<PAGE>
As filed with the Securities and Exchange Commission on February 9, 2000
Registration No. 333-95377
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
--------------
Amendment No. 1 to
FORM S-1
REGISTRATION STATEMENT
Under
The Securities Act of 1933
--------------
NOOSH, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Delaware 7379 77-0495080
(State or other
jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or
organization) Classification Code Number) Identification Number)
</TABLE>
--------------
3401 Hillview Avenue, Palo Alto, California, 94304
(650) 320-6000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
--------------
Ofer Ben-Shachar
President, Chief Executive Officer and Chairman
3401 Hillview Avenue, Palo Alto, California 94304
(650) 320-6000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
--------------
Copies To:
<TABLE>
<S> <C>
Laura A. Berezin, Esq. Steven B. Stokdyk, Esq.
Cooley Godward LLP Sullivan & Cromwell
Five Palo Alto Square 1888 Century Park East Blvd., 21st Floor
3000 El Camino Real Los Angeles, California 90067
Palo Alto, CA 94306-2155 (310) 712-6600
(650) 843-5000
</TABLE>
--------------
Approximate date of commencement of proposed sale to the public:
As soon as practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities Act"), check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the Prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment that specifically states that this registration
statement shall thereafter become effective in accordance with section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the commission, acting pursuant to said section
8(a), may determine.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
EXPLANATORY NOTE
The purpose of this Amendment No. 1 to the Registration Statement is to file
certain exhibits to the Registration Statement, as set forth in Item 16(a) of
Part II.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
The following table sets forth all expenses, other than the underwriting
discounts and commissions, payable by us in connection with the sale of the
common stock being registered. All the amounts shown are estimates except for
the registration fee, the NASD filing fee and the Nasdaq National Market
application fee.
<TABLE>
<S> <C>
Registration fee................................................. $ 15,312
NASD filing fee.................................................. 6,300
Nasdaq National Market application fee........................... 95,000
Blue sky qualification fee and expenses.......................... 20,000
Printing and engraving expenses.................................. 250,000
Legal fees and expenses.......................................... 500,000
Accounting fees and expenses..................................... 250,000
Transfer agent and registrar fees................................ 15,000
Miscellaneous.................................................... 48,388
----------
Total............................................................ $1,200,000
==========
</TABLE>
Item 14. Indemnification of Officers and Directors.
As permitted by Delaware law, our amended and restated certificate of
incorporation provides that no director of ours will be personally liable to
us or our stockholders for monetary damages for breach of fiduciary duty as a
director, except for liability for:
. any breach of duty of loyalty to us or to our stockholders;
. acts or omissions not in good faith or that involve intentional misconduct
or a knowing violation of law;
. unlawful payment of dividends or unlawful stock repurchases or redemptions;
or
. any transaction from which the director derived an improper personal
benefit.
Our amended and restated certificate of incorporation further provides that
we must indemnify our directors and officers and may indemnify our other
employees and agents to the fullest extent permitted by Delaware law. We
believe that indemnification under our amended and restated certificate of
incorporation covers negligence and gross negligence on the part of
indemnified parties.
We intend to enter into indemnification agreements with each of our
directors and executive officers. These agreements, among other things,
require us to indemnify each director and executive officer for some expenses
including attorneys' fees, judgments, fines and settlement amounts incurred by
any of these persons in any action or proceeding, including any action by or
in the right of NOOSH, arising out of these persons' services as our director
or executive officer, any subsidiary of ours or any other company or
enterprise to which the person provides services at our request.
The underwriting agreement will provide for indemnification by the
underwriters of NOOSH, our directors, our officers who sign the registration
statement, and our controlling persons for some liabilities, including
liabilities arising under the securities act.
II-1
<PAGE>
Item 15. Recent Sales of Unregistered Securities.
Since inception, we have sold and issued the following unregistered
securities:
(1) From August 15, 1998 to January 25, 2000, we have granted stock
options to purchase 7,137,435 shares of the our common stock to employees,
consultants and directors pursuant to our 1998 equity incentive plan. Of
these stock options, 73,100 shares have been cancelled without being
exercised, 3,025,428 shares have been exercised, 0 have been repurchased
and 4,038,907 shares remain outstanding.
(2) In August 1998, we issued an aggregate of 40,000 shares of common
stock to one purchaser at $0.00125 per share for an aggregate purchase
price of $50.
(3) In August 1998, we issued an aggregate of 4,000,000 shares of common
stock to Ofer Ben-Shachar at $0.00125 per share for an aggregate purchase
price of $5,000.
(4) In September 1998, we issued an aggregate of 4,000,000 shares of
common stock to Ofer Ben-Shachar at $0.00125 per share for an aggregate
purchase price of $5,000.
(5) In November 1998, we issued an aggregate of 2,023,077 shares of
Series A preferred stock to twelve purchasers at $0.65 per share for an
aggregate purchase price of $1,315,000. Shares of Series A preferred stock
are convertible into shares of common stock at the rate of two shares of
common stock for each share of Series A preferred stock owned.
(6) In January 1999 through March 1999, we issued an aggregate of 76,986
shares of common stock to four consultants at $0.325 per share for an
aggregate purchase price of $2,502.
(7) In April 1999, we issued an aggregate of 4,363,637 shares of Series B
preferred stock to twenty-two purchasers at $2.75 per share for an
aggregate purchase price of $12,000,002. Shares of Series B preferred stock
are convertible into shares of common stock at the rate of two shares of
common stock for each share of Series B preferred stock owned.
(8) On September 15, 1999, we issued an aggregate of 13,216 shares of
common stock to six consultants at $0.80 per share for an aggregate
purchase price of $10,573.
(9) On October 8, 1999, we issued an aggregate of 11,609 shares of common
stock to eight consultants at $1.00 per share for an aggregate purchase
price of $11,609.
(10) On October 15, 1999, we issued an aggregate of 19,000 shares of
common stock to one employee as consideration with an aggregate fair market
value of $19,000 under a technology transfer agreement.
(11) On November 1, 1999, we issued an aggregate of 5,727 shares of
common stock to two consultants at $1.25 per share for an aggregate
purchase price of $7,159.
(12) In November 1999, we issued an aggregate of 6,809,135 shares of
Series C preferred stock to thirty-nine purchasers at $7.45 per share for
an aggregate purchase price of $50,728,056. Shares of Series C preferred
stock are convertible into shares of common stock at the rate of one share
of common stock for each share of Series C preferred stock owned.
(13) On November 15, 1999, we issued an aggregate of 33,865 shares of
common stock to four consultants at $1.50 per share for an aggregate
purchase price of $50,798.
(14) On November 30, 1999, we issued an aggregate of 847 shares of common
stock to three consultants at $1.75 per share for an aggregate purchase
price of $1,482.
(15) On December 30, 1999, we issued two warrants to two purchasers to
purchase an aggregate of 495,000 shares of common stock. A portion of the
first warrant, for a total of 140,000 shares, became immediately
exercisable upon issuance at an exercise price of $7.45. A portion of the
second warrant, for a total of 75,000 shares, became immediately
exercisable upon
II-2
<PAGE>
issuance at an exercise price of $11.00. The remaining portions of the
warrants are exercisable when the print vendors meet stated volume targets
for business conducted over our service at exercise prices ranging from
$7.45 per share to the fair market value of our common stock on the date
the volume targets are met.
(16) On December 31, 1999, we issued an aggregate of 13,203 shares of
common stock to seven consultants for an aggregate purchase price of
$29,707.
(17) On January 14, 2000, we issued one warrant to one purchaser to
purchase an aggregate of 50,000 shares of common stock at an exercise price
of $11.00 per share.
(18) On January 25, 2000 we issued 1,418,182 shares of Series D preferred
stock to three purchasers at $11.00 per share for a total of $15,600,002.
Shares of Series D preferred stock are convertible into shares of common
stock at the rate of one share of common stock for each share of Series D
preferred stock owned. In addition, we issued two warrants to purchase an
aggregate of 2,780,159 shares of common stock at an exercise price of
$11.00 per share. A total of 961,309 shares of common stock are immediately
exercisable under the warrants. The remaining shares under the warrants are
exercisable when the holder meets stated volume targets for business
conducted over our service.
With respect to the grant of stock options described in paragraph (1), an
exemption from registration was unnecessary in that none of the transactions
involved a "sale" of securities as this term is used in Section 2(3) of the
Securities Act. The sale and issuance of securities and the exercise of
options described in paragraphs (1), (6), (8), (9), (11), (13), (14) and (15)
above were deemed to be exempt from registration under the Securities Act by
virtue of Rule 701 promulgated thereunder in that they were offered and sold
either pursuant to a written compensatory benefit plan or pursuant to a
written contract relating to compensation, as provided in Rule 701. The sale
and issuance of securities described in paragraphs (2), (3), (4), (5), (7),
(10), (12), (16), (17) and (18) above were deemed to be exempt from
registration under the Securities Act by virtue of Rule 4(2) or Regulation D
promulgated thereunder.
Appropriate legends are affixed to the stock certificates issued in the
aforementioned transactions. Similar legends were imposed in connection with
any subsequent sales of any of these securities. All recipients either
received adequate information about NOOSH or had access, through employment or
other relationships, to such information.
II-3
<PAGE>
Item 16. Exhibits and Financial Statement Schedules.
(a) Exhibits.
<TABLE>
<CAPTION>
Exhibit
Number Description of Document
------- -----------------------
<C> <S>
1.1* Form of Underwriting Agreement.
3.1** Certificate of Incorporation of Registrant, as currently in effect.
3.2** Form of Amended and Restated Certificate of Incorporation of
Registrant to be filed upon the closing of the offering made pursuant
to this Registration Statement.
3.3** Bylaws of the Registrant as currently in effect.
4.1* Specimen Common Stock Certificate.
4.2** Amended and Restated Investor Rights Agreement dated January 25, 2000
between Registrant and holders of the Registrant's Series A Preferred
Stock, Series B Preferred Stock, Series C Preferred Stock and Series D
Preferred Stock.
4.3+ Warrant for the Purchase of 225,000 shares of Common Stock issued to
Consolidated Graphics, Inc. dated December 30, 1999.
4.4+ Warrant for the Purchase of 270,000 shares of Common Stock issued to
Wallace Computer Services, Inc. dated December 30, 1999.
4.5+ Warrant for the Purchase of 50,000 shares of Common Stock issued to
Bank of America Technology and Operations, Inc. dated January 14,
2000.
4.6+ Warrant for the Purchase of 2,430,158 shares of Common Stock issued to
R.R. Donnelley & Sons Company dated January 25, 2000.
4.7+ Warrant for the Purchase of 350,000 shares of Common Stock issued to
R.R. Donnelley & Sons Company dated January 25, 2000.
5.1* Opinion of Cooley Godward LLP.
10.1** Form of Indemnity Agreement.
10.2** 1998 Equity Incentive Plan and related documents.
10.3** 2000 Equity Incentive Plan and related documents.
10.4** 2000 Employee Stock Purchase Plan.
10.5** 2000 Non-Employee Directors Stock Option Plan and related documents.
10.6** Lease Agreement, dated April 1, 1999, between Registrant and Syntex
(U.S.A.) Inc.
10.7** Sublease Agreement, dated November 1, 1999, between the Registrant and
Xerox Corporation.
10.8** Promissory Note, dated April 15, 1999, between Registrant and David
Hannebrink.
10.9** Promissory Note, dated October 8, 1999, between Registrant and Hagi
Schwartz.
10.10** Promissory Note, dated November 1, 1999, between Registrant and David
Hannebrink.
10.11* Promissory Note, dated January 3, 2000, between Registrant and Kevin
Akeroyd.
10.12* Promissory Note, dated January 3, 2000, between Registrant and Ray
Martinelli.
10.13* Promissory Note, dated January 3, 2000, between Registrant and Timothy
Moore.
10.14* Promissory Note, dated January 15, 2000, between Registrant and Steven
Baloff.
10.15* Promissory Note, dated January 15, 2000, between Registrant and David
Hannebrink.
10.16* Promissory Note, dated January 15, 2000 between Registrant and Robert
Shaw.
10.17+ Co-Development and Marketing Agreement, dated as of January 25, 2000,
between the Registrant and R.R. Donnelley & Sons Company.
23.1 Consent of Independent Accountants.
23.2* Consent of Cooley Godward LLP (included in Exhibit 5.1).
24.1** Power of Attorney.
27.1** Financial Data Schedule.
</TABLE>
- --------
* To be filed by amendment.
** Previously filed.
+ Confidential treatment has been requested for a portion of this exhibit.
(b) Financial Statement Schedules.
Schedules are omitted because they are not applicable, or because the
information is included in the Financial Statements or the Notes thereto.
II-4
<PAGE>
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(1) That for purposes of determining any liability under the Securities
Act, the information omitted from the form of this prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) That for purposes of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of the securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the provisions referenced in Item 15
of this Registration Statement or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission this
indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against these liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer, or
controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by a director, officer, or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether the indemnification by it is against
public policy as expressed in the Securities Act of 1933, and will be
governed by the final adjudication of this issue.
(4) To provide to the Underwriters at the closing specified in the
Underwriting Agreement certificates in the denomination and registered in
the names required by the Underwriters to permit prompt delivery to each
purchaser.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has caused this Amendment No. 1 to Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the County of Santa
Clara, State of California, on the 9th day of February, 2000.
NOOSH, Inc.
*
By: _________________________________
Ofer Ben-Shachar
President, Chief Executive
Officer and Chairman
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to Registration Statement has been signed below by the following persons
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
---------- ----- ----
<S> <C> <C>
* President, Chief Executive February 9, 2000
______________________________________ Officer and Chairman of
Ofer Ben-Shachar the Board of Directors
(principal executive
officer)
/s/ Hagi Schwartz Vice President and Chief February 9, 2000
______________________________________ Financial Officer
Hagi Schwartz (principal financial and
accounting officer)
* Director February 9, 2000
______________________________________
Steven Baloff
* Director February 9, 2000
______________________________________
Arthur Patterson
* Director February 9, 2000
______________________________________
Kathy Levinson
</TABLE>
/s/ Hagi Schwartz
*By: ____________________________
Name:
Hagi Schwartz
Attorney-in-Fact
II-6
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description of Document
------- -----------------------
<C> <S>
1.1* Form of Underwriting Agreement.
3.1** Certificate of Incorporation of Registrant, as currently in effect.
3.2** Form of Amended and Restated Certificate of Incorporation of
Registrant to be filed upon the closing of the offering made pursuant
to this Registration Statement.
3.3** Bylaws of the Registrant as currently in effect.
4.1* Specimen Common Stock Certificate.
4.2** Amended and Restated Investor Rights Agreement dated January 25, 2000
between Registrant and holders of the Registrant's Series A Preferred
Stock, Series B Preferred Stock, Series C Preferred Stock and Series D
Preferred Stock.
4.3+ Warrant for the Purchase of 225,000 shares of Common Stock issued to
Consolidated Graphics, Inc. dated December 30, 1999.
4.4+ Warrant for the Purchase of 270,000 shares of Common Stock issued to
Wallace Computer Services, Inc. dated December 30, 1999.
4.5+ Warrant for the Purchase of 50,000 shares of Common Stock issued to
Bank of America Technology and Operations, Inc. dated January 14,
2000.
4.6+ Warrant for the Purchase of 2,430,158 shares of Common Stock issued to
R.R. Donnelley & Sons Company dated January 25, 2000.
4.7+ Warrant for the Purchase of 350,000 shares of Common Stock issued to
R.R. Donnelley & Sons Company dated January 25, 2000.
5.1* Opinion of Cooley Godward LLP.
10.1** Form of Indemnity Agreement.
10.2** 1998 Equity Incentive Plan and related documents.
10.3** 2000 Equity Incentive Plan and related documents.
10.4** 2000 Employee Stock Purchase Plan.
10.5** 2000 Non-Employee Directors Stock Option Plan and related documents.
10.6** Lease Agreement, dated April 1, 1999, between Registrant and Syntex
(U.S.A.) Inc.
10.7** Sublease Agreement, dated November 1, 1999, between the Registrant and
Xerox Corporation.
10.8** Promissory Note, dated April 15, 1999, between Registrant and David
Hannebrink.
10.9** Promissory Note, dated October 8, 1999, between Registrant and Hagi
Schwartz.
10.10** Promissory Note, dated November 1, 1999, between Registrant and David
Hannebrink.
10.11* Promissory Note, dated January 3, 2000, between Registrant and Kevin
Akeroyd.
10.12* Promissory Note, dated January 3, 2000, between Registrant and Ray
Martinelli.
10.13* Promissory Note, dated January 3, 2000, between Registrant and Timothy
Moore.
10.14* Promissory Note, dated January 15, 2000, between Registrant and Steven
Baloff.
10.15* Promissory Note, dated January 15, 2000, between Registrant and David
Hannebrink.
10.16* Promissory Note, dated January 15, 2000 between Registrant and Robert
Shaw.
10.17+ Co-Development and Marketing Agreement, dated as of January 25, 2000,
between the Registrant and R.R. Donnelley & Sons Company.
23.1 Consent of Independent Accountants.
23.2* Consent of Cooley Godward LLP (included in Exhibit 5.1).
24.1** Power of Attorney.
27.1** Financial Data Schedule.
</TABLE>
- --------
* To be filed by amendment.
** Previously filed.
+ Confidential treatment has been requested for a portion of this exhibit.
<PAGE>
EXHIBIT 4.3
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS OF ANY STATE.
THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND
MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE
APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN
FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED
TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.
NOOSH, Inc.
Warrant for the Purchase of Shares of Common Stock
No. W-C1 225,000 Shares
FOR VALUE RECEIVED, NOOSH, Inc., a California corporation (the "Company"),
with its principal office at 3401 Hillview Avenue, Palo Alto, CA 94304, hereby
certifies that Consolidated Graphics, Inc. (the "Holder") is entitled, subject
to the provisions of this Warrant, to purchase from the Company, at such times
and in such increments as set forth below in Section 1 commencing on December
30, 1999 (the "Effective Date") and prior to the Expiration Date (as defined in
Section 10 below) up to two hundred twenty five thousand (225,000) fully paid
and nonassessable shares of Common Stock of the Company, subject to adjustment
as hereinafter provided.
The Holder may purchase such shares of Common Stock at the purchase prices
per share (as appropriately adjusted pursuant to Section 7 hereof) equal to the
price per share on an increment by increment basis as set forth below in Section
1 (the "Exercise Price"). The term "Common Stock" shall mean the aforementioned
Common Stock of the Company, together with any other equity securities that may
be issued by the Company in addition thereto or in substitution therefor as
provided herein.
The number of shares of Common Stock to be received upon the exercise of
this Warrant and the price to be paid per share upon such exercise are subject
to adjustment from time to time as hereinafter set forth. The shares of Common
Stock deliverable upon such exercise, as adjusted from time to time, are
hereinafter sometimes referred to as "Warrant Shares."
Section 1. Exercise of Warrant. This Warrant may only be exercised prior
to the Expiration Date according to the following schedule and provided that,
subject to Section 10 below, each increment may only be exercised during the one
year period commencing upon the date of achievement of the milestone (or from
the Effective Date with respect to the First Increment) relating to such
increment ("Milestone"):
1.
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
Number of Warrant
Shares That Become Exercise Price Per
Exercisable Share Milestone
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
First Increment 75,000 $11.00 Execution of User
Agreement (as defined
below) on Effective Date
________________________________________________________________________________________________________
Second Increment 9,375 $11.00 ACV ++ [*]
________________________________________________________________________________________________________
Third Increment 13,125 $11.00 ACV ++ [*]
________________________________________________________________________________________________________
Fourth Increment 20,625 $11.00 ACV ++ [*]
________________________________________________________________________________________________________
Fifth Increment 31,875 $11.00 ACV ++ [*]
________________________________________________________________________________________________________
Sixth Increment 18,750 FMV ACV ++ [*]
________________________________________________________________________________________________________
Seventh Increment 18,750 FMV ACV ++ [*]
________________________________________________________________________________________________________
Eight Increment 18,750 FMV ACV ++ [*]
________________________________________________________________________________________________________
Ninth Increment 18,750 FMV ACV ++ [*]
________________________________________________________________________________________________________
Total: 225,000
________________________________________________________________________________________________________
</TABLE>
For the purposes of the table above, "FMV" shall mean the fair market value (as
determined in Section 2(c) below) per share of NOOSH Common Stock as of the end
of the calendar quarter of achievement of the applicable Milestone. For the
purposes of this Warrant, "ACV" shall mean the aggregate dollar value of Orders
(as defined in that certain User Agreement between the Company and Holder
effective as of the Effective Date ("User Agreement")) processed by CGX (as
defined in the User Agreement) during the period commencing on the Effective
Date and ending on December 31, 2001, as such amount is determined by the
Company within 30 days following each calendar quarter during such period.
To exercise, Holder shall surrender to the Company at its principal office at
the address set forth in the initial paragraph hereof the Warrant (or at such
other address as the Company may hereafter notify the Holder in writing) with
the Purchase Form annexed hereto duly executed and accompanied by proper payment
of the Exercise Price in lawful money of the United States of America in the
form of a check, subject to collection, for the number of Warrant Shares
specified in the Purchase Form. Upon receipt by the Company of this Warrant and
such Purchase Form, together with proper payment of the Exercise Price, at such
office, and subject to compliance with applicable law, including any waiting
period applicable under Hart-Scott-Rodino regulations, the Holder shall be
deemed to be the holder of record of the Warrant Shares, notwithstanding that
the stock transfer books of the Company shall then be closed or that
certificates representing such Warrant Shares shall not then be actually
delivered to the Holder.
Section 2. Right to Convert Warrant into Stock: Net Issuance.
(a) Right to Convert. In addition to and without limiting the rights
of the holder under the terms of this Warrant, the holder shall have the right
to convert this Warrant or any portion thereof (the "Conversion Right") into
shares of Common Stock as provided in this Section 2 pursuant to the exercise
schedule, increments, and exercise price set forth in Section 1
[] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
++ greater than or equal to
2.
<PAGE>
above. Upon exercise of the Conversion Right with respect to a particular number
of shares subject to this Warrant (the "Converted Warrant Shares"), the Company
shall deliver to the holder (without payment by the holder of any exercise price
or any cash or other consideration) (X) that number of shares of fully paid and
nonassessable Common Stock equal to the quotient obtained by dividing the value
of this Warrant (or the specified portion hereof) on the Conversion Date (as
defined in subsection (b) hereof), which value shall be determined by
subtracting (A) the aggregate Exercise Price of the Converted Warrant Shares
immediately prior to the exercise of the Conversion Right from (B) the aggregate
fair market value of the Converted Warrant Shares issuable upon exercise of this
Warrant (or the specified portion hereof) on the Conversion Date (as herein
defined) by (Y) the fair market value of one (1) share of Common Stock on the
Conversion Date (as herein defined).
Expressed as a formula, such conversion shall be computed as follows:
X = B - A
-----------------
Y
Where: X = the number of shares of Common Stock to be issued
to holder
Y = the fair market value (FMV) of one (1) share of
Common Stock
A = the aggregate Exercise Price (i.e., Converted
Warrant Shares x Exercise Price)
B = the aggregate FMV (i.e. FMV x Converted Warrant
Shares)
No fractional shares shall be issuable upon exercise of the Conversion
Right, and, if the number of shares to be issued determined in accordance with
the foregoing formula is other than a whole number, the Company shall pay to the
holder an amount in cash equal to the fair market value of the resulting
fractional share on the Conversion Date (as hereinafter defined). For purposes
of Section 2 of this Warrant, shares issued pursuant to the Conversion Right
shall be treated as if they were issued upon the exercise of this Warrant.
(b) Method of Exercise. The Conversion Right may be exercised by the holder
by the surrender of this Warrant at the principal office of the Company together
with a written statement specifying that the holder thereby intends to exercise
the Conversion Right and indicating the number of shares subject to this Warrant
which are being surrendered (referred to in subsection (a) hereof as the
Conversion Warrant Shares) in exercise of the Conversion Right. Subject to
compliance with applicable law, including any waiting period applicable under
Hart-Scott-Rodino regulations, such conversion shall be effective upon receipt
by the Company of this Warrant together with the aforesaid written statement, or
on such later date as is specified therein (the "Conversion Date"), and, at the
election of the holder hereof, may be made contingent upon an IPO or a Change in
Control (as defined in Section 10 below). Certificates for the shares
[] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
3.
<PAGE>
issuable upon exercise of the Conversion Right and, if applicable, a new warrant
evidencing the balance of the shares remaining subject to this warrant, shall be
issued as of the Conversion Date and shall be delivered to the holder as soon as
possible.
(c) Determination of Fair Market Value. For purposes of this Section 11,
"fair market value" of a share of Common Stock as of a particular date (the
"Determination Date") shall mean:
(i) If the Conversion Right is exercised in connection with, and
contingent upon, an IPO, and if the Company's registration statement relating to
such IPO ("Registration Statement") has been declared effective by the SEC, then
the initial "Price to Public" specified in the final prospectus with respect to
such offering.
(ii) If the Conversion Right is exercised in connection with, and
contingent upon, a Change in Control, then the portion of the purchase price
paid by the acquirer that such share would be entitled to in such transaction.
(iii) If the Conversion Right is not exercised in connection with,
and contingent upon, an IPO or a Change in Control, then as follows:
(1) If traded on a securities exchange, the fair market value
of the Common Stock shall be deemed to be the average of the closing prices of
the Common Stock on such exchange over the thirty (30) day period ending five
(5) business days prior to the Determination Date; and
(2) If traded over-the-counter, the fair market value of the
Common Stock shall be deemed to be the average of the closing bid prices of the
Common Stock over the thirty (30) day period ending five (5) business days prior
to the Determination Date; and
(3) If there is no public market for the Common Stock, then
fair market value shall be determined in good faith by the Board of Directors of
the Company.
Section 3. Reservation of Shares. The Company hereby agrees that at all
times there shall be reserved for issuance and delivery upon exercise of this
Warrant all shares of its Common Stock or other shares of capital stock of the
Company from time to time issuable upon exercise of this Warrant. All such
shares shall be duly authorized and, when issued upon such exercise in
accordance with the terms of this Warrant, shall be validly issued, fully paid
and nonassessable.
Section 4. Fractional Interest. The Company will not issue a fractional
share of Common Stock upon exercise of this Warrant. Instead, the Company will
deliver its check for the current fair market value of the fractional share, as
determined in good faith by the Board of Directors of the Company.
[] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
4.
<PAGE>
Section 5. Assignment or Loss of Warrant.
(a) The Holder of this Warrant shall not be entitled, without
obtaining the consent of the Company, to assign, by operation of law or
otherwise, its interest in this Warrant in whole or in part to any person or
persons.
(b) Upon receipt of evidence satisfactory to the Company of the
loss, theft, destruction or mutilation of this Warrant, and (in the case of
loss, theft or destruction) of indemnification satisfactory to the Company, and
upon surrender and cancellation of this Warrant, if mutilated, the Company shall
execute and deliver a new Warrant of like tenor and date.
Section 6. Rights of the Holder. The Holder shall not, by virtue hereof,
be entitled to any rights of a stockholder in the Company, either at law or
equity, and the rights of the Holder are limited to those expressed in this
Warrant. Nothing contained in this Warrant shall be construed as conferring upon
the Holder hereof the right to vote or to consent or to receive notice as a
stockholder of the Company on any matters or with respect to any rights
whatsoever as a stockholder of the Company. No dividends or interest shall be
payable or accrued in respect of this Warrant or the interest represented hereby
or the Warrant Shares purchasable hereunder until, and only to the extent that,
this Warrant shall have been exercised in accordance with its terms.
Section 7. Adjustment of Exercise Price and Number of Shares. The number
and kind of securities purchasable upon the exercise of the Warrant and the
Exercise Price (with respect to increments one through five only) shall be
subject to adjustment from time to time upon the occurrence of certain events,
as follows:
(a) Reclassification of Outstanding Securities. In case of any
reclassification, change or conversion of securities of the class issuable upon
exercise of this Warrant (other than a change in par value, or from par value to
no par value, or from no par value to par value, or as a result of a subdivision
or combination), the Company shall execute a new Warrant (in form and substance
reasonably satisfactory to the Holder of this Warrant) providing that the Holder
of this Warrant shall have the right to exercise such new Warrant and upon such
exercise to receive, in lieu of each share of Common Stock theretofore issuable
upon exercise of this Warrant, the kind and amount of shares of stock, other
securities, money and property receivable upon such reclassification or change
by a holder of one share of Common Stock. Such new Warrant shall provide for
adjustments that shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 7. The provisions of this subsection
(a) shall similarly apply to successive reclassification or changes.
(b) Subdivisions or Combination of Shares. If the Company at any
time while this Warrant remains outstanding and unexpired shall subdivide or
combine its Common Stock, the Exercise Price (with respect to increments one
through five only) and the number of Warrant Shares issuable upon exercise
hereof shall be proportionately adjusted.
[] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
5.
<PAGE>
(c) Stock Dividends. If the Company at any time while this Warrant
is outstanding and unexpired shall pay a dividend payable in shares of Common
Stock (except any distribution specifically provided for in the foregoing
subsections (a) and (b)), then the Exercise Price (with respect to increments
one through five only) shall be adjusted, from and after the date of
determination of stockholders entitled to receive such dividend or distribution,
to that price determined by multiplying the Exercise Price in effect immediately
prior to such date of determination by a fraction (a) the numerator of which
shall be the total number of shares of Common Stock outstanding immediately
prior to such dividend or distribution, and (b) the denominator of which shall
be the total number of shares of Common Stock outstanding immediately after such
dividend or distribution and the number of Warrant Shares subject to this
Warrant shall be proportionately adjusted.
(d) Minimum Adjustment. No adjustment in the Exercise Price of this
Section 7 shall be required unless such adjustment would require an increase or
decrease of at least $.05 in such Exercise Price; provided, however, that any
adjustments which by reason of this subsection are not required to be made,
shall be carried forward and taken into account in any subsequent adjustment.
All calculations under this Section 7 shall be made to the nearest cent or to
the nearest share, as the case may be.
(e) Notice of Record Date. In the event of any taking by the
Company of a record of its stockholders for the purpose of determining
stockholders who are entitled to receive payment of any dividend (other than a
cash dividend) or other distribution, any right to subscribe for, purchase or
otherwise acquire any share of any class or any other securities or property, or
to receive any other right, or for the purpose of determining stockholders who
are entitled to vote in connection with any proposed merger or consolidation of
the Company with or into any other corporation, or any proposed sale, lease or
conveyance of all or substantially all of the assets of the Company, or any
proposed liquidation, dissolution or winding up of the Company, the Company
shall mail to the Holder of this Warrant, at least ten days prior to the date
specified therein, a notice specifying the date on which any such record is to
be taken for the purpose of such dividend, distribution or right, and the amount
and character of such dividend, distribution or right.
(f) No Adjustment Upon Exercise of Warrants. No adjustments shall
be made under any Section herein in connection with the issuance of Warrant
Shares upon exercise of the Warrants.
Section 8. Officer's Certificate. Whenever the Exercise Price shall be
adjusted as required by the provisions of Section 7, the Company shall deliver
an officer's certificate showing the adjusted Exercise Price determined as
herein provided, setting forth in reasonable detail the facts requiring such
adjustment and the manner of computing such adjustment. Each such officer's
certificate shall be signed by the chairman, president or chief financial
officer of the Company.
[] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
6.
<PAGE>
Section 9. Transfer to Comply with the Securities Act of 1933. This
Warrant may not be sold, assigned, pledged, hypothecated, encumbered or in any
other manner transferred or disposed of, in whole or in part. The Warrant
Shares, nor any interest in them, may be sold, assigned, pledged, hypothecated,
encumbered or in any other manner transferred or disposed of, in whole or in
part, except in compliance with applicable United States federal and state
securities or Blue Sky laws and the terms and conditions hereof. Each Warrant
shall bear a legend in substantially the same form as the legend set forth on
the first page of this Warrant. Each certificate for Warrant Shares issued upon
exercise of this Warrant, unless at the time of exercise such Warrant Shares are
acquired pursuant to a registration statement that has been declared effective
under the Act, shall bear a legend substantially in the following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE
SECURITIES LAWS OF ANY STATE. THESE SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE
TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE
APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR
EXEMPTION THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE
AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE
ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN
COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
Any certificate for any Warrant Shares issued at any time in exchange or
substitution for any certificate for any Warrant Shares bearing such legend
(except a new certificate for any Warrant Shares issued after the acquisition of
such Warrant Shares pursuant to a registration statement that has been declared
effective under the Act) shall also bear such legend unless, in the opinion of
counsel for the Company, the Warrant Shares represented thereby need no longer
be subject to the restriction contained herein. The provision of this Section 9
shall be binding upon all subsequent Holders of certificates for Warrant Shares
bearing the above legend and all subsequent Holders of this Warrant, if any. In
addition in connection with the issuance of this Warrant, the Holder
specifically represents to the Company by acceptance of this Warrant as follows:
(a) The Holder is aware of the Company's business affairs and
financial condition, and has acquired information about the Company sufficient
to reach an informed and knowledgeable decision to acquire this Warrant. The
Holder is acquiring this Warrant for its own account for investment purposes
only and not with a view to, or for the resale in connection with, any
"distribution" thereof in violation of the Act. The Holder is an "accredited
investor" as defined in Rule 501 of the Rules and Regulations promulgated under
the Securities Act of 1933, as amended.
[] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
7.
<PAGE>
(b) The Holder understands that this Warrant has not been registered
under the Act in reliance upon a specific exemption therefrom, which exemption
depends upon, among other things, the bona fide nature of the Holder's
investment intent as expressed herein.
(c) The Holder further understands that this Warrant must be held
indefinitely unless subsequently registered under the Act and qualified under
any applicable state securities laws, or unless exemptions from registration and
qualification are otherwise available. Moreover, the Holder understands that the
Company is under no obligation to register and qualify this Warrant.
(d) The Holder is aware of the provisions of Rule 144 promulgated
under the Act, which, in substance, permit limited public resale of "restricted
securities" acquired, directly or indirectly, from the issuer thereof (or from
an affiliate of such issuer), in a non-public offering subject to the
satisfaction of certain conditions, if applicable, including, among other
things: The availability of certain public information about the Company, the
resale occurring not less than one year after the party has purchased and paid
for the securities to be sold; the sale being made through a broker in an
unsolicited "broker's transaction" or in transactions directly with a market
maker (as said term is defined under the Securities Exchange Act of 1934, as
amended) and the amount of securities being sold during any three month period
not exceeding the specified limitations stated therein.
(e) The Holder further understands that at the time it wishes to sell
this Warrant there may be no public market upon which to make such a sale, and
that, even if such a public market then exists, the Company may not be
satisfying the current public information requirements of Rule 144, and that, in
such event, the Holder may be precluded from selling this Warrant under Rule 144
even if the one year minimum holding period had been satisfied.
(f) The Holder further understands that in the event all of the
requirements of Rule 144 are not satisfied, registration under the Act,
compliance with Regulation A, or some other registration exemption will be
required; and that, notwithstanding the fact that Rule 144 is not exclusive, the
staff of the Securities and Exchange Commission (the "SEC") has expressed its
opinion that persons proposing to sell private placement securities other than
in a registered offering and otherwise than pursuant to Rule 144 will have a
substantial burden of proof in establishing that an exemption from registration
is available for such offers or sales, and that such persons and their
respective brokers who participate in such transactions do so at their own risk.
Section 10. Expiration Date. This Warrant shall expire and shall be wholly
void and have no effect after 5:00 p.m. on the date (the "Expiration Date")
which is the earlier of (a) the third anniversary of the Effective Date; (b) the
closing date of the sale of all or substantially all of the assets of the
Company; or (c) the closing date of a merger or consolidation of the Company
with or into any other entity, including a reverse triangular merger involving
the Company, (other than a merger or consolidation in which the holders of the
voting power of the
[] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
8.
<PAGE>
Company immediately prior to such consolidation or merger hold a majority of the
surviving or resulting entity immediately following such consolidation or
merger) (a "Change in Control").
Section 11. Market Standoff. The holder of this Warrant, by acceptance
hereof, agrees that such holder will not, without the prior written consent of
the lead underwriter of the initial public offering of the Common Stock of the
Company pursuant to a registration statement filed under the Act (the "IPO"),
directly or indirectly offer to sell, contract to sell (including, without
limitation, any short sale), pledge, grant any option for the sale of, acquire
any option to dispose of, or otherwise dispose of any Warrant Shares, or
securities into which such Warrant Shares are converted, for a period of 180
days following the day on which the registration statement filed on behalf of
the Company in connection with the IPO shall become effective by order of the
SEC; provided, however, that to the extent that the requirements of this
provision differ in any way from the actual form of lockup agreement which such
lead underwriter requires the members of the Company's management and
significant shareholders to sign in connection with and IPO, the Holder agrees
to execute and deliver such form to the lead underwriter and this provision
shall be superseded accordingly.
Section 12. Governing Law. This Warrant shall be construed and enforced in
accordance with, and the right of the parties shall be governed by, the laws of
State of California, excluding its rules governing conflicts of laws.
Section 13. Modification and Waiver. Neither this Warrant nor any term
hereof may be amended, waived, discharged or terminated other than by an
instrument in writing signed by the Company and by the Holder hereof.
Section 14. Notices. Any notice, request or other document required or
permitted to be given or delivered to the Holder hereof or the Company shall be
delivered or shall be sent by certified mail, postage prepaid, to each such
Holder at its address as shown on the books of the Company or to the Company at
the address indicated therefor in the first paragraph of this Warrant.
Section 15. Descriptive Headings. The description headings of the several
sections and paragraphs of this Warrant are inserted for convenience only and do
not constitute a part of this Warrant.
Section 16. Entire Agreement. This Warrant constitutes the entire
agreement between the parties pertaining to the subject matter herein and
supersedes all prior and contemporaneous agreements, representation and
undertakings of the parties.
[] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
9.
<PAGE>
IN WITNESS WHEREOF, the Company has duly caused this Warrant to be signed
by a duly authorized officer effective as of the Effective Date.
NOOSH, Inc.
By: /s/ Ofer Ben-Shacher
--------------------------------------------
Name: Ofer Ben-Shacher
--------------------------------------
Title: President and Chief Executive Officer
-------------------------------------
ACCEPTED AND AGREED TO:
Consolidated Graphics, Inc.
By: /s/ G. Christopher Colville
---------------------------------
Name: G. Christopher Colville
-------------------------------
Title: Executive Vice President and Chief Financial Officer
----------------------------------------------------
[] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
10.
<PAGE>
NOOSH, Inc.
PURCHASE FORM
Dated ______________ ____, ____
[_] The undersigned hereby irrevocably elects to exercise the Warrant
issued to it to purchase ____________ shares of Common Stock of NOOSH,
Inc. and hereby makes payment of ______________ in payment of the
exercise price thereof.
[_] The undersigned hereby elects to convert ________ shares of the Warrant
pursuant to the provisions of Section 2 of the Warrant.
Name of Warrant Holder:
__________________________________________________
Address of Warrant Holder:
__________________________________________________
__________________________________________________
Tax identification Number or Social Security
Number of Warrant Holder:
__________________________________________________
Signature:________________________________________
NOTE: The above signature should correspond
exactly with the name on the first page of the
Warrant or with the name of the assignee appearing
on a duly executed assignment form.
Dated:____________________________________________
<PAGE>
EXHIBIT 4.4
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS OF ANY STATE.
THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND
MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE
APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN
FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED
TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.
NOOSH, Inc.
Warrant for the Purchase of Shares of Common Stock
No. W-C2 270,000 Shares
FOR VALUE RECEIVED, NOOSH, Inc., a California corporation (the
"Company"), with its principal office at 3401 Hillview Avenue, Palo Alto, CA
94304, hereby certifies that Wallace Computer Services, Inc. (the "Holder") is
entitled, subject to the provisions of this Warrant, to purchase from the
Company, at such times and in such increments as set forth below in Section 1
commencing on December 30, 1999 (the "Effective Date") and prior to the
Expiration Date (as defined in Section 10 below) up to two hundred seventy
thousand (270,000) fully paid and nonassessable shares of Common Stock of the
Company, subject to adjustment as hereinafter provided.
The Holder may purchase such shares of Common Stock at the purchase
prices per share (as appropriately adjusted pursuant to Section 7 hereof) equal
to the price per share on an increment by increment basis as set forth below in
Section 1 (the "Exercise Price"). The term "Common Stock" shall mean the
aforementioned Common Stock of the Company, together with any other equity
securities that may be issued by the Company in addition thereto or in
substitution therefor as provided herein.
The number of shares of Common Stock to be received upon the exercise
of this Warrant and the price to be paid per share upon such exercise are
subject to adjustment from time to time as hereinafter set forth. The shares of
Common Stock deliverable upon such exercise, as adjusted from time to time, are
hereinafter sometimes referred to as "Warrant Shares."
Section 1. Exercise of Warrant. This Warrant may only be exercised
prior to the Expiration Date according to the following schedule and provided
that, subject to Section 10 below, each increment may only be exercised during
the one year period commencing upon the date of achievement of the milestone (or
from the Effective Date with respect to the First Increment) relating to such
increment ("Milestone"); and provided, further, that with respect to
1.
<PAGE>
the First Increment of 140,000 Warrant Shares, the exercisability of 35,000 of
such Warrant Shares shall terminate upon the closing of the Company"s IPO (as
defined below):
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Number of Warrant
Shares That Are Exercise Price Per
Exercisable Share Milestone
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
First Increment 140,000 $7.45 Execution of User Agreement
(as defined below) on the
Effective Date
- -----------------------------------------------------------------------------------------------------------------------
Second Increment 10,000 $7.45 AWV ++ [*]
- -----------------------------------------------------------------------------------------------------------------------
Third Increment 25,000 $7.45 AWV ++ [*]
- -----------------------------------------------------------------------------------------------------------------------
Fourth Increment 30,000 $7.45 AWV ++ [*]
- -----------------------------------------------------------------------------------------------------------------------
Fifth Increment 5,000 $7.45 AWV ++ [*]
- -----------------------------------------------------------------------------------------------------------------------
Sixth Increment 30,000 FMV AWV ++ [*]
- -----------------------------------------------------------------------------------------------------------------------
Seventh Increment 10,000 FMV AWV ++ [*]
- -----------------------------------------------------------------------------------------------------------------------
Eight Increment 10,000 FMV AWV ++ [*]
- -----------------------------------------------------------------------------------------------------------------------
Ninth Increment 10,000 FMV AWV ++ [*]
- -----------------------------------------------------------------------------------------------------------------------
Total: 270,000
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
For the purposes of the table above, "FMV" shall mean the fair market value (as
determined in Section 2(c) below) per share of NOOSH Common Stock as of the date
of the achievement of the applicable Milestone. For the purposes of this
Warrant, "AWV" shall mean the aggregate dollar value of Orders (as defined in
that certain User Agreement between the Company and Holder effective as of the
Effective Date ("User Agreement")) processed by Wallace Computer Services, Inc.
during the period commencing on the Effective Date and ending on December 30,
2002, as such amount is determined by the Company within 30 days following each
calendar quarter during such period. In the event that, as of the first
anniversary of the Effective Date, the AWV is less than [*], AWV shall
nevertheless [*] as of such anniversary.
To exercise, Holder shall surrender to the Company at its principal office at
the address set forth in the initial paragraph hereof (or at such other address
as the Company may hereafter notify the Holder in writing) with the Purchase
Form annexed hereto duly executed and accompanied by proper payment of the
Exercise Price in lawful money of the United States of America in the form of a
check, subject to collection, for the number of Warrant Shares specified in the
Purchase Form. Upon receipt by the Company of this Warrant and such Purchase
Form, together with proper payment of the Exercise Price, at such office, and
subject to compliance with applicable law, including any waiting period
applicable under Hart-Scott-Rodino regulations, the Holder shall be deemed to be
the holder of record of the Warrant Shares, notwithstanding that the stock
transfer books of the Company shall then be closed or that certificates
representing such Warrant Shares shall not then be actually delivered to the
Holder.
[]= Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
++ greater than or equal to
2.
<PAGE>
Section 2. Right to Convert Warrant into Stock: Net Issuance.
(a) Right to Convert. In addition to and without limiting the
rights of the holder under the terms of this Warrant, the holder shall have the
right to convert this Warrant or any portion thereof (the "Conversion Right")
into shares of Common Stock as provided in this Section 2 pursuant to the
exercise schedule, increments, and exercise price set forth in Section 1 above.
Upon exercise of the Conversion Right with respect to a particular number of
shares subject to this Warrant (the "Converted Warrant Shares"), the Company
shall deliver to the holder (without payment by the holder of any exercise price
or any cash or other consideration) (X) that number of shares of fully paid and
nonassessable Common Stock equal to the quotient obtained by dividing the value
of this Warrant (or the specified portion hereof) on the Conversion Date (as
defined in subsection (b) hereof), which value shall be determined by
subtracting (A) the aggregate Exercise Price of the Converted Warrant Shares
immediately prior to the exercise of the Conversion Right from (B) the aggregate
fair market value of the Converted Warrant Shares issuable upon exercise of this
Warrant (or the specified portion hereof) on the Conversion Date (as herein
defined) by (Y) the fair market value of one (1) share of Common Stock on the
Conversion Date (as herein defined).
Expressed as a formula, such conversion shall be computed as follows:
X = B - A
-------------
Y
Where: X = the number of shares of Common Stock to be issued
to holder
Y = the fair market value (FMV) of one (1) share of
Common Stock
A = the aggregate Exercise Price (i.e., Converted
Warrant Shares x Exercise Price)
B = the aggregate FMV (i.e. FMV x Converted Warrant
Shares)
No fractional shares shall be issuable upon exercise of the Conversion
Right, and, if the number of shares to be issued determined in accordance with
the foregoing formula is other than a whole number, the Company shall pay to the
holder an amount in cash equal to the fair market value of the resulting
fractional share on the Conversion Date (as hereinafter defined). For purposes
of Section 2 of this Warrant, shares issued pursuant to the Conversion Right
shall be treated as if they were issued upon the exercise of this Warrant.
(b) Method of Exercise. The Conversion Right may be exercised by the
holder by the surrender of this Warrant at the principal office of the Company
together with a written statement specifying that the holder thereby intends to
exercise the Conversion Right and indicating the number of shares subject to
this Warrant which are being surrendered (referred to
[]= Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
3.
<PAGE>
in subsection (a) hereof as the Conversion Warrant Shares) in exercise of the
Conversion Right. Subject to compliance with applicable law, including any
waiting period applicable under Hart-Scott-Rodino regulations, such conversion
shall be effective upon receipt by the Company of this Warrant together with the
aforesaid written statement, or on such later date as is specified therein (the
"Conversion Date"), and, at the election of the holder hereof, may be made
contingent upon an IPO or a Change in Control (as defined in Section 10 below).
Certificates for the shares issuable upon exercise of the Conversion Right and,
if applicable, a new warrant evidencing the balance of the shares remaining
subject to this warrant, shall be issued as of the Conversion Date and shall be
delivered to the holder as soon as possible.
(c) Determination of Fair Market Value. For purposes of this Section 11,
"fair market value" of a share of Common Stock as of a particular date (the
"Determination Date") shall mean:
(i) If the Conversion Right is exercised in connection with,
and contingent upon, an IPO, and if the Company"s registration statement
relating to such IPO ("Registration Statement") has been declared effective by
the SEC, then the initial "Price to Public" specified in the final prospectus
with respect to such offering.
(ii) If the Conversion Right is exercised in connection with,
and contingent upon, a Change in Control, then the portion of the purchase price
paid by the acquirer that such share would be entitled to in such transaction.
(iii) If the Conversion Right is not exercised in connection
with, and contingent upon, an IPO or a Change in Control, then as follows:
(1) If traded on a securities exchange, the fair market
value of the Common Stock shall be deemed to be the average of the closing
prices of the Common Stock on such exchange over the thirty (30) day period
ending five (5) business days prior to the Determination Date; and
(2) If traded over-the-counter, the fair market value of
the Common Stock shall be deemed to be the average of the closing bid prices of
the Common Stock over the thirty (30) day period ending five (5) business days
prior to the Determination Date; and
(3) If there is no public market for the Common Stock, then
fair market value shall be determined in good faith by the Board of Directors of
the Company.
Section 3. Reservation of Shares. The Company hereby agrees that at all
times there shall be reserved for issuance and delivery upon exercise of this
Warrant all shares of its Common Stock or other shares of capital stock of the
Company from time to time issuable upon exercise of this Warrant. All such
shares shall be duly authorized and, when issued upon such exercise in
accordance with the terms of this Warrant, shall be validly issued, fully paid
and nonassessable.
[]= Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
4.
<PAGE>
Section 4. Fractional Interest. The Company will not issue a fractional
share of Common Stock upon exercise of this Warrant. Instead, the Company will
deliver its check for the current fair market value of the fractional share, as
determined in good faith by the Board of Directors of the Company.
Section 5. Assignment or Loss of Warrant.
(a) The Holder of this Warrant shall not be entitled, without
obtaining the consent of the Company, to assign, by operation of law or
otherwise, its interest in this Warrant in whole or in part to any person or
persons.
(b) Upon receipt of evidence satisfactory to the Company of
the loss, theft, destruction or mutilation of this Warrant, and (in the case of
loss, theft or destruction) of indemnification satisfactory to the Company, and
upon surrender and cancellation of this Warrant, if mutilated, the Company shall
execute and deliver a new Warrant of like tenor and date.
Section 6 Rights of the Holder. The Holder shall not, by virtue
hereof, be entitled to any rights of a stockholder in the Company, either at law
or equity, and the rights of the Holder are limited to those expressed in this
Warrant. Nothing contained in this Warrant shall be construed as conferring upon
the Holder hereof the right to vote or to consent or to receive notice as a
stockholder of the Company on any matters or with respect to any rights
whatsoever as a stockholder of the Company. No dividends or interest shall be
payable or accrued in respect of this Warrant or the interest represented hereby
or the Warrant Shares purchasable hereunder until, and only to the extent that,
this Warrant shall have been exercised in accordance with its terms.
Section 7. Adjustment of Exercise Price and Number of Shares. The
number and kind of securities purchasable upon the exercise of the Warrant and
the Exercise Price (with respect to increments one through five only) shall be
subject to adjustment from time to time upon the occurrence of certain events,
as follows:
(a) Reclassification of Outstanding Securities. In case of any
reclassification, change or conversion of securities of the class issuable upon
exercise of this Warrant (other than a change in par value, or from par value to
no par value, or from no par value to par value, or as a result of a subdivision
or combination), the Company shall execute a new Warrant (in form and substance
reasonably satisfactory to the Holder of this Warrant) providing that the Holder
of this Warrant shall have the right to exercise such new Warrant and upon such
exercise to receive, in lieu of each share of Common Stock theretofore issuable
upon exercise of this Warrant, the kind and amount of shares of stock, other
securities, money and property receivable upon such reclassification or change
by a holder of one share of Common Stock. Such new Warrant shall provide for
adjustments that shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 7. The provisions of this subsection
(a) shall similarly apply to successive reclassification or changes.
[]= Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
5.
<PAGE>
(b) Subdivisions or Combination of Shares. If the Company at
any time while this Warrant remains outstanding and unexpired shall subdivide or
combine its Common Stock, the Exercise Price (with respect to increments one
through five only) and the number of Warrant Shares issuable upon exercise
hereof shall be proportionately adjusted.
(c) Stock Dividends. If the Company at any time while this
Warrant is outstanding and unexpired shall pay a dividend payable in shares of
Common Stock (except any distribution specifically provided for in the foregoing
subsections (a) and (b)), then the Exercise Price (with respect to increments
one through five only) shall be adjusted, from and after the date of
determination of stockholders entitled to receive such dividend or distribution,
to that price determined by multiplying the Exercise Price in effect immediately
prior to such date of determination by a fraction (a) the numerator of which
shall be the total number of shares of Common Stock outstanding immediately
prior to such dividend or distribution, and (b) the denominator of which shall
be the total number of shares of Common Stock outstanding immediately after such
dividend or distribution and the number of Warrant Shares subject to this
Warrant shall be proportionately adjusted.
(d) Minimum Adjustment. No adjustment in the Exercise Price of
this Section 7 shall be required unless such adjustment would require an
increase or decrease of at least $.05 in such Exercise Price; provided, however,
that any adjustments which by reason of this subsection are not required to be
made, shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 7 shall be made to the nearest
cent or to the nearest share, as the case may be.
(e) Notice of Record Date. In the event of any taking by the
Company of a record of its stockholders for the purpose of determining
stockholders who are entitled to receive payment of any dividend (other than a
cash dividend) or other distribution, any right to subscribe for, purchase or
otherwise acquire any share of any class or any other securities or property, or
to receive any other right, or for the purpose of determining stockholders who
are entitled to vote in connection with any proposed merger or consolidation of
the Company with or into any other corporation, or any proposed sale, lease or
conveyance of all or substantially all of the assets of the Company, or any
proposed liquidation, dissolution or winding up of the Company, the Company
shall mail to the Holder of this Warrant, at least ten days prior to the date
specified therein, a notice specifying the date on which any such record is to
be taken for the purpose of such dividend, distribution or right, and the amount
and character of such dividend, distribution or right.
(f) No Adjustment Upon Exercise of Warrants. No adjustments shall
be made under any Section herein in connection with the issuance of Warrant
Shares upon exercise of the Warrants.
Section 8. Officer's Certificate. Whenever the Exercise Price shall be
adjusted as required by the provisions of Section 7, the Company shall deliver
an officer"s certificate showing the adjusted Exercise Price determined as
herein provided, setting forth in reasonable detail the facts requiring such
adjustment and the manner of computing such adjustment. Each
[]= Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
6.
<PAGE>
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
such officer"s certificate shall be signed by the chairman, president or chief
financial officer of the Company.
Section 9. Transfer to Comply with the Securities Act of 1933. This
Warrant may not be sold, assigned, pledged, hypothecated, encumbered or in any
other manner transferred or disposed of, in whole or in part. The Warrant
Shares, nor any interest in them, may be sold, assigned, pledged, hypothecated,
encumbered or in any other manner transferred or disposed of, in whole or in
part, except in compliance with applicable United States federal and state
securities or Blue Sky laws and the terms and conditions hereof. Each Warrant
shall bear a legend in substantially the same form as the legend set forth on
the first page of this Warrant. Each certificate for Warrant Shares issued upon
exercise of this Warrant, unless at the time of exercise such Warrant Shares are
acquired pursuant to a registration statement that has been declared effective
under the Act, shall bear a legend substantially in the following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES
LAWS OF ANY STATE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT
AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS,
PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. THE ISSUER OF THESE
SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE
SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR
RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.
Any certificate for any Warrant Shares issued at any time in exchange or
substitution for any certificate for any Warrant Shares bearing such legend
(except a new certificate for any Warrant Shares issued after the acquisition of
such Warrant Shares pursuant to a registration statement that has been declared
effective under the Act) shall also bear such legend unless, in the opinion of
counsel for the Company, the Warrant Shares represented thereby need no longer
be subject to the restriction contained herein. The provision of this Section 9
shall be binding upon all subsequent Holders of certificates for Warrant Shares
bearing the above legend and all subsequent Holders of this Warrant, if any. In
addition in connection with the issuance of this Warrant, the Holder
specifically represents to the Company by acceptance of this Warrant as follows:
(a) The Holder is aware of the Company's business affairs and
financial condition, and has acquired information about the Company sufficient
to reach an informed and knowledgeable decision to acquire this Warrant. The
Holder is acquiring this Warrant for its own account for investment purposes
only and not with a view to, or for the resale in connection with, any
"distribution" thereof in violation of the Act. The Holder is an "accredited
investor" as defined in Rule 501 of the Rules and Regulations promulgated under
the Securities Act of 1933, as amended.
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE
406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
7.
<PAGE>
(b) The Holder understands that this Warrant has not been registered
under the Act in reliance upon a specific exemption therefrom, which exemption
depends upon, among other things, the bona fide nature of the Holder's
investment intent as expressed herein.
(c) The Holder further understands that this Warrant must be held
indefinitely unless subsequently registered under the Act and qualified under
any applicable state securities laws, or unless exemptions from registration and
qualification are otherwise available. Moreover, the Holder understands that the
Company is under no obligation to register and qualify this Warrant.
(d) The Holder is aware of the provisions of Rule 144 promulgated
under the Act, which, in substance, permit limited public resale of "restricted
securities" acquired, directly or indirectly, from the issuer thereof (or from
an affiliate of such issuer), in a non-public offering subject to the
satisfaction of certain conditions, if applicable, including, among other
things: The availability of certain public information about the Company, the
resale occurring not less than one year after the party has purchased and paid
for the securities to be sold; the sale being made through a broker in an
unsolicited "broker's transaction" or in transactions directly with a market
maker (as said term is defined under the Securities Exchange Act of 1934, as
amended) and the amount of securities being sold during any three month period
not exceeding the specified limitations stated therein.
(e) The Holder further understands that at the time it wishes to sell
this Warrant there may be no public market upon which to make such a sale, and
that, even if such a public market then exits, the Company may not be satisfying
the current public information requirements of Rule 144, and that, in such
event, the Holder may be precluded from selling this Warrant under Rule 144 even
if the one year minimum holding period had been satisfied.
(f) The Holder further understands that in the event all of the
requirements of Rule 144 are not satisfied, registration under the Act,
compliance with Regulation A, or some other registration exemption will be
required; and that, notwithstanding the fact that Rule 144 is not exclusive, the
staff of the Securities and Exchange Commission (the "SEC") has expressed its
opinion that persons proposing to sell private placement securities other than
in a registered offering and otherwise than pursuant to Rule 144 will have a
substantial burden of proof in establishing that an exemption from registration
is available for such offers or sales, and that such persons and their
respective brokers who participate in such transactions do so at their own risk.
Section 10. Expiration Date. This Warrant shall expire and shall be
wholly void and have no effect after 5:00 p.m. on the date (the "Expiration
Date") which is the earlier of (a) the third anniversary of the Effective Date;
(b) the closing date of the sale of all or substantially all of the assets of
the Company; or (c) the closing date of a merger or consolidation of the Company
with or into any other entity, including a reverse triangular merger involving
the Company (other than a merger or consolidation in which the holders of the
voting power of the
[]= Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
8.
<PAGE>
Company immediately prior to such consolidation or merger hold a majority of the
surviving or resulting entity immediately following such consolidation or
merger) (a "Change in Control").
Section 11. Market Standoff. The holder of this Warrant, by acceptance
hereof, agrees that such holder will not, without the prior written consent of
the lead underwriter of the initial public offering of the Common Stock of the
Company pursuant to a registration statement filed under the Act (the "IPO"),
directly or indirectly offer to sell, contract to sell (including, without
limitation, any short sale), pledge, grant any option for the sale of, acquire
any option to dispose of, or otherwise dispose of any Warrant Shares, or
securities into which such Warrant Shares are converted, for a period of 180
days following the day on which the registration statement filed on behalf of
the Company in connection with the IPO shall become effective by order of the
SEC; provided, however, that to the extent that the requirements of this
provision differ in any way from the actual form of lockup agreement which such
lead underwriter requires the members of the Company's management and
significant shareholders to sign in connection with and IPO, the Holder agrees
to execute and deliver such form to the lead underwriter and this provision
shall be superseded accordingly.
Section 12. Governing Law. This Warrant shall be construed and enforced in
accordance with, and the right of the parties shall be governed by, the laws of
State of California, excluding its rules governing conflicts of laws.
Section 13. Modification and Waiver. Neither this Warrant nor any term
hereof may be amended, waived, discharged or terminated other than by an
instrument in writing signed by the Company and by the Holder hereof.
Section 14. Notices. Any notice, request or other document required or
permitted to be given or delivered to the Holder hereof or the Company shall be
delivered or shall be sent by certified mail, postage prepaid, to each such
Holder at its address as shown on the books of the Company or to the Company at
the address indicated therefor in the first paragraph of this Warrant.
Section 15. Descriptive Headings. The description headings of the several
sections and paragraphs of this Warrant are inserted for convenience only and do
not constitute a part of this Warrant.
Section 16. Entire Agreement. This Warrant constitutes the entire
agreement between the parties pertaining to the subject matter herein and
supersedes all prior and contemporaneous agreements, representation and
undertakings of the parties.
[]= Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
9.
<PAGE>
IN WITNESS WHEREOF, the Company has duly caused this Warrant to be
signed by a duly authorized officer effective as of the Effective Date.
NOOSH, Inc.
By: /s/ Ofer Ben-Shachar
----------------------------------------
Name: Ofer Ben-Shachar
--------------------------------------
Title: President and Chief Executive Officer
-------------------------------------
ACCEPTED AND AGREED TO:
WALLACE COMPUTER SERVICES, Inc.
By: /s/ David M. Rousseau
-----------------------------
Name: David M. Rousseau
---------------------------
Title: VP, Information Services
--------------------------
[]= Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
10.
<PAGE>
NOOSH, Inc.
PURCHASE FORM
Dated ______________ ____, ____
[_] The undersigned hereby irrevocably elects to exercise the Warrant
issued to it to purchase ___________ shares of Common Stock of NOOSH,
Inc. and hereby makes payment of ___________________ in payment of the
exercise price thereof.
[_] The undersigned hereby elects to convert ________ shares of the
Warrant pursuant to the provisions of Section 2 of the Warrant.
Name of Warrant Holder:
________________________________________
Address of Warrant Holder:
________________________________________
________________________________________
Tax identification Number or Social
Security Number of Warrant Holder:
________________________________________
Signature:______________________________
NOTE: The above signature should
correspond exactly with the name on the
first page of the Warrant or with the
name of the assignee appearing on a duly
executed assignment form.
Dated:__________________________________
<PAGE>
EXHIBIT 4.5
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS OF ANY STATE.
THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND
MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE
APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN
FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED
TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.
NOOSH, Inc.
Warrant for the Purchase of Shares of Common Stock
No. W-C3 50,000 Shares
FOR VALUE RECEIVED, NOOSH, Inc., a California corporation (the "Company"),
with its principal office at 3401 Hillview Avenue, Palo Alto, CA 94304, hereby
certifies that Bank of America Technology and Operations, Inc. (the "Holder") is
entitled, subject to the provisions of this Warrant, to purchase from the
Company, at such times as set forth below in Section 1 commencing on January 14,
2000 (the "Effective Date") and prior to the Expiration Date (as defined in
Section 10 below) up to fifty thousand (50,000) fully paid and nonassessable
shares of Common Stock of the Company, subject to adjustment as hereinafter
provided.
The Holder may purchase such shares of Common Stock at the price per share
of eleven dollars ($11.00) (as appropriately adjusted pursuant to Section 7
hereof) as set forth below in Section 1 (the "Exercise Price"). The term "Common
Stock" shall mean the aforementioned Common Stock of the Company, together with
any other equity securities that may be issued by the Company in addition
thereto or in substitution therefor as provided herein.
The number of shares of Common Stock to be received upon the exercise of
this Warrant and the price to be paid per share upon such exercise are subject
to adjustment from time to time as hereinafter set forth. The shares of Common
Stock deliverable upon such exercise, as adjusted from time to time, are
hereinafter sometimes referred to as "Warrant Shares."
Section 1. Exercise of Warrant. This Warrant may only be exercised prior
to the Expiration Date according to the following schedule and provided that,
subject to Section 10 below, the Warrant may only be exercised during the one
year period commencing upon the date of achievement of the milestone as set
forth below ("Milestone"):
-------------------------------------------------------------------
Number of Warrant Shares That Exercise Price Per
Become Exercisable Share Milestone
-------------------------------------------------------------------
50,000 $11.00 ACV ++ [*]
-------------------------------------------------------------------
++ greater than or equal to
1.
<PAGE>
For the purposes of this Warrant, "ACV" shall mean the aggregate dollar value of
Orders (as defined in that certain Internet Services Agreement between the
Company and Holder effective as of the Effective Date ("Services Agreement"))
processed by Bank of America Technology and Operations, Inc. during the period
commencing on the Effective Date and ending on January 14, 2002, as such amount
is determined by the Company within 30 days following each calendar quarter
during such period.
To exercise, Holder shall surrender to the Company at its principal office at
the address set forth in the initial paragraph hereof the Warrant (or at such
other address as the Company may hereafter notify the Holder in writing) with
the Purchase Form annexed hereto duly executed and accompanied by proper payment
of the Exercise Price in lawful money of the United States of America in the
form of a check, subject to collection, for the number of Warrant Shares
specified in the Purchase Form. Upon receipt by the Company of this Warrant and
such Purchase Form, together with proper payment of the Exercise Price, at such
office, and subject to compliance with applicable law, including any waiting
period applicable under Hart-Scott-Rodino regulations, the Holder shall be
deemed to be the holder of record of the Warrant Shares, notwithstanding that
the stock transfer books of the Company shall then be closed or that
certificates representing such Warrant Shares shall not then be actually
delivered to the Holder.
Section 2. Right to Convert Warrant into Stock: Net Issuance.
(a) Right to Convert. In addition to and without limiting the
rights of the holder under the terms of this Warrant, the holder shall have the
right to convert this Warrant or any portion thereof (the "Conversion Right")
into shares of Common Stock as provided in this Section 2 pursuant to the
exercise schedule, and exercise price set forth in Section 1 above. Upon
exercise of the Conversion Right with respect to a particular number of shares
subject to this Warrant (the "Converted Warrant Shares"), the Company shall
deliver to the holder (without payment by the holder of any exercise price or
any cash or other consideration) (X) that number of shares of fully paid and
nonassessable Common Stock equal to the quotient obtained by dividing the value
of this Warrant (or the specified portion hereof) on the Conversion Date (as
defined in subsection (b) hereof), which value shall be determined by
subtracting (A) the aggregate Exercise Price of the Converted Warrant Shares
immediately prior to the exercise of the Conversion Right from (B) the aggregate
fair market value of the Converted Warrant Shares issuable upon exercise of this
Warrant (or the specified portion hereof) on the Conversion Date (as herein
defined) by (Y) the fair market value of one (1) share of Common Stock on the
Conversion Date (as herein defined).
Expressed as a formula, such conversion shall be computed as follows:
X = B - A
---------------
Y
Where: X = the number of shares of Common Stock to be issued to
holder
[] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
2.
<PAGE>
Y = the fair market value (FMV) of one (1) share of Common Stock
A = the aggregate Exercise Price (i.e., Converted Warrant Shares
x Exercise Price)
B = the aggregate FMV (i.e. FMV x Converted Warrant Shares)
No fractional shares shall be issuable upon exercise of the Conversion
Right, and, if the number of shares to be issued determined in accordance with
the foregoing formula is other than a whole number, the Company shall pay to the
holder an amount in cash equal to the fair market value of the resulting
fractional share on the Conversion Date (as hereinafter defined). For purposes
of Section 2 of this Warrant, shares issued pursuant to the Conversion Right
shall be treated as if they were issued upon the exercise of this Warrant.
(b) Method of Exercise. The Conversion Right may be exercised by the
holder by the surrender of this Warrant at the principal office of the Company
together with a written statement specifying that the holder thereby intends to
exercise the Conversion Right and indicating the number of shares subject to
this Warrant which are being surrendered (referred to in subsection (a) hereof
as the Conversion Warrant Shares) in exercise of the Conversion Right. Subject
to compliance with applicable law, including any waiting period applicable under
Hart-Scott-Rodino regulations, such conversion shall be effective upon receipt
by the Company of this Warrant together with the aforesaid written statement, or
on such later date as is specified therein (the "Conversion Date"), and, at the
election of the holder hereof, may be made contingent upon an IPO or a Change in
Control (as defined in Section 10 below). Certificates for the shares issuable
upon exercise of the Conversion Right and, if applicable, a new warrant
evidencing the balance of the shares remaining subject to this warrant, shall be
issued as of the Conversion Date and shall be delivered to the holder as soon as
possible.
(c) Determination of Fair Market Value. For purposes of this Section 11,
"fair market value" of a share of Common Stock as of a particular date (the
"Determination Date") shall mean:
(i) If the Conversion Right is exercised in connection with, and
contingent upon, an IPO, and if the Company's registration statement relating to
such IPO ("Registration Statement") has been declared effective by the SEC, then
the initial "Price to Public" specified in the final prospectus with respect to
such offering.
(ii) If the Conversion Right is exercised in connection with, and
contingent upon, a Change in Control, then the portion of the purchase price
paid by the acquirer that such share would be entitled to in such transaction.
(iii) If the Conversion Right is not exercised in connection with,
and contingent upon, an IPO or a Change in Control, then as follows:
[] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
3.
<PAGE>
(1) If traded on a securities exchange, the fair market value
of the Common Stock shall be deemed to be the average of the closing prices of
the Common Stock on such exchange over the thirty (30) day period ending five
(5) business days prior to the Determination Date; and
(2) If traded over-the-counter, the fair market value of the
Common Stock shall be deemed to be the average of the closing bid prices of the
Common Stock over the thirty (30) day period ending five (5) business days prior
to the Determination Date; and
(3) If there is no public market for the Common Stock, then
fair market value shall be determined in good faith by the Board of Directors of
the Company.
Section 3. Reservation of Shares. The Company hereby agrees that at all
times there shall be reserved for issuance and delivery upon exercise of this
Warrant all shares of its Common Stock or other shares of capital stock of the
Company from time to time issuable upon exercise of this Warrant. All such
shares shall be duly authorized and, when issued upon such exercise in
accordance with the terms of this Warrant, shall be validly issued, fully paid
and nonassessable.
Section 4. Fractional Interest. The Company will not issue a fractional
share of Common Stock upon exercise of this Warrant. Instead, the Company will
deliver its check for the current fair market value of the fractional share, as
determined in good faith by the Board of Directors of the Company.
Section 5. Assignment or Loss of Warrant.
(a) The Holder of this Warrant shall not be entitled, without
obtaining the consent of the Company, to assign, by operation of law or
otherwise, its interest in this Warrant in whole or in part to any person or
persons.
(b) Upon receipt of evidence satisfactory to the Company of the
loss, theft, destruction or mutilation of this Warrant, and (in the case of
loss, theft or destruction) of indemnification satisfactory to the Company, and
upon surrender and cancellation of this Warrant, if mutilated, the Company shall
execute and deliver a new Warrant of like tenor and date.
Section 6. Rights of the Holder. The Holder shall not, by virtue hereof,
be entitled to any rights of a stockholder in the Company, either at law or
equity, and the rights of the Holder are limited to those expressed in this
Warrant. Nothing contained in this Warrant shall be construed as conferring upon
the Holder hereof the right to vote or to consent or to receive notice as a
stockholder of the Company on any matters or with respect to any rights
whatsoever as a stockholder of the Company. No dividends or interest shall be
payable or accrued in respect of this Warrant or the interest represented hereby
or the Warrant Shares purchasable hereunder until, and only to the extent that,
this Warrant shall have been exercised in accordance with its terms.
[] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
4.
<PAGE>
Section 7. Adjustment of Exercise Price and Number of Shares. The number
and kind of securities purchasable upon the exercise of the Warrant and the
Exercise Price shall be subject to adjustment from time to time upon the
occurrence of certain events, as follows:
(a) Reclassification of Outstanding Securities. In case of any
reclassification, change or conversion of securities of the class issuable upon
exercise of this Warrant (other than a change in par value, or from par value to
no par value, or from no par value to par value, or as a result of a subdivision
or combination), the Company shall execute a new Warrant (in form and substance
reasonably satisfactory to the Holder of this Warrant) providing that the Holder
of this Warrant shall have the right to exercise such new Warrant and upon such
exercise to receive, in lieu of each share of Common Stock theretofore issuable
upon exercise of this Warrant, the kind and amount of shares of stock, other
securities, money and property receivable upon such reclassification or change
by a holder of one share of Common Stock. Such new Warrant shall provide for
adjustments that shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 7. The provisions of this subsection
(a) shall similarly apply to successive reclassification or changes.
(b) Subdivisions or Combination of Shares. If the Company at any
time while this Warrant remains outstanding and unexpired shall subdivide or
combine its Common Stock, the Exercise Price and the number of Warrant Shares
issuable upon exercise hereof shall be proportionately adjusted.
(c) Stock Dividends. If the Company at any time while this Warrant
is outstanding and unexpired shall pay a dividend payable in shares of Common
Stock (except any distribution specifically provided for in the foregoing
subsections (a) and (b)), then the Exercise Price shall be adjusted, from and
after the date of determination of stockholders entitled to receive such
dividend or distribution, to that price determined by multiplying the Exercise
Price in effect immediately prior to such date of determination by a fraction
(a) the numerator of which shall be the total number of shares of Common Stock
outstanding immediately prior to such dividend or distribution, and (b) the
denominator of which shall be the total number of shares of Common Stock
outstanding immediately after such dividend or distribution and the number of
Warrant Shares subject to this Warrant shall be proportionately adjusted.
(d) Minimum Adjustment. No adjustment in the Exercise Price of this
Section 7 shall be required unless such adjustment would require an increase or
decrease of at least $.05 in such Exercise Price; provided, however, that any
adjustments which by reason of this subsection are not required to be made,
shall be carried forward and taken into account in any subsequent adjustment.
All calculations under this Section 7 shall be made to the nearest cent or to
the nearest share, as the case may be.
(e) Notice of Record Date. In the event of any taking by the Company
of a record of its stockholders for the purpose of determining stockholders who
are entitled to receive payment of any dividend (other than a cash dividend) or
other distribution, any right to subscribe for, purchase or otherwise acquire
any share of any class or any other securities or property, or to
[] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
5.
<PAGE>
receive any other right, or for the purpose of determining stockholders who are
entitled to vote in connection with any proposed merger or consolidation of the
Company with or into any other corporation, or any proposed sale, lease or
conveyance of all or substantially all of the assets of the Company, or any
proposed liquidation, dissolution or winding up of the Company, the Company
shall mail to the Holder of this Warrant, at least ten days prior to the date
specified therein, a notice specifying the date on which any such record is to
be taken for the purpose of such dividend, distribution or right, and the amount
and character of such dividend, distribution or right.
(f) No Adjustment Upon Exercise of Warrants. No adjustments shall be
made under any Section herein in connection with the issuance of Warrant Shares
upon exercise of the Warrants.
Section 8. Officer's Certificate. Whenever the Exercise Price shall be
adjusted as required by the provisions of Section 7, the Company shall deliver
an officer's certificate showing the adjusted Exercise Price determined as
herein provided, setting forth in reasonable detail the facts requiring such
adjustment and the manner of computing such adjustment. Each such officer's
certificate shall be signed by the chairman, president or chief financial
officer of the Company.
Section 9. Transfer to Comply with the Securities Act of 1933. This
Warrant may not be sold, assigned, pledged, hypothecated, encumbered or in any
other manner transferred or disposed of, in whole or in part; provided that Bank
of America Technology and Operations, Inc. may transfer this Warrant to an
"affiliate," which for the purposes of this Warrant shall mean any entity
controlled by, controlling or under common control with Bank of America
Technology and Operations, Inc. The Warrant Shares, nor any interest in them,
may be sold, assigned, pledged, hypothecated, encumbered or in any other manner
transferred or disposed of, in whole or in part, except in compliance with
applicable United States federal and state securities or Blue Sky laws and the
terms and conditions hereof. Each Warrant shall bear a legend in substantially
the same form as the legend set forth on the first page of this Warrant. Each
certificate for Warrant Shares issued upon exercise of this Warrant, unless at
the time of exercise such Warrant Shares are acquired pursuant to a registration
statement that has been declared effective under the Act, shall bear a legend
substantially in the following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE
SECURITIES LAWS OF ANY STATE. THESE SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE
TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE
APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR
EXEMPTION THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE
AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE
ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR
[] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
6.
<PAGE>
RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES
LAWS.
Any certificate for any Warrant Shares issued at any time in exchange or
substitution for any certificate for any Warrant Shares bearing such legend
(except a new certificate for any Warrant Shares issued after the acquisition of
such Warrant Shares pursuant to a registration statement that has been declared
effective under the Act) shall also bear such legend unless, in the opinion of
counsel for the Company, the Warrant Shares represented thereby need no longer
be subject to the restriction contained herein. The provision of this Section 9
shall be binding upon all subsequent Holders of certificates for Warrant Shares
bearing the above legend and all subsequent Holders of this Warrant, if any. In
addition in connection with the issuance of this Warrant, the Holder
specifically represents to the Company by acceptance of this Warrant as follows:
(a) The Holder is aware of the Company's business affairs and
financial condition, and has acquired information about the Company sufficient
to reach an informed and knowledgeable decision to acquire this Warrant. The
Holder is acquiring this Warrant for its own account for investment purposes
only and not with a view to, or for the resale in connection with, any
"distribution" thereof in violation of the Act. The Holder is an "accredited
investor" as defined in Rule 501 of the Rules and Regulations promulgated under
the Securities Act of 1933, as amended.
(b) The Holder understands that this Warrant has not been registered
under the Act in reliance upon a specific exemption therefrom, which exemption
depends upon, among other things, the bona fide nature of the Holder's
investment intent as expressed herein.
(c) The Holder further understands that this Warrant must be held
indefinitely unless subsequently registered under the Act and qualified under
any applicable state securities laws, or unless exemptions from registration and
qualification are otherwise available. Moreover, the Holder understands that the
Company is under no obligation to register and qualify this Warrant.
(d) The Holder is aware of the provisions of Rule 144 promulgated
under the Act, which, in substance, permit limited public resale of "restricted
securities" acquired, directly or indirectly, from the issuer thereof (or from
an affiliate of such issuer), in a non-public offering subject to the
satisfaction of certain conditions, if applicable, including, among other
things: The availability of certain public information about the Company, the
resale occurring not less than one year after the party has purchased and paid
for the securities to be sold; the sale being made through a broker in an
unsolicited "broker's transaction" or in transactions directly with a market
maker (as said term is defined under the Securities Exchange Act of 1934, as
amended) and the amount of securities being sold during any three month period
not exceeding the specified limitations stated therein.
(e) The Holder further understands that at the time it wishes to sell
this Warrant there may be no public market upon which to make such a sale, and
that, even if such a public
[] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
7.
<PAGE>
market then exists, the Company may not be satisfying the current public
information requirements of Rule 144, and that, in such event, the Holder may be
precluded from selling this Warrant under Rule 144 even if the one year minimum
holding period had been satisfied.
(f) The Holder further understands that in the event all of the
requirements of Rule 144 are not satisfied, registration under the Act,
compliance with Regulation A, or some other registration exemption will be
required; and that, notwithstanding the fact that Rule 144 is not exclusive, the
staff of the Securities and Exchange Commission (the "SEC") has expressed its
opinion that persons proposing to sell private placement securities other than
in a registered offering and otherwise than pursuant to Rule 144 will have a
substantial burden of proof in establishing that an exemption from registration
is available for such offers or sales, and that such persons and their
respective brokers who participate in such transactions do so at their own risk.
Section 10. Expiration Date. This Warrant shall expire and shall be wholly
void and have no effect after 5:00 p.m. on the date (the "Expiration Date")
which is the earlier of (a) the third anniversary of the Effective Date; (b) the
closing date of the sale of all or substantially all of the assets of the
Company; or (c) the closing date of a merger or consolidation of the Company
with or into any other entity, including a reverse triangular merger involving
the Company, (other than a merger or consolidation in which the holders of the
voting power of the Company immediately prior to such consolidation or merger
hold a majority of the surviving or resulting entity immediately following such
consolidation or merger) (a "Change in Control").
Section 11. Market Standoff. The holder of this Warrant, by acceptance
hereof, agrees that such holder will not, without the prior written consent of
the lead underwriter of the initial public offering of the Common Stock of the
Company pursuant to a registration statement filed under the Act (the "IPO"),
directly or indirectly offer to sell, contract to sell (including, without
limitation, any short sale), pledge, grant any option for the sale of, acquire
any option to dispose of, or otherwise dispose of any Warrant Shares, or
securities into which such Warrant Shares are converted, for a period of 180
days following the day on which the registration statement filed on behalf of
the Company in connection with the IPO shall become effective by order of the
SEC; provided, however, that to the extent that the requirements of this
provision differ in any way from the actual form of lockup agreement which such
lead underwriter requires the members of the Company's management and
significant shareholders to sign in connection with and IPO, the Holder agrees
to execute and deliver such form to the lead underwriter and this provision
shall be superseded accordingly.
Section 12. Governing Law. This Warrant shall be construed and enforced in
accordance with, and the right of the parties shall be governed by, the laws of
State of California, excluding its rules governing conflicts of laws.
Section 13. Modification and Waiver. Neither this Warrant nor any term
hereof may be amended, waived, discharged or terminated other than by an
instrument in writing signed by the Company and by the Holder hereof.
[] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities act of 1933, as amended.
8.
<PAGE>
Section 14. Notices. Any notice, request or other document required or
permitted to be given or delivered to the Holder hereof or the Company shall be
delivered or shall be sent by certified mail, postage prepaid, to each such
Holder at its address as shown on the books of the Company or to the Company at
the address indicated therefor in the first paragraph of this Warrant.
Section 15. Descriptive Headings. The description headings of the several
sections and paragraphs of this Warrant are inserted for convenience only and do
not constitute a part of this Warrant.
Section 16. Entire Agreement. This Warrant constitutes the entire
agreement between the parties pertaining to the subject matter herein and
supersedes all prior and contemporaneous agreements, representation and
undertakings of the parties.
[] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
9.
<PAGE>
IN WITNESS WHEREOF, the Company has duly caused this Warrant to be signed
by a duly authorized officer effective as of the Effective Date.
NOOSH, Inc.
By: /s/ Ofer Ben-Shacher
----------------------------------
Name: Ofer Ben-Shacher
--------------------------------
Title: President and Chief Executive Officer
-------------------------------------
ACCEPTED AND AGREED TO:
Bank of America Technology and Operations, Inc.
By: /s/ Jack J. Cardoza
-----------------------------------
Name: Jack J. Cardoza
---------------------------------
Title: Vice President
--------------------------------
[] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities act of 1933, as amended.
10.
<PAGE>
NOOSH, Inc.
PURCHASE FORM
Dated ___________ ____, ____
[_] The undersigned hereby irrevocably elects to exercise the Warrant issued to
it to purchase ___________ shares of Common Stock of NOOSH, Inc. and hereby
makes payment of ___________________ in payment of the exercise price
thereof.
[_] The undersigned hereby elects to convert ________ shares of the Warrant
pursuant to the provisions of Section 2 of the Warrant.
Name of Warrant Holder:
_______________________________________
Address of Warrant Holder:
_______________________________________
_______________________________________
Tax identification Number or Social
Security Number of Warrant Holder:
_______________________________________
Signature:
NOTE: The above signature should
correspond exactly with the name on the
first page of the Warrant or with the name
of the assignee appearing on a duly
executed assignment form.
Dated:_________________________________
<PAGE>
EXHIBIT 4.6
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS OF
ANY STATE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT
AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN
FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED
TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.
NOOSH, Inc.
Warrant for the Purchase of Shares of Common Stock
No. W-C4 2,430,158 Shares
FOR VALUE RECEIVED, NOOSH, Inc., a California corporation (the "Company"),
with its principal office at 3401 Hillview Avenue, Palo Alto, CA 94304, hereby
certifies that R.R. Donnelley and Sons Company (the "Holder") is entitled,
subject to the provisions of this Warrant, to purchase from the Company, at such
times and in such increments as set forth below in Section 1 commencing on
January 25, 2000 (the "Effective Date") and prior to the Expiration Date (as
defined in Section 10 below) two million four hundred thirty thousand one
hundred fifty eight (2,430,158) fully paid and nonassessable shares of Common
Stock of the Company, subject to adjustment as hereinafter provided.
The Holder may purchase such shares of Common Stock at the price per share
of eleven dollars ($11.00) (as appropriately adjusted pursuant to Section 7
hereof) on an increment by increment basis as set forth below in Section 1 (the
"Exercise Price"). The term "Common Stock" shall mean the aforementioned Common
Stock of the Company, together with any other equity securities that may be
issued by the Company in addition thereto or in substitution therefor as
provided herein.
The number of shares of Common Stock to be received upon the exercise of
this Warrant and the price to be paid per share upon such exercise are subject
to adjustment from time to time as hereinafter set forth. The shares of Common
Stock deliverable upon such exercise, as adjusted from time to time, are
hereinafter sometimes referred to as "Warrant Shares."
Section 1. Exercise of Warrant. This Warrant may only be exercised prior
to the Expiration Date according to the following schedule and provided that
each increment of Warrant Shares may only be exercised in whole or in part
during the one year period
1.
<PAGE>
commencing upon the date of achievement of the milestone (or from the Effective
Date with respect to the First Increment) relating to such increment ("Milestone
Date"):
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------
Number of Warrant
Shares That Are Exercise Price Per
Exercisable Share Milestone
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------
First Increment 911,308 $11.00 Effective Date
- ---------------------------------------------------------------------------------
Second Increment 759,425 $11.00 RRD Orders on
Service total [*] or
more in any
consecutive [*]
calendar months
period ending before
February 28, 2001
- ---------------------------------------------------------------------------------
Third Increment 759,425 $11.00 RRD Orders on
Service total
$1,500,000,000
prior to
December 31, 2001
- ---------------------------------------------------------------------------------
Total: 2,430,158
- ---------------------------------------------------------------------------------
</TABLE>
For the purposes of the table above, "RRD Orders" shall mean the aggregate
dollar value of orders run by RRD and its wholly-owned subsidiaries, [*] on the
Service (as defined below) after January 25, 2000 as such amount is determined
in good faith by the Company within thirty (30) days following each calendar
month through December 31, 2001. For the purposes of this Warrant, the term
"Service" means the Company's proprietary Internet-based service as offered by
the Company through www.noosh.com or any successor web site, as such service may
-------------
be revised, augmented, superseded, enhanced, modified or supplemented from time
to time.
To exercise, Holder shall surrender to the Company at its principal office at
the address set forth in the initial paragraph hereof the Warrant (or at such
other address as the Company may hereafter notify the Holder in writing) with
the Purchase Form annexed hereto duly executed and accompanied by proper payment
of the Exercise Price in lawful money of the United States of America in the
form of a check, subject to collection, for the number of Warrant Shares
specified in the Purchase Form. Upon receipt by the Company of this Warrant and
such Purchase Form, together with proper payment of the Exercise Price, at such
office, and subject to compliance with applicable law, including any waiting
period applicable under Hart-Scott-Rodino regulations, the Holder shall be
deemed to be the holder of record of the Warrant Shares, notwithstanding that
the stock transfer books of the Company shall then be closed or that
certificates representing such Warrant Shares shall not then be actually
delivered to the Holder.
[] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
2.
<PAGE>
Section 2. Right to Convert Warrant into Stock: Net Issuance.
(a) Right to Convert. In addition to and without limiting the rights
of the holder under the terms of this Warrant, the holder shall have the right
to convert this Warrant or any portion thereof (the "Conversion Right") into
shares of Common Stock as provided in this Section 2 pursuant to the exercise
schedule, increments, and exercise price set forth in Section 1 above. Upon
exercise of the Conversion Right with respect to a particular number of shares
subject to this Warrant (the "Converted Warrant Shares"), the Company shall
deliver to the holder (without payment by the holder of any exercise price or
any cash or other consideration) (X) that number of shares of fully paid and
nonassessable Common Stock equal to the quotient obtained by dividing the value
of this Warrant (or the specified portion hereof) on the Conversion Date (as
defined in subsection (b) hereof), which value shall be determined by
subtracting (A) the aggregate Exercise Price of the Converted Warrant Shares
immediately prior to the exercise of the Conversion Right from (B) the aggregate
fair market value of the Converted Warrant Shares issuable upon exercise of this
Warrant (or the specified portion hereof) on the Conversion Date (as herein
defined) by (Y) the fair market value of one (1) share of Common Stock on the
Conversion Date (as herein defined).
Expressed as a formula, such conversion shall be computed as follows:
X = B - A
------------
Y
Where: X = the number of shares of Common Stock to be issued to
holder
Y = the fair market value (FMV) of one (1) share of Common
Stock
A = the aggregate Exercise Price (i.e., Converted Warrant Shares
x Exercise Price)
B = the aggregate FMV (i.e. FMV x Converted Warrant Shares)
No fractional shares shall be issuable upon exercise of the Conversion
Right, and, if the number of shares to be issued determined in accordance with
the foregoing formula is other than a whole number, the Company shall pay to the
holder an amount in cash equal to the fair market value of the resulting
fractional share on the Conversion Date (as hereinafter defined). For purposes
of Section 2 of this Warrant, shares issued pursuant to the Conversion Right
shall be treated as if they were issued upon the exercise of this Warrant.
[] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
3.
<PAGE>
(b) Method of Exercise. The Conversion Right may be exercised by the holder
by the surrender of this Warrant at the principal office of the Company together
with a written statement specifying that the holder thereby intends to exercise
the Conversion Right and indicating the number of shares subject to this Warrant
which are being surrendered (referred to in subsection (a) hereof as the
Conversion Warrant Shares) in exercise of the Conversion Right. Subject to
compliance with applicable law, including any waiting period applicable under
Hart-Scott-Rodino regulations, such conversion shall be effective upon receipt
by the Company of this Warrant together with the aforesaid written statement, or
on such later date as is specified therein (the "Conversion Date"), and, at the
election of the holder hereof, may be made contingent upon an IPO (as defined in
Section 10 below) or a Change in Control (which for the purposes of this Warrant
shall mean (i) the sale of all or substantially all of the assets of the
Company, or (ii) the closing date of a merger or consolidation of the Company
with or into any other entity, including a reverse triangular merger involving
the Company (other than a merger or consolidation in which the holders of the
voting power of the Company immediately prior to such consolidation or merger
hold a majority of the surviving or resulting entity immediately following such
consolidation or merger)). Certificates for the shares issuable upon exercise
of the Conversion Right and, if applicable, a new warrant evidencing the balance
of the shares remaining subject to this warrant, shall be issued as of the
Conversion Date and shall be delivered to the holder as soon as possible.
(c) Determination of Fair Market Value. For purposes of this Section 11,
"fair market value" of a share of Common Stock as of a particular date (the
"Determination Date") shall mean:
(i) If the Conversion Right is exercised in connection with, and
contingent upon, an IPO, and if the Company's registration statement relating to
such IPO ("Registration Statement") has been declared effective by the SEC, then
the initial "Price to Public" specified in the final prospectus with respect to
such offering.
(ii) If the Conversion Right is exercised in connection with, and
contingent upon, a Change in Control, then the portion of the purchase price
paid by the acquirer that such share would be entitled to in such transaction.
(iii) If the Conversion Right is not exercised in connection with,
and contingent upon, an IPO or a Change in Control, then as follows:
(1) If traded on a securities exchange, the fair market value
of the Common Stock shall be deemed to be the closing price of the Common Stock
on the Determination Date; and
(2) If traded over-the-counter, the fair market value of the
Common Stock shall be deemed to be the closing bid price of the Common Stock on
the Determination Date; and
[] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
4.
<PAGE>
(3) If there is no public market for the Common Stock, then
fair market value shall be determined in good faith by the Board of Directors of
the Company.
Section 3. Reservation of Shares. The Company hereby agrees that at all
times there shall be reserved for issuance and delivery upon exercise of this
Warrant all shares of its Common Stock or other shares of capital stock of the
Company from time to time issuable upon exercise of this Warrant. All such
shares shall be duly authorized and, when issued upon such exercise in
accordance with the terms of this Warrant, shall be validly issued, fully paid
and nonassessable.
Section 4. Fractional Interest. The Company will not issue a fractional
share of Common Stock upon exercise of this Warrant. Instead, the Company will
deliver its check for the current fair market value of the fractional share, as
determined in good faith by the Board of Directors of the Company.
Section 5. Assignment or Loss of Warrant.
(a) The Holder of this Warrant shall not be entitled, without
obtaining the consent of the Company, to assign, by operation of law or
otherwise, its interest in this Warrant in whole or in part to any person or
persons.
(b) Upon receipt of evidence satisfactory to the Company of the loss,
theft, destruction or mutilation of this Warrant, and (in the case of loss,
theft or destruction) of indemnification satisfactory to the Company, and upon
surrender and cancellation of this Warrant, if mutilated, the Company shall
execute and deliver a new Warrant of like tenor and date.
Section 6. Rights of the Holder. The Holder shall not, by virtue hereof,
be entitled to any rights of a stockholder in the Company, either at law or
equity, and the rights of the Holder are limited to those expressed in this
Warrant and that certain Amended and Restated Investor Rights Agreement, dated
January 25, 2000 (the "Investor Rights Agreement"), of which Holder is a party.
Nothing contained in this Warrant shall be construed as conferring upon the
Holder hereof the right to vote or to consent or to receive notice as a
stockholder of the Company on any matters or with respect to any rights
whatsoever as a stockholder of the Company. No dividends or interest shall be
payable or accrued in respect of this Warrant or the interest represented hereby
or the Warrant Shares purchasable hereunder until, and only to the extent that,
this Warrant shall have been exercised in accordance with its terms.
Section 7. Adjustment of Exercise Price and Number of Shares. The number
and kind of securities purchasable upon the exercise of the Warrant and the
Exercise Price shall be subject to adjustment from time to time upon the
occurrence of certain events, as follows:
(a) Reclassification of Outstanding Securities. In case of any
reclassification, change or conversion of securities of the class issuable upon
exercise of this
[] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
5.
<PAGE>
Warrant (other than a change in par value, or from par value to no par value, or
from no par value to par value, or as a result of a subdivision or combination),
the Company shall execute a new Warrant (in form and substance reasonably
satisfactory to the Holder of this Warrant) providing that the Holder of this
Warrant shall have the right to exercise such new Warrant and upon such exercise
to receive, in lieu of each share of Common Stock theretofore issuable upon
exercise of this Warrant, the kind and amount of shares of stock, other
securities, money and property receivable upon such reclassification or change
by a holder of one share of Common Stock. Such new Warrant shall provide for
adjustments that shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 7. The provisions of this subsection
(a) shall similarly apply to successive reclassification or changes.
(b) Subdivisions or Combination of Shares. If the Company at any time
while this Warrant remains outstanding and unexpired shall subdivide or combine
its Common Stock, the Exercise Price and the number of Warrant Shares issuable
upon exercise hereof shall be proportionately adjusted.
(c) Merger. If at any time prior to the Expiration Date there shall be
a merger or consolidation of the Company with or into another corporation when
the Company is not the surviving corporation, then, as part of such merger or
consolidation, lawful provision shall be made so that the Holder of the Warrant
evidenced hereby shall thereafter be entitled to receive upon exercise of rights
granted herein, during the period specified herein and upon payment of the
Exercise Price, the number of shares of stock or other securities or property of
the successor corporation resulting from such merger or consolidation, to which
a holder of the stock deliverable upon exercise of the rights granted in this
Warrant would have been entitled in such merger or consolidation if such rights
had been exercised immediately before such merger or consolidation. In any such
case, appropriate adjustment shall be made in the application of the provisions
of this Warrant with respect to the rights and interests of the Holder after the
merger or consolidation.
(d) Stock Dividends. If the Company at any time while this Warrant is
outstanding and unexpired shall pay a dividend payable in shares of Common Stock
(except any distribution specifically provided for in the foregoing subsections
(a) and (b)), then the Exercise Price shall be adjusted, from and after the date
of determination of stockholders entitled to receive such dividend or
distribution, to that price determined by multiplying the Exercise Price in
effect immediately prior to such date of determination by a fraction (a) the
numerator of which shall be the total number of shares of Common Stock
outstanding immediately prior to such dividend or distribution, and (b) the
denominator of which shall be the total number of shares of Common Stock
outstanding immediately after such dividend or distribution and the number of
Warrant Shares subject to this Warrant shall be proportionately adjusted.
(e) Minimum Adjustment. No adjustment in the Exercise Price of this
Section 7 shall be required unless such adjustment would require an increase or
decrease of at least $.05 in such Exercise Price; provided, however, that any
adjustments which by reason of
[] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
6.
<PAGE>
this subsection are not required to be made, shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Section 7
shall be made to the nearest cent or to the nearest share, as the case may be.
(f) Notice of Record Date. In the event of any taking by the Company
of a record of its stockholders for the purpose of determining stockholders who
are entitled to receive payment of any dividend (other than a cash dividend) or
other distribution, any right to subscribe for, purchase or otherwise acquire
any share of any class or any other securities or property, or to receive any
other right, or for the purpose of determining stockholders who are entitled to
vote in connection with any proposed merger or consolidation of the Company with
or into any other corporation, or any proposed sale, lease or conveyance of all
or substantially all of the assets of the Company, or any proposed liquidation,
dissolution or winding up of the Company, the Company shall mail to the Holder
of this Warrant, at least twenty (20) days prior to the date specified therein,
a notice specifying the date on which any such record is to be taken for the
purpose of such dividend, distribution or right, and the amount and character of
such dividend, distribution or right.
(g) No Adjustment Upon Exercise of Warrants. No adjustments shall be
made under any Section herein in connection with the issuance of Warrant Shares
upon exercise of the Warrants.
Section 8. Officer's Certificate. Whenever the Exercise Price shall be
adjusted as required by the provisions of Section 7, the Company shall deliver
an officer's certificate showing the adjusted Exercise Price determined as
herein provided, setting forth in reasonable detail the facts requiring such
adjustment and the manner of computing such adjustment. Each such officer's
certificate shall be signed by the chairman, president or chief financial
officer of the Company.
Section 9. Transfer to Comply with the Securities Act of 1933. This
Warrant may not be sold, assigned, pledged, hypothecated, encumbered or in any
other manner transferred or disposed of, in whole or in part. The Warrant
Shares, nor any interest in them, may be sold, assigned, pledged, hypothecated,
encumbered or in any other manner transferred or disposed of, in whole or in
part, except in compliance with applicable United States federal and state
securities or Blue Sky laws and the terms and conditions hereof. Each Warrant
shall bear a legend in substantially the same form as the legend set forth on
the first page of this Warrant. Each certificate for Warrant Shares issued upon
exercise of this Warrant, unless at the time of exercise such Warrant Shares are
acquired pursuant to a registration statement that has been declared effective
under the Act, shall bear a legend substantially in the following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE
SECURITIES LAWS OF ANY STATE. THESE SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY
[] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
7.
<PAGE>
AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS,
PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. THE ISSUER OF
THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND
SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY
PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY
APPLICABLE STATE SECURITIES LAWS.
Any certificate for any Warrant Shares issued at any time in exchange or
substitution for any certificate for any Warrant Shares bearing such legend
(except a new certificate for any Warrant Shares issued after the acquisition of
such Warrant Shares pursuant to a registration statement that has been declared
effective under the Act) shall also bear such legend unless, in the opinion of
counsel for the Company, the Warrant Shares represented thereby need no longer
be subject to the restriction contained herein. The provision of this Section 9
shall be binding upon all subsequent Holders of certificates for Warrant Shares
bearing the above legend and all subsequent Holders of this Warrant, if any. In
addition in connection with the issuance of this Warrant, the Holder
specifically represents to the Company by acceptance of this Warrant as follows:
(a) The Holder is aware of the Company's business affairs and
financial condition, and has acquired information about the Company sufficient
to reach an informed and knowledgeable decision to acquire this Warrant. The
Holder is acquiring this Warrant for its own account for investment purposes
only and not with a view to, or for the resale in connection with, any
"distribution" thereof in violation of the Act.
(b) The Holder understands that this Warrant has not been registered
under the Act in reliance upon a specific exemption therefrom, which exemption
depends upon, among other things, the bona fide nature of the Holder's
investment intent as expressed herein.
(c) The Holder further understands that this Warrant must be held
indefinitely unless subsequently registered under the Act and qualified under
any applicable state securities laws, or unless exemptions from registration and
qualification are otherwise available. Moreover, the Holder understands that the
Company is under no obligation to register and qualify this Warrant.
(d) The Holder is aware of the provisions of Rule 144 promulgated
under the Act, which, in substance, permit limited public resale of "restricted
securities" acquired, directly or indirectly, from the issuer thereof (or from
an affiliate of such issuer), in a non-public offering subject to the
satisfaction of certain conditions, if applicable, including, among other
things: The availability of certain public information about the Company, the
resale occurring not less than one year after the party has purchased and paid
for the securities to be sold (unless the securities have been acquired pursuant
to the net issuance provisions of Section 2 in which case the securities may
generally be sold one year from the date of this Warrant); the sale being made
through a broker in
[] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
8.
<PAGE>
an unsolicited "broker's transaction" or in transactions directly with a market
maker (as said term is defined under the Securities Exchange Act of 1934, as
amended) and the amount of securities being sold during any three month period
not exceeding the specified limitations stated therein.
(e) The Holder further understands that at the time it wishes to sell
this Warrant there may be no public market upon which to make such a sale, and
that, even if such a public market then exists, the Company may not be
satisfying the current public information requirements of Rule 144, and that, in
such event, the Holder may be precluded from selling this Warrant under Rule 144
even if the one year minimum holding period had been satisfied.
(f) The Holder further understands that in the event all of the
requirements of Rule 144 are not satisfied, registration under the Act,
compliance with Regulation A, or some other registration exemption will be
required; and that, notwithstanding the fact that Rule 144 is not exclusive, the
staff of the Securities and Exchange Commission (the "SEC") has expressed its
opinion that persons proposing to sell private placement securities other than
in a registered offering and otherwise than pursuant to Rule 144 will have a
substantial burden of proof in establishing that an exemption from registration
is available for such offers or sales, and that such persons and their
respective brokers who participate in such transactions do so at their own risk.
Section 10. Expiration Date. This Warrant shall expire and shall be wholly
void and have no effect after 5:00 p.m. on January 25, 2003 (the "Expiration
Date").
Section 11. Market Standoff. The holder of this Warrant, by acceptance
hereof, agrees that such holder will not, without the prior written consent of
the lead underwriter of the initial public offering of the Common Stock of the
Company pursuant to a registration statement filed under the Act (the "IPO"),
directly or indirectly offer to sell, contract to sell (including, without
limitation, any short sale), grant any option for the sale of, acquire any
option to dispose of, or otherwise dispose of any Warrant Shares, or securities
into which such Warrant Shares are converted, for a period of 180 days following
the day on which the registration statement filed on behalf of the Company in
connection with the IPO shall become effective by order of the SEC; provided,
however, that the foregoing market standoff shall apply only to the extent that
holders of the Company's Series C Preferred Stock are subject to the same
restrictions.
Section 12. Governing Law. This Warrant shall be construed and enforced in
accordance with, and the right of the parties shall be governed by, the laws of
State of California, excluding its rules governing conflicts of laws.
Section 13. Modification and Waiver. Neither this Warrant nor any term
hereof may be amended, waived, discharged or terminated other than by an
instrument in writing signed by the Company and by the Holder hereof.
Section 14. 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
[] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
9.
<PAGE>
certified mail, postage prepaid, to each such Holder at its address as shown on
the books of the Company or to the Company at the address indicated therefor in
the first paragraph of this Warrant.
Section 15. Descriptive Headings. The description headings of the several
sections and paragraphs of this Warrant are inserted for convenience only and do
not constitute a part of this Warrant.
Section 16. Entire Agreement. This Warrant and the Investor Rights
Agreement constitute the entire agreement between the parties pertaining to the
subject matter herein and supersedes all prior and contemporaneous agreements,
representation and undertakings of the parties.
[] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
10.
<PAGE>
IN WITNESS WHEREOF, the Company has duly caused this Warrant to be signed
by a duly authorized officer this 25th day of January, 2000.
NOOSH, Inc.
By: /s/ Ofer Ben-Shachar
----------------------------------------
Name: Ofer Ben-Shachar
--------------------------------------
Title: President and Chief Executive Officer
-------------------------------------
ACCEPTED AND AGREED TO:
R.R. Donnelley and Sons Company
By: /s/ Jeffrey J. Anderson
----------------------------------
Name: Jeffrey J. Anderson
--------------------------------
Title: VP, Corporate Development
-------------------------------
[] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
11.
<PAGE>
NOOSH, Inc.
PURCHASE FORM
Dated ______________ ____, ____
[_] The undersigned hereby irrevocably elects to exercise the Warrant issued to
it to purchase ___________ shares of Common Stock of NOOSH, Inc. and hereby
makes payment of ___________________ in payment of the exercise price
thereof.
[_] The undersigned hereby elects to convert ________ shares of the Warrant
pursuant to the provisions of Section 2 of the Warrant.
Name of Warrant Holder:
__________________________________________
Address of Warrant Holder:
__________________________________________
__________________________________________
Tax identification Number or Social Security
Number of Warrant Holder:
__________________________________________
Signature:________________________________
NOTE: The above signature should correspond
exactly with the name on the first page of the
Warrant or with the name of the assignee appearing
on a duly executed assignment form.
Dated:____________________________________
<PAGE>
EXHIBIT 4.7
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES EXCHANGE COMMISSION
PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS OF
ANY STATE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT
AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN
FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED
TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.
NOOSH, Inc.
Warrant for the Purchase of Shares of Common Stock
No. W-C5 350,000 Shares
FOR VALUE RECEIVED, NOOSH, Inc., a California corporation (the "Company"),
with its principal office at 3401 Hillview Avenue, Palo Alto, CA 94304, hereby
certifies that R.R. Donnelley and Sons Company (the "Holder") is entitled,
subject to the provisions of this Warrant, to purchase from the Company, at such
times and in such increments as set forth below in Section 1 commencing on
January 25, 2000 (the "Effective Date") and prior to the Expiration Date (as
defined in Section 10 below) three hundred fifty thousand (350,000) fully paid
and nonassessable shares of Common Stock of the Company, subject to adjustment
as hereinafter provided.
The Holder may purchase such shares of Common Stock at the price per share
of eleven dollars ($11.00) (as appropriately adjusted pursuant to Section 7
hereof) on an increment by increment basis as set forth below in Section 1 (the
"Exercise Price"). The term "Common Stock" shall mean the aforementioned Common
Stock of the Company, together with any other equity securities that may be
issued by the Company in addition thereto or in substitution therefor as
provided herein.
The number of shares of Common Stock to be received upon the exercise of
this Warrant and the price to be paid per share upon such exercise are subject
to adjustment from time to time as hereinafter set forth. The shares of Common
Stock deliverable upon such exercise, as adjusted from time to time, are
hereinafter sometimes referred to as "Warrant Shares."
Section 1. Exercise of Warrant. This Warrant may only be exercised prior
to the Expiration Date according to the following schedule (but in no event for
more than 350,000 shares) and provided that each increment of Warrant Shares may
only be exercised in whole or in
1.
<PAGE>
part during the one year period commencing upon the date of achievement of the
milestone (or from the Effective Date with respect to the initial increment of
50,000 shares) relating to such increment ("Milestone Date"):
<TABLE>
- ------------------------------------------------------------------------------------------------
Number of Warrant Exercise Price Per Milestone
Shares That Are Share
Exercisable
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Initial Increment 50,000 $11.00 Effective Date
- ------------------------------------------------------------------------------------------------
First Year 50,000 $11.00 For each [*] Orders on
Increment(s) the Service prior to
December 31, 2000
- ------------------------------------------------------------------------------------------------
Second Year 100,000 $11.00 For each [*] Orders on
Increments(s) the Service from
January 1, 2001 to
December 31, 2001
- ------------------------------------------------------------------------------------------------
Total: up to a maximum of
350,000
- ------------------------------------------------------------------------------------------------
</TABLE>
For the purposes of the table above, "[*] Orders" shall mean the
aggregate dollar value of orders [*] on the Service (as defined below) after
January 25, 2000, as such amount is determined in good faith by the Company
within thirty (30) days following each calendar month through December 31, 2001.
For the purposes of this Warrant, the term "Service" means the Company's
proprietary Internet-based service as offered by the Company through
www.noosh.com or any successor web site, as such service may be revised,
- -------------
augmented, superseded, enhanced, modified or supplemented from time to time .
To exercise, Holder shall surrender to the Company at its principal office at
the address set forth in the initial paragraph hereof the Warrant (or at such
other address as the Company may hereafter notify the Holder in writing) with
the Purchase Form annexed hereto duly executed and accompanied by proper payment
of the Exercise Price in lawful money of the United States of America in the
form of a check, subject to collection, for the number of Warrant Shares
specified in the Purchase Form. Upon receipt by the Company of this Warrant and
such Purchase Form, together with proper payment of the Exercise Price, at such
office, and subject to compliance with applicable law, including any waiting
period applicable under Hart-Scott-Rodino regulations, the Holder shall be
deemed to be the holder of record of the Warrant Shares, notwithstanding that
the stock transfer books of the Company shall then be closed or that
certificates representing such Warrant Shares shall not then be actually
delivered to the Holder.
Section 2. Right to Convert Warrant into Stock: Net Issuance.
[] = Certain confidential information contained in this document, marked
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities act of 1933, as amended.
2.
<PAGE>
(a) Right to Convert. In addition to and without limiting the rights
of the holder under the terms of this Warrant, the holder shall have the right
to convert this Warrant or any portion thereof (the "Conversion Right") into
shares of Common Stock as provided in this Section 2 pursuant to the exercise
schedule, increments, and exercise price set forth in Section 1 above. Upon
exercise of the Conversion Right with respect to a particular number of shares
subject to this Warrant (the "Converted Warrant Shares"), the Company shall
deliver to the holder (without payment by the holder of any exercise price or
any cash or other consideration) (X) that number of shares of fully paid and
nonassessable Common Stock equal to the quotient obtained by dividing the value
of this Warrant (or the specified portion hereof) on the Conversion Date (as
defined in subsection (b) hereof), which value shall be determined by
subtracting (A) the aggregate Exercise Price of the Converted Warrant Shares
immediately prior to the exercise of the Conversion Right from (B) the aggregate
fair market value of the Converted Warrant Shares issuable upon exercise of this
Warrant (or the specified portion hereof) on the Conversion Date (as herein
defined) by (Y) the fair market value of one (1) share of Common Stock on the
Conversion Date (as herein defined).
Expressed as a formula, such conversion shall be computed as follows:
X = B - A
-------------
Y
Where: X = the number of shares of Common Stock to be issued to
holder
Y = the fair market value (FMV) of one (1) share of Common
Stock
A = the aggregate Exercise Price (i.e., Converted Warrant
Shares x Exercise Price)
B = the aggregate FMV (i.e. FMV x Converted Warrant Shares)
No fractional shares shall be issuable upon exercise of the Conversion
Right, and, if the number of shares to be issued determined in accordance with
the foregoing formula is other than a whole number, the Company shall pay to the
holder an amount in cash equal to the fair market value of the resulting
fractional share on the Conversion Date (as hereinafter defined). For purposes
of Section 2 of this Warrant, shares issued pursuant to the Conversion Right
shall be treated as if they were issued upon the exercise of this Warrant.
(b) Method of Exercise. The Conversion Right may be exercised by the
holder by the surrender of this Warrant at the principal office of the Company
together with a written statement specifying that the holder thereby intends to
exercise the Conversion Right and indicating the number of shares subject to
this Warrant which are being surrendered (referred to in subsection (a) hereof
as the Conversion Warrant Shares) in exercise of the Conversion Right.
[] = Certain confidential information contained in this document, marked
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities act of 1933, as amended.
3.
<PAGE>
Subject to compliance with applicable law, including any waiting period
applicable under Hart-Scott-Rodino regulations, such conversion shall be
effective upon receipt by the Company of this Warrant together with the
aforesaid written statement, or on such later date as is specified therein (the
"Conversion Date"), and, at the election of the holder hereof, may be made
contingent upon an IPO (as defined in Section 10 below) or a Change in Control
(which for the purposes of this Warrant shall mean (i) the sale of all or
substantially all of the assets of the Company, or (ii) the closing date of a
merger or consolidation of the Company with or into any other entity, including
a reverse triangular merger involving the Company (other than a merger or
consolidation in which the holders of the voting power of the Company
immediately prior to such consolidation or merger hold a majority of the
surviving or resulting entity immediately following such consolidation or
merger)). Certificates for the shares issuable upon exercise of the Conversion
Right and, if applicable, a new warrant evidencing the balance of the shares
remaining subject to this warrant, shall be issued as of the Conversion Date and
shall be delivered to the holder as soon as possible.
(c) Determination of Fair Market Value. For purposes of this Section
11, "fair market value" of a share of Common Stock as of a particular date (the
"Determination Date") shall mean:
(i) If the Conversion Right is exercised in connection with,
and contingent upon, an IPO, and if the Company's registration statement
relating to such IPO ("Registration Statement") has been declared effective by
the SEC, then the initial "Price to Public" specified in the final prospectus
with respect to such offering.
(ii) If the Conversion Right is exercised in connection with,
and contingent upon, a Change in Control, then the portion of the purchase price
paid by the acquirer that such share would be entitled to in such transaction.
(iii) If the Conversion Right is not exercised in connection
with, and contingent upon, an IPO or a Change in Control, then as follows:
(1) If traded on a securities exchange, the fair market
value of the Common Stock shall be deemed to be the closing price of the Common
Stock on the Determination Date; and
(2) If traded over-the-counter, the fair market value of
the Common Stock shall be deemed to be the closing bid price of the Common Stock
on the Determination Date; and
(3) If there is no public market for the Common Stock,
then fair market value shall be determined in good faith by the Board of
Directors of the Company.
Section 3. Reservation of Shares. The Company hereby agrees that at
all times there shall be reserved for issuance and delivery upon exercise of
this Warrant all shares of its
[] = Certain confidential information contained in this document, marked
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities act of 1933, as amended.
4.
<PAGE>
Common Stock or other shares of capital stock of the Company from time to time
issuable upon exercise of this Warrant. All such shares shall be duly authorized
and, when issued upon such exercise in accordance with the terms of this
Warrant, shall be validly issued, fully paid and nonassessable.
Section 4. Fractional Interest. The Company will not issue a fractional
share of Common Stock upon exercise of this Warrant. Instead, the Company will
deliver its check for the current fair market value of the fractional share, as
determined in good faith by the Board of Directors of the Company.
Section 5. Assignment or Loss of Warrant.
(a) The Holder of this Warrant shall not be entitled, without
obtaining the consent of the Company, to assign, by operation of law or
otherwise, its interest in this Warrant in whole or in part to any person or
persons.
(b) Upon receipt of evidence satisfactory to the Company of the
loss, theft, destruction or mutilation of this Warrant, and (in the case of
loss, theft or destruction) of indemnification satisfactory to the Company, and
upon surrender and cancellation of this Warrant, if mutilated, the Company shall
execute and deliver a new Warrant of like tenor and date.
Section 6. Rights of the Holder. The Holder shall not, by virtue hereof,
be entitled to any rights of a stockholder in the Company, either at law or
equity, and the rights of the Holder are limited to those expressed in this
Warrant and that certain Amended and Restated Investor Rights Agreement, dated
January 25, 2000 (the "Investor Rights Agreement"), of which Holder is a party.
Nothing contained in this Warrant shall be construed as conferring upon the
Holder hereof the right to vote or to consent or to receive notice as a
stockholder of the Company on any matters or with respect to any rights
whatsoever as a stockholder of the Company. No dividends or interest shall be
payable or accrued in respect of this Warrant or the interest represented hereby
or the Warrant Shares purchasable hereunder until, and only to the extent that,
this Warrant shall have been exercised in accordance with its terms.
Section 7. Adjustment of Exercise Price and Number of Shares. The number
and kind of securities purchasable upon the exercise of the Warrant and the
Exercise Price shall be subject to adjustment from time to time upon the
occurrence of certain events, as follows:
(a) Reclassification of Outstanding Securities. In case of any
reclassification, change or conversion of securities of the class issuable upon
exercise of this Warrant (other than a change in par value, or from par value to
no par value, or from no par value to par value, or as a result of a subdivision
or combination), the Company shall execute a new Warrant (in form and substance
reasonably satisfactory to the Holder of this Warrant) providing that the Holder
of this Warrant shall have the right to exercise such new Warrant and upon such
exercise to receive, in lieu of each share of Common Stock theretofore issuable
upon exercise of
[] = Certain confidential information contained in this document, marked
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities act of 1933, as amended.
5.
<PAGE>
this Warrant, the kind and amount of shares of stock, other securities, money
and property receivable upon such reclassification or change by a holder of one
share of Common Stock. Such new Warrant shall provide for adjustments that shall
be as nearly equivalent as may be practicable to the adjustments provided for in
this Section 7. The provisions of this subsection (a) shall similarly apply to
successive reclassification or changes.
(b) Subdivisions or Combination of Shares. If the Company at any
time while this Warrant remains outstanding and unexpired shall subdivide or
combine its Common Stock, the Exercise Price and the number of Warrant Shares
issuable upon exercise hereof shall be proportionately adjusted.
(c) Merger. If at any time prior to the Expiration Date there shall
be a merger or consolidation of the Company with or into another corporation
when the Company is not the surviving corporation, then, as part of such merger
or consolidation, lawful provision shall be made so that the Holder of the
Warrant evidenced hereby shall thereafter be entitled to receive upon exercise
of rights granted herein, during the period specified herein and upon payment of
the Exercise Price, the number of shares of stock or other securities or
property of the successor corporation resulting from such merger or
consolidation, to which a holder of the stock deliverable upon exercise of the
rights granted in this Warrant would have been entitled in such merger or
consolidation if such rights had been exercised immediately before such merger
or consolidation. In any such case, appropriate adjustment shall be made in the
application of the provisions of this Warrant with respect to the rights and
interests of the Holder after the merger or consolidation.
(d) Stock Dividends. If the Company at any time while this Warrant is
outstanding and unexpired shall pay a dividend payable in shares of Common Stock
(except any distribution specifically provided for in the foregoing subsections
(a) and (b)), then the Exercise Price shall be adjusted, from and after the date
of determination of stockholders entitled to receive such dividend or
distribution, to that price determined by multiplying the Exercise Price in
effect immediately prior to such date of determination by a fraction (a) the
numerator of which shall be the total number of shares of Common Stock
outstanding immediately prior to such dividend or distribution, and (b) the
denominator of which shall be the total number of shares of Common Stock
outstanding immediately after such dividend or distribution and the number of
Warrant Shares subject to this Warrant shall be proportionately adjusted.
(e) Minimum Adjustment. No adjustment in the Exercise Price of this
Section 7 shall be required unless such adjustment would require an increase or
decrease of at least $.05 in such Exercise Price; provided, however, that any
adjustments which by reason of this subsection are not required to be made,
shall be carried forward and taken into account in any subsequent adjustment.
All calculations under this Section 7 shall be made to the nearest cent or to
the nearest share, as the case may be.
[] = Certain confidential information contained in this document, marked
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities act of 1933, as amended.
6.
<PAGE>
(f) Notice of Record Date. In the event of any taking by the
Company of a record of its stockholders for the purpose of determining
stockholders who are entitled to receive payment of any dividend (other than a
cash dividend) or other distribution, any right to subscribe for, purchase or
otherwise acquire any share of any class or any other securities or property, or
to receive any other right, or for the purpose of determining stockholders who
are entitled to vote in connection with any proposed merger or consolidation of
the Company with or into any other corporation, or any proposed sale, lease or
conveyance of all or substantially all of the assets of the Company, or any
proposed liquidation, dissolution or winding up of the Company, the Company
shall mail to the Holder of this Warrant, at least twenty (20) days prior to the
date specified therein, a notice specifying the date on which any such record is
to be taken for the purpose of such dividend, distribution or right, and the
amount and character of such dividend, distribution or right.
(g) No Adjustment Upon Exercise of Warrants. No adjustments shall
be made under any Section herein in connection with the issuance of Warrant
Shares upon exercise of the Warrants.
Section 8. Officer's Certificate. Whenever the Exercise Price shall be
adjusted as required by the provisions of Section 7, the Company shall deliver
an officer's certificate showing the adjusted Exercise Price determined as
herein provided, setting forth in reasonable detail the facts requiring such
adjustment and the manner of computing such adjustment. Each such officer's
certificate shall be signed by the chairman, president or chief financial
officer of the Company.
Section 9. Transfer to Comply with the Securities Act of 1933. This
Warrant may not be sold, assigned, pledged, hypothecated, encumbered or in any
other manner transferred or disposed of, in whole or in part. The Warrant
Shares, nor any interest in them, may be sold, assigned, pledged, hypothecated,
encumbered or in any other manner transferred or disposed of, in whole or in
part, except in compliance with applicable United States federal and state
securities or Blue Sky laws and the terms and conditions hereof. Each Warrant
shall bear a legend in substantially the same form as the legend set forth on
the first page of this Warrant. Each certificate for Warrant Shares issued upon
exercise of this Warrant, unless at the time of exercise such Warrant Shares are
acquired pursuant to a registration statement that has been declared effective
under the Act, shall bear a legend substantially in the following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE
SECURITIES LAWS OF ANY STATE. THESE SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED
OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE
SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. THE
ISSUER OF THESE SECURITIES MAY REQUIRE AN
[] = Certain confidential information contained in this document, marked
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities act of 1933, as amended.
7.
<PAGE>
OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER
TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE
WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
Any certificate for any Warrant Shares issued at any time in exchange or
substitution for any certificate for any Warrant Shares bearing such legend
(except a new certificate for any Warrant Shares issued after the acquisition of
such Warrant Shares pursuant to a registration statement that has been declared
effective under the Act) shall also bear such legend unless, in the opinion of
counsel for the Company, the Warrant Shares represented thereby need no longer
be subject to the restriction contained herein. The provision of this Section 9
shall be binding upon all subsequent Holders of certificates for Warrant Shares
bearing the above legend and all subsequent Holders of this Warrant, if any. In
addition in connection with the issuance of this Warrant, the Holder
specifically represents to the Company by acceptance of this Warrant as follows:
(a) The Holder is aware of the Company's business affairs and
financial condition, and has acquired information about the Company sufficient
to reach an informed and knowledgeable decision to acquire this Warrant. The
Holder is acquiring this Warrant for its own account for investment purposes
only and not with a view to, or for the resale in connection with, any
"distribution" thereof in violation of the Act.
(b) The Holder understands that this Warrant has not been registered
under the Act in reliance upon a specific exemption therefrom, which exemption
depends upon, among other things, the bona fide nature of the Holder's
investment intent as expressed herein.
(c) The Holder further understands that this Warrant must be held
indefinitely unless subsequently registered under the Act and qualified under
any applicable state securities laws, or unless exemptions from registration and
qualification are otherwise available. Moreover, the Holder understands that the
Company is under no obligation to register and qualify this Warrant.
(d) The Holder is aware of the provisions of Rule 144 promulgated
under the Act, which, in substance, permit limited public resale of "restricted
securities" acquired, directly or indirectly, from the issuer thereof (or from
an affiliate of such issuer), in a non-public offering subject to the
satisfaction of certain conditions, if applicable, including, among other
things: The availability of certain public information about the Company, the
resale occurring not less than one year after the party has purchased and paid
for the securities to be sold (unless the securities have been acquired pursuant
to the net issuance provisions of Section 2 in which case the securities may
generally be sold one year from the date of this Warrant); the sale being made
through a broker in an unsolicited "broker's transaction" or in transactions
directly with a market maker (as said term is defined under the Securities
Exchange Act of 1934, as amended) and the amount of securities being sold during
any three month period not exceeding the specified limitations stated therein.
[] = Certain confidential information contained in this document, marked
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities act of 1933, as amended.
8.
<PAGE>
(e) The Holder further understands that at the time it wishes to
sell this Warrant there may be no public market upon which to make such a sale,
and that, even if such a public market then exists, the Company may not be
satisfying the current public information requirements of Rule 144, and that, in
such event, the Holder may be precluded from selling this Warrant under Rule 144
even if the one year minimum holding period had been satisfied.
(f) The Holder further understands that in the event all of the
requirements of Rule 144 are not satisfied, registration under the Act,
compliance with Regulation A, or some other registration exemption will be
required; and that, notwithstanding the fact that Rule 144 is not exclusive, the
staff of the Securities and Exchange Commission (the "SEC") has expressed its
opinion that persons proposing to sell private placement securities other than
in a registered offering and otherwise than pursuant to Rule 144 will have a
substantial burden of proof in establishing that an exemption from registration
is available for such offers or sales, and that such persons and their
respective brokers who participate in such transactions do so at their own risk.
Section 10. Expiration Date. This Warrant shall expire and shall be wholly
void and have no effect after 5:00 p.m. on January 25, 2003 (the "Expiration
Date").
Section 11. Market Standoff. The holder of this Warrant, by acceptance
hereof, agrees that such holder will not, without the prior written consent of
the lead underwriter of the initial public offering of the Common Stock of the
Company pursuant to a registration statement filed under the Act (the "IPO"),
directly or indirectly offer to sell, contract to sell (including, without
limitation, any short sale), grant any option for the sale of, acquire any
option to dispose of, or otherwise dispose of any Warrant Shares, or securities
into which such Warrant Shares are converted, for a period of 180 days following
the day on which the registration statement filed on behalf of the Company in
connection with the IPO shall become effective by order of the SEC; provided,
however, that the foregoing market standoff shall apply only to the extent that
holders of the Company's Series C Preferred Stock are subject to the same
restrictions.
Section 12. Governing Law. This Warrant shall be construed and enforced in
accordance with, and the right of the parties shall be governed by, the laws of
State of California, excluding its rules governing conflicts of laws.
Section 13. Modification and Waiver. Neither this Warrant nor any term
hereof may be amended, waived, discharged or terminated other than by an
instrument in writing signed by the Company and by the Holder hereof.
Section 14. 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.
[] = Certain confidential information contained in this document, marked
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities act of 1933, as amended.
9.
<PAGE>
Section 15. Descriptive Headings. The description headings of the several
sections and paragraphs of this Warrant are inserted for convenience only and do
not constitute a part of this Warrant.
Section 16. Entire Agreement. This Warrant and the Investor Rights
Agreement constitute the entire agreement between the parties pertaining to the
subject matter herein and supersedes all prior and contemporaneous agreements,
representation and undertakings of the parties.
[] = Certain confidential information contained in this document, marked
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities act of 1933, as amended.
10.
<PAGE>
IN WITNESS WHEREOF, the Company has duly caused this Warrant to be signed
by a duly authorized officer this 25th day of January, 2000.
NOOSH, Inc.
By: /s/ Ofer Ben-Shachar
---------------------------------------------
Name: Ofer Ben-Shachar
-------------------------------------------
Title: President and Chief Executive Officer
------------------------------------------
ACCEPTED AND AGREED TO:
R.R. Donnelley and Sons Company
By: /s/ Jeffrey J. Anderson
----------------------------
Name: Jeffrey J. Anderson
--------------------------
Title: VP, Corporate Development
-------------------------
[] = Certain confidential information contained in this document, marked
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities act of 1933, as amended.
11.
<PAGE>
NOOSH, Inc.
PURCHASE FORM
Dated ______________ ____, ____
[_] The undersigned hereby irrevocably elects to exercise the Warrant issued to
it to purchase ___________ shares of Common Stock of NOOSH, Inc. and hereby
makes payment of ___________________ in payment of the exercise price
thereof.
[_] The undersigned hereby elects to convert ________ shares of the Warrant
pursuant to the provisions of Section 2 of the Warrant.
Name of Warrant Holder:
________________________________________________
Address of Warrant Holder:
________________________________________________
________________________________________________
Tax identification Number or Social Security
Number of Warrant Holder:
________________________________________________
Signature:______________________________________
NOTE: The above signature should correspond
exactly with the name on the first page of the
Warrant or with the name of the assignee appearing
on a duly executed assignment form.
Dated:__________________________________________
<PAGE>
EXHIBIT 10.17
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
CO-DEVELOPMENT AND MARKETING AGREEMENT
This Co-Development and Marketing Agreement is made effective as of January
25, 2000 (the "Effective Date") by Noosh, Inc., a California corporation having
a place of business at 3401 Hillview Avenue, Palo Alto, California 94303
("Noosh"), and R.R. Donnelley & Sons Company, a Delaware corporation having a
place of business at 77 West Wacker Drive, Chicago, IL 60601 ("RRD").
Recitals
A. Noosh is engaged in the business of, among other things, designing,
developing, and providing an Internet-based service known as "Noosh.com," which
is designed to help improve the process of buying, selling and managing print
jobs by providing a web site where corporate print buyers, printers and creative
agencies can work collaboratively on print jobs.
B. RRD is engaged in the business of, among other things, providing
print-related products and services to its customers.
C. Noosh and RRD desire to enter into a relationship whereby the parties
will work together to actively promote and market the usage of the Noosh Service
(as defined below), particularly by RRD, RRD's customers and others for print
jobs within certain segments of the print industry. Initially, pursuant to a
User Agreement to be entered into between the parties as of the Effective Date,
RRD will be entitled to access and use of the standard Noosh Service for the
processing of print jobs. Promptly following the Effective Date, the parties
also intend to create rrd.noosh.com, a private web site which will link users of
RRD's web site to the Noosh Service and feature RRD as the only print vendor
permitted to interact with print buyers through rrd.noosh.com. Subsequently,
the parties intend to extend the functionality of rrd.noosh.com by integrating
the Noosh Service with up to four RRD Portals (as defined below).
D. The parties also wish to undertake co-marketing activities for their
mutual benefit as further specified in this Agreement.
Agreement
Accordingly, in consideration for their respective covenants set forth
below, the parties agree as follows:
1. Definitions. As used in this Agreement:
1.1 "Affiliate" of a party means any person, corporation or other
entity (i) which own more than 50% of the voting securities or ownership
interest of such party ("Parent"); (ii) in which such party, directly or
indirectly, owns more than 50% of the voting securities or ownership interest;
or (iii) in which such party's Parent, directly or indirectly, owns more than
50% of the voting securities or ownership interest.
1.2 "API" means an application's programmer's interface.
1.3 "Integration Code" means the software, programming code, API's
and other software-based technology used or developed by the parties, whether
alone, jointly or with
1.
<PAGE>
others, in object code form only, for use in integrating the Noosh Service with
the RRD Portals pursuant to Section 3 below.
1.4 "Integration SC" means the Integration Code, excluding third-
party source code for which Noosh does not have rights to sublicense, in human-
readable source code format and any programmer's notes or other related
materials, licensed to RRD pursuant to Section 3.5 below.
1.5 "Intellectual Property Rights" means all current and future
worldwide copyrights, trade secrets, patents and other patent rights, utility
models, mask work rights, moral rights, trademarks, trade names, service marks,
and all other intellectual property rights, including all applications and
registrations with respect thereto.
1.6 "Noosh Competitor" means [*] together with any of their
respective Affiliates or successors in interest, together with any other persons
or entities which market the products, services or technologies of [*] under
license from [*]
1.7 "Noosh Marks" means the trademarks, service marks, trade names,
and logos of Noosh listed in Exhibit A, as such list may be updated from time to
---------
time by Noosh.
1.8 "Noosh Service" means Noosh's proprietary Internet-based service
as described in Recital A above, provided by Noosh through www.noosh.com or any
successor web site, as such service may be revised, augmented, superseded,
enhanced, modified or supplemented from time to time. For the purposes of this
Agreement, the Noosh Service will include [*] The Noosh Service shall not
include [*]
1.9 "Noosh Technology" means the software, programming code, API's,
and other technology used or developed by Noosh, (whether alone or with others)
or licensed by Noosh from third parties, to develop and provide the Noosh
Service and rrd.noosh.com, together with any modifications, improvements,
enhancements and derivative works made to or from any of the foregoing by either
party in connection with this Agreement. Without limiting any rights of RRD in
the RRD Marks, Noosh Technology will include all such technology used to create
the RRD GUI as displayed within the Noosh Service (as integrated with the RRD
Portals) or rrd.noosh.com.
1.10 "Print Vendor" means, with respect to any print job run on the
Noosh Service (whether directly on the Noosh Service or through rrd.noosh.com or
an RRD Portal), the corporation or other entity which, by itself or through
subcontractors, is responsible for or performs the actual printing of materials
which are the subject of such print job.
1.11 "RRD Competitor" means [*] together with any of their respective
Affiliates or successors in interest, together with any other persons or
entities which market the products, services or technologies of [*] under
license from [*]
[] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
2.
<PAGE>
1.12 "RRD Deliverables" shall be as defined in Section 3.2 below.
1.13 "RRD GUI" means the graphic user interface intended to be
developed and displayed within rrd.noosh.com or the Noosh Service (as integrated
with the RRD Portals) to RRD Customers pursuant to the integration process
contemplated by Section 3 below.
1.14 "RRD Marks" means the trademarks, service marks, trade names,
and logos which are owned by Heritage Preservation Corporation and licensed to
RRD listed in Exhibit B, as such list may be updated from time to time by RRD.
---------
1.15 "RRD Portals" means the up to four (4) Internet-based services
to be designed and developed by RRD based upon the RRD Portal Technology to
provide print-related products and services to RRD Customers. The four potential
RRD Portals are expected to include services focused on the needs of RRD
Customers in each of the three RRD Segments [*]. RRD may change the marketing
and customer focus of an RRD Portal from time to time; however, Noosh shall not
be obligated to undertake any engineering or other efforts which may be required
to implement any such change. However, Noosh agrees to consider and discuss any
reasonable request RRD may make for additional such efforts by Noosh.
1.16 "RRD Portal Technology" means the software, programming code,
API's and other technology used or developed by RRD, alone or with others, to
develop and provide the RRD Portals or the RRD Deliverables, together with any
modifications, improvements, enhancements and derivative works made to or from
any of the foregoing by either party in connection with this Agreement;
provided, however, the RRD Portal Technology will not include any software,
programming code, API's or other technology used within or relating to the Noosh
Service. Without limiting any rights of RRD in the RRD Marks, the RRD Portal
Technology will not include any such technology used to create the RRD GUI as
displayed within rrd.noosh.com or the Noosh Service (as integrated with the RRD
Portals).
1.17 "RRD Segments" means the categories of print jobs which apply
to, and only to the extent they apply to, the printing of Books, Magazines or
Catalogs.
1.18 "RRD Subscriber" means any individual or entity which uses or
accesses any portion of the functionality of the Noosh Service through
rrd.noosh.com or through any of the RRD Portals.
1.19 "RRD Web Site" means the one or more web sites maintained by RRD
for use in its business, as such web sites may be modified and updated by RRD
from time to time. The home page for the principal web site of RRD is currently
(as of the Effective Date) located at the URL "http://www.rrdonnelley.com."
1.20 "rrd.noosh.com" means the web site [*]
[] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
3.
<PAGE>
1.21 "Target Dates" means the target dates for completion of various
aspects of the work to be undertaken by the parties pursuant to Section 3.1 of
this Agreement, as such dates may be modified and updated from time to time by
written agreement of the parties.
1.22 "User Agreement" means, collectively, the Noosh User Agreement,
the RRD Site Agreements and the RRD Subscriber Agreements, as defined in Section
3.4 below.
1.23 "NPV" means, with respect to any print job run on the Noosh
Service (whether directly on the Noosh Service or through rrd.noosh.com or an
RRD Portal), a Print Vendor which (i) is a user of the Noosh Service and (ii)
uses the Noosh Service to communicate with or provide data to other users of the
Noosh Service with respect to such print job.
1.24 "OPV" means, with respect to any print job run on the Noosh
Service (whether directly on the Noosh Service or through rrd.noosh.com or an
RRD Portal), a Print Vendor which (i) performs the actual printing of materials
which are the subject of such print job as a subcontractor of an NPV and (ii) is
not identified on the Noosh Service to other users of the Noosh Service as a
Print Vendor or participant with respect to such print job.
1.25 "RRD Customer" means any current or prospective customer of RRD
or any RRD Affiliate with respect to printing services.
1.26 "RRD Customer List" shall have the meaning set forth in Section
2.4(c)(ii)(1) below.
1.27 "Usage Data" means all data entered on the Noosh Service by RRD
or RRD Subscribers in the course of RRD's and all RRD Subscribers' use of the
Noosh Service.
1.28 "Permitted Affiliate" shall have the meaning set forth in
Section 4.20 below.
1.29 "Books" means printed books in hard cover and paperback,
including, but not limited to, trade books, children's books, professional
books, reference books, elementary, high school and college textbooks, religious
books, and direct mail books.
1.30 "Catalogs" means printed catalogs including, but not limited to,
consumer catalogs, business catalogs, retailer catalogs, and direct mail
catalogs.
1.31 "Magazines" means printed magazines including, but not limited
to, consumer magazines, trade magazines, professional and association magazines,
and Sunday newspaper magazines (including free standing inserts of the type
typically distributed with Sunday newspapers).
2. Co-Marketing.
2.1 Initial Press Release. Upon the Effective Date, Noosh and RRD
will issue a press release announcing their alliance and their co-marketing and
co-development plans, as contemplated by this Agreement. The form and substance
of the press release will be substantially as set forth in Exhibit C to this
---------
Agreement. Noosh and RRD will each be entitled to refer to their alliance
pursuant to this Agreement in the "About" sections of their subsequent
[] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
4.
<PAGE>
press releases, on their respective web sites and otherwise as required by law.
However, any additional press releases focusing on the alliance will require
prior written mutual consent of the parties.
2.2 Co-marketing Funds. During the term of the Agreement, RRD will
commit [*] to promote and enhance the relationship between Noosh and RRD and the
usage of the Noosh Service by RRD Customers. Such activities will include sales
training regarding the Noosh Service for the RRD sales force, advertising, joint
presentations at industry trade shows and similar events, and joint sales calls.
The marketing activities and funds will be focused on each RRD business unit as
it begins utilization of the Noosh Service. Within thirty (30) days of the end
of each calendar quarter during the term of this Agreement, RRD will provide
Noosh with a written summary of its marketing activities in the quarter relating
to the alliance, all in reasonable detail as reasonably requested by Noosh.
2.3 Relationship Support. To help assure the parties' continued
close working relationship and the success of their relationship, the parties
agree to the following provisions:
(a) Alliance Committee. Promptly following the Effective Date,
Noosh and RRD will form an Alliance Committee. The objective of the committee
will be to explore, plan and implement programs and other steps designed to
leverage their respective strengths for their mutual benefit. The composition
of the committee will be agreed upon by the relationship managers for both
parties, initially David Hannebrink will be the relationship manager for Noosh
and a senior member of RRD management will be the relationship manager for RRD.
During the first three months following the Effective Date, the relationship
managers will meet at least monthly, and, thereafter, at least quarterly. The
committee will alternate its meetings between Chicago and Palo Alto, as
determined by the committee.
(b) Pre-Release Access. The parties agree that the following
provisions will be effective until [*] of the date of the initial use of
rrd.noosh.com by an RRD Subscriber (but no later than [*] following the
Effective Date):
(i) Noosh Features. A reasonable amount of time before
making new features generally available on the Noosh Service, Noosh will provide
RRD with reasonably detailed descriptions of such proposed features. At its
option, RRD will provide Noosh with input and consult with Noosh regarding the
desirable specifications and functionality of the proposed features.
(ii) RRD Features. A reasonable amount of time before making
new features generally available on the RRD Portals, RRD will provide Noosh with
reasonably detailed descriptions of such proposed features. At its option, Noosh
will provide RRD with input and consult with RRD regarding the desirable
specifications and functionality of the proposed features.
(c) Personnel Matters. During the term of this Agreement, Noosh
will not solicit for employment then current employees of RRD without RRD's
prior written consent, except that Noosh may hire any RRD employees who had
existing and outstanding offers of employment from Noosh as of January 5, 2000.
[] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
5.
<PAGE>
2.4 No Conflict of Interest. The parties agree that the following
provisions will be effective until the [*] of the date of the initial use of
rrd.noosh.com by an RRD Subscriber (but no later than [*] following the
Effective Date):
(a) Except with Noosh's written consent, RRD will not [*]
(b) Except with RRD's written consent, Noosh will not [*]
Without limiting Noosh's obligations under Section 2.4(c)(ii)(5) below as to the
handling of leads, this prohibition will not preclude Noosh from [*] Also, this
prohibition will not limit Noosh's activities with [*]
(c) Promptly following the Effective Date, pursuant to this
Section 2.4 above and, specifically, in each case subject to Section 2.4(b)
above:
(i) Noosh will begin work, with assistance from RRD, to
deploy rrd.noosh.com for RRD Subscribers to gain access to the Noosh Service.
(ii) Noosh and RRD sales management will meet and set sales
plans and priorities for marketing to customers in the RRD Segments. A
preliminary list of their activities will include, without limitation:
(1) Identifying existing RRD Customers in the RRD
Segments who may want to use the Noosh Service immediately in order to direct
them to rrd.noosh.com. RRD will use reasonable commercial efforts to prepare a
list of such RRD Customers (the "RRD Customer List") for use and review by both
parties in developing related marketing plans.
(2) Notifying all Noosh and RRD Customers in the RRD
Segments and inform them about rrd.noosh.com for the purposes of processing
print jobs in the RRD Segments.
[] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
6.
<PAGE>
(3) Promoting the Noosh/RRD alliance and direction and
sending updates (mailings, etc.) to identified potential customers in the RRD
Segments.
(4) Developing plans for marketing the Noosh Service
and/or the rrd.noosh.com to qualified accounts.
(5) With respect to any leads received by Noosh on
prospective customers for applications in the RRD Segments, Noosh will use its
reasonable commercial efforts to notify RRD promptly of such leads (other than
leads provided by or through Print Vendors) and, unless impractical, RRD will
invite Noosh to join RRD in calling upon the potential customers. In handling
such leads, RRD shall consider in good faith input from Noosh, [*] to such leads
for use in the RRD Segments, subject to the following:
a. RRD will not introduce or work with a Noosh
Competitor in the account [*] Further, before RRD introduces or works in an
account [*] RRD will provide Noosh with reasonable advance notice [*]
b. Noosh will not be restricted by the
provisions of Section 2.4(b) above or this Section 2.4(c) with respect to any
lead where:
i. prior to the Effective Date, the
prospect already has [*] Prior to the Effective Date, Noosh will provide the RRD
[*]
ii. prior to the Effective Date, the
prospect is already [*]
iii. in Noosh's reasonable judgment, the
prospect will be considering [*] or
iv. during the [*] following Noosh's
delivery of a lead to RRD, RRD has not [*] to market rrd.noosh.com and/or an RRD
Portal to the prospect; provided, however, that this subsection (iv) shall not
apply until the earlier of [*].
(6) Attending trade shows and conferences jointly.
[] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
7.
<PAGE>
(7) As plans for the RRD Portals are developed, RRD,
with reasonable Noosh assistance, will use reasonable commercial efforts to
notify the prospect/customer base.
(8) Noosh will commence training RRD staff in selling
and supporting Noosh in order to support the parties' joint sales calls and
customer maintenance.
(9) Noosh will use reasonable commercial efforts to
promote each RRD Portals when available.
(10) The parties will seek to establish performance
metrics (not necessarily usage) so that RRD and Noosh are satisfied account
awareness and customer relationship goals are tracked and met.
3. Development and Implementation of rrd.noosh.com and RRD Portals.
3.1 Design and Development.
(a) With assistance and input from RRD, Noosh will use
commercially reasonable efforts to design and implement (i) first, rrd.noosh.com
and (ii) after the implementation of rrd.noosh.com, the Integration Code
required to implement the integration of the Noosh Service with each RRD Portal.
This work is expected to include, among other things, (a) identification of the
technical and functional specifications for and implementation of rrd.noosh.com;
(b) identification of the technical and functional specifications for the
Integration Code and the custom features of the RRD GUI to be implemented as
part of the integration of the Noosh Service and each RRD Portal; (c)
acquisition or development, and implementation, of the hardware, software, and
other technology, needed to provide the rrd.noosh.com, which shall be solely at
Noosh's expense, and the integration of the Noosh Service and each RRD Portal,
which, for the purposes of the integration of the Noosh Service with each RRD
Portal, may include modifications to the Noosh Technology, and which shall be
solely at RRD's expense; (d) internal and potentially external (i.e., at
customer beta sites) evaluation and testing of the Noosh Service as accessed
through rrd.noosh.com and each RRD Portal until both parties are satisfied with
levels of service quality and reliability such that, initially, rrd.noosh.com
and, subsequently, each RRD Portal, respectively, are suitable for commercial
release; and (e) the development of appropriate target dates ("Target Dates")
relating to the design and implementation of each of rrd.noosh.com and the
Integration Code with each RRD Portal. It is understood and agreed that Noosh
cannot guarantee the results or success of these efforts, the Target Dates are
subject to change as circumstances warrant, and neither Noosh nor RRD will have
liability to the other for any change in the Target Dates, or any failure to
complete any portion of this work by the applicable Target Date, as long as each
such party is using good faith, commercially reasonable efforts to fulfill its
responsibilities in performing this work.
(b) With respect to rrd.noosh.com and each of the RRD Portals
(with each of rrd.noosh.com and the RRD Portals being referred to as a "Site"),
the parties agree that each such Site shall:
[] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
8.
<PAGE>
(i) be designed to provide full functionality as provided
within the Noosh Service;
(ii) with respect to each print job run on the Noosh
Service through such Site, identify only one Print Vendor to other users of the
Noosh Service, and such Print Vendor must be an NPV;
(iii) permit the NPV for each such print job to be only RRD
or a Permitted Affiliate; provided, however, that there shall not be any
limitation as to the number of OPVs to which such NPV may subcontract work in
connection with any particular print job.
[*] (as referenced in Section 1.15 above) is developed, the parties
recognize that RRD may request amendments or waivers to the limitations set
forth in this Section 3.1(b). Noosh agrees to consider and discuss any such
request, together with the potential terms upon which any requested exceptions
to such limitations might be acceptable.
3.2 RRD Assistance.
(a) RRD will use commercially reasonable efforts to assist
Noosh, as Noosh may reasonably request from time to time, in the design and
development of rrd.noosh.com and the Integration Code. Without limiting the
generality of the foregoing, RRD will use commercially reasonable efforts to (a)
make available to Noosh the facilities and personnel of RRD or its agents or
contractors, as Noosh may reasonably request, and (b) deliver to Noosh the APIs,
software, and other technology used by RRD in connection with the RRD Web Site
and/or the RRD Portals, as Noosh may reasonably request (collectively, the "RRD
Deliverables").
(b) RRD hereby grants to Noosh a non-exclusive, non-
transferable, royalty-free license during the term of this Agreement to use and
reproduce, and to the extent necessary to fulfill its obligations under this
Agreement, modify and create derivative works from, the RRD Deliverables, solely
for the purpose of performing the work described in Section 3.1; provided,
however, that all modifications and derivative works of the RRD Deliverables
and/or the RRD Portal Technology created pursuant to this Section 3.2 (the
"Modifications") will be [*] The RRD Deliverables and the Modifications are
deemed to be the Confidential Information of RRD subject to the provisions of
Section 4.3.
3.3 Provision of Noosh Service. When the parties agree that
rrd.noosh.com or the integrated version of the Noosh Service, as the case may
be, is ready for commercial release, Noosh will begin providing the related
service. As between Noosh and RRD, RRD will have sole responsibility for first-
level customer service and support to RRD Subscribers who access the Noosh
Service through rrd.noosh.com or the RRD Portal, and Noosh will have sole
responsibility for operation of the Noosh Service and rrd.noosh.com and will
provide reasonable back-up support to RRD to resolve customer questions and
problems relating or attributable to the content or operation of the Noosh
Service as provided to such RRD Subscribers.
3.4 Use by RRD Subscribers and RRD of the Noosh Service. The parties
agree that:
[] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
9.
<PAGE>
(a) To enable RRD or a Permitted Affiliate to process print jobs
as a user on the Noosh Service (directly, as opposed to through rrd.noosh.com or
through the RRD Portals), RRD will execute and deliver to Noosh a User Agreement
in substantially the form attached as Exhibit D on or before the Effective Date
---------
(the "Noosh User Agreement"). The Noosh User Agreement shall incorporate the
terms set forth below in Section 3.4(c) below.
(b) Pursuant to Section 3.1 above, the parties are to use their
diligent efforts to work together to determine the final specifications, duties
of the parties, Target Dates and other matters relating to the development of
each Site (as defined in Section 3.1(b) above). Promptly following the parties'
determination of such matters as they relate to each Site, the parties will use
their diligent, commercially reasonable efforts to negotiate and finalize the
specific terms of (i) the additional user agreement between RRD and Noosh under
which RRD, Permitted Affiliates and RRD Subscribers may use the Noosh Service
through such Site ("RRD Site Agreement") and (ii) the terms of the additional
user agreements between RRD or its Permitted Affiliate and RRD Subscribers under
which RRD or its Permitted Affiliates may permit the use of the Noosh Service by
RRD Subscribers through such Site ("RRD Subscriber Agreement"). RRD will
determine, in its sole discretion, the fees charged to such RRD Subscribers for
access and use to the Noosh Service through a particular site. However, RRD
acknowledges that amounts will be payable by RRD to Noosh in connection with
access or use by RRD Subscribers of the Noosh Service pursuant to the terms of
the RRD Subscriber Agreements, which amounts are to be equivalent to the amounts
of the usage fees which Noosh otherwise generally charges corporate print buyers
in a direct relationship between Noosh and such buyers.
(c) The parties agree that the Noosh User Agreement and each RRD
Site Agreement will incorporate, without limitation, the following provisions
regarding monthly fee pricing structure, and pricing assurances by Noosh, and
term:
(i) With respect to each calendar month during the term of
the Agreement, RRD will pay to Noosh (i) [*] of the first [*] of print orders
processed by RRD or a Permitted Affiliate on or through a Site on the Noosh
Service during such month, and (ii) [*] of the dollar amount of any additional
such print orders processed during such month.
(ii) If, during the term of this Agreement, Noosh enters
into an agreement with a party [*] Relevant terms for consideration will include
[*]
(iii) The term of each of the User Agreements will be the
same as the term of this Agreement.
To the extent there is any conflict between the terms of
this Agreement and any User Agreement, the terms of this Agreement shall govern.
[] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
10.
<PAGE>
3.5 License to Integration Code. Notwithstanding Noosh's sole and
exclusive ownership of the Intellectual Property Rights in the Integration Code,
including the Integration SC, Noosh agrees that:
(a) Noosh hereby grants to RRD, under all of the Intellectual
Property Rights in the Integration Code which it owns or has a right to license,
a perpetual, irrevocable, royalty-free and nonexclusive license to use, modify,
reproduce, and distribute the Integration Code (including modified versions
thereof) for the sole purpose of [*]. All rights not expressly granted with
respect to the Integration Code are hereby reserved.
(b) Noosh hereby grants to RRD, under all of the Intellectual
Property Rights in the Integration SC which it owns or has a right to license, a
perpetual, irrevocable, royalty-free and nonexclusive license to use internally
and to modify the Integration SC (and to compile any such modified versions of
the Integration SC) for the sole purposes of creating error corrections,
creating performance enhancements [*]. All rights not expressly granted with
respect to the Integration SC are hereby reserved.
(c) within 30 days of creating the original version or any
modifications of the Integration Code or the Integration SC, RRD shall deliver
to Noosh a copy of such modifications in source code and object code forms,
together with a reasonably detailed description of any such modifications.
(d) RRD ACKNOWLEDGES THAT THE INTEGRATION CODE AND INTEGRATION
SC WILL BE SUPPLIED HEREUNDER ON AN "AS IS" BASIS, WITHOUT ANY WARRANTY OF ANY
KIND. WITHOUT LIMITING THE FOREGOING, NOOSH DISCLAIMS ANY AND ALL STATUTORY,
EXPRESS OR IMPLIED WARRANTIES REGARDING THE INTEGRATION CODE, THE INTEGRATION SC
AND ANY FIX, INCLUDING WITHOUT LIMITATION THE IMPLIED WARRANTIES OF TITLE,
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT OF THIRD
PARTY PROPRIETARY RIGHTS.
3.6 New Functionality. If, after the Effective Date and during the
term of this Agreement, Noosh makes generally available through or as part of
the Noosh Service new or significantly different functionality [*] ("New
Functionalities"), Noosh will make such New Functionalities available to RRD [*]
provided, however, that the availability of such New Functionalities shall be
subject to the parties' written agreement regarding the terms and conditions of
such usage.
3.7 Allocation of Expenses. The parties agree that each party will
bear its own expenses incurred in connection with the performance of its
obligations hereunder.
4. General
[] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
11.
<PAGE>
4.1 Cooperation. RRD and Noosh will cooperate and use commercially
reasonable efforts to assist one another from time to time in the identifying
and developing opportunities to market and promote the Noosh Service and the
parties' other respective products and services. The parties will also
cooperate in establishing links between their respective web sites (including
rrd.noosh.com and the RRD Portals) in a manner reasonably acceptable to both
parties.
4.2 Trademark Licenses
(a) RRD Marks. RRD grants to Noosh a limited, non-exclusive,
non-transferable license during the term of this Agreement to use the RRD Marks
in connection with its part in the marketing, promotion, and administration of
the Noosh Service, rrd.noosh.com and the RRD Portals as described in Section 2.
Before making use of any RRD Mark, Noosh will provide RRD with a sample of the
proposed use of the RRD Mark for prior approval by RRD. If RRD does not object
in writing to the proposed use of the RRD Mark within ten (10) days after
receipt of the sample from Noosh, RRD will be deemed to have approved the
proposed use. If RRD does so object to the proposed use of the RRD Mark, Noosh
will modify or cancel the proposed use, as requested by RRD. In addition, Noosh
will comply with any trademark usage guidelines or policies that RRD may furnish
to Noosh in writing from time to time concerning use of the RRD Marks. All use
of the RRD Marks hereunder will inure to the benefit of RRD. RRD has and will
retain exclusive ownership of the RRD Marks, and Noosh will not contest or
challenge, or do anything inconsistent with, RRD's exclusive ownership of the
RRD Marks. Without limiting the generality of the foregoing, Noosh may not
affix, append, or place any of its trademarks, trade names, or logos to, or in
close proximity to, the RRD Marks in a manner that results or could result in
the creation of a unitary composite mark.
(b) Noosh Marks. Noosh grants to RRD a limited, non-exclusive,
non-transferable license during the term of this Agreement to use the Noosh
Marks in connection with the advertising, marketing, and promotion of the Noosh
Service, rrd.noosh.com and the RRD Portals as described in Section 2. Before
making use of any Noosh Mark, RRD will provide Noosh with a sample of the
proposed use of the Noosh Mark for prior approval by Noosh. If Noosh does not
object in writing to the proposed use of the Noosh Mark within ten (10) days
after receipt of the sample from RRD, Noosh will be deemed to have approved the
proposed use. If Noosh does so object to the proposed use of the Noosh Mark, RRD
will modify or cancel the proposed use, as requested by Noosh. In addition, RRD
will comply with any trademark usage guidelines or policies that Noosh may
furnish to RRD in writing from time to time concerning use of the Noosh Marks.
All use of the Noosh Marks hereunder will inure to the benefit of Noosh. Noosh
has and will retain exclusive ownership of the Noosh Marks, and RRD will not
contest or challenge, or do anything inconsistent with, Noosh's exclusive
ownership of the Noosh Marks. Without limiting the generality of the foregoing,
RRD may not affix, append, or place any of its trademarks, trade names, or logos
to, or in close proximity to, the Noosh Marks in a manner that results or could
result in the creation of a unitary composite mark.
4.3 Confidentiality
(a) Definition of Confidential Information. For purposes of this
Agreement, "Confidential Information" of a party means the information and
documents identified in this Agreement as confidential information of such
party, as well as any and all
[] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
12.
<PAGE>
other information that (i) such party considers to be confidential or
proprietary to its business (including trade secrets, technical information
relating to ongoing research and development, business strategies, marketing
plans, customer lists, and financial data) and (ii) the other party knew, or
under the circumstances should have known, was considered confidential or
proprietary by the other party.
(b) General Confidentiality Obligations. Each party agrees that it
will (i) not disclose the other party's Confidential Information to any third
party (other than independent contractors as provided below); (ii) use the other
party's Confidential Information only to the extent necessary to perform its
obligations or exercise its rights under this Agreement; (iii) disclose the
other party's Confidential Information only to those of its employees and
independent contractors who need to know such information for purposes of this
Agreement and who are bound by confidentiality agreements containing terms no
less restrictive than those in this Section 4.3; and (iv) protect all
Confidential Information of the other party from unauthorized use, access, or
disclosure in the same manner as it protects its own confidential information of
a similar nature, and in no event with less than reasonable care. The parties
agree that, without limitation, (i) the Noosh Technology, the Integration Code
and the Integration SC are the Confidential Information of Noosh; and (ii) the
RRD Portal Technology, including the RRD Deliverables, and the RRD Customer List
are the Confidential Information of RRD. The Usage Data is the Confidential
Information of both RRD and Noosh.
(c) Exceptions. Each party's obligations with respect to any
portion of the other party's Confidential Information will terminate when the
receiving party can document that (i) such Confidential Information was in the
public domain at the time it was communicated to the receiving party by the
disclosing party; (ii) such Confidential Information entered the public domain
after it was communicated to the receiving party by the disclosing party through
no fault of the receiving party; (iii) such Confidential Information was in the
receiving party's possession free of any obligation of confidence at the time it
was communicated to the receiving party by the disclosing party; (iv) such
Confidential Information was rightfully in the receiving party's possession free
of any obligation of confidence at the time or after it was communicated to the
receiving party by the disclosing party; or (v) such Confidential Information
was developed by employees or agents of the receiving party independently of and
without reference to any information communicated to the receiving party by the
disclosing party. In addition, Section 4.3(b) will not be construed to prohibit
any disclosure that is (A) necessary to establish the rights of either party
under this Agreement or (B) required by a valid court order or subpoena,
provided in the latter case that the party required to make such disclosure
notifies the other party (whose Confidential Information is to be disclosed)
thereof promptly and in writing and cooperates with the other party if the other
party files a motion to contest or limit the scope of such disclosure.
(d) Terms of Agreement. Neither party will disclose the existence
or any terms of this Agreement to anyone other than its attorneys, accountants,
and other professional advisors, except (i) pursuant to Exhibit C or another
---------
mutually acceptable press release or otherwise approved by the other party in
writing; (ii) in connection with a contemplated change of control of such party
or sale of such party's business (provided that any third party to whom the
terms of this Agreement are to be disclosed signs a confidentiality agreement
reasonably satisfactory to the other party hereto before such disclosure is
made); or (iii) as may be required by law.
[] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
13.
<PAGE>
(e) Usage Data. All Usage Data will be owned jointly by the parties.
However, subject to the nondisclosure agreements of Noosh, RRD will have the [*]
right to use the specific Usage Data relating to any particular RRD Customer for
the purpose of marketing additional products and services to such RRD Customers;
provided, however, that this provision shall not be construed to prevent Noosh
from using the Usage Data for marketing and sales to potential Noosh customers,
[*]
4.4 Ownership of Intellectual Property Rights. As between RRD and
Noosh, subject to each party's ownership of its trademarks as provided in
Section 4.2, (a) RRD will retain exclusive ownership of all Intellectual
Property Rights in the RRD Portal Technology; and (b) Noosh will retain
exclusive ownership of all Intellectual Property Rights in the Noosh Service,
the Noosh Technology, the Integration Code and the Integration SC. Each party
agrees to cooperate with the other party in executing and filing any documents
and taking any other action necessary or reasonably requested by the other party
in order to give effect to the foregoing allocation of Intellectual Property
Rights. RRD agrees not to remove or obliterate any copyright, trademark or
proprietary rights notices of Noosh or its licensors from the Noosh Service
(whether used directly or via rrd.noosh.com or the RRD Portals) or the Noosh
Technology. Each party agrees that it shall not modify, translate, disassemble,
decompile, reverse engineer or cause or allow discovery of the source code of
the software of the other party in any way. In addition, RRD shall include a
copyright notice in the "About" screen of the RRD Portals indicating that the
access to the functionality of the Noosh Service is provided under agreement
with and licenses from Noosh, Inc.
4.5 Indemnification
(a) By RRD. RRD will defend, at its own expense, all suits or
actions against Noosh brought by third parties based upon claims that (A) the
RRD Marks or the RRD Portal Technology infringes or misappropriates any United
States Intellectual Property Right of a third party, and RRD will pay all
amounts agreed to in a monetary settlement of such claims and all damages
awarded as a final judgment by a court of competent jurisdiction, subject to the
limitations on liability in Section 4.7 and subject to the conditions that (i)
Noosh give RRD prompt written notice of the claim, (ii) Noosh give RRD sole
control of the defense and settlement of the claim, and (iii) Noosh cooperate
with RRD, at RRD's reasonable request and expense, in the defense or settlement
of the claim. Noosh may, at its own expense, participate in any such suit or
action with counsel of its own choice.
(b) By Noosh. Noosh will defend, at its own expense, all suits or
actions against RRD brought by third parties based upon claims that (A) the
Noosh Marks, the Noosh Technology or the Noosh Service infringes or
misappropriates any United States Intellectual Property Right of a third party,
and Noosh will pay all amounts agreed to in a monetary settlement of such claims
and all damages awarded as a final judgment by a court of competent
jurisdiction, subject to the limitations on liability in Section 4.7 and subject
to the conditions that (i) RRD give Noosh prompt written notice of the claim,
(ii) RRD give Noosh sole control of the defense and settlement of the claim, and
(iii) RRD cooperate with Noosh, at Noosh's reasonable request and expense, in
the defense or settlement of the claim. RRD may, at its own expense,
participate in any such suit or action with counsel of its own choice.
[] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
14.
<PAGE>
4.6 Warranty Disclaimers. NEITHER PARTY MAKES ANY WARRANTIES TO THE
OTHER PARTY, EXPRESS OR IMPLIED, REGARDING SUCH PARTY'S PRODUCTS, SERVICES,
DELIVERABLES, OR TECHNOLOGY, INCLUDING THE NOOSH SERVICE, NOOSH WEB SITE, NOOSH
TECHNOLOGY, RRD PORTALS AND RRD PORTAL TECHNOLOGY, AND EACH PARTY DISCLAIMS THE
IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND
NON-INFRINGEMENT WITH RESPECT TO THE FOREGOING.
4.7 Limitation of Liability. EXCEPT FOR LIABILITY RELATING TO
BREACHES OF SECTIONS 3.2(b), 3.5, 4.2, 4.3 AND 4.4, NEITHER PARTY WILL BE LIABLE
TO THE OTHER PARTY FOR ANY INDIRECT, CONSEQUENTIAL, INCIDENTAL, OR SPECIAL
DAMAGES, INCLUDING LOST PROFITS, IN CONNECTION WITH THIS AGREEMENT. EXCEPT FOR
AMOUNTS OWED BY RRD TO NOOSH UNDER SECTION 3.4(c), AND EXCEPT FOR LIABILITY
RELATING TO BREACHES OF SECTIONS 3.2(b), 3.5, 4.2, 4.3 AND 4.4, THE TOTAL,
CUMULATIVE LIABILITY OF EACH PARTY TO THE OTHER PARTY FOR ANY AND ALL CLAIMS AND
CAUSES OF ACTION ARISING FROM OR RELATING TO THIS AGREEMENT UNDER ANY THEORY OF
LIABILITY, WHETHER IN CONTRACT, IN TORT, OR OTHERWISE, WILL NOT EXCEED [*]
4.8 Term and Termination.
(a) Term. The term of this Agreement will begin as of the Effective
Date and continue until December 31, 2001 ("End Date"), subject to earlier
termination as set forth below in Section 4.8(b). Subject to Section 4.8(b)
below, RRD will have the option of extending the term of this Agreement by two
one-year increments. To extend the End Date from December 31, 2001 to December
31, 2002, RRD must notify Noosh in writing on or before November 30, 2001. To
extend the End Date from December 31, 2002 to December 31, 2003, RRD must notify
Noosh in writing on or before November 30, 2002.
(b) Termination. Each party will have the right to terminate this
Agreement upon written notice to the other party if (a) the other party has
committed a material breach of this Agreement or any User Agreement, (b) the
other party has not cured such breach within a reasonable period of time of no
less than thirty (30) days after receipt of written notice of such breach from
the other party, and (c) such breach remains uncured as of the effective date of
termination; provided, however, that either party may terminate this Agreement
immediately upon delivery of written notice in connection with any material and
willful breach by the other of Sections 3.2(b), 3.5, 4.3 or 4.4. Upon
termination of this Agreement for any reason, (i) each party will promptly
return all Confidential Information of the other party, (ii) RRD will pay all
outstanding amounts owed to Noosh under this Agreement and each User Agreement
within thirty (30) days after the effective date of such termination; (iii) at
the option of the nonbreaching party, any User Agreement may be terminated upon
delivery of written notice to the other party; and (iv) the following provisions
will nonetheless remain in effect: Section 1, Sections 3.5(a) and 3.5(b), all of
Section 4 except Sections 4.1 and 4.2, and RRD's payment obligations to Noosh
under each User Agreement.
4.9 Relationship of Parties. Nothing in this Agreement will be
construed as creating any agency, partnership, or other form of joint enterprise
between the parties. Neither
[] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
15.
<PAGE>
party will have the authority to act or create any binding obligation on behalf
of the other party, and neither party will represent to any third party that it
has the authority to act or create any binding obligation on behalf of the other
party.
4.10 Notices. All notices, consents, waivers, and other communications
intended to have legal effect under this Agreement must be in writing, must be
delivered to the other party at the address set forth at the top of this
Agreement by personal delivery, certified mail (postage pre-paid), or a
nationally recognized overnight courier, and will be effective upon receipt (or
when delivery is refused). Any such notices sent to Noosh must be addressed to
the attention of its Chief Financial Officer and General Counsel, and any such
notice sent to RRD must be addressed to the attention of its President and Chief
Operating Officer. Each party may change its address for receipt of notices by
giving notice of the new address to the other party.
4.11 Governing Law and Venue. This Agreement will be governed by and
interpreted in accordance with the laws of the State of California as such laws
apply to contracts made between California residents to be performed entirely
within California. The United Nations Convention for the Sale of International
Goods will not apply to this Agreement.
4.12 Injunctive Relief. It is understood and agreed that, notwithstanding
any other provision of this Agreement, any breach of Section 4.3 by either party
will cause irreparable damage for which recovery of money damages would be
inadequate, and that the non-breaching party will therefore be entitled to seek
timely injunctive relief to protect such party's rights under this Agreement in
addition to any and all remedies available at law.
4.13 Waiver. The failure of either party to require performance by the
other party of any provision of this Agreement will not affect the full right to
require such performance at any time thereafter; nor will the waiver by either
party of a breach of any provision of this Agreement be taken or held to be a
waiver of the provision itself.
4.14 Severability. If any provision of this Agreement is unenforceable or
invalid under any applicable law or is so held by applicable court decision,
such unenforceability or invalidity will not render this Agreement unenforceable
or invalid as a whole, and such provision will be changed and interpreted so as
to best accomplish the objectives of such unenforceable or invalid provision
within the limits of applicable law or applicable court decisions.
4.15 Assignment. Neither this Agreement nor any rights or obligations of
either party under this Agreement may be assigned in whole or in part without
the prior written consent of the other party; provided, that no such consent is
necessary in connection with a merger or sale of all or substantially all of the
business or assets of the assigning party or any of its business units or
divisions (except that such consent shall be necessary if such merger or sale
involves (a) Noosh or its Affiliate and an RRD Competitor, or (b) RRD or its
Affiliate and a Noosh Competitor). Any attempted assignment in violation of the
preceding sentence will be void. This Agreement will bind and inure to the
benefit of the respective successors and permitted assigns of the parties.
4.16 Force Majeure. Neither party will be liable for any failure to fulfill
its obligations hereunder due to causes beyond its reasonable control, including
acts or omissions of
[] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
16.
<PAGE>
government or military authority, acts of God, shortages of materials,
transportation delays, earthquakes, fires, floods, labor disturbances, riots, or
wars.
4.17 Full Power. Each party warrants that it has full power to enter into
and perform this Agreement, and the person signing this Agreement on such
party's behalf has been duly authorized and empowered to enter into this
Agreement.
4.18 Construction. The section headings appearing in this Agreement are
inserted only as a matter of convenience and in no way define, limit, construe,
or describe the scope or extent of such section or in any way affect this
Agreement. Unless otherwise expressly stated, when used in this Agreement the
word "including" means "including but not limited to."
4.19 Entire Agreement and Amendment. This Agreement together with the
Exhibits completely and exclusively states the agreement of the parties
regarding its subject matter. It supersedes, and its terms govern, all prior
understandings, agreements, or other communications between the parties, oral or
written, regarding such subject matter. This Agreement may be executed in
counterparts and may be amended only in a document signed by both parties.
4.20 Permitted Affiliates. The parties agree that the benefits of this
Agreement shall extend to any RRD Affiliate so long as such entity remains an
RRD Affiliate, but only if any such RRD Affiliate executes and delivers to Noosh
a written agreement, in form and substance reasonably satisfactory to Noosh, in
which such RRD Affiliate agrees to be subject to the same obligations as apply
to RRD hereunder ("Permitted Affiliate").
[] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
17.
<PAGE>
In Witness Whereof, the parties have executed this Agreement as of the
Effective Date.
R.R. DONNELLEY & SONS COMPANY NOOSH, INC.
By: /s/ Jeffrey J. Anderson By: /s/ Ofer Ben-Shachar
------------------------------------ -----------------------
Name: Jeffrey J. Anderson Name: Ofer Ben-Shachar
------------------------------------ -----------------------
Title: VP, Corporate Development Title: President and CEO
------------------------------------ -----------------------
[] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
18.
<PAGE>
Exhibit A
Noosh Marks
Noosh
Live Jobs
Noosh Logo
[] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
<PAGE>
Exhibit B
RRD Marks
Indian Printers Mark Logo
(Date of Registration August 27, 1996; Reg. No. 1996347)
R.R. Donnelley & Sons Company
(Date of Registration September 10, 1996; Reg. No. 1998930)
[] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
<PAGE>
Exhibit C
Initial Press Release
Release Date
January __, 2000
R.R. Donnelley and Noosh Form Strategic Marketing and Development Alliance
Leading Commercial Printer Invests $14 Million in noosh.com
Chicago and Palo Alto, Calif., January 2000 - R.R. Donnelley & Sons Company
(NYSE:DNY) and Noosh, Inc., today announced a strategic alliance to jointly
develop Internet portals for R.R. Donnelley customers and engage in co-marketing
and other initiatives. As part of the agreement, R.R. Donnelley will invest
$14million in Noosh, acquiring equity in the Internet-based communication
service designed to dramatically improve the process of buying, selling and
managing print.
"R.R. Donnelley actively embraces new ways to use the Internet to improve our
operations and strengthen our relationships with our customers, who are the
world's leading publishers and merchandisers," said William L. Davis, chairman
and chief executive officer of R.R. Donnelley. "We have chosen Noosh as a
partner to enable collaborative online business-to-business activity between us
and our customers. We believe the Noosh technology platform, early market
leadership, management team and strong financial backing will rapidly lead to
benefits for our business and our customers."
"This agreement with R.R. Donnelley helps open new markets for us and validates
our technology leadership," said Ofer Ben-Shachar, president and chief executive
officer of Noosh, Inc. "We expect even more innovation to come from the joint
product development team, which will draw upon R.R. Donnelley's best practices
and Noosh's online business-to-business expertise."
The agreement combines R. R. Donnelley's leadership in the printing industry
with the online innovations that Noosh has demonstrated in simplifying the print
buying and production process.
The agreement provides for the joint development of portals to benefit R.R.
Donnelley's book, catalog and magazine customers, as well as future initiatives.
About R.R. Donnelley & Sons Company R.R. Donnelley & Sons Company
(www.rrdonnelley.com) is a leading North American commercial printer and
information services company. From content management through logistics and
distribution, the company offers the broadest range of integrated services to
publishers of catalogs, magazines, books, directories and retail inserts. R.R.
Donnelley also provides comprehensive document and communications management
services for the financial, investment company, and health care industries. In
all of these areas, the company applies its superior skill, scale and technology
to deliver solutions that efficiently meet customers' strategic business needs.
About Noosh, Inc. Noosh, Inc. (http://www.noosh.com) was founded in 1998 with
the goal of creating the industry's leading business-to-business Internet-based
communication service for enterprise critical printing. Noosh.com, powered by
Live JobsSM collaborative technology, dramatically improves the process of
buying, selling and managing print. Leveraging the power of the Internet and
popular browsers, noosh.com helps strengthen buyer-printer relationships by
providing a collaborative environment where corporate buyers, printers and
creative agencies work together efficiently to manage complex corporate
printing.
Noosh and LiveJobs are the trademark and service mark, respectively, of Noosh,
Inc. Other trademarks appearing in this release are the property of their
holders.
[] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
<PAGE>
Exhibit D
Noosh User agreement
[] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
<PAGE>
NOOSH, INC. PRINTER AGREEMENT
This Printer Agreement (this "Agreement") is entered into as of the date written
below between the undersigned entity ("Printer"), and Noosh, Inc. ("Noosh"), to
provide for Printer's use of the service provided by Noosh through www.noosh.com
-------------
or any successor website, as such service may be revised, augmented, superseded,
enhanced, modified or supplemented from time to time (the "Service"). The
parties have also executed a related Co-Development and Marketing Agreement of
even date herewith (the "Marketing Agreement").
For valuable consideration and the covenants set forth below, the parties hereby
agree as follows:
1. Use of Service. Subject to the terms and conditions of this Agreement,
--------------
Noosh grants to Printer the limited, nontransferable, nonexclusive,
nonsublicensable right to use the Service for the sole purpose of processing and
monitoring print jobs involving Printer's production and sale of printed
materials for and to its customers ("Buyers").
2. Orders. In using the Service, a Buyer may issue or modify orders to Printer
------
relating to a print job ("Order"). Printer acknowledges that (i) any Order
accepted by Printer through the Service before it has been successfully
cancelled or modified by the Buyer (an "Accepted Order") may form a firm binding
contract between the Buyer and Printer in accordance with its terms and any
additional terms supplied by the Printer or Buyer (the "Terms"); and (ii) any
Accepted Order shall create service fee obligations from Printer to Noosh
according to the payment terms described in Section 3. Printer acknowledges
that by "clicking" on webpage buttons in the Service, including, those for
accepting an Order and accepting a change to an Order (and for agreeing to
modifications of this Agreement pursuant to Section 1 above), Printer can create
binding obligations for Printer without any further action by or notice to
Printer. Noosh does not set, approve, control, or endorse Printer's or a
Buyer's or changes to such terms. Any Order transmitted via the Service, and
any agreement resulting from acceptance thereof, shall be considered to be a
"writing" or "in writing." Any Order Printer accepts shall be deemed to be
"signed" by Printer. Printer agrees not to contest the validity or
enforceability of an Order sent or accepted via the Service under the provisions
of any applicable law relating to whether certain agreements are required to be
in writing or signed by the party to be bound thereby.
3. Payment. Printer agrees to pay the fees specified in the Section 3.4 of the
-------
Marketing Agreement relating to Accepted Orders and Printer's use of the
Service. Noosh will invoice Printer for all fees on a monthly basis. In the
event that Printer's use of the Service is subject to a per-transaction fee,
Noosh will bill Printer for the transaction in the month following the job due
date as recorded in the Service with respect to each Accepted Order. For the
purposes of any such billing, the dollar value and job due date relating to an
Accepted Order for a particular print job shall be as initially reflected in the
Accepted Order, subject to any changes to such amount and job due date as are
agreed upon by the Printer and the Buyer and entered on the Service and of which
the Printer notifies Noosh in writing on or before the previously agreed upon
job due date. Payment in full of invoices is due 30 days after the invoice
date. Printer shall use the Service in good faith and in its intended manner to
consummate business transactions through the Service and will not directly or
indirectly circumvent any fee payment obligation to Noosh in any manner,
including, without limitation, by consummating with a Buyer outside the Service
any business transaction arising from or related to an Order entered on the
Service. Printer is liable for any collection costs (including reasonable
attorneys' fees) arising from Noosh's efforts to collect any unpaid balance due.
4. Account and Password. Printer will receive an account id, username and
--------------------
password to gain access to and use the Service. Printer is responsible for
maintaining the confidentiality of its username and password, and is fully
responsible for all activities that occur under its username or account.
Printer agrees (a) not to allow a third party to use its account, username or
password at any time and (b) to notify immediately Noosh customer support of any
actual or suspected unauthorized use of its account, username or password, or
any other breach or suspected breach of security at 1-888-AT-NOOSH (1-888-286-
6674) or at [email protected]. Noosh cannot and will not be liable for any loss
or damage arising from unauthorized use of Printer's account, username or
password.
5. Disclaimer.
----------
5.1 Information. Printer acknowledges that, except for information,
-----------
products, or services clearly identified as being supplied by Noosh, Noosh does
not operate, control, or endorse any information, products, or services on this
Service in any way. Except for Noosh-identified information, products or
services, all information, products and services offered on the Service are
offered by third parties. Printer also acknowledges that Noosh cannot and does
not guarantee or warrant that any information available for downloading through
the Service will be free of infection or viruses, worms, Trojan horses or other
code or defects that manifest contaminating or destructive properties. Printer
is responsible for implementing sufficient procedures and checkpoints to satisfy
Printer's particular requirements for accuracy of data input and output, and for
maintaining a means external to the Service for the reconstruction of lost data.
5.2 Limited Warranty. Noosh shall use commercially reasonable
----------------
efforts to make the Service available for permitted uses on a 24 x 7 basis.
However, Noosh reserves the right to make the Service unavailable from time to
time for any reason. NOOSH DOES NOT WARRANT THAT THE SERVICE WILL BE
UNINTERRUPTED OR ERROR FREE OR THAT USER INFORMATION (AS DEFINED BELOW) OR OTHER
DATA WILL NOT BE LOST. NOOSH DOES NOT RECOMMEND OR ENDORSE ANY SPECIFIC BUYER.
NOOSH DOES NOT SELL, SOLICIT APPLICATIONS FOR, OR WRITE CONTRACTS FOR ANY GOODS
OR SERVICES. NOOSH IS NOT A BROKER OR AGENT ACTING ON BEHALF OF PRINTER OR ANY
BUYER. PRINTER ASSUMES TOTAL RESPONSIBILITY AND RISK FOR PRINTER'S USE OF THE
SERVICE. THE SERVICE IS PROVIDED ON AN "AS IS" BASIS WITHOUT WARRANTIES OF ANY
KIND EITHER EXPRESSED OR IMPLIED, INCLUDING BUT NOT LIMITED TO, THE IMPLIED
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NON-
INFRINGEMENT.
5.3 Limitation on Liability. EXCEPT FOR LIABILITY UNDER SECTIONS 4,
-----------------------
8 AND 11 AND EXCEPT AS PROVIDED IN THE MARKETING AGREEMENT, IN NO EVENT SHALL
EITHER PARTY BE LIABLE UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER
LEGAL OR EQUITABLE THEORY FOR ANY SPECIAL, INCIDENTAL, INDIRECT OR CONSEQUENTIAL
DAMAGES OF ANY KIND, INCLUDING, WITHOUT LIMITATION, THOSE RESULTING FROM
INTERRUPTION OF USE, LOSS OR CORRUPTION OF DATA, OR LOST PROFITS, WHETHER OR NOT
ADVISED OF THE POSSIBILITY OF SUCH DAMAGE, ARISING OUT OF OR IN CONNECTION WITH
THE USE OF OR INABILITY TO USE THE SERVICE. EXCEPT FOR LIABILITY UNDER SECTIONS
3, 4, 8 AND 11 AND EXCEPT AS PROVIDED IN THE MARKETING AGREEMENT, EACH PARTY'S
TOTAL LIABILITY FOR ANY AND ALL CLAIMS HEREUNDER WILL NOT EXCEED THE AMOUNT OF
FEES PAID BY PRINTER TO NOOSH PURSUANT TO SECTION 3 IN THE YEAR PRECEDING THE
CLAIM.
6. Venue Only; Release. The Service acts as the venue for Buyers and Printer
-------------------
to negotiate and enter into transactions for the
[] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
<PAGE>
delivery of goods. Noosh is not involved in the actual transaction between
Buyers and Printer except to provide the venue for the Service. As a result,
Noosh has no control over the quality of the goods, the truth or accuracy of the
listings, the timely performance of Buyers, or the ability of Buyers to buy
goods. Accordingly, in the event that Printer has a dispute with one or more
Buyers or other printers (except to the extent arising from Noosh's breach of
the Marketing Agreement), Printer releases Noosh (and Noosh's agents and
employees) from claims, demands and damages (actual and consequential) of every
kind and nature, known and unknown, suspected and unsuspected, disclosed and
undisclosed, arising out of or in any way connected with such disputes.
7. Indemnification. Printer agrees to defend, indemnify and hold harmless
---------------
Noosh and its agents, directors, officers and affiliates from and against any
and all claims, losses, liabilities and damages of any kind (including
reasonable attorneys' fees) relating to Printer's access to and use of the
Service and/or breach of this Agreement.
8. Title; Limited License. Except as expressly provided herein, Noosh is the
----------------------
exclusive owner or licensee of any and all copyrights, trademarks, servicemarks,
and any other intellectual property right or materials related to the Service.
Printer may print and download portions of the materials contained on the
Service solely for Printer's internal use provided Printer maintains the
copyright notice and any other notices that appear on any such copies. Any
other copying, redistribution, publication, or retransmission of any portion of
materials on the Service is strictly prohibited without the express written
permission of Noosh. Printer hereby grants to Noosh a non-exclusive, worldwide,
perpetual, irrevocable, royalty-free, license to use, display, perform and
reproduce information placed on the Service or provided to Noosh by Printer
("User Information") to operate the Service. Printer agrees that Printer's use
of the Service and the use of User Information on the Service shall not: (a)
infringe any third party's copyright, patent, trademark, trade secret or other
proprietary rights or rights of publicity or privacy; (b) violate any law,
statute, ordinance or regulation (including without limitation those governing
export control, dealer agreements, unfair competition, anti-discrimination or
false advertising); or (c) be defamatory, trade libelous, unlawfully threatening
or unlawfully harassing or obscene.
9. Termination. This Agreement shall remain in effect for the term of the
-----------
Marketing Agreement, unless terminated earlier as set forth below in this
section. This Agreement may be terminated by either party on thirty (30)
written days notice to the other party if the other party fails to materially
perform any obligation under this Agreement, the Marketing Agreement or any
other User Agreement (as defined in the Marketing Agreement) and such failure is
not cured within such thirty (30) day period; provided, however, that either
Party may terminate this Agreement immediately upon delivery of notice in
connection with any material and willful breach by the other party of Section 4,
8 or 11.
10. Relationship of Parties. For all purposes under this Agreement, each party
-----------------------
shall be and act as an independent contractor of the other and shall not bind
nor attempt to bind the other to any contract.
11. Confidentiality. The parties acknowledge that they are subject to
---------------
nondisclosure obligations as set forth in the Marketing Agreement. In addition
to such obligations, Printer agrees not to (i) disclose the confidential
information of any other printer or Buyer that Printer obtains through the use
of the Service or (ii) attempt to gain unauthorized access to the confidential
information of other printers, Buyers or Noosh via the Service.
12. Force Majeure. Neither party shall be responsible for delays or failures
-------------
in performance resulting from acts or circumstances beyond the reasonable
control of such party, provided that such party uses commercially reasonable
efforts to correct such delay or failure.
13. Amendments. Any amendments or modifications to this Agreement shall only
----------
be effective if in writing and signed by both parties; provided, however, that
any modified terms presented by Noosh to Printer through or on the Service shall
be effective if Printer indicates its assent by "clicking" an appropriate
webpage button.
14. Miscellaneous. Any notice, report, approval, or consent required or
-------------
permitted hereunder shall be in writing and in the English language. No failure
or delay in exercising any right hereunder will operate as a waiver thereof, nor
will any partial exercise of any right or power hereunder preclude further
exercise. Printer may not assign any rights or obligations hereunder, by
operation of law or otherwise, except with the prior written consent of Noosh.
If any provision of this Agreement shall be adjudged by any court of competent
jurisdiction to be unenforceable or invalid, that provision shall be limited or
eliminated to the minimum extent necessary so that this Agreement shall
otherwise remain in full force and effect and enforceable. This Agreement shall
be deemed to have been made in, and shall be construed pursuant to the laws of
the State of California without regard to its provisions regarding the conflicts
of laws. The parties agree that the United Nations Convention on Contracts for
the International Sale of Goods is specifically excluded from application to
this Agreement. Printer acknowledges that the Terms shall only apply between
Buyer and Printer, and any attempt to enforce the Terms against Noosh shall be
void and without effect. This Agreement (including any addendum mentioned
herein), together with the Marketing Agreement, is the complete and exclusive
statement of the mutual understanding of the parties and supersedes and cancels
all previous written and oral agreements and communications relating to the
subject matter of this Agreement.
Accepted by Printer:
R.R. Donnelly & Sons Company
- -------------------------------------
Name of Printer
By:
----------------------------------
Signature
- -------------------------------------
Name and Title
January 25, 2000
- -------------------------------------
Date
Address:77 West Wacker Drive
-----------------------------
Chicago, IL 60601
- -------------------------------------
Fax:
---------------------------------
Email:
-------------------------------
On Behalf Of Noosh, Inc.:
By:
----------------------------------
Signature
- -------------------------------------
Name and Title
January 25, 2000
- -------------------------------------
Date
Noosh, Inc
3410 Hillview Avenue, Bldg. B
Palo Alto, CA 94304
Telephone: (650) 320-6200
Fax: 650.858.1015
-------------------------------
Email: [email protected]
-----------------------------
[] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Amendment No. 1
to Registration Statement on Form S-1 of our reports dated January 21, 2000
relating to the financial statements and financial statement schedule, which
appear in the Noosh, Inc. Annual Report on Form S-1 for the year ended
December 31, 1999. We also consent to the reference to us under the headings
"Experts" in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
San Jose, California
February 8, 2000
