Exhibit 10.6
THE WARRANTS REPRESENTED BY THIS WARRANT CERTIFICATE, THE SHARES WHICH MAY BE
ACQUIRED UPON THE EXERCISE HEREOF AND THE SHARES WHICH MAY BE ACQUIRED UPON
CONVERSION THEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND
MAY NOT BE SOLD OR, TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
EXEMPTION THEREFROM UNDER SUCH ACT. SUCH WARRANTS AND SHARES MAY BE TRANSFERRED
ONLY IN COMPLIANCE WITH THE CONDITIONS SPECIFIED IN THIS WARRANT CERTIFICATE.
THE ISSUER OF SUCH SECURITIES (THE "COMPANY") MAY REQUIRE AS A CONDITION TO ANY
SALE, ASSIGNMENT OR TRANSFER THAT THE HOLDER OR TRANSFEREE OF SUCH WARRANT OR
SHARES FURNISH TO THE COMPANY AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO
THE COMPANY (WHICH MAY BE IN-HOUSE COUNSEL TO THE, HOLDER) THAT SUCH SALE,
ASSIGNMENT OR TRANSFER DOES NOT REQUIRE REGISTRATION UNDER THE, SECURITIES ACT
OF 1933.
FREEDOM OF INFORMATION, INC.
WARRANT CERTIFICATE FOR THE PURCHASE OF
SHARES OF SERIES A CONVERTIBLE
PARTICIPATING PREFERRED STOCK
-----------------------------
NO. A-1
THIS WARRANT CERTIFICATE (the "Warrant Certificate"), dated as of September
29, 1998, certifies that for value received Comdisco, Inc., a Delaware
corporation, or its permitted assigns (the "Holder") is the owner of a Warrant
to purchase 100,000 shares of Series A Convertible Participating Preferred
Stock, par value $.01 per share (the "Series A Preferred Stock"), of Freedom of
Information, Inc., a Delaware corporation (the "Company"), provided for herein.
W I T N E S E T H:
-----------------
WHEREAS, the Company has entered into a Master Lease Agreement dated as of
September 29, 1998, Equipment Schedule No. VL-1 and VL-2 dated as of September
29, 1998 and related Summary Equipment Schedules (collectively, the "Leases")
with the Holder; and
WHEREAS, in consideration of the Holder entering into the Leases, the
Company has authorized the issuance to the Holder of the warrant (the "Warrant")
of the Company represented by this Warrant Certificate, which Warrant entitles
the Holder to purchase, upon the terms and conditions hereinafter set forth,
shares of Series A Preferred Stock.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby certify as follows:
1. Grant of Warrant. This Warrant Certificate entitles the Holder to purchase
----------------
100,000 shares of Series A Preferred Stock at a price per share equal to
the Exercise Price (as defined in Section 2(a) hereof).
2. Certain Defined Terms; Exercise of Warrant; Exercise Price.
----------------------------------------------------------
(a) Certain Defined Terms. As used herein, the following terms shall have
---------------------
the meanings specified:
(i) "Common Stock" shall mean the Company's common stock, dollar, or
------------
par value per share.
(ii) "Exercise Period" shall mean the period commencing on the date
hereof and ending on the earliest to occur of the 10th
anniversary of the date hereof or the fifth anniversary of the
date on which a registration statement relating to the sale of
the Company's Common Stock in an underwritten initial public
offering registered under the Securities Act is declared
effective by the Securities and Exchange Commission.
(iii) "Exercise Price" shall mean $1.00 per share.
--------------
(iv) "Securities Act" shall mean the Securities Act of 1933, as
--------------
amended (the "Securities Act").
(b) Exercise Price. This Warrant Certificate shall entitle the Holder,
--------------
subject to the provisions of Sections 2 and 3 herein, to purchase from
the Company the number of shares of Series A Preferred Stock provided
for in Section 1, at the Exercise Price for each such share, which
shall be payable in full in cash at the time of exercise of this
Warrant Certificate.
(c) Right to Exercise the Warrant. This Warrant Certificate may be
-----------------------------
exercised in full or in part, at any time during the Exercise Period.
(d) Method of Exercise; Payment. The Holder may exercise this Warrant
---------------------------
Certificate by executing the Form of Election attached hereto as
Exhibit A and delivering it to the Company and tendering the requisite
aggregate Exercise Price for the number of shares of Series A
Preferred Stock subject to this Warrant Certificate to the Company on
any business day during normal business hours (the date of receipt of
such Form of Election and aggregate Exercise Price by the Company is
hereinafter referred to as the "Exercise Date") provided, that in lieu
of tendering the requisite aggregate Exercise
-2-
Price in cash, the Holder may elect to exercise this Warrant
Certificate on a net basis whereupon the Company will issue shares of
Series A Preferred Stock in accordance with the following formula:
A = B(C-D)
------
C
Where: A = the number of shares of Series A Preferred Stock to be issued to
the Holder.
B = the number of shares of Series A Preferred Stock requested to be
exercised under this Warrant Certificate.
C = the fair market value of one share of Series A Preferred Stock.
D = the Exercise Price.
For purposes of the above calculation, current fair market value of the
Series A Preferred Stock shall be determined as follows:
(i) if the Common Stock is then admitted to trading on a national
securities exchange or traded in the NASDAQ National Market System, current
fair market value of a share of the Series A Preferred Stock shall be the
product of (x) the average of the closing prices of the Common Stock over
the 20-day period ending on the date the current fair market value of the
securities is being determined or, if there have been no sales on any such
exchange or any such quotation on any day, the average of the highest bid
and lowest asked prices on all such exchanges or such system at the end of
such day, or, if any day the Common Stock is not so listed, the average of
the representative bid and asked prices quoted in the NASDAQ system as of
4:00 p.m., Boston time, or, if on any day that Common Stock is not quoted
in the NASDAQ system, the average of the highest bid and lowest asked price
on such day in the domestic over-the-counter market as reported by the
National Quotation Bureau, Incorporated, or any similar successor
organization and (y) the number of shares of Common Stock into which each
share of Series A Preferred Stock is convertible at the time of such
exercise; or
(ii) If at any time the Common Stock is not listed on any
securities exchange or quoted in the NASDAQ system or the over-the-counter
market, the current fair market value of the Series A Preferred Stock shall
be the product of (x) the highest price per share which the Company could
obtain from a willing buyer (not a current employee or director) for shares
of Common Stock sold by the Company, from authorized but unissued shares,
as determined in good faith by the Board of Directors of the Company and
(y) the number of shares of Common Stock into which each share of Series A
Preferred Stock is convertible at the time of each exercise.
-3-
Upon partial exercise of the Warrant, the Company shall promptly issue an
amended Warrant Certificate representing the remaining number of shares
purchasable hereunder. All other terms and conditions of such amended Warrant
Agreement shall be identical to those contained herein.
(e) Issuance of Shares of Series A Preferred Stock. As soon as
----------------------------------------------
practicable after the Exercise Date the Company shall (provided that it has
received the Form of Election duly executed, accompanied by payment of the
Exercise Price pursuant to Section 2(b) hereof for each of the shares of Common
Stock to be purchased) promptly cause certificates for the number of shares of
Common Stock to be issued in respect of this Warrant Certificate to be delivered
to or upon the order of the Holder, registered in such name as may be designated
by such holder; provided that if the Common Stock is to be registered in the
name of any entity or person other than the Holder, the Company may require
evidence of compliance by the Holder with all applicable securities laws,
including, without limitation, an opinion of Holder's counsel reasonably
acceptable to the Company and the payment by the Holder of any necessary
transfer taxes in connection with the issuance of such Common Stock.
3. Reservation and Availability of Series A Preferred Stock; Adjustments
---------------------------------------------------------------------
(a) Reservation of Series A Preferred Stock. The Company covenants and
---------------------------------------
agrees that it will cause to be kept available out of its authorized
and unissued Series A Preferred Stock, or its authorized and issued
Series A Preferred Stock held in its treasury, the number of shares of
Series A Preferred Stock that will be sufficient to permit the
exercise in full of this Warrant Certificate.
(b) Series A Preferred Stock to be Duly Authorized and Issued, Fully Paid
---------------------------------------------------------------------
and Non-Assessable. The Company covenants and agrees that it will
------------------
take all such action as may be necessary to ensure that all shares of
Series A Preferred Stock delivered upon exercise of the Warrant and
payment of the requisite aggregate Exercise Price thereof shall, at
the time of delivery of the certificates for such shares, be duly and
validly authorized and issued and fully paid and non-assessable
shares.
(c) Series A Record Date. Each person or entity in whose name any
--------------------
certificate for shares of Series A Preferred Stock is issued upon the
exercise of this Warrant Certificate in accordance with its terms
shall for all purposes be deemed to have become the holder of record
of the shares of Series A Preferred Stock represented thereby on, and
such certificate shall be dated, the date upon which the Form of
Election was received by the Company and payment of the aggregate
Exercise Price was received by the Company pursuant to Section 2(b)
hereof. Prior to the exercise of this Warrant
-4-
Certificate, the Holder shall not be entitled to any rights of a
stockholder of the Company with respect to the shares of Series A
Preferred Stock for which this Warrant Certificate shall be
exercisable, including, without limitation, the right to vote, to
receive dividends or other distributions or to exercise any preemptive
rights and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.
(d) Adjustments to Exercise Price. The Exercise Price for this Warrant
-----------------------------
Certificate in effect from time to time shall be subject to adjustment
as follows:
(1) Adjustment for Series A Preferred Stock Dividends,
--------------------------------------------------
Subdivision and Combinations. Upon the issuance of
----------------------------
additional shares of Series A Preferred Stock as a dividend
or other distribution on outstanding Series A Preferred
Stock, the subdivision of outstanding, shares of Series A
Preferred Stock into a greater number of shares of Series A
Preferred Stock, or the combination of outstanding shares of
Series A Preferred Stock into a smaller number of shares of
the Series A Preferred Stock, the Exercise Price shall,
simultaneously with the happening of such dividend,
distribution, subdivision or combination, be adjusted by
multiplying the then effective Exercise Price by a fraction,
the numerator of which shall be the number of shares of
Series A Preferred Stock outstanding immediately prior to
such event and the denominator of which shall be the number
of shares of Series A Preferred Stock outstanding
immediately after such event. An adjustment made pursuant to
this Section 3(d)(i) shall be given effect, upon payment of
such a dividend or distribution, as of the record date for
the determination of stockholders entitled to receive such
dividend or distribution (on a retroactive basis) and in the
case of a subdivision or combination shall become effective
immediately as of the effective date thereof.
(2) Adjustment of Number of Shares. Upon each adjustment to the
------------------------------
Exercise Price pursuant to Section 3(d)(i) hereof, the
number of shares of Series A Preferred Stock purchasable
hereunder shall be adjusted, to the nearest whole share, to
the product obtained by multiplying the number of shares
purchasable immediately prior to such adjustment by a
fraction, the numerator of which shall be the Exercise Price
immediately prior to such adjustment and the denominator of
which shall be the Exercise Price immediately thereafter.
-5-
(e) Other Adjustments. In the event the Company shall make or issue, or
-----------------
fix a record date for the determination of holders of Series A
Preferred Stock entitled to receive, a dividend or other distribution
payable in securities of the Company other than shares of Series A
Preferred Stock, then and in each such event lawful and adequate
provision shall be made so that the holders of Warrants shall receive
upon exercise thereof in addition to the number of shares of Series A
Preferred Stock receivable thereupon, the number of securities of the
Company which such holders would have received had such Warrants been
exercised on the date of such event and had such holders thereafter,
during the period from the date of such event to and including the
date of exercise, retained such securities receivable by such holders
as aforesaid during such period, giving application to such all
adjustments called for during such period under this Section 3 as
applied to such distributed securities.
If the Series A Preferred Stock issuable upon the exercise of the Warrants
shall be changed into the same or different number of shares of any class or
classes of stock, whether by reclassification or otherwise (other than a
subdivision or combination of shares or stock dividend provided for above, or a
reorganization, merger, consolidation or sale of assets provided for elsewhere
in this Section 3), then and in each such event the holder of each Warrant shall
have the right thereafter to exercise such Warrant for the purchase of the kind
and amount of shares of stock and other securities and property receivable upon
such reorganization, reclassification or other change, by holders of the number
of shares of Series A Preferred Stock for which such Warrants might have been
exercised immediately prior to such reorganization, reclassification or change,
all subject to further adjustment as provided herein.
(f) Mergers and Other Reorganizations. If at any time or from time to
---------------------------------
time there shall be a capital reorganization of the Series A Preferred
Stock (other than a subdivision, combination, reclassification or
exchange of shares provided for elsewhere in this Section 3) or a
merger or consolidation of the Company with or into another company,
then, as a part of and as a condition to the effectiveness of such
reorganization, merger, consolidation, lawful and adequate provision
shall be made so that the Holder of this Warrant shall thereafter be
entitled to receive upon exercise the number of shares of stock or
other securities or property of the Company or of the successor
Company resulting from such memo or consolidation, to which a holder
of Series A Preferred Stock deliverable upon exercise would have been
entitled on such capital reorganization, merger or consolidation if
this warrant had been exercised immediately prior thereto. In any
such case, appropriate provisions (as determined in good faith by the
Company's Board of
-6-
Directors) shall be made with respect to the rights of the Holder of
this Warrant after the reorganization, merger or consolidation to the
end that the provisions of this Section 3 (including without
limitation provisions for adjustment of the Exercise Price and the
number of shares purchasable upon exercise) shall thereafter be
applicable, as nearly as may be, with respect to any shares of stock,
securities or assets to be deliverable thereafter upon the exercise.
(g) Right to Purchase Additional Stock. If the Holder's total cost of
----------------------------------
equipment leased pursuant to the Leases exceeds $2,000,000, Holder
shall have the right to purchase from the Company at the Exercise
Price (adjusted as set forth herein) an additional number of shares of
Series A Preferred Stock, which number shall be determined by (i)
multiplying the amount by which the Holder's total equipment cost that
was financed by the Holder exceeds $2,000,000 by 5%, and (ii) dividing
the product thereof by the Exercise Price.
(h) Antidilution Rights. Additional antidilution rights applicable to the
-------------------
Series A Preferred Stock purchasable hereunder are as set forth in the
Company's Certificate of Incorporation, as amended from time to time,
a current true and correct copy of which is attached hereto as Exhibit
B. The Company shall promptly provide the Holder with any
restatement, amendment, modification or waiver of the Certificate of
Incorporation. The Company shall provide Holder with prior written
notice of any issuance of its stock or other equity security (other
than equity securities issued pursuant to an employee stock option or
similar plan) to occur after the date hereof, which notice shall
include (a) the price at which such stock or security is to be sold,
(b) the number of shares to be issued, and (c) such other information
as may be reasonably requested and is necessary to determine if a
dilutive event has occurred.
4. Holder Representations, Warranties and Covenants
------------------------------------------------
The Holder represents and warrants to and covenants with the Company, as
follows:
(a) Representations. The Holder understands the risks of investing in
---------------
computer software companies such as the Company and can afford a loss
of its entire investment. The Holder is acquiring the Warrant for
investment and not with the view to, or for resale in connection with
any distribution thereof. The Holder understands that the Warrant,
the shares of Series A Preferred Stock issuable upon exercise of the
Warrant and the shares of common stock of the Company issuable upon
conversion of such shares of Series A
-7-
Preferred Stock are subject to restrictions on transfer referred to
herein. The Holder understands that the Warrant, the shares of Series
A Preferred Stock issuable upon exercise thereof and the shares of
common stock of the Company issuable upon conversion of such shares of
Series A Preferred Stock have not been registered under the Securities
Act or any applicable state securities ("blue sky") laws, by reason of
specified exemptions from the registration provisions of the
Securities Act and such laws. The Holder acknowledges that the
Warrant, the shares of Series A Preferred Stock issuable upon exercise
thereof and the shares of common stock of the Company issuable upon
conversion of such shares of Series A Preferred Stock must be held
indefinitely unless they are subsequently registered under the
Securities Act or an exemption from such registration is available.
The Holder has been advised or is aware of the provisions of Rule 144
promulgated under the Securities Act, which permits the resale of
shares purchased in a private placement subject to the satisfaction of
certain conditions and that such Rule may not be available for resale
of the shares of Series A Preferred Stock issuable upon exercise of
the Warrant or the shares of Common Stock issuable upon conversion of
such shares of Series A Preferred Stock. The Holder has had an
opportunity to discuss the Company's business, management and
financial affairs with its management and has had the opportunity to
review the Company's facilities. The Holder is an "accredited
investor" within the meaning of Regulation D promulgated under the
Securities Act. The Holder has its principal place of business in
State of Illinois.
(b) Restrictions on Transferability. None of the Warrant, the shares of
-------------------------------
Series A Preferred Stock received upon exercise thereof nor the shares
of Common Stock received upon conversion of such shares of Series A
Preferred Stock shall be transferable, except to an affiliate of the
Holder or to another financial institution (other than a competitor of
the Company) upon the conditions specified in and in accordance with
the terms of the Stock Purchase Agreement dated as of September 29,
1998 between the Company and the Holder (the "Investment Agreement")
and this Section.
(c) Restrictive Legend. Each certificate representing shares of the
------------------
Company's Series A Preferred Stock issuable upon exercise of the
Warrant, or any other securities issued in respect of the Series A
Preferred Stock issued upon exercise of the Warrant, upon any
conversion of such shares or upon any stock split, stock dividend,
recapitalization, merger, consolidation or similar event, shall be
stamped or otherwise imprinted with a legend in substantially the
following form (in addition to any legend required under applicable
state securities laws):
-8-
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES OR
BLUE SKY LAWS AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, HYPOTHECATED OR
OTHERWISE ASSIGNED EXCEPT (1) PURSUANT TO A REGISTRATION STATEMENT WITH
RESPECT TO SUCH SECURITIES WHICH IS EFFECTIVE UNDER THE ACT OR (2) PURSUANT
TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT RELATING TO THE
DISPOSITION OF SECURITIES AND (3) IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES AND BLUE SKY LAWS.
THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO THE PROVISIONS OF A STOCK
PURCHASE AGREEMENT DATED AS OF SEPTEMBER 29, 1998, INCLUDING THEREIN
CERTAIN RESTRICTIONS ON TRANSFER. A COMPLETE AND CORRECT COPY OF SUCH
AGREEMENT AND SUCH INSTRUMENT IS AVAILABLE FOR INSPECTION AT THE PRINCIPAL
OFFICE OF THE COMPANY AND WILL BE FURNISHED UPON WRITTEN REQUEST AND
WITHOUT CHARGE.
5. No Fractional Shares of Scrip. No fractional shares or scrip representing
-----------------------------
fractional shares shall be issued upon the exercise of the Warrant, but in
lieu of such fractional shares the Company shall make a cash payment
therefor upon the basis of the Exercise Price then in effect.
6. Representations, Warranties and Covenants of the Company. The Company
--------------------------------------------------------
represents and warrants to the Holder as of the date of issuance of this
Agreement as follows:
(a) Reservation of Preferred Stock. The Series A Preferred Stock issuable
------------------------------
upon exercise of the Warrant has been duly and validly reserved and,
when issued in accordance with the provisions of this Warrant
Certificate, will be validly issued, fully paid and non-assessable,
and will be free of any taxes, liens, charges or encumbrances of any
nature whatsoever; provided, however, that the Series A Preferred
-------- -------
Stock issuable pursuant to this Warrant Agreement may be subject to
restrictions on transfer under state and/or federal securities laws.
The Company has made available to the Holder true, correct and
complete copies of its charter and by-laws, as amended. The issuance
of certificates for shares of Series A Preferred Stock upon exercise
of this Warrant shall be made without charge to the Holder for any
issuance tax in respect hereof, or other cost incurred by the Company
in connection with such exercise and the related issuance of shares of
Series A Preferred Stock. The Company shall not be required to pay
any tax which may be payable in
-9-
respect of any transfer involved and the issuance and delivery of any
certificate in a name other than that of the Holder.
(b) Due Authority. The execution and delivery by the Company of this
-------------
Warrant Certificate and the performance of all obligations of the
Company hereunder have been duly authorized by all necessary corporate
action on the part of the Company, and the execution, delivery and
performance of this Warrant Certificate do not contravene the
Company's charter or by-laws or any law or governmental rule,
regulation or order applicable to it, do not and will not contravene
any provision of, or constitute a default under, any indenture,
mortgage, contract or other instrument to which it is a party or by
which it is bound, and this Warrant Certificate constitutes legal,
valid and binding agreement of the Company, enforceable in accordance
with its terms.
(c) Consents and Approvals. No consent or approval of, giving of notice
----------------------
to, registration with, or taking of any other action in respect of any
state, Federal or other governmental authority or agency is required
with respect to the execution, delivery and performance by the Company
of its obligations under this Warrant Certificate, except for the
filing of notices pursuant to Regulation D under the Securities Act
and any filing required by applicable state securities law, which
filings will be effective by the time required thereby.
(d) Issued Securities. After giving effect to the transactions
-----------------
contemplated hereby and by the Stock Purchase Agreement between the
Company and Comdisco, Inc. dated the date hereof, the authorized
capital stock of the Company will consist of 45,000,000 shares of
Common Stock, of which 13,323,119 shares will be issued and
outstanding, 15,000,000 shares of Preferred Stock, of which 11,300,000
shares will be designated as Series A Convertible Participating
Preferred Stock, of which 10,600,000 shares will be issued and
outstanding, and 3,700,000 shares of Preferred Stock will be
undesignated. In addition, the Company has authorized and reserved
for issuance upon exercise of the Warrant, 100,000 shares of Series A
Preferred Stock (subject to adjustment for stock splits, stock
dividends and the like) and upon conversion of the Series A Preferred
Stock, 100,000 shares of Common Stock (subject to adjustment for stock
splits, stock dividends and the like).
(e) Other Commitments to Register Securities. Except as set forth in this
----------------------------------------
Warrant Certificate or as set forth or described in the Stock Purchase
Agreement or the exhibits thereto, the Company is not, pursuant to the
terms of any other agreement currently in existence, under any
obligation to
-10-
register under the 1933 Act any of its presently outstanding
securities or any of its securities which may hereafter be issued.
(f) Exempt Transaction. Subject to the accuracy of the Holder's
------------------
representations in Section 4 hereof, the issuance of the Series A
Preferred Stock upon exercise of this Warrant will constitute a
transaction exempt from (i) the registration requirements of Section 5
of the 1933 Act, in reliance upon Section 4(2) thereof, and (ii) the
qualification requirements of the applicable state securities laws.
(g) Compliance with Rule 144. At the written request of the Holder, if
------------------------
the Holder proposes to sell Series A Preferred Stock issuable upon the
exercise of the Warrant in compliance with Rule 144 promulgated by the
Securities and Exchange Commission, the Company shall furnish to the
Holder, within ten days after receipt of such request, a written
statement with respect to the Company's compliance with the filing
requirements of the Securities and Exchange Commission as set forth in
such Rule, as such Rule may be amended from time to time.
(h) Notices. In each case of an adjustment or readjustment of the
-------
Conversion Price (as defined in the Company's Certificate of
Incorporation), the Company will furnish to the Holder a certificate,
prepared by the chief financial officer of the Company, showing such
adjustment or readjustment, and stating in detail the facts upon which
such adjustment or readjustment is based.
(i) Notices of Record Date. In the event (i) the Company establishes a
----------------------
record date to determine the holders of any class of securities who
are entitled to receive any dividend or other distribution, or (ii)
there occurs any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the
Company, any merger or consolidation of the Company, and any transfer
of all or substantially all of the assets of the Company to any other
corporation, or any other entity or person, or any voluntary or
involuntary dissolution, liquidation or winding up of the Company, the
Company shall mail to the Holder at least twenty (20) days prior to
the record date or the expected effective date, as the case may be,
specified therein, a notice specifying (a) the date of such record
date for the purpose of such dividend or distribution and a
description of such dividend or distribution, (b) the date on which
any such reorganization, reclassification, transfer, consolidation,
merger, dissolution, liquidation or winding up is expected to become
effective, and (c) the time, if any, that is to be fixed, as to when
the holders of record of Common Stock (or other securities) shall be
-11-
entitled to exchange their shares of Common Stock (or other
securities) for securities or other property deliverable upon such
reorganization, reclassification, transfer, consolidation, merger,
dissolution, liquidation or winding up.
(j) Satisfaction of Obligations. The Company will satisfy its obligations
---------------------------
to Holder under this Warrant in accordance with the terms of the
Company's Certificate of Incorporation, as amended and in effect from
time to time.
7. Miscellaneous.
-------------
(a) Notices. Notices or demands relating to this Warrant Certificate
-------
shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed as follows, or telexed, telecopied, or
delivered by nationally recognized overnight or other courier:
If to the Holder: Comdisco, Inc.
Legal Department
6111 North River Road
Rosemont, Illinois 60018
Attention: General Counsel
Facsimile: (847) 518-5088
with a copy to: Comdisco, Inc./Comdisco Ventures
6111 North River Road
Rosemont, Illinois 60018
Attention: Venture Group
Facsimile: (847) 518-5465
If to the Company: Freedom of Information, Inc.
124 Mt. Auburn Street
Suite 200N
Cambridge, MA 02138
Attention: President
Facsimile: (617) 497-5734
with a copy to: Ropes & Gray
One International Place
Boston, MA 02110
Attention: Ann L. Milner, Esq.
Facsimile: (617) 951-7050
-12-
(b) Successors. All the covenants and provisions of this Warrant
----------
Certificate by or for the benefit of the Company or the Holder shall
bind and inure to the benefit of their respective successors and
assigns hereunder; provided that this Warrant Certificate may be
assigned by the Holder only in compliance with the conditions
specified in and in accordance with all of the terms of this Warrant
Certificate.
(c) Governing Law. This Warrant Certificate and the Warrant, and all
-------------
questions relating to the interpretation, construction and
enforceability of this Warrant Certificate and the Warrant, shall be
governed in all respects by the substantive laws of The Commonwealth
of Massachusetts.
(d) Amendments and Waivers. Except as otherwise provided herein, the
----------------------
provisions of this Warrant Certificate may not be amended, modified or
supplemented, other than by a written instrument executed by the
Company and the Holder.
(e) Severability. In the event that any one or more of the provisions
------------
contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason,
the validity, legality and enforceability of any such provision in
every other respect and of the remainincy provisions contained herein
shall not be in any way impaired thereby, it being intended that all
of the rights and privileges of the Holder shall be enforceable to the
fullest extent permitted by law.
(f) Survival. The representations, warranties, covenants and conditions
--------
of the respective parties contained herein or made pursuant to this
Warrant Certificate shall survive the execution and delivery of this
Warrant Certificate.
(g) Remedies. In the event of any default hereunder, the non-defaulting
--------
party may proceed to protect and enforce its rights either by suit in
equity and/or by action at law, including but not limited to an action
for damages as a result of any such default, and/or an action for
specific performance for any default where the Holder will not have an
adequate remedy at law and where damages will be readily
ascertainable. The Company expressly agrees that it shall not oppose
an application by the Holder or any other person entitled to the
benefit of this warrant certificate requiring, specific performance of
any or all provisions hereof or enjoining the Company from continuing
to commit any such breach of this Warrant Certificate.
[Remainder of page intentionally left blank]
-13-
IN WITNESS WHEREOF, the parties hereto have caused this Warrant Certificate to
be duly executed and delivered, as of the day and year first above written.
COMPANY:
-------
FREEDOM OF INFORMATION, INC.
By: /s/Stephen M. Joseph
------------------------
Name: Stephen M. Joseph
Title: CFO
-14-
HOLDER:
------
COMDISCO, INC.
By: /s/James P. Labe
---------------------------------
Name: James P. Labe
Title: President
Comdisco Ventures Division
-15-
EXHIBIT A
---------
FORM OF ELECTION TO PURCHASE
(To be executed if Holder desires to
exercise the Warrant Certificate)
To FREEDOM OF INFORMATION, INC.
The undersigned hereby irrevocably elects to exercise the Warrant
represented by the Warrant Certificate to purchase shares of Series A
Convertible Participating Preferred Stock issuable upon the exercise of such
Warrant and requests that certificates for such shares be issued in the name of:
__________________________________________________
(Please print name and address)
__________________________________________________
Please insert tax payor identification number: _________________
Dated:
HOLDER:
------
By: _________________________________
Name:
Title:
-16-