1
EXHIBIT 10.13
THIS WARRANT AND ANY SECURITIES ACQUIRED UPON THE EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND NEITHER THE SECURITIES
NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE
DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS
THAT, IN THE OPINION OF COUNSEL FOR THE HOLDER, WHICH COUNSEL AND OPINION ARE
REASONABLY SATISFACTORY TO COUNSEL FOR THIS CORPORATION, IS AVAILABLE.
NEXT LEVEL COMMUNICATIONS, INC.
COMMON STOCK PURCHASE WARRANT
This certifies that, for good and valuable consideration, Next Level
Communications, Inc., a Delaware corporation (the "Company"), grants
to__________________________ (the "Warrantholder") the right to subscribe for
and purchase from the Company_____________________ validly issued, fully paid
and nonassessable shares (the "Warrant Shares") of the Company's Common Stock,
par value $.01 per share (the "Common Stock"), at the purchase price per share
of $10.38 (the "Exercise Price"), at any time prior to 5:00 p.m., New York City
time on January 13, 2003 (the "Expiration Date"), all subject to the terms,
conditions and adjustments herein set forth. As used herein, "Business Day"
means any day other than a Saturday, Sunday or a day on which national banks are
authorized by law to close in the State of New York or California.
1. Exercise of Warrant.
1.1 Duration and Exercise of Warrant. Subject to the terms and
conditions set forth herein, this Warrant may be exercised, in whole or in part,
by the Warrantholder by:
(a) the surrender of this Warrant to the Company, with a duly
executed Exercise Form (in the form attached hereto as Exhibit A) specifying the
number of Warrant Shares to be purchased, during normal business hours on any
Business Day prior to the Expiration Date; and
(b) the delivery of payment to the Company, for the account of
the Company, in immediately available funds, of
2
2
the Exercise Price for the number of Warrant Shares specified in the Exercise
Form in lawful money of the United States of America.
1.2 Conversion Right.
(a) In lieu of exercising this Warrant by the payment of the
Exercise Price in cash, the Warrantholder shall have the right (but not the
obligation), to require the Company to convert this Warrant, in whole or in
part, into shares of Common Stock (the "Conversion Right") as provided for in
this Section 1.2. Upon exercise of the Conversion Right, the Company shall
deliver to the Warrantholder (without payment by the Warrantholder of any of the
Exercise Price) in accordance with Section 1.1 that number of shares of Common
Stock equal to the quotient obtained by dividing (x) the value of the Warrant
(or the portion thereof being exercised) at the time the Conversion Right is
exercised (determined by subtracting the aggregate Exercise Price (or the
applicable portion thereof) in effect as of the close of business on the
Business Day immediately preceding the exercise of the Conversion Right from the
aggregate Fair Market Value (as defined herein) for the shares of Common Stock
issuable upon exercise of the Warrant (or the portion thereof being exercised)
as of the close of business on the Business Day immediately preceding the
exercise of the Conversion Right) by (y) the Fair Market Value of one share of
Common Stock as of the close of business on the Business Day immediately
preceding the exercise of the Conversion Right.
(b) The Conversion Right may be exercised by the Warrantholder on
any Business Day prior to the Expiration Date by delivering the Warrant
Certificate, with a duly executed Exercise Form with the conversion section
completed, to the Company, exercising the Conversion Right and specifying the
total number of shares of Common Stock that the Warrantholder will be issued
pursuant to such conversion.
(c) "Fair Market Value" of a share of Common Stock as of a
particular date (the "Determination Date") shall mean the average of the "daily
sales prices" of the Common Stock on the Nasdaq National Market on the last 20
Business Days prior to the Determination Date. The "daily sales price" shall be
the closing price for bona fide transactions of the Common Stock at the end of
each day or, if no such transaction takes place that day, the average of the
closing bid and asked prices for such day.
1.3 Warrant Shares Certificate. A stock certificate or certificates
for the Warrant Shares specified in the Exercise Form shall be delivered to the
Warrantholder promptly after receipt of the Exercise Form by the Company and, if
the Conversion Right is not exercised, payment of the Exercise Price. If this
Warrant shall have been exercised only in part, the Company shall, at the time
of delivery of the stock certificate or certificates, deliver to the
Warrantholder a new Warrant
3
3
evidencing the rights to purchase the remaining Warrant Shares, which new
Warrant shall in all other respects be identical with this Warrant.
1.4 Payment of Taxes. The issuance of certificates for Warrant
Shares shall be made without charge to the Warrantholder for any stock transfer
or other issuance tax in respect thereto; provided, however, that the
Warrantholder shall be required to pay any and all taxes that may be payable in
respect of any transfer involved in the issuance and delivery of any certificate
in a name other than that of the then Warrantholder as reflected upon the books
of the Company.
2. Restrictions on Transfer;
Restrictive Legends.
(a) This Warrant may not be offered, sold, transferred, pledged or
otherwise disposed of (other than to an affiliate of the Warrantholder), in
whole or in part, without the prior written consent of the Company (which shall
not be unreasonably withheld).
(b) Except as otherwise permitted by this Section 2, each Warrant
(and each Warrant issued in substitution for any Warrant pursuant to Section 4)
shall be stamped or otherwise imprinted with a legend in substantially the
following form:
THIS WARRANT AND ANY SECURITIES ACQUIRED UPON THE EXERCISE OF THIS WARRANT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
ANY STATE SECURITIES LAWS AND NEITHER THE SECURITIES NOR ANY INTEREST
THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED
OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT
OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH
LAWS THAT, IN THE OPINION OF COUNSEL FOR THE HOLDER, WHICH COUNSEL AND
OPINION ARE REASONABLY SATISFACTORY TO COUNSEL FOR THIS CORPORATION, IS
AVAILABLE.
Except as otherwise permitted by this Section 2, each stock certificate for
Warrant Shares issued upon the exercise of any Warrant and each stock
certificate issued upon the direct or indirect transfer of any such Warrant
Shares shall be stamped or otherwise imprinted with a legend in substantially
the following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND
NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD,
TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS OR AN
EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS THAT, IN THE
OPINION OF COUNSEL FOR THE HOLDER, WHICH
4
4
COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO COUNSEL FOR THIS
CORPORATION, IS AVAILABLE.
Notwithstanding the foregoing, the Warrantholder may require the
Company to issue a stock certificate for Warrant Shares without such legend if
such Warrant Shares have been registered for resale under the Securities Act.
3. Reservation and Registration of Shares, Etc.
The Company covenants and agrees as follows:
(a) All Warrant Shares that are issued upon the exercise of this
Warrant will, upon issuance, be validly issued, fully paid and nonassessable,
and free from all taxes, liens, security interests, charges, and other
encumbrances imposed by or through the Company with respect to the issuance
thereof, other than taxes in respect of any transfer occurring contemporaneously
with such issue.
(b) During the period within which this Warrant may be exercised,
the Company will at all times have authorized and reserved a sufficient number
of shares of Common Stock to provide for the exercise of the rights represented
by this Warrant.
4. Loss or Destruction of Warrant.
Subject to the terms and conditions hereof, upon receipt by the
Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant and, in the case of loss, theft or
destruction, of such bond or indemnification as the Company may reasonably
require, and, in the case of such mutilation, upon surrender and cancellation of
this Warrant, the Company will execute and deliver a new Warrant of like tenor.
5. Ownership of Warrant.
The Company may deem and treat the person in whose name this Warrant
is registered as the holder and owner hereof (notwithstanding any notations of
ownership or writing hereon made by anyone other than the Company) for all
purposes and shall not be affected by any notice to the contrary, until
presentation of this Warrant for registration of transfer.
6. Certain Adjustments.
6.1 The number of Warrant Shares purchasable upon the exercise of
this Warrant and the Exercise Price shall be subject to adjustment after the
date hereof as follows:
(a) Stock Dividends. If at any time (i) the Company shall pay a
stock dividend payable in shares of Common Stock or (ii) the number of shares of
Common Stock shall have been
5
5
increased by a subdivision or split-up of shares of Common Stock, then, on the
date of the payment of such dividend or immediately after the effective date of
subdivision or split up, as the case may be, the number of shares to be
delivered upon exercise of this Warrant will be increased so that the
Warrantholder will be entitled to receive the number of shares of Common Stock
that such Warrantholder would have owned immediately following such action had
this Warrant been exercised immediately prior thereto, and the Exercise Price
will be adjusted as provided below in paragraph (g).
(b) Combination of Stock. If the number of shares of Common Stock
outstanding shall have been decreased by a combination of the outstanding shares
of Common Stock (including a reverse stock-split), then, immediately after the
effective date of such combination, the number of shares of Common Stock to be
delivered upon exercise of this Warrant will be decreased so that the
Warrantholder thereafter will be entitled to receive the number of shares of
Common Stock that such Warrantholder would have owned immediately following such
action had this Warrant been exercised immediately prior thereto, and the
Exercise Price will be adjusted as provided below in paragraph (g).
(c) Reorganization, etc. If any capital reorganization of the
Company, or any reclassification of the Common Stock, or any consolidation of
the Company with or merger of the Company with or into any other person, shall
be effected in such a way that the holders of Common Stock shall be entitled to
receive stock, other securities or assets (whether such stock, other securities
or assets are issued or distributed by the Company or another person) with
respect to or in exchange for Common Stock, then, upon exercise of this Warrant
the Warrantholder shall have the right to receive the kind and amount of stock,
other securities or assets receivable upon such reorganization,
reclassification, consolidation or merger by a holder of the number of shares of
Common Stock that such Warrantholder would have been entitled to receive upon
exercise of this Warrant had this Warrant been exercised immediately before such
reorganization, reclassification, consolidation or merger.
(d) Stock and Rights Offering at Less than Fair Market Value.
(i) If at any time the Company shall issue to all holders of
its Common Stock or sell or fix a record date for the issuance to all
holders of its Common Stock of Common Stock at a price per share that is
less than Fair Market Value per share of Common Stock (as defined in
Section 1.2(c) hereof) on the date of such issuance or such record date
then, immediately after the date of such issuance or sale or on such
record date, the number of
6
6
shares of Common Stock to be delivered upon exercise of this Warrant shall
be increased so that the Warrantholder thereafter will be entitled to
receive the number of shares of Common Stock determined by multiplying the
number of shares of Common Stock such Warrantholder would have been
entitled to receive immediately before the date of such issuance or sale
or such record date by a fraction, the denominator of which will be the
number of shares of Common Stock outstanding on such date plus the number
of shares of Common Stock that the aggregate offering price of the total
number of shares so offered for subscription or purchase would purchase at
such Fair Market Value, and the numerator of which will be the number of
shares of Common Stock outstanding on such date plus the number of
additional shares of Common Stock offered for subscription or purchase,
and the Exercise Price shall be adjusted as provided below in paragraph
(g).
(ii) If the Company shall at any time distribute to all
holders of its Common Stock any shares of capital stock of the Company
(other than Common Stock) or evidences of its indebtedness or assets
(excluding cash dividends or distributions paid from retained earnings of
the Company) or rights or warrants to subscribe for or purchase any of its
securities (any of the foregoing being hereinafter in this paragraph
(d)(ii) called the "Securities"), other than pursuant to a reorganization,
reclassification, consolidation or merger described in paragraph (c), then
in each such case, unless the Company elects to reserve shares or other
units of such Securities for distribution to the Warrantholder upon
exercise of the Warrants of such Warrantholder so that, in addition to the
shares of the Common Stock to which such Warrantholder is entitled, such
Warrantholder will receive upon such exercise the amount and kind of such
Securities that such Warrantholder would have received if the
Warrantholder had, immediately prior to the record date for the
distribution of the Securities, exercised the Warrant, then the number of
shares of Common Stock to be delivered to such Warrantholder upon exercise
of this Warrant shall be increased so that the Warrantholder thereafter
shall be entitled to receive the number of shares of Common Stock
determined by multiplying the number of shares such Warrantholder would
have been entitled to receive immediately before such record date, had the
Warrantholder exercised the Warrant immediately prior thereto by a
fraction, the denominator of which shall be the Fair Market Value per
share of Common Stock on such record date minus the then fair market value
(as reasonably determined by the Board of Directors of the Company), of
the portion of the capital stock or assets or evidences of indebtedness so
distributed or of such rights or warrants applicable to one share of
Common Stock and the numerator of which shall be the Fair Market Value per
share of the Common
7
7
Stock, and the Exercise Price shall be adjusted as provided below in
paragraph (g).
(iii) For the purpose of making any adjustment required under
this Section 6.1(d), the consideration received by the Company for any
issue or sale of securities shall (a) to the extent it consists of cash be
computed as the gross amount of cash received by the Company before
deduction of any expenses payable by the Company and any underwriting or
similar commissions, discounts, compensation or concessions paid or
allowed by the Company in connection with such issue or sale, (b) to the
extent it consists of property other than cash, be computed at the fair
value of that property as reasonably determined in good faith by the Board
of Directors and (c) if additional shares of Common Stock, securities
convertible into Common Stock or rights or options to purchase either
additional shares of Common Stock or such convertible securities or are
issued or sold together with other stock or securities or other assets of
the Company for a consideration which covers both, be computed as the
portion of the consideration so received that may be reasonably determined
in good faith by the Board of Directors to be allocable to such additional
shares of Common Stock, such convertible securities or rights or options.
(e) Fractional Shares. No fractional shares of Common Stock or scrip
shall be issued to any Warrantholder in connection with the exercise of this
Warrant. Instead of any fractional shares of Common Stock that would otherwise
be issuable to such Warrantholder, the Company will pay to such Warrantholder a
cash adjustment in respect of such fractional interest in an amount equal to
that fractional interest of the Fair Market Value per share of Common Stock as
of the close of business on the Business Day immediately preceding the exercise
of the Warrant.
(f) Carryover. Notwithstanding any other provision of this Section
6.1, no adjustment shall be made to the number of shares of Common Stock to be
delivered to the Warrantholder (or to the Exercise Price) if such adjustment
represents less than 1% of the number of shares to be so delivered, but any
lesser adjustment shall be carried forward and shall be made at the time and
together with the next subsequent adjustment that together with any adjustments
so carried forward shall amount to 1% or more of the number of shares to be so
delivered.
(g) Exercise Price Adjustment. Whenever the number of Warrant Shares
purchasable upon the exercise of the Warrant is adjusted as provided pursuant to
this Section 6.1, the Exercise Price payable upon the exercise of this Warrant
shall be adjusted by multiplying such Exercise Price immediately prior to such
adjustment by a fraction, of which the numerator shall be the number of Warrant
Shares purchasable upon the exercise of the Warrant immediately prior to such
adjustment, and of which the
8
8
denominator shall be the number of Warrant Shares purchasable immediately
thereafter; provided, however, that the Exercise Price for each Warrant Share
shall in no event be less than the par value of such Warrant Share.
6.2 Notice of Adjustment. Whenever the number of Warrant Shares or
the Exercise Price of such Warrant Shares is adjusted, as herein provided, the
Company shall promptly mail by first class, postage prepaid, to the
Warrantholder, a notice of such adjustment or adjustments setting forth the
number of Warrant Shares and the Exercise Price such adjustment, a brief
statement of the facts requiring such adjustment and the computation by which
such adjustment was made.
7. Miscellaneous.
7.1 Binding Effect; Benefits. This Warrant shall inure to the
benefit of and shall be binding upon the Company and the Warrantholder and their
respective successors and assigns. Nothing in this Warrant, expressed or
implied, is intended to or shall confer on any person other than the Company and
the Warrantholder, or their respective successors or assigns, any rights,
remedies, obligations or liabilities under or by reason of this Warrant.
7.2 Amendments. Any provision of this Warrant may be amended and the
observance thereof waived only with the written consent of the Company and the
Warrantholder.
7.3 Section and Other Headings. The section and other headings
contained in this Warrant are for reference purposes only and shall not be
deemed to be a part of this Warrant or to affect the meaning or interpretation
of this Warrant.
7.4 Notices. All notices and other communications required or
permitted hereunder shall be in writing and shall be delivered personally,
telecopied or sent by certified, registered or express mail, postage prepaid.
Any such notice shall be deemed given when so delivered personally, telecopied
or sent by certified, registered or express mail, as follows:
(a) if to the Company at 0000 Xxxxx Xxxx Xxxxx, Xxxxxxx
Xxxx, XX 00000, Attention: Chief Financial Officer (with a copy
to General Instrument Corporation, 000 Xxxxxxxxxx Xxxxx, Xxxxxxx,
XX 00000, Attention: General Counsel); or
(b) if to the Warrantholder at c/o Xxxxxxx Xxxxx
Investors LLC, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000,
Attention: Xxxxx Xxxxxxxxx.
Any party may by notice given in accordance with this Section designate another
address or person for receipt of notices hereunder.
9
9
7.5 Severability. Any term or provision of this Warrant which is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the terms and provisions of this Warrant or
affecting the validity or enforceability of any of the terms or provisions of
this Warrant in any other jurisdiction.
7.6 Governing Law. This Warrant shall be deemed to be a contract
made under the laws of the State of New York.
7.7 No Rights or Liabilities as Stockholder. Nothing contained in
this Warrant shall be determined as conferring upon the Warrantholder any rights
as a stockholder of the Company or as imposing any liabilities on the
Warrantholder to purchase any securities whether such liabilities are asserted
by the Company or by creditors or stockholders of the Company or otherwise.
7.8 Partnership Agreement. The Warrantholder agrees and acknowledges
that all of the obligations to the Warrantholder under Section 10.2 of the
Agreement of Limited Partnership dated as of January 13, 1998 of Next Level
Communications L.P. have been fully satisfied and that the Warrantholder has no
further rights thereunder.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed
by its duly authorized officer.
NEXT LEVEL COMMUNICATIONS, INC.
By: _______________________________
Name:
Title:
Acknowledged and Agreed:
___________________________
Name:
Dated: , 1999
10
Exhibit A
EXERCISE FORM
(To be executed upon exercise of this Warrant)
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant, to purchase __________ of the Warrant Shares and
[herewith tender payment for such Warrant Shares to the order of Next Level
Communications, Inc. in the amount of $__________] [hereby exercises its
Conversion Right] in accordance with the terms of this Warrant. The undersigned
requests that a certificate for [such Warrant Shares] [that number of Warrant
Shares to which the undersigned is entitled as calculated pursuant to Section
1.2] be registered in the name of the undersigned and that such certificates be
delivered to the undersigned's address below.
The undersigned represents that it is acquiring such Warrant Shares
for its own account for investment and not with a view to or for sale in
connection with any distribution thereof (subject, however, to any requirement
of law that the disposition thereof shall at all times be within its control).
Dated:____________________
Signature________________________________
_________________________________________
(Print Name)
_________________________________________
(Xxxxxx Xxxxxxx)
_________________________________________
(City) (State) (Zip Code)
____________________________
Signed in the presence of:
