EXHIBIT 10.9
THIS WARRANT HAS BEEN ACQUIRED FOR INVESTMENT AND HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933. THIS WARRANT (AND ANY SECURITIES ISSUABLE UPON
EXERCISE HEREOF) MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION THEREFROM. NO TRANSFER OF THIS WARRANT OR SUCH
SECURITIES SHALL BE VALID OR EFFECTIVE UNTIL SUCH CONDITIONS HAVE BEEN
FULFILLED.
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NEOPOINT, INC.
STOCK SUBSCRIPTION WARRANT
June 4, 1999
THIS CERTIFIES that SPRINT SPECTRUM L.P., a Delaware limited
partnership (the "Investor"), or its registered assigns, is entitled to
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subscribe for and purchase from NEOPOINT, INC., a California corporation (the
"Corporation"), 379,693 shares (the "Warrant Shares") of common stock of the
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Corporation (the "Common Stock"), at the price (the "Warrant Price") of $2.50
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per share, at any time or from time to time during the period commencing on the
date hereof and ending on the fifth anniversary of the date hereof (the
"Exercise Period"), on the terms and subject to the conditions hereof. The
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Investor and any registered assigns thereof are referred to as the "Holder." The
number of Warrant Shares and the Warrant Price are subject to adjustment, as
provided in herein.
This Warrant is issued pursuant to the CDMA PCS Subscriber Unit Supply
Agreement dated as of June 4, 1999 between Sprint Spectrum Equipment Company,
L.P., a Delaware limited partnership, and the Corporation.
Section 1. Exercise of Warrant.
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(a) The rights represented by this Warrant may be exercised (a
"Warrant Exercise") by the Holder, in whole or in part at any time during the
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Exercise Period, but not as to any fractional share of Common Stock, by the
surrender of this Warrant, accompanied by a properly completed and executed
Notice of Exercise in the form attached hereto and payment of the Warrant Price
at the offices of the Corporation set forth in Section 8. At the option of the
Holder, the Warrant Price shall be payable:
(i) in cash or by certified or official bank check payable to
the order of the Corporation; or
(ii) by delivery of this Warrant to the Corporation for
cancellation in accordance with the further provisions of this Section
1(a)(ii). In exchange for the portion of this Warrant that is being
exercised at such time, the Holder shall receive the number of shares of
Common Stock determined by multiplying (A) the number of shares of Common
Stock for which this Warrant is being exercised at such time by (B) a
fraction, (1) the numerator of which shall be the difference between (x)
current market price per share of Common Stock (as determined in good faith
by the Corporation's
Board of Directors after giving affect to any applicable illiquidity and/or
minority interest discounts) at such time and (y) the Warrant Price per
share of Common Stock, and (2) the denominator of which shall be the
current market price per share of Common Stock at such time (as determined
in good faith by the Corporation's Board of Directors after giving affect
to any applicable illiquidity and/or minority interest discounts). The
Corporation shall issue a new warrant for the portion, if any, of this
Warrant not being exercised as provided in Section 1(c).
(b) The closing of any Warrant Exercise shall take place at the
offices of the Corporation on the date specified in the Notice of Exercise (the
"Exercise Date"), which shall be within five days after the delivery of such
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Notice of Exercise. At such closing, (i) the Corporation shall issue and deliver
to the Holder or its designee a certificate or certificates for the Warrant
Shares to be issued upon such Warrant Exercise, registered in the name of the
Holder or such designee, and if such Warrant Exercise shall not have been for
all Warrant Shares, a new Warrant, registered in the name of the Holder, of like
tenor to this Warrant for the number of remaining Warrant Shares, and (ii) the
Holder shall deliver to the Corporation the aggregate Warrant Price.
(c) If this Warrant shall have been exercised only in part, the
Corporation shall, at the time of delivery of the certificate or certificates or
other evidence of ownership of the Common Stock, execute and deliver to the
Holder, without charge, a new warrant evidencing the rights of the Holder to
purchase the unpurchased Common Stock called for by this Warrant, which new
warrant shall in all other respects be identical to this Warrant.
Section 2. Record Date.
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The person in whose name any certificate for shares of Common Stock is
issued upon any Warrant Exercise or Warrant Exchange shall for all purposes be
deemed to have become the holder of record of such shares on the date on which
the Warrant was surrendered and payment of the Warrant Price and any applicable
tax was made, irrespective of the date of such certificate; provided, however,
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that if the date of such surrender and payment is a date when the stock transfer
books of the Corporation are closed, such person shall be deemed to have become
the holder of such shares at the close of business on the next succeeding date
on which the stock transfer books are open.
Section 3. Reservation of Common Stock; Covenants as to Common Stock.
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The Corporation has duly reserved, and shall at all times duly
reserve, a sufficient number of shares of authorized Common Stock for issuance
upon exercise or exchange of this Warrant. Upon issuance, sale and delivery of
any Warrant Shares, such Warrant Shares shall be validly issued and outstanding,
fully paid and nonassessable, and free from all taxes, liens and charges with
respect to the issuance thereof, and shall not be subject to preemptive or any
similar rights of any person or entity. Without limiting the generality of the
foregoing, the Corporation shall take all such action as may be necessary to
ensure that the stated or par value per share of Common Stock is at all times
equal to or less than the Warrant Price then in effect. The Corporation
covenants and agrees that if any shares of capital stock to be reserved for the
purpose of the issuance of shares of Common Stock upon the exercise of this
Warrant require registration with or approval of any governmental authority
under any
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Federal or state law before such shares may be validly issued or delivered upon
exercise, then the Corporation will in good faith and expeditiously as possible
endeavor to secure such registration or approval, as the case may be. If and so
long as the Common Stock issuable upon the exercise of this Warrant is listed on
any national securities exchange, the Corporation will, if permitted by the
rules of such exchange, list and keep listed on such exchange, upon official
notice of issuance, all shares of such capital stock.
Section 4. Adjustment of Warrant Price.
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(a) If, at any time during the Exercise Period, the number of
outstanding shares of Common Stock is (i) increased by a stock dividend payable
in shares of Common Stock or by a subdivision or split-up of shares of Common
Stock, or (ii) decreased by a combination of shares of Common Stock, then,
following the record date fixed for the determination of holders of Common Stock
entitled to receive the benefits of such stock dividend, subdivision, split-up,
or combination, as the case may be, the Warrant Price shall be adjusted to a new
amount equal to the product of (A) the Warrant Price in effect on such record
date and (B) the quotient obtained by dividing (x) the number of shares of
Common Stock outstanding on such record date (without giving effect to the event
referred to in the foregoing clause (i) or (ii)) by (y) the number of shares of
Common Stock which would be outstanding immediately after the event referred to
in the foregoing clause (i) or (ii), if such event had occurred immediately
following such record date.
(b) If, at any time during the Exercise Period, the Corporation shall
issue or be deemed to have issued (as provided below) shares of Common Stock or
any warrant or other securities exercisable for shares of Common Stock without
consideration or for a consideration per share less than the Warrant Price in
effect immediately prior to such issuance or deemed issuance, then such Warrant
Price shall be lowered, effective as of the date of such issuance, to a price
equal to the quotient obtained by dividing (i) an amount equal to the sum of (A)
the product of (x) the number of shares of Common Stock outstanding immediately
prior to such issuance or deemed issuance and (y) the then existing Warrant
Price, and (B) the total consideration received or deemed received by the
Corporation upon such issuance or deemed issuance, by (ii) the total number of
shares of Common Stock outstanding immediately after such issuance or deemed
issuance. For the purposes of any adjustment of the Warrant Price pursuant to
this paragraph, the following provisions shall be applicable:
(i) In the case of the issuance of Common Stock for cash, the
consideration shall be deemed to be the amount of cash paid therefor
without deducting therefrom any discounts, commissions or other expenses
allowed, paid or incurred by the Corporation for any underwriting or
otherwise in connection with such issuance.
(ii) In the case of the issuance of Common Stock for no
consideration, the consideration shall be deemed to be $.01 per share.
(iii) In the case of the issuance of Common Stock for a
consideration in whole or in part other than cash, the consideration other
than cash shall be deemed to be the fair market value thereof as determined
by the Board of Directors of the Corporation, irrespective of any
accounting treatment.
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(iv) In the case of the issuance of options to purchase or rights to
subscribe for Common Stock, securities by their terms convertible into or
exchangeable for Common Stock, or options to purchase or rights to subscribe for
such convertible or exchangeable securities:
(A) The shares of Common Stock deliverable upon exercise of such
options to purchase, or rights to subscribe for, Common Stock shall be
deemed to have been issued at the time such options or rights were issued
and for a consideration equal to the consideration (determined in the
manner provided in clauses (i) through (iii) above), if any, received by
the Corporation upon the issuance of such options or rights plus the
minimum purchase price provided in such options or rights for the Common
Stock covered thereby.
(B) The shares of Common Stock deliverable upon conversion of,
or in exchange for, any such convertible or exchangeable securities or upon
the exercise of options to purchase, or rights to subscribe for, such
convertible or exchangeable securities and subsequent conversions or
exchanges thereof shall be deemed to have been issued at the time such
securities were issued or such options or rights were issued and for a
consideration equal to the consideration received by the Corporation for
any such securities and related options or rights (excluding any cash
received on account of accrued interest or accrued dividends) plus the
additional consideration, if any, to be received by the Corporation upon
the conversion or exchange of such securities or the exercise of any
related options or rights (the consideration in each case to be determined
in the manner provided in clauses (i) through (iii) above).
(C) Upon any change in the exercise price or number of shares of
Common Stock deliverable upon exercise of any such options or rights of
conversion of, or exchange for, such convertible or exchangeable securities
(including any such change resulting from the termination of any such
options, rights, or securities), other than a change resulting from the
antidilution provisions thereof, the Warrant Price shall be readjusted to
such Warrant Price as would have obtained had the adjustment made upon the
issuance of such options, rights or securities not converted prior to such
change been made upon the basis of such change.
(D) No further adjustments of the Warrant Price shall be made
upon the actual issuance of such Common Stock or of such convertible or
exchangeable securities, upon exercise of such options or rights, or upon
the actual issuance of such Common Stock upon conversion or exchange of
such convertible or exchangeable securities.
(v) No adjustment shall be made to the Warrant Price for any issuance
of Common Stock to employees, officers, directors or consultants pursuant to the
Corporation's Board approved stock option plans.
(c) All calculations under this Section 4 shall be made to the nearest one
hundredths (1/100) of a cent.
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(d) Whenever the Warrant Price shall be adjusted as provided above, the
Corporation shall deliver to the Holder a statement, signed by its chief
financial officer, showing in detail the facts requiring such adjustment and the
Warrant Price that shall be in effect after such adjustment.
Section 5. Adjustment of Warrant Shares.
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(a) Upon each adjustment of the Warrant Price as provided in Section
4, the Holder shall thereafter be entitled to subscribe for and purchase, at the
Warrant Price resulting from such adjustment, the number of Warrant Shares equal
to the product of (i) the number of Warrant Shares existing prior to such
adjustment and (ii) the quotient obtained by dividing (A) the Warrant Price
existing prior to such adjustment by (B) the new Warrant Price resulting from
such adjustment. No fractional shares of Common Stock shall be issued upon
exercise of this Warrant. Instead of any fractional shares of Common Stock which
would otherwise be issuable upon exercise of this Warrant, the Holder may deduct
from the aggregate Warrant Price an amount equal to the product of (i) the fair
market value of one share of Common Stock as determined in good faith by the
Holder and (ii) such fractional interest.
(b) Following any recapitalization, reorganization, reclassification,
consolidation, merger or the conveyance of all or substantially all of the
assets of the Corporation pursuant to which the holders of Common Stock are
entitled to receive (either directly or upon subsequent liquidation) stock,
securities or assets with respect to or in exchange for Common Stock (each, an
"Organic Change") during the Exercise Period, this Warrant shall represent the
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right to subscribe for and purchase the kind and number of shares of capital
stock or other securities or property which the Holder would have owned or have
been entitled to receive with respect to each Warrant Share had this Warrant
been exercised immediately prior to such Organic Change. The foregoing provision
shall similarly apply to successive Organic Changes.
Section 6. Transfer, Division and Combination.
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(a) Subject to the restrictions on transfer set forth herein, this Warrant
and all rights hereunder are assignable and transferable, in whole or in part,
without the consent of the Corporation. Any transfer shall be effected by the
Holder in person or by duly authorized attorney by surrendering this Warrant,
properly endorsed, at the offices of the Corporation. Each taker and holder of
this Warrant, by taking or holding the same, consents and agrees that this
Warrant, when endorsed, in blank, shall be deemed negotiable, and, when so
endorsed, the holder hereof may be treated by the Corporation and all other
persons dealing with this Warrant as the absolute owner hereof for any purposes
and as the person entitled to exercise the rights represented by this Warrant,
or to the transfer hereof on the books of the Corporation, any notice to the
contrary notwithstanding; provided, however, that until such transfer is on such
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books, the Corporation may treat the registered holder hereof as the owner
hereof for all purposes. Notwithstanding anything contained herein to the
contrary for the first two (2) years from and after the date hereof (and only
for such two (2) year period) the Investor and any subsequent Holder may not
assign, transfer or sell this Warrant or the Warrant Shares issuable hereunder
to any party other than a person or entity controlled by or under common control
with the ultimate corporate parent of the Investor.
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(b) This Warrant may be exchanged for, or combined with, other
warrants upon presentation of this Warrant and any other warrants with which
this Warrant is to be combined to the Corporation, together with a written
notice specifying the denominations in which a new Warrant or Warrants are to be
issued, signed by the Holder. The Corporation shall execute and deliver a new
warrant or warrants to the Holder in exchange for the warrant or warrants to be
divided or combined in accordance with such notice.
Section 7. Right of First Refusal.
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(a) Notice of Transfer. In the event that the Holder proposes to
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sell, assign, pledge, encumber, transfer or otherwise dispose of ("Transfer")
the Warrant or any shares issued upon exercise of the Warrant (collectively, the
"Shares") during the third or fourth years from and after the date hereof to any
party other than a person or entity controlled by or under common control with
the ultimate corporate parent of the Holder, the Holder shall give the
Corporation written notice of its intention ("Transfer Notice"), describing the
offered Shares ("Offered Shares"), the identity of the prospective transferee,
the consideration and the material terms and conditions upon which the proposed
Transfer is to be made.
(b) Right of First Refusal. With respect to any proposed Transfer,
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the Corporation shall have an option to purchase all or none of the Offered
Shares (the "Right of First Refusal"). To exercise the Right of First Refusal,
the Corporation must notify the Holder in writing of its decision to exercise
such option before the expiration of the ten (10) business day period following
the delivery of the Transfer Notice to the Corporation. If the Corporation
elects to purchase the Offered Shares, it shall pay consideration for the
Offered Shares no less favorable in price and material terms and conditions than
are described in the Transfer Notice.
(c) Closing Procedures. If the Corporation exercises the Right to
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First Refusal, the Corporation and the Holder shall consummate the sale of the
Offered Shares on the terms set forth in the Transfer Notice by the date ten
(10) business days after the delivery of the Transfer Notice to the Corporation.
If the Corporation fails to exercise in full the Right of First Refusal on a
timely basis, then the Holder may, conclude the Transfer on the terms and
conditions described in the Transfer Notice.
(d) Termination of Right. The Right of First Refusal shall
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terminate at such time as public market exists for the Corporation's Common
Stock (or any other stock issued by the Corporation, or any successor, in
exchange for the Stock). For the purpose of this Agreement, a "public market"
shall be deemed to exist if (i) such stock is listed on a national securities
exchange (as that term is used in the Securities Exchange Act of 1934) or (ii)
such stock is traded on the over-the-counter market and prices therefore are
published daily on business days in a recognized financial journal.
(e) Legends. All certificates representing any Shares subject to
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the provisions of this Warrant shall have endorsed thereon the following
legends:
(i) "THE SHARES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO A RIGHT OF FIRST REFUSAL IN FAVOR OF THE CORPORATION OR ITS
ASSIGNEE, AND OTHER RESTRICTIONS ON TRANSFER SET FORTH IN A STOCK
SUBSCRIPTION WARRANT ISSUED BY THE CORPORATION TO
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THE REGISTERED HOLDER, OR HIS OR HER PREDECESSOR IN INTEREST, A COPY OF
WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THIS CORPORATION."
(ii) "THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY
NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES,
THE SALE IS MADE IN ACCORDANCE WITH RULE 144 UNDER THE ACT OR IS OTHERWISE
EXEMPT FROM REGISTRATION."
(iii) Any legend required to be placed thereon by the
California Commissioner of Corporations.
Section 8. Office of the Corporation.
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So long as this Warrant remains outstanding, the Corporation shall
maintain an office in the continental United States where the Warrant may be
presented for exercise, transfer, division or combination as provided in this
Warrant. Such office shall be at 0000 Xxxxxxxxx Xxxxx, Xxxxx 000, Xx Xxxxx,
Xxxxxxxxxx 00000, unless and until the Corporation shall designate and maintain
some other office for such purposes and give notice thereof to the Holder.
Section 9. Lost, Stolen, Mutilated or Destroyed Warrant.
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If this Warrant is lost, stolen, mutilated or destroyed, the
Corporation shall, on such terms as to indemnity or otherwise as it may in its
reasonable discretion impose (which shall, in the case of a mutilated Warrant,
include the surrender thereof), issue a new Warrant of like denomination and
tenor as the Warrant so lost, stolen, mutilated or destroyed.
Section 10. Transfer Taxes; Expenses.
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The Corporation shall pay all transfer taxes, stamp duties, and
similar taxes or fees payable in connection with any exercise or exchange of
this Warrant.
Section 11. Limitation of Liability.
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Except as otherwise provided herein, this Warrant does not entitle the
Holder to any voting rights or other rights of a shareholder of the Corporation.
No provision hereof, in the absence of affirmative action by the Holder to
purchase shares of the Common Stock, and no mere enumeration herein of the
rights or privileges of the Holder, shall give rise to any liability of the
Holder for the Warrant Price or as a shareholder of the Corporation, whether
such liability is asserted by the Corporation, by any creditor of the
Corporation or any other person.
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Section 12. Capitalization Representation.
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The authorized capital stock of the Corporation is 35,000,000 shares
of Common Stock, of which 2,158,000 shares are issued and outstanding and
18,000,000 shares of Preferred Stock issuable in series, of which (i) 6,700,000
shares are designated Series A Preferred Stock, 6,366,667 shares of which are
issued and outstanding; and (ii) 6,000,000 shares are designated Series B
Preferred Stock, 4,100,000 shares of which are issued and outstanding. All such
issued and outstanding shares have been duly authorized and validly issued, are
fully paid and nonassessable, and were issued in compliance with all applicable
state and federal laws concerning the issuance of securities. The Corporation
has reserved 6,700,000 shares of Common Stock for issuance upon the conversion
of Series A Preferred Stock, 6,000,000 shares of Common Stock for issuance upon
the conversion of Series B Preferred Stock, 759,386 shares of Common Stock for
issuance pursuant to the exercise of outstanding Common Stock purchase warrants,
and 5,140,614 shares of Common Stock for issuance to employees, directors, and
consultants pursuant to its 1998 Stock Option Plan. Upon their issuance in
accordance with this Warrant, the Warrant Shares issuable hereunder shall be
duly authorized, validly issued, fully-paid and non-assessable shares of Common
Stock.
Section 13. Governing Law.
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This Warrant shall be governed by and construed in accordance with the
laws of the State of Delaware, without giving effect to the principles governing
conflicts of laws.
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IN WITNESS WHEREOF, the undersigned has executed this Warrant on the
date first above written.
NEOPOINT, INC.
By:_______________________________
Name: Xxxxxxx Son
Title: President
NOTICE OF EXERCISE
(To be executed by the Holder
in order to exercise the Warrant.)
The undersigned hereby irrevocably elects to exercise the right
to purchase shares of Common Stock of NEOPOINT, INC., covered by this Warrant
according to the conditions thereof. The undersigned desires to consummate such
purchase on
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Dated: _________________________________
Name of Holder
By:______________________________
