EXHIBIT 4.2.6
WARRANT
NEITHER THIS WARRANT NOR THE SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH
THE REPRESENTATIONS AND AGREEMENTS MADE BY THE RECORD HOLDER HEREOF SET FORTH IN
THIS WARRANT.
AMBIENT CORPORATION
No.:
Number of Shares: ___ Date of Issuance: September 29, 2000
FOR VALUE RECEIVED, subject to the provisions hereinafter set forth, the
undersigned, Ambient Corporation, a Delaware corporation (together with its
successors and assigns, the "Issuer" or the "Company"), hereby certifies that
________________, or its registered permitted assigns is entitled to subscribe
for and purchase (hereinafter, the "Holder"), during the period specified in
this Warrant, up to __________ shares (subject to adjustment as hereinafter
provided) of the duly authorized, validly issued, fully paid and non-assessable
Common Stock, par value $0.001 (the "Common Stock") of the Company (in each such
case, the "Warrant Shares"), at an exercise price per share equal to $4.50 ("Per
Share Warrant Price"); subject, however, to the provisions and upon the terms
and conditions hereinafter set forth.
1. Warrant Period; Exercise of Warrant
1.1 This Warrant may be exercised in whole or part at any time commencing
immediately following the approval by the Company's stockholders at the annual
2000 general meeting of the stockholders of an increase in the authorized shares
of the Company's stock (such date hereinafter referred to as the "Conversion
Date"), on any business day on or after the Conversion Date and continuing up to
the fourth anniversary thereof (the "Warrant Period"), (i) by the surrender of
this Warrant (with a duly executed exercise form in the form attached at the end
hereof as Exhibit A) at the principal office of the Company, together with the
proper payment of the Per Share Warrant Price times the applicable number of
Warrant Shares or (ii) by the surrender of this Warrant (with the cashless
exercise form at the end hereof duly executed) (a "Cashless Exercise") at the
address set forth in Section 11 hereof. Such presentation and surrender shall be
deemed a waiver of the Holder's obligation to pay the aggregate Warrant Price,
or the proportionate part thereof if this Warrant is exercised in part. In the
event of a Cashless Exercise, the Holder shall exchange its Warrant for that
number of Warrant Shares subject to such Cashless Exercise multiplied by a
fraction, the numerator of which shall be the difference between the then
Current Market Price and the Per Share Warrant Price, and the denominator of
which shall be the then Current
Market Price. For purposes of any computation under this Section 1, the then
Current Market Price per share of the Common Stock (the "Current Market Price")
shall be deemed to be the last reported trade of the Common Stock on the trading
day prior to such date or, in case no such reported sales take place on such
day, the average of the last reported bid and asked prices of the Common Stock
on such day, 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 any such exchange, the representative closing sale price
of the Common Stock as reported by the National Association of Securities
Dealers, Inc. Automated Quotations System ("NASDAQ"), or other similar
organization if NASDAQ is no longer reporting such information, or, if the
Common Stock is not reported on NASDAQ, the high per share sale price for the
Common Stock in the over-the-counter market as reported by the National
Quotation Bureau or similar organization, or if not so available, the fair
market value of the Common Stock as determined in good faith by the Board of
Directors.
1.2 Upon such surrender of this Warrant, the Company will (a) issue a
certificate or certificates in the name of Holder for the Warrant Shares to
which the Holder shall be entitled and (b) if the Warrant is exercised in part,
deliver to the Holder certificates evidencing the balance, if any, of the
Warrant Shares to be issuable pursuant to the provisions of this Warrant.
2. Redemption of Warrants.
Commencing at the end of the twelve months following the issuance of the
Warrant and upon delivery of a notice of redemption to the holder hereof
(hereafter, the "Notice of Redemption"), the Company may redeem (to the extent
not then exercised) the Warrant for $.10 per Warrant Share if the underlying
capital stock issuable upon exercise thereof is covered by an effective and
current registration statement on Form SB-2 (or any other appropriate form)
under the Securities Act of 1933, as amended (the "Securities Act") and the
Average Share Price of the Company's shares is equal to or above 200% of the
Warrant exercise price for a period of twenty consecutive trading days
immediately preceding the delivery or transmission of the Notice of Redemption;
provided, that, notwithstanding the foregoing, the Holder may exercise the
Warrant (in part or in full) within seven (7) business days following delivery
to the Holder of the Notice of Redemption by payment in immediately available
funds of the amount reflecting such exercise of the Warrant.
'Average Share Price' as used herein means the average of the closing bid
prices of shares of the Common Stock of the Issuer (as reported by Bloomberg
Financial Markets) on the stock exchange or public market on which the Common
Stock trades.
3. Representations and Warranties
The Holder (i) represents, warrants, covenants and agrees that the Warrant
and the underlying Warrant Shares are being acquired by the Holder for the
Holder's own account, for investment purposes only, and not with a view to any
public distribution thereof or with any present intention of so distributing all
or any part of the Warrant or the Warrant Shares; (ii) understands (x) that if
it should thereafter decide to dispose of
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such Warrant or Warrant Shares (which it does not contemplate at such time) it
may do so only in compliance with the Securities Act, including any exemption
therefrom, (y) this Warrant and the Warrant Shares are not registered under the
Securities Act; and (iii) acknowledges that, as of the date hereof, it has been
given a full opportunity to ask questions of and to receive answers from the
Company concerning this Warrant and the Warrant Shares and the business of the
Company and to obtain such information as it desired in order to evaluate the
acquisition of this Warrant and the Warrant Shares, and all questions have been
answered to its full satisfaction.
4. Reservation of Shares
(a) The Company covenants that at all times during the Warrant Period it
shall have authorized and in reserve, and will keep available solely for
issuance or delivery upon exercise of the Warrant, the Warrant Shares and other
securities and properties as from time to time shall be receivable upon the
exercise of this Warrant.
(b) The shares of Common Stock represented by each and every certificate
for Warrant Shares delivered upon exercise of this Warrant shall at the time of
such delivery, be duly authorized, validly issued and outstanding, fully paid
and non-assessable and not subject to preemptive rights or rights of first
refusal, and the Company will take such actions as may be necessary to assure
that the par value, if any, per share of the Common Stock is at all times equal
to or less the then Par Share Warrant Price. The Company shall pay all
documentary, stamp or similar taxes and other similar governmental charges that
may be imposed with respect to the issuance or delivery of any Common Shares
upon exercise of the Warrants (other than income taxes); provided, however, that
if the Common Shares are to be delivered in a name other than the name of the
Holder, no such delivery, no such delivery shall be made unless the person
requesting the same has paid to the Company the amount of transfer taxes or
charges incident thereto, if any.
5. Adjustment
5.1 In case of any consolidation or merger of the Company with or into
another corporation (other than a merger or consolidation in which the Company
is the surviving or the continuing corporation) or in the case of any sale or
conveyance to another corporation or other entity of the property, assets or
business of the Company as an entirety or substantially as an entirety, in any
such case, the Company or such successor or purchasing corporation or entity, as
the case may be, shall (i) execute with the Holder an agreement that the Holder
shall have the right thereafter to receive upon the exercise of the Warrant the
kind and amount of shares and/or other securities or other property which he
would have owned or have been entitled to receive after the happening of such
consolidation, merger, sale or conveyance had the Warrant been exercised
immediately prior to such action, (ii) make effective provision in its
certificate of its incorporation or otherwise, if necessary, in order to effect
such agreement, and
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(iii) set aside or reserve for the benefit of the Holder, the stock, securities,
property and cash to which the Holder would be entitled to upon exercise of this
Warrant.
5.2 In case the Company shall (A) pay a dividend or make a distribution on
its shares of Capital Stock (B) subdivide or reclassify its outstanding Capital
Stock into a greater number of shares, or (C) combine or reclassify its
outstanding Capital Stock into a smaller number of shares or otherwise effect a
reverse split, (other than a change in par value or from no par value to a
specific par value), the Exercise Price shall be proportionately adjusted so
that the Holder shall have the right thereafter to receive upon exercise of this
Warrant solely the kind and amount of shares, the Holder would have owned had
this Warrant been exercised immediately prior to such dividend, subdivision,
combination or reclassification.
5.3 The above provisions of this paragraph 5 shall similarly apply to
successive reclassifications and changes of shares of capital stock of the
Company and to successive consolidations.
5.4 In case the Company shall, subsequent to the date hereof, issue rights
or options or warrants to all holders of its Capital Stock entitling them to
subscribe for or purchase shares of Capital Stock (or securities convertible
into Capital Stock) at a price (or having a conversion price per share) less
than the current market price of the Capital Stock, 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, of which the numerator shall be the number of shares of Capital Stock
outstanding on the record date mentioned below plus the number of additional
shares of Capital Stock which the aggregate offering price of the total number
of shares of Capital 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 Capital Stock, and of which the denominator shall be the number
of shares of Capital Stock outstanding on such record date plus the number of
additional shares of Capital Stock offered for subscription or purchased (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 stockholders entitled to receive such rights or warrants; and
to the extent that shares of Capital Stock or securities convertible into
Capital 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 Capital
Stock (or securities convertible into Capital Stock) actually delivered.
5.5 In case the Company shall, subsequent to the date hereof, distribute
to all holders of Capital Stock evidences of its indebtedness or assets
(excluding cash dividends or distributions paid out of current earnings or
subscription rights or warrants (excluding those referred to in Paragraph 5.4 of
this Warrant), 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, of which the numerator shall be the total number of
shares of capital Stock outstanding multiplied by the current market
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price per share of capital Stock, 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 of which the denominator shall be
the total number of shares of Capital Stock outstanding multiplied by such
current market price per share of Capital Stock. Such adjustment shall be made
successively whenever such a 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 stockholders entitled to receive
such distribution.
5.6 If, for any reason, prior to the exercise of this Warrant in full, the
Company spins off or otherwise divests itself of a part of its business or
operations or disposes all or of a part of its assets in a transaction (the
"Spin Off") in which the Company does not receive compensation (other than
nominal non-material compensation) for such business, operations or assets, but
causes securities of another entity (the "Spin Off Securities") to be issued to
security holders of the Company, then the Company shall cause (a) to be reserved
Spin Off Securities equal to the number thereof which would have been issued to
the Holder had all of the Holder's unexercised Warrants outstanding on the
record date (the "Record Date") for determining the amount and number of Spin
Off Securities to be issued to security holders of the Company (the "Outstanding
Warrants") been exercised as of the close of business on the trading day
immediately before the Record Date (the "Reserved Spin Off Shares"), and (b) to
be issued to the Holder on the exercise of all or any of the Outstanding
Warrants, such amount of the Reserved Spin Off Shares equal to (i) the Reserved
Spin Off Shares multiplied by (ii) a fraction, of which (x) the numerator is the
amount of the Outstanding Warrants then being exercised, and (y) the denominator
is the amount of the Outstanding Warrants.
6. Limited Transfer
(a) This Warrant may not be sold, transferred, assigned or hypothecated by
the Holder unless and until the capital stock for the purchase of which such
Warrant is exercisable shall then be covered by an effective and current
registration statement on Form SB-2 (or any other appropriate form) under the
Securities Act of 1933, as amended (the "Act") and all applicable state
securities laws or the Company shall have received an opinion of counsel (which
counsel is reasonably acceptable to the Company) to the effect that the proposed
sale or transfer is exempt from the registration provisions of the Act and all
applicable state securities laws. The Company may treat the registered holder of
record as the Holder for all purposes. The Company shall permit any holder of a
Warrant or his duly authorized attorney, upon written request during ordinary
business hours, to inspect and copy or make extracts from its books showing the
registered holders of Warrants.
(b) Unless covered by an effective and current registration statement, the
Warrant Shares issued upon exercise of the Warrants shall be subject to a stop
transfer order and the certificate or certificates evidencing such Warrant
Shares shall bear the following legend:
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"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, PURSUANT TO A REGISTRATION STATEMENT.
ACCORDINGLY, SUCH SHARES MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO A
REGISTRATION STATEMENT UNDER SUCH ACT, OR AN EXEMPTION FROM REGISTRATION UNDER
SUCH ACT."
7. Registration Rights
(a) Within 135 days following the Conversion Date the Company will include
in a registration statement (the "Registration Statement") which the Company
will prepare and file with the SEC under the Act the Warrant Shares
(collectively, the Warrant Shares hereinafter referred to herein as the
"Securities"). The Holder shall pay any and all underwriting commissions, if
any, in connection with the re-sale by the undersigned of the Securities, but
the Company shall bear all fees and expenses attendant to registering the
Securities under federal, state and any other securities laws, and any required
filings with the NASD, including, without limitation, all printing costs.
(b) The Company shall use its best efforts through its officers,
directors, auditors, and counsel to cause such registration statement to become
effective as promptly as practicable. The Company shall keep effective and
current any registration or qualification contemplated by this Agreement and
shall from time to time amend or supplement each applicable registration
statement, preliminary prospectus, final prospectus, application, document, and
communication in order to maintain the Registration Statement effective and
current for so long as the Securities are not transferable under Rule 144(k)
under the Act.
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(c) The Company shall use its best efforts to cause the Securities to be
registered or qualified for sale under the securities or blue sky laws of such
jurisdictions as the Holder(s) may reasonably request; provided, however, that
the Company shall not by reason of this Article be required to qualify to do
business in any state in which it is not otherwise required to qualify to do
business or to file a general consent to service of process in such
jurisdiction.
(d) Upon request, the Company shall furnish each Holder and its counsel
copies of all registration statements and amendments and supplements thereto,
each preliminary and final prospectus and amendment and supplement thereto,
comment letters from the Commission, the National Association of Securities
Dealers ("NASD") and state securities commissions, and such other documents as
any Holder shall reasonably request to facilitate the disposition of the
Securities included in such registration.
(e) The Company will indemnify and hold harmless each Holder, and each
partner, officer, director, and controlling person of such Holder, with respect
to which registration, qualification or compliance has been effected pursuant to
this Agreement against all claims, losses, damages and liabilities (or actions
in respect thereof under the Act, the Exchange Act, common law or otherwise
arising out of or based on any untrue statement (or alleged untrue statement) of
a material fact contained in any prospectus, offering circular or other document
(including any related registration statement, notification or the like as
amended and supplemented) incident to any such registration, qualification or
compliance, or based on any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or any violation by the Company of any rule or
regulation promulgated under the Act or any state securities or blue sky laws
applicable to the Company and relating to action or inaction required of the
Company in connection with any such registration, qualification or compliance,
and will promptly reimburse each such Holder, and each partner, officer,
director, and each controlling person of such Holder, for any legal and other
expenses reasonably incurred in connection with investigating or defending any
such claim, loss, damage, liability or action; provided, that the Company will
not be liable to any Holder or any partner, officer, director and controlling
person of any Holder, to the extent that any such claim, loss, damage, liability
or expense arises out of or is based on any untrue statement or omission
contained in information furnished to the Company by any Holder in writing for
use therein.
(f) In connection with any registration statement in which a holder of
Securities is participating, each such holder shall furnish to the Company in
writing such information and affidavits as the Company and any underwriter
reasonably requests for use in connection with any such registration statement
or prospectus and shall indemnify the Company, its directors and officers and
each Person who controls the Company (within the meaning of the Securities Act)
against any losses, claims, damages, liabilities and expenses resulting from any
untrue or alleged untrue statement of material fact contained in the
registration statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto or any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein
not misleading, but only to the
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extent that such untrue statement or omission is contained in any information or
affidavit so furnished in writing by such holder.
(g) If the indemnification provided for in subparagraphs (e) and (f) above
is held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, liability, claim, damage, or expense referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such of loss, liability, claim, damage, expense
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other in
connection with the statements or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by a court of competent jurisdiction by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission to state a material fact relates to
information supplied by the indemnifying party or by the indemnified party and
the party's relative intent, knowledge, access to information, and opportunity
to correct or prevent such statement or omission. Notwithstanding the provisions
of this subparagraph (viii), a Holder shall not be required to contribute any
amounts in excess of the amount equal to the gross proceeds realized by such
Holder from the sale of the securities registered pursuant to such registration
statement.
(h) With a view to making available the benefits of certain rules and
regulations of the Commission which may permit the sale of restricted securities
(as that term is used in Rule 144 under the Act) to the public without
registration, the Company undertakes to use its best efforts to:
(i) make and keep public information available as those terms are
understood and defined in Rule 144 under the Act;
(ii) file with the Commission in a timely manner all reports and
other documents required of the Company under the Act and the Exchange Act
at any time after it has become subject to such reporting requirements;
and
(iii) so long as a Holder owns any restricted Securities, furnish to
the Holder promptly upon a written request by the Holder as to the
Company's compliance with the reporting requirements of Rule 144 (at any
time from and after ninety days following the effective date of the first
registration statement filed by the Company for an offering of Securities
to the general public), and of the Act and The Exchange Act of 1934, as
amended, a copy of the most recent annual or quarterly report of the
Company, and such other reports and documents so filed as the Holder may
reasonably request in availing himself, herself or itself of any rule or
regulation of the Commission allowing the Holder to sell any such
Securities without registration.
(i) Notwithstanding the forgoing, if at any time or from time to time
after the date of effectiveness of the Registration Statement, the Company
notifies the
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Holders in writing of the existence of a Potential Material Event, the holders
shall not offer or sell any Securities, or engage in any other transaction
involving or relating to the Securities, from the time of the giving of notice
with respect to a Potential Material Event until either the events or
circumstances comprising such Potential Material Event have been disclosed to
the public or no longer constitute a Potential Material Event; provided however,
that the Company may not so suspend the right to such holders of Securities
during the periods the Registration Statement is required to be in effect other
than during a Permitted Suspension Period. The term "Permitted Suspension
Period" means one or more suspension periods during any consecutive 12-month
period which suspension periods, in the aggregate, do not exceed fifty (50)
days, provided, however, that no one such suspension period shall either (i) be
for more than twenty (20) days or (ii) begin less than ten (10) business days
after the last day of the preceding suspension (whether or not such last day was
during or after a Permitted Suspension Period) and the term "Potential Material
Event" shall mean any of the following: (i) the possession by the Company of
material information not ripe for disclosure in a registration statement, which
shall be evidenced by determinations in good faith by the Board of Directors of
the Company that disclosure of such information in the registration statement
would be detrimental to the business and affairs of the Company; or (ii) any
material engagement or activity by the Company which would, in the good faith
determination of the Board of Directors of the Company, be adversely affected by
disclosure in a registration statement at such time, which determination shall
be accompanied by a good faith determination. Notwithstanding anything to the
contrary contained herein, the provisions hereof shall not apply to the extent
that any of the Securities then included in such Registration Statement may be
sold or otherwise transferred under Rule 144 under the Act or are transferred in
a private non-brokerage transaction.
8. Loss, etc. of Warrant
Upon receipt of evidence satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant, and of indemnity reasonably
satisfactory to the Company, if lost, stolen or destroyed, and upon surrender
and cancellation of this Warrant, if mutilated, and upon reimbursement of the
Company's reasonable incidental expenses, the Company shall execute and deliver
to the Holder a new Warrant of like date, tenor and denomination.
9. Warrant Holder Not Shareholder
Except as otherwise provided herein, this Warrant does not confer upon the
Holder any right to vote or to consent or to receive notice as a shareholder of
the Company, as such, in respect of any matters whatsoever, or any other rights
or liabilities as a shareholder, prior to the exercise hereof.
10. Headings
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The headings of this Warrant have been inserted as a matter of convenience
and shall not affect the construction hereof.
11. Notices.
Unless otherwise provided, any notice required or permitted under this
Warrant shall be given in writing and shall be deemed effectively given upon
personal delivery to the party to be notified or seven (7) days after deposit
with a National Post Office, for dispatch by registered or certified mail,
postage prepaid and addressed to either party at the appropriate addresses set
forth below.
(a) If to the Company: at Ambient Corporation
0000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX
(b) if to the Holder: At the address last provided in writing by the
Holder to the Company
12. Governing Law
This Warrant shall be governed by and construed and enforced in accordance
with the laws of the State of Delaware applicable to contracts made and
performed within such State.
13. Waiver
Except as expressly provided herein, neither this Warrant nor any term
hereof may be amended, waived, discharged or terminated other than by a written
instrument signed by the party against whom enforcement of any such amendment,
waiver, discharge or termination is sought; provided, however, that any
provisions hereof may be amended, waived, discharged or terminated upon written
consent of the Company and the Majority of the Holders.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed as
of the date first written above.
AMBIENT CORPORATION
By:________________________________
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EXHIBIT A
WARRANT EXERCISE FORM
_________________, 200_
TO: Ambient Corporation
RE: Exercise of Warrant
The undersigned hereby irrevocably elects to exercise the attached Warrant to
the extent of ___________________ shares of Common Stock of Ambient Corporation
then issuable according to the terms thereof at the per share price of $___.
Payment to the Company of the total purchase price for such shares has been made
simultaneously with the delivery of this exercise of warrant.
By:________________________________
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CASHLESS EXERCISE
The undersigned, _____________, pursuant to the provisions of the
foregoing Warrant, hereby elects to exchange its Warrant for _______ shares of
Common Stock, par value $0.001 per share, of Ambient Corporation, pursuant to
the Cashless Exercise Provisions of the Warrant.
Dated: Signature:
Address:
