Exhibit 10.10
GIGABEAM CORPORATION
NOTE AND WARRANT PURCHASE AGREEMENT
DATED AS OF APRIL 19, 2004
NOTE AND WARRANT PURCHASE AGREEMENT
This NOTE AND WARRANT PURCHASE AGREEMENT (this "Agreement") dated April
19, 2004 is by and between GIGABEAM CORPORATION, a Delaware corporation (the
"Company"), and the purchaser enumerated on Schedule I attached hereto
("Purchaser").
In consideration of the premises and the covenants hereinafter
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
ARTICLE I
PURCHASE, SALE AND TERMS OF NOTE AND WARRANT
Section 1.1. The Notes. The Company has authorized the issuance and
sale to the Purchaser of convertible demand notes (the "Notes") having an
aggregate principal amount of up to One Million Five Hundred Thousand Dollars
($1,500,000.00) in the following denominations:
(a) First Note: The First Note shall be in the principal amount of Nine
Hundred Thousand Dollars ($900,000), and shall be substantially in the form set
forth in Exhibit A attached hereto;
(b) Second Note: The Second Note shall be in the principal amount of
Two Hundred Thousand Dollars ($200,000), and shall be substantially in the form
set forth in Exhibit B attached hereto;
(c) Third Note: The Third Note shall be in the principal amount of Two
Hundred thousand Dollars ($200,000), and shall be substantially in the form set
forth in Exhibit C attached hereto; and
(d) Fourth Note: The Fourth Note shall be in the principal amount of
Two Hundred Thousand Dollars ($200,000), and shall be substantially in the form
set forth in Exhibit D attached hereto.
Section 1.2. The Warrants. The Company has also authorized the issuance
and sale to the Purchaser of warrants (the "Warrants") to purchase the Company's
common stock; the shares subject to the Warrants shall constitute authorized but
unissued shares and shall be subject to adjustment in accordance with the terms
of the Warrants. The Warrants shall be issued pursuant to the following
schedule:
(a) First Warrant: The First Warrant shall be substantially in the form
set forth in Exhibit E attached hereto;
(b) Second Warrant: The Second Warrant shall be substantially in the
form set forth in Exhibit F attached hereto;
(c) Third Warrant: The Third Warrant shall be substantially in the form
set forth in Exhibit G attached hereto; and
(d) Fourth Warrant: The Fourth Warrant shall be substantially in the
form set forth in Exhibit H attached hereto.
Section 1.3. Purchase and Sale of Notes and Warrants.
(a) Issuance. The Company agrees to issue and sell to the Purchaser,
and, subject to and in reliance upon the representations, warranties, terms and
conditions of this Agreement, the Purchaser agrees to purchase from the Company,
the Notes and Warrants. The Notes and Warrants shall be issued and payment for
the Notes and Warrants shall be made in accordance with this Section 1.3(a)
(1) First Issuance: Payment for the First Note and First Warrant by the
Purchaser and the issuance of the First Note and First Warrant by the Company
shall be made at the offices of ____________, commencing at 9:00 a.m. local time
on April __, 2004, or at such other time and place upon which the Company and
the Purchaser shall mutually agree (the "First Issuance Date").
(2) Second Issuance: Payment for the Second Note and Second Warrant by
the Purchaser and the issuance of the Second Note and Second Warrant by the
Company shall be made at the offices of ____________, commencing at 9:00 a.m.
local time on May __, 2004, or at such other time and place upon which the
Company and the Purchaser shall mutually agree (the "Second Issuance Date").
(3) Third Issuance: Payment for the Third Note and Third Warrant by the
Purchaser and the issuance of the Third Note and Third Warrant by the Company
shall be made at the offices of ____________, commencing at 9:00 a.m. local time
on the earlier of (i) the consummation of an IPO; (ii) June __, 2004, or (iii)
at such other time and place upon which the Company and the Purchaser shall
mutually agree (the "Third Issuance Date").
(4) Fourth Issuance: Payment for the Fourth Note and Fourth Warrant by
the Purchaser and the issuance of the Fourth Note and Fourth Warrant by the
Company shall be made at the offices of ____________, commencing at 9:00 a.m.
local time on the earlier of (i) the consummation of an IPO; (ii) July __, 2004,
or (iii) at such other time and place upon which the Company and the Purchaser
shall mutually agree (the "Fourth Issuance Date"). (Collectively, the First
Issuance Date, the Second Issuance Date, the Third Issuance Date and the Fourth
Issuance Date, shall be referred to herein as the "Issuance Dates.")
On the Issuance Dates, the Company will deliver the respective Notes
and Warrants against receipt by the Company of a wire transfer in payment of the
full Principal Amount by the Purchaser.
(b) Allocation of Purchase Price. The Company and the Purchaser, having
adverse interests and as a result of arm's length bargaining, agree that: (i)
neither the Purchaser nor any of its affiliates has rendered or has agreed to
render any services to the Company in connection with this Agreement or the
issuance of the Notes and the Warrants; and (ii) the Warrants, when issued,
shall not be issued as compensation. The Company shall allocate the purchase
price of the Notes and Warrants as shall be determined by the Company's
independent auditors in accordance with generally accepted accounting
principles. The Company makes no representations as to the appropriate
allocation of the purchase price to the Purchaser.
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(c) Use of Proceeds. The Company agrees to use the proceeds from the
sale of the Notes and the Warrants for general working capital purposes.
Section 1.4. Payments and Endorsements. Payments of principal, interest
and premium, if any, on the Notes shall be made directly by wire transfer or by
check duly mailed or delivered to the Purchaser at the address enumerated on
Schedule I hereto, without any presentment or notation of payment, except that
prior to any transfer of the Notes, the holder of record shall endorse on the
Note a record of the date to which interest has been paid and all payments made
on account of principal of the Notes.
Section 1.5. Payment on Non-Business Days. Whenever any payment to be
made shall be due on a day which is not a Business Day (as hereinafter defined),
such payment may be made on the next succeeding Business Day, and such extension
of time shall in such case be included in the computation of payment of interest
due.
Section 1.6. Registration, etc. The Company shall maintain at its
principal office a register relating to the Notes and shall record therein the
names and addresses of the registered holders of the Notes, the address to which
notices are to be sent and the address to which payments are to be made as
designated by the registered holder if other than the address of the holder, and
the particulars of all transfers, exchanges and replacements of the Notes. No
transfer of the Notes shall be valid unless made on such register for the
registered holder or his, her or its executors or administrators or his, her or
their duly appointed attorney, upon surrender therefor for exchange as
hereinafter provided, accompanied by an instrument in writing, in form and
execution reasonably satisfactory to the Company. The Notes or any other note
issued hereunder, whether originally or upon transfer, exchange or replacement
of the Notes, shall be registered on the date of execution thereof by the
Company and shall be dated the date to which interest has been paid on such
Note. The registered holder of a Note shall be that Person (as hereinafter
defined) in whose name a Note has been so registered by the Company. A
registered holder shall be deemed the owner of a Note for all purposes of this
Agreement and, subject to the provisions hereof, shall be entitled to the
principal, premium, if any, and interest evidenced by such Note free from all
equities or rights of set-off or counterclaim among the Company and the
transferor of such registered holder or any previous registered holder of the
Note.
Section 1.7. Transfer and Exchange of Notes. Subject to compliance with
all applicable state and federal securities laws, the registered holder of the
Notes may, prior to the acceleration or prepayment thereof surrender the Notes
at the principal office of the Company for transfer or exchange. Within a
reasonable time after notice to the Company from a registered holder of its
intention to make such exchange and without expense (other than transfer taxes,
if any) to such registered holder, the Company shall, at its cost and expense,
issue in exchange therefor another note or notes, in such denominations as
requested by the registered holder, for the same aggregate principal amount as
the unpaid principal amount of the note or notes so surrendered and having the
same maturity and rate of interest, containing the same provisions and subject
to the same terms and conditions as the note or notes so surrendered. Each new
note shall be made payable to such Person or Persons, or registered assigns, as
the registered holder of such surrendered note or notes may designate, and such
transfer or exchange shall be made in such a manner that no gain or loss of
principal or interest shall result therefrom.
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Section 1.8. Replacement of Notes. Upon receipt of evidence
satisfactory to the Company of the loss, theft, destruction or mutilation of a
Note or any note issued in exchange therefor and, if requested in the case of
any such loss, theft or destruction, upon delivery of an indemnity bond or other
agreement or security reasonably satisfactory to the Company, or, in the case of
any such mutilation, upon surrender and cancellation of such note, the Company
will issue a new note, of like tenor and amount and dated the date to which
interest has been paid, in lieu of such lost, stolen, destroyed or mutilated
note; provided, however, if any note of which a Purchaser, its nominee, or any
of its partners or affiliates is the registered holder is lost, stolen or
destroyed, the affidavit of the registered holder setting forth the
circumstances with respect to such loss, theft or destruction shall be accepted
as satisfactory evidence thereof, and no indemnification bond or other security
shall be required as a condition to the execution and delivery by the Company of
a new note in replacement of such lost, stolen or destroyed note other than the
registered holder's written agreement to indemnify the Company.
Section 1.9. Representations by the Purchaser. The Purchaser hereby
represents on the date of this Agreement, on the date of each Closing and the
dates of any exercise of the Warrants as follows:
(a) It is the Purchaser's present intention to acquire the Notes and
the Warrants for its own account and the Notes and the Warrants are being and
will be acquired for the purpose of investment and not with a view to
distribution or resale thereof.
(b) The Purchaser is an "accredited investor" within the meaning of
Rule 501 of Regulation D under the Securities Act (as hereinafter defined) and
was not organized for the specific purpose of acquiring the Notes and the
Warrants.
(c) The Purchaser and its representatives understand that (a) the
Notes, Warrants and the shares underlying the Notes and Warrants have not been
registered under the Securities Act or the securities laws of any state; (b) the
Notes and Warrants are and will be, and upon issuance the shares underlying the
Notes and Warrants will be, "restricted securities," as said term is defined in
Rule 144 of the Rules and Regulations promulgated under the Securities Act; (c)
unless they have been first registered under the Securities Act and all
applicable state securities laws, the Notes and Warrants, and upon their
issuance, the shares underlying the Notes and Warrants, may only be offered,
sold or otherwise transferred to Purchaser or pursuant to an effective
registration under the Securities Act or an exemption from registration under
the Securities Act, in each case, after providing a satisfactory legal opinion
to the Company; (d) the Notes and Warrants, and the certificates for the shares
underlying the Notes and Warrants will bear a legend to the effect that their
transfer is subject to the provisions hereof; and (e) stop transfer instructions
will be placed with the transfer agent for the Purchaser's common stock;
(d) The Purchaser represents that it and its representatives have
sufficient knowledge and experience in investing in companies similar to the
Company in terms of the Company's stage of development so as to be able to
evaluate the risks and merits of its investment in the Company and it is able
financially to bear the risks thereof. Purchaser acknowledges that Purchaser and
its representatives have had an opportunity to make an independent examination
of the investment, accounting and tax aspects of the proposed purchase
transaction having relied solely upon the advice, if any, of Purchaser's
counsel, accountants, or business advisors with regard to the various
considerations involved in making an investment in the Company, and agrees that
the Company has no responsibility with respect to such matters and any such
advice. Purchaser further acknowledges that counsel to the Company does not
represent the Purchaser. Purchaser hereby confirms to the Company that Purchaser
and its representatives have been granted an opportunity to ask questions of and
receive answers from, management of the Company concerning the terms and
conditions of this investment and other matters.
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(e) The Purchaser and its representatives understand that an investment
in the Company's Notes and Warrants is a speculative investment which involves a
high degree of risk of loss of the Purchaser's entire investment and represents
that (a) Purchaser has the financial ability to bear the economic risk of the
Purchaser's investment in the Notes and Warrants, and (b) the Purchaser has no
need for liquidity with respect to such investment.
(f) The Purchaser has all necessary power and has taken all action
required to make all the provisions of this Agreement, the Notes, the Warrants
and any other agreements and instruments executed by it in connection herewith
and therewith the valid and enforceable obligations they purport to be.
(g) No Person has or will have, as a result of the transactions
contemplated by this Agreement, any right, interest or valid claim against or
upon the Purchaser for any commission, fee or other compensation as a finder or
broker because of any act or omission by the Purchaser or any agent of the
Purchaser.
Section 1.10. Conversion of Notes.
(a) (a) Subject to the terms and provisions of this Agreement and the
Notes, upon the consummation of a subsequent financing round
(other than an initial public offering (the "IPO") of the
Company's equity securities)(the "Financing Round") yielding
gross proceeds to the Company of at least $2,000,000 (calculated
without giving effect to the conversion of the Notes) all of the
unpaid principal amount of the Notes, together with any
accumulated but unpaid interest thereon accruing, shall be
automatically converted into shares of the Company's preferred
securities or common stock, if common stock is issued in a
Financing Round ("New Securities") issued in connection with a
Financing Round at a conversion price which is the same price per
share as paid by the investors in the Financing Round and upon
substantially the same terms as those given to investors in the
Financing Round, provided, however, that the Company, in its sole
discretion, may enter into agreements providing certain investors
in the Financing Round with rights and benefits more advantageous
than those granted to the Investors; or
(b) Upon the consummation of an IPO, all of the unpaid principal
amount of the Notes, shall be automatically converted into a
number of shares of the Company's common stock equal to the
unpaid principal amount of the Note divided by the public
offering price per share of the common stock issued in the IPO.
All of the accumulated but unpaid interest accrued on the Notes
shall be payable in cash at the closing of the IPO.
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ARTICLE II
CONDITIONS TO PURCHASER'S OBLIGATIONS
Section 2.1. Conditions Precedent. The obligation of the Purchasers to
purchase and pay for the Note and the Warrant to be purchased by them hereunder
at the Closing is subject to the following conditions:
(a) Representations and Warranties. Each of the representations and
warranties of the Company set forth in Article III hereof shall be true and
correct on the date of the Issuance Dates.
(b) Documentation at Closing. The Purchaser shall have received prior
to or at the respective Issuance Date (i) the duly executed Notes and Warrants
to be issued as of such date, and (ii) the First Issuance Date a certified copy
of the resolutions of the Board of Directors of the Company evidencing approval
of this Agreement, the Notes, the Warrants, and the other matters contemplated
thereby.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Purchasers, as of the date
hereof and as of the Issuance Dates, as follows, except as otherwise provided in
the Disclosure Schedules attached hereto:
Section 3.1. Required Action. Except for the authorization and
designation of the New Securities, the Company has all necessary power and has
taken all action required to make all the provisions of this Agreement, the
Notes, the Warrants and any other agreements and instruments executed by it in
connection herewith and therewith the valid and enforceable obligations they
purport to be. Neither the issuance of the Notes or the Warrants, the issuance
of Preferred Stock upon exercise of the Warrants, nor the issuance of the
Company's New Securities or Common Stock, as the case may be, upon conversion of
the Notes, is subject to preemptive or other similar statutory or contractual
rights or will conflict with any provisions of any agreement or instrument to
which the Company is a party or by which it is bound.
Section 3.2. Governmental Approvals. No authorization, consent,
approval, license, or filing or registration with, any court or governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, is or will be necessary for, or in connection with, the offer,
issuance, sale, execution or delivery by the Company of, or for the performance
by it of its obligations under, this Agreement, the Notes or the Warrants except
for applicable federal and state securities filings.
Section 3.3. Compliance with Other Instruments. Neither the execution
and delivery of this Agreement, the Notes, the Warrants, nor the consummation of
any transactions contemplated hereby or thereby, has constituted or resulted in
or will constitute or result in a material default or violation of any term or
provision in any instrument, judgment, order, writ, decree or contract to which
the Company is a party or by which it is bound, or, to the best of its
knowledge, of any provision of any federal or state statute, rule or regulation
applicable to the Company's business now or as proposed to be conducted, except
for such defaults or violations that would not have a material adverse effect on
the Company's business or properties.
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Section 3.4. No Brokers or Finders. No Person (other than the
Purchaser) has or will have, as a result of the transactions contemplated by
this Agreement, any right, interest or valid claim against or upon the Company
for any commission, fee or other compensation as a finder or broker because of
any act or omission by the Company or any agent of the Company.
ARTICLE IV
DEMAND OBLIGATIONS; EVENTS OF DEFAULT; REMEDIES; CHANGE OF CONTROL
Section 4.1. Demand Obligations - Events of Default. Nothing contained
in this section, or elsewhere in this Agreement, shall affect or alter the
demand nature of such of the Obligations (as hereinafter defined) as are by
their terms, demand obligations. The occurrence of an Event of Default shall not
be a prerequisite for the Purchaser making demand or requiring payment of such
obligations except as set forth in the Notes. The Company hereby expressly
acknowledges and agrees that the Events of Default are set forth herein as
examples of some, but not necessarily all, of the events or occurrences that may
cause the Purchaser to make demand for payment of any Obligations that are by
their terms payable on demand, and that the following shall otherwise constitute
Events of Default in respect of any Obligations that are not by their terms (or
that may be interpreted by a court of competent jurisdiction not to be) demand
obligations.
Subject to the provisions of the first paragraph of this section, the
occurrence of any one or more of the following events shall constitute an event
of default hereunder (said events are hereinafter referred to individually as an
"Event of Default" and together as the "Events of Default"), entitling the
Purchasers to pursue all of its remedies hereunder and under any of the other
Financing Documents (as hereinafter defined):
(a) The failure of the Company to pay any amount of principal and
interest under the Notes when and as due thereunder within ten (10) days of the
date when due;
(b) The termination of existence, dissolution, winding up or
liquidation of the Company or the sale or other transfer of all or substantially
all of the assets or the capital stock of the Company to a third party; or
(c) Any voluntary bankruptcy, reorganization, debt arrangement,
composition or readjustment, liquidation with respect to the Company or any of
its property or the appointment of any receiver, master, assignee, liquidator,
custodian or other similar Person with respect to the Company or any of its
property or any involuntary bankruptcy proceeding which is not dismissed within
ninety (90) days of commencement;
then, and in any such event, so long as the same may be continuing, the
Purchaser may, subject to Section 1.10 hereof, by notice in writing to the
Company, declare all of the Obligations owed to the Purchaser to be; and they
shall thereupon forthwith become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Company; provided, however, that in the event of
any Event of Default specified in clauses (c) and (d) of this Section 4.1
hereof, all of the Obligations shall become immediately due and payable
automatically and without any requirement of notice from the Purchaser.
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Section 4.2. General Remedies. In addition to and without in any way
limiting any other rights and remedies available to any of the Purchaser
hereunder or under any of the other Financing Documents or under applicable law
or in equity, and at any time or times following the demand for payment of the
Obligations which are payable on demand, and the expiry of any applicable grace
period, or upon the occurrence of an Event of Default:
(a) the Purchaser may declare and cause all or any portion of the
Obligations to be immediately due and payable;
(b) the Purchasers shall have the right to apply to the Obligations any
deposits or other sums at any time credited by or due from the Purchaser to the
Company; and
(c) the Purchasers may exercise any rights and remedies available under
the Financing Documents as they shall deem appropriate.
Section 4.3. Remedies Not Exclusive. The enumeration of rights and
remedies in the Financing Documents is not intended to be exclusive, and they
shall be in addition to and not by way of limitation of such others as the
Purchasers may have under applicable law, and any and all other documents,
instruments, agreements or other writings between or among Company, the
Purchaser or other Persons. The Purchasers shall determine its choice of rights
and remedies and the order in which they shall be exercised. The exercise of any
right or remedy against the Company or any other Person shall not preclude the
exercise of others or the exercise thereof against Company, any other Person or
any other collateral, all of which shall be cumulative. No act, failure or delay
by the Purchaser shall constitute a waiver of any of their rights and remedies.
No single or partial waiver by the Purchaser of any provision of the Financing
Documents, or of any breach or default thereunder, or of any right or remedy
which the Purchaser may have, shall operate as a waiver of any other provision,
breach, default, right or remedy or of the same one on a future occasion.
Section 4.4. Change of Control. Notwithstanding any other provision of
this Agreement, the Purchaser shall be entitled to make demand to the Company
for the payment of the Obligations immediately prior to the closing of a Change
of Control. For the purposes of this Agreement, a "Change of Control" shall mean
(A) the acquisition of the Company by another entity by means of any transaction
or series of related transactions (including, without limitation, any
reorganization, merger or consolidation) that results in the transfer of fifty
percent (50%) or more of the outstanding voting power of the Company; or (B) a
sale, transfer, license or lease of all or substantially all of the assets of
the Company.
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ARTICLE V
DEFINITIONS AND ACCOUNTING TERMS
Section 5.1. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Agreement" means this Note and Warrant Purchase Agreement, as from
time to time amended and in effect between the parties.
"Business Day" means a day other than Saturday, Sunday or a public
holiday under the laws of the State of Delaware.
"Change of Control" shall have the meaning assigned to that term in
Section 4.4.
"Closings" shall have the meaning assigned to that term in Section
1.3(a).
"Issuance Dates" shall have the meaning assigned to that term in
Section 1.3(a).
"Commission" means the United States Securities and Exchange Commission
or any other federal agency at the time administering the Securities Act.
"Company" means GigaBeam Corporation, and its successors and assigns.
"Events of Default" shall have the meaning assigned to that term in
Section 4.1.
"Exchange Act" means the Securities Exchange Act of 1934 or any similar
federal statute, and the rules and regulations of the Commission (or of any
other Federal Agency then administering the Exchange Act) thereunder, all as the
same shall be in effect at the time.
"Financing Documents" means and includes the following, as the same may
be hereafter amended, modified, substituted, extended or restated, from time to
time: this Agreement, the Notes, the Warrants, and any and all other documents,
instruments, agreements and writings, whether now or hereafter executed by or on
behalf of the Company, and delivered or assigned to the Purchaser in connection
with the transactions contemplated herein or therein.
"Financing Round" shall have the meaning assigned to that term in
Section 1,10.
"New Securities" shall have the meaning assigned to that term in
Section 1.10.
"Notes" shall have the meaning assigned to that term in Section 1.1.
"Obligations" means any and all indebtedness, liabilities, duties,
undertakings, warranties, covenants and agreements (including those of payment
or performance) of the Company to the Purchaser, of every kind, nature and
description, which arise under or pursuant to the terms of any or all of the
Financing Documents, whether or not the same are now existing or hereafter
arising, due or not due, absolute or contingent, liquidated or unliquidated.
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"Person" means an individual, corporation, partnership, joint venture,
limited liability company, trust, or unincorporated organization, or a
government or any agency or political subdivision thereof, or any other entity
or business form.
"Principal Amounts" shall have the meaning assigned to that term in
Section 1.1.
"Purchaser" means and shall include not only the Persons enumerated on
Schedule I hereto but also any other permitted transferees of the Note or the
Warrant.
"Securities Act" means the Securities Act of 1933 or any similar
federal statute, and the rules and regulations of the Commission (or of any
other federal agency then administering the Securities Act) thereunder, all as
the same shall be in effect at the time.
"Subsidiary" or "Subsidiaries" means any corporation, association,
joint stock company, business trust or other similar organization of which fifty
percent (50%) or more of the ordinary voting power for the election of a
majority of the members of the board of directors or other governing body of
such entity is held or controlled by the Company; or any other such organization
the management of which is directly or indirectly controlled by the Company
through the exercise of voting power or otherwise.
"Warrants" shall have the meaning assigned to that term in Section 1.2.
ARTICLE VI
MISCELLANEOUS
Section 6.1. No Waiver; Cumulative Remedies. No failure or delay on the
part of the Purchaser, or any other holder of the Note and the Warrant in
exercising any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy hereunder. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
Section 6.2. Amendments, Waivers and Consent. Any provision in this
Agreement, the Notes or the Warrants to the contrary notwithstanding, changes in
or additions to this Agreement may be made, and compliance with any covenant or
provision herein or therein set forth may be omitted or waived, if the Company
shall obtain consent thereto in writing from the Purchasers. Any waiver or
consent may be given subject to satisfaction of conditions stated therein and
any waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given.
Section 6.3. Addresses for Notices, etc. All notices, requests, demands
and other communications provided for hereunder shall be in writing (including
telefacsimile communication) and mailed or faxed or delivered to the applicable
party at the addresses indicated below:
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If to the Company: GigaBeam Corporation
00000-X Xxxxxxxxxx Xxxxxx
000 Xxxxx Xxxx - 0xx Xxxxx
Xxxxxxxxx, XX 00000
Attn: President
If to the Purchaser, at the address set forth in Schedule I.
If to any other holder of the Notes or the Warrants, at such holder's
address for notice as set forth in the register maintained by the Company, or,
as to each of the foregoing, at such other address as shall be designated by
such Person in a written notice to the other party complying as to delivery with
the terms of this section. All such notices, requests, demands and other
communications shall, when mailed or faxed, respectively, be deemed delivered
three (3) days after deposited in the mails or faxed with transmission confirmed
electronically, respectively, addressed as aforesaid.
Section 6.4. Costs, Expenses and Taxes. Each party shall bear its own
expenses with respect to the preparation, execution and delivery of this
Agreement, the Note, the Warrant and other instruments and documents to be
delivered hereunder.
Section 6.5. Binding Effect; Assignment. This Agreement shall be
binding upon and inure to the benefit of the Company and the Purchaser and their
respective successors and assigns, except that the Company shall not have the
right to assign its rights hereunder or any interest herein without the prior
written consent of the Purchaser.
Section 6.6. Survival of Representations and Warranties. All
representations and warranties made in this Agreement, the Notes, the Warrants
or any other instrument or document delivered in connection herewith or
therewith, shall survive the execution and delivery hereof or thereof and the
making of the loan.
Section 6.7. Prior Agreements. This Agreement constitutes the entire
agreement between the parties and supersedes any prior understandings or
agreements concerning the subject matter hereof.
Section 6.8. Severability. The invalidity or unenforceability of any
provision hereof shall in no way affect the validity or enforceability of any
other provision.
Section 6.9. Headings. Article, section and subsection headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.
Section 6.10. Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument, and each of the parties hereto may execute this Agreement by
signing any such counterpart. Delivery of an executed counterpart of a signature
page to this Agreement by telecopier or facsimile shall be effective as delivery
of a manually executed counterpart of this Amendment.
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Section 6.11. Further Assurances. From and after the date of this
Agreement, upon the request of the Purchasers, the Company shall execute and
deliver such instruments, documents and other writings as may be necessary or
desirable to confirm and carry out and to effectuate fully the intent and
purposes of this Agreement, the Note and the Warrant.
Section 6.12. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware for all purposes
and in all respects, without giving effect to the conflict of law provisions
thereof.
IN WITNESS WHEREOF, the undersigned have each duly executed or caused
to be executed this Agreement, under seal, as of the day and year first written
above.
COMPANY:
GIGABEAM CORPORATION
By: /s/ :X. Xxxxxxxxx
-----------------------------------------
Name: X. Xxxxxxxxx
---------------------------------------
Title: CEO
--------------------------------------
PURCHASER:
/s/ Xxxxxxxx X. Xxxxxx/Ameristock Corp.
Name: /s/ Xxxxxxxx X. Xxxxxx
---------------------------------------
12
LIST OF EXHIBITS AND SCHEDULES
Schedule I Purchaser
Exhibit A Form of Note
Exhibit B Form of Warrant
Schedule 3 Exceptions
SCHEDULE I
PURCHASER
Name Principal Amount
---- ----------------
Americstock Corp.
First Note $900,000
Second Note $200,000
Third Note $200,000
Fourth Note $200,000
EXHIBIT A
FORM OF FIRST NOTE
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, ASSIGNED OR TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF
1933, AS AMENDED, UNLESS THE COMPANY HAS RECEIVED THE WRITTEN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH SALE, ASSIGNMENT OR TRANSFER
DOES NOT INVOLVE A TRANSACTION REQUIRING REGISTRATION OF SUCH SECURITIES UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.
CONVERTIBLE DEMAND NOTE
April __, 2004
For value received, GIGABEAM CORPORATION, a Delaware corporation (the
"Company"), hereby unconditionally promises to pay to the order of AMERISTOCK
CORP. or its registered assigns (the "Payee"), ON DEMAND, the principal sum of
Nine Hundred Thousand Dollars ($900,000.00), together with interest thereon, and
premium, if any, all as hereinafter provided, if not earlier converted pursuant
to the Agreement (as hereinafter defined). Such principal sum, together with all
interest incurred thereon, premium (if any), and all other fees and costs, shall
be due and payable ON DEMAND and, except as provided herein, the Payee's right
to make demand is unconditional and unlimited; notwithstanding the foregoing,
prior to the one year anniversary of the date of issuance of this Note (the
"Maturity Date"), the Payee may only make demand (if not earlier converted as
provided in the Agreement): (i) following the occurrence and continuance of an
Event of Default (as such term is defined in the Agreement) or (ii) immediately
prior to the closing of a Change of Control (as such term is defined in the
Agreement), which shall permit the acceleration and demand of this Note.
The Company agrees that the Payee, in the exercise of the Payee's sole
discretion, may make demand at any time after the Maturity Date whether or not
any Event of Default or Change of Control has occurred and is continuing, and
may make demand at any time either before or after the Maturity Date in the
event of either of the occurrences described in items (i) and (ii) of the
immediately preceding paragraph of this Note. The Company agrees that, in
exercising its discretion, the Payee may make demand for any reasons which it
deems appropriate, and such reasons may be related or unrelated to the Company,
its business or financial condition or prospects. The Payee's right to make
demand is a continuing right, and acceptance by the Payee of any payment after
demand shall not be deemed a waiver of such right to make demand on any other
occasion.
Prior to the date upon which the balance of this Note becomes due and
payable as described herein, whether by demand or otherwise (the "Payment Due
Date") and after the Payment Due Date, the unpaid principal balance outstanding
on all advances, from time to time, hereunder shall accrue interest at a rate
equal to ten percent (10%) per annum. Interest shall be compounded annually and
shall be computed on the basis of a 360-day year and a 30-day month.
Notwithstanding any other provision of this Note, the Payee does not intend to
charge and the Company shall not be required to pay any interest or other fees
or charges in excess of the maximum permitted by applicable law; any payments in
excess of such maximum shall be refunded to the Company or credited to reduce
principal hereunder. All payments received by the Payee hereunder will be
applied first to costs of collection and fees, if any, then to interest, then to
principal and the balance to premium (if any).
All principal plus accrued and unpaid interest on the Note and premium
(if any) shall be immediately due and payable upon notice in writing from Payee
to the Company, without presentment, demand, protest, or notice, upon the
occurrence of an Event of Default of the type specified in Section 4.1 of the
Agreement, after taking account of all applicable grace and cure periods
thereunder. All accrued and unpaid interest on the Note and premium (if any)
shall be paid upon payment of the principal of the Note, whether by demand, or
upon acceleration as provided herein, or otherwise. At the time that the payment
of the balance of this Note becomes due, the Payee may proceed with every remedy
available at law or in equity.
This Note is issued pursuant to and is entitled to the benefits of a
certain Note and Warrant Purchase Agreement, dated as of April __, 2004, by and
among the Company and the purchaser named therein (the "Agreement"), the terms
of which are incorporated herein, and each holder of this Note, by his, her or
its acceptance hereof, agrees to be bound by the provisions of the Agreement,
including, without limitation, the representations contained in Section 1.9
thereof. Without limiting the foregoing, the holder of this Note is subject to
the mandatory equity conversion provisions as set forth in Section 1.10 of the
Agreement.
Principal and interest shall be payable in lawful money of the United
States of America, at the address of the Payee set forth in the Agreement or at
such other address as the Payee or any subsequent holder may designate from time
to time to the Company in writing. If any day on which a payment is due pursuant
to the terms of this Note is not a Business Day (as such term is defined in the
Agreement), such payment shall be due on the next Business Day following.
Upon surrender of this Note for transfer or exchange, a new note or new
notes of the same tenor dated the date to which interest has been paid on the
surrendered Note and in an aggregate principal amount equal to the unpaid
principal amount of the Note so surrendered will be issued to, and registered in
the name of, the transferor or transferees. The Company may treat the person in
whose name this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes.
In the event any one or more of the provisions of this Note shall for
any reason be held to be invalid, illegal or unenforceable, in whole or in part
or in any respect, or in the event that any one or more of the provisions of
this Note operate or would prospectively operate to invalidate this Note, then
and in any such event, such provision(s) only shall be deemed null and void and
shall not affect any other provision of this Note and the remaining provisions
of this Note shall remain operative and in full force and effect and in no way
shall be affected, prejudiced, or disturbed thereby.
In case any payment herein provided for shall not be paid when due, the
Company promises to pay all costs of collection or enforcement of this Note,
including, without limitation, court costs and all reasonable attorney's fees
and expenses incurred or paid by the Payee in enforcing the obligations of the
Company.
This Note may be not be prepaid without the prior written consent of
the Payee.
All notices to the Company and the Payee required or permitted
hereunder shall be made in accordance with the Agreement.
This Note shall be governed by, and construed in accordance with, the
laws of the State of Delaware.
Whenever used herein, the terms "Company" and "Payee" shall be deemed
to include, to the extent applicable, the successors and assigns of such
parties; provided, however, that the obligations of the Company under this Note
may not be assigned without the express written consent of the Payee or any
holder hereof, which consent may be withheld in the sole and absolute discretion
of such Payee or holder.
The Company and all endorsers of this Note herein waive presentment,
notice of nonpayment, protest and all other demand and notices in connection
with the delivery, acceptance, performance or enforcement of this Note.
If any part of this Note shall be adjudged invalid, illegal, or
unenforceable, then such partial invalidity, illegality, or unenforceability
shall not cause the remainder of this Note to be or to become invalid, illegal,
or unenforceable. If a provision hereof is held invalid, illegal or
unenforceable in one or more of its applications, the parties hereto agree that
the other provisions shall remain in effect in all valid, legal and enforceable
applications that are severable from the invalid, illegal or unenforceable
application or applications.
The validity, meaning, enforceability and effect of this Note, and the
rights and liabilities of the parties, shall be determined in accordance with
the laws of the State of Delaware.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the Company has executed this Note as of the date
and year first written above.
GIGABEAM CORPORATION
By:
--------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Chief Executive Officer
EXHIBIT B
FORM OF SECOND NOTE
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, ASSIGNED OR TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF
1933, AS AMENDED, UNLESS THE COMPANY HAS RECEIVED THE WRITTEN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH SALE, ASSIGNMENT OR TRANSFER
DOES NOT INVOLVE A TRANSACTION REQUIRING REGISTRATION OF SUCH SECURITIES UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.
CONVERTIBLE DEMAND NOTE
May __, 2004
For value received, GIGABEAM CORPORATION, a Delaware corporation (the
"Company"), hereby unconditionally promises to pay to the order of AMERISTOCK
CORP. or its registered assigns (the "Payee"), ON DEMAND, the principal sum of
Two Hundred Thousand Dollars ($200,000.00), together with interest thereon, and
premium, if any, all as hereinafter provided, if not earlier converted pursuant
to the Agreement (as hereinafter defined). Such principal sum, together with all
interest incurred thereon, premium (if any), and all other fees and costs, shall
be due and payable ON DEMAND and, except as provided herein, the Payee's right
to make demand is unconditional and unlimited; notwithstanding the foregoing,
prior to the one year anniversary of the date of issuance of this Note (the
"Maturity Date"), the Payee may only make demand (if not earlier converted as
provided in the Agreement): (i) following the occurrence and continuance of an
Event of Default (as such term is defined in the Agreement) or (ii) immediately
prior to the closing of a Change of Control (as such term is defined in the
Agreement), which shall permit the acceleration and demand of this Note.
The Company agrees that the Payee, in the exercise of the Payee's sole
discretion, may make demand at any time after the Maturity Date whether or not
any Event of Default or Change of Control has occurred and is continuing, and
may make demand at any time either before or after the Maturity Date in the
event of either of the occurrences described in items (i) and (ii) of the
immediately preceding paragraph of this Note. The Company agrees that, in
exercising its discretion, the Payee may make demand for any reasons which it
deems appropriate, and such reasons may be related or unrelated to the Company,
its business or financial condition or prospects. The Payee's right to make
demand is a continuing right, and acceptance by the Payee of any payment after
demand shall not be deemed a waiver of such right to make demand on any other
occasion.
Prior to the date upon which the balance of this Note becomes due and
payable as described herein, whether by demand or otherwise (the "Payment Due
Date") and after the Payment Due Date, the unpaid principal balance outstanding
on all advances, from time to time, hereunder shall accrue interest at a rate
equal to ten percent (10%) per annum. Interest shall be compounded annually and
shall be computed on the basis of a 360-day year and a 30-day month.
Notwithstanding any other provision of this Note, the Payee does not intend to
charge and the Company shall not be required to pay any interest or other fees
or charges in excess of the maximum permitted by applicable law; any payments in
excess of such maximum shall be refunded to the Company or credited to reduce
principal hereunder. All payments received by the Payee hereunder will be
applied first to costs of collection and fees, if any, then to interest, then to
principal and the balance to premium (if any).
All principal plus accrued and unpaid interest on the Note and premium
(if any) shall be immediately due and payable upon notice in writing from Payee
to the Company, without presentment, demand, protest, or notice, upon the
occurrence of an Event of Default of the type specified in Section 4.1 of the
Agreement, after taking account of all applicable grace and cure periods
thereunder. All accrued and unpaid interest on the Note and premium (if any)
shall be paid upon payment of the principal of the Note, whether by demand, or
upon acceleration as provided herein, or otherwise. At the time that the payment
of the balance of this Note becomes due, the Payee may proceed with every remedy
available at law or in equity.
This Note is issued pursuant to and is entitled to the benefits of a
certain Note and Warrant Purchase Agreement, dated as of April __, 2004, by and
among the Company and the purchaser named therein (the "Agreement"), the terms
of which are incorporated herein, and each holder of this Note, by his, her or
its acceptance hereof, agrees to be bound by the provisions of the Agreement,
including, without limitation, the representations contained in Section 1.9
thereof. Without limiting the foregoing, the holder of this Note is subject to
the mandatory equity conversion provisions as set forth in Section 1.10 of the
Agreement.
Principal and interest shall be payable in lawful money of the United
States of America, at the address of the Payee set forth in the Agreement or at
such other address as the Payee or any subsequent holder may designate from time
to time to the Company in writing. If any day on which a payment is due pursuant
to the terms of this Note is not a Business Day (as such term is defined in the
Agreement), such payment shall be due on the next Business Day following.
Upon surrender of this Note for transfer or exchange, a new note or new
notes of the same tenor dated the date to which interest has been paid on the
surrendered Note and in an aggregate principal amount equal to the unpaid
principal amount of the Note so surrendered will be issued to, and registered in
the name of, the transferor or transferees. The Company may treat the person in
whose name this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes.
In the event any one or more of the provisions of this Note shall for
any reason be held to be invalid, illegal or unenforceable, in whole or in part
or in any respect, or in the event that any one or more of the provisions of
this Note operate or would prospectively operate to invalidate this Note, then
and in any such event, such provision(s) only shall be deemed null and void and
shall not affect any other provision of this Note and the remaining provisions
of this Note shall remain operative and in full force and effect and in no way
shall be affected, prejudiced, or disturbed thereby.
In case any payment herein provided for shall not be paid when due, the
Company promises to pay all costs of collection or enforcement of this Note,
including, without limitation, court costs and all reasonable attorney's fees
and expenses incurred or paid by the Payee in enforcing the obligations of the
Company.
This Note may be not be prepaid without the prior written consent of
the Payee.
All notices to the Company and the Payee required or permitted
hereunder shall be made in accordance with the Agreement.
This Note shall be governed by, and construed in accordance with, the
laws of the State of Delaware.
Whenever used herein, the terms "Company" and "Payee" shall be deemed
to include, to the extent applicable, the successors and assigns of such
parties; provided, however, that the obligations of the Company under this Note
may not be assigned without the express written consent of the Payee or any
holder hereof, which consent may be withheld in the sole and absolute discretion
of such Payee or holder.
The Company and all endorsers of this Note herein waive presentment,
notice of nonpayment, protest and all other demand and notices in connection
with the delivery, acceptance, performance or enforcement of this Note.
If any part of this Note shall be adjudged invalid, illegal, or
unenforceable, then such partial invalidity, illegality, or unenforceability
shall not cause the remainder of this Note to be or to become invalid, illegal,
or unenforceable. If a provision hereof is held invalid, illegal or
unenforceable in one or more of its applications, the parties hereto agree that
the other provisions shall remain in effect in all valid, legal and enforceable
applications that are severable from the invalid, illegal or unenforceable
application or applications.
The validity, meaning, enforceability and effect of this Note, and the
rights and liabilities of the parties, shall be determined in accordance with
the laws of the State of Delaware.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the Company has executed this Note as of the date
and year first written above.
GIGABEAM CORPORATION
By:
-----------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Chief Executive Officer
EXHIBIT C
FORM OF THIRD NOTE
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, ASSIGNED OR TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF
1933, AS AMENDED, UNLESS THE COMPANY HAS RECEIVED THE WRITTEN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH SALE, ASSIGNMENT OR TRANSFER
DOES NOT INVOLVE A TRANSACTION REQUIRING REGISTRATION OF SUCH SECURITIES UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.
CONVERTIBLE DEMAND NOTE
June __, 2004
For value received, GIGABEAM CORPORATION, a Delaware corporation (the
"Company"), hereby unconditionally promises to pay to the order of AMERISTOCK
CORP. or its registered assigns (the "Payee"), ON DEMAND, the principal sum of
Two Hundred Thousand Dollars ($200,000.00), together with interest thereon, and
premium, if any, all as hereinafter provided, if not earlier converted pursuant
to the Agreement (as hereinafter defined). Such principal sum, together with all
interest incurred thereon, premium (if any), and all other fees and costs, shall
be due and payable ON DEMAND and, except as provided herein, the Payee's right
to make demand is unconditional and unlimited; notwithstanding the foregoing,
prior to the one year anniversary of the date of issuance of this Note (the
"Maturity Date"), the Payee may only make demand (if not earlier converted as
provided in the Agreement): (i) following the occurrence and continuance of an
Event of Default (as such term is defined in the Agreement) or (ii) immediately
prior to the closing of a Change of Control (as such term is defined in the
Agreement), which shall permit the acceleration and demand of this Note.
The Company agrees that the Payee, in the exercise of the Payee's sole
discretion, may make demand at any time after the Maturity Date whether or not
any Event of Default or Change of Control has occurred and is continuing, and
may make demand at any time either before or after the Maturity Date in the
event of either of the occurrences described in items (i) and (ii) of the
immediately preceding paragraph of this Note. The Company agrees that, in
exercising its discretion, the Payee may make demand for any reasons which it
deems appropriate, and such reasons may be related or unrelated to the Company,
its business or financial condition or prospects. The Payee's right to make
demand is a continuing right, and acceptance by the Payee of any payment after
demand shall not be deemed a waiver of such right to make demand on any other
occasion.
Prior to the date upon which the balance of this Note becomes due and
payable as described herein, whether by demand or otherwise (the "Payment Due
Date") and after the Payment Due Date, the unpaid principal balance outstanding
on all advances, from time to time, hereunder shall accrue interest at a rate
equal to ten percent (10%) per annum. Interest shall be compounded annually and
shall be computed on the basis of a 360-day year and a 30-day month.
Notwithstanding any other provision of this Note, the Payee does not intend to
charge and the Company shall not be required to pay any interest or other fees
or charges in excess of the maximum permitted by applicable law; any payments in
excess of such maximum shall be refunded to the Company or credited to reduce
principal hereunder. All payments received by the Payee hereunder will be
applied first to costs of collection and fees, if any, then to interest, then to
principal and the balance to premium (if any).
All principal plus accrued and unpaid interest on the Note and premium
(if any) shall be immediately due and payable upon notice in writing from Payee
to the Company, without presentment, demand, protest, or notice, upon the
occurrence of an Event of Default of the type specified in Section 4.1 of the
Agreement, after taking account of all applicable grace and cure periods
thereunder. All accrued and unpaid interest on the Note and premium (if any)
shall be paid upon payment of the principal of the Note, whether by demand, or
upon acceleration as provided herein, or otherwise. At the time that the payment
of the balance of this Note becomes due, the Payee may proceed with every remedy
available at law or in equity.
This Note is issued pursuant to and is entitled to the benefits of a
certain Note and Warrant Purchase Agreement, dated as of April __, 2004, by and
among the Company and the purchaser named therein (the "Agreement"), the terms
of which are incorporated herein, and each holder of this Note, by his, her or
its acceptance hereof, agrees to be bound by the provisions of the Agreement,
including, without limitation, the representations contained in Section 1.9
thereof. Without limiting the foregoing, the holder of this Note is subject to
the mandatory equity conversion provisions as set forth in Section 1.10 of the
Agreement.
Principal and interest shall be payable in lawful money of the United
States of America, at the address of the Payee set forth in the Agreement or at
such other address as the Payee or any subsequent holder may designate from time
to time to the Company in writing. If any day on which a payment is due pursuant
to the terms of this Note is not a Business Day (as such term is defined in the
Agreement), such payment shall be due on the next Business Day following.
Upon surrender of this Note for transfer or exchange, a new note or new
notes of the same tenor dated the date to which interest has been paid on the
surrendered Note and in an aggregate principal amount equal to the unpaid
principal amount of the Note so surrendered will be issued to, and registered in
the name of, the transferor or transferees. The Company may treat the person in
whose name this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes.
In the event any one or more of the provisions of this Note shall for
any reason be held to be invalid, illegal or unenforceable, in whole or in part
or in any respect, or in the event that any one or more of the provisions of
this Note operate or would prospectively operate to invalidate this Note, then
and in any such event, such provision(s) only shall be deemed null and void and
shall not affect any other provision of this Note and the remaining provisions
of this Note shall remain operative and in full force and effect and in no way
shall be affected, prejudiced, or disturbed thereby.
In case any payment herein provided for shall not be paid when due, the
Company promises to pay all costs of collection or enforcement of this Note,
including, without limitation, court costs and all reasonable attorney's fees
and expenses incurred or paid by the Payee in enforcing the obligations of the
Company.
This Note may be not be prepaid without the prior written consent of
the Payee.
All notices to the Company and the Payee required or permitted
hereunder shall be made in accordance with the Agreement.
This Note shall be governed by, and construed in accordance with, the
laws of the State of Delaware.
Whenever used herein, the terms "Company" and "Payee" shall be deemed
to include, to the extent applicable, the successors and assigns of such
parties; provided, however, that the obligations of the Company under this Note
may not be assigned without the express written consent of the Payee or any
holder hereof, which consent may be withheld in the sole and absolute discretion
of such Payee or holder.
The Company and all endorsers of this Note herein waive presentment,
notice of nonpayment, protest and all other demand and notices in connection
with the delivery, acceptance, performance or enforcement of this Note.
If any part of this Note shall be adjudged invalid, illegal, or
unenforceable, then such partial invalidity, illegality, or unenforceability
shall not cause the remainder of this Note to be or to become invalid, illegal,
or unenforceable. If a provision hereof is held invalid, illegal or
unenforceable in one or more of its applications, the parties hereto agree that
the other provisions shall remain in effect in all valid, legal and enforceable
applications that are severable from the invalid, illegal or unenforceable
application or applications.
The validity, meaning, enforceability and effect of this Note, and the
rights and liabilities of the parties, shall be determined in accordance with
the laws of the State of Delaware.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the Company has executed this Note as of the date
and year first written above.
GIGABEAM CORPORATION
By:
---------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Chief Executive Officer
EXHIBIT D
FORM OF FOURTH NOTE
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, ASSIGNED OR TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF
1933, AS AMENDED, UNLESS THE COMPANY HAS RECEIVED THE WRITTEN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH SALE, ASSIGNMENT OR TRANSFER
DOES NOT INVOLVE A TRANSACTION REQUIRING REGISTRATION OF SUCH SECURITIES UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.
CONVERTIBLE DEMAND NOTE
July __, 2004
For value received, GIGABEAM CORPORATION, a Delaware corporation (the
"Company"), hereby unconditionally promises to pay to the order of AMERISTOCK
CORP. or its registered assigns (the "Payee"), ON DEMAND, the principal sum of
Two Hundred Thousand Dollars ($200,000.00), together with interest thereon, and
premium, if any, all as hereinafter provided, if not earlier converted pursuant
to the Agreement (as hereinafter defined). Such principal sum, together with all
interest incurred thereon, premium (if any), and all other fees and costs, shall
be due and payable ON DEMAND and, except as provided herein, the Payee's right
to make demand is unconditional and unlimited; notwithstanding the foregoing,
prior to the one year anniversary of the date of issuance of this Note (the
"Maturity Date"), the Payee may only make demand (if not earlier converted as
provided in the Agreement): (i) following the occurrence and continuance of an
Event of Default (as such term is defined in the Agreement) or (ii) immediately
prior to the closing of a Change of Control (as such term is defined in the
Agreement), which shall permit the acceleration and demand of this Note.
The Company agrees that the Payee, in the exercise of the Payee's sole
discretion, may make demand at any time after the Maturity Date whether or not
any Event of Default or Change of Control has occurred and is continuing, and
may make demand at any time either before or after the Maturity Date in the
event of either of the occurrences described in items (i) and (ii) of the
immediately preceding paragraph of this Note. The Company agrees that, in
exercising its discretion, the Payee may make demand for any reasons which it
deems appropriate, and such reasons may be related or unrelated to the Company,
its business or financial condition or prospects. The Payee's right to make
demand is a continuing right, and acceptance by the Payee of any payment after
demand shall not be deemed a waiver of such right to make demand on any other
occasion.
Prior to the date upon which the balance of this Note becomes due and
payable as described herein, whether by demand or otherwise (the "Payment Due
Date") and after the Payment Due Date, the unpaid principal balance outstanding
on all advances, from time to time, hereunder shall accrue interest at a rate
equal to ten percent (10%) per annum. Interest shall be compounded annually and
shall be computed on the basis of a 360-day year and a 30-day month.
Notwithstanding any other provision of this Note, the Payee does not intend to
charge and the Company shall not be required to pay any interest or other fees
or charges in excess of the maximum permitted by applicable law; any payments in
excess of such maximum shall be refunded to the Company or credited to reduce
principal hereunder. All payments received by the Payee hereunder will be
applied first to costs of collection and fees, if any, then to interest, then to
principal and the balance to premium (if any).
All principal plus accrued and unpaid interest on the Note and premium
(if any) shall be immediately due and payable upon notice in writing from Payee
to the Company, without presentment, demand, protest, or notice, upon the
occurrence of an Event of Default of the type specified in Section 4.1 of the
Agreement, after taking account of all applicable grace and cure periods
thereunder. All accrued and unpaid interest on the Note and premium (if any)
shall be paid upon payment of the principal of the Note, whether by demand, or
upon acceleration as provided herein, or otherwise. At the time that the payment
of the balance of this Note becomes due, the Payee may proceed with every remedy
available at law or in equity.
This Note is issued pursuant to and is entitled to the benefits of a
certain Note and Warrant Purchase Agreement, dated as of April __, 2004, by and
among the Company and the purchaser named therein (the "Agreement"), the terms
of which are incorporated herein, and each holder of this Note, by his, her or
its acceptance hereof, agrees to be bound by the provisions of the Agreement,
including, without limitation, the representations contained in Section 1.9
thereof. Without limiting the foregoing, the holder of this Note is subject to
the mandatory equity conversion provisions as set forth in Section 1.10 of the
Agreement.
Principal and interest shall be payable in lawful money of the United
States of America, at the address of the Payee set forth in the Agreement or at
such other address as the Payee or any subsequent holder may designate from time
to time to the Company in writing. If any day on which a payment is due pursuant
to the terms of this Note is not a Business Day (as such term is defined in the
Agreement), such payment shall be due on the next Business Day following.
Upon surrender of this Note for transfer or exchange, a new note or new
notes of the same tenor dated the date to which interest has been paid on the
surrendered Note and in an aggregate principal amount equal to the unpaid
principal amount of the Note so surrendered will be issued to, and registered in
the name of, the transferor or transferees. The Company may treat the person in
whose name this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes.
In the event any one or more of the provisions of this Note shall for
any reason be held to be invalid, illegal or unenforceable, in whole or in part
or in any respect, or in the event that any one or more of the provisions of
this Note operate or would prospectively operate to invalidate this Note, then
and in any such event, such provision(s) only shall be deemed null and void and
shall not affect any other provision of this Note and the remaining provisions
of this Note shall remain operative and in full force and effect and in no way
shall be affected, prejudiced, or disturbed thereby.
In case any payment herein provided for shall not be paid when due, the
Company promises to pay all costs of collection or enforcement of this Note,
including, without limitation, court costs and all reasonable attorney's fees
and expenses incurred or paid by the Payee in enforcing the obligations of the
Company.
This Note may be not be prepaid without the prior written consent of
the Payee.
All notices to the Company and the Payee required or permitted
hereunder shall be made in accordance with the Agreement.
This Note shall be governed by, and construed in accordance with, the
laws of the State of Delaware.
Whenever used herein, the terms "Company" and "Payee" shall be deemed
to include, to the extent applicable, the successors and assigns of such
parties; provided, however, that the obligations of the Company under this Note
may not be assigned without the express written consent of the Payee or any
holder hereof, which consent may be withheld in the sole and absolute discretion
of such Payee or holder.
The Company and all endorsers of this Note herein waive presentment,
notice of nonpayment, protest and all other demand and notices in connection
with the delivery, acceptance, performance or enforcement of this Note.
If any part of this Note shall be adjudged invalid, illegal, or
unenforceable, then such partial invalidity, illegality, or unenforceability
shall not cause the remainder of this Note to be or to become invalid, illegal,
or unenforceable. If a provision hereof is held invalid, illegal or
unenforceable in one or more of its applications, the parties hereto agree that
the other provisions shall remain in effect in all valid, legal and enforceable
applications that are severable from the invalid, illegal or unenforceable
application or applications.
The validity, meaning, enforceability and effect of this Note, and the
rights and liabilities of the parties, shall be determined in accordance with
the laws of the State of Delaware.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the Company has executed this Note as of the date
and year first written above.
GIGABEAM CORPORATION
By:
-----------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Chief Executive Officer
EXHIBIT E
FORM OF FIRST WARRANT
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, ASSIGNED OR TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF
1933, AS AMENDED, UNLESS THE COMPANY HAS RECEIVED THE WRITTEN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH SALE, ASSIGNMENT OR TRANSFER
DOES NOT INVOLVE A TRANSACTION REQUIRING REGISTRATION OF SUCH SECURITIES UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.
Warrant No. ____
Issue Date: April ___, 2004
GIGABEAM CORPORATION
WARRANT
THIS CERTIFIES that, for value received, AMERISTOCK CORP. or its
registered assigns (the "Holder") is entitled, upon the terms and subject to the
conditions hereinafter set forth, to subscribe for and purchase from GIGABEAM
CORPORATION, a Delaware corporation (the "Company"), 24 shares (as the same may
be adjusted from time to time as set forth herein, the "Warrant Number") of the
Company's Common Stock, $0.00l par value per share ("Common Stock") at the
exercise price of $.01 per share (as the same may be adjusted from time to time
as set forth herein, the "Exercise Price").
1. Exercise Period - The purchase rights represented by this Warrant
are exercisable by the Holder, in whole or in part, at any time from time to
time during the Exercise Period, which shall commence immediately upon the Issue
Date set forth above and shall end at 5:00 p.m. Boston time on the fifth
anniversary of the Issue Date.
2. Exercise of Warrant -
(a) During the Exercise Period and provided this Warrant has not been
terminated, this Warrant shall be exercised, in whole or in part and from time
to time, by the surrender of this Warrant and the Notice of Exercise annexed
hereto duly executed at the principal office of the Company (or such other
office or agency of the Company as it may designate) and upon payment of the
Exercise Price of the shares thereby purchased.
(i) Exercise by Payment of Exercise Price. Payment of the Exercise
Price may be made (A) by check or bank draft payable to the
order of the Company, (B) by wire transfer, (C) by
cancellation of indebtedness of the Company to the Holder
hereof at the time of exercise, including but not limited to
the loans evidenced by the Note held by the Holder, or (C) by
any combination of the foregoing. If the amount of the payment
received by the Company is less than the Exercise Price, the
Holder will be notified of the deficiency and shall make
payment in that amount within three (3) business days. In the
event the payment exceeds the Exercise Price, the Company will
refund the excess to the holder within three days of receipt.
(b) As a condition to the exercise of this Warrant, the Holder agrees
to furnish or cause to be furnished to the Company such documents and opinions
of counsel as may reasonably be required to satisfy the Company that the shares
of Common Stock that are issued upon the exercise of rights represented by this
Warrant (the "Warrant Shares") may be issued to the Holder pursuant to an
exemption from the registration requirements of, and otherwise in compliance
with, applicable federal and state securities laws.
(c) Upon exercise, the Holder shall be entitled to receive, promptly
after payment in full or by net exercise, one or more certificates, issued in
the Holder's name or in such name or names as the Holder may direct, subject to
the limitations on transfer contained herein, for the number of shares of Common
Stock so purchased. The shares so purchased or received shall be deemed to be
issued as of the close of business on the date on which this Warrant shall have
been exercised. The Company may postpone for a period not to exceed 90 days the
time of delivery of certificates for the shares issuable upon the exercise of
this Warrant for such additional time as the Company shall deem necessary or
desirable to enable it to comply with the listing or quotation requirements of
any securities exchange upon which shares of the Company may or are then
contemplated to be listed on the National Association of Securities Dealers,
Inc., or the requirements of the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, any applicable rules or regulations
of the Securities and Exchange Commission or the requirements of applicable
state securities laws. Any shares of Common Stock issued upon the exercise of
this Warrant shall bear the restrictive legend set forth on the face of this
Warrant.
(a) The Company covenants that all Warrant Shares will be fully paid,
nonassessable, and free from all taxes, liens and charges in respect of the
issue thereof (other than taxes in respect of any transfer occurring
contemporaneously with such issue).
3. No Fractional Shares or Scrip - No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this Warrant
unless this Warrant is exercised in full. In lieu thereof, a cash payment shall
be made equal to such fraction multiplied by the Exercise Price per share as
then in effect.
4. Charges, Taxes and Expenses - Issuance of certificates for Warrant
Shares shall be made without charge to the Holder for any issue or transfer tax
or other incidental expense in respect of the issuance of such certificate, all
of which taxes and expenses shall be paid by the Company.
5. No Rights as Shareholder - This Warrant does not entitle the Holder
to any voting rights, dividend rights or other rights as a shareholder of the
Company prior to exercise and payment in full of the Exercise Price in
accordance with Section 2 hereof.
6. Investment Representation - The Holder, by acceptance of this
Warrant, represents and warrants to the Company that this Warrant and all
securities acquired upon any and all exercises of this Warrant are purchased for
the Holder's own account for investment, and not with view to resale or
distribution of either this Warrant or any securities purchasable upon exercise
hereof.
2
7. Sale or Transfer of the Warrant; Legend - Neither this Warrant nor
the Warrant Shares may be sold or transferred unless either (i) they first shall
been have registered under the Securities Act of 1933, as amended (the "1933
Act") and any applicable state securities laws and such sale is made in
accordance with, and pursuant to, such registration statement, or (ii) the
Company first shall have been furnished with an opinion of legal counsel
reasonably satisfactory to the Company to the effect that such sale or transfer
is exempt from the registration requirements of the 1933 Act and such state
laws. Notwithstanding the foregoing, this Warrant may be transferred by the
original holder hereof to any of its affiliates without the requirement of an
opinion of legal counsel, so long as such transfer is in compliance with federal
and state securities laws. Each certificate representing any Warrant or any
Warrant Shares that has not been registered and that has not been sold pursuant
to an exemption that permits removal of the legend shall bear a legend referring
to such restrictions on transfer, substantially in the form of the legend
affixed to this Warrant. Upon the request of a holder of a certificate
representing any Warrant Shares, the Company shall remove the foregoing legend
from the certificate or issue to such holder a new certificate therefor free of
any transfer legend, if, with such request, the Company shall have received
either (i) an opinion of counsel reasonably satisfactory to the Company to the
effect that such legend may be removed from such certificate or (ii) if
Paragraph (k) of Rule 144 or a substantially similar successor rule remains in
force and effect, representations from the Holder that such Holder is not then,
and has not been during the preceding three months, an affiliate of the Company
and that such Holder has beneficially owned the security (within the meaning of
Rule 144) for two years or more (or such shorter period as may then be specified
in Rule 144).
8. Adjustments
8.1 Adjustments for Stock Splits, Reverse Stock Splits or Stock
Dividends In the event that the outstanding shares of Common Stock shall be
subdivided (split), combined (reverse split), by reclassification or otherwise,
or in the event of any dividend or other distribution payable on the Common
Stock in shares of Common Stock, the Warrant Number in effect immediately prior
to such subdivision, combination, or dividend or other distribution, and the
Exercise Price per share, shall be proportionately adjusted. Adjustments set
forth herein shall be readjusted in the same manner for any successive event or
events described herein.
8.2 Adjustment for Capital Reorganizations - If at any time there shall
be a capital reorganization of the Company or a merger or consolidation of the
Company with or into another corporation, or the sale of the Company's
properties and assets as, or substantially as, an entirety to any other person,
then, as part of such reorganization, merger, consolidation, or sale, lawful
provision shall be made so that the Holder of this Warrant shall thereafter be
entitled to receive on exercise of this Warrant during the period specified in
this Warrant and on payment of the Exercise Price then in effect, the number of
shares of stock or other securities or property of the Company, or of the
successor corporation resulting from such merger or consolidation, to which a
holder of the Common Stock deliverable on exercise of this Warrant would have
been entitled on such capital reorganization, merger, consolidation, or sale if
this Warrant had been exercised immediately before that capital reorganization,
merger, consolidation, or sale. In any such case, appropriate adjustment, as
determined in good faith by the Board of Directors of the Company, shall be made
in the application of the provisions of this Warrant with respect to the rights
and interests of the Holder of this Warrant after the reorganization, merger,
consolidation, or sale to the end that the provisions of this Warrant (including
adjustment of the number of shares purchasable on exercise of this Warrant)
shall be applicable after that event, as near as reasonably may be, in relation
to any shares or other securities or property deliverable after that event on
exercise of this Warrant.
3
8.3 Adjustments for Subsequent Equity Offerings - In the event that the
Company makes an offering of its equity securities subsequent to the issue date
of this Warrant, (an "Equity Offering"),
(a) the Warrant Number shall be adjusted to be equal to the product
derived by multiplying .20 by the quotient resulting from dividing
900,000 by the New Securities Purchase Price; and
(b) if the Value/Cash Ratio (as defined below) of the Equity Offerings
is greater than 1.50, the Warrant Number in effect immediately prior to
the Equity Offering, but after giving effect to the provisions of
Section 8.3(a) shall be adjusted to be equal to the result of the
following formula:
(900,000/(Equity Offering Proceeds X 2.5/Fully-Diluted Shares) -
900,000/((Equity Offering Proceeds + Pre-Money Valuation)/Fully-Diluted
Shares)) +.2 X (900,000/(Equity Offering Proceeds X 2.5/Fully-Diluted
Shares))
For the purposes of this Section 8.3,
(i) "New Securities" shall mean the securities offered in the
Equity Offering.
(ii) "New Securities Purchase Price" shall mean the per-share
purchase price of the New Securities.
(iii) "Value/Cash Ratio" shall mean the quotient resulting
from dividing the Pre-Money Valuation by the Equity Offering Proceeds.
(iv) "Pre-Money Valuation" shall mean the aggregate pre-money
valuation of the Company calculated on a fully-diluted basis used to
determine the New Securities Purchase Price.
4
(v) "Equity Offering Proceeds" shall mean the gross proceeds
received by the Company from the sale of New Securities, including
proceeds received by conversion of the Note or any other convertible
instrument.
(vi) "Fully-Diluted Shares" shall mean the number of shares of
outstanding stock of the Company immediately after the conclusion of
the Equity Offering calculated of a fully-diluted basis, taking into
account all outstanding convertible securities and shares reserved for
issuance under any stock option plans.
(vii) "Note" shall mean that certain Convertible Demand Note
in the principal amount of $900,000 of even date issued by the Company
to the Holder.
In the event that the terms of the Equity Offering provide for multiple
closings, the Equity Offering Proceeds shall be deemed to include the aggregate
proceeds of all such closings, and no adjustment shall be made to the Warrant
Number or Exercise Price pursuant to Section 8.3(b) until the conclusion of the
Equity Offering. The terms of this Section 8.3 shall automatically terminate
upon the conversion of the Note into New Securities, provided that such terms
shall apply to the Equity Offering in which the Note is converted.
8.4 Certificate as to Adjustments - Upon the occurrence of each
adjustment or readjustment pursuant to this Section 8, the Company at its
expense shall promptly compute such adjustment or readjustment in accordance
with the terms hereof and furnish to each Holder a certificate setting forth
such adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based. The Company shall, upon the written
request, at any time, of any Holder, furnish or cause to be furnished to such
Holder, a like certificate setting forth: (i) such adjustments and
readjustments; (ii) the Exercise Price at the time in effect; and (iii) the
number of shares of Common Stock and the amount, if any, of other property that
at the time would be received upon the exercise of the Warrant.
8.5 Notices of Record Date - In the event of any taking by the Company
of a record of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive any dividend (other
than a cash dividend that is the same as cash dividends paid in previous
quarters) or other distribution, or any right to subscribe for, purchase or
otherwise acquire any shares of stock of any class or any other securities or
property, or to receive any other right, or any capital reorganization of the
Company, any reclassification or recapitalization of the capital stock of the
Company or any transfer of all or substantially all the assets of the Company to
or consolidation or merger of the Company with or into any other person, or any
voluntary or involuntary dissolution, liquidation or winding-up of the Company,
then and in each such event the Company will mail or cause to be mailed to the
holder of this Warrant a notice specifying (i) the date on which any such 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, and
(ii) the date on which any such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, 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 any class of securities shall be entitled to exchange
their shares of securities for securities or other property deliverable on such
reorganization, reclassification, recapitalization, transfer, consolidation,
merger, dissolution, liquidation or winding-up. Such notice shall be mailed at
least ten (10) days prior to the date specified in such notice on which any such
action is to be taken.
8.6 No Impairment - The Company will not, by amendment of its
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the holder of this
Warrant against impairment. Without limiting the generality of the foregoing,
the Company (a) will not increase the par value of any shares of stock
receivable on the exercise of this Warrant above the amount payable therefor on
such exercise, and (b) will take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and nonassessable shares of stock on the exercise of this Warrant.
5
9. Reservation of Stock Issuable on Exercise of Warrant - The Company
will at all times reserve and keep available, solely for issuance and delivery
upon the exercise of this Warrant, all shares of Common Stock (or other
securities) from time to time issuable upon the exercise of this Warrant.
10. Loss, Theft, Destruction or Mutilation of Warrant - Upon receipt by
the Company of evidence reasonably satisfactory to it of the loss, theft,
destruction, or mutilation of this Warrant, and in case of loss, theft, or
destruction, of indemnity or security reasonably satisfactory to it, and upon
reimbursement to the Company of all reasonable expenses incidental thereto, and
upon surrender and cancellation of this Warrant, if mutilated, the Company will
make and deliver a new warrant of like tenor and dated as of such cancellation
in lieu of this Warrant; provided, however, if any Warrant of which the original
holder, its nominee, or any of its partners or affiliates is the registered
holder is lost, stolen or destroyed, the affidavit of the registered holder
setting forth the circumstances with respect to such loss, theft or destruction
shall be accepted as satisfactory evidence thereof, and no indemnification bond
or other security shall be required as a condition to the execution and delivery
by the Company of a new Warrant in replacement of such lost, stolen or destroyed
Warrant other than the registered holder's unsecured written agreement to
indemnify the Company.
11. Remedies - The Company stipulates that the remedies at law of the
holder of this Warrant in the event of any default or threatened default by the
Company in the performance of or compliance with any of the terms of this
Warrant are not adequate and may be enforced by a decree for the specific
performance of any agreement contained herein or by an injunction against a
violation of any of the terms hereof or otherwise.
12. Dissolution - In the event of any dissolution of the Company
following the transfer of all or substantially all of its properties or assets,
the Company, prior to such dissolution, shall at its expense deliver or cause to
be delivered the stock and other securities and property (including cash, where
applicable) receivable by the Holders of the Warrants after the effective date
of such dissolution pursuant to this Section 12 to a bank or trust company
having its principal office in [_________________], as trustee for the Holder or
Holders of the Warrants. Such bank or trust company shall be appointed by the
Company, by written notice to each Holder of a Warrant, for the purpose of
issuing Common Stock (or other securities) on the exercise of the Warrants,
exchanging thereafter any such issuance, exchange or replacement, as the case
may be, shall be made at such office by such Warrants pursuant to this Section
12, such bank or trust company shall have all the power and duties of a warrant
agent appointed pursuant to this Section 12 and shall accept, in its own name
for the account of the Company or such successor person as may be entitled
thereto, all amounts otherwise payable to the Company or such successor, as the
case may be, on exercise of this Warrant.
6
13. Notices, etc. - All notices and other communications from the
Company to the holder of this Warrant shall be mailed, by first class mail, to
such address as may have been furnished to the Company in writing by such
holder, or, until an address is so furnished, to and at the address of the last
holder of this Warrant who has so furnished an address to the Company (and shall
be deemed effective on the third day following the date of mailing). All
communications from the holder of this Warrant to the Company shall be mailed by
first class mail to the Company at it principal business address, or such other
address as may have been furnished to the holder in writing by the Company.
14. Miscellaneous - This Warrant and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. This Warrant shall be construed and enforced in accordance with and
governed by the laws of the State of Delaware. The headings in this Warrant are
for purposes of reference only, and shall not limit or otherwise affect any of
the terms hereof. This Warrant is being executed as an instrument under seal.
The invalidity or unenforceability of any provision hereof shall in no way
affect the validity or enforceability of any other provision.
15. "Market Stand-Off" Agreement - The Holder (and any permitted
transferee hereunder) hereby agrees that it will not, without the prior written
consent of the managing underwriter, during the period commencing on the date of
the final prospectus relating to the Company's initial public offering and
ending on the date specified by the Company and the managing underwriter (such
period not to exceed one hundred eighty (180) days) (i) lend, offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock (whether such shares or any such securities are then owned by the
Holder (or any other party bound by this Section 15) or are thereafter
acquired), or (ii) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
the Common Stock, whether any such transaction described in clause (i) or (ii)
above is to be settled by delivery of Common Stock or such other securities, in
cash or otherwise. The foregoing provisions of this Section 15 shall apply only
to the Company's initial public offering of equity securities and shall not
apply to the sale of any shares to an underwriter pursuant to an underwriting
agreement. The underwriters in connection with the Company's initial public
offering are intended third party beneficiaries of this Section 15 and shall
have the right, power and authority to enforce the provisions hereof as though
they were a party hereto. In order to enforce the foregoing covenant, the
Company may impose stop-transfer instructions with respect to the securities of
the Holder (and the shares or securities of every other person subject to the
foregoing restriction) until the end of such period.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
7
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
in its corporate name by its duly authorized officer and to be dated as of the
issue date set forth on the first page of this Warrant.
Attest: GIGABEAM CORPORATION
By:
-----------------------------
Name: Xxxxx Xxxxxxxxx
Title: Chief Executive Officer
[CORPORATE SEAL]
8
NOTICE OF EXERCISE OF WARRANT
TO: GIGABEAM CORPORATION
Pursuant to the terms of the attached Warrant, the undersigned hereby
elects:
______ to purchase ____ shares of Common Stock of GIGABEAM
CORPORATION (the "Company"), by the tender herewith
of payment of the Exercise Price of such shares in
full.
Please issue a certificate or certificates representing said shares in the name
of the undersigned or in such other name(s) as is/are specified immediately
below or, if necessary, on an attachment hereto:
Name Address
---- -------
DATE:
-----------------------------
HOLDER:
-------------------------------------
FORM OF ASSIGNMENT
(To be signed only on transfer of Warrant)
TO: GIGABEAM CORPORATION
For value received, the undersigned hereby sells, assigns, and
transfers unto __________________________ the right represented by the within
Warrant to purchase shares of equity securities of GIGABEAM CORPORATION, as
described in the Warrant, and appoints ____________________________ attorney to
transfer such right on the books of GIGABEAM CORPORATION with full power of
substitution in the premises.
Dated:
----------------------------------------
Printed Name:
--------------------------------
Signature:
------------------------------------
(Signature must conform to name of Holder as
specified on the face of the Warrant)
Address:
------------------------------------
Signed in the presence of:
----------------------------------------
EXHIBIT F
FORM OF SECOND WARRANT
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, ASSIGNED OR TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF
1933, AS AMENDED, UNLESS THE COMPANY HAS RECEIVED THE WRITTEN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH SALE, ASSIGNMENT OR TRANSFER
DOES NOT INVOLVE A TRANSACTION REQUIRING REGISTRATION OF SUCH SECURITIES UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.
Warrant No. ____
Issue Date: May ___, 2004
GIGABEAM CORPORATION
WARRANT
THIS CERTIFIES that, for value received, AMERISTOCK CORP. or its
registered assigns (the "Holder") is entitled, upon the terms and subject to the
conditions hereinafter set forth, to subscribe for and purchase from GIGABEAM
CORPORATION, a Delaware corporation (the "Company"), 5.333 shares (as the same
may be adjusted from time to time as set forth herein, the "Warrant Number") of
the Company's Common Stock, $0.00l par value per share ("Common Stock") at the
exercise price of $.01 per share (as the same may be adjusted from time to time
as set forth herein, the "Exercise Price").
1. Exercise Period - The purchase rights represented by this Warrant
are exercisable by the Holder, in whole or in part, at any time from time to
time during the Exercise Period, which shall commence immediately upon the Issue
Date set forth above and shall end at 5:00 p.m. Boston time on the fifth
anniversary of the Issue Date.
2. Exercise of Warrant -
(a) During the Exercise Period and provided this Warrant has not been
terminated, this Warrant shall be exercised, in whole or in part and from time
to time, by the surrender of this Warrant and the Notice of Exercise annexed
hereto duly executed at the principal office of the Company (or such other
office or agency of the Company as it may designate) and upon payment of the
Exercise Price of the shares thereby purchased.
(i) Exercise by Payment of Exercise Price. Payment of the
Exercise Price may be made (A) by check or bank draft payable to the
order of the Company, (B) by wire transfer, (C) by cancellation of
indebtedness of the Company to the Holder hereof at the time of
exercise, including but not limited to the loans evidenced by the Note
held by the Holder, or (C) by any combination of the foregoing. If the
amount of the payment received by the Company is less than the Exercise
Price, the Holder will be notified of the deficiency and shall make
payment in that amount within three (3) business days. In the event the
payment exceeds the Exercise Price, the Company will refund the excess
to the holder within three days of receipt.
(b) As a condition to the exercise of this Warrant, the Holder agrees
to furnish or cause to be furnished to the Company such documents and opinions
of counsel as may reasonably be required to satisfy the Company that the shares
of Common Stock that are issued upon the exercise of rights represented by this
Warrant (the "Warrant Shares") may be issued to the Holder pursuant to an
exemption from the registration requirements of, and otherwise in compliance
with, applicable federal and state securities laws.
(c) Upon exercise, the Holder shall be entitled to receive, promptly
after payment in full or by net exercise, one or more certificates, issued in
the Holder's name or in such name or names as the Holder may direct, subject to
the limitations on transfer contained herein, for the number of shares of Common
Stock so purchased. The shares so purchased or received shall be deemed to be
issued as of the close of business on the date on which this Warrant shall have
been exercised. The Company may postpone for a period not to exceed 90 days the
time of delivery of certificates for the shares issuable upon the exercise of
this Warrant for such additional time as the Company shall deem necessary or
desirable to enable it to comply with the listing or quotation requirements of
any securities exchange upon which shares of the Company may or are then
contemplated to be listed on the National Association of Securities Dealers,
Inc., or the requirements of the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, any applicable rules or regulations
of the Securities and Exchange Commission or the requirements of applicable
state securities laws. Any shares of Common Stock issued upon the exercise of
this Warrant shall bear the restrictive legend set forth on the face of this
Warrant.
(d) The Company covenants that all Warrant Shares will be fully paid,
nonassessable, and free from all taxes, liens and charges in respect of the
issue thereof (other than taxes in respect of any transfer occurring
contemporaneously with such issue).
3. No Fractional Shares or Scrip - No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this Warrant
unless this Warrant is exercised in full. In lieu thereof, a cash payment shall
be made equal to such fraction multiplied by the Exercise Price per share as
then in effect.
4. Charges, Taxes and Expenses - Issuance of certificates for Warrant
Shares shall be made without charge to the Holder for any issue or transfer tax
or other incidental expense in respect of the issuance of such certificate, all
of which taxes and expenses shall be paid by the Company.
5. No Rights as Shareholder - This Warrant does not entitle the Holder
to any voting rights, dividend rights or other rights as a shareholder of the
Company prior to exercise and payment in full of the Exercise Price in
accordance with Section 2 hereof.
6. Investment Representation - The Holder, by acceptance of this
Warrant, represents and warrants to the Company that this Warrant and all
securities acquired upon any and all exercises of this Warrant are purchased for
the Holder's own account for investment, and not with view to resale or
distribution of either this Warrant or any securities purchasable upon exercise
hereof.
2
7. Sale or Transfer of the Warrant; Legend - Neither this Warrant nor
the Warrant Shares may be sold or transferred unless either (i) they first shall
been have registered under the Securities Act of 1933, as amended (the "1933
Act") and any applicable state securities laws and such sale is made in
accordance with, and pursuant to, such registration statement, or (ii) the
Company first shall have been furnished with an opinion of legal counsel
reasonably satisfactory to the Company to the effect that such sale or transfer
is exempt from the registration requirements of the 1933 Act and such state
laws. Notwithstanding the foregoing, this Warrant may be transferred by the
original holder hereof to any of its affiliates without the requirement of an
opinion of legal counsel, so long as such transfer is in compliance with federal
and state securities laws. Each certificate representing any Warrant or any
Warrant Shares that has not been registered and that has not been sold pursuant
to an exemption that permits removal of the legend shall bear a legend referring
to such restrictions on transfer, substantially in the form of the legend
affixed to this Warrant. Upon the request of a holder of a certificate
representing any Warrant Shares, the Company shall remove the foregoing legend
from the certificate or issue to such holder a new certificate therefor free of
any transfer legend, if, with such request, the Company shall have received
either (i) an opinion of counsel reasonably satisfactory to the Company to the
effect that such legend may be removed from such certificate or (ii) if
Paragraph (k) of Rule 144 or a substantially similar successor rule remains in
force and effect, representations from the Holder that such Holder is not then,
and has not been during the preceding three months, an affiliate of the Company
and that such Holder has beneficially owned the security (within the meaning of
Rule 144) for two years or more (or such shorter period as may then be specified
in Rule 144).
8. Adjustments
8.1 Adjustments for Stock Splits, Reverse Stock Splits or Stock
Dividends In the event that the outstanding shares of Common Stock shall be
subdivided (split), combined (reverse split), by reclassification or otherwise,
or in the event of any dividend or other distribution payable on the Common
Stock in shares of Common Stock, the Warrant Number in effect immediately prior
to such subdivision, combination, or dividend or other distribution, and the
Exercise Price per share, shall be proportionately adjusted. Adjustments set
forth herein shall be readjusted in the same manner for any successive event or
events described herein.
8.2 Adjustment for Capital Reorganizations - If at any time there shall
be a capital reorganization of the Company or a merger or consolidation of the
Company with or into another corporation, or the sale of the Company's
properties and assets as, or substantially as, an entirety to any other person,
then, as part of such reorganization, merger, consolidation, or sale, lawful
provision shall be made so that the Holder of this Warrant shall thereafter be
entitled to receive on exercise of this Warrant during the period specified in
this Warrant and on payment of the Exercise Price then in effect, the number of
shares of stock or other securities or property of the Company, or of the
successor corporation resulting from such merger or consolidation, to which a
holder of the Common Stock deliverable on exercise of this Warrant would have
been entitled on such capital reorganization, merger, consolidation, or sale if
this Warrant had been exercised immediately before that capital reorganization,
merger, consolidation, or sale. In any such case, appropriate adjustment, as
determined in good faith by the Board of Directors of the Company, shall be made
in the application of the provisions of this Warrant with respect to the rights
and interests of the Holder of this Warrant after the reorganization, merger,
consolidation, or sale to the end that the provisions of this Warrant (including
adjustment of the number of shares purchasable on exercise of this Warrant)
shall be applicable after that event, as near as reasonably may be, in relation
to any shares or other securities or property deliverable after that event on
exercise of this Warrant.
3
8.3 Adjustments for Subsequent Equity Offerings - In the event that the
Company makes an offering of its equity securities subsequent to the issue date
of this Warrant, (an "Equity Offering"),
(a) the Warrant Number shall be adjusted to be equal to the product
derived by multiplying .20 by the quotient resulting from dividing
200,000 by the New Securities Purchase Price; and
(b) if the Value/Cash Ratio (as defined below) of the Equity Offerings
is greater than 1.50, the Warrant Number in effect immediately prior to
the Equity Offering, but after giving effect to the provisions of
Section 8.3(a) shall be adjusted to be equal to the result of the
following formula:
(200,000/(Equity Offering Proceeds X 2.5/Fully-Diluted Shares) -
200,000/((Equity Offering Proceeds + Pre-Money Valuation)/Fully-Diluted
Shares)) +.2 X (200,000/(Equity Offering Proceeds X 2.5/Fully-Diluted
Shares))
For the purposes of this Section 8.3,
(i) "New Securities" shall mean the securities offered in the
Equity Offering.
(ii) "New Securities Purchase Price" shall mean the per-share
purchase price of the New Securities.
(iii) "Value/Cash Ratio" shall mean the quotient resulting
from dividing the Pre-Money Valuation by the Equity Offering Proceeds.
(iv) "Pre-Money Valuation" shall mean the aggregate pre-money
valuation of the Company calculated on a fully-diluted basis used to
determine the New Securities Purchase Price.
(v) "Equity Offering Proceeds" shall mean the gross proceeds
received by the Company from the sale of New Securities, including
proceeds received by conversion of the Note or any other convertible
instrument.
(vi) "Fully-Diluted Shares" shall mean the number of shares of
outstanding stock of the Company immediately after the conclusion of
the Equity Offering calculated of a fully-diluted basis, taking into
account all outstanding convertible securities and shares reserved for
issuance under any stock option plans.
4
(vii) "Note" shall mean that certain Convertible Demand Note
in the principal amount of $200,000 of even date issued by the Company
to the Holder.
In the event that the terms of the Equity Offering provide for multiple
closings, the Equity Offering Proceeds shall be deemed to include the aggregate
proceeds of all such closings, and no adjustment shall be made to the Warrant
Number or Exercise Price pursuant to Section 8.3(b) until the conclusion of the
Equity Offering. The terms of this Section 8.3 shall automatically terminate
upon the conversion of the Note into New Securities, provided that such terms
shall apply to the Equity Offering in which the Note is converted.
8.4 Certificate as to Adjustments - Upon the occurrence of each
adjustment or readjustment pursuant to this Section 8, the Company at its
expense shall promptly compute such adjustment or readjustment in accordance
with the terms hereof and furnish to each Holder a certificate setting forth
such adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based. The Company shall, upon the written
request, at any time, of any Holder, furnish or cause to be furnished to such
Holder, a like certificate setting forth: (i) such adjustments and
readjustments; (ii) the Exercise Price at the time in effect; and (iii) the
number of shares of Common Stock and the amount, if any, of other property that
at the time would be received upon the exercise of the Warrant.
8.5 Notices of Record Date - In the event of any taking by the Company
of a record of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive any dividend (other
than a cash dividend that is the same as cash dividends paid in previous
quarters) or other distribution, or any right to subscribe for, purchase or
otherwise acquire any shares of stock of any class or any other securities or
property, or to receive any other right, or any capital reorganization of the
Company, any reclassification or recapitalization of the capital stock of the
Company or any transfer of all or substantially all the assets of the Company to
or consolidation or merger of the Company with or into any other person, or any
voluntary or involuntary dissolution, liquidation or winding-up of the Company,
then and in each such event the Company will mail or cause to be mailed to the
holder of this Warrant a notice specifying (i) the date on which any such 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, and
(ii) the date on which any such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, 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 any class of securities shall be entitled to exchange
their shares of securities for securities or other property deliverable on such
reorganization, reclassification, recapitalization, transfer, consolidation,
merger, dissolution, liquidation or winding-up. Such notice shall be mailed at
least ten (10) days prior to the date specified in such notice on which any such
action is to be taken.
8.6 No Impairment - The Company will not, by amendment of its
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the holder of this
Warrant against impairment. Without limiting the generality of the foregoing,
the Company (a) will not increase the par value of any shares of stock
receivable on the exercise of this Warrant above the amount payable therefor on
such exercise, and (b) will take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and nonassessable shares of stock on the exercise of this Warrant.
5
9. Reservation of Stock Issuable on Exercise of Warrant - The Company
will at all times reserve and keep available, solely for issuance and delivery
upon the exercise of this Warrant, all shares of Common Stock (or other
securities) from time to time issuable upon the exercise of this Warrant.
10. Loss, Theft, Destruction or Mutilation of Warrant - Upon receipt by
the Company of evidence reasonably satisfactory to it of the loss, theft,
destruction, or mutilation of this Warrant, and in case of loss, theft, or
destruction, of indemnity or security reasonably satisfactory to it, and upon
reimbursement to the Company of all reasonable expenses incidental thereto, and
upon surrender and cancellation of this Warrant, if mutilated, the Company will
make and deliver a new warrant of like tenor and dated as of such cancellation
in lieu of this Warrant; provided, however, if any Warrant of which the original
holder, its nominee, or any of its partners or affiliates is the registered
holder is lost, stolen or destroyed, the affidavit of the registered holder
setting forth the circumstances with respect to such loss, theft or destruction
shall be accepted as satisfactory evidence thereof, and no indemnification bond
or other security shall be required as a condition to the execution and delivery
by the Company of a new Warrant in replacement of such lost, stolen or destroyed
Warrant other than the registered holder's unsecured written agreement to
indemnify the Company.
11. Remedies - The Company stipulates that the remedies at law of the
holder of this Warrant in the event of any default or threatened default by the
Company in the performance of or compliance with any of the terms of this
Warrant are not adequate and may be enforced by a decree for the specific
performance of any agreement contained herein or by an injunction against a
violation of any of the terms hereof or otherwise.
12. Dissolution - In the event of any dissolution of the Company
following the transfer of all or substantially all of its properties or assets,
the Company, prior to such dissolution, shall at its expense deliver or cause to
be delivered the stock and other securities and property (including cash, where
applicable) receivable by the Holders of the Warrants after the effective date
of such dissolution pursuant to this Section 12 to a bank or trust company
having its principal office in [_________________], as trustee for the Holder or
Holders of the Warrants. Such bank or trust company shall be appointed by the
Company, by written notice to each Holder of a Warrant, for the purpose of
issuing Common Stock (or other securities) on the exercise of the Warrants,
exchanging thereafter any such issuance, exchange or replacement, as the case
may be, shall be made at such office by such Warrants pursuant to this Section
12, such bank or trust company shall have all the power and duties of a warrant
agent appointed pursuant to this Section 12 and shall accept, in its own name
for the account of the Company or such successor person as may be entitled
thereto, all amounts otherwise payable to the Company or such successor, as the
case may be, on exercise of this Warrant.
6
13. Notices, etc. - All notices and other communications from the
Company to the holder of this Warrant shall be mailed, by first class mail, to
such address as may have been furnished to the Company in writing by such
holder, or, until an address is so furnished, to and at the address of the last
holder of this Warrant who has so furnished an address to the Company (and shall
be deemed effective on the third day following the date of mailing). All
communications from the holder of this Warrant to the Company shall be mailed by
first class mail to the Company at it principal business address, or such other
address as may have been furnished to the holder in writing by the Company.
14. Miscellaneous - This Warrant and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. This Warrant shall be construed and enforced in accordance with and
governed by the laws of the State of Delaware. The headings in this Warrant are
for purposes of reference only, and shall not limit or otherwise affect any of
the terms hereof. This Warrant is being executed as an instrument under seal.
The invalidity or unenforceability of any provision hereof shall in no way
affect the validity or enforceability of any other provision.
15. "Market Stand-Off" Agreement - The Holder (and any permitted
transferee hereunder) hereby agrees that it will not, without the prior written
consent of the managing underwriter, during the period commencing on the date of
the final prospectus relating to the Company's initial public offering and
ending on the date specified by the Company and the managing underwriter (such
period not to exceed one hundred eighty (180) days) (i) lend, offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock (whether such shares or any such securities are then owned by the
Holder (or any other party bound by this Section 15) or are thereafter
acquired), or (ii) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
the Common Stock, whether any such transaction described in clause (i) or (ii)
above is to be settled by delivery of Common Stock or such other securities, in
cash or otherwise. The foregoing provisions of this Section 15 shall apply only
to the Company's initial public offering of equity securities and shall not
apply to the sale of any shares to an underwriter pursuant to an underwriting
agreement. The underwriters in connection with the Company's initial public
offering are intended third party beneficiaries of this Section 15 and shall
have the right, power and authority to enforce the provisions hereof as though
they were a party hereto. In order to enforce the foregoing covenant, the
Company may impose stop-transfer instructions with respect to the securities of
the Holder (and the shares or securities of every other person subject to the
foregoing restriction) until the end of such period.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
7
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
in its corporate name by its duly authorized officer and to be dated as of the
issue date set forth on the first page of this Warrant.
Attest: GIGABEAM CORPORATION
By:
------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Chief Executive Officer
[CORPORATE SEAL]
8
NOTICE OF EXERCISE OF WARRANT
TO: GIGABEAM CORPORATION
Pursuant to the terms of the attached Warrant, the undersigned hereby
elects:
______ to purchase ____ shares of Common Stock of GIGABEAM
CORPORATION (the "Company"), by the tender herewith
of payment of the Exercise Price of such shares in
full.
Please issue a certificate or certificates representing said shares in the name
of the undersigned or in such other name(s) as is/are specified immediately
below or, if necessary, on an attachment hereto:
Name Address
---- -------
DATE:
-----------------------------
HOLDER:
-------------------------------------
1
FORM OF ASSIGNMENT
(To be signed only on transfer of Warrant)
TO: GIGABEAM CORPORATION
For value received, the undersigned hereby sells, assigns, and
transfers unto __________________________ the right represented by the within
Warrant to purchase shares of equity securities of GIGABEAM CORPORATION, as
described in the Warrant, and appoints ____________________________ attorney to
transfer such right on the books of GIGABEAM CORPORATION with full power of
substitution in the premises.
Dated:
-----------------------------------------
Printed Name:
---------------------------------
Signature:
-------------------------------------
(Signature must conform to name of Holder as
specified on the face of the Warrant)
Address:
---------------------------------------
Signed in the presence of:
----------------------------------------------
2
EXHIBIT G
FORM OF THIRD WARRANT
3
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, ASSIGNED OR TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF
1933, AS AMENDED, UNLESS THE COMPANY HAS RECEIVED THE WRITTEN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH SALE, ASSIGNMENT OR TRANSFER
DOES NOT INVOLVE A TRANSACTION REQUIRING REGISTRATION OF SUCH SECURITIES UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.
Warrant No. ____
Issue Date: June ___, 2004
GIGABEAM CORPORATION
WARRANT
THIS CERTIFIES that, for value received, AMERISTOCK CORP. or its
registered assigns (the "Holder") is entitled, upon the terms and subject to the
conditions hereinafter set forth, to subscribe for and purchase from GIGABEAM
CORPORATION, a Delaware corporation (the "Company"), 5.333 shares (as the same
may be adjusted from time to time as set forth herein, the "Warrant Number") of
the Company's Common Stock, $0.00l par value per share ("Common Stock") at the
exercise price of $.01 per share (as the same may be adjusted from time to time
as set forth herein, the "Exercise Price").
1. Exercise Period - The purchase rights represented by this Warrant
are exercisable by the Holder, in whole or in part, at any time from time to
time during the Exercise Period, which shall commence immediately upon the Issue
Date set forth above and shall end at 5:00 p.m. Boston time on the fifth
anniversary of the Issue Date.
2. Exercise of Warrant -
(a) During the Exercise Period and provided this Warrant has not been
terminated, this Warrant shall be exercised, in whole or in part and from time
to time, by the surrender of this Warrant and the Notice of Exercise annexed
hereto duly executed at the principal office of the Company (or such other
office or agency of the Company as it may designate) and upon payment of the
Exercise Price of the shares thereby purchased.
(i) Exercise by Payment of Exercise Price. Payment of the
Exercise Price may be made (A) by check or bank draft payable to the
order of the Company, (B) by wire transfer, (C) by cancellation of
indebtedness of the Company to the Holder hereof at the time of
exercise, including but not limited to the loans evidenced by the Note
held by the Holder, or (C) by any combination of the foregoing. If the
amount of the payment received by the Company is less than the Exercise
Price, the Holder will be notified of the deficiency and shall make
payment in that amount within three (3) business days. In the event the
payment exceeds the Exercise Price, the Company will refund the excess
to the holder within three days of receipt.
(b) As a condition to the exercise of this Warrant, the Holder agrees
to furnish or cause to be furnished to the Company such documents and opinions
of counsel as may reasonably be required to satisfy the Company that the shares
of Common Stock that are issued upon the exercise of rights represented by this
Warrant (the "Warrant Shares") may be issued to the Holder pursuant to an
exemption from the registration requirements of, and otherwise in compliance
with, applicable federal and state securities laws.
(c) Upon exercise, the Holder shall be entitled to receive, promptly
after payment in full or by net exercise, one or more certificates, issued in
the Holder's name or in such name or names as the Holder may direct, subject to
the limitations on transfer contained herein, for the number of shares of Common
Stock so purchased. The shares so purchased or received shall be deemed to be
issued as of the close of business on the date on which this Warrant shall have
been exercised. The Company may postpone for a period not to exceed 90 days the
time of delivery of certificates for the shares issuable upon the exercise of
this Warrant for such additional time as the Company shall deem necessary or
desirable to enable it to comply with the listing or quotation requirements of
any securities exchange upon which shares of the Company may or are then
contemplated to be listed on the National Association of Securities Dealers,
Inc., or the requirements of the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, any applicable rules or regulations
of the Securities and Exchange Commission or the requirements of applicable
state securities laws. Any shares of Common Stock issued upon the exercise of
this Warrant shall bear the restrictive legend set forth on the face of this
Warrant.
(d) The Company covenants that all Warrant Shares will be fully paid,
nonassessable, and free from all taxes, liens and charges in respect of the
issue thereof (other than taxes in respect of any transfer occurring
contemporaneously with such issue).
3. No Fractional Shares or Scrip - No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this Warrant
unless this Warrant is exercised in full. In lieu thereof, a cash payment shall
be made equal to such fraction multiplied by the Exercise Price per share as
then in effect.
4. Charges, Taxes and Expenses - Issuance of certificates for Warrant
Shares shall be made without charge to the Holder for any issue or transfer tax
or other incidental expense in respect of the issuance of such certificate, all
of which taxes and expenses shall be paid by the Company.
5. No Rights as Shareholder - This Warrant does not entitle the Holder
to any voting rights, dividend rights or other rights as a shareholder of the
Company prior to exercise and payment in full of the Exercise Price in
accordance with Section 2 hereof.
6. Investment Representation - The Holder, by acceptance of this
Warrant, represents and warrants to the Company that this Warrant and all
securities acquired upon any and all exercises of this Warrant are purchased for
the Holder's own account for investment, and not with view to resale or
distribution of either this Warrant or any securities purchasable upon exercise
hereof.
2
7. Sale or Transfer of the Warrant; Legend - Neither this Warrant nor
the Warrant Shares may be sold or transferred unless either (i) they first shall
been have registered under the Securities Act of 1933, as amended (the "1933
Act") and any applicable state securities laws and such sale is made in
accordance with, and pursuant to, such registration statement, or (ii) the
Company first shall have been furnished with an opinion of legal counsel
reasonably satisfactory to the Company to the effect that such sale or transfer
is exempt from the registration requirements of the 1933 Act and such state
laws. Notwithstanding the foregoing, this Warrant may be transferred by the
original holder hereof to any of its affiliates without the requirement of an
opinion of legal counsel, so long as such transfer is in compliance with federal
and state securities laws. Each certificate representing any Warrant or any
Warrant Shares that has not been registered and that has not been sold pursuant
to an exemption that permits removal of the legend shall bear a legend referring
to such restrictions on transfer, substantially in the form of the legend
affixed to this Warrant. Upon the request of a holder of a certificate
representing any Warrant Shares, the Company shall remove the foregoing legend
from the certificate or issue to such holder a new certificate therefor free of
any transfer legend, if, with such request, the Company shall have received
either (i) an opinion of counsel reasonably satisfactory to the Company to the
effect that such legend may be removed from such certificate or (ii) if
Paragraph (k) of Rule 144 or a substantially similar successor rule remains in
force and effect, representations from the Holder that such Holder is not then,
and has not been during the preceding three months, an affiliate of the Company
and that such Holder has beneficially owned the security (within the meaning of
Rule 144) for two years or more (or such shorter period as may then be specified
in Rule 144).
8. Adjustments
8.1 Adjustments for Stock Splits, Reverse Stock Splits or Stock
Dividends In the event that the outstanding shares of Common Stock shall be
subdivided (split), combined (reverse split), by reclassification or otherwise,
or in the event of any dividend or other distribution payable on the Common
Stock in shares of Common Stock, the Warrant Number in effect immediately prior
to such subdivision, combination, or dividend or other distribution, and the
Exercise Price per share, shall be proportionately adjusted. Adjustments set
forth herein shall be readjusted in the same manner for any successive event or
events described herein.
8.2 Adjustment for Capital Reorganizations - If at any time there shall
be a capital reorganization of the Company or a merger or consolidation of the
Company with or into another corporation, or the sale of the Company's
properties and assets as, or substantially as, an entirety to any other person,
then, as part of such reorganization, merger, consolidation, or sale, lawful
provision shall be made so that the Holder of this Warrant shall thereafter be
entitled to receive on exercise of this Warrant during the period specified in
this Warrant and on payment of the Exercise Price then in effect, the number of
shares of stock or other securities or property of the Company, or of the
successor corporation resulting from such merger or consolidation, to which a
holder of the Common Stock deliverable on exercise of this Warrant would have
been entitled on such capital reorganization, merger, consolidation, or sale if
this Warrant had been exercised immediately before that capital reorganization,
merger, consolidation, or sale. In any such case, appropriate adjustment, as
determined in good faith by the Board of Directors of the Company, shall be made
in the application of the provisions of this Warrant with respect to the rights
and interests of the Holder of this Warrant after the reorganization, merger,
consolidation, or sale to the end that the provisions of this Warrant (including
adjustment of the number of shares purchasable on exercise of this Warrant)
shall be applicable after that event, as near as reasonably may be, in relation
to any shares or other securities or property deliverable after that event on
exercise of this Warrant.
3
8.3 Adjustments for Subsequent Equity Offerings - In the event that the
Company makes an offering of its equity securities subsequent to the issue date
of this Warrant, (an "Equity Offering"),
(a) the Warrant Number shall be adjusted to be equal to the product
derived by multiplying .20 by the quotient resulting from dividing
200,000 by the New Securities Purchase Price; and
(b) if the Value/Cash Ratio (as defined below) of the Equity Offerings
is greater than 1.50, the Warrant Number in effect immediately prior to
the Equity Offering, but after giving effect to the provisions of
Section 8.3(a) shall be adjusted to be equal to the result of the
following formula:
(200,000/(Equity Offering Proceeds X 2.5/Fully-Diluted Shares) -
200,000/((Equity Offering Proceeds + Pre-Money Valuation)/Fully-Diluted
Shares)) +.2 X (200,000/(Equity Offering Proceeds X 2.5/Fully-Diluted
Shares))
For the purposes of this Section 8.3,
(i) "New Securities" shall mean the securities offered in the
Equity Offering.
(ii) "New Securities Purchase Price" shall mean the per-share
purchase price of the New Securities.
(iii) "Value/Cash Ratio" shall mean the quotient resulting
from dividing the Pre-Money Valuation by the Equity Offering Proceeds.
(iv) "Pre-Money Valuation" shall mean the aggregate pre-money
valuation of the Company calculated on a fully-diluted basis used to
determine the New Securities Purchase Price.
(v) "Equity Offering Proceeds" shall mean the gross proceeds
received by the Company from the sale of New Securities, including
proceeds received by conversion of the Note or any other convertible
instrument.
(vi) "Fully-Diluted Shares" shall mean the number of shares of
outstanding stock of the Company immediately after the conclusion of
the Equity Offering calculated of a fully-diluted basis, taking into
account all outstanding convertible securities and shares reserved for
issuance under any stock option plans.
4
(vii) "Note" shall mean that certain Convertible Demand Note
in the principal amount of $200,000 of even date issued by the Company
to the Holder.
In the event that the terms of the Equity Offering provide for multiple
closings, the Equity Offering Proceeds shall be deemed to include the aggregate
proceeds of all such closings, and no adjustment shall be made to the Warrant
Number or Exercise Price pursuant to Section 8.3(b) until the conclusion of the
Equity Offering. The terms of this Section 8.3 shall automatically terminate
upon the conversion of the Note into New Securities, provided that such terms
shall apply to the Equity Offering in which the Note is converted.
8.4 Certificate as to Adjustments - Upon the occurrence of each
adjustment or readjustment pursuant to this Section 8, the Company at its
expense shall promptly compute such adjustment or readjustment in accordance
with the terms hereof and furnish to each Holder a certificate setting forth
such adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based. The Company shall, upon the written
request, at any time, of any Holder, furnish or cause to be furnished to such
Holder, a like certificate setting forth: (i) such adjustments and
readjustments; (ii) the Exercise Price at the time in effect; and (iii) the
number of shares of Common Stock and the amount, if any, of other property that
at the time would be received upon the exercise of the Warrant.
8.5 Notices of Record Date - In the event of any taking by the Company
of a record of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive any dividend (other
than a cash dividend that is the same as cash dividends paid in previous
quarters) or other distribution, or any right to subscribe for, purchase or
otherwise acquire any shares of stock of any class or any other securities or
property, or to receive any other right, or any capital reorganization of the
Company, any reclassification or recapitalization of the capital stock of the
Company or any transfer of all or substantially all the assets of the Company to
or consolidation or merger of the Company with or into any other person, or any
voluntary or involuntary dissolution, liquidation or winding-up of the Company,
then and in each such event the Company will mail or cause to be mailed to the
holder of this Warrant a notice specifying (i) the date on which any such 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, and
(ii) the date on which any such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, 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 any class of securities shall be entitled to exchange
their shares of securities for securities or other property deliverable on such
reorganization, reclassification, recapitalization, transfer, consolidation,
merger, dissolution, liquidation or winding-up. Such notice shall be mailed at
least ten (10) days prior to the date specified in such notice on which any such
action is to be taken.
8.6 No Impairment - The Company will not, by amendment of its
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the holder of this
Warrant against impairment. Without limiting the generality of the foregoing,
the Company (a) will not increase the par value of any shares of stock
receivable on the exercise of this Warrant above the amount payable therefor on
such exercise, and (b) will take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and nonassessable shares of stock on the exercise of this Warrant.
5
9. Reservation of Stock Issuable on Exercise of Warrant - The Company
will at all times reserve and keep available, solely for issuance and delivery
upon the exercise of this Warrant, all shares of Common Stock (or other
securities) from time to time issuable upon the exercise of this Warrant.
10. Loss, Theft, Destruction or Mutilation of Warrant - Upon receipt by
the Company of evidence reasonably satisfactory to it of the loss, theft,
destruction, or mutilation of this Warrant, and in case of loss, theft, or
destruction, of indemnity or security reasonably satisfactory to it, and upon
reimbursement to the Company of all reasonable expenses incidental thereto, and
upon surrender and cancellation of this Warrant, if mutilated, the Company will
make and deliver a new warrant of like tenor and dated as of such cancellation
in lieu of this Warrant; provided, however, if any Warrant of which the original
holder, its nominee, or any of its partners or affiliates is the registered
holder is lost, stolen or destroyed, the affidavit of the registered holder
setting forth the circumstances with respect to such loss, theft or destruction
shall be accepted as satisfactory evidence thereof, and no indemnification bond
or other security shall be required as a condition to the execution and delivery
by the Company of a new Warrant in replacement of such lost, stolen or destroyed
Warrant other than the registered holder's unsecured written agreement to
indemnify the Company.
11. Remedies - The Company stipulates that the remedies at law of the
holder of this Warrant in the event of any default or threatened default by the
Company in the performance of or compliance with any of the terms of this
Warrant are not adequate and may be enforced by a decree for the specific
performance of any agreement contained herein or by an injunction against a
violation of any of the terms hereof or otherwise.
12. Dissolution - In the event of any dissolution of the Company
following the transfer of all or substantially all of its properties or assets,
the Company, prior to such dissolution, shall at its expense deliver or cause to
be delivered the stock and other securities and property (including cash, where
applicable) receivable by the Holders of the Warrants after the effective date
of such dissolution pursuant to this Section 12 to a bank or trust company
having its principal office in [_________________], as trustee for the Holder or
Holders of the Warrants. Such bank or trust company shall be appointed by the
Company, by written notice to each Holder of a Warrant, for the purpose of
issuing Common Stock (or other securities) on the exercise of the Warrants,
exchanging thereafter any such issuance, exchange or replacement, as the case
may be, shall be made at such office by such Warrants pursuant to this Section
12, such bank or trust company shall have all the power and duties of a warrant
agent appointed pursuant to this Section 12 and shall accept, in its own name
for the account of the Company or such successor person as may be entitled
thereto, all amounts otherwise payable to the Company or such successor, as the
case may be, on exercise of this Warrant.
6
13. Notices, etc. - All notices and other communications from the
Company to the holder of this Warrant shall be mailed, by first class mail, to
such address as may have been furnished to the Company in writing by such
holder, or, until an address is so furnished, to and at the address of the last
holder of this Warrant who has so furnished an address to the Company (and shall
be deemed effective on the third day following the date of mailing). All
communications from the holder of this Warrant to the Company shall be mailed by
first class mail to the Company at it principal business address, or such other
address as may have been furnished to the holder in writing by the Company.
14. Miscellaneous - This Warrant and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. This Warrant shall be construed and enforced in accordance with and
governed by the laws of the State of Delaware. The headings in this Warrant are
for purposes of reference only, and shall not limit or otherwise affect any of
the terms hereof. This Warrant is being executed as an instrument under seal.
The invalidity or unenforceability of any provision hereof shall in no way
affect the validity or enforceability of any other provision.
15. "Market Stand-Off" Agreement - The Holder (and any permitted
transferee hereunder) hereby agrees that it will not, without the prior written
consent of the managing underwriter, during the period commencing on the date of
the final prospectus relating to the Company's initial public offering and
ending on the date specified by the Company and the managing underwriter (such
period not to exceed one hundred eighty (180) days) (i) lend, offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock (whether such shares or any such securities are then owned by the
Holder (or any other party bound by this Section 15) or are thereafter
acquired), or (ii) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
the Common Stock, whether any such transaction described in clause (i) or (ii)
above is to be settled by delivery of Common Stock or such other securities, in
cash or otherwise. The foregoing provisions of this Section 15 shall apply only
to the Company's initial public offering of equity securities and shall not
apply to the sale of any shares to an underwriter pursuant to an underwriting
agreement. The underwriters in connection with the Company's initial public
offering are intended third party beneficiaries of this Section 15 and shall
have the right, power and authority to enforce the provisions hereof as though
they were a party hereto. In order to enforce the foregoing covenant, the
Company may impose stop-transfer instructions with respect to the securities of
the Holder (and the shares or securities of every other person subject to the
foregoing restriction) until the end of such period.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
7
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
in its corporate name by its duly authorized officer and to be dated as of the
issue date set forth on the first page of this Warrant.
Attest: GIGABEAM CORPORATION
By:
--------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Chief Executive Officer
[CORPORATE SEAL]
8
NOTICE OF EXERCISE OF WARRANT
TO: GIGABEAM CORPORATION
Pursuant to the terms of the attached Warrant, the undersigned hereby
elects:
______ to purchase ____ shares of Common Stock of GIGABEAM
CORPORATION (the "Company"), by the tender herewith
of payment of the Exercise Price of such shares in
full.
Please issue a certificate or certificates representing said shares in the name
of the undersigned or in such other name(s) as is/are specified immediately
below or, if necessary, on an attachment hereto:
Name Address
---- -------
DATE:
-----------------------------
HOLDER:
-------------------------------------
1
FORM OF ASSIGNMENT
(To be signed only on transfer of Warrant)
TO: GIGABEAM CORPORATION
For value received, the undersigned hereby sells, assigns, and
transfers unto __________________________ the right represented by the within
Warrant to purchase shares of equity securities of GIGABEAM CORPORATION, as
described in the Warrant, and appoints ____________________________ attorney to
transfer such right on the books of GIGABEAM CORPORATION with full power of
substitution in the premises.
Dated:
----------------------------------------
Printed Name:
---------------------------------
Signature:
-------------------------------------
(Signature must conform to name of Holder as
specified on the face of the Warrant)
Address:
---------------------------------------
Signed in the presence of:
-----------------------------------------------
2
EXHIBIT H
FORM OF FOURTH WARRANT
3
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, ASSIGNED OR TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF
1933, AS AMENDED, UNLESS THE COMPANY HAS RECEIVED THE WRITTEN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH SALE, ASSIGNMENT OR TRANSFER
DOES NOT INVOLVE A TRANSACTION REQUIRING REGISTRATION OF SUCH SECURITIES UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.
Warrant No. ____
Issue Date: July ___, 2004
GIGABEAM CORPORATION
WARRANT
THIS CERTIFIES that, for value received, AMERISTOCK CORP. or its
registered assigns (the "Holder") is entitled, upon the terms and subject to the
conditions hereinafter set forth, to subscribe for and purchase from GIGABEAM
CORPORATION, a Delaware corporation (the "Company"), 5.333 shares (as the same
may be adjusted from time to time as set forth herein, the "Warrant Number") of
the Company's Common Stock, $0.00l par value per share ("Common Stock") at the
exercise price of $.01 per share (as the same may be adjusted from time to time
as set forth herein, the "Exercise Price").
1. Exercise Period - The purchase rights represented by this Warrant
are exercisable by the Holder, in whole or in part, at any time from time to
time during the Exercise Period, which shall commence immediately upon the Issue
Date set forth above and shall end at 5:00 p.m. Boston time on the fifth
anniversary of the Issue Date.
2. Exercise of Warrant -
(a) During the Exercise Period and provided this Warrant has not been
terminated, this Warrant shall be exercised, in whole or in part and from time
to time, by the surrender of this Warrant and the Notice of Exercise annexed
hereto duly executed at the principal office of the Company (or such other
office or agency of the Company as it may designate) and upon payment of the
Exercise Price of the shares thereby purchased.
(i) Exercise by Payment of Exercise Price. Payment of the
Exercise Price may be made (A) by check or bank draft payable to the
order of the Company, (B) by wire transfer, (C) by cancellation of
indebtedness of the Company to the Holder hereof at the time of
exercise, including but not limited to the loans evidenced by the Note
held by the Holder, or (C) by any combination of the foregoing. If the
amount of the payment received by the Company is less than the Exercise
Price, the Holder will be notified of the deficiency and shall make
payment in that amount within three (3) business days. In the event the
payment exceeds the Exercise Price, the Company will refund the excess
to the holder within three days of receipt.
(b) As a condition to the exercise of this Warrant, the Holder agrees
to furnish or cause to be furnished to the Company such documents and opinions
of counsel as may reasonably be required to satisfy the Company that the shares
of Common Stock that are issued upon the exercise of rights represented by this
Warrant (the "Warrant Shares") may be issued to the Holder pursuant to an
exemption from the registration requirements of, and otherwise in compliance
with, applicable federal and state securities laws.
(c) Upon exercise, the Holder shall be entitled to receive, promptly
after payment in full or by net exercise, one or more certificates, issued in
the Holder's name or in such name or names as the Holder may direct, subject to
the limitations on transfer contained herein, for the number of shares of Common
Stock so purchased. The shares so purchased or received shall be deemed to be
issued as of the close of business on the date on which this Warrant shall have
been exercised. The Company may postpone for a period not to exceed 90 days the
time of delivery of certificates for the shares issuable upon the exercise of
this Warrant for such additional time as the Company shall deem necessary or
desirable to enable it to comply with the listing or quotation requirements of
any securities exchange upon which shares of the Company may or are then
contemplated to be listed on the National Association of Securities Dealers,
Inc., or the requirements of the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, any applicable rules or regulations
of the Securities and Exchange Commission or the requirements of applicable
state securities laws. Any shares of Common Stock issued upon the exercise of
this Warrant shall bear the restrictive legend set forth on the face of this
Warrant.
(d) The Company covenants that all Warrant Shares will be fully paid,
nonassessable, and free from all taxes, liens and charges in respect of the
issue thereof (other than taxes in respect of any transfer occurring
contemporaneously with such issue).
3. No Fractional Shares or Scrip - No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this Warrant
unless this Warrant is exercised in full. In lieu thereof, a cash payment shall
be made equal to such fraction multiplied by the Exercise Price per share as
then in effect.
4. Charges, Taxes and Expenses - Issuance of certificates for Warrant
Shares shall be made without charge to the Holder for any issue or transfer tax
or other incidental expense in respect of the issuance of such certificate, all
of which taxes and expenses shall be paid by the Company.
5. No Rights as Shareholder - This Warrant does not entitle the Holder
to any voting rights, dividend rights or other rights as a shareholder of the
Company prior to exercise and payment in full of the Exercise Price in
accordance with Section 2 hereof.
6. Investment Representation - The Holder, by acceptance of this
Warrant, represents and warrants to the Company that this Warrant and all
securities acquired upon any and all exercises of this Warrant are purchased for
the Holder's own account for investment, and not with view to resale or
distribution of either this Warrant or any securities purchasable upon exercise
hereof.
2
7. Sale or Transfer of the Warrant; Legend - Neither this Warrant nor
the Warrant Shares may be sold or transferred unless either (i) they first shall
been have registered under the Securities Act of 1933, as amended (the "1933
Act") and any applicable state securities laws and such sale is made in
accordance with, and pursuant to, such registration statement, or (ii) the
Company first shall have been furnished with an opinion of legal counsel
reasonably satisfactory to the Company to the effect that such sale or transfer
is exempt from the registration requirements of the 1933 Act and such state
laws. Notwithstanding the foregoing, this Warrant may be transferred by the
original holder hereof to any of its affiliates without the requirement of an
opinion of legal counsel, so long as such transfer is in compliance with federal
and state securities laws. Each certificate representing any Warrant or any
Warrant Shares that has not been registered and that has not been sold pursuant
to an exemption that permits removal of the legend shall bear a legend referring
to such restrictions on transfer, substantially in the form of the legend
affixed to this Warrant. Upon the request of a holder of a certificate
representing any Warrant Shares, the Company shall remove the foregoing legend
from the certificate or issue to such holder a new certificate therefor free of
any transfer legend, if, with such request, the Company shall have received
either (i) an opinion of counsel reasonably satisfactory to the Company to the
effect that such legend may be removed from such certificate or (ii) if
Paragraph (k) of Rule 144 or a substantially similar successor rule remains in
force and effect, representations from the Holder that such Holder is not then,
and has not been during the preceding three months, an affiliate of the Company
and that such Holder has beneficially owned the security (within the meaning of
Rule 144) for two years or more (or such shorter period as may then be specified
in Rule 144).
8. Adjustments
8.1 Adjustments for Stock Splits, Reverse Stock Splits or Stock
Dividends In the event that the outstanding shares of Common Stock shall be
subdivided (split), combined (reverse split), by reclassification or otherwise,
or in the event of any dividend or other distribution payable on the Common
Stock in shares of Common Stock, the Warrant Number in effect immediately prior
to such subdivision, combination, or dividend or other distribution, and the
Exercise Price per share, shall be proportionately adjusted. Adjustments set
forth herein shall be readjusted in the same manner for any successive event or
events described herein.
8.2 Adjustment for Capital Reorganizations - If at any time there shall
be a capital reorganization of the Company or a merger or consolidation of the
Company with or into another corporation, or the sale of the Company's
properties and assets as, or substantially as, an entirety to any other person,
then, as part of such reorganization, merger, consolidation, or sale, lawful
provision shall be made so that the Holder of this Warrant shall thereafter be
entitled to receive on exercise of this Warrant during the period specified in
this Warrant and on payment of the Exercise Price then in effect, the number of
shares of stock or other securities or property of the Company, or of the
successor corporation resulting from such merger or consolidation, to which a
holder of the Common Stock deliverable on exercise of this Warrant would have
been entitled on such capital reorganization, merger, consolidation, or sale if
this Warrant had been exercised immediately before that capital reorganization,
merger, consolidation, or sale. In any such case, appropriate adjustment, as
determined in good faith by the Board of Directors of the Company, shall be made
in the application of the provisions of this Warrant with respect to the rights
and interests of the Holder of this Warrant after the reorganization, merger,
consolidation, or sale to the end that the provisions of this Warrant (including
adjustment of the number of shares purchasable on exercise of this Warrant)
shall be applicable after that event, as near as reasonably may be, in relation
to any shares or other securities or property deliverable after that event on
exercise of this Warrant.
3
8.3 Adjustments for Subsequent Equity Offerings - In the event that the
Company makes an offering of its equity securities subsequent to the issue date
of this Warrant, (an "Equity Offering"),
(a) the Warrant Number shall be adjusted to be equal to the product
derived by multiplying .20 by the quotient resulting from dividing
200,000 by the New Securities Purchase Price; and
(b) if the Value/Cash Ratio (as defined below) of the Equity Offerings
is greater than 1.50, the Warrant Number in effect immediately prior to
the Equity Offering, but after giving effect to the provisions of
Section 8.3(a) shall be adjusted to be equal to the result of the
following formula:
(200,000/(Equity Offering Proceeds X 2.5/Fully-Diluted Shares) -
200,000/((Equity Offering Proceeds + Pre-Money Valuation)/Fully-Diluted
Shares)) +.2 X (200,000/(Equity Offering Proceeds X 2.5/Fully-Diluted
Shares))
For the purposes of this Section 8.3,
(i) "New Securities" shall mean the securities offered in the
Equity Offering.
(ii) "New Securities Purchase Price" shall mean the per-share
purchase price of the New Securities.
(iii) "Value/Cash Ratio" shall mean the quotient resulting
from dividing the Pre-Money Valuation by the Equity Offering Proceeds.
(iv) "Pre-Money Valuation" shall mean the aggregate pre-money
valuation of the Company calculated on a fully-diluted basis used to
determine the New Securities Purchase Price.
(v) "Equity Offering Proceeds" shall mean the gross proceeds
received by the Company from the sale of New Securities, including
proceeds received by conversion of the Note or any other convertible
instrument.
(vi) "Fully-Diluted Shares" shall mean the number of shares of
outstanding stock of the Company immediately after the conclusion of
the Equity Offering calculated of a fully-diluted basis, taking into
account all outstanding convertible securities and shares reserved for
issuance under any stock option plans.
4
(vii) "Note" shall mean that certain Convertible Demand Note
in the principal amount of $200,000 of even date issued by the Company
to the Holder.
In the event that the terms of the Equity Offering provide for multiple
closings, the Equity Offering Proceeds shall be deemed to include the aggregate
proceeds of all such closings, and no adjustment shall be made to the Warrant
Number or Exercise Price pursuant to Section 8.3(b) until the conclusion of the
Equity Offering. The terms of this Section 8.3 shall automatically terminate
upon the conversion of the Note into New Securities, provided that such terms
shall apply to the Equity Offering in which the Note is converted.
8.4 Certificate as to Adjustments - Upon the occurrence of each
adjustment or readjustment pursuant to this Section 8, the Company at its
expense shall promptly compute such adjustment or readjustment in accordance
with the terms hereof and furnish to each Holder a certificate setting forth
such adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based. The Company shall, upon the written
request, at any time, of any Holder, furnish or cause to be furnished to such
Holder, a like certificate setting forth: (i) such adjustments and
readjustments; (ii) the Exercise Price at the time in effect; and (iii) the
number of shares of Common Stock and the amount, if any, of other property that
at the time would be received upon the exercise of the Warrant.
8.5 Notices of Record Date - In the event of any taking by the Company
of a record of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive any dividend (other
than a cash dividend that is the same as cash dividends paid in previous
quarters) or other distribution, or any right to subscribe for, purchase or
otherwise acquire any shares of stock of any class or any other securities or
property, or to receive any other right, or any capital reorganization of the
Company, any reclassification or recapitalization of the capital stock of the
Company or any transfer of all or substantially all the assets of the Company to
or consolidation or merger of the Company with or into any other person, or any
voluntary or involuntary dissolution, liquidation or winding-up of the Company,
then and in each such event the Company will mail or cause to be mailed to the
holder of this Warrant a notice specifying (i) the date on which any such 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, and
(ii) the date on which any such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, 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 any class of securities shall be entitled to exchange
their shares of securities for securities or other property deliverable on such
reorganization, reclassification, recapitalization, transfer, consolidation,
merger, dissolution, liquidation or winding-up. Such notice shall be mailed at
least ten (10) days prior to the date specified in such notice on which any such
action is to be taken.
8.6 No Impairment - The Company will not, by amendment of its
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the holder of this
Warrant against impairment. Without limiting the generality of the foregoing,
the Company (a) will not increase the par value of any shares of stock
receivable on the exercise of this Warrant above the amount payable therefor on
such exercise, and (b) will take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and nonassessable shares of stock on the exercise of this Warrant.
5
9. Reservation of Stock Issuable on Exercise of Warrant - The Company
will at all times reserve and keep available, solely for issuance and delivery
upon the exercise of this Warrant, all shares of Common Stock (or other
securities) from time to time issuable upon the exercise of this Warrant.
10. Loss, Theft, Destruction or Mutilation of Warrant - Upon receipt by
the Company of evidence reasonably satisfactory to it of the loss, theft,
destruction, or mutilation of this Warrant, and in case of loss, theft, or
destruction, of indemnity or security reasonably satisfactory to it, and upon
reimbursement to the Company of all reasonable expenses incidental thereto, and
upon surrender and cancellation of this Warrant, if mutilated, the Company will
make and deliver a new warrant of like tenor and dated as of such cancellation
in lieu of this Warrant; provided, however, if any Warrant of which the original
holder, its nominee, or any of its partners or affiliates is the registered
holder is lost, stolen or destroyed, the affidavit of the registered holder
setting forth the circumstances with respect to such loss, theft or destruction
shall be accepted as satisfactory evidence thereof, and no indemnification bond
or other security shall be required as a condition to the execution and delivery
by the Company of a new Warrant in replacement of such lost, stolen or destroyed
Warrant other than the registered holder's unsecured written agreement to
indemnify the Company.
11. Remedies - The Company stipulates that the remedies at law of the
holder of this Warrant in the event of any default or threatened default by the
Company in the performance of or compliance with any of the terms of this
Warrant are not adequate and may be enforced by a decree for the specific
performance of any agreement contained herein or by an injunction against a
violation of any of the terms hereof or otherwise.
12. Dissolution - In the event of any dissolution of the Company
following the transfer of all or substantially all of its properties or assets,
the Company, prior to such dissolution, shall at its expense deliver or cause to
be delivered the stock and other securities and property (including cash, where
applicable) receivable by the Holders of the Warrants after the effective date
of such dissolution pursuant to this Section 12 to a bank or trust company
having its principal office in [_________________], as trustee for the Holder or
Holders of the Warrants. Such bank or trust company shall be appointed by the
Company, by written notice to each Holder of a Warrant, for the purpose of
issuing Common Stock (or other securities) on the exercise of the Warrants,
exchanging thereafter any such issuance, exchange or replacement, as the case
may be, shall be made at such office by such Warrants pursuant to this Section
12, such bank or trust company shall have all the power and duties of a warrant
agent appointed pursuant to this Section 12 and shall accept, in its own name
for the account of the Company or such successor person as may be entitled
thereto, all amounts otherwise payable to the Company or such successor, as the
case may be, on exercise of this Warrant.
6
13. Notices, etc. - All notices and other communications from the
Company to the holder of this Warrant shall be mailed, by first class mail, to
such address as may have been furnished to the Company in writing by such
holder, or, until an address is so furnished, to and at the address of the last
holder of this Warrant who has so furnished an address to the Company (and shall
be deemed effective on the third day following the date of mailing). All
communications from the holder of this Warrant to the Company shall be mailed by
first class mail to the Company at it principal business address, or such other
address as may have been furnished to the holder in writing by the Company.
14. Miscellaneous - This Warrant and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. This Warrant shall be construed and enforced in accordance with and
governed by the laws of the State of Delaware. The headings in this Warrant are
for purposes of reference only, and shall not limit or otherwise affect any of
the terms hereof. This Warrant is being executed as an instrument under seal.
The invalidity or unenforceability of any provision hereof shall in no way
affect the validity or enforceability of any other provision.
15. "Market Stand-Off" Agreement - The Holder (and any permitted
transferee hereunder) hereby agrees that it will not, without the prior written
consent of the managing underwriter, during the period commencing on the date of
the final prospectus relating to the Company's initial public offering and
ending on the date specified by the Company and the managing underwriter (such
period not to exceed one hundred eighty (180) days) (i) lend, offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock (whether such shares or any such securities are then owned by the
Holder (or any other party bound by this Section 15) or are thereafter
acquired), or (ii) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
the Common Stock, whether any such transaction described in clause (i) or (ii)
above is to be settled by delivery of Common Stock or such other securities, in
cash or otherwise. The foregoing provisions of this Section 15 shall apply only
to the Company's initial public offering of equity securities and shall not
apply to the sale of any shares to an underwriter pursuant to an underwriting
agreement. The underwriters in connection with the Company's initial public
offering are intended third party beneficiaries of this Section 15 and shall
have the right, power and authority to enforce the provisions hereof as though
they were a party hereto. In order to enforce the foregoing covenant, the
Company may impose stop-transfer instructions with respect to the securities of
the Holder (and the shares or securities of every other person subject to the
foregoing restriction) until the end of such period.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
7
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
in its corporate name by its duly authorized officer and to be dated as of the
issue date set forth on the first page of this Warrant.
Attest: GIGABEAM CORPORATION
By:
-----------------------------
Name: Xxxxx Xxxxxxxxx
Title: Chief Executive Officer
[CORPORATE SEAL]
8
NOTICE OF EXERCISE OF WARRANT
TO: GIGABEAM CORPORATION
Pursuant to the terms of the attached Warrant, the undersigned hereby
elects:
______ to purchase ____ shares of Common Stock of GIGABEAM
CORPORATION (the "Company"), by the tender herewith
of payment of the Exercise Price of such shares in
full.
Please issue a certificate or certificates representing said shares in the name
of the undersigned or in such other name(s) as is/are specified immediately
below or, if necessary, on an attachment hereto:
Name Address
---- -------
DATE:
-----------------------------
HOLDER:
-------------------------------------
1
FORM OF ASSIGNMENT
(To be signed only on transfer of Warrant)
TO: GIGABEAM CORPORATION
For value received, the undersigned hereby sells, assigns, and
transfers unto __________________________ the right represented by the within
Warrant to purchase shares of equity securities of GIGABEAM CORPORATION, as
described in the Warrant, and appoints ____________________________ attorney to
transfer such right on the books of GIGABEAM CORPORATION with full power of
substitution in the premises.
Dated:
------------------------------------------
Printed Name:
----------------------------------
Signature:
--------------------------------------
(Signature must conform to name of Holder as
specified on the face of the Warrant)
Address:
---------------------------------------
Signed in the presence of:
-----------------------------------------------
