Exhibit 10.17
NEITHER THIS WARRANT NOR THE SHARES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT")
OR ANY OTHER APPLICABLE STATE SECURITIES LAWS IN RELIANCE UPON AN EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT PURSUANT TO REGULATION D AND
SUCH OTHER SECURITIES LAWS. NEITHER THIS WARRANT NOR THE SHARES ISSUABLE UPON
EXERCISE HEREOF MAY BE SOLD, PLEDGED, TRANSFERRED, ENCUMBERED OR OTHERWISE
DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR IN A TRANSACTION WHICH IS EXEMPT FROM REGISTRATION UNDER THE
PROVISIONS OF THE SECURITIES ACT OR ANY APPLICABLE STATE LAWS. THIS WARRANT MAY
NOT BE EXERCISED BY OR ON BEHALF OF A UNITED STATES PERSON UNLESS REGISTERED
UNDER THE SECURITIES ACT OR AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE, AS
REQUIRED BY REGULATION D.
STOCK PURCHASE WARRANT
To Purchase __________________ Shares of Common Stock of
ION NETWORKS INC.
THIS CERTIFIES that, for value received,________________________
(the "Holder"), is entitled, upon the terms and subject to the limitations on
exercise and the conditions hereinafter set forth, at any time on or after the
date hereof (the "Initial Exercise Date") and on or prior to the close of
business on July 17, 2006 (the "Termination Date") but not thereafter, to
subscribe for and purchase from ION NETWORKS, Inc., a corporation incorporated
in the State of Delaware, with offices at 0000 Xxxxx Xxxxxxxxxx Xxxxxx,
Xxxxxxxxxx, Xxx Xxxxxx 00000 (the "Company"), up to ____________ shares
(the "Warrant Shares") of Common Stock, $0.001 par value, of the Company
(the "Common Stock"). The purchase price of one share of Common Stock
(the "Exercise Price") under this Warrant shall be $________. The Exercise Price
and the number of shares for which the Warrant is exercisable shall be subject
to adjustment as provided herein.
1. Title to Warrant. Prior to the Termination Date and subject to
compliance with applicable laws, this Warrant and all rights hereunder are
transferable, in whole or in part, at the office or agency of the Company by the
holder hereof in person or by duly authorized attorney, upon surrender of this
Warrant together with the Assignment Form annexed hereto properly endorsed.
2. Authorization of Shares. The Company covenants that all shares
of Common Stock which may be issued upon the exercise of rights represented by
this Warrant will, upon exercise of the rights represented by this Warrant, be
duly authorized, validly issued, fully paid
and nonassessable and free from all taxes, liens and charges in respect of
the issue thereof (other than taxes in respect of any transfer occurring
contemporaneously with such issue).
3. Exercise of Warrant.
(a) Except as provided in Section 4 herein, exercise of the purchase
rights represented by this Warrant may be made at any time or times on or after
the Initial Exercise Date, and before the close of business on the Termination
Date by the surrender of this Warrant and the Notice of Exercise Form annexed
hereto duly executed, at the office of the Company (or such other office or
agency of the Company as it may designate by notice in writing to the registered
holder hereof at the address of such holder appearing on the books of the
Company) and upon payment of the Exercise Price of the shares thereby purchased
by wire transfer or cashier's check drawn on a United States bank, the holder of
this Warrant shall be entitled to receive a certificate for the number of shares
of Common Stock so purchased. Certificates for shares purchased hereunder shall
be delivered to the holder hereof within three (3) Trading Days after the date
on which this Warrant shall have been exercised as aforesaid. This Warrant shall
be deemed to have been exercised and such certificate or certificates shall be
deemed to have been issued, and Holder or any other person so designated to be
named therein shall be deemed to have become a holder of record of such shares
for all purposes, as of the date the Warrant has been exercised by payment to
the Company of the Exercise Price and all taxes required to be paid by Holder,
if any, pursuant to Section 5 prior to the issuance of such shares, have been
paid. For the purposes of this Agreement, (i) "Trading Day" shall mean any day
on which the Principal Market is open for business and (ii) "Principal Market"
shall mean initially the Nasdaq National Market and shall include the American
Stock Exchange, Nasdaq National Market, the Nasdaq SmallCap Market, Bulletin
Board or the New York Stock Exchange if the Company is listed and trades on such
market or exchange.
(b) If this Warrant shall have been exercised in part, the Company
shall, at the time of delivery of the certificate or certificates representing
Warrant Shares, deliver to Holder a new Warrant evidencing the rights of Holder
to purchase the unpurchased shares of Common Stock called for by this Warrant,
which new Warrant shall in all other respects be identical with this Warrant.
(c) If no registration statement is effective permitting the resale of
the shares of Common Stock issued upon exercise of this Warrant at any time
commencing one year after the issuance date hereof, then this Warrant shall also
be exercisable by means of a "cashless exercise" in which the holder shall be
entitled to receive a certificate for the number of shares equal to the quotient
obtained by dividing [(A-B) (X)] by (A), where:
(A) = the average of the high and low trading prices per share of Common Stock
on the Trading Day preceding the date of such election on the Nasdaq National
Market, or if the Common Stock is not traded on the Nasdaq National Market, then
the Principal Market in terms of volume, and converted into US Dollars;
(B) = the Exercise Price of the Warrants; and
(X) = the number of shares issuable upon exercise of the Warrants in accordance
with the terms of this Warrant.
4. No Fractional Shares or Scrip. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. As to any
fraction of a share which Holder would otherwise be entitled to purchase upon
such exercise, the Company shall pay a cash adjustment in respect of such final
fraction in an amount equal to the Exercise Price.
5. Charges, Taxes and Expenses. Issuance of certificates for shares of
Common Stock upon the exercise of this Warrant shall be made without charge to
the holder hereof for any issue or transfer tax or other incidental expense in
respect of the issuance of such certificate, all of which taxes and expenses
shall be paid by the Company, and such certificates shall be issued in the name
of the holder of this Warrant or in such name or names as may be directed by the
holder of this Warrant; provided, however, that in the event certificates for
shares of Common Stock are to be issued in a name other than the name of the
holder of this Warrant, this Warrant when surrendered for exercise shall be
accompanied by the Assignment Form attached hereto duly executed by the holder
hereof; and the Company may require, as a condition thereto, the payment of a
sum sufficient to reimburse it for any transfer tax incidental thereto.
6. Closing of Books. The Company will not close its shareholder books or
records in any manner which prevents the timely exercise of this Warrant.
7. Transfer, Division and Combination. (a) Subject to compliance with any
applicable securities laws, 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 principal
office of the Company, together with a written assignment of this Warrant
substantially in the form attached hereto duly executed by Holder or its agent
or attorney and funds sufficient to pay any transfer taxes payable upon the
making of such transfer. Upon such surrender and, if required, such payment, the
Company shall execute and deliver a new Warrant or Warrants in the name of the
assignee or assignees and in the denomination or 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, and this Warrant shall
promptly be cancelled. A Warrant, if properly assigned, may be exercised by a
new holder for the purchase of shares of Common Stock without having a new
Warrant issued.
(b) This Warrant may be divided or combined with other Warrants
upon presentation hereof at the aforesaid office of the Company, together with a
written notice specifying the names and denominations in which new Warrants are
to be issued, signed by Holder or its agent or attorney. Subject to compliance
with Section 7(a), as to any transfer which may be involved in such division or
combination, the Company shall execute and deliver a new Warrant or Warrants in
exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice.
(c) The Company shall prepare, issue and deliver at its own expense (other
than transfer taxes) the new Warrant or Warrants under this Section 7.
(d) The Company agrees to maintain, at its aforesaid office, books for the
registration and the registration of transfer of the Warrants.
8. Registration of Warrant Shares. (a) If (but without any obligation to do
so) the Company proposes to register (including for this purpose a registration
effected by the Company for stockholders other than the Holders) any of its
stock or other securities under the Act in connection with the public offering
of such securities solely for cash (other than a registration statement relating
either to the sale of securities to employees of the Company pursuant to a stock
option, stock purchase or similar plan or a SEC Rule 145 transaction), the
Company shall, at such time, promptly give each Holder written notice of such
proposed registration. Upon the written request of each Holder given within
twenty (20) days after mailing of such notice by the Company in accordance with
Section 18(d) hereof, the Company shall, subject to the provisions of Section
8(c), endeavor to cause to be registered under the Act all of the Warrant Shares
that each such Holder has requested to be registered.
(b) Whenever required under this Section 8(a) to effect the
registration of any Warrant Shares, the Company shall, as expeditiously as
reasonably possible use reasonable efforts to (i) file a registration statement
(the "Registration Statement"), registering for resale the Warrant Shares and
(ii) cause the Registration Statement to be declared effective under the
Securities Act of 1933, as amended (the "Act") as soon thereafter as reasonably
practicable. The Company promptly shall provide each Holder with such copies of
the final prospectus contained in the Registration Statement after it becomes
effective as they shall reasonably request. In addition, the Company shall
(a) use reasonable efforts to keep the Registration Statement effective for a
period ending on the earlier of (x) 120 days from its effective date or (y) when
all such Warrant Shares can be sold without limitation or delay under Rule 144
and (b) file all reports and forms required to be filed by it under the
Securities Exchange Act of 1934, as amended ("Reports") on a timely basis so
long as each Holder owns any Warrant Shares and shall provide each Holder copies
thereof when filed.
(c) Notwithstanding anything contained herein to the contrary,
the Company shall be entitled to postpone the filing of the Registration
Statement otherwise required to be prepared and filed by it in accordance with
subparagraph (b) or, in the event the Registration Statement has been declared
effective, without suspending such effectiveness, instruct the Holder promptly
in writing (or any subsequent holders thereof) not to sell or distribute any
Warrant Shares (a "Delay") as long as the reason for non-disclosure continues,
if the Company would be required to disclose in the Registration Statement the
existence of any fact relating to a material business situation, transaction or
negotiation, or would be required to disclose information that the Company has
not otherwise made public, in each case, that the Company reasonably determines
is in the best interests of the Company not to disclose at such time, and unless
and until each Holder furnishes to the Company in writing information that may
be required to prepare the disclosure required by Items 507 and 508 of Regu-
lation S-B promulgated under the Act, with respect to such Holder's Warrant
Shares being sold under the Registration Statement provided that, with respect
to Delays because of information related to
the Company (rather than disclosure required to be provided by the holders), the
Company shall only be entitled to a maximum of three (3) Delays, each Delay not
to exceed a period of thirty (30) days; and further provided, that no period of
Delay shall commence within 60 days of a previous Delay.
(d) Each Holder shall (i) reasonably cooperate with
the Company in connection with the preparation and filing of the Registration
Statement and execute and deliver any agreements or instruments reasonably
requested by the Company or its counsel in connection therewith and (ii) upon
discovery that, or upon the happening of any event as a result of which, the
Registration Statement (or any prospectus included therein), as then in effect,
includes an untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading, in the light of the circumstances under which they were made
(as determined by the Company or its counsel in its sole discretion), forthwith
discontinue its disposition of Warrant Shares pursuant to the Registration
Statement, until such time as such Holder (or any holders) have received a
supplemented or amended prospectus from the Company relating thereto. The Com-
pany agrees to use its best efforts to prepare any necessary amendments or supp-
lements to the Registration Statement as soon as reasonably practicable after
the same becomes necessary and to provide to each Holder quantities of such
amendments or supplements reasonably sufficient for the distribution thereof.
(e) The Company shall indemnify and hold harmless
each Holder and its respective officers, directors, employees, members, agents,
affiliates and control persons (each of the foregoing, a "Holder Indemnitee")
who is or may be a party or is or may be threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative by reason of or arising from any act-
ual or alleged misrepresentation or misstatement of facts or omission to repre-
sent or state any fact or omission to state a fact necessary to make the facts
stated under the circumstances not materially misleading, in the Registration
Statement or any amendment or supplement thereto or to the prospectus incorpor-
ated therein from and against any claim, losses, liabilities, costs and expenses
(including attorney's fees, judgments, fines and amounts paid in settlement)
("Loss") actually and reasonably incurred by any such Holder Indemnitee in
connection with such claim, action, suit or proceeding or the defense thereof,
except to the extent such Loss is the direct result of a misstatement or omiss-
ion for which such Holder Indemnitee is liable to the Company under Section 9
(i); provided, however, that the indemnification contained in this Section 8(e)
with respect to any preliminary prospectus shall not inure to the benefit of any
Holder Indemnitee on account of any such Loss arising from the sale of the
Warrant Shares by such Holder Indemnitee to any person if a copy of the defini-
tive prospectus shall not have been delivered or sent to such person within the
time required by the Act and the regulations thereunder, and an untrue statement
or alleged untrue statement or omission or alleged omission of a material fact
contained in such preliminary prospectus was corrected in the definitive
prospectus.
(f) In connection with any offering involving an
underwriting of shares of the Company's capital stock, the Company shall not be
required under Section 8(a) to include any of the Holders' Warrant Shares in
such underwriting unless they accept the terms of the underwriting as agreed
upon between the Company and the underwriters selected by it (or by
other persons entitled to select the underwriters), and then only in such
quantity as the underwriters determine in their sole discretion will not
jeopardize the success of the offering by the Company. If the total amount of
securities, including Warrant Shares, requested by stockholders to be included
in such offering exceeds the amount of securities sold other than by the Company
that the underwriters determine in their sole discretion is compatible with the
success of the offering, then the Company shall be required to include in the
offering only that number of such securities, including Warrant Shares, which
the underwriters determine in their sole discretion will not jeopardize the
success of the offering (the securities so included to be apportioned pro rata
among the selling stockholders according to the total amount of securities
entitled to be included therein owned by each selling stockholder or in such
other proportions as shall mutually be agreed to by such selling stockholders).
9. Representations of Holder. The Holder acknowledges that the Company will rely
on the information and on the representations set forth herein, and the
undersigned hereby represents, warrants and agrees that:
(a) The Holder is an "Accredited Investor", as that term is defined
under Section 501(a) of Regulation D under the Act.
(b) The Holder has not received any general solicitation or general
advertising regarding the exercise of the Warrant.
(c) The Holder has sufficient knowledge and experience in financial and
business matters so that he or it is able to evaluate the merits and risks of
exercising the Warrant as well as substantial experience in previous private and
public purchases of securities.
(d) The Holder understands that an investment in the Company involves
significant risk. The Holder does not require the funds to be used to exercise
this Warrant or the Warrant Shares for his liquidity or other needs, possesses
the ability to bear the economic risk of holding the this Warrant or the Warrant
Shares purchased hereunder indefinitely and can afford a complete loss of its
investment in the this Warrant or the Warrant Shares.
(e) Prior to the issuance of this Warrant and prior to exercise, the
Holder has or will have had full opportunity to ask questions of and receive
answers from the Company and its officers and authorized representatives
regarding the terms and conditions of the Warrant and the transactions
contemplated hereby, as well as the affairs of the Company and related matters.
The Holder confirms that he does not desire to receive any further information.
(f) The Holder understands that the exercise price of the Warrant being
purchased hereby has been arbitrarily determined and does not necessarily bear
any relationship to investment criteria such as projected earnings, discounted
cash flow, book value or other measures of value.
(g) The Holder understands that the Warrant has not been filed with or
reviewed by the Commission nor the securities department of any state because of
the private or limited nature of this offering as defined by applicable laws,
and that the Warrant and the
Warrant Shares have not been registered with the Commission under the Act
nor with the securities department of any state in reliance upon an exemption
therefrom for non-public offerings.
(h) The Holder is a bona fide resident of the state set
forth as his "address" above and further represents that (a) if a corporation,
partnership, trust or other form of business organization, it has a principal
office within such state; and (b) if an individual, he has his principal
residence in such state.
(i) The Holder represents and warrants that the Warrant
and the Warrant Shares are or will be acquired for investment purposes and not
with a view to or for sale or distribution. The Holder represents that there is
no contract, undertaking, agreement or arrangement with any person to sell,
transfer or pledge to such person or anyone else the Warrant and the Warrant
Shares or any part thereof, and the Holder has no present plans to enter into
such contract, undertaking, agreement or arrangement and will neither directly
or indirectly seek to assign, transfer or sell the same in any way inconsistent
with the legend which is being placed on the Warrant.
(j) Each Holder agrees to indemnify and hold harmless the
Company and each officer, director, employee, agent or control person of the
Company, who is or may be a party or is or may be threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative, to the extent by reason of or
arising from any misrepresentation or misstatement of material facts or omission
to state material facts necessary to make the facts stated, under the circum-
stances, not materially misleading, made or omitted by such Holder to the
Company in a writing provided to the Company expressly for the purpose of
inclusion in the Registration Statement or any amendment thereto, against
losses, liabilities and expenses for which the Company, or any officer, director
or control person of the Company has not otherwise been reimbursed (including
attorneys' fees, judgments, fines and amounts paid in settlement) actually and
reasonably incurred by the Company or such officer, director or control person
in connection with such action, suit or proceeding.
10. No Rights as Shareholder until Exercise. This Warrant does
not entitle the holder hereof to any voting rights or other rights as a share-
holder of the Company prior to the exercise hereof. Upon the surrender of this
Warrant and the payment of the aggregate Exercise Price, the Warrant Shares so
purchased shall be and be deemed to be issued to such holder as the record owner
of such shares as of the close of business on the later of the date of such
surrender or payment.
11. Loss, Theft, Destruction or Mutilation of Warrant. The
Company covenants that upon receipt by the Company of evidence reasonably satis-
factory to it of the loss, theft, destruction or mutilation of this Warrant
certificate or any stock certificate relating to the Warrant Shares, and in case
of loss, theft or destruction, of indemnity or security reasonably satisfactory
to it (which shall not include the posting of any bond), and upon surrender and
cancellation of such Warrant or stock certificate, if mutilated, the Company
will make and deliver a new Warrant or stock certificate of like tenor and dated
as of such cancellation, in lieu of such Warrant or stock certificate.
12. Saturdays, Sundays, Holidays, etc. If the last or appointed day
for the taking of any action or the expiration of any right required or granted
herein shall be a Saturday, Sunday or a legal holiday, then such action may be
taken or such right may be exercised on the next succeeding day not a Saturday,
Sunday or legal holiday.
13. Adjustments of Exercise Price and Number of Warrant Shares.
(a) The number and kind of securities purchasable upon the exercise of this
Warrant and the Exercise Price shall be subject to adjustment from time to time
upon the happening of any of the following. In case the Company shall (i) pay a
dividend in shares of Common Stock or make a distribution in shares of Common
Stock to holders of its outstanding Common Stock, (ii) subdivide its outstanding
shares of Common Stock into a greater number of shares of Common Stock, or (iii)
combine its outstanding shares of Common Stock into a smaller number of shares
of Common Stock, then the number of Warrant Shares purchasable upon exercise of
this Warrant immediately prior thereto shall be adjusted so that the holder of
this Warrant shall be entitled to receive the kind and number of Warrant Shares
of the Company which he would have owned or have been entitled to receive had
such Warrant been exercised in advance thereof. Upon each such adjustment of the
kind and number of Warrant Shares of the Company which are purchasable
hereunder, the holder of this Warrant shall thereafter be entitled to purchase
the number of Warrant Shares resulting from such adjustment at an Exercise Price
per Warrant Share or other security obtained by multiplying the Exercise Price
in effect immediately prior to such adjustment by the number of Warrant Shares
purchasable pursuant hereto immediately prior to such adjustment and dividing by
the number of Warrant Shares of the Company resulting from such adjustment. An
adjustment made pursuant to this paragraph shall become effective immediately
after the effective date of such event retroactive to the record date, if any,
for such event.
(b) Subject to Section 13(c) below, in case the Company shall
reorganize its capital, reclassify its capital stock, consolidate or merge with
or into another corporation, and pursuant to the terms of such reorganization,
reclassification, merger, or consolidation, shares of common stock of the
successor or acquiring corporation, or shares of stock other than Common Stock
of the Company, is to be received by or distributed to the holders of Common
Stock of the Company in lieu of the Company's Common Stock, then Holder shall
have the right thereafter to receive, upon exercise of this Warrant, the number
of shares of common stock of the successor or acquiring corporation or other
shares of stock of the Company (other than Common Stock) if the Company is the
surviving corporation (in the merger, reorganization or reclassification),
receivable upon or as a result of such reorganization, reclassification, merger
or consolidation, by a holder of the number of shares of Common Stock for which
this Warrant is exercisable immediately prior to such event. Subject to Section
13(c), in case of any such reorganization, reclassification, merger or
consolidation, the successor or acquiring corporation (if other than the
Company) shall expressly assume the due and punctual observance and performance
of each and every covenant and condition of this Warrant to be performed and
observed by the Company and all the obligations and liabilities hereunder,
subject to such modifications as may be deemed appropriate (as determined in
good faith by resolution of the Board of Directors of the Company) in order to
provide for adjustments of shares of Common Stock for which this Warrant is
exercisable which shall be as nearly equivalent as practicable to the
adjustments provided for in this Section 13(b). For purposes of this Section
13(b), "common stock of the successor or acquiring corporation" shall include
stock of such corporation of any class which is not preferred as to dividends or
assets over any other class of stock of such corporation and which is not
subject to redemption. Subject to Section 13(c), the foregoing provisions
of this Section 13(b) shall similarly apply to successive reorganizations,
reclassifications, mergers or consolidations.
(c) In the event of (i) a proposed dissolution or liqui-
dation of the Company, or (ii) a proposed sale of all or substantially all of
the assets or outstanding equity of the Company, or (iii) the merger or xxxxxxx-
dation of the Company with or into another entity or any other corporate
reorganization if persons who were not shareholders of the Company immediately
prior to such merger, consolidation or other reorganization own immediately
after such merger, consolidation or other reorganization fifty percent (50%) or
more of the voting power of the outstanding securities of each of (A) the
continuing or surviving entity and (B) any direct or indirect parent corporation
of such continuing or surviving entity, the Board of Directors of the Company,
at its sole discretion, shall, as to any unexercised portion of this Warrant,
either (1) make appropriate provision for the protection of any such unexercised
portion by the substitution on an equitable basis of appropriate stock of the
Company or of the merged, consolidated or otherwise reorganized corporation
which will be issuable in respect to one share of Common Stock of the Company as
set forth in Section 13(b) above; provided that the excess of the aggregate fair
market value of the shares subject to the unexercised portion of this Warrant
immediately after such substitution over the purchase price thereof is not more
than the excess of the aggregate fair market value of the shares subject to such
unexercised portion immediately before such substitution over the purchase price
thereof, or (2) upon written notice to Holder, provide that the entire unexer-
cised portion of this Warrant must be exercised within a specified number of
days of the date of such notice or such unexercised portion will be terminated.
14. Voluntary Adjustment by the Company. The Company may at any time
during the term of this Warrant, reduce the then current Exercise Price to any
amount and for any period of time deemed appropriate by the Board of Directors
of the Company.
15. Notice of Adjustment. Whenever the number of Warrant Shares or
number or kind of securities purchasable upon the exercise of this Warrant or
the Exercise Price is adjusted, as herein provided, the Company shall promptly
mail by registered or certified mail, return receipt requested, to the holder of
this Warrant notice of such adjustment or adjustments setting forth the number
of Warrant Shares (or other securities) purchasable upon the exercise of this
Warrant and the Exercise Price of such Warrant Shares (or other securities)
after such adjustment, setting forth a brief statement of the facts requiring
such adjustment and setting forth the computation by which such adjustment was
made. Such notice, in the absence of manifest error, shall be conclusive
evidence of the correctness of such adjustment.
16. Notice of Corporate Action. If at any time:
(a) the Company shall take a record of the holders of its
Common Stock for the purpose of entitling them to receive a dividend or other
distribution, or any right to subscribe for or purchase any evidences of its
indebtedness, any shares of stock of any class or any other securities or
property, or to receive any other right, or
(b) there shall be any capital reorganization of the
Company, any reclassification or recapitalization of the capital stock of the
Company or any consolidation or
merger of the Company with, or any sale, transfer or other disposition of all or
substantially all the property, assets or business of the Company to, another
corporation or,
(c) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then, in any one or more of such cases, the Company shall give to Holder (i) at
least 10 days' prior written notice of the date on which a record date shall be
selected for such dividend, distribution or right or for determining rights to
vote in respect of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, liquidation or winding up, and (ii)
in the case of any such reorganization, reclassification, merger, consolidation,
sale, transfer, disposition, dissolution, liquidation or winding up, at least 10
days' prior written notice of the date when the same shall take place. Such
notice in accordance with the foregoing clause also shall specify (i) the date
on which any such record is to be taken for the purpose of such dividend,
distribution or right, the date on which the holders of Common Stock shall be
entitled to any such dividend, distribution or right, and the amount and
character thereof, and (ii) the date on which any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up is to take place and the time, if any
such time is to be fixed, as of which the holders of Common Stock shall be
entitled to exchange their shares of Common Stock for securities or other
property deliverable upon such disposition, dissolution, liquidation or winding
up. Each such written notice shall be sufficiently given if addressed to Holder
at the last address of Holder appearing on the books of the Company and
delivered in accordance with Section 16(d).
17. Authorized Shares. The Company covenants that during the period
the Warrant is outstanding, it will reserve from its authorized and unissued
Common Stock a sufficient number of shares to provide for the issuance of the
Warrant Shares upon the exercise of any purchase rights under this Warrant. The
Company further covenants that its issuance of this Warrant shall constitute
full authority to its officers who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates for the Warrant
Shares upon the exercise of the purchase rights under this Warrant. The Company
will take all such reasonable action as may be necessary to assure that such
Warrant Shares may be issued as provided herein without violation of any applic-
able law or regulation, or of any requirements of the Principal Market upon
which the Common Stock may be listed.
18. Miscellaneous.
(a) Jurisdiction. This Warrant shall be binding upon any
successors or assigns of the Company. This Warrant shall be construed in accord-
ance with the laws of the State of New York, other than those which would defer
to the substantive laws of another jurisdiction.
(b) Restrictions. The holder hereof acknowledges that the
Warrant Shares acquired upon the exercise of this Warrant, if not registered,
will have restrictions upon resale imposed by state and federal securities laws.
(c) Nonwaiver and Expenses. No course of dealing or any delay or
failure to exercise any right hereunder on the part of Holder shall operate as a
waiver of such right or otherwise prejudice Holder's rights, powers or remedies,
notwithstanding all rights hereunder terminate on the Termination Date.
(d) Notices. Any notice, request or other document required or
permitted to be given or delivered to the holder hereof by the Company shall be
delivered in accordance with the notice provisions of the Financial Consulting
Agreement dated April 27, 2001, by and between Holder and Company.
(e) Limitation of Liability. No provision hereof, in the absence
of affirmative action by Holder to purchase shares of Common Stock, and no
enumeration herein of the rights or privileges of Holder hereof, shall give rise
to any liability of Holder for the purchase price of any Common Stock or as a
stockholder of the Company, whether such liability is asserted by the Company or
by creditors of the Company.
(f) Remedies. Holder, in addition to being entitled to exercise
all rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Warrant. The Company agrees that
monetary damages would not be adequate compensation for any loss incurred by
reason of a breach by it of the provisions of this Warrant and hereby agrees to
waive the defense in any action for specific performance that a remedy at law
would be adequate.
(g) Successors and Assigns. Subject to applicable securities
laws, this Warrant and the rights and obligations evidenced hereby shall inure
to the benefit of and be binding upon the successors of the Company and the
successors and permitted assigns of Holder. The provisions of this Warrant are
intended to be for the benefit of all Holders from time to time of this Warrant
and shall be enforceable by any such Holder or holder of Warrant Shares.
(h) Indemnification. Except as set forth in Section 9 hereof, the
Company agrees to indemnify and hold harmless Holder from and against any lia-
bilities, obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, attorneys' fees, expenses and disbursements of any kind which may
be imposed upon, incurred by or asserted against Holder in any manner relating
to or arising out of any failure by the Company to perform or observe in any
material respect any of its covenants, agreements, undertakings or obligations
set forth in this Warrant; provided, however, that the Company will not be
liable hereunder to the extent that any liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, claims, costs, attorneys' fees,
expenses or disbursements are found in a final non-appealable judgment by a
court to have resulted from Holder's negligence, bad faith or willful misconduct
in its capacity as a stockholder or warrantholder of the Company.
(i) Amendment. This Warrant may be modified or amended or the
provisions hereof waived with the written consent of the Company and the Holder.
(j) Severability. Wherever possible, each provision of this
Warrant shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be prohibited by or
invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provisions or the remaining
provisions of this Warrant.
(k) Headings. The headings used in this Warrant are for the
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.
IN WITNESS WHEREOF, the Company has caused this Warrant to be
executed by its officer thereunto duly authorized.
Dated: July 17, 2001
ION NETWORKS, INC.
By:--------------------------------
Name:
Title:
NOTICE OF EXCERCISE
To: ION NETWORKS, Inc.
(1) The undersigned hereby elects to purchase ________ shares of Common
Stock (the "Common Stock"), of Ion Networks, Inc. pursuant to the terms of the
attached Warrant, and tenders herewith payment of the exercise price in full,
together with all applicable transfer taxes, if any.
(2) Please issue a certificate or certificates representing said shares
of Common Stock in the name of the undersigned or in such other name as is
specified below:
_______________________________
(Name)
_______________________________
(Address)
_______________________________
Dated:
_______________________________
Signature
ASSIGNMENT FORM
(To assign the foregoing warrant, execute
this form and supply required information.
Do not use this form to exercise the warrant.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced
thereby are hereby assigned to
_______________________________________________ whose address is
________________________________________________________________.
________________________________________________________________
Dated: ______________, _______
Holder's Signature: ____________________________________
Holder's Address: ____________________________________
____________________________________
Signature Guaranteed: ___________________________________________
NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in an fiduciary or other representative
capacity should file proper evidence of authority to assign the foregoing
Warrant.
