EXHIBIT 4.5
WARRANT FOR THE PURCHASE OF
SHARES OF COMMON STOCK
FOR VALUE RECEIVED, Tomorrow's Morning, Inc. (the "Company") hereby
certifies that Adam Linter, or a permitted successor or assign thereof, is
entitled to purchase from the Company, at any time or from time to time
commencing January 15, 2000 (the "Commencement Date") and prior to 5:00 P.M.,
P.S.T., on January 14, 2005 (the "Expiration Date"), Five Hundred Thousand
(500,000) fully paid and nonassessable shares of common stock of the Company,
for Ten Cents ($0.10) per share, subject to adjustment pursuant to Section 3.
(Hereinafter, (i) said common stock, together with any other equity securities
which may be issued by the Company with respect thereto or in substitution
therefor, is referred to as the "Common Stock," (ii) the shares of the Common
Stock purchasable hereunder or under any other Warrant (as hereinafter defined)
are referred to as the "Warrant Shares," (iii) the aggregate purchase price
payable hereunder for the Warrant Shares is referred to as the "Aggregate
Warrant Price," (iv) the price payable hereunder for each of the Warrant Shares
is referred to as the "Per Share Warrant Price," (v) this Warrant, all identical
warrants issued on the date hereof and all warrants hereafter issued in exchange
or substitution for this Warrant or such other warrants are referred to as the
"Warrants" and (vi) the holder of this Warrant is referred to as the "Holder"
and the holder of this Warrant and all other Warrants are referred to as the
"Holders").
1. EXERCISE OF WARRANT. This Warrant may be exercised, in whole at any
time or in part from time to time, from the Commencement Date until 5:00 P.M.,
P.S.T., on the Expiration Date (the "Warrant Period"), by the Holder by the
surrender of this Warrant (with the subscription form at the end hereof duly
executed) at the address set forth in Subsection 8(a) hereof, together with
proper payment of the Aggregate Warrant Price, or the proportionate part thereof
if this Warrant is exercised in part. Payment for the applicable number of
Warrant Shares shall be made by certified or official bank check payable to the
order of the Company. If this Warrant is exercised in part, this Warrant must be
exercised for a number of whole shares of the Common Stock, and the Holder is
entitled to receive a new Warrant covering the Warrant Shares which have not
been exercised and setting forth the proportionate part of the Aggregate Warrant
Price applicable to such Warrant Shares. Upon such surrender of this Warrant,
the Company will (a) issue a certificate or certificates in the name of the
Holder for the largest number of whole shares of the Common Stock to which the
Holder shall be entitled and, if this Warrant is exercised in whole, in lieu of
any fractional share of the Common Stock to which the Holder shall be entitled,
pay to the Holder cash in an amount equal to the fair value of such fractional
share (determined in such reasonable manner as the Board of Directors of the
Company shall determine) and (b) deliver the other securities and properties
receivable by the Holder upon the exercise of this Warrant, or the proportionate
part thereof if this Warrant is exercised in part, pursuant to the provisions of
this Warrant.
2. RESERVATION OF WARRANT SHARES; LISTING. The Company agrees that,
prior to the expiration of this Warrant, the Company will at all times have
authorized and in reserve, and will keep available, solely for issuance or
delivery upon the exercise of this Warrant, the shares of Common Stock and other
securities and properties as from time to time shall be receivable upon the
exercise of this Warrant, free and clear of all restrictions on sale or transfer
(except for applicable state or federal securities law restrictions) and free
and clear of all pre-emptive rights.
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3. PROTECTION AGAINST DILUTION
(a) DISTRIBUTION OF DEBT, ASSETS OR SECURITIES. If, at any
time or from time to time after the date of this Warrant, the Company shall
issue or distribute (for no consideration) to the holders of shares of Common
Stock evidences of its indebtedness, any other securities of the Company or any
cash, property or other assets (excluding a subdivision, combination or
reclassification, or dividend or distribution payable in shares of Common Stock,
referred to in Section 3(b)),(any such nonexcluded event being herein called a
"Special Dividend"), then in each case the Holder, upon the exercise of this
Warrant, shall be entitled to receive in addition to the shares then issuable
under this Warrant, (i) the assets or securities to which such Holder would have
been entitled as a holder of Common Stock if such Holder had exercised this
Warrant immediately prior to the record date for such Special Dividend and (ii)
with respect to clause (A) below only, any income earned on the assets or
securities distributed from the distribution date to the date of exercise. At
the time of any such distribution, the Company shall either (A) deposit the
assets or securities payable to the Holder pursuant hereto in trust for the
Holder with an "eligible institution" with instructions as to the investment of
such property and any proceeds therefrom so as to protect the value of such
property and income for the Holder upon exercise of the Warrant or (B)
distribute to the Holder the assets or securities to which it would be entitled
upon exercise and, upon any such distribution pursuant to this clause (B), the
provisions of this subparagraph (a) shall no longer apply to such event. Such
election shall be made by the Company giving written notice thereof to the
Holder.
For the purposes of this subsection 3(a), the term "eligible
institution" shall mean a corporation organized and doing business under the
laws of the United States of America or of any state thereof, authorized under
such laws to exercise corporate trust powers, having a combined capital and
surplus of at least $50,000,000, and subject to supervision or examination by
Federal or state authority.
(b) SUBDIVISION 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 Per Share Warrant Price shall be proportionately
decreased in the case of a subdivision or proportionately increased in the case
of a combination. Upon each adjustment in the Per Share Warrant Price pursuant
to this paragraph, the number of shares of Common Stock purchasable hereunder
shall be adjusted, to the nearest whole share, to the product obtained by
multiplying the number of shares purchasable immediately prior to such
adjustment in the Per Share Warrant Price by a fraction, the numerator of which
shall be the Per Share Warrant Price immediately prior to such adjustment and
the denominator of which shall be the Per Share Warrant Price immediately
thereafter.
(c) STOCK DIVIDEND. If the Company at any time while this
Warrant is outstanding and unexpired shall pay a dividend with respect to Common
Stock payable in, or make any other distribution with respect to, Common Stock
(except any distribution provided for in subparagraphs (b) or (d) of this
Section 3) then the Per Share Warrant Price shall be decreased from and after
the date of determination of shareholders entitled to receive such dividend or
distribution, to that price determined by multiplying the Per Share Warrant
Price in effect immediately prior to such date of determination by a fraction
(a) the numerator of which shall be the total number of shares of Common Stock
outstanding immediately prior to such dividend or distribution and (b) the
denominator of which shall be the total number of shares of Common Stock
outstanding immediately after such dividend or distribution. Upon each
adjustment in the Per Share Warrant Price pursuant to this paragraph, the number
of shares of Common Stock purchasable hereunder shall be adjusted, to the
nearest whole share, to the product obtained by multiplying the number of shares
purchasable immediately prior to such adjustment in the Per Share Warrant Price
by a fraction, the numerator of which shall be the Per Share Warrant Price
immediately prior to such adjustment and the denominator of which shall be the
Per Share Warrant Price immediately thereafter.
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(d) MERGERS, REORGANIZATIONS AND OTHER TRANSACTIONS. In case
of any capital reorganization or reclassification, or any consolidation or
merger to which the Company is a party (other than a merger or consolidation in
which the Company is the continuing corporation and which does not result in any
reclassification or change of securities of the class issuable upon exercise of
this Warrant (other than as a result of a subdivision or combination)), or in
case of any sale or conveyance to another entity of the property of the Company
as an entirety or substantially as an entirety, or in the case of any statutory
exchange of securities with another corporation (including any exchange effected
in connection with a merger of a third corporation into the Company), the
Company, or such successor or purchasing corporation shall execute a new Warrant
providing that the Holder of this Warrant shall have the right thereafter to
convert such Warrant into the kind and amount of securities, cash or other
property which such Holder would have owned or have been entitled to receive
immediately after such reorganization, reclassification, consolidation, merger,
statutory exchange, sale or conveyance had this Warrant been converted
immediately prior to the effective date of such reorganization,
reclassification, consolidation, merger, statutory exchange, sale or conveyance.
Such new Warrant shall provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Section
3 and shall otherwise be subject to the same provisions and upon the same terms
and conditions set forth herein. No consolidation or merger of the Company with
or into another corporation referred to in the first sentence of this paragraph
(d) shall be consummated unless the successor or purchasing corporation referred
to above shall have agreed to execute a new Warrant as provided in this Section
3. The above provisions of this Subsection 3(d) shall similarly apply to
successive reorganizations, reclassifications, consolidations, mergers,
statutory exchanges, sales or conveyances. The issuer of any shares of stock or
other securities or property thereafter deliverable on the conversion of this
Warrant shall be responsible for all of the agreements and obligations of the
Company hereunder. Notice of any such reorganization, reclassification,
consolidation, merger, statutory exchange, sale or conveyance and of said
provisions to be made, shall be mailed to the Holders of the Warrants not less
than 10 days prior to such event. A sale of all or substantially all of the
assets of the Company for a consideration consisting primarily of securities
shall be deemed a consolidation or merger for the foregoing purposes.
(e) ADJUSTMENT PROCEDURES. No adjustment in the Per Share
Warrant Price shall be required unless such adjustment would require an increase
or decrease of at least $0.01 per share of Common Stock; provided, however, that
any adjustments which by reason of this Subsection 3(e) are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment; provided, further, that adjustments shall be required and made in
accordance with the provisions of this Section 3 (other than this Subsection
3(e)) not later than such time as may be required in order to preserve the
tax-free nature of a distribution to the Holder of this Warrant or Common Stock
issuable upon exercise hereof. All calculations under this Section 3 shall be
made to the nearest cent. Anything in this Section 3 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Per Share Warrant Price, in addition to those required by this Section 3, as it
in its discretion shall deem to be advisable in order that any stock dividend,
subdivision of shares or distribution of rights to purchase stock or securities
convertible or exchangeable for stock hereafter made by the Company to its
shareholders shall not be taxable.
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(f) ACCOUNTANTS' CERTIFICATE. Whenever the Per Share Warrant
Price is adjusted as provided in this Section 3 and upon any modification of the
rights of a Holder of Warrants in accordance with this Section 3, the Company
shall promptly obtain, at its expense, a certificate of a firm of independent
public accountants of nationally recognized standing selected by the Board of
Directors (who may be the regular auditors of the Company) setting forth the Per
Share Warrant Price and the number of Warrant Shares after such adjustment or
the effect of such modification, a brief statement of the facts requiring such
adjustment or modification and the manner of computing the same, and cause
copies of such certificate to be promptly mailed (by first class mail, postage
prepaid) to the Holder of the Warrants at 3700 West Lawton, Seattle, Washington
98199, or at such other address as may be provided in writing by the Holder to
the Company.
(g) NOTICE OF CAPITAL CHANGES. In case:
(i) the Company shall declare any dividend or
distribution payable to the holders of its Common Stock;
(ii) there shall be any capital reorganization or
reclassification of the capital stock of the Company, or consolidation or merger
of the Company with, or sale of all or substantially all of its assets to,
another corporation or business organization; or
(iii) there shall be a voluntary or involuntary
dissolution, liquidation or winding up of the Company;
then, in any one or more of said cases, the Company shall give the Holder of
this Warrant written notice, in the manner set forth in subparagraph (f) above,
of the date on which a record shall be taken for such dividend or distribution
or for determining shareholders entitled to vote upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding up and of the date when any such transaction shall take place, as the
case may be. Such written notice shall be given at least 30 days prior to the
transaction in question and not less than 20 days prior to the record date in
respect thereto.
4. FULLY PAID STOCK; TAXES. The Company agrees that the shares of
Common Stock represented by each and every certificate for Warrant Shares
delivered on the exercise of this Warrant shall, at the time of such delivery,
be validly issued and outstanding, fully paid and nonassessable, and not subject
to any liens, security interests, encumbrances, charges or pre-emptive rights,
and the Company will take all such actions as may be necessary to assure that
the par value or stated value, if any, per share of the Common Stock is at all
times equal to or less than the then Per Share Warrant Price. The Company
further covenants and agrees that it will pay, when due and payable, any and all
federal and state stamp, original issue, transfer or similar taxes which may be
payable in respect of the issue or delivery of any Warrant Share or certificate
therefor.
5. TRANSFERABILITY.
(a) Neither the Warrants nor the Warrant Shares have been or
will be registered under the Act or qualified under the laws of any
jurisdiction. In agreeing to issue the Warrants, the Company has relied, among
others, upon the exemption from registration provided by Section 4(2) of the Act
on the ground that the Warrants are to be issued in a transaction by an issuer
not involving any public offering.
(b) Holder represents that he is acquiring the Warrants for
his own account and not with a view to the distribution thereof. Holder agrees
not to offer, sell, transfer, pledge or hypothecate any Warrants or any Warrant
Shares without an effective registration statement for such Warrants or Warrant
Shares under the Act and all required state qualifications or an opinion of
counsel satisfactory to the Company to the effect that such registration and
qualifications are not required.
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(c) The certificates evidencing the Warrants and/or the
Warrant Shares shall contain a legend substantially in the form set forth below,
and the Company may issue orders to any duly authorized agent for the Warrants
and to its transfer agent for the Common Stock not to transfer the Warrants or
Warrant Shares if such restrictions are not satisfied.
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED PURSUANT TO THE SECURITIES ACT OF 1933 OR QUALIFIED UNDER
THE LAWS OF ANY STATE. THEY MAY NOT BE OFFERED, SOLD, TRANSFERRED,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AND ALL REQUIRED STATE QUALIFICATIONS OR AN OPINION OF
COUNSEL SATISFACTORY TO THE ISSUER HEREOF TO THE EFFECT THAT SUCH
REGISTRATION AND QUALIFICATIONS ARE NOT REQUIRED."
(d) Subject to compliance with the foregoing, the Holder of
any Warrant may, prior to exercise or expiration thereof, surrender such Warrant
at the principal office of the Company for transfer or exchange. Within a
reasonable time after notice to the Company from a registered Holder of such
Holder's intention to make such exchange and without expense (other than
transfer taxes, if any) to such registered Holder, the Company shall issue in
exchange therefor another Warrant or Warrants, in such denominations as
requested by the registered Holder, for the same aggregate number of Warrants so
surrendered and containing the same provisions and subject to the same terms and
conditions as the Warrant(s) so surrendered. The Company may treat the
registered holder of this Warrant as he, she or it appears on the Company's
books at any time as the Holder for all purposes. The Company shall permit any
Holder of a Warrant or such Holder's duly authorized attorney, upon written
request during ordinary business hours, to inspect and copy or make extracts
from its books showing the registered holders of the Warrants. All Warrants
issued upon the transfer or assignment of this Warrant will be dated the same
date as this Warrant, and all rights of the Holder thereof shall be identical to
those of the original Holder.
6. LOSS, ETC. OF WARRANT. Upon receipt of evidence satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant, and of
indemnity reasonably satisfactory to the Company, if lost, stolen or destroyed,
and upon surrender and cancellation of this Warrant, if mutilated, the Company
shall execute and deliver to the Holder a new Warrant of like date, tenor and
denomination.
7. WARRANT HOLDER NOT A SHAREHOLDER. Except as otherwise provided
herein, this Warrant does not confer upon the Holder any right to vote or to
consent to or receive notice as a shareholder of the Company, as such, in
respect to any matters whatsoever, or any other rights or liabilities as a
shareholder, prior to the exercise hereof.
8. COMMUNICATION. No notice or other communication under this Warrant
shall be effective unless, but any notice or other communication shall be
effective and shall be deemed to have been given if, the same is in writing and
is mailed by first-class mail, postage prepaid, addressed to:
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(a) the Company at such address as the Company has designated
in writing to the Holder; or
(b) the Holder at such address as the Holder has designated in
writing to the Company.
9. HEADINGS. The headings of this Warrant have been inserted as a
matter of convenience and shall not affect the construction hereof.
10. APPLICABLE LAW. Due to the fact that the Company is incorporated in
California and has its principal place of business in that state, this Warrant
shall be governed by and construed in accordance with the law of the State of
California, without giving effect to the principles of conflicts of law thereof.
11. ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS. This Warrant contains the
entire agreement of the parties with respect to its subject matter and
supersedes all prior understandings or agreements, written or oral, with respect
to such subject matter. Any provision of this Warrant may be amended or waived,
but only if such amendment or waiver is in writing and is signed by the Company
and the Holder.
12. NO IMPAIRMENT. The Company will not, by amendment of its Articles
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 to be observed or performed hereunder by the Company, but will at all
times in good faith assist in the carrying out of all the provisions in the
Warrant.
IN WITNESS WHEREOF, Tomorrow's Morning, Inc. has caused this Warrant to
be signed as of January 15, 2000.
TOMORROW'S MORNING, INC.
By:________________________________
Adam Linter, President
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SUBSCRIPTION
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The undersigned, _____________________________, pursuant to the provisions
of the foregoing Warrant, hereby agrees to subscribe for and purchase shares of
the Common Stock of Tomorrow's Morning, Inc. covered by said Warrant, and makes
payment therefor in full at the price per share provided by said Warrant.
Dated: __________________ Signature: _____________________________
Address: _____________________________
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ASSIGNMENT
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FOR VALUE RECEIVED ____________________ hereby sells, assigns and
transfers unto _____________ the foregoing Warrant and all rights evidenced
thereby, and does irrevocably constitute and appoint ____________________, as
attorney, to transfer said Warrant on the books of Tomorrow's Morning, Inc.
Dated: __________________ Signature: _____________________________
Address: _____________________________
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PARTIAL ASSIGNMENT
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FOR VALUE RECEIVED__________________ hereby assigns and transfers unto
____________________ the right to purchase ________ shares of the Common Stock
of Tomorrow's Morning, Inc. by the foregoing Warrant, and a proportionate part
of said Warrant and the rights evidenced thereby, and does irrevocably
constitute and appoint _____________, as attorney, to transfer that part of said
Warrant on the books of Tomorrow's Morning, Inc.
Dated: __________________ Signature: _____________________________
Address: _____________________________
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