EXHIBIT 10.54
Form of Warrant
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COMMON STOCK PURCHASE WARRANT
THIS WARRANT AND THE SHARES OF COMMON STOCK WHICH MAY BE
PURCHASED PURSUANT TO THE EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), AND NEITHER SUCH SECURITIES NOR ANY INTEREST
THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR AN
EXEMPTION UNDER THE ACT AND THE RULES AND REGULATIONS
THEREUNDER AND IN THE ABSENCE OF REGISTRATION UNDER ANY
APPLICABLE STATE SECURITIES LAWS. SUCH SECURITIES ARE SUBJECT
TO, AND ARE TRANSFERABLE ONLY UPON COMPLIANCE WITH, THE
PROVISIONS OF THE SECURITIES PURCHASE AGREEMENT DATED AS OF
MARCH 8, 2002 AMONG INTERLIANT, INC., THE HOLDER AND CERTAIN
OTHER PARTIES. A COPY OF THE ABOVE-REFERENCED AGREEMENT IS ON
FILE AT THE OFFICE OF INTERLIANT, INC.
No. W-R______ Void After Expiration Date
(as defined below)
WARRANT
TO PURCHASE ________ SHARES OF COMMON STOCK OF
INTERLIANT, INC.
Dated: March 8, 2002
THIS WARRANT CERTIFIES THAT, for value received, [_________] or its transferees
or assigns (the "Holder") is entitled to purchase from Interliant, Inc., a
Delaware corporation (the "Company"), up to _________ fully paid and
nonassessable shares (the "Shares") (as adjusted pursuant to Section 2 below) of
common stock, $.01 par value
("Common Stock"), of the Company, at the price of $.30 per share (the "Exercise
Price") (as adjusted pursuant to Section 2 or Section 3 below), subject to the
provisions and upon the terms and conditions set forth below. This Warrant shall
expire on March 8, 2007 (the "Expiration Date").
Capitalized terms used and not otherwise defined in this warrant shall have the
meanings assigned in the Securities Purchase Agreement, dated as of March 8,
2002 among the Company, the Holder and certain other parties (the "Purchase
Agreement").
1. Exercise and Payment.
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(a) Exercise. On or after the date of this Warrant, the
purchase rights represented by this Warrant may be exercised by the Holder, in
whole or in part, by the surrender of this Warrant (together with a duly
executed exercise notice (the "Notice of Exercise") in the form attached hereto
as Exhibit A) at the principal office of the Company, and, except as provided in
Section 1(b) below, by the payment to the Company, by wire transfer, of an
amount equal to the aggregate Exercise Price of the Shares being purchased.
(b) Net Issuance Election. The Holder may elect to receive,
without the payment by the Holder of any additional consideration, shares of
Common Stock equal to the value of this Warrant or any portion hereof by the
surrender of this Warrant or such portion to the Company, with the net issue
election notice annexed hereto as Exhibit B duly executed. Thereupon, the
Company shall issue to the Holder such number of fully paid and nonassessable
shares of Common Stock as is computed using the following formula:
Y (A - B)
X = ---------
A
where
X = the number of shares of Common Stock to be issued to the Holder
pursuant to this Section 1.2(b);
Y = the number of shares of Common Stock covered by this Warrant in
respect of which the net issue election is made pursuant to this Section 1.2(b);
A = the fair market value of one share of Common Stock which shall be
the closing price of one share of Common Stock (on the last trading date
preceding the date the net issue election notice is received by the Company) on
any national securities exchange or automated quotation system on which the
Common Stock is listed or traded; provided that if the Common Stock is not so
listed or traded, the fair market value shall be the as determined in good faith
by the Board of Directors of the Company, at the time the net issue election is
made pursuant to this Section 1.2(b); and
B = the Exercise Price in effect under this Warrant at the time the net
issue election notice is received by the Company pursuant to this Section
1.2(b).
The Board shall promptly respond in writing to an inquiry by the Holder
as to the fair market value of one share of Common Stock.
(c) Stock Certificates. In the event of the exercise of all or
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any portion of this Warrant, certificates for the shares of Common Stock so
purchased shall be delivered to the Holder by the Company at its own expense
(including the payment by the Company of any applicable issue taxes or
governmental charges imposed in connection with the issuance or delivery of the
Common Stock) within a reasonable time, which shall in no event be later than
ten (10) days thereafter (or such later time as the transfer agent requires,
assuming prompt notice by the Company) and, unless this Warrant has been fully
exercised or has expired, a new Warrant representing the Shares with respect to
which this Warrant shall not have been exercised shall also be issued to the
Holder within such time.
If this Warrant shall be surrendered for exercise within any
period during which the transfer books for shares of the Common Stock or other
securities purchasable upon the exercise of this Warrant are closed for any
purpose, the Company shall not be required to make delivery of certificates for
the securities purchasable upon such exercise until the date of the reopening of
said transfer books.
2. Adjustment of Exercise Price and Number of Shares. The number and kind of
securities purchasable upon the exercise of this Warrant and the Exercise Price
therefor shall be subject to adjustment from time to time upon the occurrence of
certain events, as follows:
(a) Adjustments for Subdivisions of Common Stock. If the
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number of shares of Common Stock outstanding at any time is increased by a stock
dividend payable in shares of Common Stock or by a subdivision or split up of
stock, then concurrently with the effectiveness of such dividend, subdivision or
split up, (i) the Exercise Price then in effect shall be proportionately
decreased and (ii) the number of shares of Common Stock issuable upon exercise
of this Warrant shall be increased in proportion to such increase of outstanding
shares of Common Stock.
(b) Adjustments for Combinations of Common Stock. If the
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number of shares of Common Stock outstanding at any time is decreased by a
combination of the outstanding shares of Common Stock, then concurrently with
the effectiveness of such combination, (i) the Exercise Price then in effect
shall be proportionately increased and (ii) the number of shares of Common Stock
issuable upon exercise of this Warrant shall be decreased in proportion to such
decrease in outstanding shares of Common Stock.
(c) Adjustments for Other Distributions. In the event the
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Company at any time or from time to time makes or fixes a record date for the
determination of
holders of Common Stock entitled to receive any distribution (excluding any
repurchases of securities by the Company not made on a pro rata basis from all
holders of any class of the Company securities) payable in property or in
securities of the Company other than shares of Common Stock, then and in each
such event the Holder of this Warrant shall receive at the time of such
distribution, the amount of property or the number of securities of the Company
that the Holder would have received had it exercised this Warrant on the date of
such event.
(d) Adjustments for Reclassification, Exchange and
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Substitution. Except as provided in Section 5 upon a Notice Event, if the Common
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Stock issuable upon exercise of this Warrant shall be changed into the same or a
different number of shares of any other class or classes of stock, whether by
capital reorganization, reclassification or otherwise (other than a subdivision
or combination of shares provided for above), this Warrant shall thereafter be
exercisable for the purchase of, in lieu of the number of shares of Common Stock
which the Holder would otherwise have been entitled to receive, a number of
shares of such other class or classes of stock equivalent to the number of
shares of Common Stock that would have been received by the Holder upon exercise
of this Warrant immediately before that change. In addition, to the extent
applicable in any reorganization or recapitalization, provision shall be made by
the Company with the successor or surviving entity, if not the Company, so that
the Holder of this Warrant shall thereafter be entitled to receive upon exercise
of this Warrant the number of shares of stock or other securities or property of
the Company or otherwise, to which the Holder would have been entitled on such
reorganization or recapitalization had the Holder exercised the Warrant in its
entirety immediately prior to such change.
(e) Notification. Upon any increase or decrease in the number
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of Shares purchasable upon the exercise of this Warrant or the Exercise Price,
the Company shall, within a reasonable period thereafter, deliver written notice
thereof to the Holder, which notice shall state the increased or decreased
number of Shares purchasable upon the exercise of this Warrant and the adjusted
Exercise Price, setting forth in reasonable detail the method of calculation and
the facts upon which such calculations are based.
3. Additional Anti-Dilution Rights.
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(a) Adjustment of Price upon Issuance of Common Stock. If
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prior to December 31, 2002, the Company shall issue or sell (or, in accordance
with Section 3(b), shall be deemed to have issued and sold) any shares of Common
Stock for a consideration per share (the "Issuance Price") less than the
Exercise Price in effect immediately prior to such issue or sale, then, upon
such issue or sale, the Exercise Price shall be reduced to an amount equal to
the Issuance Price. For purposes of this Section 3(a) any issuance or sale (or
deemed issuance and sale) for no consideration shall be deemed to be an issue or
sale at an Issuance Price or $.01.
(b) Additional Adjustments. For the purposes of subsection (a)
of this Section 3, the following clauses shall also be applicable:
(i) Issuance of Rights or Options. In case at any time the
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Company shall grant (whether directly or by assumption in a merger in which the
Company is the surviving Company or otherwise) any rights to subscribe for or to
purchase, or any options for the purchase of, Common Stock or any stock or
securities (including debt securities) convertible into or exchangeable for
Common Stock (such convertible or exchangeable stock or securities being herein
called "Convertible Securities"), whether or not such rights or options or the
right to convert or exchange any such Convertible Securities are immediately
exercisable, the Company shall be deemed to have issued and sold shares of
Common Stock at an Issuance Price equal to the price per share for which Common
Stock is issuable upon the exercise of such rights or options or upon conversion
or exchange of such Convertible Securities.
(ii) Issuance of Convertible Securities. In case the Company
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shall issue (whether directly or by assumption in a merger in which the Company
is the surviving Company or otherwise) or sell any Convertible Security, whether
or not the rights to exchange or convert thereunder are immediately exercisable,
the Company shall be deemed to have issued and sold shares of Common Stock at an
Issuance Price equal to the price per share for which Common Stock is issuable
upon conversion or exchange of such Convertible Securities.
(iii) Exempt Issuance. Notwithstanding anything herein to the
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contrary, the provisions of this Section 3 shall not apply to the grant of stock
options or the issuance of shares of Common Stock, in either case, to officers
or directors of the Company or to entities by which they are employed.
4. Merger, Consolidation, or Liquidation.
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(i) If (A) the Company consolidates with or merges into
another entity and is not the survivor, or sells or conveys substantially all of
its property, and (B) in connection therewith, shares of stock, other
securities, property, or cash (collectively, "Merger Consideration") are
issuable or deliverable in exchange for the Company's capital stock, then (C)
the Company shall give the Holder at least 10 days prior written notice of the
consummation of such transaction and (D) the Holder may thereafter, at its
option, exercise the Warrant or acquire in lieu of the shares of Common Stock
issuable upon exercise of this Warrant the Merger Consideration which the Holder
could have received had the Holder exercised this Warrant in its entirety,
immediately prior to such merger, sale or conveyance.
(ii) If the Company receives notice that a purchase, tender or
exchange offer has been made to the holders of more than 50% of the outstanding
Common Stock (on an as converted basis), the Company shall give the Holder
reasonable notice thereof.
5. Notice of Certain Events. In the event (a "Notice Event"): (a) the
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Company authorizes the issuance to all holders of any class of its capital stock
rights or warrants to subscribe for or purchase shares of its capital stock, or
any other subscription rights or warrants; (b) the Company authorizes the
distribution to all holders of any class of its
capital stock evidences of indebtedness or assets; (c) of any capital
reorganization or reclassification of the Warrant Shares or the Company's Common
Stock, other than a subdivision or combination of the outstanding Common Stock
and other than a change in par value of the Common Stock; (d) of any liquidation
or merger to which the Company is a party and for which approval of any of the
Company's stockholders is required, other than a consolidation or merger in
which the Company is a continuing corporation and that does not result in any
reclassification or change of the shares of Common Stock issuable upon the
exercise of this Warrant; (e) of the conveyance or transfer of the Company's
properties and assets, substantially as an entirety; or (f) of the Company's
voluntary or involuntary dissolution, liquidation or winding-up; then the
Company shall cause to be mailed by certified mail to the Holder, at least 10
days prior to the applicable record or effective date hereinafter specified, a
notice stating the dates as of which (x) the holders of capital stock of record
to be entitled to receive any such rights, warrants or distributions or to be
entitled to vote on such Notice Event are to be determined, (y) such Notice
Event is expected to become effective, and (z) it is expected that Holders of
record of Warrants shall be entitled to exchange or sell their shares of Common
Stock issuable upon the exercise of this Warrant for securities or other
property, if any, deliverable upon such Notice Event.
6. Fractional Shares. No fractional shares of Common Stock will be
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issued in connection with any exercise hereunder. In lieu of such fractional
shares the Company shall make a cash payment therefor based upon the Fair Market
Value (as defined below) of the Common Stock on the date of exercise. For the
purposes hereof "Fair Market Value" of a share of Common Stock as of a
particular date means: (a) if traded on an exchange or the over-the-counter
market, quoted on the Nasdaq National Market or reported by the National
Quotation Bureau, then the most recently reported closing or bid price, (b) if
conversion or exercise is simultaneous with an underwritten public offering
registered under the Act, the public offering price (before deducting
commissions, discounts or expenses) per share sold in such offer, and (c)
otherwise, the price, not less than book value, determined in good faith and in
such reasonable manner as prescribed by a majority of Company's Directors who
are not Company officers or employees (the "Outside Directors"); provided,
however that (i) Company shall notify the Holder of such price within ten days;
(ii) the Holder shall have ten days after receipt of such notice to dispute such
price by written notice to Company; (iii) the Holder and Company shall
thereafter mutually agree upon an appraiser to determine a Fair Market Value
binding upon the Holder and Company; and (iv) Company and the Holder shall split
equally the costs of such appraisal unless the Fair Market Value determined
thereby is 110% or more of that determined by the Outside Directors, in which
case Company shall bear the full costs of such appraisal.
7. Restrictions on Transfer.
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(a) Restrictive Legend. Each certificate representing (i) the
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Shares and (ii) any other securities issued in respect of the Shares upon any
stock split, stock dividend or recapitalization (collectively, the "Restricted
Securities"), shall be endorsed as described in the Purchase Agreement.
(b) Ownership of Warrant. The Company may deem and treat the
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person in whose name this Warrant is registered as the holder and owner hereof
(notwithstanding any notations of ownership or writing hereon made by any person
other than the Company) for all purposes and shall not be affected by any notice
to the contrary, until presentation of this Warrant for registration of transfer
as provided in this Section 6.
(c) Transfer of the Warrant. This Warrant shall not be
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transferred except in accordance with provisions of the Purchase Agreement. Upon
transfer of the Warrant pursuant to this Section 7(c), the Company shall at the
request of ▇▇▇▇▇▇ and upon surrender of the Warrant to the Company, with a duly
executed Assignment Form in the form of Exhibit C promptly issue new Warrants in
the names and amounts requested by the Holder to replace the surrendered
Warrant.
8. Miscellaneous.
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(a) No Rights of Stockholders. This Warrant does not entitle
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the Holder to any voting rights as a stockholder of the Company prior to the
exercise of the Warrant; further, the Holder has no liability as to the Exercise
Price.
(b) No Impairment. The Company will not, by amendment of its
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Certificate of Incorporation, as amended, or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms to be observed or performed hereunder by the
Company, but it will at all times in good faith assist in the carrying out of
all of the provisions of this Warrant and in the taking of all such action as
may be necessary or appropriate in order to protect the rights of the holder of
this Warrant against impairment.
(c) Loss, Theft, Destruction or Mutilation of Warrant. Upon
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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, of indemnity or security reasonably satisfactory to it, 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.
(d) Saturdays, Sundays, Holidays, etc. If the last or
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appointed day for the taking of any action or the expiration of any right
required or granted herein shall be a Saturday or a Sunday or shall be a legal
holiday, then such action may be taken or such right may be exercised on the
next succeeding day that is not a Saturday or a Sunday or a legal holiday.
(e) Expiration of Warrant. Notwithstanding any other provision
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of this Warrant, this Warrant shall expire and shall no longer be exercisable at
12:00 a.m., New York time, on the Expiration Date.
(f) Governing Law. This Warrant shall be governed by and
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construed in all respects in accordance with the laws of the State of New York
without giving effect to the conflicts of laws provisions thereof.
(g) Entire Agreement; Amendment. This Warrant constitutes the
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full and entire understanding and agreement between the parties with regard to
the subjects hereof, except as may be provided in the Purchase Agreement.
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.
(h) Successors and Assigns. Except as otherwise provided
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herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the permitted successors and assigns, heirs, executors, and administrators
of the Company and the Holder.
(i) Notices, etc. All notices and other communications
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required or permitted hereunder shall be in writing and shall be mailed by
registered or certified mail, postage prepaid, by overnight courier, or
otherwise delivered by hand or by messenger or sent by facsimile and confirmed
by mail, addressed (a) if to the Company, at Two Manhattanville Road, Purchase,
New York 10577, Attention: General Counsel, and (b) if to the Holder, at the
address of the Holder set forth on the signature page of this Warrant. Each such
notice or other communication shall for all purposes of this Warrant be treated
as effective or having been given when delivered if delivered personally, or, if
sent by facsimile, mail or by Federal Express or other reputable overnight
carrier, upon receipt.
[The remainder of this page has been intentionally left blank.]
Issued this 8th day of March, 2002
INTERLIANT, INC.
By: ______________________________
Title:
Address: Two Manhattanville Road,
Purchase, New York 10577
WARRANT HOLDER:
By:
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Title:
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Address:
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Attention:
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with a copy to:
Attention:
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EXHIBIT A
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NOTICE OF EXERCISE
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TO: INTERLIANT, INC.
Two Manhattanville Road,
Purchase, New York 10577
Attention: General Counsel
The undersigned hereby elects to purchase _________ shares of
Common Stock of INTERLIANT, INC. pursuant to the terms of this Warrant, and
tenders herewith payment of the purchase price of such shares in full.
Please issue a certificate or certificates representing said
shares of Common Stock in the name of the undersigned or in such other name as
is specified below:
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(Name)
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(Address)
The undersigned hereby represents and warrants that the
aforesaid shares of Common Stock are being acquired for the account of the
undersigned for investment and not with a view to, or for resale, in connection
with the distribution thereof, and that the undersigned has no present intention
of distributing or reselling such shares.
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(Signature)
Title:______________________________
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(Date)
EXHIBIT B
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NET ISSUE ELECTION NOTICE
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TO: INTERLIANT, INC.
Two Manhattanville Road,
Purchase, New York 10577
Attention: General Counsel
The undersigned hereby elects to receive _________ shares of Common
Stock of INTERLIANT, INC. pursuant to the terms of Section 1.2(b) of this
Warrant, by surrender of the applicable portion of this Warrant.
Please issue a certificate or certificates representing said shares of
Common Stock in the name of the undersigned or in such other name as is
specified below:
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(Name)
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(Address)
The undersigned hereby represents and warrants that the aforesaid
shares of Common Stock are being acquired for the account of the undersigned for
investment and not with a view to, or for resale, in connection with the
distribution thereof, and that the undersigned has no present intention of
distributing or reselling such shares.
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(Signature)
Title:_____________________________
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(Date)
EXHIBIT C
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ASSIGNMENT FORM
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(To be signed only upon transfer of Warrant)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
______________________________, whose address is _____________________, the
right represented by the attached Warrant to purchase _________ shares of Common
Stock of INTERLIANT, INC., to which the attached Warrant relates.
Dated:____________________
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(Signature must conform in all respects
to name of ▇▇▇▇▇▇ as specified on the
face of the Warrant)
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(Address)
Signed in the presence of:
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