EXHIBIT 4.5
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
CORPORATION AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.
WARRANT TO PURCHASE STOCK
Company: First Pacific Networks, Inc., a Delaware corporation
Number of Shares: 100,000 shares
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Class of Stock: Common Stock
Initial Exercise Price: $1.52 per share
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Issue Date: as of 8/27/1996
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Expiration Date: 8/26/1999
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Becomes Exercisable: Immediate
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THIS WARRANT CERTIFIES THAT, in consideration of the payment of $1.00 and
for other good and valuable consideration, STATE CAPITAL MARKET GROUP, LTD.
("Holder") is entitled to purchase the number of fully paid and nonassessable
shares of the class of securities (the "Shares") of First Pacific Networks,
Inc., a Delaware corporation (the "Company") at the Initial Exercise Price per
Share all as set forth above and as adjusted pursuant to Article 2 of this
Warrant (the "Warrant Price"), subject to the provisions and upon the terms
and conditions set forth in this Warrant.
I. EXERCISE AND CONVERSION RIGHT
1. EXERCISE. Holder may exercise this Warrant, in whole or in part, by
delivering this Warrant and a duly executed Notice of Exercise/Conversion in
substantially the form attached as Appendix 1 (the "Notice of
Exercise/Conversion") to the principal office of the Company. Holder shall also
deliver to the Company a check for the aggregate Warrant Price for the Shares
being purchased.
2. CONVERSION RIGHT. In lieu of exercising this Warrant as specified in
Section 1.1, Holder may at its option convert this Warrant, in whole or in part,
into a number of Shares determined by dividing (a) the aggregate fair market
value of the Shares or other securities otherwise issuable upon exercise of this
Warrant minus the aggregate Warrant Price of such Shares by (b) the fair market
value of one Share by delivering the Warrant and a duly executed Notice of
Exercise/Conversion. The fair market value of the Shares shall be determined
pursuant to Section 1.3.
3. FAIR MARKET VALUE. If the Shares are traded in a public market, the
fair market value of the Shares shall be the closing price of the Shares
reported for the business day immediately before Holder delivers its Notice of
Exercise/Conversion to the Company. If the Shares are not traded in a public
market, the Board of Directors of the Company shall determine fair market value
in its reasonable good faith judgment. The foregoing notwithstanding, if Holder
advises the Board of Directors in writing that Holder disagrees with such
determination, then the Company and Holder shall promptly agree upon a reputable
investment banking firm to undertake such valuation. If the valuation of such
investment banking firm is greater than that determined by the Board of
Directors, then all fees and expenses of such investment banking firm shall be
paid by the Company. In all other circumstances, such fees and expenses shall
be paid by Holder.
4. DELIVERY OF CERTIFICATE AND NEW WARRANT. Promptly after Holder
exercises or converts this Warrant, the Company shall deliver to Holder
certificates for the Shares acquired, and, if this
Warrant has not been fully exercised or converted and has not expired, a new
Warrant representing the Shares not so acquired.
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.
6. SALE, MERGER, OR CONSOLIDATION OF THE COMPANY.
1) "ACQUISITION". For the purpose of this Warrant, "Acquisition"
means any sale, license, or other disposition of all or substantially all of the
assets (including intellectual property) 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.
2) ASSUMPTION OF WARRANT. If, upon the closing of any Acquisition
the successor entity assumes the obligations of this Warrant, then this Warrant
shall be exercisable for the same securities, cash, and property as would be
payable for the Shares issuable upon exercise 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.
3) NON-ASSUMPTION. If upon the closing of any Acquisition the
successor entity does not assume the obligations of this Warrant and Holder has
not otherwise exercised or converted this Warrant then this Warrant shall be
deemed to have been automatically converted pursuant to Section 1.2 and
thereafter Holder shall participate in the Acquisition on the same terms as
other holders of the same class of securities of the Company.
II. ADJUSTMENTS TO THE SHARES
1. STOCK DIVIDENDS, SPLITS, ETC. If the Company declares or pays a
dividend on its common stock payable in common stock, or other securities,
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. 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 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 provisions
of this Section 2.2 shall similarly apply to successive reclassifications,
exchanges, substitutions, or other events.
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.
4. NO IMPAIRMENT. The Company shall not, by amendment of its Certificate
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.
III. REPRESENTATIONS
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 or upon conversion of this
Warrant, upon issuance, will 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.
IV. MISCELLANEOUS
1. TERM. This Warrant is exercisable or convertible, in whole or in
part, at any time on or before the Expiration Date set forth above.
2. LEGENDS. This Warrant and the Shares 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 CORPORATION AND ITS COUNSEL
THAT SUCH REGISTRATION IS NOT REQUIRED.
3. COMPLIANCE WITH SECURITIES LAWS ON TRANSFER. This Warrant and the
Shares issuable upon exercise 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 reasonably
satisfactory to the Company, as reasonably requested by the Company).
4. TRANSFER PROCEDURE. Subject to the provisions of Section 4.2, Holder
may transfer, to any person owning all or substantially all of Holder's assets
or capital stock, 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). Unless
the Company is filing financial information with the SEC pursuant to the
Securities Exchange Act of 1934, as amended, the Company shall have the right to
refuse to transfer any portion of this Warrant to any person who directly
competes with the Company.
5. REGISTRATION RIGHTS. The Shares shall have the registration rights
set forth on Exhibit A.
6. NOTICES. All notices and other communications from the Company to the
Holder, or vice versa, shall be deemed delivered and effective when given
personally or mailed by first-class registered or certified mail, postage
prepaid, at such address as may have been furnished to the Company or the
Holder, as the case may be, in writing by the Company or such Holder from time
to time.
7. 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.
8. 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.
9. GOVERNING LAW. This Warrant shall be governed by and construed in
accordance with the laws of the State of Delaware without giving effect to its
principles regarding conflicts of law.
FIRST PACIFIC NETWORKS, INC.
By /s/ M. Xxxxx Xxxxxx
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M. Xxxxx Xxxxxx, President
By /s/ Xxxxxxx X. Xxxxxxxxx
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Xxxxxxx X. Xxxxxxxxx, Secretary
APPENDIX 1
NOTICE OF EXERCISE/CONVERSION
1. The undersigned hereby elects to purchase ____________ shares of
Common Stock of FIRST PACIFIC NETWORKS, INC. pursuant to the terms of the
attached Warrant, and tenders herewith payment of the purchase price of such
Shares in full.
1. The undersigned hereby elects to convert the attached Warrant into
Shares in the manner specified in the Warrant. This conversion is made as to
_________ Shares of the Common Stock covered by the Warrant.
[Strike paragraph 1 that does not apply.]
2. Please issue a certificate of certificates representing said Shares in
the name of the undersigned or in such other name as is specified below.
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(Name)
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(Address)
3. The undersigned represents the undersigned 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)
Addendum A
IRREVOCABLE STOCK POWER
FOR VALUE RECEIVED, the undersigned does hereby sell, assign, and transfer
unto _______________________________________ ________________________
(name of transferee) (no. of shares)
shares of the Common Stock of First Pacific Networks, Inc. represented by
Certificate(s) No.(s). _____________________ (inclusive), and does hereby
appoint ___________________ attorney to transfer the foregoing on the books of
First Pacific Networks, Inc., with full power of substitution in the premises.
Dated ______________, 199__
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(Signature)
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Typed Name
THE SIGNATURE(S) ON THIS STOCK POWER MUST CORRESPOND WITH THE NAME(S) ON THE
FACE OF THE CERTIFICATE(S) IN EVERY PARTICULAR, WITHOUT ALTERATION OR
ENLARGEMENT. TRUSTEES, OFFICERS AND OTHER FIDUCIARIES OR AGENTS SHOULD INDICATE
THEIR TITLES OR CAPACITIES.
ADDENDUM B
SELLER'S REPRESENTATION LETTER
In connection with the sale of ________ shares (the "Shares") of Common
Stock of First Pacific Networks, Inc. (the "Company") by the undersigned (the
"Seller"), on ____________, 199__ (the "Sale Date"), the Seller hereby
represents and warrants to the Company and its transfer agent as follows:
1. The Shares were sold by the Seller on the Sale Date.
2. The Seller has fully complied with the provisions of Sections 3 and 4
of Exhibit A to the Warrant to Purchase Stock dated as of __________, 1996 of
the Company to the undersigned (the "Warrant).
3. The Shares were issued to the Seller by the Company on ,
1996 upon exercise or conversion of the Warrant; and
4. The Seller has caused the Prospectus (as defined in Exhibit A of the
Warrant) to be furnished to the purchase of the Shares and to the broker-dealer,
if any, through whom the sale of the Shares was made.
Executed this day of _______________, 199__.
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Signature
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Name
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Address
Exhibit A
Registration Rights
1. Prior to the expiration date of this Warrant the Company will use its
best efforts to effect the registration under the Securities Act of 1933, as
amended (the "Act") and the rules and regulations of the Securities and Exchange
Commission (the "Commission") of the resale of the Shares and, in connection
therewith, it will:
(a) prepare and file a registration statement on Form S-3 (the
"Registration Statement") with respect to the Shares, pursuant to the
rules and regulations of the Commission and use its best efforts to
cause the Registration Statement to become and remain effective for a
period of not less than the earliest date (the "Termination Date") of
(i) the date one year after the date of effectiveness of the
Registration Statement, (ii) the date the Holder may sell all of the
Shares issuable upon conversion of the Warrant on reliance upon Rule
144 under the Act, and (iii) the date the holder no longer owns the
Warrant and/or any of the Shares issued to Holder upon exercise or
conversion of the Warrant;
(b) prepare and file with the Commission such amendments and
supplements to the Registration Statement and the Prospectus (as
defined in Section 4(b) below) as may be necessary to keep the
Registration Statement effective until the Termination Date and comply
with the applicable provisions of the rules and regulations of the
Commission; and
(c) furnish to Holder the number of copies of the Prospectus the
Holder may reasonably request.
Notwithstanding any other provision of this Exhibit A, the Company shall have
the right at any time to require that to Holder to suspend further open market
offers and sales of the Shares whenever, and for so long as, in the reasonable
judgment of the Company after consultation with counsel there is or maybe in
existence material undisclosed information or events with respect to the Company
(the "Suspension Right"). In the event the Company exercises the Suspension
Right, such suspension will continue for the period of time reasonably necessary
for disclosure to occur at a time that is not detrimental to the Company and its
stockholders or until such time as the information or event is no longer
material, each as determined in good faith by the Company after consultation
with counsel. The Company will promptly give the Holder notice of any such
suspension and will use all reasonable efforts to minimize the length of the
suspension.
2. The costs and expenses of registration of the shares to be borne by
the Company for purposes of this Exhibit B shall include, without limitation,
printing expenses (including a reasonable number of prospectuses for circulation
by the selling Holders), legal fees and disbursements of counsel for the
Company, "blue sky" expenses, accounting fees and filing fees, but shall not
include underwriting commissions or similar charges, legal fees and
disbursements of counsel for the Holder.
3. The Holder shall be required to submit the following documents to the
transfer agent of the Company's Common Stock when making a sale of Shares
pursuant to the Registration Statement, with copies to the Company:
(i) Original stock certificate representing the Shares sold;
(ii) Originally executed stock power in the form of ADDENDUM A
hereto, with signature guaranteed; and
(iii) Originally executed Seller's Representation Letter in the form
of ADDENDUM B hereto.
4. The Holder by accepting the Warrant hereby represents to and covenants
with the Company that, until the Termination Date, the Holder will:
(a) Not engage in any stabilization activity in connection with any
of the Company's securities other than as permitted under the
Securities and Exchange Act of 1934, as amended ("Exchange Act");
(b) Cause to be furnished to any purchaser of the Shares and to the
broker-dealer, if any, through whom Shares may be offered, a copy of
the final prospectus contained in the Registration Statement, as
supplemented or amended through the date of the sale (the
"Prospectus"); and
(c) Not bid for or purchase any securities of the Company or any
rights to acquire the Company's securities, or attempt to induce any
person to purchase any of the Company's securities (except for the
Share to be sold to such person by means of the Prospectus) or any
rights to acquire the Company's securities other than as permitted
under the Exchange Act.
