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Warrant to Purchase Common Stock

 

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Title:

Warrant to Purchase Common Stock

Entities:

Hewlett-Packard Co.; Novadigm Inc.; Katten Muchin Zavis Rosenman; Skadden, Arps, Slate, Meagher & Flom LLP

Date:

2000

Size:

Preview shows 6KB of 36KB total

Price:

$33

ID:

#233986

 

 

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NEITHER THIS WARRANT NOR ANY SHARES OF COMMON STOCK ISSUABLE UPON THE

EXERCISE OF THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"). SUCH SECURITIES HAVE BEEN ACQUIRED
FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR
ASSIGNED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT, UNLESS THE HOLDER HEREOF SHALL HAVE
DELIVERED TO THE ISSUER A WRITTEN OPINION OF COUNSEL, IN FORM, SUBSTANCE
AND SCOPE REASONABLY ACCEPTABLE TO THE ISSUER, TO THE EFFECT THAT SUCH
SECURITIES ARE BEING OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT;
PROVIDED, HOWEVER, THAT SUCH OPINION OF COUNSEL WILL NOT BE REQUIRED BY THE
COMPANY FOR ANY DISPOSITIONS MADE BY THE HOLDER (1) TO ANY OF ITS
AFFILIATES (AS SUCH TERM IS DEFINED IN RULE 405 PROMULGATED UNDER THE
SECURITIES ACT) OR (2) PURSUANT TO RULE 144 PROMULGATED UNDER THE
SECURITIES ACT, PROVIDED THAT PRIOR TO SUCH DISPOSITION THE COMPANY
RECEIVES FROM THE HOLDER AND THE RELEVANT BROKER, IF APPLICABLE, SUCH
CERTIFICATIONS AS ARE NECESSARY FOR THE COMPANY TO CONFIRM THAT SUCH
DISPOSITION IS EXEMPT FROM REGISTRATION PURSUANT TO RULE 144 OR OTHERWISE,
AS THE CASE MAY BE. FURTHERMORE, THIS WARRANT MAY ONLY BE SOLD, TRANSFERRED
OR ASSIGNED TO AN AFFILIATE OF HEWLETT-PACKARD COMPANY.


NOVADIGM, INC.

WARRANT TO PURCHASE COMMON STOCK

Warrant Number: 1

Number of Shares: 250,000 Shares of Common Stock
(subject to adjustment as provided herein)

Original Date of Issuance: June 30, 2000

FOR VALUE RECEIVED, Hewlett-Packard Company, the registered holder hereof
or its permitted assigns ("HOLDER"), is entitled, subject to the terms set
forth below, to purchase from Novadigm, Inc., a Delaware corporation (the
"COMPANY"), upon surrender of this Warrant, at any time or times on or
after the date hereof, but not after 5:00 P.M., Pacific Time, on the date
three years from the commencement of the Milestone Period (as hereinafter
defined) (the "EXPIRATION DATE") Two Hundred Fifty Thousand (250,000) fully
paid and nonassessable shares of common stock, $0.001 par value per share
(the "COMMON STOCK"), of the Company (the "WARRANT SHARES") at the exercise
price per Warrant Share equal to $20.875, subject to adjustment as set
forth herein (the "EXERCISE Price"). This Warrant is issued pursuant to the
terms of the Alliance Agreement (the "ALLIANCE AGREEMENT"), dated as of
June 30, 2000, between the Company and Hewlett-Packard Company ("HP").

Section 1. Exercise Price.

(a) If, during the Milestone Period (as hereinafter
defined), the Company receives an aggregate of $15,000,000 (the "LICENSE
REVENUES MILESTONE") in license revenues (which revenues shall not include
any revenues from fees charged by the Company for installation,
maintenance, support or other services or training of, or with respect to,
the licensed products) as a result of the reference-selling by HP of
licenses to use the Company's products pursuant to Section 5.6 of the
Alliance Agreement (which reference-selling is documented pursuant to
Section 6.3(c) of the Alliance Agreement), then the Exercise Price shall be
reduced to $0; provided, however, that license revenues received by the
Company from existing customers of HP referred directly to the Company by
HP (and not through reference-selling by HP pursuant to Section 5.6 of the
Alliance Agreement) during the period from the date hereof to the date on
which Milestone Period begins, shall be credited to the License Revenues
Milestone. For purposes hereof, the "MILESTONE PERIOD" means the period
beginning on the date as of which the Company has employed two (2) of the
five (5) pairs of sales representatives and technical consultants it is
required to employ pursuant to Section 3.2 of the Alliance Agreement and
ending twelve (12) months thereafter. The Company shall promptly notify HP
in writing of the commencement of the Milestone Period.

(b) Within thirty (30) days of the end of the Milestone
Period, the Company shall deliver to HP written notice of whether the
License Revenues Milestone has been met. In the event that the Company
determines that the License Revenues Milestone has not been met and HP
disagrees with such determination, HP shall deliver written notice to the
Company, within thirty (30) days of the date of the Company's notice, that
it intends to conduct an audit of the records maintained by the Company
pursuant to Section 5.2(d) of the Alliance Agreement. Thereafter, HP shall
select an independent certified public accounting firm (the "HP ACCOUNTING
Firm"), and the Company shall allow the HP Accounting Firm, at HP's sole
expense, to inspect such records and make a determination, within thirty
(30) days of the date of HP's notice, of whether the License Revenues
Milestone has been met. In the event that the HP Accounting Firm determines
that the License Revenues Milestone has been met, the Company and HP shall
select a mutually agreeable independent public accounting firm (which
accounting firm shall not be the HP Accounting Firm or an accounting firm
which conducts audits of the financial statements of the Company or HP)
(the "INDEPENDENT ACCOUNTING FIRM"), and the Company shall allow the
Independent Accounting Firm, with the expenses thereof shared equally by

 

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