<PAGE> 1
EXHIBIT 4.3
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED. THESE SECURITIES MAY NOT BE OFFERED OR
SOLD IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION FROM REGISTRATION UNDER
SUCH ACT.
THE TRANSFER OF THIS WARRANT IS
RESTRICTED AS DESCRIBED HEREIN.
Starbase
Warrant for the Purchase of Shares of Common Stock,
par value $0.01 per Share
2000-CMN-001 146,379 Shares
THIS CERTIFIES that, for value received, KAUFMAN BROS., L.P., 800 Third
Avenue - 25th Floor, New York, New York 10022 (the "Holder"), is entitled to
subscribe for and purchase from Starbase, a California corporation (the
"Company"), upon the terms and conditions set forth herein, at any time or from
time to time after April 17, 2000, and before 5:00 P.M. on April 17, 2001, New
York time (the "Exercise Period"), 146,379 shares of the Company's Common Stock,
par value $0.01 per share ("Common Stock"), at a price of $3.88 per share (the
"Exercise Price"). As used herein the term "this Warrant" shall mean and include
this Warrant and any Common Stock or Warrants hereafter issued as a consequence
of the exercise or transfer of this Warrant in whole or in part. This Warrant
may not be sold, transferred, assigned or hypothecated except that it may be
transferred, in whole or in part, to (i) one or more officers or partners of the
Holder (or the officers or partners of any such partner); (ii) a successor to
the Holder, or the officers or partners of such successor; (iii) a purchaser of
substantially all of the assets of the Holder; or (iv) by operation of law; and
the term the "Holder" as used herein shall include any transferee to whom this
Warrant has been transferred in accordance with the above.
The number of shares of Common Stock issuable upon exercise of the
Warrant (the "Warrant Shares") and the Exercise Price may be adjusted from time
to time as hereinafter set forth.
1. This Warrant may be exercised during the Exercise Period, as to the
whole or any lesser number of whole Warrant Shares, by the surrender of this
Warrant (with the election at the end hereof duly executed) to the Company at
its office at 4 Hutton Centre Drive Suite 800, Santa Ana, California 92707, or
at such other place as is designated in writing by the Company, together with a
certified or bank cashier's check payable to the order of the Company in an
amount equal to the Exercise Price multiplied by the number of Warrant Shares
for which this Warrant is being exercised (the "Stock Purchase Price").
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2. (a) In lieu of the payment of the Stock Purchase Price, the
Holder shall have the right (but not the obligation), to require the
Company to convert this Warrant, in whole or in part, into shares of
Common Stock (the "Conversion Right") as provided for in this Section
2. Upon exercise of the Conversion Right, the Company shall deliver to
the Holder (without payment by the Holder of any of the Stock Purchase
Price) that number of shares of Common Stock (the "Conversion Shares")
equal to the quotient obtained by dividing (x) the value of this
Warrant (or portion thereof as to which the Conversion Right is being
exercised if the Conversion Right is being exercised in part) at the
time the Conversion Right is exercised (determined by subtracting the
aggregate Stock Purchase Price of the shares of Common Stock as to
which the Conversion Right is being exercised in effect immediately
prior to the exercise of the Conversion Right from the aggregate
Current Market Price (as defined in Section 6(e) hereof) of the shares
of Common Stock as to which the Conversion Right is being exercised) by
(y) the Current Market Price of one share of Common Stock immediately
prior to the exercise of the Conversion Right.
(b) The Conversion Right provided under this Section 2 may be
exercised in whole or in part and at any time and from time to time
while this Warrant remains outstanding. In order to exercise the
Conversion Right, the Holder shall surrender to the Company, at its
offices, this Warrant with the Notice of Conversion at the end hereof
duly executed. The presentation and surrender shall be deemed a waiver
of the Holder's obligation to pay all or any portion of the aggregate
purchase price payable for the shares of Common Stock as to which such
Conversion Right is being exercised. This Warrant (or so much thereof
as shall have been surrendered for conversion) shall be deemed to have
been converted immediately prior to the close of business on the day of
surrender of such Warrant for conversion in accordance with the
foregoing provisions.
3. Upon each exercise of the Holder's rights to purchase Warrant Shares
or Conversion Shares, the Holder shall be deemed to be the holder of record of
the Warrant Shares or Conversion Shares issuable upon such exercise or
conversion, notwithstanding that the transfer books of the Company shall then be
closed or certificates representing such Warrant Shares or Conversion Shares
shall not then have been actually delivered to the Holder. As soon as
practicable after each such exercise or conversion of this Warrant, the Company
shall issue and deliver to the Holder a certificate or certificates for the
Warrant Shares or Conversion Shares issuable upon such exercise or conversion,
registered in the name of the Holder or its designee. If this Warrant should be
exercised or converted in part only, the Company shall, upon surrender of this
Warrant for cancellation, execute and deliver a new Warrant evidencing the right
of the Holder to purchase the balance of the Warrant Shares (or portions
thereof) subject to purchase hereunder.
4. Any Warrant issued upon the transfer or exercise or conversion in
part of this Warrant shall be numbered and shall be registered in a Warrant
Register as they are issued. The Company shall be entitled to treat the
registered holder of any Warrant on the Warrant Register as the owner in fact
thereof for all purposes and shall not be bound to recognize any equitable or
other claim to or interest in such Warrant on the part of any other person, and
shall
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not be liable for any registration or transfer of Warrants which are registered
or to be registered in the name of a fiduciary or the nominee of a fiduciary
unless made with the actual knowledge that a fiduciary or nominee is committing
a breach of trust in requesting such registration or transfer, or with the
knowledge of such facts that its participation therein amounts to bad faith.
This Warrant shall be transferable only on the books of the Company upon
delivery thereof duly endorsed by the Holder or by his duly authorized attorney
or representative, or accompanied by proper evidence of succession, assignment,
or authority to transfer. In all cases of transfer by an attorney, executor,
administrator, guardian, or other legal representative, duly authenticated
evidence of his or its authority shall be produced. Upon any registration of
transfer, the Company shall deliver a new Warrant or Warrants to the person
entitled thereto. This Warrant may be exchanged, at the option of the Holder
thereof, for another Warrant, or other Warrants of different denominations, of
like tenor and representing in the aggregate the right to purchase a like number
of Warrant Shares (or portions thereof), upon surrender to the Company or its
duly authorized agent. Notwithstanding the foregoing, the Company shall have no
obligation to cause Warrants to be transferred on its books to any person if, in
the opinion of counsel to the Company, such transfer does not comply with the
provisions of the Securities Act of 1933, as amended (the "Act"), and the rules
and regulations thereunder.
5. The Company shall at all times reserve and keep available out of its
authorized and unissued Common Stock, solely for the purpose of providing for
the exercise of the rights to purchase all Warrant Shares and/or Conversion
Shares granted pursuant to this Warrant, such number of shares of Common Stock
as shall, from time to time, be sufficient therefor. The Company covenants that
all shares of Common Stock issuable upon exercise of this Warrant, upon receipt
by the Company of the full Exercise Price therefor, and all shares of Common
Stock issuable upon conversion of this Warrant, shall be validly issued, fully
paid, non-assessable, and free of preemptive rights.
6. (a) In case the Company shall at any time after the date
the shares of its capital stock, (ii) subdivide the outstanding Common
Stock, (iii) combine the outstanding Common Stock into a smaller number
of shares, or (iv) issue any shares of its capital stock by
reclassification of the Common Stock (including any such
reclassification in connection with a consolidation or merger in which
the Company is the continuing corporation), then, in each case, the
Exercise Price, and the number and kind of securities issuable upon
exercise or conversion of this Warrant, in effect at the time of the
record date for such dividend or of the effective date of such
subdivision, combination, or reclassification, shall be proportionately
adjusted so that the Holder after such time shall be entitled to
receive the aggregate number and kind of shares which, if such Warrant
had been exercised or converted immediately prior to such time, he
would have owned upon such exercise or conversion and been entitled to
receive by virtue of such dividend, subdivision, combination, or
reclassification. Such adjustment shall be made successively whenever
any event listed above shall occur.
(b) In case the Company shall issue or fix a record date for
the issuance to all holders of Common Stock of rights, options, or
warrants to subscribe for or purchase Common Stock (or securities
convertible into or exchangeable for Common Stock) at a price per share
(or having a conversion or exchange price per share, if a
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security convertible into or exchangeable for Common Stock) less than
the Current Market Price per share of Common Stock on such record date,
then, in each case, the Exercise Price shall be adjusted by multiplying
the Exercise Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the number of shares of
Common Stock outstanding on such record date plus the number of shares
of Common Stock which the aggregate offering price of the total number
of shares of Common Stock so to be offered (or the aggregate initial
conversion or exchange price of the convertible or exchangeable
securities so to be offered) would purchase at such Current Market
Price and the denominator of which shall be the number of shares of
Common Stock outstanding on such record date plus the number of
additional shares of Common Stock to be offered for subscription or
purchase (or into which the convertible or exchangeable securities so
to be offered are initially convertible or exchangeable). Such
adjustment shall become effective at the close of business on such
record date; provided, however, that, to the extent the shares of
Common Stock (or securities convertible into or exchangeable for shares
of Common Stock) are not delivered, the Exercise Price shall be
readjusted after the expiration of such rights, options, or warrants
(but only with respect to Warrants exercised after such expiration), to
the Exercise Price which would then be in effect had the adjustments
made upon the issuance of such rights, options, or warrants been made
upon the basis of delivery of only the number of shares of Common Stock
(or securities convertible into or exchangeable for shares of Common
Stock) actually issued. In case any subscription price may be paid in a
consideration part or all of which shall be in a form other than cash,
the value of such consideration shall be as determined in good faith by
the board of directors of the Company, whose determination shall be
conclusive absent manifest error. Shares of Common Stock owned by or
held for the account of the Company or any majority-owned subsidiary
shall not be deemed outstanding for the purpose of any such
computation.
(c) In case the Company shall distribute to all holders of
Common Stock (including any such distribution made to the stockholders
of the Company in connection with a consolidation or merger in which
the Company is the continuing corporation) evidences of its
indebtedness or assets (other than cash dividends or distributions and
dividends payable in shares of Common Stock), or rights, options, or
warrants to subscribe for or purchase Common Stock, or securities
convertible into or exchangeable for shares of Common Stock (excluding
those with respect to the issuance of which an adjustment of the
Exercise Price is provided pursuant to Section 6(b) hereof), then, in
each case, the Exercise Price shall be adjusted by multiplying the
Exercise Price in effect immediately prior to the record date for the
determination of stockholders entitled to receive such distribution by
a fraction, the numerator of which shall be the Current Market Price
per share of Common Stock on such record date, less the fair market
value (as determined in good faith by the board of directors of the
Company, whose determination shall be conclusive absent manifest error)
of the portion of the evidences of indebtedness or assets so to be
distributed, or of such rights, options, or warrants or convertible or
exchangeable securities, applicable to one share, and the denominator
of which shall be such Current Market Price per share of Common Stock.
Such adjustment shall be made whenever any such distribution is made,
and shall
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become effective on the record date for the determination of
stockholders entitled to receive such distribution.
(d) In case the Company shall issue shares of Common Stock or
rights, options, or warrants to subscribe for or purchase Common Stock,
or securities convertible into or exchangeable for Common Stock
(excluding shares, rights, options, warrants, or convertible or
exchangeable securities, issued or issuable (i) in any of the
transactions with respect to which an adjustment of the Exercise Price
is provided pursuant to Sections 6(a), 6(b), or 6(c) above, or (ii)
upon exercise of the Warrants), at a price per share (determined, in
the case of such rights, options, warrants, or convertible or
exchangeable securities, by dividing (x) the total amount received or
receivable by the Company in consideration of the sale and issuance of
such rights, options, warrants, or convertible or exchangeable
securities, plus the minimum aggregate consideration payable to the
Company upon exercise, conversion, or exchange thereof, by (y) the
maximum number of shares covered by such rights, options, warrants, or
convertible or exchangeable securities) lower than the Current Market
Price per share of Common Stock in effect immediately prior to such
issuance, then the Exercise Price shall be reduced on the date of such
issuance to a price (calculated to the nearest cent) determined by
multiplying the Exercise Price in effect immediately prior to such
issuance by a fraction, (iii) the numerator of which shall be an amount
equal to the sum of (A) the number of shares of Common Stock
outstanding immediately prior to such issuance plus (B) the quotient
obtained by dividing the consideration received by the Company upon
such issuance by such Current Market Price, and (iv) the denominator of
which shall be the total number of shares of Common Stock outstanding
immediately after such issuance. For the purposes of such adjustments,
the maximum number of shares which the holders of any such rights,
options, warrants, or convertible or exchangeable securities, shall be
entitled to initially subscribe for or purchase or convert or exchange
such securities into shall be deemed to be issued and outstanding as of
the date of such issuance, and the consideration received by the
Company therefor shall be deemed to be the consideration received by
the Company for such rights, options, warrants, or convertible or
exchangeable securities, plus the minimum aggregate consideration or
premiums stated in such rights, options, warrants, or convertible or
exchangeable securities, to be paid for the shares covered thereby. No
further adjustment of the Exercise Price shall be made as a result of
the actual issuance of shares of Common Stock on exercise of such
rights, options, or warrants, or on conversion or exchange of such
convertible or exchangeable securities. On the expiration or the
termination of such rights, options, or warrants, or the termination of
such right to convert or exchange, the Exercise Price shall forthwith
be readjusted (but only with respect to Warrants exercised or converted
after such expiration or termination) to such Exercise Price as would
have obtained had the adjustments made upon the issuance of such
rights, options, warrants, or convertible or exchangeable securities,
been made upon the basis of the delivery of only the number of shares
of Common Stock actually delivered upon the exercise of such rights,
options, or warrants, or upon the conversion or exchange of any such
securities; and on any change of the number of shares of Common Stock
deliverable upon the exercise of any such rights, options, or warrants
or conversion, or exchange of such convertible or exchangeable
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securities, or any change in the consideration to be received by the
Company upon such exercise, conversion, or exchange, including, but not
limited to, a change resulting from the anti-dilution provisions
thereof, the Exercise Price, as then in effect, shall forthwith be
readjusted (but only with respect to Warrants exercised or converted
after such change) to such Exercise Price as would have been obtained
had an adjustment been made upon the issuance of such rights, options,
or warrants not exercised prior to such change, or securities not
converted or exchanged prior to such change, on the basis of such
change. In case the Company shall issue shares of Common Stock or any
such rights, options, warrants, or convertible or exchangeable
securities, for a consideration consisting, in whole or in part, of
property other than cash or its equivalent, then the "price per share"
and the "consideration received by the Company" for purposes of the
first sentence of this Section 6(d) shall be as determined in good
faith by the board of directors of the Company, whose determination
shall be conclusive absent manifest error. Shares of Common Stock owned
by or held for the account of the Company or any majority-owned
subsidiary shall not be deemed outstanding for the purpose of any such
computation.
(e) For the purpose of any computation under this Section 6,
the Current Market Price per share of Common Stock on any date shall be
deemed to be the average of the daily closing prices for the 30
consecutive trading days immediately preceding the date in question.
The closing price for each day shall be the last reported sales price
regular way or, in case no such reported sale takes place on such day,
the closing bid price regular way, in either case on the principal
national securities exchange (including, for purposes hereof, the
NASDAQ National Market System) on which the Common Stock is listed or
admitted to trading or, if the Common Stock is not listed or admitted
to trading on any national securities exchange, the highest reported
bid price for the Common Stock as furnished by the National Association
of Securities Dealers, Inc. through NASDAQ or a similar organization if
NASDAQ is no longer reporting such information. If on any such date the
Common Stock is not listed or admitted to trading on any national
securities exchange and is not quoted by NASDAQ or any similar
organization, the fair value of a share of Common Stock on such date,
as determined in good faith by the board of directors of the Company,
whose determination shall be conclusive absent manifest error, shall be
used.
(f) No adjustment in the Exercise Price shall be required if
such adjustment is less than $.05; provided, however, that any
adjustments which by reason of this Section 6 are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 6 shall be made to the
nearest cent or to the nearest one-thousandth of a share, as the case
may be.
(g) In any case in which this Section 6 shall require that an
adjustment in the Exercise Price be made effective as of a record date
for a specified event, the Company may elect to defer, until the
occurrence of such event, issuing to the Holder, if the Holder
exercised or converted this Warrant after such record date, the shares
of Common Stock, if any, issuable upon such exercise or conversion over
and above the shares of Common Stock, if any, issuable upon such
exercise or conversion
<PAGE> 7
on the basis of the Exercise Price in effect prior to such adjustment;
provided, however, that the Company shall deliver to the Holder a due
bill or other appropriate instrument evidencing the Holder's right to
receive such additional shares upon the occurrence of the event
requiring such adjustment.
(h) Upon each adjustment of the Exercise Price as a result of
the calculations made in Sections 6(b), 6(c), or 6(d) hereof, this
Warrant shall thereafter evidence the right to purchase, at the
adjusted Exercise Price, that number of shares (calculated to the
nearest thousandth) obtained by dividing (i) the product obtained by
multiplying the number of shares purchasable upon exercise of this
Warrant prior to adjustment of the number of shares by the Exercise
Price in effect prior to adjustment of the Exercise Price, by (ii) the
Exercise Price in effect after such adjustment of the Exercise Price.
(i) Whenever there shall be an adjustment as provided in this
Section 6, the Company shall promptly cause written notice thereof to
be sent by registered mail, postage prepaid, to the Holder, at its
address as it shall appear in the Warrant Register, which notice shall
be accompanied by an officer's certificate setting forth the number of
Warrant Shares purchasable upon the exercise of this Warrant and the
Exercise Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment and the computation
thereof, which officer's certificate shall be conclusive evidence of
the correctness of any such adjustment absent manifest error.
(j) The Company shall not be required to issue fractions of
shares of Common Stock or other capital stock of the Company upon the
exercise or conversion of this Warrant. If any fraction of a share
would be issuable on the exercise or conversion of this Warrant (or
specified portions thereof), the Company shall purchase such fraction
for an amount in cash equal to the same fraction of the Current Market
Price of such share of Common Stock on the date of exercise or
conversion of this Warrant.
7. (a) In case of any consolidation with or merger of the
Company with or into another corporation (other than a merger or
consolidation in which the Company is the surviving or continuing
corporation), or in case of any sale, lease, or conveyance to another
corporation of the property and assets of any nature of the Company as
an entirety or substantially as an entirety, such successor, leasing,
or purchasing corporation, as the case may be, shall (i) execute with
the Holder an agreement providing that the Holder shall have the right
thereafter to receive upon exercise or conversion of this Warrant
solely the kind and amount of shares of stock and other securities,
property, cash, or any combination thereof receivable upon such
consolidation, merger, sale, lease, or conveyance by a holder of the
number of shares of Common Stock for which this Warrant might have been
exercised or converted immediately prior to such consolidation, merger,
sale, lease, or conveyance, and (ii) make effective provision in its
certificate of incorporation or otherwise, if necessary, to effect such
agreement. Such agreement shall provide for adjustments which shall be
as nearly equivalent as practicable to the adjustments in Section 6.
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(b) In case of any reclassification or change of the shares of
Common Stock issuable upon exercise or conversion of this Warrant
(other than a change in par value or from no par value to a specified
par value, or as a result of a subdivision or combination, but
including any change in the shares into two or more classes or series
of shares), or in case of any consolidation or merger of another
corporation into the Company in which the Company is the continuing
corporation and in which there is a reclassification or change
(including a change to the right to receive cash or other property) of
the shares of Common Stock (other than a change in par value, or from
no par value to a specified par value, or as a result of a subdivision
or combination, but including any change in the shares into two or more
classes or series of shares), the Holder shall have the right
thereafter to receive upon exercise or conversion of this Warrant
solely the kind and amount of shares of stock and other securities,
property, cash, or any combination thereof receivable upon such
reclassification, change, consolidation, or merger by a holder of the
number of shares of Common Stock for which this Warrant might have been
exercised or converted immediately prior to such reclassification,
change, consolidation, or merger. Thereafter, appropriate provision
shall be made for adjustments which shall be as nearly equivalent as
practicable to the adjustments in Section 6.
(c) The above provisions of this Section 7 shall similarly
apply to successive reclassifications and changes of shares of Common
Stock and to successive consolidations, mergers, sales, leases, or
conveyances.
8. In case at any time the Company shall propose
(a) to pay any dividend or make any distribution on shares of
Common Stock in shares of Common Stock or make any other distribution
(other than regularly scheduled cash dividends which are not in a
greater amount per share than the most recent such cash dividend) to
all holders of Common Stock; or
(b) to issue any rights, warrants, or other securities to all
holders of Common Stock entitling them to purchase any additional
shares of Common Stock or any other rights, warrants, or other
securities; or
(c) to effect any reclassification or change of outstanding
shares of Common Stock, or any consolidation, merger, sale, lease, or
conveyance of property, described in Section 7; or
(d) to effect any liquidation, dissolution, or winding-up of
the Company; or
(e) to take any other action which would cause an adjustment
to the Exercise Price;
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then, and in any one or more of such cases, the Company shall give written
notice thereof, by registered mail, postage prepaid, to the Holder at the
Holder's address as it shall appear in the Warrant Register, mailed at least 15
days prior to (i) the date as of which the holders of record of shares of Common
Stock to be entitled to receive any such dividend, distribution, rights,
warrants, or other securities are to be determined, (ii) the date on which any
such reclassification, change of outstanding shares of Common Stock,
consolidation, merger, sale, lease, conveyance of property, liquidation,
dissolution, or winding-up is expected to become effective, and the date as of
which it is expected that holders of record of shares of Common Stock shall be
entitled to exchange their shares for securities or other property, if any,
deliverable upon such reclassification, change of outstanding shares,
consolidation, merger, sale, lease, conveyance of property, liquidation,
dissolution, or winding-up, or (iii) the date of such action which would require
an adjustment to the Exercise Price.
9. The issuance of any shares or other securities upon the exercise or
conversion of this Warrant, and the delivery of certificates or other
instruments representing such shares or other securities, shall be made without
charge to the Holder for any tax or other charge in respect of such issuance.
The Company shall not, however, be required to pay any tax which may be payable
in respect of any transfer involved in the issue and delivery of any certificate
in a name other than that of the Holder and the Company shall not be required to
issue or deliver any such certificate unless and until the person or persons
requesting the issue thereof shall have paid to the Company the amount of such
tax or shall have established to the satisfaction of the Company that such tax
has been paid.
10. (a) If, at any time prior to April 17, 2001, the Company
shall file a registration statement (other than on Form S-4, Form S-8,
or any successor form) with the Securities and Exchange Commission (the
"Commission") while any Warrant or Warrant Shares are outstanding, the
Company shall give the Holder at least 45 days prior written notice of
the filing of such registration statement. If requested by the Holder
in writing within 30 days after receipt of any such notice, the Company
shall, at the Company's sole expense (other than the fees and
disbursements of counsel for the Holder and the underwriting discounts,
if any, payable in respect of the Warrant or Warrant Shares sold by the
Holder), register or qualify all or, at the Holders' option, any
portion of the Warrant or Warrant Shares of the Holder concurrently
with the registration of such other securities, all to the extent
requisite to permit the public offering and sale of the Warrant or
Warrant Shares through the facilities of all appropriate securities
exchanges and the over-the-counter market, and will use its best
efforts through its officers, directors, auditors, and counsel to cause
such registration statement to become effective as promptly as
practicable. Notwithstanding the foregoing, if the managing underwriter
of any such offering shall advise the Company in writing that, in its
opinion, the distribution of all or a portion of the Warrant or Warrant
Shares requested to be included in the registration concurrently with
the securities being registered by the Company would materially
adversely affect the distribution of such securities by the Company for
its own account, then the Holder shall delay the offering and sale of
Warrant or Warrant Shares (or the portions thereof so designated by
such managing underwriter) for such period, not to exceed 90 days (the
"Delay Period"), as the managing underwriter shall request, provided
that no such delay shall be required as
<PAGE> 10
to any Warrant or Warrant Shares if any securities of the Company are
included in such registration statement and eligible for sale during
the Delay Period for the account of any person other than the Company
and the Holder unless the securities included in such registration
statement and eligible for sale during the Delay Period for such other
person shall have been reduced pro rata to the reduction of the Warrant
or Warrant Shares which were requested to be included and eligible for
sale during the Delay Period in such registration. As used herein,
"Warrant or Warrant Shares" shall mean the Warrants and the Warrant
Shares and the Conversion Shares which, in each case, have not been
previously sold pursuant to a registration statement or Rule 144
promulgated under the Act.
(b) If, at any time prior to April 17, 2001, the Company shall
receive a written request, from the Holder to register the sale of all
or a portion of the Warrant or Warrant Shares, the Company shall, as
promptly as practicable, prepare and file with the Commission a
registration statement sufficient to permit the public offering and
sale of the Warrant or Warrant Shares through the facilities of all
appropriate securities exchanges and the over-the-counter market, and
will use its best efforts through its officers, directors, auditors,
and counsel to cause such registration statement to become effective as
promptly as practicable; provided, however, that the Company shall only
be obligated to file one such registration statement for which all
expenses incurred in connection with such registration (other than the
fees and disbursements of counsel for the Holder and underwriting
discounts, if any, payable in respect of the Warrant or Warrant Shares
sold by the Holder) shall be borne by the Company and one additional
such registration statement for which all such expenses shall be paid
by the Holder. Within three business days after receiving any request
contemplated by this Section 10(b), the Company shall give written
notice to the Holder, advising each of them that the Company is
proceeding with such registration.
(c) In the event of a registration pursuant to the provisions
of this Section 10, the Company shall use its best efforts to cause the
Warrant or Warrant Shares so registered to be registered or qualified
for sale under the securities or blue sky laws of such jurisdictions as
the Holder may reasonably request; provided, however, that the Company
shall not be required to qualify to do business in any state by reason
of this Section 10(c) in which it is not otherwise required to qualify
to do business.
(d) The Company shall keep effective any registration or
qualification contemplated by this Section 10 and shall from time to
time amend or supplement each applicable registration statement,
preliminary prospectus, final prospectus, application, document, and
communication for such period of time as shall be required to permit
the Holder to complete the offer and sale of the Warrant or Warrant
Shares covered thereby. The Company shall in no event be required to
keep any such registration or qualification in effect for a period in
excess of nine months from the date on which the Holder is first free
to sell such Warrant or Warrant Shares; provided, however, that, if the
Company is required to keep any such registration or qualification in
effect with respect to securities other than the Warrant or Warrant
Shares beyond such period, the Company shall keep such registration or
qualification in
<PAGE> 11
effect as it relates to the Warrant or Warrant Shares for so long as
such registration or qualification remains or is required to remain in
effect in respect of such other securities.
(e) In the event of a registration pursuant to the provisions
of this Section 10, the Company shall furnish to the Holder such number
of copies of the registration statement and of each amendment and
supplement thereto (in each case, including all exhibits), such
reasonable number of copies of each prospectus contained in such
registration statement and each supplement or amendment thereto
(including each preliminary prospectus), all of which shall conform to
the requirements of the Act and the rules and regulations thereunder,
and such other documents, as the Holder may reasonably request to
facilitate the disposition of the Warrant or Warrant Shares included in
such registration.
(f) In the event of a registration pursuant to the provisions
of this Section 10, the Company shall furnish the Holder so registered
with an opinion of its counsel (reasonably acceptable to the Holder) to
the effect that (i) the registration statement has become effective
under the Act and no order suspending the effectiveness of the
registration statement, preventing or suspending the use of the
registration statement, any preliminary prospectus, any final
prospectus, or any amendment or supplement thereto has been issued, nor
has the Commission or any securities or blue sky authority of any
jurisdiction instituted or threatened to institute any proceedings with
respect to such an order, (ii) the registration statement and each
prospectus forming a part thereof (including each preliminary
prospectus), and any amendment or supplement thereto, complies as to
form with the Act and the rules and regulations thereunder, and (iii)
such counsel has no knowledge of any material misstatement or omission
in such registration statement or any prospectus, as amended or
supplemented. Such opinion shall also state the jurisdictions in which
the Warrant or Warrant Shares have been registered or qualified for
sale pursuant to the provisions of Section 10(c).
(g) In the event of a registration pursuant to the provision
of this Section 10, the Company shall enter into a cross-indemnity
agreement and a contribution agreement, each in customary form, with
each underwriter, if any, and, if requested, enter into an underwriting
agreement containing conventional representations, warranties,
allocation of expenses, and customary closing conditions, including,
but not limited to, opinions of counsel and accountants' cold comfort
letters, with any underwriter who acquires any Warrant or Warrant
Shares.
(h) The Company agrees that until all the Warrant or Warrant
Shares have been sold under a registration statement or pursuant to
Rule 144 under the Act, it shall keep current in filing all reports,
statements and other materials required to be filed with the Commission
to permit the Holder to sell the Warrant or Warrant Shares under Rule
144.
(i) Except for rights granted hereof, the Company will not,
without the written consent of the Holder, grant to any persons the
right to request the Company
<PAGE> 12
to register any securities of the Company, provided that the Company
may grant such registration rights to other persons so long as such
rights are subordinate to the rights of the Holder.
11. (a) Subject to the conditions set forth below, the Company
agrees to indemnify and hold harmless the Holder, its officers,
directors, partners, employees, agents, and counsel, and each person,
if any, who controls any such person within the meaning of Section 15
of the Act or Section 20(a) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), from and against any and all loss,
liability, charge, claim, damage, and expense whatsoever (which shall
include, for all purposes of this Section 11, but not be limited to,
attorneys' fees and any and all reasonable expense whatsoever incurred
in investigating, preparing, or defending against any litigation,
commenced or threatened, or any claim whatsoever, and any and all
amounts paid in settlement of any claim or litigation), as and when
incurred, arising out of, based upon, or in connection with (i) any
untrue statement or alleged untrue statement of a material fact
contained (A) in any registration statement, preliminary prospectus, or
final prospectus (as from time to time amended and supplemented), or
any amendment or supplement thereto, relating to the sale of any of the
Warrant or Warrant Shares, or (B) in any application or other document
or communication (in this Section 11 collectively called an
"application") executed by or on behalf of the Company or based upon
written information furnished by or on behalf of the Company filed in
any jurisdiction in order to register or qualify any of the Warrant or
Warrant Shares under the securities or blue sky laws thereof or filed
with the Commission or any securities exchange; or any omission or
alleged omission to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, unless such
statement or omission was made in reliance upon and in conformity with
written information furnished to the Company with respect to the Holder
by or on behalf of the Holder expressly for inclusion in any
registration statement, preliminary prospectus, or final prospectus, or
any amendment or supplement thereto, or in any application, as the case
may be, or (ii) any breach of any representation, warranty, covenant,
or agreement of the Company contained in this Warrant. The foregoing
agreement to indemnify shall be in addition to any liability the
Company may otherwise have, including liabilities arising under this
Warrant.
If any action is brought against the Holder or any of its
officers, directors, partners, employees, agents, or counsel, or any
controlling persons of such person (an "indemnified party") in respect
of which indemnity may be sought against the Company pursuant to the
foregoing paragraph, such indemnified party or parties shall promptly
notify the Company in writing of the institution of such action (but
the failure so to notify shall not relieve the Company from any
liability pursuant to this Section 11(a) and the Company shall promptly
assume the defense of such action, including the employment of counsel
(reasonably satisfactory to such indemnified party or parties) and
payment of expenses. Such indemnified party or parties shall have the
right to employ its or their own counsel in any such case, but the fees
and expenses of such counsel shall be at the expense of such
indemnified party or parties unless the employment of such counsel
shall have been authorized in writing by the Company in
<PAGE> 13
connection with the defense of such action or the Company shall not
have promptly employed counsel reasonably satisfactory to such
indemnified party or parties to have charge of the defense of such
action or such indemnified party or parties shall have reasonably
concluded that there may be one or more legal defenses available to it
or them or to other indemnified parties which are different from or
additional to those available to the Company, in any of which events
such fees and expenses shall be borne by the Company and the Company
shall not have the right to direct the defense of such action on behalf
of the indemnified party or parties. Anything in this Section 11 to the
contrary notwithstanding, the Company shall not be liable for any
settlement of any such claim or action effected without its written
consent, which shall not be unreasonably withheld. The Company shall
not, without the prior written consent of each indemnified party that
is not released as described in this sentence, settle or compromise any
action, or permit a default or consent to the entry of judgment in or
otherwise seek to terminate any pending or threatened action, in
respect of which indemnity may be sought hereunder (whether or not any
indemnified party is a party thereto), unless such settlement,
compromise, consent, or termination includes an unconditional release
of each indemnified party from all liability in respect of such action.
The Company agrees promptly to notify the Holder of the commencement of
any litigation or proceedings against the Company or any of its
officers or directors in connection with the sale of any Warrant or
Warrant Shares or any preliminary prospectus, prospectus, registration
statement, or amendment or supplement thereto, or any application
relating to any sale of any Warrant or Warrant Shares.
(b) The Holder agrees to indemnify and hold harmless the
Company, each director of the Company, each officer of the Company who
shall have signed any registration statement covering Warrant or
Warrant Shares held by the Holder, each other person, if any, who
controls the Company within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act, and its or their respective counsel,
to the same extent as the foregoing indemnity from the Company to the
Holder in Section 11(a), but only with respect to statements or
omissions, if any, made in any registration statement, preliminary
prospectus, or final prospectus (as from time to time amended and
supplemented), or any amendment or supplement thereto, or in any
application, in reliance upon and in conformity with written
information furnished to the Company with respect to the Holder by or
on behalf of the Holder expressly for inclusion in any such
registration statement, preliminary prospectus, or final prospectus, or
any amendment or supplement thereto, or in any application, as the case
may be. If any action shall be brought against the Company or any other
person so indemnified based on any such registration statement,
preliminary prospectus, or final prospectus, or any amendment or
supplement thereto, or in any application, and in respect of which
indemnity may be sought against the Holder pursuant to this Section
11(b), the Holder shall have the rights and duties given to the
Company, and the Company and each other person so indemnified shall
have the rights and duties given to the indemnified parties, by the
provisions of Section 11(a).
(c) To provide for just and equitable contribution, if (i) an
indemnified party makes a claim for indemnification pursuant to Section
11(a) or 11(b)
<PAGE> 14
(subject to the limitations thereof) but it is found in a final
judicial determination, not subject to further appeal, that such
indemnification may not be enforced in such case, even though this
Agreement expressly provides for indemnification in such case, or (ii)
any indemnified or indemnifying party seeks contribution under the Act,
the Exchange Act or otherwise, then the Company (including for this
purpose any contribution made by or on behalf of any director of the
Company, any officer of the Company who signed any such registration
statement, any controlling person of the Company, and its or their
respective counsel), as one entity, and the Holder (including for this
purpose any contribution by or on behalf of an indemnified party), as a
second entity, shall contribute to the losses, liabilities, claims,
damages, and expenses whatsoever to which any of them may be subject,
on the basis of relevant equitable considerations such as the relative
fault of the Company and such Holder in connection with the facts which
resulted in such losses, liabilities, claims, damages, and expenses.
The relative fault, in the case of an untrue statement, alleged untrue
statement, omission, or alleged omission, shall be determined by, among
other things, whether such statement, alleged statement, omission, or
alleged omission relates to information supplied by the Company or by
such Holder, and the parties' relative intent, knowledge, access to
information, and opportunity to correct or prevent such statement,
alleged statement, omission, or alleged omission. The Company and the
Holder agree that it would be unjust and inequitable if the respective
obligations of the Company and the Holder for contribution were
determined by pro rata or per capita allocation of the aggregate
losses, liabilities, claims, damages, and expenses (even if the Holder
and the other indemnified parties were treated as one entity for such
purpose) or by any other method of allocation that does not reflect the
equitable considerations referred to in this Section 11(c). In no case
shall the Holder be responsible for a portion of the contribution
obligation imposed on it in excess of its pro rata share based on the
number of shares of Common Stock owned (or which would be owned upon
exercise of all Warrant or Warrant Shares) by it and included in such
registration as compared to the total number of shares of Common Stock
included in such registration. No person guilty of a fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who is not guilty of
such fraudulent misrepresentation. For purposes of this Section 11(c),
each person, if any, who controls the Holder within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act and each
officer, director, partner, employee, agent, and counsel of each such
Holder or control person shall have the same rights to contribution as
such Holder or control person and each person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20(a) of
the Exchange Act, each officer of the Company who shall have signed any
such registration statement, each director of the Company, and its or
their respective counsel shall have the same rights to contribution as
the Company, subject in each case to the provisions of this Section
11(c). Anything in this Section 11(c) to the contrary notwithstanding,
no party shall be liable for contribution with respect to the
settlement of any claim or action effected without its written consent.
This Section 11(c) is intended to supersede any right to contribution
under the Act, the Exchange Act or otherwise.
<PAGE> 15
12. Unless registered pursuant to the provisions of Section 10 hereof,
the Warrant Shares or Conversion Shares issued upon exercise or conversion of
the Warrants shall be subject to a stop transfer order and the certificate or
certificates evidencing such Warrant Shares shall bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THESE SHARES MAY NOT BE
OFFERED OR SOLD IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
FROM REGISTRATION UNDER SUCH ACT."
13. Upon receipt of evidence satisfactory to the Company of the loss,
theft, destruction, or mutilation of this Warrant (and upon surrender of this
Warrant if mutilated), and upon reimbursement of the Company's reasonable
incidental expenses, the Company shall execute and deliver to the Holder thereof
a new Warrant of like date, tenor, and denomination.
14. The Holder shall not have, solely on account of such status, any
rights of a stockholder of the Company, either at law or in equity, or to any
notice of meetings of stockholders or of any other proceedings of the Company,
except as provided in this Warrant.
15. This Warrant shall be construed in accordance with the laws of the
State of New York applicable to contracts made and performed within such State,
without regard to principles of conflicts of law.
16. The Company irrevocably consents to the jurisdiction of the courts
of the State of New York and of any federal court located in such State in
connection with any action or proceeding arising out of or relating to this
Warrant, any document or instrument delivered pursuant to, in connection with or
simultaneously with this Warrant, or a breach of this Warrant or any such
document or instrument. In any such action or proceeding, the Company waives
personal service of any summons, complaint or other process and agrees that
service thereof may be made in accordance with Section 12 of the Underwriting
Agreement. Within 30 days after such service, or such other time as may be
mutually agreed upon in writing by the attorneys for the parties to such action
or proceeding, the Company shall appear to answer such summons, complaint or
other process. Should the Company so served fail to appear or answer within such
30-day period or such extended period, as the case may be, the Company shall be
deemed in default and judgment may be entered against the Company for the amount
as demanded in any summons, complaint or other process so served.
Dated: April 17, 2000 Starbase
By:
----------------------------------------
Douglas S. Norman
Assistant Secretary
[Seal]
<PAGE> 16
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer the
attached Warrant.)
FOR VALUE RECEIVED, _______________________ hereby sells, assigns, and
transfers unto ______________ a Warrant to purchase __________ shares of Common
Stock, par value $[.01] per share, of [Company] (the "Company"), together with
all right, title, and interest therein, and does hereby irrevocably constitute
and appoint ________________ attorney to transfer such Warrant on the books of
the Company, with full power of substitution.
Dated:
--------------------------
By:
----------------------------------------
Signature
The signature on the foregoing Assignment must correspond to the name
as written upon the face of this Warrant in every particular, without alteration
or enlargement or any change whatsoever.
<PAGE> 17
To: Starbase
ELECTION TO EXERCISE
The undersigned hereby exercises his or its rights to purchase _______
Warrant Shares covered by the within Warrant and tenders payment herewith in the
amount of $_________ in accordance with the terms thereof, and requests that
certificates for such securities be issued in the name of, and delivered to:
_____________________________________
_____________________________________
_____________________________________
(Print Name, Address and Social Security
or Tax Identification Number)
and, if such number of Warrant Shares shall not be all the Warrant Shares
covered by the within Warrant, that a new Warrant for the balance of the Warrant
Shares covered by the within Warrant be registered in the name of, and delivered
to, the undersigned at the address stated below.
Dated:
--------------------------
By:
----------------------------------------
Print Name
---------------------------------------------
Signature
Address:
_____________________________________
_____________________________________
_____________________________________
<PAGE> 18
To: Starbase
CASHLESS EXERCISE FORM
(To be executed upon conversion of the attached Warrant)
The undersigned hereby irrevocably elects to surrender its Warrant for
the number of shares of Common Stock as shall be issuable pursuant to the
cashless exercise provisions of the within Warrant, in respect of __________
shares of Common Stock underlying the within Warrant, and requests that
certificates for such securities be issued in the name of and delivered to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print Name, Address and Social Security
or Tax Identification Number)
and, if such number of shares shall not be all the shares exchangeable or
purchasable under the within Warrant, that a new Warrant for the balance of the
Warrant Shares covered by the within Warrant be registered in the name of, and
delivered to, the undersigned at the addressed stated below.
Dated: _________________________ Name _____________________________
(Print)
Address: _____________________________________________________________
__________________________________
(Signature)
