EXHIBIT 10.12
WARRANT
TO PURCHASE COMMON STOCK
OF
V-ONE CORPORATION
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THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR UNDER ANY APPLICABLE STATE STATUTES. SUCH SECURITIES
MAY NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT RELATING TO SUCH
DISPOSITION OR AN EXEMPTION THEREFROM UNDER THE ACT AND THE RULES AND
REGULATIONS THEREUNDER OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
THAT THE SECURITIES MAY BE SO DISPOSED OF WITHOUT BEING REGISTERED.
Date of Issuance: July 26, 2002
WARRANT TO PURCHASE SHARES
OF COMMON STOCK
This is to Certify that, FOR VALUE RECEIVED, _________________ or assigns
("Holder"), is entitled to purchase, subject to the provisions of this Warrant,
from V-ONE CORPORATION, a Delaware corporation (the "Company"), such number of
fully paid, validly issued, and non-assessable shares of Common Stock, par value
$0.001 per share, of the Company ("Common Stock ") as is obtained by dividing
$__________, the principal amount of the 8% Secured Convertible Promissory Notes
(the "Notes") purchased by Xxxxxx from the Company, by $1.00. This Warrant shall
be exercisable at an exercise price of $0.50 per share, subject to the Exercise
Floor (as defined below). This Warrant may be exercised at any time or from time
to time during the period (the "Exercise Period"): (i) from the date six months
immediately after the date hereof, and (ii) until 5:00 p.m. New York City time
on July 26, 2007 (the "Termination Date"). NOTWITHSTANDING ANY OTHER PROVISION
OF THIS WARRANT, THE COMPANY SHALL HAVE THE RIGHT TO REQUIRE THE EXERCISE OF
THIS WARRANT (IN ACCORDANCE WITH ITS TERMS) UPON 30 DAYS WRITTEN NOTICE IF THE
CLOSING SALES PRICES OF THE COMPANY'S COMMON STOCK, AS TRADED ON THE NASDAQ,
SHALL BE EQUAL TO OR GREATER THAN $3.00 FOR ANY CONSECUTIVE 20 TRADING DAYS, AND
IF THE COMMON STOCK UNDERLYING THE WARRANT SHALL HAVE BEEN REGISTERED PURSUANT
TO THE SECURITIES ACT OF 1933, AS AMENDED. (IF NOT EXERCISED WITHIN SUCH 30 DAY
PERIOD, THIS WARRANT SHALL AUTOMATICALLY EXPIRE AND TERMINATE WITHOUT ANY OTHER
OR FURTHER ACTION BY THE COMPANY.) The number of shares of Common Stock to be
received upon the exercise of this Warrant and the price to be paid for each
share of Common Stock underlying this Warrant may be adjusted from time to time
as hereinafter set forth. The shares of Common Stock deliverable upon exercise
of this Warrant, and as adjusted from time to time, are hereinafter sometimes
referred to as "Warrant Shares" and the exercise price of a share of Common
Stock in effect at any time and as adjusted from time to time is hereinafter
sometimes referred to as the "Exercise Price." Notwithstanding anything to the
contrary, this Warrant may not be exercised at any time at an Exercise Price
less than the greater of book or market value of Common Stock ("Exercise Price
Floor") as of the date of that certain Note Purchase Agreement between the
purchaser of this Warrant and the Company, which provides, among other things,
for the issuance of this Warrant, as applied under NASDAQ Marketplace Rule
4350(i)(1)(D).
(a) EXERCISE OF WARRANT.
(1) This Warrant may be exercised in whole or in part at any time or
from time to time during the Exercise Period; provided, however, that if such
day is a day on which banking institutions in the State of New York are
authorized by law to close, then on the next succeeding day which shall not be
such a day. This Warrant may be exercised by presentation and surrender hereof
to the Company at its principal office, or, at the Company's option, at the
office of its stock transfer agent, if any, with the Purchase Form annexed
hereto duly executed and accompanied by payment of the Exercise Price for the
number of Warrant Shares specified in such form. As soon as practicable after
each such exercise of the Warrant, but not later than seven (7) days from the
date of such exercise, the Company shall issue and deliver to the Holder a
certificate or certificate for the Warrant Shares issuable upon such exercise,
registered in the name of the Holder or its designee. If this Warrant should be
exercised in part only, the Company shall, upon surrender of this Warrant for
cancellation, execute and deliver a new Warrant evidencing the rights of the
Holder thereof to purchase the balance of the Warrant Shares purchasable
hereunder. Upon receipt by the Company of this Warrant at its office, or by the
stock transfer agent of the Company at its office, during the Exercise Period,
in proper form for exercise, the Holder shall be deemed to be the holder of
record of the Warrant Shares issuable upon such exercise, notwithstanding that
the stock transfer books of the Company shall then be closed or that
certificates representing such Warrant Shares shall not then be physically
delivered to the Holder.
(2) The Holder may, at its option, exercise this Warrant, in whole or in
part (a "Cashless Exercise"), into the number of Warrant Shares determined in
accordance with this Section (without payment by the Holder of any exercise
price or any cash or other consideration), by surrendering the Warrant
Certificate at the principal office of the Company or at the office of its stock
transfer agent, accompanied by a notice stating such Holder's intent to effect
such Cashless Exercise, the number of Warrant Shares to be exchanged and the
date on which the Holder requests that such Cashless Exercise occur (the "Notice
of Cashless Exercise"). The Cashless Exercise shall take place on the date
specified in the Notice of Cashless Exercise or, if later, the date the Notice
of Cashless Exercise is received by the Company (the "Cashless Exercise Date").
Certificates for the shares issuable upon such Cashless Exercise and, if
applicable, a new warrant of like tenor evidencing the balance of the shares
remaining subject to such Warrant, shall be issued as of the Cashless Exercise
Date and delivered to the Holder within seven (7) days following the Cashless
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Exercise Date. In connection with any Cashless Exercise, a Warrant shall
represent the right to subscribe for and acquire the number of Warrant Shares
(rounded to the next highest integer) equal to (i) the number of Warrant Shares
specified by the Holder in its Notice of Cashless Exercise (the "Total Number")
less (ii) the number of Warrant Shares equal to the quotient obtained by
dividing (A) the product of the Total Number and the existing Exercise Price by
(B) the current market value of a share of Common Stock. Current market value
shall have the meaning set forth herein, except that for purposes hereof, the
date of exercise shall mean the Cashless Exercise Date.
(b) RESERVATION OF SHARES. The Company shall at all times reserve for
issuance and/or delivery upon exercise of this Warrant such number of shares of
its Common Stock as shall be required for issuance and delivery upon exercise of
the Warrant.
(c) FRACTIONAL SHARES. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. With
respect to any fraction of a share called for upon any exercise hereof, the
Company shall pay to the Holder an amount in cash equal to such fraction
multiplied by the current market value of a share, determined as follows:
(1) If the Common Stock is listed on a National Securities Exchange
or admitted to unlisted trading privileges on such exchange or listed for
trading on the NASDAQ system, the current market value shall be the last
reported sale price of the Common Stock on such exchange or system on the
last business day prior to the date of exercise of this Warrant or if no
such sale is made on such day, the average closing bid and asked prices
for such day on such exchange or system; or
(2) If the Common Stock is not so listed or admitted to unlisted
trading privileges, the current market value shall be the mean of the last
reported bid and lowest asked prices reported by the National Quotation
Bureau, Inc. on the last business day prior to the date of the exercise of
this Warrant; or
(3) If the Common Stock is not so listed or admitted to unlisted
trading privileges and bid and asked prices are not so reported, the
current market value shall be an amount, not less than book value thereof
as at the end of the most recent fiscal quarter-end of the Company ending
prior to the date of the exercise of the Warrant, determined in such
reasonable manner as may be prescribed by the Board of Directors of the
Company.
(d) HOLDER INVESTMENT IN WARRANT. The Holder, by acceptance of this
Warrant, covenants and agrees that it is acquiring the Warrant evidenced hereby
and the Warrant Shares issuable upon exercise of this Warrant (collectively, the
"Warrant Securities") for its own account and not with a view to distribution.
The Holder acknowledges that the Warrant Securities have not been registered
under the Act, or any state securities or "blue sky" laws, and may not be sold
or transferred except pursuant to an effective registration statement thereunder
or under an exemption therefrom.
(e) EXCHANGE, TRANSFER, ASSIGNMENT OR LOSS OF WARRANT. This Warrant is
exchangeable and transferable, without expense, at the option of the Holder,
upon presentation and surrender hereof to the Company or, at the Company's
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option, at the office of its stock transfer agent, if any, for other Warrants of
different denominations entitling the holder thereof to purchase in the
aggregate the same number of shares of Common Stock purchasable hereunder. Upon
compliance with this paragraph and surrender of this Warrant to the Company at
its principal office or at the office of its stock transfer agent, if any, with
the Assignment Form annexed hereto duly executed and funds sufficient to pay any
transfer tax, the Company shall, without charge, execute and deliver a new
Warrant in the name of the assignee named in such instrument of assignment and
this Warrant shall promptly be canceled. This Warrant may be divided or combined
with other Warrants which carry the same rights upon presentation hereof at the
principal office of the Company or at the office of its stock transfer agent, if
any, together with a written notice specifying the names and denominations in
which new Warrants are to be issued and signed by the Holder hereof. The term
"Warrant" as used herein includes any Warrants into which this Warrant may be
divided or exchanged. Upon receipt by the Company of evidence satisfactory to it
of the loss, theft, destruction or mutilation of this Warrant, and (in the case
of loss, theft or destruction) of reasonably satisfactory indemnification, and
upon surrender and cancellation of this Warrant, if mutilated, the Company will
execute and deliver a new Warrant of like tenor and date. Any such new Warrant
executed and delivered shall constitute an additional contractual obligation on
the part of the Company, whether or not this Warrant so lost, stolen, destroyed,
or mutilated shall be at any time enforceable by anyone. This Warrant may not be
assigned or transferred except as provided herein and in accordance with and
subject to the provisions of the Securities Act of 1933, as amended, and the
Rules and Regulations promulgated thereunder (such Act and such Rules and
Regulations being hereinafter collectively referred to as the "Act"). This
Warrant shall be transferable only upon receipt by the Company, if requested to
the Company, of an opinion of counsel satisfactory to the Company, which may be
counsel to the Company, that (i) the transferee is a person to whom this Warrant
may be legally transferred without registration under the Act, and (ii) such
transfer will not violate any applicable law or governmental rule or regulation,
including, without limitation, any applicable federal or state securities law.
(f) RIGHTS OF THE HOLDER. The Holder shall not, by virtue hereof, be
entitled to any rights of a shareholder in the Company, either at law or equity,
and the rights of the Holder are limited to those expressed in the Warrant and
are not enforceable against the Company except to the extent set forth herein.
(g) ANTI-DILUTION PROVISIONS. The Exercise Price in effect at any time
and the number and kind of securities purchasable upon the exercise of the
Warrant shall be subject to adjustment from time to time upon the happening of
certain events as follows:
(1) In case the Company shall (i) declare a dividend or make a
distribution on its outstanding shares of Common Stock in shares of Common
Stock, (ii) subdivide or reclassify its outstanding shares of Common Stock
into a greater number of shares, or (iii) combine or reclassify its
outstanding shares of Common Stock into a smaller number of shares, the
Exercise Price of the Warrants in effect at the time of the record date
for such dividend or distribution or of the effective date of such
subdivision, combination or reclassification shall be proportionately
adjusted so that the Holder of this Warrant exercised after such date,
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shall be entitled to receive the aggregate number and kind of shares
which, if this Warrant had been exercised by such Holder immediately prior
to such date, the Holder would have owned upon such exercise and been
entitled to receive upon such dividend, distribution, subdivision,
combination or reclassification.
(2) In case the Company shall fix a record date for the issuance of
rights or warrants to all holders of any series of its Preferred Stock
and/or its Common Stock entitling them to subscribe for or purchase shares
of Common Stock (or securities convertible into Common Stock) at a price
per share (or having a conversion price per share) less than the current
market price of the Common Stock (as defined in Subsection (6) below) on
the record date mentioned below or less than the Exercise Price in effect
immediately prior to the date of such issuance, then the Exercise Price
shall be adjusted so that the same shall equal the price determined by
multiplying the Exercise Price in effect immediately prior to the date of
such issuance by a fraction, the numerator of which shall be the sum of
the number of shares of Common Stock outstanding on the record date
mentioned below and the number of additional shares of Common Stock which
the aggregate offering price of the total number of shares of Common Stock
so offered (or the aggregate conversion price of the convertible
securities so offered) would purchase at such current market price per
share of the Common Stock or the Exercise Price in effect immediately
prior to such issuance, whichever is higher, and the denominator of which
shall be the sum of the number of shares of Common Stock outstanding on
such record date and the number of additional shares of Common Stock
offered for subscription or purchase (or into which the convertible
securities so offered are convertible). Such adjustment shall be made
successively whenever such rights or warrants are issued and shall become
effective immediately after the record date for the determination of
shareholders entitled to receive such rights or warrants; and to the
extent that shares of Common Stock are not delivered (or securities
convertible into Common Stock are not delivered) after the expiration of
such rights or warrants the Exercise Price shall be readjusted to the
Exercise Price which would then be in effect had the adjustments made upon
the issuance of such rights or warrants been made upon the basis of
delivery of only the number of shares of Common Stock (or securities
convertible into Common Stock) actually delivered. This paragraph shall
not be applicable to any shares of Common Stock issuable upon exercise of
any presently outstanding options or warrants.
(3) In case the Company shall hereafter distribute to the holders of
its Common Stock evidences of its indebtedness or assets (excluding cash
dividends or distributions and dividends or distributions referred to in
Subsection (1) above) or subscription rights or warrants (excluding those
referred to in Subsection (2) above), then in each such case the Exercise
Price in effect thereafter shall be determined by multiplying the Exercise
Price in effect immediately prior thereto by a fraction, the numerator of
which shall be the total number of shares of Common Stock outstanding
multiplied by the current market price per share of Common Stock (as
defined in Subsection (6) below), less the fair market value (as
determined by the Company's Board of Directors) of said assets or
evidences of indebtedness so distributed or of such rights or warrants,
and the denominator of which shall be the total number of shares of Common
Stock outstanding multiplied by such current market price per share of
Common Stock. Such adjustment shall be made successively whenever such a
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record date is fixed. Such adjustment shall be made whenever any such
distribution is made and shall become effective immediately after the
record date for the determination of shareholders entitled to receive such
distribution.
(4) To the extent that an adjustment has been made for purposes of
determining the Exercise Price of the Warrant upon issuance of any rights,
options or warrants to purchase Common Stock, then the subsequent issuance
of Common Stock upon actual exercise of the right, option or warrant shall
be excluded from the adjustment provisions hereof.
(5) Whenever the Exercise Price payable upon exercise of each
Warrant is adjusted pursuant to Subsection (1) above, the number of
Warrant Shares purchasable upon exercise of this Warrant shall
simultaneously be adjusted by multiplying the number of Warrant Shares
initially issuable upon exercise of this Warrant by the Exercise Price in
effect on the date hereof and dividing the product so obtained by the
Exercise Price, as adjusted.
(6) For the purpose of any computation under Subsections (2) and (3)
above, the current market price per share of Common Stock at any date
shall be deemed to be the average of the daily closing prices for 20
consecutive business days before such date. The closing price for each day
shall be the last sale price or, in case no such reported sale takes place
on such day, the average of the last reported bid and asked prices, in
either case on the principal national securities exchange on which the
Common Stock is admitted to trading or listed, or if not listed or
admitted to trading on such exchange, the average of the highest reported
bid and lowest reported asked prices as reported by NASDAQ, or other
similar organization if NASDAQ is no longer reporting such information, or
if not so available, the fair market price as determined by the Board of
Directors.
(7) No adjustment in the Exercise Price shall be required unless
such adjustment would require an increase or decrease of at least two
cents ($.02) in such price; provided, however, that any adjustments which
by reason of this Subsection (7) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment
required to be made hereunder. All calculations under this Section (f)
shall be made to the nearest cent or to the nearest one-hundredth of a
share, as the case may be. Anything in this Section (f) to the contrary
notwithstanding, the Company shall be entitled, but shall not be required,
to make such changes in the Exercise Price, in addition to those required
by this Section (f), as it shall determine, in its sole discretion, to be
advisable in order that any dividend or distribution in shares of Common
Stock, or any subdivision, reclassification or combination of Common
Stock, hereafter made by the Company shall not result in any Federal
Income tax liability to the holders of Common Stock or securities
convertible into Common Stock (including the Warrants).
(8) In the event that at any time, as a result of an adjustment made
pursuant to this Section (f), the Holder of this Warrant thereafter shall
become entitled to receive any shares of the Company, other than Common
Stock, thereafter the number of such other shares so receivable upon
exercise of this Warrant shall be subject to adjustment from time to time
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in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Common Stock contained in Subsections (1)
to (7), inclusive above.
(9) Irrespective of any adjustments in the Exercise Price or the
number or kind of shares purchasable upon exercise of this Warrant,
Warrant Certificates theretofore or thereafter issued upon exchange,
transfer, assignment, loss of certificate or upon exercise in part may
continue to express the same price and number and kind of shares as were
stated in the Warrant Certificates when the same were originally issued.
(h) OFFICER'S CERTIFICATE. Whenever the Exercise Price shall be adjusted
as required by the provisions of the foregoing Section, the Company shall
forthwith file in the custody of its Secretary or an Assistant Secretary at its
principal office and with the stock transfer agent responsible for this Warrant,
if any, an officer's certificate showing the adjusted Exercise Price determined
as herein provided, setting forth in reasonable detail the facts requiring such
adjustment, including a statement of the number of additional shares of Common
Stock, if any, and such other facts as shall be necessary to show the reason for
and the manner of computing such adjustment. Each such officer's certificate
shall be made available at all reasonable times for inspection by the Holder or
any holder of a Warrant executed and delivered pursuant to Section (a) and the
Company shall, forthwith after each such adjustment, mail a copy by certified
mail of such certificate to the Holder or any such holder.
(i) NOTICES TO WARRANT HOLDERS. So long as this Warrant shall be
outstanding, (i) if the Company shall pay any dividend or make any distribution
upon the Common Stock or (ii) if the Company shall offer to all of the holders
of its Common Stock or any series of its Preferred Stock for subscription or
purchase by them any share of any class or any other rights or (iii) if any
capital reorganization of the Company, reclassification of the capital stock of
the Company, consolidation or merger of the Company with or into another
corporation (including, but not limited to, a reorganization pursuant to which
the Company will become a wholly-owned subsidiary of a newly created
corporation), sale, lease or transfer of all or substantially all of the
property and assets of the Company to another corporation, or voluntary or
involuntary dissolution, liquidation or winding up of the Company shall be
effected, then in any such case, the Company shall cause to be mailed by
certified mail to the Holder, at least ten days prior the date specified in (A)
or (B) below, as the case may be, a notice containing a brief description of the
proposed action and stating the date on which (A) a record is to be taken for
the purpose of such dividend, distribution or rights, or (B) such
reorganization, reclassification, consolidation, merger, sale, lease or
transfer, dissolution, liquidation or winding up is to take place and the date,
if any is to be fixed, as of which the holders of Common Stock or other
securities shall receive cash or other property deliverable upon such
reorganization, reclassification, consolidation, merger, sale, lease or
transfer, dissolution, liquidation or winding up.
(j) RECLASSIFICATION, REORGANIZATION OR MERGER. In case of any
reclassification, capital reorganization or other change of outstanding shares
of Common Stock of the Company, or in case of any consolidation or merger of the
Company with or into another corporation (including, but not limited to, a
reorganization pursuant to which the Company will become a wholly-owned
subsidiary of a newly created corporation) (but not including a merger in which
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the Company is the continuing corporation and which does not result in any
reclassification, capital reorganization or other change of outstanding shares
of Common Stock of the class issuable upon exercise of this Warrant) or in case
of any sale, lease or conveyance to another corporation of all or substantially
all of the business and assets of the Company, the Company shall, as a condition
precedent to such transaction, cause effective provisions to be made so that the
Holder shall have the right thereafter by exercising this Warrant at any time
prior to the expiration of the Warrant, to purchase the kind and amount of
shares of stock and other securities and property receivable upon such
reclassification, capital reorganization or other change, consolidation, merger,
sale, lease or conveyance 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, capital reorganization or other change, consolidation,
merger, sale, lease or conveyance. 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 (i) shall similarly apply to successive reclassifications, capital
reorganizations or other changes of shares of Common Stock and to successive
consolidations, mergers, sales, leases or conveyances. In the event that in
connection with any such reclassification, capital reorganization or other
change, consolidation, merger, sale, lease or conveyance, additional shares of
Common Stock shall be issued in exchange, conversion, substitution or payment,
in whole or in part, for a security of the Company other than Common Stock, any
such issue shall be treated as an issue of Common Stock covered by the
provisions of Subsection (1) of Section (f) hereof.
(k) REGISTRATION RIGHTS. The Holder and the Company will also enter into
a Registration Rights Agreement which shall be on terms no less favorable than
those offered to the Purchasers of the Notes.
(l) AMENDMENT; WAIVER OF PROVISIONS. This Warrant may not be amended by
or compliance with any provision hereof waived without the written consent of
holders of the majority of the Warrants and/or Warrant Shares related to the
issuance of the Notes.
(m) GOVERNING LAW. This Warrant shall be governed by the laws of the
State of New York without giving effect to is conflicts of laws principles.
[signature page to follow]
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IN WITNESS WHEREOF, the undersigned has caused this Warrant to be duly
executed as of the date first above written.
V-ONE CORPORATION
By:______________________________
Name:
Title:
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V-ONE CORPORATION
PURCHASE FORM
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Dated ____________________
The undersigned hereby irrevocably elects to exercise the within Warrant
to the extent of purchasing ____________________________________________ shares
of Common Stock and hereby makes and delivers payment of
__________________________________ in payment of the actual exercise price
thereof.
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INSTRUCTIONS FOR REGISTRATION OF STOCK
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Name________________________________________________________________________
(Please typewrite or print in block letters)
Address_____________________________________________________________________
Signature_______________________________________________
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ASSIGNMENT FORM
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FOR VALUE RECEIVED, _____________________________________ hereby sells,
assigns and transfers unto
Name________________________________________________________________________
(Please typewrite or print in block letters)
Address_____________________________________________________________________
the right to purchase Common Stock represented by this Warrant to the extent of
_______ shares as to which such right is exercisable and does hereby irrevocably
constitute and appoint___________________________________________________
Attorney, to transfer the same on the books of the Company with full power of
substitution in the premises.
Date ______________,_____ Signature________________________________________
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