THIS WARRANT MAY NOT BE TRANSFERRED EXCEPT IN THE LIMITED
CIRCUMSTANCES SET FORTH HEREIN OR WITH THE PRIOR WRITTEN
CONSENT OF THE COMPANY
COMMON STOCK PURCHASE WARRANT
for the purchase of
COMMON STOCK
of
VIEW TECH, INC.
(a Delaware corporation)
Original Issue Date: April 24, 2000
VIEW TECH, INC., a Delaware corporation (the "Company"), for good and
valuable consideration received, hereby certifies that ___________, a(n)
____________ with a place of business at __________________________________ or
registered assigns permitted hereunder (the "Holder"), is entitled to purchase
from the Company, at any time or from time to time during the Warrant Exercise
Period (as hereinafter defined), that number of shares of the Company's Common
Stock, $.0001 par value per share ("Common Stock"), as shall be equal to the
Warrant Number (as hereinafter defined), at that price per share of Common Stock
as shall be equal to the Purchase Price (as hereinafter defined).
1. Definitions. For the purposes of this Warrant:
"Fair Market Value" means the average of the closing sale prices (if
listed on a stock exchange or quoted on the Nasdaq National Market System or any
successor thereto), or the average of the mean between the closing bid and asked
prices (if quoted on NASDAQ or otherwise publicly traded), of the Common Stock
on each of the three trading days prior to the date of exercise. If the Common
Stock is not listed or admitted for trading on any national securities exchange
or quoted on NASDAQ, then the Fair Market Value of one share of Common Stock
shall be equal to the fair market value of the entire capital equity of the
Company taken as a whole, divided by the number of shares of Common Stock (on a
fully diluted basis) then issued (or deemed issued) and outstanding, without
premium for control and without discount for minority interest or restriction on
transfer, as determined by the Company's Board of Directors in good faith and
set forth in writing to Holder within ten (10) days after the occurrence of the
event which requires the valuation
"Holder" means Holder as defined above and any transferee or assignee
of Holder.
"Purchase Price" means $6.00, subject to automatic adjustment from time
to time in accordance with Section 3.
"Termination Date" is defined in Section 7.
"Warrant" means the Warrant originally issued to Holder on the original
issue date or any new warrant issued to Holder pursuant to Section 2(d)(ii)
hereof or replacement warrant issued to Holder pursuant to Section 9 hereof.
"Warrant Exercise Period" means the period commencing with the original
issue date of this Warrant and ending on the Termination Date.
"Warrant Number" means, initially, ________ shares of Common Stock,
subject to automatic adjustment from time to time in accordance with Section 3.
2. Exercise.
(a) This Warrant may be exercised by the Holder, in whole or in part,
by surrendering this Warrant, with the purchase form appended hereto as Exhibit
A, duly executed by such Holder, at the principal office of the Company, or at
such other office or agency as the Company may designate, accompanied by payment
in full by bank or certified check in lawful money of the United States, of the
aggregate Purchase Price payable in respect of the total number of shares of
Common Stock purchased upon such exercise.
(b) Each exercise of this Warrant shall be deemed to have been
effected immediately prior to the close of business on the day on which this
warrant shall have been surrendered to the Company as provided in Subsection
2(a) above. At such time, the person or persons in whose name or names any
certificates for or other instruments evidencing shares of Common Stock shall be
issuable upon such exercise as provided in Subsection 2(d) below shall be deemed
to have become the holder or holders of record of the Common Stock represented
by such certificates or other instruments.
(c) (i) The Holder may, at his, her or its sole option, and in lieu
of paying the Purchase Price pursuant to Subsection 2(a) hereof, exchange this
Warrant in whole or in part for a number of shares of Common Stock as determined
below. Such shares of Common Stock shall be issued by the Company to the Holder
without payment by the Holder of any other exercise price or any cash or other
consideration. The number of shares of Common Stock to be so issued to the
Holder shall be equal to the quotient obtained by dividing (A) the Surrendered
Value (as defined below) on the date of surrender of this Warrant pursuant to
Subsection 2(a), by (B) the Fair Market Value on the exchange date of one share
of Common Stock.
2
(ii) For the purposes of this Subsection 2(c), the "Surrendered
Value" of a portion of this Warrant on a given date shall be deemed to be the
excess of (A) the aggregate Fair Market Value on such date of the total number
of shares of Common Stock otherwise issuable upon exercise of such portion of
the Warrant, over (B) the aggregate Purchase Price of such total number of
shares of Common Stock.
(d) As soon as practicable after the exercise of this Warrant in full
or in part, and in any event within three (3) business days thereafter, the
Company, at its expense, will cause to be issued in the name of, and delivered
to, the Holder, or, subject to the terms and conditions hereof, as such Holder
(upon payment by such Holder of any applicable transfer taxes) may direct:
(i) a certificate or certificates for the number of full shares
of Common Stock to which such Holder shall be entitled upon such exercise, plus,
in lieu of any fractional shares to which such Holder would otherwise be
entitled, cash in an amount determined pursuant to Section 3 hereof, and
(ii) in case such exercise is in part only, a new warrant or
warrants (dated the date hereof) of like tenor, calling in the aggregate on the
face or faces thereof for the number of shares of Common Stock equal (without
giving effect to any adjustment therein) to the Warrant Number minus the number
of such shares of Common Stock purchased by the Holder upon such exercise.
3. Adjustments; Fractional Securities.
(a) If, at any time and from time to time after the original issue
date of this Warrant, the outstanding Common Stock shall be subdivided into a
greater number of shares or a dividend in Common Stock shall be paid in respect
of Common Stock, the Purchase Price in effect immediately prior to such
subdivision or at the record date of such dividend shall simultaneously with the
effectiveness of such subdivision or immediately after the record date of such
dividend be immediately and automatically proportionately and equitably reduced.
If, at any time after the original issue date of this Warrant, the outstanding
Common Stock shall be combined into a smaller number of shares, the Purchase
Price in effect immediately prior to such combination, be immediately and
automatically proportionately and equitably increased. When any adjustment is
required to be made in the Purchase Price, the number of shares of Common Stock
purchasable upon the exercise of this Warrant shall be changed to the number
determined by dividing (i) an amount equal to the maximum number of shares of
Common Stock issuable upon the exercise of this Warrant immediately prior to
such adjustment, multiplied by the Purchase Price in effect immediately prior to
such adjustment, by (ii) the Purchase Price in effect immediately after such
adjustment.
(b) If, at any time and from time to time after the original issue
date of this Warrant, there shall occur any capital reorganization or
reclassification of the Common Stock (other than a change in par value or a
subdivision or combination as provided in
3
Subsection 3(a) above), or any consolidation or merger of the Company with or
into another person or entity, or a sale, license or transfer of all or
substantially all of the assets of the Company, or the payment of a liquidating
distribution, then, as part of any such reorganization, reclassification,
consolidation, merger, sale, license or other transfer, or liquidating
distribution, lawful provision shall be made so that the Holder of this Warrant
shall have the right thereafter to receive upon the exercise hereof (to the
extent, if any, still exercisable) the kind and amount of shares of stock or
other securities or property which such Holder would have been entitled to
receive if, immediately prior to any such event, such Holder had held the number
of shares of Common Stock which were then purchasable upon the exercise of this
Warrant. In any such case, appropriate adjustment (as reasonably determined in
good faith by the Board of Directors of the Company) shall be made in the
application of the provisions set forth herein with respect to the rights and
interest thereafter of the Holder of this Warrant such that the provisions set
forth in Section 3 (including provisions with respect to adjustments of the
Purchase Price) shall thereafter be applicable, as nearly as is reasonably
practicable, in relation to any shares of stock or other securities or property
thereafter deliverable upon the exercise of this Warrant.
(c) If the Company shall, at any time and from time to time after the
original issue date of this Warrant, issue or sell any shares of its Common
Stock without consideration or for a consideration per share which is less than
(x) the Fair Market Value in effect immediately prior to such issue or sale, if
shares of Common Stock are then listed on a national securities exchange or the
NASDAQ National Market System, or (y) the Purchase Price in effect immediately
prior to such issue or sale if shares of Common Stock are not then so listed (a
"Dilutive Issuance"), then, and in each such case, the Purchase Price shall be
lowered to a price determined by dividing (i) the sum of (A) the number of
shares of Common Stock outstanding immediately prior to such issue or sale,
multiplied by the Purchase Price in effect immediately prior to such issue or
sale, plus (B) the consideration, if any, received by the Company upon such
issue or sale, by (ii) the total number of shares of Common Stock outstanding
immediately after such issue or sale. For purposes of this Section 3(c):
(i) the issuance or sale of any warrants, options, or other
subscription or purchase rights with respect to shares of Common Stock and the
issuance of any securities convertible into or exchangeable for shares of Common
Stock (or the issuance of any warrants, options, or any rights with respect to
such convertible or exchangeable securities) shall be deemed a Dilutive Issuance
at the time of such issuance or sale if the Net Consideration Per Share (defined
below) to be received by the Company for such Common Stock (as hereinafter
determined) shall be less than the Purchase Price at the time of such issuance
or sale and, except as hereinafter provided, an adjustment in the Purchase Price
and the number of shares of Common Stock issuable upon exercise of this Warrant
shall be made upon each such issuance or sale in the manner provided in this
Section 3(c). Any obligation, agreement or undertaking to issue or sell
warrants, options, or other subscription or purchase rights at any time in the
future shall be deemed to be an issuance or sale at the time such obligation,
agreement, or undertaking is made or arises.
4
No adjustment of the Purchase Price and the number of shares of Common Stock
issuable upon exercise of this Warrant shall be made under this Section 3(c)
upon the issuance or sale of any shares of Common Stock that are issued or sold
pursuant to the exercise of any warrants, options, or other subscription or
purchase rights or pursuant to the exercise of any conversion or exchange rights
in any convertible securities if any adjustment shall previously have been made
upon the issuance or sale of any such warrants, options, or other rights or upon
the issuance or sale of any convertible securities (or upon the issuance or sale
of any warrants, options, or any rights therefor) as above provided. For
purposes of this Section 3(c)(i), the "Net Consideration Per Share" to be
received by the Company shall be determined as follows: (A) the "Net
Consideration Per Share" shall mean the amount equal to the total amount of
consideration, if any, received by the Company for the issuance or sale of such
warrants, options, subscriptions, or other purchase rights or convertible or
exchangeable securities, plus the minimum amount of consideration, if any,
payable to the Company upon exercise or conversion thereof, divided by the
aggregate number of shares of Common Stock that would be outstanding if all such
warrants, options, subscriptions, or other purchase rights or convertible or
exchangeable securities were exercised, exchanged, or converted; (B) the "Net
Consideration Per Share" to be received by the Company shall be determined in
each instance as of the date of issuance or sale of warrants, options,
subscriptions, or other purchase rights, or convertible or exchangeable
securities without giving effect to any possible future price adjustments or
rate adjustments that may be applicable with respect to such warrants, options,
subscriptions, or other purchase rights or convertible securities;
(ii) If a part or all of the consideration received by the
Company in connection with the issuance or sale of shares of the
Common Stock or the issuance or sale of any of the securities
described in this Section 3(c) consists of property other than
cash, such consideration shall be deemed to have the same value
as shall be determined in good faith by the Board of Directors of
the Company; and
(iii) All shares of Common Stock issuable upon the exercise
and/or conversion of all outstanding warrants (including this
Warrant), options and convertible securities shall be deemed to
be outstanding.
(d) In any case in which this Section 3 shall require that any
adjustment in the number of shares of Common Stock or other securities or
property for which this Warrant may be exercised be made effective as of a
record date for a specified event, the Company may elect to defer until the
occurrence of such event the issuing to the Holder with respect to the exercise
of this Warrant after that record date the Common Stock and other property, if
any, issuable upon exercise over and above the Common Stock and other property,
if any, issuable upon exercise of this Warrant as in effect prior to such
adjustment; provided, however, that, upon request, the Company shall deliver to
the Holder a due ▇▇▇▇ or other appropriate instrument evidencing the Holder's
right to receive such additional shares or property upon the occurrence of the
event requiring such adjustment.
5
(e) When any adjustment is required to be made in the Purchase Price
or the Warrant Number, the Company shall promptly mail to the Holder a
certificate setting forth the Purchase Price and the Warrant Number after such
adjustment, and setting forth a brief statement of the facts requiring such
adjustment. Such certificate shall also set forth the kind and amount of stock
or other securities or property into which this Warrant shall be exercisable
following the occurrence of any of the events specified in Subsections 3(a), (b)
or (c) above.
(f) The Company shall not be required, upon the exercise of this
Warrant, to issue any fractional shares, but shall make an adjustment therefor
in cash on the basis of the Fair Market Value of the Common Stock at the time of
exercise.
4. Limitation on Sale, etc. The Holder, and each subsequent holder of this
Warrant, if any, acknowledges that this Warrant and the underlying shares of
Common Stock have not been registered under the Securities Act of 1933, as now
in force or hereafter amended, or any successor legislation (the "Act"), and
agrees not to sell, pledge, distribute, offer for sale, transfer or otherwise
dispose of this Warrant or any Common Stock issued upon its exercise in the
absence of (a) an effective registration statement under the Act as to this
Warrant or such underlying shares of Common Stock and registration or
qualification of this Warrant or such underlying shares of Common Stock under
any applicable Blue Sky or state securities laws then in effect, or (b) an
opinion of counsel, reasonably satisfactory to the Company, that such
registration and qualification are not required.
Without limiting the generality of the foregoing, unless the offering
and sale of the Common Stock to be issued upon the particular exercise of the
Warrant shall have been effectively registered under the Act, the Company shall
be under no obligation to issue the shares covered by such exercise unless and
until the registered Holder shall have executed an investment representation
letter in form and substance reasonably satisfactory to the Company, including a
warranty at the time of such exercise that it is acquiring such shares for its
own account, for investment, and not with a view to, or for sale in connection
with, the distribution of any such shares, in which event the registered Holder
shall be bound by the provisions of a legend to such effect on the
certificate(s) representing the Common Stock.
In addition, without limiting the generality of the foregoing, the
Company may delay issuance of the Common Stock hereunder until completion of any
action or obtaining of any consent which the Company deems necessary under
applicable law (including, without limitation, state securities or Blue Sky
laws), provided, that the Company shall use all reasonable efforts in good faith
to diligently pursue completion of such action or the receipt of such consent.
5. Notices of Record Date, etc. In case:
6
(a) the Company shall take a record of the holders of Common Stock
for the purpose of entitling or enabling them to receive any dividend or other
distribution, or to receive an right to subscribe for or purchase any shares of
stock of any class or any other securities, or to receive any other right, or
(b) of any capital reorganization of the Company, any
reclassification of the stock of the Company, any consolidation or merger of the
Company with or into another person or entity, or any sale, license or other
transfer of all or substantially all of the assets of the Company, or
(c) of the voluntary or involuntary bankruptcy, dissolution,
liquidation or winding-up of the Company,
then, and in each such case, the Company will mail or cause to be mailed to the
Holder of this Warrant a notice specifying, as the case may be, (i) the date on
which a record is to be taken for the purpose of such dividend, distribution or
right, and stating the amount and character of such dividend, distribution or
right, or (ii) the effective date on which such event is to take place, and the
time, if any is to be fixed, as of which the holders of record of Common Stock
shall be entitled to exchange their Common Stock for securities or other
property deliverable upon the happening of such event. Such notice shall be
mailed at least twenty (20) days prior to the record date or effective date for
the event specified in the notice, provided that the failure to so mail such
notice shall not affect the legality or validity of any such action.
6. Representations, Warranties and Covenants of Company.
(a) Organization and Good Standing. The Company is duly organized and
existing as a corporation in good standing in the State of Delaware and is duly
qualified as a foreign corporation and authorized to do business in all other
jurisdictions in which the nature of its business or property makes such
qualification necessary. The Company has the corporate power to own its
properties and to carry on its business as now conducted and as proposed to be
conducted.
(b) Authorization, The execution, delivery and performance by the
Company of this Warrant, and the issuance and sale by the Company of Common
Stock hereunder (a) are within the Company's corporate power and authority, (b)
have been duly authorized by all necessary corporate proceedings, and (c) do not
conflict with or result in any breach of any provision of, or the creation of
any lien upon any of the property of the Company or require any consent or
approval pursuant to its Certificate of Incorporation, as amended, or by-laws,
as amended, or any law, regulation, order, judgment, writ, injunction, license,
permit, agreement or instrument applicable to the Company.
(c) Enforceability. The execution, delivery and performance by the
Company of this Warrant, and the issuance and sale by the Company of Common
Stock hereunder, will result in legally binding obligations of the Company,
enforceable against the
7
Company in accordance with the respective terms and provisions hereof, except to
the extent that (a) such enforceability is limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting generally the
enforcement of creditors' rights, and (b) the availability of the remedy of
specific performance or in injunctive or other equitable relief is subject to
the discretion of the court before which any proceeding therefor may be brought.
(d) Governmental Approvals. The execution, delivery and performance
by the Company of this Warrant, and the issuance and sale of Common Stock
hereunder, do not require the approval or consent of, or any filing with, any
governmental authority or agency.
(e) Capitalization. The authorized capital stock of the Company
consists of 25,000,000 shares, consisting of 20,000,000 shares of Common Stock,
and 5,000,000 shares of preferred stock, $0.0001 par value per share. As of the
original issue date of this Warrant, there are 7,897,885 shares of Common Stock
outstanding, and no shares of preferred stock outstanding; and there are
1,752,771 shares of Common Stock issuable upon exercise of options, warrants and
other rights to purchase or subscribe for Common Stock, and no shares of Common
Stock issuable upon the conversion of or in exchange for securities which by
their terms are convertible into or exchangeable for shares of Common Stock.
(f) Validity of Shares. All shares of Common Stock or other
securities which may be issued upon the due exercise of this Warrant shall, upon
issuance, be duly authorized, validly issued, fully paid and nonassessable, and
free of any liens and encumbrances except for restrictions on transfer provided
for herein or under applicable federal and state securities laws.
(g) Reservation of Shares. The Company will at all times reserve and
keep available, solely for issuance and delivery upon the exercise of this
Warrant, such number of shares of Common Stock, other securities and other
property as from time to time shall be issuable upon the exercise of this
Warrant.
(h) No Impairment. The Company will not, by amendment of its
Certificate or Incorporation or by-laws or through reorganization,
consolidation, merger, dissolution, issuance of capital stock or sale of
treasury stock (other than upon exercise of this Warrant), or sale of assets or
by any other act or deed, avoid or seek to avoid the material performance or
observance of any of the covenants, stipulations or conditions in the Warrant to
be observed or performed by the Company. The Company will at all times in good
faith assist, insofar as it is able, in the carrying out of all of the
provisions of this Warrant in a reasonable manner and in the taking of all other
action which may be necessary in order to protect the rights hereunder of the
Holder of this Warrant.
(i) Office. The Company will maintain an office where presentations
and demand to or upon the Company in respect of this Warrant may be made. The
Company will give
8
notice in writing to the Holder, at the address of the Holder appearing on the
books of the Company, of each change in the location of such office.
(j) No Senior Lender Registration Rights. None of the Senior Lenders,
as defined in that certain Loan and Security Agreement of even date herewith
among the Company, Holder and the other parties thereto (the "Loan Agreement")
has any contractual or other right to cause the Company to register any shares
of Common Stock beneficially owned by it, or shares of Common Stock issuable
upon the exercise, conversion or exchange of any securities (including without
limitation debt securities and other evidences of indebtedness) beneficially
owned by it, or any other securities beneficially owned by it, whether for
original issuance to such Senior Lender or resale by it, under the Act or any
state securities law, or to demand that the Company register any such shares or
securities under such Act or law, or to cause the Company to, or demand that the
Company, include any such shares or securities in any registration by the
Company for its own account or for the account of others.
(k) Rule 144 Reporting. With a view to making available to Holder the
benefits of certain rules and regulations of the U.S. Securities and Exchange
Commission (the "SEC") which may permit the sale of Common Stock to the public
without registration, the Company agrees at all times to (i) make and keep
public information available, as those terms are understood and defined in Rule
144, as amended, under the Act; (ii) file with the SEC in a timely manner all
reports and other documents required of the Company under the Act and the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules
and regulations thereunder; and (iii) so long as Holder owns this Warrant or any
shares of Common Stock or other securities issuable upon the exercise hereof, to
furnish to Holder forthwith upon request a written statement by the Company as
to its compliance with the reporting requirements of said Rule 144 and of the
Act and the Exchange Act, a copy of the most recent annual or quarterly report
of the Company, and such other reports and documents so filed by the Company as
Holder may reasonably request in complying with any rule or regulation of the
SEC allowing Holder to sell any such securities without registration.
(l) Listing of Shares. The Company shall cause the shares of Common
Stock issuable upon exercise of this Warrant to be included for listing or
quotation or admitted for trading on the national securities exchange or the
NASDAQ National Market System on which shares of the Company's Common Stock are
then listed, quoted or admitted for trading no later than the date upon which
the shares of Common Stock issuable upon exercise of this Warrant may lawfully
be sold by Holder to the public either pursuant to a registration of such shares
under the Act or Rule 144.
(m) Notice of Expiration. The Company shall provide written notice to
Holder of the expiration of this Warrant no less than thirty (30) days, and no
more than sixty (60) days, prior to the Termination Date.
9
7. Termination. This Warrant shall terminate and no longer be exercisable
from and after 5:00 p.m., Boston time, on the date that is five (5) years after
the Original Issue Date first set forth above (the "Termination Date").
8. Transfers, etc.
(a) The Company will maintain a register containing the names and
addresses of the Holders of this Warrant. The Holder may change its, his or her
address as shown on the warrant register as the absolute owner hereof for all
purposes.
(b) Until any tranfer of this Warrant is made in the warrant
register, the Company may treat the Holder of this Warrant as the absolute owner
hereof for all purposes.
9. Replacement of Warrants. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant, and (in the case of loss, theft or destruction) upon delivery of
an indemnity agreement (with surety, if reasonably required) in an amount
reasonably satisfactory to the Company, or (in the case of mutilation) upon
surrender or cancellation of this Warrant, the Company will issue, in lieu
thereof, a new Warrant of like tenor.
10. Mailing of Notices, etc. All notices and other communications from the
Company to the Holder of this Warrant shall be mailed by first-class certified
or registered mail, postage prepaid, to the address furnished to the Company in
writing by the last Holder of this Warrant who shall have furnished an address
to this Company in writing. All notices and other communications from the Holder
of this Warrant or in connection herewith to the Company shall be mailed by
first-class certified or registered mail, postage prepaid, to the Company at its
principal executive offices or at such other address as the Company shall so
notify the Holder.
11. No Rights as Stockholder. Until the exercise of this Warrant, the
Holder shall not have or exercise any rights by virtue hereof as a stockholder
of the Company.
12. Company Right to Repurchase. Notwithstanding anything to the contrary
contained in this Agreement, subject to the terms and conditions set forth
below, the Company shall have the right to repurchase all (but not less than
all) of this Warrant (to the extent not previously exercised) for the Repurchase
Price (defined below) at any time on or after the date on which all of the
Repurchase Conditions (defined below) have been met. As used in this Section 12:
(a) "Repurchase Conditions" means (i) the Company, on or before 5:00 PM, Eastern
time on June 30, 2000, shall have paid in full all amounts (including, without
limitation, principal, accrued interest and other charges) owing, and otherwise
fully performed all of its obligations, under the Loan Agreement and all
instruments and other evidences of indebtedness issued thereunder, (ii) the
average closing or last sale price of a share of the Company's Common Stock on
the national securities exchange or NASDAQ National Market System on which
shares of the
10
Company's Common Stock are then listed, quoted or admitted for trading over the
twenty (20) trading days immediately prior to the date of the Company's
Repurchase Notice (defined below) shall equal at least two hundred percent
(200%) of the Purchase Price then in effect, (iii) the Company shall, no later
than the date of the Repurchase Notice, have filed with the SEC and caused to
become effective the Registration Statement (as defined in and in accordance
with Section 13 below) and any and all state securities law registrations or
qualifications pursuant to Section 13(b)(v) below, and shall have complied with
the provisions of Section 13(b)(viii) below, and (iv) on and as of each of the
date of the Repurchase Notice and the date of the Repurchase Closing, the
Registration Statement and all state securities law registrations and
qualifications shall be effective, the Registrable Shares (defined below) shall
be listed or admitted for trading or quotation in accordance with Section
13(b)(viii) below, and there shall not, to the best knowledge of the Company, be
any actual or threatened occurrence of an event described in Section
13(b)(ii)(B), (C) or (D) below, nor any actual, threatened or anticipated
occurrence of an event that could result in a Blackout Period (defined below);
(b) "Repurchase Price" means (i) ten cents ($0.10) multiplied by (ii) the number
of shares of Common Stock as to which this Warrant remains unexercised on and as
of the date of the Repurchase Closing (defined below). Provided that the
Repurchase Conditions have been met, the Company may exercise its right to
repurchase this Warrant by delivering written notice thereof to Holder (the
"Repurchase Notice"), which notice shall specify the Repurchase Price and a
date, not less than thirty (30) days nor more than sixty (60) days after
Holder's receipt of such notice, on which such repurchase shall be consummated
(the "Repurchase Closing"); provided, that Holder may exercise this Warrant as
to all or any portion of the Warrant Number at any time prior to the Repurchase
Closing and the shares of Common Stock issued or issuable pursuant to such
exercise shall not be subject to repurchase by the Company. At the Repurchase
Closing, Holder shall surrender this Warrant, duly endorsed for transfer on the
books of the Company, against receipt of the Repurchase Price in cash, by
certified or bank check, or wire transfer of immediately available funds to the
account designated by Holder. Notwithstanding anything to the contrary contained
herein, the Company's right to repurchase this Warrant, and the Holder's
obligation to consummate the Company's repurchase hereof, (x) shall be subject
to the Company having exercised such right as to all warrants issued in
connection with the Loan Agreement simultaneously, (y) shall apply only to the
portion of this Warrant that is unexercised on and as of the date of the
Repurchase Closing and not to any shares of Common Stock issued and outstanding
to Holder or as to which Holder has exercised this Warrant prior to such date,
and (z) shall terminate and be of no further force or effect upon the Company's
execution of a letter of intent, memorandum of understanding or similar
instrument with respect to, or earlier announcement of, a merger or
consolidation of the Company with or into another person or entity or a sale,
license or other transfer of all or substantially all of its assets or any
transaction in which the holders of the Company's issued and outstanding voting
equity securities immediately prior to such transaction hold less than a
majority of the issued and outstanding voting equity securities immediately
after such transaction.
13. Registration.
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(a) Shelf Registration. In the event the Company determines to
exercise its repurchase right as set forth in Section 12 above, the Company
shall, no later than the date of the Repurchase Notice, have filed a
registration statement (the "Registration Statement") on the appropriate form
with the SEC covering the resale by Holder to the public of the shares of Common
Stock issuable hereunder as to which Holder has not prior to such date exercised
this Warrant (the "Registrable Shares") and shall have caused such Registration
Statement to become effective on or before such date. The Registration Statement
shall register the Registrable Shares for resale by Holder to the public on a
delayed or continuous basis pursuant to Rule 415 under the Act. From and after
the effective date of the Registration Statement, the Company shall use its best
efforts to keep the Registration Statement continuously effective under the Act
in order to permit the prospectus included therein to be lawfully delivered by
Holder until the later of (x) the Termination Date, or (y) one (1) year after
the date of the Repurchase Closing specified in the Repurchase Notice (the
"Effectiveness Period"); provided, that, except as provided below with respect
to any Blackout Period (defined below), the Company shall be deemed not to have
used its best efforts to keep the Registration Statement effective during the
requisite period if it voluntarily takes any action or omits to take any action,
the taking or omission of which would result in Holder not being able to offer
and sell the Registrable Shares under the Registration Statement during that
period, unless such action or omission is required by applicable law; provided,
further, that the Company shall not be required to amend or supplement the
Registration Statement, any related prospectus or any document incorporated
therein by reference in the event that, and for a period (a "Blackout Period")
not to exceed, until the end of the Effectiveness Period, an aggregate of sixty
(60) days if (i) an event occurs and is continuing as a result of which the
Registration Statement, any related prospectus or any document incorporated
therein by reference as then amended or supplemented would, in the Company's
good faith judgment, contain an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made not misleading, and
(ii)(A) the Company determines in good faith that the disclosure of such event
at such time would have a material adverse effect on the business, operations or
prospects of the Company or (B) the disclosure otherwise relates to a pending
material business transaction which has not yet been publicly disclosed.
(b) Registration Procedure.
(i) The Company shall cause the Registration Statement and the
related prospectus and any amendments or supplements thereto, as of the
effective date of the Registration Statement, (subject to Section 13(a)above),
at all times during the Effectiveness Period (i) to comply in all material
respects with the applicable requirements of the Act and the rules and
regulations of the SEC and (ii) not to contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
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(ii) The Company shall give prompt written notice to Holder:
(A) on the date(s) when the Registration Statement or any
post-effective amendments thereto have become effective;
(B) of the issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement or the initiation or threatening of
any proceedings for that purpose;
(C) of the receipt by the Company or its legal counsel of any
notification with respect to the suspension of the qualification of the
Registrable Shares for sale in any jurisdiction or the initiation or threatening
of any proceeding for such purpose;
(D) of the happening of any event that requires the Company to
make changes in the Registration Statement or prospectus in order to make the
statements therein not misleading;
(E) of the commencement and termination of any Blackout Period,
provided, that the Company agrees that "prompt written notice" of either such
event shall be deemed to have been given only if the Company provides written
notice to Holder of any actual, threatened or anticipated event or occurrence
that to the best knowledge of the Company could result in the commencement or
termination of a Blackout Period as soon as possible, consistent with the duties
of the Company under applicable federal and state securities laws, after the
Company first becomes aware of such actual, threatened or anticipated event or
occurrence,; and
(F) thirty (30) days prior to the end of the Effectiveness
Period.
(iii) The Company shall use its best efforts to prevent the issuance or
obtain the withdrawal of any order suspending the effectiveness of the
Registration Statement at the earliest possible time.
(iv) Upon the occurrence of any event contemplated by clauses (ii)(D)
or (E) of this Section 13(b) the Company shall promptly prepare a post-effective
amendment to the Registration Statement or a supplement to the related
prospectus or file any other required document so that, as thereafter delivered
to Holders of the Registrable Shares, the prospectus will not contain an untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading and will contain the current information required by the
Act.
(v) The Company shall register or qualify the Registrable Shares under
the securities or blue sky laws of such states of the United States as Holder
reasonably requests and do any and all other acts or things necessary or
advisable to enable such
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exercise in such jurisdictions; provided, that the Company shall not be required
to (A) qualify to do business in any jurisdiction where it is not then so
qualified or (B) take any action which would subject it to general service of
process or to taxation in any jurisdiction where it is not then so subject.
(vi) The Company shall bear all expenses incurred by it in connection
with the performance of its obligations under this Section 13, other than
underwriting discounts and commissions, if any and fees of Holder's professional
advisors, if any).
(vii) The Company shall deliver to the Holder, without charge, a
reasonable number of copies of the Registration Statement and any post-effective
amendment thereto, including financial statements and schedules, and all
exhibits (including those, if any, incorporated by reference).
(viii) The Company shall, no later than the date of the Repurchase
Notice, cause all Registrable Shares covered by the Registration Statement to be
listed or admitted for trading or quotation on each securities exchange and/or
inter-dealer quotation system on which similar securities issued by the Company
are then listed or admitted for trading or quotation, and at all times
thereafter shall cause such listing or admission for trading or quotation to be
maintained.
(c) Indemnification
(i) The Company will indemnify Holder and each of its or his heirs,
executors, administrators, representatives, officers, directors and partners,
and each person controlling such Holder against all claims, losses, expenses,
damages and liabilities (or actions in respect thereto) arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in the Registration Statement and any post-effective amendment thereto
and any prospectus or other document incident thereto and any registration or
qualification materials filed under any applicable state securities or blue sky
law, or based on any omission (or alleged omission) to state therein a material
fact required to be stated therein or necessary to make the statement therein
not misleading, or any violation or alleged violation by the Company of the Act,
the Exchange Act, and the rules and regulations thereunder, or any state
securities or blue sky law applicable to the Company or any rule or regulation
promulgated any such state law and relating to action or inaction required of
the Company in connection with any such registration, qualification or
compliance, and will reimburse Holder and each such other person within a
reasonable amount of time after incurred for all reasonable legal and other
expenses incurred in connection with investigating, defending or settling any
such claim, loss, damage, liability or action; provided, however, that the
indemnity agreement contained in this Section 13(c)(i) shall not apply to
amounts paid in settlement of any such claim, loss, damage, liability, or action
if such settlement is effected without the consent of the Company (which consent
shall not be unreasonably withheld or delayed); and provided further, that the
Company will not be liable in any such case to the extent that any such claim,
loss, damage or liability arises out of or is based on any
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untrue statement or omission based upon written information furnished to the
Company by an instrument duly executed by Holder r specifically for use therein.
(ii) Holder will indemnify the Company, each of its directors and
officers, and each person who controls the Company within the meaning of the
Act, against all claims, losses, expenses, damages and liabilities (or actions
in respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in the Registration Statement and
any post-effective amendment thereto and any prospectus or other document
incident thereto and any registration or qualification materials filed under any
applicable state securities or blue sky law, or any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse the
Company, such directors, officers, partners, and persons for all reasonable
legal or other expenses incurred in connection with investigating, defending or
settling any such claim, loss, damage, liability or action, in each case to the
extent, but only to the extent, that such untrue statement (or alleged untrue
statement) or omission (or alleged omission) is made in such registration
statement, prospectus, or other document in reliance upon and in conformity with
written information furnished to the Company by an instrument duly executed by
Holder specifically for use therein; provided, however, that the indemnity
agreement contained in this Section 13(c)(ii) shall not apply to amounts paid in
settlement of any such claim, loss, damage, liability or action if such
settlement is effected without the consent of Holder, (which consent shall not
be unreasonably withheld or delayed); and provided further, that the total
amount for which Holder shall be liable under this Section 13(c)(ii) shall not
in any event exceed the aggregate proceeds received by Holder from the sale of
Registrable Shares pursuant to such Registration Statement.
(iii) Each party entitled to indemnification under this Section 13(c)
(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not be unreasonably
withheld), and the Indemnified Party may participate in such defense at such
party's expense; and provided further, that the failure of any Indemnified Party
to give notice as provided herein shall not relieve the Indemnifying Party of
its obligations hereunder, unless such failure resulted in prejudice to the
Indemnifying Party; and provided further, that an Indemnified Party (together
with all other Indemnified Parties which may be represented without conflict by
one counsel) shall have the right to retain one separate counsel, with the fees
and expenses to be paid by the Indemnifying Party, if representation of such
Indemnified Party by the counsel retained by the Indemnifying Party would be
inappropriate due to actual or potential differing interests between such
Indemnified Party and any other party represented by such counsel in such
proceeding. No Indemnifying Party, in the defense of any such claim or
litigation, shall, except with
15
the consent of each Indemnified Party, consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release from
all liability in respect to such claim or litigation.
14. Change or Waiver. Any term of this Warrant may be changed or waived
only by an instrument in writing signed by the party against which enforcement
of the change or waiver is sought.
15. Headings. The headings in this Warrant are purposes of reference only
and shall not limit or otherwise affect the meaning of any provision of this
Warrant.
16. Governing Law. The validity, construction and performance of this
Warrant shall be governed by and construed in accordance with the laws of the
State of Delaware applicable to contracts executed in and performed entirely
within such State, without reference to any choice of law principles of such
State.
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IN WITNESS WHEREOF, VIEW TECH, INC. has caused this COMMON STOCK
PURCHASE WARRANT to be signed in its corporate name and its corporate seal to be
impressed hereon by its duly authorized officers on and as of the date first
above written.
VIEW TECH, INC.
By:
--------------------------
Its
Attest:
-------------------------------
Acknowledged and agreed to by Holder:
----------------------------------------------
Holder name: please print
----------------------------------------------
Holder signature
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EXHIBIT A
PURCHASE FORM
To:
The undersigned, pursuant to the provisions set forth in the attached
COMMON STOCK PURCHASE WARRANT, hereby irrevocably elects either (a) to purchase
______ shares of Common Stock covered by such Warrant and herewith makes payment
of $__________, representing the full purchase price for such shares at the
Purchase Price per share provided for in such Warrant, or (b) to surrender
_______________ number of shares of such Warrant in exchange for the number of
shares of Common Stock determined pursuant to Subsection 2(c) thereof.
Dated: By:
---------------------------------
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EXHIBIT B
ASSIGNMENT FORM
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _______________ the right to purchase common stock represented
by this Warrant to the extent of ______________ shares, and does hereby
irrevocably constitute and appoint _________________, attorney-in-fact to
transfer the same on the books of the Company with power of substitution in
the premises.
Dated: By:____________________________
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