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EXHIBIT 10.9
THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, OR AN OPINION
OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER
SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.
WARRANT TO PURCHASE COMMON STOCK
OF
NEXTRON COMMUNICATIONS, INC.
This Warrant (the "Warrant") is issued to ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇ ("Holder")
by Nextron Communications, Inc., a California corporation (the "Company"), on
September 8, 2000 (the "Warrant Issue Date") for the consideration stated in the
Consulting Contract between the Company and Holder ("Consulting Contract") dated
of even date herewith, receipt of which is hereby acknowledged.
1. Purchase Shares. Subject to the terms and conditions hereinafter set
forth, the Holder is entitled, upon surrender of this Warrant at the principal
office of the Company (or at such other place as the Company shall notify the
Holder hereof in writing), to purchase from the Company Thirty Thousand (30,000)
shares of Common Stock of the Company (the "Warrant Shares" or "Common Stock")
at the Exercise Price (defined below), subject to adjustment as provided in
Section 8 below.
2. Exercise Price. The exercise price for the Warrant Shares shall be
$5.50 per Warrant Share, as adjusted from time to time pursuant to Section 8
hereof (the "Exercise Price").
3. Exercise Period. This Warrant shall be exercisable, in whole or in
part, during the term commencing on the Warrant Issue Date and ending on the
earlier of (i) the fifth anniversary of the date hereof, (ii) 180 days after
closing of the sale and issuance of Common Stock of the Company in a firmly
underwritten initial public offering, pursuant to an effective registration
under the Securities Act of 1933, as amended, with gross proceeds to the Company
of at least $15,000,000 (the "Initial Public Offering") or (iii) immediately
preceding a Change of Control. The term "Change of Control" shall mean (a) the
acquisition of the Company pursuant to a consolidation of the Company with or
merger of the Company with or into any other person in which the Company is not
the surviving corporation (other than a reincorporation);(ii) the sale of all or
substantially all of the assets of the 'company to any other person. In the
event of a Change of Control, the Company shall provide the Holder with thirty
(30) days' prior written notice of the event constituting the Change of Control.
Further, in the event of a Change of Control whereby (i) the consideration to be
received by Holder in the event of Change of Control in respect of the Common
Stock exceeds the exercise price of the Warrant, and (ii) Holder has not
notified the Company of Holder's intent to exercise the Warrant within the 30
days' notice provision contained in this Section 3, then, the Warrant shall be
deemed automatically exercised as of the closing of the event constituting the
Change of Control pursuant to provisions of Section 5 Thereof.
4. Method of Exercise. While this Warrant remains outstanding and
exercisable in accordance with Section 3 above, the Holder may exercise, in
whole or in part, the purchase rights evidenced hereby. Such exercise shall be
effected by:
(a) the surrender of the Warrant, together with a duly executed copy of
the form of Notice of Exercise attached hereto, to the Secretary of the Company
at its principal offices; and
(b) the payment to the Company of an amount equal to the aggregate
Exercise Price for the number of Warrant Shares being purchased.
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5. Net Exercise. In lieu of exercising this Warrant pursuant to Section
4, the Holder may elect to receive, without the payment by the Holder of any
additional consideration, Warrant Shares equal to the value of this Warrant (or
the portion thereof being canceled) by surrender of this Warrant at the
principal office of the Company together with the Notice of Exercise attached
hereto indicating such election, in which event the Company shall issue to the
Holder hereof a number of Warrant Shares computed using the following formula:
Y (A-B)
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X= A
Where: X = The number of Warrant Shares to be issued to the
Holder pursuant to this net exercise;
Y = The number of Warrant Shares in respect of which
the net issue election is made;
A = The fair market value of one Warrant Share at the
time the net issue election is made;
B = The Exercise Price (as adjusted to the date of the
net issuance).
For purposes of this Section 5, the fair market value of one Warrant
Share as of a particular date shall be determined as follows: (i) if traded on a
securities exchange or through the Nasdaq National Market, the value shall be
deemed to be the closing price of the securities on such exchange on the date of
the exercise of the Warrants; (ii) if traded over-the-counter, the value shall
be deemed to be the average of the closing bid or sale prices (whichever is
applicable) over the thirty (30) day period ending three (3) days prior to the
net exercise; and (iii) if there is no active public market, the value shall be
the fair market value thereof, as determined in good faith by the Board of
Directors of the Company; provided, that, if the Warrant is being exercised upon
the closing of the Initial Public Offering, the value will be the initial "Price
to Public" of the number of shares of Common Stock into which each Warrant Share
is convertible as specified in the final prospectus with respect to such
offering.
6. Certificates for Shares. Upon the exercise of the purchase rights
evidenced by this Warrant, one or more certificates for the number of Warrant
Shares so purchased shall be issued as soon as practicable thereafter (with
appropriate restrictive legends, if applicable), and in any event within thirty
(30) days of the delivery of the subscription notice.
7. Issuance of Shares. The Company covenants that the Warrant Shares,
when issued pursuant to the exercise of this Warrant, will be duly and validly
issued, fully paid and nonassessable and free from all taxes, liens, and charges
with respect to the issuance thereof.
8. Adjustment of Exercise Price and Kind and Number of Shares. The
number and kind of securities purchasable upon exercise of this Warrant and the
Exercise Price shall be subject to adjustment from time to time as follows:
(a) Subdivisions. Combinations and Other Issuances. If the Company shall
at any time prior to the expiration of this Warrant (i) subdivide its Common
Stock, by split-up or otherwise, or combine its Common Stock, (ii) issue
additional shares of its Common Stock or other equity securities as a dividend
with respect to any shares of its Common Stock, or (iii) declare a cash dividend
with respect to any shares of its Common Stock, the number of shares of Common
Stock issuable on the exercise of this Warrant shall forthwith be
proportionately increased in the case of a subdivision or stock or cash
dividend, or proportionately decreased in the case of a combination. Appropriate
adjustments shall also be made to the purchase price payable per share, but the
aggregate purchase price payable for the total number of Warrant Shares
purchasable under this Warrant (as adjusted) shall remain the same. Any
adjustment under this Section 8(a) shall become effective at the close of
business on the date the subdivision or combination becomes effective, or as of
the record date of such dividend, or in the event that no record date is fixed,
upon the making of such dividend.
(b) Reclassification. Reorganization and Consolidation. In case of any
reclassification, capital reorganization, or change in the Common Stock of the
Company (other than as a result of a subdivision,
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combination, or stock dividend provided for in Section 8(a) above), then, as a
condition of such reclassification, reorganization, or change, lawful provision
shall be made, and duly executed documents evidencing the same from the Company
or its successor shall be delivered to the Holder, so that the Holder shall have
the right at any time prior to the expiration of this Warrant to purchase, at a
total price equal to that payable upon the exercise of this Warrant (subject to
adjustment of the Exercise Price as provided in Section 8, the kind and amount
of shares of stock and other securities and property receivable in connection
with such reclassification, reorganization, or change by a Holder of the same
number of shares of Common Stock as were purchasable by the Holder immediately
prior to such reclassification, reorganization, or change. In any such case
appropriate provisions shall be made with respect to the rights and interest of
the Holder so that the provisions hereof shall thereafter be applicable with
respect to any shares of stock or other securities and property deliverable upon
exercise hereof, and appropriate adjustments shall be made to the purchase price
per share payable hereunder, provided the aggregate purchase price shall remain
the same.
(c) Notice of Adjustment. When any adjustment is required to be made in
the number or kind of shares purchasable upon exercise of the Warrant, or in the
Exercise Price, the Company shall promptly notify the Holder of such event and
of the number of shares of Common Stock or other securities or property
thereafter purchasable upon exercise of this Warrant.
(d) Issuance of New Warrant. Upon the occurrence of any of the events
listed in this Section 8 that results in an adjustment of the type, number or
exercise price of the securities underlying this Warrant, the Holder shall have
the right to receive a new warrant reflecting such adjustment upon the Holder
tendering this Warrant in exchange. The new warrant shall otherwise have terms
identical to this Warrant.
9. No Impairment. Pursuant to the terms and conditions of this Warrant,
Company shall: (i) reserve an appropriate number of shares of Company's Common
Stock to facilitate the issuance of Warrant Shares to Holder pursuant to this
Warrant, (ii) not amend its articles or take any other action that would
materially impair Company's ability to comply with the terms of the Warrant or
otherwise unfairly impair the rights of the Holder, and (iii) provide Holder
with reasonable notice before Company undertakes any significant corporate
action that would have a material impact upon Holder's rights under the Warrant
or upon the rights of the holders of Common Stock generally.
10. Representations and Warranties. Pursuant to the terms and conditions
of this Warrant, Company represents and warrants that Company is: (i) properly
organized and structured pursuant to all applicable corporate laws of the State
of California, (ii) not in violation of any applicable laws, ordinances or
contracts, where such violation would have a material adverse effect on Holder's
rights under this Warrant, and (iii) under the belief that all financial
statements or other material representations made to Holder are complete and
accurate.
11. No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant, but in lieu of such fractional shares the Company shall make a cash
payment therefor on the basis of the Exercise Price then in effect.
12. No Stockholder Rights. Prior to exercise of this Warrant, the Holder
shall not be entitled to any rights of a stockholder with respect to the shares
of Common Stock issuable on the exercise hereof, including (without limitation)
the right to vote such shares of Common Stock, receive dividends or other
distributions thereon, exercise preemptive rights or be notified of stockholder
meetings, and such Holder shall not be entitled to any notice or other
communication concerning the business or affairs of the Company. However,
nothing in this Section 12 shall limit the right of the Holder to be provided
the Notices required under this Warrant.
13. Successors and Assigns. The terms and provisions of this Warrant
shall inure to the benefit of, and be binding upon, the Company and the Holder
and their respective successors and assigns.
14. Amendments and Waivers. Any term of this Warrant may be amended and
the observance of any term of this Warrant may be waived (either generally or in
a particular instance and either retroactively or prospectively), with the
written consent of the Company and the Holder. Any waiver or amendment affected
in accordance with this Section shall be binding upon each holder of any shares
of Common Stock purchased under this
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Warrant at the time outstanding (including securities into which such shares
have been converted), each future holder of all such shares, and the Company.
15. Notices. All notices required under this Warrant shall be deemed to
have been given or made for all purposes (i) upon personal delivery, (ii) upon
confirmation receipt that the communication was successfully sent to the
applicable number if sent by facsimile; (iii) one day after being sent, when
sent by professional overnight courier service, or (iv) five days after posting
when sent by registered or certified mail. Notices to the Company shall be sent
to the principal office of the Company (or at such other place as the Company
shall notify the Holder hereof in writing). Notices to the Holder shall be sent
to the address of the Holder on the books of the Company (or at such other place
as the Holder shall notify the Company hereof in writing).
16. Attorneys' Fees. If any action at law or equity is necessary to
enforce or interpret the terms of this Warrant, the prevailing party shall be
entitled to its reasonable attorneys' fees, costs and disbursements in addition
to any other relief to which it may be entitled.
17. Captions. The section and subsection headings of this Warrant are
inserted for convenience only and shall not constitute a part of this Warrant in
construing or interpreting any provision hereof.
18. Governing Law. This Warrant shall be governed by the laws of the
State of California as applied to agreements among California residents made and
to be performed entirely within the State of California.
[SIGNATURE TO FOLLOW ON NEXT PAGE]
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IN WITNESS WHEREOF, Nextron Communications, Inc. caused this Warrant to
be executed by an office thereunto duly authorized.
NEXTRON COMMUNICATIONS, INC.
By [SIGNATURE ILLEGIBLE]
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Name:
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Address:
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Fax Number:
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NOTICE OF EXERCISE
To:
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The undersigned hereby elects to [check applicable subsection]:
[ ] (a) Purchase _________________ shares of Common Stock of Nextron
Communications, Inc., pursuant to the terms of the attached
Warrant and payment of the Exercise Price per share required
under such Warrant accompanies this notice;
OR
[ ] (b) Exercise the attached Warrant for [all of the shares] of the
Shares] [cross out inapplicable phrase] of Common Stock of
Nextron Communications, Inc. purchasable under the Warrant
pursuant to the net exercise provisions of Section 5 of such
Warrant.
The undersigned hereby represents and warrants that the undersigned is
acquiring such shares for its own account for investment purposes only, and not
for resale or with a view to distribution of such shares or any part thereof.
WARRANTHOLDER:
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By:
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[NAME]
Address:
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Date:
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Name in which shares should be registered:
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