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EXHIBIT 10.23
THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE
HEREOF HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAW OF ANY STATE. THE
SECURITIES MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO A
WRITTEN OPINION OF COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.
- OPTIMARK TECHNOLOGIES, INC. -
COMMON STOCK PURCHASE WARRANT
250,000 shares (subject to adjustment)
December 31, 1996
FOR VALUE RECEIVED, the receipt and sufficiency of which are
acknowledged, this Common Stock Purchase Warrant ("this Warrant") certifies that
the Chicago Board Options Exchange, Incorporated, a Delaware non-stock
corporation, its successors and permitted assigns (generally, "Holder") is
entitled to subscribe for and purchase from OptiMark Technologies, Inc., a
Delaware corporation (the "Company"), up Two Hundred Fifty Thousand (250,000)
fully paid and nonassessable shares (subject to potential adjustment as noted
below, the "Warrant Shares") of the common stock of the Company ("Common
Stock"). This Warrant is subject to the following terms and conditions:
1. DEFINITIONS. For purposes of this Warrant, in addition to
terms defined elsewhere herein, the following terms shall have the indicated
meanings:
(a) "Additional Shares of Common Stock" shall mean any and all
shares of Common Stock (including, without limitation, Common Stock issuable
upon exercise, conversion or exchange of Convertible Securities) issued by the
Company after the date of this Warrant, whether or not subsequently reacquired
or retired by the Company; provided, however, that the term "Additional Shares
of Common Stock" does not include (i) Warrant Shares issued or issuable upon
exercise of this Warrant, (ii) Common Stock issued or issuable upon exercise of
Reserved Options, (iii) Common Stock issued or issuable upon conversion of the
Company's Series A Preferred Stock, or (iv) up to 2,046,385 shares of Series A
Preferred Stock that the Company may issue to State Street Boston Corporation,
an affiliate thereof and/or other investors in the absolute discretion of the
Company, at a price of not less than $7.33 per share.
(b) "Affiliate" of a Holder means any natural person,
corporation or other entity that controls, is controlled by, or is under common
control with the Holder.
(c) "CBOE" means the Chicago Board Options Exchange,
Incorporated, i.e., the initial Holder.
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(d) "Common Stock" means shares of the Company's presently or
subsequently authorized $.01 par value common stock and any stock into which
such common stock may hereafter be exchanged or substituted.
(e) "Convertible Securities" means any rights, warrants or
options for the purchase of, or stock or other securities (including, without
limitation, evidences of indebtedness) convertible into, or exchangeable for,
Additional Shares of Common Stock, other than this Warrant, the Series A
Preferred Stock and the Reserved Options.
(f) "Effective Price" when used with reference to an issue or
sale of Additional Shares of Common Stock means the quotient determined by
dividing the total number of Additional Shares of Common Stock in such issue
which were issued or sold, or deemed to have been issued or sold, by the Company
under Section 5(e) into the aggregate consideration received or deemed to have
been received by the Company for such issue or sale, or deemed issue or sale,
under Section 5(e) hereof.
(g) "Equity Options Commencement Date" means the first day on
which the Exchange has made OptiMark-Securities Available with respect to equity
options classes representing at least eighty percent (80%) of the average daily
contract volume of all equity options classes, excluding FLEX equity options
from the calculation, measured over the then most recent six complete calendar
months.
(h) "Exchange" means the registered national securities
exchange operated by CBOE.
(i) "Exercise Price" means the purchase price per Warrant
Share, as adjusted from time to time pursuant to Section 5 hereof, required
under the terms of this Warrant to exercise this Warrant and acquire Common
Stock pursuant to such exercise.
(j) "Flex Options Commencement Date" means the first day on
which the Exchange has made OptiMark-Securities Available with respect to FLEX
options classes representing at least eighty percent (80%) of the average daily
contract volume of all FLEX options classes, measured over the then most recent
six complete calendar months.
(k) "FMV" of a share of Common Stock means (i) in connection
with any effective registration under the Securities Laws and public sale of
Common Stock by the Company, the gross offering price per share to the public,
or otherwise (ii) if there exists a public market for the Common Stock, the
average of the closing bid and asked prices of the Common Stock quoted in the
Over-The-Counter Market Summary or the last reported sale price of the Common
Stock or the closing price quoted on any Exchange on which the Common Stock is
listed, as published in the Western Edition of The Wall Street Journal, for the
five (5) trading days immediately preceding the date of determination of FMV, or
otherwise (iii) the fair market value thereof determined in good faith by the
Board of Directors of the Company.
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(l) "Fully Diluted" means computed on the assumption that all
outstanding Convertible Securities (including but not limited to Reserved
Options) that are then convertible or exercisable are converted or exercised,
without regard to whether such Convertible Securities are "in the money".
(m) "Index Options Commencement Date" means the first day on
which the Exchange has made OptiMark-Securities Available with respect to index
options classes representing at least eighty percent (80%) of the average daily
contract volume of all index options classes, excluding FLEX index options from
the calculation, measured over the then most recent six complete calendar
months.
(n) "Issuance Date" means the date of this Warrant set forth
above.
(o) "IPO Effectiveness Date" means the date on which the
Company commences its initial offer for sale of shares of Common Stock pursuant
to an effective registration statement filed under the Securities Act of 1933,
as amended.
(p) "Made Available", "Making Available" and like terms, as
applied to OptiMark-Securities and the Exchange, means that the necessary
communications links between OptiMark-Securities and the relevant systems of the
Exchange have been established such that persons wishing to utilize
OptiMark-Securities as a facility of the Exchange may do so.
(q) "OptiMark-Securities" means the market structuring
technology and related software which is generally described as
"OptiMark-Securities" in Exhibit A hereto, including all derivatives, releases
and subsequent versions of such technology and software, regardless of platform
or operating media.
(r) "Reserved Options" means (i) currently outstanding options
and warrants granted by the Company to employees and former employees to
purchase up to 320,000 shares of Common Stock at an exercise price of $6.00 per
share, a currently outstanding warrant granted by the Company in favor of Xxxx
X. Xxxxxx to purchase up to 50,000 shares of Common Stock at an exercise price
of $6.00 per share, and a currently outstanding warrant granted by the Company
in favor of The Pacific Stock Exchange Incorporated to purchase up to 526,000
shares of Common Stock at an exercise price of $7.33 per share (with the number
of shares and the exercise price therefor subject to potential anti-dilution and
other adjustments as currently provided therein), (ii) any Convertible
Securities issued by the Company to the current holders of such options and
warrants, with respect to the same number or fewer shares, with the same or any
greater exercise price, in substitution or replacement of any of the foregoing,
and (iii) the right of future grantees to purchase up to 491,567 shares of
Common Stock reserved for issuance upon exercise of ungranted options under the
Company's Stock Option Plan (as such Plan may be amended from time to time) or
otherwise, at an exercise price not less than $6.00 per share, subject to
appropriate adjustment for all subdivisions and combinations.
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(s) "Securities Laws" means the Securities Act of 1933, as
amended, and any applicable state securities ("blue sky") laws.
(t) "Warrant Expiration Date" means the earlier to occur of
(i) December 31, 2010, or (ii) two years following the IPO Effectiveness Date;
provided, however, that the Warrant Expiration Date shall not occur until and
unless the Company has given at least thirty (30) days' prior notice to Holder
of (A) the pendency of the Warrant Expiration Date and (B) if there exists no
public market for the Common Stock, the FMV of the Common Stock; and provided
further, however, that the Warrant Expiration Date shall not occur prior to
December 31, 2005.
(u) "Warrant Shares" means the shares of Common Stock that are
issuable by the Company from time to time upon exercise of this Warrant. .
2. INITIAL EXERCISE PRICE. The Exercise Price on the Issuance
Date is Nine Dollars (US $9.00) per Warrant Share.
3. EXERCISABILITY. Subject to potential adjustment with respect to the
number of Warrant Shares and the Exercise Price pursuant to Section 5 below,
this Warrant may be exercised from time to time as follows:
(a) Up to fifty thousand (50,000) Warrant Shares (the "Flex
Options Warrant Shares") may be purchased by Holder under this Warrant at any
time and from time to time beginning on the Flex Options Commencement Date and
ending on the Warrant Expiration Date; provided, however, that this Warrant
shall not be exercisable as to the Flex Options Warrant Shares during such
period(s) of time, if any, during which CBOE unilaterally has withdrawn
OptiMark-Securities from Availability through the Exchange with respect to
twenty percent (20%) or more of the average daily contract volume of all FLEX
options classes, measured over the then most recent six complete calendar
months.
(b) Up to one hundred thousand (100,000) Warrant Shares (the
"Index Options Warrant Shares") may be purchased by Holder under this Warrant at
any time and from time to time beginning on the Index Options Commencement Date
and ending on the Warrant Expiration Date; provided, however, that this Warrant
shall not be exercisable as to the Index Options Warrant Shares during such
period(s) of time, if any, during which CBOE unilaterally has withdrawn
OptiMark-Securities from Availability through the Exchange with respect to
twenty percent (20%) or more of the average daily contract volume of all index
options classes, excluding FLEX index options from the calculation, measured
over the then most recent six complete calendar months.
(c) Up to one hundred thousand (100,000) Warrant Shares
(the "Equity Options Warrant Shares") may be purchased by Holder under this
Warrant at any time and from time to time beginning on the Equity Options
Commencement Date and ending on the Warrant Expiration Date; provided, however,
that this Warrant shall not be exercisable as to the Equity Options Warrant
Shares during such period(s) of time,
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if any, during which CBOE unilaterally has withdrawn OptiMark-Securities from
Availability through the Exchange with respect to twenty percent (20%) or more
of the average daily contract volume of all equity options classes, excluding
FLEX equity options from the calculation, measured over the then most recent six
complete calendar months.
Within twenty (20) days following request by Holder from time to time,
the Company shall deliver to Holder a written statement, certified as accurate
and complete by a senior officer of the Company, attesting to (i) the number and
type of Warrant Shares as to which this Warrant then is exercisable, (ii) their
respective expiration dates under this Section 3, and (iii) the Exercise Price
therefor.
4. EXERCISE PROCEDURE.
(a) Manner of Exercise. This Warrant is exercisable at the
Exercise Price per Warrant Share payable in cash or by check payable to the
order of the Company, or by Net Issue Exercise pursuant to Section 4(b) below.
Upon surrender of this Warrant at the Company's principal executive office
together with appropriate payment of the Exercise Price for the Warrant Shares
purchased, Holder shall be entitled to receive one or more certificates for the
Warrant Shares so purchased. Any exercise of this Warrant as to fewer than all
of the Warrant Shares as to which this Warrant is then exercisable shall be
effected in even increments of one thousand (1,000) shares. In the case of the
purchase of fewer than all the Warrant Shares actually or potentially
subsequently purchasable under this Warrant, the Company shall cancel this
Warrant upon the surrender hereof and shall execute and deliver to Holder a new
Warrant of like tenor for the balance of the Warrant Shares purchasable
hereunder.
(b) Net Issue Exercise. Notwithstanding any provisions herein
to the contrary, if at any time when this Warrant is otherwise exercisable the
FMV of the Common Stock is greater than the Exercise Price, in lieu of
exercising this Warrant for cash, Holder may notify the Company of Holder's
election to exercise this Warrant in whole or in part by "Net Issue Exercise".
Upon delivery of such notification together with surrender of this Warrant at
the principal executive office of the Company, Holder shall receive from the
Company a number of shares of Common Stock equal to where A = the number of
Warrant Shares as to which this Warrant is being exercised by Net Issue
Exercise.
(c) Delivery of Stock Certificates. As soon as practicable,
but not exceeding ten (10) business days, after any exercise of this Warrant,
the Company, at its expense, shall cause to be issued in the name of Holder and
delivered to Holder (or upon payment by Holder of any applicable transfer taxes,
subject to the provisions of Section 8 below, Holder's assigns) one or more
certificates for the number of Warrant Shares or such other securities or
property or combination thereof, to which Holder shall be entitled upon such
exercise, determined in accordance with Section 5 hereof. In lieu of any
fractional share, the Company shall deliver cash in proportion to the FMV of the
Common Stock. Irrespective of the date of issuance and delivery of certificates
for any Common Stock or
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other securities issuable upon the exercise of this Warrant, each person in
whose name any such certificates are to be issued shall for all purposes be
deemed to have become the holder of record of the Common Stock or other
securities represented thereby immediately prior to the close of business on the
date on which this Warrant and payment for the number of Warrant Shares as to
which this Warrant shall have been exercised shall have been delivered to the
Company.
5. ADJUSTMENTS.
(a) Subdivision, Stock Split or Combination. If the Company at
any time after the Issuance Date effects a subdivision of its Common Stock
(whether by stock split or otherwise), then and in each such event the Exercise
Price then in effect immediately before the subdivision shall be proportionately
decreased. Conversely, if the Company at any time after the Issuance Date
combines the outstanding shares of Common Stock (whether by reverse stock split
or otherwise), then and in each such event the Exercise Price then in effect
immediately before the combination shall be proportionately increased. Any
adjustment under this Section 5(a) due to a subdivision of the outstanding
Common Stock shall become effective as of the record date of such subdivision.
Any adjustment under this Section 5(a) due to a combination of the outstanding
Common Stock shall become effective as of the effective date of such
combination.
(b) Common Stock Dividends and Distributions. If the Company
at any time after the Issuance Date makes or pays, or fixes a record date for
the determination of holders of Common Stock entitled to receive, a dividend or
other distribution payable in Additional Shares of Common Stock (except a
dividend or other distribution described in Sections 5(a) or 5(d)), then and in
each such event the Exercise Price then in effect shall be decreased as of the
time of such issuance or, in the event such a record date is fixed, as of the
close of business on such record date, by multiplying the Exercise Price then in
effect by a fraction of which the numerator shall be the total number of shares
of Common Stock issued and actually outstanding immediately prior to the time of
such issuance or the close of business on such record date and the denominator
of which shall be the total number of shares of Common Stock issued and actually
outstanding immediately prior to the time of such issuance or the close of
business on such record date plus the number of Additional Shares of Common
Stock issuable in payment of such dividend or distribution; provided, however,
that if such record date is fixed and such dividend is not fully paid, or if
such distribution is not fully made on the date fixed therefor, the Exercise
Price shall be recalculated to reflect that such dividend was not fully paid or
that such distribution was not fully made and thereafter the Exercise Price
shall be adjusted pursuant to this Section 5(b) as of the time of actual payment
of such dividends or distributions.
(c) Other Dividends or Distributions. If the Company at
any time after the Issuance Date makes, or fixes a record date for the
determination of holders of Common Stock entitled to receive, a dividend or
other distribution payable in cash or in securities of the Company other than
Additional Shares of Common Stock (except an event provided for in Section
5(d)), then and in each such event lawful and adequate provision
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shall be made so that Holder shall receive upon exercise of this Warrant, in
addition to the number of Warrant Shares receivable thereupon, the amount of
cash or securities of the Company which Holder would have received had this
Warrant been exercised for Warrant Shares immediately prior to the record date
for such event and had Holder thereafter, during the period from such record
date to and including the date of exercise, retained such securities receivable
by it as aforesaid during such period, subject to all other adjustments called
for during such period under this Section 5 with respect to the rights of
Holder.
(d) Reclassification, Merger, Consolidation or Sale of Assets.
If at any time after the Issuance Date there is (i) any reclassification or
change of outstanding securities issuable upon exercise of this Warrant (except
for a subdivision or combination provided for in Section 5(a)), (ii) any merger
or consolidation of the Company with or into another corporation or other entity
(other than a merger or consolidation in which the Company is the surviving
corporation and which does not result in any reclassification, change or
exchange of outstanding securities issuable upon exercise of this Warrant), or a
reverse triangular merger in which the Company is the surviving corporation but
the shares of the Company's capital stock outstanding immediately prior to the
merger are converted by virtue of the merger into other property, whether in the
form of securities, cash or otherwise, or (iii) any sale or transfer of all or
substantially all of the Company's properties and assets to any other person
(whether or not as part of the liquidation or dissolution of the Company), then,
and in each such event, and as a part of and as a condition to the consummation
of such reclassification, merger, consolidation, sale or transfer, lawful and
adequate provision shall be made so that Holder shall thereafter be entitled to
receive, upon exercise of this Warrant, the number of shares of stock or other
securities or property of the Company or other entity resulting from such
reclassification, merger, consolidation, sale or transfer, to which a holder of
Common Stock or other securities deliverable upon the exercise of this Warrant
would have been entitled on such reclassification, change, merger,
consolidation, sale or transfer if this Warrant had been exercisable and had
been exercised immediately prior to such event. In any such case, appropriate
adjustments shall be made in the application of the provisions of this Section 5
so as to ensure that the provisions of this Section 5 applicable after such
events shall be as equivalent as possible to the provisions of this Section 5
applicable before such events.
(e) Issuance or Sale at Less than Exercise Price.
(i) If at any time or from time to time after the
Issuance Date the Company issues or sells, or is deemed by the express
provisions of this Section 5(e) to have issued or sold, Additional Shares of
Common Stock (except as a dividend or other distribution on any class of stock
as provided in Sections 5(b) or 5(c) above, or a subdivision or combination of
shares of Common Stock as provided in Section 5(a) above), for an Effective
Price that is less than the Exercise Price in effect immediately prior to such
issuance or sale (or deemed issuance or sale), then and in each such case the
Exercise Price shall be reduced as of the opening of business on the date of
such issue or sale to a price equal to the Effective Price for such issuance or
sale.
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(ii) For the purpose of making any adjustment
required under this Section 5(e), the consideration received by the Company for
any issue or sale (or deemed issue or sale) of securities shall (A) to the
extent it consists of cash, be computed at the aggregate sales price paid, (B)
to the extent it consists of property other than cash, be computed at the fair
value of the property as determined in good faith by the Board of Directors of
the Company, and (C) if Additional Shares of Common Stock, or rights or options
to purchase Additional Shares of Common Stock, are issued or sold together with
other assets of the Company for a consideration which covers both, be computed
as the portion of the consideration so received that may be reasonably
determined in good faith by the Board of Directors to be allocable to such
Additional Shares of Common Stock or rights or options.
(iii) For the purpose of the adjustments required
under this Section 5(e), if the Company issues or sells any Convertible
Securities, then in each such case, the Company shall be deemed to have issued
at the time of the issuance of such Convertible Securities the maximum number of
Additional Shares of Common Stock (determined without regard to adjustment
provisions similar to those contained in this Section 5) issuable upon exercise
or conversion thereof and to have received as consideration for the issuance of
such shares an amount equal to the total amount of the consideration, if any,
received by the Company for the issuance of such Convertible Securities, plus
the minimum amount of consideration, if any, payable to the Company upon
exercise or conversion (other than by cancellation of liabilities or obligations
evidenced by such Convertible Securities), assuming conversion immediately after
the time of such issuance or sale. No further adjustment of the Exercise Price,
adjusted upon the issuance of such Convertible Securities, shall be made as a
result of the actual issuance of shares of Common Stock upon exercise of such
Convertible Securities; provided, however, that if the convertibility or
exercisability feature of such Convertible Securities shall expire prior to
conversion or exercise thereof, then the Exercise Price shall be readjusted (but
to no greater extent than originally adjusted) to an Exercise Price equal to
that price which would have existed had the expired Convertible Securities never
been issued or sold.
(iv) For the purpose of the adjustments
required under this Section 5(e), if the Company issues or sells
any rights or options for the purchase of Convertible Securities, then in
each such case the Company shall be deemed to have issued at the time of
the issuance of such rights or options the maximum number of Additional
Shares of Common Stock (determined without regard to adjustment
provisions similar to those contained in this Section 5) issuable upon
conversion of the total amount of Convertible Securities covered by such
rights or options and to have received as consideration for the issuance
of such Additional Shares of Common Stock an amount equal to the amount
of consideration, if any, received by the Company for the issuance of
such rights or options, plus the minimum amount of consideration, if any,
payable to the Company upon the
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exercise of such rights or options, and plus the minimum amount of
consideration, if any, payable to the Company (other than by cancellation
of liabilities or obligations evidenced by such Convertible Securities)
upon exercise of the conversion or purchase rights of such Convertible
Securities, assuming exercise or conversion immediately after the time of
such issuance or sale. No further adjustment of the Exercise Price,
adjusted upon the issuance of such rights or options, shall be made as a
result of the actual issuance of the Convertible Securities upon the
exercise of such rights or options or upon the actual issuance of Common
Stock upon exercise of the conversion or purchase rights of such
Convertible Securities; provided, however, that if such rights or options
to purchase Convertible Securities shall expire prior to conversion or
exercise thereof, or if the convertibility or exercisability feature of
such Convertible Securities shall expire prior to the exercise thereof,
the Exercise Price shall be readjusted to an Exercise Price equal to that
price which would have existed had the expired rights or options to
purchase Convertible Securities or such Convertible Securities never been
issued or sold.
(f) Equitable Adjustment. In case the Company, at any time or
from time to time, shall take any action affecting its Common Stock similar to
or having an effect similar to any of the actions described in this Section 5
(but not including any action described expressly in this Section 5) and the
Board of Directors in good faith determines that it would be equitable in the
circumstances to adjust the Exercise Price as a result of such action, then, and
in each such case, the Exercise price shall be adjusted in such manner and at
such time as the Board of Directors of the Company in good faith determines
would be equitable in the circumstances (such determination to be evidenced in a
resolution, a certified copy of which shall be mailed to Holder).
(g) Number of Warrant Shares. Upon each adjustment of the
Exercise Price pursuant to the provisions of this Section 5, the number of
shares of Common Stock issuable upon the exercise of this Warrant shall be
adjusted, to the nearest full share, by multiplying the Exercise Price in effect
immediately prior to such adjustment by the number of shares of Common Stock
issuable upon exercise of this Warrant immediately prior to such adjustment and
dividing the product so obtained by the adjusted Exercise Price.
(h) Accountant's Certificate. In case of any adjustment or
readjustment of the Exercise Price and/or the number of shares of Common Stock
or other securities or property issuable upon exercise of this Warrant, the
Company at its expense shall cause independent certified public accountants of
recognized national standing selected by the Company (who may be the independent
certified public accountants then auditing the books of the Company) to compute
such adjustment or readjustment in accordance with the provisions hereof and
prepare a certificate showing such adjustment or readjustment, and shall mail
such certificate, by first class mail, postage prepaid, to Holder at Holder's
address as shown in the Company's books. The certificate shall set forth such
adjustment or readjustment, showing in detail the facts upon which such
adjustment or readjustment is based including a statement of (i) the
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consideration received or deemed to be received by the Company for any
Additional Shares of Common Stock issued or sold or deemed to have been issued
or sold, (ii) the Exercise Price at the time in effect, (iii) the number of
Additional Shares of Common Stock issued or sold or deemed to have been issued
or sold, and (iv) the type and amount, if any, of other property which at the
time would be receivable upon exercise of this Warrant.
6. RESERVED SHARES. The Company shall at all times reserve and keep
available out of its authorized but unissued shares of Common Stock, solely for
the purpose of issuance upon exercise of this Warrant, such number of shares of
Common Stock as shall be issuable upon the exercise hereof. All Warrant Shares
that are issued upon exercise of this Warrant will be, upon issuance, duly
authorized, validly issued, fully paid and nonassessable.
7. NO RIGHTS AS A STOCKHOLDER. Unless, until and except to the extent
that this Warrant is exercised, Holder shall not be entitled to any voting
rights, dividends or other rights as a stockholder of the Company.
8. SECURITIES LAWS; TRANSFER; RIGHT OF FIRST REFUSAL.
(a) This Warrant may not be transferred in whole or in part,
unless (i) this Warrant has been registered under the Securities Laws, or (ii)
Holder provides to the Company an opinion of counsel acceptable to the Company
in its reasonable discretion, or the Company is otherwise satisfied, that such
transfer is exempt from registration under the Securities Laws. This Warrant
also may not be transferred if and to the extent not then exercisable, except to
an Affiliate of CBOE.
(b) If Holder ever wishes to sell or otherwise transfer
this Warrant or any Warrant Shares to any person other than an Affiliate of CBOE
(a "Third Party Purchaser"), Holder first shall offer this Warrant or such
Warrant Shares to the Company by sending written notice to the Company (the
"Offering Notice"). The Offering Notice shall state (i) the identity of the
Third Party Purchaser, (ii) the portion of this Warrant and/or the number of
Warrant Shares proposed to be transferred (the "Offered Securities"), and (iii)
the proposed purchase price which Holder is willing to accept therefor (the
"Offer Price"). For a period of fifteen (15) days after delivery of the Offering
Notice (the "Option Period"), the Company shall have the right and option to
purchase all (but not less than all) of the Offered Securities at a purchase
price equal to the Offer Price and upon the terms and conditions set forth in
the Offering Notice. The right of the Company to purchase any or all of the
Offered Securities under this paragraph (b) shall be exercisable by delivering
written notice of exercise to Holder, prior to expiration of the Option Period.
Any failure of the Company to respond to the Offering Notice within the Option
Period shall be deemed a waiver of the Company's rights under this paragraph
(b). The closing of any purchase of the Offered Securities by the Company under
this (b) shall be held at the principal office of the Company at 11:00 a.m.,
local time, on the 60th day following the date of delivery of the Offering
Notice. At such closing, (x) Holder shall deliver one or more certificates
representing the Offered
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Securities being purchased, duly endorsed for transfer, together with all
requisite transfer taxes and a written representation that Holder is the sole
beneficial and record owner of such Offered Securities, free and clear of all
liens, claims, options, charges, encumbrances and rights, (y) the Company shall
deliver the necessary payment in full for such Offered Securities in immediately
Available funds, and (z) Holder and the Company shall execute and deliver such
additional documents as are otherwise necessary or appropriate. If and to the
extent that the Company does not purchase the Offered Securities under this
paragraph (b), Holder may sell the Offered Securities to the Third Party
Purchaser at a price not less than the Offer Price and on the other terms and
conditions set forth in the Offering Notice at any time within 180 days
following expiration of the Option Period. The Offered Securities in the hands
of the Third Party Purchaser shall remain subject to the Company's right of
first refusal in this paragraph (b) and the other restrictions on transfer set
forth in this Section 8.
(c) No Warrant Shares shall be issued other than to CBOE or an
Affiliate of CBOE, and no Warrant Shares may be transferred except to an
Affiliate of CBOE, unless (i) such issuance or transfer has been registered
under the Securities Laws, or (ii) Holder provides to the Company an opinion of
counsel acceptable to the Company in its reasonable discretion, or otherwise
satisfies the Company, that the issuance or transfer is exempt from the
registration requirements of the Securities Laws. Each notice of exercise of
this Warrant automatically shall be deemed to include a representation and
warranty from Holder that Holder is acquiring the Warrant Shares for investment
only, and not with a view to the distribution thereof.
(d) Each certificate evidencing Warrant Shares shall
include a prominent legend to the following effect:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE
SECURITIES LAWS OF ANY STATE. THE SECURITIES MAY NOT BE TRANSFERRED
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT
AND SUCH LAWS OR PURSUANT TO A WRITTEN OPINION OF COUNSEL THAT SUCH
REGISTRATION IS NOT REQUIRED. THESE SHARES ALSO ARE SUBJECT TO A RIGHT
OF FIRST REFUSAL IN FAVOR OF THE ISSUER.
(e) Notwithstanding any provision of this Section 8 to the
contrary, the restrictions imposed by Sections 8 (a), 8(b), 8(c) and 8(d) above
shall terminate as to any particular Warrant Shares when (i) any class of Common
Stock of the Company shall have been effectively registered under the Securities
Laws, or (ii) an opinion to the effect that the restrictions imposed by Sections
8(a) and 8(c) are no longer required under the Securities Laws shall have been
received from counsel to Holder acceptable to the Company. Whenever the
restrictions imposed by this Section 8 shall terminate, each Holder of any
Warrant Shares as to which such restrictions shall have terminated shall be
entitled to receive from the Company, without expense, new certificates not
bearing the restrictive legend set forth in Section 8(d) of this Agreement.
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(f) To transfer this Warrant, Holder shall surrender the
original Warrant to the Secretary of the Company, and the Company shall exchange
such instrument for one or more new Warrants of like tenor, of such nature and
in such denominations as may be specified by Holder, representing in the
aggregate the right to subscribe for and purchase the number of Warrant Shares
purchasable hereunder. Unless and until such transfer(s) is/are duly registered
on the books of the Company, the Company shall be entitled to treat the record
Holder as the sole and absolute owner of this Warrant for purposes of notices,
rights to exercise, rights to transfer, and for all other purposes.
9. INFORMATION.
(a) By its acceptance hereof, CBOE acknowledges the
opportunity to have reviewed the financial statements of the Company and
otherwise to have obtained such information concerning the business and
financial status and prospects of the Company as CBOE desired.
(b) The Company shall cooperate with Holder in supplying such
information as may be reasonably necessary for Holder to complete and file any
information reporting forms presently or hereafter required by the SEC as a
condition to the availability of an exemption from the Securities Laws for any
permitted sale or other transfer of this Warrant and/or the Warrant Shares.
(c) Prior to any exercise or contemplated exercise of this
Warrant, Holder shall be entitled to review current financial statements of the
Company, to inquire of management as to the Company's business and financial
status and prospects, and to review other non-privileged information that may be
available from the Company without undue effort or expense.
10. PAYMENT OF TAXES. The Company shall pay all taxes and other
governmental charges that may be imposed upon the issuance or delivery of
Warrant Shares (but not on income related thereto). The Company shall not be
required, however, to pay any tax or other charge imposed in connection with any
transfer of this Warrant or the issue of any certificate evidencing Warrant
Shares in any name other than that of Holder.
11. NO IMPAIRMENT. The Company will not, by any 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 Holder against impairment.
12. LOSS. Upon receipt of evidence reasonably satisfactory to the
Company of the ownership of and the loss, theft, destruction or mutilation of
this Warrant and (in the
13
case of loss, theft or destruction) upon delivery of an indemnity reasonably
satisfactory to the Company or (in the case of mutilation) upon surrender and
cancellation of the mutilated Warrant, the Company will execute and deliver, in
lieu thereof, a new Warrant of like tenor.
13. NOTICES. All notices and other communications related to this
Warrant shall be in writing, shall be delivered by Federal Express or other
nationally recognized overnight delivery service, and shall be directed as
follows:
i) if to the Company: To the following
address, or any other address which the Company may designate by notice to
Holder from time to time:
OptiMark Technologies, Inc.
000 Xxxx Xxxxxx
Xxxxxxx, XX 00000
attn: Xxxxxxx X. Xxxxxx, Chief Executive Officer
with a copy in the same manner to:
Xxxxxx, Xxxxxxx & Xxxxxxxxxx, P.C.
0000 Xxxxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
attn: Xxxxxx X. Xxxxxxxxxx, Esq.
ii) if to Holder: To the following address, or to any
other address which Holder may designate by notice to the Company from
time to time:
Chicago Board Options Exchange, Incorporated
LaSalle at Van Buren
Xxxxxxx, XX 00000
attn: Xxxxxxx Du Four
14. MISCELLANEOUS.
(a) Office of the Company. As long as any part of this Warrant remains
outstanding, the Company shall maintain an office or agency (which may be the
principal executive office of the Company) where this Warrant may be presented
for exercise, registration of transfer, division or combination as provided in
this Warrant. The Company will not at any time, except upon dissolution,
liquidation or winding up of the Company, close its Common Stock transfer books
or Warrant transfer books so as to result in preventing or delaying the exercise
or transfer of this Warrant. The Company shall notify Holder in writing prior to
any change of the address of the office at which this Warrant may be presented.
(b) Limitation of Liability. No provision hereof, and no
enumeration herein of the rights or privileges of Holder, shall give rise to any
liability of Holder for the
14
purchase price of any Common Stock or as a stockholder of the Company, whether
such liability is asserted by the Company or by creditors of the Company.
(c) Nonwaiver. No course of dealing or any delay or failure to exercise
any right hereunder on the part of the Company shall operate as a waiver of such
right or otherwise prejudice the Company's rights, powers or remedies. No course
of dealing or any delay or failure to exercise any right hereunder on the part
of Holder shall operate as a waiver of such right or otherwise prejudice
Holder's rights, power or remedies.
(d) Successors. All the covenants, agreements, representations and
warranties contained in this Warrant shall bind the parties hereto and their
respective heirs, executors, administrators, distributees, successors and
assigns.
(e) Change; Waiver. Neither this Warrant nor any term hereof may be
changed, waived, discharged or terminated orally but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought.
(f) Headings. The section headings in this Warrant are inserted for
purposes of convenience only and shall have no substantive effect.
(g) Law Governing. This Warrant shall for all purposes be construed and
enforced in accordance with, and governed by, the laws of the State of Colorado.
(h) Attorneys' Fees. In the event any party hereto initiates any legal
action or suit in connection with any dispute concerning the interpretation of
this Warrant or the enforcement of any provision hereof, the prevailing party in
such action or suit shall be entitled to recover all of its costs of action or
suit (including without limitation reasonable attorneys' and expert witness
fees) from the other party.
IN WITNESS WHEREOF, OptiMark Technologies, Inc., a Delaware corporation,
has caused this Warrant to be signed by its duly authorized officers under its
corporate seal, as of the date first set forth above.
OPTIMARK TECHNOLOGIES, INC.
By: /s/ Xxxxxxx X. Xxxxxx,
Chief Executive Officer
Attest:
/s/ Xxxxxxxxx X. Xxxxxx
Secretary
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EXHIBIT A
DEFINITION OF OPTIMARK-SECURITIES (fka MJTX)
OptiMark-Securities (the "Service") describes a service to be implemented
and offered by OptiMark Technologies, Inc. or its Affiliates (the "Company").
The Service will incorporate a market mechanism developed and owned by the
Company and with regard to which patents are pending. The market mechanism
features two innovations: 1) an anonymous and non-disclosed representation of
trading desire in terms of a "satisfaction profile", which may be thought of as
a normalized bivariate (extendible to multivariate) utility function in
price/size space; and 2) a means of optimizing the sequential allocation of
trades between buyers and sellers at different prices and sizes based upon a
measure of "mutual satisfaction."
The Service will be accessible via TCP/IP network protocols, and access to
the transaction facility will be via network providers of the users' choice that
might include, for example, Dow Xxxxx Telerate, Bridge or IBM. Users will send
profiles to a computer facility operated by the Company, where they will be
processed using software incorporating the Company's proprietary algorithms. The
Company will also provide application programming interfaces to network
providers.
At the user's site, the Service will include a sophisticated graphical
user interface initially running under Microsoft Windows (3.1 through 95), OS/2
or UNIX to simplify and enhance the customers' ability to define and enter
profiles. At the central site, the Service will include a computer to computer
interface (CTCI) for receiving computer-generated profiles. The Service will
process quotation feeds from third parties, including the real-time feeds
available from the Consolidated Quotation Service ("CQS"), the Options Price
Reporting Authority ("OPRA"), and the National Association of Securities Dealers
Automated Quotation Service ("NASDAQ").
