrant shall be binding upon any
corporation succeeding the Company by merger, consolidation or acquisition of
all or substantially all of the Company's assets. All of the obligations of the
Company relating to the Shares, or the Company's Common Stock issuable upon
conversion thereof, shall survive the exercise and termination of this Warrant
All of the covenants and agreements of the Company shall inure to the benefit of
the successors and assigns of the holder hereof. The Company will at the time of
the exercise of this Warrant in whole or in part upon request of the holder
hereof but at the Company's expense, acknowledge in writing its continuing
obligation to the holder hereof in respect of any rights (including, without
limitation, any right to registration of the Shares in accordance with Section
9) to which the holder hereof shall continue to be entitled after such exercise
in accordance with this Warrant provided; that the failure of the holder hereof
to make any such request shall not affect the continuing obligation of the
Company to the holder hereof in respect of such rights.
16. Lost Warrants or Stock Certificates. The Company covenants to the
holder hereof that upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction, or mutilation of this Warrant or any
stock certificate issued upon exercise thereof and, in the case of any such
loss, theft or destruction, upon receipt of an indemnity reasonably satisfactory
to the Company, or in the case of any such mutilation upon surrender and
cancellation of such Warrant or stock certificate, the Company shall make and
deliver a new Warrant or stock certificate, or like tenor, in lieu of the lost,
stolen, destroyed or mutilated Warrant or stock certificate.
17. No Impairment. The Company will not by amendment of its Charter or
through any reorganization, recapitalization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed hereunder by the Company, but will at all times in good
faith assist in the carrying out of all the provisions of this Warrant and in
the taking of all such action as may be necessary or appropriate in order to
protect the rights of the holder of this Warrant against impairment.
18. Descriptive Headings. The descriptive headings of the several
paragraphs of this Warrant are inserted for convenience only and do not
constitute a part of this Warrant.
19. Recovery of Litigation Costs. If any legal action or other
proceeding is brought for the enforcement of this Warrant, or because of an
alleged dispute, breach, default or misrepresentation in connection with any of
the provisions of this Warrant, the successful or prevailing party or parties
shall be entitled to recover reasonable attorneys' fees and other costs incurred
in that action or proceeding, in addition to any other relief to which it or
they may be entitled.
20. Severability. If one or more provisions of this Warrant are held to
be unenforceable under applicable law, such provisions shall be excluded from
this Warrant and the balance of this Warrant shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.
8
24
20. Governing Law. THIS WARRANT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAWS OF
THE STATE OF CALIFORNIA.
Date: October 12, 1999 FAIRBANKS SYSTEMS GROUP d/b/a
@BACKUP, INC.
a California Corporation
By: /s/ Xxxx Xxxxxx
------------------------------------
Name: Xxxx Xxxxxx
Title: Chief Executive Officer
Address: 0000 Xxxxxxx Xxxxxxx Xxxxx
Xxx Xxxxx, XX 00000-0000
9
25
EXHIBIT A-1
NOTICE OF EXERCISE
To: FAIRBANKS SYSTEMS GROUP d/b/a @BACKUP, INC.
(Company Name)
1. The undersigned hereby:
[ ] elects to purchase shares of Series E Preferred Stock of the
Company pursuant to the terms of the attached Warrant, and
tenders herewith payment of the purchase price of such shares in
full; or
[ ] elects to exercise its net issuance rights pursuant to Section
2.3 of the attached Warrant with respect to shares of Series E
Preferred Stock.
2. Please issue a certificate or certificates representing said shares
in the name of the undersigned or in such other name or names as are specified
below:
-------------------------------------
(Name)
-------------------------------------
(Address)
-------------------------------------
(Address)
3. The undersigned represents that the aforesaid shares 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.
---------------
(Date)
------------------------------------
(Signature)
10
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EXHIBIT A-2
NOTICE OF EXERCISE
To: FAIRBANKS SYSTEMS GROUP d/b/a @BACKUP, INC.
(COMPANY NAME)
1. Contingent upon and effective immediately prior to the closing (the
"Closing") of the Company's public offering contemplated by the Registration
Statement on Form S-______, filed on _______________, 19___, the undersigned
hereby:
[ ] elects to purchase _______ shares of Series E Preferred Stock of
the Company (or such lesser number of shares as may be sold on
behalf of the undersigned at the Closing) pursuant to the terms
of the attached Warrant; or
[ ] elects to exercise its net issuance rights pursuant to Section 23
of the attached Warrant respect to _______ shares of Series E
Preferred Stock.
2. Please deliver to the custodian for the selling shareholders a stock
certificate representing such _________________ shares.
3. The undersigned has instructed the custodian for the selling
shareholders to deliver to the Company $_____________, or, if less, the net
proceeds due the undersigned from the sale of shares in the aforesaid public
offering. If such net proceeds are less than the purchase price for such shares,
the undersigned agrees to deliver the difference to the Company prior to the
Closing.
----------------
(Date)
------------------------------------
(Signature)
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APPENDIX I
ADJUSTMENT PROVISIONS
1. Capitalized Terms. Capitalized used in this Appendix I that are not
otherwise defined herein shall have the respective meanings assigned to them in
the Warrant, dated as of October 12, 1999, to which this Appendix I is attached,
if therein defined.
2. (Intentionally Deleted).
3. Reclassification or Merger. In case of any reclassification, change
or conversion of securities of the class issuable upon exercise of this Warrant
(other than 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 or entity
(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 of all or substantially all of the assets of the Company, the
Company, or such successor or purchasing corporation or entity, as the case may
be, shall execute a new Warrant (in form and substance satisfactory to the
holder of this Warrant) providing that the holder of this Warrant shall have the
right to exercise such new Warrant and upon such exercise to receive, in lieu of
each share of Preferred Stock theretofore issuable upon exercise of this
Warrant, the kind and amount of shares of stock, other securities, money and
property receivable upon such reclassification, change or merger by a holder of
one share of Preferred Stock. Such new Warrant shall provide for adjustments
that shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Appendix I. The provisions of this Section 3 shall
similarly apply to successive reclassifications, changes, mergers and transfers.
4. Subdivision or Combination of Shares. If the Company at any time
while this Warrant is outstanding and unexpired shall subdivide or combine its
Preferred Stock, the Exercise Price and the number of Shares issuable upon
exercise hereof shall be proportionately adjusted.
5. Stock Dividends. If the Company at any time while this Warrant is
outstanding and unexpired shall pay a dividend payable in shares of Preferred
Stock, then the Exercise Price shall be adjusted, from and after the date of
determination of shareholders entitled to receive such dividend or distribution,
to that price determined by multiplying the Exercise Price in effect immediately
prior to such determination by a fraction (a) the numerator of which shall be
the total number of shares of Preferred Stock outstanding immediately prior to
such dividend or distribution, and (b) the denominator of which shall be the
total number of shares of Preferred Stock outstanding immediately after such
dividend or distribution and the number of Shares subject to this Warrant shall
be proportionately adjusted.
6. Other Distribution. In the event the Company shall declare a dividend
or distribution payable in cash, securities of other persons, evidences of
indebtedness issued by the Company or other persons assets or options or rights
not referred to in Sections 3, 4 or 5 of this Appendix I, then, in each such
case, provision shall be made by the Company such that the
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holder of this Warrant shall receive upon exercise of this Warrant a
proportionate share of any such dividend or distribution as though it were the
holder of the Shares (or Common Stock issuable upon conversion thereof) as of
the record date fixed for the determination of the shareholders of the Company
entitled to receive such dividend or distribution.
7. Notice of Adjustments. Whenever the Exercise Price shall be adjusted
pursuant to the provisions hereof, the Company shall within thirty (30) days of
such adjustment deliver a certificate signed by its chief financial officer to
the registered holder(s) hereof 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 Exercise Price after giving effect to such
adjustment.
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APPENDIX II
CAPITALIZATION SCHEDULE
14
