CLASS "D" WARRANT
THIS WARRANT CERTIFIES THAT -----------------------------------------------
("Holder") is entitled to purchase from VERTICALBUYER, INC., 00 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000, a Delaware corporation, ("VerticalBuyer"), at the price and
during the period as hereinafter specified, up to ------------------------------
shares (the "Shares") of VerticalBuyer common stock, $.001 par value per share.
References to "Holder" in this apply to the Holder and, as appropriate, to any
transferee, if any, of the Warrants.
1. EXERCISE
Price and Period. The rights represented by this warrant (the "Warrant")
shall be exercisable for a period of two (2) years (the "Exercise Period")
beginning on the effective date (the "Effective Date") of a registration
statement covering the Shares (the "Registration Statement") filed with the
Securities and Exchange Commission ("SEC"), at an exercise price of $1.00
per Share, subject to adjustment in accordance with paragraph 7 of hereof.
2. EXERCISE PROCEDURE
The Warrant may be exercised at any time within the period above specified,
in whole or in part, by
(i) the surrender of the Warrant, with the purchase form (the "Purchase
Form") at the end hereof properly executed, at the principal executive
office of VerticalBuyer, at the office of Olde Monmouth Stock
Transfer, Inc., 00 Xxxxxxxx Xxxxxxx (Xxxxx 000), Xxxxxxxx Xxxxxxxxx,
Xxx Xxxxxx 00000 (the "Warrant Agent") (or such other office or agency
as VerticalBuyer may designate by notice in writing to CSPI at the
address of CSPI appearing on its books); and
(ii) payment to VerticalBuyer of the Exercise Price then in effect for the
number of Shares specified in the Purchase Form together with
applicable stock transfer taxes, if any; and
The Warrant shall be deemed to have been exercised, in whole or in
part to the extent specified, immediately prior to the close of
business on the date it is surrendered and payment is made in pursuant
to this paragraph, and the person or persons in whose name or names
the certificates for Shares shall be issuable upon such exercise shall
become the holders as of that date. The certificates for the Shares so
purchased shall be delivered to the holder(s) within a reasonable time
after the Warrant shall have been exercised.
3. TRANSFER
The Warrant is issued under Regulation D to the United States Securities
Act of 1933, as amended (the "1933 Act"), and shall not be transferred,
sold, assigned, or hypothecated except pursuant to an effective
registration statement under the 1933 Act or an exemption therefrom. Any
such assignment shall be effected by CSPI by
(i) executing the form of assignment at the end hereof and
(ii) surrendering the Warrant for cancellation at the office or agency of
VerticalBuyer referred to in paragraph 2 hereof,
whereupon VerticalBuyer shall issue, in the name(s) specified by CSPI
("Transferee(s)") and, which may include CSPI, new Warrant of like tenor
representing in the aggregate rights to purchase the same number of Shares
as are purchasable hereunder.
4. UNDERLYING SHARES OF COMMON STOCK
VerticalBuyer covenants and agrees that all Shares which may be issued upon
exercise of the Warrants will, upon issuance, be duly and validly issued,
fully paid and nonassessable. VerticalBuyer further covenants and agrees
that during the periods within which the Warrant may be exercised,
VerticalBuyer will at all times have authorized and reserved a sufficient
number of Shares to provide for the exercise of the Warrant.
5. NO ENTITLEMENT
The Warrant shall not entitle CSPI to any voting, dividend, or other rights
as a stockholder of VerticalBuyer.
6. REGISTRATION STATEMENT AND INDEMNIFICATION
VerticalBuyer will perform and carry out its obligations under that certain
Registration Rights Agreement by and between VerticalBuyer and CSPI, of
even date herewith
7. ADJUSTMENT
The Exercise Price in effect at any time and the number and kind of
securities purchasable upon the exercise of the Warrant shall be subject to
adjustment from time to time upon the happening of certain events as
follows:
(a) In case VerticalBuyer shall (i) declare a dividend or make a
distribution on its outstanding Shares, (ii) subdivide or reclassify
its outstanding shares of into a greater number of shares, or (iii)
combine or reclassify its outstanding shares into a smaller number of
shares, the Exercise Price in effect at the time of the record date
for such dividend or distribution or of the effective date of such
subdivision, combination or reclassification shall be adjusted so that
it shall equal the price determined by multiplying the Exercise Price
by a fraction, the denominator of which shall be the number of shares
outstanding after giving effect to such action, and the numerator of
which shall be the number of shares outstanding immediately prior to
such action.
(b) In case VerticalBuyer shall fix a record date for the issuance of
rights or warrants to all holders of its common stock entitling them
to subscribe for or purchase Shares (or securities convertible into
common stock) at a price (the "Subscription Price") (or having a
conversion price per share) less than the current market price of the
Shares (as defined in Subsection (e) below) on the record date
mentioned below, the Exercise Price shall be adjusted so that the same
shall equal the price determined by multiplying the number of shares
then comprising underlying Shares by the product of the Exercise Price
in effect immediately prior to the date of such issuance multiplied by
a fraction, the numerator of which shall be the sum of the number of
Shares outstanding on the record date mentioned below and the number
of additional Shares which the aggregate offering price of the total
number of Shares so offered (or the aggregate conversion price of the
convertible securities so offered) would purchase at such current
market price per share of its common stock, and the denominator of
which shall be the sum of the number of Shares outstanding on such
record date and the number of additional Shares offered for
subscription or purchase (or into which the convertible securities so
offered are convertible). Such adjustment shall be made successively
whenever such rights or warrants are issued and shall become effective
immediately after the record date for the determination of
shareholders entitled to receive such rights or warrants; and to the
extent that Shares are not delivered (or securities convertible into
its common stock are not delivered) after the expiration of such
rights or warrants the Exercise Price shall be readjusted to the
Exercise Price which would then be in effect had the adjustments made
upon the issuance of such rights or warrants been made upon the basis
of delivery of only the number of Shares (or securities convertible
into its common stock actually delivered).
(c) In case VerticalBuyer shall hereafter distribute to the holders of its
common stock evidences of its indebtedness or assets (excluding cash
dividends or distributions and dividends or distributions referred to
in Subsection (a) above) or subscription rights or warrants (excluding
those referred to in Subsection (b) above), then in each such case the
Exercise Price in effect thereafter shall be determined by multiplying
the number of shares then comprising an Shares by the product of the
Exercise Price in effect immediately prior thereto multiplied by a
fraction, the numerator of which shall be the total number of Shares
outstanding multiplied by the current market price of the Shares (as
defined in Subsection (e) below), less the fair market value (as
determined by VerticalBuyer's Board of Directors) of the assets or
evidences of indebtedness so distributed or of such rights or
warrants, and the denominator of which shall be the total number of
Shares outstanding multiplied by such current market price per share
of its common stock. Such adjustment shall be made successively
whenever such a record date is fixed. Such adjustment shall be made
whenever any such distribution is made and shall become effective
immediately after the record date for the determination of
shareholders entitled to receive such distribution.
(d) Whenever the Exercise Price payable upon exercise of the Warrant is
adjusted pursuant to Subsections (a), (b) or (c) above, the number of
Shares purchasable upon exercise of the Warrant shall simultaneously
be adjusted by multiplying the number of Shares initially issuable
upon exercise of the Warrant by the Exercise Price in effect on the
date hereof and dividing the product so obtained by the Exercise
Price, as adjusted.
(e) For the purpose of any computation under Subsections (b) or (c) above,
the current market price per share of its common stock at any date
shall be deemed to be the average of the daily closing prices for 20
consecutive business days before such date. The closing price for each
day shall be the last sale price regular way or, in case no such
reported sale takes place on such day, the average of the last
reported bid and asked prices regular way, in either case on the
principal national securities exchange on which its common stock is
admitted to trading or listed, or if not listed or admitted to trading
on such exchange, the average of the highest reported bid and lowest
reported asked prices as reported by NASDAQ, or if not listed or
admitted to trading on such market, than the Over the Counter Bulletin
Board ("OTCBB") or other similar organization if the OTCBB is no
longer reporting such information, or if not so available, the fair
market price as determined by the Board of Directors.
(f) All calculations under this Section 8 shall be made to the nearest
cent or to the nearest one-hundredth of a share, as the case may be.
Anything in this Section 8 to the contrary notwithstanding,
VerticalBuyer shall be entitled, but shall not be required, to make
such changes in the Exercise Price, in addition to those required by
this Section 8, as it shall determine, in its sole discretion, to be
advisable in order that any dividend or distribution in Shares, or any
subdivision, reclassification or combination of its common stock,
hereafter made by VerticalBuyer shall not result in any Federal Income
tax liability to the holders of its common stock or securities
convertible into its common stock.
(g) Whenever the Exercise Price is adjusted, as herein provided,
VerticalBuyer shall promptly, but no later than 10 days after any
request for such an adjustment by CSPI, cause a notice setting forth
the adjusted Exercise Price and adjusted number of Shares issuable
upon exercise of the Warrant and, if requested, information describing
the transactions giving rise to such adjustments, to be mailed to
CSPI, at the address set forth herein, and shall cause a certified
copy thereof to be mailed to its transfer agent, if any. VerticalBuyer
may retain a firm of independent certified public accountants selected
by its board of directors (which may be the regular accountants
employed by VerticalBuyer) to make any computation required by this
Section 8, and a certificate signed by such firm shall be conclusive
evidence of the correctness of such adjustment.
(h) In the event that at any time, as a result of an adjustment made
pursuant to Subsection (a) above, CSPI thereafter shall become
entitled to receive any shares of VerticalBuyer, other than its common
stock, thereafter the number of such other shares so receivable upon
exercise of the Warrant shall be subject to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable to
the provisions with respect to its common stock contained in
Subsections (a) to (g), inclusive above.
8. APPLICABLE LAW
The Warrant shall be governed by and in accordance with the laws of the
State of Massachusetts applied to contracts made and before within the
State of Massachusetts.
IN WITNESS WHEREOF, VerticalBuyer, Inc., has caused the Warrant to be
signed by its duly authorized officer under its corporate seal, and the Warrant
to be dated the date first above written.
VERTICALBUYER, INC.
--------------------- ------------------------
Xxx Xxxx, President
TRANSFER FORM
(To be signed only upon transfer of the Warrant)
For value received, the undersigned hereby sells, assigns, and transfers
unto -------------------- the right to purchase Shares of the Common Stock of
VerticalBuyer, Inc., in the numbers set forth below represented by the foregoing
Warrant to the extent of ------------ shares and appoints
--------------------- as attorney-in-fact to transfer such rights on the
books of VerticalBuyer, Inc., with full power of substitution in the premises.
Dated:
Name:
Signature:
Address:
In the presence of:
PURCHASE FORM
(To be signed only upon exercise of option)
THE UNDERSIGNED, the holder of the foregoing Warrant (the "Warrant"),
hereby irrevocably elects to exercise the purchase rights represented by the
Warrant for, and to purchase thereunder, ---------- shares of the common stock,
$.001 par value ("Shares") of VerticalBuyer, Inc., exercisable for a period of
one year after the date of an effective registration statement relating to the
Shares underlying the Warrant makes payment of $---------- therefor, and
requests that the certificates for the Shares be issued in the name(s) of, and
delivered as follows:
Name(s)
Address:
Dated:
