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EXHIBIT 10.35
[*] - Confidential treatment requested pursuant to Rule 406.
030498
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. IT MAY
NOT BE SOLD OR OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS WARRANT UNDER
SAID ACT OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL TO THE COMPANY
OR HOLDER'S COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED TO EFFECTUATE SUCH TRANSACTION OR UNLESS PURSUANT
TO RULE 144.
PARK `N VIEW, INC.
WARRANT
DATED MARCH 12, 1998
THIS CERTIFIES that [*************************************] (the
"Warrantholder"), for value received, is entitled, upon the terms and subject to
the conditions set forth herein, to subscribe for and purchase up to 180,000
fully-paid and nonassessable shares (the "Shares") of the Common Stock, par
value $.01 per share (the "Stock"), of Park `N View, Inc., a Delaware
corporation (the "Company"), at the exercise price of $8.00 per share (the
"Initial Exercise Price"), which number of Shares and Initial Exercise Price
shall be adjusted pursuant to the provisions of Section 10 hereof (the "Exercise
Price").
1. Term. Except as otherwise provided for herein, the right to purchase the
Shares as granted herein shall become exercisable from time to time in
cumulative increments of [****] shares of Stock [*******************************
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****************] provided however that this Warrant shall become exercisable in
full upon the first to occur of the following: (i)[****************************]
(ii) the sale of the Company, (iii) the consummation of a Qualifying Offering
(as hereinafter defined), (iv)[*************************************************
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or (vi) at such other time as the Company may request pursuant to Section 3(g).
Except as otherwise provided, this Warrant shall terminate and cease to
be exercisable upon the first to occur of the following: (i) the Warrantholder's
purchase of all the Shares, (ii) [*********************************] (iii)
[********************************************************************* (iv)
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addition, upon the occurrence of items (iii) or (iv) above, the Company shall
have the right to immediately repurchase any Stock previously purchased by
[*******] pursuant to the Warrant at a price of $8.00 per share (or at such
other prices paid by [******] as adjusted pursuant to the anti-dilution
provisions of the Warrant). In addition to the foregoing, if within five (5)
years of the date of this Warrant: (i) [********************************] (ii)
[***************************************************] and (iii)
[*******************************************************************************
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***************************************************************************] (a)
Warrantholder shall have no further right to purchase any of such Shares
hereunder; and (b) [************************************************************
*******************************] previously purchased by [*******] pursuant to
the Warrant at a price of $8.00 per share (or at such other prices paid by
[******] as adjusted pursuant to the anti-dilution provisions of the Warrant).
Any stock certificate issued to [*****] pursuant to its exercise of all or any
part of the Warrant shall bear a legend indicating that such Shares are subject
to the Company's rights of repurchase under the terms of this Warrant and the
Company's rights shall survive the termination of this Warrant [*******].
Notwithstanding the foregoing, the Company's rights of repurchase under this
Warrant shall terminate upon a Qualifying Offering (defined below) or the sale
of the Company.
2. Exercise of Purchase Rights.
(a) Exercise. The purchase rights represented by this Warrant are
exercisable by the Warrantholder, in whole or in part, at any time, or from time
to time during the period set forth in Section 1 above, by tendering the Company
at its principal office a notice of exercise in the form attached hereto as
Exhibit A (the "Notice of Exercise"), duly completed and executed. Upon receipt
of the Notice of Exercise and the payment of the Exercise Price in accordance
with the terms set forth below, the Company shall issue to the Warrantholder a
certificate for the number of shares of Stock of the Company purchased and shall
execute the Notice of Exercise indicating the number of shares of Stock which
remain subject to future purchases, if any. The person or persons in whose
name(s) any certificate(s) representing shares of Stock shall be issued upon
exercise of this Warrant shall be deemed to have become the holder(s) of the
Shares represented thereby (and such shares shall be deemed to have been issued)
immediately prior to the close of business on the date or dates upon which this
Warrant is exercised. In the event of any exercise of the rights represented by
this Warrant, certificates for the Shares so purchased shall be delivered to the
Warrantholder or its designee as soon as practical and in any event within
thirty (30) days after receipt of such notice and, unless this Warrant has been
fully exercised or expired, a new Warrant representing the remaining portion of
the Shares, if any, with respect to which this Warrant shall not then have been
exercised shall also be issued to the Warrantholder as soon as possible and in
any event within such thirty (30) day period.
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(b) Method of Exercise. The purchase rights hereby represented may
be exercised, at the election of the Warrantholder, by the tender of the Notice
of Election and the surrender of this Warrant at the principal office of the
Company and by the payment to the Company, by check, cancellation of
indebtedness or other form of payment acceptable to the Company, of an amount
equal to the then applicable Exercise Price per share multiplied by the number
of Shares then being purchased.
(c) Termination in the Event of Initial Public Offering. Except as
otherwise provided, this Warrant shall terminate immediately upon the Company's
consummation of a firm underwritten commitment public offering of the Stock
pursuant to an effective registration under the Securities Act of 1933, as
amended, covering the offer and sale of both primary and secondary shares of
Stock which results in gross proceeds of least $20,000,000, the Stock is quoted
or listed on either The Nasdaq Stock Market, the New York Stock Exchange or the
American Stock Exchange and the price at which the Stock is sold in such
offering is at least equal to the Exercise Price (a "Qualifying Offering"). The
Company shall provide written notice of its proposed filing of a registration
statement relating to a Qualifying Offering at least 30 days prior to such
filing. The Warrantholder will be permitted to rescind any previously tendered
Notice of Election in the event that a proposed public offering is not
consummated for a per share price greater than the Exercised Price.
3. Piggyback Registration Rights.
(a) If the Company, at any time proposes to register shares of Stock
under the Securities Act of 1933, as amended (the "Securities Act") (other than
pursuant to a registration on Form S-4 or Form S-8 or any similar or successor
forms), it shall at least 30 days prior to the filing of the Registration
Statement relating to such registration with the Securities and Exchange
Commission give written notice to the Warrantholder of the Company's intention
to do so, which notice shall include a statement as to the estimated maximum
number of Shares that the Warrantholder may include in such registration. Within
15 days after receipt of any such notice, the Warrantholder shall notify the
Company in writing whether the Warrantholder wishes to register any Shares in
such registration, which notification shall specify the number of Shares
intended to be sold or disposed of by the Warrantholder and shall state the
intended method of disposition of such Shares. If the Warrantholder fails to
submit such notice within such 15 day period, it shall be deemed to have
notified the Company that the Warrantholder does not then wish to register any
Shares. Upon receipt of such notice, the Company shall promptly use best efforts
to effect the registration under the Securities Act of the specified number of
Shares; provided that the Company need not promptly register any Shares if the
Warrantholder has failed to comply with paragraph (c) hereof in a timely manner.
(b) Prior to the effectiveness of a registration statement pursuant to
which any of the Shares are being registered, the Warrantholder must exercise
the Warrant for at least the number of Shares being registered.
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(c) The Warrantholder will furnish to the Company in writing such
information as the Company may reasonably require from the Warrantholder, and
otherwise reasonably cooperate with the Company in connection with any
registration statement with respect to the Shares. The Company may exclude
Shares from registration to the extent that the Warrantholder fails to furnish
such information within a reasonable time after receiving such request.
(d) The Warrantholder may not participate in any underwritten
registration pursuant hereto unless the Warrantholder (a) agrees to sell Shares
on the basis provided in any underwriting arrangements approved by the Company
and (b) completes and executes all questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents required by the terms
of such underwriting arrangements. The Warrantholder shall be entitled at any
time to withdraw Shares from such registration prior to its effective date in
the event that the Warrantholder shall disapprove of any of the terms of the
related underwriting agreement but only if the Warrantholder is permitted to do
so by the managing underwriters or pursuant to any agreement therewith.
(e) In the event that the proposed registration by the Company is, in
whole or in part, an underwritten public offering of the Stock, if the managing
underwriter determines that the inclusion of the Shares proposed to be included
would jeopardize the successful marketing of securities by the Company or
another selling securityholder, then the number of Shares to be included in such
underwritten public offering by the Warrantholder shall be reduced or
eliminated, the total amount of such reduction or elimination to be in the
discretion of the managing underwriter, provided that the number of shares of
stock to be included in any such registration for the account of selling
securityholders, other than those referenced in Section 3(h) hereof, shall be
reduced pro rata based on the number of shares of stock which each such selling
securityholder has requested to be included in such registration.
(f) The Warrantholder agrees to notify the Company as promptly as
practicable of any inaccuracy or change in information previously furnished by
such Warrantholder to the Company or of the occurrence of any event in either
case as a result of which any Prospectus included in a registration statement
pursuant to which Shares are registered contains or would contain an untrue
statement of a material fact regarding such Warrantholder or such
Warrantholder's intended method of distribution of Shares or omits to state any
material fact regarding such Warrantholder or such Warrantholder's intended
method of distribution of Shares necessary to make the statements therein, in
light of the circumstances then existing, not misleading, and promptly to
furnish to the Company any additional information required to correct and update
any previously furnished information or required so that such Prospectus shall
not contain, with respect to such Warrantholder or intended method of
distribution of Shares, an untrue statement of a material fact or omit to state
a material fact necessary to make the statements therein, in light of the
circumstances then existing, not misleading.
(g) If Company at any time proposes to register shares of Stock for
sale to the public in a firm commitment underwritten public offering and the
underwriter(s) thereof requires as a condition to such offering that the
Warrantholder exercise the Warrant prior to such offering,
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then the Warrantholder agrees to exercise the Warrant if and to the extent the
Warrant is exercisable and the public offering price is at least equal to the
Exercise Price.
(h) Notwithstanding any provision hereof to the contrary, the
Warrantholder understands and acknowledges that there are in effect, and the
Warrantholder has been given the opportunity to review, agreements of the
Company pursuant to which the holders of the Company's preferred stock have
certain superior rights with respect to the Company's registration of their
offers and sales of the Stock under the Securities Act. The rights granted
hereunder to the Warrantholder are subordinate in all respects to the rights
granted under such prior agreements. Specifically, but without limitation, such
securityholders have priority over the Warrantholder with respect to inclusion
of securities in any registration statement of the Company with the result that,
among other things, the securities of such securityholders shall be included in
a registration statement filed by the Company prior to any inclusion in such
registration statement by the Warrantholder.
(i) In the event of any underwritten offering of securities by the
Company or other securityholders of the Stock, the Warrantholder agrees that it
will not sell any shares of Stock, regardless of whether the Warrantholder is a
selling securityholder in such offering, during the period commencing 10 days
prior to any such underwritten offering and ending 90 days following such
underwritten offering.
(j) The Company shall not be obligated to include any Shares in a
registration pursuant hereto, if at the time of the receipt of a request to
include such Shares, the Shares could be sold by the Warrantholder pursuant to
Rule 144 under the Securities Act (or any similar or successor rule in effect at
that time), provided that, the Company shall, at its expense, promptly provide,
to or on behalf of Warrantholder, such opinions of counsel and other
documentation as may be required in connection with all sales by Warrantholder
of the Shares pursuant to Rule 144 under the Securities Act (or any similar or
successor rule in effect at that time).
(k) The Company will take all such actions as may be reasonably
necessary to assure that the Shares issuable pursuant to this Warrant, upon
issuance, shall have been approved for listing upon any domestic stock exchange
upon which the Stock is then listed.
(l) The costs and expenses incurred in connection with the registration
of the Shares hereunder will be paid by the Company; provided, however, that the
Company will not bear the cost of nor pay for any (i) stock transfer taxes
imposed in respect of the transfer of any Shares, (ii) any underwriting
discounts or commission or similar fees related to an underwritten offering of
the Shares or (iii) any fees and disbursements of counsel representing the
Warrantholder.
4. Reservation of Shares.
(a) Authorization and Reservation of Shares. The Company will at all
times have authorized and reserved a sufficient number of Shares to provide for
the exercise of the rights to purchase Stock as provided herein. All such shares
of Common Stock will be duly
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authorized and, when issued upon exercise of this Warrant in accordance with the
terms hereof, shall be validly issued, fully paid and nonassessable with no
liability on the part of the holders thereof. The Company shall not at any time
while this Warrant remains outstanding allow the par value of its Common Stock
to exceed the then effective Exercise Price.
(b) Registration or Listing. If any shares of Stock required to be
reserved for purposes of exercise of this Warrant require registration with or
approval of any governmental authority under any Federal or State law (other
than any registration under the Securities Act of 1933, as then in effect, or
any similar Federal statute then enforced, or any state securities law, required
by reason of any transfer), or listing on any domestic securities exchange, or
if at the time of exercise the class of Stock into which this Warrant is then
exercisable is listed on any domestic securities exchange, the Company will, at
its expense and as expeditiously as possible, use its best efforts to cause such
shares to be duly registered, listed or approved for listing on such domestic
securities exchange, as the case may be.
5. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Warrantholder that, as of the Warrant Grant Date:
(a) Organization and Capitalization. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware. The authorized capital stock of the Company consists of
17,750,000 shares of capital stock, comprised of 12,000,000 shares of Common
Stock, of which 4,318,182 shares of Common Stock are issued and outstanding and
5,750,000 shares of Preferred Stock, of which (i) 627,630 shares are designated
as Series A Preferred Stock, of which 388,065 shares are issued and outstanding,
(ii) 1,372,370 shares are designated as Series B Preferred Stock, of which
1,372,370 shares are issued and outstanding, and (iii) 3,750,000 shares are
designated as Series C Preferred Stock, of which 2,275,412 shares are issued and
outstanding. There are reserved for issuance: (i) 1,875,000 shares of Common
Stock which may be issued upon conversion of Series B Preferred Stock; (ii)
2,275,412 shares of Common Stock which may be issued upon conversion of Series C
Preferred Stock; (iii) 409,846 shares of Common Stock which may be issued
pursuant to the exercise of options previously granted to present and future
employees of the Company; (iv) 390,154 shares of Common Stock which are
available for future grants of options under the Company's Stock Option Plan;
and (v) up to 186,750 shares of Common Stock which may be issued pursuant to the
exercise of a warrant issued to ▇▇▇▇. ▇▇▇▇▇ & Sons Incorporated. Except as set
forth above, the Company has not issued or agreed to issue any stock purchase
rights or securities convertible into Common Stock; there are no preemptive
rights in effect with respect to the issuance of any shares of Common Stock. All
the issued and outstanding shares of the Company's capital stock have been
validly issued without violation of any preemptive or similar rights and are
fully paid and nonassessable. A copy of the Company's Certificate of
Incorporation, as in effect as of the Warrant Grant Date, is attached hereto as
Exhibit C.
(b) Authority. The Company has full corporate power and authority to
execute and deliver this Warrant and to perform all of its obligations
hereunder, and the
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execution, delivery and performance hereof have been duly authorized by all
necessary corporate action on its part. This Warrant has been duly executed on
behalf of the Company and constitutes the legal, valid and binding obligation of
the Company enforceable in accordance with its terms.
(c) No Legal Bar. Except to the extent that any of the rights,
conflicts or requirements described in this paragraph may have been previously
waived or complied with, neither the execution, delivery or performance of this
Warrant will not (i) conflict with or result in a violation of the Company's
Certificate of Incorporation, as amended, or the Company's Bylaws, as amended,
(ii) conflict with or result in a violation of any law, statute, regulation,
order or decree applicable to the Company, (iii) require any consent or
authorization or filing with, or other act by or in respect of, any governmental
authority (other than compliance with federal and state securities requirements,
which requirements shall be complied with by the Company within the prescribed
periods), conflict with or result in a breach of, constitute a default under or
constitute an event creating rights of acceleration, termination or cancellation
under any mortgage, lease, contract, franchise, instrument or other agreement to
which the Company is a party or by which it is bound.
(d) Validity of Shares. When issued upon the exercise of this
Warrant as contemplated herein, shares of Common Stock will have been validly
issued and will be fully paid and nonassessable.
(e) Notice of Cash Dividends. The Company shall provide
Warrantholder with notice of the declaration of a cash dividend at least 15 days
prior to the record date for the payment of such dividend and shall provide
Warrantholder with such information as may be reasonably requested by
Warrantholder to allow Warrantholder to make a decision as to whether to
exercise all or some portion of this Warrant.
6. Covenants of the Company.
(a) No Breach or Amendment. The Company shall not by any action,
including, without limitation, amending its Certificate of Incorporation, as
amended, avoid or seek to avoid the observance or performance of any of the
terms of this Warrant; the Company will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such reasonable action
as may be necessary or appropriate to protect the rights of the Warrantholder
against breach; provided, however, that nothing in this Section 6(a) will
restrict the Company's ability to enter into agreements for the incurrence of
indebtedness with financial or other institutional investors in the ordinary
course of business. Without limiting the generality of the foregoing, the
Company will (i) not increase the par value of any shares of Common Stock
issuable upon the exercise of this Warrant above the amount payable therefor
upon such exercise, (ii) take all such action as may be necessary or appropriate
in order that the Company may validly issue fully paid and nonassessable shares
of Common Stock upon the exercise of this Warrant, and (iii) obtain all such
authorizations, exemptions or consents from any public regulatory body having
jurisdiction thereof as may be necessary to enable the Company to
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perform its obligations under this Warrant. Upon the request of the
Warrantholder, the Company will at any time during the period this Warrant is
outstanding acknowledge in writing, in a form reasonably satisfactory to the
Warrantholder, the continued validity of this Warrant and the Company's
obligations hereunder.
(b) Availability of Information. The Company will cooperate with the
Warrantholder in supplying such information as may be reasonably necessary for
the Warrantholder to complete and file any information reporting forms presently
or hereafter required by the Securities and Exchange Commission as a condition
to the availability of an exemption from the Securities Act of 1933, as amended,
for the sale of this Warrant or any shares issued pursuant to this Warrant. So
long as this Warrant is outstanding, the Company will provide the Warrantholder
as soon as reasonably practicable but in any event (i) within 120 days after the
close of each fiscal year of the Company, audited financial statements as of the
end of such fiscal year; and (ii) within 60 days after the close of each of the
Company's first 3 fiscal quarters, an unaudited balance sheet of the Company as
of the end of such fiscal quarter and unaudited statements of operations and
cash flows of the Company for the quarter just ended and for the portion of the
fiscal year ended with the end of such quarter. In addition, simultaneous with
the distribution to its stockholders, the Company will provide the Warrantholder
with all notices to stockholders or other communications sent by or on behalf of
the Company to such stockholders.
(c) Certain Expenses. The Company will pay all expenses in
connection with, and all taxes (other than stock transfer, income and capital
gain taxes) and other governmental charges that may be imposed in respect of the
issuance and delivery of this Warrant or any shares issued or issuable pursuant
to this Warrant.
7. No Fractional Shares. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of the Warrantholder's
rights to purchase Stock, but in lieu of such fractional shares the Company
shall make a cash payment therefor upon the basis of the fair market value of a
share of that stock at the time of exercise.
8. No Rights as Shareholder. This Warrant does not entitle the
Warrantholder to any voting rights or other rights as a shareholder of the
Company prior to the exercise of the Warrantholder's rights to purchase Stock as
provided for herein.
9. Warrantholder Registry. The Company shall maintain a registry
showing the name and address of the registered holder of this Warrant.
10. Adjustment Rights. The Exercise Price and the number of Shares of
Stock purchasable hereunder are subject to adjustment from time to time, as
follows:
(a) Reclassification or Merger. In case of any reclassification,
change or conversion of securities of the class issuable upon exercise of this
Warrant into the same or a different number of securities of any other class or
classes, or in case of any merger of the
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Company with or into another corporation (other than a merger with another
corporation in which the Company is the acquiring and the surviving corporation
and which does not result in any reclassification or change of outstanding
securities issuable upon exercise of this Warrant), or in case of any sale of
all or substantially all of the assets of the Company, the Company, or such
successor or purchasing corporation, as the case may be, shall duly execute and
deliver to the holder of this Warrant, so that the holder of this Warrant shall
have the right to receive, at a total purchase price not to exceed that payable
upon the exercise of the unexercised portion of this Warrant, and in lieu of the
Shares of Stock theretofore issuable upon exercise of this Warrant, the kind and
amount of shares of stock, other securities, money and property receivable upon
such reclassification, change or merger by a holder of the number of Shares of
Stock then purchasable under this Warrant. Such new Warrant shall provide for
adjustment that shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 10. The provisions of this subparagraph
(a) shall similarly apply to successive reclassifications, changes, mergers and
transfers.
(b) Subdivision or Combination of Shares. If the Company at any time
shall subdivide its Stock, the Exercise Price shall be proportionately decreased
and the number of Shares issuable pursuant to this Warrant shall be
proportionately increased. If the Company at any time shall combine its Stock,
the Exercise Price shall be proportionately increased and the number of Shares
issuable pursuant to this Warrant shall be proportionately decreased.
(c) Stock Dividends. If the Company at any time shall pay a dividend
payable in, or make any other distribution (except any distribution specifically
provided for in the foregoing subsections (a) or (b)) of Stock, or issue shares
of Common Stock at a price less than the Exercise Price (other than shares of
Common Stock issuable: (i) under the Park `N View Stock Option Plan; or (ii)
upon conversion of any outstanding preferred stock), then the Exercise Price
shall be adjusted, from and after the date of determination of stockholders
entitled to receive such dividend or distribution or the date of such issuance
to that price determined by multiplying the Exercise price in effect immediately
prior to such date of determination by a fraction (i) the numerator of which
shall be the total number of shares of Stock outstanding immediately prior to
such dividend or distribution, and (ii) the denominator of which shall be the
total number of shares of Stock outstanding immediately after such dividend,
distribution or issuance. The Warrantholder shall thereafter be entitled to
purchase, at the Exercise Price resulting from such adjustment, the number of
Shares of Stock (calculated to the nearest whole share) obtained by multiplying
(i) the Exercise Price in effect immediately prior to such adjustment by (ii)
the number of Shares of Stock issuable upon the exercise hereof immediately
prior to such adjustment and dividing the product thereof by the Exercise Price
resulting from such adjustment.
(d) Reserved Shares Adjustment. The number of shares reserved for
issuance pursuant to this Warrant shall automatically be adjusted without
further action by the Company in the event of any adjustment of the number of
Shares issuable pursuant to this Warrant. In case of any event resulting in
adjustment pursuant to Section 10(a), 10(b) or 10(c) above, the Company shall
give written notice thereof to the Warrantholder stating the date on
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which such event is to take place (which shall be at least forty-five (45) days
after the Warrantholder's receipt of such notice).
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11. Compliance with Securities Act; Disposition of Warrant or Shares of
Stock.
(a) Compliance with Securities Act. The Warrantholder, by acceptance
hereof, agrees that this Warrant, and the Shares of Stock to be issued upon
exercise hereof, are being acquired for investment and that such Warrantholder
will not offer, sell or otherwise dispose of this Warrant, or any Shares of
Stock to be issued upon exercise hereof except under circumstances which will
not result in a violation of the Securities Act of 1933, as amended (the
"Securities Act"), or any applicable state securities laws. At the time of
exercise, the Warrantholder shall execute an Investment Letter in the form
attached hereto as Exhibit B stating (among other things) that the shares issued
pursuant to the Warrant have not been registered under federal or state
securities laws, and that such shares may not be transferred unless the shares
are so registered or unless the Company has received an opinion of the Company's
counsel or such holder's counsel reasonably acceptable to the Company that such
transfers are exempt from registration.
(b) Legend. This Warrant and all shares of Stock issued upon
exercise of this Warrant (unless registered under the Securities Act and any
applicable state securities laws) shall be stamped or imprinted with a legend in
substantially the following form:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED. THEY MAY NOT BE SOLD OR OFFERED FOR SALE,
PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT RELATED THERETO UNDER SAID ACT OR
UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL THAT SUCH
REGISTRATION IS NOT REQUIRED TO EFFECTUATE SUCH TRANSACTION OR
UNLESS PURSUANT TO RULE 144."
(c) Representations and Warranties of Warrantholder. In addition, in
connection with the issuance of this Warrant, the Warrantholder specifically
represents to the Company by acceptance of this Warrant as follows:
(i) The Warrantholder is aware of the Company's business
affairs and financial condition, and has acquired information about the Company
sufficient to reach an informed and knowledgeable decision to acquire this
Warrant. The Warrantholder is acquiring this Warrant for its own account for
investment purposes only and not with a view to, or for the resale in connection
with, any "distribution" thereof in violation of the Securities Act.
(ii) The Warrantholder understands that this Warrant has not
been registered under the Securities Act in reliance upon a specific exemption
therefrom, which exemption depends upon, among other things, the bona fide
nature of the Warrantholder's investment intent as expressed herein.
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(iii) The Warrantholder further understands that this Warrant
and any shares of Stock to be issued upon exercise hereof must be held
indefinitely unless subsequently registered under the Securities Act and
qualified under any applicable state securities laws, or unless exemptions from
registration and qualification are otherwise available.
(d) Disposition of Warrant or Shares. Subject to the terms and
conditions of Section 11(e), with respect to any offer, sale or other
disposition of this Warrant or any Shares of Stock acquired pursuant to the
exercise of this Warrant prior to registration of such Warrant or Shares, the
holder agrees to give written notice to the Company prior thereto, describing
briefly the manner thereof, together with an opinion of the Company's counsel or
such ▇▇▇▇▇▇'s counsel reasonably satisfactory to the Company, or other evidence,
if reasonably requested by the Company, to the effect that such offer, sale or
other disposition may be effected without registration or qualification (under
the Securities Act as then in effect or any federal or state securities law then
in effect) of this Warrant or such shares of Stock and indicating whether or not
under the Securities Act certificates for this Warrant or such shares of Stock
to be sold or otherwise disposed of require any restrictive legend as to
applicable restrictions on transferability in order to ensure compliance with
such law. Promptly upon receiving such written notice and reasonably
satisfactory opinion or other evidence, if so requested, the Company, as
promptly as practicable but no later than five (5) days after receipt of the
written notice, shall notify such holder that such holder may sell or otherwise
dispose of this Warrant or such shares of Stock, all in accordance with the
terms of the notice delivered to the Company. Notwithstanding the foregoing,
this Warrant or such shares of Stock may, as to such federal laws, be offered,
sold or otherwise disposed of in accordance with Rule 144 or 144A under the
Securities act, provided that the Company shall have been furnished with such
information as the Company may reasonably request to provide a reasonable
assurance that the provisions of Rule 144 or 144A have been satisfied. Each
certificate representing this Warrant or the shares of Stock thus transferred
(except a transfer pursuant to Rule 144 or 144A) shall bear a legend as to the
applicable restrictions on transferability in order to ensure compliance with
such laws, unless in the aforesaid opinion of counsel for the Company or the
Warrantholder or pursuant to Rule 144 or 144A, such legend is not required in
order to ensure compliance with such laws. The Company may issue stop transfer
instruction to its transfer agent in connection with such restrictions.
(e) Prohibition Against Transfer. This Warrant, the rights of the
Warrantholder hereunder and the Shares may not be assigned or transferred except
to a parent or subsidiary entity of the Warrantholder that, in the case of a
parent, owns at least 80% of the Warrantholder, and, in the case of a
subsidiary, is 80% owned by the Warrantholder; provided however that such
transferee shall be bound by the terms and provisions hereof and the prohibition
on transfer of the Shares in this Section 11(e) shall terminate upon the
termination of all of the Company's rights to repurchase the Shares pursuant to
Section 1 hereof.
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12. Miscellaneous.
(a) Attorney's Fees. In any litigation, arbitration or court
proceeding between the Company and the Warrantholder relating hereto, the
prevailing party shall be entitled to attorneys' fees and expenses and all costs
of proceedings incurred in enforcing this Warrant.
(b) Governing Law. This Warrant Agreement shall be governed by and
construed for all purposes under and in accordance with the laws of the State of
Delaware.
(c) Descriptive Headings. The descriptive headings of the paragraphs
of this Warrant are inserted for convenience only and do not constitute a part
of this Warrant.
(d) Notices. Any notice required or permitted hereunder shall be
given in writing and shall be deemed effectively given upon personal delivery or
upon deposit in the United States mail, by registered or certified mail,
addressed (1) to the Warrantholder, at the address in the Warrant Register
maintained by the Company, and (ii) to the Company, at ▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, or at such other address as any such party may
subsequently designate by written notice to the other party.
(e) Lost Warrants. The Company covenants to the Warrantholder, that
upon receipt of evidence reasonably satisfactory to the Company of the loss,
theft, destruction or mutilation of this Warrant or any stock certificate and,
in the case of any such loss, theft or destruction, upon receipt of an indemnity
reasonably satisfactory to the Company, or in the case of any such mutilation,
upon surrender and cancellation of such Warrant or stock certificate, the
Company will make and deliver a new Warrant or stock certificate of like tenor,
in lieu of the lost, stolen, destroyed or mutilated Warrant or stock
certificate.
(f) Severability. In the event any one or more of the provisions of
this Warrant shall for any reason be held invalid, illegal or unenforceable, the
remaining provisions of this Warrant shall be unimpaired, and the invalid,
illegal or unenforceable provision shall be replaced by a mutually acceptable
valid, legal and enforceable provision, which comes closest to the intention of
the parties underlying the invalid, illegal or unenforceable provision.
(g) Modification and Waiver. This Warrant and any provision hereof
may be amended, waived, discharged or terminated only by an instrument in
writing signed by the party against whom enforcement of the same is sought.
(h) Application of Securityholders' Agreement. The Warrantholder
understands and acknowledges that there is in effect that certain Amended and
Restated SecurityHolders' and Exchange Agreement, as amended, (a copy of which
has been provided to the Warrantholder) and that the Shares and the
Warrantholder shall be subject to the terms and conditions thereof.
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(i) Survival of Representations and Warranties. All of the
Warrantholders representations, warranties, agreements and obligations with
respect to the ownership of the Shares shall survive the termination of the
Warrant.
(j) Entire Agreement. This Warrant constitutes the entire agreement
between the parties pertaining to the subject matter contained in it and
supersedes all prior and contemporaneous agreements, representations and
undertakings of the parties, whether oral or written, with respect to such
subject matter.
IN WITNESS WHEREOF, this warrant has been duly executed and delivered by
the undersigned.
PARK `N VIEW, INC.
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------
▇▇▇ ▇▇▇▇▇▇▇▇, President
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Exhibit A
NOTICE OF EXERCISE FOR CASH
To: Park `N View, Inc.
▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
1. The undersigned, hereby elects to purchase shares of the Common
Stock of Park `N View, Inc. pursuant to the terms of the attached Warrant, and
tenders herewith payment of the purchase price of such shares in full.
2. Please issue a certificate or certificates representing said
shares in the name of the undersigned or in such other name or names as are
specified below:
Name Address
---- -------
Unless this Warrant has been fully exercised or expired, please
issue a new Warrant representing the remaining portion of the Shares, if any,
with respect to which this Warrant has not been exercised in the name of the
Warrantholders.
----------------------------------------
(SIGNATURE)
Date:
--------------------
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EXHIBIT B
FORM OF
INVESTMENT LETTER
___________, 19___
Park `N View, Inc.
▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
Gentlemen:
The undersigned, ________________________ ("Purchaser") intends to
acquire up to _________ shares (the "Shares") of the Common Stock of Park `N
View, Inc. (the "Company") from the Company pursuant to the exercise of certain
Warrant held by Purchaser. The Shares will be issued to Purchaser in a
transaction not involving a public offering and pursuant to an exemption from
registration under the Securities Act of 1933, as amended (the "1933 Act"). In
connection with such purchase and in order to comply with the exemption from
registration relied upon by the Company, Purchaser represents, warrants and
agrees as follows:
1. Purchaser is acquiring the Shares for Purchaser's own account, to
hold for investment, and Purchaser shall not make any sale, transfer or other
disposition of the Shares in violation of the 1933 Act or the rules and
regulations promulgated thereunder by the Securities and Exchange Commission or
in violation of any applicable state securities law.
2. Purchaser has been advised that the issuance of the Shares is not
being registered under the 1933 Act on the ground that this transaction is
exempt from registration under Section 3(b) or 4(2) of the 1933 Act, as not
involving any public offering, and that reliance by the Company on such
exemptions is predicated in part on Purchaser's representations set forth in
this letter. Purchaser also has been advised that neither the Shares nor the
issuance thereof are being registered under the securities laws of any state.
3. Purchaser has been informed that the Shares must be held
indefinitely unless subsequently registered under the 1933 Act and applicable
state securities laws, or unless exemptions from such registration are available
with respect to any proposed transfer or disposition by Purchaser of the Shares.
▇▇▇▇▇▇▇▇▇ understands and agrees that the Company, as a condition to the
transfer of any of the Shares, may require that the request for transfer be
accompanied by an opinion of counsel satisfactory to the Company, in form and
substance satisfactory to the Company, to the effect that the proposed transfer
is exempt from registration
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under 1933 Act and applicable state securities laws, unless such transfer is
covered by an effective registration statement under the 1933 Act and all
applicable state securities laws.
4. ▇▇▇▇▇▇▇▇▇ understands and agrees that there will be placed on the
certificates for the Shares, or any substitutions therefor, a legend stating in
substance:
The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the "Act"),
nor under any state securities law and may not be pledged, sold,
assigned or transferred unless (i) a registration statement with
respect thereto is effective under the Act and any applicable state
securities laws or (ii) in the opinion of counsel acceptable to the
Company such securities may be pledged, sold, assigned or
transferred without an effective registration statement under the
Act or applicable state securities laws.
5. Purchaser has been furnished with or has had access to the
information it has requested from the Company in connection with the investment
represented by the Shares and has had an opportunity to discuss with the
officers and management of the Company the Company's business and financial
affairs. Purchaser has such knowledge and experience in business and financial
matters and with respect to investments in securities or in privately held
companies so as to enable it to understand and evaluate the risks of such
investment and form an investment decision with respect thereto.
Very truly yours,
-----------------------------------
Name:
Accepted as of the _____ day of ____________, 19____.
PARK `N VIEW, INC.
By:
---------------------------------
Name:
Title:
RALLIB01:470748.01
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