EXHIBIT B TO
SECURITIES
PURCHASE AGREEMENT
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAW, AND MAY NOT BE OFFERED FOR SALE, SOLD OR
TRANSFERRED UNLESS A REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS SHALL BE EFFECTIVE WITH RESPECT THERETO, OR AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS IS
AVAILABLE IN CONNECTION WITH SUCH OFFER, SALE OR TRANSFER.
WARRANT TO PURCHASE ISSUE DATE: MARCH [ ], 2000
1,250,000 SHARES
WARRANT TO PURCHASE COMMON STOCK
OF
ASPEON SOLUTIONS, INC.
THIS CERTIFIES that Xxxxxxxx Capital Management, Inc. or any subsequent
holder hereof (the "HOLDER"), has the right to purchase from ASPEON SOLUTIONS,
INC., a Delaware corporation (the "COMPANY"), up to 1,250,000 fully paid and
nonassessable shares of the Company's Common Stock, $.01 par value (the "COMMON
STOCK"), subject to adjustment as provided herein, at a price equal to the
Exercise Price (as defined below), at any time beginning on the date (the
"INITIAL EXERCISE DATE") that is the earlier to occur of (i) the date on which
an initial public offering of the Common Stock (the "INITIAL PUBLIC OFFERING")
is commenced (it being understood that the Initial Public Offering shall be
deemed to commence on the date on which the registration statement pursuant to
which the offering will be conducted is declared effective by the Securities and
Exchange Commission) and (ii) the one-year anniversary of the Issue Date (as
defined below) and ending at 5:00 p.m., eastern time, on the date that is the
fifth (5th) anniversary of the Initial Exercise Date (as defined below) (the
"EXPIRATION DATE"). This Warrant is issued, and all rights hereunder shall be,
subject to all of the conditions, limitations and provisions set forth herein
and in the related Securities Purchase Agreement by and among the Company and
the Purchaser named
therein (the "SECURITIES PURCHASE AGREEMENT"). The date on
which this Warrant is issued is referred to herein as the "ISSUE DATE".
Capitalized terms used herein and not otherwise defined shall have the
respective meanings set forth in the Securities Purchase Agreement.
1. EXERCISE.
(a) Right to Exercise; Exercise Price. The Holder shall have the
right to exercise this Warrant at any time and from time to time during the
period beginning on the Initial Exercise Date and ending on the Expiration
Date as to all or any part of the shares of Common Stock covered hereby (the
"WARRANT SHARES"). The "EXERCISE PRICE" payable by the Holder in connection
with the exercise of this Warrant shall be $5.00 per share, subject to
adjustment for the events specified in Section 6 below.
(b) Exercise Notice. In order to exercise this Warrant, the Holder
shall send by facsimile transmission, at any time prior to 7:00 p.m., eastern
time, on the Business Day (as defined below) on which the Holder wishes to
effect such exercise (the "EXERCISE DATE"), to the Company a copy of the notice
of exercise in the form attached hereto as Exhibit A (the "EXERCISE NOTICE")
stating the number of Warrant Shares as to which such exercise applies and the
calculation therefor. As used herein, "BUSINESS DAY" shall mean any day on which
the New York Stock Exchange (the "NYSE") and commercial banks in the city of New
York are open for business. The Holder shall promptly thereafter deliver to the
Company the original Exercise Notice, the original Warrant and (unless a
cashless exercise is intended) the Exercise Price. In the case of a dispute as
to the calculation of the Exercise Price or the number of Warrant Shares
issuable hereunder (including without limitation the calculation of any
adjustment to the Exercise Price pursuant to Section 6 below), the Company shall
promptly issue to the Holder the number of Warrant Shares that are not disputed
and shall submit the disputed calculations to the Company's independent
accountant within two (2) Business Days following the Exercise Date. The Company
shall cause such accountant to calculate the Exercise Price and/or the number of
Warrant Shares issuable hereunder and to notify the Company and the Holder of
the results in writing no later than three Business Days following the day on
which such accountant received the disputed calculations. Such accountant's
calculation shall be deemed conclusive absent manifest error. The fees of any
such accountant shall be borne by the party whose calculations were most at
variance with those of such accountant.
(c) Cancellation of Warrant. This Warrant shall be canceled upon its
exercise and, if this Warrant is exercised in part, the Company shall, at the
time that it delivers Warrant Shares to the Holder pursuant to such exercise as
provided herein, issue a new warrant, and deliver to the Holder a certificate
representing such new warrant, with terms identical in all respects to this
Warrant (except that such new warrant shall be exercisable into the number of
shares of Common Stock with respect to which this Warrant shall remain
unexercised); PROVIDED, HOWEVER, that the Holder shall be entitled to exercise
all or any portion of such new warrant at any time following the time at which
this Warrant is exercised, regardless of whether the Company has actually issued
such new warrant or delivered to the Holder a certificate therefor.
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2. DELIVERY OF WARRANT SHARES UPON EXERCISE. Upon receipt of a
Exercise Notice pursuant to paragraph 1 above, the Company shall, (A) in the
case of a Cashless Exercise (as defined below), no later than the close of
business on the third (3rd) Business Day following the Exercise Date set forth
in such Exercise Notice, (B) in the case of a Cash Exercise (as defined below)
no later than the close of business on the later to occur of (i) the third (3rd)
Business Day following the Exercise Date set forth in such Exercise Notice and
(ii) such later date on which the Company shall have received payment of the
Exercise Price, and (C) with respect to Warrant Shares which are disputed as
described in paragraph 1(b) above, and required to be delivered by the Company
pursuant to the accountant's calculations described therein, the close of
business on the third (3rd) Business Day following the determination made
pursuant to paragraph 1(b) (the "DELIVERY DATE"), issue and deliver or caused to
be delivered to the Holder the number of Warrant Shares as shall be determined
as provided herein. The Company shall effect delivery of Warrant Shares to the
Holder by, as long as the Company's designated transfer agent for the Common
Stock (the "TRANSFER AGENT") participates in the Depository Trust Company
("DTC") Fast Automated Securities Transfer program ("FAST"), crediting the
account of the Holder or its nominee at DTC (as specified in the applicable
Exercise Notice) with the number of Warrant Shares required to be delivered, no
later than the close of business on such Delivery Date. In the event that the
Transfer Agent is not a participant in FAST, or if Warrant Shares are not
otherwise eligible for delivery through FAST, or if the Holder so specifies in
an Exercise Notice or otherwise in writing on or before the Exercise Date, the
Company shall effect delivery of Warrant Shares by delivering to the Holder or
its nominee physical certificates representing such Warrant Shares, no later
than the close of business on such Delivery Date. Warrant Shares delivered to
the Holder shall not contain any restrictive legend as long as the resale of
such Warrant Shares is covered by an effective Registration Statement (as
defined in the Registration Rights Agreement) and such Holder represents in
writing to the Company that such Warrant Shares (i) have been or are being sold
pursuant to such registration statement or pursuant to Rule 144 under the
Securities Act of 1933, as amended, or (ii) may be made pursuant to Rule 144(k)
under the Securities Act of 1933, as amended, or any successor rule or
provision.
3. FAILURE TO DELIVER WARRANT SHARES.
(a) Exercise Default. In the event that, as a result of any
action or failure to act on the part of the Company (including without
limitation a failure by the Company to have a sufficient number of shares of
Common Stock authorized and reserved for issuance pursuant to exercise of the
Warrants), the Company does not deliver to a Holder certificates representing
the number of Warrant Shares specified in the applicable Exercise Notice on or
before the Delivery Date therefor and such failure continues for ten (10)
Business Days (an "EXERCISE DEFAULT"), the Company shall pay to the Holder
payments ("EXERCISE DEFAULT PAYMENTS") in the amount of (i) (N/365) MULTIPLIED
BY (ii) the aggregate Exercise Price for the Warrant Shares which are the
subject of such Exercise Default MULTIPLIED BY (iii) the lower of twenty four
percent (24%) and the maximum rate permitted by applicable law, where "N" equals
the number of days elapsed between the original Delivery Date for
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such Warrant Shares and the date on which all of such Warrant Shares are issued
and delivered to the Holder. Amounts payable under this subparagraph 3(a)
shall be paid to the Holder in immediately available funds on or before the
fifth (5th) Business Day of the calendar month immediately following the
calendar month in which such amount has accrued.
(b) Buy-in. Nothing herein shall limit a Holder's right to
pursue actual damages for the Company's failure to issue and deliver Warrant
Shares in connection with an exercise on the applicable Delivery Date
(including, without limitation, damages relating to any purchase of shares of
Common Stock by the Holder to make delivery on a sale effected in anticipation
of receiving Warrant Shares upon exercise, such damages to be in an amount equal
to (A) the aggregate amount paid by the Holder for the shares of Common Stock so
purchased MINUS (B) the aggregate amount of net proceeds, if any, received by
the Holder from the sale of the Warrant Shares issued by the Company pursuant to
such exercise), and the Holder shall have the right to pursue all remedies
available to it at law or in equity (including, without limitation, a decree of
specific performance and/or injunctive relief).
(c) Reduction of Exercise Price. In the event that, as a
result of any action or failure to act on the part of the Company (including
without limitation a failure by the Company to have a sufficient number of
shares of Common Stock authorized and reserved for issuance pursuant to exercise
of the Warrants), a Holder has not received certificates representing the
Warrant Shares by the tenth (10th) Business Day following an Exercise Default,
the Holder may, upon written notice to the Company, regain on such Business Day
the rights of a Holder of this Warrant, or part thereof, with respect to the
Warrant Shares that are the subject of such Exercise Default, and the Exercise
Price for such Warrant Shares shall be reduced by one percent (1%) for each day
beyond such 10th Business Day in which the Exercise Default continues. In such
event, the Holder shall retain all of the Holder's rights and remedies with
respect to the Company's failure to deliver such Warrant Shares (including
without limitation the right to receive the cash payments specified in
subparagraph 3(a) above).
(d) Holder of Record. Each Holder shall, for all purposes, be
deemed to have become the holder of record of Warrant Shares on the Exercise
Date of this Warrant, irrespective of the date of delivery of such Warrant
Shares. Nothing in this Warrant shall be construed as conferring upon the
Holder hereof any rights as a stockholder of the Company prior to the Exercise
Date.
4. EXERCISE LIMITATIONS.
In no event shall a Holder be permitted to exercise this Warrant, or part
thereof, with respect to Warrant Shares in excess of the number of such shares,
upon the issuance of which, (x) the number of shares of Common Stock
beneficially owned by the Holder PLUS (y) the number of shares of Common Stock
issuable upon such exercise, would be equal to or exceed (z) 4.99% of the number
of shares of Common Stock then issued and outstanding. To the extent that the
limitation contained in this paragraph 4 applies, the submission of an Exercise
Notice by the Holder shall be deemed to be the Holder's representation that this
Warrant is exercisable pursuant to the terms hereof and the Company
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shall be entitled to rely on such representation without making any further
inquiry as to whether this Section 4 applies. Nothing contained herein shall
be deemed to restrict the right of a Holder to exercise this Warrant, or part
thereof, at such time as such exercise will not violate the provisions of
this Section 4. The provisions of this Section 4 may not be amended without
the approval of the holders of a majority of the Common Stock then
outstanding.
5. PAYMENT OF THE EXERCISE PRICE. The Holder may pay the Exercise
Price in either of the following forms or, at the election of Holder, a
combination thereof:
(a) Cash Exercise: by delivery of immediately available funds.
(b) Cashless Exercise: by surrender of this Warrant to the Company
together with a notice of cashless exercise, in which event the Company shall
issue to the Holder the number of Warrant Shares determined as follows:
X = Y x (A-B)/A
where: X = the number of Warrant Shares to be issued to the
Holder.
Y = the number of Warrant Shares with respect to which this
Warrant is being exercised.
A = the average of the Closing Bid Prices of the Common
Stock for the five (5) Trading Days immediately prior to
(but not including) the Exercise Date.
B = the Exercise Price;
PROVIDED, HOWEVER, that the Holder may exercise this Warrant pursuant to a
Cashless Exercise only if, on the Exercise Date, the resale of Warrant Shares
is not covered by an effective Registration Statement (as defined in the
Registration Rights Agreement) that is available to the Holder on such date.
For purposes of Rule 144 under the Securities Act of 1933, as amended, it is
intended, understood and acknowledged that the Warrant Shares issued in a
cashless exercise transaction shall be deemed to have been acquired by the
Holder, and the holding period for the Warrant Shares shall be deemed to have
been commenced, on the Issue Date.
6. ANTI-DILUTION ADJUSTMENTS; DISTRIBUTIONS; OTHER EVENTS. The
Exercise Price and the number of Warrant Shares issuable hereunder shall be
subject to adjustment from time to time as provided in this Section 6. In the
event that any adjustment of the Exercise Price or number of Warrant Shares as
required herein results in a fraction of a cent or fraction of a share, as
applicable, such
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exercise Price or number of Warrant Shares shall be rounded up
or down to the nearest cent or share, as applicable.
(a) ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES UPON
ISSUANCE OF COMMON STOCK. Except as otherwise provided in Sections 6(b)(vi),
6(c) and 6(e) hereof, if and whenever after the initial issuance of this
Warrant, the Company issues or sells, or in accordance with Section 6(b) hereof
is deemed to have issued or sold, any shares of Common Stock for no
consideration (other than a stock split or stock dividend) or for a
consideration per share less than Exercise Price (as then in effect) (a
"Dilutive Issuance"), then effective immediately upon the Dilutive Issuance, the
Exercise Price will be adjusted in accordance with the following formula:
E' = (E)(O+P/E)
------------
(CSDO)
where:
E' = the adjusted Exercise Price
E = the then current Exercise Price;
O = the number of shares of Common Stock outstanding
immediately prior to
the Dilutive Issuance;
P = the aggregate consideration, calculated as set forth in
Section 6(b) hereof,
received by the Company upon such Dilutive Issuance; and
CSDO = the total number of shares of Common Stock Deemed
Outstanding (as
herein defined) immediately after the Dilutive Issuance.
(b) EFFECT ON EXERCISE PRICE OF CERTAIN EVENTS. For purposes
of determining the adjusted Exercise Price under Section 6(a) hereof, the
following will apply:
(i) Issuance of Rights, Options or Convertible
Securities. Subject to Section 6(b)(ii) below, if, after the date hereof, the
Company in any manner issues or grants any warrants, rights or options, whether
or not immediately exercisable, to subscribe for or to purchase Common Stock or
other securities exercisable, convertible into or exchangeable for Common Stock
("Convertible Securities")(such warrants, rights and options to purchase Common
Stock or Convertible Securities are hereinafter referred to as "Options"), and
the price per share for which Common Stock is purchasable or issuable upon the
exercise of such Options is less than the Exercise Price (as then in effect) on
the date of issuance of such Option or direct stock grant ("Below Market
Options"), then the maximum total number of shares of Common Stock issuable upon
the exercise of all such Below Market Options (assuming full exercise,
conversion or exchange of Convertible Securities, if applicable) will, as of the
date of the issuance or grant of such Below Market Options, be deemed to be
outstanding and to have been issued and sold by the Company for such price per
share. For purposes of the preceding sentence, the price per share for which
Common Stock is issuable upon the exercise of such Below Market Options is
determined by dividing (i) the total amount, if any, received or
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receivable by the Company as consideration for the issuance or sale of all
such Below Market Options, plus the minimum aggregate amount of additional
consideration, if any,payable to the Company upon the exercise of all such
below Market Options, plus, in the case of Convertible Securities issuable
upon the exercise of such Below Market Options, the minimum aggregate amount
of additional consideration payable upon the exercise, conversion or exchange
thereof at the time such Convertible Securities first become exercisable,
convertible or exchangeable, by (ii) the maximum total number of shares of
Common Stock issuable upon the exercise of all such Below Market Options
(assuming fll conversion of Convertible Securities, if applicable). No
further adjustment to the Exercise Price will be made upon the exercise of
such Below Market Options or upon the exercise, conversion or exchange of
Convertible Securities issuable upon exercise of such Below Market Options.
(ii) ISSUANCE OF CONVERTIBLE SECURITIES.
(A) If the Company in any manner issues or sells
any Convertible Securities, whether or not immediately convertible (other than
where the same are issuable upon the exercise of Options) and the price per
share for which Common Stock is issuable upon such exercise, conversion or
exchange (as determined pursuant to Section 6(b)(ii)(B) if applicable) is less
than the Exercise Price (as then in effect) on the date of issuance of such
Convertible Security, then the maximum total number of shares of Common Stock
issuable upon the exercise, conversion or exchange of all such Convertible
Securities will, as of the date of the issuance of such Convertible Securities,
be deemed to be outstanding and to have been issued and sold by the Company for
such price per share. For the purposes of the preceding sentence, the price per
share for which Common Stock is issuable upon such exercise, conversion or
exchange is determined by dividing (i) the total amount, if any, received or
receivable by the Company as consideration for the issuance or sale of all such
Convertible Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the exercise, conversion or
exchange thereof at the time such Convertible Securities first become
exercisable, convertible or exchangeable, by (ii) the maximum total number of
shares of Common Stock issuable upon the exercise, conversion or exchange of all
such Convertible Securities. No further adjustment to the Exercise Price will
be made upon the actual issuances of such Common Stock upon exercise, conversion
or exchange of such Convertible Securities.
(B) If the Company in any manner issues or sells
any Convertible Securities with a fluctuating or re-setting conversion or
exercise price or exchange ratio (a "Variable Rate Convertible Security"), then
the price per share for which Common Stock is issuable upon such exercise,
conversion or exchange for purposes of the calculation contemplated by Section
6(b)(ii)(A) shall be deemed to be the lowest price per share which would be
applicable assuming that all holding period and other conditions to any
discounts contained in such Convertible Security have been satisfied.
(iii) CHANGE IN OPTION PRICE OR CONVERSION RATE. If there
is a change at any
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time in (i) the amount of additional consideration payable to
the Company upon the exercise of any Options; (ii) the amount of additional
consideration, if any, payable to the Company upon the exercise, conversion or
exchange of any Convertible Securities; or (iii) the rate at which any
Convertible Securities are convertible into or exchangeable for Common Stock
(other than under or by reason of provisions designed to protect against
dilution), the Exercise Price in effect at such time shall be adjusted to the
Exercise Price which would have been in effect had such Options or Convertible
Securities still outstanding provided for such changed additional consideration
or changed conversion rate, as the case may be, at the time initially granted,
issued or sold.
(iv) TREATMENT OF EXPIRED OPTIONS AND UNEXERCISED
CONVERTIBLE SECURITIES. If, in any case, the total number of shares of Common
Stock issuable upon exercise of any Options or upon exercise, conversion or
exchange of any Convertible Securities is not, in fact, issued and the rights to
exercise such Option or to exercise, convert or exchange such Convertible
Securities shall have expired or terminated, the Exercise Price then in effect
will be readjusted to the Exercise Price which would have been in effect at the
time of such expiration or termination had such Options or Convertible
Securities, to the extent outstanding immediately prior to such expiration or
termination (other than in respect of the actual number of shares of Common
Stock issued upon exercise or conversion thereof), never been issued.
(v) CALCULATION OF CONSIDERATION RECEIVED. If any
Common Stock, Options or Convertible Securities are issued, granted or sold for
cash, the consideration received therefor for purposes of this Warrant will be
the amount received by the Company therefor, before deduction of reasonable
commissions, underwriting discounts or allowances or other reasonable expenses
paid or incurred by the Company in connection with such issuance, grant or sale.
In case any Common Stock, Options or Convertible Securities are issued or sold
for a consideration part or all of which shall be other than cash, the amount of
the consideration other than cash received by the Company will be the fair
market value of such consideration except where such consideration consists of
freely-tradable securities, in which case the amount of consideration received
by the Company will be the Market Price thereof as of the date of receipt. The
fair market value of any consideration other than cash or securities will be
determined in the good faith reasonable business judgment of the Board of
Directors.
(vi) EXCEPTIONS TO ADJUSTMENT OF EXERCISE PRICE. No
adjustment to the Exercise Price will be made AS A RESULT OF THE ISSUANCE OF
ANY SECURITIES OF THE COMPANY ISSUED PURSUANT TO (i) AN EMPLOYEE BENEFIT PLAN OR
PROGRAM DULY ADOPTED BY THE COMPANY; (ii) ANY OPTIONS, WARRANT, CONVERTIBLE
SECURITIES OR RIGHTS OR AGREEMENTS TO PURCHASE SECURITIES OF THE COMPANY
outstanding on the date hereof; (iii) ANY PUBLIC OFFERINGS OF EQUITY SECURITIES
(as defined in the Securities Purchase Agreement); (iv) ANY EQUITY SECURITIES
ISSUED FOR CONSIDERATION OTHER THAN CASH PURSUANT TO A MERGER, CONSOLIDATION,
ACQUISITION OR SIMILAR BUSINESS COMBINATION; (v) SHARES OF COMMON STOCK ISSUED
IN CONNECTION WITH ANY STOCK SPLIT, STOCK DIVIDEND OR RECAPITALIZATION BY THE
COMPANY; (vi) SHARES OF COMMON STOCK ISSUED UPON CONVERSION OF THE PREFERRED
SHARES OR EXERCISE OF THE WARRANTS; (vii) ANY EQUITY SECURITIES ISSUED PURSUANT
TO ANY EQUIPMENT LEASING ARRANGEMENT OR
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DEBT FINANCING FROM A BANK OR SIMILAR FINANCIAL INSTITUTION; OR (viii) ANY
EQUITY SECURITIES ISSUED IN CONNECTION WITH STRATEGIC TRANSACTIONS INVOLVING
THE COMPANY AND OTHER ENTITIES, INCLUDING (A) JOINT VENTURES, MANUFACTURING,
MARKETING OR DISTRIBUTION ARRANGEMENTS OR (B) TECHNOLOGY TRANSFER OR
DEVELOPMENT ARRANGEMENTS; PROVIDED, THAT THE PRIMARY PURPOSE OF SUCH
TRANSACTION IS NOT THE RAISING OF CAPITAL.
(c) SUBDIVISION OR COMBINATION OF COMMON STOCK. If the Company, at
any time after the initial issuance of this Warrant, subdivides (by any stock
split, stock dividend, recapitalization, reorganization, reclassification or
otherwise) its shares of Common Stock into a greater number of shares, then
after the date of record for effecting such subdivision, the Exercise Price in
effect immediately prior to such subdivision will be proportionately reduced.
If the Company, at any time after the initial issuance of this Warrant, combines
(by reverse stock split, recapitalization, reorganization, reclassification or
otherwise) its shares of Common Stock into a smaller number of shares, then,
after the date of record for effecting such combination, the Exercise Price in
effect immediately prior to such combination will be proportionally increased.
In the event of any adjustment to the Exercise Price arising from an event
specified in the subparagraph (c), the number of shares of Common Stock into
which this Warrant is exercisable will be proportionately increased or reduced,
as the case may be.
(d) DISTRIBUTIONS. If the Company or any of its subsidiaries shall at
any time distribute to holders of Common Stock (or to a holder, other than the
Company, of the common stock of any such subsidiary) cash, evidences of
indebtedness or other securities or assets (other than cash dividends or
distributions payable out of earned surplus or net profits for the current or
the immediately preceding year) including any dividend or distribution in shares
of capital stock of a subsidiary of the Company (collectively, a "DISTRIBUTION")
then, in any such case, the Holder of this Warrant shall be entitled to receive,
at the same time as such assets are received by a holder of such stock, an
amount and type of such Distribution as though such Holder were a holder on the
record date therefor of a number of shares of Common Stock into which this
Warrant is exercisable as of such record date (such number of shares to be
determined at the Exercise Price then in effect and without regard to any
limitation on exercise of this Warrant that may exist pursuant to the terms
hereof or otherwise). The Company shall not distribute or transfer any of its
businesses or assets to Aspeon, Inc. or to any subsidiary or affiliate of
Aspeon, Inc., during the period beginning on the Issue Date and ending on the
Expiration Date, without the prior consent of the Holder.
(e) MAJOR TRANSACTIONS. If the Company shall consolidate or merge
with any other corporation or entity (other than a consolidation or merger in
which the Company is the surviving or continuing entity and its capital stock is
unchanged and unissued in such transaction (except for issuances which do not
exceed fifty percent (50%) of the Common Stock)) or there shall occur any share
exchange pursuant to which all of the outstanding shares of Common Stock are
converted into other securities or property or any such other reclassification
or change of the outstanding shares of Common Stock or the Company shall sell
all or substantially all of its assets (each of the foregoing
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being a "MAJOR TRANSACTION"), then the holder of this Warrant may, at its
option, either (a) in the event that the Common Stock remains outstanding or
holders of Common Stock receive any common stock or substantially similar
equity interest, in each of the foregoing cases which is publicly traded,
retain this Warrant and this Warrant shall continue to apply to such Common
Stock or shall apply, as nearly as practicable, to such other common stock or
equity interest, as the case may be, or (b) regardless of whether (a)
applies, receive consideration, in exchange for this Warrant (without payment
of any exercise price hereunder), equal to the greater of, as determined in
the sole discretion of such holder, (i) the number of shares of stock or
securities or property of the Company, or of the entity resulting from such
Major Transaction (the "MAJOR TRANSACTION CONSIDERATION"), to which a holder
of the number of shares of Common Stock delivered upon the exercise of this
Warrant (pursuant to the cashless exercise feature hereof) would have been
entitled upon such Major Transaction had such holder so exercised this
Warrant (without regard to any limitations on exercise herein or elsewhere
contained) on the trading date immediately preceding the public announcement
of the transaction resulting in such Major Transaction and had such Common
Stock been issued and outstanding and had such Holder been the holder of
record of such Common Stock at the time of the consummation of such Major
Transaction, and (ii) cash paid by the Company in immediately available funds
in an amount equal to the Black-Scholes Amount (as defined herein) times the
number of shares of Common Stock for which this Warrant was exercisable
(without regard to any limitations on exercise herein contained and assuming
payment of the exercise payment in cash hereunder), and the Company shall
make lawful provision for the foregoing as a part of such Major Transaction
and shall cause the issuer of any security in such transaction to assume all
of the Company's obligations under the Registration Rights Agreement.
Notwithstanding the foregoing, this Section 6(e) shall not apply to a Major
Transaction if the securities ("Exchange Securities") of the surviving entity
of such Major Transaction are publicly traded and (a) the average trading
volume of the Exchange Securities during the one hundred eighty (180) day
period ending on the date which such Major Transaction is publicly disclosed
is greater than two million dollars ($2,000,000), (b) the historical one
hundred (100) day volatility of the Exchange Securities during the period
ending on the date on which such transaction is publicly disclosed is greater
than sixty percent (60%), and (c) the market capitalization of the issuer of
the Exchange Securities on such date is not less than one hundred fifty
million dollars ($150,000,000).
The "BLACK-SCHOLES AMOUNT" shall be the amount determined by calculating
the "Black-Scholes" value of an option to purchase one share of Common Stock on
the applicable page on the Bloomberg online page, using the following variable
values: (i) the current market price of the Common Stock equal to the closing
trade price on the last trading day before the date of the Notice of the Major
Transaction; (ii) volatility of the Common Stock equal to the volatility of the
Common Stock during the 100 trading day period preceding the date of the Major
Transaction; (iii) a risk free rate equal to the interest rate on the United
States treasury xxxx or treasury note with a maturity corresponding to the
remaining term of this Warrant on the date of the Notice of the Major
Transaction; and (iv) an exercise price equal to the Exercise Price on the date
of the Notice of the Major Transaction. In the event such calculation function
is no longer available utilizing the
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Bloomberg online page, the Holder shall calculate such amount in its sole
discretion using the closest available alternative mechanism and variable
values to those available utilizing the Bloomberg online page for such
calculation function.
(f) ADJUSTMENTS; ADDITIONAL SHARES, SECURITIES OR ASSETS. In the
event that at any time, as a result of an adjustment made pursuant to this
paragraph 6, the Holder of this Warrant shall, upon exercise of this Warrant,
become entitled to receive securities or assets (other than Common Stock) then,
wherever appropriate, all references herein to shares of Common Stock shall be
deemed to refer to and include such shares and/or other securities or assets;
and thereafter the number of such shares and/or other securities or assets shall
be subject to adjustment from time to time in a manner and upon terms as nearly
equivalent as practicable to the provisions of this paragraph 6.
7. FRACTIONAL INTERESTS. No fractional shares or scrip representing
fractional shares shall be issuable upon the exercise of this Warrant, but on
exercise of this Warrant, the Holder hereof may purchase only a whole number of
shares of Common Stock. If, on exercise of this Warrant, the Holder hereof
would be entitled to a fractional share of Common Stock or a right to acquire a
fractional share of Common Stock, such fractional share shall be disregarded and
the number of shares of Common Stock issuable upon exercise shall be rounded up
or down to the nearest whole number of shares of Common Stock.
8. TRANSFER OF THIS WARRANT. The Holder may sell, transfer, assign,
pledge or otherwise dispose of this Warrant, in whole or in part, as long as
such sale or other disposition is made pursuant to an effective registration
statement or an exemption to the registration requirements of the Securities Act
of 1933, as amended, and applicable state laws. Upon such transfer or other
disposition, the Holder shall deliver a written notice to Company, substantially
in the form of the Transfer Notice attached hereto as Exhibit B (the "TRANSFER
NOTICE"), indicating the person or persons to whom this Warrant shall be
transferred and, if less than all of this Warrant is transferred or this Warrant
is transferred in parts, the number of Warrant Shares to be covered by the part
of this Warrant to be transferred to each such person. Within three (3) Business
Days of receiving a Transfer Notice and the original of this Warrant, the
Company shall deliver to the each transferee designated by the Holder a Warrant
or Warrants of like tenor and terms for the appropriate number of Warrant
Shares. Notwithstanding the foregoing, no Holder may knowingly and voluntarily
sell this Warrant (or any portion thereof) to an entity that is a competitor of
the Company.
9. BENEFITS OF THIS WARRANT. Nothing in this Warrant shall be
construed to confer upon any person other than the Holder of this Warrant any
legal or equitable right, remedy or claim under this Warrant and this Warrant
shall be for the sole and exclusive benefit of the Holder of this Warrant.
10. LOSS, THEFT, DESTRUCTION OR MUTILATION OF WARRANT. Upon receipt
by the Company of evidence of the loss, theft, destruction or mutilation of this
Warrant, and (in the case of loss, theft or
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destruction) of indemnity or security reasonably satisfactory to the
Company, and upon surrender of this Warrant, if mutilated, the Company shall
execute and deliver a new Warrant of like tenor and date.
11. NOTICE OR DEMANDS. Except as otherwise provided herein, any
notice, demand or request required or permitted to be given pursuant to the
terms of this Warrant shall be in writing and shall be deemed given (i) when
delivered personally or by verifiable facsimile transmission (with an original
to follow) on or before 5:00 p.m., eastern time, on a Business Day or, if such
day is not a Business Day, on the next succeeding Business Day, (ii) on the next
Business Day after timely delivery to a nationally-recognized overnight courier
and (iii) on the Business Day actually received if deposited in the U.S. mail
(certified or registered mail, return receipt requested, postage prepaid),
addressed as follows:
If to the Company:
Aspeon Solutions, Inc.
00000 Xxxxxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Chief Financial Officer
with a copy to:
Xxxxxx Godward LLP
0000 Xxxxxxxxx Xxxxx
Xxxxx 0000
Xxx Xxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
and if to the Holder, to such address as shall be designated by the Holder in
writing to the Company.
12. APPLICABLE LAW. This Warrant is issued under and shall for all
purposes be governed by and construed in accordance with the laws of the state
of Delaware, without giving effect to conflict of law provisions thereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the undersigned has executed this Warrant as of the
[]day of March, 2000.
ASPEON SOLUTIONS, INC.
By:___________________________
Name: Xxxxxxx X. Xxxxx
Title: Chief Executive Officer
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EXHIBIT A to WARRANT
EXERCISE NOTICE
The undersigned Holder hereby irrevocably exercises the right to purchase
__________of the shares of Common Stock ("WARRANT SHARES") of ASPEON
SOLUTIONS, INC. 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. Unless otherwise specified in writing to the Company,
the undersigned represents to the Company that the shares of Common Stock
covered by this notice have been or will be sold pursuant to the terms of an
effective registration statement.
1. Form of Exercise Price. The Holder intends that payment of the
Exercise Price shall be made as:
______ a CASH EXERCISE with respect to _________________ Warrant
Shares; and/or
______ a CASHLESS EXERCISE with respect to _________________
Warrant Shares.
2. Payment of Exercise Price. In the event that the Holder has
elected a Cash Exercise with respect to some or all of the Warrant Shares to be
issued pursuant hereto, 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: ______________________
___________________________________
Name of Registered Holder
By: _______________________________
Name:
Title:
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EXHIBIT B TO WARRANT
TRANSFER NOTICE
FOR VALUE RECEIVED, the undersigned Holder of the attached Warrant hereby sells,
assigns and transfers unto the person or persons named below the right to
purchase__________shares of the Common Stock of ASPEON SOLUTIONS, INC.
evidenced by the attached Warrant.
Date: ______________________
___________________________________
Name of Registered Holder
By: _______________________________
Name:
Title:
Transferee Name and Address:
____________________________
____________________________
____________________________
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