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EXHIBIT 4.12
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE
HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR ANY STATE SECURITIES OR BLUE SKY LAWS AND
MAY NOT BE OFFERED, SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE
ASSIGNED EXCEPT (1) PURSUANT TO A REGISTRATION STATEMENT WITH
RESPECT TO SUCH SECURITIES WHICH IS EFFECTIVE UNDER THE ACT OR (2)
PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT
RELATING TO THE DISPOSITION OF SECURITIES AND (3) IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES AND BLUE SKY LAWS.
WARRANT
WARRANT TO PURCHASE EIGHTY SIX THOUSAND TWO HUNDRED FIFTY (86,250)
SHARES OF COMMON STOCK
OF
SONUS COMMUNICATION HOLDINGS, INC.
Date of Issuance: August 4, 1`999
No.__________
THIS CERTIFIES that, in exchange for placement agent services provided in
the 10% Convertible Debenture Offering, X. Xxxxxxxxxx & Co., Inc., or its
assigns (in either case, the "Holder") is entitled to purchase, subject to the
provisions of this Warrant, from SONUS COMMUNICATION HOLDINGS, INC., a Delaware
corporation (the "Company"), at the price per share set forth in Section 8
hereof, the number of shares of the Company's common stock, $.0001 par value per
share (the "Common Stock"), set forth in Section 7 hereof. This Warrant is
referred to herein as the "Warrant" and the shares of Common Stock issuable
pursuant to the terms hereof are sometimes referred to herein as "Warrant
Shares".
Section 1. Exercise of Warrant. To exercise this Warrant in whole or in
part, the Holder shall deliver to the Company at its principal office, (a) a
written notice, in substantially the form of the exercise notice attached hereto
(the "Exercise Notice"), of the Holder's election to exercise this Warrant,
which notice shall specify the number of shares of Common Stock to be purchased,
(b) a check in the amount of the aggregate exercise price for the Warrant Shares
being purchased, and (c) this Warrant. The Company shall as promptly as
practicable, and in any event within twenty (20) days after delivery to the
Company of (i) the Exercise Notice, (ii) the check mentioned above, and (iii)
this Warrant, execute and deliver or cause to be executed and delivered, in
accordance with such notice, a certificate or certificates representing the
aggregate number of shares of Common Stock specified in such notice, provided
the Warrants specified in such notice have vested on or prior to the date such
notice is delivered. If the Holder elects to purchase, at any time, less than
the number of shares of Common Stock then purchasable under the terms of this
Warrant, the Company shall issue to the Holder a new Warrant exercisable into
the number of remaining shares of Common Stock purchasable under this Warrant.
Each certificate representing Warrant Shares shall bear the legend or legends
required by applicable securities laws as well as such other legend(s) the
Company requires to be included on certificates for its Common Stock.
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The Company shall pay all expenses, taxes and other charges payable in
connection with the preparation, issuance and delivery of such stock
certificates except that, in case such stock certificates shall be registered in
a name or names other than the name of the Holder, funds sufficient to pay all
stock transfer taxes that are payable upon the issuance of such stock
certificate or certificates shall be paid by the Holder at the time of
delivering the Exercise Notice. All shares of Common Stock issued upon the
exercise of this Warrant shall be validly issued, fully paid, and nonassessable.
This Warrant may be exercised on multiple occasions in amounts not less than 15%
of the original amount issued before the expiration of its term as described in
this Section 1. This Warrant will expire on November 17, 2004 (the "Expiration
Date").
Section 2. Reservation of Shares. The Company hereby covenants that at
all times during the term of this Warrant there shall be reserved for issuance
such number of shares of its Common Stock as shall be required to be issued upon
exercise of this Warrant.
Section 3. Fractional Shares. This Warrant may be exercised only for a
whole number of shares of Common Stock, and no fractional shares or scrip
representing fractional shares shall be issuable upon the exercise of this
Warrant.
Section 4. Transfer of Warrant and Warrant Shares. The Holder may sell,
pledge, hypothecate, or otherwise transfer this Warrant, in whole or in part,
only in accordance with and subject to the terms and conditions set forth in the
Subscription Agreement and then only if such sale, pledge, hypothecation, or
transfer is made in compliance with the Act or pursuant to an available
exemption from registration under the Act relating to the disposition of
securities, and is made in accordance with applicable State securities laws.
Section 5. Loss of Warrant. Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, or destruction of this Warrant, and of
indemnification satisfactory to it, or upon surrender and cancellation of this
Warrant, if mutilated, the Company will execute and deliver a new Warrant of
like tenor.
Section 6. Rights of the Holder. No provision of this Warrant shall be
construed as conferring upon the Holder the right to vote, consent, receive
dividends or receive notice other than as expressly provided herein. Prior to
exercise, no provision hereof, in the absence of affirmative action by the
Holder to exercise this Warrant, and no enumeration herein of the rights or
privileges of the Holder, shall give rise to any liability of the Holder for the
purchase price of any Warrant Shares or as a stockholder of the Company, whether
such liability is asserted by the Company or by creditors of the Company.
Section 7. Number of Warrant Shares. This Warrant shall be exercisable
for up to Eighty Six Thousand Two Hundred Fifty (86,250) shares of the Company's
Common Stock, as adjusted in accordance with this Agreement.
Section 8. Exercise Price; Redemption; Adjustment of Warrants.
(a) Determination of Exercise Price. The per share purchase price (the
"Exercise Price") for each of the Warrant Shares purchasable under this Warrant
shall be equal to One Dollar ($1.00).
(b) Redemption of Warrants. The Warrants are redeemable by the Company
at $0.05 per Warrant (the "Redemption Price"), upon 20 days notice, at the
discretion of the Company, when the following three conditions have been met:
(i) a registration statement has been filed under the Securities Act covering
the resale of the Shares, Warrants and the Warrant Shares, and such registration
statement is
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effective, (ii) a public market has developed for the Common Stock, and (iii)
the bid price of the Common Stock has closed at $4.50 or higher for ten
consecutive trading days. Redemption of the Warrants shall be automatically
effective and the Warrants shall be deemed cancelled upon the Company's delivery
of the Redemption Price to the Holder in accordance with this Agreement. Upon
receipt of the Redemption Price, Holder agrees to return any evidence of the
Warrants to the Company.
(c) Adjustments for Stock Dividends, Distributions and Subdivisions.
If the Company at any time or from time to time after the original issue date
shall declare or pay any dividend or distribution on the Common Stock payable in
Common Stock, or effect a subdivision of the outstanding shares of Common Stock
into a greater number of shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in Common Stock), then the number of
shares of Common Stock into which this Warrant is exercisable shall be increased
to an amount which is equal to the product of (i) the number of shares of Common
Stock for which this Warrant is exercisable immediately prior to the stock
dividend, distribution or subdivision, as the case may be, and (ii) a fraction,
the numerator of which is equal to the number of shares of Common Stock issued
and outstanding after giving effect to such stock dividend, distribution or
subdivision, and the denominator of which is the number of shares of Common
Stock issued and outstanding prior to such stock dividend, distribution or
subdivision. If the outstanding shares of Common Stock shall be divided or
increased because of a stock dividend or distribution, by stock split or
otherwise, into a greater number of shares of Common Stock, the Exercise Price
in effect immediately prior to such dividend, distribution or division shall,
concurrently with the effectiveness of such division, dividend or distribution,
be proportionately decreased.
(d) Adjustments for Combinations or Consolidation of Common Stock. If
the outstanding shares of Common Stock shall be combined or consolidated, by
reclassification, reverse stock split or otherwise, into a lesser number of
shares of Common Stock, then the number of shares of Common Stock into which
this Warrant is exercisable shall be decreased to an amount which is equal to
the product of (i) the number of shares of Common Stock for which this Warrant
is exercisable immediately prior to combination or consolidation, as the case
may be, and (ii) a fraction, the numerator of which is equal to the number of
shares of Common Stock issued and outstanding after giving effect to such
combination or consolidation, and the denominator of which is the number of
shares of Common Stock issued and outstanding prior to such combination or
consolidation. If the outstanding shares of Common Stock shall be combined or
consolidated, by reclassification, reverse stock split or otherwise, into a
lesser number of shares of Common Stock, the Exercise Price in effect
immediately prior to such combination or consolidation shall, concurrently with
the effectiveness of such combination or consolidation, be proportionately
increased.
(e) Adjustment for Mergers or Reorganization, etc. In case of any
consolidation or merger of the Company with or into another corporation or the
conveyance of all or substantially all of the assets of the Company to another
corporation, this Warrant shall be exercisable into the number of shares of
stock or other securities or property to which a holder of the number of shares
of Common Stock of the Company deliverable upon exercise of this Warrant would
have been entitled upon such consolidation, merger or conveyance; and, in any
such case, appropriate adjustment (as determined by the Board of Directors of
the Company) shall be made in the application of the provisions herein set forth
with respect to the rights and interest thereafter of the holder of this
Warrant, to the end that the provisions set forth herein shall thereafter be
applicable, as nearly as reasonable may be, in relation to any shares of stock
or other property thereafter deliverable upon the exercise of this Warrant.
(f) No Impairment. The Company will not, 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 to be observed or performed hereunder by the
Company, but will at all times in good faith assist in the carrying out of all
the provisions of this Section 8
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and in the taking of all such action as may be necessary or appropriate in order
to protect the exercise rights of the holder of this Warrant against impairment.
(g) Issue Taxes. The Company shall pay any and all issue and other
taxes that may be payable in respect of any issue or delivery of shares of
Common Stock on exercise of this Warrant, in whole or in part; provided,
however, that the Company shall not be obligated to pay any transfer taxes
resulting from any transfer requested by any holder in connection with any such
exercise.
(h) Reservation of Stock Issuable Upon Conversion. The Company shall
at all times reserve and keep available out of its authorized but unissued
shares of Common Stock, solely for the purpose of effecting the exercise of this
Warrant, such number of its shares of Common Stock as shall from time to time be
sufficient to effect the exercise of this Warrant; and if at any time the number
of authorized but unissued shares of Common Stock shall not be sufficient to
effect the exercise of this Warrant, the Company will take all appropriate
corporate action as may, in the opinion of its counsel, be necessary to increase
its authorized but unissued shares of Common Stock to such number of shares as
shall be sufficient for such purpose.
(i) Fractional Shares. No fractional share shall be issued upon the
exercise, in whole or in part, of this Warrant. If any exercise in whole or in
part of this Warrant would result in the issuance of a fraction of a share of
Common Stock, the Company shall, in lieu of issuing any fractional share, pay
the holder otherwise entitled to such fraction a sum in cash equal to the fair
market value of such fraction on the date of exercise (as determined in good
faith by the Board of Directors of the Company).
Section 9. Certain Distributions. In case the Company shall, at any time,
prior to the Expiration Date set forth in Section 1 hereof, declare any
distribution of its assets to holders of its Common Stock as a partial
liquidation, distribution or by way of return of capital, other than as a
dividend payable out of earnings or any surplus legally available for dividends,
then the Holder shall be entitled, upon the proper exercise of this Warrant in
whole or in part prior to the effecting of such declaration, to receive, in
addition to the shares of Common Stock issuable on such exercise, the amount of
such assets (or at the option of the Company a sum equal to the value thereof at
the time of such distribution to holders of Common Stock as such value is
determined by the Board of Directors of the Company in good faith), which would
have been payable to the Holder had it been a holder of record of such shares of
Common Stock on the record date for the determination of those holders of Common
Stock entitled to such distribution.
Section 10. Dissolution or Liquidation. In case the Company shall, at any
time prior to the Expiration Date set forth in Section 1 hereof, dissolve,
liquidate or wind up its affairs, the Holder shall be entitled, upon the proper
exercise of this Warrant in whole or in part and prior to any distribution
associated with such dissolution, liquidation, or winding up, to receive on such
exercise, in lieu of the shares of Common Stock to which the Holder would have
been entitled, the same kind and amount of assets as would have been distributed
or paid to the Holder upon any such dissolution, liquidation or winding up, with
respect to such shares of Common Stock had the Holder been a holder of record of
such share of Common Stock on the record date for the determination of those
holders of Common Stock entitled to receive any such dissolution, liquidation,
or winding up distribution.
Section 11. Reclassification or Reorganization. In case of any
reclassification, capital reorganization or other change of outstanding shares
of Common Stock of the Company (other than a change in par value, or from par
value to no par value, or from no par value to par value, or as a result of an
issuance of Common Stock by way of dividend or other distribution or of a
subdivision or combination), the Company shall cause effective provision to be
made so that the Holder shall have the right thereafter by exercising this
Warrant, to purchase the kind and amount of shares of stock and other
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securities and property receivable upon such reclassification, capital
reorganization or other change, by a holder of the number of shares of Common
Stock which might have been purchased upon exercise of this Warrant immediately
prior to such reclassification or change. Any such provision shall include
provision for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Warrant. The foregoing
provisions of this Section 11 shall similarly apply to successive
reclassifications, capital reorganizations and changes of shares of Common
Stock. In the event that in any such capital reorganization, reclassification,
or other change, additional shares of Common Stock shall be issued in exchange,
conversion, substitution or payment, in whole or in part, for or of a security
of the Company other than Common Stock, any amount of the consideration received
upon the issue thereof being determined by the Board of Directors of the Company
shall be final and binding on the Holder.
Section 12. Miscellaneous.
(a) Successors and Assigns. The terms and conditions of this
Agreement shall inure to the benefit of, and be binding upon, the respective
successors and assigns of the parties, except to the extent otherwise provided
herein. Nothing in this Agreement, express or implied, is intended to confer
upon any party, other than the parties hereto or their respective successors and
assigns, any rights, remedies, obligations or liabilities under or by reason of
this Agreement, except as expressly provided in this Agreement.
(b) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to the principles of conflict of laws thereof.
(c) Counterparts; Delivery by Facsimile. This Agreement may be
executed in one or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument. Delivery
of this Agreement may be effected by facsimile.
(d) Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
(e) Notices. Unless otherwise provided, any notice required or
permitted hereunder shall be given by personal service upon the party to be
notified, by nationwide overnight delivery service or upon deposit with the
United States Post Office, by certified mail, return receipt requested and:
i. if to the Company, addressed to SONUS COMMUNICATION
HOLDINGS, INC., 0000 Xxxxxx Xxxx., Xxxxx 0000, Xxxxxxxxx, Xxxxxxxx 00000,
Attention: W. Xxxx Xxxxxx, with a copy to Xxxxx X. Xxxxxx, III, Esquire,
XxXxxxx, Xxxxx Battle & Booth LLP, Seven Saint Xxxx Street, Suite 1000,
Baltimore, Maryland 21202-1626, or at such other address as the Company may
designate by notice to each of the Investors in accordance with the provisions
of this Section; and
ii. if to the Warrant holder, at the address indicated
on the signature pages hereof, or at such other addresses as such Holder may
designate by notice to the Company in accordance with the provisions of this
Section.
(f) Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either prospectively or
retroactively), only with the written consent of the Company and a majority in
interest of the Holders.
(g) Entire Agreement. This Agreement and the Subscription
Agreement (including the exhibits and schedules hereto) constitute the entire
agreement among the parties hereto with respect to the
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subject matter hereof and thereof and supersede all prior agreements,
understandings, negotiations and discussions, whether oral or written, of the
parties hereto.
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IN WITNESS WHEREOF, the undersigned hereby sets his hand and seal this
22nd day of November, 1999.
SONUS COMMUNICATION HOLDINGS, INC.
By:
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Name: Xxxxxxx X. Xxxx
Title: Chief Financial Officer
Investor Name: X. Xxxxxxxxxx & Co., Inc.
Investor Address: 000 X. 00xx Xx
Xxxxx 0000
Xxx Xxxx, XX 00000
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EXERCISE NOTICE
Dated: _____________________
The undersigned hereby irrevocably elects to exercise his, her or its
right to purchase _________ shares of the common stock, $.0001 par value per
share (the "Common Stock"), of SONUS COMMUNICATION HOLDINGS, INC., a Delaware
corporation (the "Company"), such right being pursuant to a Warrant dated
_________, 1999, and as issued to the undersigned by the Company, and remits
herewith the sum of $______ in payment for same in accordance with the Exercise
Price specified in Section 8 of said Warrant.
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ASSIGNMENT FORM
Dated: _____________________
For value received ____________________ hereby sells, assigns and
transfers unto
Name:
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(Please typewrite or print block letters)
Address:
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and appoints:
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Attorney to transfer the said Warrant on the books of SONUS COMMUNICATION
HOLDINGS, INC. with full power of substitution in the premises.
Signature:
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