Exhibit 10.24
Warrant #96-6
NEITHER THIS WARRANT, NOR THE SHARES REPRESENTED BY THIS WARRANT, HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
LAW OF ANY STATE, AND THEREFORE THEY MAY NOT BE SOLD, TRANSFERRED, PLEDGED,
HYPOTHECATED OR ASSIGNED UNLESS REGISTERED UNDER THE APPLICABLE PROVISIONS OF
SUCH ACTS OR UNLESS THE CORPORATION HAS RECEIVED AN OPINION FROM LEGAL
COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION IS NOT
REQUIREd.
WARRANT
FOR PAYMENT OF THE SUM OF SIX THOUSAND U.S. DOLLARS (U.S. $6,000),
PHASECOM, INc., a Delaware corporation (the "Corporation"), hereby grants to
PHASECOM INVESTOR GROUP LIMITED PARTNERSHIP ("Holder"), the right to purchase
from the Corporation up to sixty thousand (60,000) shares of the Common Stock
of the Corporation (the "Warrant Shares"), subject to the following terms and
conditions:
1. TERM. This Warrant may be exercised in whole at any time during
from the date of issuance of this Warrant through April 22, 2000 (the
"Exercise Period"). The number of shares subject to this Warrant shall only
be exerciseable up to the aggregate number of shares exercised pursuant to
the following warrants issued by the Corporation:
# DATE ISSUED NAME OF WARRANT HOLDER EXERCISE PRICE # SHARES
-- ----------- ---------------------- -------------- --------
96-3 04/22/96 Lior Bregman $3.00 20,000
96-4 04/22/96 Stanley Stern $3.00 20,000
96-5 04/22/96 Avraham Fischer $3.00 20,000
TOTAL 60,000
2. PURCHASE PRICE. The purchase price for each share of the
Corporation's Common Stock purchasable hereunder shall be Three U.S. Dollars
(U.S. $3.00) (the "Warrant Exercise Price"), although this Warrant shall only
be exercisable pursuant to Section 3 (below).
3. EXERCISE OF WARRANT. The purchase rights represented by this
Warrant may be exercised by the Holder, in whole, but not in part, at any
time and from time to time before the end of the Exercise Period by the
surrender of this Warrant at the office of the Corporation, at its principal
office in Cupertino, California (or such other office or agency of the
Corporation as it may be designated by notice in writing to the Holder at the
address of the Holder appearing on the books of the Corporation), without the
payment in cash of any exercise price for that number of Warrant Shares equal
to the quotient obtained by dividing (x) the value of
the Warrant Shares for which this Warrant is being exercised (the "Exercised
Shares") on the exercise date (determined by subtracting the aggregate
Warrant Exercise Price for the Exercised Shares on the exercise date from the
aggregate Fair Market Value (as hereinafter defined) of the Exercised Shares
on the exercise date) by (y) the Fair Market Value of one (1) share of Common
Stock on the exercise date.
Fair Market Value of a share of Common Stock shall mean:
a. If the Corporation's Common Stock is listed on a
national securities exchange or is quoted on the National Association of
Securities Dealers, Inc. Automated Quotation/ National Market System
(NASDAQ/NMS), then the closing or last sale price, respectively, reported for
the exercise date.
b. If the Corporation's Common Stock is not listed on a
national securities exchange or quoted on NASDAQ/NMS, but is traded in the
over-the-counter market, then the mean of the closing bid and asked prices is
reported for the exercise date.
c. Except as set forth in Section 3.d. (below), if the
Corporation's Common Stock is not publicly traded, then as determined by an
independent third party who shall be appointed by eighty percent (80%) of the
Corporation's Board of Directors.
d. If the exercise date is the date of closing of a public
offering of the Corporation's Common Stock pursuant to an effective
registration statement under the Securities Act of 1933, as amended, then the
public offering price (before deduction of discounts, commissions or
expenses) in such offering.
Certificates for shares purchased hereunder shall be
delivered to the Holder within thirty (30) business days after the date on
which this Warrant shall have been exercised as aforesaid, but Holder shall
be deemed the record owner of such Warrant Shares as of and from the close of
business on the date on which this Warrant shall be surrendered.
The entire Warrant must be surrendered, and no new Warrant
shall be issued. In no event shall a cashless exercise entitle the Holder to
exercise more than the Warrant Shares.
4. FRACTIONAL INTEREST. The Corporation shall not be required to
issue any fractional shares on the exercise of this Warrant.
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5. WARRANT CONFERS NO RIGHTS OF SHAREHOLDER. Holder shall not have
any rights as a shareholder of the Corporation with regard to the Warrant
Shares prior to actual exercise resulting in the purchase of the Warrant
Shares.
6. INVESTMENT REPRESENTATION. Neither this Warrant nor the Warrant
Shares issuable upon the exercise of this Warrant have been registered under
the Securities Act of 1933, as amended (the "Securities Act"), or under the
California Corporate Securities Law of 1968. Holder acknowledges by
acceptance of the Warrant that (a) it has acquired this Warrant for
investment and not with a view toward distribution; (b) it has a pre-existing
personal or business relationship with the Corporation, or its executive
officers, or by reason of its business or financial experience it has the
capacity to protect its own interests in connection with the transaction; and
(c) it is an accredited investor as that term is defined in Regulation D
promulgated under the Securities Act. Holder agrees that any Warrant Shares
issuable upon exercise of this Warrant will be acquired for investment and
not with a view toward distribution; and acknowledges that to the extent such
Warrant Shares will not be registered under the Securities Act and applicable
state securities laws, that such Warrant Shares may have to be held
indefinitely unless they are subsequently registered or qualified under the
Securities Act and applicable state securities laws; or, based on an opinion
of counsel reasonably satisfactory to the Corporation, an exemption from such
registration and qualification is available. Holder, by acceptance hereof,
consents to the placement of the following restrictive legend, or similar
legend, on each certificate to be issued to Holder by the Corporation in
connection with the issuance of such Warrant Shares:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
QUALIFIED UNDER ANY STATE SECURITIES LAW, AND MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS (A) THERE IS AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR LAWS COVERING
SUCH SECURITIES, OR (B) THE HOLDER RECEIVES AN OPINION OF COUNSEL
FOR THE HOLDER OF THE SECURITIES SATISFACTORY TO THE CORPORATION,
STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS
EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF
SUCH ACT AND ANY FURTHER QUALIFICATION REQUIREMENTS UNDER APPLICABLE
STATE LAW."
7. STOCK FULLY PAID, RESERVATION OF SHARES. All Warrant Shares that
may be issued upon the exercise of the rights represented by this Warrant and
Common Stock will, upon issuance, be fully paid and nonassessable, and free
from all taxes, liens and charges with respect to the issue thereof. The
Corporation agrees at all times during the Exercise Period to have authorized
and reserved, for the exclusive purpose of issuance and delivery upon
exercise of this Warrant, a sufficient number of shares of its Common Stock
to provide for the exercise of the rights represented hereby.
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8. ADJUSTMENT OF WARRANT EXERCISE PRICE AND NUMBER OF SHARES. The
number and kind of securities purchasable under the exercise of the 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 any case of any
reclassification, change or conversion of securities of the class issuable
upon exercise of this Warrant (other than a change in the par value, or from
par value to no par value, or from no par value to par value, or as a result
of a subdivision or combination), or in case of any merger of the Corporation
with or into another corporation (other than a merger with another
corporation in which the Corporation 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 Corporation, the Corporation, or such
successor or purchasing corporation, as the case may be, shall execute a new
Warrant (in form and sub stance satisfactory to Holder), providing that
Holder shall have the right to exercise such new Warrant and, upon such
exercise, to receive, in lieu of each Share of Common Stock thereto fore
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 one (1) share of Common
Stock. Such new Warrant shall provide for adjustment that shall be as nearly
equivalent as may be practicable to the adjustment provided for in this
Section 8. The provisions of this subsection 8.a. shall similarly apply to
successive reclassifications, changes, mergers and transfers.
b. SUBDIVISIONS OR COMBINATIONS OF SHARES. If the
Corporation at any time while this Warrant remains outstanding and unexpired
shall subdivide or combine its Common Stock, the Warrant Exercise Price, and
the number of Shares issuable upon exercise hereof shall be proportionately
adjusted.
c. STOCK DIVIDENDS. If the Corporation at any time while
this Warrant is outstanding and unexpired shall pay a dividend payable in
shares of Common Stock (except as a distribution specifically provided for in
the foregoing subsections 8.a. and 8.b., then the Warrant Exercise Price
shall be adjusted, from and after the date of determination of share holders
entitled to receive such dividend or distribution, to that price determined
by multiplying the Warrant 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 Common Stock
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outstanding immediately prior to such dividend or distribution, and (ii) the
denominator of which shall be the total number of Shares of Common Stock
outstanding immediately after such dividend or distribution and the number of
Warrant Shares subject to this Warrant shall be proportionately adjusted.
d. NO IMPAIRMENT. The Corporation will not, by amendment of
its Articles of Incorporation or through any reorganization,
recapitalization, transfer of assets, con solidation, merger, dissolution,
issue or sale of securities, or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms to be observed or
performed hereunder by the Corporation, but will at all times in good faith
assist in the carrying out of all the provisions of this Section 8, and in
the taking of all such action as may be necessary or appropriate in order to
protect the rights of Holder against impairment.
e. NOTICE OF ADJUSTMENTS. Whenever the Warrant Exercise
Price shall be adjusted pursuant to the provisions hereof, the Corporation
shall within thirty (30) days after such adjustment deliver a certificate
signed by its Chief Financial Officer to Holder 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 Exercise
Price, after giving effect to such adjustment.
9. PUBLIC OFFERING LOCK-UP. For a period of one hundred eighty (180)
days (the "Stand-off Period"), commencing on the date of an Initial Public
Offering ("IPO"), Holder shall not exercise its right to purchase any Warrant
Shares hereunder if requested by the Corporation at any time prior to an IPO,
or sell, pledge or otherwise transfer any Warrant Shares (or any other shares
exchanged therefor), if this Warrant has been exercised, to any person or
entity; provided, that the Stand-off Period shall in no event be longer than
the shortest comparable stand-off period agreed to in connection with such
IPO by any executive officer of the Corporation, or any person holding five
percent (5%) or more of the Common Stock of the Corporation (assuming the
conversion into Common Stock of all outstanding convertible securities). If
the Corporation has requested Holder not to exercise this Warrant, the
Exercise Period hereunder shall be extended for a period equal to the term of
the Stand-off Period. Holder shall execute any agreement as requested by the
Corporation with an under writer of the Corporation's stock, to reflect the
foregoing.
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10. ADDITIONAL RIGHTS. Unless the Corporation provides Holder with
advance notice of the terms and conditions of a proposed transaction as
described below, the Corporation will not (a) sell, lease, exchange, convey
or otherwise dispose of all or substantially all of its property or business;
or (b) merge into or consolidate with any other corporation (other than a
wholly-owned subsidiary of the Corporation, or effect any transaction
(including a merger or other reorganization) or series of related
transactions, in which more than fifty percent (50%) of the voting power of
the Corporation is disposed.
11. REPRESENTATIONS AND WARRANTIES. This Warrant is issued and
delivered on the basis of the following:
a. CORPORATE AUTHORIZATION. This Warrant has been duly
authorized and executed by the Corporation, and when delivered will be the
valid and binding obligation of the Corporation, enforceable in accordance
with the terms hereof.
b. WARRANT AUTHORIZATION. The Warrant Shares have been duly
authorized and reserved for issuance by the Corporation and, when issued in
accordance with the terms hereof, will be validly issued, fully paid and
nonassessable.
c. ARTICLES OF INCORPORATION. The rights, preferences,
privileges and restrictions granted to or imposed upon the Shares of Common
Stock and Holder are as set forth in the Corporation's Articles of
Incorporation, as amended, a true and complete copy of which has been
delivered to the original Warrant Holder.
d. RESERVATION OF SHARES. The Shares of Common Stock
issuable have been duly authorized and reserved and, when issued in
accordance with the terms of the Corpora tion's Articles of Incorporation, as
amended, will be validly issued, fully paid and nonassessable.
e. DELIVERY. The execution and delivery of this Warrant are
not, and the issuance of the Shares upon exercise of this Warrant in
accordance with the terms hereof will not be, inconsistent with the
Corporation's Articles of Incorporation or Bylaws; do not and will not
contravene any law, governmental rule or regulation, judgment or order
applicable to the Corporation; and do not and will not contravene any
provision of, or constitute a default under, any indenture, mortgage,
contract or other instrument of which the Corporation is a party, or by which
it is bound or requires the consent or approval of, the giving of notice to,
the registration with or the taking of any action in respect of or by, any
federal, state or local
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government authority or agency, or other person, other than qualification
with the California Department of Corporations.
12. GOVERNING LAW. This Warrant shall be governed by and construed
in accordance with the laws of the State of California, applicable to
contracts between California residents entered into and to be performed
entirely within the State of California.
13. DESCRIPTIVE HEADINGS. The headings used herein are descriptive
only and for the convenience of identifying provisions, and are not
determinative of the meaning or effect of any such provisions.
AGREED BY UNDERSIGNED AND BINDING ON HOLDER THAT THIS WARRANT
SUPERSEDES AND REPLACES ANY AND ALL EXISTING WARRANTS OF THE SAME
NUMBER OF WARRANT SHARES.
Dated: April 23, 1996 PHASECOM, INc.
By: /s/ Shaul Berger, President
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Shaul Berger, President
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