Exhibit 10.4
The security represented by this certificate was originally issued
on October 16, 2000, and has not been registered under the
Securities Act of 1933, as amended. The transfer of such security is
subject to the conditions specified in the LLC Interest and Warrant
Purchase Agreement, dated as of October 16, 2000 (as amended and
modified from time to time), between the issuer hereof (the
"Company") and certain investors and the Company reserves the right
to refuse the transfer of such security until such conditions have
been fulfilled with respect to such transfer. Upon written request,
a copy of such conditions shall be furnished by the Company to the
holder hereof without charge.
ZECAL TECHNOLOGY, LLC
WARRANT
Date of Issuance: October 16, 2000 Certificate No. W-1
FOR VALUE RECEIVED, Zecal Technology, LLC, a Delaware limited
liability company (the "Company"), hereby grants to LZ Partners, LLC or its
registered assigns (the "Registered Holder") the right to purchase from the
Company $3,000,000 of Preferred Company Interests of the Company. This Warrant
is issued pursuant to the terms of the LLC Interest and Warrant Purchase
Agreement, dated as of October 16, 2000 (the "Purchase Agreement"), between the
Company and certain investors. Capitalized terms used in this Warrant but not
defined herein shall have the meanings set forth in the Purchase Agreement.
This Warrant is subject to the following provisions:
Section 1. Exercise of Warrant.
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1A. Exercise Period. The Registered Holder may exercise, in whole or
in part, the purchase rights represented by this Warrant at any time and from
time to time after the Date of Issuance to and including October 15, 2005 (the
"Exercise Period"). The Company shall give the Registered Holder written notice
of the expiration of the Exercise Period at least 30 days but not more than 90
days prior to the end of the Exercise Period.
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1B. Exercise Procedure.
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(i) This Warrant shall be deemed to have been exercised when the
Company has received all of the following items (the "Exercise Time"):
(a) a completed Exercise Agreement, as described in paragraph 1C
below, executed by the Person exercising all or part of the purchase
rights represented by this Warrant (the "Purchaser");
(b) this Warrant;
(c) if this Warrant is not registered in the name of the Purchaser,
an Assignment or Assignments in the form set forth in Exhibit II hereto
evidencing the assignment of this Warrant to the Purchaser, in which case
the Registered Holder shall have complied with the provisions set forth in
Section 3 hereof; and
(d) either (1) a check payable to the Company in an amount equal to
dollar amount of the Preferred Company Interests being purchased upon such
exercise (the "Aggregate Exercise Price"), (2) the surrender to the
Company of debt or equity securities of the Company having a Market Price
equal to the Aggregate Exercise Price of the Preferred Company Interests
being purchased upon such exercise or (3) a written notice to the Company
that the Purchaser is exercising the Warrant (or a portion thereof) by
authorizing the Company to withhold from issuance a dollar amount of
Preferred Company Interests issuable upon such exercise of the Warrant
which when multiplied by the Market Price of such Preferred Company
Interests is equal to the Aggregate Exercise Price (and such withheld
Preferred Company Interest shall no longer be issuable under this
Warrant). "Market Price" shall mean, as to any security, the average of
the closing prices of such security's sales on all domestic securities
exchanges on which such security may at the time be listed, or, if there
have been no sales on any such exchange on any day, the average of the
highest bid and lowest asked prices on all such exchanges at the end of
such day, or, if on any day such security is not so listed, the average of
the representative bid and asked prices quoted in the NASDAQ System as of
4:00 P.M., New York time, on such day, or, if on any day such security is
not quoted in the NASDAQ System, the average of the highest bid and lowest
asked prices on such day in the domestic over-the-counter market as
reported by the National Quotation Bureau, Incorporated, or any similar
successor organization, in each such case averaged over a period of 21
days consisting of the day as of which "Market Price" is being determined
and the 20 consecutive business days prior to such day; provided that if
such security is listed on any domestic securities exchange the term
"business days" as used in this sentence means business days on which such
exchange is open for trading. If at any time such security is not listed
on any domestic securities exchange or quoted in the NASDAQ System or the
domestic over-the-counter market, the "Market Price" shall be the fair
value thereof determined jointly by the Company and the Registered Holders
of Warrants representing a majority of the Preferred Company Interests
issuable upon exercise of all the Warrants then outstanding; provided,
that if such parties are unable to reach agreement within a reasonable
period of time, such fair value shall be determined by an appraiser
jointly selected by the Company and the Registered Holders of Warrants
representing a majority of the Preferred Company Interests issuable upon
exercise of all the Warrants then outstanding. The determination of such
appraiser shall be final and binding on the Company and the Registered
Holders of the Warrants, and the fees and expenses of such appraiser shall
be paid by the Company.
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(ii) A schedule, certified by an officer of the Company, setting
forth the fully diluted capitalization of the Company following the exercise of
some or all or the rights hereunder shall be delivered by the Company to the
Purchaser within five business days after the date of the Exercise Time. Unless
this Warrant has expired or all of the purchase rights represented hereby have
been exercised, the Company shall prepare a new Warrant, substantially identical
hereto, representing the rights formerly represented by this Warrant which have
not expired or been exercised and shall, within such five-day period, deliver
such new Warrant to the Person designated for delivery in the Exercise
Agreement.
(iii) The issuance of Preferred Company Interests upon exercise of
this Warrant shall be made without charge to the Registered Holder or the
Purchaser for any issuance tax in respect thereof or other cost incurred by the
Company in connection with such exercise and the related issuance of Preferred
Company Interests. All Preferred Company Interests issuable upon exercise of
this Warrant shall, upon payment of the exercise price therefor, be fully paid
and nonassessable and free from all liens and charges with respect to the
issuance thereof.
(iv) The Company shall not close its books against the transfer of
this Warrant or of any Preferred Company Interests issued or issuable upon the
exercise of this Warrant in any manner which interferes with the timely exercise
of this Warrant.
(v) The Company shall assist and cooperate with any Registered
Holder or Purchaser required to make any governmental filings or obtain any
governmental approvals prior to or in connection with any exercise of this
Warrant (including, without limitation, making any filings required to be made
by the Company).
(vi) Notwithstanding any other provision hereof, if an exercise of
any portion of this Warrant is to be made in connection with a registered public
offering or the sale of the Company, the exercise of any portion of this Warrant
may, at the election of the holder hereof, be conditioned upon the consummation
of the public offering or sale of the Company in which case such exercise shall
not be deemed to be effective until the consummation of such transaction.
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(vii) The Company shall take all such actions as may be necessary to
assure that all Preferred Company Interests purchased hereunder may be so
purchased without violation of any applicable law or governmental regulation.
(viii) If the Preferred Company Interests issuable by reason of
exercise of this Warrant are convertible into or exchangeable for any other
stock or securities of the Company, the Company shall, at the exercising
holder's option and upon surrender of this Warrant by such holder as provided
above together with any notice, statement or payment required to effect such
conversion or exchange of Preferred Company Interests, deliver to such holder
(or as otherwise specified by such holder) a certificate or certificates
representing the stock or securities into which Preferred Company Interests
issuable by reason of such conversion are convertible or exchangeable,
registered in such name or names and in such denomination or denominations as
such holder has specified.
1C. Exercise Agreement. Upon any exercise of this Warrant, the
Exercise Agreement shall be substantially in the form set forth in Exhibit I
hereto, except that if the Preferred Company Interests are not to be issued in
the name of the Person in whose name this Warrant is registered, the Exercise
Agreement shall also state the name of the Person purchasing such Preferred
Company Interests, and, unless this Warrant has expired or all of the purchase
rights represented hereby have been exercised, it shall also state the name of
the Person to whom a new Warrant for the unexercised portion of the rights
hereunder is to be delivered. Such Exercise Agreement shall be dated the actual
date of execution thereof.
Section 2. No Voting Rights; Limitations of Liability. Until the
exercise of the rights hereunder, this Warrant shall not entitle the holder
hereof to any voting rights or other rights as a holder of Company Interests. No
provision hereof, in the absence of affirmative action by the Registered Holder
to purchase Preferred Company Interests, and no enumeration herein of the rights
or privileges of the Registered Holder, shall give rise to any liability of such
holder for the exercise price of the Preferred Company Interests acquirable by
exercise hereof or as a member of the Company.
Section 3. Warrant Transferable. Subject to the transfer conditions
referred to in the legend endorsed hereon, this Warrant and all rights hereunder
are transferable, in whole or in part, without charge to the Registered Holder,
upon surrender of this Warrant with a properly executed Assignment (in the form
of Exhibit II hereto) at the principal office of the Company.
Section 4. Warrant Exchangeable for Different Denominations. This
Warrant is exchangeable, upon the surrender hereof by the Registered Holder at
the principal office of the Company, for new Warrants of like tenor representing
in the aggregate the purchase rights hereunder, and each of such new Warrants
shall represent such portion of such rights as is designated by the Registered
Holder at the time of such surrender. The date the Company initially issues this
Warrant shall be deemed to be the "Date of Issuance" hereof regardless of the
number of times new certificates representing the unexpired and unexercised
rights formerly represented by this Warrant shall be issued. All Warrants
representing portions of the rights hereunder are referred to herein as the
"Warrants."
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Section 5. Replacement. Upon receipt of evidence reasonably
satisfactory to the Company (an affidavit of the Registered Holder shall be
satisfactory) of the ownership and the loss, theft, destruction or mutilation of
any certificate evidencing this Warrant, and in the case of any such loss, theft
or destruction, upon receipt of indemnity reasonably satisfactory to the Company
(provided that if the holder is a financial institution or other institutional
investor its own agreement shall be satisfactory), or, in the case of any such
mutilation upon surrender of such certificate, the Company shall (at its
expense) execute and deliver in lieu of such certificate a new certificate of
like kind representing the same rights represented by such lost, stolen,
destroyed or mutilated certificate and dated the date of such lost, stolen,
destroyed or mutilated certificate.
Section 6. Notices. Except as otherwise expressly provided herein,
all notices referred to in this Warrant shall be in writing and shall be
delivered personally, sent by reputable overnight courier service (charges
prepaid) or sent by registered or certified mail, return receipt requested,
postage prepaid and shall be deemed to have been given when so delivered, sent
or deposited in the U.S. Mail (i) to the Company, at its principal executive
offices and (ii) to the Registered Holder of this Warrant, at such holder's
address as it appears in the records of the Company (unless otherwise indicated
by any such holder).
Section 7. Amendment and Waiver. Except as otherwise provided
herein, the provisions of the Warrants may be amended and the Company may take
any action herein prohibited, or omit to perform any act herein required to be
performed by it, only if the Company has obtained the written consent of the
Registered Holders of Warrants representing a majority of the Preferred Company
Interests obtainable upon exercise of the Warrants.
Section 8. Descriptive Headings; Governing Law. The descriptive
headings of the several Sections and paragraphs of this Warrant are inserted for
convenience only and do not constitute a part of this Warrant. The limited
liability company laws of the State of Delaware shall govern all issues
concerning the relative rights of the Company and its members. All other
questions concerning the construction, validity, enforcement and interpretation
of this Warrant shall be governed by the internal law of the State of Delaware,
without giving effect to any choice of law or conflict of law provision or rule
(whether of the State of Delaware or any other jurisdictions) that would cause
the application of the laws of any jurisdictions other than the State of
Delaware.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed
and attested by its duly authorized officers and to be dated the Date of
Issuance hereof.
ZECAL TECHNOLOGY, LLC
By ____________________________
Its____________________________
Attest:
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EXHIBIT I
EXERCISE AGREEMENT
To: Dated:
The undersigned, pursuant to the provisions set forth in the
attached Warrant (Certificate No. W-____), hereby agrees to subscribe for the
purchase of $______ of Preferred Company Interests covered by such Warrant and
makes payment herewith in full therefor at the price provided by such Warrant.
Signature ____________________
Address ______________________
EXHIBIT II
ASSIGNMENT
FOR VALUE RECEIVED, _____________________________ hereby sells,
assigns and transfers all of the rights of the undersigned under the attached
Warrant (Certificate No. W-_____) with respect to the Preferred Company
Interests covered thereby set forth below, unto:
Names of Assignee Address Dollar Value
Dated: Signature _______________________
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Witness _______________________
