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EXHIBIT 4.5
THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT FILED UNDER SUCH ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER SUCH ACT.
October 14, 1999
WARRANT
TO SUBSCRIBE FOR AND PURCHASE COMMON STOCK OF
MUSTANG.COM, INC.
VOID AFTER 5:00 P.M., CALIFORNIA TIME, ON OCTOBER 10, 2004,
OR IF NOT A BUSINESS DAY, AS DEFINED HEREIN, AT 5:00 P.M.,
CALIFORNIA TIME, ON THE IMMEDIATELY PRECEDING BUSINESS DAY
No. Placement Agent 1
THIS CERTIFIES that, for good and valuable consideration, FIRST SECURITY
VAN KASPER ("FSVK"), or registered assigns (the "Warrantholder"), is entitled to
subscribe for and purchase from , MUSTANG.COM, INC., a California corporation
(the "Company"), at a price of $7.3125 per share (such price, as from time to
time to be adjusted as hereinafter provided, being hereinafter called the
"Warrant Price"), at any time and from time to time prior to the Expiration Date
(as defined below), up to 57,443 fully paid, nonassessable shares of Common
Stock, no par value, of the Company ("Common Stock"), subject, however, to the
provisions and upon the terms and conditions hereinafter set forth, including
without limitation the provisions of Section 2 hereof. "Expiration Date" shall
mean 5:00 P.M., California time, on October 10, 2004, , or if not a Business
Day, as defined herein, at 5:00 P.M., California time, on the immediately
preceding business day. "Business Day" shall mean a day other than a Saturday,
Sunday or other day on which banks in the State of California are authorized by
law to remain closed.
SECTION 1. EXERCISE OF WARRANT
(a) CASH EXERCISE
This Warrant may be exercised, at any time and from time to time prior
to the Expiration Date, by the Warrantholder, in whole or in part (but not as to
a fractional share of Common Stock and in no event for less than 500 shares
(unless less than an aggregate of 500 shares are then purchasable under all
outstanding Warrants held by a Warrantholder)), by the completion of the
subscription form attached hereto and by the surrender of this Warrant (properly
endorsed) at the Company's offices at 6200 Lake Ming Road, Bakersfield, CA 93306
(or at such other location in the United States as the Company may designate by
notice in writing to the Warrantholder at the address of the Warrantholder
appearing on the books of the Company), and by payment to the Company of the
Warrant Price, in cash or by certified or official bank check, for each share
being purchased.
(b) NET EXERCISE
Notwithstanding anything to the contrary contained in Section 1(a) and
subject to the last sentence of this Section 1(b), the Warrantholder may elect
to exercise this Warrant and receive shares on a "net exercise" basis in an
amount equal to the value of this Warrant by delivery of the subscription form
attached hereto and surrender of this Warrant at the principal office of the
Company, in which event the Company shall issue to Holder a number of shares
computed using the following formula:
X = (P)(Y)(A-B)
-----------
A
Where: X = the number of shares of Common Stock to be issued
to Holder.
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P = the portion of the Warrant being exercised.
Y = the number of shares of Common Stock issuable
upon exercise of this Warrant if the Warrant were
exercised for cash.
A = the Current Market Price (as determined pursuant
to Section 1(d)) of one share of Common Stock.
B = Warrant Price.
Notwithstanding anything in this Warrant to the contrary, the provisions of this
Section 1(b) shall not be applicable if, at the time of exercise of this
Warrant, a registration statement under the Securities Act of 1933 covering the
resale of the shares issued upon such exercise is in effect.
(c) PROCEDURE FOR EXERCISE
In the event of any exercise of the rights represented by this Warrant,
a certificate or certificates for the total number of whole shares of Common
Stock so purchased, registered in the name of the Warrantholder, shall be
delivered to the Warrantholder within a reasonable time, not exceeding five
Business Days, after the rights represented by this Warrant shall have been so
exercised; and, unless this Warrant has expired, a new Warrant representing the
number of shares (except a remaining fractional share), if any, with respect to
which this Warrant shall not then have been exercised shall also be issued to
the Warrantholder within such time. With respect to any such exercise, the
Warrantholder shall for all purposes be deemed to have become the holder of
record of the number of shares of Common Stock evidenced by such certificate or
certificates from the date on which this Warrant was surrendered and if exercise
is pursuant to Section 1(a), payment of the Warrant Price was made, irrespective
of the date of delivery of such certificate, except that, if the date of such
surrender and payment is a date on which the stock transfer books of the Company
are closed, such person shall be deemed to have become the holder of such shares
at the close of business on the next succeeding date on which the stock transfer
books are open. No fractional shares shall be issued upon exercise of this
Warrant and no payment or adjustment shall be made upon any exercise on account
of any cash dividends on the Common Stock issued upon such exercise. If any
fractional interest in a share of Common Stock would, except for the provisions
of this Section 1, be delivered upon any such exercise, the Company, in lieu of
delivering the fractional share thereof, shall pay to the Warrantholder an
amount in cash equal to the Current Market Price of such fractional interest, as
determined below.
(d) CURRENT MARKET PRICE
For any computation hereunder, the "Current Market Price" per share of
Common Stock on any date shall be deemed to be the average of the daily Market
Price per share for the 30 consecutive Trading Days commencing 45 Trading Days
before the date in question. "Market Price" is defined as the closing bid price
of such security on the principal United States securities exchange or trading
market on which such security is listed or traded as reported by the Research
Service of Nasdaq Trading and Market Services (or a comparable reporting service
of national reputation), or if the foregoing does not apply, the last reported
sale price of such security in the over-the-counter market on the electronic
bulletin board for such security as reported by Nasdaq, or, if no sale price is
reported for such security by Nasdaq, the average of the bid prices of any
market makers for such security as reported in the "pink sheets" by the National
Quotation Bureau, Inc. If Market Price cannot be established as described above,
Market Price shall be the fair market value of the Common Stock as determined in
good faith by the Board of Directors. The term "Trading Day" shall mean a day on
which Nasdaq or the principal national securities exchange on which the Common
Stock is listed or admitted to trading is open for the transaction of business.
SECTION 2. ADJUSTMENTS
The Warrant Price and the number and kind of shares issuable hereunder
shall be subject to adjustment from time to time upon the happening of certain
events as provided in this Section 2.
(a) ADJUSTMENTS
(1) If at any time prior to the exercise of this Warrant in full,
the Company shall (A) declare a dividend or make a distribution on the Common
Stock payable in shares of its capital stock (whether shares of Common Stock or
of capital stock of any other class); (B) subdivide, reclassify or recapitalize
its outstanding
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Common Stock into a greater number of shares; (C) combine, reclassify or
recapitalize its outstanding Common Stock into a smaller number of shares; or
(D) issue any shares of its capital stock by reclassification of its Common
Stock (excluding any such reclassification in connection with a consolidation or
a merger), the Warrant Price in effect at the time of the record date of such
dividend, distribution, subdivision, combination, reclassification or
recapitalization shall be adjusted so that the Warrant Price shall be equal to
the price determined by multiplying the Warrant Price in effect immediately
prior to such event by a fraction, the numerator of which shall be (x) the total
number of outstanding shares of Common Stock of the Company immediately prior to
such event; and the denominator of which shall be (y) the total number of
outstanding shares of Common Stock of the Company immediately after such event
and, as so adjusted or readjusted, the Warrant Price shall remain in effect
until a further adjustment or readjustment is required by this Section 2.
Whenever the Warrant Price is adjusted pursuant to this Section 2(a)(1), the
shares issuable hereunder shall simultaneously be adjusted by multiplying the
number of shares issuable upon exercise of the Warrant immediately prior to such
event by the Warrant Price in effect on the date thereof and dividing the
product so obtained by the Warrant Price resulting from such adjustment. Any
adjustment required by this Section 2(a)(1) shall be made successively
immediately after the record date, in the case of a dividend or distribution, or
the effective date, in the case of a subdivision, combination, reclassification
or recapitalization, to allow the purchase of such aggregate number and kind of
shares.
(2) If at any time prior to the exercise of this Warrant in full,
the Company shall make a distribution to all holders of the Common Stock of
stock of a subsidiary or other corporation or securities convertible into or
exercisable for such stock, then in lieu of an adjustment in the Warrant Price
or the number of shares of Common Stock purchasable upon the exercise of this
Warrant, the Warrantholder, upon the exercise hereof at any time after such
distribution, shall be entitled to receive from the Company the stock or other
securities to which the Warrantholder would have been entitled if the
Warrantholder had exercised this Warrant immediately prior thereto, all subject
to further adjustment as provided in this Section 2, and the Company shall
reserve, for the life of the Warrant, such securities of such subsidiary or
other corporation; provided, however, that no adjustment in respect of dividends
or interest on such stock or other securities shall be made during the term of
this Warrant or upon its exercise.
(3) If at any time prior to the expiration of this Warrant in full,
the Company shall issue rights or warrants to all holders of Common Stock as
such entitling them to subscribe for or purchase Common Stock at a price per
share less than the Current Market Price per share on such record date, then, in
each such case the number of shares subject to this Warrant thereafter
purchasable upon the exercise of this Warrant shall be determined by multiplying
the number of shares of Common Stock theretofore purchasable upon exercise of
this Warrant by a fraction, the numerator of which shall be (x) the number of
shares of Common Stock outstanding on the date of issuance of such rights or
warrants, plus the number of additional shares of Common Stock offered for
subscription or purchase, and the denominator of which shall be (y) the number
of shares of Common Stock outstanding on the date of issuance of such rights or
warrants plus the number of shares that the aggregate offering price of the
total number of shares of Common Stock so offered would purchase at the Current
Market Price on such record date. For purposes of this Section 2(a)(3), the
issuance of rights or warrants to subscribe for or purchase securities
convertible into Common Stock shall be deemed to be the issuance of rights or
warrants to purchase the Common Stock into which such securities are convertible
at an aggregate offering price equal to the aggregate offering price of such
securities plus the minimum aggregate amount (if any) payable upon conversion of
such securities into Common Stock. In addition to the adjustment in the number
of shares in this Section 2(a)(3), the Warrant Price per share shall be
appropriately adjusted so that the aggregate Warrant Price shall remain
constant.
(4) If at any time prior to the exercise of this Warrant in full,
the Company shall distribute to all holders of its Common Stock evidence of
indebtedness of the Company or assets of the Company (excluding cash dividends
or distributions out of earned surplus) or rights or warrants to subscribe for
securities of the Company (excluding those referred to in Section 2(a)(3)
above), then in each case the Warrant Price shall be adjusted to a price
determined by multiplying the Warrant Price in effect immediately prior to such
distribution by a fraction, the numerator of which shall be (x) the then Current
Market Price per share of Common Stock on the record date for determination of
stockholders entitled to receive such distribution, less the then fair value (as
reasonably determined by the Board of Directors of the Company, whose
determination shall be conclusive) of the portion of the assets or evidences of
indebtedness so distributed or of such subscription rights or warrants which are
applicable to one share of Common stock, and the denominator of which shall be
(y) the Current Market Price per share of Common Stock; provided, however, that
if the then Current Market Price per share of Common Stock on the record date
for determination of stockholders entitled to receive such distribution is less
than the then fair value of the portion of the assets or evidence of
indebtedness so distributed or of such subscription rights or warrants which are
applicable to
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one share of Common Stock, the foregoing adjustment of the Warrant Price shall
not be made and in lieu thereof the number of shares purchasable upon exercise
of each Warrant immediately prior to such distribution shall be adjusted so that
the holder of such Warrant shall be entitled to receive upon exercise of such
Warrant the kind and number of assets, evidence of indebtedness, subscription
rights and warrants (or, in the event of the redemption of such evidence of
indebtedness, subscription rights or warrants, any cash paid in respect of such
redemption) that such Warrantholder would have owned or have been entitled to
receive in such distribution had such Warrant been exercised immediately prior
to the record date of such distribution.
(5) For purposes of any computation under this Section 2(a), the
Current Market Price per share of Common Stock on any date shall be deemed
calculated as provided in Section 1(d).
(6) No adjustment in the Warrant Price shall be required unless such
adjustment would require an increase or decrease of at least five cents ($.05)
in such price; provided, however, that any adjustments which by reason of this
Section 2(a)(6) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Section
2(a) shall be made to the nearest cent or to the nearest one hundredth of a
share, as the case may be. Notwithstanding anything in this Section 2(a) to the
contrary, the Warrant Price shall not be reduced to less than the then existing
par value of the Common Stock as a result of any adjustment made hereunder.
(7) In the event that at any time, as the result of any adjustment
made pursuant to this Section 2(a), the Warrantholder thereafter shall become
entitled to receive any securities other than Common Stock, thereafter the
number of such other securities so receivable upon exercise of this Warrant
shall be subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to the Common
Stock contained in Section 2(a).
(b) NO ADJUSTMENT FOR DIVIDENDS
Except as provided in Section 2(a) of this Agreement, no adjustment in
respect of any cash dividends shall be made during the term of this Warrant or
upon the exercise of this Warrant.
(c) PRESERVATION OF PURCHASE RIGHTS IN CERTAIN TRANSACTIONS
In case of any consolidation of the Company with or merger of the
Company into another corporation or in case of any sale or conveyance to another
corporation of the property of the Company as an entirety or substantially as an
entirety, the Company or such successor or purchasing corporation, as the case
may be, shall execute an agreement with the Warrantholder whereby the
Warrantholder shall have the right thereafter upon payment of the Warrant Price
in effect immediately prior to such action to purchase upon exercise of the
Warrant the kind and amount of shares and other securities and property which
the Warrantholder would have owned or have been entitled to receive after the
happening of such consolidation, merger, sale or conveyance had the Warrant been
exercised immediately prior to such action. The Company shall mail by first
class mail, postage prepaid, to the Warrantholder, notice of the execution of
any such agreement. Such agreement shall provide for adjustments, which shall be
as nearly equivalent as may be practicable to the adjustments provided for in
this Section 2. The provisions of this Section 2 shall similarly apply to
successive consolidations, mergers, sales or conveyances. The Warrantholder
shall be under no duty or responsibility to determine the correctness of any
provisions contained in any such agreement relating either to the kind or amount
of shares of stock or other securities or property receivable upon exercise of
warrants or with respect to the method employed and provided therein for any
adjustments.
(d) FORM OF WARRANT AFTER ADJUSTMENTS
The form of this Warrant need not be changed because of any adjustments
in the Warrant Price or the number or kind of the shares purchasable pursuant to
this Warrant, and Warrants theretofore or thereafter issued may continue to
express the same price and number and kind of shares as are stated in this
Warrant, as initially issued; provided, however, that the Company may, at any
time in its sole discretion (which shall be conclusive), make any change in the
form of Warrant certificate that it may deem appropriate and that does not
affect the substance thereof. Any Warrant certificate thereafter issued, whether
upon registration of transfer of, or in exchange or substitution for, an
outstanding Warrant certificate may be in the form so changed.
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(e) TREATMENT OF WARRANTHOLDER
Prior to due presentment for registration of transfer of this Warrant,
the Company may deem and treat the Warrantholder as the absolute owner of this
Warrant (notwithstanding any notation of ownership or other writing hereon) for
all purposes and shall not be affected by any notice to the contrary.
(f) NOTICE OF ADJUSTMENT
Upon any adjustment under this Section 2, then and in each such case the
Company shall give written notice thereof, by first-class mail, postage prepaid,
addressed to the Warrantholder at the address of such holder as shown on the
books of the Company, which notice shall state the Warrant Price and the number
or kind of the shares purchasable pursuant to this Warrant resulting from such
adjustment, setting forth in reasonable detail the method of calculation and the
facts upon which such calculation is based.
(g) STOCK TO BE RESERVED
The Company will at all times reserve and keep available out of its
authorized Common Stock, solely for the purpose of issuance upon the exercise of
this Warrant as herein provided, such number of shares of Common Stock as shall
then be issuable upon the exercise of this Warrant. The Company covenants that
all shares of Common Stock which shall be so issued, upon full payment of the
Warrant Price therefore or as otherwise set forth herein, shall be duly and
validly issued and fully paid and nonassessable and free from all taxes, liens
and charges with respect to the issue thereof, and, without limiting the
generality of the foregoing, the Company covenants that it will from time to
time take all such action as may be required to ensure that the par value per
share, if any, of the Common Stock is at all times equal to or less than the
effective Warrant Price. The Company will take all such action as may be
necessary to ensure that all such shares of Common Stock may be so issued
without violation of any applicable law or regulation, or of any requirement of
any national securities exchange or automated quotation system upon which the
Common Stock of the Company may be listed. The Company will not take any action
that results in any adjustment under this Section 2, if the total number of
shares of Common Stock issued and issuable after such action upon exercise of
this Warrant would exceed the total number of shares of Common Stock then
authorized by the Company's Certificate of Incorporation. The Company has not
granted and will not grant any right of first refusal with respect to shares
issuable upon exercise of this Warrant, and there are no preemptive rights
associated with such shares.
(h) ISSUE TAX
The issuance of certificates for shares of Common Stock upon exercise of
any Warrant shall be made without a charge to the Warrantholder for any issuance
tax in respect thereof, provided that the Company shall not be required to pay
any tax which may be payable in respect of any transfer involved in the issuance
and delivery of any certificate in a name other than that of the Warrantholder.
(i) CLOSING OF BOOKS
The Company will at no time close its transfer books against the
transfer of the shares of Common Stock issued or issuable upon the exercise of
this Warrant in any manner that interferes with the timely exercise of this
Warrant.
(j) DEFINITION OF COMMON STOCK
As used herein the term "Common Stock" shall mean and include the Common
Stock, par value $0.01, of the Company as authorized on the date hereof, or
shares of any class or classes resulting from any recapitalization or
reclassification thereof which are not limited to any fixed sum or percentage
and are not subject to redemption by the Company and in case at any time there
shall be more than one such resulting class, the shares of each class then so
issuable shall be substantially in the proportion which the total number of
shares of such class resulting from all such reclassification bears to the total
number of shares of all such classes resulting from all such reclassification.
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SECTION 3. REGISTRATION RIGHTS
The Company and the Warrantholder hereby adopt, incorporate and make a
part of this Agreement each of the provisions, rights, duties, obligations,
representations, conditions and responsibilities of the respective parties to
that certain Registration Rights Agreement dated as of October 14, 1999 (the
"Registration Rights Agreement") by and between the Company and the Initial
Investors (as defined in the Registration Rights Agreement) as though
Warrantholder was party to the Registration Rights Agreement as an Initial
Investor and as though such Registration Rights Agreement were fully set forth
herein with the following exceptions:
(a) As used in the Registration Rights Agreement
(i) "Investors" shall mean Warrantholder;
(ii) "Registrable Securities" shall mean the shares of Common
Stock issuable upon exercise of this Warrant and any shares of capital stock
issued or issuable, from time to time (with any adjustments), as a distribution
on or in exchange for or otherwise with respect to thereto; and
(b) The provisions of the second paragraph of Section 2(c) of the
Registration Rights Agreement entitled "Payments by the Company" shall be
inapplicable.
SECTION 4. NOTICES OF RECORD DATES
In the event of:
(a) any taking by the Company of a record of the holders of any
class of securities for the purpose of determining the holders
thereof who are entitled to receive any dividend or other
distribution (other than cash dividends out of earned surplus),
or any right to subscribe for, purchase or otherwise acquire any
shares of stock of any class or any other securities or
property, or to receive any right to sell shares of stock of any
class or any other right, or
(b) any capital reorganization of the Company, any reclassification
or recapitalization of the capital stock of the Company or any
transfer of all or substantially all the assets of the Company
to or consolidation or merger of the Company with or into any
other corporation or entity, or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company,
then and in each such event the Company will give notice to the Warrantholder
specifying (1) the date on which any such record is to be taken for the purpose
of such dividend, distribution or right and stating the amount and character of
such dividend, distribution or right, and (2) the date on which any such
reorganization, reclassification, recapitalization, transfer, consolidation,
merger, dissolution, liquidation or winding-up is to take place, and the time,
if any is to be fixed, as of which the holders of record of Common Stock will be
entitled to exchange their shares of Common Stock for securities or other
property deliverable upon such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up. Such notice shall be given at least 20 days and not more than 90
days prior to the date therein specified, and such notice shall state that the
action in question or the record date is subject to the effectiveness of a
registration statement under the Securities Act or to a favorable vote of
stockholders, if either is required. Failure to mail or receive such notice or
any defect therein shall not affect the validity of any action with respect
thereto.
SECTION 5. NO STOCKHOLDERS RIGHTS OR LIABILITIES
This Warrant shall not entitle the Warrantholder to any voting rights or
other rights as a stockholder of the Company. No provision hereof, in the
absence of affirmative action by the Warrantholder to purchase shares of Common
Stock, and no mere enumeration herein of the rights or privileges of the
Warrantholder shall give rise to any liability of such Warrantholder for the
Warrant Price or as a stockholder of the Company, whether such liability is
asserted by the Company or by creditors of the Company.
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SECTION 6. LOST, STOLEN, MUTILATED OR DESTROYED WARRANT
In case the certificate or certificates evidencing the Warrants shall be
mutilated, lost, stolen or destroyed, the Company shall, at the request of the
Warrantholder, issue and deliver in exchange and substitution for and upon
cancellation of the mutilated certificate or certificates, or in lieu of and
substitution for the certificate or certificates lost, stolen or destroyed, a
new Warrant certificate or certificates of like tenor and representing an
equivalent right or interest, but only upon receipt of evidence satisfactory to
the Company of such loss, theft or destruction of such Warrant and an agreement
of indemnity, if requested.
SECTION 7. NOTICES
All notices, requests and other communications required or permitted to
be given or delivered hereunder shall be in writing, and shall be delivered, or
shall be sent by certified or registered mail or overnight courier, postage
prepaid, or by facsimile,
(a) If to a Warrantholder or a holder of shares issued upon exercise
of this Warrant, addressed to
First Security Van Kasper
600 California Street, Suite 1700
San Francisco, CA 94108
Telephone No.: (415) 675-2490
Facsimile No.: (415) 954-8309
Attention: Ronald F. Richards
Senior Vice President
(b) If to the Company addressed to it If to the Company:
Mustang Software, Inc.
6200 Lake Ming Road
Bakersfield CA 93306
Telephone No.: (661) 873-2580
Facsimile No.: (661) 873-2474
Attention: Donald M Leonard,
Vice President Finance and
Chief Financial Officer
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with a copy to:
Freshman, Marantz, Orlanski, Cooper & Klein
9100 Wilshire Boulevard, Eighth Floor, East Tower
Beverly Hills, CA 90212-3480
Telephone No.: (310) 273-9710
Facsimile No.: (310) 274-8357
Attention: Mark A. Klein, Esq.
Each party may from time to time change the address to which notices to
it are to be delivered or mailed hereunder by notice in accordance herewith to
the other party.
SECTION 8. REPRESENTATIONS AND WARRANTIES OF WARRANTHOLDER.
(a) Acquisition for Own Account. Warrantholder is acquiring the
Warrant and the shares of Common Stock upon exercise thereof ("Securities") for
Warrantholder's own account and not with a present view towards the distribution
thereof. Warrantholder understands that Warrantholder must bear the economic
risk of this investment indefinitely, unless the Securities are registered
pursuant to the Securities Act and any applicable state securities or blue sky
laws or an exemption from such registration is available, and that the Company
has no present intention of registering any of the Securities other than as
contemplated by the Registration Rights Agreement. Notwithstanding anything in
this Section 8(a) to the contrary, by making the foregoing representation,
Warrantholder does not agree to hold the Securities for any minimum or other
specific term and reserves the right to dispose of the Securities at any time in
accordance with or pursuant to a registration statement or an exemption from
registration under the Securities Act and any applicable state securities laws.
(b) Information. Warrantholder has been furnished all materials
relating to the business, finances and operations of the Company and materials
relating to the issuance of the Securities, which have been requested by
Warrantholder. Warrantholder has been afforded the opportunity to ask questions
of the Company and has received what Warrantholder believes to be satisfactory
answers to any such inquiries. Warrantholder understands that its investment in
the Securities involves a high degree of risk.
(c). Governmental Review. Warrantholder understands that no United
States federal or state agency or any other government or governmental agency
has passed upon or made any recommendation or endorsement of the Securities.
(d) Authorization; Enforcement. Warrantholder has the requisite
power and authority to enter into and perform its obligations under this Warrant
and to purchase the shares in accordance with the terms hereof. This Warrant has
been duly and validly authorized, executed and delivered on behalf of
Warrantholder and is a valid and binding agreement of Warrantholder enforceable
against Warrantholder in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and
other laws affecting creditors' rights and remedies generally and to general
principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity).
(e) Transfer or Resale. Warrantholder understands that (i) except as
provided in the Registration Rights Agreement, the Securities have not been and
are not being registered under the Securities Act or any state securities laws,
and may not be transferred unless (A) subsequently registered thereunder, or (B)
Warrantholder shall have delivered to the Company an opinion of counsel
reasonably acceptable to the Company (which opinion shall be in form, substance
and scope customary for opinions of counsel in comparable transactions) to the
effect that the Securities to be sold or transferred may be sold or transferred
under an exemption from such registration, or (C) sold under Rule 144
promulgated under the Securities Act (or a successor rule), or (D) sold or
transferred to an employee or other affiliate of Warrantholder pursuant to an
exemption under the Securities Act; and (ii) neither the Company nor any other
person is under any obligation to register such Securities under the Securities
Act or any state securities laws or to comply with the terms and conditions of
any exemption thereunder, in each case, other than pursuant to the Registration
Rights Agreement.
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(f) Legend. Warrantholder understands that this Warrant and the
shares of Common Stock issuable upon exercise of this Warrant and, until such
time as the shares of Common Stock issuable upon exercise of this Warrant have
been registered under the Securities Act as contemplated by the Registration
Rights Agreement or otherwise may be sold by Warrantholder under Rule 144, the
certificates for the shares may bear a restrictive legend in substantially the
following form:
These securities have not been registered under the Securities
Act of 1933, as amended, or the securities laws of any state
of the United States. The securities represented hereby may
not be offered or sold in the absence of an effective
registration statement for the securities under applicable
securities laws unless offered, sold or transferred under an
available exemption from the registration requirements of
those laws.
The legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of any Security upon which it is
stamped, if (a) the sale of such Security is registered under the Securities Act
or (b) in connection with the resale of such Security, such holder provides the
Company with an opinion of counsel, in form, substance and scope customary for
opinions of counsel in comparable transactions, to the effect that a public sale
or transfer of such Security may be made without registration under the
Securities Act or (c) such holder provides the Company with reasonable
assurances that such Security can be sold under Rule 144(k). Warrantholder
agrees to sell all Securities, including those represented by a certificate(s)
from which the legend has been removed, pursuant to an effective registration
statement or under an exemption from the registration requirements of the
Securities Act.
(g) Accredited Investor Status. Warrantholder is an "accredited
investor" as that term is defined in Rule 501(a) of Regulation D.
SECTION 9. AMENDMENTS AND WAIVERS
This Warrant and any term hereof may be changed, waived, discharged or
terminated only by an instrument in writing signed by the party against which
enforcement of such change, waiver, discharge or termination is sought.
SECTION 10. SEVERABILITY
If one or more provisions of this Warrant are held to be unenforceable
under applicable law, such provisions shall be excluded from this Warrant, and
the balance of this Warrant shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms.
SECTION 11. GOVERNING LAW
THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE
STATE OF CALIFORNIA WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES.
SECTION 12. HEADINGS
The headings in this Warrant are for purposes of reference only and
shall not limit or otherwise affect any of the terms hereof.
SECTION 13. COUNTERPARTS
This Warrant may be executed in any number of counterparts, each of
which shall be deemed an original but all of which together shall constitute one
and the same instrument.
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IN WITNESS WHEREOF, the Company and FSVK have executed this Warrant on
and as of the day and year first above written.
MUSTANG.COM, INC.,
a California corporation
By: ____________________________________
Donald M. Leonard
Its: Vice President, Finance and
Chief Financial Officer
Attest:
_______________________
FIRST SECURITY VAN KASPER
By: ____________________________________
____________________________________
Its:____________________________________
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SUBSCRIPTION FORM
(To be executed upon exercise of this Warrant)
Mustang Software, Inc.
6200 Lake Ming Road
Bakersfield CA 93306
Attention: Donald M Leonard, Vice President Finance and
Chief Financial Officer
The undersigned hereby irrevocably elects to exercise the right of
purchaser represented by the within Warrant for, and to purchase thereunder,
______________ shares of Common Stock, as provided for therein, and either
tenders herewith payment of the purchase price in full in the form of cash or a
certified or official bank check in the amount of $_____________ or, if the
undersigned elects pursuant to Section 1(b) of the within Warrant to convert
such Warrant into Common Stock a net issuance basis, the undersigned exercises
the within Warrant by exchange under the terms of Section 1(b).
Please issue a certificate or certificates for such Common Stock in the
name of, and pay any cash for any fractional share to:
Name:______________________________
Address:
Social
Security No:
If said number of shares shall not be all the shares purchasable under
the within Warrant, a new Warrant is to be issued in the name of said
undersigned for the balance remaining of the shares purchasable thereunder
rounded up to the next higher number of shares.
Name_______________________________
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
(To be executed only upon assignment of Warrant)
For value received, _______________________________ hereby sells,
assigns and transfers unto _______________________ the within Warrant
Certificate, together with all right, title and interest therein, and does
hereby irrevocably constitute and appoint ____________________ attorney, to
transfer said Warrant on the books of the within-named Company with respect to
the number of Warrants set forth below, with full power of substitution in the
premises:
Name(s) of
Assignee(s)/Address No. of Warrants
And if said number of Warrants shall not be all the Warrants represented by the
Warrant, a new Warrant is to be issued in the name of said undersigned for the
balance remaining of the Warrants registered by said Warrant.
Name_________________________
Dated: __________________ Signature____________________
Note: The above signature must correspond
exactly with the name on the face
of this Warrant
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