EXHIBIT 4.11
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY OTHER APPLICABLE SECURITIES LAW, AND MAY NOT BE TRANSFERRED IN
THE ABSENCE OF REGISTRATION THEREUNDER OR AN EXEMPTION THEREFROM.
WARRANT
To Purchase Common Stock of
EDGE TECHNOLOGY GROUP, INC.
1. Issuance. This Warrant, dated as of April 1, 2002 (the "Issuance Date"),
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is issued to______________________________ by Edge Technology Group, Inc., a
Delaware corporation (hereinafter with its successors called the "Company"). The
term Warrant as used herein shall include this Warrant and any warrants
delivered in substitution or exchange herefor or therefor as provided herein.
2. Exercise of Warrant.
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(a) Exercise Price; Number of Shares. This Warrant represents the
-------------------------------- right to purchase from the Company
__________________________________________________ (_______) shares (the
"Warrant Shares") of the Company's common stock, $0.01 par value ("Common
Stock") at an initial exercise price of One Dollar and Fifteen Cents
($1.15) per share (the "Exercise Price"). Until such time as this Warrant
is exercised in full or expires, the Exercise Price and the Warrant Shares
are subject to adjustments pursuant to the procedures described in Section
below.
(b) Exercise Procedure. Subject to the terms and conditions of this
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Warrant, the registered holder of this Warrant (the "Holder"), is entitled
to exercise this Warrant during the Exercise Period, in whole or in part,
upon surrender of this Warrant together with payment of the Exercise Price
and delivery of the subscription form (as annexed hereto, the "Subscription
Form") duly executed, to be presented at the office of the Company, 0000
Xxxxxxxxx, Xx. 000, Xxxxxx, Xxxxx 00000, or such other office in the United
States as the Company shall notify the Holder of in writing.
(c) Exercise Period. This Warrant may be exercised at any time after
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the second anniversary of the Issuance Date until the earlier of (i) the
fourth anniversary of the Issuance Date or (ii) the date of a Deemed
Liquidation, as defined below (the "Exercise Period"); provided, however,
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that the Company shall not effect a Deemed Liquidation without compliance
with the provisions of Section 2(d) below.
(d) Deemed Liquidation. For purposes of this Warrant, a "Deemed
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Liquidation" shall mean (i) any liquidation, dissolution or winding up of
the Company, (ii) any sale, conveyance or disposition of all or
substantially all of its property or business, (iii) any merger or
consolidation with any other corporation (other than a wholly owned
subsidiary corporation) or (iv) any other transaction or series of related
transactions in which more than fifty percent (50%) of the voting power of
the Company
will not,immediately after such acquisition or transaction be held by the
Company's stockholders of record as constituted immediately prior to such
acquisition or transaction, provided that a merger effected exclusively for
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the purpose of changing the domicile of the Company shall not constitute be
a Deemed Liquidation.
(i) Notice of Transaction. The Company shall give each Holder
written notice of a Deemed Liquidation (a "Notice of Liquidation
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Event") not later than ten (10) days prior to the stockholders'
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meeting called to approve such transaction, or ten (10) days prior to
the closing of such transaction, whichever is earlier, and shall also
notify the Holders in writing of the final approval of such
transaction. The first of such notices shall describe the material
terms and conditions of the impending transaction and the provisions
of this Section 2(d), and the Company shall thereafter give such
Holders prompt notice of any material changes. The transaction shall
in no event take place sooner than ten (10) days after the Company has
given the first notice provided for herein or sooner than five (5)
days after the Company has given notice of any material changes
provided for herein; provided, however, that such periods may be
shortened upon the written consent of all of the Holders.
(ii) Effect of Noncompliance. In the event the requirements of
this Section 2(d) are not complied with, the Company shall forthwith
either cause the closing of the transaction to be postponed until such
requirements have been complied with, or cancel such transaction.
(iii) Election to Exercise. Upon receipt of a Notice of
Liquidation Event, each Holder shall have the right to elect to
exercise this Warrant, in whole or in part, as provided for in this
Section 2, notwithstanding the prohibition on exercise prior to the
second anniversary of the Issuance Date set forth in Section 2(c)
above.
3. Payment of Exercise Price. The Holder may make payment of the Exercise
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Price in cash or by certified or official bank check payable to the order of the
Company or by wire transfer of immediately available funds to the account of the
Company.
4. Cashless Exercise of Warrants.
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(a) Notwithstanding the provisions of Section 3 above, if the Fair
Market Value is greater than the Exercise Price (at the date of
calculation, as set forth below), in lieu of exercising the Warrant as
permitted in Section 2.1(b), the Holder may elect to receive shares of
Common Stock equal to the value (as determined below) of the Warrants (or
the portion thereof being canceled) by surrender of the Warrant, together
with the Subscription Form duly executed, to the Company at its office
referred to in Section 2(b) hereof, in which event the Company shall issue
to the Holder that number of shares of Common Stock computed using the
following formula:
CS = WCS x (FMV - EP)
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Warrant - Page 2
FMV
Where
CS equals the number of shares of Common Stock to be issued to
the holder of the Warrant
WCS equals the number of shares of Common Stock purchasable under
the Warrants being exercised (at the date of such calculation)
FMV equals the Fair Market Value of one share of the Common Stock
(at the date of such calculation)
EP equals the Exercise Price (as adjusted to the date of such
calculation).
(b) For purposes of Rule 144 under the Securities Act, 17 C.F.R. ss.
230.144, the parties hereto agree that the exercise of any Warrants in
accordance with this Section 2.2 shall be deemed to be a conversion of such
Warrants, pursuant to the terms of this Agreement and the Warrants, into
Common Stock.
(c) For purposes of this Section 4, "Fair Market Value" shall mean
with respect to every share of Common Stock on any date in question (i) the
average of the closing bid prices per share of the Common Stock for the
previous fifteen (15) consecutive trading days (A) on the principal
securities exchange or trading market where the Common Stock is listed or
traded or, if the foregoing does not apply, (B) in the over-the-counter
market on the electronic bulletin board for the Common Stock or (ii), if,
and only if, no trading price is reported for the Common Stock, then its
Fair Market Value shall be as determined, in good faith by the board of
directors of the Company. If the Holder shall object in writing within 5
days of notification of the determination of the Company's board of
directors, then the Fair Market Value shall be determined by an investment
banking firm or appraisal firm (which firm shall own no securities of, and
shall not be an affiliate, subsidiary or a related person of, the Company
or any Holder) of recognized national standing retained by the Company and
acceptable to the Holder.
5. Partial Exercise. This Warrant may be exercised in part, and the Holder
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shall be entitled to receive a new warrant, which shall be dated as of the date
of this Warrant, covering the number of Warrant Shares in respect of which this
Warrant shall not have been exercised.
6. Issuance Date. The person or persons in whose name or names any
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certificate representing Warrant Shares is issued hereunder shall be deemed to
have become the holders of record of such shares represented thereby as at the
close of business on the date this Warrant is exercised with respect to such
shares, whether or not the transfer books of the Company shall be closed. As
soon as practicable after the exercise of this Warrant, the Company at its
expense (including the payment of any applicable taxes) will use its best lawful
efforts to cause the Company's transfer agent to issue and deliver to Holder a
certificate for the number of fully paid nonassessable shares of Common Stock to
which such Holder is entitled.
Warrant - Page 3
7. Reserved Shares; Valid Issuance. The Company covenants that it will
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reserve and keep available at all times from and after the date hereof such
number of its authorized shares of Common Stock, free from all preemptive or
similar rights therein, as will be sufficient to permit the exercise of this
Warrant in full. The Company further covenants that such shares as may be issued
pursuant to the exercise of this Warrant will, upon issuance, be duly and
validly issued, fully paid and nonassessable and free from all taxes, liens and
charges with respect to the issuance thereof.
8. Adjustment Provision.
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(a) Subdivisions, Split-ups, Combinations and Stock Dividends. If
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after the Issuance Date the Company shall subdivide the Common Stock, by
split up or otherwise, or combine such shares, or issue additional shares
in payment of a stock dividend on such shares, the number of shares
issuable on the exercise of this Warrant shall forthwith be proportionately
increased in the case of a subdivision or stock dividend, or
proportionately decreased in the case of a combination, and the Exercise
Price shall forthwith be proportionately decreased in the case of a
subdivision or stock dividend, or proportionately increased in the case of
a combination.
(b) Reclassifications. If after the Issuance Date there shall be any
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reclassification, capital reorganization or change of the Common Stock
(other than as a result of a subdivision, combination or stock dividend
provided for in Section 7(a) hereof), then, as a condition of such
reclassification, reorganization or change, lawful provisions shall be
made, and duly executed documents evidencing the same from the Company
shall be delivered to the Holder, so that the Holder shall thereafter have
the right to purchase, at a total price not to exceed that payable upon the
exercise of this Warrant in full, the kind and amount of shares of stock
and other securities and property receivable upon such reclassification,
reorganization or change, by holders of the number of shares of Common
Stock which might have been purchased by the Holder immediately prior to
such reclassification, reorganization or change, and in such case
appropriate provisions shall be made with respect to the rights and
interest of the Holder to the end that the provisions hereof (including,
without limitation, provisions for the adjustment of the Exercise Price and
the number of shares issuable hereunder) shall thereafter be applicable in
relation to any shares of stock or other securities and property thereafter
deliverable upon exercise hereof.
9. Fractional Shares. In no event shall any fractional share of Common
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Stock be issued upon any exercise of this Warrant and the number of shares of
Common Stock to be issued shall be rounded to the nearest whole share.
10. Certificate of Adjustment. Whenever the Exercise Price or the number of
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shares issuable hereunder is adjusted, as herein provided, the Company shall
promptly deliver to the Holder a certificate of the Company's Chief Financial
Officer setting forth the number of shares issuable hereunder and the Exercise
Price after such adjustment and setting forth a brief statement of the facts
requiring such adjustment.
Warrant - Page 4
11. Notices of Record Date. In the event of:
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(a) any taking by the Company of a record of the holders of any class
of securities for the purpose of determining the holders thereof who are
entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any
class or any other securities or property, or to receive any other right,
(b) any reclassification of the capital stock of the Company, capital
reorganization of the Company, or
(c) any transaction which would constitute a Deemed Liquidation,
then and in each such event the Company will mail or cause to be mailed to
the Holder a notice specifying (i) the date on which any such 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,
or (ii) the date on which any such reclassification, reorganization,
conveyance or Deemed Liquidation is to take place, and the time, if any is
to be fixed, as of which the holders of record in respect of such event are
to be determined. Such notice shall be mailed at least ten (10) days prior
to the date specified in such notice on which any such action is to be
taken.
12. Amendment. The terms of this Warrant may be amended, modified or waived
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only with the written consent of the Company and the Holder.
13. Warrant Register; Transfers.
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(a) The Company will maintain a register containing the names and
addresses of the registered holders of the Warrants. The Holder may change
his or its address as shown on the warrant register by written notice to
the Company requesting such change. Any notice or written communication
required or permitted to be given to the Holder may be given by certified
mail or delivered to the Holder at his or its address as shown on the
warrant register.
(b) Subject to compliance with applicable federal and state securities
laws, this Warrant may be transferred by the Holder with respect to any or
all of the Warrant Shares purchasable hereunder. Upon surrender of this
Warrant to the Company, together with the assignment hereof properly
endorsed for transfer of this Warrant as an entirety by the Holder, the
Company shall issue a new warrant of the same denomination to the assignee.
Upon surrender of this Warrant to the Company, together with the assignment
hereof properly endorsed by the Holder for transfer with respect to a
portion of the Warrant Shares purchasable hereunder, the Company shall
issue a new warrant to the assignee, in such denomination as shall be
requested by the Holder hereof, and shall issue to such Holder a new
warrant covering the number of shares in respect of which this Warrant
shall not have been transferred.
Warrant - Page 5
(c) In case this Warrant shall be mutilated, lost, stolen or
destroyed, the Company shall issue a new warrant of like tenor and
denomination and deliver the same (i) in exchange and substitution for and
upon surrender and cancellation of any mutilated Warrant, or (ii) in lieu
of any Warrant lost, stolen or destroyed, upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft or destruction of
such Warrant (including a reasonably detailed affidavit with respect to the
circumstances of any loss, theft or destruction) and of indemnity
reasonably satisfactory to the Company.
14. No Impairment. The Company will not, by amendment of its Charter or
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by-laws or through any reclassification, capital reorganization, consolidation,
merger, sale or conveyance of assets, dissolution, liquidation, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of this Warrant, but will 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.
15. Governing Law. The provisions and terms of this Warrant shall be
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governed by and construed in accordance with the internal laws of State of
Texas, without giving effect to principles of conflicts law.
16. Successors and Assigns. This Warrant shall be binding upon the
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Company's successors and assigns and shall inure to the benefit of each of the
Holder's successors, legal representatives and permitted assigns.
[signature page follows]
Warrant - Page 6
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed as
an instrument under seal by its duly authorized officer as of the date first
above written.
EDGE TECHNOLOGY GROUP, INC.
By: ----------------------------------
Xxxxxx X. Xxxxxxx XX
President and Chief Executive Officer
Attest:
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Xxxxx X. Xxxxxxx, Secretary
Warrant - Page 7
Subscription
Date:___________
The undersigned hereby subscribes for:
_______ shares of Common Stock covered by this Warrant.
The certificate(s) for such shares shall be issued in the name of the
undersigned or as otherwise indicated below:
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Signature
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Name for Registration
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Mailing Address
Assignment
For value received _______________hereby sells, assigns and transfers
unto ---------------
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Please print or typewrite name and address of Assignee
the within Warrant, and does hereby irrevocably constitute and appoint
________________its attorney to transfer the within Warrant on the books of the
within named Company with full power of substitution in the premises.
Dated:
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In the Presence of:
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