THE SECURITIES REPRESENTED HEREBY (THE "SECURITIES") HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE
SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED FOR SALE IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES OR AN OPINION
OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE CORPORATION THAT SUCH
REGISTRATION IS NOT REQUIRED.
COMMON STOCK PURCHASE WARRANT
XYBERNAUT CORPORATION
Expires July 29, 2006
No.: W-1009 Number of Shares: 39,735
Date of Issuance: July 30, 2001
1. Issuance. For good and valuable consideration, the receipt of which
is hereby acknowledged by Xybernaut Corporation, a Delaware corporation (the
"Company"), DA VINCI INTERNATIONAL LTD., or its registered assigns (the
"Holder") is hereby granted the right to purchase at any time until 5:00 P.M.,
New York City time, on July 29, 2006 (the "Expiration Date"), Thirty Nine
Thousand Seven Hundred and Thirty Five (39,735) shares of the Company's Common
Stock, par value $.01 per share (the "Common Stock") at an initial exercise
price of $4.53 per share (the "Exercise Price"), subject to further adjustment
as set forth in Section 6 hereof.
2. Exercise of Warrants. This Warrant is exercisable in whole or in
part at the Exercise Price per share of Common Stock payable hereunder, payable
in cash or by certified or official bank check. Upon surrender of this Warrant
Certificate with the annexed Notice of Exercise Form duly executed, together
with payment of the Exercise Price for the shares of Common Stock purchased, the
Holder shall be entitled to receive a certificate or certificates for the shares
of Common Stock so purchased.
3. Reservation of Shares. The Company hereby agrees that at all times
during the term of this Warrant there shall be reserved for issuance upon
exercise of this Warrant such number of shares of its Common Stock as shall be
required for issuance upon exercise of this Warrant (the "Warrant Shares").
4. Mutilation or Loss of Warrant. Upon receipt by the Company of
evidence satisfactory to it of the loss, theft, destruction or mutilation of
this Warrant, and (in the case of loss, theft or destruction) receipt of
reasonably satisfactory indemnification, and (in the case of mutilation) upon
surrender and cancellation of this Warrant, the Company will execute and
deliver a new Warrant of like tenor and date and any such lost, stolen,
destroyed or mutilated Warrant shall thereupon become void.
5. Rights of the Holder. The Holder shall not, by virtue hereof, be
entitled to any rights of a stockholder in the Company, either at law or equity,
and the rights of the Holder are limited to those expressed in this Warrant and
are not enforceable against the Company except to the extent set forth herein.
6. Protection Against Dilution.
(a) Adjustment Mechanism. If an adjustment of the Exercise Price is
required pursuant to this Section 6, the Holder shall be entitled to purchase
such number of additional shares of Common Stock as will cause (i) the total
number of shares of Common Stock Holder is entitled to purchase pursuant to this
Warrant, multiplied by (ii) the adjusted purchase price per share, to equal
(iii) the dollar amount of the total number of shares of Common Stock Holder is
entitled to purchase before adjustment multiplied by the total purchase price
before adjustment.
(b) Capital Adjustments. In case of any stock split or reverse
stock split, stock dividend, reclassification of the Common Stock,
recapitalization, merger or consolidation, or like capital adjustment affecting
the Common Stock of the Company, the provisions of this Section 6 shall be
applied as if such capital adjustment event had occurred immediately prior to
the date of this Warrant and the original purchase price had been fairly
allocated to the stock resulting from such capital adjustment; and in other
respects the provisions of this Section 6 shall be applied in a fair, equitable
and reasonable manner so as to give effect, as nearly as may be, to the purposes
hereof. A rights offering to stockholders of the Company shall be deemed a stock
dividend to the extent of the bargain purchase element of the rights.
7. Warrant Call. At any time or from time to time after the
Registration Statement (as defined in Section 8(b) hereof) has been declared
effective, the Company, at its option, may, upon written notice to the Holder
(the "Call Notice"), call up to one hundred percent (100%) of this Warrant if
the Common Stock trades at a price equal to or greater than $6.50 per share for
five (5) consecutive trading days prior to the date the Company calls the
Warrant. To be effective, the Call Notice must be given within ten (10) days
after the aforementioned five (5) day period. The rights and privileges granted
pursuant to this Warrant with respect to such Warrant Shares subject to the Call
Notice shall terminate if this Warrant is not exercised with respect to such
Warrant Shares by the Holder within ten (10) days after the Call Notice is
received by the Holder. In the event that this Warrant is not exercised by the
Holder with respect to the Warrant Shares subject to the Call Notice, this
Warrant shall expire at 5:00 p.m. eastern time on the call date and the Company
will remit to the Holder $0.01 per Warrant Share and a new Warrant certificate
representing the number of Warrant Shares, if any, with respect to which this
Warrant has not been exercised or subject to a Call Notice upon such Holder
tendering to the Company the expired Warrant certificate.
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8. Transfer to Comply with the Securities Act;
Registration Rights.
(a) This Warrant has not been registered under the Securities Act
of 1933, as amended (the "Act"), or any applicable state securities laws, and
has been issued to the Holder for investment and not with a view to the
distribution of either the Warrant or the Warrant Shares. Neither this Warrant
nor any of the Warrant Shares or any other security issued or issuable upon
exercise of this Warrant may be sold, transferred, pledged or hypothecated in
the absence of an effective registration statement under the Act relating to
such security or an opinion of counsel satisfactory to the Company that
registration is not required under the Act. Each certificate for the Warrant,
the Warrant Shares and any other security issued or issuable upon exercise of
this Warrant shall contain a legend on the face thereof, in form and substance
satisfactory to counsel for the Company, setting forth the restrictions on
transfer contained in this Section.
(b) The Company agrees to file a registration statement, which
shall include the Warrant Shares, on Form S-3 or another available form (the
"Registration Statement"), pursuant to the Registration Rights Agreement between
the Company and the Holder dated as of July 30, 2001 (the "Registration Rights
Agreement").
9. Notices. Any notice or other communication required or permitted
hereunder shall be in writing and shall be delivered personally, telegraphed,
telexed, sent by facsimile transmission or sent by certified, registered or
express mail, postage pre-paid. Any such notice shall be deemed given when so
delivered personally, telegraphed, telexed or sent by facsimile transmission,
or, if mailed, two (2) days after the date of deposit in the United States
mails, as follows:
if to the Company, to:
Xybernaut Corporation
12701 Fair Lakes Circle
Suite 550
Fairfax, Virginia 22033
Attn: John F. Moynahan, Sr. Vice President
and Chief Financial Officer
Telephone No.: (703) 631-6925
Facsimile No.: (703) 631-3903
with a copy to:
Jenkens & Gilchrist Parker Chapin LLP
The Chrysler Building
405 Lexington Avenue
New York, New York 10174
Attn: Martin Eric Weisberg, Esq.
Telephone No.: (212) 704-6000
Facsimile No.: (212) 704-6288
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The address with respect to the Holder of this Warrant or of Warrant Shares
issued pursuant hereto shall be its last known address or facsimile number
appearing on the books of the Company maintained for such purposes. Any party
may be notice given in accordance with this Section to the other parties
designate another address or person for receipt of notices hereunder.
10. Supplements and Amendments; Whole Agreement. This Warrant may be
amended or supplemented only by an instrument in writing signed by the parties
hereto. This Warrant and the Purchase Agreement, of even date herewith, by and
between the Company and the Holder contain the full understanding of the parties
hereto with respect to the subject matter hereof and thereof and there are no
representations, warranties, agreements or understandings other than expressly
contained herein and therein.
11. Governing Law. This Warrant shall be deemed to be a contract made
under the laws of the State of New York and for all purposes shall be governed
by and construed in accordance with the laws of such State applicable to
contracts to be made and performed entirely within such State.
12. Counterparts. This Warrant may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
13. Descriptive Headings. Descriptive headings of the several Sections
of this Warrant are inserted for convenience only and shall not control or
affect the meaning or construction of any of the provisions hereof.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have executed this Warrant as of
the 30th day of July 2001.
XYBERNAUT CORPORATION
By:
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Name:
Title:
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NOTICE OF EXERCISE OF WARRANT
The undersigned hereby irrevocably elects to exercise the right,
represented by the Warrant Certificate No. W-___ dated as of July 30, 2001, to
purchase __________ shares of the Common Stock, par value $.01 per share, of
Xybernaut Corporation and tenders herewith payment in accordance with Section 1
of said Common Stock Purchase Warrant.
Please deliver the stock certificate to:
Dated:
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By:
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