THE SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR ANY STATE SECURITIES
LAW. THESE SECURITIES MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE
STATE SECURITIES LAWS, OR AN EXEMPTION THEREFROM.
THIS WARRANT MAY NOT BE EXERCISED EXCEPT IN COMPLIANCE WITH ALL APPLICABLE
FEDERAL AND STATE SECURITIES LAWS TO THE REASONABLE SATISFACTION OF THE
COMPANY AND LEGAL COUNSEL FOR THE COMPANY.
Warrant No. ---------
CAVION TECHNOLOGIES, INC.
STOCK PURCHASE WARRANT
This Warrant is issued as of ---------------, 1999, by Cavion
Technologies, Inc., a Colorado corporation, the ("Company") to and for the
benefit of ------------------ ("Holder").
WHEREAS, this Warrant is being issued pursuant to a certain
Promissory Note payable to Holder dated -----------------, 1999 (the
"Note") and a Subscription Agreement (the "Subscription Agreement")
between the Company and the Holder.
WHEREAS, the Subscription Agreement provides that the Holder is
entitled to the issuance of Warrants to purchase the Company's Class A
Common Stock, upon the Holder's grant of a loan pursuant to the Note and
Subscription Agreement.
WHEREAS, the Holder has loaned the Company -------------------------
($-----------) pursuant to the Note and Subscription Agreement.
NOW, THEREFORE, for good and valuable consideration, consisting of
the covenants contained in the Note and the Subscription Agreement, the
Company agrees as follows:
1. GRANT OF WARRANTS. The Company hereby grants to Holder, the
right to purchase, subject to the terms and conditions hereinafter set
forth, an aggregate of -,000 fully paid and nonassessable shares
("Shares") of the Class A Common Stock of the Company ("Common Stock").
2. WARRANT PRICE. The purchase price of the Shares upon exercise
of this Warrant is the price at which shares of the Company's Common Stock
are sold in its initial public offering, as filed in the SB-2 Registration
Statement on June 10, 1999 with the U.S. Securities and Exchange
Commission, and as subsequently amended (the "IPO"), or, if the IPO does
not close within one (1) year from the date of this Warrant, then at $6.00
per share.
3. TERM. The purchase right represented by this Warrant is
exercisable, in whole or in part, at any time and from time to time for a
period of five (5) years beginning on the earlier of the date on which the
Company receives the proceeds of the IPO (not necessarily including
proceeds from the over-allotment option) (the "IPO Closing Date"), or one
(1) year from the date of this Warrant (the "Exercise Period"). The
Company shall have no obligation to furnish any further notice of the
expiration date of this Warrant to Holder before the expiration date.
4. Method of Exercise; Payment; Issuance of New Warrant.
(a) Subject to paragraph 3 hereof, Holder may exercise the
purchase right represented by this Warrant, in whole or in part, by
delivering to the principal office of the Company a notice of exercise
("Exercise Notice") in the form attached hereto as Exhibit A, duly
executed, this Warrant, and payment to the Company, by check, of an amount
equal to the then applicable Warrant Price per share multiplied by the
number of Shares then being purchased. The Company shall within twenty
(20) business days after its receipt of the original Exercise Notice, this
Warrant and payment, issue and deliver to the Holder at the Company's
principal office, or at such other place designated by Holder, a
certificate evidencing the issuance of those Shares to which Holder is
entitled pursuant to the terms hereunder. If this Warrant is not fully
exercised, a new Warrant representing the portion of the Shares with
respect to which this Warrant shall not have been exercised shall be
issued to Holder within thirty (30) days. No cashless exercise of this
Warrant is permitted.
(b) Exercise shall be deemed to be effective on the date the
Exercise Notice, this Warrant and payment are received by the Company as
described in (a) above. Upon the effective date of exercise, the Holder
shall be deemed to be the holder of record of the Shares, notwithstanding
that the certificate representing the Shares shall not then be actually
delivered to such Holder or that such Shares are not then set forth on the
stock transfer books of the Company.
5. STOCK FULLY PAID; RESERVATION OF SHARES. All Shares which may
be issued upon the exercise of the rights represented by this Warrant
will, upon issuance, be fully paid and nonassessable, and free from all
taxes, liens and charges with respect to the issue thereof. During the
period within which the rights represented by this Warrant may be
exercised, the Company will at all times have authorized, and reserved for
the purpose of the issue upon exercise of the purchase rights evidenced by
this Warrant, a sufficient number of shares of its Common Stock to provide
for the exercise of the rights represented by this Warrant.
6. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SHARES. The number
and kind of securities purchasable upon the exercise of this Warrant and
the Warrant Price shall be subject to adjustment from time to time upon
the occurrence of certain events, as follows:
(a) RECLASSIFICATION OR MERGER. In case of any
reclassification or change of outstanding securities of the class issuable
upon exercise of this Warrant (other than a change in par value, or from
par value to no par value, or from no par value to par value, or in case
of any merger of the Company with or into another corporation (other than
a merger with another corporation in which the Company is a continuing
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 shall, as condition precedent to such transaction, cause
provisions to be made so that Holder shall have the right, upon exercise
of this Warrant, to receive, in lieu of each share of the Company's Common
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 the holder of one share of
the Company's Common Stock. The provisions of this subparagraph (a) shall
similarly apply to successive reclassifications, changes, mergers and
sales of assets.
(b) SUBDIVISION OR COMBINATION OF SHARES. If the Company at
any time while this Warrant remains outstanding and unexpired shall
subdivide or combine its Common Stock, the Warrant Price shall be
proportionately decreased in the case of a subdivision or increased in the
case of a combination.
(c) STOCK DIVIDENDS. If the Company at any time while this
Warrant is outstanding and unexpired shall pay a dividend with respect to
Common Stock payable in Common Stock, or make any other distribution with
respect to Common Stock (except any distribution specifically provided for
in the foregoing subparagraphs (a) and (b)) then the Warrant Price shall
be adjusted, from and after the date of determination of shareholders
entitled to receive such dividend or distribution, to that price
determined by multiplying the Warrant Price in effect immediately prior to
such date of determination by a fraction (a) the numerator of which shall
be the total number of shares of Common Stock outstanding immediately
prior to such dividend or distribution, and (b) the denominator of which
shall be the total number of shares of Common Stock outstanding
immediately after such dividend or distribution.
(d) ADJUSTMENT OF NUMBER OF SHARES. Upon each adjustment in
the Warrant Price, the number of Shares of Common Stock purchasable
hereunder shall be adjusted, to the nearest whole share, to the product
obtained by multiplying the number of Shares purchasable immediately prior
to such adjustment in the Warrant Price by a fraction, the numerator of
which shall be the Warrant Price immediately prior to such adjustment and
the denominator of which shall be the Warrant Price immediately
thereafter.
7. NOTICE OF ADJUSTMENTS. Whenever any Warrant Price shall be
adjusted pursuant to paragraph 6 hereof, the Company shall make a
certificate signed by its chief financial officer setting forth, in
reasonable detail, the event requiring the adjustment, the amount of the
adjustment, the method by which such adjustment was calculated, and the
Warrant Price or Prices after giving effect to such adjustment, and shall
cause copies of such certificate to be mailed by first class mail, postage
prepaid, to Holder.
8. FRACTIONAL SHARES. No fractional shares of Common will be
issued in connection with any exercise hereunder, but in lieu of such
fractional shares the Company shall make a cash payment therefore in an
amount determined in such reasonable manner as may be prescribed by the
board of directors of the Company.
9. COMPLIANCE WITH SECURITIES ACT; NON-TRANSFERABILITY OF WARRANT;
DISPOSITION OF SHARES OF COMMON.
(a) COMPLIANCE WITH SECURITIES ACT. By acceptance hereof,
Holder agrees that this Warrant and the shares of Common Stock to be
issued upon exercise hereof are being acquired for investment and that
it/he/she will not offer, sell or otherwise dispose of this Warrant or the
Shares except under circumstances which will not result in a violation of
the Securities Act of 1933, as amended (the "Act"). In the absence of
registration of the Shares (including but not limited to registration
pursuant to the Subscription Agreement under which the Warrant was
purchased from the Company), upon exercise of this Warrant, Holder shall
confirm in writing, in the form attached hereto as Exhibit B, that the
shares of Common Stock so purchased are being acquired for investment and
not with a view toward distribution or resale. In addition, Holder shall
provide such additional information regarding Holder's financial and
investment background as the Company may reasonably request. All shares
of Common Stock issued upon exercise of this Warrant (unless registered
under the Act) shall be stamped or imprinted with a legend in
substantially the following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
(THE "ACT"). NO SALE OR DISPOSITION MAY BE EFFECTED WITHOUT THE PRIOR
WRITTEN CONSENT OF THE COMPANY AND WITHOUT REGISTRATION UNDER THE ACT AND
APPLICABLE STATE SECURITIES LAWS, IF ANY, OR PURSUANT TO EXEMPTIONS
THEREFROM."
10. RIGHTS OF SHAREHOLDERS. Holder shall not be entitled to vote or
receive dividends and shall not be deemed the holder of Common Stock or
any other securities of the Company which may at any time be issuable on
the exercise hereof for any purpose. Nothing contained herein shall be
construed to confer upon Holder, as such, any of the rights of a
shareholder of the Company or any right to vote for the election of
directors or upon any matter submitted to shareholders at any meeting
thereof, or to give or withhold consent to any corporate action (whether
upon any recapitalization, issuance of stock, reclassification of stock,
change of par value or change of stock to no par value, consolidation,
merger, conveyance, or otherwise) or to receive notice of meetings, or to
receive dividends or subscription rights or otherwise until the Warrant
shall have been exercised and the Shares purchasable upon the exercise
hereof shall have become deliverable, as provided herein.
11. REGISTRATION RIGHTS. The Shares obtained upon exercise of this
Warrant shall have the registration rights, obligations and restrictions
set forth in the Subscription Agreement. The term "Registrable
Securities" in such Subscription Agreement shall mean the Common Stock
obtained upon exercise of this Warrant.
12. GOVERNING LAW. The terms and conditions of this Warrant shall
be governed by and construed in accordance with Colorado law.
13. MISCELLANEOUS. The headings in this Warrant are for purposes of
convenience and reference only, and shall not be deemed to constitute a
part hereof. Neither this Warrant nor any term hereof may be changed,
waived, discharged or terminated orally but only by an instrument in
writing signed by the Company and the registered holder hereof. All
notices, requests and other communications to any party hereunder shall be
in writing (including telecopy or similar writing) and shall be given to
such party at its address or telecopy number contained in the Company's
records or such other address or telecopy number as such party may
hereafter specify in writing to the Company at such address for that
purpose, or, if to the Company, to 7475 Dakin Street, Suite 607, Denver,
CO 80221, telecopy number 303/657-8210. Each such notice, request or
other communication shall be effective (i) if given by telecopy, when such
message is transmitted to the telecopy number contained in the Company's
records or such other number as a party may specify in writing to the
Company at such address, or (ii) if given by any other means, the earlier
of (x) when delivered by hand to the address contained in the Company's
record or such other address as a party may specify in writing to the
Company at such address or (y) five (5) business days after the mailing of
such notice by certified mail.
IN WITNESS WHEREOF, the Company has caused this Warrant to be
executed in its name by the signature of its President and attested by the
signature of its Chief Financial Officer and this Warrant to be dated
August ----, 1999.
CAVION TECHNOLOGIES, INC.
ATTEST:
By:---------------------------- By:----------------------------
Marshall E. Aster, David J. Selina, President
Chief Financial Officer
EXHIBIT A
---------
TO STOCK PURCHASE WARRANT
-------------------------
NOTICE OF EXERCISE
TO: CAVION TECHNOLOGIES, INC.
1. The undersigned hereby elects to purchase ------------ shares of
Class A Common Stock of Cavion Technologies, Inc. pursuant to the terms of
the attached Warrant, and tenders herewith payment of the purchase price
of such shares in full, together with all applicable transfer taxes, if
any.
2. Please issue a certificate or certificates representing said
shares of Class A Common Stock in the name of the undersigned or in such
other names as is specified below:
--------------------------------
(Name)
--------------------------------
--------------------------------
(Address)
3. [For use only in the absence of an effective registration
statement covering the Shares] The undersigned represents that the
aforesaid shares of Class A Common Stock are being acquired for the
account of the undersigned for investment and not with a view to, or for
resale in connection with, the distribution thereof and that the
undersigned has no present intention of distributing or reselling such
shares. In support thereof, the undersigned has executed an Investment
Representation Statement attached hereto as Exhibit B.
--------------------------------
(Signature)
- ----------------------------
(Date)
EXHIBIT B
---------
TO STOCK PURCHASE WARRANT
-------------------------
INVESTMENT REPRESENTATION STATEMENT
PURCHASER : -------------------------
COMPANY : CAVION TECHNOLOGIES, INC.
SECURITY : CLASS A COMMON STOCK
AMOUNT : -------------------------
DATE : -------------------------
In connection with the purchase of the above-listed securities (the
"Securities"), I, the Purchaser, represent to the Company the following:
(a) I am aware of the Company's business affairs and financial
condition, and have acquired sufficient information about the Company to
reach an informed and knowledgeable decision to acquire the Securities. I
am purchasing these Securities for my own account for investment purposes
only and not with a view to, or for the resale in connection with, any
"distribution" thereof for purposes of the Securities Act of 1933
("Securities Act").
(b) I understand that the Securities have 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 my
investment intent as expressed herein. In this connection, I understand
that, in the view of the Securities and Exchange Commission ("SEC"), the
statutory basis for such exemption may be unavailable if my representation
was predicated solely upon a present intention to hold these Securities
for the minimum capital gains period specified under tax statutes, for a
deferred sale, for or until an increase or decrease in the market price of
the Securities, or for a period of one year or any other fixed period in
the future.
(c) I further understand that the Securities must be held
indefinitely unless subsequently registered under the Securities Act or
unless an exemption from registration is otherwise available. Moreover, I
understand that the Company is under no obligation to register the
Securities except as set forth in the Subscription Agreement. In
addition, I understand that the certificate evidencing the Securities will
be imprinted with a legend which prohibits the transfer of the Securities
unless they are registered or such registration is not required in the
opinion of counsel for the Company.
(d) I am aware of the provisions of Rule 144, promulgated under the
Securities Act, which, in substance, permits limited public resale of
"restricted securities" acquired, directly or indirectly, from the issuer
thereof (or from an affiliate of such issuer), in a non- public offering
subject to the satisfaction of certain conditions.
(e) I further understand that at the time I wish to sell the
Securities there may be no public market upon which to make such a sale.
(f) I further understand that in the event all of the requirements
of Rule 144 are not satisfied, registration under the Securities Act,
compliance with Regulation A, or some other registration exemption will be
required; and that, notwithstanding the fact that Rule 144 is not
exclusive, the Staff of the SEC has expressed its opinion that persons
proposing to sell private placement securities other than in a registered
offering and otherwise than pursuant to Rule 144 will have a substantial
burden of proof in establishing that an exemption from registration is
available for such offers or sales, and that such persons and their
respective brokers who participate in such transactions do so at their own
risk.
Signature of Purchaser:
Date: ------------------------- -------------------------