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EXHIBIT 10.6
[*] - Confidential Treatment Requested Pursuant to Rule 24b-2
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. IT MAY
NOT BE SOLD OR OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS WARRANT UNDER
SAID ACT OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL TO THE COMPANY
OR HOLDER'S COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED TO EFFECTUATE SUCH TRANSACTION OR UNLESS PURSUANT
TO RULE 144.
PARK `N VIEW, INC.
WARRANT
DATED MARCH 12, 1999
THIS CERTIFIES that [*] (the "Warrantholder"), for value received, is
entitled, upon the terms and subject to the conditions set forth herein, to
subscribe for and purchase up to 100,000 fully-paid and nonassessable shares
(the "Shares") of the Common Stock, par value $.01 per share (the "Stock"), of
Park `N View, Inc., a Delaware corporation (the "Company"), at the exercise
price of $9.20 per share (the "Initial Exercise Price"), which number of Shares
and Initial Exercise Price shall be adjusted pursuant to the provisions of
Section 10 hereof (the "Exercise Price").
1. Term. Except as otherwise provided for herein, the right to purchase
the Shares as granted herein shall become exercisable from time to time in
cumulative increments of 1,111 shares of Stock on the date on which [*] if
Warrantholder does not [*] and 1,121 shares of Stock on the date on which [*];
provided however that this Warrant shall become exercisable in full upon the
first to occur of the following: (i) 18 months following [*], (ii) the sale of
the Company, (iii) the consummation of a Qualifying Offering (as hereinafter
defined), (iv) the Company's [*] for any reason other than [*], or (v) the
Company's [*] or (vi) at such other time as the Company may request pursuant to
Section 3(g).
Except as otherwise provided, this Warrant shall terminate and cease to
be exercisable upon the first to occur of the following: (i) the Warrantholder's
purchase of all the Shares, (ii) [*], (iii) the Warrantholder's [*] for any
reason other than [*] or (iv) [*]. In addition, upon the occurrence of items
(iii) or (iv) above, the Company shall have the right to immediately repurchase
any Stock previously purchased by [*] pursuant to the Warrant at a price of
$9.20 per share (or at such other prices paid by [*] as adjusted pursuant to the
anti-dilution provisions of the Warrant). In addition to the foregoing, if
within four (4) years of the date of this Warrant: (i) the Warrantholder [*];
(ii) [*]; and (iii) [*] or [*], that increment of the Warrant [*] shall
immediately be null and void and (a) Warrantholder shall have no further right
to purchase any of such Shares
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hereunder; and (b) the Company shall have the right to immediately repurchase
any Shares [*] previously purchased by [*] pursuant to the Warrant at a price of
$9.20 per share (or at such other prices paid by [*] as adjusted pursuant to the
anti-dilution provisions of the Warrant). Any stock certificate issued to [*]
pursuant to its exercise of all or any part of the Warrant shall bear a legend
indicating that such Shares are subject to the Company's rights of repurchase
under the terms of this Warrant and the Company's rights shall survive the
termination of this Warrant or [*]. Notwithstanding the foregoing, the Company's
rights of repurchase under this Warrant shall terminate upon a Qualifying
Offering (defined below) or the sale of the Company.
2. Exercise of Purchase Rights.
Exercise. The purchase rights represented by this
Warrant are exercisable by the Warrantholder, in whole or in part, at any time,
or from time to time during the period set forth in Section 1 above, by
tendering the Company at its principal office a notice of exercise in the form
attached hereto as Exhibit A (the "Notice of Exercise"), duly completed and
executed. Upon receipt of the Notice of Exercise and the payment of the Exercise
Price in accordance with the terms set forth below, the Company shall issue to
the Warrantholder a certificate for the number of shares of Stock of the Company
purchased and shall execute the Notice of Exercise indicating the number of
shares of Stock which remain subject to future purchases, if any. The person or
persons in whose name(s) any certificate(s) representing shares of Stock shall
be issued upon exercise of this Warrant shall be deemed to have become the
holder(s) of the Shares represented thereby (and such shares shall be deemed to
have been issued) immediately prior to the close of business on the date or
dates upon which this Warrant is exercised. In the event of any exercise of the
rights represented by this Warrant, certificates for the Shares so purchased
shall be delivered to the Warrantholder or its designee as soon as practical and
in any event within thirty (30) days after receipt of such notice and, unless
this Warrant has been fully exercised or expired, a new Warrant representing the
remaining portion of the Shares, if any, with respect to which this Warrant
shall not then have been exercised shall also be issued to the Warrantholder as
soon as possible and in any event within such thirty (30) day period.
Method of Exercise. The purchase rights hereby
represented may be exercised, at the election of the Warrantholder, by the
tender of the Notice of Election and the surrender of this Warrant at the
principal office of the Company and by the payment to the Company, by check,
cancellation of indebtedness or other form of payment acceptable to the Company,
of an amount equal to the then applicable Exercise Price per share multiplied by
the number of Shares then being purchased.
(c) Termination in the Event of Initial Public Offering.
Except as otherwise provided, this Warrant shall terminate immediately upon the
Company's consummation of a firm underwritten commitment public offering of the
Stock pursuant to an effective registration under the Securities Act of 1933, as
amended, covering the offer and sale of both primary and secondary shares of
Stock which results in gross proceeds of least $20,000,000, the Stock is quoted
or listed on either The Nasdaq Stock Market, the New York Stock Exchange or the
American Stock Exchange and the price at which the Stock is sold in such
offering is at least equal to the Exercise
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Price (a "Qualifying Offering"). The Company shall provide written notice of its
proposed filing of a registration statement relating to a Qualifying Offering at
least 30 days prior to such filing. The Warrantholder will be permitted to
rescind any previously tendered Notice of Election in the event that a proposed
public offering is not consummated for a per share price greater than the
Exercise Price.
3. Piggyback Registration Rights.
(a) If the Company, at any time proposes to register shares of Stock
under the Securities Act of 1933, as amended (the "Securities Act") (other than
pursuant to a registration on Form S-4 or Form S-8 or any similar or successor
forms), it shall at least 30 days prior to the filing of the Registration
Statement relating to such registration with the Securities and Exchange
Commission give written notice to the Warrantholder of the Company's intention
to do so, which notice shall include a statement as to the estimated maximum
number of Shares that the Warrantholder may include in such registration. Within
15 days after receipt of any such notice, the Warrantholder shall notify the
Company in writing whether the Warrantholder wishes to register any Shares in
such registration, which notification shall specify the number of Shares
intended to be sold or disposed of by the Warrantholder and shall state the
intended method of disposition of such Shares. If the Warrantholder fails to
submit such notice within such 15 day period, it shall be deemed to have
notified the Company that the Warrantholder does not then wish to register any
Shares. Upon receipt of such notice, the Company shall promptly use best efforts
to effect the registration under the Securities Act of the specified number of
Shares; provided that the Company need not promptly register any Shares if the
Warrantholder has failed to comply with paragraph (c) hereof in a timely manner.
(b) Prior to the effectiveness of a registration statement pursuant to
which any of the Shares are being registered, the Warrantholder must exercise
the Warrant for at least the number of Shares being registered.
(c) The Warrantholder will furnish to the Company in writing such
information as the Company may reasonably require from the Warrantholder, and
otherwise reasonably cooperate with the Company in connection with any
registration statement with respect to the Shares. The Company may exclude
Shares from registration to the extent that the Warrantholder fails to furnish
such information within a reasonable time after receiving such request.
(d) The Warrantholder may not participate in any underwritten
registration pursuant hereto unless the Warrantholder (a) agrees to sell Shares
on the basis provided in any underwriting arrangements approved by the Company
and (b) completes and executes all questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents required by the terms
of such underwriting arrangements. The Warrantholder shall be entitled at any
time to withdraw Shares from such registration prior to its effective date in
the event that the Warrantholder shall disapprove of any of the terms of the
related underwriting agreement but only
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if the Warrantholder is permitted to do so by the managing underwriters or
pursuant to any agreement therewith.
(e) In the event that the proposed registration by the Company is, in
whole or in part, an underwritten public offering of the Stock, if the managing
underwriter determines that the inclusion of the Shares proposed to be included
would jeopardize the successful marketing of securities by the Company or
another selling securityholder, then the number of Shares to be included in such
underwritten public offering by the Warrantholder shall be reduced or
eliminated, the total amount of such reduction or elimination to be in the
discretion of the managing underwriter, provided that the number of shares of
stock to be included in any such registration for the account of selling
securityholders, other than those referenced in Section 3(h) hereof, shall be
reduced pro rata based on the number of shares of stock which each such selling
securityholder has requested to be included in such registration.
(f) The Warrantholder agrees to notify the Company as promptly as
practicable of any inaccuracy or change in information previously furnished by
such Warrantholder to the Company or of the occurrence of any event in either
case as a result of which any Prospectus included in a registration statement
pursuant to which Shares are registered contains or would contain an untrue
statement of a material fact regarding such Warrantholder or such
Warrantholder's intended method of distribution of Shares or omits to state any
material fact regarding such Warrantholder or such Warrantholder's intended
method of distribution of Shares necessary to make the statements therein, in
light of the circumstances then existing, not misleading, and promptly to
furnish to the Company any additional information required to correct and update
any previously furnished information or required so that such Prospectus shall
not contain, with respect to such Warrantholder or intended method of
distribution of Shares, an untrue statement of a material fact or omit to state
a material fact necessary to make the statements therein, in light of the
circumstances then existing, not misleading.
(g) If Company at any time proposes to register shares of Stock for
sale to the public in a firm commitment underwritten public offering and the
underwriter(s) thereof requires as a condition to such offering that the
Warrantholder exercise the Warrant prior to such offering, then the
Warrantholder agrees to exercise the Warrant if and to the extent the Warrant is
exercisable and the public offering price is at least equal to the Exercise
Price.
(h) Notwithstanding any provision hereof to the contrary, the
Warrantholder understands and acknowledges that there are in effect, and the
Warrantholder has been given the opportunity to review, agreements of the
Company pursuant to which the holders of the Company's preferred stock have
certain superior rights with respect to the Company's registration of their
offers and sales of the Stock under the Securities Act. The rights granted
hereunder to the Warrantholder are subordinate in all respects to the rights
granted under such prior agreements. Specifically, but without limitation, such
securityholders have priority over the Warrantholder with respect to inclusion
of securities in any registration statement of the Company with the result that,
among other things, the securities of such securityholders shall be
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included in a registration statement filed by the Company prior to any inclusion
in such registration statement by the Warrantholder.
(i) In the event of any underwritten offering of securities by the
Company or other securityholders of the Stock, the Warrantholder agrees that it
will not sell any shares of Stock, regardless of whether the Warrantholder is a
selling securityholder in such offering, during the period commencing 10 days
prior to any such underwritten offering and ending 90 days following such
underwritten offering.
(j) The Company shall not be obligated to include any Shares in a
registration pursuant hereto, if at the time of the receipt of a request to
include such Shares, the Shares could be sold by the Warrantholder pursuant to
Rule 144 under the Securities Act (or any similar or successor rule in effect at
that time), provided that, the Company shall, at its expense, promptly provide,
to or on behalf of Warrantholder, such opinions of counsel and other
documentation as may be required in connection with all sales by Warrantholder
of the Shares pursuant to Rule 144 under the Securities Act (or any similar or
successor rule in effect at that time).
(k) The Company will take all such actions as may be reasonably
necessary to assure that the Shares issuable pursuant to this Warrant, upon
issuance, shall have been approved for listing upon any domestic stock exchange
upon which the Stock is then listed.
(l) The costs and expenses incurred in connection with the registration
of the Shares hereunder will be paid by the Company; provided, however, that the
Company will not bear the cost of nor pay for any (i) stock transfer taxes
imposed in respect of the transfer of any Shares, (ii) any underwriting
discounts or commission or similar fees related to an underwritten offering of
the Shares or (iii) any fees and disbursements of counsel representing the
Warrantholder.
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4. Reservation of Shares.
(a) Authorization and Reservation of Shares. The Company will
at all times have authorized and reserved a sufficient number of Shares to
provide for the exercise of the rights to purchase Stock as provided herein. All
such shares of Common Stock will be duly authorized and, when issued upon
exercise of this Warrant in accordance with the terms hereof, shall be validly
issued, fully paid and nonassessable with no liability on the part of the
holders thereof. The Company shall not at any time while this Warrant remains
outstanding allow the par value of its Common Stock to exceed the then effective
Exercise Price.
(b) Registration or Listing. If any shares of Stock required
to be reserved for purposes of exercise of this Warrant require registration
with or approval of any governmental authority under any Federal or State law
(other than any registration under the Securities Act of 1933, as then in
effect, or any similar Federal statute then enforced, or any state securities
law, required by reason of any transfer), or listing on any domestic securities
exchange, or if at the time of exercise the class of Stock into which this
Warrant is then exercisable is listed on any domestic securities exchange, the
Company will, at its expense and as expeditiously as possible, use its best
efforts to cause such shares to be duly registered, listed or approved for
listing on such domestic securities exchange, as the case may be.
5. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Warrantholder that, as of the date hereof:
(a) Organization and Capitalization. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. The authorized capital stock of the Company consists
of 17,750,000 shares of capital stock, comprised of 12,000,000 shares of Common
Stock, of which 4,318,182 shares of Common Stock are issued and outstanding and
5,750,000 shares of Preferred Stock, of which (i) 627,630 shares are designated
as Series A Preferred Stock, of which 388,065 shares are issued and outstanding,
(ii) 1,372,370 shares are designated as Series B Preferred Stock, of which
1,372,370 shares are issued and outstanding, and (iii) 3,750,000 shares are
designated as Series C Preferred Stock, of which 2,351,543 shares are issued and
outstanding. There are reserved for issuance: (i) 1,875,000 shares of Common
Stock which may be issued upon conversion of Series B Preferred Stock; (ii)
2,351,543 shares of Common Stock which may be issued upon conversion of Series C
Preferred Stock; (iii) 1,496,363 shares of Common Stock which may be issued
pursuant to the exercise of options previously granted to present employees of
the Company; (iv) 437,803 shares of Common Stock which are available for future
grants of options under the Company's Stock Option Plan; and (v) up to 785,774
shares of Common Stock which may be issued pursuant to the exercise of
outstanding warrants (excluding this Warrant). Except as set forth above, the
Company has not issued or agreed to issue any stock purchase rights or
securities convertible into Common Stock. All the issued and outstanding shares
of the Company's capital stock have been validly issued without violation of any
preemptive or similar rights and are fully paid and nonassessable.
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(b) Authority. The Company has full corporate power and
authority to execute and deliver this Warrant and to perform all of its
obligations hereunder, and the execution, delivery and performance hereof have
been duly authorized by all necessary corporate action on its part. This Warrant
has been duly executed on behalf of the Company and constitutes the legal, valid
and binding obligation of the Company enforceable in accordance with its terms.
(c) No Legal Bar. Except to the extent that any of the rights,
conflicts or requirements described in this paragraph may have been previously
waived or complied with, neither the execution, delivery or performance of this
Warrant will not (i) conflict with or result in a violation of the Company's
Certificate of Incorporation, as amended, or the Company's Bylaws, as amended,
(ii) conflict with or result in a violation of any law, statute, regulation,
order or decree applicable to the Company, (iii) require any consent or
authorization or filing with, or other act by or in respect of, any governmental
authority (other than compliance with federal and state securities requirements,
which requirements shall be complied with by the Company within the prescribed
periods), conflict with or result in a breach of, constitute a default under or
constitute an event creating rights of acceleration, termination or cancellation
under any mortgage, lease, contract, franchise, instrument or other agreement to
which the Company is a party or by which it is bound.
(d) Validity of Shares. When issued upon the exercise of this
Warrant as contemplated herein, shares of Common Stock will have been validly
issued and will be fully paid and nonassessable.
(e) Notice of Cash Dividends. The Company shall provide
Warrantholder with notice of the declaration of a cash dividend at least 15 days
prior to the record date for the payment of such dividend and shall provide
Warrantholder with such information as may be reasonably requested by
Warrantholder to allow Warrantholder to make a decision as to whether to
exercise all or some portion of this Warrant.
6. Covenants of the Company.
(a) No Breach or Amendment. The Company shall not by any
action, including, without limitation, amending its Certificate of
Incorporation, as amended, avoid or seek to avoid the observance or performance
of any of the terms of this Warrant; the Company will at all times in good faith
assist in the carrying out of all such terms and in the taking of all such
reasonable action as may be necessary or appropriate to protect the rights of
the Warrantholder against breach; provided, however, that nothing in this
Section 6(a) will restrict the Company's ability to enter into agreements for
the incurrence of indebtedness with financial or other institutional investors
in the ordinary course of business. Without limiting the generality of the
foregoing, the Company will (i) not increase the par value of any shares of
Common Stock issuable upon the exercise of this Warrant above the amount payable
therefor upon such exercise, (ii) take all such action as may be necessary or
appropriate in order that the Company may validly issue fully paid and
nonassessable shares of Common Stock upon the exercise of this Warrant, and
(iii) obtain all such authorizations, exemptions or consents from any public
regulatory body having jurisdiction thereof as may be necessary to enable the
Company to
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perform its obligations under this Warrant. Upon the request of the
Warrantholder, the Company will at any time during the period this Warrant is
outstanding acknowledge in writing, in a form reasonably satisfactory to the
Warrantholder, the continued validity of this Warrant and the Company's
obligations hereunder.
(b) Availability of Information. The Company will cooperate
with the Warrantholder in supplying such information as may be reasonably
necessary for the Warrantholder to complete and file any information reporting
forms presently or hereafter required by the Securities and Exchange Commission
as a condition to the availability of an exemption from the Securities Act of
1933, as amended, for the sale of this Warrant or any shares issued pursuant to
this Warrant. So long as this Warrant is outstanding, the Company will provide
the Warrantholder as soon as reasonably practicable but in any event (i) within
120 days after the close of each fiscal year of the Company, audited financial
statements as of the end of such fiscal year; and (ii) within 60 days after the
close of each of the Company's first 3 fiscal quarters, an unaudited balance
sheet of the Company as of the end of such fiscal quarter and unaudited
statements of operations and cash flows of the Company for the quarter just
ended and for the portion of the fiscal year ended with the end of such quarter.
In addition, simultaneous with the distribution to its stockholders, the Company
will provide the Warrantholder with all notices to stockholders or other
communications sent by or on behalf of the Company to such stockholders.
(c) Certain Expenses. The Company will pay all expenses in
connection with, and all taxes (other than stock transfer, income and capital
gain taxes) and other governmental charges that may be imposed in respect of the
issuance and delivery of this Warrant or any shares issued or issuable pursuant
to this Warrant.
7. No Fractional Shares. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of the Warrantholder's
rights to purchase Stock, but in lieu of such fractional shares the Company
shall make a cash payment therefor upon the basis of the fair market value of a
share of that stock at the time of exercise.
8. No Rights as Shareholder. This Warrant does not entitle the
Warrantholder to any voting rights or other rights as a shareholder of the
Company prior to the exercise of the Warrantholder's rights to purchase Stock as
provided for herein.
9. Warrantholder Registry. The Company shall maintain a registry
showing the name and address of the registered holder of this Warrant.
10. Adjustment Rights. The Exercise Price and the number of Shares of
Stock purchasable hereunder are subject to adjustment from time to time, as
follows:
(a) Reclassification or Merger. In case of any
reclassification, change or conversion of securities of the class issuable upon
exercise of this Warrant into the same or a different number of securities of
any other class or classes, or in case of any merger of the
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Company with or into another corporation (other than a merger with another
corporation in which the Company is the acquiring and the surviving corporation
and which does not result in any reclassification or change of outstanding
securities issuable upon exercise of this Warrant), or in case of any sale of
all or substantially all of the assets of the Company, the Company, or such
successor or purchasing corporation, as the case may be, shall duly execute and
deliver to the holder of this Warrant, so that the holder of this Warrant shall
have the right to receive, at a total purchase price not to exceed that payable
upon the exercise of the unexercised portion of this Warrant, and in lieu of the
Shares of Stock theretofore issuable upon exercise of this Warrant, the kind and
amount of shares of stock, other securities, money and property receivable upon
such reclassification, change or merger by a holder of the number of Shares of
Stock then purchasable under this Warrant. Such new Warrant shall provide for
adjustment that shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 10. The provisions of this subparagraph
(a) shall similarly apply to successive reclassifications, changes, mergers and
transfers.
(b) Subdivision or Combination of Shares. If the Company at
any time shall subdivide its Stock, the Exercise Price shall be proportionately
decreased and the number of Shares issuable pursuant to this Warrant shall be
proportionately increased. If the Company at any time shall combine its Stock,
the Exercise Price shall be proportionately increased and the number of Shares
issuable pursuant to this Warrant shall be proportionately decreased.
(c) Stock Dividends. If the Company at any time shall pay a
dividend payable in, or make any other distribution (except any distribution
specifically provided for in the foregoing subsections (a) or (b)) of Stock, or
issue shares of Common Stock at a price less than the Exercise Price (other than
shares of Common Stock issuable: (i) under the Park `N View Stock Option Plan as
in effect on the date hereof and as disclosed in Section 5(a) above; (ii) upon
conversion of any outstanding preferred stock as disclosed in Section 5(a)
above; or (iii) upon exercise of any warrants outstanding as disclosed in
Section 5(a) above), then the Exercise Price shall be adjusted, from and after
the date of determination of stockholders entitled to receive such dividend or
distribution or the date of such issuance to that price determined by
multiplying the Exercise price in effect immediately prior to such date of
determination by a fraction (i) the numerator of which shall be the total number
of shares of Stock outstanding immediately prior to such dividend or
distribution, and (ii) the denominator of which shall be the total number of
shares of Stock outstanding immediately after such dividend, distribution or
issuance. The Warrantholder shall thereafter be entitled to purchase, at the
Exercise Price resulting from such adjustment, the number of Shares of Stock
(calculated to the nearest whole share) obtained by multiplying (i) the Exercise
Price in effect immediately prior to such adjustment by (ii) the number of
Shares of Stock issuable upon the exercise hereof immediately prior to such
adjustment and dividing the product thereof by the Exercise Price resulting from
such adjustment.
(d) Reserved Shares Adjustment. The number of shares reserved
for issuance pursuant to this Warrant shall automatically be adjusted without
further action by the Company in the event of any adjustment of the number of
Shares issuable pursuant to this Warrant. In case of
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any event resulting in adjustment pursuant to Section 10(a), 10(b) or 10(c)
above, the Company shall give written notice thereof to the Warrantholder
stating the date on which such event is to take place (which shall be at least
forty-five (45) days after the Warrantholder's receipt of such notice).
11. Compliance with Securities Act; Disposition of Warrant or Shares of
Stock.
(a) Compliance with Securities Act. The Warrantholder, by
acceptance hereof, agrees that this Warrant, and the Shares of Stock to be
issued upon exercise hereof, are being acquired for investment and that such
Warrantholder will not offer, sell or otherwise dispose of this Warrant, or any
Shares of Stock to be issued upon exercise hereof except under circumstances
which will not result in a violation of the Securities Act of 1933, as amended
(the "Securities Act"), or any applicable state securities laws. At the time of
exercise, the Warrantholder shall execute an Investment Letter in the form
attached hereto as Exhibit B stating (among other things) that the shares issued
pursuant to the Warrant have not been registered under federal or state
securities laws, and that such shares may not be transferred unless the shares
are so registered or unless the Company has received an opinion of the Company's
counsel or such holder's counsel reasonably acceptable to the Company that such
transfers are exempt from registration.
(b) Legend. This Warrant and all shares of Stock issued upon
exercise of this Warrant (unless registered under the Securities Act and any
applicable state securities laws) shall be stamped or imprinted with a legend in
substantially the following form:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD OR
OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT RELATED THERETO UNDER SAID ACT OR UNLESS THE COMPANY
HAS RECEIVED AN OPINION OF COUNSEL THAT SUCH REGISTRATION IS
NOT REQUIRED TO EFFECTUATE SUCH TRANSACTION OR UNLESS PURSUANT
TO RULE 144."
(c) Representations and Warranties of Warrantholder. In
addition, in connection with the issuance of this Warrant, the Warrantholder
specifically represents to the Company by acceptance of this Warrant as follows:
The Warrantholder is aware of the Company's
business affairs and financial condition, and has acquired information about the
Company sufficient to reach an informed and knowledgeable decision to acquire
this Warrant. The Warrantholder is acquiring this Warrant for its own account
for investment purposes only and not with a view to, or for the resale in
connection with, any "distribution" thereof in violation of the Securities Act.
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The Warrantholder understands that this
Warrant has not been registered under the Securities Act in reliance upon a
specific exemption therefrom, which exemption depends upon, among other things,
the bona fide nature of the Warrantholder's investment intent as expressed
herein.
The Warrantholder further understands
that this Warrant and any shares of Stock to be issued upon exercise hereof must
be held indefinitely unless subsequently registered under the Securities Act and
qualified under any applicable state securities laws, or unless exemptions from
registration and qualification are otherwise available.
(d) Disposition of Warrant or Shares. Subject to the terms and
conditions of Section 11(e), with respect to any offer, sale or other
disposition of this Warrant or any Shares of Stock acquired pursuant to the
exercise of this Warrant prior to registration of such Warrant or Shares, the
holder agrees to give written notice to the Company prior thereto, describing
briefly the manner thereof, together with an opinion of the Company's counsel or
such xxxxxx's counsel reasonably satisfactory to the Company, or other evidence,
if reasonably requested by the Company, to the effect that such offer, sale or
other disposition may be effected without registration or qualification (under
the Securities Act as then in effect or any federal or state securities law then
in effect) of this Warrant or such shares of Stock and indicating whether or not
under the Securities Act certificates for this Warrant or such shares of Stock
to be sold or otherwise disposed of require any restrictive legend as to
applicable restrictions on transferability in order to ensure compliance with
such law. Promptly upon receiving such written notice and reasonably
satisfactory opinion or other evidence, if so requested, the Company, as
promptly as practicable but no later than five (5) days after receipt of the
written notice, shall notify such holder that such holder may sell or otherwise
dispose of this Warrant or such shares of Stock, all in accordance with the
terms of the notice delivered to the Company. Notwithstanding the foregoing,
this Warrant or such shares of Stock may, as to such federal laws, be offered,
sold or otherwise disposed of in accordance with Rule 144 or 144A under the
Securities act, provided that the Company shall have been furnished with such
information as the Company may reasonably request to provide a reasonable
assurance that the provisions of Rule 144 or 144A have been satisfied. Each
certificate representing this Warrant or the shares of Stock thus transferred
(except a transfer pursuant to Rule 144 or 144A) shall bear a legend as to the
applicable restrictions on transferability in order to ensure compliance with
such laws, unless in the aforesaid opinion of counsel for the Company or the
Warrantholder or pursuant to Rule 144 or 144A, such legend is not required in
order to ensure compliance with such laws. The Company may issue stop transfer
instruction to its transfer agent in connection with such restrictions.
(e) Prohibition Against Transfer. This Warrant, the rights of
the Warrantholder hereunder and the Shares may not be assigned or transferred
except to a parent or subsidiary entity of the Warrantholder that, in the case
of a parent, owns at least 80% of the Warrantholder, and, in the case of a
subsidiary, is 80% owned by the Warrantholder; provided
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however that such transferee shall be bound by the terms and provisions hereof
and the prohibition on transfer of the Shares in this Section 11(e) shall
terminate upon the termination of all of the Company's rights to repurchase the
Shares pursuant to Section 1 hereof.
12. Miscellaneous.
(a) Attorney's Fees. In any litigation, arbitration or court
proceeding between the Company and the Warrantholder relating hereto, the
prevailing party shall be entitled to attorneys' fees and expenses and all costs
of proceedings incurred in enforcing this Warrant.
(b) Governing Law. This Warrant Agreement shall be governed by
and construed for all purposes under and in accordance with the laws of the
State of Delaware.
(c) Descriptive Headings. The descriptive headings of the
paragraphs of this Warrant are inserted for convenience only and do not
constitute a part of this Warrant.
(d) Notices. Any notice required or permitted hereunder shall
be given in writing and shall be deemed effectively given upon personal delivery
or upon deposit in the United States mail, by registered or certified mail,
addressed (1) to the Warrantholder, at the address in the Warrant Register
maintained by the Company, and (ii) to the Company, at 00000 XX 00xx Xxxxxx,
Xxxxx Xxxxxxx, XX 00000, or at such other address as any such party may
subsequently designate by written notice to the other party.
(e) Lost Warrants. The Company covenants to the Warrantholder,
that upon receipt of evidence reasonably satisfactory to the Company of the
loss, theft, destruction or mutilation of this Warrant or any stock certificate
and, in the case of any such loss, theft or destruction, upon receipt of an
indemnity reasonably satisfactory to the Company, or in the case of any such
mutilation, upon surrender and cancellation of such Warrant or stock
certificate, the Company will make and deliver a new Warrant or stock
certificate of like tenor, in lieu of the lost, stolen, destroyed or mutilated
Warrant or stock certificate.
(f) Severability. In the event any one or more of the
provisions of this Warrant shall for any reason be held invalid, illegal or
unenforceable, the remaining provisions of this Warrant shall be unimpaired, and
the invalid, illegal or unenforceable provision shall be replaced by a mutually
acceptable valid, legal and enforceable provision, which comes closest to the
intention of the parties underlying the invalid, illegal or unenforceable
provision.
(g) Modification and Waiver. This Warrant and any provision
hereof may be amended, waived, discharged or terminated only by an instrument in
writing signed by the party against whom enforcement of the same is sought.
(h) Application of Securityholders' Agreement. The
Warrantholder understands and acknowledges that there is in effect that certain
Xxxxxxx and Restated
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SecurityHolders' and Exchange Agreement, as amended, (a copy of which has been
provided to the Warrantholder) and that the Shares and the Warrantholder shall
be subject to the terms and conditions thereof.
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(i) Survival of Representations and Warranties. All of the
Warrantholders representations, warranties, agreements and obligations with
respect to the ownership of the Shares shall survive the termination of the
Warrant.
(j) Entire Agreement.This Warrant constitutes the entire
agreement between the parties pertaining to the subject matter contained in it
and supersedes all prior and contemporaneous agreements, representations and
undertakings of the parties, whether oral or written, with respect to such
subject matter.
IN WITNESS WHEREOF, this warrant has been duly executed and delivered
by the undersigned.
PARK `N VIEW, INC.
By:/s/ Xxx Xxxxxxxx
---------------------------------
Xxx Xxxxxxxx, Chairman of the Board
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Exhibit A
NOTICE OF EXERCISE FOR CASH
To: Park `N View, Inc.
00000 XX 00xx Xxxxxx
Xxxxx Xxxxxxx, XX 00000
Attention: President
1. The undersigned, hereby elects to purchase ___ shares of
the Common Stock of Park `N View, Inc. pursuant to the terms of the attached
Warrant, and tenders herewith payment of the purchase price of such shares in
full.
2. Please issue a certificate or certificates representing
said shares in the name of the undersigned or in such other name or names as are
specified below:
Name Address
---- -------
Unless this Warrant has been fully exercised or expired, please issue a
new Warrant representing the remaining portion of the Shares, if any, with
respect to which this Warrant has not been exercised in the name of the
Warrantholders.
------------------------------
(SIGNATURE)
Date:
--------------------
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EXHIBIT B
FORM OF
INVESTMENT LETTER
___________, 19___
Park `N View, Inc.
00000 XX 00xx Xxxxxx
Xxxxx Xxxxxxx, XX 00000
Attention: President
Gentlemen:
The undersigned, ________________________ ("Purchaser") intends to
acquire up to _________ shares (the "Shares") of the Common Stock of Park `N
View, Inc. (the "Company") from the Company pursuant to the exercise of certain
Warrant held by Purchaser. The Shares will be issued to Purchaser in a
transaction not involving a public offering and pursuant to an exemption from
registration under the Securities Act of 1933, as amended (the "1933 Act"). In
connection with such purchase and in order to comply with the exemption from
registration relied upon by the Company, Purchaser represents, warrants and
agrees as follows:
1. Purchaser is acquiring the Shares for Purchaser's own account, to
hold for investment, and Purchaser shall not make any sale, transfer or other
disposition of the Shares in violation of the 1933 Act or the rules and
regulations promulgated thereunder by the Securities and Exchange Commission or
in violation of any applicable state securities law.
2. Purchaser has been advised that the issuance of the Shares is not
being registered under the 1933 Act on the ground that this transaction is
exempt from registration under Section 3(b) or 4(2) of the 1933 Act, as not
involving any public offering, and that reliance by the Company on such
exemptions is predicated in part on Purchaser's representations set forth in
this letter. Purchaser also has been advised that neither the Shares nor the
issuance thereof are being registered under the securities laws of any state.
3. Purchaser has been informed that the Shares must be held
indefinitely unless subsequently registered under the 1933 Act and applicable
state securities laws, or unless exemptions from such registration are available
with respect to any proposed transfer or disposition by Purchaser of the Shares.
Xxxxxxxxx understands and agrees that the Company, as a condition to the
transfer of any of the Shares, may require that the request for transfer be
accompanied by an opinion of counsel satisfactory to the Company, in form and
substance satisfactory to the Company, to the effect that the proposed transfer
is exempt from registration
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under 1933 Act and applicable state securities laws, unless such transfer is
covered by an effective registration statement under the 1933 Act and all
applicable state securities laws.
4. Xxxxxxxxx understands and agrees that there will be placed on the
certificates for the Shares, or any substitutions therefor, a legend stating in
substance:
The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended (the "Act"), nor under any
state securities law and may not be pledged, sold, assigned or
transferred unless (i) a registration statement with respect thereto is
effective under the Act and any applicable state securities laws or
(ii) in the opinion of counsel acceptable to the Company such
securities may be pledged, sold, assigned or transferred without an
effective registration statement under the Act or applicable state
securities laws.
5. Purchaser has been furnished with or has had access to the
information it has requested from the Company in connection with the investment
represented by the Shares and has had an opportunity to discuss with the
officers and management of the Company the Company's business and financial
affairs. Purchaser has such knowledge and experience in business and financial
matters and with respect to investments in securities or in privately held
companies so as to enable it to understand and evaluate the risks of such
investment and form an investment decision with respect thereto.
Very truly yours,
-----------------------------------
Name:
Accepted as of the day of 19
----- ------------------, ----.
PARK `N VIEW, INC.
By:
------------------------
Name:
Title:
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