EXHIBIT 10.3
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE SHARES ISSUABLE UPON THE
SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND MAY NOT BE TRANSFERRED EXCEPT UPON DELIVERY TO THE
CORPORATION OF AN OPINION OF COUNSEL SATISFACTORY IN FORM AND SUBSTANCE TO IT
THAT SUCH TRANSFER WILL NOT VIOLATE THE SECURITIES ACT OF 1933, AS AMENDED
THE TRANSFER OF THIS WARRANT IS RESTRICTED AS DESCRIBED HEREIN.
Nx Networks, Inc.
Warrant for the Purchase of Shares of Common Stock,
par value $0.05 per Share
No. NxE-__ _______ Shares
THIS CERTIFIES that, for value received, ___________, whose address is
_____________________________ (the "Holder"), is entitled to subscribe for and
purchase from Nx Networks, Inc., a Delaware corporation (the "Company"), upon
the terms and conditions set forth herein, _____________ shares of the Company's
Common Stock, par value $0.05 per share ("Common Stock"), at a price of $1.438
per share (the "Exercise Price"). As used herein the term "this Warrant" shall
mean and include this Warrant and any Common Stock or Warrants hereafter issued
as a consequence of the exercise or transfer of this Warrant in whole or in
part.
The number of shares of Common Stock issuable upon exercise of the
Warrants (the "Warrant Shares") and the Exercise Price may be adjusted from time
to time as hereinafter set forth. The Warrant Shares are entitled to the
benefits, and subject to the obligations, set forth in the Registration Rights
Agreement between the Company and the Holder dated concurrently herewith.
1. EXERCISE PRICE AND EXERCISE PERIOD. This Warrant may be exercised at
any time or from time to time during the period commencing on the date hereof
and ending at 5:00 P.M. Eastern time on May 14, 2006 (the "Exercise Period").
2. PROCEDURE FOR EXERCISE; EFFECT OF EXERCISE.
(a) CASH EXERCISE. This Warrant may be exercised, in whole or in part,
by the Holder during normal business hours on any business day during the
Exercise Period by (i) the presentation and surrender of this Warrant to the
Company at its principal office along with a duly executed Notice of Exercise
(in the form attached to this Agreement) specifying the number of Warrant Shares
to be purchased and (ii) delivery of payment to the Company of the Exercise
Price for the number of Warrant Shares specified in the Notice of Exercise by
cash, wire transfer of immediately available funds to a bank account specified
by the Company, or by certified or bank cashier's check.
(B) CASHLESS EXERCISE. This Warrant may be exercised by the Holder
through a cashless exercise, as described in this Section 2(b). This Warrant may
be exercised, in whole or in part, by the Holder during normal business hours on
any business day after such second anniversary and during the Exercise Period by
the presentation and surrender of this Warrant to the Company at its principal
office along with a duly executed Notice of Exercise specifying the number of
Warrant Shares to be applied to such exercise. The number of Warrant Shares to
be delivered upon exercise of this Warrant pursuant to this Section 2(b) shall
equal the value of this Warrant (or the portion thereof being canceled) computed
as of the date of delivery of this Warrant to the Company using the following
formula:
X = Y(A-B)
------
A
Where:
X = the number of shares of Common Stock to be issued to
Holder under this Section 3(b);
Y = the number of Warrant Shares identified in the Notice of
Exercise as being applied to the subject exercise;
A = the Current Market Price on such date;
B = the Exercise Price on such date
For purposes of this Section 2(b), Current Market Price shall have the
definition provided in Section 6(g).
(c) EFFECT OF EXERCISE. Upon receipt by the Company of this Warrant and
a Notice of Exercise, together with proper payment of the Exercise Price, as
provided in this Section 2, the Company agrees that such Warrant Shares shall be
deemed to be issued to the Holder as the record holder of such Warrant Shares as
of the close of business on the date on which this Warrant has been surrendered
and payment has been made for such Warrant Shares in accordance with this
Agreement and the Holder shall be deemed to be the holder of record of the
Warrant Shares, notwithstanding that the stock transfer books of the Company
shall then be closed or that certificates representing such Warrant Shares shall
not then be actually delivered to the Holder. A stock certificate or
certificates for the Warrant Shares specified in the Notice of Exercise shall be
delivered to the Holder as promptly as practicable, and in any event within
seven (7) business days, thereafter. The stock certificate(s) so delivered shall
be in any such denominations as may be reasonably specified by the Holder in the
Notice of Exercise. If this Warrant should be exercised in part only, the
Company shall, upon surrender of this Warrant for cancellation, execute and
deliver a new Warrant evidencing the right of the Holder to purchase the balance
of the Warrant Shares subject to purchase hereunder.
3. REGISTRATION OF WARRANTS; TRANSFER OF WARRANTS. Any Warrants issued
upon the transfer or exercise in part of this Warrant shall be numbered and
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shall be registered in a Warrant Register as they are issued. The Company shall
be entitled to treat the registered holder of any Warrant on the Warrant
Register as the owner in fact thereof for all purposes and shall not be bound to
recognize any equitable or other claim to or interest in such Warrant on the
part of any other person, and shall not be liable for any registration or
transfer of Warrants which are registered or to be registered in the name of a
fiduciary or the nominee of a fiduciary unless made with the actual knowledge
that a fiduciary or nominee is committing a breach of trust in requesting such
registration or transfer, or with the knowledge of such facts that its
participation therein amounts to bad faith. This Warrant shall be transferable
only on the books of the Company upon delivery thereof duly endorsed by the
Holder or by his duly authorized attorney or representative, or accompanied by
proper evidence of succession, assignment, or authority to transfer. In all
cases of transfer by an attorney, executor, administrator, guardian, or other
legal representative, duly authenticated evidence of his or its authority shall
be produced. Upon any registration of transfer, the Company shall deliver a new
Warrant or Warrants to the person entitled thereto. This Warrant may be
exchanged, at the option of the Holder thereof, for another Warrant, or other
Warrants of different denominations, of like tenor and representing in the
aggregate the right to purchase a like number of Warrant Shares, upon surrender
to the Company or its duly authorized agent.
4. (a) RESTRICTIONS ON TRANSFER. The Holder, as of the date of issuance
hereof, represents to the Company that such Holder is acquiring the Warrants for
its own account for investment purposes and not with a present view to the
distribution thereof or of the Warrant Shares, except pursuant to sales
registered or exempted from registration under the Securities Act of 1933, as
amended (the "Securities Act"). Notwithstanding any provisions contained in this
Warrant to the contrary, this Warrant and the related Warrant Shares shall not
be transferable except pursuant to the proviso contained in the following
sentence or upon the conditions specified in this Section 5, which conditions
are intended, among other things, to insure compliance with the provisions of
the Securities Act and applicable state law in respect of the transfer of this
Warrant or such Warrant Shares. The Holder by acceptance of this Warrant, agrees
that such Holder will not transfer this Warrant or the related Warrant Shares
prior to delivery to the Company of an opinion of such Holder's counsel (as such
opinion and such counsel are described in Section 5(b) hereof) or until
registration of such Warrant Shares under the Securities Act has become
effective or after a sale of such Warrant or Warrant Shares has been consummated
pursuant to Rule 144 or Rule 144A under the Securities Act; PROVIDED, HOWEVER,
that such holder may freely transfer this Warrant or such Warrant Shares
(without delivery to the Company or opinion of Counsel) (w) to one of its
nominees, affiliates or a nominee thereof, (x) to a pension or profit-sharing
fund established and maintained for its employees or for the employees of any
affiliate, (y) from a nominee to any of the aforementioned persons as beneficial
owner of this Warrant or such Warrant Shares, or (z) to a qualified
institutional buyer, so long as such transfer is effected in compliance with
Rule 144A under the Securities Act.
(b) NOTICE OF INTENTION TO TRANSFER; OPINION OF COUNSEL. The Holder, by
its acceptance hereof, agrees that prior to any transfer of this Warrant or of
the related Warrant Shares (other than as permitted by Section 4(a) hereof or
pursuant to a registration under the Securities Act), the Holder will give
written notice to the Company of its intention to effect such transfer, together
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with an opinion of such counsel for the Holder as shall be reasonably acceptable
to the Company, to the effect that the proposed transfer of this Warrant and/or
such Warrant Shares may be effected without registration under the Securities
Act. Upon delivery of such notice and opinion to the Company, the Holder shall
be entitled to transfer this Warrant and/or such Warrant Shares in accordance
with the intended method of disposition specified in the notice to the Company.
(c) LEGEND. Each stock certificate representing Warrant Shares issued
upon exercise or exchange of this Warrant shall bear the following legend unless
the opinion of counsel referred to in Section 4(b) states such legend is not
required:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE TRANSFERRED EXCEPT UPON
DELIVERY TO THE CORPORATION OF AN OPINION OF COUNSEL SATISFACTORY IN
FORM AND SUBSTANCE TO IT THAT SUCH TRANSFER WILL NOT VIOLATE THE
SECURITIES ACT OF 1933, AS AMENDED."
The Holder understands that the Company may place, and may instruct any transfer
agent or depository for the Warrant Shares to place, a stop transfer notation in
the securities records in respect of the Warrant Shares.
5. RESERVATION OF SHARES. The Company shall at all times during the
Exercise Period reserve and keep available out of its authorized and unissued
Common Stock, solely for the purpose of providing for the exercise of the rights
to purchase all Warrant Shares granted pursuant to the Warrants, such number of
shares of Common Stock as shall, from time to time, be sufficient therefor. The
Company covenants that all shares of Common Stock issuable upon exercise of this
Warrant, upon receipt by the Company of the full Exercise Price therefor, and
all shares of Common Stock issuable upon conversion of this Warrant, shall be
validly issued, fully paid, non-assessable, and free of preemptive rights.
6. EXERCISE PRICE ADJUSTMENTS. The Exercise Price shall be subject to
adjustment from time to time as follows:
a. (i) In the event that the Company shall (A) pay a dividend or make a
distribution, in shares of Common Stock on any class of capital stock of the
Company or any subsidiary which is not directly or indirectly wholly owned by
the Company, (B) split or subdivide its outstanding Common Stock into a greater
number of shares or (C) combine its outstanding Common Stock into a smaller
number of shares, then in each such case the Exercise Price in effect
immediately prior thereto shall be adjusted so that the Holder of a Warrant
thereafter surrendered for Exercise shall be entitled to receive the number of
shares of Common Stock that such Holder would have owned or have been entitled
to receive after the occurrence of any of the events described above had such
Warrant been exercised immediately prior to the occurrence of such event. An
adjustment made pursuant to this Section 6(a)(i) shall become effective
immediately after the close of business on the record date in the case of a
dividend or distribution (except as provided in Section 6(e) below) and shall
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become effective immediately after the close of business on the effective date
in the case of such subdivision, split or combination, as the case may be. Any
shares of Common Stock issuable in payment of a dividend shall be deemed to have
been issued immediately prior to the close of business on the record date for
such dividend for purposes of calculating the number of outstanding shares of
Common Stock under clauses (ii) and (iii) below.
(ii) In the event that the Company shall commit to issue or distribute
Common Stock and/or issue rights, warrants, options or convertible or
exchangeable securities entitling the holder thereof to subscribe for or
purchase, convert into or exchange for Common Stock, in any such case at a price
per share (calculated as set forth below) a less than the Current Market Price
per share on the earliest of (i) the date the Company shall enter into a firm
contract for such issuance or distribution, (ii) the record date for the
determination of stockholders entitled to receive any such rights, warrants,
options or convertible or exchangeable securities, if applicable, or (iii) the
date of actual issuance or distribution of any such Common Stock or rights,
warrants, options or convertible or exchangeable securities (provided that the
issuance of Common Stock upon the exercise of rights, warrants, options or
convertible or exchangeable securities will not cause an adjustment in the
Exercise Price if no such adjustment would have been required at the time such
right, warrant, option or convertible or exchangeable security was issued), then
the Exercise Price in effect immediately prior to such earliest date shall be
adjusted so that the Exercise Price shall equal the price determined by
multiplying the Exercise Price in effect immediately prior to such earliest date
by the fraction:
(x) whose numerator shall be the number of shares of Common Stock
outstanding on such date plus the number of shares which the
aggregate offering price of the total number of shares so offered
would purchase at such Current Market Price (such amount, with
respect to any such rights, warrants, options or convertible or
exchangeable securities, determined by multiplying the total
number of shares subject thereto by the exercise price of such
rights, warrants, options or convertible or exchangeable
securities and dividing the product so obtained by the Current
Market Price), and
(y) whose denominator shall be the number of shares of Common
Stock outstanding on such date plus the number of additional
shares of Common Stock to be issued and/or distributed or
receivable upon exercise of any such right, warrant, option or
convertible or exchangeable security.
Such adjustment shall be made successively whenever any such Common Stock,
rights, warrants, options or convertible or exchangeable securities are issued
or distributed. In determining whether any rights, warrants or options entitle
the holders to subscribe for or purchase shares of Common Stock at less than
such Current Market Price, and in determining the aggregate offering price of
shares of Common Stock so issued or distributed, there shall be taken into
account any consideration received by the Company for such Common Stock, rights,
warrants, options, or convertible or exchangeable securities, the value of such
consideration, if other than cash, to be determined by the Board of Directors,
whose determination shall be conclusive and described in a certificate filed
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with the records of corporate proceedings of the Company. If any right, warrant,
option or convertible or exchangeable security to purchase or acquire Common
Stock, the issuance of which resulted in an adjustment in the Exercise Price
pursuant to this subsection (b) shall expire and shall not have been exercised,
the Exercise Price shall immediately upon such expiration be recomputed to the
Exercise Price which would have been in effect had the adjustment of the
Exercise Price made upon the issuance of such right, warrant, option or
convertible or exchangeable security been made on the basis of offering for
subscription, purchase or issuance, as the case may be, only of that number of
shares of Common Stock actually purchased or issued upon the actual exercise of
such right, warrant, option or convertible or exchangeable securities. For
purposes of calculating the price per share of any security pursuant to this
Section 6(a)(ii), the issuance of rights, warrants, options, or convertible or
exchangeable securities in conjunction with an issuance or distribution of
Common Stock will be ascribed no value if (x) the number of shares of Common
Stock issuable pursuant to such rights, warrants, options, or convertible or
exchangeable securities does not exceed 20% of the number of shares of Common
Stock to with respect to which they shall have been issued and (y) the exercise
or conversion price of such rights, warrants, options, or convertible or
exchangeable securities is at least 125% of the Current Market Price on the date
the related Common Stock is issued. In all other cases, the price per share of
the security with respect to which such rights, warrants, options, or
convertible or exchangeable securities is issued shall be reduced by the value
of such rights, warrants, options, or convertible or exchangeable securities
determined by reference to a Black-Scholes pricing model. In addition to the
foregoing, if the Corporation shall commit to issue or distribute rights,
warrants, options or convertible or exchangeable securities entitling the holder
thereof to subscribe for or purchase, convert into or exchange for Common Stock,
in any such case at a price per share that is equal to or in excess of the
Current Market Price per share on the earliest of (i) the date the Corporation
shall enter into a firm contract for such issuance or distribution, (ii) the
record date for the determination of stockholders entitled to receive any such
rights, warrants, options or convertible or exchangeable securities, if
applicable, or (iii) the date of actual issuance or distribution of any such
rights, warrants, options or convertible or exchangeable securities (the
"Commitment Date") (such that no adjustment to the Conversion Price is made on
the Commitment Date pursuant to the foregoing provisions of this Section
6(a)(ii)) but which thereafter may become exerciseable or exchangeable for
Common Stock at a price per share less than the Current Market Price per share
on the Commitment Date (other than by reason of the anit-dilution provisions
thereof), then the issue of Common Stock after the Commitment Date pursuant to
such rights, warrants, options or convertible or exchangeable securities at a
price per share less than the Current Market Price on the Commitment Date shall
be deemed to be a new issue of Common Stock as of the date of such exercise or
exchange and, for this purpose the Current Market Price on the date of such
exercise or exchange shall be deemed to be equal to the Current Market Price on
the Commitment Date related to such rights, warrants, options or convertible or
exchangeable securities.
(iii) No adjustment in the Exercise Price shall be required unless the
adjustment would require an increase or decrease of at least 1% in the Exercise
Price then in effect; PROVIDED, HOWEVER, that any adjustments that by reason of
this Section 6(a) are not required to be made shall be carried forward and taken
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into account in any subsequent adjustment. All calculations under this Section
6(a) shall be made to the nearest cent or nearest 1/100th of a share.
(iv) No adjustment shall be made to the Exercise Price upon (A) the
issuance of shares of Common Stock pursuant to any compensation or incentive
plan for officers, directors, employees or consultants of the Company which plan
has been approved by the Compensation Committee of the Board of Directors (or if
there is no such committee then serving, by the majority vote of the Directors
then serving who are not employees or officers of the Company, a 5% or greater
stockholder of the Company or an officer or employee of any such 5% or greater
stockholder) and, if required by law, the requisite vote of the stockholders of
the Company (unless the exercise price thereof is changed after the date hereof
other than solely by operation of the anti-dilution provisions thereof or by the
Compensation Committee of the Board of Directors or, if applicable, the Board of
Directors and, if required by law, the stockholders of the Company as provided
in this clause (A)) or (B) the issuance of Common Stock upon the conversion or
exercise of the options or warrants of the Company outstanding on April 1, 2001,
unless the conversion or exercise price thereof is changed after April 1, 2001
(other than solely by operation of the anti-dilution provisions thereof).
(v) In the event that, at any time as a result of an adjustment made
pursuant to Sections 6(a)(i) through 6(a)(iii) above, the Holder of any Warrant
thereafter surrendered for exercise shall become entitled to receive any shares
of the Company other than shares of the Common Stock, thereafter the number of
such other shares so receivable upon exercise of any such Warrant shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Common Stock
contained in Sections 6(a)(i) through 6(a)(iv) above, and the other provisions
of this Section 6(a) with respect to the Common Stock shall apply on like terms
to any such other shares.
a. In case of any reclassification of the Common Stock (other than in a
transaction to which Section 6(a)(i) applies), any consolidation of the Company
with, or merger of the Company into, any other entity, any merger of another
entity into the Company (other than a merger that does not result in any
reclassification, conversion, exchange or cancellation of outstanding shares of
Common Stock of the Company), any sale or transfer of all or substantially all
of the assets of the Company or any compulsory share exchange, pursuant to which
share exchange the Common Stock is converted into other securities, cash or
other property, then lawful provision shall be made as part of the terms of such
transaction whereby the Holder of a Warrant then outstanding shall have the
right thereafter, during the period such Warrant shall be exercisable, to
exercise such Warrant only for the kind and amount of securities, cash and other
property receivable upon the reclassification, consolidation, merger, sale,
transfer or share exchange by a holder of the number of shares of Common Stock
of the Company into which a Warrant might have been able to exercise for
immediately prior to the reclassification, consolidation, merger, sale, transfer
or share exchange assuming that such holder of Common Stock failed to exercise
rights of election, if any, as to the kind or amount of securities, cash or
other property receivable upon consummation of such transaction subject to
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adjustment as provided in Section 6(a) above following the date of consummation
of such transaction. The provisions of this Section 6(b) shall similarly apply
to successive reclassifications, consolidations, mergers, sales, transfers or
share exchanges.
b. If:
(i) the Company shall take any action which would require an
adjustment in the Exercise Price pursuant to Section 6(a);
or
(ii) the Company shall authorize the granting to the holders of
its Common Stock generally of rights or warrants to
subscribe for or purchase any shares of any class or any
other rights or warrants; or
(iii) there shall be any reclassification or change of the Common
Stock (other than a subdivision or combination of its
outstanding Common Stock or a change in par value) or any
consolidation, merger or statutory share exchange to which
the Company is a party and for which approval of any
stockholders of the Company is required, or the sale or
transfer of all or substantially all of the assets of the
Company; or
(iv) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then, the Company shall cause to be mailed to each Holder at such Holder's
address as shown on the books of the transfer agent for the Warrants, as
promptly as possible, but at least 15 days prior to the applicable date
hereinafter specified, a notice stating (A) the date on which a record is to be
taken for the purpose of such dividend, distribution or granting of rights or
warrants, or, if a record is not to be taken, the date as of which the holders
of Common Stock of record to be entitled to such dividend, distribution or
rights or warrants are to be determined or (B) the date on which such
reclassification, change, consolidation, merger, statutory share exchange, sale,
transfer, dissolution, liquidation or winding up is expected to become effective
or occur, and the date as of which it is expected that holders of Common Stock
of record shall be entitled to exchange their shares of Common Stock for
securities or other property deliverable upon such reclassification, change,
consolidation, merger, statutory share exchange, sale, transfer, dissolution,
liquidation or winding up. Failure to give such notice or any defect therein
shall not affect the legality or validity of the proceedings described in this
Section 6(c).
c. Whenever the Exercise Price is adjusted as herein provided, the
Company shall promptly mail to each Holder a notice setting forth the Exercise
Price after the adjustment and setting forth a brief statement of the facts
requiring such adjustment and a computation thereof. The Company shall promptly
cause a notice of the adjusted Exercise Price to be mailed to each Holder.
d. In any case in which Section 6(a) provides that an adjustment shall
become effective immediately after a record date for an event and the date fixed
for such adjustment pursuant to Section 6(a) occurs after such record date but
before the occurrence of such event, the Company may defer until the actual
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occurrence of such event (i) issuing to the Holder of any Warrants exercised
after such record date and before the occurrence of such event the additional
shares of Common Stock issuable upon such conversion by reason of the adjustment
required by such event over and above the Common Stock issuable upon such
exercise before giving effect to such adjustment and (ii) paying to such holder
any amount in cash in lieu of any fraction pursuant to Section 6(j).
e. In case the Company shall take any action affecting the Common
Stock, other than actions described in this Section 6, which in the opinion of
the Board of Directors would materially adversely affect the exercise right of
the Holders, the Exercise Price may be adjusted, to the extent permitted by law,
in such manner, if any, and at such time, as the Board of Directors may
determine to be equitable in the circumstances; PROVIDED, however, that in no
event shall the Board of Directors be required to take any such action.
F. DEFINITION OF "CURRENT MARKET PRICE". For the purpose of any
computation under Section 2(b) or this Section 6, the Current Market Price per
share of Common Stock on any date shall be deemed to be the average of the daily
closing prices for the 30 consecutive trading days immediately preceding the
date in question. The closing price for each day shall be the last reported
sales price regular way or, in case no such reported sale takes place on such
day, the closing bid price regular way, in either case on the principal national
securities exchange (including, for purposes hereof, the NASDAQ National Market
System) on which the Common Stock is listed or admitted to trading or, if the
Common Stock is not listed or admitted to trading on any national securities
exchange, the highest reported bid price for the Common Stock as furnished by
the National Association of Securities Dealers, Inc. through NASDAQ or a similar
organization if NASDAQ is no longer reporting such information. If on any such
date the Common Stock is not listed or admitted to trading on any national
securities exchange and is not quoted by NASDAQ or any similar organization, the
fair value of a share of Common Stock on such date, as determined in good faith
by the board of directors of the Company, whose determination shall be
conclusive absent manifest error, shall be used.
G. NO ADJUSTMENT IN CERTAIN CIRCUMSTANCES. No adjustment in the
Exercise Price shall be required if such adjustment is less than $.05; PROVIDED,
HOWEVER, that any adjustments which by reason of this Section 6 are not required
to be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 6 shall be made to the nearest
cent or to the nearest one-thousandth of a share, as the case may be.
H. ADJUSTMENT TO WARRANT SHARES; CONTINUED VALIDITY OF WARRANT
AGREEMENT. Upon each adjustment of the Exercise Price as a result of the
calculations made in Sections 6(b), 6(c), or 6(d) hereof, this Warrant shall
thereafter evidence the right to purchase, at the adjusted Exercise Price, that
number of shares (calculated to the nearest thousandth) obtained by dividing (i)
the product obtained by multiplying the number of shares purchasable upon
exercise of this Warrant prior to adjustment of the number of shares by the
Exercise Price in effect prior to adjustment of the Exercise Price, by (ii) the
Exercise Price in effect after such adjustment of the Exercise Price.
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I. NO FRACTIONAL SHARES. The Company shall not be required to issue
fractions of shares of Common Stock or other capital stock of the Company upon
the exercise of this Warrant. If any fraction of a share would be issuable on
the exercise of this Warrant (or specified portions thereof), the Company shall
purchase such fraction for an amount in cash equal to the same fraction of the
Current Market Price of such share of Common Stock on the date of exercise of
this Warrant.
7. TRANSFER TAXES. The issuance of any shares or other securities upon
the exercise of this Warrant, and the delivery of certificates or other
instruments representing such shares or other securities, shall be made without
charge to the Holder for any tax or other charge in respect of such issuance.
The Company shall not, however, be required to pay any tax which may be payable
in respect of any transfer involved in the issue and delivery of any certificate
in a name other than that of the Holder and the Company shall not be required to
issue or deliver any such certificate unless and until the person or persons
requesting the issue thereof shall have paid to the Company the amount of such
tax or shall have established to the satisfaction of the Company that such tax
has been paid.
8. LOSS OR MUTILATION OF WARRANT AGREEMENT. Upon receipt of evidence
satisfactory to the Company of the loss, theft, destruction, or mutilation of
any Warrant (and upon surrender of any Warrant if mutilated), and upon
reimbursement of the Company's reasonable incidental expenses, the Company shall
execute and deliver to the Holder thereof a new Warrant of like date, tenor, and
denomination.
9. NO RIGHTS AS A STOCKHOLDER. The Holder of any Warrant shall not
have, solely on account of such status, any rights of a stockholder of the
Company, either at law or in equity, or to any notice of meetings of
stockholders or of any other proceedings of the Company, except as provided in
this Warrant.
10. GOVERNING LAW. This Warrant shall be construed in accordance with
the laws of the State of Delaware applicable to contracts made and performed
within such State, without regard to principles of conflicts of law.
Dated: May 14, 2001 Nx Networks, Inc.
By:
---------------------------------------
Chief Executive Officer
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FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer the
attached Warrant.)
FOR VALUE RECEIVED, ________ hereby sells, assigns, and transfers unto
________ a Warrant to purchase ________ shares of Common Stock, par value $0.05]
per share, of Nx Networks, Inc. (the "Company"), together with all right, title,
and interest therein, and does hereby irrevocably constitute and appoint
________ attorney to transfer such Warrant on the books of the Company, with
full power of substitution.
Dated:
---------------------------------
By:
------------------------------------
Signature
The signature on the foregoing Assignment must correspond to the name
as written upon the face of this Warrant in every particular, without alteration
or enlargement or any change whatsoever.
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To: Nx Networks, Inc.
13595 Dulles Technology Drive
Herndon, Virginia 20171
Attention: Chief Financial Officer
NOTICE OF EXERCISE
The undersigned hereby exercises his or its rights to purchase _______
Warrant Shares covered by the within Warrant and tenders payment herewith in the
amount of $_________ in accordance with the terms thereof, and requests that
certificates for such securities be issued in the name of, and delivered to:
- -----------------------------
- -----------------------------
- -----------------------------
(Print Name, Address and Social Security
or Tax Identification Number)
and, if such number of Warrant Shares shall not be all the Warrant Shares
covered by the within Warrant, that a new Warrant for the balance of the Warrant
Shares covered by the within Warrant be registered in the name of, and delivered
to, the undersigned at the address stated below.
Dated:
-----------------------------------
By:
-------------------------------------
Print Name
----------------------------------------
Signature
Address:
- -----------------------------
- -----------------------------
- -----------------------------
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