SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
MOBINETIX SYSTEMS, INC.
(Name of Issuer)
COMMON STOCK, PAR VALUE $.001 PER SHARE
(Title of Class of Securities)
709751
(CUSIP Number)
DENNIS J. BRODERICK, ESQ.
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
FEDERATED DEPARTMENT STORES, INC.
7 WEST SEVENTH STREET
CINCINNATI, OHIO 45202
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
with a copy to:
MARK E. BETZEN, ESQ.
JONES, DAY, REAVIS & POGUE
2300 TRAMMELL CROW CENTER
2001 ROSS AVENUE
DALLAS, TEXAS 75201
(214) 220-3939
MARCH 20, 1998
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this schedule because of Rule 13d-
1(b)(3) or (4), check the following box \_\.
(Continued on following pages)
CUSIP NO. 709751 13D
1 NAME OF REPORTING PERSON
I.R.S IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
Federated Department Stores, INc.
13-3324058
_
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) \_\
(b) \_\
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT _
TO ITEM 2(d) OR 2(e) \_\
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7 SOLE VOTING POWER
SHARES 125,000 (See Item 5 below)
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH
8 SHARED VOTING POWER
- 0 -
9 SOLE DISPOSITIVE POWER
125,000 (See Item 5 below)
10 SHARED DISPOSITIVE POWER
- 0 -
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
125,000 (See Item 5 below)
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) _
EXCLUDES CERTAIN SHARES \_\
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.5% (See Item 5 below)
14 TYPE OF REPORTING PERSON*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
ITEM 1. SECURITY AND ISSUER.
The securities to which this statement relates are shares of
Common Stock, par value $.001 per share ("Common Stock"), of
MobiNetix Systems, Inc., a Delaware corporation (the "Company").
The Company's principal executive offices are located at 500
Oakmead Parkway, Sunnyvale, California 94086.
ITEM 2. IDENTITY AND BACKGROUND.
This statement is filed by Federated Department Stores,
Inc., a Delaware corporation ("Federated"). Federated's
principal business is the operation of full-line department
stores. Federated's principal executive offices are located at
151 West 34th Street, New York, New York 10001 and 7 West Seventh
Street, Cincinnati, Ohio 45202.
Schedule I hereto, which is incorporated herein by this
reference, sets forth the name, the business address, the present
principal occupation or employment (and the name, principal
business and address of any corporation or other organization in
which such employment is conducted), and the citizenship of the
directors and executive officers of Federated.
Neither Federated nor, to its knowledge, any of the persons
identified in Schedule I hereto has, during the last five years,
been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or been a party to a civil
proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject
to a judgment, decree, or final order enjoining future violations
of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to
such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
On March 16, 1998, Federated, through its wholly owned
subsidiary Federated Systems Group, Inc. ("FSG"), entered into a
Systems Acquisition Agreement (the "Acquisition Agreement") with
the Company, providing for the acquisition by FSG from the
Company of certain electronic signature capture products. Under
the terms of the Acquisition Agreement, FSG was to pay the
purchase price for such products following the delivery thereof
to FSG. On March 20, 1998, Federated caused FSG to enter into an
amendment to the Acquisition Agreement (the "Amendment"),
pursuant to which FSG agreed to pay to the Company $5,000,160 as
an advance payment of a portion of the total purchase price
payable for the products to be delivered by the Company to FSG
pursuant to the Acquisition Agreement. FSG had previously
included the total purchase price for such products in its
capital expenditure budget to be paid from its general corporate
funds. As an inducement to Federated's willingness to cause FSG
to enter into the Amendment, the Company agreed to issue to
Federated a Common Stock Purchase Warrant, dated as of March 20,
1998 (the "Warrant").
Pursuant to the Warrant, Federated has the right to purchase
from the Company, from time to time, in whole or in part, 125,000
shares of Common Stock at an exercise price of $3.75 per share.
The exercise price and the number and kind of securities
purchasable upon exercise of the Warrant are subject to
adjustment as specified therein. It is presently contemplated
that Federated would use its working capital to fund the purchase
price payable in connection with any purchase of shares of Common
Stock upon exercise of the Warrant.
The foregoing response to this Item 3 is qualified in its
entirety by reference to the Warrant, the full text of which is
filed as Exhibit 1 hereto and incorporated herein by this
reference.
ITEM 4. PURPOSE OF TRANSACTION.
The responses to Items 3, 5, and 6 are incorporated herein
by this reference.
Federated's principal purpose for obtaining the Warrant was
to take advantage of what it perceived as an opportunity to
enable itself to acquire an equity interest in the Company at an
attractive price.
Federated may acquire shares of Common Stock (upon exercise
of the Warrant or otherwise), dispose of shares of Common Stock
owned by it (including without limitation shares purchase upon
exercise of the Warrant), or take such other actions with respect
to the Company or any of its securities, as Federated, in its
discretion, determines to be desirable or appropriate, at any
time and in any manner permitted by law. In this regard, as of
the date of this statement, the Company and Federated are engaged
in discussions regarding the possibility of a direct investment
in the Company by Federated. The Company and Federated have not
entered into definitive documentation with respect to any such
investment and, accordingly, no assurance can be given as to
whether such an investment will be made by Federated or, if such
an investment is made, as to the terms or timing thereof.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
The responses to Items 3, 4, and 6 are incorporated herein
by this reference.
By reason of the Warrant, Federated may be deemed to be the
beneficial owner of 125,000 shares of Common Stock, or 7.5% of
the total number of shares of Common Stock outstanding or deemed
outstanding pursuant to Rule 13d-3(d)(1) under the Securities
Exchange Act of 1934, as amended. If Federated were to exercise
the Warrant to purchase shares of Common Stock, Federated would
have the sole power to vote and dispose of all shares so
purchased.
Except as disclosed in this statement, neither Federated
nor, to its knowledge, any of the persons identified on
Schedule I hereto have effected transactions in shares of Common
Stock during the preceding 60 days.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS
WITH RESPECT TO SECURITIES OF THE ISSUER.
The responses to Items 3, 4, and 5 are incorporated herein
by this reference.
The Warrant provides that Federated will have so-called
"piggyback" registration rights with respect to any shares of
Common Stock purchased by Federated upon exercise of the Warrant.
The foregoing response to this Item 6 is qualified in its
entirety by reference to the Warrant, the full text of which is
filed as Exhibit 1 hereto and incorporated herein by this
reference.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 1 -- Common Stock Purchase Warrant, dated March
20, 1998, issued by the Company in favor of
Federated
SIGNATURES
After reasonable inquiry, and to the best of my knowledge
and belief, I certify that the information set forth in this
statement is true, complete and correct.
Date: March 30, 1998 FEDERATED DEPARTMENT STORES, INC.
By: /s/ Karen M. Hoguet
Karen M. Hoguet
Senior Vice President
SCHEDULE I
INFORMATION WITH RESPECT TO
DIRECTORS AND EXECUTIVE OFFICERS OF FEDERATED
Except for Mr. Ronald W. Tysoe, who is a Canadian citizen,
each of the individuals listed below is a United States citizen.
The business address of each such individual is 7 West Seventh
Street, Cincinnati, Ohio 45202. The address of the corporation
or organization (if other than Federated), if any, in which the
principal occupation or employment of each such individual is
conducted is set forth opposite such individual's name below.
NAME TITLE PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT
James M. Chairman of the Chairman of the Board and
Zimmerman Board, Chief Chief Executive Officer of
Executive Federated
Officer, and
Director
Terry J. President, Chief President and Chief
Lundgren Merchandising Merchandising Officer of
Officer, and Federated
Director
Ronald W. Vice Chairman of Vice Chairman of the Board
Tysoe the Board and of Federated
Director
Thomas G. Executive Vice Executive Vice President -
Cody President - Legal Legal and Human Resources of
and Homan Federated
Resources
Dennis J. Senior Vice Senior Vice President,
Broderick President, General Counsel and
General Counsel, Secretary of Federated
and Secretary
Karen Hoguet Senior Vice Senior Vice President, Chief
President, Chief Financial Officer, and
Financial Treasurer of Federated
Officer, and
Treasurer
Joel A. Vice President Vice President and
Belsky and Controller Controller of Federated
Meyer Director Dean of the Columbia
Feldberg Business School at Columbia
University
Columbia Business School at
Columbia University
101 Uris Hall
116th and Broadway
New York, New York 10027
Earl G. Director President and Chief
Graves, Jr. Executive Officer of Earl G.
Graves, Ltd.
Earl G. Graves, Ltd.
130 5th Avenue
New York, NY 10011
George V. Director Chairman and Chief Executive
Grune Officer of The Reader's
Digest Association, Inc.
The Reader's Digest
Association, Inc.
Reader's Digest Road
Pleasantville, NY 10570
Karl M. von Director Vice Chairman and Chief
der Heyden Financial Officer of
PepsiCo, Inc.
PepsiCo, Inc.
700 Anderson Hill Road
Purchase, NY 10577
Sara Levinson Director President of NFL Properties, Inc.
NFL Properties, Inc.
280 Park Avenue #12W
New York, New York 10017-1216
Joseph Director Chairman and Chief Executive
Neubauer Officer of The ARAMARK
Corporation
The ARAMARK Corporation
1101 Market Street
Philadelphia, PA 19107
Joseph A. Director Chairman and Chief Executive
Pichler Officer of The Kroger Co.
The Kroger Co.
1014 Vine Street
Cincinnati, Ohio 45202-1141
Craig E. Director Chairman and Chief Executive
Weatherup Officer of Pepsi-Cola Company
Pepsi-Cola Company
1 Pepsi Way
Somers, New York 10589-2212
Marna C. Director Chief Operating Officer of
Whittington Morgan Stanley Asset Management
Morgan Stanley Asset
Management
1221 Avenue of the Americas
New York, New York 10020-1001
EXHIBIT INDEX
Exhibit No. Description
1 Common Stock Purchase Warrant, dated March
20, 1998, issued by the Company in favor of
Federated
EXHIBIT 1
COMMON STOCK PURCHASE WARRANT
THIS WARRANT HAS BEEN, AND THE SHARES OF COMMON STOCK WHICH MAY
BE PURCHASED PURSUANT TO THE EXERCISE OF THIS WARRANT (THE
"SHARES") WILL BE, ACQUIRED SOLELY FOR INVESTMENT AND NOT WITH A
VIEW TO, OR FOR RESALE IN CONNECTION WITH, ANY DISTRIBUTION
THEREOF. NEITHER THIS WARRANT NOR THE SHARES (TOGETHER, THE
"SECURITIES") HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAWS. SUCH
SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF SUCH REGISTRATION OR AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH
DISPOSITION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS
DELIVERY REQUIREMENTS OF THE ACT AND OF ANY APPLICABLE STATE
SECURITIES LAWS.
No. W-
MOBINETIX SYSTEMS, INC.
WARRANT TO PURCHASE 125,000 SHARES OF COMMON STOCK
THIS CERTIFIES THAT, for value received, Federated Systems
Group (the "Holder") is entitled to subscribe for and purchase
from MobiNetix Systems, Inc., a Delaware corporation (the
"Company"), 125,000 shares (as adjusted pursuant to Section 3
hereof) of the fully paid and nonassessable Common Stock (the
"Shares"), of the Company at the price per share as determined in
accordance with Section 1(b) below (the "Exercise Price") (and as
adjusted pursuant to Section 3 hereof), subject to the provisions
and upon the terms and conditions hereinafter set forth. This
Warrant has been executed and delivered by the Company as an
inducement to Holder's willingness to cause its subsidiary,
Federated Systems Group, Inc., to agree to enter into the
Amendment to Systems Acquisition Agreement, dated even date
herewith, between the Company and Holder.
This Warrant is subject to the following terms and
conditions:
1. Method of Exercise; Payment.
(a) Cash Exercise. The purchase rights represented
by this Warrant may be exercised by the Holder, in whole or in
part, from time to time by the surrender of this Warrant (with
the notice of exercise form (the "Notice of Exercise") attached
hereto as Exhibit A duly executed) at the principal office of the
Company, and by the payment to the Company of an amount equal to
the Exercise Price multiplied by the number of the Shares being
purchased, which amount may be paid, at the election of the
Holder, by wire transfer or certified check payable to the order
of the Company. The person or persons in whose name(s) any
certificate(s) representing Shares shall be issuable upon
exercise of this Warrant shall be deemed to have become the
holder(s) of record of, and shall be treated for all purposes as
the record holder(s) of, the Shares represented thereby (and such
Shares shall be deemed to have been issued) immediately prior to
the close of business on the date or dates upon which this
Warrant is exercised.
(b) Initial Exercise Price. The initial Exercise
Price shall be $3.75.
(c) Stock Certificates. In the event of any
exercise of the rights represented by this Warrant, certificates
for the shares of Common Stock so purchased shall be delivered to
the Holder within a reasonable time and, unless this Warrant has
been fully exercised or has expired, a new Warrant representing
the shares with respect to which this Warrant shall not have been
exercised shall also be issued to the Holder within such time.
2. Stock Fully Paid; Reservation of Shares. All of the
Shares issuable upon the exercise of the rights represented by
this Warrant will, upon issuance and receipt of the Exercise
Price therefor, be fully paid and nonassessable, and free from
all preemptive rights, rights of first refusal or first offer,
taxes, liens and charges with respect to the issuance thereof.
During the period within which the rights represented by this
Warrant may be exercised, the Company shall at all times have
authorized and reserved for issuance sufficient shares of its
Common Stock to provide for the exercise of the rights
represented by this Warrant.
3. Mechanical Adjustments. The Exercise Price and the
number and kind of Shares purchasable upon exercise of this
Warrant will be subject to adjustment as follows:
(a) Subject to Section 3(f), if the Company (i) pays
a dividend or otherwise distributes to all of its holders
of its Common Stock, as such, shares of its capital stock
(whether Common Stock or capital stock of any other
class), (ii) subdivides its outstanding shares of Common
Stock into a greater number of shares of Common Stock,
(iii) combines its outstanding shares of Common Stock
into a smaller number of shares of Common Stock, or (iv)
issues any shares of its capital stock in a
reclassification of its outstanding shares of Common
Stock (including any such reclassification in connection
with a consolidation, merger or other business
combination transaction in which the Company is the
continuing or surviving corporation), then the number and
kind of Shares purchasable upon exercise of this Warrant
immediately prior thereto will be adjusted so that the
Holder will be entitled to receive (A) in the case of a
dividend or distribution, the sum of (1) the number of
Shares that, if such Warrant had been exercised
immediately prior to such adjustment, the Holder would
have received upon such exercise and (2) the number and
kind of additional shares of capital stock that the
Holder would have been entitled to receive as a result of
such dividend or distribution by virtue of its ownership
of such Shares, (B) in the case of a subdivision or
combination, the number of Shares that, if such Warrant
had been exercised immediately prior to such adjustment,
the Holder would have received upon such exercise,
adjusted to give effect to such subdivision or
combination as if such Shares had been subject thereto,
or (C) in the case of an issuance in a reclassification,
the sum of (1) the number of Shares that, if this Warrant
had been exercised immediately prior to such adjustment,
the Holder would have received upon such exercise and
retained after giving effect to such reclassification as
if such Shares had been subject thereto and (2) the
number and kind of additional shares of capital stock
that the Holder would have been entitled to receive as a
result of such reclassification as if such Shares had
been subject thereto. An adjustment made pursuant to
this paragraph (a) will become effective immediately
after the record date for the determination of
shareholders entitled to receive such dividend or
distribution in the case of a dividend or distribution
and will become effective immediately after the effective
date of such subdivision, combination or reclassification
in the case of a subdivision, combination or
reclassification.
(b) Subject to Section 3(f), if the Company
distributes to all of its holders of its Common Stock, as
such, (i) evidences of indebtedness or assets (excluding
regular cash dividends or cash distributions payable out
of consolidated retained earnings) of the Company or any
corporation or other legal entity a majority of the
voting equity securities or equity interests of which are
owned, directly or indirectly, by the Company (a
"Subsidiary"), (ii) shares of capital stock of any
Subsidiary, (iii) securities convertible into or
exchangeable for capital stock of the Company (including
Common Stock or capital stock of any other class) or any
Subsidiary, or (iv) any rights, options or warrants to
purchase any of the foregoing (excluding those described
in Section 3(c)), then, the number of Shares thereafter
purchasable upon exercise of this Warrant will be
adjusted to the number that results from multiplying the
number of Shares purchasable upon the exercise of this
Warrant immediately prior to such adjustment by a
fraction (not to be less than one), the numerator of
which will be the Current Market Price per share (as
defined in Section 3(e)) of Common Stock on the record
date for such distribution, and the denominator of which
will be such Current Market Price per share of Common
Stock less the fair value (as determined in good faith by
the Board of Directors of the Company, whose
determination will be conclusive if based on the
financial advice of a nationally recognized investment
banking firm) of the portion of the evidences of
indebtedness, assets, securities or rights, options or
warrants so distributed on account of one share of Common
Stock. Such adjustment will be made whenever any such
distribution is made, and will become effective
immediately after the record date for the determination
of stockholders entitled to receive such distribution.
Except as provided in Section 3(i), no further
adjustments of the number of Shares will be made upon the
actual issue of shares of Common Stock upon conversion or
exchange of such securities convertible or exchangeable
for shares of Common Stock or upon exercise of such
rights, warrants or options for shares of Common Stock.
(c) Subject to Section 3(f), if the Company issues
rights, options or warrants to all of its holders of the
outstanding shares of Common Stock, as such, entitling
the holders of such rights, options or warrants (for a
period expiring within 60 calendar days after the record
date mentioned below) to subscribe for or purchase shares
of Common Stock at a price per share that is lower on the
record date mentioned below than the Current Market Price
per share of Common Stock on such record date, then the
number of Shares thereafter purchasable upon the exercise
of this Warrant will be adjusted to the number that
results from multiplying the number of Shares purchasable
upon exercise of this Warrant immediately prior to such
adjustment by a fraction (not to be less than one), the
numerator of which will be the number of shares of Common
Stock outstanding on such record date plus the number of
additional shares of Common Stock offered by such rights,
options or warrants for subscription or purchase and the
denominator of which will be the number of shares of
Common Stock outstanding on such record date plus the
number of shares of Common Stock which the aggregate
subscription or purchase price of the total number of
shares of Common Stock so offered would purchase at the
Current Market Price per share of Common Stock on such
record date. Such adjustment will be made whenever such
rights, options or warrants are issued, and will become
effective immediately after the record date for the
determination of stockholders entitled to receive such
rights, options or warrants. In case such subscription
or purchase price may be paid in a consideration part or
all of which is in a form other than cash, the fair value
of such consideration will be as determined by the Board
of Directors of the Company, whose determination will be
conclusive if based on the financial advice of a
nationally recognized investment banking firm. Except as
provided in Section 3(i), no further adjustments of the
number of Shares will be made upon the actual issue of
shares of Common Stock upon exercise of such rights,
options or warrants.
(d) Subject to Section 3(f), if the Company issues
shares of Common Stock or securities convertible into or
exchangeable for shares of Common Stock (excluding shares
of Common Stock or convertible or exchangeable securities
issued in any of the transactions described in paragraph
(a), (b) or (c) of this Section 3) for a purchase price
per share of such Common Stock, or for a conversion or
exchange price per share of Common Stock initially
deliverable upon conversion or exchange of such
securities, that is less than the Series C Conversion
Price (as defined in the Company's Restated Certificate
of Incorporation) or, if there are no shares of Series C
Preferred (as defined in the Company's Restated
Certificate of Incorporation) then outstanding, the
Current Market Price per share of the Common Stock, in
either case, on the date the purchase, conversion or
exchange price of such additional shares of Common Stock
is first fixed (the "Adjustment Determination Price"),
then the number of Shares thereafter purchasable upon the
exercise of this Warrant will be adjusted to the number
that results from multiplying the number of Shares
purchasable upon exercise of this Warrant immediately
prior to such adjustment by a fraction (not to be less
than one), the numerator of which will be the number of
shares of Common Stock outstanding on such date plus the
number of additional shares of Common Stock so issued or
issuable upon such conversion or exchange, and the
denominator of which will be the number of shares of
Common Stock outstanding on such date plus the number of
shares of Common Stock which the aggregate purchase,
conversion or exchange price received or receivable by
the Company for such additional shares of Common Stock
would purchase at the Adjustment Determination Price.
Such adjustment will be made whenever such shares of
Common Stock or convertible or exchangeable securities
are issued, and will become effective immediately after
the effective date of such event. In case such purchase,
conversion or exchange price may be paid in a
consideration part or all of which is in a form other
than cash, the fair value of such consideration will be
as determined by the Board of Directors of the Company,
whose determination will be conclusive if based on the
financial advice of a nationally recognized investment
banking firm. Except as provided in 3(i), no further
adjustment will be made upon the actual issue of shares
of Common Stock upon conversion or exchange of such
securities convertible into or exchangeable for shares of
Common Stock.
(e) For purposes of this Warrant, the "Current
Market Price" per share of Common Stock on any date will
be the average of the daily closing prices for 20
consecutive Trading Days commencing 30 Trading Days
before the date of such computation. The closing price
for each day (the "Closing Price") will be the last
reported sales price regular way or, in case no such
reported sale takes place on such day, the average of the
closing bid and asked prices regular way for such day, in
each case on the principal national securities exchange
on which the shares of Common Stock are listed or
admitted to trading or, if not so listed or admitted to
trading, the average of the closing bid and asked prices
of the shares of Common Stock in the over-the-counter
market as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System or
any comparable system, or if not so reported by any such
organization on such day, the average of the bid and
asked prices furnished by a professional market maker
selected by the Board of Directors of the Company. In
the absence of one or more such quotations, the Board of
Directors of the Company will determine the Current
Market Price in good faith on the basis of such
quotations or other relevant information as it considers
appropriate.
(f) No adjustment in the number of Warrant Shares
purchasable upon the exercise of this Warrant will be
required unless such adjustment would require an increase
or decrease in the number of Shares purchasable upon the
hypothetical exercise of the Warrant of at least 1%;
provided, however, that any adjustments which by reason
of this paragraph (f) are not required to be made
currently will be carried forward and made at the time
and together with the next subsequent adjustment which,
together with any adjustments so carried forward, would
require an increase or decrease in the number of Shares
purchasable upon the hypothetical exercise of this
Warrant of 1% or more. All calculations with respect to
the number of Shares will be made to the nearest one-
thousandth of a share and all calculations with respect
to the Exercise Price will be to the nearest whole cent.
No adjustment in the number of Shares purchasable upon
the exercise of a Warrant will be made under paragraph
(b), (c) or (d) of this Section 3 if the Company issues
or distributes to the Holder the shares, rights, options,
warrants, convertible or exchangeable securities,
evidences of indebtedness, assets or other securities
referred to in the applicable paragraph that the Holder
would have been entitled to receive had this Warrant been
exercised prior to the happening of such event on the
record date with respect thereto (provided that, in any
case in which the Holder would have been so entitled to
receive a fractional interest in any such securities or
assets, the Company may distribute to the Holder in lieu
of such fractional interest cash in an amount equal to
the fair value of such fractional interest as determined
in good faith by the Board of Directors of the Company).
No adjustment in the number of Shares purchasable upon
the exercise of this Warrant will be made on account of:
(1) any issuance of shares of Common Stock, or of
options, rights or warrants to purchase, or securities
exchangeable for or convertible into, shares of Common
Stock, in accordance with any plan for the benefit of the
employees or directors of the Company that shall have
been duly approved by the holders of Common Stock, (2)
any issuance of shares of Common Stock in connection with
a Company-sponsored plan for reinvestment of dividends or
interest, or (3) any issuance of shares of Common Stock
or securities convertible into or exchangeable for shares
of Common Stock pursuant to an underwritten public
offering for a price per share of Common Stock in the
case of an issuance of shares of Common Stock, or for a
price per share of Common Stock initially deliverable
upon conversion or exchange of such securities, that is
equal to or greater than 95% of the Closing Price per
share of Common Stock on the date the offering,
conversion, or exchange price of such additional shares
of Common Stock is first fixed. No adjustment in the
number of Shares will be made for a change in the par
value of the shares of Common Stock.
(g) Whenever the number of Shares purchasable upon
the exercise of each Warrant is adjusted as herein
provided, the Exercise Price will be adjusted by
multiplying the Exercise Price in effect immediately
prior to such adjustment by a fraction, the numerator of
which will be the number of Shares purchasable upon the
exercise of this Warrant immediately prior to such
adjustment, and the denominator of which will be the
number of Shares so purchasable immediately thereafter.
(h) For the purpose of this Section 3, the term
"Common Stock" means (i) the class of shares designated
as the Common Stock of the Company as of the date of this
Warrant, (ii) all shares of any class or classes (however
designated) of the Company, now or hereafter authorized,
the holders of which have the right, without limitation
as to amount, either to all or to a part of the balance
of current dividends and liquidating dividends after the
payment of dividends and distributions on any shares
entitled to preference, and the holders of which are
ordinarily entitled to vote generally in the election of
directors of the Company, or (iii) any other class of
shares resulting from successive changes or
reclassifications of such shares consisting solely of
changes in par value, or from par value to no par value,
or from no par value to par value. In the event that at
any time, as a result of an adjustment made pursuant to
Section 3(a), this Warrant becomes exercisable to
purchase Shares other than shares of Common Stock,
thereafter the number of such other shares so purchasable
upon exercise of this Warrant and the Exercise Price
payable in respect of such other shares upon the exercise
of this Warrant will be subject to adjustment from time
to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Shares
and the Exercise Price contained in this Section 3.
(i) Upon the expiration of any rights, options,
warrants or conversion or exchange privileges, if any
thereof have not been exercised, the Exercise Price and
the number of Shares purchasable upon the exercise of
this Warrant will, upon such expiration, be readjusted
and will thereafter be such as it would have been had it
been originally adjusted (or had the original adjustment
not been required, as the case may be) as if (i) the only
shares of Common Stock so issued were the shares of
Common Stock, if any, actually issued or sold upon the
exercise of such rights, options, warrants or conversion
or exchange rights and (ii) such shares of Common Stock,
if any, were issued or sold for the consideration
actually received by the Company upon such exercise,
conversion or exchange plus the aggregate consideration,
if any, actually received by the Company for the
issuance, sale or grant of all such rights, options,
warrants or conversion or exchange rights whether or not
exercised; provided, however, that no such readjustment
will have the effect of increasing the Exercise Price or
decreasing the number of Shares purchasable upon the
exercise of this Warrant by an amount in excess of the
amount of the adjustment initially made in respect of the
issuance, sale or grant of such rights, options, warrants
or conversion or exchange privileges.
(j) In case of any consolidation of the Company with
or merger of the Company into another corporation or in
case of any sale, transfer or lease to another
corporation of all or substantially all the property of
the Company, the Company or such successor or purchasing
corporation, as the case may be, will execute an
agreement providing that the Holder will have the right
thereafter, upon payment of an amount equal to the amount
payable upon the exercise of this Warrant immediately
prior thereto, to purchase upon exercise of this Warrant
the kind and amount of securities or property that it
would have owned or have been entitled to receive after
giving effect to such consolidation, merger, sale,
transfer or lease on account of the Shares that would
have been purchasable upon the exercise of this Warrant
had this Warrant been exercised immediately prior thereto
(provided that, to the extent that the Holder would have
been so entitled to receive cash on account of such
Shares, the Holder may elect in connection with the
exercise of this Warrant in accordance with Section 1 to
reduce the amount of cash that it would be entitled to
receive upon such exercise in exchange for a
corresponding reduction in the amount payable upon such
exercise). Such agreement will provide for adjustments
that will be as nearly equivalent as may be practicable
to the adjustments provided for in this Section 3. The
provisions of this Section 3(j) will similarly apply to
successive consolidations, mergers, sales, transfers or
leases.
4. Notices.
(a) Upon any adjustment of the Exercise Price or the
kind and number of Shares purchasable upon the exercise of this
Warrant in accordance with Section 3 hereof, then, and in each
such case, the Company, within thirty (30) days thereafter, shall
give written notice thereof to the Holder at the address of such
Holder as shown on the books of the Company which notice shall
state the Exercise Price as adjusted and, if applicable, the kind
and number of Shares purchasable upon the exercise of this
Warrant, setting forth in reasonable detail the method of
calculation of each.
(b) Any written notice by the Company required or
permitted hereunder shall be given by hand delivery or first
class mail, postage prepaid, addressed to the Holder at the
address shown on the books of the Company for the Holder.
5. Transfer of Warrant Except in accordance with the
conditions contained in Section 6 hereof, this Warrant and all
rights hereunder are not transferable. In order to effect any
transfer of all or a portion of this warrant or the Shares, the
transferor shall deliver a completed and duly executed Notice of
Transfer (attached hereto as Exhibit B).
6. Condition of Exercise or Transfer of Warrant.
(a) Unless exercised pursuant to an effective
registration statement under the Act which includes the Shares so
exercised, it shall be a condition to any exercise or transfer of
this Warrant that the Company shall have received, at the time of
such exercise or transfer, a representation in writing from the
recipient or transferee in the form attached hereto as Exhibit
A-1 or Exhibit B-1, respectively, that the Shares being issued
upon exercise, or this Warrant (or portion hereof) transferred,
as the case may be, are being acquired for investment and not
with a view to any sale or distribution thereof.
(b) It shall be a further condition to any transfer
of this Warrant, or of any or all of the Shares issued upon
exercise of this Warrant, other than a transfer registered under
the Act, that the Holder shall have given written notice to the
Company which shall describe the manner and circumstances of the
proposed transfer and be accompanied by a written opinion of
Holder's legal counsel or a "no-action" letter reasonably
satisfactory to the Company stating that such transfer is exempt
from the registration requirements of the Act and applicable
state securities laws.
(c) Each certificate evidencing the Shares issued
upon exercise of this Warrant, or transfer of such shares (other
than a transfer registered under the Act or any subsequent
transfer of shares so registered) shall be stamped or imprinted
with a legend substantially in the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR FOR
RESALE IN CONNECTION WITH, ANY DISTRIBUTION THEREOF, AND
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT") OR ANY STATE SECURITIES LAWS. SUCH
SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF SUCH REGISTRATION OR AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY AND ITS
COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE
ACT.
Subject to this Section 6, the Company may instruct its
transfer agent not to register the transfer of all or a part of
this Warrant, or any of the Shares, unless one of the conditions
specified in the above legend is satisfied.
7. Removal of Legend. Upon request of a holder of a
certificate with the legend referred to in Section 6 hereof, the
Company shall issue to such holder a new certificate therefor
free of any transfer legend, if, with such request, the Company
shall have received either an opinion of counsel or a "no-action"
letter referred to in Section 6(b) of this Warrant to the effect
that any transfer by such holder of the shares evidenced by such
certificate will not violate the Act and applicable state
securities laws.
8. Fractional Shares. No fractional shares of Common
Stock will be issued in connection with any exercise hereunder,
but in lieu of such fractional shares the Company shall make a
cash payment therefor upon the basis of the Exercise Price then
in effect.
9. Representations and Warranties of the Company. The
Company represents and warrants to the Holder as follows:
(a) This Warrant has been duly authorized and
executed by the Company and is a valid and binding obligation of
the Company enforceable in accordance with its terms;
(b) The Shares have been duly authorized and
reserved for issuance by the Company and, when issued in
accordance with the terms hereof, will be validly issued, fully
paid and nonassessable;
(c) The rights, preferences, privileges and
restrictions granted to or imposed upon the Shares and the
holders thereof are as set forth in the Company's Certificate of
Incorporation, a true and complete copy of which has been
delivered to the original Holder of this Warrant; and
(d) The execution and delivery of this Warrant are
not, and the issuance of the Shares upon exercise of this warrant
in accordance with the terms hereof will not be, inconsistent
with the Company's Certificate of Incorporation or Bylaws, as
amended.
10. Representations and Warranties by the Holder. The
Holder represents and warrants to the Company as follows:
(a) This Warrant is being acquired for its own
account, for investment and not with a view to, or for resale in
connection with, any distribution or public offering thereof
within the meaning of the Act. Upon exercise of this Warrant,
the Holder shall, if so requested by the Company, confirm in
writing, in a form reasonably satisfactory to the Company, that
the Shares issuable upon exercise of this Warrant are being
acquired for investment and not with a view toward distribution
or resale.
(b) The Holder understands that the Warrant and the
Shares have not been registered under the Act by reason of their
issuance in a transaction exempt from the registration and pros
pectus delivery requirements of the Act pursuant to Section 4(2)
thereof, and that they must be held by the Holder indefinitely,
and that the Holder must therefore bear the economic risk of such
investment indefinitely, unless a subsequent disposition thereof
is registered under the Act or is exempted from such
registration. The Holder further understands that the Shares
have not been qualified under the California Securities Law of
1968 (the "California Law") by reason of their issuance in a
transaction exempt from the qualification requirements of the
California Law pursuant to Section 25102(f) thereof, which
exemption depends upon, among other things, the bona fide nature
of the Holder's investment intent expressed above.
(c) The Holder has such knowledge and experience in
financial and business matters that it is capable of evaluating
the merits and risks of the purchase of this Warrant and the
Shares purchasable pursuant to the terms of this Warrant and of
protecting its interests in connection therewith.
(d) The Holder is able to bear the economic risk of
the purchase of the Shares pursuant to the terms of this Warrant.
11. Rights of Stockholders. No holder of this Warrant
shall be entitled, as a Warrant holder, to vote or receive
dividends or be deemed the holder of Common Stock or any other
securities of the Company which may at any time be issuable on
the exercise hereof for any purpose, nor shall anything contained
herein be construed to confer upon the holder of this Warrant, as
such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action (whether upon any
recapitalization, issuance of stock, reclassification of stock,
change of par value, consolidation, merger, conveyance, or
otherwise) or to receive notice of meetings, or to receive
dividends or subscription rights or otherwise until the Warrant
shall have been exercised and the Shares purchasable upon the
exercise hereof shall have become deliverable, as provided
herein.
12. Expiration of Warrant. This Warrant shall expire and
shall no longer be exercisable as of the date of the earliest of
the following to occur:
(a) March 20, 2003; and
(b) the closing of a firm commitment underwritten
public offering pursuant to an effective registration statement
under the Securities Act of 1933, as amended, covering the offer
and sale of Common Stock for the account of the Company to the
public with gross proceeds to the Company (prior to underwriter
commissions and offering expenses) per share of not less than $8
(the "Public Offering"), subject to equitable adjustment in the
event of any dividend paid in shares of Common Stock, any
subdivision or combination of the outstanding shares of Common
Stock or any similar transaction.
13. Certain Registration Rights for Shares.
(a) If the Company proposes to file a registration
statement (other than in connection with an exchange offer, an
offering made solely to employees of the Company or a
registration statement on Form S-4 or S-8 or any successor form
to such forms) under the Act with respect to an offering of any
securities issued or to be issued by the Company (whether or not
for its own account), the Company will give written notice of the
proposed registration at least 20 business days prior to the
filing of a registration statement under the Act with respect
thereto to the Holder. The Holder will have the right to request
that all or any part of its Shares, whether issued or issuable
(such Shares being referred to herein as "Registrable
Securities") be included in such registration by giving written
notice to the Company within 10 business days after the giving of
such notice by the Company. Subject to the next following
sentence, the Company will include such Registrable Securities in
such registration in accordance with such request and on the
terms and subject to the conditions set forth herein. If the
registration is an underwritten offering and the managing
underwriters of such offering deliver an opinion to the Holder
that the total amount of securities which the Holder, the Company
and any other person or entity having rights to participate in
such offering is such as to materially and adversely affect the
success of such offering, then the amount of securities to be
offered for the account of the Holder will be reduced (to zero,
if necessary) on the same basis as any other person or entity
seeking to exercise so-called "piggyback" registration rights in
connection therewith or, if there are no such other persons or
entities, to the maximum number of Registrable Securities, if
any, as can be included therein without materially and adversely
affecting the success of such offering.
(b) Registrable Securities proposed to be registered for
sale pursuant to an underwritten offering for the account of the
Holder will be sold to prospective underwriters selected or
approved by the Company and on the terms and subject to the
conditions of one or more underwriting agreements negotiated
between the Company and such underwriters. The Company may
withdraw any registration statement which covers Registrable
Securities (a "Registration Statement") at any time before it
becomes effective, or postpone the offering of securities,
without obligation or liability to the Holder. Notwithstanding
anything to the contrary herein contained, Registrable Securities
need not be included in any Registration Statement pursuant to
Section 13(a) if (i) registration under the Act is not required
for public distribution of such Registrable Securities in the
manner that the Holder seeks to distribute such Registrable
Securities or (ii) such Registrable Securities may be sold
pursuant to Rule 144(k) under the Securities Act.
(c) The Holder will, if so requested by the managing
underwriters in an underwritten public offering, not effect any
public sale or distribution of securities of the Company of the
same class as the securities to be included in such registration,
including a sale pursuant to Rules 144 or 144A under the Act
(except as part of such offering), during the 20 calendar day
period prior to, and for a period of 180 days beginning on, the
closing date of such offering. Holder further agrees to execute
any agreement reflecting the foregoing as may be requested by the
underwriters in connection with the Public Offering.
(d) In connection with its obligations under
Section 13(a), the Company will as expeditiously as reasonably
practicable:
(i) before filing with the Securities and Exchange
Commission (the "Commission") a Registration Statement or any
amendments or supplements thereto, furnish to the Holder, if its
Registrable Securities are covered by such Registration Statement
(as such, the "Selling Shareholder"), copies of all such
documents proposed to be filed, which documents will be subject
to the reasonable review of the Holder;
(ii)prepare and file with the Commission a
Registration Statement and such amendments and supplements
thereto as may be required by the Commission's rules and
regulations; and comply with the provisions of the Act with
respect to the disposition of all securities covered by such
Registration Statement during the applicable period in accordance
with the intended methods of disposition by the sellers thereof
set forth in the related prospectus (the "Prospectus");
(iii) notify the Selling Shareholder promptly:
(A) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement
or the initiation of any proceedings for that purpose,
(B) of the receipt by the Company of any
notification with respect to the suspension of the qualification
of the Registrable Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose, and
(C) of the existence of any fact which results in
the Registration Statement or the Prospectus containing an untrue
statement of a material fact required to be stated therein or
necessary to make the statements therein not misleading;
(iv)make every reasonable effort to obtain the
withdrawal of any order suspending the effectiveness of the
Registration Statement at the earliest practicable time (unless
such order has been issued as the result of any action, omission
or status of the Selling Shareholder);
(v) furnish to the Selling Shareholder, without
charge, at least one copy of the Registration Statement and any
post-effective amendment thereto;
(vi)deliver to the Selling Shareholder, without
charge, as many copies of the Prospectus (including each
preliminary prospectus) and any amendment or supplement thereto
as the Selling Shareholder may reasonably request; and
(vii) cooperate with the Selling Shareholder to
facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold.
(e) As a condition of the inclusion of Registrable
Securities in a registration, the Company may require the Selling
Shareholder to furnish to the Company such information regarding
the proposed distribution of its securities as the Company may
from time to time reasonably request in writing.
(f) In connection with any Registration Statement
prepared and filed under Section 13(a), the Selling Shareholder
will bear all costs and expenses incurred by them directly and
the underwriting discounts and commissions relating to its
Registrable Securities included in the related offering. The
Company will pay all other costs and expenses of registration.
(g) The Company will indemnify and hold harmless the
Selling Shareholder, its officers, directors, employees and
agents and each person who controls the Selling Shareholder
within the meaning of Section 15 of the Act from and against all
losses, claims, damages, liabilities and expenses (including
reasonable costs of investigation and legal expenses) arising out
of or based upon any untrue statement or allegedly untrue
statement of a material fact contained in any Registration
Statement (or any prospectus or prospectus supplement relating
thereto), arising out of or based upon any omission or alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages,
liabilities or expenses arising out of or are based upon any such
untrue statement or omission or allegation thereof based upon
information furnished in writing to the Company by the Selling
Shareholder or on the Selling Shareholder's behalf expressly for
use therein; provided, however, that in connection with any non-
underwritten offering the Company will not be liable to the
Selling Shareholder to the extent that any such losses, claims,
damages, liabilities or expenses arise out of or are based upon
an untrue statement or alleged untrue statement or omission or
alleged omission made in any preliminary prospectus if either (i)
(A) the Selling Shareholder failed to send or deliver a copy of
the Prospectus with or prior to the deliver of written
confirmation of the sale by the Selling Shareholder of a
Registrable Security to the person asserting the claim from which
such losses, claims, damages, liabilities or expenses arise and
(B) the Prospectus would have completely corrected such untrue
statement or alleged untrue statement or such omission or alleged
omission or (ii) such untrue statement or alleged untrue
statement, omission or alleged omission is completely corrected
in an amendment or supplement to the Prospectus and, having
previously been furnished by or on behalf of the Company with
copies of the Prospectus as so amended or supplemented, the
Selling Shareholder thereafter fails to deliver such Prospectus
as so amended or supplemented prior to or concurrently with the
sale of a Registrable Security to the person asserting the claim
from which such losses, claims, damages, liabilities or expenses
arise. The Selling Shareholder will indemnify and hold harmless
the Company, its directors and officer, any agent of the Company,
and each person, if any, who controls the Company within the
meaning of Section 15 of the Act to the same extent as the
foregoing indemnity from the Company to the Selling Shareholder,
but only with respect to information relating to the Selling
Shareholder furnished in writing by the Selling Shareholder or on
the Selling Shareholder's behalf expressly for use in any
Registration Statement (or any prospectus supplement relating
thereto).
(h) If the indemnification provided for in Section 13(g)
is unavailable to an indemnified party (other than by reason of
exceptions provided therein) in respect of any losses, claims,
damages, liabilities or expenses referred to therein, then the
indemnifying party, in lieu of indemnifying such indemnified
party, will contribute to the amount paid or payable by the
indemnified party as a result of such losses, claims, damages,
liabilities or expenses in such proportion as if appropriate to
reflect the relative fault of the indemnified party on the one
hand and of the indemnifying party on the other hand in
connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The relative fault
of the Company on the one hand and of the Selling Shareholder on
the other hand will be determined by reference to, among other
things, whether the untrue or allegedly untrue statement of a
material fact or the omission or alleged omission to state a
material fact related to information supplied by the Company or
by the Selling Shareholder and the parties' relative intent,
knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Selling
Shareholder acknowledge that it would not be just and equitable
if contribution pursuant to this Section 13(h) were determined by
pro rata allocation or any other method of allocation which does
not take into account the equitable considerations referred to
above. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) will be entitled to
contribution from any person who was not guilty of such
fraudulent misrepresentation.
(i) Notwithstanding anything to the contrary herein
contained, if this Warrant has been exercised prior to
termination of this Warrant in accordance with Section 12, the
provisions of this Section 13 shall survive with respect to the
Registrable Securities.
14. Miscellaneous.
(a) The headings in this Warrant are for purposes of
reference only, and shall not limit or otherwise affect any of
the terms hereof.
(b) The terms of this Warrant shall be binding upon
and shall inure to the benefit of any successors or assigns of
the Company and of the holder or holders hereof and of the Shares
issued or issuable upon the exercise hereof.
(c) This Warrant and the other documents delivered
pursuant hereto constitute the full and entire understanding and
agreement between the parties with regard to the subjects hereof
and thereof.
(d) The Company shall not, by amendment of its
Certificate of Incorporation, or through any other means,
directly or indirectly, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant and shall at all
times in good faith assist in the carrying out of all such terms
and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the holder of this
Warrant against impairment.
(e) Upon receipt of evidence reasonably satisfactory
to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of any such loss, theft or
destruction, upon delivery of an indemnity agreement reasonably
satisfactory in form and amount to the Company or, in the case of
any such mutilation, upon surrender and cancellation of such
Warrant, the Company at its expense will execute and deliver to
the holder of record, in lieu thereof, a new Warrant of like date
and tenor.
(f) This Warrant and any provision hereof may be
amended, waived or terminated only by an instrument in writing
signed by the Company and the Holders.
(g) Receipt of this Warrant by the Holder hereof
shall constitute acceptance of and agreement to the foregoing
terms and conditions.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, the Company has caused this Warrant to
be signed by its duly authorized officer.
Issued this 19th day of March, 1998.
MOBINETIX SYSTEMS, INC.
By: /s/ Nazim Karimi
Name: Nazim Karimi
Title: Executive Vice
President
Acknowledged and Accepted:
FEDERATED DEPARTMENT STORES, INC.
By: /s/ Karen M. Hoguet
Name: Karen M. Hoguet
Title: Senior Vice President,
Chief Fiancial Officer and Treasurer
EXHIBIT A
NOTICE OF EXERCISE
TO: MOBINETIX SYSTEMS, INC.
500 Oakmead Parkway
Sunnyvale, California 94086
Attention: President
1. The undersigned hereby elects to purchase
_______________ shares of Common Stock of MOBINETIX SYSTEMS, INC.
pursuant to the terms of this Warrant, and tenders herewith
payment of the purchase price of such shares in full.
2. Please issue a certificate or certificates
representing said shares of Common Stock in the name of the
undersigned or in such other name as is specified below:
(Name)
(Address)
3. The undersigned hereby represents and warrants that
the aforesaid shares of Common Stock are being acquired for the
account of the undersigned for investment and not with a view to,
or for resale, in connection with the distribution thereof, and
that the undersigned has no present intention of distributing or
reselling such shares and all representations and warranties of
the undersigned set forth in Section 10 of the attached Warrant
are true and correct as of the date hereof. In support thereof,
the undersigned agrees to execute an Investment Representation
Statement in a form substantially similar to the form attached to
the Warrant as Exhibit A-1.
(Signature and Date)
Title:
EXHIBIT A-l
INVESTMENT REPRESENTATION STATEMENT
PURCHASER :
SELLER :
COMPANY : MOBINETIX SYSTEMS, INC.
SECURITY : COMMON STOCK ISSUED UPON EXERCISE
OF THE COMMON STOCK PURCHASE WARRANT ISSUED
ON March ___, 1998
AMOUNT : _______________ SHARES
DATE : ___________________, ______
In connection with the purchase of the above-listed Securities,
I, the Purchaser, represent to the Seller and to the Company the
following:
(a) I am aware of the Company's business affairs and
financial condition, and have acquired sufficient information
about the Company to reach an informed and knowledgeable decision
to acquire the Securities. I am purchasing these Securities for
my own account for investment purposes only and not with a view
to, or for the resale in connection with, any "distribution"
thereof for purposes of the Securities Act of 1933, as amended
(the "Securities Act").
(b) I understand that the Securities have not been
registered under the Securities Act in reliance upon a specific
exemption therefrom, which exemption depends upon, among other
things, the bona fide nature of my investment intent as expressed
herein. In this connection, I understand that, in the view of
the Securities and Exchange Commission (the "SEC"), the statutory
basis for such exemption may be unavailable if my representation
was predicated solely upon a present intention to hold these
Securities for the minimum capital gains period specified under
tax statutes, for a deferred sale, for or until an increase or
decrease in the market price of the Securities, or for a period
of one year or any other fixed period in the future.
(c) I further understand that the Securities must be held
indefinitely unless subsequently registered under the Securities
Act or unless an exemption from registration is otherwise avail
able. Moreover, I understand that the Company is under no
obligation to register the Securities. In addition, I understand
that the certificate evidencing the Securities will be imprinted
with a legend which prohibits the transfer of the Securities
unless they are registered or such registration is not required
in the opinion of counsel for the Company.
(d) I am familiar with the provisions of Rule 144, promul
gated under the Securities Act, which, in substance, permits
limited public resale of "restricted securities" acquired,
directly or indirectly, from the issuer thereof, in a non-public
offering subject to the satisfaction of certain conditions.
The Securities may be resold in certain limited
circumstances subject to the provisions of Rule 144, which
requires among other things: (1) the availability of certain
public information about the Company, (2) the resale occurring
not less than one year after the party has purchased, and made
full payment for, within the meaning of Rule 144, the securities
to be sold; and, in the case of an affiliate, or of a
non-affiliate who has held the securities less than two years,
(3) 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) and the amount of securities being sold during any three
month period not exceeding the specified limitations stated
therein, if applicable.
(e) I hereby accept and agree to be bound by the
provisions of the Warrant as though I were a party thereto.
(f) I further understand that in the event all of the
applicable requirements of Rule 144 are not satisfied,
registration under the Securities 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 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.
(Signature)
By:
Title:
Date:
EXHIBIT B
NOTICE OF TRANSFER
(To be signed only upon transfer of Warrant)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns
and transfers unto _________________________________ the right
represented by the attached Warrant to purchase _______________ *
shares of Common Stock of MOBINETIX SYSTEMS, INC., to which the
attached warrant relates, and appoints ______________________
Attorney to transfer such right on the books of MOBINETIX
SYSTEMS, INC., with full power of substitution in the premises.
Dated:
(Signature must conform in
all respects to name of Holder
as specified on the face of
the Warrant)
(Address)
Signed in the presence of:
* Insert here the number of shares without making any adjustment
for additional shares of Common Stock or any other stock or other
securities or property or cash which, pursuant to the adjustment
provisions of the Warrant, may be deliverable upon exercise.
EXHIBIT B-1
INVESTMENT REPRESENTATION STATEMENT
PURCHASER :
TRANSFEROR :
COMPANY : MOBINETIX SYSTEMS, INC.
SECURITY : COMMON STOCK PURCHASE WARRANT
ORIGINALLY ISSUED ON MARCH ___, 1998
AMOUNT : ________________ SHARES
DATE : _______________, ____
In connection with the purchase of the above-listed Securities,
I, the Purchaser, represent to the Transferor and to the Company
the following:
(a) I am aware of the Company's business affairs and
financial condition, and have acquired sufficient information
about the Company to reach an informed and knowledgeable decision
to acquire the Securities. I am purchasing these Securities for
my own account for investment purposes only and not with a view
to, or for the resale in connection with, any "distribution"
thereof for purposes of the Securities Act of 1933, as amended
(the "Securities Act").
(b) I understand that the Securities have not been
registered under the Securities Act in reliance upon a specific
exemption therefrom, which exemption depends upon, among other
things, the bona fide nature of my investment intent as expressed
herein. In this connection, I understand that, in the view of
the Securities and Exchange Commission (the "SEC"), the statutory
basis for such exemption may be unavailable if my representation
was predicated solely upon a present intention to hold these
Securities for the minimum capital gains period specified under
tax statutes, for a deferred sale, for or until an increase or
decrease in the market price of the Securities, or for a period
of one year or any other fixed period in the future.
(c) I further understand that the Securities must be held
indefinitely unless subsequently registered under the Securities
Act or unless an exemption from registration is otherwise avail
able. Moreover, I understand that the Company is under no
obligation to register the Securities. In addition, I understand
that the certificate evidencing the Securities will be imprinted
with a legend which prohibits the transfer of the Securities
unless they are registered or such registration is not required
in the opinion of counsel for the Company.
(d) I am familiar with the provisions of Rule 144, promul
gated under the Securities Act, which, in substance, permits
limited public resale of "restricted securities" acquired,
directly or indirectly, from the issuer thereof, in a non-public
offering subject to the satisfaction of certain conditions.
The Securities may be resold in certain limited
circumstances subject to the provisions of Rule 144, which
requires among other things: (1) the availability of certain
public information about the Company, (2) the resale occurring
not less than one year after the party has purchased, and made
full payment for, within the meaning of Rule 144, the securities
to be sold; and, in the case of an affiliate, or of a
non-affiliate who has held the securities less than two years,
(3) 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) and the amount of securities being sold during any three
month period not exceeding the specified limitations stated
therein, if applicable.
(e) I hereby accept and agree to be bound by the
provisions of the Warrant as though I were a party thereto.
(f) I further understand that in the event all of the
applicable requirements of Rule 144 is not satisfied,
registration under the Securities 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 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.
(Signature)
By:
Title:
Date:
