EXHIBIT 4.2
THIS PURCHASE OPTION HAS BEEN ACQUIRED FOR INVESTMENT. THIS PURCHASE OPTION AND
THE SHARES ISSUABLE UPON EXERCISE OF THIS PURCHASE OPTION HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
APPLICABLE STATE SHARES LAWS. THIS PURCHASE OPTION AND THE SHARES ISSUABLE UPON
EXERCISE OF THIS PURCHASE OPTION MAY NOT BE SOLD, PLEDGED OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR PURSUANT TO AN EXEMPTION
THEREFROM UNDER THE ACT AND SUCH LAWS, SUPPORTED BY AN OPINION OF COUNSEL,
REASONABLY SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION
IS NOT REQUIRED.
THIS PURCHASE OPTION MAY NOT, IN ANY EVENT, BE TRANSFERRED TO ANY PERSON OR
ENTITY THAT IS NOT AN ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501,
PROMULGATED UNDER THE ACT.
PURCHASE OPTION
FOR THE PURCHASE OF
31,250 SHARES OF COMMON STOCK
OF
GIGABEAM CORPORATION
(A DELAWARE CORPORATION)
1. Purchase Option.
THIS CERTIFIES THAT, in consideration of $50 and other good and valuable
consideration duly paid by or on behalf of HCFP/Xxxxxxx Securities, LLC
("Holder"), as registered owner of this Purchase Option, to GigaBeam Corporation
("Company"), Holder is entitled, at any time or from time to time commencing on
the date hereof ("Commencement Date") and at or before 5:00 p.m., Eastern Time,
January 28, 2011 ("Expiration Date"), but not thereafter, to subscribe for,
purchase and receive, in whole or in part, up to 31,250 shares ("Shares") of the
common stock of the Company ("Common Stock"). If the Expiration Date is a day on
which banking institutions are authorized by law to close, then this Purchase
Option may be exercised on the next succeeding day that is not such a day in
accordance with the terms herein. During the period ending on the Expiration
Date, the Company agrees not to take any action that would terminate the
Purchase Option.
This Purchase Option is being issued in connection with the issuance and
sale by the Company of 8% senior convertible promissory notes ("Notes") and
common stock purchase warrants ("Warrants") to investors in a private placement
under the terms of a securities purchase agreement of even date herewith
("Securities Purchase Agreement") and the offering contemplated thereby for
which HCFP/Xxxxxxx Securities, LLC ("HCFP") has acted as placement agent
("Private Placement").
This Purchase Option is initially exercisable at a price per Share equal
to $8.00; provided, however, that upon the occurrence of any of the events
specified in Section 6 hereof, the rights granted by this Purchase Option,
including the exercise price and the number of Shares to be received upon such
exercise, shall be adjusted as therein specified. The term "Exercise Price"
shall mean the initial exercise price or, if adjustments thereto have been made,
the adjusted exercise price to purchase one Share.
2. Exercise.
2.1 Exercise Form. In order to exercise this Purchase Option, the exercise
form attached hereto must be duly executed and completed and delivered to the
Company, together with this Purchase Option and payment of the Exercise Price
multiplied by the number of Shares for which this Purchase Option is then being
exercised (except as provided in Section 2.3 hereof) in cash or by certified
check or official bank check for the Shares being purchased. If the subscription
rights represented hereby shall not be exercised at or before 5:00 p.m., Eastern
time, on the Expiration Date, except as otherwise provided in Section 1 hereof,
this Purchase Option shall become null and be void without further force or
effect, and all rights represented hereby shall cease and expire.
2.2 Legend. The Shares purchased under this Purchase Option shall bear the
legends contained on the Shares issued to investors in the Private Placement.
Each certificate for Shares purchased under this Purchase Option shall bear a
legend substantially as follows unless the issuance of such Shares by the
Company have been registered under the Securities Act of 1933, as amended
("Securities Act"):
These Shares been acquired for investment and has not been
registered under the Securities Act of 1933, as amended, or
applicable state securities laws. The securities may not be sold,
pledged or transferred in the absence of such registration or an
exemption therefrom under said Act and such laws, supported by an
opinion of counsel, reasonably satisfactory to the Company and its
counsel, that such registration is not required.
2.3 Conversion Right.
2.3.1 Determination of Amount. In lieu of the payment of the
Exercise Price multiplied by the number of Shares for which this Purchase Option
is exercisable in the manner required by Section 2.1, the Holder shall have the
right (but not the obligation) to convert any exercisable but unexercised
portion of this Purchase Option into Shares ("Conversion Right") as follows:
upon exercise of the Conversion Right, the Company shall deliver to the Holder
(without payment by the Holder of any of the Exercise Price in cash) that number
of Shares equal to the quotient obtained by dividing (x) the "Value" (as defined
below) of the portion of the Purchase Option being converted by (y) the Current
Market Value (as defined below). The "Value" of the portion of the Purchase
Option being converted shall equal the remainder derived from subtracting (a)
(i) the Exercise Price multiplied by (ii) the number of Shares underlying the
portion of this Purchase Option being converted from (b) the Current Market
Value of a Share multiplied by the number of Shares underlying the portion of
the Purchase Option being converted. As used herein, the term "Current Market
Value" per Share at any date means (i) if the Common Stock or such other
security is not registered under the Shares Exchange Act of 1934, as amended
("Exchange Act"), (A) the value of the Common Stock or such other security as
determined in good faith by the Board of Directors and certified in a board
resolution, based on the most recently completed arm's-length transaction
between the Company and a person other than an affiliate of the Company or
between any two such persons and the closing of which occurs on such date or
shall have occurred within the six-month period preceding such date, or (B) if
no such transaction shall have occurred on such date or within such six-month
period, the value of the Common Stock or such other security as determined in
good faith by resolution of the Board of Directors, based on the best
information available, or (ii) if the Common Stock or such other security is
registered under the Exchange Act, the average of the daily closing sale prices
of the Common Stock or such other security for each trading day during the
period commencing 10 trading days before such date and ending on the date one
day prior to such date; provided, however, that if the closing bid price is not
determinable for at least three trading days in such period, the "Current Market
Price" of the Common Stock or such other security shall be determined as if the
Common Stock or such other security was not registered under the Exchange Act.
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2.3.2 Mechanics of Conversion Right. The Conversion Right may be
exercised by the Holder on any business day on or after the Commencement Date
and not later than the Expiration Date, except as otherwise provided in Section
1 hereof, by delivering to the Company this Purchase Option with a duly executed
exercise form attached hereto with the conversion section completed exercising
the Conversion Right.
3. Transfer.
3.1 General Restrictions. On and after the Commencement Date, the Holder
of this Purchase Option may sell, transfer or assign or hypothecate this
Purchase Option or the Shares only upon compliance with, or pursuant to
exemptions from, applicable securities laws and in accordance with Section 3.2
below. In order to make any permitted assignment of this Purchase Option, the
Holder must deliver to the Company the assignment form attached hereto duly
executed and completed both by the Holder and the transferee as applicable,
together with this Purchase Option. The Company shall immediately transfer this
Purchase Option on the books of the Company and shall execute and deliver a new
Purchase Option or Purchase Options of like tenor to the appropriate assignee(s)
expressly evidencing the right to purchase the aggregate number of Shares
purchasable hereunder or such portion of such number as shall be contemplated by
any such assignment.
3.2 Restrictions Imposed by the Securities Act. This Purchase Option and
the Shares underlying this Purchase Option shall not be transferred unless and
until (i) the Company has received the opinion of counsel for the Holder that
this Purchase Option or the Shares, as the case may be, may be transferred
pursuant to an exemption from registration under the Securities Act and
applicable state law, the availability of which is established to the reasonable
satisfaction of the Company, or (ii) a registration statement relating to such
Purchase Option or Shares, as the case may be, has been filed by the Company and
declared effective by the Shares and Exchange Commission (the "SEC") and remains
effective and current and is in compliance with applicable state law.
4. New Purchase Options to be Issued.
4.1 Partial Exercise or Transfer. This Purchase Option may be exercised or
assigned in whole or in part. In the event of the exercise or assignment hereof
in part only, upon surrender of this Purchase Option for cancellation, together
with the duly executed exercise or assignment form and funds sufficient to pay
any Exercise Price, the Company shall cause to be delivered to the Holder
without charge a new Purchase Option of like tenor to this Purchase Option in
the name of the Holder evidencing the right of the Holder to purchase the
aggregate number of Shares purchasable hereunder as to which this Purchase
Option has not been exercised or assigned.
4.2 Lost Certificate. Upon receipt by the Company of evidence satisfactory
to it of the loss, theft, destruction or mutilation of this Purchase Option and
of reasonably satisfactory indemnification, the Company shall execute and
deliver a new Purchase Option of like tenor and date. Any such new Purchase
Option executed and delivered as a result of such loss, theft, mutilation or
destruction shall constitute a substitute contractual obligation on the part of
the Company.
5. Registration Obligation.
5.1 The Holder of this Purchase Option shall be entitled to the same
registration rights with respect to the resale of the Shares underlying this
Purchase Option (the "Registrable Shares") as the Company has granted to
investors in the Private Placement with respect to the Shares underlying the
Warrants, as provided in the Securities Purchase Agreement including, without
limitation and subject to the limitations and obligations set forth therein, the
mandatory and piggyback registration obligations set forth therein; provided,
however, that the Holder shall not be entitled to any of the delinquent filing
and effectiveness penalties afforded such investors thereunder.
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5.2 Successors and Assigns. The registration rights granted to the Holders
inure to the benefit of all the Holders' successors, heirs, pledges and
permitted assignees.
6. Adjustments.
6.1 Adjustment of Common Stock.
6.1.1 Stock Dividends - Recapitalization, Reclassification,
Split-Ups. If after the date hereof, and subject to the provisions of Section
6.2 below, the number of outstanding shares of Common Stock is increased by a
stock dividend payable in shares of Common Stock or by a split-up,
recapitalization or reclassification of shares of Common Stock or other similar
event, then, on the effective date thereof, the number of Shares issuable upon
exercise of the Purchase Option shall be increased in proportion to such
increase in outstanding shares of Common Stock.
6.1.2 Aggregation of Shares. If after the date hereof, and subject
to the provisions of Section 6.2, the number of outstanding shares of Common
Stock is decreased by a consolidation, combination or reclassification of shares
of Common Stock or other similar event, then, upon the effective date thereof,
the number of Shares issuable upon exercise of the Purchase Option shall be
decreased in proportion to such decrease in outstanding shares of Common Stock.
6.1.3 Adjustments in Exercise Price. Whenever the number of Shares
purchasable upon the exercise of this Purchase Option is adjusted, as provided
in this Section 6.1, the Exercise Price shall be adjusted (to the nearest cent)
by multiplying such Exercise Price immediately prior to such adjustment by a
fraction (x) the numerator of which shall be the number of Shares purchasable
upon the exercise of this Purchase Option immediately prior to such adjustment,
and (y) the denominator of which shall be the number of Shares so purchasable
immediately thereafter.
6.1.4 Replacement of Shares upon Reorganization, etc. In case of any
reclassification or reorganization of the outstanding shares of Common Stock
other than a change covered by Section 6.1.1 hereof or which solely affects the
par value of such shares of Common Stock, or in the case of any merger or
consolidation of the Company with or into another corporation (other than a
consolidation or merger in which the Company is the continuing corporation and
which does not result in any reclassification or reorganization of the
outstanding shares of Common Stock), or in the case of any sale or conveyance to
another corporation or entity of the property of the Company as an entirety or
substantially as an entirety in connection with which the Company is dissolved,
the Holder of this Purchase Option shall have the right thereafter (until the
expiration of the right of exercise of this Purchase Option) to receive upon the
exercise hereof, for the same aggregate Exercise Price payable hereunder
immediately prior to such event, the kind and amount of shares of stock or other
securities or property (including cash) receivable upon such reclassification,
reorganization, merger or consolidation, or upon a dissolution following any
such sale or other transfer, by a Holder of the number of Shares issuable upon
exercise of this Purchase Option immediately prior to such event; and if any
reclassification also results in a change in shares of Common Stock covered by
Section 6.1.1, then such adjustment shall be made pursuant to Sections 6.1.1,
6.1.3 and this Section 6.1.4. The provisions of this Section 6.1.4 shall
similarly apply to successive reclassifications, reorganizations, mergers or
consolidations, sales or other transfers.
6.1.5 Changes in Form of Purchase Option. This form of Purchase
Option need not be changed because of any change pursuant to this Section, and
Purchase Options issued after such change may state the same Exercise Price and
the same number of Shares as are stated in the Purchase Options initially issued
pursuant to this Agreement. The acceptance by any Holder of the issuance of new
Purchase Options reflecting a required or permissive change shall not be deemed
to waive any rights to a prior adjustment or the computation thereof.
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6.2 Elimination of Fractional Interests. The Company shall not be required
to issue certificates representing fractions of shares of Common Stock upon the
exercise or transfer of the Purchase Option, nor shall it be required to issue
scrip or pay cash in lieu of any fractional interests, it being the intent of
the parties that all fractional interests shall be eliminated by rounding any
fraction up or down to the nearest whole number of shares of Common Stock.
7. Reservation and Listing. The Company shall at all times reserve and keep
available out of its authorized shares of Common Stock, solely for the purpose
of issuance upon exercise of this Purchase Option, the number of Shares issuable
upon exercise of this Purchase Option. The Company covenants and agrees that,
upon exercise of the Purchase Options and payment of the Exercise Price
therefor, all Shares issuable upon the exercise of this Purchase Option shall be
duly and validly issued, fully paid and non-assessable and not subject to
preemptive rights of any stockholder. As long as the Purchase Options shall be
outstanding, the Company shall use its best efforts to cause all Shares
underlying the Purchase Option to be listed (subject to official notice of
issuance) on all securities exchanges (or, if applicable, on Nasdaq or the OTC
Bulletin Board) on which the Common Stock is then listed and/or quoted.
8. Notices of Record Date. Nothing herein shall be construed as conferring upon
the Holders the right to vote or consent as a stockholder for the election of
directors or any other matter, or as having any right whatsoever as a
stockholder of the Company. In case:
(a) the Company shall take a record of the holders of its Common Stock
(and/or other stock or securities at the time deliverable upon the exercise of
this Purchase Option) 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 any class or any other securities, or to receive any
other right, or
(b) of any capital reorganization of the Company, any reclassification of
the capital stock of the Company, any consolidation or merger of the Company
with or into another corporation (other than a consolidation or merger in which
the Company is the surviving entity), or any transfer of all or substantially
all of the assets of the Company, or
(c) of the voluntary or involuntary dissolution, liquidation or winding-up
of the Company,
then, and in each such case, the Company will deliver or cause to be delivered
to the Holder a notice specifying, as the case may be, (i) the date on which a
record is to be taken for the purpose of such dividend, distribution or right,
and stating the amount and character of such dividend, distribution or right, or
(ii) the effective date on which such reorganization, reclassification,
consolidation, merger, transfer, dissolution, liquidation or winding-up is to
take place, and the time, if any is to be fixed, as of which the holders of
record of Common Stock (or such other stock or securities at the time
deliverable upon the exercise of this Purchase Option) shall be entitled to
exchange their shares of Common Stock for securities or other property
deliverable upon such reorganization, reclassification, consolidation, merger,
transfer, dissolution, liquidation or winding-up. Such notice shall be mailed at
least ten (10) days (or such lesser number of days as may be practicable (but in
no event less than five business days) based on the date on which the Board of
Directors acts to set such record date or transfer book closing) prior to the
record date or effective date for the event specified in such notice, provided
that the failure to mail such notice shall not affect the legality or validity
of any such action.
8.1 Transmittal of Notices. All notices, requests, consents and other
communications under this Purchase Option shall be in writing and shall be
deemed to have been duly made on the date of delivery if delivered personally,
by courier, by facsimile or sent by overnight courier service (such as federal
express), with acknowledgment of receipt to the party to whom notice is given,
or on the fifth day after mailing if mailed to the party to whom notice is to be
given, by registered or certified mail, return receipt requested, postage
prepaid and properly addressed as follows: (i) if to the registered Holder of
the Purchase Option, to the address of such Holder as shown on the books of the
Company, or (ii) if to the Company, to its principal executive office,
attention: Chief Financial Officer.
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9. Miscellaneous.
9.1 Amendments. The Company and HCFP may from time to time supplement or
amend this Purchase Option without the approval of any of the Holders in order
to cure any ambiguity, to correct or supplement any provision contained herein
which may be defective or inconsistent with any other provisions herein, or to
make any other provisions in regard to matters or questions arising hereunder
that the Company and HCFP may deem necessary or desirable and that the Company
and HCFP deem shall not adversely affect the interest of the Holders. All other
modifications or amendments shall require the written consent of the party
against whom enforcement of the modification or amendment is sought.
9.2 Headings. The headings contained herein are for the sole purpose of
convenience of reference, and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this Purchase Option.
9.3 Entire Agreement. This Purchase Option (together with the registration
rights provisions in the Subscription Agreement referred to in this Purchase
Option) constitutes the entire agreement of the parties hereto with respect to
the subject matter hereof, and supersedes all prior agreements and
understandings of the parties, oral and written, with respect to the subject
matter hereof.
9.4 Binding Effect. This Purchase Option shall inure solely to the benefit
of and shall be binding upon, the Holder and the Company and their respective
successors, legal representatives and assigns, and no other person shall have or
be construed to have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Purchase Option or any provisions herein
contained.
9.5 Governing Law; Submission to Jurisdiction. This Purchase Option shall
be governed by and construed and enforced in accordance with the laws of the
State of New York, without giving effect to conflict of laws. Each of the
Company and the Holder hereby agrees that any action, proceeding or claim
against it arising out of, or relating in any way to this Purchase Option shall
be brought and enforced in the courts of the State of New York or of the United
States of America for the Southern District of New York, and irrevocably submits
to such jurisdiction, which jurisdiction shall be exclusive. Each of the Company
and the Holder hereby waives any objection to such exclusive jurisdiction and
that such courts represent an inconvenient forum. Any process or summons to be
served upon the Company may be served by transmitting a copy thereof by
registered or certified mail, return receipt requested, postage prepaid,
addressed to it at its principal business offices. Such mailing shall be deemed
personal service and shall be legal and binding upon the Company in any action,
proceeding or claim. The prevailing party(ies) in any such action shall be
entitled to recover from the other party(ies) all of its reasonable attorneys'
fees and expenses relating to such action or proceeding and/or incurred in
connection with the preparation therefor.
9.6 Waiver, Etc. The failure of the Company or the Holder to at any time
enforce any of the provisions of this Purchase Option shall not be deemed or
construed to be a waiver of any such provision, nor to in any way affect the
validity of this Purchase Option or any provision hereof or the right of the
Company or any Holder to thereafter enforce each and every provision of this
Purchase Option. No waiver of any breach, non-compliance or non-fulfillment of
any of the provisions of this Purchase Option shall be effective unless set
forth in a written instrument executed by the party or parties against whom or
which enforcement of such waiver is sought; and no waiver of any such breach,
non-compliance or non-fulfillment shall be construed or deemed to be a waiver of
any other or subsequent breach, non-compliance or non-fulfillment.
9.7 Exchange Agreement. As a condition of the Holder's receipt and
acceptance of this Purchase Option, Holder agrees that, at any time prior to the
complete exercise of this Purchase Option by Holder, if the Company and HCFP
enter into an agreement ("Exchange Agreement") pursuant to which they agree that
all outstanding Purchase Options will be exchanged for securities or cash or a
combination of both, then Holder shall agree to such exchange and become a party
to the Exchange Agreement.
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IN WITNESS WHEREOF, the Company has caused this Purchase Option to be
signed by its duly authorized officer as of the 28th day of January, 2005.
GIGABEAM CORPORATION
By: /s/ Xxxxx X. Xxxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Chairman of the Board and
Chief Executive Officer
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NOTICE OF EXERCISE
To Be Executed by the Registered Holder
In Order to Exercise this Purchase Option
The undersigned registered Holder hereby irrevocably elects to exercise
the attached Purchase Option and to purchase ___ shares of Common Stock of
GigaBeam Corporation and hereby makes payment of $________ (at the rate of $____
per Share) in payment of the Exercise Price pursuant thereto. Please issue the
securities comprising the shares as to which this Purchase Option is exercised
in accordance with the instructions given below. The undersigned acknowledges
that upon exercise of this Purchase Option, the Company will issue certificates
evidencing the shares.
or
The undersigned Registered Holder hereby irrevocably elects to exercise
the attached Purchase Option and to purchase ___ shares of GigaBeam Corporation
by surrender of the unexercised portion of the attached Purchase Option. Please
issue the securities comprising the shares as to which this Purchase Option is
exercised in accordance with the instructions given below.
PLEASE ISSUE CERTIFICATES AS FOLLOWS:
____________________________________________
PLEASE INSERT SOCIAL SECURITY
____________________________________________ OR OTHER IDENTIFYING NUMBER
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or type name and address)
and be delivered to
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or type name and address)
and if such number of Shares exercised shall not be all the Shares evidenced by
the attached Purchase Option, that a new Purchase Option for the balance of such
Purchase Option be registered in the name of, and delivered to, the registered
Holder at the address stated below.
Dated:______________________ ______________________________________
(Signature of Registered Holder)
______________________________________
______________________________________
(Address)
______________________________________
(Taxpayer Identification Number)
______________________________________
Signature Guaranteed
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ASSIGNMENT FORM
To be executed by the Registered Holder
In order to Assign Purchase Option
FOR VALUE RECEIVED,____________________________________ hereby sell, assigns and
transfer unto
____________________________________________
PLEASE INSERT SOCIAL SECURITY
____________________________________________ OR OTHER IDENTIFYING NUMBER
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or type name and address)
______________________ of the Purchase Options represented by the attached
instrument, and hereby irrevocably constitutes and appoints
________________________ Attorney to transfer these Purchase Options on the
books of the Company, with full power of substitution in the premises.
Dated:________________
X______________________________
(Signature of Registered Holder)
_______________________________
(Signature Guaranteed)
THE SIGNATURE ON THE ASSIGNMENT OR THE PURCHASE FORM MUST CORRESPOND TO THE NAME
AS WRITTEN UPON THE FACE OF THIS PURCHASE OPTION CERTIFICATE IN EVERY
PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER, AND MUST
BE GUARANTEED BY A COMMERCIAL BANK OR TRUST COMPANY OR A MEMBER FIRM OF THE
AMERICAN STOCK EXCHANGE, NEW YORK STOCK EXCHANGE, PACIFIC STOCK EXCHANGE OR
MIDWEST STOCK EXCHANGE.
CERTIFICATION OF STATUS OF TRANSFEREE
TO BE EXECUTED BY THE TRANSFEREE OF THIS PURCHASE OPTION
The undersigned transferee hereby certifies to the registered Holder and
to GigaBeam Corporation that the transferee is an "accredited investor" within
the meaning of Rule 501 of Regulation D promulgated under the Securities Act of
1933, as amended.
Dated:________________
X_________________________________
(Signature of Transferee)
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