FORM OF WARRANT
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE OR FOREIGN
SECURITIES LAWS, AND ACCORDINGLY, SUCH SECURITIES MAY NOT BE TRANSFERRED, SOLD
OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH THE REGISTRATION OR
QUALIFICATION PROVISIONS OF APPLICABLE FEDERAL, STATE AND FOREIGN SECURITIES
LAWS OR APPLICABLE EXEMPTIONS THEREFROM.
WIRE ONE TECHNOLOGIES, INC.
WARRANT TO PURCHASE COMMON STOCK
Warrant No.: W-1 Number of Shares: 220,000
Date of Issuance: August 8, 2001
Wire One Technologies, Inc., a Delaware corporation (the "Company"),
hereby certifies that, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, H.C. WAINWRIGHT & CO., INC., the
registered holder hereof or its permitted assigns, is entitled, subject to the
terms set forth below, to purchase from the Company upon surrender of this
Warrant, at any time or times on or after the date hereof, but not after 11:59
P.M. Eastern Time on the Expiration Date (as defined herein) TWO HUNDRED TWENTY
THOUSAND (220,00) fully paid and nonassessable shares of Common Stock (as
defined herein) of the Company (the "Warrant Shares") at the Warrant Exercise
Price provided in Section l(b) below; provided, however, that in no event shall
the holder be entitled to exercise this Warrant for a number of Warrant Shares
in excess of that number of Warrant Shares which, upon giving effect to such
exercise, would cause the aggregate number of shares of Common Stock
beneficially owned by the holder and its affiliates to exceed 4.99% of the
outstanding shares of the Common Stock following such exercise. For purposes of
the foregoing proviso, the aggregate number of shares of Common Stock
beneficially owned by the holder and its affiliates shall include the number of
shares of Common Stock issuable upon exercise of this Warrant with respect to
which the determination of such proviso is being made, but shall exclude shares
of Common Stock which would be issuable upon (i) exercise of the remaining,
unexercised Warrants beneficially owned by the holder and its affiliates and
(ii) exercise or conversion of the unexercised or unconverted portion of any
other securities of the Company beneficially owned by the holder and its
affiliates (including, without limitation, any convertible notes or preferred
stock) subject to a limitation on conversion or exercise analogous to the
limitation contained herein. Except as set forth in the preceding sentence, for
purposes of this paragraph, beneficial ownership shall be calculated in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended. For purposes of this Warrant, in determining the number of outstanding
shares of Common Stock a holder may rely on the number of outstanding shares of
Common Stock as reflected in (1) the Company's most recent Form 10-Q or Form
10-K, as the case may be, (2) a more recent public announcement by the Company
or (3) any other notice by the Company or its transfer agent setting forth the
number of shares of Common Stock outstanding. In any case, the number of
outstanding shares of Common Stock shall be determined after giving effect to
conversions of Preferred Shares and exercise of Warrants (as defined below) by
such holder and its affiliates since the date as of which such number of
outstanding shares of Common Stock was reported.
Section 1. Definitions. The following words and terms as used in this
Warrant shall have the following meanings:
(i) "Approved Stock Plan" shall mean any employee benefit plan
which has been approved by the Board of Directors of the Company,
pursuant to which the Company's securities may be issued to any
employee, officer, director, consultant or other service provider of
the Company.
(ii) "Business Day" means any day other than Saturday, Sunday
or other day on which commercial banks in the City of New York are
authorized or required by law to remain closed.
(iii) "Closing Bid Price" means, for any security as of any
date, the last closing bid price for such security at 4:00 p.m. Eastern
Standard Time on the Nasdaq National Market, or, if the Nasdaq National
Market is not the principal trading market for such security, the last
closing bid price of such security at 4:00 p.m. Eastern Standard Time
on the principal securities exchange or trading market where such
security is listed or traded, or if the foregoing do not apply, the
last closing bid price of such security in the over the counter market
on the electronic bulletin board for such security at 4:00 p.m. Eastern
Standard Time, or, if no closing bid price is reported for such
security, the last closing trade price for such security, or, if no
last closing trade price is reported for such security, the average of
the bid and ask prices of any market makers for such security as
reported in the "pink sheets" by the National Quotation Bureau, Inc. If
the Closing Bid Price cannot be calculated for such security on such
date on any of the foregoing bases, the Closing Bid Price of such
security on such date shall be the fair market value as determined in
good faith by the Board of Directors of the Company. (All such
determinations to be appropriately adjusted for any stock dividend,
stock split or other similar transaction during such period.)
(iv) "Closing Sale Price" means, for any security as of any
date, the last closing trade price for such security at 4:00 p.m.
Eastern Standard Time on the Nasdaq National Market, or, if the Nasdaq
National Market is not the principal securities exchange or trading
market for such security, the last closing trade price of such security
at 4:00 p.m. Eastern Standard Time on the principal securities exchange
or trading market where such security is listed or traded, or if the
foregoing do not apply, the last closing trade price of such security
in the over-the-counter market on the electronic bulletin board for
such security at 4:00 p.m. Eastern Standard Time, or, if no last
closing trade price is reported for such security, the closing bid and
ask price of such security, or, if no closing ask or bid prices are
reported for such security, the average of the bid and ask prices of
any market makers for such security as reported in the "pink sheets" by
the National Quotation Bureau, Inc. If the Closing Sale Price cannot be
calculated for such security on such date on any of the foregoing
bases, the Closing Sale Price of such security on such date shall be
the fair market value as determined in good faith by the Board of
Directors of the Company. (All such determinations to be appropriately
adjusted for any stock dividend, stock split or other similar
transaction during such period).
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(v) "Common Stock" means (i) the Company's common stock, par
value $0.0001 per share, and (ii) any capital stock into which such
Common Stock shall have been changed or any capital stock resulting
from a reclassification of such Common Stock.
(vi) "Common Stock Deemed Outstanding" means, at any given
time, the number of shares of Common Stock actually outstanding at such
time, plus the number of shares of Common Stock deemed to be
outstanding pursuant to Sections 8(b)(i) and 8(b)(ii) hereof regardless
of whether the Options (as defined below) or Convertible Securities (as
defined below) are actually exercisable or convertible at such time,
but excluding any shares of Common Stock owned or held by or for the
account of the Company or issuable upon exercise of the Common Share
Warrants.
(vii) "Convertible Securities" means any stock or securities
(other than Options) directly or indirectly convertible into or
exchangeable for Common Stock.
(viii) "Expiration Date" means the date five (5) years from
the date of this Warrant or, if such date falls on a Saturday, Sunday
or other day on which banks are required or authorized to be closed in
the City of New York or the State of New York or on which trading does
not take place on the principal exchange or automated quotation system
on which the Common Stock is traded (a "Holiday"), the next date that
is not a Holiday.
(ix) "Market Price" means, with respect to any security for
any period, the average Closing Bid Price during the 10 Business Days
immediately preceding the date of determination.
(x) "Options" means any rights, warrants or options to
subscribe for or purchase Common Stock or Convertible Securities
(excluding options granted under the Company's stock option plans).
(xi) "Other Securities" means those warrants of the Company
issued prior to, and outstanding on, the date of issuance of this
Warrant and options to purchase Common Stock granted prior to, and
outstanding on, the date of issuance of this Warrant.
(xii) "Person" means an individual, a limited liability
company, a partnership, a joint venture, a corporation, a trust, an
unincorporated organization and a government or any department or
agency thereof.
(xiii) "Securities Act" means the Securities Act of 1933, as
amended.
(xiv) "Warrant" means this Warrant and all Warrants issued in
exchange, transfer or replacement thereof.
(xv) "Warrant Exercise Price" shall be equal to, with respect
to any Warrant Share, $5.00, subject to adjustment as hereinafter
provided.
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(xvi) "Warrant Period" means the period beginning on the date
hereof and ending on and including the Expiration Date.
(b) Other Definitional Provisions.
(i) Except as otherwise specified herein, all references
herein (A) to the Company shall be deemed to include the Company's
successors and (B) to any applicable law defined or referred to herein,
shall be deemed references to such applicable law as the same may have
been or may be amended or supplemented from time to time.
(ii) When used in this Warrant, the words "herein," "hereof"
and "hereunder," and words of similar import, shall refer to this
Warrant as a whole and not to any provision of this Warrant, and the
words "Section," "Schedule," and "Exhibit" shall refer to Sections of,
and Schedules and Exhibits to, this Warrant unless otherwise specified.
(iii) Whenever the context so requires, the neuter gender
includes the masculine or feminine, and the singular number includes
the plural, and vice versa.
Section 2. Exercise of Warrant.
(a) Subject to the terms and conditions hereof, this Warrant may be
exercised by the holder hereof then registered on the books of the Company, in
whole or in part, at any time on any Business Day on or after the opening of
business on the date hereof and prior to 11:59 P.M. Eastern Time on the
Expiration Date by (i) delivery of a written notice, in the form of the exercise
notice attached as Exhibit A hereto (the "Exercise Notice"), of such holder's
election to exercise this Warrant, which notice shall specify the number of
Warrant Shares to be purchased, (ii) payment to the Company of an amount equal
to the applicable Warrant Exercise Price multiplied by the number of Warrant
Shares as to which this Warrant is being exercised (plus any applicable issue or
transfer taxes) (the "Aggregate Exercise Price") in cash or wire transfer of
immediately available funds, unless the holder elects to make a "Cashless
Exercise" in accordance with section 2(d) of this Agreement, and (iii) the
surrender to a common carrier for overnight delivery to the Company as soon as
practicable following such date, this Warrant (or an indemnification undertaking
with respect to this Warrant in the case of its loss, theft or destruction);
provided, that if such Warrant Shares are to be issued in any name other than
that of the registered holder of this Warrant, such issuance shall be deemed a
transfer and the provisions of Section 7 shall be applicable. In the event of
any exercise of the rights represented by this Warrant in compliance with this
Section 2(a), the Company shall on the third Business Day following the date of
receipt of the Exercise Notice, the Aggregate Exercise Price and this Warrant
(or an indemnification undertaking with respect to this Warrant in the case of
its loss, theft or destruction) (the "Exercise Delivery Documents"), credit such
aggregate number of shares of Common Stock to which the holder shall be entitled
to the holder's or its designee's balance account with The Depository Trust
Company; provided, however, if the holder who submitted the Exercise Notice
requested physical delivery of any or all of the Warrant Shares, then the
Company shall, on or before the third Business Day following receipt of the
Exercise Delivery Documents, issue and surrender to a common carrier for
overnight delivery to the address specified in the Exercise Notice, a
certificate, registered in the name of the holder, for the number of shares of
Common Stock to which the holder shall be entitled pursuant to such request.
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Upon delivery of the Exercise Notice and Aggregate Exercise Price referred to in
clause (ii) above or notification to the Company of a Cashless Exercise referred
to in Section 2(d), the holder of this Warrant shall be deemed for all corporate
purposes to have become the holder of record of the Warrant Shares, with respect
to which this Warrant has been exercised, irrespective of the date of delivery
of this Warrant as required by clause (iii) above or the certificates evidencing
such Warrant Shares.
(b) Unless the rights represented by this Warrant shall have expired or
shall have been fully exercised, the Company shall, as soon as practicable and
in no event later than five (5) Business Days after any exercise and at its own
expense, issue a new Warrant identical in all respects to this Warrant exercised
except it shall represent rights to purchase the number of Warrant Shares
purchasable immediately prior to such exercise under this Warrant exercised,
less the number of Warrant Shares with respect to which such Warrant is
exercised.
(c) No fractional shares of Common Stock are to be issued upon the
exercise of this Warrant, but rather the number of shares of Common Stock issued
upon exercise of this Warrant shall be rounded up or down to the nearest whole
number.
(d) Notwithstanding anything contained herein to the contrary, upon
exercising this Warrant in whole or in part, the holder of this Warrant may, in
lieu of making the cash payment otherwise contemplated to be made to the Company
upon such exercise in payment of the Aggregate Exercise Price, elect to receive
upon such exercise the "Net Number" of shares of Common Stock (a "Cashless
Exercise") which shall be determined according to the following formula:
Net Number = (A x B) - (A x C)
-----------------
B
For purposes of the foregoing formula:
A=the total number of Warrant Shares with respect to which
this Warrant is then being exercised.
B=the last reported sale price of the Common Stock on the date
immediately preceding the date of the exercise notice.
C =the Warrant Exercise Price then in effect for the
applicable Warrant Shares at the time of such exercise.
Section 3. Covenants as to Common Stock. The Company hereby covenants and
agrees as follows:
(a) This Warrant is, and any Warrants issued in substitution for or
replacement of this Warrant will upon issuance be, duly authorized and validly
issued.
(b) All Warrant Shares which may be issued upon the exercise of the
rights represented by this Warrant will, upon issuance, be validly issued, fully
paid and nonassessable and free from all taxes, liens and charges with respect
to the issue thereof.
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(c) During the period within which the rights represented by this
Warrant may be exercised, the Company will at all times have authorized and
reserved the number of shares of Common Stock needed to provide for the exercise
of the rights then represented by this Warrant.
(d) The Company shall promptly secure the listing of the shares of
Common Stock issuable upon exercise of this Warrant upon each national
securities exchange or automated quotation system, if any, upon which shares of
Common Stock are then listed (subject to official notice of issuance upon
exercise of this Warrant) and shall maintain, so long as any other shares of
Common Stock shall be so listed, such listing of all shares of Common Stock from
time to time issuable upon the exercise of this Warrant; and the Company shall
so list on each national securities exchange or automated quotation system, as
the case may be, and shall maintain such listing of, any other shares of capital
stock of the Company issuable upon the exercise of this Warrant if and so long
as any shares of the same class shall be listed on such national securities
exchange or automated quotation system.
(e) The Company will not, by amendment of its Certificate of
Incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issuance 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 by it hereunder, but will at all times in good faith
assist in the carrying out of all the provisions of this Warrant and in the
taking of all such action as may reasonably be requested by the holder of this
Warrant in order to protect the exercise privilege of the holder of this Warrant
consistent with the tenor and purpose of this Warrant.
(f) This Warrant will be binding upon any entity succeeding to the
Company by merger, consolidation or acquisition of all or substantially all of
the Company's assets.
Section 4. Taxes. The Company shall pay any and all taxes which may be
payable with respect to the issuance and delivery of Warrant Shares upon
exercise of this Warrant; provided, however, that the Company shall not be
required to pay any tax that may be payable in respect of any transfer involved
in the issue or delivery of Common Stock or other securities or property in a
name other than that of the registered holders of this Warrant to be converted
and such holder shall pay such amount, if any, to cover any applicable transfer
or similar tax.
Section 5. Warrant Holder Not Deemed a Stockholder. Except as otherwise
specifically provided herein, no holder, as such, of this Warrant shall be
entitled to vote or receive dividends or be deemed the holder of shares of the
Company for any purpose, nor shall anything contained in this Warrant be
construed to confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote, give or withhold consent to any
corporate action (whether any reorganization, issue of stock, reclassification
of stock, consolidation, merger, conveyance or otherwise), receive notice of
meetings, receive dividends or subscription rights, or otherwise, prior to the
issuance to the holder of this Warrant of the Warrant Shares which he or she is
then entitled to receive upon the due exercise of this Warrant. In addition,
nothing contained in this Warrant shall be construed as imposing any liabilities
on such holder to purchase any securities (upon exercise of this Warrant or
otherwise) or as a stockholder of the Company, whether such liabilities are
asserted by the Company or by creditors of the Company.
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Section 6. Representations of Holder. The holder of this Warrant, by the
acceptance hereof, represents that it is acquiring this Warrant and the Warrant
Shares for its own account for investment only and not with a view towards, or
for resale in connection with, the public sale or distribution of this Warrant
or the Warrant Shares, except pursuant to sales registered or exempted under the
Securities Act; provided, however, that by making the representations herein,
the holder does not agree to hold this Warrant or any of the Warrant Shares for
any minimum or other specific term and reserves the right to dispose of this
Warrant and the Warrant Shares at any time in accordance with or pursuant to a
registration statement or an exemption under the Securities Act. The holder of
this Warrant further represents, by acceptance hereof, that, as of this date,
such holder is an "accredited investor" as such term is defined in Rule 501(a)
of Regulation D promulgated by the Securities and Exchange Commission under the
Securities Act (an "Accredited Investor"). Upon exercise of this Warrant, other
than pursuant to a Cashless Exercise, the holder shall, if requested by the
Company, confirm in writing, in a form satisfactory to the Company, that the
Warrant Shares so purchased are being acquired solely for the holder's own
account and not as a nominee for any other party, for investment and not with a
view toward distribution or resale and that such holder is an Accredited
Investor. If such holder cannot make such representations because they would be
factually incorrect, it shall be a condition to such holder's exercise of this
Warrant that the Company receive such other representations as the Company
considers reasonably necessary to assure the Company that the issuance of its
securities upon exercise of this Warrant shall not violate any United States or
state securities laws.
Section 7. Ownership and Transfer.
(a) The Company shall maintain at its principal executive offices (or
such other office or agency of the Company as it may designate by notice to the
holder hereof), a register for this Warrant, in which the Company shall record
the name and address of the person in whose name this Warrant has been issued,
as well as the name and address of each transferee. The Company may treat the
person in whose name any Warrant is registered on the register as the owner and
holder thereof for all purposes, notwithstanding any notice to the contrary.
(b) This Warrant and the rights granted hereunder shall be assignable
by the holder hereof without the consent of the Company.
(c) The Company agrees to register the Warrant Shares for resale under
the Securities Act pursuant to the Registration Rights Agreements dated August
8, 2001 by and between the Company and the Purchasers set forth therein (the
"Registration Rights Agreement"), and the initial holder of this Warrant (and
certain assignees thereof) is entitled to the registration rights in respect of
the Warrant Shares, and subject to the obligations of the Purchasers in
connection therewith, as if it were a signatory to the Registration Rights
Agreement.
Section 8. Adjustment of Warrant Exercise Price and Number of Shares. The
Warrant Exercise Price and the number of shares of Common Stock issuable upon
exercise of this Warrant shall be adjusted from time to time as follows:
(a) Adjustment of Warrant Exercise Price and Number of Shares upon
Issuance of Common Stock. If and whenever on or after the date of issuance of
this Warrant, the Company issues or sells, or is deemed to have issued or sold,
any shares of Common Stock (other than shares of Common Stock deemed to have
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been issued by the Company in connection with an Approved Stock Plan or upon
exercise or conversion of the Other Securities) for a consideration per share
less than a price (the "Applicable Price") equal to the Warrant Exercise Price
in effect immediately prior to such issuance or sale, then immediately after
such issuance or sale the Warrant Exercise Price then in effect shall be reduced
to an amount equal to the product of (x) the Warrant Exercise Price in effect
immediately prior to such issuance or sale and (y) the quotient determined by
dividing (1) the sum of (I) the product of the Applicable Price and the number
of shares of Common Stock Deemed Outstanding immediately prior to such issuance
or sale, and (II) the consideration, if any, received by the Company upon such
issuance or sale, by (2) the product of (I) the Applicable Price and (II) the
number of shares of Common Stock Deemed Outstanding immediately after such
issuance or sale. Upon each such adjustment of the Warrant Exercise Price
hereunder, the number of shares of Common Stock acquirable upon exercise of this
Warrant shall be adjusted to the number of shares determined by multiplying the
Warrant Exercise Price in effect immediately prior to such adjustment by the
number of shares of Common Stock acquirable upon exercise of this Warrant
immediately prior to such adjustment and dividing the product thereof by the
Warrant Exercise Price resulting from such adjustment.
(b) Effect on Warrant Exercise Price of Certain Events. For purposes of
determining the adjusted Warrant Exercise Price under Section 8(a) above, the
following shall be applicable:
(i) Issuance of Options. If the Company in any manner grants
any Options and the lowest price per share for which one share of
Common Stock is issuable upon the exercise of any such Option or upon
conversion or exchange of any Convertible Securities issuable upon
exercise of any such Option is less than the Applicable Price, then
such share of Common Stock shall be deemed to be outstanding and to
have been issued and sold by the Company at the time of the granting or
sale of such Option for such price per share. For purposes of this
Section 8(b)(i), the "lowest price per share for which one share of
Common Stock is issuable upon exercise of any such Option or upon
conversion or exchange of such Convertible Securities" shall be equal
to the sum of the lowest amounts of consideration (if any) received or
receivable by the Company with respect to any one share of Common Stock
upon the granting or sale of the Option, upon exercise of the Option
and upon conversion or exchange of any Convertible Security issuable
upon exercise of such Option. No further adjustment of the Warrant
Exercise Price shall be made upon the actual issuance of such Common
Stock or of such Convertible Securities upon the exercise of such
Options or upon the actual issuance of such Common Stock upon
conversion or exchange of such Convertible Securities. Upon the
expiration or termination of any unexercised Option, such Warrant
Exercise Price shall be readjusted to such amount as would have
obtained had the adjustment made upon the granting or issuance of such
Option been made based upon the issuance of only the number of shares
of Common Stock actually issued on exercise of such Option.
Notwithstanding the foregoing, no adjustment shall be made pursuant to
this Section 8(b)(i) to the extent that such adjustment is based solely
on the fact that the Convertible Securities issuable upon exercise of
such Option are convertible into or exchangeable for Common Stock at a
price which varies with the market price of the Common Stock.
(ii) Issuance of Convertible Securities. If the Company in any
manner issues or sells any Convertible Securities and the lowest price
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per share for which one share of Common Stock is issuable upon such
conversion or exchange thereof is less than the Applicable Price, then
such share of Common Stock shall be deemed to be outstanding and to
have been issued and sold by the Company at the time of the issuance or
sale of such Convertible Securities for such price per share. For the
purposes of this Section 8(b)(ii), the "lowest price per share for
which one share of Common Stock is issuable upon such conversion or
exchange "shall be equal to the sum of the lowest amounts of
consideration (if any) received or receivable by the Company with
respect to one share of Common Stock upon the issuance or sale of the
Convertible Security and upon conversion or exchange of such
Convertible Security. No further adjustment of the Warrant Exercise
Price shall be made upon the actual issuance of such Common Stock upon
conversion or exchange of such Convertible Securities, and if any such
issuance or sale of such Convertible Securities is made upon exercise
of any Options for which adjustment of the Warrant Exercise Price had
been or are to be made pursuant to other provisions of this Section
8(b), no further adjustment of the Warrant Exercise Price shall be made
by reason of such issuance or sale. Upon the expiration of any rights
of conversion or exchange under such Convertible Securities, such
Warrant Exercise Price shall be readjusted to such amount as would have
obtained had the adjustment made upon the granting or issuance of such
Convertible Securities been made based upon the issuance of only the
number of shares of Common Stock actually issued on conversion of such
Convertible Securities. Notwithstanding the foregoing, no adjustment
shall be made pursuant to this Section 8(b)(ii) to the extent that such
adjustment is based solely on the fact that such Convertible Securities
are convertible into or exchangeable for Common Stock at a price which
varies with the market price of the Common Stock.
(iii) Change in Option Price or Rate of Conversion. If the
purchase price provided for in any Options, the additional
consideration, if any, payable upon the issuance, conversion or
exchange of any Convertible Securities, or the rate at which any
Convertible Securities are convertible into or exchangeable for Common
Stock changes at any time, the Warrant Exercise Price in effect at the
time of such change shall be adjusted to the Warrant Exercise Price
which would have been in effect at such time had such Options or
Convertible Securities provided for such changed purchase price,
additional consideration or changed conversion rate, as the case may
be, at the time initially granted, issued or sold and the number of
shares of Common Stock acquirable hereunder shall be correspondingly
readjusted. For purposes of this Section 8(b)(iii), if the terms of any
Option or Convertible Security that was outstanding as of the date of
issuance of this Warrant are changed in the manner described in the
immediately preceding sentence, then such Option or Convertible
Security and the Common Stock deemed issuable upon exercise, conversion
or exchange thereof shall be deemed to have been issued as of the date
of such change.
(c) Adjustment of Warrant Exercise Price upon Subdivision or
Combination of Common Stock. If the Company at any time after the date of
issuance of this Warrant subdivides (by any stock split, stock dividend,
recapitalization or otherwise) one or more classes of its outstanding shares of
Common Stock into a greater number of shares, any Warrant Exercise Price in
effect immediately prior to such subdivision will be proportionately reduced and
the number of shares of Common Stock obtainable upon exercise of this Warrant
will be proportionately increased. If the Company at any time after the date of
issuance of this Warrant combines (by combination, reverse stock split or
otherwise) one or more classes of its outstanding shares of Common Stock into a
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smaller number of shares, any Warrant Exercise Price in effect immediately prior
to such combination will be proportionately increased and the number of shares
of Common Stock obtainable upon exercise of this Warrant will be proportionately
decreased. Any adjustment under this Section 8(d) shall become effective at the
close of business on the date the subdivision or combination becomes effective.
(d) Minimum Adjustment of Warrant Exercise Price. No adjustment of the
Warrant Exercise Price shall be made under this Section 8 in an amount of less
than 1% of the Warrant Exercise Price in effect at the time such adjustment is
otherwise required to be made, but any such lesser adjustment shall be carried
forward and shall be made at the time and together with the next subsequent
adjustment which, together with any adjustments so carried forward, shall amount
to not less than 1% of such Warrant Exercise Price. No adjustments shall be made
pursuant to this Section 8 which would result in an increase in the Warrant
Exercise Price.
(e) Certain Events. If any event occurs of the type contemplated by the
provisions of this Section 8 but not expressly provided for by such provisions
(including, without limitation, the granting of stock appreciation rights,
phantom stock rights or other rights with equity features), then the Company's
Board of Directors will make an appropriate adjustment in the Warrant Exercise
Price and the number of shares of Common Stock obtainable upon exercise of this
Warrant so as to protect the rights of the holders of the Common Share Warrants;
provided that no such adjustment will increase the Warrant Exercise Price or
decrease the number of shares of Common Stock obtainable as otherwise determined
pursuant to this Section 8.
(f) Notices.
(i) Immediately upon any adjustment of a Warrant Exercise
Price, the Company will give written notice thereof to the holder of
this Warrant, setting forth in reasonable detail, and certifying, the
calculation of such adjustment.
(ii) The Company will give written notice to the holder of
this Warrant at least ten (10) days prior to the date on which the
Company closes its books or takes a record (A) with respect to any
dividend or distribution upon the Common Stock, (B) with respect to any
pro rata subscription offer to holders of Common Stock or (C) for
determining rights to vote with respect to any Organic Change (as
defined below), dissolution or liquidation, provided that such
information shall be made known to the public prior to or in
conjunction with such notice being provided to such holder. Any
recapitalization, reorganization, reclassification, consolidation,
merger, sale of all or substantially all of the Company's assets to
another Person or other transaction in each case which is effected in
such a way that holders of Common Stock are entitled to receive (either
directly or upon subsequent liquidation) stock, securities or assets
with respect to or in exchange for Common Stock is referred to herein
as an "Organic Change."
(iii) The Company will also give written notice to the holder
of this Warrant at least ten (10) days prior to the date on which any
Organic Change, dissolution or liquidation will take place, provided
that such information shall be made known to the public prior to or in
conjunction with such notice being provided to such holder.
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Section 9. Lost, Stolen, Mutilated or Destroyed Warrant. If this Warrant is
lost, stolen, mutilated or destroyed, the Company shall, on receipt of an
indemnification undertaking (or, in the case of a mutilated Warrant, the
Warrant), issue a new Warrant of like denomination and tenor as this Warrant so
lost, stolen, mutilated or destroyed.
Section 10. Notice. Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Warrant must be in
writing and will be deemed to have been delivered: (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one Business Day after deposit with
a nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses and facsimile numbers
for such communications shall be:
If to the Company:
Wire One Technologies, Inc.
225 Long Avenue
Hillside, New Jersey 07205
Telephone: (973) 282-2000
Facsimile: (973) 391-9776
Attention: General Counsel
With a copy to:
Fulbright & Jaworski L.L.P.
666 Fifth Avenue
New York, NY 10103
Telephone: (212) 318-3022
Facsimile: (212) 318-3400
Attention: Neil Gold
If to the holder:
H.C. Wainwright & Co., Inc.
245 Park Avenue
New York, NY 10167
Telephone: (212) 856-5711
Facsimile: (212) 856-5750
Attention: Jason T. Adelman
or its transferee as shall appear on the records maintained by
the Company.
Each party shall provide five days' prior written notice to the other party of
any change in address or facsimile number. Written confirmation of receipt (A)
given by the recipient of such notice, consent, waiver or other communication,
(B) mechanically or electronically generated by the sender's facsimile machine
containing the time, date, recipient facsimile number and an image of the first
page of such transmission or (C) provided by a nationally recognized overnight
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delivery service shall be rebuttable evidence of personal service, receipt by
facsimile or receipt from a nationally recognized overnight delivery service in
accordance with clause (i), (ii) or (iii) above, respectively.
Section 11. Date. The date of this Warrant is August 8, 2001. This Warrant,
in all events, shall be wholly void and of no effect after the close of business
on the Expiration Date, except that notwithstanding any other provisions hereof,
the provisions of Section 7 shall continue in full force and effect after such
date as to any Warrant Shares or other securities issued upon the exercise of
this Warrant.
Section 12. Amendment and Waiver. Except as otherwise provided herein, the
provisions of the Common Stock Warrants may be amended and the Company may take
any action herein prohibited, or omit to perform any act herein required to be
performed by it, only if the Company has obtained the written consent of the
holders of Common Stock Warrants representing a majority of the shares of Common
Stock obtainable upon exercise of the Common Stock Warrants then outstanding;
provided that no such action may increase the Warrant Exercise Price of the
Common Stock Warrants or decrease the number of shares or class of stock
obtainable upon exercise of any Common Stock Warrant without the written consent
of the holder of such Common Stock Warrant.
Section 13. Descriptive Headings; Governing Law. The descriptive headings of
the several Sections and paragraphs of this Warrant are inserted for convenience
only and do not constitute a part of this Warrant. The corporate laws of the
State of Delaware shall govern all issues concerning the relative rights of the
Company and its stockholders. All other questions concerning the construction,
validity, enforcement and interpretation of this Warrant shall be governed by
the internal laws of the State of New York, without giving effect to any choice
of law or conflict of law provision or rule (whether of the State of New York,
or any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of New York.
WIRE ONE TECHNOLOGIES, INC.
By: _________________________________
Name: Jonathan Birkhahn
Title: Executive Vice President
Business Affairs & General Counsel
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EXHIBIT A TO WARRANT
EXERCISE NOTICE
TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS WARRANT
WIRE ONE TECHNOLOGIES, INC.
The undersigned holder hereby exercises the right to purchase
_____________________ (_______) of the shares of Common Stock ("Warrant Shares")
of Wire One Technologies, Inc., a Delaware corporation (the "Company"),
evidenced by the attached Warrant (the "Warrant"). Capitalized terms used herein
and not otherwise defined shall have the respective meanings set forth in the
Warrant.
1. Form of Warrant Exercise Price. The Holder intends that payment of
the Warrant Exercise Price shall be made as:
___________ a "Cash Exercise" with respect to _____________
Warrant Shares; and/or
___________ a "Cashless Exercise" with respect to _____________
Warrant Shares.
2. Payment of Warrant Exercise Price. The holder shall pay the sum of
$________ to the Company in accordance with the terms of the Warrant.
3. Delivery of Warrant Shares. The Company shall deliver to the holder
_________ Warrant Shares in accordance with the terms of the Warrant.
Date: ___________ _, ____
- ------------------------------------
Name of Registered Holder
By:
---------------------------------
Name:
Title:
EXHIBIT B TO WARRANT
FORM OF WARRANT POWER
FOR VALUE RECEIVED, the undersigned does hereby assign and transfer to
___________, with an address at ______________________________________, Federal
Identification No. _____________, a warrant to purchase ____________ shares of
the Common Stock of Wire One Technologies, Inc., a Delaware corporation,
represented by warrant certificate no. _________, standing in the name of the
undersigned on the books of said corporation. The undersigned does hereby
irrevocably constitute and appoint ___________, attorney to transfer the
warrants of said corporation, with full power of substitution in the premises.
Dated: ______, _____
[HOLDER]
By:
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Its:
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