Exhibit 5
NEITHER THIS WARRANT NOR THE COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THIS
WARRANT MAY ONLY BE EXERCISED AND THE COMMON STOCK ISSUABLE UPON EXERCISE OF
THIS WARRANT MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY IF SO REGISTERED
UNDER SAID ACT OR IF THE HOLDER HAS DELIVERED TO THE COMPANY AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE.
CERTIFICATE FOR WARRANTS
EXERCISABLE ON OR AFTER THE DATE OF ISSUANCE UNTIL 5:00 P.M., NEW YORK CITY
TIME, ON DECEMBER 31, 2001
COMMUNICATION INTELLIGENCE CORPORATION
COMMON STOCK PURCHASE WARRANT CERTIFICATE
337,500 Warrants
THIS CERTIFIES that: LIBRA INVESTMENTS, INC.
or registered assigns is the registered holder (the "Registered Holder") of the
number of Warrants set forth above, each of which, subject to the provisions of
Section 1.1 of Article hereof, represents the right to purchase one fully paid
and nonassessable share (the "Shares") of Common Stock, par value $.01 per share
("Common Stock") of Communication Intelligence Corporation, a corporation formed
under the laws of the state of Delaware (the "Company"), at the initial exercise
price equal to the lesser of (i) $2.50 per Share, or (ii) the closing price of
the Common Stock as reported on the NASDAQ SmallCap Market on the date hereof
(the "Initial Exercise Price"), at any time prior to the Exercise Deadline
hereinafter referred to, by surrendering this Warrant Certificate, with the form
of election to purchase set forth hereon duly executed, at the office of the
Company, 275 Shoreline Drive, Redwood Shores, CA 94065, or such other address as
to which the Company shall have given written notice to the Registered Holder.
Payment of the exercise price shall be made in United States currency, by
certified check or money order payable to the order of the Company. This
Warrant Certificate is being issued in connection with the issuance of 337,500
Warrants (the "Warrants").
ARTICLE 1
WARRANT EXERCISE PRICE AND EXERCISE OF WARRANTS
1.1 EXERCISE PRICE; NUMBER OF SHARES. This Warrant Certificate shall,
when executed by the Company, entitle the Registered Holder hereof to purchase
from the Company one Share for each Warrant evidenced hereby, at the Initial
Exercise Price, or such adjusted number of Shares at such adjusted purchase
price as may be established from time to time pursuant to the provisions of
Articles 1 and 2 hereof, payable in full at the time of exercise of this
Warrant. The term "Exercise Price" as used in this Agreement shall mean the
purchase price of one Share upon the exercise of this Warrant, reflecting all
appropriate adjustments made in accordance with the provisions hereof.
1.2 EXERCISABILITY OF WARRANTS. Each Warrant may be exercised at any time
on or after the date of its issuance until 5:00 P.M., New York City time, on
December 31, 2001 (the "Exercise Deadline").
1.3 PROCEDURE FOR EXERCISE. Prior to the Exercise Deadline, Warrants may
be exercised by surrendering this Warrant Certificate to the Company at the
address specified above, accompanied by payment in full of the Exercise Price as
provided in Section 1.1 in effect at the time of such exercise, together with
such taxes as are specified in Section 4.1 hereof, for each Share with respect
to which such Warrants are being exercised. Such Exercise Price and taxes shall
be paid in full by certified check, money order or wire transfer, payable in
United States currency to the order of the Company. The date on which Warrants
are exercised in accordance with this Section 1.3 is sometimes referred to
herein as the Date of Exercise.
1.4 ISSUANCE OF SHARES. As soon as practicable after the Date of Exercise
of any Warrants, the Company shall issue, or cause the transfer agent for the
Common Stock, if any, to issue a certificate or certificates for the number of
full Shares to which the holder is entitled, registered in accordance with the
instructions set forth in the Form of Election to Purchase. All Shares shall be
validly authorized and issued, fully paid and nonassessable and free from all
liens and charges created by the Company in respect of the issue thereof. Each
person in whose name any such certificate for Shares is issued shall for all
purposes be deemed to have become the holder of record of the Shares represented
thereby on the Date of Exercise of the Warrants resulting in the issuance of
such shares, irrespective of the date of issuance or delivery of such
certificate for the Shares.
1.5 CERTIFICATES FOR UNEXERCISED WARRANTS. In the event that less than
all of the Warrants represented by a Warrant Certificate are exercised, the
Company shall execute and mail, by first class mail, as soon as practicable but,
in any event, not later than 30 days after the Date of Exercise, to the
Registered Holder of such Warrant Certificate, or such other person as shall be
designated in the election to purchase, a new Warrant Certificate representing
the number of full Warrants not exercised. In no event shall a fraction of a
Warrant be exercised, and the Company shall distribute no Warrant Certificates
representing fractions of Warrants under this or any other section of this
Agreement. Fractions of Shares shall be treated as
provided in Section 2.9.
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1.6 RESERVATION OF SHARES. The Company shall at all times reserve and
keep available for issuance upon the exercise of Warrants that number of its
authorized but unissued shares of Common Stock sufficient to permit the exercise
in full of all outstanding Warrants.
ARTICLE 2
ADJUSTMENTS AND NOTICE PROVISIONS
2.1 ADJUSTMENT OF EXERCISE PRICE. Subject to the provisions of this
Article 2, the Exercise Price in effect from time to time shall be subject to
adjustment, as follows:
(a) In case the Company shall at any time after the date hereof (i)
declare a dividend on the outstanding Common Stock payable in shares of its
capital stock, (ii) subdivide the outstanding Common Stock, (iii) combine the
outstanding Common Stock into a smaller number of shares, or (iv) issue any
shares of its capital stock by reclassification of the Common Stock (including
any such reclassification in connection with a consolidation or merger in which
the Company is the continuing corporation), then, in each case, the Exercise
Price in effect, and the number of Shares issuable upon exercise of the Warrants
outstanding, at the time of the record date for such dividend or of the
effective date of such subdivision, combination or reclassification, shall be
proportionately adjusted so that the holders of the Warrants after such time
shall be entitled to receive the aggregate number and kind of shares which, if
such Warrants had been exercised immediately prior to such time, such holders
would have owned upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination or reclassification. Such adjustment
shall be made successively whenever any event listed above shall occur.
(b) In case the Company shall distribute to all holders of shares of
Common Stock (including any such distribution made to the shareholders of the
Company in connection with a consolidation or merger in which the Company is the
continuing corporation but excluding the transaction referred to in Section
2.1(a)) evidences of its indebtedness, cash (other than cash dividends) or
assets (other than distributions and dividends payable in Common Stock), then,
in each case, the Registered Holder, upon the exercise hereof, shall be entitled
to receive the amount of evidence of indebtedness, cash or assets which such
Registered Holder would have been entitled to receive had such Registered Holder
exercised the Warrants immediately prior to the record date for such
distribution.
(c) In case the Company shall sell any shares of Common Stock (other
than in a transaction referred to in Section 2.1(a)-(b)) for a consideration per
share less than the Exercise Price per Share, THEN, in each case, the Exercise
Price in effect immediately prior to such sale shall be adjusted to a price
determined by multiplying the Exercise Price in effect immediately prior to such
sale by a fraction, the numerator of which shall be the sum of (i) the total
number of Shares outstanding immediately prior to such sale, and (ii) the
aggregate consideration, if any, received by the Company upon such sale divided
by the Exercise Price immediately prior to such sale, and the denominator of
which shall be the total number of Shares outstanding immediately after such
sale.
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(d) For the purposes of any adjustment to be made in accordance with
Section 2.1(c) the following provisions shall be applicable:
(i) In case of the sale of Common Stock for a
consideration part or all of which shall be cash, the amount of the cash portion
of the consideration therefor deemed to have been received by the Company shall
be without deduction for any expenses (including, without limitation, any
underwriting discount, selling concession or other compensation paid in
connection with such sale) incurred by the Company in connection with such
transaction. In case of the sale of Common Stock for consideration part or all
of which shall be in a form other than cash, the value of such consideration
shall be as determined in good faith by the board of directors of the Company,
whose determination shall be conclusive absent manifest error.
(ii) The number of shares of Common Stock at any one time
outstanding shall be deemed to include the aggregate maximum number of shares
issuable (subject to readjustment upon the actual issuance thereof) upon the
exercise of options, rights or warrants and upon the conversion or exchange of
convertible or exchangeable securities.
(iii) Except as hereinafter provided, in case the
Company shall at any time after the date hereof issue options, rights or
warrants to subscribe for Common Stock, or issue any securities convertible into
or exchangeable for Common Stock, for a consideration (determined as provided in
this Section 2.1(d)) less than the Exercise Price in effect immediately prior
to the earlier of the issuance of such options, rights or warrants, or such
convertible or exchangeable securities or the record date therefor, or without
consideration (including the issuance of any such securities by way of dividend
or other distribution), the Exercise Price for the Warrants in effect
immediately prior to the issuance of such options, rights or warrants, or such
convertible or exchangeable securities or the record date therefor, as the case
may be, shall be reduced to a price determined by making the computation in
accordance with the provisions of Section 2.1(c) hereof, provided that:
a. The aggregate maximum number of shares of Common
Stock issuable or that may become issuable under such options, rights or
warrants (assuming exercise in full even if not then currently exercisable or
currently exercisable in full) shall be deemed to be issued and outstanding at
the time such options, rights or warrants were issued, for a consideration equal
to the minimum purchase or exercise price per share provided for in such
options, rights or warrants at the time of issuance, plus the consideration, if
any, received by the Company upon the issuance of such options, rights or
warrants (without deduction for expenses incurred or amounts paid to any
underwriter by the Company in connection with such issuance); provided, however,
that upon the expiration or other termination of such options, rights or
warrants, if any thereof shall not have been exercised, the number of shares of
Common Stock deemed to be issued and outstanding pursuant to this Section 2.1(d)
shall be reduced by the number of shares as to which options, warrants and/or
rights shall have expired, and such number of shares shall no longer be deemed
to be issued and outstanding, and the Exercise Price then in effect shall
forthwith be readjusted and thereafter be the price that it would have been had
the adjustment been made on the basis of the issuance only of the shares
actually issued plus the shares remaining issuable upon the exercise of those
options, rights or warrants as to which the exercise rights shall not have
expired or terminated unexercised.
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b. The aggregate maximum number of shares of Common
Stock issuable or that may become issuable upon conversion or exchange of any
convertible or exchangeable securities (assuming conversion or exchange in full
even if not then currently convertible or exchangeable in full) shall be deemed
to be issued and outstanding at the time of issuance of such securities, for a
consideration equal to the consideration received by the Company upon the
issuance of such securities (without deduction for expenses incurred or amounts
paid to any underwriter in connection with such issuance), plus the minimum
consideration, if any, receivable by the Company upon the conversion or exchange
thereof; provided, however, that upon the termination of the right to convert or
exchange such convertible or exchangeable securities (whether by reason of
redemption or otherwise), the number of shares of Common Stock deemed to be
issued and outstanding pursuant to this subsection 2.1(d) shall be reduced by
the number of shares as to which the conversion or exchange rights shall have
expired or terminated unexercised, and such number of shares shall no longer be
deemed to be issued and outstanding, and the Exercise Price then in effect shall
forthwith be readjusted and thereafter be the price that it would have been had
adjustment been made on the basis of the issuance only of the shares actually
issued plus the shares remaining issuable upon conversion or exchange of those
convertible or exchangeable securities as to which the conversion or exchange
rights shall not have expired or terminated unexercised.
c. If any change shall occur in the price per share
provided for in any of the options, rights or warrants referred to in this
Section 2.1(d), or in the price per share or ratio at which the securities
referred to in this Section 2.1(d) are convertible or exchangeable (in either
case, other than changes in such prices or ratios arising pursuant to
antidilution adjustments in such options, rights, warrants, convertible or
exchangeable securities or the instruments pursuant to which they were issued),
such options, rights or warrants or convertible or exchangeable securities, as
the case may be, to the extent not theretofore exercised, shall be deemed to
have expired or terminated on the date when such price change became effective
in respect of shares of Common Stock not theretofore issued pursuant to the
exercise or conversion or exchange thereof, and the Company shall be deemed to
have issued upon such date new options, rights or warrants or convertible or
exchangeable securities.
2.2 NO ADJUSTMENTS TO EXERCISE PRICE. (a) No adjustment in the Exercise
Price shall be required if such adjustment is less than $.01; provided, however,
that any adjustments which by reason of this Article 2 are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Article 2 shall be made to the nearest
cent or to the nearest one hundredth of a share, as the case may be.
(b) Notwithstanding any provision of this Warrant Certificate, no
adjustment of the Exercise Price or in the number of Shares shall be made as a
result of or in connection with the issuance or sale of shares of Common Stock
pursuant to options, warrants, stock purchase agreements, loan agreements and
convertible or exchangeable securities outstanding or in effect on the date
hereof.
2.3 ADJUSTMENT TO NUMBER OF SHARES. Upon each adjustment of the Exercise
Price as a result of the calculations made in Section 2.1(b), (c) and (d)
hereof, the Warrants shall thereafter evidence the right to purchase, at the
adjusted Exercise Price, that number of shares (calculated
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to the nearest hundredth) obtained by dividing (A) the product obtained by
multiplying the number of shares purchasable upon exercise of the Warrants prior
to such adjustment by the Exercise Price in effect prior to adjustment of the
Exercise Price by (B) the Exercise Price in effect after such adjustment of the
Exercise Price.
2.4 REORGANIZATIONS. In case of (x) any capital reorganization (other
than in the transactions referred to in Section 2.1 hereof) or (y) the
consolidation or merger of the Company with or into another corporation (other
than a merger or consolidation in which the Company is the surviving or
continuing corporation and which does not result in any reclassification of the
outstanding Common Stock or the conversion of such outstanding Common Stock into
shares of other stock or other securities or property), or in the case of any
sale, lease or conveyance to another corporation of the property and assets of
any nature of the Company as an entirety or substantially as an entirety (such
actions being hereinafter collectively referred to as "Reorganizations"), there
shall thereafter be deliverable upon exercise of any Warrant (in lieu of the
number of shares theretofore deliverable) the number of shares of stock or other
securities or property to which a holder of the number of shares which would
otherwise have been deliverable upon the exercise of such Warrant would have
been entitled upon such Reorganization if such Warrant had been exercised in
full immediately prior to such Reorganization on the record date therefor. In
case of any Reorganization, appropriate adjustment, as determined in good faith
by the board of directors of the Company, shall be made in the application of
the provisions herein set forth with respect to the rights and interests of
Warrant holders so that the provisions set forth herein shall thereafter be
applicable, as nearly as possible, in relation to any shares or other property
thereafter deliverable upon exercise of Warrants. Any such adjustment shall be
made by and set forth in a supplemental agreement of the Company, or any
successor thereto, and shall for all purposes hereof conclusively be deemed to
be an appropriate adjustment. The Company shall not effect any such
Reorganization unless upon or prior to the consummation thereof the successor
corporation, or if the Company shall be the surviving corporation in any such
Reorganization and is not the issuer of the shares of stock or other securities
or property to be delivered to holders of the Common Stock outstanding at the
effective time thereof, then such issuer, shall assume by written instrument the
obligation to deliver to the Registered Holder of each Warrant Certificate such
shares of stock, securities, cash or other property as such holder shall be
entitled to purchase in accordance with the foregoing provisions. In the event
of sale, lease or conveyance or other transfer of all or substantially all of
the assets of the Company as part of a plan for liquidation of the Company, all
rights to exercise any Warrant shall terminate 30 days after the Company gives
written notice to each Registered Holder of each Warrant Certificate that such
sale or conveyance or other transfer has been consummated.
2.5 RECLASSIFICATIONS. In case of any reclassification or change of the
Shares issuable upon exercise of the Warrants (other than a change in par value
or from no par value to a specified par value, or as a result of a transaction
referred to in Section 2.1 or 2.4, but including any change in the shares into
two or more classes or series of shares), or in case of any consolidation or
merger of another corporation into the Company in which the Company is the
continuing corporation and in which there is a reclassification or change
(including a change to the right to receive cash or other property) of the
Common Stock (other than a change in par value, or from no par value to a
specified par value, or as a result of a subdivision or combination, but
including any change in the shares into two or more classes or series of
shares),
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the holders of the Warrants shall have the right thereafter to receive upon
exercise of the Warrants solely, the kind and amount of shares of stock and
other securities, property, cash, or any combination thereof receivable upon
such reclassification, change, consolidation or merger by a holder of the number
of Shares for which the Warrants might have been exercised immediately prior to
such reclassification, change, consolidation or merger on the record date
therefor. Thereafter, appropriate provision shall be made for adjustments which
shall be as nearly equivalent as practicable to the adjustments in Article 2.
The above provisions of this Section 2.5 shall similarly apply to successive
reclassifications and changes of the Shares.
2.6 CASHLESS EXERCISE. In lieu of exercising this Warrant by paying the
Exercise Price in cash as provided herein, the Registered Holder may exercise
this Warrant by surrender of this Warrant at the principal office of the Company
together with the notice of election to purchase and the payment for such taxes
as specified in Section 4.1 hereof, in which event the Company shall issue to
the Registered Holder upon such exercise a number of shares of the Company's
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
Registered Holder.
Y = The number of shares of Common Stock purchasable under this
Warrant.
A = The fair market value of one share of the Common Stock.
B = Exercise Price per share.
For purposes of this Warrant, fair market value of the Common Stock shall
be determined as follows: (i) if the Common Stock is publicly traded, the fair
market value shall be the average of the highest and lowest reported sales price
of the Common Stock on the NASDAQ SmallCap Market, the NASDAQ National Market
system or on any securities exchange (or, if the sales price of the Common Stock
is unavailable, the average of the highest bid and lowest asked price of the
Common Stock) for the twenty trading days prior to the date of determination of
fair market value, or (ii) if the Common Stock is not publicly traded, the fair
market value shall be determined by the Board of Directors, in their good faith
judgement.
2.7 VERIFICATION OF COMPUTATIONS. Whenever the Exercise Price is adjusted
as provided in this Article 2, the Company will promptly deliver to each
Registered Holder a certificate setting forth the Exercise Price as so adjusted
and a brief statement of the facts accounting for such adjustment, and will make
available a brief summary thereof to the holders of the Warrant, at their
addresses listed on the register maintained for that purpose by the Company.
2.8 NOTICE OF CERTAIN ACTIONS. In case at any time the Company shall
propose:
(a) to pay any dividend or make any distribution on shares of Common
Stock in shares of Common Stock or make any other distribution (other than
regularly scheduled cash dividends) to all holders of such shares; or
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(b) to issue any rights, warrants or other securities to all holders
of shares entitling them to purchase any additional shares of Common Stock or
any other rights, warrants, other securities or other property; or
(c) to effect any consolidation, merger, sale, lease, or conveyance
of property, described in Section 2.4, or any reclassification or change of
outstanding shares of Shares, described in Section 2.5; or
(d) to effect any liquidation, dissolution or winding-up of the
Company;
then, in each such case, the Company shall cause notice of such proposed action
to be mailed to each Registered Holder. Such notice shall specify the date on
which the books of the Company shall close, or a record shall be taken, for
determining holders of shares entitled to receive such stock dividend or other
distribution or such rights, warrants or property, or the date on which such
reclassification, change, consolidation, merger, sale, lease, other disposition,
liquidation, dissolution, winding up or exchange or other action shall take
place or commence, as the case may be, and the date as of which it is expected
that holders of record of shares shall be entitled to receive securities or
other property deliverable upon such action, if any such date has been fixed.
Such notice shall be mailed, in the case of any action covered by Subsection
2.8(a) or 2.8(b) above, at least 15 days prior to the record date for
determining holders of shares for purposes of receiving such payment or offer;
in the case of any action covered by Subsection 2.8(c) or 2.8(d) above, at least
15 days prior to the earlier of the date upon which such action is to take place
or any record date to determine holders of shares entitled to receive such
securities or other property.
2.9 WARRANT CERTIFICATE AMENDMENTS. Irrespective of any adjustments
pursuant to this Article 2, Warrant Certificates theretofore or thereafter
issued need not be amended or replaced but certificates thereafter issued shall
bear an appropriate legend or other notice of any adjustments.
2.10 FRACTIONAL SHARES. The Company shall not be required upon the
exercise of any Warrant to issue fractional Shares which may result from
adjustments in the Exercise Price or number of shares purchasable under each
Warrant. If more than one Warrant is exercised at one time by the same
Registered Holder, the number of full shares of Shares which shall be
deliverable shall be computed based on the number of shares deliverable in
exchange for the aggregate number of Warrants exercised. With respect to any
fraction of a share called for upon the exercise of any Warrant or Warrants, the
Company shall pay a cash adjustment in respect of such fraction in an amount
equal to the same fraction of the then fair market value per share.
2.11 COMPLIANCE WITH SECURITIES ACT. The Registered Holder, by acceptance
hereof, agrees that this Warrant, and the shares of Common Stock to be issued
upon exercise hereof, are being acquired for investment and that such Registered
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
which will not result in a violation of the Securities Act of 1933, as amended
(the "Securities Act") or any applicable state securities laws. Upon exercise
of this Warrant, unless the shares of Common Stock being acquired are registered
under the Securities
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Act and any applicable state securities laws, the Registered Holder hereof shall
confirm in writing that the shares of Common Stock so purchased are being
acquired for investment and not with a view toward distribution or resale in
violation of the Securities Act and shall confirm such other matters related
thereto as may be reasonably requested by the Company. This Warrant and all
shares of Common Stock issued upon exercise of this Warrant (unless registered
under the Securities Act and any applicable state securities laws) shall be
stamped or imprinted with a legend in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES
LAWS OF ANY STATE. THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT
WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD, MORTGAGED, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT FOR SUCH SHARES UNDER THE SECURITIES ACT AND APPLICABLE STATE
SECURITIES LAWS, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT AND APPLICABLE STATE
SECURITIES LAWS.
ARTICLE 3
OTHER PROVISIONS RELATING TO RIGHTS
OF REGISTERED HOLDERS OF WARRANT CERTIFICATES
3.1 RIGHTS OF WARRANT HOLDERS. This Warrant Certificate shall not entitle
the Registered Holder thereof to any of the rights of a shareholder of the
Company, including, without limitation, the right to vote, to receive dividends
and other distributions, or to receive any notice of, or to attend, meetings of
shareholders or any other proceedings of the Company.
3.2 LOST, STOLEN, MUTILATED OR DESTROYED WARRANT CERTIFICATES. If this
Warrant Certificate shall be mutilated, lost, stolen or destroyed, the Company
shall execute and deliver, in exchange and substitution for and upon
cancellation of a mutilated Warrant Certificate, or in lieu of or in
substitution for a lost, stolen or destroyed Warrant Certificate, a new Warrant
Certificate for the number of Warrants represented by the Warrant Certificate so
mutilated, lost, stolen or destroyed but only upon receipt of evidence of such
loss, theft or destruction of such Warrant Certificate, and of the ownership
thereof, and indemnity, if requested, all reasonably satisfactory to the
Company. Applicants for such substitute Warrant Certificates shall also comply
with such other reasonable regulations and pay such other reasonable charges
incidental thereto as the Company may prescribe.
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ARTICLE 4
SPLIT UP, COMBINATION, EXCHANGE, TRANSFER
AND CANCELLATION OF WARRANT CERTIFICATES
4.1 SPLIT UP, COMBINATION, EXCHANGE AND TRANSFER OF WARRANT CERTIFICATES.
Prior to the Exercise Deadline, this Warrant Certificate, subject to the
provisions of Section 4.2, may be split up, combined or exchanged for other
Warrant Certificates representing a like aggregate number of Warrants. Any
holder desiring to split up, combine or exchange a Warrant Certificate or
Warrant Certificates shall make such request in writing delivered to the Company
at its principal office and shall surrender the Warrant Certificate or Warrant
Certificates so to be split up, combined or exchanged at said office. Upon any
such surrender for split up, combination or exchange, the Company shall execute
and deliver to the person entitled thereto a Warrant Certificate or Warrant
Certificates, as the case may be, as so requested, provided that, the Company
has received an opinion of counsel reasonably satisfactory to the Company that
said split up is in accordance with the provisions of the Securities Act of
1933, as amended. The Company may require the holder to pay a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
split up, combination, exchange or transfer of Warrant Certificates prior to the
issuance of any new Warrant Certificate.
4.2 AGREEMENT OF WARRANT CERTIFICATE HOLDERS. Every holder of a Warrant
Certificate by accepting the same, consents and agrees with the Company and with
every other holder of a Warrant Certificate that:
(a) transfer of the Warrant Certificates shall be registered on the
books of the Company maintained for that purpose by the Company only if
surrendered at the principal office of the Company, duly endorsed or accompanied
by a proper instrument of transfer and an opinion of counsel reasonably
satisfactory to the Company that such transfer is permitted under the Securities
Act of 1933, as amended; and
(b) prior to due presentment for registration of transfer, the
Company may deem and treat the person in whose name the Warrant Certificate is
registered as the absolute owner thereof and of the Warrants evidenced thereby
(notwithstanding any notations of ownership or writing on the Warrant
Certificates made by anyone other than the Company) for all purposes whatsoever,
and the Company shall not be affected by any notice to the contrary.
ARTICLE 5
MISCELLANEOUS
5.1 CHANGES TO AGREEMENT. The Company may, without the consent or
concurrence of any Registered Holder of a Warrant Certificate, by supplemental
agreement, make any changes or corrections in this Certificate that it has been
advised by counsel (i) are required to cure any ambiguity or to correct any
defective or inconsistent provision or clerical omission or mistake or
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manifest error herein contained, (ii) add to the covenants and agreements of the
Company, (iii) reduce the Exercise Price or extend the Exercise Deadline or (iv)
result in the surrender of any right or power reserved to or conferred upon the
Company in this Certificate, which changes or corrections do not or will not
adversely affect, alter or change the rights, privileges or immunities of the
Registered Holders of Warrant Certificates. Other changes in this Agreement may
be made only with the prior written consent of a holder of a majority of the
Warrants affected thereby, provided that no such change shall increase the
Exercise Price or shorten the exercise period without the prior written consent
of each affected Registered Holder.
5.2 ASSIGNMENT. All the covenants and provisions of this Agreement by or
for the benefit of the Company shall bind and inure to the benefit of their
respective permitted successors and assigns.
5.3 NOTICES. Any notice or demand required by this Warrant Certificate to
be given or made by the Registered Holder of any Warrant Certificate to or on
the Company shall be sufficiently given or made if sent by first-class or
registered mail, postage prepaid, addressed to the Company's principal offices
specified above (until another address is given in writing to the Registered
Holder by the Company).
Any notice or demand required by this Warrant Certificate to be given or
made by the Company to or on the Registered Holder of any Warrant Certificate
shall be sufficiently given or made, whether or not such holder receives the
notice, if sent by first-class or registered mail, postage prepaid, addressed to
such registered holder at his last address as shown on the books of the Company.
Otherwise such notice or demand shall be deemed given when received by the party
entitled thereto.
5.4 DEFECTS IN NOTICE. Failure to file any certificate or notice or to
mail any notice, or any defect in any certificate or notice pursuant to this
Agreement, shall not affect in any way the rights of any Registered Holder of a
Warrant Certificate or the legality or validity of any adjustment made pursuant
to Article 2 hereof, or any transaction giving rise to any such adjustment, or
the legality or validity of any action taken or to be taken by the Company.
5.5 GOVERNING LAW. The laws of the State of New York shall govern this
Warrant Certificate.
5.6 STANDING. Nothing in this Agreement expressed and nothing that may be
implied from any of the provisions hereof is intended, or shall be construed, to
confer upon, or give to, any person or corporation other than the Company, and
the Registered Holders of the Warrant Certificates any right, remedy or claim
under or by reason of this Warrant Certificate or of any covenant, condition,
stipulation, promise or agreement contained herein; and all covenants,
conditions, stipulations, promises and agreements contained in this Agreement
shall be for the sole and exclusive benefit of the Company and its successors
and assigns, and the Registered Holders of the Warrant Certificates.
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5.7 HEADINGS. The descriptive headings of the articles and sections of
this Warrant Certificate are inserted for convenience only and shall not control
or affect the meaning or construction of any of the provisions hereof.
5.8 COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be an original, but all of which shall constitute one instrument.
5.9 REGISTERED BROKER/DEALER. The initial Holder hereby represents and
warrants to the Company that Libra Investments, Inc. is registered as a
broker/dealer under the Securities Exchange Act of 1934, as amended.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto as of the day and year first above written.
Dated: December 31, 1996
COMMUNICATION INTELLIGENCE CORPORATION
By: /s/James Dao
------------------------------------
Name: James Dao
Title: Chief Executive Officer
AGREED AND ACCEPTED
LIBRA INVESTMENTS, INC.
By:
---------------------
Name:
Title:
-13-
[FORM OF ELECTION TO PURCHASE]
The undersigned hereby irrevocably elects to exercise _______________ of
the Warrants represented by this Warrant Certificate and to purchase the Shares
issuable upon the exercise of said Warrants, and requests that certificates for
such shares be issued and delivered as follows:
ISSUE TO:
-------------------------------------------------------------------
(NAME)
-------------------------------------------------------------------
(ADDRESS, INCLUDING ZIP CODE)
-------------------------------------------------------------------
(SOCIAL SECURITY OR OTHER TAX IDENTIFYING NUMBER)
DELIVER TO:
-------------------------------------------------------------------
(NAME)
-------------------------------------------------------------------
(ADDRESS, INCLUDING ZIP CODE)
If the number of Warrants hereby exercised is less than all the Warrants
represented by this Warrant Certificate, the undersigned requests that a new
Warrant Certificate representing the number of full Warrants not exercised be
issued and delivered as set forth below.
In full payment of the purchase price with respect to the Warrants
exercised and transfer taxes, if any, the undersigned hereby tenders payment of
$______________ by certified check or money order payable to the order of the
Company in United States currency.
Dated: ________________
- --------------------------- -----------------------------------
(Insert Social Security or (Signature of registered holder)
other identifying
number(s) of holder(s))
---------------------------------------------
(Signature of registered holder, if co-owned)
NOTE: Signature must conform in all respects
to name of holder as specifiedon the
face of the Warrant Certificate.