CERTIFICATE NO. **200** DATE: March 22, 1999
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE ON EXERCISE
OF THIS WARRANT (TOGETHER, THE "SECURITIES") HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY APPLICABLE STATE SECURITIES
LAW, AND NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE ENCUMBERED,
PLEDGED, HYPOTHECATED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT THEREFOR UNDER SAID ACT AND
QUALIFICATION UNDER SAID LAW OR AN OPINION OF COUNSEL SATISFACTORY IN FORM AND
SUBSTANCE TO THE CORPORATION AND CONCURRED IN BY THE CORPORATION'S COUNSEL TO
THE EFFECT THAT SUCH REGISTRATION AND QUALIFICATION ARE NOT REQUIRED.
xXxx.xxx, Inc.
COMMON STOCK PURCHASE WARRANT
TO PURCHASE UP TO 5,000 SHARES OF COMMON STOCK
VOID AFTER March 22, 2002
xXxx.xxx, Inc., a Delaware corporation (the "Corporation"), hereby
certifies that, for good and valuable consideration, receipt and sufficiency of
which are hereby acknowledged by the Corporation, Global NAPs, Inc. (the
"Holder"), is entitled, subject to the terms and conditions set forth below, to
purchase from the Corporation up to 5,000 fully paid and non-assessable shares
(the "Shares") of the Common Stock, par value $.01 per share, of the
Corporation ("Common Stock"), at a purchase price of $15.19 per Share (the
"Purchase Price") at any time or times on or prior to the Expiration Date (as
defined below). This Warrant shall expire and be of no further force or effect
at the earlier of the time when it has been exercised with respect to all
Shares which the Holder is entitled to purchase hereunder or 5:00 p.m.,
California time, on the Expiration Date. Such number of Shares and the
Purchase Price are subject to adjustment, as hereinafter provided. Such number
shall be reduced at such time or times as this Warrant is exercised in part by
the number of Shares as to which this Warrant is then exercised.
1. Manner of Exercise. The Holder of this Warrant may
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exercise the rights hereunder at any time by written notice to the Corporation
as set forth herein. This Warrant may be exercised as a whole at any time, or
in part from time to time, by the Holder by delivering this Warrant, for
cancellation if it is exercised as a whole or for endorsement if it is
exercised in part, together with a Subscription in the form appearing at the
end hereof properly completed and duly executed by or on behalf of the Holder
and such other information and investment representations as may be reasonably
requested by the Corporation for the purpose of complying with applicable
securities laws, to the Corporation at its office in Menlo Park, California (or
at the office of the agency
maintained for such purpose or at such other office or agency of the
Corporation as it may designate by notice in writing to the Holder at the
address thereof appearing on the books of the Company), accompanied by payment
by certified or official bank check payable to the order of the Corporation, in
an aggregate amount equal to the Purchase Price as then adjusted times the
number of Shares as to which this Warrant is then being exercised. In the
event of any exercise of this Warrant that is partial, the Corporation shall
endorse this Warrant as having been exercised to that extent and return this
Warrant to the Holder for the balance. Anything in this Warrant to the
contrary notwithstanding, this Warrant may not be exercised to any extent after
5:00 p.m., California time, on the Expiration Date or after it has been
exercised in the aggregate for the number of Shares that the Holder is entitled
to purchase hereunder, and unless this Warrant is being exercised with respect
to all Shares subject to this Warrant, this Warrant may be exercised only with
respect to whole Shares.
2. Delivery of Stock Certificates on Exercise. The
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Corporation will, or will direct its transfer agent to, issue, as soon as
practicable after any exercise of this Warrant, and in any event within thirty
days thereafter, at the Corporation's expense (including the payment by it of
any applicable issue taxes), in the name of and deliver to the Holder, or as
the Holder may direct (on payment by the Holder of any applicable transfer
taxes and compliance with all restrictions on transferability set forth
herein), a certificate or certificates for the number of fully paid and
nonassessable Shares as to which this Warrant is so exercised, plus, in lieu of
any fractional shares to which the Holder would otherwise be entitled, cash
equal to such fraction or fractions multiplied by the Purchase Price as then
adjusted.
3. Anti-Dilution Adjustments.
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3.1. Stock Dividends, Splits, Etc. The number of
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Shares purchasable on exercise of this Warrant shall be subject to adjustment
from time to time in the event that the Corporation shall (a) pay a dividend
in, or make a distribution of, shares of Common Stock on any of its outstanding
Common Stock, (b) subdivide its outstanding shares of Common Stock into a
greater number of shares, (c) combine its outstanding shares of Common Stock
into a smaller number of shares or (d) issue by reclassification of its Common
Stock any shares of capital stock of the Corporation (other than a
reclassification resulting from a merger or consolidation covered in section
3.2 or a Buy-Out Event (as defined below)). In any such case, the total number
of Shares issuable upon exercise of this Warrant immediately prior thereto
shall be adjusted so that the Holder shall be entitled to receive at the same
aggregate Purchase Price (as set forth in section 3.3) the number of shares of
stock or other securities of the Corporation or otherwise to which the Holder
would have owned or would have been entitled to receive immediately following
the occurrence of any of the events described above had this Warrant been
exercised in full immediately prior to the occurrence (or applicable record
date) of such event. An adjustment made pursuant to this section 3.1 shall, in
the case of a stock dividend or distribution, be made as of the record date
therefor and, in the case of a subdivision, combination or a reclassification,
be made as of the effective date thereof. In any such case, appropriate
adjustments shall be
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made in the application of the provisions hereof with respect to the rights of
the Holder after a recapitalization to the end that the provisions hereof shall
be applicable after that event as nearly equivalent as may be practicable.
3.2. Reorganization, Recapitalization, Consolidation,
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Merger or Sale of Assets. In the event of any reorganization or
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recapitalization of the Corporation (other than as provided in section 3.1) or
in the event that the Corporation consolidates with or merges into another
corporation in a transaction in which the Corporation is not the resulting
corporation or transfers all or substantially all of its assets to another
entity, then and in each such event (other than a Buy-Out Event), the Holder,
on exercise of this Warrant as provided herein, at any time after the
consummation of such reorganization, recapitalization, consolidation, merger or
transfer, shall be entitled to receive the stock or other securities or
property to which the Holder would have been entitled on such consummation if
the Holder had exercised this Warrant immediately prior thereto. In such case,
the terms of this Warrant shall survive the consummation of any such
reorganization, recapitalization, consolidation, merger or transfer and shall
be applicable to the shares of stock or other securities or property receivable
on the exercise of this Warrant after such consummation.
3.3. Adjustment of Purchase Price. On each adjustment
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of the number of Shares or other securities issuable upon exercise of this
Warrant pursuant to this section 3, the Purchase Price shall thereafter be the
number obtained by dividing (a) the product of the number of Shares issuable on
full exercise of this Warrant immediately prior to such adjustment by the
Purchase Price in effect immediately prior to such adjustment by (b) the number
of Shares or other securities issuable upon full exercise of this Warrant after
such adjustment.
3.4. Rounding. All calculations under this section 3
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shall be made to the nearest cent or to the nearest one-hundredth of a Share,
as the case may be, but in no event shall the Corporation be obligated to issue
any fractional share on any exercise of this Warrant.
4. Expiration Date. This Warrant shall expire and shall be of
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no further force or effect at the earlier of the following times (the
"Expiration Date") (a) the time when the Warrant has been exercised with
respect to all Shares which the Holder is or may be entitled to purchase
hereunder, (b) 5:00 p.m., California time, on March 22, 2002, or (c) a Buy-Out
Event. A "Buy-Out Event" shall occur if a purchaser acquires more than 66-2/3%
of the fully diluted Common Stock of the Corporation, whether through stock
purchase, merger or otherwise.
5. Further Assurances. The Corporation will not, by amendment
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of its Certificate of Incorporation or through any reorganization,
recapitalization, transfer of assets, consolidation, merger, dissolution,
issuance or sale of securities or any other voluntary action, avoid or seek to
avoid, directly or indirectly, the performance of any of the terms of this
Warrant, but will at all times in good faith take all necessary action to carry
out all such terms. Without limiting the generality of the
3
foregoing, the Corporation (a) will not create any par value, or increase the
par value, of any shares of stock receivable on exercise of this Warrant above
the amount payable therefor on such exercise, (b) will take all such action as
may be necessary or appropriate so that the Corporation may validly and legally
issue fully paid and nonassessable shares of stock on the exercise of this
Warrant, and (c) will not transfer all or substantially all of its assets to
any person, or consolidate with or merge into any person or permit any person
to consolidate with or merge into the Corporation (if the Corporation is not
the surviving person), unless such person shall be bound by all of the terms of
this Warrant. This Warrant shall be binding on the successors and assigns of
the Corporation.
6. Notices of Record Dates, Etc.
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(a) If the Corporation shall fix a record date of the holders of
Common Stock (or other stock or securities at the time deliverable on exercise
of this Warrant) for the purpose of entitling or enabling them to receive any
dividend (other than a stock dividend) or other distribution, or to receive any
right to subscribe for or purchase any shares of any class of any other
securities, or to receive any other right,
(b) in the event of any reorganization or recapitalization of the
Corporation, any Buy-Out Event, any reclassification of the capital stock of
the Corporation, any consolidation or merger of the Corporation with or into
another corporation or any transfer of all or substantially all of the assets
of the Corporation to another entity,
(c) in the event of the voluntary or involuntary dissolution,
liquidation or winding up of the Corporation or
(d) if the Corporation has filed a registration statement under the
Securities Act of 1933, as amended, with the Securities and Exchange Commission
for an offering of the Corporation's capital stock,
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then in any such event, the Corporation will mail or cause to be mailed to the
Holder a notice specifying, as the case may be, (i) the date on which a record
is to be taken for the purpose of such dividend, distribution or right and
stating the amount and character of such dividend, distribution or right, (ii)
the date on which a record is to be taken for the purpose of voting on or
approving such reorganization, recapitalization, Buy-Out Event,
reclassification, consolidation, merger, conveyance, dissolution, liquidation
or winding up and the date on which such event is to take place and the time,
if any is to be fixed, as of which the holders of record of Common Stock (or
such other stock or securities at the time deliverable on exercise of this
Warrant) shall be entitled to exchange their shares of Common Stock (or such
other stock or securities) for securities or other property deliverable on such
reorganization, recapitalization, reclassification, consolidation, merger,
conveyance, dissolution, liquidation or winding up or (iii) the date on which
the Corporation's registration statement was filed and the class of securities
proposed to be registered. Such notice shall be mailed at least twenty-one
days prior to the record date therein specified or within twenty-one days after
filing the registration statement, as the case may be.
7. 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, on
delivery of a bond or other indemnity reasonably satisfactory to the
Corporation, or, in the case of any such mutilation, on surrender and
cancellation of this Warrant, the Corporation covenants that it will issue a
new Warrant, of like tenor, in lieu of such lost, stolen, destroyed or
mutilated Warrant.
8. Covenant to Reserve Common Stock. The Corporation shall at
--------------------------------
all times reserve and keep available out of its authorized but unissued Common
Stock the full number of shares of Common Stock deliverable upon exercise of
this Warrant and shall, at its own expense, take all such actions and attain
all such permits and orders as may be necessary to enable the Corporation
lawfully to issue such Common Stock upon exercise of this Warrant.
9. Issuance Taxes. On exercise of this Warrant, the
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Corporation pay any and all issuance taxes that may be payable in respect of
any issuance or delivery of shares of Common Stock on such exercise. The
Corporation shall not, however, be required to pay, and the Holder shall pay,
any tax that may be payable in respect of any transfer involved in the issuance
and delivery of shares of Common Stock in a name other than that of the Holder,
and no such issuance or delivery shall be made unless and until the person
requesting such issuance has paid to the Corporation the amount of any such
tax, where it is established to the satisfaction of the Corporation, that such
tax has been paid.
10. Non-Transferability of Warrant. This Warrant is
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non-transferable and is only exercisable by the Holder.
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11. Survival of Covenants, Representations and Warranties.
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All agreements, covenants, representations and warranties herein shall survive
the execution and delivery of this Warrant and any investigation at any time
made on behalf of any party and the exercise, sale and purchase of this Warrant
and the Common Stock issuable on exercise hereof.
1.
12. Voting Rights. This Warrant shall not entitle the Holder,
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as such, to any voting rights or other rights as a stockholder of the
Corporation or to any other rights except the rights stated herein.
13. Entire Agreement. This Warrant, the letter agreement
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dated April 20, 1999 between the Corporation and the Holder relating to this
Warrant (the "Letter Agreement"), and the Addendum to the Co-Location and the
Telephone Switch Agreements (the "Addendum") together contain the entire
agreement of the parties and supersede all prior or contemporaneous written or
oral negotiations, correspondence, understandings and agreements between the
parties, regarding the subject matter hereof.
14. Successors and Assigns. Except as otherwise provided
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herein, this Warrant shall bind and inure to the benefit of the Holder and the
Corporation and any successor of the Corporation.
15. Notices. All demands, notices and other communications to
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be given hereunder shall be in writing and shall be deemed duly given and
received when transmitted by facsimile transmission with receipt acknowledged
by the addressee, when delivered personally or three days after being mailed by
first class mail, postage prepaid, properly addressed, if to the Corporation,
at 0000 Xxxxxx Xxxx, Xxxxx Xxxx, Xxxxxxxxxx 00000, facsimile number (650) 326-
6003 or, if to the Holder, at the Holder's address contained in the Letter
Agreement between the Holder and the Corporation or at any other address or
facsimile number designated by notice by either party to the other party.
16. Amendments; Waivers; Termination; Governing Law, Headings.
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This Warrant and any term hereof may be changed, waived, discharged or
terminated only by an instrument in writing signed by the party against which
enforcement of such change, waiver, discharge or termination is sought. This
Warrant shall be governed by and construed and interpreted in accordance with
the laws of the State of California. The headings in this Warrant are for
convenience of reference only and shall not affect the construction or
interpretation of any provision hereof.
17. Saturdays, Sundays, Holidays, etc.. If the last or
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appointed day for the taking of any action or the expiration of any right
required or granted herein shall be a Saturday or a Sunday or shall be a legal
holiday, then such action may be taken or such right may be exercised on the
next succeeding day not a Saturday, Sunday or legal holiday.
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Dated as of March 22, 1999
[SEAL] xXxx.xxx, Inc.
By:____________________________
Xxxxxx X. Xxxxxx III
CEO
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ENDORSEMENTS
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Number
Number of of Shares
Shares as Remaining
Exercise to which Available Signature of Authorized
Date Exercised for Exercise Officer of the Corporation
---- --------- ------------ --------------------------
SUBSCRIPTION
(To be completed and signed only on
an exercise of the Warrant.)
To xXxx.xxx, Inc.
The undersigned, the Holder of the within Warrant, hereby irrevocably
elects to exercise the purchase right represented by such Warrant for, and to
purchase thereunder, ____________ shares of the Common Stock of xXxx.xxx, Inc.
of those to which such Holder is entitled thereunder, and herewith makes
payment of $__________ therefor by certified or official bank check. The
undersigned hereby requests that the certificate(s) for such shares be issued
in the name(s) and delivered to the address(es) as follows:
_______________________
________________________________________________
________________________________________________
________________________________________________
Dated: __________________ __________________________________
__________________________, Holder
By ___________________________
Its _________________________