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Exhibit 10.1
WARRANT TO PURCHASE COMMON STOCK
OF
DAY RUNNER, INC.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT
WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH
SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
RELATING THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
Warrant to Purchase
____________ Shares of Common Stock
DAY RUNNER, INC.
INCORPORATED UNDER THE LAWS OF THE STATE
OF DELAWARE
Void after August 19, 2007
THE WARRANT evidenced by this Certificate has been issued for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged.
THIS CERTIFICATE evidences the right of ____________________ (the
"Holder") to purchase ____________ shares of Common Stock, par value $0.001 per
share (the "Shares"), of Day Runner, Inc., a Delaware corporation (the
"Company"), at a price of $33.75 per Share, subject, however, to the terms and
conditions hereinafter set forth.
1. Definitions. As used in this Certificate:
(a) Warrant" shall mean the rights evidenced by this Certificate.
(b) "Warrant Price" shall mean $33.75, as adjusted in accordance with
Section 5 hereof.
2. Term of Warrant. The Warrant may be exercised only during the period
commencing on August 19, 1997 through the close of business on August 19, 2007
(the
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"Warrant Term") and may be exercised only in accordance with the terms and
conditions hereinafter set forth.
3. Exercise of Warrant. The Warrant shall be exercisable as follows:
(a) Right to Exercise. The Warrant shall immediately vest and be
exercisable in full.
(b) Method of Exercise; Payment; Issuance of New Warrant; Transfer
and Exchange. The Warrant may be exercised by the Holder, in whole or in part,
by the surrender of this Certificate, properly endorsed, with the form of
subscription attached to this Certificate duly executed by the Holder, at the
principal office of the Company, and by the payment to the Company by certified
or cashier's check of the then applicable Warrant Price. In the event of any
exercise of the Warrant, certificates for the Shares so purchased shall be
delivered to the Holder within a reasonable time after the Warrant has been so
exercised and, unless the Warrant has expired, a new certificate representing
the right to purchase the number of Shares, if any, with respect to which this
Warrant shall not then have been exercised shall also be issued to the Holder
within such time. All such new certificates shall be dated the date hereof and
shall be identical to this Certificate except as to the number of Shares
issuable pursuant thereto.
(c) Restrictions on Exercise. The Warrant may not be exercised if the
issuance of the Shares upon such exercise would constitute a violation of any
applicable federal or state securities laws or other laws or regulations. As a
condition to the exercise of the Warrant, the Company may require the Holder to
make such representations and warranties to the Company as may be required by
applicable law or regulation.
4. Shares Fully Paid; Reservation of Shares. The Company covenants and
agrees that all Shares will, upon issuance and payment in accordance herewith,
be fully paid, validly issued and nonassessable. The Company further covenants
and agrees that during the Warrant Term the Company will at all times have
authorized and reserved for the purpose of issue upon exercise of the Warrant at
least the maximum number of Shares as are issuable upon the exercise of the
Warrant.
5. Adjustment of Purchase Price and Number of Shares. The number and
kind of securities purchasable upon the exercise of the Warrant and the Warrant
Price shall be subject to adjustment from time to time upon the happening of
certain events, as follows:
(a) Consolidation, Merger or Reclassification. If the Company at any
time while the Warrant remains outstanding and unexpired shall consolidate with
or merge into any other corporation, or sell all or substantially all of its
assets to another corporation, or reclassify or in any manner change the
securities then purchasable upon the exercise of the Warrant (any of which shall
constitute a "Reorganization"), then lawful and adequate provision shall be made
whereby this Certificate shall thereafter evidence the right to purchase such
number and kind of securities and other property as would have been issuable or
distributable on account of such Reorganization upon or with respect to the
securities which were purchasable or would have become purchasable under the
Warrant immediately prior to such Reorganization. The Company
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shall not effect any such Reorganization unless prior to or simultaneously with
the consummation thereof the successor corporation (if other than the Company)
resulting from such Reorganization shall assume by written instrument executed
and mailed or delivered to the Holder, at the last address of the Holder
appearing on the books of the Company, the obligation to deliver to the Holder
such shares of stock, securities or assets as, in accordance with the foregoing
provisions, the Holder may be entitled to purchase. Notwithstanding anything in
this Section 5(a) to the contrary, the prior two sentences shall be inoperative
and of no force and effect if upon the completion of any such Reorganization the
stockholders of the Company immediately prior to such event do not own at least
50% of the equity interest of the corporation resulting from such
Reorganization, in which case the Warrant or any unexercised portion thereof
shall expire upon the completion of such Reorganization if the notice required
by Section 5(e) hereof has been duly given.
(b) Subdivision or Combination of Shares. If the Company at any time
while the Warrant remains outstanding and unexpired shall subdivide or combine
its Common Stock, the Warrant Price shall be adjusted to that price determined
by multiplying the Warrant Price in effect immediately prior to such subdivision
or combination by a fraction (i) the numerator of which shall be the total
number of shares of Common Stock outstanding immediately prior to such
subdivision or combination and (ii) the denominator of which shall be the total
number of shares of Common Stock outstanding immediately after such subdivision
or combination.
(c) Certain Dividends and Distributions. If the Company at any time
while the Warrant is outstanding and unexpired shall take a record of the
holders of its Common Stock for the purpose of:
(i) Stock Dividends. Entitling them to receive a dividend
payable in, or other distribution without consideration of, Common
Stock, then the Warrant Price shall be adjusted to that price
determined by multiplying the Warrant Price in effect immediately
prior to each dividend or distribution by a fraction (A) the
numerator of which shall be the total number of shares of Common
Stock outstanding immediately prior to such dividend or distribution
and (B) the denominator of which shall be the total number of shares
of Common Stock outstanding immediately after such dividend or
distribution; or
(ii) Distribution of Assets, Securities, etc. Making any
distribution without consideration with respect to its Common Stock
(other than a cash dividend) payable other than in its Common Stock,
the Holder shall, upon the exercise hereof, be entitled to receive,
in addition to the number of Shares receivable upon such exercise,
and without payment of any additional consideration therefor, such
assets or securities as would have been payable to the Holder as
owner of that number of Shares receivable by exercise of the Warrant
had the Holder been the holder of record of such Shares on the record
date for such distribution, and an appropriate provision therefor
shall be made a part of any such distribution.
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(d) Adjustment of Number of Shares. Upon each adjustment in the
Warrant Price pursuant to Subsections (b) or (c)(i) of this Section 5, the
number of Shares purchasable hereunder shall be adjusted to that number
determined by multiplying the number of Shares purchasable upon the exercise of
the Warrant immediately prior to such adjustment by a fraction, the numerator of
which shall be the Warrant Price immediately prior to such adjustment and the
denominator of which shall be the Warrant Price immediately following such
adjustment.
(e) Notice. In case at any time during the Warrant Term:
(i) The Company shall pay any dividend payable in stock
upon its Common Stock or make any distribution, excluding a cash
dividend, to the holders of its Common Stock;
(ii) The Company shall offer for subscription pro rata to
the holders of its Common Stock any additional shares of stock of any
class or other rights;
(iii) There shall be any reclassification of the Common
Stock of the Company, or consolidation or merger of the Company with,
or sale of all or substantially all of its assets to, another
corporation; or
(iv) There shall be a voluntary or involuntary
dissolution, liquidation or winding up of the Company;
then, in any one or more of such cases, the Company shall give to the Holder at
least ten days' prior written notice (or, in the event of notice pursuant to
Section 5(e)(iii), at least 30 days' prior written notice) of the date on which
the books of the Company shall close or a record shall be taken for such
dividend, distribution or subscription rights or for determining rights to vote
in respect to any such reclassification, consolidation, merger, sale,
dissolution, liquidation or winding up. Such notice shall also specify, in the
case of any such dividend, distribution or subscription rights, the date on
which the holders of Common Stock shall be entitled thereto, and such notice
shall also specify the date on which the holders of Common Stock shall be
entitled to exchange their Common Stock for securities or other property
deliverable upon such reclassification, consolidation, merger, sale,
dissolution, liquidation or winding up, as the case may be. Each such written
notice shall be given personally or by first-class, registered or certified mail
or similar delivery service, postage prepaid, addressed to the Holder at the
address of the Holder as shown on the books of the Company.
(f) No Change in Certificate. The form of this Certificate need not
be changed because of any adjustment in the Warrant Price or in the number of
Shares purchasable upon exercise of any or all of the Warrant. The Warrant Price
or the number of Shares shall be considered to have been so changed as of the
close of business on the date of adjustment.
6. Fractional Shares. No fractional Shares will be issued in connection
with any exercise of the Warrant, rather, in lieu of such fractional Shares, the
Company shall make a cash payment therefor upon the basis of the fair market
value of the Shares at the time of such exercise, as determined in good faith by
the Company's Board of Directors.
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7. Transfer and Exchange of Warrant. Subject to the terms hereof,
including, without limitation, Section 8, the Warrant and all rights hereunder
are transferable, in whole or in part, on the books of the Company maintained
for such purpose at its principal office referred to above by the registered
holder hereof in person or by its duly authorized attorney, upon surrender of
the Warrant properly endorsed and upon payment of any necessary transfer tax or
other governmental charge imposed upon such transfer. Upon any partial transfer,
the Company will issue and deliver to such holder a new Warrant or Warrants with
respect to the shares of Common Stock not so transferred. Each taker and holder
of the Warrant, by taking or holding the same, consents and agrees that the
Warrant when endorsed in blank shall be deemed negotiable and that when the
Warrant shall have been so endorsed, the holder hereof may be treated by the
Company and all other persons dealing with the Warrant, as the absolute owner
hereof for any purpose and as the person entitled to exercise the rights
represented hereby, or to the transfer hereof on the books of the Company, any
notice to the contrary notwithstanding; but until such transfer on such books,
the Company may treat the registered holder hereof as the owner for all
purposes.
The Warrant is exchangeable at such office for a Warrant or Warrants for
the same aggregate number of shares of Common Stock, all new Warrants to
represent the right to purchase such number of shares as the holder hereof shall
designate at the time of such exchange.
8. Restrictions on Transfer of Warrant. The Holder, by acceptance
hereof, agrees that, absent an effective notification under Regulation A or a
registration statement, in either case under the Securities Act of 1933,
covering the disposition of the Warrant or Common Stock issued, or issuable upon
exercise hereof, such Holder will not sell, transfer, pledge or hypothecate any
or all of such Warrant or Common Stock, as the case may be, unless such sale or
transfer will be exempt from the registration and prospectus delivery
requirements of the Securities Act of 1933 and applicable state securities laws,
and such Holder consents to the Company making a notification on its records or
giving instructions to any transfer agent of the Warrant or such Common Stock in
order to implement such restriction on transferability.
9. No Rights as Stockholder. The holder of the Warrant, as such, shall
not be entitled to vote or receive dividends or be considered a stockholder of
the Company for any purpose, nor shall anything in the Warrant be construed to
confer on such holder, as such, any rights of a stockholder of the Company or
any right to vote, give or withhold consent to any corporate action, to receive
notice of meetings of stockholders, to receive dividends or subscription rights
or otherwise.
10. Miscellaneous Provisions.
(a) Replacement. On receipt of evidence reasonably satisfactory to
the Company of the loss, theft, destruction or mutilation of the Warrant and, in
the case of loss, theft or destruction, on delivery of any indemnity agreement
or bond reasonably satisfactory in form and amount to the Company or, in the
case of mutilation, on surrender and cancellation of the Warrant, the Company at
its expense will execute and deliver, in lieu of the Warrant, a new Warrant of
like tenor.
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(b) Governing Law. The Warrant shall be governed by and construed and
enforced in accordance with the internal laws, and not the laws pertaining to
choice or conflicts of laws, of the State of Delaware.
Dated as of August 19, 1997.
DAY RUNNER, INC.
By: Mark A. Vidovich
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Mark A. Vidovich,
Chief Executive Officer
ATTEST:
Dennis K. Marquardt
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Dennis K. Marquardt, Secretary
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DAY RUNNER, INC.
SUBSCRIPTION FORM
(To be completed and signed only upon exercise of the Warrant)
TO: Day Runner, Inc.
15295 Alton Parkway
Irvine, CA 92718
Attention: Secretary
The undersigned, the holder of the attached Warrant, hereby irrevocably
elects to exercise the right of purchase represented by such Warrant for, and to
purchase thereunder, _______* shares of Day Runner, Inc. Common Stock and
herewith makes payment of $___________ for those shares, and requests that the
certificate(s) for those shares be issued in the name of and delivered to:
(Please print name and address)
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Dated:
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Signature
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Print Name
* Insert here the number of shares called for on the face of the Warrant
(or in the case of partial exercise, that portion as to which the Warrant is
being exercised), without making any adjustment for additional Common Stock or
any other securities or property which, under the adjustment provisions of the
Warrant, may be deliverable upon exercise.
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SCHEDULE OF WARRANTHOLDERS
No. of Shares
Name of Officer Subject to Warrant
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Mark Vidovich 15,000
Dennis Marquardt 15,000
Dennis Baglama 15,000
Ron Bianco 15,000
Stan Littley 15,000
Judy Tucker 15,000
John Kirkland 5,000
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TOTAL 95,000
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