EXHIBIT 4.4
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL OR OTHER EVIDENCE
ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
AMEDIA NETWORKS, INC.
COMMON STOCK PURCHASE WARRANT
1. ISSUANCE; CERTAIN DEFINITIONS. In consideration of good and
valuable consideration, the receipt of which is hereby acknowledged by AMEDIA
NETWORKS, INC., a Delaware corporation (the "Company"), DOUBLE U MASTER FUND,
L.P .or registered assigns (the "Holder") is hereby granted the right to
purchase at any time commencing August 10, 2004 until 5:00 P.M., New York City
time, on August 9, 2009 (the "Expiration Date"), Three Hundred Thirty Three
Thousand Three Hundred and Thirty Three (333,333) fully paid and nonassessable
shares of the Company's Common Stock, $0.01 par value per share (the "Common
Stock"), at an initial exercise price per share (the "Exercise Price") of $2.00
per share, subject to further adjustment as set forth herein. This Warrant is
being issued pursuant to the terms of that certain Private Equity Credit
Agreement, dated as of August 9, 2004 (the "Agreement"), to which the Company
and Holder (or Holder's predecessor in interest) are parties.
2. EXERCISE OF WARRANTS.
2.1 (a) This Warrant is exercisable in whole or in part
at any time and from time to time. Such exercise shall be effectuated by
submitting to the Company (either by delivery to the Company or by facsimile
transmission as provided in Section 8 hereof) a completed and duly executed
Notice of Exercise (substantially in the form attached to this Warrant) as
provided in this paragraph. The date such Notice of Exercise is faxed to the
Company shall be the Exercise Date, provided that the Holder of this Warrant
tenders this Warrant Certificate to the Company within five (5) business days
thereafter. The Notice of Exercise shall be executed by the Holder of this
Warrant and shall indicate the number of shares then being purchased pursuant to
such exercise. Upon surrender of this Warrant Certificate, together with
appropriate payment of the Exercise Price for the shares of Common Stock
purchased, the Holder shall be entitled to receive a certificate or certificates
for the shares of Common Stock so purchased.
(b) If subsequent to August 9, 2005 there shall not
be an effective Registration Statement (other than during a Permitted Suspension
Period, as defined in the Registration Rights Agreement), the Holder may elect a
"cashless" exercise of this Warrant. If the Notice of Exercise form elects a
"cashless" exercise, the Holder shall thereby be entitled to receive a number of
shares of Common Stock equal to (x) the excess of the Current Market Value (as
defined below) over the total cash exercise price of the portion of the Warrant
then being exercised, divided by (y) the Market Price of the Common Stock as of
the trading day immediately prior to the Exercise Date. For the purposes of this
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Warrant, the terms (Q) "Current Market Value" shall be an amount equal to the
Market Price of the Common Stock as of the trading day immediately prior to the
Exercise Date, multiplied by the number of shares of Common Stock specified in
such Notice of Exercise Form, and (R) "Market Price of the Common Stock" shall
be the average of the Closing Bid Price of the Common Stock (as reported by
Bloomberg L.P.) for the 5 Trading days prior to the exercise date.
(c) If the Notice of Exercise form elects a "cash"
exercise, the Exercise Price per share of Common Stock for the shares then being
exercised shall be payable in cash or by certified or official bank check.
(d) The Holder shall be deemed to be the holder of
the shares issuable to it in accordance with the provisions of this Section 2.1
on the Exercise Date
2.2 LIMITATION ON EXERCISE. Notwithstanding the provisions
of this Warrant, the Agreement or of the other Transaction Agreements, in no
event (except (i) as specifically provided in this Warrant as an exception to
this provision, (ii) while there is outstanding a tender offer for any or all of
the shares of the Company's Common Stock, or (iii) at the Holder's option, on at
least sixty-five (65) days advance written notice from the Holder) shall the
Holder be entitled to exercise this Warrant, or shall the Company have the
obligation to issue shares upon such exercise of all or any portion of this
Warrant to the extent that, after such exercise the sum of (1) the number of
shares of Common Stock beneficially owned by the Holder and its affiliates
(other than shares of Common Stock which may be deemed beneficially owned
through the ownership of the unexercised portion of the Warrants or other rights
to purchase Common Stock or through the ownership of the unconverted portion of
the Debentures or other convertible securities), and (2) the number of shares of
Common Stock issuable upon the exercise of the Warrants with respect to which
the determination of this proviso is being made, would result in beneficial
ownership by the Holder and its affiliates of more than 4.99% of the outstanding
shares of Common Stock (after taking into account the shares to be issued to the
Holder upon such exercise). For purposes of the proviso to the immediately
preceding sentence, beneficial ownership shall be determined in accordance with
Section 13(d) of the Securities Exchange Act of 1934, as amended (the "1934
Act"), except as otherwise provided in clause (1) of such sentence. The Holder,
by its acceptance of this Warrant, further agrees that if the Holder transfers
or assigns any of the Warrants to a party who or which would not be considered
such an affiliate, such assignment shall be made subject to the transferees or
assignees specific agreement to be bound by the provisions of this Section 2.2
as if such transferee or assignee were the original Holder hereof.
3. RESERVATION OF SHARES. The Company hereby agrees that at all
times during the term of this Warrant there shall be reserved for issuance upon
exercise of this Warrant such number of shares of its Common Stock as shall be
required for issuance upon exercise of this Warrant (the "Warrant Shares").
4. MUTILATION OR LOSS OF WARRANT. Upon receipt by the Company of
evidence satisfactory to it of the loss, theft, destruction or mutilation of
this Warrant, and (in the case of loss, theft or destruction) receipt of
reasonably satisfactory indemnification, and (in the case of mutilation) upon
surrender and cancellation of this Warrant, the Company will execute and deliver
a new Warrant of like tenor and date and any such lost, stolen, destroyed or
mutilated Warrant shall thereupon become void.
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5. RIGHTS OF THE HOLDER. The Holder shall not, by virtue hereof, be
entitled to any rights of a stockholder in the Company, either at law or equity,
and the rights of the Holder are limited to those expressed in this Warrant and
are not enforceable against the Company except to the extent set forth herein.
6. PROTECTION AGAINST DILUTION AND OTHER ADJUSTMENTS.
6.1 ADJUSTMENT MECHANISM. If an adjustment of the Exercise
Price is required pursuant to this Section 6, the Holder
shall be entitled to purchase such number of additional shares of Common Stock
as will cause (i) the total number of shares of Common Stock Holder is entitled
to purchase pursuant to this Warrant, multiplied by (ii) the adjusted Exercise
Price per share, to equal (iii) the dollar amount of the total number of shares
of Common Stock Holder is entitled to purchase before adjustment multiplied by
the total Exercise Price immediately before adjustment.
6.2 CAPITAL ADJUSTMENTS. In case of any stock split or
reverse stock split, stock dividend, reclassification of the Common Stock,
recapitalization, merger or consolidation, or like capital adjustment affecting
the Common Stock of the Company prior to the exercise of this Warrant or its
applicable portion, the provisions of this Section 6 shall be applied as if such
capital adjustment event had occurred immediately prior to the exercise date of
this Warrant and the original Exercise Price had been fairly allocated to the
stock resulting from such capital adjustment; and in other respects the
provisions of this Section shall be applied in a fair, equitable and reasonable
manner so as to give effect, as nearly as may be, to the purposes hereof.
6.3 ADJUSTMENT FOR SPIN OFF. If, for any reason, prior to
the exercise of this Warrant in full, the Company spins off or otherwise divests
itself of a part of its business or operations or disposes all or a part of its
assets in a transaction (the "Spin Off") in which the Company does not receive
compensation for such business, operations or assets, but causes securities of
another entity (the "Spin Off Securities") to be issued to security holders of
the Company, then (a) the Company shall cause (i) to be reserved Spin Off
Securities equal to the number thereof which would have been issued to the
Holder had all of the Holder's unexercised Warrants outstanding on the record
date (the "Record Date") for determining the amount and number of Spin Off
Securities to be issued to security holders of the Company (the "Outstanding
Warrants") been exercised as of the close of business on the trading day
immediately before the Record Date (the "Reserved Spin Off Shares"), and (ii) to
be issued to the Holder on the exercise of all or any of the Outstanding
Warrants, such amount of the Reserved Spin Off Shares equal to (x) the Reserved
Spin Off Shares multiplied by (y) a fraction, of which (I) the numerator is the
amount of the Outstanding Warrants then being exercised, and (II) the
denominator is the amount of the Outstanding Warrants.
7. TRANSFER TO COMPLY WITH THE SECURITIES ACT; REGISTRATION RIGHTS.
7.1 TRANSFER. This Warrant has not been registered under the
Securities Act of 1933, as amended, (the "Act") and has been issued to the
Holder for investment and not with a view to the distribution of either the
Warrant or the Warrant Shares. Except for transfers to officers, employees and
affiliates of the Holder, neither this Warrant nor any of the Warrant Shares or
any other security issued or issuable upon exercise of this Warrant may be sold,
transferred, pledged or hypothecated in the absence of an effective registration
statement under the Act relating to such security or an opinion of counsel
satisfactory to the Company that registration is not required under the Act.
Each certificate for the Warrant, the Warrant Shares and any other security
issued or issuable upon exercise of this Warrant shall contain a legend on the
face thereof, in form and substance satisfactory to counsel for the Company,
setting forth the restrictions on transfer contained in this Section.
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7.2 REGISTRATION RIGHTS. (a) Reference is made to the
Registration Rights Agreement. The Company's obligations under the Registration
Rights Agreement and the other terms and conditions thereof with respect to the
Warrant Shares, including, but not necessarily limited to, the Company's
commitment to file a registration statement including the Warrant Shares, to
have the registration of the Warrant Shares completed and effective, and to
maintain such registration, are incorporated herein by reference.
(b) In addition to the registration rights referred
to in the preceding provisions of Section 7.2(a), effective after the expiration
of the effectiveness of the Registration Statement as contemplated by the
Registration Rights Agreement, the Holder shall have piggy-back registration
rights with respect to the Warrant Shares then held by the Holder or then
subject to issuance upon exercise of this Warrant (collectively, the "Remaining
Warrant Shares"), subject to the conditions set forth below. If, at any time
after the Registration Statement has ceased to be effective, the Company
participates (whether voluntarily or by reason of an obligation to a third
party) in the registration of any shares of the Company's stock (other than a
registration on Form S-8 or on Form S-4), the Company shall give written notice
thereof to the Holder and the Holder shall have the right, exercisable within
ten (10) business days after receipt of such notice, to demand inclusion of all
or a portion of the Holder's Remaining Warrant Shares in such registration
statement. If the Holder exercises such election, the Remaining Warrant Shares
so designated shall be included in the registration statement at no cost or
expense to the Holder (other than any costs or commissions which would be borne
by the Holder under the terms of the Registration Rights Agreement); provided,
however, that if there is a managing underwriter of the offering of shares
referred to in the registration statement and such managing underwriter advises
the Company in writing that the number of shares proposed to be included in the
offering will have an adverse effect on its ability to successfully conclude the
offering and, as a result, the number of shares to be included in the offering
is to be reduced, the number of Remaining Warrant Shares of the Holder which
were to be included in the registration (before such reduction) will be reduced
pro rata with the number of shares included for all other parties whose shares
are being registered. The Holder's rights under this Section 7 shall expire at
such time as the Holder can sell all of the Remaining Warrant Shares under Rule
144 without volume or other restrictions or limit.
8. NOTICES. Any notice or other communication required or permitted
hereunder shall be in writing and shall be delivered personally, telegraphed,
sent by facsimile transmission or sent by certified, registered or express mail,
postage pre-paid. Any such notice shall be deemed given when so delivered
personally, telegraphed, telexed or sent by facsimile transmission, or, if
mailed, four days after the date of deposit in the United States mails, as
follows:
If to the Company:
Amedia Networks
000 Xxxxxxxxx Xxxxxx Xxxx
Xxxxxxx, XX 00000
Phone: 000.000.0000
Fax: 000.000.0000
with a copy (which shall not constitute notice) to:
Xxxxx Xxxxxx
Aboudi & Xxxxxxxxxx
3 Gavish Street
Kfar Xxxx Xxxxxxxxxx Xxxx
Xxxxxx 00000
ph: 972-9-764-4833
fax: 000-0-000-0000
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if to Holder :
Double U Master Fund L.P.
Beacon Capital Fund
Harbour House, Waterfront drive
P.O. Box 972
Road Town, Tortola
British Virgin Islands
with a copy (which shall not constitute notice) to::
Xxxxxxx & Prager LLP, Esqs.
00 Xxxxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx, Esq.
Telephone No.: (000) 000-0000
Telecopier No. (000) 000-0000
Any party may give notice in accordance with this Section to the other parties
designate to another address or person for receipt of notices hereunder.
9. SUPPLEMENTS AND AMENDMENTS; WHOLE AGREEMENT. This Warrant may be
amended or supplemented only by an instrument in writing signed by the parties
hereto. This Warrant contains the full understanding of the parties with respect
to the subject matter hereof and thereof and there are no representations,
warranties, agreements or understandings other than expressly contained herein
and therein.
10. GOVERNING LAW. This Warrant shall be deemed to be a contract
made under the laws of the State of New York for contracts to be wholly
performed in such State and without giving effect to the principles thereof
regarding the conflict of laws. Each of the parties consents to the jurisdiction
of the federal courts whose districts encompass any part of the State of New
York, New York County in connection with any dispute arising under this Warrant
and hereby waives, to the maximum extent permitted by law, any objection,
including any objection based on FORUM NON CONVENIENS, to the bringing of any
such proceeding in such jurisdictions.
11. JURY TRIAL WAIVER. The Company and the Holder hereby waive a
trial by jury in any action, proceeding or counterclaim brought by either of the
parties hereto against the other in respect of any matter arising out or in
connection with this Warrant.
12. COUNTERPARTS. This Warrant may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
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13. DESCRIPTIVE HEADINGS. Descriptive headings of the several
Sections of this Warrant are inserted for convenience only and shall not control
or affect the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the Company has executed this Warrant as of the 9th
day of August , 2004.
AMEDIA NETWORKS, INC.
By: /s/ Xxxxx Xxxxxxx
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Name: Xxxxx Xxxxxxx
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Title: Chief Executive Officer
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