Exhibit 4.1
THIS WARRANT HAS BEEN, AND THE SHARES OF COMMON STOCK WHICH MAY BE PURCHASED
PURSUANT TO THE EXERCISE OF THIS WARRANT (THE "WARRANT SHARES") WILL BE,
ACQUIRED SOLELY FOR INVESTMENT AND NOT WITH A VIEW TO, OR FOR RESALE IN
CONNECTION WITH, ANY DISTRIBUTION THEREOF. NEITHER THIS WARRANT NOR THE WARRANT
SHARES (TOGETHER, THE "SECURITIES") HAVE BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS.
THE SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF SUCH REGISTRATION OR AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY AND ITS COUNSEL THAT SUCH DISPOSITION IS EXEMPT FROM THE REGISTRATION
AND PROSPECTUS DELIVERY REQUIREMENTS OF THE SECURITIES ACT AND OF ANY APPLICABLE
STATE SECURITIES LAWS.
WARRANT
TO PURCHASE SHARES OF COMMON STOCK
of
ANCOR COMMUNICATIONS, INCORPORATED
A Minnesota Corporation
Warrant No.: __________ Issuance Date: June 2, 1999
---------------------------
THIS CERTIFIES THAT, for value received, Sun Microsystems, Inc. (the
"Holder") is entitled to subscribe for and purchase from Ancor Communications,
Incorporated, a Minnesota corporation (the "Company"), 1,500,000 fully paid and
nonassessable shares (as adjusted pursuant to Section 2 hereof) (the "Warrant
Shares") of Common Stock, par value $0.01 per share, of the Company ("Common
Stock"), at an exercise price equal to $7.30 per share (as adjusted pursuant to
Section 2 hereof) (the "Exercise Price"), all upon the terms and subject to the
conditions hereinafter set forth.
1. EXERCISE RIGHTS.
(a) Cash Exercise. The purchase rights represented by this
Warrant may be exercised by the Holder for any Warrant Shares that have
vested pursuant Section 7, at any time on or prior to the Expiration
Date (as defined in Section 7), in whole or in part, by delivery to the
principal offices of the Company of this Warrant and a completed and
duly executed Notice of Cash Exercise, in the form attached as Exhibit
A hereto, accompanied by payment to the Company of an amount equal to
the Exercise Price per share then in effect multiplied by the number of
Warrant Shares to be purchased by the Holder in connection with such
cash exercise of this Warrant, which amount may be paid, at the
election of the Holder, by wire transfer or delivery of a check payable
to the order of the Company.
(b) Net Issue Exercise.
(i) In lieu of exercising the purchase rights represented by
this Warrant on a cash basis pursuant to Section 1(a) hereof,
the Holder may elect to exercise such rights represented by
this Warrant for any Warrant Shares that have vested pursuant
to Section 7, at any time on or prior to the Expiration Date,
in whole or in part, on a net-issue basis by electing to
receive the number of Warrant Shares which are equal in value
to the value of this Warrant at the time of any such net-issue
exercise, by delivery to the principal offices of the Company
of this Warrant and a completed and duly executed Notice of
Net-Issue Exercise, in the form attached as Exhibit B hereto,
properly marked to indicate (A) the number of Warrant Shares
vested, (B) the number of Warrant Shares to be delivered to
Holder, (C) the number of Warrant Shares surrendered by
Holder, (D) the number of Warrant Shares
remaining subject to the Warrant and (F) the calculation of
Fair Market Value as of the date of exercise (each as
determined in accordance with Section 1(b)(ii) hereof).
(ii) In the event that the Holder shall elect to exercise the
rights represented by this Warrant in whole or in part on a
net-issue basis pursuant to this Section 1(b), the Company
shall issue to the Holder the number of Warrant Shares
determined in accordance with the following formula:
X = Y (A-B)
-------
A
X = the number of Warrant Shares to be issued to
the Holder in connection with such net-issue
exercise.
Y = the number of Warrant Shares with respect to
which this Warrant is being exercised.
A = the Fair Market Value of one share of Common
Stock.
B = the Exercise Price per share in effect as of
the date of such net-issue exercise.
(c) Fair Market Value. For purposes of this Section 1, the
"Fair Market Value" of the Common Stock shall mean the average, for the
five trading days ending with the trading day which is two trading days
prior to the date of such exercise, of:
(i) the closing sale price of the Company's
Common Stock sold on the primary national
securities exchange or market on which the
Common Stock may at the time be listed or
traded, or
(ii) if there have been no sales on such exchange
or market on any such trading day, the
average of the highest bid and lowest asked
prices on such exchange or market at the end
of such day shall be used for such day, or
(iii) if on any such trading day the Common Stock
is not quoted on a national exchange or in
the NASDAQ System, the average of the
highest bid and lowest asked price on such
day in the domestic over-the-counter market
as reported by the National Quotation
Bureau, Incorporated, or any similar
successor organization.
(iv) Notwithstanding the foregoing, if the Holder
shall purchase any Warrant Shares
contemporaneously with the closing of a
Change in Control (as defined in Section
2(a)), then the Fair Market Value of one
share of Common Stock shall be the value
received by the holders of the Company's
Common Stock pursuant to such transaction
for each share of Common Stock, and such
purchase shall be effective upon the closing
of such transaction, subject to the due,
proper and prior surrender of this Warrant
and the aggregate Exercise Price applicable
thereto.
(d) Additional Conditions to Exercise of Warrant.
Notwithstanding the foregoing, this Warrant may not be exercised unless
and until:
(i) the Company shall have received an Investment
Representation Statement, in the form attached as Exhibit C
hereto, certifying that, among other things, the Warrant
Shares to be issued upon
-2-
the exercise of the rights represented by this Warrant are
being acquired for investment and not with a view to any sale
or distribution thereof; and
(ii) each certificate evidencing the Warrant Shares to be
issued upon the exercise of the rights represented by this
Warrant shall be stamped or imprinted with a legend
substantially in the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "SECURITIES
ACT") AND ARE "RESTRICTED SECURITIES" AS DEFINED IN RULE 144
PROMULGATED UNDER THE SECURITIES ACT. SUCH SECURITIES MAY NOT
BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE
DISTRIBUTED EXCEPT (I) PURSUANT TO A REGISTRATION STATEMENT
DECLARED OR ORDERED EFFECTIVE BY THE SECURITIES AND EXCHANGE
COMMISSION UNDER THE SECURITIES ACT COVERING SUCH SECURITIES,
OR (II) IN COMPLIANCE WITH RULE 144, OR (III) PURSUANT TO AN
OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF SUCH
SECURITIES THAT SUCH REGISTRATION OR RULE 144 COMPLIANCE IS
NOT REQUIRED UNDER THE SECURITIES ACT AS TO SUCH SALE, OFFER
OF SALE, PLEDGE, HYPOTHECATION OR OTHER DISTRIBUTION. THIS
CERTIFICATE MUST BE SURRENDERED TO THE ISSUER HEREOF OR ITS
TRANSFER AGENT AS A CONDITION PRECEDENT TO THE TRANSFER OF ANY
INTEREST IN THE SECURITIES REPRESENTED HEREBY.
(e) Fractional Shares. Upon the exercise of the rights
represented by this Warrant, the Company shall not be obligated to
issue fractional shares of Common Stock, and in lieu thereof, the
Company shall pay to the Holder an amount in cash equal to the Fair
Market Value per share of Common Stock immediately prior to such
exercise multiplied by such fraction (rounded to the nearest cent).
(f) Record Ownership of Warrant Shares. The Warrant Shares
shall be deemed to have been issued, and the person in whose name any
certificate representing Warrant Shares shall be issuable upon the
exercise of the rights represented by this Warrant (as indicated in the
appropriate Notice of Exercise) shall be deemed to have become the
holder of record of (and shall be treated for all purposes as the
record holder of) the Warrant Shares represented thereby, immediately
prior to the close of business on the date or dates upon which the
rights represented by this Warrant are exercised in accordance with the
terms hereof.
(g) Stock Certificates. In the event of any exercise of the
rights represented by this Warrant, certificates for the Warrant Shares
so purchased pursuant hereto shall be delivered to the Holder within a
reasonable time and unless this Warrant has been fully exercised or has
expired, a new Warrant representing the right to purchase the Warrant
Shares with respect to which this Warrant shall not have been exercised
shall also be issued to the Holder within such time.
(h) Issue Taxes. The issuance of certificates for shares of
Common Stock upon the exercise of the rights represented by this
Warrant shall be made without charge to the Holder for any issuance tax
in respect thereof; provided, however, that the Company shall not be
required to pay any tax which may be payable in respect of any transfer
involved in the issuance and delivery of any certificate in a name
other than that of the Holder of the Warrant.
-3-
2. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES. The number and
kind of securities purchasable upon the exercise of this Warrant and the
Exercise Price shall be subject to adjustment from time to time upon the
occurrence of certain events, as follows:
(a) Reclassification or Change of Control. In case of any
reclassification or change of outstanding securities of the class
issuable upon exercise of this Warrant (other than a change in par
value, or from par value to no par value, or from no par value to par
value, or as result of a subdivision or combination), or in case of any
merger or consolidation of the Company with or into another
corporation, (other than a merger in which the shares of the Company's
Common Stock immediately prior to such merger are not converted by
virtue of the merger into stock, other securities, cash or other
property), or in case of any sale of all or substantially all of the
assets of the Company (any such merger, consolidation or sale of assets
shall be referred to as a "Change in Control"), the Company shall, as
soon as practicable after such transaction, execute a new Warrant or
cause such successor or purchasing corporation, as the case may be, to
execute a new Warrant providing that the Holder of this Warrant shall
have the right to exercise such new Warrant and upon such exercise to
receive, in lieu of each share of Common Stock theretofore issuable
upon exercise of this Warrant, the kind and amount of shares of stock,
other securities, cash and other property received or receivable upon
such reclassification, change or Change in Control by a holder of one
share of Common Stock. Such new Warrant shall provide for adjustments
which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 2. The provisions of this
subparagraph (a) shall similarly apply to successive reclassifications,
changes, Changes in Control and transfers.
(b) Subdivision or Combination of Shares. If the Company at
any time while this Warrant remains outstanding and unexpired shall
subdivide or combine its Common Stock, the Exercise Price shall be
proportionately decreased in the case of a subdivision or increased in
the case of a combination.
(c) Stock Dividends. If the Company at any time while this
Warrant is outstanding and unexpired shall pay a dividend with respect
to Common Stock payable in Common Stock (except any distribution
specifically provided for in the foregoing Sections 2 (a) and (b)),
then the Exercise Price shall be adjusted, from and after the date of
determination of shareholders entitled to receive such dividend, to
that price determined by, multiplying the Exercise Price in effect
immediately prior to such date of determination by a fraction (a) the
numerator of which shall be the total number of shares of Common Stock
outstanding immediately prior to such dividend, and (b) the denominator
of which shall be total number of shares of Common Stock outstanding
immediately after such dividend.
(d) Other Distribution If the Company at anytime while this
Warrant is outstanding and unexpired shall make a distribution (other
than a Common Stock dividend as specifically provided for in Section
2(c) or a cash dividend) then the number of Warrant Shares exercisable
under this Warrant shall be proportionately adjusted such that the
Holder shall be entitled to receive upon exercise of this Warrant, the
Warrant Shares, plus the amount of shares of stock, other securities or
other property (other than cash) that the Holder would have received if
the Holder had exercised the Warrant prior to the distribution and,
provided further, that the Exercise Price will be proportionately
adjusted, only if appropriate, to take into account such distribution.
(e) Adjustment of Number of Shares. Upon each adjustment in
the Exercise Price pursuant to Sections 2(b) and (c), the number of
Warrant Shares purchasable hereunder shall be adjusted, to the nearest
whole share, to the product obtained by multiplying the number of
Warrant Shares purchasable immediately prior to such adjustment by a
fraction, the numerator of which shall be the Exercise Price
immediately prior to such adjustment and the denominator of which shall
be the Exercise Price immediately thereafter.
-4-
3. TRANSFER OF WARRANT.
(a) This Warrant and the rights represented hereby shall not
be transferable unless (i) the Warrant is transferred in whole to a
majority-owned subsidiary of the Holder or a successor in interest of
all or substantially all of the Holder's business, or (ii) the Holder
receives prior written consent of such transfer from the Company, and
(iii) such transfer is in compliance with applicable federal and state
securities laws.
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to the Holder as follows:
(a) This Warrant has been duly authorized and validly executed
and delivered by the Company and constitutes a valid and legally
binding obligation of the Company enforceable against the Company in
accordance with its terms.
(b) The Warrant Shares have been duly and validly authorized
and reserved for issuance by the Company upon the exercise of the
rights represented by this Warrant and, when issued upon the exercise
of such rights in accordance with the terms and conditions hereof, the
Warrant Shares will be (A) duly authorized and validly issued, fully
paid and nonassessable shares of Common Stock, (B) free from all
preemptive rights, rights of first refusal or first offer, taxes,
liens, charges or other encumbrances with respect to the issuance
thereof by the Company, and (C) free of any restrictions on the
transfer thereof other than restrictions on transfer under applicable
federal and state securities laws. At all times during the term hereof,
the Company shall have authorized and reserved for issuance a
sufficient number of shares of Common Stock to provide for the exercise
of the rights represented by this Warrant. As of April 29, 1999 there
were 24,081,331 shares of the Company's Common Stock outstanding and
since such date, the Company has not issued more than 25,000 shares.
(c) The due execution and delivery of this Warrant are not,
and the issuance of the Warrant Shares upon the exercise of the rights
represented by this Warrant in accordance with the terms hereof will
not, conflict with the Articles of Incorporation or Bylaws of the
Company, each as amended to the date of issuance hereof.
5. REPRESENTATIONS AND WARRANTIES OF THE HOLDER. The Holder hereby
represents and warrants to the Company as follows:
(a) This Warrant is being acquired for such Holder's own
account, for investment and not with a view to, or for resale in
connection with, any distribution or public offering thereof within the
meaning of the Securities Act. Upon the exercise of the rights
represented by this Warrant, the Holder shall, if so requested by the
Company, confirm in writing, in a form reasonably satisfactory to the
Company, that the Warrant Shares issuable upon the exercise of such
rights are being acquired for investment and not with a view toward
distribution or resale thereof.
(b) The Holder understands that the Warrant and the Warrant
Shares have not been registered under the Securities Act by reason of
their issuance in a transaction exempt from the registration and pros
pectus delivery requirements of the Securities Act pursuant to Section
4(2) thereof, and that such Warrant and the Warrant Shares, as the case
may be, must be held by the Holder indefinitely, and therefore, that
the Holder must bear the economic risk of such investment indefinitely,
unless a subsequent disposition thereof is registered under the
Securities Act or is exempt from such registration requirements. The
Holder further understands that the Warrant Shares have not been
qualified under applicable state securities laws by reason of an
exemption from such qualification requirements, which exemption depends
upon, among other things, the bona fide nature of such Holder's
investment intent expressed herein.
-5-
(c) The Holder has such knowledge and experience in financial
and business matters that it is capable of evaluating the merits and
risks of the purchase of this Warrant and the Warrant Shares and of
protecting its interests in connection therewith.
(d) The Holder is able to bear the economic risk of the
purchase of the Warrant Shares pursuant to the terms of this Warrant.
(e) The Holder is an accredited investor as defined under Rule
501 of the Securities Act of 1933.
6. NO STOCKHOLDER RIGHTS. The Holder of this Warrant (and any
transferee hereof) shall not be entitled to vote on matters submitted for the
approval or consent of the stockholders of the Company or to receive dividends
declared on or in respect of shares of Common Stock, or otherwise be deemed to
be the holder of Common Stock or any other capital stock or other securities of
the Company which may at any time be issuable upon the exercise of the rights
represented hereby for any purpose, nor shall anything contained herein be
construed to confer upon the Holder any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any matter
submitted for the approval or consent of the stockholders, or to give or
withhold consent to any corporate action (whether upon any recapitalization,
issuance of stock, reclassification of stock, merger or consolidation,
conveyance, or otherwise) or to receive notice of meetings, or to receive
dividends or subscription rights or otherwise until this Warrant shall have been
exercised and the Warrant Shares issuable upon the exercise of the rights
represented hereby shall have become deliverable as provided herein.
7. VESTING SCHEDULE/EXPIRATION DATE. The number of Warrant Shares
issuable upon exercise of this Warrant shall vest and become issuable on each
Vesting Date (as defined below) at a rate of one share for every $67 of Net
Revenues (as defined below), for the period of time (the "Period") beginning the
first day following the previous Vesting Date and ending on the current Vesting
Date; provided however, that with respect to the first Vesting Date to occur
such Period shall begin on the date hereof and end on the first Vesting Date.
For purposes of this Warrant, the Vesting Dates shall be June 30, September 30,
December 31 and March 31 of each calendar year beginning June 30, 1999 and
ending September 30, 2002 (each such date referred to herein as the "Vesting
Date"). On October 1, 2002, ("the Vesting Termination Date"), any vesting of the
Warrant Shares shall cease and Holder shall not be entitled to exercise this
Warrant for any remaining unvested Warrant. Notwithstanding the foregoing, in
the event that the amount of Net Revenues billed to the Holder does not equal or
exceed $10 million (the "Minimum") by the first Vesting Date, then no Warrant
Shares shall vest until the date that the Minimum is met, at which time the
number of Warrant Shares that would have vested, based on the vesting schedule
set forth in the preceding sentences (the "Vesting Schedule"), shall be
immediately vested. Within five (5) business days of the date that the Minimum
is met, the Company shall notify the Holder that the Minimum has been met and
accompany such notice with an accounting report evidencing the amount of Net
Revenues billed to the Holder, the date that the Minimum was met, and the number
of Warrant Shares that have vested. Once the Minimum has been met, the remaining
unvested Warrant Shares shall vest pursuant to the Vesting Schedule as if no
Minimum was required. In addition, within 30 calendar days of each Vesting Date,
the Company shall deliver to the Holder a report evidencing the Net Revenues
billed to the Holder for such Period and the number of Warrant Shares that
vested on such Vesting Date. This Warrant shall expire on the date five (5)
years from the date hereof (the "Expiration Date"). After the Expiration Date
the Holder shall not be entitled to exercise any portion of this Warrant that
had not been previously exercised. For purposes of this Section 7, Net Revenues
shall mean for each Period, the sum of all amounts billed to Holder by the
Company for the purchase or license of Products (as defined in the Agreement,
hereafter defined) pursuant to the Product Purchase Agreement between the Holder
and the Company dated the date hereof (the "Agreement") less any credits issued
to the Holder by the Company during such Period which have the effect of
reducing amounts due to the Company by the Holder.
8. NOTICE OF ADJUSTMENTS. Whenever any Exercise Price shall be adjusted
pursuant to Section 2 hereof, the Company shall make a certificate signed by its
chief financial officer setting forth, in reasonable detail, the event requiring
the adjustment, the amount of the adjustment the method by which such adjustment
was calculated, the
-6-
Exercise Price or Prices and the number of Warrant Shares excisable hereunder
after giving effect to such adjustment, and shall cause copies of such
certificate to be mailed (by first class mail, postage prepaid) to the Holder of
this Warrant.
9. NOTICE OF CHANGE IN CONTROL. In the event that the Company shall
propose at any time to effect a Change in Control, then in connection with such
transaction the Company shall send to the Holder the same notice, proxy
materials or other information that it sends to its shareholders with respect to
such Change in Control at the same time and in the same manner that it sends
such notice and information to its shareholders.
10. LOCK-UP AGREEMENT. Holder agrees not to sell or otherwise transfer
any Warrant Shares purchased under this Warrant until the date ending six months
after the date the first Warrant Shares are purchased hereunder except (i)
Holder may transfer any Warrant Shares purchased hereunder to any affiliate of
the Holder and (ii) in the event of a Change in Control of the Company, this
Section 11 shall terminate and any Warrant Shares purchased hereunder shall be
transferable without restrictions except as provided by Section 3.
11. MISCELLANEOUS.
(a) Governing Law. This Warrant shall be construed and
enforced in accordance with and governed by the laws of the state of
Minnesota. The parties expressly stipulate that any litigation under
this Warrant shall be brought in the State courts of the Counties of
Santa Xxxxx or San Mateo, California and in the United States District
Court for the Northern District of California. The parties agree to
submit to the jurisdiction and venue of such courts. The Company shall
deliver to the Holder an opinion of counsel to the satisfaction of
Holder regarding the due issuance of the Warrant and the Warrant Shares
exercisable hereunder and the enforceability of this Warrant.
(b) Notice Procedures. Any written notice by the Company
required hereunder shall be made by hand delivery, national overnight
courier or first class mail, postage prepaid, addressed to the Holder
at the address set forth on the books of the Company.
(c) Successors and Assigns. The terms of this Warrant shall be
binding upon and shall inure to the benefit of any successors or
assigns of the Company and of the Holder or Holders of this Warrant and
the Warrant Shares issued or issuable upon the exercise of the rights
represented by this Warrant.
(d) Entire Agreement. This Warrant constitutes the full and
entire understanding and agreement between the parties with respect to
the subject matter hereof and supersedes in their entirety any prior or
contemporaneous agreements by and between the Company and the Holder
with respect to such matters. The parties acknowledge that, upon
issuance of this Warrant, the value of this Warrant cannot be
reasonably ascertained, and the parties agree to account for this
Warrant for income tax and financial statement purposes accordingly.
(e) Further Assurances; No Impairment. The Company shall not,
by amendment of its Articles of Incorporation or through any other
means, directly or indirectly, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant and shall at all times
in good faith assist in the carrying out of all such terms and in the
taking of all such action as may be necessary or appropriate in order
to protect the rights of the holder of this Warrant against impairment.
Subject to Sections 3 and 11 hereof, Company shall at no time close its
transfer books against the transfer of this Warrant or of any Warrant
Shares issued or issuable upon the exercise of the rights represented
by this Warrant in any matter which interferes with a timely exercise
of such rights. The Company shall not, by any action, seek to avoid the
observance or performance of any of the terms of this Warrant, but
shall at all times in good faith seek to carry out all such terms and
take all such actions as may be necessary or appropriate in order to
protect the rights of the Holder under this Warrant against impairment.
-7-
(f) Lost Warrant. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant and, in the case of any such loss, theft or
destruction, upon delivery of an indemnity agreement reasonably
satisfactory in form and amount to the Company or, in the case of any
such mutilation, upon surrender and cancellation of such Warrant, the
Company at the Holder's expense shall execute and deliver to the
Holder, in lieu thereof, a new Warrant of like date and tenor.
(g) Amendments. This Warrant and any provision hereof may be
amended, waived or terminated (either generally or in a particular
instance, retroactively or prospectively and for a specified period of
time or indefinitely) only by a written instrument signed by the
Company and the Holder.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer.
Issued this 2nd day of June, 1999. ANCOR COMMUNICATIONS,
INCORPORATED
A Minnesota Corporation
/s/ Xxx Xxxxxx
-----------------------------------
By: Xxx Xxxxxx
Title: President
Address: 0000 Xxxx Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Acknowledged and Accepted:
/s/ G. Xxxxx Xxxxx
--------------------------------
By: G. Xxxxx Xxxxx
Title: V.P. Strategic Relationship
Address: Sun Microsystems, Inc.
000 Xxx Xxxxxxx Xxxx
Xxxx Xxxx, XX 00000
-8-
EXHIBIT A
---------
NOTICE OF CASH EXERCISE
TO: ANCOR COMMUNICATIONS, INCORPORATED
Attention: President
1. The undersigned hereby elects to purchase ____________ shares of
Common Stock of Ancor Communications, Incorporated, a Minnesota corporation (the
"Company"), pursuant to the terms of Warrant No. [____], issued [date] to and in
the name of [________________], a copy of which is attached hereto (the
"Warrant"), and tenders herewith full payment of the aggregate Exercise Price
for such shares in accordance with the terms of the Warrant.
2. Please issue a certificate or certificates representing said shares
of Common Stock in such name or names as specified below:
-------------------------------------- -------------------------------------
(Name) (Name)
-------------------------------------- -------------------------------------
-------------------------------------- -------------------------------------
(Address) (Address)
Tax I.D. Number________________________
3. The undersigned hereby represents and warrants that the aforesaid
shares of Common Stock are being acquired for the account of the undersigned for
investment and not with a view to, or for resale in connection with, the
distribution thereof, and that the undersigned has no present intention of
distributing or reselling such shares and all representations and warranties of
the undersigned set forth in the attached Warrant are true and correct as of the
date hereof. In support thereof, the undersigned has executed an Investment
Representation Statement, in the form attached as Exhibit C to the Warrant,
concurrently herewith.
_______________________________________________
By:____________________________________________
Name:__________________________________________
Title:_________________________________________
Date:__________________________________________
A-1
EXHIBIT B
---------
NOTICE OF NET-ISSUE EXERCISE
TO: ANCOR COMMUNICATIONS, INCORPORATED
Attention: President
1. The undersigned hereby elects to purchase ____________ shares of
Common Stock of Ancor Communications, Incorporated., a Minnesota corporation
(the "Company"), on a net-issue basis pursuant to the terms of Warrant No.
[____], issued [date] to and in the name of [________________], a copy of which
is attached hereto (the "Warrant").
2. Net-Issue Information:
(a) Number of Warrant Shares vested:________________________________
(b) Number of Warrant Shares vested to be delivered to Holder:______
(c) Number of Warrant Shares vested Surrendered by Holder:__________
(d) Number of Warrant Shares Remaining Subject to the Warrant:______
(e) Calculation of Fair Market Value as of _____________: $_________
3. Please issue a certificate or certificates representing said shares
of Common Stock in such name or names as specified below:
-------------------------------------- -------------------------------------
(Name) (Name)
-------------------------------------- -------------------------------------
-------------------------------------- -------------------------------------
(Address) (Address)
4. The undersigned hereby represents and warrants that the aforesaid
shares of Common Stock are being acquired for the account of the undersigned for
investment and not with a view to, or for resale in connection with, the
distribution thereof, and that the undersigned has no present intention of
distributing or reselling such shares and all representations and warranties of
the undersigned set forth in the attached Warrant are true and correct as of the
date hereof. In support thereof, the undersigned has executed an Investment
Representation Statement, in the form attached as Exhibit C to the Warrant,
concurrently herewith.
By:_______________________________________
Name:_____________________________________
Title:____________________________________
Date:_____________________________________
B-1
EXHIBIT C
---------
INVESTMENT REPRESENTATION STATEMENT
PURCHASER:
COMPANY: ANCOR COMMUNICATIONS, INCORPORATED
SECURITY: COMMON STOCK
AMOUNT:
DATE:
In connection with the purchase of the above-listed securities (the
"Securities"), I, the Purchaser, represent to the Company the following:
(a) I am aware of the Company's business affairs and financial
condition, and have acquired sufficient information about the
Company to reach an informed and knowledgeable decision to
acquire the Securities. I am purchasing these Securities for
my own account for investment purposes only and not with a
view to, or for the resale in connection with, any
"distribution" thereof for purposes of the Securities Act of
1933 ("Securities Act").
(b) I understand that the Securities have not been registered
under the Securities Act in reliance upon a specific exemption
therefrom, which exemption depends upon, among other things,
the bona fide nature of my investment intent as expressed
herein. In this connection, I understand that, in the view of
the Securities and Exchange Commission ("SEC"), the statutory
basis for such exemption may be unavailable if my
representation was predicated solely upon a present intention
to hold these Securities for the minimum capital gains period
specified under tax statutes, for a deferred sale, for or
until an increase or decrease in the market price of
Securities, or for a period of one year or any other fixed
period in the future.
(c) I further understand that the Securities must be held
indefinitely unless subsequently registered under the
Securities Act or unless an exemption from registration is
otherwise available. Moreover, I understand that he Company is
under no obligation to register the Securities. In addition, I
understand that the certificate evidencing the Securities will
be imprinted with a legend which prohibits the transfer of the
Securities unless they are registered or such registration is
not required in the opinion of counsel for the Company.
(d) I am aware of the provisions of Rule 144, promulgated under
the Securities Act, which, in substance, permits limited
public resale of "restricted securities" acquired, directly or
indirectly, from the issuer thereof (or from an affiliate of
such issuer), in a non-public offering subject to the
satisfaction of certain conditions.
(e) I further understand that in the event all of the requirements
of Rule 144 are not satisfied, registration under the
Securities Act, compliance with Regulation A, or some other
registration exemption will be required; and that,
notwithstanding the fact that Rule 144 is not exclusive, the
Staff of the SEC has expressed its opinion that persons
proposing to sell private placement securities other than in a
registered offering and otherwise than pursuant to Rule 144
will have a substantial burden of proof in establishing that
an exemption from registration is available for such offers or
sales, and that such persons and their respective brokers who
participate in such transactions do so at their own risk.
(f) The exercise price of the Warrant is less that 10% of my net
worth excluding home, home furnishings and automobiles.
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(g) The Holder is an accredited investor as defined under Rule 501
of the Securities Act of 1933.
Signature of Purchaser:
___________________________________
Date:______________________, 19____
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