EXHIBIT 10.21
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD OR
TRANSFERRED UNLESS SUCH SALE OR TRANSFER IS IN ACCORDANCE WITH THE REGISTRATION
REQUIREMENTS OF ACT AND APPLICABLE LAWS OR SOME OTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF SUCH ACT AND APPLICABLE LAWS IS AVAILABLE WITH
RESPECT THERETO.
PREFERRED STOCK PURCHASE WARRANT
Warrant No. 1
POINTCAST INCORPORATED
Void after July 31, 2002
1. ISSUANCE. In consideration of $100, receipt of which is
hereby acknowledged, this Warrant is issued to Lighthouse Capital Partners,
L.P. by Pointcast Incorporated, a California corporation (hereinafter with its
successors called "COMPANY").
2. PURCHASE PRICE; NUMBER OF SHARES. The registered holder of
this Warrant (the "HOLDER"), commencing on the date hereof, is entitled upon
surrender of this Warrant with the subscription form annexed hereto duly
executed, at the principal office of the Company, to purchase form the Company
at a per share (the "Next Purchase Price") equal to the price per share of the
series of Preferred Stock of the Company next issued by the Company after July
1, 1995 (the "Next Preferred Stock") that number of fully paid and
nonassessable shares of Next Preferred Stock equal to $52,500 divided by the
Next Purchase Price. Notwithstanding the foregoing, if the closing sale of
the Next Preferred Stock has not occurred by December 31, 1995, the Holder
shall be entitled to purchase from the Company pursuant to the conditions set
forth above 83,758 shares of Series A Preferred Stock at $0.6268 per share
(the "Series A Purchase Price"). The Series A Preferred Stock or Next
Purchase Stock, as the case may be, shall hereafter be known as the "Preferred
Stock," and the Next Purchase Price or Series A Purchase Price, as the case
may be, shall hereafter be known as the "Purchase Price." Until such time as
this Warrant is exercised in full, or expires, the Purchase Price and the
securities issuable upon exercise of this Warrant are subject to adjustment as
hereinafter provided. The person or persons in whose name or names any
certificate representing shares of Preferred Stock is issued hereunder shall
be deemed to have become the holder of record of the shares represented
thereby as at the close of business on the date this Warrant is exercised with
respect to such shares, whether or not the transfer books of the Company shall
be closed.
3. PAYMENT OF PURCHASE PRICE. The Purchase Price may be paid (i)
in cash or by check, (ii) by the surrender by the Holder to the Company of any
promissory notes or other obligations issued by the Company, with all such notes
and obligations so surrendered being credited against the Purchase Price in an
amount equal to the principal amount thereof plus accrued interest to the date
of surrender, or by (iii) by any combination of the foregoing.
4. NET ISSUE ELECTION. The Holder may elect to receive, without
the payment by the Holder of any additional consideration, shares of Preferred
Stock equal to the value of this Warrant or any portion hereof by the
surrender of this Warrant or such portion to the Company, with the net issue
election notice annexed hereto duly executed, at the principal office of the
Company. Thereupon, the Company shall issue to the Holder such number of fully
paid and nonassessable shares of Preferred Stock as is computed using the
following formula:
Y(A-B)
X= --------
A
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where: X= the number of shares of Preferred Stock to be issued
to the Holder pursuant to this Section 4.
Y= the number of shares of Preferred Stock covered by
this Warrant in respect of which the net issues
election is made pursuant to the Section 4.
A= the fair market value of one share of Preferred Stock,
as determined in good faith by the Board, as at the time
the net issue election is made pursuant to this Section
4.
B= the Purchase Price in effect under this Warrant at the
time the net issue election is made pursuant to this
Section 4.
5. PARTIAL EXERCISE. This Warrant may be exercised in part, and
the Holder shall be entitled to receive a new warrant, which shall be dated as
of the date of this Warrant, covering the number of shares in respect of which
this Warrant shall not have been exercised.
6. FRACTIONAL SHARES. In no event shall any fractional share of
Preferred Stock be issued upon any exercise of this Warrant. If, upon exercise
of this Warrant as an entirety, the Holder would, except as provided in this
Section 6, be entitled to receive a fractional share of Preferred Stock, then
the Company shall issue the next lower number of full shares of Preferred
Stock. The Company shall pay to the Holder upon exercise the fair market
value, determined by the Board of Directors of the Company in its sole
discretion, acting reasonably, of any fractional share of Preferred Stock
otherwise issuable upon exercise of this Warrant.
7. EXPIRATION DATE. This Warrant shall expire at the close of
business on July 31, 2002, and shall be void thereafter. Notwithstanding the
term of this Warrant fixed pursuant to Section 7 hereof and the provisions of
Section 10 below, the right to purchase Preferred Stock as granted herein
shall expire, if not previously exercised, immediately upon the closing of a
merger or consolidation of the Company with or into another corporation when
the Company is not the surviving corporation (other than a merger or
consolidation for the principal purpose of changing the domicile of the
Company), or the sale of all or substantially all of the Company's properties
and assets to any other person (the "Merger"), provided that the price per
share paid in the Merger is equal to or greater than two times the Purchase
Price per share.
The Company shall notify the Holder, in accordance with Section 13 below, of
any Merger, and if the Company fails to deliver such notice, then
notwithstanding anything to the contrary in this Warrant, the rights to
purchase the Company's Preferred Stock shall not expire until ten (10)
business days after the actual receipt by Holder of such notice; provided,
however, that notwithstanding the foregoing, in no event shall the right to
purchase Preferred Stock under this Warrant expire in Section 7 unless the
Holder receives written notice of the proposed merger at least five (5)
business days prior to the closing of such Merger. If such closing does not
take place, the Company shall promptly notify the Holder that such proposed
transaction has been terminated, and the Holder may rescind any exercise of
its purchase rights promptly after such notice of termination of the proposed
transaction if the exercise of the Warrant occurred after the Company notified
the Holder that the Merger was proposed, or if the exercise was otherwise
precipitated by such proposed Merger. In the event of such rescission, the
Warrant will continue to be exercisable on the same terms and conditions
contained herein.
8. RESERVED SHARES; VALID ISSUANCE. The Company covenants that it
will at all times from and after the earlier of the closing of the Next
Preferred Stock or December 31, 1995 reserve and keep available such number of
its authorized shares of such Preferred Stock and any Common Stock issuable
upon the conversion thereof, $0.001 par value, of the Company (the "Common
Stock"), free from all preemptive or similar rights therein, as will be
sufficient to permit, respectively, the exercise of this Warrant in full and
the conversion into shares of Common Stock of all shares of Preferred Stock
receivable upon such exercise. The Company further covenants that such shares
as may be issued pursuant to such exercise and/or conversion will, upon
issuance, be duly and validly issued, fully paid and nonassessable and free
from all taxes, liens and charges with respect to the issuance thereof.
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9. STOCK SPLITS AND DIVIDENDS. If after the date hereof the Company
shall subdivide the Preferred Stock, by split-up or otherwise, or combine the
Preferred Stock, or issue additional shares of Preferred Stock in payment of a
stock dividend on the Preferred Stock, the number of shares of Preferred Stock
issuable on the exercise of this Warrant shall forthwith be proportionately
increased in the case of a subdivision or stock dividend, or proportionately
decreased in the case of a combination, and the Purchase Price shall forthwith
be proportionately decreased in the case of a subdivision or stock dividend,
or proportionately increased in the case of a combination.
10. MERGERS AND RECLASSIFICATIONS. Subject in all respects to Section
7 above, if after the date hereof the Company shall enter into any
Reorganization (as hereinafter defined), then, as a condition of such
Reorganization, lawful provisions shall be made, and duly executed documents
evidencing the same from the Company or its successor shall be delivered to
the Holder, so that the Holder shall thereafter have the right to purchase, at
a total price not to exceed that payable upon the exercise of this Warrant in
full, the kind and amount of shares of stock and other securities and property
receivable upon such Reorganization by a holder of the number of shares of
Preferred Stock which might have been purchased by the Holder immediately
prior to such Reorganization, and in any such case appropriate provisions
shall be made with respect to the rights and interest of the Holder to the end
that the provisions hereof (including without limitation, provisions for the
adjustment of the Purchase Price and the number of shares issuable
hereunder) shall thereafter be applicable in relation to any shares of stock
or other securities and property thereafter deliverable upon exercise hereof.
For the purposes of this Section 10, the term "REORGANIZATION" shall include
without limitation any reclassification, capital reorganization or change of
the Preferred Stock (other than as a result of a subdivision, combination or
stock dividend provided for in Section 9 hereof), or any consolidation of the
Company with, or merger of the Company into, another corporation or other
business organization (other than a merger in which the Company is the
surviving corporation and which does not result in any reclassification or
change of the outstanding Preferred Stock), or any sale or conveyance to
another corporation or other business organization of all or substantially all
of the assets of the Company.
11. CERTIFICATE OF ADJUSTMENT. Whenever the Purchase Price is
adjusted, as herein provided, the Company shall promptly deliver to the holder
a certificate of the Company's chief financial officer setting forth the
Purchase Price after such adjustment and setting forth a brief statement of
the facts requiring such adjustment.
12. NO RIGHTS AS SHAREHOLDERS. Except as provided herein, this Warrant
does not entitle the Holder to any voting rights as a shareholder of the
Company prior to the exercise if the Holder's rights to purchase Preferred
Stock as provided herein.
13. NOTICE OF RECORD DATE, ETC. In the event of:
(a) any taking of 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, or any right to
subscribe for, purchase, sell or otherwise acquire or dispose of any shares of
stock of any class or any other securities or property, or to receive any
other right;
(b) any reclassification of the capital stock of the Company,
capital reorganization of the Company, consolidation or merger involving the
Company, or sale or convergence of all or substantially all of its assets; or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company;
then and in each such event the Company will provide or cause to be provided
to the Holder a written notice thereof. Such notice shall be provided at least
twenty (20) business days prior to the date specified in such notice on which
any such action is taken.
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14. REPRESENTATIONS, WARRANTIES AND COVENANTS. This Warrant is issued
and delivered by the Company and accepted by each Holder on the basis of the
following representations, warranties and covenants made by the Company:
A. The Company has all necessary authority to issue, execute and
deliver this Warrant and to perform its obligations hereunder. This Warrant
has been duly authorized, issued, executed and delivered by the Company and is
the valid and binding obligation of the Company, enforceable in accordance
with its terms.
B. The shares of Preferred Stock issuable upon the exercise of this
Warrant will be duly authorized and reserved for issuance by the Company and,
when issued in accordance with the terms hereof, will be validly issued, fully
paid and nonassessable.
C. This issuance, execution and delivery of this Warrant do not, and
the issuance of the shares of Preferred Stock upon the exercise of this
Warrant in accordance with the terms hereof will not, (i) violate or
contravene the Company's Articles of Incorporation or by-laws, or any law,
statute, regulation, rule, judgment or order applicable to the Company, (ii)
violate, contravene or result in a breach or default under any contract,
agreement or instrument to which the Company is a party or by which the
Company or any of its assets are bound or (iii) require the consent or
approval of or the filing of any notice or registration with any person or
entity.
D. As long as this Warrant is, or any shares of Preferred Stock issued
upon exercise of this Warrant or any shares of Common Stock issued upon
conversion of such shares of Preferred Stock are, issued and outstanding, the
Company will provide to the Holder the financial and other information
described in that certain Lease Line Schedule No. 01 to Master Equipment Lease
Agreement No. 111 between the Company and Lighthouse Capital Partners, L.P.
dated as of August 10, 1995.
E. The Company hereby grants to the Holder the Registration Rights
contained in Section 1 of the Company's Investor Rights Agreement dated as of
June 4, 1994, so that (i) the shares of Common Stock issuable upon conversion
of the shares of Preferred Stock issuable upon exercise of this Warrant shall
be Registrable Securities, and (ii) the Holder shall be a "Holder", for all
purposes of such Investor Rights Agreement.
15. AMENDMENT. The terms of this Warrant may be amended, modified or
waived only with the written consent of the Holder.
16. REPRESENTATIONS AND COVENANTS OF THE HOLDER. This Preferred Stock
Purchase Warrant has been entered into by the Company in reliance upon the
following representations and covenants of the Holder, which by its execution
hereof the Holder hereby confirms:
(a) INVESTMENT PURPOSE. The right to acquire Preferred Stock or the
Preferred Stock issuable upon exercise of the Holder's rights contained herein
will be acquired for investment and not with a view to the sale or
distribution of any part thereof, and the Holder has no present intention of
selling or engaging in any public distribution of the same except pursuant to
a registration or exemption.
(b) ACCREDITED INVESTOR. Holder is an "accredited investor" within the
meaning of the Securities and Exchange Rule 501 of Regulation D, as presently
in effect.
(c) PRIVATE ISSUE. The Holder understands (i) that the Preferred Stock
issuable upon exercise of the Holder's rights contained herein is not
registered under the 1933 Act or qualified under applicable state securities
laws on the ground that the issuance contemplated by this Warrant Agreement
will be exempt from the registration and qualification requirements thereof,
and (ii) that the Company's reliance on such exemption is predicated on the
representations set forth in this Section 16.
(d) DISPOSITION OF HOLDER'S RIGHTS. In no event will the Holder make a
disposition of any of its rights to acquire Preferred Stock or Preferred Stock
issuable upon exercise of such rights unless and until (i)
it shall have notified the Company of the proposed disposition, and (ii) if
requested by the Company, it shall nave furnished the Company with an opinion
of counsel (which counsel may either be inside or outside counsel to the
Holder) reasonably satisfactory to the Company and its counsel to the effect
that (A) appropriate action necessary for compliance with the 1933 Act has
been taken, or (B) an exemption from the registration requirements of the 1933
Act is available; provided that the Company shall not require Holder to
provide an opinion of counsel if the transfer is to an affiliate Holder or if
there is no material question as to the availability of current information as
referenced in Rule 144(c), Holder represents that it has complied with Rule
144(d) and (e) in reasonable detail, the selling broker represents that it has
complied with Rule 144(f), and the Company is provided with a copy of Holder's
notice of proposed sale. Notwithstanding the foregoing, the restrictions
imposed upon the transferability of any of its rights to acquire Preferred
Stock or Preferred Stock issuable on the exercise of such rights do not apply
to transfers from the beneficial owner of any of the aforementioned securities
to its nominee or from such nominee to its beneficial owner, and shall
terminate as to any particular share of Preferred Stock when (1) such security
shall have been effectively registered under the 1933 Act and sold by the
holder thereof in accordance with such registration or (2) such security shall
have been sold without registration in compliance with Rule 144 under the 1933
Act, or (3) a letter shall have been issued to the Holder at its request by
the staff of the Securities and Exchange Commission or a ruling shall have
been issued to the Holder at its request by such Commission stating that no
action shall be recommended by such staff or taken by such Commission, as the
case may be, if such security is transferred without registration under the
1933 Act in accordance with the conditions set forth in such letter or ruling
and such letter or ruling specifies that no subsequent restrictions or
transfer are required. Whenever the restrictions imposed hereunder shall
terminate, as hereinabove provided, the Holder or holder of a share of
Preferred Stock then outstanding as to which such restrictions have terminated
shall be entitled to receive from the Company, without expense to such holder,
one or more new certificates for the Warrant or for such shares of Preferred
Stock not bearing any restrictive legend.
(e) FINANCIAL RISK. The Holder has such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of its investment and has the ability to bear the economic
risks of its investments.
(f) RISK OF NO REGISTRATION. The Holder understands that if
the Company does not register with the Securities and Exchange Commission
pursuant to Section 12 of the 1933 Act, or file reports pursuant to Section
15(d) of the Securities Exchange Act of 1934 (the "1934 Act"), or of a
registration statement covering the securities under the 1933 Act is not in
effect when it desires to sell (i) the rights to purchase Preferred Stock
pursuant to this Warrant Agreement, or (ii) the Preferred Stock issuable upon
exercise of the right to purchase, it may be required to hold such securities
for an indefinite period. The Holder also understands that any sale of the
rights of the Holder to purchase Preferred Stock which might be made by it in
reliance upon Rule 144 under the 1933 Act may be made only in accordance with
the terms and conditions of that Rule.
17. NOTICE TRANSFERS, ETC.
A. Any notice or written communication required or permitted
to be given to the Holder may be given by mail or delivered to the Holder at
the address most recently provided by the Holder to the Company.
B. Subject to compliance with applicable federal and state
securities laws, and to the Holder's obtaining the Company's prior written
consent, which shall not be unreasonably withheld, this Warrant may be
transferred by the Holder with respect to any or all of the shares purchasable
hereunder. Upon surrender of this Warrant to the Company, together with the
assignment notice annexed hereto duly executed, for transfer of this Warrant
as an entirety by the Holder, the Company shall issue a new warrant of the
same denomination to the assignee. Upon surrender of this Warrant to the
Company, together with the assignment hereof properly endorsed, by the Holder
for transfer with respect to a portion of the shares of Preferred Stock
purchasable hereunder, the Company shall issue a new warrant to the assignee,
in such denomination as shall be requested by the Holder hereof, and shall
issue to such Holder a new warrant covering the number of shares in respect of
which this Warrant shall not have been transferred.
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C. In case this Warrant shall be mutilated, lost, stolen or
destroyed, the Company shall issue a new warrant of like tenor and denomination
and deliver the same (i) in exchange and substitution for and upon surrender and
cancellation of any mutilated Warrant, or (ii) in lieu of any Warrant lost,
stolen or destroyed, upon receipt of an affidavit of the Holder or other
evidence reasonably satisfactory to the Company of the loss, theft or
destruction of such Warrant.
18. NO IMPAIRMENT. The Company will not, by amendment of its
Articles of Incorporation or through any reclassification, capital
reorganization, consolidation, merger, sale or conveyance of assets,
dissolution, liquidation, issue or sale of securities or any other voluntary
action, avoid or seek to avoid the observance of 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 action as may be necessary or
appropriate in order to protect the rights of the Holder.
19. GOVERNING LAW. The provisions and terms of this Warrant shall
be governed by and construed in accordance with the internal laws of the State
of California.
20. SUCCESSORS AND ASSIGNS. This Warrant shall be binding upon the
Company's successors and assigns and shall inure to the benefit of the Holder's
successors, legal representatives and permitted assigns.
21. BUSINESS DAYS. If the last or appointed day for the taking of
any action required or the expiration of any right granted herein shall be a
Saturday or Sunday or a legal holiday in California, then such action may be
taken or right may be exercised on the next succeeding day which is not a
Saturday or Sunday or such a legal holiday.
22. QUALIFYING PUBLIC OFFERING. If the Company shall effect a firm
commitment underwritten public offering of shares of Common Stock which results
in the conversion of the Preferred Stock into Common Stock pursuant to the
Company's Articles of Incorporation in effect immediately prior to such
offering, then, effective upon such conversion, this Warrant shall change from
the right to purchase shares of Preferred Stock to the right to purchase shares
of Common Stock, and the Holder shall thereupon have the right to purchase, at a
total price equal to that payable upon the exercise of this Warrant in full, the
number of shares of Common Stock which would have been receivable by the Holder
upon the exercise of this Warrant for shares of Preferred Stock immediately
prior to such conversion of such shares of Preferred Stock into shares of Common
Stock, and in such event appropriate provisions shall be made with respect to
the right and interest of the Holder to the end that the provisions hereof
(including, without limitation, provisions for the adjustment of the Purchase
Price and of the number of shares purchasable upon exercise of this Warrant)
shall thereafter be applicable to any shares of Common Stock deliverable upon
the exercise hereof.
23. VALUE; TAX INDEMNITY. The Company and the Holder agree that the
value of this Warrant on the date of grant is $100. The Company hereby agrees to
pay, indemnify and hold the Holder harmless from, and to reimburse the Holder
for, all taxes, penalties, fines, additions to tax or interest thereon
(collectively, "Taxes") imposed on, incurred by or asserted against the Holder
by any Federal, state or local taxing authority to the extent resulting from
income attributable to such Holder due to warrant accretion expense incurred by
the Company. The Company further agrees that, with respect to any payment or
indemnity hereunder, such payment or indemnity shall include any amount
necessary to hold the recipient of the payment or indemnity harmless on a net
aggregate after tax basis from all Taxes required to be paid by the recipient
with respect to such payment or indemnity under the laws of any Federal, state
or local taxing authority. Any payment or indemnity payable by the Company
pursuant to this Section 23 shall be payable five (5) days prior to the time
that the Taxes giving rise to such payment nor indemnity become payable.
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Dated: August 10, 1995
-------------------
POINTCAST INCORPORATED
(Corporate Seal) By: /s/ John Jewett
----------------------------------------
Name: John Jewett
--------------------------------------
Title: Vice President Finance & Operations
-------------------------------------
Attest:
- --------------------------
VICE PRESIDENT
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Subscription
To: ____________________________ Date: _________________________________
The undersigned hereby subscribes for _________________ shares of Preferred
Stock covered by this Warrant. The certificate(s) for such shares shall be
issued in the name of the undersigned or as otherwise indicated below:
_______________________________________
Signature
_______________________________________
Name for Registration
_______________________________________
Mailing Address
Net Issue Election Notice
To: ____________________________ Date: _________________________________
The undersigned hereby elects under Section 4 to surrender the right to
purchase _______ shares of Preferred Stock pursuant to this Warrant. The
certificate(s) for the shares issuable upon such net issue election shall be
issued in the name of the undersigned or as otherwise indicated below.
_______________________________________
Signature
_______________________________________
Name for Registration
_______________________________________
Mailing Address
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Assignment
For value received _______________________________ hereby sells, assigns
and transfers unto ___________________________________________________________
(Please print or typewrite name and address of Assignee)
______________________________________________________________________________
the within Warrant, and does hereby irrevocably constitute and appoint
_____________________________ its attorney to transfer the within Warrant on the
books of the within named Company with full power of substitution on the
premises.
Dated: ____________________
________________________________________
In the Presence of:
___________________________________
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