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EXHIBIT 10.19
July 15, 1999
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE
SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE
OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT AND ANY APPLICABLE
STATE SECURITIES LAWS.
WARRANT TO PURCHASE UP TO [SHARES]
SHARES OF SERIES E PREFERRED STOCK
OF EXACTIS.COM, INC.
(VOID AFTER JULY 15, 2004)
THIS CERTIFIES that [warrantholder] or its assigns (the "HOLDER"),
for value received, is entitled to purchase from EXACTIS.COM, INC., a Delaware
corporation (the "COMPANY"), having a place of business at 707-17th Street,
Suite 2850, Denver, CO 80202, up to a maximum of [shares]
[shares_spelledout] fully paid and nonassessable shares of Series E
Preferred Stock (the "PREFERRED STOCK"), for cash at a price of $8.00 per share
(the "STOCK PURCHASE PRICE") at any time or from time to time up to and
including 5:00 p.m. (Colorado Time) on July 15, 2004 (such date being referred
to herein as the "EXPIRATION DATE"), upon surrender to the Company at its
principal office (or at such other location as the Company may advise the Holder
in writing) of this Warrant properly endorsed with the Notice of Exercise and
Investment Representation Statement attached hereto duly filled in and executed
and, if applicable, upon payment in cash or by check of the aggregate Stock
Purchase Price for the number of shares for which this Warrant is being
exercised determined in accordance with the provisions hereof. The Stock
Purchase Price and the number of shares purchasable hereunder are subject to
adjustment as provided in Section 3 of this Warrant.
1. EXERCISE; ISSUANCE OF CERTIFICATES; PAYMENT FOR SHARES.
(a) GENERAL. This Warrant is exercisable at the option of the Holder of
record hereof, at any time or from time to time, up to the Expiration Date for
all or any part of the shares of Preferred Stock (but not for a fraction of a
share) which may be purchased hereunder.
(b) ISSUANCE OF CERTIFICATES. The Company agrees that the shares of
Preferred Stock purchased under this Warrant shall be and are deemed to be
issued to the Holder hereof as the record owner of such shares as of the close
of business on the date on which this Warrant shall have been surrendered,
properly endorsed and payment (if any) made for such shares. Certificates for
the shares of Preferred Stock so purchased, together with any other securities
or property to which the Holder hereof is entitled upon such exercise, shall be
delivered to the Holder hereof by the Company at the Company's expense within a
reasonable time after the rights represented by this Warrant have been so
exercised. In case of a purchase of less than all the shares which may be
purchased under this Warrant, the Company shall cancel this Warrant and execute
and deliver a new Warrant or Warrants of like tenor for the balance of the
shares purchasable under the Warrant surrendered upon such purchase to the
Holder hereof within a reasonable time. Each stock certificate so delivered
shall be in such denominations of Preferred Stock as may be requested by the
Holder hereof and shall be registered in the name of such Holder or as directed
by such Holder.
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(c) NET ISSUE EXERCISE. Notwithstanding any provisions herein to the
contrary, if the fair market value of one share of the Company's Preferred Stock
is greater than the Stock Purchase Price (at the date of calculation as set
forth below), in lieu of exercising this Warrant for cash, the Holder may elect
to receive shares equal to the value (as determined below) of this Warrant (or
the portion thereof being canceled) by surrender of this Warrant at the
principal office of the Company and notice of such election in which event the
Company shall issue to the Holder a number of shares of Preferred Stock computed
using the following formula:
X = Y (A-B)
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A
Where X = the number of shares of Preferred Stock to be
issued to the Holder
Y = the number of shares of Preferred Stock
purchasable under the Warrant or, if only a portion
of the Warrant is being exercised, the portion of the
Warrant being canceled (at the date of such
calculation)
A = the fair markEt value of one share of the
Company's Preferred Stock (at the date of such
calculation)
B = Stock Purchase Price (as adjusted to the date of
such calculation)
For purposes of the above calculation, the fair market value of one share of
Preferred Stock shall be determined by the Company's Board of Directors in good
faith; provided, however, that in the event Holder exercises this Warrant in
connection with the Company's initial public offering of its Common Stock, the
fair market value per share shall be the product of (i) the per share offering
price to the public of the Company's initial public offering and (ii) the number
of shares of Common Stock into which each share of Preferred Stock is
convertible at the time of such exercise; and, provided, further, that following
the Company's initial public offering of its Common Stock, the fair market value
per share shall be the average of the closing prices quoted on any exchange or
the Nasdaq Stock Market, whichever is applicable, on which the Common Stock is
listed for the ten (10) trading days prior to the date of determination of fair
market value.
2. SHARES TO BE FULLY PAID; RESERVATION OF SHARES. The Company
covenants and agrees that all shares of Preferred Stock which may be issued upon
the exercise of the rights represented by this Warrant will, upon issuance, be
duly authorized, validly issued, fully paid and nonassessable and free from all
preemptive rights of any stockholder and free of all taxes, liens and charges
with respect to the issue thereof. The Company further covenants and agrees that
during the period within which the rights represented by this Warrant may be
exercised, the Company will at all times have authorized and reserved, for the
purpose of issue or transfer upon exercise of the subscription rights evidenced
by this Warrant, a sufficient number of shares of authorized but unissued
Preferred Stock, or other securities and property, when and as required to
provide for the exercise of the rights represented by this Warrant. The Company
will take all such action as may be necessary to assure that such shares of
Preferred Stock may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of any domestic securities
exchange upon which the Preferred Stock may be listed, provided, however, that
the Company shall not be required to effect a registration under federal or
state securities laws with respect to such issuance.
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3. ADJUSTMENT OF STOCK PURCHASE PRICE AND NUMBER OF SHARES. The Stock
Purchase Price and the number of shares purchasable upon the exercise of this
Warrant shall be subject to adjustment from time to time upon the occurrence of
certain events described in this Section 3. Upon each adjustment of the Stock
Purchase Price, the Holder of this Warrant shall thereafter be entitled to
purchase, at the Stock Purchase Price resulting from such adjustment, the number
of shares obtained by multiplying the Stock Purchase Price in effect immediately
prior to such adjustment by the number of shares purchasable pursuant hereto
immediately prior to such adjustment, and dividing the product thereof by the
Stock Purchase Price resulting from such adjustment.
(a) SUBDIVISION OR COMBINATION OF STOCK. In case the Company shall
at any time subdivide its outstanding shares of Preferred Stock into a greater
number of shares, the Stock Purchase Price in effect immediately prior to such
subdivision shall be proportionately reduced, and conversely, in case the
outstanding shares of Preferred Stock of the Company shall be combined into a
smaller number of shares, the Stock Purchase Price in effect immediately prior
to such combination shall be proportionately increased.
(b) DIVIDENDS IN PREFERRED STOCK, OTHER STOCK, PROPERTY,
RECLASSIFICATION. If at any time or from time to time any holder of Preferred
Stock (or any shares of stock or other securities at the time receivable upon
the exercise of this Warrant) shall have received or become entitled to receive,
without payment therefor,
(i) (a) any shares of stock or (b) other securities which are
at any time directly or indirectly convertible into or exchangeable for shares
of stock, or any rights or options to subscribe for, purchase or otherwise
acquire any of the foregoing by way of dividend or other distribution;
(ii) Any cash paid or payable otherwise than as a cash
dividend out of current earnings; or
(iii) Preferred Stock or additional stock or other securities
or property (including cash) by way of spin-off, split-up, reclassification,
combination of shares or similar corporate rearrangement (other than (a) shares
of Preferred Stock issued as a stock split, adjustments in respect of which
shall be covered by the terms of Section 3(a) above or (b) an event for which
adjustment is otherwise made pursuant to Section 3(c) below);
then and in each such case, the Holder hereof shall, upon the
exercise of this Warrant, be entitled to receive, in addition to the number of
shares of Preferred Stock receivable thereupon, and without payment of any
additional consideration therefor, the amount of stock and other securities and
property (including cash in the case referred to in clause 3(b)(ii) above) which
such Holder would hold on the date of such exercise had he been the holder of
record of such Preferred Stock as of the date on which Holder of Preferred Stock
received or became entitled to receive such shares or all other additional stock
and other securities and property.
(C) REORGANIZATION, RECLASSIFICATION, CONSOLIDATION, MERGER OR
SALE. If any capital reorganization or reclassification of the capital stock of
the Company, or any consolidation or merger of the Company with another
corporation, or the sale of all or substantially all of its assets to another
corporation (an "ORGANIC CHANGE") shall be effected in such a way that a holder
of
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Preferred Stock shall be entitled to receive stock, securities, or other assets
or property, then, as a condition of such Organic Change, lawful and adequate
provisions shall be made whereby the Holder hereof shall thereafter have the
right to purchase and receive (in lieu of the shares of the Preferred Stock of
the Company immediately theretofore purchasable and receivable upon the exercise
of the rights represented hereby) such shares of stock, securities or other
assets or property as may be issued or payable with respect to or in exchange
for a number of outstanding shares of such Preferred Stock equal to the number
of shares of such stock immediately theretofore purchasable and receivable upon
the exercise of the rights represented hereby; provided, however, that in the
event the value of the stock, securities or other assets or property (determined
in good faith by the Board of Directors of the Company) issuable or payable with
respect to one share of the Preferred Stock of the Company immediately
theretofore purchasable and receivable upon the exercise of the rights
represented hereby is in excess of the Stock Purchase Price hereof effective at
the time of an Organic Change and securities received in such Organic Change, if
any, are publicly traded, then this Warrant shall expire unless exercised prior
to such Organic Change. The Company will not effect any such Organic Change,
unless prior to the consummation thereof, the successor corporation (if other
than the Company) or such corporation's parent resulting from such consolidation
or the corporation purchasing such assets shall assume by written instrument,
executed and mailed or delivered to the registered Holder hereof at the last
address of such Holder appearing on the books of the Company, the obligation to
deliver to such Holder such shares of stock, securities or assets as, in
accordance with the foregoing provisions, such Holder may be entitled to
purchase.
(d) NOTICES. Upon (i) any adjustment of the Stock Purchase Price,
(ii) any increase or decrease in the number of shares purchasable upon the
exercise of this Warrant (iii) any Organic Change, (iv) any declaration by the
Company of a cash dividend or other distribution on its Preferred Stock or
Common Stock, (v) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company or (vi) any initial public offering of Company's
securities, the Company shall give written notice thereof, by certified or first
class mail, postage prepaid, addressed to the registered Holder of this Warrant
at the address of such Holder as shown on the books of the Company no less than
ten (10) days in advance of the closing or effective date of such event. The
notice shall state the Stock Purchase Price resulting from such adjustment and
the increase or decrease, if any, in the number of shares purchasable at such
price upon the exercise of this Warrant or the amount of securities to be
received by the Company's stockholders, as applicable, setting forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based.
(e) CERTAIN EVENTS. If any change in the outstanding Preferred
Stock of the Company or any other event occurs as to which the other provisions
of this Section 3 are not strictly applicable or if strictly applicable would
not fairly protect the purchase rights of the Holder of the Warrant in
accordance with such provisions, the Board of Directors of the Company shall
make an adjustment in the number and class of shares available under the
Warrant, the Stock Purchase Price or the application of such provisions, so as
to protect such purchase rights as aforesaid. The adjustment shall be such as
will give the Holder of the Warrant upon exercise for the same aggregate Stock
Purchase Price the total number, class and kind of shares as he would have owned
had the Warrant been exercised prior to the event and had he continued to hold
such shares until after the event requiring adjustment.
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4. ISSUE TAX. The issuance of certificates for shares of Preferred
Stock upon the exercise of the Warrant shall be made without charge to the
Holder of the Warrant for any issue tax (other than any applicable income taxes)
in respect thereof; provided, however, 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 then
Holder of the Warrant being exercised.
5. CLOSING OF BOOKS. The Company will at no time close its transfer
books against the transfer of any warrant or of any shares of Preferred Stock
issued or issuable upon the exercise of any warrant in any manner which
interferes with the timely exercise of this Warrant.
6. NO VOTING OR DIVIDEND RIGHTS; LIMITATION OF LIABILITY. 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 or any other matters or any rights whatsoever as a stockholder of
the Company. Except as otherwise provided herein, no dividends or interest shall
be payable or accrued in respect of this Warrant or the interest represented
hereby or the shares purchasable hereunder until, and only to the extent that,
this Warrant shall have been exercised. No provision hereof in the absence of
affirmative action by the holder to purchase shares of Preferred Stock, and no
mere enumeration herein of the rights or privileges of the holder hereof, shall
give rise to any liability of such holder for the Stock Purchase Price or as a
stockholder of the Company, whether such liability is asserted by the Company or
by its creditors.
7. WARRANTS TRANSFERABLE. Subject to compliance with applicable federal
and state securities laws, and the transfer restrictions set forth below, this
Warrant and all rights hereunder are transferable, in whole or in part, without
charge to the holder hereof (except for transfer taxes), upon surrender of this
Warrant properly endorsed. Each taker and holder of this Warrant, by taking or
holding the same, consents and agrees that this Warrant, when endorsed in blank,
shall be deemed negotiable, and that the holder hereof, when this Warrant shall
have been so endorsed, may be treated by the Company, at the Company's option,
and all other persons dealing with this Warrant as the absolute owner hereof for
any purpose and as the person entitled to exercise the rights represented by
this Warrant, or to transfer this Warrant on the books of the Company any notice
to the contrary notwithstanding; but until such transfer on such books, the
Company may treat the registered owner hereof as the owner for all purposes.
8. RIGHTS AND OBLIGATIONS SURVIVE EXERCISE OF WARRANT. The rights and
obligations of the Company, of the Holder of this Warrant and of the Holder of
shares of Preferred Stock issued upon exercise of this Warrant, referred to in
Section 7 shall survive the exercise of this Warrant.
9. MODIFICATION AND WAIVER. This Warrant and any provision hereof may
be changed, waived, discharged or terminated only by an instrument in writing
signed by the party or parties against which enforcement of the same is sought.
10. 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 or such
other address as either may from time to time provide to the other and shall be
deemed to be received four
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days after deposit in the U.S. Mail or two (2) days after deposit with a
nationally recognized overnight courier.
11. BINDING EFFECT ON SUCCESSORS. This Warrant shall be binding upon
any corporation succeeding the Company by merger, consolidation or acquisition
of all or substantially all of the Company's assets. All of the obligations of
the Company relating to the Preferred Stock issuable upon the exercise of this
Warrant shall survive the exercise and termination of this Warrant. All of the
covenants and agreements of the Company shall inure to the benefit of the
successors and assigns of the holder hereof.
12. DESCRIPTIVE HEADINGS AND GOVERNING LAW. 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. This Warrant shall be
construed and enforced in accordance with, and the rights of the parties shall
be governed by, the laws of the State of Colorado.
13. LOST WARRANTS. The Company represents and warrants to the Holder
hereof that upon receipt of evidence reasonably satisfactory to the Company of
the loss, theft, destruction, or mutilation of this Warrant and, in the case of
any such loss, theft or destruction, upon receipt of an indemnity reasonably
satisfactory to the Company, or in the case of any such mutilation upon
surrender and cancellation of such Warrant, the Company, at its expense, will
make and deliver a new Warrant, of like tenor, in lieu of the lost, stolen,
destroyed or mutilated Warrant.
14. FRACTIONAL SHARES. No fractional shares shall be issued upon
exercise of this Warrant. The Company shall, in lieu of issuing any fractional
share, pay the holder entitled to such fraction a sum in cash equal to such
fraction multiplied by the then effective Stock Purchase Price.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its officers, thereunto duly authorized this ___ day of ________,
1999.
EXACTIS.COM, INC.
a Delaware Corporation
By:
------------------------------------
Thomas Detmer
President
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NOTICE OF EXERCISE
Date: _________________, 19___
Exactis.com, Inc.
707- 17th Street, Suite 2850
Denver, CO 80202
Attn: Chief Executive Officer
Ladies and Gentlemen:
|_| The undersigned hereby elects to exercise the warrant issued to it by
Exactis.com, Inc. (the "COMPANY") and dated _____ ___, 1999 (the
"WARRANT") and to purchase thereunder ________________________________
shares of Series E Preferred Stock of the Company (the "SHARES") at a
purchase price of Eight Dollars ($8.00) per Share or an aggregate
purchase price of ______________________________ Dollars ($__________)
(the "PURCHASE PRICE").
|_| The undersigned hereby elects to convert _______________________
percent (____%) of the value of the Warrant pursuant to the provisions
of Section 1(c) of the Warrant.
Please issue a certificate or certificates representing said shares of
Preferred Stock in the name of the undersigned or in such other name as is
specified below:
-----------------------------------
(name)
-----------------------------------
-----------------------------------
(address)
Pursuant to the terms of the Warrant the undersigned has delivered the
Purchase Price, if any, herewith in full in cash or by certified check or wire
transfer. The undersigned also makes the representations set forth on the
attached Investment Representation Letter.
Very truly yours,
------------------------------------
By:
--------------------------------
Title:
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INVESTMENT REPRESENTATION STATEMENT
TO: EXACTIS.COM, INC.
With respect to the __________ shares of Series E Preferred Stock ("SHARES") of
EXACTIS.COM, INC. ("COMPANY") which the undersigned ("PURCHASER") has purchased
from the Company today, the Purchaser hereby represents and warrants as follows:
1. The Purchaser acknowledges that it has received no formal prospectus
or offering memorandum describing the business and operations of the Company. It
has, however, by virtue of his relationship with the Company, been given access
to all information that it believes is material to his decision to purchase the
Shares. The Purchaser has had the opportunity to ask questions of, and receive
answers from, representatives of the Company concerning its business operations.
Any questions raised by the Purchaser have been answered to his satisfaction.
2. The Shares are being acquired by the Purchaser for its account, for
investment purposes only, and not with a view to the distribution or resale
thereof.
3. No representations or promises have been made concerning the
marketability or value of the Shares. The Purchaser understands that there is
currently no market for the transfer of the Shares. The Purchaser further
acknowledges that, because the Shares have not been registered under the
Securities Act of 1933, as amended (the "ACT"), or applicable state securities
laws, they cannot be resold unless they are subsequently registered under the
Act or applicable state securities laws, or an exemption from registration is
available, and the Purchaser must continue to bear the economic risk of his
investment in the Shares for an indefinite period of time. Specifically, the
Purchaser agrees that the Shares may not be transferred, except to an investment
company with an investment advisor under common control, until the Company has
received, if reasonably requested by the Company, an opinion of counsel
reasonably satisfactory to it that the proposed transfer will not violate
federal or state securities laws. The Company has not agreed or represented to
the Purchaser that the Shares will be purchased or redeemed from the Purchaser
at any time in the future. The Purchaser further understands that a notation
will be made on the appropriate records of the Company and on the stock
certificate representing the Shares so that the transfers of Shares will not be
effected on those records without compliance with the restrictions referred to
above.
Date: By:
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Name:
--------------------------------
Title:
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10.