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EXHIBIT 10.2
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. NO SALE
OR DISPOSITION MAY BE EFFECTED WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY
OR WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF
COUNSEL FOR THE HOLDER, REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE ACT.
THIS WARRANT MAY NOT BE EXERCISED EXCEPT IN COMPLIANCE WITH ALL APPLICABLE
FEDERAL AND STATE SECURITIES LAWS TO THE REASONABLE SATISFACTION OF THE COMPANY
AND LEGAL COUNSEL FOR THE COMPANY.
WARRANT TO PURCHASE
287,599 SHARES OF COMMON STOCK
OF
PNV INC.
A DELAWARE CORPORATION
ISSUED
MARCH, 15, 2000
THIS CERTIFIES THAT, for value received, America Online, Inc. (as the
context requires, "AOL" or the "WARRANTHOLDER") is entitled to purchase, on the
terms hereof, Two Hundred Eighty-seven Thousand Five Hundred Ninety-nine
(287,599) shares (subject to adjustment as set forth herein, "WARRANT STOCK"),
of common stock, par value $.001 per share ("COMMON STOCK") of PNV, Inc., a
Delaware corporation (the "COMPANY"), at a purchase price and upon the terms and
conditions as set forth herein.
1. EXERCISE OF WARRANT.
The terms and conditions upon which this Warrant may be exercised and
the shares of Common Stock covered hereby that may be purchased, are as follows:
1.1. Exercise.
(a) This Warrant is being issued pursuant to an Interactive
Services Agreement, dated as of the date hereof (as same may be
amended, the "ISA"), between the Company and AOL. All terms used but
not defined herein shall have the meanings set forth in the ISA. This
Warrant may be exercised, in whole or in part, with respect to all of
the Warrant Stock, at any time or from time to time on or after May 30,
2000, provided that if the ISA is terminated by AOL for any reason
prior to May 30, 2000, this Warrant shall terminate and shall be void
and of no further force or effect
(b) Notwithstanding the foregoing, this Warrant may not be
exercised under any circumstances after 5:00 p.m., New York, New York
time on May 30, 2008 (the "TERMINATION DATE"), after which time this
Warrant shall terminate and shall be void and of no further force or
effect.
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1.2. Exercise Price. The purchase price for the shares of Common Stock
to be issued upon exercise of this Warrant shall be $6.6875 per share, subject
to adjustment as set forth herein (the "EXERCISE PRICE").
1.3. Method of Exercise. The exercise of the purchase rights evidenced
by this Warrant shall be effected by (a) the surrender of this Warrant, together
with a duly executed copy of the form of Election to Purchase attached hereto,
to the Company at its principal office and (b) the delivery of the Exercise
Price multiplied by the number of shares for which the purchase rights hereunder
are being exercised, payable (x) by certified check, corporate check, or wire
transfer of immediately available funds payable to the Company's order or (y) on
a net basis, such that, without the exchange of any funds, the Warrantholder
receives that number of shares otherwise issuable (or other consideration
payable) upon exercise of this Warrant less that number of shares of Warrant
Stock having an aggregate fair market value (as defined below) at the time of
exercise (i.e., the date a duly executed Election to Purchase is delivered to
the Company) equal to the aggregate Exercise Price that would otherwise have
been paid by the Warrantholder for the shares of the Warrant Stock issuable. In
connection with such exercise the holder shall, if requested by the Company,
include confirmation of the accuracy of the representations set forth in Section
12 and otherwise as reasonably requested by the Company to evidence compliance
with any applicable securities laws as of the date of exercise. For purposes of
the foregoing, "FAIR MARKET VALUE" of the Warrant Stock on any date shall be the
average of the Quoted Prices of the Common Stock of the Company for 20
consecutive trading days ending the trading day prior to such date (if, during
such 30-day period, there is a day in which no trades are reported, such date
shall be discarded and the 20-day period extended). The "QUOTED PRICE" of the
Common Stock as reported by Nasdaq or, if the principal trading market for the
Common Stock is then a securities exchange, the last reported sales price of the
Common Stock on such exchange which shall be consolidated trading if applicable
to such exchange, or if neither so reported or listed, the last reported bid
price of the Common Stock. In the absence of quotation or listing, such
determination as to "Quoted Price" shall be made in good faith by the Board of
Directors of the Company after taking into consideration all factors it deems
appropriate, including, without limitation, recent sale and offer prices of the
capital stock of the Company in private transactions negotiated at arm's length.
1.4. Issuance of Shares. In the event that the purchase rights
evidenced by this Warrant are exercised in whole or in part in accordance with
the terms of this Warrant, a certificate or certificates for the purchased
shares shall be issued to the Warrantholder as soon as practicable. The Warrant
Stock shall be stamped or imprinted with a legend in substantially the following
form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933. NO SALE OR OTHER DISPOSITION MAY BE EFFECTED WITHOUT THE PRIOR
WRITTEN CONSENT OF THE COMPANY AND WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL FOR THE HOLDER,
SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED
UNDER THE ACT."
In the event the purchase rights evidenced by this Warrant are
exercised in part, the Company will also issue to the Warrantholder a new
warrant within a reasonable time representing the unexercised purchase rights.
1.5 Exercise of Warrants on Termination Date. If as of the Termination
Date the Warrants are in the money based on the cash or other property to be
received, such exercise shall take place automatically with respect to all then
outstanding and exercisable (but not exercised) Warrants (the
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"TERMINATION DATE EXERCISE"), on a net exercise basis, immediately prior to the
Termination Date; provided, however, that the Company may condition such
exercise on the delivery by the Warrantholder of a duly completed Election to
Purchase and the reasonable satisfaction of the Company that all applicable
securities laws have been complied with, which the Company shall give notice to
the Warrantholder of within ten (10) days prior to the Termination Date. No such
Termination Date Exercise shall take place if such issuance would not comply
with applicable securities laws, whereupon the Termination Date shall occur as
scheduled.
2. CERTAIN ADJUSTMENTS.
2.1. Stock Dividends. If at any time while this Warrant remains
outstanding and unexpired, the Company pays a dividend or makes a distribution
with respect to the Common Stock payable in shares of Common Stock, then the
Exercise Price shall be adjusted, as of the record date of stockholders
established for such purpose (or if no such record is taken, as at the date of
such payment or distribution), to that price determined by multiplying the
Exercise Price in effect immediately prior to such payment or distribution by a
fraction (A) the numerator of which shall be the total number of shares of
Common Stock outstanding immediately prior to such dividend or distribution, and
(B) the denominator of which shall be the total number of shares of Common Stock
outstanding immediately after such dividend or distribution. The Warrantholder
shall thereafter be entitled to purchase, at the Exercise Price resulting from
such adjustment, the number of shares of Common Stock (calculated to the nearest
whole share) obtained by multiplying the Exercise Price in effect immediately
prior to such adjustment by the number of shares of Common Stock issuable upon
the exercise hereof immediately prior to such adjustment and dividing the
product thereof by the Exercise Price resulting from such adjustment. The
provisions of this Section 2.1 shall not apply under any of the circumstances
for which an adjustment is provided under Sections 2.2, 2.3 or 2.4.
2.2. Mergers, Consolidations or Sale of Assets. If at any time while
this Warrant remains outstanding and unexpired, there shall be a capital
reorganization of the shares of the Company's capital stock (other than a
combination, reclassification, exchange or subdivision otherwise provided for
herein), or a merger or consolidation of the Company with or into another
corporation in which the Company is not the surviving corporation (collectively,
a "CORPORATE TRANSACTION"), then lawful provision shall be made so that such
successor corporation or entity shall assume this Warrant such that the
Warrantholder shall thereafter be entitled to receive, upon exercise of this
Warrant, during the period specified in this Warrant and upon payment of the
Exercise Price then in effect, the number of shares of stock or other securities
or property of the successor corporation resulting from such Corporate
Transaction to which a holder of the securities deliverable upon exercise of
this Warrant would have been entitled under the provisions of the agreement in
such Corporate Transaction if this Warrant had been exercised immediately prior
to such Corporate Transaction. Appropriate adjustment (as determined in good
faith by the Company's Board of Directors after taking into consideration all
factors it deems appropriate, including, without limitation, recent sale and
offer prices of the capital stock of the Company in private transactions
negotiated at arm's length) shall be made in the application of the provisions
of this Warrant with respect to the rights and interests of the Warrantholder
after the Corporate Transaction to the end that the provisions of this Warrant
(including adjustment of the Exercise Price then in effect and the number of
shares of Common Stock issuable under this Warrant) shall be applicable after
the Corporate Transaction, as near as reasonably may be, in relation to any
shares or other property deliverable after the Corporate Transaction upon
exercise of this Warrant. The provisions of this Section 2.2 shall similarly
apply to successive reorganizations, consolidations or mergers.
2.3. Reclassification. If the Company at any time shall, by
subdivision, combination or reclassification or securities or otherwise, change
any of the securities issuable under this Warrant into
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the same or a different number of securities of any other class or classes, this
Warrant shall thereafter represent the right to acquire such number and kind of
securities as would have been issuable as a result of such change with respect
to the securities issuable under this Warrant immediately prior to such
subdivision, combination, reclassification or other change.
2.4. Subdivision or Combination of Shares. If at any time while this
Warrant remains outstanding and unexpired, the number of shares of Common Stock
outstanding is decreased by a combination of the outstanding shares of Common
Stock, then the Exercise Price shall be proportionately increased in the case of
a combination of such shares, or shall be proportionately decreased in the case
of a subdivision of such shares, and the number of shares of Common Stock
issuable upon exercise of the Warrant shall thereafter be adjusted to equal the
product obtained by multiplying the number of shares of Common Stock issuable
under this Warrant immediately prior to such Exercise Price adjustment by a
fraction (A) the numerator of which shall be the Exercise Price immediately
prior to such adjustment, and (B) the denominator of which shall be the Exercise
Price immediately after such adjustment.
2.5. Liquidating Dividends, Etc. If the Company at any time while the
Warrant remains outstanding and unexpired makes a distribution of its assets to
the holders of its Common Stock as a dividend in liquidation or by way of return
of capital or other than as a dividend payable out of earnings or surplus
legally available for dividends under applicable law or any distribution to such
holders made in respect of the sale of all or substantially all of the Company's
assets (other than under the circumstances provided for in the foregoing
Sections 2.1 through 2.4), the holder of this Warrant shall be entitled to
receive upon the exercise hereof, in addition to the shares of Common Stock
receivable upon such exercise, and without payment of any consideration other
than the Exercise Price, an amount in cash equal to the value of such
distribution per share of Common Stock multiplied by the number of shares of
Common Stock which, on the record date for such distribution, are issuable upon
exercise of this Warrant (with no further adjustment being made following any
event which causes a subsequent adjustment in the number of shares of Common
Stock issuable upon the exercise hereof), and an appropriate provision therefor
should be made a part of any such distribution. The value of a distribution
which is paid in other than cash shall be determined in good faith by the Board
of Directors.
2.6. Notice of Adjustments. Whenever any of the Exercise Price or the
number of securities purchasable under the terms of this Warrant at that
Exercise Price shall be adjusted pursuant to Section 2 hereof, the Company shall
promptly notify the Warrantholder in writing of such adjustment, setting forth
in reasonable detail the event requiring the adjustment, the amount of the
adjustment, the method by which such adjustment was calculated, and the Exercise
Price and number of shares of Common Stock or other securities issuable at that
Exercise Price after giving effect to such adjustment. Such notice shall be
mailed (by first class and postage prepaid) to the registered Warrantholder. In
the event of:
(a) The taking by the Company of a record of the holders of
any class of securities of the Company for the purpose of determining the
holders thereof who are entitled to receive any dividend or other distribution,
or any right to subscribe for, purchase or otherwise acquire any shares of stock
of any class or any other securities or property, or to receive any other right
for which no adjustment is required by the operation of this Section 2,
(b) Any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or any
transfer of all or substantially all of the assets of the Company to any other
person or any consolidation or merger involving the Company for which no
adjustment is required by the operation of this Section 2, or
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(c) Any voluntary or involuntary dissolution, liquidation, or
winding-up of the Company, the Company will mail (by first class and postage
prepaid) to the Warrantholder, at its last address at least ten (10) days prior
to the earliest date specified therein as described below, a notice specifying:
(i) The date on which any such record is to be taken
for the purpose of such dividend, distribution or right, and the amount
and character of such dividend, distribution or right; and
(ii) The date on which any such reorganization,
reclassification, transfer, consolidation, merger, dissolution,
liquidation or winding-up is expected to become effective and the
record date for determining shareholders entitled to vote thereon.
Failure to give any notice required under this Section 2.6, or any
defect in such notice, shall not affect the legality or validity of the
underlying corporate action taken or transaction entered into by the Company.
3. FRACTIONAL SHARES.
No fractional shares shall be issued in connection with any exercise of
this Warrant. In lieu of the issuance of such fractional share, the Company
shall make a cash payment equal to the then fair market value of such fractional
share as determined under Section 1.3.
4. RESERVATION OF COMMON STOCK.
The Company shall at all times reserve and keep available out of its
authorized but unissued shares of Common Stock, solely for the purpose of
effecting the exercise of this Warrant, a sufficient number of shares of Common
Stock to effect the exercise of the entire Warrant and if at any time the number
of authorized but unissued shares of Common Stock shall not be sufficient to
effect the exercise of the entire Warrant, in addition to such other remedies as
shall be available to the holder of this Warrant, the Company will use its
reasonable efforts to take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued shares of Common
Stock to such number of shares as shall be sufficient for such purposes.
5. PRIVILEGE OF STOCK OWNERSHIP.
Other than as set forth herein, prior to the exercise of this Warrant
and the issuance to the Warrantholder of certificates representing the resulting
shares of Common Stock, and except as otherwise provided herein, the
Warrantholder shall not be entitled, by virtue of holding this Warrant, to any
rights of a Stockholder of the Company, including (without limitation) the right
to vote, receive dividends or other distributions or be notified of Stockholder
meetings, and such holder shall not be entitled to any notice or other
communication concerning the business or affairs of the Company, except as
required by law.
6. LIMITATION OF LIABILITY.
No provision hereof, in the absence of affirmative action by the holder
hereof to purchase the securities issuable under this Warrant, and no mere
enumeration herein of the rights of privileges of the holder hereof, shall give
rise to any liability of such holder for the purchase price or as a Stockholder
of the Company, whether such liability is asserted by the Company or by
creditors of the Company.
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7. TRANSFERS, EXCHANGES AND REGISTRATION RIGHTS.
(a) This Warrant may be transferred or assigned in whole or in part at
any time or from time to time on or after March 17, 2000, provided such transfer
complies with all applicable federal and state securities laws and the
requirements of any legend on this Warrant.
(b) The Warrant Stock issuable hereunder shall be entitled to those
registration rights as set forth on Exhibit A attached hereto, the provisions of
which are incorporated herein by reference and made a part hereof as if set
forth herein in their entirety.
8. PAYMENT OF TAXES.
The Company shall pay all stamp or similar issue or transfer taxes
payable in respect of the issue or delivery of the securities issuable under
this Warrant. The Company shall not be required, however, to pay any tax or
other charge imposed in connection with any transfer involved in the issue of
any certificate for shares of the securities issuable under this Warrant in any
name other than that of the Warrantholder, and in such case, the Company shall
not be required to issue or deliver any stock certificate until such tax or
other charge has been paid or it has been established to the Company's
satisfaction that no such tax or other charge is due.
9. NO IMPAIRMENT OF RIGHTS.
The Company hereby agrees that it will not, through the amendment of
its Certificate of Incorporation or otherwise, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, but will at all
times in good faith assist in the carrying out of all such terms and in the
taking of all such actions as may be necessary or appropriate in order to
protect the rights of the Warrantholder against impairment.
10. SUCCESSORS AND ASSIGNS.
The terms and provisions of this Warrant shall be binding upon the
Company and the Warrantholder and their respective successors and assigns.
11. LOSS, THEFT, DESTRUCTION OR MUTILATION OF WARRANT
Upon receipt by the Company of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of this Warrant, and in case of
loss, theft or destruction, upon receipt of an indemnity or security reasonably
satisfactory to the Company, and upon reimbursement to the Company of all
reasonable expenses incidental thereto, and upon surrender and cancellation of
this Warrant, if mutilated, the Company will make and deliver a new warrant of
like tenor and dated as of such cancellation, in lieu of this Warrant.
12. SECURITIES LAW MATTERS.
Warrantholder represents to the Company as follows:
(a) the Warrants and Common Stock to be acquired by
Warrantholder pursuant hereto will be acquired for its own account and not with
a view to, or intention of, distribution thereof in violation of the Securities
Act of 1933 (the "SECURITIES ACT") or any applicable state securities laws, and
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such securities will not be disposed of in contravention of the Securities Act
or any applicable state securities laws;
(b) the Warrantholder understands that (a) the Warrants and
Common Stock issuable on exercise have not been registered under the Securities
Act, nor qualified under the securities laws of any other jurisdiction, (b) such
securities cannot be resold unless they subsequently are registered under the
Securities Act and qualified under applicable state securities laws, unless the
Company determines that exemptions from such registration and qualification
requirements are available, and (c) this Warrant does not grant the
Warrantholder any right to require such registration or qualification;
(c) Warrantholder is familiar with the term "accredited
investor" as defined in Rule 501 under the Securities Act and investor is an
"accredited investor" within the meaning of such term in Rule 501 under the
Securities Act;
(d) Warrantholder is sophisticated in financial matters and
the market for Internet companies and is able to evaluate the risks and benefits
of the investment in the Warrants and Common Stock issuable on exercise;
(e) Warrantholder is able to bear the economic risk of its
investment in the Warrants and the Common Stock issuable on exercise for an
indefinite period of time; and
(f) Warrantholder has had an opportunity to ask questions and
receive answers concerning the terms and conditions of the offering of
securities and has had full access to such other information concerning the
Company as investor has requested.
13. SATURDAYS, SUNDAYS, HOLIDAYS.
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 or Sunday
or shall be a legal holiday, then such action may be taken or such right may be
exercised on the next succeeding day not a legal holiday.
14. GOVERNING LAW.
This Warrant shall be construed, interpreted, and the rights of the
Company and the Warrantholder determined in accordance with the internal laws of
the State of Delaware, without regard to the conflict of laws provision thereof.
15. BENEFITS OF THIS WARRANT.
Nothing in this Warrant shall be construed to give any person other
than the Company and the registered Warrantholder any legal or equitable right,
remedy or claim.
16. COUNTERPARTS.
This Warrant may be exercised in counterpart with each constitution; an
original and together constituting but one and the same Warrant.
(signature page follows)
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IT WITNESS WHEREOF, PNV Inc. has caused this Warrant to be duly
executed and delivered to the Warrantholder identified below on the date first
set forth above.
PNV Inc.
By: /s/ Xxxxxx X. Xxx
------------------------------
Chief Executive Officer
Dated: March 17, 2000
Address for Notice:
PNV Inc.
00000 X.X. 00xx Xxxxxx
Xxxxx Xxxxxxx, XX 00000
Attention: ________, President & CEO
Fax: (__) ________
Acknowledged and Accepted:
America Online, Inc.
By: /s/
-------------------------------
Name:
Title:
Address for Notice:
00000 XXX Xxx
Xxxxxx, XX 20166
Attention: General Counsel
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ELECTION TO PURCHASE
PNV Inc.
00000 X.X. 00xx Xxxxxx
Xxxxx Xxxxxxx, XX 00000
Ladies and Gentlemen:
The undersigned hereby elects to purchase, pursuant to the provisions
of the Warrant dated March 17, 2000 held by the undersigned, _________ shares of
the Common Stock of PNV Inc., a Delaware corporation.
Payment of the per share purchase price required under such Warrant
[accompanies this Election to Purchase.][shall be made pursuant to the net
exercise provision contained in Section 1.3 of the Warrant.]
The undersigned hereby confirms the representations made in Section 12
of the Warrant are true and correct as of the date of this Election to Purchase.
Dated: ___________________, 200_
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Print Name of Warrantholder
By
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Address:
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EXHIBIT A
