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EXHIBIT 10.18
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT
OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
RELATED THERETO OR AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY,
THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED.
COMMON STOCK WARRANT
OF
NEWSREAL, INC.
AUG 27, 1999
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THIS CERTIFIES that, for value received, Insight Investments, Corp.
(the "Warrantholder"), is entitled, upon the terms and subject to the conditions
set forth herein, to purchase from NewsReal, Inc., a Delaware corporation (the
"Company"), Four Thousand Two Hundred Eighty-five (4,285) shares (the "Shares")
of the common stock, par value $.001 per share (the "Common Stock"), of the
Company at the purchase price per share of $3.50 (the "Exercise Price"). The
number of shares and Exercise Price are subject to adjustment as provided below.
This Warrant is being issued to the Warrantholder in consideration for
Warrantholder entering into the Master Equipment Lease Agreement with the
Company of even date herewith (the "Equipment Lease Agreement"), and is subject
to the following terms and conditions:
1. Exercise of Warrant.
(a) Immediately following the commencement date of the
Equipment Lease Agreement and subject to the provision providing for the
automatic extension of the Expiration Date (as set forth in Section 3(b) below),
this Warrant may be exercised in whole or in part, at any time, or from time to
time, after the date hereof and on or before the Expiration Date (as defined
below) by the surrender of this Warrant and the Notice of Exercise annexed
hereto (duly completed and executed on behalf of the Warrantholder) to the
Company and by the payment of the Exercise Price for the Shares to be purchased
by the Warrantholder to the Company by cash or check acceptable to the Company,
except as provided in Section 13 hereof. The Company will prepare a certificate
for the Shares purchased and, if this Warrant is exercised in part, a new
Warrant for the unexercised portion of this Warrant. The Company agrees that,
upon exercise of this Warrant in accordance with the terms hereof, the Shares so
purchased will be deemed to be issued to the Warrantholder as the record owner
of such Shares as of the close of business on the date on which this Warrant was
exercised.
(b) The Warrantholder, by acceptance hereof, acknowledges
that this Warrant and Shares to be issued upon exercise hereof, are being
acquired solely for the Warrantholder's
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own account or for the account of other non-U.S. Persons. The Warrantholdcr will
not offer, sell or otherwise dispose of this Warrant or the Shares to be issued
upon exercise hereof except under circumstances that will not result in a
violation of Securities Act of 1933, as amended (the "Act") or other applicable
federal or state securities laws. Upon exercise or transfer of this Warrant, the
Warrantholder shall provide the Company with such information as may be
necessary or reasonably requested by the Company to establish an exemption from
the registration requirements under the Act, including without limitation,
representation regarding the status of the Warrantholder as a non-U.S. Person or
accredited investor and such other matters as may be appropriate to establish
the availability of the Regulation S or Regulation D exemption from the
registration requirements of the Act. If the Company reasonably determines that
registration under the Act is required or that the Warrantholder has failed to
provide the Company with such information as may be necessary to establish an
exemption from the registration requirements under the Act, the Company may
defer the exercise or transfer of this Warrant until either a registration
statement under the Act has been declared effective or the Warrantholder has
provided information satisfactory to the Company that establishes the
availability of an exemption from the registration requirements under the Act.
(c) Certificates for Shares purchased under this Warrant
and, on partial exercise of this Warrant, a new Warrant for the unexercised
portion of this Warrant will be delivered to the Warrantholder or to such person
or persons as the Warrantholder may direct as promptly as practicable after the
date on which this Warrant was exercised. The Company covenants that all Shares
that may be issued upon the exercise of rights represented by this Warrant will,
upon exercise of the rights represented by this Warrant, payment of the Exercise
Price and issuance by the Company, be duly authorized, validly issued, fully
paid and nonassessable.
(d) With the consent of the Company, which consent will not
be unreasonably withheld, and subject to applicable laws and regulations, the
Warrantholder may direct that the certificates for Shares purchased under this
Warrant be issued in name or names other than the name of the Warrantholder. In
this case, this Warrant when surrendered for exercise must be accompanied by the
Assignment Form attached hereto duly executed by the Warrantholder and the
Notice of Exercise duly completed and executed and stating in whose name or
names certificates are to be issued.
2. Reservation of Shares; No Impairment or Amendment. The Company
will at all times reserve and keep available, solely for issuance, sale and
delivery upon the exercise of this Warrant, a number of shares of Common Stock
equal to the number of shares of Common Stock issuable upon the exercise of this
Warrant. The Company will not by any amendment of its Articles of Incorporation
or through any other means, avoid or seek to avoid the observance or performance
of any of the terms of this Warrant. The Company will take all such reasonable
action as may be necessary to assure that such shares of Common Stock may be
issued as provided herein without violation of any applicable law or regulation,
or of any requirements of
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any domestic securities exchange or automated quotation system upon which the
shares of Common Stock may be listed.
3. Expiration.
(a) This Warrant, if not exercised by Warrantholder prior
thereto, will expire on the termination date of the Equipment Lease agreement as
such date may be extended from time to time (the "Expiration Date").
(b) Notwithstanding anything herein to the contrary, the
Expiration Date shall be extended automatically until the tenth (10th)
anniversary of the date of this Agreement, in any of the following events: (i)
an order for relief against the Company is entered under Chapter 7 of the
federal bankruptcy law; (ii) the Company (A) makes a general assignment for the
benefit of creditors, (B) files a voluntary petition under the federal
bankruptcy law, (C) files a petition or answer seeking for the Company any
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under any statute, law or regulation, (D) files an answer or
other pleading admitting or failing to contest the material allegations of a
petition filed against the Company in any proceeding of this nature, or (E)
seeks, consents to or acquiesces in the appointment of a trustee, receiver or
liquidator of the Company or of all or any substantial part of that Company's
property; or (iii) 60 days after the commencement of any proceeding against the
Company seeking reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any statute, law or regulation,
the proceeding has not been dismissed, or if within 60 days after the
appointment without the Company's consent or acquiescence of a trustee, receiver
or liquidator of the Company or of all or a substantial part of that Company's
properties, the appointment is not vacated or stayed, or within 60 days after
the expiration of any such stay, the appointment is not vacated.
4. Adjustments of Exercise Price and Number of Shares Purchasable.
The Exercise Price and the number of Shares purchasable under this Warrant are
subject to adjustment from time to time in accordance with the following
provisions:
(a) Reorganization, Reclassification, Consolidation or
Merger.
(i) If any capital reorganization or
reclassification of the capital stock of the Company, or an Exchange Transaction
(as defined below), or the sale of all or substantially all of its assets to
another corporation shall be effected in such a way that holders of Common Stock
shall be entitled to receive stock, securities, cash or other property with
respect to or in exchange for Common Stock, then, as a condition of such
reorganization, reclassification, Exchange Transaction or sale, lawful and
adequate provision shall be made whereby the Warrantholder shall have the right
to acquire and receive upon exercise of this Warrant such shares of stock,
securities, cash or other property issuable or payable (as part of the
reorganization, reclassification, Exchange Transaction or sale) with respect to
or in exchange for such number of outstanding shares
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of the Company's Common Stock as would have been received upon exercise
of this Warrant at the Exercise Price then in effect and which
represent Shares that are vested and exercisable as of the date
immediately preceding such reorganization, reclassification, Exchange
Transaction or sale. The Company will not effect any such Exchange
Transaction or sale, unless prior to the consummation thereof the
successor corporation (if other than the Company) resulting from such
Exchange Transaction or the corporation purchasing such assets shall
assume by written instrument mailed or delivered to the holder of this
Warrant at the last address of such holder appearing on the books of
the Company, the obligation to deliver to such holder such shares of
stock, securities or assets as, in accordance with the foregoing
provisions, such holder may be entitled to purchase. If a purchase,
tender or exchange offer is made to and accepted by the holders of
more than 50% of the outstanding shares of Common Stock of the
Company, the Company shall not effect any Exchange Transaction or sale
with the person having made such offer or with any Affiliate of such
person, unless prior to the consummation of such Exchange Transaction
or sale the holder of this Warrant shall have been given a reasonable
opportunity to then elect to receive upon the exercise of this Warrant
either the stock, securities or assets then issuable with respect to
the Common Stock of the Company or the stock, securities or assets, or
the equivalent, issued to previous holders of the Common Stock in
accordance with such offer.
(ii) For purposes hereof, the term "Affiliate" with
respect to any given person shall mean any person controlling,
controlled by or under common control with the given person.
(iii) For purposes hereof, the term "Exchange
Transaction" means a merger (other than a merger of the Company in
which the holders of Common Stock immediately prior to the merger have
the same proportionate ownership of Common Stock in the surviving
corporation immediately after the merger), consolidation, acquisition
of property or stock, separation, reorganization (other than a mere
reincorporation or the creation of a holding company), liquidation of
the Company or any other similar transaction or event so designated by
the Board, in its sole discretion, as a result of which the
stockholders of the Company receive cash, stock or other property in
exchange for or in connection with their shares of Common Stock.
(b) Adjustments in Exercise Price on the Sale of Common Stock
or Stock Dividends, Subdivisions or Combinations. Subject to the exceptions
referred to in Section 4(c) below, in the event the Company shall, at any time
or from time to time after the date hereof, sell any shares of Common Stock for
a consideration per share less than the Exercise Price or issue any shares of
Common Stock as a stock dividend to the holders of Common Stock, or subdivide
or combine the outstanding shares of Common Stock into a greater or lesser
number of shares (any such sale, issuance, subdivision or combination being
herein called a "Change of Shares"), then, and thereafter upon each further
Change of Shares, the Exercise Price in effect immediately after such Change of
Shares shall equal the product of the Exercise Price in effect immediately
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prior to such Change of Shares multiplied by a fraction, the
numerator of which shall be the sum of (x) the number of shares of
Common Stock outstanding immediately prior to the issuance of such
additional shares, (y) the number of shares of Common Stock
issuable upon exercise of this Warrant, and (z) the number of
shares of Common Stock which the aggregate consideration received
(determined as provided in subsection 4(c)(vi) below), if any, for
the issuance of such additional shares would purchase at such
Exercise Price per share of Common Stock, and the denominator of
which shall be the sum of (aa) the number of shares of Common Stock
outstanding immediately after the issuance of such additional
shares and (bb) the number of shares of Common Stock issuable upon
exercise of this Warrant. Such adjustment shall be made
successively whenever such an issuance is made.
Upon each adjustment of the Exercise Price pursuant to this
Section 4, the total number of shares of Common Stock purchasable
upon the exercise of this Warrant shall (subject to the provisions
contained in Section 4(b) hereof) be such number of shares
(calculated to the nearest tenth) purchasable at the Exercise Price
immediately prior to such adjustment multiplied by a fraction, the
numerator of which shall be the Exercise Price in effect
immediately prior to such adjustment and the denominator of which
shall be the Exercise Price in effect immediately after such
adjustment.
(c) Adjustments in Exercise Price for Issuances of
Convertible Securities, Rights, Options and Warrants. For purposes
of Sections 4(a) and 4(b) hereof, the following provisions (i) to
(vi) shall also be applicable:
(i) The number of shares of Common Stock
outstanding at any given time shall include shares of Common
Stock owned or held by or for the account of the Company and
the sale or issuance of such treasury shares or the
distribution of any such treasury shares shall not be
considered a Change of Shares for purposes of said sections.
(ii) No adjustment of the Exercise Price
shall be made unless such adjustment would require an
increase or decrease of at least $.01 in such price;
provided that any adjustments which by reason of this clause
(ii) are not required to be made shall be carried forward
and shall be made at the time of and together with the next
subsequent adjustment which, together with any adjustment(s)
so carried forward, shall require an increase or decrease of
at least $.01 in the Exercise Price then in effect
hereunder.
(iii) Except for the Shares, in case of (A)
the sale by the Company for cash of any rights or warrants
to subscribe for or purchase, or any options for the
purchase of, Common Stock or any securities convertible into
or exchangeable for Common Stock without the payment of any
further consideration other than cash, if any (such
convertible or exchangeable securities being herein called
"Convertible Securities"), or (B) the issuance by the
Company, without the receipt by the Company of any
consideration therefor, of any rights or warrants to
subscribe for or purchase, or any options for the purchase
of, Common Stock or Convertible Securities, in each case, if
and
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only if the consideration payable to the Company upon the
exercise of such rights, warrants or options shall consist
of cash, whether or not such rights, warrants or options, or
the right to convert or exchange such Convertible
Securities, are immediately exercisable, and the price per
share for which Common Stock is issuable upon the exercise
of such rights, warrants or options or upon the conversion
or exchange of such Convertible Securities (determined by
dividing (x) the aggregate consideration payable to the
Company upon the exercise of such rights, warrants or
options, plus the consideration received by the Company for
the issuance or sale of such rights, warrants or options,
plus, in the case of such Convertible Securities, the
aggregate amount of additional consideration, if any, other
than such Convertible Securities, payable upon the
conversion or exchange thereof, by (y) the total number of
shares of Common Stock issuable upon the exercise of such
rights, warrants or options or upon the conversion or
exchange of such Convertible Securities issuable upon the
exercise of such rights, warrants or options) is less than
the Exercise Price (as determined hereunder immediately
prior to the date of the issuance or sale of such rights,
warrants or options), then the total maximum number of
shares of Common Stock issuable upon the exercise of such
rights, warrants or options or upon the conversion or
exchange of such Convertible Securities (as of the date of
the issuance or sale of such rights, warrants or options)
shall be deemed to be outstanding shares of Common Stock for
purposes of Sections 4(a), 4(b) and 4(c) hereof and shall be
deemed to have been sold for cash in an amount equal to such
price per share.
(iv) Except for the Shares, in case of the
sale by the Company for cash of any Convertible Securities,
whether or not the right of conversion or exchange
thereunder is immediately exercisable, and the price per
share for which Common Stock is issuable upon the conversion
or exchange of such Convertible Securities (determined by
dividing (x) the total amount of consideration received by
the Company for the sale of such Convertible Securities,
plus the aggregate amount of additional consideration, if
any, other than such Convertible Securities, payable upon
the conversion or exchange thereof, by (y) the total number
of shares of Common Stock issuable upon the conversion or
exchange of such Convertible Securities) is less than the
Exercise Price (as determined hereunder immediately prior to
the date of the issuance or sale of such Convertible
Securities), then the total number of shares of Common Stock
issuable upon the conversion or exchange of such Convertible
Securities (as of the date of the sale of such Convertible
Securities) shall be deemed to be outstanding shares of
Common Stock for purposes of Sections 4(a), 4(b) and 4(c)
hereof and shall be deemed to have been sold for cash in an
amount equal to such price per share.
(v) If the exercise price or purchase price
provided for in any right, warrant or option referred to in
4(c)(iii) above, or the rate at which any Convertible
Securities referred to in 4(c)(iii) or 4(c)(iv) above are
convertible into or exchangeable for Common Stock, shall
change at any time (other than under or by reason of
provisions designed to protect against dilution), the
Exercise Price then in effect hereunder shall forthwith be
readjusted to such Exercise Price as would have obtained (A)
had the
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adjustments made upon the issuance or sale of such rights, warrants,
options or Convertible Securities been made upon the basis of the
issuance of only the number of shares of Common Stock theretofore
actually delivered (and the total consideration received therefor) upon
the exercise of such rights, warrants or options or upon the conversion
or exchange of such Convertible Securities, (B) had adjustments been made
on the basis of the Exercise Price as adjusted under clause (A) for all
transactions (which would have affected such adjusted Exercise Price)
made after the issuance or sale of such rights, warrants, options or
Convertible Securities, and (C) had any such rights, warrants, options or
Convertible Securities then still outstanding been originally issued or
sold at the time of such change. On the expiration of any such right,
warrant or option or the termination of any such right to convert or
exchange any such Convertible Securities, the Exercise Price then in
effect hereunder shall forthwith be readjusted to such Exercise Price as
would have obtained (a) had the adjustments made upon the issuance or
sale of such rights, warrants, options or Convertible Securities been
made upon the basis of the issuance of only the number of shares of
Common Stock theretofore actually delivered (and the total consideration
received therefor) upon the exercise of such rights, warrants or options
or upon the conversion or exchange of such Convertible Securities and (b)
had adjustments been made on the basis of the Exercise Price as adjusted
under clause (a) for all transactions (which would have affected such
adjusted Exercise Price) made after the issuance or sale of such rights,
warrants, options or Convertible Securities.
(vi) In case of the sale for cash of any shares of Common
Stock, any Convertible Securities, any rights or warrants to subscribe
for or purchase, or any options for the purchase of, Common Stock or
Convertible Securities, the consideration received by the Company
therefore shall be deemed to be the gross sales price therefor without
deducting therefrom any expense paid or incurred by the Company for any
underwriting discounts or commissions or concessions paid or allowed by
the Company in connection therewith.
(d) Exceptions to Adjustments. No adjustment to the Exercise
Price of the Warrant or to the number of Shares will be made in any of the
following events:
(i) upon the grant or exercise of any other options granted
to any employee or consultant of the Company prior to the date of
issuance of this Warrant; or
(ii) any options which may hereafter be granted or exercised
under any stock option plan, stock option agreement or any other employee
benefit plan of the Company so long as the exercise price of such options
that are granted after the Effective Date of this Warrant equals or
exceeds the Exercise Price of this Warrant; or
(iii) upon the sale or exercise of this Warrant or any other
warrants issued by the Company prior to the issuance of this Warrant.
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5. Notice of Adjustment; Notices. Whenever the Exercise Price or
number of shares purchasable hereunder will be adjusted, the Company at its
expense will promptly issue a certificate signed by an executive officer of the
Company 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 will cause a copy of such certificate to be sent
to the Warrantholder.
6. No Fractionalized Shares. No fractionalized shares of Common Stock
or other security will be issued upon exercise of this Warrant. The shares of
Common Stock or other security issued to the Warrantholder as a result of any
exercise of this Warrant in accordance with the terms hereof will be rounded
down to the nearest whole share.
7. Transfer of Warrant. Subject to Section 1 hereof, this Warrant
and all rights hereunder are transferable, in whole or in part, to any affiliate
of Warrantholder. Any transfer by Warrantholder to any non-affiliate shall be
made only with the prior written consent of the Company, which consent will not
be unreasonably withheld. In order to transfer this Warrant, the Warrantholder
must deliver to the Company this Warrant together with the Assignment Form
annexed hereto properly endorsed. Upon receipt thereof, the Company will affect
such transfer as promptly as practicable.
8. No Voting Rights, Etc. Prior to the proper exercise of this
Warrant, the Warrantholder, as such, is not entitled to vote or receive
dividends or be deemed to be a shareholder of the Company for any purposes, nor
may anything contained in this Warrant be construed to confer such rights upon
Warrantholder.
9. Registry of Warrant. The Company will maintain a registry showing
the name and address of the Warrantholder and the Company will be entitled to
rely in all respects, prior to written notice to the contrary, upon such
registry. The Warrantholder is responsible for notifying the Company of any
change of its address.
10. Loss, Theft, Destruction or Mutilation of Warrant. Upon receipt by
the Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant, and in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to the Company,
and upon reimbursement to the Company of all reasonable expenses incidental
thereto, and upon surrender and cancellation of this Warrant, if mutilated, the
Company will replace this Warrant with a new Warrant of like tenor, dated as of
such cancellation, and deliver it to the Warrantholder.
11. Office for Exercise or Exchange. This Warrant may be surrendered
for exchange, transfer or exercise, in accordance with its terms, at the
principal office of the Company, or at such other office or such other office or
agency of the Company as it may designate in writing to the Warrantholder at its
address appearing on the Company's registry or other books.
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12. Charges, Taxes and Expenses. Issuance of certificates to the
Warrantholder for Shares upon the exercise of this Warrant will be made without
charge to the Warrantholder for any issue or transfer tax or other incidental
expense in respect of the issuance of such certificates, all of which taxes and
expenses will be paid by the Company. However, if the certificates are to be
issued in a name or names other than the name of the Warrantholder, the Company
may require, as a condition to such issuance, the payment of a sum sufficient to
reimburse it for any transfer tax incidental thereto.
13. Cashless Exercise. In lieu of payment of the aggregate Exercise
Price, the Warrantholder may exercise this Warrant with respect to the Shares
that are then vested and exercisable, in whole or in part, by presentation and
surrender of this Warrant to the Company, together with a Cashless Exercise Form
attached hereto (or a reasonable facsimile thereof) duly executed (a "Cashless
Exercise"). Acceptance by the Company of such presentation and surrender shall
be deemed a waiver of the Warrantholder's obligation to pay all or any portion
of the aggregate Exercise Price. In the event of a Cashless Exercise, the
Warrantholder shall exchange this Warrant for that number of shares of Common
Stock determined by multiplying the number of Shares being exercised by a
fraction, the numerator of which shall be the difference between the then
current market price per share of the Common Stock and the Exercise Price, and
the denominator of which shall be the then current market price per share of
Common Stock. For purposes of any computation under this Section 13, the then
current market price per share of Common Stock at any date shall be deemed to be
the average for the five consecutive business days immediately prior to the
Cashless Exercise of the daily closing prices of the Common Stock on the
principal national securities exchange on which the Common Stock is admitted to
trading or listed, or if not listed or admitted to trading on any such exchange,
the closing prices as reported by the Nasdaq National Market, or if not then
listed on the Nasdaq National Market, the average of the highest reported bid
and lowest reported asked prices as reported by the National Association of
Securities Dealers, Inc. Automated Quotations System ("NASDAQ") or if not then
publicly traded, the fair market price of the Common Stock as determined by the
Board.
14. Piggyback Registration Rights.
(a) If at any time or from time to time, the Company shall
determine to register any of its securities, for its own account or the account
of any of its shareholders, other than (i) a registration relating to an initial
public offering of the Company's Common Stock and any other securities, (ii) a
registration solely relating to the Company's employee benefit plans or stock
option plans, or (iii) a registration relating solely to an SEC Rule 145
transaction, the Company will:
(i) give to the Warrantholder written notice thereof as
soon as practicable prior to filing the registration statement; and
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(ii) include in such registration and in any underwriting
involved therein, all the Shares specified in a written request or
requests, made within fifteen (15) days after receipt of such written
notice from the Company, by the Warrantholder, except as set forth in
subsection (b) below.
(b) Subject to the exceptions set forth in Section 14(a) above,
if the registration is for a registered public offering involving an
underwriting, the Company shall so advise the Warrantholder as a part of the
written notice given pursuant to subsection 14(a)(i). In such event, the
Warrantholder's right to registration pursuant to Section 14 shall be
conditioned upon its participation in such underwriting and the inclusion of the
Warrantholder's Shares in the underwriting to the extent provided herein. If the
Warrantholder proposes to distribute its Shares through such underwriting, it
shall (together with the Company and the other holders distributing their
securities through such underwriting) enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for such
underwriting by the Company. Notwithstanding any other provision of this Section
14, if the managing underwriter determines that marketing factors require a
limitation of the number of shares to be underwritten, the managing underwriter
may limit the number of shares of Common Stock to be included in the
registration and underwriting. The number of Shares and the number of shares of
common stock being sold by the Company shall be proportionately reduced or may
exclude the Shares entirely from such registration. The Company shall so advise
the Warrantholder of the managing underwriter's decision and the number of
Shares that may be included in such underwriting.
15. Miscellaneous.
(a) Governing Law. This Warrant constitutes a contract
under and will be construed in accordance with and governed by the internal laws
of the State of Delaware.
(b) Successors and Assigns. This Warrant is binding upon
any successors or assigns of the Company and the Warrantholder and of the Shares
issued OR issuable upon the exercise hereof.
(c) Definition of Warrantholder. The term Warrantholder
means the Warrantholder named in the first paragraph of this Warrant and any
successor or permitted assign of such Warrantholder known to the Company and
reflected on the Company's registry as the holder of this Warrant.
(d) Restrictions. THESE SECURITIES HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF ANY EFFECTIVE REGISTRATION
STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED.
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(e) Amendments. This Warrant may be amended and the
observance of any term of this Warrant may be waived only with the written
consent of the Company and the Warrantholder.
(f) Notice. Any notice required or permitted under this
Warrant will be deemed effectively given upon personal delivery, delivery by
recognized international express courier or upon deposit with the United States
Post Office, by certified mail, postage prepaid and addressed to the party to be
notified at the address indicated below for such party, or at such other address
as such other party may designate by ten-day advance written notice.
(g) Acceptance. Receipt of this Warrant by the
Warrantholder constitutes acceptance of and agreement to the foregoing terms and
conditions.
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This Warrant Agreement has been duly executed on the date first
written above.
NEWSREAL, INC., a Delaware corporation
By: /s/ DAVID C. HOPPMANN (SEAL)
-----------------------------
David C. Hoppmann
President & CEO
Agreed to and accepted by:
Insight Investments, Corp.
By: /s/ RICHARD M. HEARD
-------------------------
Name: RICHARD M. HEARD
-----------------------
Title: C.F.O
----------------------
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NOTICE OF EXERCISE
TO: NEWSREAL, INC.
1. The undersigned hereby elects to purchase __________________ shares
of Common Stock ("Stock") of NEWSREAL, INC. (the "Company") pursuant to the
terms of the attached Warrant, and tenders herewith payment of the purchase
price, together with an Investment Representation Statement (see attached form)
in form and substance satisfactory to legal counsel to the Company.
2. The shares of Stock to be received by the undersigned upon exercise
of the Warrant are being acquired for its own account, not as a nominee or
agent, and not with a view to resale or distribution of any part thereof, and
the undersigned has no present intention of selling, granting any participation
in, or otherwise distributing the same, except as permitted by applicable law.
The undersigned further represents that it does not have any contract,
undertaking, agreement or arrangement with any person to sell, transfer or grant
participation to such person or to any third person, with respect to the Stock.
The undersigned believes it has received all the information it considers
necessary or appropriate for deciding whether to purchase the Stock.
3. The undersigned understands that the shares of Stock and the shares
of the Company's Common Stock into which the Stock is convertible are
characterized as "restricted securities" under the federal securities laws
inasmuch as they are being acquired from the Company in transactions not
involving a public offering and that under such laws and applicable regulations
such securities may be resold without registration under the Securities Act of
1933, as amended (the "Act"), only in certain limited circumstances. In this
connection, the undersigned represents that it is familiar with Rule 144
promulgated under the Act, as presently in effect, and understandings the resale
limitations imposed thereby and by the Act.
4. The undersigned is an "accredited investor" as defined in Rule 502
of Regulation D under the Act or is not a "U.S. Person" as defined in Rule 902
regulations under the Act.
5. The undersigned understands the instruments evidencing the Stock
may bear one or all of the following legends:
(a) "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED."
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(b) Any legend required by applicable state law.
6. Please issue a certificate or certificates representing said
shares of Stock in the name set forth below.
---------------------------
[Please type or print name]
7. Please issue a new Warrant for the unexercised portion of the
attached Warrant in the name set forth below.
---------------------------
[Please type or print name]
INSIGHT Investments, Corp.
By:
-------------------------------------
Name:
---------------------
Title:
--------------------
Date:
-------------------
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15
NEWSREAL, INC.
CASHLESS EXERCISE FORM
(To be executed upon exercise of Warrant pursuant to Section 13)
The undersigned hereby irrevocably elects to surrender _______________
shares purchasable under this Warrant for such shares of Common Stock issuable
in exchange therefor pursuant to the Cashless Exercise provisions of the within
Warrant, as provided for in Section 13 of such Warrant.
Please issue a certificate or certificates for such Common Stock in the
name of, and pay cash for fractional shares in the name of:
- --------------------------------------------------------------------------------
(Please print name, address, and social security number/tax identification
number:)
- --------------------------------------------------------------------------------
and, if said number of shares of Common Stock shall not be all the shares of
Common Stock purchasable thereunder, that a new Warrant for the balance
remaining of the shares of Common Stock purchasable under the within Warrant be
registered in the name of the undersigned Warrantholder or his or her Assignee
as below indicated and delivered to the address stated below.
Dated:
--------------------
Name of Holder
or Assignee:
- --------------------------------------------------------------------------------
(Please print)
Address:
------------------------------------------------------------------------
Signature:
------------------------------------------------------------------------
NOTE: The above signature must correspond exactly with the name on the first
page of this Warrant or with the name of the assignee appearing in the
assignment form below.
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ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this
form and supply required information. Do not
use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced
thereby are hereby assigned to
----------------------------
[Please type or print name.]
whose address is
-------------------------------
[Please type or print address.]
-------------------------------
-------------------------------
Insight Investments, Corp.
By:
--------------------------------------
Name:
-------------------------
Title:
------------------------
Date:
-----------------
Signature Guaranteed:
----------------------------------
NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatever, and must be guaranteed by a bank or trust company. Officers of
a corporation and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.
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17
INVESTMENT REPRESENTATION STATEMENT
PURCHASER:
-------------------------------------------
COMPANY: NEWSREAL, INC.
SECURITIES: Warrant to purchase shares of Common Stock
------------
DATE:
----------------
In connection with the purchase of the above-listed Securities, the undersigned,
the Purchaser, represents to the Company the following:
(a) The undersigned is sufficiently aware of the Company's
business affairs and financial condition to reach an informed and knowledgeable
decision to acquire the Securities. The undersigned is purchasing these
Securities for its own account for investment purposes only and not with a view
to, or for the resale in connection with, any "distribution" thereof for
purposes of the Securities Act of 1933, as amended (the "Securities Act").
(b) The undersigned understands that the Securities have not been
registered under the Securities Act in reliance upon a specific exemption
therefrom, which exemption depends upon, among other things, the bona fide
nature of its investment intent as expressed herein. In this connection, the
undersigned understands that, in the view of the Securities and Exchange
Commission (the "SEC"), the statutory basis for such exemption may be
unavailable if its representation was predicated solely upon a present intention
to hold these Securities for the minimum capital gains period specified under
tax statutes for a deferred sale, for or until an increase or decrease in the
market price of the Securities, or for a period of one year or any other fixed
period in the future.
(c) The undersigned further understands that the Securities must
be held indefinitely unless subsequently registered under the Securities Act or
unless an exemption from registration is otherwise available (such as Rule 144
under the Securities Act). In addition, the undersigned understands that the
certificate evidencing the Securities may be imprinted with a legend which
prohibits the transfer of the Securities unless they are registered or such
registration is not required in the opinion of counsel for the Company.
(d) The undersigned is familiar with the provisions of Rule 144,
promulgated under the Securities Act, which, in substance, permits limited
public resale of "restricted securities" acquired, directly or indirectly, from
the issuer thereof (or from an affiliate of such issuer), in a non-public
offering subject to the satisfaction of certain conditions, including, among
other things: (1) The availability of certain public information about the
Company; (2) the resale occurring not less than one year after the party has
purchased, and made full payment for, within the meaning of Rule 144, the
securities to be
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sold; and, in the case of an affiliate, or of a non-affiliate who has held the
securities less than three years; and (3) the sale being made through a broker
in an unsolicited "broker's transaction" or in transactions directly with a
market maker, as said term is defined under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and the amount of securities being sold during
any three month period not exceeding the specified limitation stated therein, if
applicable. There can be no assurances that the requirements of Rule 144 will be
met, or that the Securities will ever be saleable.
(e) The undersigned further understands that at the time the
undersigned wishes to sell the Securities there may be no public market upon
which to make such a sale, and that, even if such a public market then exists,
the Company may not be satisfying the current public information requirements of
Rule 144, and that, in such event, the undersigned would be precluded from
selling the Securities under Rule 144 even if the two-year minimum holding
period has been satisfied.
(f) The undersigned further understands that in the event all of
the applicable requirements of Rule 144 are not satisfied registration under the
Securities Act, compliance with some other registration exemption or the
notification to the Company of the proposed disposition by it and the furnishing
to the Company of (i) detailed information regarding the disposition, and (ii)
opinion of its counsel to the effect that such disposition will not require
registration (the undersigned understands such counsel's opinion must concur
with the opinion by counsel for the Company and the undersigned must have been
informed of such compliance) will be required and that, notwithstanding the fact
that Rule 144 is not exclusive, the Staff of the SEC has expressed its opinion
that person proposing to sell private placement securities other than in a
registered offering and otherwise than pursuant to Rule 144 will have a
substantial burden of proof in establishing that an exemption from registration
is available for such offers or sales, and that such persons and their
respective brokers who participate in such transactions do so at their own risk.
Signature of Purchaser:
By:
------------------------
Name:
Title:
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