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Exhibit 10.2
NEITHER THIS WARRANT NOR THE SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE
BEEN REGISTERED UNDER THE SECURITEIS ACT OF 1933, AS AMENDED, APPLICABLE STATE
SECURITIES LAWS, OR APPLICABLE LAWS OF ANY FOREIGN JURISDICTION. THIS WARRANT
AND THE SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND NEITHER THIS
WARRANT NOR THE SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT CAN BE SOLD OR
TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND IN THE ABSENCE OF COMPLIANCE WITH ANY
APPLICABLE STATE SECURITIES LAWS AND APPLICABLE LAWS OF ANY FOREIGN
JURISDICTION, OR, IF THE CORPORATION SO REQUESTS, AN OPINION OF COUNSEL
SATISFACTORY TO THE CORPORATION, ACTING REASONABLY, THAT SUCH REGISTRATION IS
NOT REQIRED AND SUCH FOREIGN JURISDICTION LAWS HAVE BEEN SATISFIED.
W-[ ] Dated: November 10, 2000
SOFTLOCK.COM, INC.
Common Stock Purchase Warrant
THIS IS TO CERTIFY THAT, for value received, [__________] (the "Initial
Warrant Holder") and its successors and permitted assigns are entitled, subject
to the terms and conditions set forth below, to purchase from SOFTLOCK.COM,
INC., a Delaware corporation (the "Corporation"), at any time and from time to
time after 9:00 A.M., Boston, Massachusetts time on the Initial Exercise Date
(as defined in Section 1 below) and on or prior to 5:00 P.M., Boston,
Massachusetts time on the Expiration Date (as defined in Section 1 below), all
or any portion of the Warrant Shares (as defined in Section 1 below), at a
purchase price per share equal to the Exercise Price (as defined in Section 1
below). The number and character of the Warrant Shares and the Exercise Price
are subject to adjustment as provided herein.
This Common Stock Purchase Warrant (the "Warrant") evidences the right
of the Holder to purchase shares of Common Stock in connection with the
execution by the Initial Warrant Holder of the Shareholder Agreement, by and
among the Corporation and the persons listed therein).
1. Definitions. As used in this Warrant, the following terms
shall have the respective meanings set forth below or
elsewhere in this Warrant as referred to below:
"Affiliates" and "Affiliated Group" shall have the meaning ascribed
thereto in the Stock Purchase Agreement.
"Certificate of Incorporation" means the Company's Certificate of
Incorporation as amended and restated from time to time.
"Commission" means the Securities and Exchange Commission or its
successor entity.
"Common Stock" shall mean shares of the Common Stock of the
Corporation, $0.01 par value per share of the Corporation.
"Corporation" shall mean SoftLock.com, Inc. and/or any Person that
shall succeed to, or assume the obligations hereunder of, SoftLock.com, Inc.
"Exercise Date" shall have the meaning set forth in Section 2.2 hereof.
"Exercise Price" shall mean, as of the Initial Exercise Date, the
Initial Exercise Price and after the Initial Exercise Date, the Initial Exercise
Price as adjusted from time to time pursuant to the terms of this Warrant.
"Expiration Date" shall mean November 10, 2002, unless terminated
earlier pursuant to Section 2.1(b) hereof.
"Fair Market Value" shall mean (i) the last sale price per share of
Stock reported by Nasdaq SmallCap Market or any national securities exchange on
which such Stock is quoted or listed, as the case may be, on the date
immediately preceding the Exercise Date or, if no such sale price is reported on
such date, such price on the next preceding business day in which such price was
reported, or (ii) if such Stock is not at the time quoted or listed by Nasdaq
SmallCap Market or on any national securities exchange, the average of the last
reported bid and asked prices as reported by The National Quotation Bureau
Incorporated or any similar reputable quotation and reporting service on the
date immediately preceding the Exercise Date or if no such bid and asked prices
are reported on such date, such price on the next preceding business day on
which such prices were reported, provided such date is not more than ten (10)
days prior to the Exercise Date or (iii) if such Stock is not quoted or listed
by Nasdaq SmallCap Market or on any national securities exchange or reported on
a reputable quotation and reporting service within the ten (10) day period prior
to the Exercise Date, the fair market value of a share of such Stock, as
determined in good faith by the Board of Directors of the Corporation and based
upon the fair market value of the Corporation as a whole, on a going concern
basis, using customary and appropriate valuation methods and the unaudited
financial statements for the most recently ended fiscal quarter of the
Corporation in addition to the most recent fiscal year end audited financial
statements of the Corporation, in each case, as filed with the Commission and
not taking into account any discount for minority ownership or restrictions on
transfer of the capital stock of the Corporation.
"Holder" shall mean, as applicable, (i) the Initial Warrant Holder,
(ii) any successor of the Initial Warrant Holder, or (iii) any other holder of
record of this Warrant or any portion thereof to whom this Warrant or any
portion thereof shall have been transferred in accordance with the provisions of
Section 9 hereof.
"Initial Exercise Date" shall mean the date of execution of this
Warrant by the Corporation.
"Initial Exercise Price" shall mean an amount per share equal to the
greater of Fair Market Value as determined on the Issue Date or $2.25 per share.
"Initial Warrant Holder" shall have the meaning set forth in the first
paragraph of this Warrant.
"Initial Warrant Shares" shall mean [___] shares of Common Stock.
"Issue Date" shall mean the date hereof.
"Person" shall mean an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, governmental authority or other entity of whatever
nature.
"Preferred Stock" shall mean the Series A Preferred Stock, the Series B
Preferred Stock and all other capital stock of the Corporation having a
preference on dissolution or liquidation of the Corporation.
"Registrable Securities" shall mean all Warrant Shares that may be
acquired by the Holder through exercise hereof.
"Registration Statement" means any registration statement of the
Corporation which covers any of the Registrable Securities, including the
prospectus, amendments and supplements to such registration statement, including
post effective amendments, all exhibits and all material incorporated by
reference in such registration statement.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Series A Preferred Stock" shall mean the Series A Convertible
Preferred Stock of the Corporation, $0.01 par value per share.
"Series B Preferred Stock" shall mean the Series B Convertible
Preferred Stock of the Corporation, $0.01 par value per share.
"Shareholder Agreement" means that certain agreement dated November 10,
2000 by and among the Company and the shareholders signatory thereto.
"Stock" shall mean (i) Common Stock, (ii) capital stock of the
Corporation (other than Common Stock) or of any other Person or any other
securities of the Corporation or of any other Person that the Holder is entitled
to receive, or receives, upon exercise of this Warrant, in lieu of or in
addition to Common Stock, and/or (iii) capital stock of the Corporation (other
than Common Stock) or of any other Person or any other securities of the
Corporation or of any other Person that may be issued in replacement of,
substitution, exchange or redemption for, or upon reclassification or conversion
of, Common Stock or any other Stock, in each case whether as a result of a
reorganization, reclassification, merger, consolidation or sale of substantially
all of the assets of the Corporation.
"Stock Purchase Agreement" means that certain Series B Preferred Stock
and Warrant Purchase Agreement dated February 10, 2000 by and among the Company
and the parties signatory thereto.
"Warrant" shall have the meaning set forth in the second paragraph of
this Warrant.
"Warrant Shares" shall mean at any time, the number and type of shares
of Stock purchasable hereunder, which shall be the Initial Warrant Shares after
giving effect to the number of shares of Stock previously purchased by the
Holder pursuant to any and all exercises of this Warrant prior to such time and
after giving effect to all adjustments with respect to the number and type of
Warrant Shares purchasable hereunder as provided for herein, including, without
limitation, those set forth in the definition of "Stock" and in Section 4
hereof, prior to such time.
2. Exercise of Warrant. Subject to and upon all of the terms and
conditions set forth in this Warrant (including the limitation set forth in the
next paragraph), the Holder may exercise this Warrant, in whole or in part with
respect to any Warrant Shares, at any time and from time to time during the
period commencing on the Initial Exercise Date and ending on the Expiration
Date, by giving prior written notice to the Corporation that the Holder intends
to exercise this Warrant (the "Exercise Notice"), which Exercise Notice shall
indicate the number of shares for which the Holder intends to exercise this
Warrant, and upon presentation and surrender of this Warrant to the Corporation
at its principal office, together with (a) a properly completed and duly
executed subscription form, in the form attached hereto, which subscription form
shall specify the number of Warrant Shares for which this Warrant is then being
exercised, and (b) payment of the aggregate Exercise Price payable hereunder in
respect of the number of Warrant Shares being purchased upon exercise of this
Warrant. Payment of such aggregate Exercise Price shall be made (i) in cash or
by money order, certified or bank cashier's check or wire transfer (in each case
in lawful currency of the United States of America), (ii) by the Holder
surrendering a number of Warrant Shares having a Fair Market Value on the
Exercise Date equal to or greater than (but only if by a fractional share) the
required aggregate Exercise Price, in which case the Holder would receive the
number of Warrant Shares to which it would otherwise be entitled upon such
exercise, less the surrendered shares, or (iii) any combination of the methods
described in the foregoing clauses (i) and (ii).
2.2 Effectiveness of Exercise; Ownership. Each exercise of
this Warrant by the Holder shall be deemed to have been effected immediately
prior to the close of business on the date upon which all of the requirements of
Section 2.1 hereof with respect to such exercise shall have been complied with
in full (each such date, an "Exercise Date"). On the applicable Exercise Date
with respect to any exercise of this Warrant by the Holder, the Corporation
shall be deemed to have issued to the Holder, and the Holder shall be deemed to
have become the holder of record and legal owner of, the number of Warrant
Shares being purchased upon such exercise of this Warrant, notwithstanding that
the stock transfer books of the Corporation shall then be closed or that
certificates representing such number of Warrant Shares being purchased shall
not then be actually delivered to the Holder.
2.3 Delivery of Stock Certificates on Exercise. As soon as
practicable after the exercise of this Warrant, and in any event within ten (10)
days thereafter, the Corporation, at its expense, and in accordance with
applicable securities laws, will cause to be issued in the name and delivered to
the Holder, or as the Holder may direct (subject in all cases, to the provisions
of Section 9 hereof), a certificate or certificates for the number of Warrant
Shares purchased by the Holder on such exercise, plus, in lieu of any fractional
share to which the Holder would otherwise be entitled, cash equal to such
fraction multiplied by the Fair Market Value.
2.4 Shares To Be Fully Paid and Nonassessable. All Warrant
Shares issued upon the exercise of this Warrant shall be validly issued, fully
paid and nonassessable, free of all liens, taxes, charges and other encumbrances
or restrictions on sale (other than those set forth herein) and free and clear
of all preemptive rights.
2.5 Fractional Shares. No fractional shares of Stock or scrip
representing fractional shares of Stock shall be issued upon the exercise of
this Warrant. With respect to any fraction of a share of Stock called for upon
any exercise hereof, the Corporation shall make a cash payment to the Holder as
set forth in Section 2.3 hereof.
2.6 Issuance of New Warrants; Corporation Acknowledgement.
Upon any partial exercise of this Warrant, the Corporation, at its expense, will
forthwith and, in any event, within ten (10) days after partial exercise, issue
and deliver to the Holder a new warrant or warrants of like tenor, registered in
the name of the Holder, exercisable, in the aggregate, for the balance of the
Warrant Shares. Moreover, the Corporation shall, at the time of any exercise of
this Warrant, upon the request of the Holder, acknowledge in writing its
continuing obligation to afford to the Holder any rights to which the Holder
shall continue to be entitled after such exercise in accordance with the
provisions of this Warrant; provided, however, that if the Holder shall fail to
make any such request, such failure shall not affect the continuing obligation
of the Corporation to afford to the Holder any such rights.
2.7 Payment of Taxes and Expenses. The Corporation shall pay
any recording, filing, stamp or similar tax which may be payable in respect of
any transfer involved in the issuance of, and the preparation and delivery of
certificates (if applicable) representing, (i) any Warrant Shares purchased upon
exercise of this Warrant and/or (ii) new or replacement warrants in the Holder's
name or the name of any transferee. The Holder shall pay any transfer tax due as
a result of the transfer of all or any portion of this Warrant to a transferee.
2.8 Expiration. This Warrant and the Holder's rights
hereunder, to the extent not previously exercised, shall
expire as of 5:00 P.M., Boston, Massachusetts time, on the Expiration Date.
3. Registration Rights. If the Corporation shall determine to
register any of its securities, either for its own account or the account of a
security holder or holders exercising their registration rights pursuant to any
other contractual obligation, other than a registration relating solely to
employee benefit plans or a registration on any registration form which does not
permit secondary sales or does not include substantially the same information as
would be required to be included in a registration statement covering the sale
of Registrable Securities or pursuant to Form S-4, the Corporation will promptly
give to the Holder written notice thereof (which shall include the number of
shares the Corporation or other security holder proposes to register and, if
known, the name of the proposed underwriter) and use its best efforts to include
in such registration all the Registrable Securities specified in a written
request or requests, made by the Holder within twenty (20) days after the date
of delivery of the written notice from the Corporation described above.
Notwithstanding the foregoing, the Registrable Securities of the Holder shall be
included in such registration only to the extent that such inclusion shall not
limit the number of shares requested for inclusion by any other shareholder
exercising a contractual right existing as of the date hereof to include
securities in such registration. If the Holder desires to include in such
registration any or all of its Registrable Securities it shall agree to enter
into a standard underwriting agreement with the underwriter for such
registration and shall abide by all terms and conditions of such underwriting.
Notwithstanding the foregoing, nothing contained herein shall be deemed to limit
the number of securities included in such registration by holders exercising a
right to include securities in the registration pursuant to any contractual
right.
4. Adjustments.
4.1 Adjustments for Stock Dividends, Subdivisions and
Combinations.
(a) In the event that, at any time and from time to time
after the Issue Date, the Corporation shall (A) issue any
additional shares of Stock as a dividend or distribution on its
outstanding Stock or options, warrants or other rights to
purchase, directly or indirectly, Stock, as a dividend or
distribution on its outstanding Stock, or securities convertible,
directly or indirectly, into Stock as a dividend or distribution
on its outstanding Stock (other than shares of Stock issued upon
exchange, exercise or conversion of the Preferred Stock or upon
exercise of this Warrant), (B) subdivide its outstanding shares
of Stock into a greater number of shares of Stock or (C) combine
its outstanding shares of Stock into a smaller number of shares
of Stock, then and in each such event, (x) the Exercise Price
shall, simultaneously with the happening of such event, be
adjusted by multiplying the then current Exercise Price by a
fraction, (i) the numerator of which shall be the number of
shares of Stock outstanding immediately prior to such event, and
(ii) the denominator of which shall be the number of shares of
Stock outstanding immediately after such event, each in
accordance with their terms, and the product so obtained shall
thereafter be the Exercise Price then in effect, and (y) the
number of Warrant Shares shall be adjusted by increasing or
decreasing, as the case may be, the number of shares of Stock
included within the Warrant Shares immediately prior to such
event by the percentage increase or decrease in the total number
of shares of Stock outstanding immediately after such event as
compared to the total number of shares of Stock outstanding
immediately prior to such event and the result so obtained shall
be the number of Warrant Shares then in effect.
(b) The exercise Price and the number of Warrant Shares, as
so adjusted, shall be readjusted in the same manner upon the
happening of any successive event or events described in this
Section 4.1.
4.2 Adjustment for Reorganization, Consolidation or Merger. In
the event that, at any time or from time to time after the Issue Date,
the Corporation shall (a) effect a reorganization, (b) consolidate
with or merge into any other Person, or (c) sell or transfer all or
substantially all of its properties or assets or more than 50% of the
voting capital stock of the Corporation (whether issued and
outstanding, newly issued, from treasury, or any combination thereof)
to any other Person under any plan or arrangement contemplating the
reorganization, consolidation or merger, sale or transfer, or
dissolution of the Corporation, then, in each such case, the Holder,
upon the exercise of this Warrant as provided in Section 2 hereof at
any time or from time to time after the consummation of such
reorganization, consolidation, merger or sale or the effective date of
such dissolution (subject to the limitation contained in Section 4.6,
if applicable), as the case may be, shall receive, in lieu of the
Warrant Shares issuable on such exercise immediately prior to such
consummation or such effective date, as the case may be, the Stock and
property (including cash) to which the Holder would have been entitled
upon the consummation of such reorganization, consolidation or merger,
or sale or transfer, or in connection with such dissolution, as the
case may be, if the Holder had so exercised this Warrant immediately
prior thereto (assuming the payment by the Holder of the Exercise
Price therefor as required hereby in a form permitted hereby, which
payment shall be included in the assets of the Corporation for the
purposes of determining the amount available for distribution), all
subject to successive adjustments thereafter from time to time
pursuant to, and in accordance with, the provisions of this Section 4.
4.3 Adjustments for Reclassifications. If the Common Stock
issuable upon the conversion of this Warrant shall be changed into the
same or a different number of shares of any class(es) or series of
stock, whether by classification or otherwise (other than an
adjustment under Section 4.1 or a merger, consolidation, or sale of
assets provided for under Section 4.2), then and in each such event,
the Holder hereof shall have the right thereafter to convert each
Warrant Share into the kind and amount of shares of stock and other
securities and property receivable upon such reclassification, or
other change by holders of the number of shares of Common Stock into
which such Warrant Shares would have been convertible immediately
prior to such reclassification, or change, all subject to further
adjustment as provided herein.
4.4 Distributions. In the event that, at any time or from time to
time after the Issue Date, the Corporation shall make or issue, or
shall fix a record date for the determination of eligible holders
entitled to receive, a dividend or other distribution with respect to
Common Stock payable in (i) shares of its capital stock (other than a
stock dividend provided for in Section 4.1), (ii) other securities of
the Corporation or any other Person, (iii) evidences of indebtedness
issued by the Corporation or any other Person, (iv) options, warrants
or rights to subscribe for or purchase any of the foregoing, or (v)
assets (excluding cash dividends) then, in each such case, the Holder
of this Warrant shall receive, in addition to the shares of Stock
issuable upon the exercise of this Warrant prior to such date, and
without the payment of additional consideration therefor, the shares
of capital stock, other securities, evidence of indebtedness, options,
warrants or other rights or assets, as the case may be, to which such
Holder would have been entitled upon such date as if such Holder had
exercised this Warrant on the date hereof and had thereafter, during
the period from the date hereof to and including the date of the
actual exercise of this Warrant, retained such shares and/or all other
additional stock available to it as aforesaid during such period,
giving effect to all adjustments pursuant to this Section 4. The
Corporation shall reserve and set aside, for the life of this Warrant
or until exercised in full, all such distributions to which the Holder
is entitled to receive pursuant to this Section 4.4.
4.5 Continuation of Terms. Upon any reorganization,
reclassification, sale, consolidation, merger or other transfer (and
any liquidation, dissolution or winding up of the Corporation
following any such transfer) referred to in this Section 4, this
Warrant shall continue in full force and effect and the terms hereof
shall be applicable to the shares of Stock and property (including
cash, where applicable) receivable upon the exercise of this Warrant
after the consummation of such reorganization, reclassification, sale,
consolidation, merger or other transfer or the effective date of
liquidation, dissolution or winding up of the Corporation following
any such transfer, as the case may be, and shall be binding upon the
issuer of any such Stock, including, in the case of any such transfer,
the Person acquiring all or substantially all of the properties or
assets or more than 50% of the voting capital stock of the Corporation
(whether issued and outstanding, newly issued or from treasury or any
combination thereof), whether or not such Person shall have expressly
assumed the terms of this Warrant.
4.6 Dissolution. Subject to Section 4.5 hereof, in the event of
any dissolution of the Corporation following the transfer of all or
substantially all of its properties or assets at any time after the
Issue Date, the Corporation shall retain for a period of at least
ninety (90) days after the effective date of such dissolution the
Stock and property (including cash, where applicable) receivable by
the Holder pursuant to Section 4.2 hereof upon exercise of this
Warrant at any time after the effective date of such dissolution
(assuming the payment by the Holder of the Exercise Price therefor as
required hereby in a form permitted hereby). If the Holder fails to
exercise this Warrant within the sixty (60) day period following the
effective date of such dissolution, then such Stock and property
(including cash, where applicable) shall be distributed pro rata to
those Persons who were stockholders of record of the Corporation on
the effective date of such dissolution or as otherwise required by law
or the Certificate of Incorporation of the Corporation.
5. Officer's Certificate as to Adjustments. In each case of any adjustment
or readjustment in the number and kind of Warrant Shares, or property, issuable
hereunder from time to time, or the Exercise Price, the Corporation, at its
expense, will promptly cause an officer of the Corporation to compute such
adjustment or readjustment in accordance with the terms of this Warrant and
prepare a certificate setting forth such adjustment or readjustment and showing
the facts upon which such adjustment or readjustment is based. The Corporation
will forthwith send a copy of each such certificate to the Holder in accordance
with Section 10.5 below.
6. Notices of Record Date, Etc. In the event of:
(a) any taking by the Corporation of a record of the holders of Stock
for the purpose of determining the holders thereof who are entitled to receive
any shares of Stock as a dividend or other distribution of pursuant to stock
split, or
(b) any reorganization of the Corporation, or any sale or transfer, in
a single transaction or a series of related transactions, of all or
substantially all the assets of the Corporation to, or the consolidation or
merger of the Corporation with or into, any other Person, or
(c) any voluntary or involuntary dissolution, liquidation or winding-up of
the Corporation, or
(d) any sale, in a single transaction or a series of related transactions,
of more than fifty percent (50%) of the Corporation's voting capital stock
(whether issued and outstanding, newly issued, from treasury, or any combination
thereof), then and in each such event the Corporation will mail or cause to be
mailed to the Holder a notice specifying (i) the date on which any such record
is to be taken for the purpose of such dividend, distribution or stock split,
and stating the amount and character of such dividend, distribution or stock
split, or (ii) the date on which any such reorganization, transfer,
consolidation, merger, dissolution, liquidation or winding-up is to take place,
and the time, if any is to be fixed, as of which the holders of record of any
one or more classes of Stock shall be entitled to exchange their shares of Stock
for securities or other property deliverable on such reorganization, transfer,
consolidation, merger, dissolution, liquidation or winding-up, or (iii) the date
on which any such sale of more than fifty percent (50%) of the Corporation's
voting capital stock is to take place and the material terms thereof, as the
case may be. Such notice shall be mailed at least ten (10) days prior to the
date specified in such notice on which any such action is to be taken.
7. Exchange of Warrant. Subject to the provisions of Section 9 hereof (if
and to the extent applicable), this Warrant shall be exchangeable, upon the
surrender hereof by the Holder at the principal office of the Corporation, for
new warrants of like tenor, each registered in the name of the Holder or in the
name of such other Persons as the Holder may direct. Each of such new warrants
shall be exercisable for such number of Warrant Shares as the Holder shall
direct, provided that all of such new warrants shall represent, in the
aggregate, the right to purchase the same number of Warrant Shares and cash,
securities or other property, if any, which may be purchased by the Holder upon
exercise of this Warrant at the time of its surrender.
8. Replacement of Warrant. On receipt of evidence reasonably satisfactory
to the Corporation of the loss, theft, destruction or mutilation of this Warrant
and, in the case of any such loss, theft or destruction of this Warrant, on
delivery of a customary affidavit of the Holder and an indemnity agreement or,
in the case of any such mutilation, on surrender and cancellation of this
Warrant, the Corporation at its expense will execute and deliver, in lieu
thereof, a new warrant of like tenor.
9. Transfer Provisions, etc.
9.1 Legends.
(a) Each certificate representing any Warrant Shares issued
upon exercise of this Warrant shall bear the following legend:
"THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, AND MAY BE TRANSFERRED ONLY PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR IN ACCORDANCE WITH AN APPLICABLE EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS
AMENDED."
(b) Each certificate representing any shares of Stock issued
from time to time upon exercise of this Warrant shall also bear any legend
required under any applicable state securities or blue sky laws.
9.2 Mechanics of Transfer. Any transfer of all or any portion of this
Warrant, or of any interest therein, that is otherwise in compliance with
applicable law shall be effected by surrendering this Warrant to the
Corporation at its principal office, together with (i) a duly executed form
of assignment, in the form attached hereto, (ii) payment of any applicable
transfer taxes and (iii) unless there is in effect a registration statement
under the Securities Act covering the proposed transfer or the proposed
transfer is to Affiliates or Affiliated Groups of the Holder, if the
Corporation so requests (except in transactions in compliance with Rule
144) a written opinion of legal counsel reasonably satisfactory to the
Corporation addressed to the Corporation and satisfactory in form and
substance to the Corporation's counsel, acting reasonably, to the effect
that the proposed transfer of the Warrant or the Warrant Shares may be
effected without registration under the Securities Act. In the event of any
such transfer of this Warrant, in whole, the Corporation shall issue a new
warrant of like tenor to the transferee, representing the right to purchase
the same number of Warrant Shares, and cash, securities or other property,
if any, which were purchasable by the Holder upon exercise of this Warrant,
(i) the Corporation shall issue a new warrant of like tenor to the
transferee, representing the right to purchase the same number of Warrant
Shares, and cash, securities or other property, if any, which were
purchasable by the Holder upon exercise of the transferred portion of this
Warrant at the time of such transfer, and (iii) the Corporation shall issue
a new warrant of like tenor to the Holder, representing the right to
purchase the number of Warrant Shares, and cash, securities or other
property, if any, purchasable by the Holder upon exercise of the portion of
this Warrant not transferred to such transferee. Until this Warrant or any
portion thereof is transferred on the books of the Corporation, the
Corporation may treat the Holder as the absolute holder of this Warrant and
all right, title and interest therein for all purposes, notwithstanding any
notice to the contrary.
9.3 Restrictions on Transfer. Subject to Section 9.2 hereof and
compliance with applicable securities laws, this Warrant, and any portion
hereof, and the Warrant Shares may be transferred by the Holder in its sole
discretion at any time and to any Person, including without limitation
transfers to Affiliates or Affiliated Groups, without the consent of the
Corporation.
10. General.
10.1 Statement on Warrant. Irrespective of any adjustments in the
Exercise Price or the number or kind of Warrant Shares, this Warrant may
continue to express the same kind of Warrant Shares as are stated on the
front page hereof.
10.2 Authorized Shares; Reservation of Shares for Issuance. At all
times while this Warrant is outstanding the Corporation shall maintain its
corporate authority to issue, and shall have authorized and reserved for
issuance upon exercise of this Warrant, such number of shares of Stock as
shall be sufficient to perform its obligations under this Warrant (after
giving effect to any and all adjustments to the number and kind of Warrant
Shares purchasable upon exercise of this Warrant).
10.3 No Impairment. The Corporation will not, by amendment of its
Certificate of Incorporation or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issuance or sale of securities,
sale or other transfer of any of its assets or properties, or any other
voluntary action, avoid or seek to avoid the observance or performance of
any of the terms of this Warrant, but will 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 hereunder against impairment. Without limiting the generality of
the foregoing, the Corporation (a) will not increase the par value of any
shares of Stock receivable upon the exercise of this Warrant above the
amount payable therefor on such exercise, and (b) will take all action that
may be necessary or appropriate in order that the Corporation may validly
and legally issue fully paid and nonassessable shares of Stock on the
exercise of this Warrant.
10.4 No Rights as Stockholder. The Holder shall not be entitled to
vote or to receive dividends or to be deemed the holder of Stock that may
at any time be issuable upon exercise of this Warrant for any purpose
whatsoever, nor shall anything contained herein be construed to confer upon
the Holder any of the rights of a stockholder of the Corporation until the
Holder shall have exercised this Warrant and been issued Warrant Shares in
accordance with the provisions hereof.
10.5 Notices. All notices, demands, requests, certificates or other
communications under this Warrant shall be in writing and shall be either
mailed by certified mail, postage prepaid, in which case such notice,
demand, request, certificate or other communications shall be deemed to
have been given three (3) days after the date on which it is first
deposited in the mails, or hand delivered or sent by facsimile
transmission, by tested or otherwise authenticated telex or cable or by
private expedited courier for overnight delivery with signature required,
in each such case, such notice, demand, request, certificate or other
communications being deemed to have been given upon delivery or receipt, as
the case may be:
(i) if to the Corporation, SoftLock.com, Inc., Five Clock Tower
Place, Suite 440, Maynard, Massachusetts 01754, Attention: President,
or at such other address as the Corporation may have furnished in
writing to the Holder; and
(ii) if to the Holder, at the Holder's address appearing in the
books maintained by the Corporation.
10.6 Amendment and Waiver. No failure or delay of the Holder in
exercising any power or right hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Holder are cumulative and
not exclusive of any rights or remedies which it would otherwise have. The
provisions of this Warrant may be amended, modified or waived with (and
only with) the written consent of the Corporation and the Holder.
10.7 Governing Law. This Warrant shall be governed by, and construed
and enforced in accordance with, the laws of the State of Delaware.
10.8 Covenants to Bind Successor and Assigns. All covenants,
stipulations, promises and agreements in this Warrant shall be binding on
and inure to the benefit of the Corporation and the Holder and their
respective successors, assigns and transferees, whether so expressed or
not.
10.9 Severability. In case any one or more of the provisions contained
in this Warrant shall be invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby. The
parties shall endeavor in good faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the invalid, illegal
or unenforceable provisions.
10.10 Construction. The definitions of this Warrant shall apply
equally to both the singular and the plural forms of the terms defined.
Wherever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The section and
paragraph headings used herein are for convenience of reference only, are
not part of this Warrant and are not to affect the construction of or be
taken into consideration in interpreting this Warrant.
10.11 Remedies. The Holder, in addition to being entitled to exercise
all rights granted by law, including recovery of damages, will be entitled
to specific performance of its rights under this Warrant. The Corporation
agrees that monetary damages would not be adequate compensation for any
loss incurred by reason of a breach by it of the provision of this Warrant
and hereby agrees to waive the defense in any action for specific
performance that a remedy at law would be adequate. In any action or
proceeding brought to enforce any provision of this Warrant or where any
provision hereof is validly asserted as a defense, the successful party to
such action or proceeding shall be entitled to recover reasonable
attorneys' fees in addition to any other available remedy.
10.12 Counterparts; Delivery by Facsimile. This Warrant may be
executed in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument. Delivery of this Warrant may be effected by facsimile.
[rest of page intentionally left blank]
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused this Common Stock
Purchase Warrant to be executed as an instrument under seal in its corporate
name by one of its officers thereunto duly authorized, all as of the day and
year first above written.
SOFTLOCK.COM, INC.
By:______________________________
Name: Scott Griffith
Title: President
<PAGE>
FORM OF SUBSCRIPTION
(To be executed upon exercise of Warrant)
To: SOFTLOCK.COM, INC.
The undersigned hereby irrevocably elects to exercise the right of
purchase represented by the attached Warrant for, and to exercise thereunder,
______ shares of Common Stock, $0.001 par value per share ("Common Stock"), of
SoftLock.com, Inc., a Delaware corporation, and tenders herewith payment of
$____________, representing the aggregate purchase price for such shares based
on the price per share provided for in such Warrant. Such payment is being made
in accordance with [Section 2.1(a)(i)] [Section 2.1(a)(ii)] [Section
2.1(a)(iii)] of the attached Warrant.
Please issue a certificate or certificates for such shares of Common
Stock in the following name or names and denominations and deliver such
certificate or certificates to the person or persons listed below at their
respective addresses set forth below:
Dated: _____________, 2000 _________________________________
---------------------------------
(Address)
If said number of shares of Common Stock shall not be all the shares of
Common Stock issuable upon exercise of the attached Warrant, a new Warrant is to
be issued in the name of the undersigned for the balance remaining of such
shares of Common Stock less any fraction of a share of Common Stock paid in
cash.
Dated:_____________, 2000 _________________________________
NOTE: The above signature
should correspond exactly
with the name on the face
of the attached Warrant or
with the name of the
assignee appearing in the
assignment form below.
<PAGE>
FORM OF ASSIGNMENT
(To be executed upon assignment of Warrant)
For value received, ______________________________ hereby sells,
assigns and transfers unto ______________ the attached Warrant [____% of the
attached Warrant], together with all right, title and interest therein, and does
hereby irrevocably constitute and appoint _______________________________
attorney to transfer said Warrant [said percentage of said Warrant] on the books
of SoftLock.com, Inc., a Delaware corporation, with full power of substitution
in the premises.
If not all of the attached Warrant is to be so transferred, a new
Warrant is to be issued in the name of the undersigned for the balance of said
Warrant.
Dated:_______________, 2000 _________________________________
NOTE: The above signature should
correspond exactly with the name on
the face of the attached Warrant.
<PAGE>
List of Warrant holders and number of shares for which they received warrants.
Warrantholder Number of Warrant Shares
Raptor Global Portfolio, Ltd. 746,760
Altar Rock Fund, L.P. 3,240
RC Capital, L.L.C. 100,000
Ram Trading, Ltd. 500,000
Ritchie Capital Management, L.L.C. 100,000
Apex Investment Fund IV, L.P. 181,880
Apex Strategic Partners IV, LLC 5,640
SI Venture Fund II, L.P. 187,520
<PAGE>
