THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED ("1933 ACT"), OR ANY STATE
SECURITIES LAWS AND SHALL NOT BE SOLD, PLEDGED, HYPOTHECATED, DONATED,
OR OTHERWISE TRANSFERRED, WHETHER OR NOT FOR CONSIDERATION, BY THE
HOLDER EXCEPT UPON THE ISSUANCE TO THE COMPANY OF A FAVORABLE OPINION
OF ITS COUNSEL OR THE SUBMISSION TO THE COMPANY OF SUCH OTHER EVIDENCE
AS MAY BE SATISFACTORY TO COUNSEL FOR THE COMPANY, IN EITHER CASE, TO
THE EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE 1933
ACT AND APPLICABLE STATE SECURITIES LAWS.
NETGURU, INC.
Common Stock Purchase Warrant
to
Purchase 22,500 Shares
of
Common Stock
This Common Stock Purchase Warrant is issued to:
MARTY TULLIO
by NETGURU, INC., a Delaware corporation (hereinafter called the "COMPANY",
which term shall include its successors and assigns).
FOR VALUE RECEIVED and subject to the terms and conditions hereinafter
set out, the registered holder of this Warrant as set forth on the books and
records of the Company (the "HOLDER") is entitled upon surrender of this Warrant
to purchase from the Company Twenty-Two Thousand Five Hundred Thousand (22,500)
fully paid and nonassessable shares of Common Stock, $.01 par value per share
(the "COMMON STOCK"), at the Exercise Price (as defined below) per share.
This Warrant shall expire at the close of business on May 24, 2003.
1. (a) The right to purchase shares of Common Stock represented by this
Warrant may be exercised by the Holder, in whole or in part, by the
surrender of this Warrant (properly endorsed if required) at the
principal office of the Company at 22700 Savi Ranch Road, Yorba Linda,
California 92887 (or such other office or agency of the Company as it
may designate by notice in writing to the Holder at the address of the
Holder appearing on the books of the Company), and upon payment to the
Company, by cash or by certified check or bank draft, of the Exercise
Price for such shares. The Company agrees that the shares of Common
Stock so purchased shall be deemed to be issued to the Holder as the
record owner of such shares of Common Stock as of the close of business
on the date on which this Warrant shall have been surrendered and
payment made for such shares of Common Stock as aforesaid. Certificates
for the shares of Common Stock so purchased (together with a cash
adjustment in lieu of any fraction of a share) shall be delivered to
the Holder within a reasonable time, not exceeding five (5) business
days, after the rights represented by this Warrant shall have been so
exercised, and, unless this Warrant has expired, a new Warrant
representing the number of shares of Common Stock, if any, with respect
to which this Warrant shall not then have been exercised, in all other
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respects identical with this Warrant, shall also be issued and
delivered to the Holder within such time, or, at the request of the
Holder, appropriate notation may be made on this Warrant and the same
returned to the Holder.
(b) This Warrant may be exercised to acquire, from and after the date
hereof, the aggregate number of shares of Common Stock set forth on the
first page hereof (subject to adjustments described in this Warrant);
provided, however, the right hereunder to purchase such shares of
Common Stock shall expire at the close of business on May 24, 2003.
2. This Warrant is being issued by the Company in connection with
certain services provided to the Company by Holder.
3. The Company covenants and agrees that all Common Stock upon issuance
against payment in full of the Exercise Price by the Holder pursuant to this
Warrant will be validly issued, fully paid and nonassessable and free from all
taxes, liens and charges with respect to the issue thereof (except to the extent
resulting from the Holder's own circumstances, actions or omissions). The
Company covenants and agrees that during the period within which the rights
represented by this Warrant may be exercised, the Company will have at all times
authorized, and reserved for the purpose of issue or transfer upon exercise of
the rights evidenced by this Warrant, a sufficient number of shares of Common
Stock to provide for the exercise of the rights represented by this Warrant, and
will procure at its sole expense upon each such reservation of shares the
listing thereof (subject to issuance or notice of issuance) on all stock
exchanges on which the Common Stock is then listed or inter-dealer trading
systems on which the Common Stock is then traded. The Company will take all such
action as may be necessary to assure that such shares of Common Stock may be so
issued without violation of any applicable law or regulation, or of any
requirements of any national securities exchange upon which the Common Stock may
be listed or inter-dealer trading system on which the Common Stock is then
traded. The Company will not take any action which would result in any
adjustment in the number of shares of Common Stock purchasable hereunder if the
total number of shares of Common Stock issuable pursuant to the terms of this
Warrant after such action upon full exercise of this Warrant and, together with
all shares of Common Stock then outstanding and all shares of Common Stock then
issuable upon exercise of all options and other rights to purchase shares of
Common Stock then outstanding, would exceed the total number of shares of Common
Stock then authorized by the Company's Certificate of Incorporation, as then
amended.
4. The Initial Exercise Price is $16.50 per share of Common Stock
("INITIAL EXERCISE PRICE"). The Initial Exercise Price shall be adjusted as
provided for below in this SECTION 4 (the Initial Exercise Price, and the
Initial Exercise Price, as thereafter then adjusted, shall be referred to as the
"EXERCISE PRICE") and the Exercise Price from time to time shall be further
adjusted as provided for below in this SECTION 4. Upon each adjustment of the
Exercise Price, the Holder shall thereafter be entitled to receive upon exercise
of this Warrant, at the Exercise Price resulting from such adjustment, the
number of shares of Common Stock obtained by (i) multiplying the Exercise Price
in effect immediately prior to such adjustment by the number of shares of Common
Stock purchasable hereunder immediately prior to such adjustment, and (ii)
dividing the product thereof by the Exercise Price resulting from such
adjustment. The Exercise Price shall be adjusted as follows:
(a) In the case of any amendment to the Company's Certificate of
Incorporation to change the designation of the Common Stock or the
rights, privileges, restrictions or conditions in respect to the Common
Stock or division of the Common Stock, this Warrant shall be adjusted
so as to provide that upon exercise thereof, the Holder shall receive,
in lieu of each share of Common Stock theretofore issuable upon such
exercise, the kind and amount of shares, other securities, money and
property receivable upon such designation, change or division by the
Holder issuable upon such exercise had the exercise occurred
immediately prior to such designation, change or division. This Warrant
shall be deemed thereafter to provide for adjustments which shall be as
nearly equivalent as may be practicable to the adjustments provided for
in this SECTION 4. The provisions of this SECTION 4(A) shall apply in
the same manner to successive reclassifications, changes,
consolidations and mergers.
(b) If the Company shall at any time subdivide its outstanding shares
of Common Stock into a greater number of shares of Common Stock, or
declare a dividend or make any other distribution upon the Common Stock
payable in shares of Common Stock, the Exercise Price in effect
immediately prior to such subdivision or dividend or other distribution
shall be proportionately reduced, and conversely, in case the
outstanding shares of Common Stock shall be combined into a smaller
number of shares of Common Stock, the Exercise Price in effect
immediately prior to such combination shall be proportionately
increased.
(c) If any capital reorganization or reclassification of the capital
stock of the Company, or any consolidation or merger of the Company
with or into another corporation or other entity, or the sale of all or
substantially all of the Company's assets to another corporation or
other entity shall be effected in such a way that holders of shares of
Common Stock shall be entitled to receive stock, securities, other
evidence of equity ownership or assets with respect to or in exchange
for shares of Common Stock, then, as a condition of such
reorganization, reclassification, consolidation, merger or sale (except
as otherwise provided below in this SECTION 4), lawful and adequate
provisions shall be made whereby the Holder shall thereafter have the
right to receive upon the exercise hereof upon the basis and upon the
terms and conditions specified herein, such shares of stock,
securities, other evidence of equity ownership or assets as may be
issued or payable with respect to or in exchange for a number of
outstanding shares of such Common Stock equal to the number of shares
of Common Stock immediately theretofore purchasable and receivable upon
the exercise of this Warrant under this SECTION 4 had such
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reorganization, reclassification, consolidation, merger or sale not
taken place, and in any such case appropriate provisions shall be made
with respect to the rights and interests of the Holder to the end that
the provisions hereof (including, without limitation, provisions for
adjustments of the Exercise Price and of the number of shares of Common
Stock receivable upon the exercise of this Warrant) shall thereafter be
applicable, as nearly as may be, in relation to any shares of stock,
securities, other evidence of equity ownership or assets thereafter
deliverable upon the exercise hereof (including an immediate
adjustment, by reason of such consolidation or merger, of the Exercise
Price to the value for the Common Stock reflected by the terms of such
consolidation or merger if the value so reflected is less than the
Exercise Price in effect immediately prior to such consolidation or
merger). Subject to the terms of this Warrant, in the event of a merger
or consolidation of the Company with or into another corporation or
other entity as a result of which the number of shares of common stock
of the surviving corporation or other entity issuable to holders of
Common Stock, is greater or lesser than the number of shares of Common
Stock outstanding immediately prior to such merger or consolidation,
then the Exercise Price in effect immediately prior to such merger or
consolidation shall be adjusted in the same manner as though there were
a subdivision or combination of the outstanding shares of Common Stock.
The Company shall not effect any such consolidation, merger or sale,
unless, prior to the consummation thereof, the successor corporation
(if other than the Company) resulting from such consolidation or merger
or the corporation purchasing such assets shall assume by written
instrument executed and mailed or delivered to the Holder, the
obligation to deliver to the Holder such shares of stock, securities,
other evidence of equity ownership or assets as, in accordance with the
foregoing provisions, the Holder may be entitled to receive or
otherwise acquire. If a purchase, tender or exchange offer is made to
and accepted by the holders of more than fifty (50%) percent of the
outstanding shares of Common Stock, the Company shall not effect any
consolidation, merger or sale with the person having made such offer or
with any affiliate of such person, unless prior to the consummation of
such consolidation, merger or sale the Holder of this Warrant shall
have been given a reasonable opportunity to then elect to receive upon
the exercise of this Warrant the amount of stock, securities, other
evidence of equity ownership or assets then issuable with respect to
the number of shares of Common Stock in accordance with such offer.
(d) In case the Company shall, at any time prior to exercise of this
Warrant, consolidate or merge with any other corporation or other
entity (where the Company is not the surviving entity) or transfer all
or substantially all of its assets to any other corporation or other
entity, then the Company shall, as a condition precedent to such
transaction, cause effective provision to be made so that the Holder of
this Warrant upon the exercise of this Warrant after the effective date
of such transaction shall be entitled to receive the kind and amount of
shares, evidences of indebtedness and/or other securities or property
receivable on such transaction by a holder of the number of shares of
Common Stock as to which this Warrant was exercisable immediately prior
to such transaction (without giving effect to any restriction upon such
exercise); and, in any such case, appropriate provision shall be made
with respect to the rights and interest of the Holder of this Warrant
to the end that the provisions of this Warrant shall thereafter be
applicable (as nearly as may be practicable) with respect to any
shares, evidences of indebtedness or other securities or assets
thereafter deliverable upon exercise of this Warrant. Upon the
occurrence of any event described in this SECTION 4(d), the
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holder of this Warrant shall have the right to (i) exercise this
Warrant immediately prior to such event at an Exercise Price equal to
lesser of (1) the then Exercise Price or (2) the price per share of
Common Stock paid in such event, or (ii) retain ownership of this
Warrant, in which event, appropriate provisions shall be made so that
the Warrant shall be exercisable at the Holder's option into shares of
stock, securities or other equity ownership of the surviving or
acquiring entity.
Whenever the Exercise Price shall be adjusted pursuant to this SECTION
4, the Company shall issue a certificate signed by its President or Vice
President and by its Treasurer, Assistant Treasurer, Secretary or Assistant
Secretary, setting forth, in reasonable detail, the event requiring the
adjustment, the amount of the adjustment, the method by which such adjustment
was calculated (including a description of the basis on which the Board of
Directors of the Company made any determination hereunder), and the Exercise
Price after giving effect to such adjustment, and shall cause copies of such
certificates to be mailed (by first-class mail, postage prepaid) to the Holder
of this Warrant. The Company shall make such certificate and mail it to the
Holder promptly after each adjustment.
5. No fractional shares of Common Stock shall be issued in connection
with any exercise of this Warrant, but in lieu of such fractional shares, the
Company shall make a cash payment therefor equal in amount to the product of the
applicable fraction multiplied by the Exercise Price then in effect.
6. In the event the Company grants rights (other than rights granted
pursuant to a shareholder rights or poison pill plan) to all shareholders to
purchase Common Stock, the Holder shall have the same rights as if this Warrant
had been exercised immediately prior to such grant.
7. This Warrant need not be changed because of any change in the
Exercise Price or in the number of shares of Common Stock purchased hereunder.
8. The terms defined in this paragraph, whenever used in this Warrant,
shall, unless the context otherwise requires, have the respective meanings
hereinafter specified. The term "COMMON STOCK" shall mean and include the
Company's Common Stock, $.01 par value per share, authorized on the date of the
original issue of this Warrant and shall also include in case of any
reorganization, reclassification, consolidation, merger or sale of assets of the
character referred to in SECTION 4 hereof, the stock, securities or assets
provided for in such paragraph. The term "COMPANY" shall also include any
successor corporation to NETGURU, INC. by merger, consolidation or otherwise.
The term "OUTSTANDING" when used with reference to Common Stock shall mean at
any date as of which the number of shares thereof is to be determined, all
issued shares of Common Stock, except shares then owned or held by or for the
account of the Company. The term "1933 ACT" shall mean the Securities Act of
1933, as amended, or any successor Federal statute, and the rules and
regulations of the Securities and Exchange Commission, or any other Federal
agency then administering the 1933 Act, thereunder, all as the same shall be in
effect at the time.
9. This Warrant is exchangeable, upon the surrender hereby by the
Holder at the office or agency of the Company, for new Warrants of like tenor
representing in the aggregate the right to subscribe for and purchase the number
of shares of Common Stock which may be subscribed for and purchased hereunder,
each of such new Warrants to represent the right to subscribe for and purchase
such number of shares of Common Stock as shall be designated by the Holder at
the time of such surrender. Upon receipt of evidence satisfactory to the Company
of the loss, theft, destruction or mutilation of this Warrant or any such new
Warrants and, in the case of any such loss, theft, or destruction, upon delivery
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of a bond of indemnity, reasonably satisfactory to the Company, or, in the case
of any such mutilation, upon surrender or cancellation of this Warrant or such
new Warrants, the Company will issue to the Holder a new Warrant of like tenor,
in lieu of this Warrant or such new Warrants, representing the right to
subscribe for and purchase the number of shares of Common Stock which may be
subscribed for and purchased hereunder.
10. The Company will at no time close its transfer books against the
transfer of this Warrant or of any shares of Common Stock issued or issuable
upon the exercise of this Warrant in any manner which interferes with the timely
exercise of this Warrant. This Warrant shall not entitle the Holder to any
voting rights or any rights as a shareholder of the Company. The rights and
obligations of the Company, of the Holder, and of any holder of shares of Common
Stock issuable hereunder, shall survive the exercise of this Warrant.
11. This Warrant sets forth the entire agreement of the Company and the
Holder of the Common Stock issuable upon the exercise of this Warrant with
respect to the rights of the Holder and the Common Stock issuable upon the
exercise of this Warrant, notwithstanding the knowledge of such Holder of any
other agreement or the provisions of any agreement, whether or not known to the
Holder, and the Company represents that there are no agreements inconsistent
with the terms hereof or which purport in any way to bind the Holder of this
Warrant or the Common Stock.
12. The validity, interpretation and performance of this Warrant and
each of its terms and provisions shall be governed by the laws of the State of
California.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer under its corporate seal and dated as of May 24,
2000.
NETGURU, INC.
By: /S/ Jyoti Chatterjee
-----------------------------------
Jyoti Chatterjee, President
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