EXHIBIT 10.15
AGREEMENT REGARDING CONDITIONAL
EXERCISE OF WARRANT
This Agreement Regarding Conditional Exercise of Warrants (the "Agreement")
is entered into this ____ day of May, 1999 by and among Efficient Networks, Inc.
("Efficient" or the "Company") and___________________ (the "Investor"), and
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional Corporation as escrow agent (the
"Escrow Agent").
Pursuant to a Securities Purchase Agreement dated _________ ___, 1999 (the
"Purchase Agreement"), the Company borrowed $___________ from the Investor and,
in connection with such loan, issued to the Investor (1) a 10% Subordinated Note
due January ___, 2002 (the "Note") and (2) a warrant to purchase ____________
shares of the Company's Series H Preferred Stock at an exercise price of $2.92
per share (the "Warrant").
Payment of the principal amount and all accrued interest on the Note is
due, and the Warrant expires, upon completion by the Company of a public
offering of shares of the Company's Common Stock pursuant to a registration
statement declared effective under the Securities Act of 1933, as amended in
which the price per share is at least $5.00 and the aggregate offering proceeds
are at least $10 million. A public offering meeting those requirements is
referred to as a "Qualified Public Offering."
The Company has filed a registration statement with the Securities and
Exchange Commission for a Qualified Public Offering. In connection with the
public offering, the Company and the Investor wish to ensure that the Notes are
repaid and that the Warrant is exercised.
The Investor understands that, upon completion of a Qualified Public
Offering, the Series H Preferred Stock that would be issuable upon exercise of
the Warrant will automatically convert to Common Stock.
Based upon and in consideration of the foregoing, the parties hereby agree
as follows:
1. Conditional Exercise of Warrant. The Investor hereby elects to
exercise the Warrant in full, conditioned upon completion of a Qualified Public
Offering. The Investor hereby tenders the Warrant along with this Agreement.
This election to exercise shall become automatically effective immediately prior
to the closing of the Qualified Public Offering.
2. Tender of Exercise Price. In payment of the aggregate exercise price
under the Warrant, the Investor hereby tenders the Note for cancellation. The
Note shall be cancelled concurrently with the automatic exercise of the Warrant
as provided in Section 1.
3. Issuance of Common Stock. Promptly following completion of the
Qualified Public Offering, the Company will cause a certificate representing
that number of shares of Common Stock
as would have been issued had the Warrant been exercised to purchase an
aggregate of __________ shares of Series H Preferred Stock. The certificate
representing the Common Stock will bear the legends referred to in the Purchase
Agreement.
4. Payment of Interest. Promptly following cancellation of the Note, the
Company will pay to the Investor any interest accrued on the Note up to the date
of cancellation.
5. Escrow of Note and Warrant. In order to ensure faithful exercise of
the Warrant and cancellation of the Note as provided herein, the Investor agrees
to tender the Note and Warrant to the Escrow Agent. Immediately prior to
completion of a Qualified Public Offering and without further instruction or
authorization from any party, the Escrow Agent shall (1) take appropriate
actions to record the full exercise of the Warrant and (2) xxxx the Note
cancelled. Notwithstanding that the Escrow Agent is holding the Note, any
interest payments, notices or the like relating thereto shall continue to be
sent directly to the Investor as provided in the Purchase Agreement.
6. Right to Exercise Not Limited. Nothing in this Agreement is intended
to limit the Investor's right to exercise the Warrant. In the event that
Investor wishes to exercise the Warrant outside of this Agreement, Investor
should so notify the Company and Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, P.C., and
arrangements will be made to effect such exercise.
7. Expiration of Agreement. This Agreement will become void if a
Qualified Public Offering has not been consummated on or before December 31,
1999. In the event that this Agreement expires, Xxxxxx Xxxxxxx Xxxxxxxx &
Xxxxxx, P.C. will promptly return the original Note and Warrant to the Investor.
8. Notices. Notices shall be sent to a party at the address set forth
below their signature below, or at such other address as a party may indicate to
the other parties in writing.
The parties have executed this Agreement as of the date set forth above.
Company Investor
Efficient Networks, Inc.
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By: By:
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0000 Xxxxxx Xxxxxx Xxxx, Xxx. 0000 Address:
Xxxxxx, Xxxxx 00000 ------------------------------
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Attn: President Attn:
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Escrow Agent
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, P.C.
By:
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000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx
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