[EXHIBIT 4.3]
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), 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.
SERIES A WARRANT
TO
PURCHASE COMMON STOCK
OF
RAPTOR NETWORKS TECHNOLOGY, INC.
Issue Date: April 1, 2004 Warrant No. A-___
THIS CERTIFIES that ______________________ or any subsequent
holder hereof (the "Holder"), has the right to purchase from RAPTOR
NETWORKS TECHNOLOGY, INC., a Colorado corporation (the "Company"), up
to __________ fully paid and nonassessable shares of the Company's
common stock, par value $0.001 per share (the "Common Stock"), subject
to adjustment as provided herein, at a price per share equal to the
Exercise Price (as defined below), at any time beginning on the date
on which this Warrant is issued (the "Issue Date") and ending at 5:00
p.m., eastern time, on the sixtieth (60th) day following the Effective
Date (the "Expiration Date"). This Warrant is issued pursuant to a
Securities Purchase Agreement, dated as of April 1, 2004 (the
"Securities Purchase Agreement"). Capitalized terms used herein and
not otherwise defined shall have the respective meanings set forth in
the Securities Purchase Agreement.
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1. Exercise.
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() Right to Exercise; Exercise Price. The Holder shall have
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the right to exercise this Warrant at any time and from time to time
during the period beginning on the Issue 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" for each
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Warrant Share purchased by the Holder upon the exercise of this
Warrant shall be equal to $2.25, subject to adjustment for the events
specified in Section 4 below.
() Exercise Notice. In order to exercise this Warrant, the
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Holder shall send by facsimile transmission, at any time prior to 5:00
p.m., eastern time, on the Business Day on which the Holder wishes to
effect such exercise (the "Exercise Date"), to the Company an executed
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copy of the notice of exercise in the form attached hereto as Exhibit A
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(the "Exercise Notice"), the original Warrant and the Exercise
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Price. The Exercise Notice shall also state the name or names (with
address) in which the shares of Common Stock that are issuable on such
exercise shall be issued. If shares are to be issued in the name of a
person other than the Holder, the Holder will pay all transfer taxes
payable with respect thereto.
(c) Holder of Record. The Holder shall, for all purposes, be
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deemed to have become the holder of record of the Warrant Shares
specified in an Exercise Notice on the Exercise Date specified
therein, irrespective of the date of delivery of such Warrant Shares.
Except as specifically provided herein, 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.
(d) Cancellation of Warrant. This Warrant shall be canceled
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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.
2. Delivery of Warrant Shares Upon Exercise. Upon receipt of
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an Exercise Notice pursuant to paragraph 1 above, the Company shall,
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) the date on which the Company has received
payment of the Exercise Price, 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 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 the
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.
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3. Failure to Deliver Warrant Shares.
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(a) In the event that the Company fails for any reason to
deliver to the Holder the number of Warrant Shares specified in the
applicable Exercise Notice on or before the Delivery Date therefor (an
"Exercise Default"), and such default continues for five (5) Business
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Days following delivery of a written notice of such default by the
Holder to the Company, the Company shall pay to the Holder payments
("Exercise Default Payments") in the amount of (i) (N/365) multiplied
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by (ii) the aggregate Exercise Price of the Warrant Shares which are
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the subject of such Exercise Default multiplied by (iii) the lower of
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fifteen percent (15%) and the maximum rate permitted by applicable law
(the "Default Interest Rate"), where "N" equals the number of days
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elapsed between the original Delivery Date of such Warrant Shares and
the date on which all of such Warrant Shares are issued and delivered
to the Holder. Cash amounts payable hereunder shall be paid on or
before the fifth (5th) Business Day of the calendar month following
the calendar month in which such amount has accrued.
(b) The Holder's rights and remedies hereunder are cumulative,
and no right or remedy is exclusive of any other. In addition to the
amounts specified herein, the Holder shall have the right to pursue
all other remedies available to it at law or in equity (including,
without limitation, a decree of specific performance and/or injunctive
relief). Nothing herein shall limit the Holder's right to pursue
actual damages for the Company's failure to issue and deliver Warrant
Shares on the applicable Delivery Date (including, without limitation,
damages relating to any purchase 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 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).
4. Adjustments to Exercise Price.
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(a) Adjustment upon Subdivision or Combination of Common Stock.
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If the Company, at any time after the Issue Date, 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 Issue Date, 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.
(b) Distributions. If the Company shall declare or make any
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distribution of its assets (or rights to acquire its assets) to
holders of Common Stock as a partial liquidating dividend or otherwise
(including without limitation any dividend or distribution to the
Company's stockholders in cash or shares (or rights to acquire shares)
of capital stock of a subsidiary) (a "Distribution"), the Company
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shall deliver written notice of such Distribution (a "Distribution
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Notice") to the Holder at least fifteen (15) Business Days prior to
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the earlier to occur of (i) the record date for determining
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stockholders entitled to such Distribution (the "Record Date") and
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(ii) the date on which such Distribution is made (the "Distribution
Date"). The Holder shall be entitled, at its option (to be exercised
by written notice delivered to the Company on or before the fifteenth
(15th) Business Day following the date on which a Distribution Notice
is delivered to the Holder), either (A) upon any exercise of this
Warrant on or after the Record Date, to be entitled to receive on the
Distribution Date (for any exercise effected on or prior to the
Distribution Date) or the applicable Delivery Date (for any exercise
effected after the Distribution Date), the amount of such assets which
would have been payable to the holder with respect to the shares of
Common Stock issuable upon such exercise had the Holder been the
holder of such shares of Common Stock on the Record Date or (B) upon
any exercise of this Warrant on or after the Record Date, to reduce
the Exercise Price applicable to such exercise by reducing the
Exercise Price in effect on the Business Day immediately preceding the
Record Date by an amount equal to the fair market value of the assets
to be distributed divided by the number of shares of Common Stock as
to which such Distribution is to be made, such fair market value to be
reasonably determined by a nationally recognized investment banking
firm retained by the Company and reasonably acceptable to the holders
of a majority of the Outstanding Registrable Securities.
(c) Major Transactions. In the event of a merger,
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consolidation, business combination, tender offer, exchange of shares,
recapitalization, reorganization, redemption or other similar event,
as a result of which shares of Common Stock of the Company shall be
changed into the same or a different number of shares of the same or
another class or classes of stock or securities or other assets of the
Company or another entity or the Company shall sell all or
substantially all of its assets (each of the foregoing being a "Major
Transaction"), the Company will give the Holder at least thirty (30)
days written notice prior to the closing of such Major Transaction;
provided, however, that the Company shall publicly disclose the terms
of any such Major Transaction on or before the date on which it
delivers notice of a Major Transaction to the Holder. Upon the
occurrence of a Major Transaction, (i) the Holder shall be permitted
to exercise this Warrant in whole or in part at any time prior to the
record date for the receipt of such consideration and shall be
entitled to receive, for each share of Common Stock issued to Holder
for such exercise, the same per share consideration paid to the other
holders of Common Stock in connection with such Major Transaction, and
(ii) if and to the extent that the Holder retains any portion of this
Warrant following such record date, the Company will cause the
surviving or, in the event of a sale of assets, purchasing entity, as
a condition precedent to such Major Transaction, to assume the
obligations of the Company under this Warrant, with such adjustments
to the Exercise Price and the securities covered hereby as are deemed
appropriate by the Company's Board of Directors in order to preserve
the economic benefits of this Warrant to the Holder.
(d) Adjustments; Additional Shares, Securities or Assets. In
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the event that at any time, as a result of an adjustment made pursuant
to this paragraph 4, 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
4. Any adjustment made herein that results in a decrease in the
Exercise Price shall also effect a proportional increase in the number
of shares of Common Stock into which this Warrant is exercisable.
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5. Fractional Interests.
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No fractional shares or scrip representing fractional shares
shall be issuable upon the exercise of this Warrant. 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, the Company shall, in lieu of issuing any such
fractional share, pay to the Holder an amount in cash equal to the
product resulting from multiplying such fraction by the Market Price
(as defined in the Series B Warrants) as of the Exercise Date.
6. Transfer of this Warrant.
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The Holder may sell, transfer, assign 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 from the registration requirements of the Securities Act,
and applicable state securities laws, and is otherwise made in
accordance with the applicable provisions of the Securities Purchase
Agreement. Upon such transfer or other disposition, the Holder shall
deliver this Warrant to the Company together with a written notice to
the 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, 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 and, if
less than all this Warrant is transferred, shall deliver to the Holder
a Warrant for the remaining number of Warrant Shares.
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7. Benefits of this Warrant.
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This Warrant shall be for the sole and exclusive benefit of
the Holder of this Warrant and 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 hereunder.
8. Loss, theft, destruction or mutilation of Warrant.
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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 destruction) of indemnity 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.
9. Notice or Demands.
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Any notice, demand or request required or permitted to be
given by the Company or the Holder pursuant to the terms of this
Warrant shall be in writing and shall be deemed delivered (i) when
delivered personally or by verifiable facsimile transmission, unless
such delivery is made on a day that is not a Business Day, in which
case such delivery will be deemed to be made on the next succeeding
Business Day, (ii) on the next Business Day after timely delivery to
an 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:
Raptor Networks Technology, Inc.
00 Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxx Xxxxx, XX 00000
Attn: Xxx Xxxxxxxxxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Xxxxxx X. Xxxxxxx, Esq.
000 X.X. Xxxxx Xxxxxx
Xx. Xxxxxxxxxx, XX 00000
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.
10. Taxes.
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(a) The issue of stock certificates on exercises of this
Warrant shall be made without charge to the exercising Holder for any
tax in respect of the issue thereof. The Company shall not, however,
be required to pay any tax which may be payable in respect of any
transfer involved in the issue and delivery of stock in any name other
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than that of the Holder of any Warrant exercised, and the Company
shall not be required to issue or deliver any such stock certificate
unless and until the person or persons requesting the issue thereof
shall have paid to the Company the amount of such tax or shall have
established to the reasonable satisfaction of the Company that such
tax has been paid.
(b) Notwithstanding any other provision of this Warrant or
any other Transaction Document, for income tax purposes, any assignee
or transferee shall agree that the Company and the Transfer Agent
shall be permitted to withhold from any amounts payable to such
assignee or transferee any taxes required by law to be withheld from
such amounts. Unless exempt from the obligation to do so, each
assignee or transferee shall, upon request, execute and deliver to the
Company or the Transfer Agent, as applicable, a properly completed
Form W-8 or W-9, indicating that such assignee or transferee is not
subject to back-up withholding for United States Federal income tax
purposes.
11. Applicable Law.
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This Warrant is issued under and shall for all purposes be
governed by and construed in accordance with the laws of the State of
New York applicable to contracts made and to be performed entirely
within the State of New York.
12. Amendments.
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No amendment, modification or other change to, or waiver of
any provision of, this Warrant may be made unless such amendment,
modification or change is (A) set forth in writing and is signed by
the Company and the Holder and (B) agreed to in writing by the holders
of at least sixty-six percent (66%) of the number of shares into which
the Warrants are exercisable, it being understood that upon the
satisfaction of the conditions described in (A) and (B) above, each
Warrant (including any Warrant held by a Holder who did not execute
the agreement specified in (B) above) shall be deemed to incorporate
any amendment, modification, change or waiver effected thereby as of
the effective date thereof.
[Signature Page to Follow]
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IN WITNESS WHEREOF, the Company has duly executed and delivered
this Warrant as of the Issue Date.
RAPTOR NETWORKS TECHNOLOGY, INC.
By:_____________________________________
Name:
Title:
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EXHIBIT A to WARRANT
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EXERCISE NOTICE
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The undersigned Holder hereby irrevocably exercises the right to
purchase of the shares of Common Stock ("Warrant
Shares") of RAPTOR NETWORKS TECHNOLOGY, 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.
Number of Warrant Shares: _________________
Exercise Price : $__________________
Date: ______________________
___________________________________
Name of Registered Holder
By:_______________________________
Name:
Title:
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EXHIBIT B to WARRANT
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TRANSFER NOTICE
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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 RAPTOR
NETWORKS TECHNOLOGY, INC. evidenced by the attached Warrant.
Date: ______________________
___________________________________
Name of Registered Holder
By:________________________________
Name:
Title:
Transferee Name and Address:
___________________________________
___________________________________
___________________________________
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