Contract
EXHIBIT
10.18 |
THIS
WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”), OR APPLICABLE STATE SECURITIES LAWS AND 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 THE ACT AND ANY APPLICABLE STATE
SECURITIES LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY AND ITS
COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.
No. W- [XX] | Warrant to Purchase [XXXX] Shares of |
Common Stock (subject to adjustment) | |
WARRANT
TO PURCHASE COMMON STOCK
of
APTIMUS,
INC.
Void
after March 24, 2010
This
certifies that, for value received, [Investor Name], or registered assigns
(“Holder”) is entitled, subject to the terms set forth below, to purchase from
Aptimus, Inc., a Washington corporation (the “Company”), [XXXX] shares of the
common stock, without par value (“Common Stock”) of the Company, upon surrender
hereof at the principal office of the Company referred to below, with the
subscription form attached hereto duly executed, and simultaneous payment
therefor in lawful money of the United States or otherwise as hereinafter
provided, at the Exercise Price as set forth in Section 2 below. The number,
character and Exercise Price of such shares of Common Stock are subject to
adjustment as provided below. The term “Warrant” as used herein shall include
this Warrant and any warrants delivered in substitution or exchange therefor as
provided herein.
1. Term
of Warrant. Subject
to the terms and conditions set forth herein, this Warrant shall be exercisable,
in whole or in part, during the term commencing on the date hereof (the “Warrant
Issue Date”) and ending at 5:00 p.m., Pacific Time, on March 24, 2010, and shall
be void thereafter.
2. Exercise
Price. The
Exercise Price at which this Warrant may be exercised shall be [alternatively,
$20.22; $18.15] per share of Common Stock, as adjusted from time to time
pursuant to Section 12 hereof.
3. Exercise
of Warrant.
(a) The
purchase rights represented by this Warrant are exercisable by the Holder in
whole or in part, but not for less than 2,000 shares at a time (or such lesser
number of shares which may then constitute the maximum number purchasable; such
number being subject to adjustment as provided in Section 12 below), at any
time, or from time to time, during the term hereof as described in Section 1
above, by the surrender of this Warrant and the Notice of Exercise annexed
hereto duly completed and executed on behalf of the Holder, at the office of the
Company (or such other office or agency of the Company as it may designate by
notice in writing to the Holder at the address of the Holder appearing on the
books of the Company), upon payment in cash or by check acceptable to the
Company of the purchase price of the shares to be purchased.
(b) This
Warrant shall be deemed to have been exercised immediately prior to the close of
business on the date of its surrender for exercise as provided above, and the
person entitled to receive the shares of Common Stock issuable upon such
exercise shall be treated for all purposes as the holder of record of such
shares as of the close of business on such date. As promptly as practicable on
or after such date, the Company at its expense shall issue and deliver to the
person or persons entitled to receive the same a certificate or certificates for
the number of shares issuable upon such exercise. In the event that this Warrant
is exercised in part, the Company at its expense will execute and deliver a new
Warrant of like tenor exercisable for the number of shares for which this
Warrant may then be exercised.
(c) Net
Issue Exercise. So long
as the shares of Common Stock issuable upon exercise of the Warrant are not
registered pursuant to an effective registration statement on Form S-3 or its
equivalent, and notwithstanding any provisions herein to the contrary, if the
fair market value of one share of Common Stock is greater than the Exercise
Price (at the date of calculation as set forth below), in lieu of exercising
this Warrant for cash, the Holder may elect to receive shares equal to the value
(as determined below) of this Warrant (or the portion thereof being canceled) by
surrender of this Warrant at the principal office of the Company together with
the properly endorsed Notice of Exercise and notice of such election, in which
event the Company shall issue to the Holder a number of shares of Common Stock
computed using the following formula:
X = Y
(A-B)
A
Where |
X
= |
the
number of shares of Common Stock to be issued to the
Holder |
Y
= |
the
number of shares of Common Stock purchasable under the Warrant or, if only
a portion of the Warrant is being exercised, the portion of the Warrant
being canceled (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
= |
Exercise
Price (as adjusted to the date of such
calculation) |
For
purposes of the above calculation, fair market value of one share of Common
Stock shall be determined by the Company’s Board of Directors in good faith;
provided, however, that where there exists a public market for the Company’s
Common Stock at the time of such exercise, the fair market value per share shall
be the product of (i) 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 the Nasdaq
National 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 fair
market value and (ii) the number of shares of Common Stock into which each share
of Common Stock is convertible at the time of such exercise. Notwithstanding the
foregoing, in the event the Warrant is exercised in connection with the
Company’s initial public offering of Common Stock, the fair market value per
share shall be the product of (i) the per share offering price to the public of
the Company’s initial public offering, and (ii) the number of shares of Common
Stock into which each share of Common Stock is convertible at the time of such
exercise. The “cashless” exercise right of Holder set forth in this Section 3(c)
shall terminate upon the Effectiveness Date, as that term is defined in that
certain Stock Purchase Agreement (“Stock Purchase Agreement”) of even date, by
and between the Company and Holder or its assignor, as the case may
be.
4. No
Fractional Shares or Scrip. No
fractional shares or scrip representing fractional shares shall be issued upon
the exercise of this Warrant. In lieu of any fractional share to which the
Holder would otherwise be entitled, the Company shall make a cash payment equal
to the Exercise Price multiplied by such fraction.
5. Replacement
of Warrant. On
receipt of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant and on delivery of an indemnity
agreement reasonably satisfactory in form and substance to the Company or, in
the case of mutilation, on 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 and amount.
6. Rights
of Shareholders. Subject
to Sections 10 and 12 of this Warrant, the Holder shall not be entitled to vote
or receive dividends or be deemed the holder of Common Stock or any other
securities of the Company that may at any time be issuable on the exercise
hereof for any purpose, nor shall anything contained herein be construed to
confer upon the Holder, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to shareholders at any meeting thereof, or to give or withhold consent
to any corporate action (whether upon any recapitalization, issuance of stock,
reclassification of stock, change of par value, or change of stock to no par
value, consolidation, merger, conveyance, or otherwise) or to receive notice of
meetings, or to receive dividends or subscription rights or otherwise until the
Warrant shall have been exercised as provided herein.
7. Transfer
of Warrant.
(a) Warrant
Register. The
Company shall maintain a register (the “Warrant Register”) containing the names
and addresses of the Holder or Holders. Any Holder of this Warrant or any
portion thereof may change his or her address as shown on the Warrant Register
by written notice to the Company requesting such change. Any notice or written
communication required or permitted to be given to the Holder may be delivered
or given by mail to such Holder as shown on the Warrant Register and at the
address shown on the Warrant Register. Until this Warrant is transferred on the
Warrant Register of the Company, the Company may treat the Holder as shown on
the Warrant Register as the absolute owner of this Warrant for all purposes,
notwithstanding any notice to the contrary.
(b) Warrant
Agent. The
Company may, by written notice to the Holder, appoint an agent for the purpose
of maintaining the Warrant Register referred to in Section 7(a) above, issuing
the Common Stock or other securities then issuable upon the exercise of this
Warrant, exchanging this Warrant, replacing this Warrant, or any or all of the
foregoing. Thereafter, any such registration, issuance, exchange, or
replacement, as the case may be, shall be made at the office of such
agent.
(c) Transferability
and Nonnegotiability of Warrant. This
Warrant may not be transferred or assigned in whole or in part without
compliance with all applicable federal and state securities laws by the
transferor and the transferee (including the delivery of investment
representation letters and legal opinions reasonably satisfactory to the
Company, if such are requested by the Company). Subject to the provisions of
this Warrant with respect to compliance with the Securities Act of 1933, as
amended (the “Act”), and applicable state securities laws, title to this Warrant
may be transferred by endorsement (by the Holder executing the Assignment Form
annexed hereto) and delivery in the same manner as a negotiable instrument
transferable by endorsement and delivery; provided, however, that this Warrant
may not be transferred in part unless such transfer is to a transferee who
pursuant to such transfer receives the right to purchase at least 2,000 shares
hereunder.
(d) Exchange
of Warrant Upon a Transfer. On
surrender of this Warrant for exchange, properly endorsed on the Assignment Form
and subject to the provisions of this Warrant with respect to compliance with
the Act and with the limitations on assignments and transfers and contained in
this Section 7, the Company at its expense shall issue to or on the order of the
Holder a new warrant or warrants of like tenor, in the name of the Holder or as
the Holder (on payment by the Holder of any applicable transfer taxes) may
direct, for the number of shares issuable upon exercise hereof.
(e) Compliance
with Securities Laws.
(i) The
Holder of this Warrant, by acceptance hereof, acknowledges that this Warrant and
the shares of Common Stock to be issued upon exercise hereof are being acquired
solely for the Holder’s own account and not as a nominee for any other party,
and for investment, and that the Holder will not offer, sell or otherwise
dispose of this Warrant or any shares of Common Stock to be issued upon exercise
hereof except under circumstances that will not result in a violation of the Act
or any state securities laws. Upon exercise of this Warrant, the Holder shall,
if requested by the Company, confirm in writing, in a form satisfactory to the
Company, that the shares of Common Stock so purchased are being acquired solely
for the Holder’s own account and not as a nominee for any other party, for
investment, and not with a view toward distribution or resale.
(ii) Unless
and until an effective registration statement covering this Warrant and/or all
shares of Common Stock issuable upon exercise hereof is in place, the
certificates representing same shall be stamped or imprinted with a legend in
substantially the following form (in addition to any legend required by state
securities laws):
THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “ACT”), OR APPLICABLE STATE SECURITIES LAWS AND 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 THE ACT
AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL SATISFACTORY
TO THE COMPANY AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT
REQUIRED.
8. Reservation
of Stock. The
Company covenants that during the term this Warrant is exercisable, the Company
will reserve from its authorized and unissued Common Stock a sufficient number
of shares to provide for the issuance of Common Stock upon the exercise of this
Warrant and, from time to time, will take all steps necessary to amend its
Articles of Incorporation (the “Articles”) to provide sufficient reserves of
shares of Common Stock issuable upon exercise of the Warrant. The Company
further covenants that all shares that may be issued upon the exercise of rights
represented by this Warrant and payment of the Exercise Price, all as set forth
herein, will be free from all taxes, liens and charges in respect of the issue
thereof (other than taxes in respect of any transfer occurring contemporaneously
or otherwise specified herein). The Company agrees that its issuance of this
Warrant shall constitute full authority to its officers who are charged with the
duty of executing stock certificates to execute and issue the necessary
certificates for shares of Common Stock upon the exercise of this
Warrant.
9. Capital
Stock of the Company. The
Company represents and warrants that it has (i) 100,000,000 authorized shares of
common stock, of which 6,040,108 shares were outstanding as of March 15, 2005,
and (ii) 6,814,516 authorized shares of preferred stock, of which none were
outstanding as of the date hereof. All of the outstanding shares of common stock
have been duly authorized and validly issued and are fully paid and
nonassessable and were not issued in violation of any subscription or preemptive
rights. When issued in accordance with the terms of this Warrant, the shares of
Common Stock issued upon the exercise of this Warrant will be duly authorized,
validly issued, fully paid and nonassessable, and shall not have been issued in
violation of any subscription or preemptive rights.
10. Notices.
(a) Whenever
the Exercise Price or number of shares purchasable hereunder shall be adjusted
pursuant to Section 12 hereof, the Company shall issue a certificate signed by
its Chief Financial Officer setting forth, in reasonable detail, the event
requiring the adjustment, the amount of the adjustment, the method by which such
adjustment was calculated, and the Exercise Price and number of shares
purchasable hereunder after giving effect to such adjustment, and shall cause a
copy of such certificate to be mailed (by U.S. mail, registered or certified,
return receipt requested, postage prepaid, and signed confirmation of receipt,
or by personal delivery with signed acknowledgment of receipt) to the Holder of
this Warrant at such address set forth in the Warrant Register.
(b) In
case:
(i) the
Company shall take a record of the holders of its Common Stock for the purpose
of entitling them to receive any dividend or other distribution, or any right to
subscribe for or purchase any shares of stock of any class or any other
securities, or to receive any other right, or
(ii) of any
capital reorganization of the Company, any reclassification of the capital stock
of the Company, any consolidation or merger of the Company with or into another
corporation, or any conveyance of all or substantially all of the assets of the
Company to another corporation, or
(iii)
of any
voluntary dissolution, liquidation or winding-up of the Company,
then, and
in each such case, the Company will mail or cause to be mailed to the Holder or
Holders a notice specifying, as the case may be, (A) the date on which a record
is to be taken for the purpose of such dividend, distribution or right, and
stating the amount and character of such dividend, distribution or right, or (B)
the date on which such reorganization, reclassification, consolidation, merger,
conveyance, dissolution, liquidation or winding-up is to take place, and the
time, if any is to be fixed, as of which the holders of record of Common Stock
shall be entitled to exchange their shares of Common Stock for securities or
other property deliverable upon such reorganization, reclassification,
consolidation, merger, conveyance, dissolution, liquidation or winding-up. Such
notice shall be mailed at least 15 days prior to the date therein
specified.
(c) All such
notices, advices and communications shall be deemed to have been received (i) in
the case of personal delivery, on the date of such delivery and (ii) in the case
of mailing, on the third business day following the date of such
mailing.
11. Amendments.
(a) Any term
of this Warrant may be amended only with the written consent of the Company and
the Holder.
(b) No
waivers of, or exceptions to, any term, condition or provision of this Warrant,
in any one or more instances, shall be deemed to be, or construed as, a further
or continuing waiver of any such term, condition or provision.
12. Adjustments. The
Exercise Price and the number of shares purchasable hereunder are subject to
adjustment from time to time as follows:
(a) Merger,
Sale of Assets, etc. If at
any time while this Warrant, or any portion thereof, is outstanding and
unexpired there shall be (i) a reorganization (other than a combination,
reclassification, exchange or subdivision of shares otherwise provided for
herein), (ii) a merger or consolidation of the Company with or into another
corporation in which the Company is not the surviving entity, or a reverse
triangular merger in which the Company is the surviving entity 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) a sale or transfer of the Company’s
properties and assets as, or substantially as, an entirety to any other person,
then, as a part of such reorganization, merger, consolidation, sale or transfer,
lawful provision shall be made so that the holder of this Warrant shall
thereafter be entitled to receive upon exercise of this Warrant, during the
period specified herein and upon payment of the Exercise Price then in effect,
the number of shares of stock or other securities or property of the successor
corporation resulting from such reorganization, merger, consolidation, sale or
transfer that a holder of the shares deliverable upon exercise of this Warrant
would have been entitled to receive in such reorganization, consolidation,
merger, sale or transfer if this Warrant had been exercised immediately before
such reorganization, merger, consolidation, sale or transfer, all subject to
further adjustment as provided in this Section 12. The foregoing provisions of
this Section 12(a) shall similarly apply to successive reorganizations,
consolidations, mergers, sales and transfers and to the stock or securities of
any other corporation that are at the time receivable upon the exercise of this
Warrant. If the per-share consideration payable to the holder hereof for shares
in connection with any such transaction is in a form other than cash or
marketable securities, then the value of such consideration shall be determined
in good faith by the Company’s Board of Directors. In all events, appropriate
adjustment (as determined in good faith by the Company’s Board of Directors)
shall be made in the application of the provisions of this Warrant with respect
to the rights and interests of the Holder after the transaction, to the end that
the provisions of this Warrant shall be applicable after that event, as near as
reasonably may be, in relation to any shares or other property deliverable after
that event upon exercise of this Warrant.
(b) Reclassification,
etc. If the
Company, at any time while this Warrant, or any portion thereof, remains
outstanding and unexpired by reclassification of securities or otherwise, shall
change any of the securities as to which purchase rights under this Warrant
exist into the same or a different number of securities of any other class or
classes, this Warrant shall thereafter represent the right to acquire such
number and kind of securities as would have been issuable as the result of such
change with respect to the securities that were subject to the purchase rights
under this Warrant immediately prior to such reclassification or other change
and the Exercise Price therefor shall be appropriately adjusted, all subject to
further adjustment as provided in this Section 12.
(c) Split,
Subdivision or Combination of Shares. If the
Company at any time while this Warrant, or any portion thereof, remains
outstanding and unexpired shall split, subdivide or combine the securities as to
which purchase rights under this Warrant exist, into a different number of
securities of the same class, the Exercise Price for such securities shall be
proportionately decreased in the case of a forward split or subdivision or
proportionately increased in the case of a reverse split or
combination.
(d) Adjustment
of Warrant Exercise Price Upon Issuance of Additional Shares of Common
Stock. In the
event the Company shall at any time prior to [Insert Date = one- (1-) year
anniversary of the Closing Date] issue shares of its Common Stock other than (i)
to directors, employees or consultants pursuant to an employee benefit plan,
(ii) pursuant to the acquisition of another corporation or entity by the Company
by consolidation, merger, purchase of all or substantially all of the assets, or
(iii) pursuant to a shareholder rights plan or other similar device, without
consideration or for a consideration per share less than the Purchase Price (as
that term is defined in that certain Stock Purchase Agreement), then the
Exercise Price in effect immediately prior to such issue, if higher, shall be
reduced, concurrently with such issue, to the consideration per share received
by the Company for such issue of the Common Stock; provided,
however, that if
such issuance or deemed issuance is without consideration, then the Company
shall be deemed to have received an aggregate $1.00 of consideration for all
such shares of Common Stock issued. For purposes of this Section
12(d), the
consideration received by the Company for the issue of any additional shares of
Common Stock shall be computed:
(i) insofar
as it consists of cash, at the aggregate amount of cash received by the Company,
excluding amounts paid or payable for accrued interest;
(ii) insofar
as it consists of property other than cash, at the fair market value thereof at
the time of such issue, as determined in good faith by the Board of Directors of
the Company; and
(iii) in the
event such shares of Common Stock are issued together with other shares or
securities or other assets of the Company for consideration which covers both,
as the proportion of such consideration so received, computed as provided in
clauses (i) and (ii) above, as determined in good faith by the Board of
Directors of the Company.
(e) Certificate
as to Adjustments. Upon the
occurrence of each adjustment or readjustment pursuant to this Section 12, the
Company at its expense shall promptly compute such adjustment or readjustment in
accordance with the terms hereof and furnish to each Holder of this Warrant a
certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based. The Company
shall, upon the written request, at any time, of any such Holder, furnish or
cause to be furnished to such Holder a like certificate setting forth: (i) such
adjustments and readjustments; (ii) the Exercise Price at the time in effect;
and (iii) the number of shares and the amount, if any, of other property that at
the time would be received upon the exercise of the Warrant.
13. Miscellaneous.
(a) Applicable
Law. This
Warrant shall be governed by and construed in accordance with the laws of the
State of Delaware applicable to contracts made and to be performed entirely
within the State of Washington.
(b) Attorneys
Fees. In the
event of any dispute between the parties concerning the terms and provisions of
this Warrant, the party prevailing in such dispute shall be entitled to collect
from the other party all costs incurred in such dispute, including reasonable
attorney’s fees.
(c) Captions. The
captions for the sections and subsections of this Warrant have been inserted for
convenience only and shall have no substantive effect.
[signature
page follows]
IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
officer thereunto duly authorized as of the date first written
above.
APTIMUS, INC. | |
By | |
Its |