Exhibit 10.46
THIS WARRANT AND THE SECURITIES RECEIVABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR ANY STATE SECURITIES LAW, AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS (i) A REGISTRATION STATEMENT UNDER
THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS SHALL HAVE BECOME
EFFECTIVE WITH REGARD THERETO, OR (ii) AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT OR APPLICABLE STATE SECURITIES LAWS IS AVAILABLE IN CONNECTION
WITH SUCH OFFER, SALE OR TRANSFER.
Warrant to Purchase
________ Shares
WARRANT TO PURCHASE COMMON STOCK
of
VIDEOLAN TECHNOLOGIES, INC.
THIS CERTIFIES that _______________________ ("___________") or any
subsequent holder hereof ("Holder"), has the right to purchase from VideoLan
Technologies, Inc. (the "Company"), not more than __________ fully paid and
nonassessable shares of the Company's Common Stock, $0.01 par value ("Common
Stock"), at a price of $____ per share subject to adjustment as provided below
(the "Exercise Price"), at any time on or before 5:00 p.m., Louisville, Kentucky
time, on _____________.
The Holder of this Warrant agrees with the Company that this Warrant is
issued and all rights hereunder shall be held subject to all of the conditions,
limitations and provisions set forth herein.
1. Date of Issuance.
This Warrant shall be deemed to be issued on ________________.
2. Exercise.
(a) Manner of Exercise. This Warrant may be exercised as to all or any
lesser number of full shares of Common Stock covered hereby upon surrender of
this Warrant, with the Exercise Form attached hereto as Exhibit A ("Exercise
Form") duly executed, together with the full Exercise Price (as defined in
Section 3) for each share of Common Stock as to which this Warrant is exercised,
at the office of the Company, Attn: Chief Financial Officer, VideoLan
Technologies, Inc., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ or
at such other office or agency as the Company may designate in writing, by
overnight mail, with an advance copy of the Exercise Form by facsimile (such
surrender and payment of the Exercise Price hereinafter called the "Exercise of
this Warrant").
(b) Date of Exercise. The "Date of Exercise" of the Warrant shall be
defined as the date that the advance copy of the Exercise Form is sent by
facsimile to the Company, provided that the original Warrant and Exercise Form
are received by the Company within five (5) business days thereafter. The
original Warrant and Exercise Form must be received within five (5) business
days of the Date of Exercise, or the Exercise Form may, at the Company's option,
be considered void. Alternatively, the Date of Exercise shall be defined as the
date of the original Exercise Form is received by the Company, if Holder has not
sent advance notice by facsimile.
(c) Cancellation of Warrant. This Warrant shall be cancelled upon its
Exercise, and, as soon as practical after the Date of Exercise, the Holder
hereof shall be entitled to receive Common Stock for the number of shares
purchased upon such Exercise, and if this Warrant is not exercised in full, the
Holder shall be entitled to receive a new Warrant or Warrants (containing terms
identical to this Warrant) representing any unexercised portion of this Warrant
in addition to such Common Stock.
(d) Holder of Record. Each person in whose name any Warrant for shares
of Common Stock is issued shall, for all purposes, be deemed to have become the
holder of record of such shares on the Date of Exercise of this Warrant,
irrespective of the date of delivery of such Warrant. Nothing in this Warrant
shall be construed as conferring upon the Holder hereof any rights as a
shareholder of the Company.
3. Payment of Warrant Exercise Price.
The Exercise Price ("Exercise Price") shall equal $___ ("Initial Exercise
Price") or, if the Date of Exercise is more than one (1) year after the Date of
Issuance, the lesser of (i) the Initial Exercise Price or (ii) the "Reset
Price", which shall equal one hundred percent (100%) of the Market Price of the
Company's Common Stock for the five (5) trading days ending on the first
anniversary date of the Date of Issuance, taking into account, as appropriate,
any adjustments made pursuant to Section 5 hereof.
For purposes of this Agreement, the term "Market Price" shall mean the
average closing bid price of the Common Stock for the five trading days prior to
the Date of Exercise of this Warrant (the "Average Closing Bid Price"), as
reported by the National Association of Securities Dealers Automated Quotation
System ("Nasdaq") or if the Common Stock is not traded on Nasdaq, the average of
the daily high and low sales prices in the over-the-counter market; provided,
however, that if the Common Stock is listed on a stock exchange, the Market
Price shall be the average of the daily high and low sales prices on such
exchange. If the Common Stock was not traded during the five trading days prior
to the Date of Exercise, then the closing bid price for the last publicly traded
day shall be deemed to be the closing bid price for any and all (if applicable)
days during such five trading day period, or the average of the daily high and
low sales prices (if no closing bid prices are reported).
-2-
Payment of the Exercise Price may be made by either of the following, or a
combination thereof, at the election of Holder:
(i) Cash Exercise: cash, certified check or cashiers check or wire
transfer; or
(ii) Cashless Exercise: surrender of this Warrant at the principal
office of the Company together with notice of cashless election, in which event
the Company shall issue Holder a number of shares of Common Stock computed using
the following formula:
X = Y (A-B)/A
where: X = the number of shares of Common Stock to be issued to Holder.
Y = the number of shares of Common Stock for which this Warrant is being
exercised.
A = the Market Price.
B = the Exercise Price.
It is intended that the Common Stock issuable upon exercise of this Warrant in a
cashless exercise transaction shall be deemed to have been acquired at the time
this Warrant was issued, for purposes of Rule 144(d)(3)(ii).
4. Transfer.
Subject to the provisions of Section 8 of this Warrant, this Warrant may be
transferred on the books of the Company, in whole but not in part, in person or
by attorney, upon surrender of this Warrant properly endorsed. This Warrant
shall be canceled upon such surrender and, as soon as practicable thereafter,
the person to whom such transfer is made shall be entitled to receive a new
Warrant or Warrants.
5. Anti-Dilution Adjustments.
(a) Stock Dividend. If the Company shall at any time declare a
dividend payable in shares of Common Stock, then the Holder hereof, upon
Exercise of this Warrant after the record date for the determination of holders
of Common Stock entitled to receive such dividend, shall be entitled to receive
upon Exercise of this Warrant, the additional shares of Common Stock that such
Holder would have received had this Warrant been Exercised immediately prior to
such record date.
(b) Recapitalization or Reclassification. If the Company shall at any
time effect a recapitalization, reclassification or other similar transaction of
such character that the shares of Common Stock shall be changed into or become
exchangeable for a larger or smaller number of shares, then upon the effective
date thereof, the number of shares of Common Stock which the Holder hereof shall
be entitled to purchase upon Exercise of this Warrant shall be increased or
decreased, as the case may be, in direct proportion to the increase or decrease
in the number of shares of Common Stock by reason of such recapitalization,
reclassification or similar transaction.
-3-
(c) Distributions. If the Company shall at any time distribute to
holders of Common Stock cash, evidences of indebtedness or other securities or
assets (other than cash dividends or distributions payable out of earned surplus
or net profits for the current or preceding year) then, in any such case, the
Holder of this Warrant shall be entitled to receive upon exercise of this
Warrant, with respect to each share of Common Stock issuable upon such Exercise,
the amount of cash or evidences of indebtedness or other securities or assets
which such Holder would have been entitled to receive with respect to each such
share of Common Stock as a result of the happening of such event had this
Warrant been Exercised immediately prior to the record date or other date fixing
shareholders to be affected by such event (the "Determination Date") or, in lieu
thereof, if the Board of Directors of the Company should so determine at the
time of such distribution, reducing the Exercise Price by the value of such
distribution applicable to one share of Common Stock (such value to be
determined by the Board in its discretion).
(d) Notice of Consolidation or Merger. If the Company shall at any
time consolidate or merge with any other corporation or transfer all or
substantially all of its assets, then the Company shall deliver written notice
to the Holder of such merger, consolidation or sale of assets at least thirty
(30) days prior to the closing of such merger, consolidation or sale of assets
and this Warrant shall terminate and expire immediately prior to the closing of
such merger, consolidation or sale of assets.
(e) Exercise Price Defined. As used in this Warrant, the term
"Exercised Price" shall mean the purchase price per share specified in this
Warrant until the occurrence of an event stated in subsection (c) of this
Section 5 and thereafter shall mean said price as adjusted from time to time in
accordance with the provisions of such subsection. No such adjustment shall be
made unless such adjustment would change the Exercise Price at the time by $.01
or more; provided, however, that all adjustments not so made shall be deferred
and made when the aggregate thereof would change the Exercise Price at the time
by $.01 or more.
(f) Adjustments: Additional Shares, Securities or Assets. In the event
that at any time, as a result of an adjustment made pursuant to this Section 5,
the Holder of this Warrant shall, upon Exercise of this Warrant, become entitled
to receive shares and/or other securities or assets (other than Common Stock)
then, wherever appropriate, all references herein to shares of Common Stock
shall be deemed to refer to and include such shares and/or other securities or
assets; and thereafter the number of such shares and/or other securities or
assets shall be subject to adjustments from time to time in a manner and upon
terms as nearly equivalent as practicable to the provisions of this Section 5.
-4-
6. Fractional Interest.
No fractional shares or scrip representing fractional shares shall be
issuable upon the Exercise of this Warrant, but on Exercise of this Warrant, the
Holder hereof may purchase only a whole number of shares of Common Stock. The
Company shall make a payment in cash in respect of any fractional shares which
might otherwise be issuable upon Exercise of this Warrant, calculated by
multiplying the fractional share amount by the Market Price on the Date of
Exercise as reported by the Nasdaq SmallCap or National Market or such other
exchange as Company's Common Stock is traded on.
7. Reservation of Shares.
The Company shall at all times reserve for issuance such number of
authorized and unissued shares of Common Stock (or other securities substituted
therefor as herein above provided) as shall be sufficient for Exercise of this
Warrant. The Company covenants and agrees that upon Exercise of this Warrant,
all shares of Common Stock issuable upon such Exercise shall be duly and validly
issued, fully paid, nonassessable, and not subject to rights of first refusal or
similar rights of any person or entity.
8. Restrictions of Shares.
(a) Registration or Exemption Required. This Warrant and the Common
Stock issuable on Exercise hereof have not been registered under the Securities
Act of 1933, as amended (the "Securities Act"), and may not be offered, sold,
transferred, assigned, pledged, hypothecated or otherwise disposed of in the
absence of registration or the availability of an exemption from registration
under such Act. All shares of Common Stock issued upon Exercise of this Warrant
shall bear an appropriate legend to such effect, if applicable.
(b) Assignment. Assuming the conditions of (a) above regarding
registration or exemption have been satisfied, the Holder may offer, sell,
transfer, assign, pledge, hypothecate or otherwise dispose of this Warrant, in
whole or in part. The Holder shall deliver a written notice to Company,
substantially in the form of the Assignment attached hereto as Exhibit B,
indicating the person or persons to whom the Warrant shall be assigned and the
respective number of Warrants to be assigned to each assignee. The Company shall
effect the assignment within ten days, and shall deliver to the assignee(s)
designated by the Holder a Warrant or Warrants of like tenor and terms for the
appropriate number of shares.
(c) The Warrant and Common Stock issuable upon conversion are intended
to be held for investment purposes and not with an intent to distribution, as
defined in the Act.
-5-
9. Registration.
(a) Registration Rights.
(i) Whenever the Company proposes to file a registration
statement with the Securities and Exchange Commission (other than a registration
statement on Form S-8 or Form S-4, or their successors, or any other form for a
similar limited purpose, or any registration statement covering only securities
proposed to be issued in exchange for securities or assets of another
corporation) for a public offering of Common Stock (a "Registration Statement"),
at any time and from time to time, it will, prior to such filing, give written
notice to the Holder of its intention to do so and, upon the written request of
the Holder given within 20 days after the Company provides such notice (which
request shall state the intended method of disposition of the shares of Common
Stock issuable upon exercise of the Warrant ("Registrable Shares")), the Company
shall use its best efforts to cause all Registrable Shares to be registered
under the Securities Act to the extent necessary to permit their sale or other
disposition in accordance with the intended methods of distribution specified in
the request of the Holder; provided that the Company shall have the right to
postpone or withdraw any registration effected pursuant to this Section 9
without obligation to the Holder and provided further that the Company shall
only be required to register the Registrable Shares under the securities laws of
the State of Georgia and one other state designated by the Holder.
(ii) In connection with any registration under this Section 9
involving an underwriting, the Company shall not be required to include any
Registrable Shares in such registration unless the holders thereof accept the
terms of the underwriting as agreed upon between the Company and the
underwriters selected by it (provided that such terms must be consistent with
this Warrant). If in the opinion of the managing underwriter it is appropriate
because of marketing factors to limit the number of Registrable Shares to be
included in the offering (a "Share Cutback"), then the Company shall be required
to include in the registration only that number of Registrable Shares, if any,
which the managing underwriter believes should be included therein. If the
number of Registrable Shares to be included in the offering in accordance with
the foregoing is less than the total number of shares which the Holder has
requested to be included, then the Holder and other holders of securities
entitled to include them in such registration shall participate in the
registration pro rata based upon their total ownership of shares of Common Stock
(giving effect to the conversion into Common Stock of all securities convertible
thereinto).
(iii) Upon the first registration of the Registrable Shares
pursuant to this Section 9, the Holder shall not be entitled to any further
registration rights under this Warrant unless the number of Registrable Shares
to be included in the offering made pursuant to such registration is limited in
accordance with Subsection 9(b)(ii) to a number less than the total number of
Registrable Shares.
-6-
(b) Registration Procedures. If and whenever the Company is required
by the provisions of this Warrant to use its best efforts to effect the
registration of any of the Registrable Shares under the Securities Act, the
Company shall:
(i) file with the Commission a Registration Statement with
respect to such Registrable Shares and use its best efforts to cause that
Registration Statement to become and remain effective;
(ii) as expeditiously as possible prepare and file with the
Commission any amendments and supplements to the Registration Statement and the
prospectus included in the Registration Statement as may be necessary to keep
the Registration Statement effective, in the case of a firm commitment
underwritten public offering, until each underwriter has completed the
distribution of all securities purchased by it and, in the case of any other
offering, until the earlier of the sale of all Registrable Shares covered
thereby or 90 days after the effective date thereof;
(iii) as expeditiously as possible furnish to the Holder such
reasonable numbers of copies of the prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act, and such
other documents as the Holder may reasonably request in order to facilitate the
public sale or other disposition of the Registrable Shares owned by the Holder;
and
(iv) as expeditiously as possible use its best efforts to
register or qualify the Registrable Shares covered by the Registration Statement
under the securities laws of the State of Georgia and one other state designated
by the Holder, and do any and all other acts and things that may be necessary or
desirable to enable the Holder to consummate the public sale or other
disposition in such states of the Registrable Shares owned by the Holder;
provided, however, that the Company shall not be required in connection with
this Subsection (b)(iv) to qualify as a foreign corporation or execute a consent
to service of process, other than a consent to service limited to claims or
matters arising out of or in connection with the offering of securities in
connection with the Registration Statement, in any jurisdiction.
If the Company has delivered preliminary or final prospectuses to the
Holder and after having done so the prospectus is amended to comply with the
requirements of the Securities Act, the Company shall promptly notify the Holder
and, if requested, the Holder shall immediately cease making offers of
Registrable Shares and return all prospectuses to the Company. The Company shall
promptly provide the Holder with revised prospectuses and, following receipt of
the revised prospectuses, the Holder shall be free to resume making offers of
the Registrable Shares.
(c) Allocation of Expenses. The Company will pay all Registration
Expenses of all registrations under this Warrant. For purposes of this Section
9, the term "Registration Expenses" shall mean all expenses incurred by the
Company in complying with this Warrant, including, without limitation, all
registration and filing fees, exchange listing fees, printing expenses, fees and
expenses of counsel for the
-7-
Company, state Blue Sky fees and expenses, and the expense of any special audits
incident to or required by any such registration, but excluding underwriting
fees, discounts and selling commissions attributable to the sale of Registrable
Shares and the fees and expenses of counsel retained by the Holder.
(d) Information from the Holder. The Holder shall furnish to the
Company such information regarding the Holder and the distribution proposed by
the Holder as the Company may reasonably request in writing and as shall be
required in connection with any registration, qualification or compliance
referred to in this Warrant.
(e) Mergers, Etc. The Company shall not, directly or indirectly, enter
into any merger, consolidation or reorganization in which the Company shall not
be the surviving corporation unless the proposed surviving corporation shall,
prior to such merger, consolidation or reorganization, agree in writing to
assume the obligations of the Company under this Warrant, and for that purpose
references hereunder to "Registrable Shares" shall be deemed to be references to
the securities which the Holder would be entitled to receive in exchange for
Registrable Shares under any such merger, consolidation or reorganization;
provided, however, that the provisions of this Subsection (e) shall not apply in
the event of any merger, consolidation or reorganization in which the Company is
not the surviving corporation if the Holder is entitled to receive in exchange
for his Registrable Shares consideration consisting solely of (i) cash, (ii)
securities of the acquiring corporation which may be immediately sold to the
public without registration under the Securities Act, or (iii) securities of the
acquiring corporation which the acquiring corporation has agreed to register
within 90 days of completion of the transaction for resale to the public
pursuant to the Securities Act.
(f) Termination. All of the Company's obligations to register
Registrable Shares under this Agreement shall terminate on ________________.
10. Benefits of this Warrant.
Nothing in this Warrant shall be construed to confer upon any person other
then the Company and the Holder of this Warrant any legal or equitable right,
remedy or claim under this Warrant and this Warrant shall be for the sole and
exclusive benefit of the Company and the Holder of this Warrant.
11. Applicable Law.
This Warrant is issued under and shall for all purposes be governed by and
construed in accordance with the laws of the Commonwealth of Kentucky, without
giving effect to conflict of law provisions thereof. Jurisdiction for any
dispute regarding this Warrant lies in the Commonwealth of Kentucky, Jefferson
County.
12. Loss of Warrant.
Upon receipt by the Company of evidence of the loss, theft, destruction or
mutilation of this Warrant, and (in the case of loss, theft or destruction) of
indemnity or security reasonably satisfactory to the Company,
-8-
and upon surrender and cancellation of this Warrant, if mutilated, the Company
shall execute and deliver a new Warrant of like tenor and date.
13. Notice or Demands.
Notices or demands pursuant to this Warrant to be given or made by the
Holder of this Warrant to the Company shall be sufficiently given or made if
sent by certified or registered mail, return receipt requested, postage prepaid,
and addressed to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Chief Financial Officer, VideoLan
Technologies, Inc., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇ until another address is designated in writing by the Company. Notices or
demands pursuant to this Warrant to be given or made to the Holder shall be
sufficiently given or made if sent by certified or registered mail, return
receipt requested, postage prepaid, and addressed to the Holder, Attn:
______________________________ until another address is designated in writing by
Holder.
IN WITNESS WHEREOF, this Warrant issued to ______________________ is hereby
executed and effective as of the date set forth below.
Dated as of _______________.
VIDEOLAN TECHNOLOGIES, INC.
By:
_________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Chief Financial Officer
-9-
EXHIBIT A
EXERCISE FORM
TO:
The undersigned hereby irrevocably exercises the right to purchase
___________ shares of Common Stock of VideoLan Technologies, Inc. (the
"Shares"), pursuant to the attached warrant (the "Warrant"), and herewith makes
payment of the Exercise Price with respect to such Shares in full, all in
accordance with the conditions and provisions of such Warrant.
The undersigned agrees not to offer, sell, transfer, assign, pledge,
hypothecate or otherwise dispose of any of such Shares, except in accordance
with the provisions of Section 8 of the Warrant, and consents that the following
legend may be affixed to the certificates for the Shares hereby subscribed for,
if such legend is applicable:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAW, AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED OF UNTIL EITHER (i) A REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS SHALL HAVE BECOME EFFECTIVE
WITH REGARD THERETO, OR (ii) AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT OR APPLICABLE PROVINCIAL OR STATE SECURITIES LAWS IS AVAILABLE IN CONNECTION
WITH SUCH OFFER, SALE OR TRANSFER."
The undersigned requests that the Shares be issued, and a warrant
representing any unexercised portion be issued, pursuant to the Warrant in the
name of the registered holder and delivered to the undersigned at the address
set forth below:
Date:
____________________________________________________________
Signature of Registered Holder
____________________________________________________________
Name of Registered Holder (print)
____________________________________________________________
Address
____________________________________________________________
____________________________________________________________
-10-
EXHIBIT B
ASSIGNMENT
(To be executed by the registered holder
desiring to transfer the Warrant)
FOR VALUE RECEIVED, the undersigned holder of the attached Warrant hereby sells,
assigns and transfers unto the person or persons below named the right to
purchase ______ shares of the Common Stock of VideoLan Technologies, Inc.
evidenced by the attached Warrant and does hereby irrevocably constitute and
appoint ____________________________ attorney to transfer such Warrant on the
books of the Company, with full power of substitution in the premises.
Date:
Name and Address of Transferee of Warrant:
_______________________________________
Name
_______________________________________
Address
_______________________________________
Name and address of assignee
including zip code number
------------------------------------------------------------------------------
NOTICE
The signature to the foregoing Exercise Form or Assignment must correspond to
the name as written upon the face of the attached Warrant in every particular,
without alteration or enlargement or any change whatsoever.