EXHIBIT
4.3
THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT
OR PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.
WARRANT TO PURCHASE 3,363,229 SHARES OF STOCK
Company: FASTCOMM COMMUNICATIONS CORPORATION
Class of Stock: common stock
Warrant Price: $0.5575
Issue Date: June 8, 2001
Expiration Date: June 8, 2006
THIS WARRANT CERTIFIES THAT, for the agreed upon value of $1.00 and for
other good and valuable consideration, XXXXXX XXXXXX CORPORATION ("Holder") is
entitled to purchase the number of fully paid and nonassessable shares of common
stock set forth in Section 1.1 below (the "Shares") of FASTCOMM COMMUNICATIONS
CORPORATION, a Virginia corporation (the "Company"), at a price per Share (the
"Warrant Price") equal to $0.5575, as adjusted pursuant to Article 2 of this
Warrant, subject to the provisions and upon the terms and conditions set forth
of this Warrant.
ARTICLE 1. EXERCISE.
1.1 Shares. The Holder is entitled to purchase for a purchase
price per share equal to the Warrant Price 3,363,229 Shares of fully paid and
nonassessable shares of common stock of the Company.
1.2 Method of Exercise. Holder may exercise this Warrant by
delivering a duly executed Notice of Exercise in substantially the form attached
as Appendix 1 to the principal office of the Company. Holder shall deliver to
the Company a check for the aggregate Warrant Price for the Shares being
purchased.
1.3 No Rights of Shareholder. This Warrant does not entitle Holder
to any voting rights as a shareholder of the Company prior to the exercise
hereof.
1.4 Delivery of Certificate and New Warrant. The Company shall, on
or before the later of (a) the third (3rd) business day following the exercise
date and (b) the business day following the date of the Company's receipt of
this Warrant, issue and deliver to the Holder or its nominee (x) that number of
shares of common stock issuable upon exercise of the portion of this Warrant
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being exercised and (y) if this Warrant has not been fully exercised and has not
expired, a new Warrant representing the Shares not so acquired. Subject to the
last sentence of this Section 1.4, if the Company's transfer agent is
participating in the Depository Trust Company ("DTC") Fast Automated Securities
Transfer program, and so long as the certificates therefor are not required to
bear a legend, the Company shall cause its transfer agent to electronically
transmit the common stock issuable upon exercise to the Holder by crediting the
account of Holder or its nominee with DTC through its Deposit Withdrawal Agent
Commission system ("DTC Transfer"). If the aforementioned conditions to a DTC
Transfer are not satisfied, the Company shall deliver to Holder physical
certificates representing the common stock issuable upon such exercise. Further,
Holder may instruct the Company to deliver to Holder physical certificates
representing the common stock issuable upon such exercise in lieu of delivering
such shares by way of DTC Transfer.
1.5 Replacement of Warrants. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of loss, theft or destruction, on delivery of an
indemnity agreement reasonably satisfactory in form and amount to the Company
or, in the case of mutilation, or surrender and cancellation of this Warrant,
the Company at its expense shall execute and deliver, in lieu of this Warrant, a
new warrant of like tenor.
1.6 Repurchase on Sale, Merger, or Consolidation of the Company.
1.6.1 "Acquisition". For the purpose of this Warrant, "Acquisition"
means any sale, license, or other disposition of all or substantially all of the
assets of the Company, or any reorganization, consolidation, or merger of the
Company where the holders of the Company's securities before the transaction
beneficially own less than 50% of the outstanding voting securities of the
surviving entity after the transaction.
1.6.2 Assumption of Warrant. Upon the closing of any Acquisition,
the successor entity shall assume the obligations of this Warrant, and this
Warrant shall be exercisable for the same securities, cash, and property as
would be payable for the Shares issuable upon exercise of the unexercised
portion of this Warrant as if such Shares were outstanding on the record date
for the Acquisition and subsequent closing. The Warrant Price shall be adjusted
accordingly.
1.6.3 Purchase Right. Notwithstanding the foregoing, at the election
of Holder, the Company shall purchase the unexercised portion of this Warrant
for cash upon the closing of any Acquisition for an amount equal to (a) the fair
market value of any consideration that would have been received by Holder in
consideration of the Shares had Holder exercised the unexercised portion of this
Warrant immediately before the record date for determining the shareholders
entitled to participate in the proceeds of the Acquisition, less (b) the
aggregate Warrant Price of the Shares, but in no event less than zero.
ARTICLE 2. ADJUSTMENTS TO THE SHARES.
2.1 Stock Dividends, Splits, Etc. If the Company declares or pays
a dividend on its common stock payable in common stock, or other securities,
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subdivides the outstanding common stock into a greater amount of common stock,
then upon exercise of this Warrant, for each Share acquired, Holder shall
receive, without cost to Holder, the total number and kind of securities to
which Holder would have been entitled had Holder owned the Shares of record as
of the date the dividend or subdivision occurred.
2.2 Reclassification, Exchange or Substitution. Upon any
reclassification, exchange, substitution, or other event that results in a
change of the number and/or class of the securities issuable upon exercise or
conversion of this Warrant, Holder shall be entitled to receive, upon exercise
of this Warrant, the number and kind of securities and property that Holder
would have received for the Shares if this Warrant had been exercised
immediately before such reclassification, exchange, substitution, or other
event. The Company or its successor shall promptly issue to Holder a new Warrant
for such new securities or other property. The new Warrant shall provide for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Article 2 including, without limitation,
adjustments to the Warrant Price and to the number of securities or property
issuable upon exercise of the new Warrant. The provisions of this Section 2.2
shall similarly apply to successive reclassifications, exchanges, substitutions,
or other events.
2.3 Adjustments for Combinations, Etc. If the outstanding Shares
are combined or consolidated, by reclassification or otherwise, into a lesser
number of shares, the Warrant Price shall be proportionately increased.
2.4 No Impairment. The Company shall not, by amendment of its
Articles of Incorporation or through a 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 under this Warrant by the Company, but
shall at all times in good faith assist in carrying out of all the provisions of
this Article 2 and in taking all such action as may be necessary or appropriate
to protect Holder's rights under this Article against impairment. If the Company
takes any action affecting the Shares or its common stock other than as
described above that adversely affects Holder's rights under this Warrant, the
Warrant Price shall be adjusted downward and the number of Shares issuable upon
exercise of this Warrant shall be adjusted upward in such a manner that the
aggregate Warrant Price of this Warrant is unchanged.
2.5 Fractional Shares. No fractional Shares shall be issuable upon
exercise of the Warrant and the number of Shares to be issued shall be rounded
down to the nearest whole Share. If a fractional share interest arises upon any
exercise of the Warrant, the Company shall eliminate such fractional share
interest by paying Holder an amount computed by multiplying the fractional
interest by the fair market value of a full Share.
2.6 Certificate as to Adjustments. Upon each adjustment of the
Warrant Price, the Company at its expense shall promptly compute such
adjustment, and furnish Holder with a certificate of its Chief Financial Officer
setting forth such adjustment and the facts upon which such adjustment is based.
The Company shall, upon written request, furnish Holder a certificate setting
forth the Warrant Price in effect upon the date thereof and the series of
adjustments leading to such Warrant Price.
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ARTICLE 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY.
3.1 Representations and Warranties. The Company hereby represents
and warrants to the Holder that all Shares which may be issued upon the exercise
of the purchase right represented by this Warrant, shall, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable, and free of any liens
and encumbrances except for restrictions on transfer provided for herein or
under applicable federal and state securities laws. The Company shall at all
times reserve a sufficient number of shares of common stock for issuance upon
Holder's exercise of its rights hereunder.
3.2 Notice of Certain Events. If the Company proposes at any time
(a) to declare any dividend or distribution upon its common stock, whether in
cash, property, stock, or other securities and whether or not a regular cash
dividend; (b) to offer for subscription pro rata to the holders of any class or
series of its stock any additional shares of stock of any class or series or
other rights; (c) to effect any reclassification or recapitalization of common
stock; (d) to merge or consolidate with or into any other corporation, or sell,
lease, license, or convey all or substantially all of its assets, or to
liquidate, dissolve or wind up; or (e) to offer holders of registration rights
the opportunity to participate in an underwritten public offering of the
company's securities for cash, then, in connection with each such event, the
Company shall give Holder (1) at least 20 days prior written notice of the date
on which a record will be taken for such dividend, distribution, or subscription
rights (and specifying the date on which the holders of common stock will be
entitled thereto) or for determining rights to vote, if any, in respect of the
matters referred to in (c) and (d) above; (2) in the case of the matters
referred to in (c) and (d) above at least 20 days prior written notice of the
date when the same will take place (and specifying the date on which the holders
of common stock will be entitled to exchange their common stock for securities
or other property deliverable upon the occurrence of such event); and (3) in the
case of the matter referred to in (e) above, the same notice as is given to the
holders of such registration rights.
3.3 Registration Under Securities Act of 1933, as amended. The
Company hereby grants to Holder the registration rights set forth in Section 8
of the Debenture Purchase & Security Agreement.
ARTICLE 4 REDEMPTION
4.1 Company's Right to Redeem. At any time or times on or after
the date hereof, provided that the Conditions to Call (as defined in Section
4.2) have been satisfied, the Company shall have the right (a "Call"), in its
sole discretion, to redeem all of the amount that is exercisable under this
Warrant on the date the Company delivers a written notice (the "Notice of Call")
to the Holder (the "Exercise Amount"). The Holder shall upon receipt of a Notice
of Call have two (2) business days to pay the Exercise Amount of the Warrant to
the Company and the Company shall simultaneously issue to Holder the number of
shares of common stock issuable for the Exercise Amount.
4.2 Conditions of Exercise. "Conditions to Call" means the
following conditions: (i) on each day during the period beginning thirty (30)
trading days prior to the Notice of Call and ending on and including the date of
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the Call Date, a Registration Statement (as that term as defined in Section
8.2(a) of the Note Purchase & Security Agreement), shall be effective and
available for the sale of no less than the sum of (A) the number of shares of
common stock then issuable upon the exercise of the Warrant (without regard to
any limitations on exercise herein or elsewhere) and (B) the number of shares of
common stock previously issued upon exercise of the Warrant that are then held
by the Holder, (ii) on each day during the period beginning 30 trading days
prior to the date of the Notice of Call and ending on and including the Call
Date, the common stock is designated for quotation on the Nasdaq
Over-the-Counter Bulletin Board or a national securities exchange or market, is
not suspended from trading, and the closing price of the common stock on each
such date is equal to or greater than $1.12 per share (as adjusted pursuant to
Article II of this Warrant), (iii) none of an Event of Default (as that term is
defined in Section 11.10 of the Note Purchase & Security Agreement) or any event
that with the passage of time would constitute an Event of Default shall have
occurred; and (iv) the Company has sufficient shares of common stock immediately
available to satisfy its obligations to issue shares of common stock to the
Holder for the Eligible Exercise Amount as set forth herein. Notwithstanding the
above, the Holder may exercise this Warrant for common stock pursuant to Article
1 on or prior to the Company's Call Date.
4.3 Termination of Warrant. In the event of a Call, if the Holder
does not pay the Exercise Amount, in accordance with the procedures set forth in
Section 4.1, the Warrant shall expire.
4.4 Convertible Debenture. The Company's exercises of the Call
rights provided in this Section 4 shall not affect the Holder's conversion
rights under Section 7 of the Convertible Debenture.
ARTICLE 5. MISCELLANEOUS.
5.1 Term. This Warrant is exercisable, in whole or in part, at any
time and from time to time on or before the Expiration Date set forth above.
5.2 Legends. This Warrant and the Shares (and the securities
issuable, directly or indirectly, upon conversion of the Shares, if any) shall
be imprinted with a legend in substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED
WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR PURSUANT TO
RULE 144 OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
COMPANY AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.
5.3 Compliance with Securities Laws on Transfer. This Warrant and
the Shares issuable upon exercise of this Warrant may not be transferred or
assigned in whole or in part without compliance with applicable federal and
state securities laws by the transferor and the transferee (including, without
limitation, the delivery of investment representation letters and legal opinions
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reasonably satisfactory to the Company, as reasonably requested by the Company).
The Company shall not require Holder to provide an opinion of counsel if the
transfer is to an affiliate of Holder or such senior lender, or if there is no
material question as to the availability of current information as referenced in
Rule 144(c), Holder represents that it has complied with Rule 144(d) and (e) in
reasonable detail, the selling broker represents that it has complied with Rule
144(f), and the Company is provided with a copy of Holder's notice of proposed
sale.
5.4 Transfer Procedure. Subject to the provisions of Section 5.2
and Section 5.3 of this Warrant and Section 12.2 of the Debenture Purchase &
Security Agreement, Holder may transfer all or part of this Warrant or the
Shares issuable upon exercise of this Warrant by giving the Company notice of
the portion of the Warrant being transferred setting forth the name, address and
taxpayer identification number of the transferee and surrendering this Warrant
to the Company for reissuance to the transferee(s) (and Holder if applicable).
5.5 Notices. All notices and other communications from the Company
to the Holder, at such address as may have been furnished to the Company or the
Holder, or vice versa, shall be deemed delivered and effective at the time
delivered by hand; on the fifth (5th) business days after being mailed by
first-class registered or certified mail, postage prepaid; when receipt
acknowledged if telecopied; or on the next business day if sent by overnight
courier, as the case may be, in writing by the Company or such Holder from time
to time.
5.6 Waiver. 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.
5.7 Attorneys Fees. In the event of any dispute between the
parties concerning the terms and provisions of this Warrant, the party
prevailing in such dispute shall be entitled to collect from the other party all
costs incurred in such dispute, including reasonable attorneys' fees.
5.8 Governing Law. This Warrant shall be governed by and construed
in accordance with the laws of the Commonwealth of Virginia, without giving
effect to its principles regarding conflicts of law.
FASTCOMM COMMUNICATIONS CORPORATION
By:
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Title:
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APPENDIX 1
NOTICE OF EXERCISE
1. The undersigned hereby elects to purchase __________ shares of
the common stock of FastComm Communications Corporation pursuant to the terms of
the attached Warrant, and tenders herewith payment of the purchase price of such
shares in full.
2. Please issue a certificate or certificates representing said
shares in the name of the undersigned or in such other name as is specified
below:
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(Name)
-----------------------------
-----------------------------
(Address)
3. The undersigned represents it is acquiring the shares solely
for its own account and not as a nominee for any other party and not with a view
toward the resale or distribution thereof except in compliance with applicable
securities laws.
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(Signature)
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(Date)
