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EXHIBIT 4.6
NEITHER THIS WARRANT NOR ANY OF THE SECURITIES ISSUABLE UPON EXERCISE HEREOF
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES LAW. NO TRANSFER OF THIS WARRANT OR
OF THE SECURITIES ISSUABLE UPON EXERCISE HEREOF SHALL BE VALID OR EFFECTIVE
UNLESS (A) SUCH TRANSFER IS MADE PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES
LAW, OR (B) THE HOLDER SHALL DELIVER TO THE COMPANY AN OPINION OF COUNSEL IN
FORM AND SUBSTANCE REASONABLY ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND OF ANY
APPLICABLE STATE SECURITIES LAW.
WARRANT NO. 2 DECEMBER 28, 2000
USINTERNETWORKING, INC.
COMMON STOCK PURCHASE WARRANT
USinternetworking, Inc., a Delaware corporation (the "COMPANY"), hereby
grants to [ NAME OF COMPANY ], or its permitted assigns or transferees and each
such permitted assignee or transferee being referred to herein as a "HOLDER" and
collectively as the "HOLDERS") the right to purchase, at any time after the
Original Issue Date (as defined below) and from time to time on and after the
date hereof until the Expiration Date (as defined below), [ AMOUNT OF SHARES ]
fully paid and non-assessable shares of Common Stock of the Company, $.001 par
value per share (the "COMMON STOCK"), to be purchased on the terms and subject
to the conditions set forth below.
This Warrant was originally issued on December 28, 2000 (the "ORIGINAL
ISSUE DATE"). This Warrant shall expire and be of no further force or effect on
the date (the "EXPIRATION DATE") five (5) years from the Original Issue Date.
Appropriate provisions shall be made in accordance with Section 3.2 below so
that holder shall have the right to receive a similar warrant (the "REPLACEMENT
WARRANT") for the remainder of such term in the event of a merger,
consolidation, reorganization or similar transaction.
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1. EXERCISE OF WARRANT.
1.1 EXERCISE AND VESTING. Subject to adjustment as
hereinafter provided, the rights represented by this Warrant are exercisable on
and after the Original Issue Date until the Expiration Date, at a price per
share (the "EXERCISE PRICE") of the Common Stock issuable hereunder
(hereinafter, "WARRANT SHARES") of $ 4.08, subject to adjustment as set forth
in Section 3. Except as provided below in Section 1.2, the Exercise Price shall
be payable in cash, by certified or official bank check or by wire transfer as
hereinafter provided.
1.2 NET ISSUANCE ELECTION.
The holder may elect to receive, without the payment by the holder
of any additional consideration, shares equal to the value of this Warrant or
any portion hereof by the surrender of this Warrant or such portion to the
Company, with the net issue election notice annexed hereto as Annex A duly
executed, at the office of the Company. Thereupon, the Company shall issue to
the holder such number of fully paid and nonassessable shares of Common Stock as
is computed using the following formula:
X = Y (A - B)
---------
A
where
X = the number of shares to be issued to the Holder pursuant to this Section
1.2;
Y = the number of shares covered by this Warrant in respect of which the net
issue election is made pursuant to this Section 1.2;
A = the fair market value of one share of Common Stock shall be the closing
price of one share of Common Stock (on the last trading date preceding the date
the net issuance election is made) on any national securities exchange or
automated quotation system on which the Common Stock is listed or traded;
provided that (i) if the election occurs in connection with the registration of
securities, then the fair market value shall be the per share proceeds received
by the Company, and (ii) if the Common Stock is not so listed or traded, the
fair market value shall be the as determined in good faith by the Board, at the
time the net issue election is made pursuant to this Section 1.2; and
B = the Purchase Price in effect under this Warrant at the time the net issue
election is made pursuant to this Section 1.2.
The Board shall promptly respond in writing to an inquiry by the Holder as to
the fair market value of one share of Common Stock.
Upon surrender of this Warrant with a duly executed Notice of Exercise
in the form of Annex A hereto, together with payment of the Exercise Price for
the Warrant Shares purchased, at the Company's principal executive offices
presently located at One USi Plaza, Annapolis, MD 21401, or at such other
address as the Company shall have advised the holder in writing (the "DESIGNATED
OFFICE"), the holder shall be entitled to receive a certificate or certificates
for the
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Warrant Shares so purchased. The Company agrees that the Warrant Shares shall be
deemed to have been issued to the holder as of the close of business on the date
on which this Warrant shall have been surrendered together with the Notice of
Exercise and payment for such Warrant Shares.
1.3 RESTRICTION ON SALE. Holder or its assigns shall not sell
Warrant Shares during the forty five (45) days following such exercise.
2. TRANSFER; ISSUANCE OF STOCK CERTIFICATES; RESTRICTIVE LEGENDS.
2.1 TRANSFER. Subject to compliance with the restrictions on
transfer set forth in this Section 2, each transfer of this Warrant and all
rights hereunder, in whole or in part, shall be registered on the books of the
Company to be maintained for such purpose, upon surrender of this Warrant at the
Designated Office, together with a written assignment of this Warrant in the
form of Annex B hereto, duly executed by the holder or its agent or attorney.
Upon such surrender and delivery, the Company shall execute and deliver a new
Warrant or Warrants in the name of the assignee or assignees and in the
denominations specified in such instrument of assignment, and shall issue to the
assignor a new Warrant evidencing the portion of this Warrant not so assigned,
if any. A Warrant, if properly assigned in compliance with the provisions
hereof, may be exercised by the new holder for the purchase of Warrant Shares
without having a new Warrant issued. All Warrants issued upon any assignment of
Warrants shall be the valid obligations of the Company, evidencing the same
rights, and entitled to the same benefits as the Warrants surrendered upon such
registration of transfer or exchange.
2.2 STOCK CERTIFICATES. Certificates for the Warrant Shares
shall be delivered to the holder within a reasonable time after the rights
represented by this Warrant have been exercised pursuant to Section 1, and a new
Warrant representing the share, shares or fraction of a share of Common Stock,
if any, with respect to which this Warrant shall not then have been exercised
shall also be issued to the holder within such time. The issuance of
certificates for Warrant Shares upon the exercise of this Warrant shall be made
without charge to the holder hereof including, without limitation, any tax that
may be payable in respect thereof; provided, however, that the Company shall not
be required to pay any income tax to which the holder hereof may be subject in
connection with the issuance of this Warrant or the Warrant Shares.
2.3 RESTRICTIVE LEGENDS. Except as otherwise provided in this
Section 2, each certificate for Warrant Shares initially issued upon the
exercise of this Warrant, and each
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certificate for Warrant Shares issued to any subsequent transferee of any such
certificate, shall be stamped or otherwise imprinted with a legend in
substantially the following form:
THE [SECURITY] [SHARES] REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES LAW. NO TRANSFER OF THE
[SECURITY] [SHARES] REPRESENTED BY THIS CERTIFICATE SHALL BE VALID OR
EFFECTIVE UNLESS (A) SUCH TRANSFER IS MADE PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, OR (B) THE HOLDER
SHALL DELIVER TO THE COMPANY AN OPINION OF COUNSEL IN FORM AND
SUBSTANCE REASONABLY ACCEPTABLE TO THE COMPANY THAT SUCH PROPOSED
TRANSFER IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT.
Notwithstanding the foregoing, the legend requirements of this Section 2.3 shall
terminate as to any particular Warrant or Warrant Share when (i) the Company
shall have received from the holder thereof an opinion of counsel that such
legend is not required in order to ensure compliance with the Securities Act, or
(ii) the Warrant Shares have been registered using an appropriate filing under
the Securities Act. Whenever the restrictions imposed by this Section 2.3 shall
terminate, the holder hereof or of Warrant Shares, as the case may be, shall be
entitled to receive from the Company without cost to such holder a new Warrant
or certificate for Warrant Shares of like tenor, as the case may be, without
such restrictive legend.
3. ADJUSTMENT OF NUMBER OF SHARES; EXERCISE PRICE; NATURE OF SECURITIES
ISSUABLE UPON EXERCISE OF WARRANTS.
3.1 EXERCISE PRICE; ADJUSTMENT OF NUMBER OF SHARES. The
Exercise Price set forth in Section 1 hereof and the number of shares
purchasable hereunder shall be subject to adjustment from time to time as
hereinafter provided.
3.2 REORGANIZATION, RECLASSIFICATION, CONSOLIDATION, MERGER OR
SALE. If any capital reorganization or reclassification of the capital stock of
the Company, or any consolidation or merger of the Company with another entity,
or the sale of all or substantially all of the Company's assets to another
person or entity (collectively referred to as a "TRANSACTION") shall be effected
in such a way that holders of Common Stock shall be entitled to receive stock,
securities, cash or assets with respect to or in exchange for Common Stock,
then, as a condition of such Transaction, reasonable, lawful and adequate
provisions shall be made whereby the holder of this Warrant shall thereafter
have the right to receive, upon the basis and upon the terms and conditions
specified in this Warrant, a Replacement Warrant issued by the surviving
company, acquiring company, reclassified company or other entity that accurately
reflects the nature of the Transaction. The Replacement Warrant shall entitle
holder to purchase such
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number, amount and like kind of shares of stock immediately theretofore
purchasable and receivable upon the exercise of the rights represented hereby as
if such shares were outstanding immediately prior to the Transaction, and in any
such case appropriate provision shall be made with respect to the rights and
interest of the holders to the end that the provisions hereof (including,
without limitation, provisions for adjustments of the Exercise Price and of the
number of Warrant Shares purchasable and receivable upon the exercise of this
Warrant and the remaining term of this Warrant) shall thereafter be applicable,
as nearly as may be practicable, in relation to any shares of stock or
securities thereafter deliverable upon the exercise hereof.
3.3 STOCK SPLITS, STOCK DIVIDENDS AND REVERSE STOCK SPLITS. In
case at any time the Company shall subdivide its outstanding shares of Common
Stock into a greater number of shares, or shall declare and pay any stock
dividend with respect to its outstanding stock that has the effect of increasing
the number of outstanding shares of Common Stock, the Exercise Price in effect
immediately prior to such subdivision or stock dividend shall be proportionately
reduced and the number of Warrant Shares purchasable pursuant to this Warrant
immediately prior to such subdivision or stock dividend shall be proportionately
increased, and conversely, in case at any time the Company shall combine its
outstanding shares of Common Stock into a smaller number of shares, the Exercise
Price in effect immediately prior to such combination shall be proportionately
increased and the number of Warrant Shares purchasable upon the exercise of this
Warrant immediately prior to such combination shall be proportionately reduced.
3.4 DISSOLUTION, LIQUIDATION OR WIND-UP. In case the Company
shall, at any time prior to the exercise of this Warrant, dissolve, liquidate or
wind up its affairs, the holder hereof shall be entitled, upon the exercise of
this Warrant, to receive, in lieu of the Warrant Shares which the holder would
have been entitled to receive, the same kind and amount of assets as would have
been issued, distributed or paid to such holder upon any such dissolution,
liquidation or winding up with respect to such Warrant Shares, had such holder
hereof been the holder of record of the Warrant Shares receivable upon the
exercise of this Warrant on the record date for the determination of those
persons entitled to receive any such liquidating distribution.
3.5 ACCOUNTANT'S CERTIFICATE. In each case of an adjustment in
the Exercise Price, number of Warrant Shares or other stock, securities or
property receivable upon the exercise of this Warrant, the Company shall
compute, and upon the holder's request shall at the Company's expense cause
independent public accountants of recognized standing selected by the Company
and reasonably acceptable to the holder to certify such computation, such
adjustment in accordance with the terms of this Warrant and prepare a
certificate setting forth such adjustment and showing in detail the facts upon
which such adjustment is based, including a statement of (i) the number of
shares of Common Stock of each class outstanding or deemed to be outstanding,
(ii) the adjusted Exercise Price and (iii) the number of Warrant Shares issuable
upon exercise of this Warrant. The Company will forthwith mail a copy of each
such certificate to the holder hereof. In the event that the holder disputes
such adjustment, the holder shall be entitled to select an additional firm of
independent certified public accountants of national
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standing and paid for by the holder to certify such adjustment and the Company
and the holder shall use their good faith best efforts to agree on such
adjustment based on the reports of the two accounting firms. In the event that
the Company and the holder are still unable to reach agreement as to such
adjustment, the Company and the holder agree to submit such determination to
binding arbitration pursuant to Section 11. Upon determination of such
adjustment, the Board of Directors shall forthwith make the adjustments
described therein.
3.6 DEFINITION OF COMMON STOCK. As used in this Section 3, the
term "COMMON STOCK" shall mean and include the Company's authorized common stock
of any class or classes and any securities convertible into or exchangeable for
such common stock.
4. EXTRAORDINARY EVENTS.
In the event that the Company at any time after the Original
Issue Date shall pay a special dividend or make any other distribution with
respect to its Common Stock (or any other shares of the capital stock of the
Company for which this Warrant becomes exercisable pursuant to Section 3 above)
other than in the ordinary course of business in the form of cash or other
property (other than (a) a distribution to which the provisions of Section 3.2
apply or (b) a stock dividend subject to the provisions of Section 3.3 above),
at the election of the holder, either:
(i) The Exercise Price in effect immediately prior to the
record date with respect to such distribution or issuance (the
"ADJUSTMENT DATE") shall forthwith be adjusted effective on the
Adjustment Date to a price determined by multiplying such Exercise
Price by a fraction (x) the numerator of which shall be the average
closing price of the Company's Common Stock as publicly reported on the
primary exchange or automated inter-dealer quotation system on which it
is listed (the "EXCHANGE") on the next trading day following the
Adjustment Date (the "POST-EVENT MARKET PRICE"), and (y) the
denominator of which shall be the average closing price of the
Company's Common Stock as publicly reported on the Exchange over the
ten trading days preceding the Adjustment Date (the "PRE-EVENT MARKET
PRICE") and after each such adjustment of the Exercise Price, the total
number of shares then issuable upon exercise of the Warrant shall be
adjusted by multiplying such number of shares issuable upon exercise of
the Warrant by a fraction (x) the numerator of which shall be the
amount obtained by subtracting the Exercise Price in effect immediately
prior to the Adjustment Date from the Pre-Event Market Price for the
Company's Common Stock and (y) the denominator of which shall be the
amount obtained by subtracting the Exercise Price in effect immediately
following the Adjustment Date from the Post-Event Market Price for the
Company's Common Stock; or
(ii) The Company shall deliver to the holder hereof a dilution
fee (a "DILUTION FEE") payable in cash on the date of payment of such
dividend or other distribution equal to the number of shares of Common
Stock (or such other shares of stock) issuable upon
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exercise of this Warrant on such date multiplied by the amount of cash
and the fair value of any other property distributed with respect to
each share of Common Stock (or such other stock). The fair value of any
such other property shall mean the fair market value thereof on the
record date for such dividend, as determined by the Board of Directors
of the Company in good faith and supported, upon the request of the
holder, by an opinion of an investment banking firm or appraisal firm
of recognized national standing selected by the Company and acceptable
to the holder.
Notwithstanding the foregoing, in no event shall the Exercise Price be
increased or the number of Warrant Shares issuable upon exercise hereof be
reduced pursuant to the provisions of this Section 4.
5. REGISTRATION; EXCHANGE AND REPLACEMENT OF WARRANT; RESERVATION OF
SHARES.
The Company shall keep at the Designated Office a register in
which the Company shall provide for the registration, transfer and exchange of
this Warrant. The Company shall not at any time, except upon the dissolution,
liquidation or winding-up of the Company, close such register so as to result in
preventing or delaying the exercise or transfer of this Warrant.
The Company may deem and treat the person in whose name this
Warrant is registered as the holder and owner hereof for all purposes and shall
not be affected by any notice to the contrary, until presentation of this
Warrant for registration or transfer as provided in this Section 5.
Upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant, and upon surrender and cancellation of this Warrant, if mutilated, the
Company will make and deliver a new Warrant of like tenor, in lieu of this
Warrant without requiring the posting of any bond or the giving of any security.
The Company shall at all times reserve and keep available out
of its authorized shares of Common Stock, solely for the purpose of issuance
upon the exercise of this Warrant, such number of shares of Common Stock as
shall be issuable upon the exercise hereof. The Company covenants and agrees
that, upon exercise of this Warrant and payment of the Exercise Price all
Warrant Shares issuable upon such exercise shall be duly and validly issued,
fully paid and non-assessable.
6. NOTICES.
All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed to have been duly made when
delivered personally, or mailed by registered or certified mail, return receipt
requested. Notice may also be given by facsimile
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transmission (effective when receipt is acknowledged by a writing other than a
sending machine generated notice of delivery) or by overnight delivery service
(effective the next business day):
(a) If to the holder of this Warrant, to the address of such
holder as shown on the books of the Company; or
(b) If to the Company, to the address set forth in Section 1
of this Warrant;
or at such other address as the holder or the Company may hereafter have advised
the other.
7. SUCCESSORS.
All the covenants, agreements, representations and warranties
contained in this Warrant shall bind the parties hereto and their respective
heirs, executors, administrators, distributees, successors, assigns and
transferees.
8. GOVERNING LAW.
This Warrant shall be construed and enforced in accordance
with, and governed by, the laws of the State of New York (not including the
choice of law rules thereof) regardless of the jurisdiction of creation or
domicile of the Company or its successors or of the holder at any time hereof.
The exclusive jurisdiction for all actions and proceedings arising out of or
relating to this Agreement which are not subject to arbitration pursuant to
Section 11 shall be in any New York state or federal court thereof.
9. ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS.
This Warrant sets forth the entire understanding of the
parties with respect to the transactions contemplated hereby. The failure of any
party to seek redress for the violation or to insist upon the strict performance
of any term of this Warrant shall not constitute a waiver of such term and such
party shall be entitled to enforce such term without regard to such forbearance.
This Warrant may be amended, and any breach of or compliance with any covenant,
agreement, warranty or representation may be waived, only if the Company has
obtained the written consent or written waiver of the holder, and then such
consent or waiver shall be effective only in the specific instance and for the
specific purpose for which given.
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10. SEVERABILITY; HEADINGS.
If any term of this Warrant as applied to any person or to any
circumstance is prohibited, void, invalid or unenforceable in any jurisdiction,
such term shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or invalidity without in any way affecting any other term of this
Warrant or affecting the validity or enforceability of this Warrant or of such
provision in any other jurisdiction. The Section headings in this Warrant have
been inserted for purposes of convenience only and shall have no substantive
effect.
11. ARBITRATION. In the event a dispute occurs with respect to any claim,
dispute or other matter arising out of or relating to this Warrant, the parties
hereto will promptly attempt to settle such dispute through consultation and
negotiation in good faith and in a spirit of mutual cooperation. If agreement is
reached concerning the resolution of such dispute, then such agreement shall be
final, conclusive and binding on the parties hereto. If, on or before the tenth
day after written notice of such dispute is given by one party to the other
parties, such dispute has not been resolved by the agreement of all the parties,
such dispute shall be settled by an expedited arbitration proceeding conducted
in accordance with the then-current CPR Non-Administered Arbitration Rules and
the Federal Rules of Evidence in Washington, D.C. by a panel of three
arbitrators who shall have experience relating to the dispute or matter to be
resolved. Each of the Company and the holder shall select an arbitrator, and
those two arbitrators shall select a third arbitrator. The parties hereto shall
provide such arbitrators with such information as may be reasonably requested in
connection with the arbitration of such dispute and shall otherwise cooperate
with each other and such arbitrators in good faith and with the goal of
resolving such dispute as promptly as reasonably practicable. The arbitrators'
decision and award with respect to the dispute referred to shall be final and
binding on the parties hereto and may be entered in any court with jurisdiction,
and the parties hereto shall abide by such decision and award. The cost of the
arbitration proceeding and any proceeding in court to confirm or to vacate any
arbitration award, as applicable (including, without limitation, attorneys' fees
and costs), shall be borne by the unsuccessful party (if any) and shall be
awarded as part of the arbitrators' award; provided however, that if the
arbitrators do not find one party to be unsuccessful then the cost of the
arbitral proceeding shall be paid equally by the parties hereto.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be
duly executed as of the date first written above.
USINTERNETWORKING, INC.
By:________________________
Name:
Title:
Accepted and agreed:
[ NAME OF COMPANY ]
By:_______________________________
Name: ____________________________
Title: ___________________________
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ANNEX A
NOTICE OF EXERCISE
(TO BE EXECUTED UPON PARTIAL OR FULL
EXERCISE OF THE WITHIN WARRANT)
THE UNDERSIGNED HEREBY IRREVOCABLY ELECTS TO EXERCISE THE
RIGHT TO PURCHASE ___________ SHARES OF COMMON STOCK OF
USINTERNETWORKING, INC. COVERED BY THE WARRANT ACCORDING TO THE
CONDITIONS HEREOF AND HEREWITH MAKES PAYMENT OF THE EXERCISE PRICE OF
SUCH SHARES IN FULL IN THE AMOUNT OF $____________________
OR
NET ISSUE ELECTION NOTICE
The undersigned hereby elects under Section 1.2 of this Warrant to surrender the
right to purchase shares of Common Stock pursuant hereto. The certificates for
the shares issuable upon such net issue election shall be issued in the name of
the undersigned or as otherwise indicated below.
.
By:________________________________
(Signature of Registered Holder)
Dated:_______________
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ANNEX B
ASSIGNMENT FORM
FOR VALUE RECEIVED the undersigned registered owner of this
Warrant hereby sells, assigns and transfers unto the Assignee named below all of
the rights of the undersigned under this Warrant, with respect to the number of
shares of Common Stock set forth below:
No. of Shares of
Name and Address of Assignee Common Stock
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and does hereby irrevocably constitute and appoint ________ _____________
attorney-in-fact to register such transfer onto the books of USinternetworking,
Inc. maintained for the purpose, with full power of substitution in the
premises.
Dated:___________________ Print Name:___________________
Signature:____________________
Witness:______________________
NOTICE: The signature on this assignment must correspond with the name as
written upon the face of this Warrant in every particular, without
alteration or enlargement or any change whatsoever.
