EXHIBIT 10.25
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS OF ANY STATE.
THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND
MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE
APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN
FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED
TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.
NOOSH, Inc.
Warrant for the Purchase of Shares of Class B Common Stock
No. W-C8 958,400 Shares
FOR VALUE RECEIVED, as of April 4, 2000 (the "Effective Date"), NOOSH,
Inc., a Delaware corporation (the "Company"), with its principal office at 3401
Hillview Avenue, Palo Alto, CA 94304, hereby certifies that GE Capital Equity
Investments, Inc. (the "Holder") is entitled, subject to the provisions of this
Warrant, to purchase from the Company, at such times and in such increments as
set forth below in Section 1, during the period commencing on the applicable
Milestone Date (as defined below) and ending on the Expiration Date (as defined
in Section 12 below) nine hundred fifty-eight thousand four hundred (958,400)
fully paid and nonassessable shares of the capital stock of the Company, subject
to adjustment as hereinafter provided.
Initially, this Warrant shall entitle the Holder to purchase shares of the
Class B Common Stock, par value $0.001 per share, of the Company (the "Class B
Common Stock"). Upon the earlier of (i) the date one year after the Effective
Date and (ii) the date 180 days after an IPO (as defined in Section 13 below),
the shares purchasable upon exercise of this Warrant shall change from such
Class B Common Stock to Common Stock, par value $0.001 per share, of the Company
(the "Common Stock"), notwithstanding the twenty-five percent (25%) of the Class
B Common Stock which may converted to Common Stock ninety (90) days after an IPO
under the terms of the Investor Rights Agreement (as defined in Section 7
below), and, this Warrant, to the extent then unexercised, shall thereafter be
exercisable for shares of such Common Stock. The shares of Class B Common Stock
or Common Stock, as the case may be, issuable upon exercise of this Warrant, as
adjusted from time to time pursuant to the terms of this Warrant, are
hereinafter sometimes referred to as the "Warrant Shares." The number of
Warrant Shares to be received upon the exercise of this Warrant and the price to
be paid per share upon such exercise are subject to adjustment from time to time
as hereinafter set forth.
1.
The Holder may purchase such Warrant Shares at the price per share of
thirteen dollars ($13.00) (as appropriately adjusted pursuant to Section 8
hereof) on an increment by increment basis as set forth below in Section 1 (the
"Exercise Price").
Section 1. Exercise of Warrant.
(a) Exercise Schedule. This Warrant may only be exercised in
increments according to the following schedule and provided that each increment
of Warrant Shares may only be exercised in whole or in part during the period
commencing upon the date of achievement of the milestone (or from the Effective
Date with respect to the First Increment) relating to such increment ("Milestone
Date") and ending on the Expiration Date:
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Number of Warrant
Shares Milestone
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First Increment 432,000 Execution and delivery to the
Company of the Print Buyer
Agreement and the License
Agreement.
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Second Increment 88,200 AV * $30 million in any period
of four consecutive months
ending on or before the date
("Milestone End Date") of
March 31, 2001.
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* greater than or equal to
2.
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Third Increment 175,000 (1) AV * $60 million in any period
of four consecutive months
ending on or before the
Milestone End Date of March
31, 2001; and
(2) On or before September 30,
2000, Holder's introducing and
endorsing the Company and the
use of the Service to at least
15 GE Retailers designated by
the Company and at least 40%
of the GE Printers (as
identified by the parties by
such date) pursuant to
Sections F1 and F2,
respectively, of the Print
Buyer Agreement
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Fourth Increment 50,000 AV * $200 million on or before
the Milestone End Date of
March 31, 2002
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Fifth Increment 75,000 AV * $400 million on or before
the Milestone End Date of
March 31, 2002
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* greater than or equal to
3.
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Sixth Increment 138,200 (1) AV * $600 million on or before
the Milestone End Date of
March 31, 2002; and
(2) On or before March 31, 2001,
Holder's introducing and
endorsing the Company and the
use of the Service to at least
30 GE Retailers designated by
Noosh and at least 80% of the
GE Printers (as identified by
the parties by such date)
pursuant to Sections F1 and
F2, respectively, of the Print
Buyer Agreement.
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Total Warrant Shares: 958,400
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(b) Certain Definitions. For the purposes of the table above, in
Section 1(a), the following definitions should apply:
(i) "Affiliate" means any person, corporation or other
entity (i) which owns more than fifty percent (50%) of the voting securities or
ownership interest of Holder ("Parent"); (ii) in which Holder, directly or
indirectly, owns more than fifty percent (50%) of the voting securities or
ownership interest; or (iii) in which Holder's Parent, directly or indirectly,
owns more than fifty percent (50%) of the voting securities or ownership
interest. Any such person, corporation or other entity shall only be considered
an "Affiliate" as such times as it means one or more of the above criteria;
provided, however, that the term "Affiliate" shall include any person,
corporation or entity which GE Capital Services, Inc. and the Company may agree
should be deemed an Affiliate pursuant to Section 1 of the Print Buyer
Agreement.
(ii) "AV" shall mean, with respect to each of the second
through sixth increments set forth above in Section 1(a), the aggregate Job
Value of Qualifying Jobs with Job Due Dates falling during the applicable period
specified in Section 1(a) for such increment, as such amount is determined in
good faith by the Company within thirty (30) days following each calendar
quarter during such period.
(iii) "GE Printers" shall be as defined in the Print Buyer
Agreement.
(iv) "GE Retailers" shall be as defined in the Print Buyer
Agreement.
(v) "Job Due Date" shall mean the due date for a Noosh Job
as entered on the Service, and as adjusted pursuant to Section 2 of the attached
Addendum A to the Print Buyer Agreement; provided, however, that to the extent
that such date for a particular Qualifying
* greater than or equal to
4.
Job is extended beyond a Milestone End Date due to performance problems with the
Service which cause an unscheduled interruption or outage of the Service, then
the applicable Job Due Date shall be deemed to occur on such Milestone End Date.
(vi) "Job Value" shall mean the applicable dollar value for a Noosh
Job as entered on the Service.
(vii) "License Agreement" shall mean that certain license agreement by
and between the Company and GE Capital Services, Inc. dated as of the Effective
Date.
(viii) "Noosh Job" shall be as defined in the Print Buyer Agreement.
(ix) "Print Buyer Agreement" shall mean that certain print buyer
agreement by and between Company and GE Capital Services, Inc. dated as of the
Effective Date.
(x) "Qualifying Jobs" shall mean Noosh Jobs (i) for which Holder or
its Affiliates act as users of the Service in the capacity of a "Buyer", as
defined in the Print Buyer Agreement or (ii) for which customers of Holder or
any Affiliate (while it remains an Affiliate) act as users of the Service in the
capacity of a "Buyer", but only where an employee of Holder or any such
Affiliate also participates as a user of the Service for the purposes of such
Noosh Job and, in such capacity as a user, serves a bona fide, active role in
the processing, production and/or management of the specific tasks of such Noosh
Job.
(xi) "Service" shall be as defined in the attached Addendum A to the
Print Buyer Agreement.
(c) To exercise, Holder shall surrender to the Company at its principal
office at the address set forth in the initial paragraph hereof the Warrant (or
at such other address as the Company may hereafter notify the Holder in writing)
with the Purchase Form annexed hereto duly executed and accompanied by proper
payment of the Exercise Price in lawful money of the United States of America in
the form of a check, subject to collection, for the number of Warrant Shares
specified in the Purchase Form. Upon receipt by the Company of this Warrant and
such Purchase Form, together with proper payment of the Exercise Price, at such
office, and subject to compliance with applicable law, including any waiting
period applicable under Hart-Scott-Rodino regulations, the Holder shall be
deemed to be the holder of record of the Warrant Shares, notwithstanding that
the stock transfer books of the Company shall then be closed or that
certificates representing such Warrant Shares shall not then be actually
delivered to the Holder.
Section 2. Right to Convert Warrant into Stock: Net Issuance.
(a) Right to Convert. In addition to and without limiting the rights of the
holder under the terms of this Warrant, the holder shall have the right to
convert this Warrant or any portion thereof (the "Conversion Right") into
Warrant Shares as provided in this Section 2 pursuant to the exercise schedule,
increments, and Milestone set forth in Section 1 above. Upon exercise of the
Conversion Right with respect to a particular number of shares subject to this
Warrant (the "Converted Warrant Shares"), the Company shall deliver to the
holder (without
5.
payment by the holder of any exercise price or any cash or other consideration)
(X) that number of fully paid and nonassessable Warrant Shares equal to the
quotient obtained by dividing the value of this Warrant (or the specified
portion hereof) on the Conversion Date (as defined in subsection (b) hereof),
which value shall be determined by subtracting (A) the aggregate Exercise Price
of the Converted Warrant Shares immediately prior to the exercise of the
Conversion Right from (B) the aggregate fair market value of the Converted
Warrant Shares issuable upon exercise of this Warrant (or the specified portion
hereof) on the Conversion Date (as herein defined) by (Y) the fair market value
(as herein defined) of one (1) share of Common Stock on the Conversion Date.
Expressed as a formula, such conversion shall be computed as follows:
X = B - A
-------
Y
Where: X = the number of shares of Warrant Shares to be issued to
holder
Y = the fair market value (FMV) of one (1) share of Common
Stock
A = the aggregate Exercise Price (i.e., Converted Warrant Shares
x Exercise Price)
B = the aggregate FMV (i.e. FMV x Converted Warrant Shares)
No fractional shares shall be issuable upon exercise of the Conversion
Right, and, if the number of shares to be issued determined in accordance with
the foregoing formula is other than a whole number, the Company shall pay to the
holder an amount in cash equal to the fair market value of the resulting
fractional share on the Conversion Date (as hereinafter defined). For purposes
of Section 2 of this Warrant, shares issued pursuant to the Conversion Right
shall be treated as if they were issued upon the exercise of this Warrant.
(b) Method of Exercise. The Conversion Right may be exercised by the holder
by the surrender of this Warrant at the principal office of the Company together
with a written statement specifying that the holder thereby intends to exercise
the Conversion Right and indicating the number of shares subject to this Warrant
which are being surrendered (referred to in subsection (a) hereof as the
Conversion Warrant Shares) in exercise of the Conversion Right. Subject to
compliance with applicable law, including any waiting period applicable under
Hart-Scott-Rodino regulations, such conversion shall be effective upon receipt
by the Company of this Warrant together with the aforesaid written statement, or
on such later date as is specified therein (the "Conversion Date"), and, at the
election of the holder hereof, may be made contingent upon an IPO (as defined in
Section 13 below) or a Change in Control (which for the purposes of this Warrant
shall mean (i) the sale of all or substantially all of the assets of the
Company, or (ii) the closing date of a merger or consolidation of the Company
with or into any other entity, including a reverse triangular merger involving
the Company (other than a merger or consolidation in which the holders of the
voting power of the Company immediately prior to such consolidation or merger
hold a majority of the surviving or resulting entity immediately following such
6.
consolidation or merger)). Certificates for the shares issuable upon exercise of
the Conversion Right and, if applicable, a new warrant evidencing the balance of
the shares remaining subject to this warrant, shall be issued as of the
Conversion Date and shall be delivered to the holder as soon as possible.
(c) Determination of Fair Market Value. For purposes of this Section 2,
"fair market value" of a share of Common Stock as of a particular date (the
"Determination Date") shall mean:
(i) If the Conversion Right is exercised in connection with, and
contingent upon, an IPO, and if the Company's registration statement relating to
such IPO ("Registration Statement") has been declared effective by the SEC, then
the initial "Price to Public" specified in the final prospectus with respect to
such offering.
(ii) If the Conversion Right is exercised in connection with, and
contingent upon, a Change in Control, then the portion of the purchase price
paid by the acquirer that such share would be entitled to in such transaction.
(iii) If the Conversion Right is not exercised in connection with, and
contingent upon, an IPO or a Change in Control, then as follows:
(1) If traded on a securities exchange, the fair market value of each
Warrant Share shall be deemed to be the closing price of the Common Stock on the
Determination Date; and
(2) If traded over-the-counter, the fair market value of each Warrant
Share shall be deemed to be the closing bid price of the Common Stock on the
Determination Date; and
(3) If there is no public market for the Common Stock, then fair
market value shall be determined in good faith by an independent third party
experienced in the valuation of such securities or property selected in good
faith by the Board of Directors or a committee thereof and reasonably acceptable
to the holders of a majority of the Warrant Shares.
Section 3. Reservation of Shares. The Company hereby agrees that at all
times there shall be reserved for issuance and delivery upon exercise of this
Warrant all shares of its Class B Common Stock or Common Stock, as applicable,
or other shares of capital stock of the Company from time to time issuable upon
exercise of this Warrant. All such shares shall be duly authorized and, when
issued upon such exercise in accordance with the terms of this Warrant, shall be
validly issued, fully paid and nonassessable.
Section 4. Fractional Interest. The Company will not issue a fractional
share of Class B Common Stock or Common Stock, as applicable, upon exercise of
this Warrant. Instead, the Company will deliver its check for the current fair
market value of the fractional share, as determined in good faith by the Board
of Directors of the Company.
7.
Section 5. Payment of Taxes. The Company shall pay all taxes (other than
taxes based upon income) and other governmental charges with respect to the
issuance and delivery of the Warrant Shares, unless such tax or charge is
imposed by law upon Holder. Company shall not be required, however, to pay any
transfer tax or other similar charge imposed in connection with the issuance and
delivery of any certificate for shares of Class B Common Stock or Common Stock,
as applicable, in any name other than that of Holder, and in such case Company
shall not be required to issue or deliver any stock certificate until such tax
or other charge has been paid or it has been established to the satisfaction of
the Company that no such tax or other charge is due.
Section 6. Assignment or Loss of Warrant.
(a) The Holder of this Warrant shall not be entitled, without obtaining the
consent of the Company, to assign, by operation of law or otherwise, its
interest in this Warrant in whole or in part to any person or persons, except to
Affiliates.
(b) Upon receipt of evidence satisfactory to the Company of the loss,
theft, destruction or mutilation of this Warrant, and (in the case of loss,
theft or destruction) of indemnification satisfactory to the Company, and upon
surrender and cancellation of this Warrant, if mutilated, the Company shall
execute and deliver a new Warrant of like tenor and date.
Section 7. Rights of the Holder. The Holder shall not, by virtue hereof,
be entitled to any rights of a stockholder in the Company, either at law or
equity, and the rights of the Holder are limited to those expressed in this
Warrant and that certain Amended and Restated Investor Rights Agreement, dated
April 4, (the "Investor Rights Agreement"), of which Holder is a party. Nothing
contained in this Warrant shall be construed as conferring upon the Holder
hereof the right to vote or to consent or to receive notice as a stockholder of
the Company on any matters or with respect to any rights whatsoever as a
stockholder of the Company. No dividends or interest shall be payable or
accrued in respect of this Warrant or the interest represented hereby or the
Warrant Shares purchasable hereunder until, and only to the extent that, this
Warrant shall have been exercised in accordance with its terms.
Section 8. Adjustment of Exercise Price and Number of Shares. The number
and kind of securities purchasable upon the exercise of the Warrant and the
Exercise Price shall be subject to adjustment from time to time upon the
occurrence of certain events, as follows:
(a) Reclassification of Outstanding Securities. In case of any
reclassification, change or conversion of securities of the class issuable upon
exercise of this Warrant (other than a change in par value, or from par value to
no par value, or from no par value to par value, or as a result of a subdivision
or combination), the Company shall execute a new Warrant (in form and substance
reasonably satisfactory to the Holder of this Warrant) providing that the Holder
of this Warrant shall have the right to exercise such new Warrant and upon such
exercise to receive, in lieu of each Warrant Share theretofore issuable upon
exercise of this Warrant, the kind and amount of shares of stock, other
securities, money and property receivable upon such reclassification or change
by a holder of one Warrant Share of the same class and series. Such
8.
new Warrant shall provide for adjustments that shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Section 8. The
provisions of this subsection (a) shall similarly apply to successive
reclassification or changes.
(b) Subdivisions or Combination of Shares. If the Company at any time while
this Warrant remains outstanding and unexpired shall subdivide or combine its
Common Stock, the Exercise Price and the number of Warrant Shares issuable upon
exercise hereof shall be proportionately adjusted.
(c) Merger. If at any time prior to the Expiration Date there shall be a
merger or consolidation of the Company with or into another corporation when the
Company is not the surviving corporation, then, as part of such merger or
consolidation, lawful provision shall be made so that the Holder of the Warrant
evidenced hereby shall thereafter be entitled to receive upon exercise of rights
granted herein, during the period specified herein and upon payment of the
Exercise Price, the number of shares of stock or other securities or property of
the successor corporation resulting from such merger or consolidation, to which
a holder of the stock deliverable upon exercise of the rights granted in this
Warrant would have been entitled in such merger or consolidation if such rights
had been exercised immediately before such merger or consolidation. In any such
case, appropriate adjustment shall be made in the application of the provisions
of this Warrant with respect to the rights and interests of the Holder after the
merger or consolidation.
(d) Adjustment of Exercise Price.
(i) If the Company's outstanding shares of Series E Preferred Stock or
Series E-1 Preferred Stock are converted automatically into Common Stock or
Class B Common Stock upon an IPO pursuant to the terms of the Company's Restated
Certificate of Incorporation, then the Exercise Price shall be adjusted as of
the date of such conversion to the lesser of (i) $13.00 (as adjusted for stock
splits, stock dividends, recapitalizations and the like) or (ii) the Series E
Conversion Price or Series E-1 Conversion Price, as the case may be, in effect
as of the date of such conversion.
(ii) If at any time prior to an IPO there shall be an Asset Transfer or
Acquisition, then the Exercise Price shall be adjusted immediately prior to the
closing of such Asset Transfer or Acquisition to the lesser of (x) $13.00 (as
adjusted for stock splits, stock dividends, recapitalizations and the like) or
(y) 85% of the Acquisition Price Per Share. The terms "Acquisition Price Per
Share," "Acquisition," "Asset Transfer," "Series E Conversion Price" and "Series
E-1 Conversion Price" shall be as defined in the Restated Certificate as in
effect as of the Effective Date.
(e) Stock Dividends. If the Company at any time while this Warrant is
outstanding and unexpired shall pay a dividend payable in shares of Common Stock
(except any distribution specifically provided for in the foregoing subsections
(a) and (b)), then the Exercise Price shall be adjusted, from and after the date
of determination of stockholders entitled to receive such dividend or
distribution, to that price determined by multiplying the Exercise Price in
effect immediately prior to such date of determination by a fraction (a) the
numerator of which
9.
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 and the number of Warrant Shares subject to this
Warrant shall be proportionately adjusted.
(f) Minimum Adjustment. No adjustment in the Exercise Price of this Section
8 shall be required unless such adjustment would require an increase or decrease
of at least $.05 in such Exercise Price; provided, however, that any adjustments
which by reason of this subsection are not required to be made, shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Section 8 shall be made to the nearest cent or to the nearest share,
as the case may be.
(g) Notice of Record Date. In the event of any taking by the Company of a
record of its stockholders for the purpose of determining stockholders who are
entitled to receive payment of any dividend (other than a cash dividend) or
other distribution, any right to subscribe for, purchase or otherwise acquire
any share of any class or any other securities or property, or to receive any
other right, or for the purpose of determining stockholders who are entitled to
vote in connection with any proposed merger or consolidation of the Company with
or into any other corporation, or any proposed sale, lease or conveyance of all
or substantially all of the assets of the Company, or any proposed liquidation,
dissolution or winding up of the Company, the Company shall mail to the Holder
of this Warrant, at least twenty (20) days prior to the date specified therein,
a notice specifying the date on which any such record is to be taken for the
purpose of such dividend, distribution or right, and the amount and character of
such dividend, distribution or right.
(h) No Adjustment Upon Exercise of Warrants. No adjustments shall be made
under any Section herein in connection with the issuance of Warrant Shares upon
exercise of the Warrants.
Section 9. Officer's Certificate. Whenever the Exercise Price shall be
adjusted as required by the provisions of Section 8, the Company shall deliver
an officer's certificate showing the adjusted Exercise Price determined as
herein provided, setting forth in reasonable detail the facts requiring such
adjustment and the manner of computing such adjustment. Each such officer's
certificate shall be signed by the chairman, president or chief financial
officer of the Company.
Section 10. No Impairment. Without the consent of Holder, the Company
shall not by any action, including, without limitation, amending its certificate
of incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such actions as may be
reasonably necessary or appropriate to protect the rights of Holder against
impairment. Without limiting the generality of the foregoing, Company will take
all such action as may be reasonably necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable shares of
Class B Common Stock or Common Stock, as applicable, upon the exercise of this
Warrant in accordance with the
10.
terms of the Warrant, including Section 1(c), including taking such action as is
reasonably necessary for the current Exercise Price to be not less than the par
value of the shares of Class B Common Stock or Common Stock, as applicable,
issuable upon exercise of this Warrant. Company will take such action as is
reasonably necessary to obtain all such authorizations, exemptions or consents
from any governmental authority having jurisdiction thereof as may be necessary
to enable Company to perform its obligations under this Warrant.
Section 11. Transfer to Comply with the Securities Act of 1933. This
Warrant may not be sold, assigned, pledged, hypothecated, encumbered or in any
other manner transferred or disposed of, in whole or in part, except to
Affiliates. The Warrant Shares, nor any interest in them, may be sold, assigned,
pledged, hypothecated, encumbered or in any other manner transferred or disposed
of, in whole or in part, except in compliance with applicable United States
federal and state securities or Blue Sky laws and the terms and conditions
hereof. The Warrant shall bear a legend in substantially the same form as the
legend set forth on the first page of this Warrant. Each certificate for Warrant
Shares issued upon exercise of this Warrant, unless at the time of exercise such
Warrant Shares are acquired pursuant to a registration statement that has been
declared effective under the Act, shall bear a legend substantially in the
following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE
SECURITIES LAWS OF ANY STATE. THESE SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED
OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE
SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. THE
ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM
AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY
PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY
APPLICABLE STATE SECURITIES LAWS.
Any certificate for any Warrant Shares issued at any time in exchange or
substitution for any certificate for any Warrant Shares bearing such legend
(except a new certificate for any Warrant Shares issued after the acquisition of
such Warrant Shares pursuant to a registration statement that has been declared
effective under the Act) shall also bear such legend unless, in the opinion of
counsel for the Company, the Warrant Shares represented thereby need no longer
be subject to the restriction contained herein. The provision of this Section 11
shall be binding upon all subsequent Holders of certificates for Warrant Shares
bearing the above legend and all subsequent Holders of this Warrant, if any. In
addition in connection with the issuance of this Warrant, the Holder
specifically represents to the Company by acceptance of this Warrant as follows:
(a) The Holder is aware of the Company's business affairs and financial
condition, and has acquired information about the Company sufficient to reach an
informed and
11.
knowledgeable decision to acquire this Warrant. The Holder is acquiring this
Warrant for its own account for investment purposes only and not with a view to,
or for the resale in connection with, any "distribution" thereof in violation of
the Act.
(b) The Holder is a "qualified institutional buyer" as defined in Rule 144A
under the Act.
(c) The Holder understands that this Warrant has not been registered under
the Act in reliance upon a specific exemption therefrom, which exemption depends
upon, among other things, the bona fide nature of the Holder's investment intent
as expressed herein.
(d) The Holder further understands that this Warrant must be held
indefinitely unless subsequently registered under the Act and qualified under
any applicable state securities laws, or unless exemptions from registration and
qualification are otherwise available. Moreover, the Holder understands that the
Company is under no obligation to register and qualify this Warrant.
(e) The Holder is aware of the provisions of Rule 144 promulgated under the
Act, which, in substance, permit 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, if applicable, including, among other
things: The availability of certain public information about the Company, the
resale occurring not less than one year after the party has purchased and paid
for the securities to be sold (unless the securities have been acquired pursuant
to the net issuance provisions of Section 2 in which case the securities may
generally be sold one year from the date of this Warrant); 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) and the amount of securities being sold during
any three month period not exceeding the specified limitations stated therein.
(f) The Holder further understands that at the time it wishes to sell this
Warrant 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 Holder may be precluded from selling this Warrant under Rule 144 even if the
one year minimum holding period had been satisfied.
(g) The Holder further understands that in the event all of the
requirements of Rule 144 are not satisfied, registration under the Act,
compliance with Regulation A, or some other registration exemption will be
required; and that, notwithstanding the fact that Rule 144 is not exclusive, the
staff of the Securities and Exchange Commission (the "SEC") has expressed its
opinion that persons 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.
12.
Section 12. Expiration Date. This Warrant shall expire and shall be wholly
void and have no effect after 5:00 p.m. on April 3, 2004 (the "Expiration
Date").
Section 13. Market Standoff. The holder of this Warrant, by acceptance
hereof, agrees that such holder will not, without the prior written consent of
the lead underwriter of the initial public offering of the Common Stock of the
Company pursuant to a registration statement filed under the Act (the "IPO"),
directly or indirectly offer to sell, contract to sell (including, without
limitation, any short sale), grant any option for the sale of, acquire any
option to dispose of, or otherwise dispose of any Warrant Shares, or securities
into which such Warrant Shares are converted, for a period of 180 days following
the day on which the registration statement filed on behalf of the Company in
connection with the IPO shall become effective by order of the SEC; provided,
however, that the foregoing market standoff shall apply only to the extent that
holders of the Company's Series C Preferred Stock are subject to the same
restrictions.
Section 14. Governing Law. This Warrant shall be construed and enforced in
accordance with, and the right of the parties shall be governed by, the laws of
State of Delaware, excluding its rules governing conflicts of laws.
Section 15. Modification and Waiver. Neither this Warrant nor any term
hereof may be amended, waived, discharged or terminated other than by an
instrument in writing signed by the Company and by the Holder hereof.
Section 16. Notices. Any notice, request or other document required or
permitted to be given or delivered to the Holder hereof or the Company shall be
delivered or shall be sent by certified mail, postage prepaid, to each such
Holder at its address as shown on the books of the Company or to the Company at
the address indicated therefor in the first paragraph of this Warrant.
Section 17. Descriptive Headings. The description headings of the several
sections and paragraphs of this Warrant are inserted for convenience only and do
not constitute a part of this Warrant.
Section 18. Entire Agreement. This Warrant and the Investor Rights
Agreement constitute the entire agreement between the parties pertaining to the
subject matter herein and supersedes all prior and contemporaneous agreements,
representation and undertakings of the parties.
13.
IN WITNESS WHEREOF, the Company has duly caused this Warrant to be signed
by a duly authorized officer as of the Effective Date.
NOOSH, Inc.
By: /s/ Ofer Ben-Shachar
----------------------
Name: Ofer Ben-Shachar
Title: President and Chief Executive Officer
ACCEPTED AND AGREED TO:
GE CAPITAL EQUITY INVESTMENTS, INC.
By: /s/ Jerome C. Marcus
----------------------
Name: Jerome C. Marcus
Title: Managing Director
14.