EXHIBIT 10.6
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE HEREOF
HAVE NOT BEEN REGISTERED UNDER EITHER THE SECURITIES ACT OF 1933 (THE "ACT") OR
APPLICABLE STATE SECURITIES LAWS (THE STATE ACTS") AND SHALL NOT BE SOLD,
PLEDGED, HYPOTHECATED, DONATED, OR OTHERWISE TRANSFERRED (WHETHER OR NOT FOR
CONSIDERATION) BY THE HOLDER EXCEPT UPON THE ISSUANCE TO THE COMPANY OF A
FAVORABLE OPINION OF COUNSEL AND/OR SUBMISSION TO THE COMPANY OF SUCH EVIDENCE
AS MAY BE SATISFACTORY TO COUNSEL TO THE COMPANY, IN EACH SUCH CASE, TO THE
EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE ACT AND THE STATE
ACTS.
WARRANT TO PURCHASE 257,200 SHARES OF COMMON STOCK
CLEARLOGIC, INC.
(A NEW JERSEY CORPORATION)
NOT TRANSFERABLE OR EXERCISABLE EXCEPT UPON CONDITIONS HEREIN SPECIFIED, VOID
AFTER 5:00 P.M, ON AUGUST 19, 2003
CLEARLOGIC, INC., a New Jersey corporation (the "Company") hereby certifies that
Xxxxxxx Xxxxxxxxxxxxxx, an individual, residing at 000 Xxxxxxx Xxxx Xxxx.,
Xxxxxx Xxxx, XX 00000, his registered successors and permitted assigns
registered on the books of the Company maintained for such purposes as the
registered holder hereof (the "Holder"), for value received, is entitled to
purchase from the Company the number of fully paid and nonassessable shares of
Common Stock of the Company, par value of $0.001 per share, (the "Shares")
stated above at the purchase price of one dollar ($1.00) per Share (the
"Exercise Price") (the number of Shares and Exercise Price being subject to
adjustment as hereinafter provided) upon the terms and conditions herein
provided.
1. Exercise of Warrants.
(a) Subject to subsection (b) of this Section 1, upon presentation and
surrender of this Warrant Certificate, with the attached Purchase Form duly
executed, at the principal office of the Company at 00 Xxxxx Xxxxxx Xxxxxx,
Xxxxxxxxxxx, Xxx Xxxxxx 00000, or at such other place as the Company may
designate by notice to the Holder hereof, together with a certified or bank
cashier's check payable to the order of the Company in the amount of the
Exercise Price times the number of Shares being purchased, the Company shall
deliver to the Holder hereof, as promptly as practicable, certificates
representing the Shares being purchased. This Warrant may be exercised in whole
or in part; and, in case of exercise hereof in part only, the Company, upon
surrender hereof, will deliver to the Holder a new Warrant Certificate or
Warrant Certificates of like tenor entitling the Holder to purchase the number
of Shares as to which this Warrant has not been exercised.
(b) This Warrant may be exercised in whole or in part at any time prior
to 5:00 p.m., on August 19, 2003 ("Exercise Period").
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2. Exchange and Transfer of Warrant. This Warrant:
(a) At any time prior to the exercise hereof, upon presentation and
surrender to the Company, may be exchanged, alone or with other Warrants of like
tenor registered in the name of the Holder, for another Warrant or other
Warrants of like tenor in the name of such Holder exercisable for the same
aggregate number of Shares as the Warrant or Warrants surrendered;
(b) Subject to Sections 5,6,7,8 herein, this Warrant may be transferred
or assigned, in whole or in part. The Holder shall present and surrender to the
Company at its office or at the office of its stock transfer agent, if any: (1)
this Warrant, (2) the Assignment Form annexed hereto duly executed, and (3)
funds sufficient to pay the applicable transfer tax, if any. The Company shall,
without charge, execute and deliver a new Warrant in the name of the assignee
named in the Assignment Form and this Warrant shall promptly be cancelled.
3. Rights and Obligations of Warrant Holder.
(a) The Holder of this Warrant Certificate shall not, by virtue hereof,
be entitled to any rights of a shareholder in the Company, either at law or in
equity; provided, however, in the event that any certificate representing the
Shares is issued to the Holder hereof upon exercise of this Warrant, such Holder
shall, for all purposes, be deemed to have become the holder of record of such
Shares on the date on which this Warrant Certificate, together with a duly
executed Purchase Form, was surrendered and payment of the Exercise Price was
made, irrespective of the date of delivery of such Share certificate. The rights
of the Holder of this Warrant are limited to those expressed herein and the
Holder of this Warrant, by its acceptance hereof, consents to and agrees to be
bound by and to comply with all the provisions of this Warrant Certificate,
including, without limitation, all the obligations imposed upon the Holder
hereof by Sections 2 and 5 hereof. In addition, the Holder of this Warrant
Certificate, by accepting the same, agrees that the Company may deem and treat
the person in whose name this Warrant Certificate is registered on the books of
the Company maintained for such purpose as the absolute, true and lawful owner
for all purposes whatsoever, notwithstanding any notation of ownership or other
writing thereon, and the Company shall not be affected by any notice to the
contrary.
(b) No Holder of this Warrant Certificate, as such, shall be entitled
to vote or receive dividends or to be deemed the holder of Shares for any
purpose, nor shall anything contained in this Warrant Certificate be construed
to confer upon any Holder of this Warrant Certificate, as such, any of the
rights of a shareholder of the Company or any right to vote, give or withhold
consent to any action by the Company, whether upon any recapitalization, issue
of stock, reclassification of stock, consolidation, merger, conveyance or
otherwise, receive notice of meetings or other action affecting shareholders
(except for notices provided for herein), receive dividends, subscription
rights, or otherwise, until this Warrant shall have been exercised and the
Shares purchasable upon the exercise thereof shall have become deliverable as
provided herein; provided, however, that any such exercise on any date when the
stock transfer books of the Company shall be closed shall constitute the person
or persons in whose name or names the certificate or certificates for those
Shares are to be issued as the record holder or holders thereof for all purposes
at the opening of business on the next succeeding day on which such stock
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transfer books are open, and the Warrant surrendered shall not be deemed to
have been exercised, in whole or in part as the case may be, until the next
succeeding day on which stock transfer books are open for the purpose of
determining entitlement to dividends on the Company's common stock.
4. Shares Underlying Warrants.
The Company covenants and agrees that all Shares delivered upon
exercise of this Warrant shall, upon delivery and payment therefor, be duly and
validly authorized and issued, fully paid and nonassessable, and free from all
stamp taxes, liens, and charges with respect to the purchase thereof. In
addition, the Company agrees at all times to reserve and keep available an
authorized number of Shares sufficient to permit the exercise in full of this
Warrant.
5. Disposition of Warrants or Shares.
(a) The holder of this Warrant Certificate and any transferee hereof or
of the Shares issuable upon the exercise of the Warrant Certificate, by their
acceptance hereof, hereby understand and agree that the Warrant, and the Shares
issuable upon the exercise hereof, have not been registered under either the
Securities Act of 1933 (the "Act") or applicable state securities laws (the
"State Acts") and shall not be sold, pledged, hypothecated, donated, or
otherwise transferred (whether or not for consideration) except upon the
issuance to the Company of a favorable opinion of counsel and/or submission to
the Company of such evidence as may be satisfactory to counsel to the Company,
in each such case, to the effect that any such transfer shall not be in
violation of the Act and the State Acts. It shall be a condition to the transfer
of this Warrant that any transferee thereof deliver to the Company its written
agreement to accept and be bound by all of the terms and conditions of this
Warrant Certificate.
(b) The stock certificates of the Company that will evidence the shares
of Common Stock with respect to which this Warrant may be exercisable will be
imprinted with a conspicuous legend in substantially the following form:
The securities represented by this certificate have not been registered
under either Securities Act of 1933 (the "Act") or applicable state
securities laws (the "State Acts") and shall not be sold, pledged,
hypothecated, donated or otherwise transferred (whether or not for
consideration) by the holder except upon the issuance to the Company of
a favorable opinion of its counsel and/or submission to the company of
such other evidence as may be satisfactory to counsel of the Company,
in each such case, to the effect that any such transfer shall not be in
violation of the "Act and the State Acts."
The Company does not file, and does not in the foreseeable future contemplate
filing, periodic reports with the Securities and Exchange Commission ("SEC")
pursuant to the provisions of the Securities Exchange Act of 1934, as amended.
Except as provided in Section 9 of this Warrant, the Company has not agreed to
register any of the holder's shares of Common Stock of the Company with respect
to which this Warrant may be exercisable for distribution in accordance with the
provisions of the Act or the State Acts, and the Company has not agreed to
comply with any exemption from registration under the Act or the State Acts for
the resale of the Holder's Shares of Common Stock of the Company with respect to
which this Warrant may be exercised. Hence, it is the understanding of the
holders of this Warrant that by virtue of the provisions of certain rules
respecting restricted securities promulgated by the SEC, the shares of Common
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Stock of the Company with respect to which this Warrant may be exercisable may
be required to be held indefinitely, unless and until registered under the Act
and the State Acts, unless an exemption from such registration is available, in
which case the holder may still be limited as to the number of shares of Common
Stock of the Company with respect to which this Warrant may be exercised and
that may be sold.
6. Adjustments.
The number of Shares purchasable upon the exercise of each Warrant is
subject to adjustment from time to time upon the occurrence of any of the events
enumerated below.
(a) In case the Company shall:
(i) pay a dividend in Shares,
(ii) subdivide its outstanding Shares into a greater number
of Shares,
(iii) combine its outstanding Shares into a smaller number of
Shares, or
(iv) issue, by reclassification of its Shares, any shares of its
capital stock, the amount of Shares purchasable upon the
exercise of each Warrant immediately prior thereto shall be
adjusted so that the Holder shall be entitled to receive upon
exercise of the Warrant that number of Shares which such
Holder would have owned or would have been entitled to
receive after the happening of such event had such Holder
exercised the Warrant immediately prior to the record date,
in the case of such dividend, or the effective date, in the
case of any such subdivision, combination or
reclassification.
An adjustment made pursuant to this subsection (a) shall be made whenever any of
such events shall occur, but shall become effective retroactively after such
record date or such effective date, as the case may be, as to Warrants exercised
between such record date or effective date and the date of happening of any such
event.
(b) In case the Company shall issue rights or warrants to all holders
of its Shares entitling them to subscribe for or to purchase Shares at a price
per Share which, when added to the amount of consideration received or
receivable by the Company for such rights or warrants, is less than the Current
Market Price (as hereinafter defined) per Share at the record date, the number
of Shares purchasable upon the exercise of this Warrant shall be adjusted so
that thereafter, until further adjusted, each Warrant shall entitle the Holder
to purchase that number of Shares determined by multiplying the number of Shares
purchasable hereunder by a fraction, the numerator of which shall be the number
of additional Shares issuable upon the exercise of such rights or warrants, and
the denominator of which shall be the number of Shares which an amount equal to
the sum of (i) the aggregate exercise price of the total number of Shares
issuable upon the exercise of such rights or warrants, and (ii) the aggregate
amount of consideration, if any, received, or receivable by the Company for such
rights or warrants, would purchase at such Current Market Price. Such adjustment
shall be made whenever such rights or warrants are issued, but shall also be
effective retroactively as to Warrants exercised between the record date for the
determination of shareholders entitled to receive such rights or warrants and,
the date such rights or warrants are issued.
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(c) For the purpose of any computation under subsection (b) above, the
Current Market Price per Share at any date shall be: (i) if the Shares are
listed on any national securities exchange, the average of the daily closing
prices for the 15 consecutive business days commencing 20 business days before
the day in question (the "Trading Period"); (ii) if the Shares are not listed on
any national securities exchange but are quoted on the National Association of
Securities Dealers, Inc, Automated Quotation System ("NASDAQ"), the average of
the high and low bids as reported by NASDAQ for the Trading Period, and (iii) if
the Shares are neither listed on any national securities exchange nor quoted on
NASDAQ, (iv) any or National or similar quotation bureau (which could include
the National Quotation Bureau), or if the shares are not listed anywhere, (v)
the higher of. (x) the exercise price then in effect, or (y) the price
determined by Company's Board of Directors.
(d) No adjustment shall be required unless such adjustment would
require an increase or decrease of at least 10% in the number of Shares
purchasable hereunder, provided, however, that any adjustments which by reason
of this subsection (d) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 6 shall be made to the nearest onehundredth of a Share.
(e) No adjustment shall be made in any of the following cases:
(i) Upon the grant or exercise of stock options now or hereafter
granted, or under any employee stock option or stock purchase plan now or
hereafter authorized, to the extent that the aggregate of the number of Shares
which may be purchased under such options and the number of Shares issued under
such employee stock purchase plan is less than or equal to 10 % of the number of
Shares outstanding on January 1 of the year of the grant or exercise;
(ii) Shares issued upon the conversion of any of the Company's
convertible or exchangeable securities;
(iii) Shares issued in connection with the acquisition by the Company
or by any subsidiary of the Company of 80 % or more of the assets of another
corporation or entity, and Shares issued in connection with the acquisition by
the Company or by any subsidiary of the Company of 80 % or more of the voting
shares of another corporation (including Shares issued in connection with such
acquisition of voting shares of such other corporation subsequent to the
acquisition of an aggregate of 80 % of such voting shares), Shares issued in a
merger of the Company or a subsidiary of the Company with another corporation in
which the Company or the Company's subsidiary is the surviving corporation, and
Shares issued upon the conversion of other securities issued in connection with
any such acquisition or in any such merger, and
(iv) Shares issued pursuant to this Warrant and pursuant to all stock
options and warrants outstanding on the date hereof.
(f) Notice to Warrant Holders of Adjustment. Whenever the number of
Shares purchasable hereunder is adjusted as herein provided, the Company shall
cause to be mailed to the Holder in accordance with the provisions of this
Section 6 a notice (i) stating that the number of Shares purchasable upon
exercise of this Warrant have been adjusted, (ii) setting forth the adjusted
number of Shares purchasable upon the exercise of a Warrant, and (iii) showing
in reasonable detail the computations and the facts, including the amount of
consideration received or deemed to have been received by the Company, upon
which such adjustments are based.
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7. Fractional Shares.
The Company shall not be required to issue any fraction of a Share upon
the exercise of Warrants. If more than one Warrant shall be surrendered for
exercise at one time by the same Holder, the number of full Shares which shall
be issuable upon exercise thereof shall be computed on the basis of the
aggregate number of Shares with respect to which this Warrant is exercised. If
any fractional interest in a Share shall be deliverable upon the exercise of
this Warrant, the Company shall make an adjustment therefor in cash equal to
such fraction multiplied by the Current Market Price of the Shares on the
business day next preceding the day of exercise.
8. Registration Rights.
(a) (i) If the Company at any time elects or proposes to register any
of its Shares (the "Registration Shares") under the Securities Act of 1933 (the
"Act") on Forms S1, S2, S3 or S18, or any successor registration statement forms
in effect at such time (a "Registration Statement") with the Securities and
Exchange Commission (the "SEC") pursuant to which Shares owned by any
shareholder of the Company may be registered, the Company shall give prompt
written notice (the "Registration Notice") to the Holder of its intention to
register the Registration Shares.
(ii) Within 15 days after the Registration Notice shall have been given
to the Holder, the Holder shall give written notice to the Company (the "Holder
Notice"), stating the number of Shares to be registered (the "Holder Shares")
and the states in which the Holder wishes to register the Shares. In the event
the Registration Notice is given by the Company prior to the time that this
Warrant is otherwise exercisable pursuant to Section 1(b) hereof, the Holder
Notice shall be accompanied by this Warrant Certificate together with a duly
executed Purchase Form and payment of the Exercise Price for the Holder Shares
in accordance with Section 1 hereof.
(iii) The Company shall use reasonable efforts to register the Holder
Shares under the Act and the applicable state securities laws (the "State Acts")
designated by the Holder in the Holder Notice. Anything contained herein to the
contrary notwithstanding, the Company shall have the right to withdraw and
discontinue registration of the Holder Shares at any time prior to the effective
date of such Registration Statement if the registration of the Registration
Shares is withdrawn or discontinued.
(iv) The Company shall not be required to include any of the Holder
Shares in any Registration Statement unless the Holder agrees, if so requested
by the Company, to: (A) offer and sell the Holder Shares to or through an
underwriter selected by the Company and, to the extent possible, on
substantially the same terms and conditions under which the Registration Shares
are to be offered and sold; (B) comply with any arrangements, terms and
conditions with respect to the offer and sale of the Shares to which the Company
may be required to agree; and (C) enter into any underwriting agreement
containing customary terms and conditions, including provisions for the
indemnification of the underwriters.
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(b) If the offering of the Registration Shares by the Company is, in
whole or in part, an underwritten public offering, and if the managing
underwriter determines and advises the Company in writing that the inclusion in
such Registration Statement of all of the Holder Shares, together with the
Shares of other persons who have exercised their right to include their Shares
in the Registration Statement (collectively referred to as the "Aggregate
Shares") would adversely affect the marketability of the offering of the
Registration Shares, then the Holder shall be entitled to register a proportion,
as determined in subsection (b)(i) below, of such number of Aggregate Shares as
the managing underwriter determines may be included without such adverse effects
("Aggregate Underwriter Shares"), subject to the terms, exceptions and
conditions of this Section 8.
(i) The proportion of the Aggregate Underwriter Shares which the Holder
shall be entitled to register shall be equal to the ratio which the Holder
Shares bear to the Aggregate Shares.
(c) The Company shall bear all costs and expenses of registration of
the Registration Shares; provided, however, that the Holder shall bear all costs
and expenses directly related to registration of the Holder Shares.
(d) It shall be a condition precedent to the Company's obligation to
register any Holder Shares pursuant to this Section 8 that the Holder provide
the Company with all information and documents, and shall execute, acknowledge,
seal and deliver all documents reasonably necessary, to enable the Company to
comply with the Act, the State Acts, and all applicable laws, rules and
regulations of the SEC or of any State Securities Commission.
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NOW, WHEREFORE, this Warrant to Purchase Common Stock of ClearLogic,
Inc. is hereby executed this 19th day of August, 1999.
SEAL CLEARLOGIC, INC.
By: /s/ Sina Khelil
--------------------------------
Title:
Date:
ATTEST:
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------
Assistant Secretary
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CLEARLOGIC, INC.
PURCHASE FORM
ClearLogic, Inc.
00 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxxx, Xxx Xxxxxx 00000
The undersigned hereby irrevocably elects to exercise the Right of Purchase
represented by this Warrant and to purchase __________ shares of Common Stock,
at the purchase price of $1.00 per share, par value $0.001 per share, of
ClearLogic, Inc. (the "Shares"), as provided by this Warrant. The undersigned
requests that a certificate for the Shares by issued as follows:
---------------------------------------
(Please Print Name -- Warrant Holder)
---------------------------------------
(Address)
---------------------------------------
---------------------------------------
(Social Security Number)
If said number of Shares shall not constitute the total number of Shares
purchasable under this Warrant, a new Warrant for the balance of the Shares
purchasable under this Warrant shall be registered in the name of the
Undersigned Warrant Holder and delivered to the address listed below.
Dated: , 200
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Name of Warrant Holder:
----------------------
Address:
-------------------------------------
-------------------------------------
Signature:
-----------------------------------
Signature Guaranteed:
---------------------------------------
Notary Republic
My Commission Expires:
Note: The above signature must
correspondence with the name as it
appears, in the case of the original
Warrant Holder upon the front page of
the Warrant; in every particular,
without alternation or enlargement or
any change whatsoever.
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CLEARLOGIC, INC.
ASSIGNMENT FORM
ClearLogic, Inc.
00 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxxx, Xxx Xxxxxx 00000
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers to:
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Address:
-----------------------------
-----------------------------
-----------------------------
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(Social Security Number)
the rights of the Undersigned represented by this Warrant, to the extent of
________________________ (_____) shares of Common Stock, par value $0.001 per
share, of ClearLogic, Inc. By such sale, assignment or transfer the Undersigned
irrevocably appoints ____________________________, Attorney to make and record
such transfer on the books of the Company.
Dated: 200
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Name of Warrant Holder:
----------------------
Address:
-------------------------------------
-------------------------------------
Signature:
-----------------------------------
(Warrant Holder)
Signature Guaranteed:
---------------------------------------
Notary Republic
My Commission Expires:
Note: The above signature must
correspondence with the name as it
appears, in the case of the original
Warrant Holder upon the front page of
the Warrant; in every particular,
without alternation or enlargement or
any change whatsoever.
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