EXHIBIT 11
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THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED
OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
OR EXEMPTION FROM REGISTRATION UNDER THE FOREGOING LAWS.
THIS WARRANT SHALL BE VOID AFTER 5:00 P.M. EASTERN TIME ON DECEMBER 1,
2016 (the "EXPIRATION DATE").
No. 2006-[__]
VERTICAL COMMUNICATIONS, INC.
WARRANT TO PURCHASE SHARES OF COMMON STOCK
FOR VALUE RECEIVED, [WARRANTHOLDER] ("Warrantholder"), is entitled to
purchase, subject to the provisions of this Warrant To Purchase Shares of Common
Stock (the "Warrant"), from Vertical Communications, Inc., a Delaware
corporation ("Company"), at any time not later than 5:00 P.M., Eastern time, on
the Expiration Date (as defined above), at an initial exercise price per share
equal to fifty-eight cents ($0.58) (such price and such other price as shall
result, from time to time, from the adjustments specified in Section 8 hereof is
herein referred to as the "Warrant Price"), [NUMBER OF] (such number and such
other number as shall result, from time to time, from the adjustments specified
in Section 8 hereof is herein referred to as the "Warrant Shares") of Common
Stock (as defined below). The number of Warrant Shares purchasable upon exercise
of this Warrant and the Warrant Price shall be subject to adjustment from time
to time as described herein. As used herein, "Common Stock" means the common
stock, $0.01 par value per share, of the Company, and any capital stock of any
class of the Company hereafter authorized that shall not be entitled to a fixed
sum in respect of the rights of the holders thereof to participate in dividends
or in the distribution of assets upon the voluntary or involuntary liquidation,
dissolution or winding up of the Company. This Warrant is one of the several
warrants (collectively, the "December 2006 Warrants") evidencing the right to
purchase shares of Common Stock issued pursuant to that certain Amended and
Restated Securities Purchase Agreement dated as of December 1, 2006 by and among
the Company, the Warrantholder and the other parties thereto (as such agreement
is amended and/or restated and in effect from time to time, the "2006 Purchase
Agreement").
1. Registration. The Company shall maintain books for the transfer and
registration of the Warrant. Upon the initial issuance of the Warrant,
the Company shall issue and register the Warrant in the name of the
Warrantholder.
2. Transfers. As provided herein, this Warrant may be transferred only
pursuant to a registration statement filed under the Securities Act of
1933, as amended ("Securities Act"), or an exemption from such
registration. Subject to such restrictions, the Company shall transfer
this Warrant from time to time upon the books to be maintained by the
Company for that purpose, upon surrender thereof for transfer properly
endorsed or accompanied by appropriate instructions for transfer and
such other documents as may be reasonably required by the Company to
establish that such transfer is being made in accordance with the terms
hereof, and a new Warrant shall be issued to the transferee and the
surrendered Warrant shall be canceled by the Company.
3. Exercise of Warrant.
Warrant -- Page 2
(a) Subject to the provisions hereof, the Warrantholder may
exercise this Warrant in whole or in part at any time upon
surrender of the Warrant, together with delivery of the duly
executed Warrant exercise form attached hereto as Appendix A
(the "Exercise Agreement") and payment by cash, certified
check or wire transfer of funds (or by cash-less exercise as
provided in Section 17) for the Warrant Price for that number
of Warrant Shares then being purchased, to the Company during
normal business hours on any business day at the Company's
principal executive offices (or such other office or agency of
the Company as it may designate by notice to the holder
hereof). The Warrant Shares so purchased shall be deemed to be
issued to the holder hereof or such holder's designee, as the
record owner of such shares, as of the close of business on
the date on which this Warrant shall have been surrendered (or
evidence of loss, theft or destruction thereof and security or
indemnity reasonably satisfactory to the Company), the Warrant
Price shall have been paid, the completed Exercise Agreement
shall have been delivered and, in the case of any transfer of
Warrant Shares effected at the time of such exercise, an
appropriately executed stock power and a certificate
containing such reasonable and appropriate customary
representations as may be reasonably requested by the Company
shall have been delivered to the Company. Certificates for the
Warrant Shares so purchased, representing the aggregate number
of shares specified in the Exercise Agreement, shall be
delivered to the holder hereof within a reasonable time, not
exceeding three (3) business days, after this Warrant shall
have been so exercised. The certificates so delivered shall be
in such denominations as may be requested by the holder hereof
and shall be registered in the name of such holder or, subject
to compliance with applicable law, such other name as shall be
designated by such holder. If this Warrant shall have been
exercised only in part, then, unless this Warrant has expired,
the Company shall, at its expense, at the time of delivery of
such certificates, deliver to the holder a new Warrant
representing the number of shares with respect to which this
Warrant shall not then have been exercised.
(b) Each exercise hereof shall constitute the re-affirmation by
the Warrantholder that the representations and warranties
contained in Sections 5.2, 5.3 and 5.4 of the 2006 Purchase
Agreement are true and correct in all material respects with
respect to the Warrantholder as of the time of such exercise.
4. Compliance with the Securities Act. The Company may cause the legend
set forth on the first page of this Warrant to be set forth on each
Warrant or similar legend on any security issued or issuable upon
exercise of this Warrant, unless counsel for the Company is of the
opinion as to any such security that such legend is unnecessary.
5. Payment of Taxes. The Company will pay any documentary stamp taxes
attributable to the initial issuance of Warrant Shares issuable upon
the exercise of the Warrant; provided, however, that the Company shall
not be required to pay any tax or taxes which may be payable in respect
of any transfer involved in the issuance or delivery of any
certificates for Warrant Shares in a name other than that of the
registered holder of this Warrant in respect of which such shares are
issued, and in such case, the Company shall not be required to issue or
deliver any certificate for Warrant Shares or any Warrant until the
person requesting the same has paid to the Company the amount of such
tax or has established to the Company's reasonable satisfaction that
such tax has been paid. The holder shall be responsible for income and
gift taxes due under federal, state or other law, if any such tax is
due.
6. Mutilated or Missing Warrants. In case this Warrant shall be mutilated,
lost, stolen, or destroyed, the Company shall issue in exchange and
substitution of and upon cancellation of the mutilated
Warrant -- Page 3
Warrant, or in lieu of and substitution for the Warrant lost, stolen or
destroyed, a new Warrant of like tenor and for the purchase of a like
number of Warrant Shares, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction of the
Warrant, and with respect to a lost, stolen or destroyed Warrant,
reasonable indemnity or bond with respect thereto, if requested by the
Company.
7. Reservation of Common Stock. The Company shall at all applicable times
keep reserved until issued (if necessary) as contemplated by this
Section 7, out of the authorized and unissued Common Stock, sufficient
shares to provide for the exercise of the rights of purchase
represented by the Warrant in compliance with its terms. The Company
agrees that all Warrant Shares issued upon exercise of the Warrant
shall be, at the time of delivery of the certificates for such Warrant
Shares upon payment in full of the Warrant Price therefor in accordance
with the terms of this Warrant (or by cash-less exercise as provided
below), duly authorized, validly issued, fully paid and non-assessable
shares of Common Stock of the Company.
8. Adjustments to Warrant Price and Warrant Shares. Subject and pursuant
to the provisions of this Section 8, the Warrant Price and number of
Warrant Shares subject to this Warrant shall be subject to adjustment
from time to time as set forth hereinafter.
(a) In the event the Company shall at any time after the Original
Issue Date (as defined below) issue Additional Shares of
Common Stock (defined below) (including Additional Shares of
Common Stock deemed to be issued), without consideration or
for a consideration per share less than the applicable Warrant
Price in effect immediately prior to such issuance, then the
Warrant Price shall be reduced, concurrently with such
issuance, to the consideration per share received by the
Company for such issuance or deemed issuance of the Additional
Shares of Common Stock; provided that, if such issuance or
deemed issuance was without consideration, then the Company
shall be deemed to have received an aggregate of $0.01 of
consideration for all such Additional Shares of Common Stock
issued or deemed to be issued. Notwithstanding anything to the
contrary set forth in this Warrant, if the Company shall issue
any Options and/or Convertible Securities, or otherwise agrees
to issue any Options and/or Convertible Securities, then the
Company shall be deemed to have issued Additional Shares of
Common Stock and the applicable provisions of this Section 8
shall apply to such issuance or deemed issuance.
(b) Determination of Consideration. For purposes of this Section
8, the consideration received by the Company for the issue of
any Additional Shares of Common Stock shall be computed as
follows:
(i) Cash and Property: Such consideration shall:
(1) insofar as it consists of cash, be computed
at the aggregate amount of cash received by
the Company, excluding amounts paid or
payable for accrued interest;
(2) insofar as it consists of property other
than cash, be computed at the fair market
value thereof at the time of such issue, as
determined in good faith by the Board of
Directors; and
(3) in the event Additional Shares of Common
Stock are issued together with other shares
or securities or other assets of the Company
for
Warrant -- Page 4
consideration which covers both, be the
proportion of such consideration so
received, computed as provided in clauses
(A) and (B) above, as determined in good
faith by the Board of Directors.
(ii) Options and Convertible Securities. The consideration
per share received by the Company for Additional
Shares of Common Stock deemed to have been issued,
relating to Options and Convertible Securities, shall
be determined by dividing:
(1) the total amount, if any, received or
receivable by the Company as consideration
for the issue of such Options or Convertible
Securities, plus the minimum aggregate
amount of additional consideration (as set
forth in the instruments relating thereto,
without regard to any provision contained
therein for a subsequent adjustment of such
consideration) payable to the Company upon
the exercise of such Options or the
conversion or exchange of such Convertible
Securities, or in the case of Options for
Convertible Securities, the exercise of such
Options for Convertible Securities and the
conversion or exchange of such Convertible
Securities, by
(2) the maximum number of shares of Common Stock
(as set forth in the instruments relating
thereto, without regard to any provision
contained therein for a subsequent
adjustment of such number) issuable upon the
exercise of such Options or the conversion
or exchange of such Convertible Securities,
or in the case of Options for Convertible
Securities, the exercise of such Options and
Convertible Securities and the conversion or
exchange of such Convertible Securities.
(c) Multiple Closing Dates. In the event the Company shall issue
on more than one date Additional Shares of Common Stock that
are a part of one transaction or a series of related
transactions and that would result in an adjustment to the
Warrant Price pursuant to the terms of Section 8(a) above, and
such issuance dates occur within a period of no more than 30
days from the first such issuance to the final such issuance,
then, upon the final such issuance, the Warrant Price shall be
readjusted to give effect to all such issuances as if they
occurred on the date of the first such issuance (and without
giving effect to any additional adjustments as a result of any
such subsequent issuances within such period).
(d) Adjustment for Stock Splits and Combinations. If the Company
shall at any time or from time to time after the Original
Issue Date effect a subdivision of the outstanding Common
Stock, the Warrant Price in effect immediately before that
subdivision shall be proportionately decreased so that the
number of shares of Common Stock issuable upon exercise of the
Warrant shall be increased in proportion to such increase in
the aggregate number of shares of Common Stock outstanding. If
the Company shall at any time or from time to time after the
Original Issue Date combine the outstanding shares of Common
Stock, the Warrant Price in effect immediately before the
combination shall be proportionately increased so that the
number of shares of Common Stock issuable upon exercise of the
Warrant shall be decreased in proportion to such decrease in
the aggregate number of shares of Common Stock outstanding.
Any adjustment under this Section 8(d) shall become effective
at the close of business on the date the subdivision or
combination becomes effective.
Warrant -- Page 5
(e) Adjustment for Certain Dividends and Distributions. In the
event the Company at any time or from time to time after the
Original Issue Date shall make or issue, or fix a record date
for the determination of holders of Common Stock entitled to
receive, a dividend or other distribution payable on the
Common Stock in additional shares of Common Stock, then and in
each such event the Warrant Price in effect immediately before
such event shall be decreased as of the time of such issuance
or, in the event such a record date shall have been fixed, as
of the close of business on such record date, by multiplying
the Warrant Price then in effect by a fraction:
(i) the numerator of which shall be the total number of
shares of Common Stock issued and outstanding
immediately prior to the time of such issuance or the
close of business on such record date, and
(ii) the denominator of which shall be the total number of
shares of Common Stock issued and outstanding
immediately prior to the time of such issuance or the
close of business on such record date plus the number
of shares of Common Stock issuable in payment of such
dividend or distribution;
provided, however, that if such record date shall have been
fixed and such dividend is not fully paid or if such
distribution is not fully made on the date fixed therefor, the
Warrant Price shall be recomputed accordingly as of the close
of business on such record date and thereafter the Warrant
Price shall be adjusted pursuant to this Section 8(e) as of
the time of actual payment of such dividends or distributions;
and provided further, however, that no such adjustment shall
be made if the Warrantholder simultaneously receives a
dividend or other distribution of shares of Common Stock in a
number equal to the number of shares of Common Stock as the
Warrantholder would have received if the Warrant had been
exercised on the date of such event.
(f) Adjustments for Other Dividends and Distributions. In the
event the Company at any time or from time to time after the
Original Issue Date shall make or issue, or fix a record date
for the determination of holders of Common Stock entitled to
receive, a dividend or other distribution payable in
securities of the Company (other than a distribution of shares
of Common Stock in respect of outstanding shares of Common
Stock) or in other property, then and in each such event the
Warrantholder shall receive, simultaneously with the
distribution to the holders of Common Stock, a dividend or
other distribution of such securities or other property in an
amount equal to the amount of such securities or other
property as the Warrantholder would have received if the
Warrant had been exercised on the date of such event.
(g) Adjustment for Merger or Reorganization, etc. If there shall
occur any reorganization, recapitalization, reclassification,
consolidation or merger involving the Company in which the
Common Stock is converted into or exchanged for securities,
cash or other property (other than a transaction covered by
Sections 8(d), 5(e) or 5(f), then, following any such
reorganization, recapitalization, reclassification,
consolidation or merger, this Warrant shall thereafter be
exercisable in lieu of the Common Stock into which it was
exercisable prior to such event into the kind and amount of
securities, cash or other property which a holder of shares of
Common Stock of the Company immediately prior to such
reorganization, recapitalization, reclassification,
consolidation or merger would have been entitled to receive
pursuant to such transaction; and, in such case, appropriate
adjustment (as determined in good faith by the Board of
Directors) shall be made in the application of the provisions
in this Section 8, to the end that the provisions set forth in
Warrant -- Page 6
this Section 8 (including provisions with respect to changes
in and other adjustments of the Warrant Price) shall
thereafter be applicable, as nearly equivalent as may be
practicable in relation to any shares of stock, securities or
properties thereafter deliverable upon the exercise thereof..
(h) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Warrant Price pursuant to
this Section 8, the Company at its expense shall, as promptly
as reasonably practicable but in any event not later than 10
days thereafter, compute such adjustment or readjustment in
accordance with the terms hereof and furnish to the
Warrantholder a certificate setting forth such adjustment or
readjustment (including the kind and amount of securities,
cash or other property into which the Warrant is exercisable)
and showing in detail the facts upon which such adjustment or
readjustment is based. The Company shall, as promptly as
reasonably practicable after the written request at any time
of the Warrantholder (but in any event not later than 10 days
thereafter), furnish or cause to be furnished to the
Warrantholder a certificate setting forth (i) the Warrant
Price then in effect, and (ii) the number of shares of Common
Stock and the amount, if any, of other securities, cash or
property which then would be received upon the exercise of
this Warrant.
(i) Notice of Record Date. In the event:
(i) the Company shall take a record of the holders of its
Common Stock for the purpose of entitling or enabling
them to receive any dividend or other distribution,
or to receive any right to subscribe for or purchase
any shares of capital stock of any class or any other
securities, or to receive any other security; or
(ii) of any capital reorganization of the Company, any
reclassification of the Common Stock of the Company,
or any liquidation of the Company; or
(iii) of the voluntary or involuntary dissolution,
liquidation or winding-up of the Company,
then, and in each such case, the Company will send or cause to
be sent to the Warrantholder a notice specifying, as the case
may be, (i) the record date for such dividend, distribution or
right, and the amount and character of such dividend,
distribution or right, or (ii) the effective date on which
such reorganization, reclassification, consolidation, merger,
transfer, dissolution, liquidation or winding-up is proposed
to take place, and the time, if any is to be fixed, as of
which the holders of record of Common Stock shall be entitled
to exchange their shares of Common Stock (or such other
capital stock or securities) for securities or other property
deliverable upon such reorganization, reclassification,
consolidation, merger, transfer, dissolution, liquidation or
winding-up, and the amount per share and character of such
exchange applicable to the Common Stock. Such notice shall be
sent at least 20 days prior to the record date or effective
date for the event specified in such notice. Any notice
required by the provisions hereof to be given to the
Warrantholder shall be deemed sent to the Warrantholder if
deposited in the United States mail, postage prepaid, and
addressed to the Warrantholder at his, her or its address
appearing on the books of the Company.
(j) The following terms shall have the following meanings:
Warrant -- Page 7
(i) "Additional Shares of Common Stock" shall mean all shares of
Common Stock issued (or, pursuant to the terms of this Section
8, deemed to be issued) by the Company after the Original
Issue Date, other than the following shares of Common Stock,
and shares of Common Stock deemed issued pursuant to the
following Options and Convertible Securities:
(1) shares of Common Stock, Options or Convertible
Securities issued or deemed issued as a dividend,
stock split, split-up or other distribution on shares
of Common Stock that is covered by this Section 8;
(2) up to an aggregate of 24,584,167 shares of Common
Stock (subject to appropriate adjustment in the event
of any stock dividend, stock split, combinations or
other similar recapitalization affecting such
shares), including Options therefor, authorized under
the Company's various stock option plans in effect as
of the Original Issue Date, of which no shares of
Common Stock have been issued as restricted stock as
of the Original Issue Date or are issuable upon the
exercise of Options outstanding as of the Original
Issue Date and 24,584,167 shares of Common Stock are
issuable to employees, consultants or directors
pursuant to stock option, stock grant, stock purchase
or similar plans or arrangements approved by the
Board of Directors or a committee thereof;
(3) shares of Common Stock or Convertible Securities
actually issued upon the exercise of Options or
shares of Common Stock actually issued upon the
conversion or exchange of Convertible Securities, in
each case provided such issuance is pursuant to the
terms of such Option or Convertible Security; and
(4) the issuance of the Warrants contemplated in that
certain Credit Agreement dated as of October 18,
2006, by and among the Company, Vertical
Communications Acquisition Corp., a Delaware
corporation, Columbia Partners, L.L.C. Investment
Management, and National Elevator Industry Pension
Fund and the shares of Common Stock issued or
issuable upon the exercise thereof.
(ii) "Convertible Securities" shall mean any evidences of
indebtedness, shares of capital stock or other securities
directly or indirectly convertible into or exchangeable for
Common Stock, but excluding Options.
(iii) "Option" shall mean rights, options or warrants to subscribe
for, purchase or otherwise acquire shares of Common Stock or
Convertible Securities.
(iv) "Original Issue Date" shall mean December 1, 2006.
9. Fractional Interest. The Company shall not be required to issue
fractions of Warrant Shares upon the exercise of the Warrant. If any
fractional share of Common Stock would, except for the provisions of
the first sentence of this Section 9, be delivered upon such exercise,
the Company, in lieu of delivering such fractional share, shall pay to
the exercising holder of this Warrant an amount in cash equal to the
current Market Price of such fractional share of Common Stock.
Warrant -- Page 8
10. Benefits. Nothing in this Warrant shall be construed to give any
person, firm or corporation (other than the Company and the
Warrantholder) any legal or equitable right, remedy or claim, it being
agreed that this Warrant shall be for the sole and exclusive benefit of
the Company and the Warrantholder.
11. Notices to Warrantholder. Upon the happening of any event requiring an
adjustment of the Warrant Price or the number of Warrant Shares, the
Company shall promptly give written notice thereof to the Warrantholder
at the address appearing in the records of the Company, stating the
adjusted Warrant Price and the adjusted number of Warrant Shares
resulting from such event and setting forth in reasonable detail the
method of calculation and the facts upon which such calculation is
based. Failure to give such notice to the Warrantholder or any defect
therein shall not affect the legality or validity of the subject
adjustment.
12. Identity of Transfer Agent. The Transfer Agent for the Common Stock is
ComputerShare Investor Services. Upon the appointment of any subsequent
transfer agent for the Common Stock or other shares of the Company's
capital stock issuable upon the exercise of the rights of purchase
represented by the Warrant, the Company will mail to the Warrantholder
a statement setting forth the name and address of such transfer agent.
13. Notices. Unless otherwise provided, any notice required or permitted
under this Warrant shall be given in writing and shall be deemed
effectively given as hereinafter described (i) if given by personal
delivery, then such notice shall be deemed given upon such delivery,
(ii) if given by telex or telecopier, then such notice shall be deemed
given upon receipt of confirmation of complete transmittal, (iii) if
given by mail, then such notice shall be deemed given upon the earlier
of (A) receipt of such notice by the recipient or (B) three days after
such notice is deposited in first class mail, postage prepaid, and (iv)
if given by an internationally recognized overnight air courier, then
such notice shall be deemed given one day after delivery to such
carrier. All notices shall be addressed as follows: (i) if to the
Warrantholder, at its address as set forth in the Company's books and
records and, if to the Company, at the address as follows, or at such
other address as the Warrantholder or the Company may designate by ten
days' advance written notice to the other:
If to the Company:
Vertical Communications, Inc.
Xxx Xxxxxxxx Xxxxx, 00xx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attn: President
Fax: (000) 000-0000
With a copy to:
Xxxxxxx Xxxxx LLP
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: Xxxxxx X. Xxxxxxx
Fax: (000) 000-0000
14. Registration Rights. The initial holder of this Warrant may be entitled
to the benefit of certain registration rights in respect of the Warrant
Shares as provided in the 2006 Purchase Agreement, and any subsequent
holder hereof may be entitled to such rights.
Warrant -- Page 9
15. Successors. All the covenants and provisions hereof by or for the
benefit of the Warrantholder shall bind and inure to the benefit of its
respective successors and assigns hereunder.
16. Governing Law. This Warrant shall be governed by, and construed in
accordance with, the laws of the State of New York.
17. Net Issue Election. Notwithstanding any other provision contained
herein to the contrary, if the Warrant Shares may not be freely sold to
the public for any reason (including, but not limited to, the failure
of the Company to have effected the registration of the Warrant Shares
or to have a current prospectus available for delivery or otherwise,
but excluding the inability of the Warrantholder to sell the Warrant
Shares due to market conditions), the Warrantholder may elect to
receive, without the payment by the Warrantholder of the aggregate
Warrant Price in respect of the shares of Common Stock to be acquired,
shares of Common Stock equal to the value of this Warrant or any
portion hereof by the surrender of this Warrant (or such portion of
this Warrant being so exercised) together with the Net Issue Election
Notice annexed hereto as Appendix B duly executed, at the office of the
Company. Thereupon, the Company shall issue to the Warrantholder such
number of fully paid, validly issued and nonassessable shares of Common
Stock as is computed using the following formula:
X = Y (A - B)
A
where
X = the number of Warrant Shares which the Warrantholder has
then requested be issued to the Warrantholder;
Y = the total number of Warrant Shares which the
Warrantholder has surrendered at such time for cash-less
exercise (including both shares to be issued to the
Warrantholder and shares to be canceled as payment
therefor);
A = the Market Price of a share of Common Stock; and
B = the Warrant Price in effect under this Warrant at the
time the net issue election is made.
18. No Rights as Stockholder. Prior to the exercise of this Warrant, the
Warrantholder shall not have or exercise any rights as a stockholder of
the Company by virtue of its ownership of this Warrant.
19. Amendment; Waiver. Any term of this Warrant may be amended or waived
(including the adjustment provisions included in Section 8 of this
Warrant) upon the written consent of the Company and the single holder
of at least thirty percent (30%) of the aggregate shares of Common
Stock issuable upon exercise of all of the December 2006 Warrants.
20. Section Headings. The section heading in this Warrant are for the
convenience of the Company and the Warrantholder and in no way alter,
modify, amend, limit or restrict the provisions hereof.
21. No Dilution or Impairment. The Company will not, by amendment of its
certificate of incorporation or through reorganization, consolidation,
merger, dissolution, sale of assets 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
Warrant -- Page 10
the taking of all such action as may be necessary or appropriate in
order to protect the rights of the Warrantholder set forth herein.
Without limiting the generality of the foregoing, the Company will not
increase the par value of any shares of stock receivable upon the
exercise of this Warrant above the amount payable therefor upon such
exercise, and at all times will take all such action as may be
necessary or appropriate in order that the Company may validly and
legally issue fully paid and non-assessable stock upon the exercise of
this Warrant.
[Remainder of Page Intentionally Left Blank]
Signature Page to Warrant
IN WITNESS WHEREOF, Vertical Communications, Inc. has caused this
Warrant to be duly executed, as of the __ day of ____________, 2006.
VERTICAL COMMUNICATIONS, INC.
By:
--------------------------------------
Name:
Title:
APPENDIX A
WARRANT EXERCISE FORM
To: Vertical Communications, Inc.
The undersigned hereby irrevocably elects to exercise the right of
purchase represented by the within Warrant ("Warrant") for, and to purchase
thereunder by the payment of the Warrant Price and surrender of the Warrant,
_________ shares of Common Stock ("Warrant Shares") provided for therein, and
requests that certificates for the Warrant Shares be issued as follows:
------------------------------------
------------------------------------
Address
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Federal Tax ID or Social Security No.
and delivered by [ ] certified mail to the above address, or
[ ] electronically (provide DWAC Instructions: ), or
-----------
[ ] other (specify: ).
-----------------------------------------
and, if the number of Warrant Shares shall not be all the Warrant Shares
purchasable upon exercise of the Warrant, that a new Warrant for the balance of
the Warrant Shares purchasable upon exercise of this Warrant be registered in
the name of the undersigned Warrantholder or the undersigned's Assignee as below
indicated and delivered to the address stated below.
By exercising the rights represented by this Warrant, the undersigned
hereby certifies that, as of the date of exercise of this Warrant, the
representations and warranties contained in Sections 5.2, 5.3 and 5.4 of the
2006 Purchase Agreement are true and correct in all material respects with
respect to the undersigned.
Dated: , Signature:
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Note: The signature must correspond with Name (please print)
the name of the registered holder as
written on the first page of the Warrant ------------------------------------
in every particular, without alteration
or enlargement or any change whatever, ------------------------------------
unless the Warrant has been assigned. Address
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Federal Identification or
Social Security No.
Assignee:
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APPENDIX B
NET ISSUE ELECTION NOTICE
To: Vertical Communications, Inc.
Date:
-----------------------------------
The undersigned hereby elects under Section 17 of this Warrant to
surrender the right to purchase __________ shares of Common Stock pursuant to
this Warrant and hereby requests the issuance of __________ shares of Common
Stock. The certificate(s) for the shares issuable upon such net issue election
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
