EXHIBIT 4.4
THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECT REGISTRATION THEREOF UNDER SUCH ACT OR
PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
CORPORATION AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.
WARRANT TO PURCHASE STOCK
Corporation: Chorum Technologies, Inc., a Delaware Corporation
Number of Shares: 85,653
Class of Stock: Series D Preferred Shares
Exercise Price: $4.67 per share
Issue Date: June 1, 2000
Expiration Date: June 1, 2007
THIS WARRANT CERTIFIES THAT, in consideration of the payment of $1.00 and for
other good and valuable consideration, IMPERIAL BANCORP or registered assignee
("Holder") is entitled to purchase the number of fully paid and nonassessable
shares of the class of securities (the "Shares") of the corporation (the
"Company") at the exercise price per Share (the "Warrant Price") all as set
forth above and as adjusted pursuant to Article 2 of this Warrant, subject to
the provisions and upon the terms and conditions set forth of this Warrant.
ARTICLE 1. EXERCISE
1.1 Method of Exercise. Holder may exercise this Warrant by delivering this
Warrant and a duly executed Notice of Exercise in substantially the form
attached as Appendix 1 to the principal office of the Company. Unless Holder is
exercising the conversion right set forth in Section 1.2, Holder shall also
deliver to the Company a check for the aggregate Warrant Price for the Shares
being purchased.
1.2 Conversion Right. In lieu of exercising this Warrant as specified in
Section 1.1, Holder may from time to time convert this Warrant, in whole or in
part, into a number of Shares determined by dividing (a) the aggregate fair
market value of the Shares or other securities otherwise issuable upon exercise
of this Warrant minus the aggregate Warrant Price of such Shares by (b) the fair
market value of one Share. The fair market value of the Shares shall be
determined pursuant to Section 1.3.
1.3 Fair Market Value. If the Shares are traded regularly in a public market,
the fair market value of the Shares shall be the average closing price of the
Shares (or the closing price of the Company's stock into which the Shares are
convertible) reported for the ten (10) consecutive trading days immediately
before the date on which Holder delivers its Notice of Exercise to the
Company. If the Shares are not regularly traded in a public market, the Board of
Directors of the Company shall determine fair market value in its reasonable
good faith judgment.
1.4 Delivery of Certificate and New Warrant. Promptly after Holder exercises
or converts this Warrant, the Company shall deliver to Holder certificates for
the Shares acquired and, if this Warrant has not been fully exercised or
converted and has not expired, a new Warrant representing the Shares not so
acquired.
1.5 Replacement of Warrants. On 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, on delivery of an indemnity
agreement reasonably satisfactory in form and amount to the Company or, in the
case of mutilation, or surrender and cancellation of this Warrant, the Company
at its expense shall execute and deliver, in lieu of this Warrant, a new warrant
of like tenor.
1.6 Repurchase on Sale, Merger, or Consolidation of the Company.
1.6.1. "Acquisition". For the purpose of this Warrant, "Acquisition" means any
sale, license, or other disposition of all or substantially all of the assets
(including intellectual property) of the Company, or any reorganization,
consolidation, or merger of the Company where the holders of the Company's
securities before the transaction beneficially own less than 50% of the
outstanding voting securities of the surviving entity after the transaction.
1.6.2 Notice. The Company shall notify the Holder of the Warrant of any
proposed Acquisition by no later than the date such notice is provided to the
Company's stockholders.
1.6.3. Assumption of Warrant. If upon the closing of any Acquisition the
successor entity assumes the obligations of this Warrant, then this Warrant
shall be exercisable for the same securities, cash, and property as would be
payable for the Shares issuable upon exercise of the unexercised portion of this
Warrant as if such Shares were outstanding on the record date for the
Acquisition and subsequent closing. The Warrant Price shall be adjusted
accordingly.
1.6.4. Nonassumption. If upon the closing of any Acquisition the successor
entity does not assume the obligations of this Warrant and Holder has not
otherwise exercised this Warrant in full, then the unexercised portion of this
Wan-ant shall be deemed to have been automatically converted pursuant to Section
1.2 and thereafter Holder shall participate in the Acquisition on the same terms
as other holders of the same class of securities of the Company.
ARTICLE 2. ADJUSTMENTS TO THE SHARES.
2.1 Stock Dividends, Splits, Etc. If the Company declares or pays a dividend
on its common stock payable in common stock, or other securities, subdivides the
outstanding common stock into a greater amount of common stock, then upon
exercise of this Warrant, for each Share acquired, Holder shall receive, without
cost to Holder, the total number and kind of securities to which Holder would
have been entitled had Holder owned the Shares of record as of the date the
dividend or subdivision occurred.
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2.2 Reclassification, Exchange or Substitution. Upon any reclassification,
exchange, substitution, or other event that results in a change of the number
and/or class of the securities issuable upon exercise or conversion of this
Warrant, Holder shall be entitled to receive, upon exercise or conversion of
this Warrant, the number and kind of securities and property that Holder would
have received for the Shares if this Warrant had been exercised immediately
before such reclassification, exchange, substitution, or other event. Such an
event shall include any automatic conversion of the outstanding or issuable
securities of the Company of the same class or series as the Shares to common
stock pursuant to the terms of the Company's Certificate of Incorporation upon
the closing of a registered public offering of the Company's common stock. The
Company or its successor shall promptly issue to Holder a new Warrant for such
new securities or other property. The new Warrant shall provide for adjustments
which shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Article 2 including, without limitation, adjustments to the
Warrant Price and to the number of securities or property issuable upon exercise
of the new Warrant. The provisions of this Section 2.2 shall similarly apply to
successive reclassifications, exchanges, substitutions, or other events.
2.3 Adjustments for Combinations, Etc. If the outstanding Shares are combined
or consolidated, by reclassification or otherwise, into a lesser number of
shares, the Warrant Price shall be proportionately increased.
2.4 Adjustments for Diluting Issuances. The Warrant Price and the number of
Shares issuable upon exercise of this Warrant shall be subject to adjustment,
from time to time, in the manner set forth on Exhibit A, if attached, in the
event of Diluting Issuances (as defined on Exhibit A).
2.5 No Impairment. The Company shall not, by amendment of its Certificate of
Incorporation or through a 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 under this Warrant by the Company, but shall at all times
in good faith assist in carrying out all the provisions of this Article 2 and in
taking all such action as may be necessary or appropriate to protect Holder's
rights under this Article against impairment. If the Company takes any action
affecting the Shares or its common stock other than as described above that
adversely affects Holder's rights under this Warrant, the Warrant Price shall be
adjusted downward and the number of Shares issuable upon exercise of this
Warrant shall be adjusted upward in such a manner that the aggregate Warrant
Price of this Warrant is unchanged.
2.6 Certificate as to Adjustments. Upon each adjustment of the Warrant Price,
the Company at its expense shall promptly compute such adjustment, and furnish
Holder with a certificate of its Chief Financial Officer setting forth such
adjustment and the facts upon which such adjustment is based. The Company shall,
upon written request, furnish Holder a certificate setting forth the Warrant
Price in effect upon the date thereof and the series of adjustments leading to
such Warrant Price.
2.7 Fractional Shares. No fractional Shares shall be issuable upon exercise or
conversion of the Warrant and the number of shares to be issued shall be rounded
down to the nearest whole
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Share. If a fractional share interest arises upon any exercise or conversion of
the Warrant, the Company shall eliminate such fractional share interest by
paying Holder an amount computed by multiplying the fractional interest by the
fair market value of a full Share.
ARTICLE 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY.
3.1 Representations and Warranties. The Company hereby represents and warrants
to the Holder as follows:
(a) The initial Warrant Price referenced on the first page of this Warrant is
not greater than the fair market value of the Shares as of the date of this
Warrant.
(b) All Shares which may be issued upon the exercise of the purchase right
represented by this Warrant, and all securities, if any, issuable upon
conversion of the Shares, 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.
3.2 Notice of Certain Events. If the Company proposes at any time (a) to
declare any dividend or distribution upon its common stock, whether in cash,
properly, stock, or other securities and whether or not a regular cash dividend;
(b) to offer for subscription pro rata to the holders of any class or series of
its stock any additional shares of stock of any class or series or other rights;
(c) to effect any reclassification or recapitalization of common stock; (d) to
merge or consolidate with or into any other corporation, or sell, lease,
license, or convey all or substantially all of its assets, or to liquidate,
dissolve or wind up; or (e) offer holders of registration rights the opportunity
to participate in an underwritten public offering of the company's securities
for cash, then, in connection with each such event, the Company shall give
Holder (1) at least ten (10) days prior written notice of the date on which a
record will be taken for such dividend, distribution, or subscription rights
(and specifying the date on which the holders of common stock will be entitled
thereto) or for determining rights to vote, if any, in respect of the matters
referred to in (a) and (b) above; (2) in the case of the matters referred to in
(c) and (d) above at least ten (10) days prior written notice of the date when
the same will take place (and specifying the date on which the holders of common
stock will be entitled to exchange their common stock for securities or other
property deliverable upon the occurrence of such event); and (3) in the case of
the matter referred to in (e) above, the same notice as is given to the holders
of such registration rights.
3.3 Information Rights. So long as the Holder holds this Warrant and/or any of
the Shares, the Company shall deliver to the Holder (a) promptly after mailing,
copies of all written communiques to the shareholders of the Company, (b) within
ninety (90) days after the end of each fiscal year of the Company, the annual
audited financial statements of the Company certified by independent public
accountants of recognized standing and (c) within forty-five (45) days after the
end of each of the first three quarters of each fiscal year, the Company's
quarterly, unaudited financial statements.
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ARTICLE 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE HOLDER
4.1 Representations and Warranties. Holder understands that the Company is
issuing the Warrant in reliance upon the following representations and
warranties made by the Holder:
(a) Purchase for Own Account for Investment. Except for the transfer procedure
in Section 5.4 hereof, Holder is acquiring the Warrant, the Shares, and the
shares of the Company's Common Stock issuable upon conversion of the Shares
(collectively with the Warrants and the Shares, the "Securities") for Holder's
own account for investment purposes only and not with a view to, or for sale in
connection with, a distribution of the Securities within the meaning of the
Securities Act of 1993, as amended (the "1993 Act"). Holder has no present
intention of selling or otherwise disposing of all or any portion of the
Securities and no one other than Holder has any beneficial ownership of the
Securities.
(b) Access to Information. Holder has had access to all information regarding
the Company and its present and prospective business, assets, liabilities and
financial condition that Holder reasonably considers important in making the
decision to purchase the Securities, and Holder has had ample opportunity to ask
questions of the Company's representatives concerning such matters and
investment.
(c) Accredited Investor. Holder is an "accredited investor" within the meaning
of Securities and Exchange Commission ("SEC") Rule 501 of Regulation D, as
presently in effect.
(d) Holder's Qualifications. Holder is an investor in securities of companies
in the development stage and acknowledges that it has by reason of Holder's
business or financial experience or the business or financial experience of
purchaser representative has such knowledge and experience in financial and
business matters that Holder is capable of evaluating the merits and risks of
this investment and had the ability to protect Holder's own interests in this
transaction. Holder is financially capable of bearing a total loss of this
investment. Holder has been organized for the purpose of acquiring the
Securities.
(e) No General Solicitation. At no time was Holder presented with or solicited
by any publicly issued or circulated newspaper, mail, radio, television or other
form of general advertising or solicitation in connection with the offer, sale
and purchase of the Securities.
(f) Compliance with Securities Laws. Holder understands and acknowledges that,
in reliance upon the representations and warranties made by Holder herein, the
Securities are not being registered with the SEC under the 1933 Act or being
qualified under any state securities law (the "Law"), but instead are being
issued under an exemption or exemptions from the registration and qualification
requirements of the 1933 Act and the Law which impose certain restrictions on
Holder's ability to transfer the Securities.
(g) Rule 144. In addition, Holder has been advised that SEC Rule 144
promulgated under the 1933 Act, which permits certain limited sales of
unregistered securities, is not presently available with respect to the
Securities and, in any event, requires that the Securities be held for a
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minimum of one year, and in certain cases two years, after they have been
purchased, before they may be resold under Rule 144. The public resale of the
Securities will be limited by Rule 144 in the absence of an effective
registration statement under the 1933 Act providing for the public resale of
securities.
ARTICLE 5. MISCELLANEOUS.
5.1 Term: Notice of Expiration. This Warrant is exercisable, in whole or in
part, at any time and from time to time on or before the Expiration Date set
forth above.
5.2 Legends. This Warrant and the Shares (and the securities issuable, directly
or indirectly, upon conversion of the Shares, if any) shall be imprinted with a
legend in substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR PURSUANT TO RULE 144 OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE CORPORATION AND ITS COUNSEL
THAT SUCH REGISTRATION IS NOT REQUIRED.
5.3 Compliance with Securities Laws on Transfer. This Warrant and the Shares
issuable upon exercise this Warrant (and the securities issuable, directly or
indirectly, upon conversion of the Shares, if any) may not be transferred or
assigned in whole or in part without compliance with applicable federal and
state securities laws by the transferor and the transferee (including, without
limitation, the delivery of investment representation letters and legal opinions
reasonably satisfactory to the Company). The Company shall not require Holder to
provide an opinion of counsel if the transfer is to an affiliate of Holder or if
there is no material question as to the availability of current information as
referenced in Rule 144(c), Holder represents that it has complied with Rule
144(d) and (e) in reasonable detail, the selling broker represents that it has
complied with Rule 144(f), and the Company is provided with a copy of Holder's
notice of proposed sale.
5.4 Transfer Procedure. Subject to the provisions of Section 5.3, Holder may
transfer all or part of this Warrant or the Shares issuable upon exercise of
this Warrant (or the securities issuable, directly or indirectly, upon
conversion of the Shares, if any) by giving the Company notice of the portion of
the Warrant being transferred setting forth the name, address and taxpayer
identification number of the transferee and surrendering this Warrant to the
Company for reissuance to the (transferees) (and Holder, if applicable). Unless
the Company is filing financial information with the SEC pursuant to the
Securities Exchange Act of 1934, the Company shall have the right to refuse to
transfer any portion of this Warrant to any person who directly competes with
the Company.
5.5 Market Standoff. Holder hereby agrees that, during the period of duration
specified by the Company and an underwriter of Common Stock or other securities
of the Company, following the effective date of a registration statement of the
Company filed under the Act, it
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shall not, to the extent requested by the Company and such underwriter, directly
or indirectly sell, offer to sell, contract to sell (including, without
limitation, any short sale), grant any option to purchase or otherwise transfer
or dispose of (other than to donees who agree to be similarly bound) any
securities of the Company held by it immediately prior to the effective date of
such registration statement, except Common Stock included in such registration;
provided, however, that:
(a) such agreement shall be applicable only to the first such registration
statement of the Company that covers Common Stock (or other securities) to be
sold on its behalf to the public in an underwritten offering;
(b) all officers and directors of the Company and all other persons with
registration rights (whether or not pursuant to this Agreement) enter into
similar agreements; and
(c) such market stand-off time period shall not exceed one hundred eighty (180)
days.
In order to enforce the foregoing covenant, the Company may impose stop-transfer
instructions with respect to the Company's securities held by the Holder (and
the shares of securities of every other person subject to the foregoing
restriction) until the end of such period.
5.6 Notices. All notices and other communications from the Company to the
Holder, or vice versa, shall be deemed delivered and effective when given
personally or mailed by first-class registered or certified mail, postage
prepaid, at such address as may have been furnished to the Company or the
Holder, as the case may be, in writing by the Company or such Holder from time
to time.
5.7 Waiver. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought.
5.8 Attorneys' Fees. In the event of any dispute between the parties
concerning the terms and provisions of this Warrant, the party prevailing in
such dispute shall be entitled to collect from the other party all costs
incurred in such dispute, including reasonable attorneys' fees.
5.9 Governing Law. This Warrant shall be governed by and construed in
accordance with the laws of the State of California, without giving effect to
its principles regarding conflicts of law.
Chorum Technologies
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇ By:____________________
-----------------
Name: ▇▇▇ ▇▇▇▇▇▇▇▇▇ Name:__________________
Title: VP Finance Title:_________________
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APPENDIX 1
NOTICE OF EXERCISE
1. The undersigned hereby elects to purchase _____________ shares of the
Preferred Stock of Chorum Technologies, Inc. pursuant to the terms of the
attached Warrant, and tenders herewith payment of the purchase price of such
shares in full.
1. The undersigned hereby elects to convert the attached Warrant into
Shares/cash [strike one] in the manner specified in the Warrant. This conversion
is exercised with respect to ______________ of the Shares covered by the
Warrant.
[Strike paragraph that does not apply.]
2. Please issue a certificate or certificates representing said shares in the
name of the undersigned or in such other name as is specified below:
Chief Financial Officer
Controllers Department
Imperial Bancorp
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Or Registered Assignee
3. The undersigned represents it is acquiring the shares solely for its own
account and not as a nominee for any other party and not with a view toward the
resale or distribution thereof except in compliance with applicable securities
laws.
IMPERIAL BANCORP or Registered Assignee
___________________________________
(Signature)
___________________________________
(Date)
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