EXHIBIT 4.1
FORM OF WARRANT
WIRE ONE TECHNOLOGIES, INC.
WARRANT TO PURCHASE COMMON STOCK
Warrant No.: W- Number of Shares: _______
Date of Issuance: January __, 2002
Wire One Technologies, Inc., a Delaware corporation (the "Company"),
hereby certifies that, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, _____________________________, the
registered holder hereof or its permitted assigns, is entitled, subject to the
terms set forth below, to purchase from the Company upon surrender of this
Warrant, at any time or times on or after the date hereof, but not after 11:59
P.M. Eastern Time on the Expiration Date (as defined herein)
_______________________ (________) fully paid and nonassessable shares of Common
Stock (as defined herein) of the Company (the "Warrant Shares") at the Warrant
Exercise Price provided in Section l(a) below.
Section 1.
(a) Definitions. The following words and terms as used in this
Warrant shall have the following meanings:
(i) "Business Day" means any day other than Saturday,
Sunday or other day on which commercial banks in the City of New York
are authorized or required by law to remain closed.
(ii) "Closing Sale Price" means, for any security as of
any date, the last closing trade price for such security at 4:00 p.m.
Eastern Standard Time on the Nasdaq National Market, or, if the Nasdaq
National Market is not the principal securities exchange or trading
market for such security, the last closing trade price of such security
at 4:00 p.m. Eastern Standard Time on the principal securities exchange
or trading market where such security is listed or traded, or if the
foregoing do not apply, the last closing trade price of such security
in the over-the-counter market on the electronic bulletin board for
such security at 4:00 p.m. Eastern Standard Time, or, if no last
closing trade price is reported for such security, the closing bid and
ask price of such security, or, if no closing ask or bid prices are
reported for such security, the average of the bid and ask prices of
any market makers for such security as reported in the "pink sheets" by
the National Quotation Bureau, Inc. If the Closing Sale Price cannot be
calculated for such security on such date on any of the foregoing
bases, the Closing Sale Price of such security on such date shall be
the fair market value as determined in good faith by the Board of
Directors of the Company. (All such determinations to be appropriately
adjusted for any stock dividend, stock split or other similar
transaction during such period).
(iii) "Common Stock" means (i) the Company's common
stock, par value $0.0001 per share, and (ii) any capital stock into
which such Common Stock shall have been changed or any capital stock
resulting from a reclassification of such Common Stock.
(iv) "Expiration Date" means the date five (5) years from
the date of this Warrant or, if such date falls on a Saturday, Sunday
or other day on which banks are required or authorized to be closed in
the City of New York or the State of New York or on which trading does
not take place on the principal exchange or automated quotation system
on which the Common Stock is traded (a "Holiday"), the next date that
is not a Holiday.
(v) "Person" means an individual, a limited liability
company, a partnership, a joint venture, a corporation, a trust, an
unincorporated organization and a government or any department or
agency thereof.
(vi) "Securities Act" means the Securities Act of 1933,
as amended.
(vii) "Warrant" means this Warrant and all Warrants
issued in exchange, transfer or replacement thereof.
(viii) "Warrant Exercise Price" shall be equal to, with
respect to any Warrant Share, $10.00, subject to adjustment as
hereinafter provided.
(ix) "Warrant Period" means the period beginning on the
date hereof and ending on and including the Expiration Date.
(b) Other Definitional Provisions.
(i) Except as otherwise specified herein, all references
herein (A) to the Company shall be deemed to include the Company's
successors and (B) to any applicable law defined or referred to herein,
shall be deemed references to such applicable law as the same may have
been or may be amended or supplemented from time to time.
(ii) When used in this Warrant, the words "herein,"
"hereof" and "hereunder," and words of similar import, shall refer to
this Warrant as a whole and not to any provision of this Warrant, and
the words "Section," "Schedule," and "Exhibit" shall refer to Sections
of, and Schedules and Exhibits to, this Warrant unless otherwise
specified.
(iii) Whenever the context so requires, the neuter gender
includes the masculine or feminine, and the singular number includes
the plural, and vice versa.
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Section 2. Exercise of Warrant.
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(a) Subject to the terms and conditions hereof, this Warrant
may be exercised by the holder hereof then registered on the books of the
Company, in whole or in part, at any time on any Business Day on or after the
opening of business on the date hereof and prior to 11:59 P.M. Eastern Time on
the Expiration Date by (i) delivery of a written notice, in the form of the
exercise notice attached as Exhibit A hereto (the "Exercise Notice"), of such
holder's election to exercise this Warrant, which notice shall specify the
number of Warrant Shares to be purchased, (ii) payment to the Company of an
amount equal to the applicable Warrant Exercise Price multiplied by the number
of Warrant Shares as to which this Warrant is being exercised (plus any
applicable issue or transfer taxes) (the "Aggregate Exercise Price") in cash or
wire transfer of immediately available funds, unless the holder elects to make a
"Cashless Exercise" under certain conditions in accordance with section 2(d) of
this Agreement, and (iii) the surrender to a common carrier for overnight
delivery to the Company as soon as practicable following such date, this Warrant
(or an indemnification undertaking with respect to this Warrant in the case of
its loss, theft or destruction); provided, that if such Warrant Shares are to be
issued in any name other than that of the registered holder of this Warrant,
such issuance shall be deemed a transfer and the provisions of Section 7 shall
be applicable. In the event of any exercise of the rights represented by this
Warrant in compliance with this Section 2(a), the Company shall on the third
Business Day following the date of receipt of the Exercise Notice, the Aggregate
Exercise Price and this Warrant (or an indemnification undertaking with respect
to this Warrant in the case of its loss, theft or destruction) (the "Exercise
Delivery Documents"), credit such aggregate number of shares of Common Stock to
which the holder shall be entitled to the holder's or its designee's balance
account with The Depository Trust Company; provided, however, if the holder who
submitted the Exercise Notice requested physical delivery of any or all of the
Warrant Shares, then the Company shall, on or before the third Business Day
following receipt of the Exercise Delivery Documents, issue and surrender to a
common carrier for overnight delivery to the address specified in the Exercise
Notice, a certificate, registered in the name of the holder, for the number of
shares of Common Stock to which the holder shall be entitled pursuant to such
request. Upon delivery of the Exercise Notice and Aggregate Exercise Price
referred to in clause (ii) above or notification to the Company of a Cashless
Exercise referred to in Section 2(d), the holder of this Warrant shall be deemed
for all corporate purposes to have become the holder of record of the Warrant
Shares, with respect to which this Warrant has been exercised, irrespective of
the date of delivery of this Warrant as required by clause (iii) above or the
certificates evidencing such Warrant Shares.
(b) Unless the rights represented by this Warrant shall have
expired or shall have been fully exercised, the Company shall, as soon as
practicable and in no event later than five (5) Business Days after any exercise
and at its own expense, issue a new Warrant identical in all respects to this
Warrant exercised except it shall represent rights to purchase the number of
Warrant Shares purchasable immediately prior to such exercise under this Warrant
exercised, less the number of Warrant Shares with respect to which such Warrant
is exercised.
(c) No fractional shares of Common Stock are to be issued upon
the exercise of this Warrant, but rather the number of shares of Common Stock
issued upon exercise of this Warrant shall be rounded up or down to the nearest
whole number.
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(d) Notwithstanding anything contained herein to the contrary,
if, at the time of any exercise of this Warrant, no registration statement with
respect to the shares of Common Stock issuable upon such exercise is then
effective under the Securities Act, the holder of this Warrant may elect to
exercise this Warrant in whole or in part and, in lieu of making the cash
payment otherwise contemplated to be made to the Company upon such exercise in
payment of the Aggregate Exercise Price, receive upon such exercise the "Net
Number" of shares of Common Stock (a "Cashless Exercise") which shall be
determined according to the following formula:
Net Number = (A x B) - (A x C)
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B
For purposes of the foregoing formula:
A=the total number of Warrant Shares with respect to which
this Warrant is then being exercised.
B=the last reported sale price of the Common Stock on the date
immediately preceding the date of the exercise notice.
C=the Warrant Exercise Price then in effect for the applicable
Warrant Shares at the time of such exercise.
Section 3. Covenants as to Common Stock. The Company hereby covenants
and agrees as follows:
(a) This Warrant is, and any Warrants issued in substitution
for or replacement of this Warrant will upon issuance be, duly authorized and
validly issued.
(b) All Warrant Shares which may be issued upon the exercise
of the rights represented by this Warrant will, upon issuance, be validly
issued, fully paid and nonassessable and free from all taxes, liens and charges
with respect to the issue thereof.
(c) During the period within which the rights represented by
this Warrant may be exercised, the Company will at all times have authorized and
reserved the number of shares of Common Stock needed to provide for the exercise
of the rights then represented by this Warrant.
(d) The shares of Common Stock issuable upon exercise of this
Warrant shall be listed upon each national securities exchange or automated
quotation system, if any, upon which shares of Common Stock are then listed
(subject to official notice of issuance upon exercise of this Warrant) and shall
maintain, so long as any other shares of Common Stock shall be so listed, such
listing of all shares of Common Stock from time to time issuable upon the
exercise of this Warrant; and the Company shall so list on each national
securities exchange or automated quotation system, as the case may be, and shall
maintain such listing of, any other shares of capital stock of the Company
issuable upon the exercise of this Warrant if and so long as any shares of the
same class shall be listed on such national securities exchange or automated
quotation system.
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(e) The Company will not, by amendment of its Certificate of
Incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issuance or sale of securities, or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
to be observed or performed by it hereunder, but will at all times in good faith
assist in the carrying out of all the provisions of this Warrant and in the
taking of all such action as may reasonably be requested by the holder of this
Warrant in order to protect the exercise privilege of the holder of this Warrant
consistent with the tenor and purpose of this Warrant.
(f) This Warrant will be binding upon any entity succeeding to
the Company by merger, consolidation or acquisition of all or substantially all
of the Company's assets.
Section 4. Taxes. The Company shall pay any and all taxes which may be
payable with respect to the issuance and delivery of Warrant Shares upon
exercise of this Warrant; provided, however, that the Company shall not be
required to pay any tax that may be payable in respect of any transfer involved
in the issue or delivery of Common Stock or other securities or property in a
name other than that of the registered holders of this Warrant to be converted
and such holder shall pay such amount, if any, to cover any applicable transfer
or similar tax.
Section 5. Warrant Holder Not Deemed a Stockholder. Except as otherwise
specifically provided herein, no holder, as such, of this Warrant shall be
entitled to vote or receive dividends or be deemed the holder of shares of the
Company for any purpose, nor shall anything contained in this Warrant be
construed to confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote, give or withhold consent to any
corporate action (whether any reorganization, issue of stock, reclassification
of stock, consolidation, merger, conveyance or otherwise), receive notice of
meetings, receive dividends or subscription rights, or otherwise, prior to the
issuance to the holder of this Warrant of the Warrant Shares which he or she is
then entitled to receive upon the due exercise of this Warrant. In addition,
nothing contained in this Warrant shall be construed as imposing any liabilities
on such holder to purchase any securities (upon exercise of this Warrant or
otherwise) or as a stockholder of the Company, whether such liabilities are
asserted by the Company or by creditors of the Company.
Section 6. Securities Laws. Shares may not be issued to the Holder upon
exercise of this Warrant if, at the time of exercise, a registration statement
with respect to such shares is not effective under the Securities Act or if such
shares are not qualified or exempt from qualification in the state wherein the
holder of this Warrant resides. The Company agrees to use commercially
reasonable efforts to cause a registration statement to continue to be effective
during the term of this Warrant with respect to sales under the Securities Act
and to take such action under the laws of various states as may be required to
cause the sale of securities upon exercise to be lawful.
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Section 7. Ownership and Transfer.
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(a) The Company shall maintain at its principal executive
offices (or such other office or agency of the Company as it may designate by
notice to the holder hereof), a register for this Warrant, in which the Company
shall record the name and address of the person in whose name this Warrant has
been issued, as well as the name and address of each transferee. The Company may
treat the person in whose name any Warrant is registered on the register as the
owner and holder thereof for all purposes, notwithstanding any notice to the
contrary.
(b) This Warrant and the rights granted hereunder shall be
assignable by the holder hereof without the consent of the Company.
Section 8. Adjustment of Warrant Exercise Price and Number of Shares.
The Warrant Exercise Price and the number of shares of Common Stock issuable
upon exercise of this Warrant shall be adjusted from time to time as follows:
(a) Adjustment of Warrant Exercise Price upon Subdivision or
Combination of Common Stock. If the Company at any time after the date of
issuance of this Warrant subdivides (by any stock split, stock dividend,
recapitalization or otherwise) one or more classes of its outstanding shares of
Common Stock into a greater number of shares, any Warrant Exercise Price in
effect immediately prior to such subdivision will be proportionately reduced and
the number of shares of Common Stock obtainable upon exercise of this Warrant
will be proportionately increased. If the Company at any time after the date of
issuance of this Warrant combines (by combination, reverse stock split or
otherwise) one or more classes of its outstanding shares of Common Stock into a
smaller number of shares, any Warrant Exercise Price in effect immediately prior
to such combination will be proportionately increased and the number of shares
of Common Stock obtainable upon exercise of this Warrant will be proportionately
decreased. Any adjustment under this Section 8(a) shall become effective at the
close of business on the date the subdivision or combination becomes effective.
(b) Minimum Adjustment of Warrant Exercise Price. No
adjustment of the Warrant Exercise Price shall be made under this Section 8 in
an amount of less than 1% of the Warrant Exercise Price in effect at the time
such adjustment is otherwise required to be made, but any such lesser adjustment
shall be carried forward and shall be made at the time and together with the
next subsequent adjustment which, together with any adjustments so carried
forward, shall amount to not less than 1% of such Warrant Exercise Price. No
adjustments shall be made pursuant to this Section 8 which would result in an
increase in the Warrant Exercise Price.
(c) Notices.
(i) Immediately upon any adjustment of a Warrant Exercise
Price, the Company will give written notice thereof to the holder of
this Warrant, setting forth in reasonable detail, and certifying, the
calculation of such adjustment.
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(ii) The Company will give written notice to the holder
of this Warrant at least ten (10) days prior to the date on which the
Company closes its books or takes a record (A) with respect to any
dividend or distribution upon the Common Stock, (B) with respect to any
pro rata subscription offer to holders of Common Stock or (C) for
determining rights to vote with respect to any Organic Change (as
defined below), dissolution or liquidation, provided that such
information shall be made known to the public prior to or in
conjunction with such notice being provided to such holder. Any
recapitalization, reorganization, reclassification, consolidation,
merger, sale of all or substantially all of the Company's assets to
another Person or other transaction in each case which is effected in
such a way that 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 is referred to herein
as an "Organic Change."
(iii) The Company will also give written notice to the
holder of this Warrant at least ten (10) days prior to the date on
which any Organic Change, dissolution or liquidation will take place,
provided that such information shall be made known to the public prior
to or in conjunction with such notice being provided to such holder.
Section 9. Redemption.
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(a) At any time after six (6) months from the date hereof, the
Warrants may be redeemed, at the option of the Company, at a redemption price of
$0.10 per Warrant Share, provided the Closing Sale Price of the Common Stock
issuable upon exercise of this Warrant shall equal or exceed 200% of the Warrant
Exercise Price for a period of twenty (20) consecutive trading days prior to the
date of the notice of redemption.
(b) If the conditions set forth in Section 9(a) are met, and
the Company elects to exercise its right to redeem the Warrants, it shall mail
by certified or registered mail, return receipt requested, or send by nationally
recognized overnight delivery service, a notice of redemption to each of the
registered holders of the Warrants to be redeemed not later than the thirtieth
day before the date fixed for redemption, at their last address as shall appear
on the records maintained by the Company. Any notice mailed in the manner
provided herein shall be conclusively presumed to have been duly given whether
or not the registered holder receives such notice.
(c) The notice of redemption shall specify (i) the redemption
price, (ii) the date fixed for redemption, and (iii) that the right to exercise
the Warrant shall terminate at 5:00 P.M. (New York time) on the business day
immediately preceding the date fixed for redemption. The date fixed for the
redemption of the Warrant shall be the "Redemption Date." No failure to mail
such notice nor any defect therein or in the mailing thereof shall affect the
validity of the proceedings for such redemption except as to a registered holder
(A) to whom notice was not mailed or (B) whose notice was defective. An
affidavit of the warrant agent or of the Secretary or an Assistant Secretary of
the Company that notice of redemption has been mailed shall, in the absence of
fraud, be prima facie evidence of the facts stated therein.
(d) Any right to exercise a Warrant shall terminate at 5:00
P.M. (New York time) on the business day immediately preceding the Redemption
Date. On and after the Redemption Date, holders of the Warrants shall have no
further rights except to receive, upon surrender of the Warrant, the redemption
price.
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(e) From and after the Redemption Date specified, the Company
shall, at the place specified in the notice of redemption, upon presentation and
surrender to the Company by or on behalf of the registered holder thereof of one
or more warrant certificates evidencing Warrants to be redeemed, deliver or
cause to be delivered to or upon the written order of such holder a sum in cash
equal to the redemption price of each such Warrant. From and after the
Redemption Date and upon the deposit or setting aside by the Company of a sum
sufficient to redeem all the Warrants called for redemption, such Warrants shall
expire and become void and all rights hereunder and under the warrant
certificates, except the right to receive payment of the redemption price, shall
cease.
Section 10. Lost, Stolen, Mutilated or Destroyed Warrant. If this
Warrant is lost, stolen, mutilated or destroyed, the Company shall, on receipt
of an indemnification undertaking (or, in the case of a mutilated Warrant, the
Warrant), issue a new Warrant of like denomination and tenor as this Warrant so
lost, stolen, mutilated or destroyed.
Section 11. Notice. Any notices, consents, waivers or other
communications required or permitted to be given under the terms of this Warrant
must be in writing and will be deemed to have been delivered: (i) upon receipt,
when delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); (iii) one Business Day after deposit with a
nationally recognized overnight delivery service; or (iv) three days after
mailing by certified or registered mail, return receipt requested, in each case
properly addressed to the party to receive the same. The addresses and facsimile
numbers for such communications shall be:
If to the Company:
Wire One Technologies, Inc.
000 Xxxx Xxxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: General Counsel
With a copy to:
Xxxxxxxx & Xxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X.X. Xxxxxxx
If to the holder, at the address of such holder or its
transferee as shall appear on the records maintained by the Company.
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Each party shall provide five days' prior written notice to the other party of
any change in address or facsimile number. Written confirmation of receipt (A)
given by the recipient of such notice, consent, waiver or other communication,
(B) mechanically or electronically generated by the sender's facsimile machine
containing the time, date, recipient facsimile number and an image of the first
page of such transmission or (C) provided by a nationally recognized overnight
delivery service shall be rebuttable evidence of personal service, receipt by
facsimile or receipt from a nationally recognized overnight delivery service in
accordance with clause (i), (ii) or (iii) above, respectively.
Section 12. Date. The date of this Warrant is January __, 2002. This
Warrant, in all events, shall be wholly void and of no effect after the close of
business on the Expiration Date, except that notwithstanding any other
provisions hereof, the provisions of Section 7 shall continue in full force and
effect after such date as to any Warrant Shares or other securities issued upon
the exercise of this Warrant.
Section 13. Amendment and Waiver. Except as otherwise provided herein,
the provisions of the Common Stock Warrants may be amended and the Company may
take any action herein prohibited, or omit to perform any act herein required to
be performed by it, only if the Company has obtained the written consent of the
holders of Common Stock Warrants representing a majority of the shares of Common
Stock obtainable upon exercise of the Common Stock Warrants then outstanding;
provided that no such action may increase the Warrant Exercise Price of the
Common Stock Warrants or decrease the number of shares or class of stock
obtainable upon exercise of any Common Stock Warrant without the written consent
of the holder of such Common Stock Warrant.
Section 14. Descriptive Headings; Governing Law. The descriptive
headings of the several Sections and paragraphs of this Warrant are inserted for
convenience only and do not constitute a part of this Warrant. The corporate
laws of the State of Delaware shall govern all issues concerning the relative
rights of the Company and its stockholders. All other questions concerning the
construction, validity, enforcement and interpretation of this Warrant shall be
governed by the internal laws of the State of New York, without giving effect to
any choice of law or conflict of law provision or rule (whether of the State of
New York, or any other jurisdictions) that would cause the application of the
laws of any jurisdictions other than the State of New York.
WIRE ONE TECHNOLOGIES, INC.
By: _________________________________
Name:
Title:
9
EXHIBIT A TO WARRANT
EXERCISE NOTICE
TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS WARRANT
WIRE ONE TECHNOLOGIES, INC.
The undersigned holder hereby exercises the right to purchase
_____________________ (_______) of the shares of Common Stock ("Warrant Shares")
of Wire One Technologies, Inc., a Delaware corporation (the "Company"),
evidenced by the attached Warrant (the "Warrant"). Capitalized terms used herein
and not otherwise defined shall have the respective meanings set forth in the
Warrant.
1. Form of Warrant Exercise Price. The Holder intends that payment of
the Warrant Exercise Price shall be made as:
___________ a "Cash Exercise" with respect to ____________________
Warrant Shares; and/or
___________ a "Cashless Exercise" with respect to ________________
Warrant Shares (to the extent permitted by the terms
of the Warrant).
2. Payment of Warrant Exercise Price. The holder shall pay the sum of
$________ to the Company in accordance with the terms of the Warrant.
3. Delivery of Warrant Shares. The Company shall deliver to the holder
_________ Warrant Shares in accordance with the terms of the Warrant.
Date: ___________ _, ____
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Name of Registered Holder
By:
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Name:
Title:
EXHIBIT B TO WARRANT
FORM OF WARRANT POWER
FOR VALUE RECEIVED, the undersigned does hereby assign and transfer to
___________, with an address at
_________________________________________________________, Federal
Identification No. _____________, a warrant to purchase ____________ shares of
the Common Stock of Wire One Technologies, Inc., a Delaware corporation,
represented by warrant certificate no. _________, standing in the name of the
undersigned on the books of said corporation. The undersigned does hereby
irrevocably constitute and appoint ___________, attorney to transfer the
warrants of said corporation, with full power of substitution in the premises.
Dated: ______, _____
[HOLDER]
By:
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Its:
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