WARRANT #98B-1-23
THE SECURITIES REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES ISSUABLE
UPON EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"), OR UNDER ANY STATE SECURITIES LAWS, AND MAY NOT BE
OFFERED, SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE ACT OR AN OPINION
OF COUNSEL SATISFACTORY TO THE CORPORATION THAT AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER SET FORTH HEREIN AND IN THAT CERTAIN D1998 SERIES B-1
NOTE AND WARRANT PURCHASE AGREEMENT BETWEEN THE CORPORATION AND THE ORIGINAL
HOLDER HEREOF.
1998 SERIES B-1 WARRANT
FOR PAYMENT VALUE RECEIVED, PhaseCom, Inc., a Delaware corporation (the
"Corporation"), hereby grants to ________________ ("Holder"), subject to
Section 2 herein, the right to purchase from the Corporation up to the number of
shares of the Corporation's Common Stock equal to the sum of initial principal
sum of the Corporation's Promissory Note identified as 1998 Series B-1-23 (the
"Promissory Note"), issued by the Corporation or PhaseCom Ltd., an Israeli
company and majority-owned subsidiary of the Corporation, as the case may be, in
the name of Holder multiplied by 35/100ths (0.35) divided by the Conversion
Price (as defined in the Promissory Note) at which Holder converted the
Promissory Note (the "Warrant Shares"), subject to the following terms and
conditions:
1. SERIES. This Warrant is one of a duly authorized series of warrants
of the Corporation (which are identical except for the variations necessary to
express the identification numbers, names of the holder, number of common shares
issuable upon exercise thereof and warrant issue dates) designated as its "1998
Series B-1 Warrants."
2. TERM. This Warrant may be exercised in whole, or in part at any
time, and from time to time, from the date of conversion of the Promissory Note,
through December 31, 2001 (the "Exercise Period").
3. PURCHASE PRICE. The purchase price for each Warrant Share
purchasable hereunder shall be equal to the Conversion Price at which Holder
converted the Promissory Note.
4. EXERCISE OF WARRANT. The purchase rights represented by this Warrant
may be exercised by the Holder, in whole or in part, in accordance with
paragraph 2, herein before the end of the Exercise Period by surrender of this
Warrant at the principal office of the Corporation in Cupertino, California (or
such other office or agency of the Corporation as may be designated by notice in
writing to the Holder at the address of the Holder appearing on the books of the
Corporation), together with the Notice of Exercise annexed hereto duly completed
and executed on behalf of the Holder accompanied by payment in full of the
amount of the aggregate Warrant Exercise Price in immediately available funds in
United States Dollars. 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.
5. FRACTIONAL INTEREST. The Corporation shall not be required to issue
any fractional shares on the exercise of this Warrant.
6. 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.
7. 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 any
applicable state securities laws. Holder acknowledges by acceptance of this
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 or is note a U.S. Person as that term is defined in Regulation S
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 legends, or similar legends, 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 (THE "ACT"),
OR UNDER ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD,
TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE ACT OR AN
OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT AN
EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN RESTRICTIONS ON TRANSFER SET FORTH IN THAT CERTAIN 1998
SERIES B-1 NOTE AND WARRANT PURCHASE AGREEMENT BETWEEN THE
CORPORATION AND THE ORIGINAL HOLDER HEREOF.
8. RESERVATION OF SHARES. The Corporation agrees at all times during
the Exercise Period to have authorized and reserved, for the exclusive purpose
of issuance and delivery
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upon exercise of this Warrant, a sufficient number of shares of its Common
Stock to provide for the exercise of the rights represented hereby.
9. ADJUSTMENT FOR RE-CLASSIFICATION OF CAPITAL STOCK. If the
Corporation at any time during the Exercise Period shall, by subdivision,
combination or re-classification of securities, change any of the securities to
which purchase rights under this Warrant exist under the same or different
number of securities of any class or classes, this Warrant shall thereafter
entitle the Holder to acquire such number and kind of securities as would have
been issuable as a result of such change with respect to the Warrant Shares
immediately prior to such subdivision, combination or re-classification. If
shares of the Corporation's common stock are subdivided into a greater number of
shares of common stock, the purchase price for the Warrant Shares upon exercise
of this Warrant shall be proportionately reduced and the Warrant Shares shall be
proportionately increased; and conversely, if shares of the Corporation's common
stock are combined into a smaller number of common stock shares, the price shall
be proportionately increased, and the Warrant Shares shall be proportionately
decreased.
10. PUBLIC OFFERING LOCK-UP. In connection with any public registration
of this Corporation's securities, the Holder (and any transferee of Holder)
agrees, upon the request of the Corporation or the underwriter(s) managing such
underwritten offering of the Corporation's securities, not to sell, make any
short sale of, loan, grant any option for the purchase of, or otherwise dispose
of this Warrant, any of the shares of Common Stock issuable upon exercise of
this Warrant or any other securities of the Corporation heretofore or hereafter
acquired by Holder (other than those included in the registration) without the
prior written consent of the Corporation and such underwriter(s), as the case
may be, for a period of time not to exceed on hundred eighty (180) days from the
effective date of the registration. Upon request by the Corporation, Holder (and
any transferee of Holder) agrees to enter into any further agreement in writing
in a form reasonably satisfactory to the Corporation and such underwriter(s).
The Corporation may impose stop-transfer instructions with respect to the
securities subject to the foregoing restrictions until the end of said 180-day
period. Any shares issued upon exercise of this Warrant shall bear an
appropriate legend referencing this lock-up provision.
11. ASSIGNMENT. With respect to any offer, sale or other disposition of
this Warrant or any underlying securities, the Holder will give written notice
to the Corporation prior thereto, describing briefly the manner thereof,
together with a written opinion of such Holder's counsel, to the effect that
such offer, sale or other distribution may be effected without registration or
qualification (under any applicable federal or state law then in effect).
Furthermore, no such transfer shall be made unless the transferee meets the same
investor suitability standards set forth in Section 7 of this Warrant. Promptly
upon receiving such written notice and reasonably satisfactory opinion, if so
requested, the Corporation, as promptly as practicable, shall notify such Holder
that such Holder may sell or otherwise dispose of this Warrant or the underlying
securities, as the case may be, all in accordance with the terms of the written
notice delivered to the Corporation. If a determination has been made pursuant
to this Section 11 that the opinion of counsel for the Holder is not reasonably
satisfactory to the Corporation, the Corporation shall so notify the Holder
promptly after such determination has been made. Each Warrant thus transferred
shall bear the same legends appearing on this Warrant, and underlying securities
thus transferred shall bear the legends required by Section 7. The Corporation
may
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impose stop-transfer instructions in connection with such restrictions.
Subject to any restrictions on transfer described elsewhere herein, the
rights and obligations of the Corporation and the Holder of this Warrant
shall be binding upon and benefit the successors, assigns, heirs,
administrators and transferees of the parties hereto.
12. NOTICE. Any notice, demand, consent or other communication
hereunder shall be in writing addressed to the other party at its principal
office or, in respect of Holder, as its address as shown on the books of the
Corporation, or to such other address as such party shall have theretofore
furnished by like notice, and either served personally, sent by express,
registered or certified first class mail, postage prepaid, sent by facsimile
transmission, or delivered by reputable commercial courier. Such notice shall be
deemed given (i) when so personally delivered, or (ii) if mailed as aforesaid,
seven (7) days after the same shall have been posted, or (iii) if sent by
facsimile transmission, as soon as sender receives written or telephonic
confirmation that the message has been received and such facsimile is followed
the same day by mailing by prepaid express, registered or certified mail as set
forth herein, or (iv) if delivered by commercial courier, upon receipt.
13. 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.
14. ATTORNEYS' FEES. If any action at law or in equity is necessary to
enforce or interpret the terms of this Warrant, the prevailing party shall be
entitled to reasonable attorneys' fees, costs and disbursements in addition to
any other relief to which such party may be entitled.
15. 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.
Dated: June 30, 1998 PHASECOM, INC.
By: _______________________________
Shaul Berger, President
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NOTICE OF EXERCISE
1998 SERIES B-1 WARRANT
TO: PHASECOM, INC.
(1) The undersigned hereby elects to purchase ______ shares of Common
Stock of PhaseCom, Inc., pursuant to the terms of the attached 1998 Series B-1
Warrant, and tenders herewith payment in full of the purchase price for such
shares.
(2) In exercising this Warrant, the undersigned hereby confirms and
acknowledges that the shares of Common Stock are being acquired solely for the
account of the undersigned and not as a nominee for any other party, for
investment, and that the undersigned will not offer, sell or otherwise dispose
of any such shares of Common Stock except under circumstances that will not
result in a violation of the Securities Act of 1933, as amended, or any state
securities laws.
(3) Please issue a certificate representing said shares of Common Stock
in the name of the undersigned.
(4) Please issue a new Warrant for the unexercised portion of the
attached Warrant in the name of the undersigned.
Date: __________, 199__ _______________________________
(Name)
_______________________________
(Signature)
_______________________________
_______________________________
(Print Address)
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