THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, OR HYPOTHECATED IN THE
ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES
UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT
SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OF SUCH
ACT.
WARRANT TO PURCHASE STOCK
WARRANT NO. WC-__
CORPORATION: NetObjects, Inc., a Delaware corporation
NUMBER OF SHARES: See below.
CLASS OF STOCK: See below.
INITIAL EXERCISE PRICE: See below.
ISSUE DATE: December 18, 1996
EXPIRATION DATE: Upon the Expiration Date of the Put Right, as provided
in Section 2.5
THIS WARRANT CERTIFIES THAT, for the agreed upon value of $1.00 and for
other good and valuable consideration, __________ ("Holder") is entitled to
purchase the number of fully paid and nonassessable shares of Series C Preferred
Stock (the "Shares") of the corporation (the "Company") at the initial exercise
price per Share (the "Warrant Price") all as set forth herein and as adjusted
pursuant to Article 3 of this Warrant, subject to the provisions and upon the
terms and conditions set forth of this Warrant. The Warrant Price shall be
$0.3035413 per share. The number of Shares subject to this Warrant shall be the
quotient derived by dividing _____________________________ ($__________) by the
Warrant Price.
ARTICLE 1. EXERCISE.
1.1 METHOD OF EXERCISE. Holder may exercise this Warrant by
delivering a duly executed Notice of Exercise in substantially the form attached
as Appendix 1 to the principal office of the Company. Holder shall also deliver
to the Company a check for the aggregate Warrant Price for the Shares being
purchased; or at Holder's option, Holder may elect to cancel indebtedness of the
Company for money borrowed from Holder, including accrued and unpaid interest
thereon, as payment for the Shares, to the extent of any such indebtedness. In
lieu of exercising this Warrant as provided in the preceding sentence, at any
time on or after the effective date of a Form S-1 registration statement
relating to Common Stock of the Company filed by the Company pursuant to the
Securities Act of 1933, as amended (the "1933 Act"), Holder may elect to receive
shares equal to the value of this Warrant (or any portion thereof remaining
unexercised) by surrender of this Warrant at the principal office of the Company
together with notice of such election, in which event the Company shall issue to
Holder a number of shares of the Company's Common Stock (if Common Stock is then
issuable upon exercise of this Warrant pursuant to Section 3.2 hereof) computed
using the following formula:
X = Y (A-B)
-------
A
Where X = the number of shares of Common Stock to be issued to Holder.
Y = the number of shares of Common Stock purchasable under this
Warrant (at the date of such calculation).
A = the fair market value of one share of the Company's Common Stock
(at the date of such calculation).
B = Warrant Price (as adjusted to the date of such calculation).
For purposes of this subsection, the fair market value of one
share of the Company's Common Stock shall mean the average of the daily closing
prices per share of the Common Stock as quoted on the Nasdaq Stock Market or on
any exchange on which the Common Stock is listed, whichever is applicable, as
published in the Western Edition of The Wall Street Journal for the five (5)
trading days prior to the date of determination of the fair market value.
1.2 DELIVERY OF CERTIFICATE AND NEW WARRANT. Promptly after Holder
exercises or converts this Warrant, the Company shall deliver to Holder
certificates for the Shares acquired and, if this Warrant has not been fully
exercised or converted and has not expired, a new Warrant representing the
Shares not so acquired.
1.3 REPLACEMENT OF WARRANTS. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of loss, theft or destruction, on delivery of an
indemnity agreement reasonably satisfactory in form and amount to the Company
or, in the case of mutilation, or surrender and cancellation of this Warrant,
the Company at its expense shall execute and deliver, in lieu of this Warrant, a
new warrant of like tenor.
1.4 OTHER AGREEMENTS AND INSTRUMENTS REGARDING THE SHARES. The
Shares, when acquired, may also be subject to such rights, preferences,
privileges and restrictions as may be set forth in the Company's Certificate of
Incorporation, as amended, and Bylaws, as amended, and as may be set forth in
the First Amended and Restated Investor Rights Agreement described in Exhibit B
hereto, a First Amended and Restated Co-Sale Agreement, an Amended and Restated
Voting Rights Agreement, and such other agreements as may be entered into from
time to time by the Company and the holders of Series C Preferred Stock, or
rights to acquire the same, prior to the exercise of this Warrant.
ARTICLE 2. EXERCISE RIGHTS FOLLOWING AN ACQUISITION.
2.1 DEFINITIONS. As used in this Article 2, the following terms have
the following meanings:
"ACQUISITION" shall mean an acquisition by any Person (an "ACQUIROR")
of Beneficial Ownership (including by way of merger) of securities of the
Company constituting 70% or more (but less than 100%) of the Voting Power of the
Company.
"AFFILIATE" shall mean, when used with respect to a specified Person,
another Person that directly, or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with the specified
Person.
"BENEFICIAL OWNERSHIP" shall mean that a Person shall be deemed the
beneficial owner of, and shall be deemed to beneficially own any securities (a)
which such Person or any of its Affiliates is deemed to "beneficially own"
within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as
amended (the "1934 Act"), or (b) which such Person or any of its Affiliates has
the right to acquire (whether such right is exercisable immediately or only
after the passage of time) pursuant to any agreement, arrangement or
understanding or upon the exercise of any right of conversion or exchange,
warrant, option or otherwise.
"BUSINESS DAY" shall mean each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in the City of New York
are authorized or obligated by law or executive order to close.
"COMMON STOCK" shall mean common stock, par value $0.00000001 per share,
of the Company.
"EFFECTIVE TIME" shall mean the effective time of the Acquisition.
2
"EXERCISE PERIOD" shall mean the period beginning on the second
anniversary of the Effective Time and ending on the earlier to occur of (i) the
364th day thereafter or (ii) the first day of a Suspension Period; PROVIDED,
HOWEVER, that if one or more Suspension Periods occur, the Exercise Period shall
be extended, following the termination of each such Suspension Period, until the
Exercise Period, as so extended, shall have comprised 365 days.
"GOVERNMENTAL ENTITY" shall mean any Federal, state, local or foreign
court, governmental or administrative agency or commission or other governmental
agency, authority, instrumentality or regulatory body.
"PERSON" shall mean any individual, firm, corporation, partnership,
limited liability company, trust, joint venture, Governmental Entity or other
entity, and shall include any successor (by merger or otherwise) of such entity.
"QUARTERLY DATE" shall mean, with respect to any date, the 90th day,
180th day, 270th day and 364th day thereafter.
"REGISTRATION APPROVAL DATE" shall mean a date on which the Board of
Directors of the Company approves the filing with the Securities and Exchange
Commission of a Registration Statement.
"REGISTRATION STATEMENT" shall mean a registration statement under the
1993 Act for an initial public offering of the Company's capital stock.
"REGISTRATION TERMINATION DATE" shall mean the date of Company action
having the effect of withdrawing, terminating or abandoning a Registration
Statement.
"SPECIAL EXERCISE DATE" shall mean (i) the second anniversary of the
Effective Time, and each Quarterly Date thereafter occurring during the Exercise
Period or (ii) if any Suspension Period shall have occurred, the day following
the end of such Suspension Period, and each Quarterly Date thereafter occurring
during the Exercise Period; provided, however, that, in the case of (i) or (ii)
above, if any such date shall not be a Business Day, the applicable Special
Exercise Date shall be the next Business Day.
"SUSPENSION PERIOD" shall mean a period beginning on a Registration
Approval Date and ending, if applicable, on the Registration Termination Date
next following such Registration Approval Date.
"VOTING POWER" shall mean the voting power of all securities of a Person
then outstanding generally entitled to vote for the election of directors of the
Person.
2.2 EXERCISE RIGHTS FOLLOWING AN ACQUISITION. Following the
Effective Time of an Acquisition, Holder shall (i) continue to have the right to
exercise this Warrant in accordance with Section 1.1 of this Warrant (a
"Conventional Exercise"), and (ii) have the additional right (the "Special
Exercise Right") to exercise this Warrant, in whole or in part, on any Special
Exercise Date by delivering a duly executed Notice of Special Exercise in the
form attached as Appendix 3 in accordance with Section 2.3, and to receive upon
such exercise and payment of the Warrant Price, cash in an amount equal to
$0.667 per share, in lieu of the number of shares of Series C Preferred Stock
otherwise issuable had this Warrant (or portion hereof) been exercised in a
Conventional Exercise (a "Special Exercise"); PROVIDED, HOWEVER, that Acquiror
shall have the right, following receipt of a Notice of Special Exercise, to
elect to purchase the portion of this Warrant with respect to which a Notice of
Special Exercise was delivered from Holder for a purchase price equal to the
product of (a) the difference between (x) $0.667 MINUS (y) the Warrant Price
MULTIPLIED by (b) the number of shares otherwise issuable had this Warrant (or
portion hereof) been exercised in a Conventional Exercise (a "Purchase
Election"). If Acquiror makes a Purchase Election and pays the purchase price,
and returns to Holder the Warrant Price of the shares of Series C Preferred
Stock tendered by Holder with the Notice of Special Exercise, this Warrant (or
portion hereof) shall not be deemed exercised but rather shall be transferred to
Acquiror in accordance with the transfer provisions hereof.
3
2.3 SPECIAL EXERCISE PROCEDURES. In order to exercise the Special
Exercise Right, Holder shall deliver, not less than 10 Business Days nor more
than 20 Business Days prior to the applicable Special Exercise Date, to the
Company (with a copy to Acquiror) Holder's Notice of Special Exercise. Such
Notice of Special Exercise shall be irrevocable. On the Special Exercise Date,
the Company or Acquiror, as applicable, shall mail or deliver to Holder the
amounts then due as a result of the exercise of such Special Exercise Right or
Purchase Election, and the Company shall mail or deliver to Holder a new Warrant
representing the portion (if any) of this Warrant not theretofore exercised or
purchased.
2.4 SUSPENSION. The provisions of Sections 2.2 (other than
Section 2.2(i)) and 2.3 above shall be suspended and of no force and effect
during any Suspension Period; PROVIDED, HOWEVER, that, subject to Section 2.5
hereof, such provisions shall be reinstated upon the termination of such
Suspension Period.
2.5 FINAL TERMINATION. The Special Exercise Right shall expire upon
the earlier to occur of (i) the effective date of a Registration Statement or
(ii) the date on which the Exercise Period shall have been in effect for an
aggregate of 365 days.
2.6 CONDITIONS PRECEDENT. Notwithstanding any other term of this
Warrant, neither the Company nor Acquiror shall have an obligation under this
Article 2 with respect to any purported Special Exercise (i) unless any waiting
period under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976 applicable
to the purchase of all or a portion of this Warrant pursuant to this Article 2
shall have expired or been terminated, (ii) at any time when, in Acquiror's
reasonable opinion, purchase of all or a portion of this Warrant under this
Article 2 would violate any applicable law, including without limitation
Section 10(b) of the 1934 Act and/or Rule 10b-5 thereunder, or court order and
(iii) if such Special Exercise, when aggregated with each other Special Exercise
(and/or purchase pursuant to a Purchase Election) theretofore made by Holder
would result in the purchase of, and/or Special Exercise of, Series C Warrants
to purchase under this Warrant more than 208,282 shares of Series C Preferred
Stock of the Company.
2.7 EXPENSES. Whether or not the transactions contemplated by this
Article 2 are consummated, all costs and expenses incurred in connection with
this Article 2 and the transactions contemplated hereby shall be paid by the
party incurring such costs or expenses, except as otherwise provided in this
Article 2.
2.8 ACQUISITION. In the event that an Acquisition shall occur, then
proper provision shall be made so that Acquiror shall assume the obligations of
the Company in the event of a Special Exercise and shall have the right to make
a Purchase Election.
ARTICLE 3. ADJUSTMENTS TO THE SHARES.
3.1 STOCK DIVIDENDS, SPLITS, ETC. If the Company declares or pays a
dividend on its common stock (or the Shares if the Shares are securities other
than common stock) payable in common stock, or other securities, subdivides the
outstanding common stock into a greater amount of common stock, or, if the
Shares are securities other than common stock, subdivides the Shares in a
transaction that increases the amount of common stock into which the Shares are
convertible, then upon exercise of this Warrant, for each Share acquired, Holder
shall receive, without cost to Holder, the total number and kind of securities
to which Xxxxxx would have been entitled had Xxxxxx owned the Shares of record
as of the date the dividend or subdivision occurred.
3.2 RECLASSIFICATION, EXCHANGE OR SUBSTITUTION. Upon any
reclassification, exchange, substitution, or other event that results in a
change of the number and/or class of the securities issuable upon exercise or
conversion of this Warrant, Holder shall be entitled to receive, upon exercise
or conversion of this Warrant, the number and kind of securities and property
that Holder would have received for the Shares if this Warrant had been
exercised immediately before such reclassification, exchange, substitution, or
other event. Such an event shall include any automatic conversion of the
4
outstanding or issuable securities of the Company of the same class or series as
the Shares to common stock pursuant to the terms of the Company's Certificate of
Incorporation upon the closing of a registered public offering of the Company's
common stock. The Company or its successor shall promptly issue to Holder a new
Warrant for such new securities or other property. The new Warrant shall provide
for adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Article 3 including, without limitation,
adjustments to the Warrant Price and to the number of securities or property
issuable upon exercise of the new Warrant. The provisions of this Section 3.2
shall similarly apply to successive reclassifications, exchanges, substitutions,
or other events. Under no circumstances shall this Warrant be exercisable to
purchase shares of Common Stock of International Business Machines Corporation
("IBM") as a result of the consummation of the transactions contemplated by that
certain Agreement and Plan of Merger dated as of March 18, 1997 by and among the
Company, IBM, Net Acquisition Corp. and the stockholders of the Company listed
on the signature page thereto.
3.3 ADJUSTMENTS FOR COMBINATIONS, ETC. If the outstanding Shares are
combined or consolidated, by reclassification or otherwise, into a lesser number
of shares, the Warrant Price shall be proportionately increased.
3.4 ADJUSTMENTS FOR DILUTING ISSUANCES. The number of shares of
common stock issuable upon conversion of the Shares, shall be subject to
adjustment from time to time in the manner set forth on Exhibit A.
3.5 NO IMPAIRMENT. The Company shall not, by amendment of its
Certificate of Incorporation or through a reorganization, 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 under this Warrant by the Company, but
shall at all times in good faith assist in carrying out of all the provisions of
this Article 3 and in taking all such action as may be necessary or appropriate
to protect Holder's rights under this Article against impairment. If the Company
takes any action affecting the Shares or its common stock other than as
described above that adversely affects Holder's rights under this Warrant, the
Warrant Price shall be adjusted downward and the number of Shares issuable upon
exercise of this Warrant shall be adjusted upward in such a manner that the
aggregate Warrant Price of this Warrant is unchanged.
3.6 FRACTIONAL SHARES. No fractional Shares shall be issuable upon
exercise or conversion of the Warrant and the number of Shares to be issued
shall be rounded down to the nearest whole Share. If a fractional share interest
arises upon any exercise or conversion of the Warrant, the Company shall
eliminate such fractional share interest by paying Holder amount computed by
multiplying the fractional interest by the fair market value of a full Share.
3.7 CERTIFICATE AS TO ADJUSTMENTS. Upon each adjustment of the
Warrant Price, the Company at its expense shall promptly compute such
adjustment, and furnish Holder with a certificate of its Chief Financial Officer
setting forth such adjustment and the facts upon which such adjustment is based.
The Company shall, upon written request, furnish Holder a certificate setting
forth the Warrant Price in effect upon the date thereof and the series of
adjustments leading to such Warrant Price.
ARTICLE 4. REPRESENTATIONS AND COVENANTS OF THE COMPANY.
4.1 REPRESENTATIONS AND WARRANTIES. The Company hereby represents
and warrants to the Holder that all Shares which may be issued upon the exercise
of the purchase right represented by this Warrant, and all securities, if any,
issuable upon conversion of the Shares, shall, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable, and free of any liens
and encumbrances except for restrictions on transfer provided for herein or
under applicable federal and state securities laws.
4.2 NOTICE OF CERTAIN EVENTS. If the Company proposes at any time
(a) to declare any dividend or distribution upon its common stock, whether in
cash, property, stock, or other securities and whether or not a regular cash
dividend; (b) to offer for subscription pro rata to the holders of any class or
5
series of its stock any additional shares of stock of any class or series or
other rights; (c) to effect any reclassification or recapitalization of common
stock; (d) to merge or consolidate with or into any other corporation, or sell,
lease, license, or convey all or substantially all of its assets, or to
liquidate, dissolve or wind up; or (e) offer holders of registration rights the
opportunity to participate in an underwritten public offering of the company's
securities for cash, then, in connection with each such event, the Company shall
give Holder (1) at least 20 days' prior written notice of the date on which a
record will be taken for such dividend, distribution, or subscription rights
(and specifying the date on which the holders of common stock will be entitled
thereto) or for determining rights to vote, if any, in respect of the matters
referred to in (c) and (d) above; (2) in the case of the matters referred to in
(c) and (d) above at least 20 days' prior written notice of the date when the
same will take place (and specifying the date on which the holders of common
stock will be entitled to exchange their common stock for securities or other
property deliverable upon the occurrence of such event); and (3) in the case of
the matter referred to in (e) above, the same notice as is given to the holders
of such registration rights.
4.3 REGISTRATION UNDER SECURITIES ACT OF 1933, AS AMENDED. The
Company agrees that the Shares or, if the Shares are convertible into common
stock of the Company, such common stock, shall be subject to the registration
rights set forth on Exhibit B, if attached.
ARTICLE 5. MISCELLANEOUS.
5.1 TERM; NOTICE OF EXPIRATION. This Warrant is exercisable, in
whole or in part, at any time and from time to time on or before the Expiration
Date set forth above. The Company shall give Holder written notice of Xxxxxx's
right to exercise this Warrant in the form attached as Appendix 2 not more than
90 days and not less than 30 days before the Expiration Date.
5.2 LEGENDS. This Warrant and the Shares (and the securities
issuable, directly or indirectly, upon conversion of the Shares, if any) shall
be imprinted with legends in substantially the following form:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, OR
HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH
RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED
OR UNLESS SOLD PURSUANT TO RULE 144 OF SUCH ACT.
THIS WARRANT IS ISSUED PURSUANT TO AN INVESTMENT AGREEMENT DATED AS OF
DECEMBER 17, 1996 AMONG THE COMPANY, THE HOLDER AND EACH OTHER ORIGINAL
HOLDER OF A WARRANT TO PURCHASE THE SHARES AND IS SUBJECT TO CERTAIN
RESTRICTIONS THEREUNDER, INCLUDING SECTION 5, WHICH PROVIDES FOR
MANDATORY DEEMED EXERCISE AND FORFEITURE OF THIS WARRANT UNDER CERTAIN
CIRCUMSTANCES.
In addition, the Company will place such legends on the Shares as shall
be necessary to comply with the applicable terms of agreements and instruments
referred to in Section 1.4.
5.3 COMPLIANCE WITH SECURITIES LAWS ON TRANSFER. This Warrant and
the Shares issuable upon exercise this Warrant (and the securities issuable,
directly or indirectly, upon conversion of the Shares, if any) may not be
transferred or assigned in whole or in part without compliance with applicable
federal and state securities laws by the transferor and the transferee
(including, without limitation, the delivery of investment representation
letters and legal opinions reasonably satisfactory to the Company, as reasonably
requested by the Company). The Company shall not require Holder to provide an
opinion of counsel if the transfer is to an affiliate of Holder or if there is
no material question as to the availability of current information as referenced
in Rule 144(c), Holder represents that it has
6
complied with Rule 144(d) and (e) in reasonable detail, the selling broker
represents that it has complied with Rule 144(f), and the Company is provided
with a copy of Xxxxxx's notice of proposed sale.
5.4 TRANSFER PROCEDURE. Subject to the provisions of Section 5.2,
Holder may transfer all or part of this Warrant or the Shares issuable upon
exercise of this Warrant (or the securities issuable, directly or indirectly,
upon conversion of the Shares, if any) by giving the Company notice of the
portion of the Warrant being transferred setting forth the name, address and
taxpayer identification number of the transferee and surrendering this Warrant
to the Company for reissuance to the transferee(s) (and Holder if applicable).
5.5 NOTICES. All notices and other communications from the Company
to the Holder, or vice versa, shall be deemed delivered and effective when given
personally or mailed by first-class registered or certified mail, postage
prepaid, at such address as may have been furnished to the Company or the
Holder, as the case may be, in writing by the Company or such holder from time
to time.
5.6 WAIVER. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought.
5.7 GOVERNING LAW. This Warrant shall be governed by and construed
in accordance with the laws of the State of California, without giving effect to
its principles regarding conflicts of laws.
"COMPANY"
NETOBJECTS, INC.
By
--------------------------------
Name
--------------------------------
(Print)
Title: President
7
APPENDIX 1
NOTICE OF EXERCISE
1. The undersigned hereby elects to purchase ____________ shares of
the Series __ Preferred Stock of NetObjects, Inc. (the "Company") pursuant to
the terms of the attached Warrant, and (i) tenders herewith payment of the
purchase price of such shares in full, or (ii) releases and discharges the
Company's obligation to pay indebtedness for money loaned by the undersigned in
the amount of $________ and tenders payment for the balance of the purchase
price herewith.
2. Please issue a certificate or certificates representing said
shares in the name of the undersigned or in such other name as is specified
below:
--------------------
(Name)
--------------------
--------------------
(Address)
3. The undersigned represents it is acquiring the shares solely for
its own account and not as a nominee for any other party and not with a view
toward the resale or distribution thereof except in compliance with applicable
securities laws.
----------------------------------------
(Signature)
-------------------
(Date)
APPENDIX 2
NOTICE THAT WARRANT IS ABOUT TO EXPIRE
----------------------
(Name of Holder)
(Address of Holder)
Attn: Chief Financial Officer
Dear ___________________________:
This is to advise you that the Warrant issued to you described below
will expire on _____________________, 19____.
Issuer:
Issue Date: December 18, 1996
Class of Security Issuable: See Warrant.
Exercise Price per Share: See Warrant.
Number of Shares Issuable: See Warrant.
Procedure for Exercise:
Please contact [name of contact person at (phone number)] with any
questions you may have concerning exercise of the Warrant. This is your only
notice of pending expiration.
----------------------------------------
(Name of Issuer)
By
-------------------------------------
Its
-------------------------------------
APPENDIX 3
NOTICE OF SPECIAL EXERCISE
1. The undersigned hereby elects to exercise this Warrant in a
Special Exercise pursuant to Article 2 hereof, subject to Acquiror's right to
make a Purchase Election, with respect to _____ shares of Series C Preferred
Stock of the Company otherwise issuable had this Warrant been exercised in a
Conventional Exercise, to receive $0.677 for each such share. The undersigned
hereby tenders herewith payment of the Warrant Price of such shares in full.
Capitalized terms used herein shall have the meanings ascribed to them in this
Warrant.
--------------------
(Signature)
--------------------
(Date)
EXHIBIT A
Anti-Dilution Provisions
After the Issue Date of the Warrant, the Shares issued or issuable under
the terms of the Warrant shall be entitled to the same anti-dilution protection
as provided for shares of Series C Preferred Stock in the Company's Certificate
of Incorporation with respect to dilutive issuances. Under no circumstances
shall the aggregate Warrant Price payable by the Holder upon exercise of the
Warrant increase as a result of any adjustment arising from the application of
the anti-dilution provisions in the Company's Certificate of Incorporation.
EXHIBIT B
REGISTRATION RIGHTS
The Shares (if common stock), or the common stock issuable upon
conversion of the Shares, shall be deemed "registrable securities" or otherwise
entitled to registration rights in accordance with the terms of the First
Amended and Restated Investor Rights Agreement or similar agreement granting
registration rights to the holders of Series C Preferred Stock (the "Agreement")
between the Company and its investor(s).
The Company agrees that no amendments will be made to the Agreement
which would have an adverse impact on Holder's registration rights thereunder
without the consent of Holder. By acceptance of the Warrant to which this
Exhibit B is attached, Holder shall be deemed to be a party to the Agreement.
