EXHIBIT 4.1
WARRANT TO PURCHASE
SHARES OF COMMON STOCK
OF
GLOWPOINT, INC.
Expires March 14, 2010
No.: W-F-05-___ Number of Shares: ___________
Date of Issuance: March 14, 2005
FOR VALUE RECEIVED, subject to the provisions hereinafter set forth,
the undersigned, Glowpoint, Inc., a Delaware corporation (together with its
successors and assigns, the "Issuer"), hereby certifies that
_______________________________ or its registered assigns is entitled to
subscribe for and purchase, during the Term (as hereinafter defined), up to
____________________________________ (_____________) shares (subject to
adjustment as hereinafter provided) of the duly authorized, validly issued,
fully paid and non-assessable Common Stock of the Issuer, at an exercise price
per share equal to the Warrant Price then in effect, subject, however, to the
provisions and upon the terms and conditions hereinafter set forth. Capitalized
terms used in this Warrant and not otherwise defined herein shall have the
respective meanings specified in Section 8 hereof.
1. Term. The term of this Warrant shall commence on March 14, 2005 and
shall expire at 5:00 p.m., eastern time, on March 14, 2010 (such period being
the "Term").
2. Method of Exercise Payment; Issuance of New Warrant; Transfer and
Exchange.
(a) Time of Exercise. The purchase rights represented by this Warrant
may be exercised in whole or in part during the Term commencing on September 15,
2005.
(b) Method of Exercise. The Holder hereof may exercise this Warrant, in
whole or in part, by the surrender of this Warrant (with the exercise form
attached hereto duly executed) at the principal office of the Issuer, and by the
payment to the Issuer of an amount of consideration therefor equal to the
Warrant Price in effect on the date of such exercise multiplied by the number of
shares of Warrant Stock with respect to which this Warrant is then being
exercised, payable at such Holder's election (i) by certified or official bank
check or by wire transfer to an account designated by the Issuer, (ii) by
"cashless exercise" in accordance with the provisions of subsection (c) of this
Section 2, or (iii) by a combination of the foregoing methods of payment
selected by the Holder of this Warrant.
(c) Cashless Exercise. The Holder may exercise this Warrant by a
cashless exercise and shall receive the number of shares of Common Stock equal
to an amount (as determined below) by surrender of this Warrant at the principal
office of the Issuer together with the properly endorsed Notice of Exercise in
which event the Issuer shall issue to the Holder a number of shares of Common
Stock computed using the following formula:
X = Y - (A)(Y)
------
B
Where X = the number of shares of Common Stock to be issued to
the Holder.
Y = the number of shares of Common Stock purchasable
upon exercise of all of the Warrant or, if only a
portion of the Warrant is being exercised, the
portion of the Warrant being exercised.
A = the Warrant Price.
B = the Per Share Market Value of one share of Common
Stock.
(d) Issuance of Stock Certificates. In the event of any exercise of the
rights represented by this Warrant in accordance with and subject to the terms
and conditions hereof, (i) certificates for the shares of Warrant Stock so
purchased shall be dated the date of such exercise and delivered to the Holder
hereof within a reasonable time, not exceeding three (3) Trading Days after such
exercise or, at the request of the Holder, issued and delivered to the
Depository Trust Company ("DTC") account on the Holder's behalf via the Deposit
Withdrawal Agent Commission System ("DWAC") within a reasonable time, not
exceeding three (3) Trading Days after such exercise, and the Holder hereof
shall be deemed for all purposes to be the holder of the shares of Warrant Stock
so purchased as of the date of such exercise and (ii) unless this Warrant has
expired, a new Warrant representing the number of shares of Warrant Stock, if
any, with respect to which this Warrant shall not then have been exercised (less
any amount thereof which shall have been canceled in payment of the Warrant
Price as hereinabove provided) shall also be issued to the Holder hereof at the
Issuer's expense within such time. All shares of Warrant Stock received upon
exercise of this Warrant shall be freely tradeable and will not be subject to a
restrictive legend on the certificates evidencing such shares. If the
certificates for the shares of Warrant Stock issuable upon exercise of this
Warrant are not delivered within the time period set forth in the first sentence
of this Section 2(d) (an "Exercise Default"), the Holder may, upon written
notice to the Issuer (an "Exercise Default Notice"), regain on the date of such
notice the rights of the Holder under the exercised portion of this Warrant that
is the subject of such Exercise Default. In the event of such Exercise Default
and delivery of an Exercise Default Notice, the Holder shall retain all of the
Holder's rights and remedies with respect to the Issuer's failure to deliver
such shares of Warrant Stock. The Holder's rights and remedies hereunder are
cumulative, and no right or remedy is exclusive of any other. In addition to the
amounts specified herein, the Holder shall have the right to pursue all other
remedies available to it at law or in equity (including, without limitation, a
decree of specific performance and/or injunctive relief). Nothing herein shall
limit the Holder's right to pursue actual damages for the Issuer's failure to
issue and deliver shares of Warrant Stock on the applicable delivery date
(including, without limitation, damages relating to any purchase of Common Stock
by the Holder to make delivery on a sale effected in anticipation of receiving
shares of Warrant Stock upon exercise, such damages to be in an amount equal to
(A) the aggregate amount paid by the Holder for the Common Stock so purchased
minus (B) the aggregate amount of net proceeds, if any, received by the Holder
from the sale of the shares of Warrant Stock issued by the Issuer pursuant to
such exercise).
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(e) Transferability of Warrant. This Warrant may be transferred by a
Holder by surrendering this Warrant at the principal office of the Issuer,
properly endorsed (by the Holder executing an assignment in the form attached
hereto) and upon payment of any necessary transfer tax or other governmental
charge imposed upon such transfer. If transferred pursuant to this paragraph,
this Warrant may be transferred on the books of the Issuer by the Holder hereof
in person or by duly authorized attorney. This Warrant is exchangeable at the
principal office of the Issuer for Warrants for the purchase of the same
aggregate number of shares of Warrant Stock, each new Warrant to represent the
right to purchase such number of shares of Warrant Stock as the Holder hereof
shall designate at the time of such exchange. All Warrants issued on transfers
or exchanges shall be dated the Original Issue Date and shall be identical with
this Warrant except as to the name of the Holder or the number of shares of
Warrant Stock, as applicable.
(f) Continuing Rights of Holder. The Issuer will, at the time of or at
any time after each exercise of this Warrant, upon the request of the Holder
hereof, acknowledge in writing the extent, if any, of its continuing obligation
to afford to such Holder all rights to which such Holder shall continue to be
entitled after such exercise in accordance with the terms of this Warrant,
provided that if any such Holder shall fail to make any such request, the
failure shall not affect the continuing obligation of the Issuer to afford such
rights to such Holder.
3. Stock Fully Paid; Reservation and Listing of Shares; Covenants.
(a) Stock Fully Paid. The Issuer represents, warrants, covenants and
agrees that all shares of Warrant Stock which may be issued upon the exercise of
this Warrant or otherwise hereunder will, when issued in accordance with the
terms of this Warrant, be duly authorized, validly issued, fully paid and
non-assessable and free from all taxes, liens and charges created by or through
the Issuer. The Issuer further covenants and agrees that during the period
within which this Warrant may be exercised, the Issuer will at all times have
authorized and reserved for the purpose of the issue upon exercise of this
Warrant a sufficient number of shares of Common Stock to provide for the
exercise of this Warrant.
(b) Reservation. If any shares of Common Stock required to be reserved
for issuance upon exercise of this Warrant or as otherwise provided hereunder
require registration or qualification with any governmental authority under any
federal or state law before such shares may be so issued, the Issuer will in
good faith use its reasonable best efforts as expeditiously as possible at its
expense to cause such shares to be duly registered or qualified. If the Issuer
shall list any shares of Common Stock on any securities exchange or market it
will, at its expense, list thereon, maintain and increase when necessary such
listing, of, all shares of Warrant Stock from time to time issued upon exercise
of this Warrant or as otherwise provided hereunder and, to the extent
permissible under the applicable securities exchange rules, all unissued shares
of Warrant Stock which are at any time issuable hereunder, so long as any shares
of Common Stock shall be so listed. The Issuer will also so list on each
securities exchange or market, and will maintain such listing of, any other
securities which the Holder of this Warrant shall be entitled to receive upon
the exercise of this Warrant if at the time any securities of the same class
shall be listed on such securities exchange or market by the Issuer.
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(c) Covenants. The Issuer shall not by any action including, without
limitation, amending the Certificate of Incorporation or the by-laws of the
Issuer, or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other action, avoid or
seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good faith assist in the carrying out of all such terms
and in the taking of all such actions as may be necessary or appropriate to
protect the rights of the Holder hereof against dilution (to the extent
specifically provided herein) or impairment. Without limiting the generality of
the foregoing, the Issuer will (i) not permit the par value, if any, of its
Common Stock to exceed the then effective Warrant Price, (ii) not amend or
modify any provision of the Certificate of Incorporation or by-laws of the
Issuer in any manner that would adversely affect the rights of the Holders of
the Warrants in their capacity as Holders of the Warrants, (iii) take all such
action as may be reasonably necessary in order that the Issuer may validly and
legally issue fully paid and nonassessable shares of Common Stock, free and
clear of any liens, claims, encumbrances and restrictions (other than as
provided herein) upon the exercise of this Warrant, and (iv) use its reasonable
best efforts to obtain all such authorizations, exemptions or consents from any
public regulatory body having jurisdiction thereof as may be reasonably
necessary to enable the Issuer to perform its obligations under this Warrant.
(d) Loss, Theft, Destruction of Warrants. Upon receipt of an affidavit
of loss and other evidence satisfactory to the Issuer of the ownership of and
the loss, theft, destruction or mutilation of any Warrant and upon receipt of
indemnity or security satisfactory to the Issuer or, in the case of any such
mutilation, upon surrender and cancellation of such Warrant, the Issuer will
make and deliver, in lieu of such lost, stolen, destroyed or mutilated Warrant,
a new Warrant of like tenor and representing the right to purchase the same
number of shares of Common Stock.
4. Adjustment of Warrant Price and Warrant Share Number. The number of
shares of Common Stock for which this Warrant is exercisable, and the price at
which such shares may be purchased upon exercise of this Warrant, shall be
subject to adjustment from time to time as set forth in this Section 4. The
Issuer shall give the Holder notice of any event described below which requires
an adjustment pursuant to this Section 4 in accordance with Section 5.
Notwithstanding anything contained herein to the contrary, the Warrant Price
shall not be adjusted pursuant to Section 4(d) or (e) hereof to a price that is
less than the Per Share Market Value on the Original Issue Date.
(a) Recapitalization, Reorganization, Reclassification, Consolidation,
Merger or Sale.
(i) In case the Issuer after the Original Issue Date
shall do any of the following (each, a "Triggering Event"): (a)
consolidate or merge with or into another corporation where the holders
of outstanding Voting Stock prior to such merger or consolidation do
not own over 50% of the outstanding Voting Stock of the merged or
consolidated entity immediately after such merger or consolidation, or
(b) sell all or substantially all of its properties or assets to any
other Person, or (c) change the Common Stock to the same or different
number of shares of any class or classes of stock, whether by
reclassification, exchange, substitution or otherwise (other than by
way of a stock split or combination of shares or stock dividends
provided for in Section 4(b)), or (d) effect a capital reorganization
(other than by way of a stock split or combination of shares or stock
dividends provided for in Section 4(b)), then, and in the case of each
such Triggering Event, proper provision shall be made so that, upon the
basis and the terms and in the manner provided in this Warrant, the
Holder of this Warrant shall be entitled upon the exercise hereof at
any time after the consummation of such Triggering Event, to the extent
this Warrant is not exercised prior to such Triggering Event, to
receive at the Warrant Price in effect at the time immediately prior to
the consummation of such Triggering Event in lieu of the Common Stock
issuable upon such exercise of this Warrant prior to such Triggering
Event, the securities, cash and property to which such Holder would
have been entitled upon the consummation of such Triggering Event if
such Holder had exercised the rights represented by this Warrant
immediately prior thereto, subject to adjustments (subsequent to such
corporate action) as nearly equivalent as possible to the adjustments
provided for elsewhere in this Section 4. The Issuer will not effect
any consolidation, merger or sale or conveyance unless prior to the
consummation thereof, the successor or acquiring entity (if other than
the Issuer) and, if an entity different from the successor or acquiring
entity, the entity whose capital stock or assets the holders of the
Common Stock of the Issuer are entitled to receive as a result of such
consolidation, merger or sale or conveyance assumes by written
instrument the obligations under this Section 4 and the obligations to
deliver to the holder of this Warrant such shares of stock, securities
or assets as, in accordance with the foregoing provisions, the holder
may be entitled to acquire.
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(ii) Notwithstanding anything contained in this Warrant to the
contrary, a Triggering Event shall not be deemed to have occurred if,
prior to the consummation thereof, each Person (other than the Issuer)
which may be required to deliver any securities, cash or property upon
the exercise of this Warrant as provided herein shall assume, by
written instrument delivered to, and reasonably satisfactory to, the
Holder of this Warrant, (A) the obligations of the Issuer under this
Warrant (and if the Issuer shall survive the consummation of such
Triggering Event, such assumption shall be in addition to, and shall
not release the Issuer from, any continuing obligations of the Issuer
under this Warrant) and (B) the obligation to deliver to such Holder
such shares of securities, cash or property as, in accordance with the
foregoing provisions of this subsection (a), such Holder shall be
entitled to receive, and such Person shall have similarly delivered to
such Holder a written acknowledgement executed by the President or
Chief Financial Officer of the Issuer, stating that this Warrant shall
thereafter continue in full force and effect and the terms hereof
(including, without limitation, all of the provisions of this
subsection (a)) shall be applicable to the securities, cash or property
which such Person may be required to deliver upon any exercise of this
Warrant or the exercise of any rights pursuant hereto.
(b) Stock Dividends, Subdivisions and Combinations. If at any time the
Issuer shall:
(i) make or issue or set a record date for the
holders of its Common Stock for the purpose of entitling them to
receive a dividend payable in, or other distribution of, shares of
Common Stock,
(ii) effect a stock split of its outstanding shares
of Common Stock into a larger number of shares of Common Stock, or
(iii) combine its outstanding shares of Common Stock
into a smaller number of shares of Common Stock,
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then (1) the number of shares of Common Stock for which this Warrant is
exercisable immediately after the occurrence of any such event shall be adjusted
to equal the number of shares of Common Stock which a record holder of the same
number of shares of Common Stock for which this Warrant is exercisable
immediately prior to the occurrence of such event would own or be entitled to
receive after the happening of such event, and (2) the Warrant Price then in
effect shall be adjusted to equal (A) the Warrant Price then in effect
multiplied by the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to the adjustment divided by (B) the number of
shares of Common Stock for which this Warrant is exercisable immediately after
such adjustment.
Notwithstanding the foregoing, if such record date shall have been fixed and
such dividend is not fully paid or if such distribution is not fully made on the
date fixed therefor, the Warrant Price shall be adjusted pursuant to this
paragraph as of the time of actual payment of such dividends or distributions.
(c) Certain Other Distributions. If at any time the Issuer shall take a
record of the holders of its Common Stock for the purpose of entitling them to
receive any dividend or other distribution of:
(i) cash (other than a cash dividend payable out of earnings
or earned surplus legally available for the payment of dividends under
the laws of the jurisdiction of incorporation of the Issuer),
(ii) any evidences of its indebtedness, any shares of stock of
any class or any other securities or property of any nature whatsoever
(other than cash, Common Stock Equivalents or Additional Shares of
Common Stock), or
(iii) any warrants or other rights to subscribe for or
purchase any evidences of its indebtedness, any shares of stock of any
class or any other securities or property of any nature whatsoever
(other than cash, Common Stock Equivalents or Additional Shares of
Common Stock),
then (1) the number of shares of Common Stock for which this Warrant is
exercisable shall be adjusted to equal the product of the number of shares of
Common Stock for which this Warrant is exercisable immediately prior to such
adjustment multiplied by a fraction (A) the numerator of which shall be the Per
Share Market Value of Common Stock at the date of taking such record and (B) the
denominator of which shall be such Per Share Market Value minus the amount
allocable to one share of Common Stock of any such cash so distributable and of
the fair value (as determined in good faith by the Board of Directors of the
Issuer) of any and all such evidences of indebtedness, shares of stock, other
securities or property or warrants or other subscription or purchase rights so
distributable, and (2) the Warrant Price then in effect shall be adjusted to
equal (A) the Warrant Price then in effect multiplied by the number of shares of
Common Stock for which this Warrant is exercisable immediately prior to the
adjustment divided by (B) the number of shares of Common Stock for which this
Warrant is exercisable immediately after such adjustment. A reclassification of
the Common Stock (other than a change in par value, or from par value to no par
value or from no par value to par value) into shares of Common Stock and shares
of any other class of stock shall be deemed a distribution by the Issuer to the
holders of its Common Stock of such shares of such other class of stock within
the meaning of this Section 4(c) and, if the outstanding shares of Common Stock
shall be changed into a larger or smaller number of shares of Common Stock as a
part of such reclassification, such change shall be deemed a subdivision or
combination, as the case may be, of the outstanding shares of Common Stock
within the meaning of Section 4(b).
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(d) Issuance of Additional Shares of Common Stock.
(i) Subject to the third sentence of the first paragraph of
this Section 4, in the event the Issuer shall, at any time while this
Warrant is outstanding, issue any Additional Shares of Common Stock
(otherwise than as provided in the foregoing subsections (b) through
(c) of this Section 4), at a price per share less than the Warrant
Price then in effect or without consideration, then the Warrant Price
upon each such issuance shall be adjusted to that price determined by
multiplying the Warrant Price then in effect by a fraction:
(A) the numerator of which shall be equal to the sum
of (x) the number of shares of Common Stock outstanding
immediately prior to the issuance of such Additional Shares of
Common Stock plus (y) the number of shares of Common Stock
which the aggregate consideration for the total number of such
Additional Shares of Common Stock so issued would purchase at
a price per share equal to the Warrant Price then in effect,
and
(B) the denominator of which shall be equal to the
number of shares of Common Stock outstanding immediately after
the issuance of such Additional Shares of Common Stock.
(ii) The provisions of paragraph (i) of Section 4(d) shall not
apply to any issuance of Additional Shares of Common Stock for which an
adjustment is provided under Section 4(b) or 4(c). No adjustment of the
number of shares of Common Stock for which this Warrant shall be
exercisable shall be made under paragraph (i) of Section 4(d) upon the
issuance of any Additional Shares of Common Stock which are issued
pursuant to the exercise of any Common Stock Equivalents, if any such
adjustment shall previously have been made upon the issuance of such
Common Stock Equivalents (or upon the issuance of any warrant or other
rights therefor) pursuant to Section 4(e).
(e) Issuance of Common Stock Equivalents. Subject to the third sentence
of the first paragraph of this Section 4, if at any time the Issuer shall take a
record of the Holders of its Common Stock for the purpose of entitling them to
receive a distribution of, or shall in any manner (whether directly or by
assumption in a merger in which the Issuer is the surviving corporation) issue
or sell, any Common Stock Equivalents, whether or not the rights to exchange or
convert thereunder are immediately exercisable, and the price per share for
which Common Stock is issuable upon such conversion or exchange shall be less
than the Warrant Price in effect immediately prior to the time of such issue or
sale, then the number of shares of Common Stock for which this Warrant is
exercisable and the Warrant Price then in effect shall be adjusted as provided
in Section 4(d) on the basis that the maximum number of Additional Shares of
Common Stock necessary to effect the conversion or exchange of all such Common
Stock Equivalents shall be deemed to have been issued and outstanding and the
Issuer shall have received all of the consideration payable therefor, if any, as
of the date of actual issuance of such Common Stock Equivalents. No further
adjustment of the number of shares of Common Stock for which this Warrant is
exercisable and the Warrant Price then in effect shall be made under this
Section 4(f) upon the issuance of any Common Stock Equivalents which are issued
pursuant to the exercise of any warrants or other subscription or purchase
rights therefor, if any such adjustment shall previously have been made upon the
issuance of such warrants or other rights pursuant to Section 4(e).
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(f) Superseding Adjustment. If, at any time after any adjustment of the
number of shares of Common Stock for which this Warrant is exercisable and the
Warrant Price then in effect shall have been made pursuant to Section 4(e) as
the result of any issuance of warrants, other rights or Common Stock
Equivalents, and (i) such warrants or other rights, or the right of conversion
or exchange in such other Common Stock Equivalents, shall expire, and all or a
portion of such warrants or other rights, or the right of conversion or exchange
with respect to all or a portion of such other Common Stock Equivalents, as the
case may be shall not have been exercised, or (ii) the consideration per share
for which shares of Common Stock are issuable pursuant to such Common Stock
Equivalents, shall be increased solely by virtue of provisions therein contained
for an automatic increase in such consideration per share upon the occurrence of
a specified date or event, then for each outstanding Warrant such previous
adjustment shall be rescinded and annulled and the Additional Shares of Common
Stock which were deemed to have been issued by virtue of the computation made in
connection with the adjustment so rescinded and annulled shall no longer be
deemed to have been issued by virtue of such computation. Upon the occurrence of
an event set forth in this Section 4(f) above, there shall be a recomputation
made of the effect of such Common Stock Equivalents on the basis of: (i)
treating the number of Additional Shares of Common Stock or other property, if
any, theretofore actually issued or issuable pursuant to the previous exercise
of any such warrants or other rights or any such right of conversion or
exchange, as having been issued on the date or dates of any such exercise and
for the consideration actually received and receivable therefor, and (ii)
treating any such Common Stock Equivalents which then remain outstanding as
having been granted or issued immediately after the time of such increase of the
consideration per share for which shares of Common Stock or other property are
issuable under such Common Stock Equivalents; whereupon a new adjustment of the
number of shares of Common Stock for which this Warrant is exercisable and the
Warrant Price then in effect shall be made, which new adjustment shall supersede
the previous adjustment so rescinded and annulled.
(g) Other Provisions Applicable to Adjustments under this Section. The
following provisions shall be applicable to the making of adjustments of the
number of shares of Common Stock for which this Warrant is exercisable and the
Warrant Price then in effect provided for in this Section 4:
(i) Computation of Consideration. To the extent that any
Additional Shares of Common Stock or any Common Stock Equivalents (or
any warrants or other rights therefor) shall be issued for cash
consideration, the consideration received by the Issuer therefor shall
be the amount of the cash received by the Issuer therefor, or, if such
Additional Shares of Common Stock or Common Stock Equivalents are
offered by the Issuer for subscription, the subscription price, or, if
such Additional Shares of Common Stock or Common Stock Equivalents are
sold to underwriters or dealers for public offering without a
subscription offering, the initial public offering price (in any such
case subtracting any amounts paid or receivable for accrued interest or
accrued dividends and without taking into account any compensation,
discounts or expenses paid or incurred by the Issuer for and in the
underwriting of, or otherwise in connection with, the issuance
thereof). To the extent that such issuance shall be for a consideration
other than cash, then, except as herein otherwise expressly provided,
the amount of such consideration shall be deemed to be the fair value
of such consideration at the time of such issuance as determined in
good faith by the Board of Directors of the Issuer. In case any
Additional Shares of Common Stock or any Common Stock Equivalents (or
any warrants or other rights therefor) shall be issued in connection
with any merger in which the Issuer issues any securities, the amount
of consideration therefor shall be deemed to be the fair value, as
determined in good faith by the Board of Directors of the Issuer, of
such portion of the assets and business of the nonsurviving corporation
as such Board in good faith shall determine to be attributable to such
Additional Shares of Common Stock, Common Stock Equivalents, or any
warrants or other rights therefor, as the case may be. The
consideration for any Additional Shares of Common Stock issuable
pursuant to any warrants or other rights to subscribe for or purchase
the same shall be the consideration received by the Issuer for issuing
such warrants or other rights plus the additional consideration payable
to the Issuer upon exercise of such warrants or other rights. The
consideration for any Additional Shares of Common Stock issuable
pursuant to the terms of any Common Stock Equivalents shall be the
consideration received by the Issuer for issuing warrants or other
rights to subscribe for or purchase such Common Stock Equivalents, plus
the consideration paid or payable to the Issuer in respect of the
subscription for or purchase of such Common Stock Equivalents, plus the
additional consideration, if any, payable to the Issuer upon the
exercise of the right of conversion or exchange in such Common Stock
Equivalents. In case of the issuance at any time of any Additional
Shares of Common Stock or Common Stock Equivalents in payment or
satisfaction of any dividends upon any class of stock other than Common
Stock, the Issuer shall be deemed to have received for such Additional
Shares of Common Stock or Common Stock Equivalents a consideration
equal to the amount of such dividend so paid or satisfied.
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(ii) When Adjustments to Be Made. The adjustments required by
this Section 4 shall be made whenever and as often as any specified
event requiring an adjustment shall occur, except that any adjustment
of the number of shares of Common Stock for which this Warrant is
exercisable that would otherwise be required may be postponed (except
in the case of a subdivision or combination of shares of the Common
Stock, as provided for in Section 4(b)) up to, but not beyond the date
of exercise if such adjustment either by itself or with other
adjustments not previously made adds or subtracts less than one percent
(1%) of the shares of Common Stock for which this Warrant is
exercisable immediately prior to the making of such adjustment. Any
adjustment representing a change of less than such minimum amount
(except as aforesaid) which is postponed shall be carried forward and
made as soon as such adjustment, together with other adjustments
required by this Section 4 and not previously made, would result in a
minimum adjustment or on the date of exercise. For the purpose of any
adjustment, any specified event shall be deemed to have occurred at the
close of business on the date of its occurrence.
(iii) Fractional Interests. In computing adjustments under
this Section 4, fractional interests in Common Stock shall be taken
into account to the nearest one one-hundredth (1/100th) of a share.
(iv) When Adjustment Not Required. If the Issuer shall take a
record of the holders of its Common Stock for the purpose of entitling
them to receive a dividend and shall, thereafter and before the
dividend to stockholders thereof, legally abandon its plan to pay or
deliver such dividend, then thereafter no adjustment shall be required
by reason of the taking of such record and any such adjustment
previously made in respect thereof shall be rescinded and annulled.
(h) Form of Warrant after Adjustments. The form of this Warrant need
not be changed because of any adjustments in the Warrant Price or the number and
kind of Securities purchasable upon the exercise of this Warrant.
5. Notice of Adjustments. Whenever the Warrant Price or Warrant Share
Number shall be adjusted pursuant to Section 4 hereof (for purposes of this
Section 5, each an "adjustment"), the Issuer shall cause its Chief Financial
Officer to prepare and execute a certificate 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 Price and
Warrant Share Number after giving effect to such adjustment, and shall cause
copies of such certificate to be delivered to the Holder of this Warrant
promptly after each adjustment.
6. Fractional Shares. No fractional shares of Warrant Stock will be
issued in connection with and exercise hereof, but in lieu of such fractional
shares, the Issuer shall make a cash payment therefor equal in amount to the
product of the applicable fraction multiplied by the Per Share Market Value then
in effect.
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7. Ownership Cap and Certain Exercise Restrictions. Notwithstanding
anything to the contrary set forth in this Warrant, at no time may a Holder of
this Warrant exercise this Warrant if the number of shares of Common Stock to be
issued pursuant to such exercise would exceed, when aggregated with all other
shares of Common Stock owned by such Holder at such time, the number of shares
of Common Stock which would result in such Holder owning more than 4.999% of all
of the Common Stock outstanding at such time; provided, however, that upon a
holder of this Warrant providing the Issuer with sixty-one (61) days notice
(pursuant to Section 12 hereof) (the "Waiver Notice") that such Holder would
like to waive this Section 7 with regard to any or all shares of Common Stock
issuable upon exercise of this Warrant, this Section 7 will be of no force or
effect with regard to all or a portion of the Warrant referenced in the Waiver
Notice; provided, further, that this provision shall be of no further force or
effect during the sixty-one (61) days immediately preceding the expiration of
the term of this Warrant.
8. Definitions. For the purposes of this Warrant, the following terms have the
following meanings:
"Capital Stock" means and includes (i) any and all shares,
interests, participations or other equivalents of or interests in
(however designated) corporate stock, including, without limitation,
shares of preferred or preference stock, (ii) all partnership interests
(whether general or limited) in any Person which is a partnership,
(iii) all membership interests or limited liability company interests
in any limited liability company, and (iv) all equity or ownership
interests in any Person of any other type.
"Certificate of Incorporation" means the Certificate of
Incorporation of the Issuer as in effect on the Original Issue Date,
and as hereafter from time to time amended, modified, supplemented or
restated in accordance with the terms hereof and thereof and pursuant
to applicable law.
"Common Stock" means the Common Stock, par value $.0001 per
share, of the Issuer and any other Capital Stock into which such stock
may hereafter be changed.
"Holders" mean the Persons who shall from time to time own any
Warrant. The term "Holder" means one of the Holders.
"Independent Appraiser" means a nationally recognized or major
regional investment banking firm or firm of independent certified
public accountants of recognized standing (which may be the firm that
regularly examines the financial statements of the Issuer) that is
regularly engaged in the business of appraising the Capital Stock or
assets of corporations or other entities as going concerns, and which
is not affiliated with either the Issuer or the Holder of any Warrant.
"Issuer" means Glowpoint, Inc., a Delaware corporation, and
its successors.
"Majority Holders" means at any time the Holders of Warrants
exercisable for at least 51% of the shares of Warrant Stock issuable
under the Warrants at the time outstanding.
"Nasdaq" means the Nasdaq National Market or the Nasdaq
SmallCap Market.
"Original Issue Date" means March 14, 2005.
"OTC Bulletin Board" means the over-the-counter electronic
bulletin board.
"Person" means an individual, corporation, limited liability
company, partnership, joint stock company, trust, unincorporated
organization, joint venture, governmental authority or other entity of
whatever nature.
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"Per Share Market Value" means on any particular date (a) the
average of the closing bid and asked price per share of the Common
Stock on such date on Nasdaq or another registered national stock
exchange on which the Common Stock is then listed, or if there is no
such price on such date, then the average of the closing bid and asked
price on such exchange or quotation system on the date nearest
preceding such date, or (b) if the Common Stock is not listed then on
Nasdaq or any registered national stock exchange, the closing bid price
for a share of Common Stock in the over-the-counter market, as reported
by the OTC Bulletin Board or in the National Quotation Bureau
Incorporated or similar organization or agency succeeding to its
functions of reporting prices) at the close of business on such date,
or (c) if the Common Stock is not then reported by the OTC Bulletin
Board or the National Quotation Bureau Incorporated (or similar
organization or agency succeeding to its functions of reporting
prices), then the average of the "Pink Sheet" quotes for the relevant
conversion period, as determined in good faith by the holder, or (d) if
the Common Stock is not then publicly traded the fair market value of a
share of Common Stock as determined by an Independent Appraiser
selected in good faith by the Majority Holders; provided, however, that
the Issuer, after receipt of the determination by such Independent
Appraiser, shall have the right to select an additional Independent
Appraiser, in which case, the fair market value shall be equal to the
average of the determinations by each such Independent Appraiser; and
provided, further that all determinations of the Per Share Market Value
shall be appropriately adjusted for any stock dividends, stock splits
or other similar transactions during such period. The determination of
fair market value by an Independent Appraiser shall be based upon the
fair market value of the Issuer determined on a going concern basis as
between a willing buyer and a willing seller and taking into account
all relevant factors determinative of value, and shall be final and
binding on all parties.
"Purchase Agreement" means the Common Stock Purchase Agreement
dated as of March 14, 2005, among the Issuer and the investors a party
thereto.
"Securities" means any debt or equity securities of the
Issuer, whether now or hereafter authorized, any instrument convertible
into or exchangeable for Securities or a Security, and any option,
warrant or other right to purchase or acquire any Security. "Security"
means one of the Securities.
"Securities Act" means the Securities Act of 1933, as amended,
or any similar federal statute then in effect.
"Subsidiary" means any corporation at least 50% of whose
outstanding Voting Stock shall at the time be owned directly or
indirectly by the Issuer or by one or more of its Subsidiaries, or by
the Issuer and one or more of its Subsidiaries.
"Term" has the meaning specified in Section 1 hereof.
"Trading Day" means (a) a day on which the Common Stock is
traded on Nasdaq, or (b) if the Common Stock is not listed on Nasdaq, a
day on which the Common Stock is traded on any other registered
national stock exchange, or (c) if the Common Stock is not traded on
any other registered national stock exchange, a day on which the Common
Stock is traded on the OTC Bulletin Board, or (d) if the Common Stock
is not traded on the OTC Bulletin Board, a day on which the Common
Stock is quoted in the over-the-counter market as reported by the
National Quotation Bureau Incorporated (or any similar organization or
agency succeeding its functions of reporting prices); provided,
however, that in the event that the Common Stock is not listed or
quoted as set forth in (a), (b) or (c) hereof, then Trading Day shall
mean any day except Saturday, Sunday and any day which shall be a legal
holiday or a day on which banking institutions in the State of New York
are authorized or required by law or other government action to close.
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"Voting Stock" means, as applied to the Capital Stock of any
corporation, Capital Stock of any class or classes (however designated)
having ordinary voting power for the election of a majority of the
members of the board of directors (or other governing body) of such
corporation, other than Capital Stock having such power only by reason
of the happening of a contingency.
"Warrants" means the Warrants issued and sold pursuant to the
Purchase Agreement, including, without limitation, this Warrant, and
any other warrants of like tenor issued in substitution or exchange for
any thereof pursuant to the provisions of Section 2(c), 2(d) or 2(e)
hereof or of any of such other Warrants.
"Warrant Price" initially means $2.40, as such Warrant Price
may be adjusted from time to time as shall result from the adjustments
specified in this Warrant, including Section 4 hereto.
"Warrant Share Number" means at any time the aggregate number
of shares of Warrant Stock which may at such time be purchased upon
exercise of this Warrant, after giving effect to all prior adjustments
and increases to such number made or required to be made under the
terms hereof.
"Warrant Stock" means Common Stock issuable upon exercise of
any Warrant or Warrants or otherwise issuable pursuant to any Warrant
or Warrants.
9. Other Notices. In case at any time:
(A) the Issuer shall make any
distributions to the holders of
Common Stock; or
(B) the Issuer shall authorize the
granting to all holders of its
Common Stock of rights to subscribe
for or purchase any shares of
Capital Stock of any class or other
rights; or
(C) there shall be any reclassification
of the Capital Stock of the Issuer;
or
(D) there shall be any capital
reorganization by the Issuer; or
(E) there shall be any (i) consolidation
or merger involving the Issuer or
(ii) sale, transfer or other
disposition of all or substantially
all of the Issuer's property, assets
or business (except a merger or
other reorganization in which the
Issuer shall be the surviving
corporation and its shares of
Capital Stock shall continue to be
outstanding and unchanged and except
a consolidation, merger, sale,
transfer or other disposition
involving a wholly-owned
Subsidiary); or
(F) there shall be a voluntary or
involuntary dissolution, liquidation
or winding-up of the Issuer or any
partial liquidation of the Issuer or
distribution to holders of Common
Stock;
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then, in each of such cases, the Issuer shall give written notice to the Holder
of the date on which (i) the books of the Issuer shall close or a record shall
be taken for such dividend, distribution or subscription rights or (ii) such
reorganization, reclassification, consolidation, merger, disposition,
dissolution, liquidation or winding-up, as the case may be, shall take place.
Such notice also shall specify the date as of which the holders of Common Stock
of record shall participate in such dividend, distribution or subscription
rights, or shall be entitled to exchange their certificates for Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, disposition, dissolution, liquidation
or winding-up, as the case may be. Such notice shall be given at least twenty
(20) days prior to the record date or effective date for the event specified in
such notice.
10. Amendment and Waiver. Any term, covenant, agreement or condition in
this Warrant may be amended, or compliance therewith may be waived (either
generally or in a particular instance and either retroactively or
prospectively), by a written instrument or written instruments executed by the
Issuer and the Majority Holders; provided, however, that no such amendment or
waiver shall reduce the Warrant Share Number, increase the Warrant Price,
shorten the period during which this Warrant may be exercised or modify any
provision of this Section 10 without the consent of the Holder of this Warrant.
11. Governing Law. This Warrant shall be governed by and construed in
accordance with the laws of the State of Delaware, without giving effect to
principles of conflicts of law. Each of the Issuer and the Holder (i) hereby
irrevocably submits to the exclusive jurisdiction of the United States District
Court sitting in the District of Delaware and the courts of the State of
Delaware for the purposes of any suit, action or proceeding arising out of or
relating to this Warrant or any of the other Transaction Documents (as defined
in the Purchase Agreement) or the transactions contemplated hereby or thereby
and (ii) hereby waives, and agrees not to assert in any such suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of
such court, that the suit, action or proceeding is brought in an inconvenient
forum or that the venue of the suit, action or proceeding is improper. Each of
the Issuer and the Holder consents to process being served in any such suit,
action or proceeding by mailing a copy thereof to such party at the address in
effect for notices to it under the Purchase Agreement and agrees that such
service shall constitute good and sufficient service of process and notice
thereof. Nothing in this Section 11 shall affect or limit any right to serve
process in any other manner permitted by law.
12. Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earlier of (i) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile
telephone number specified for notice prior to 5:00 p.m., eastern time, on a
Trading Day, (ii) the Trading Day after the date of transmission, if such notice
or communication is delivered via facsimile at the facsimile telephone number
specified for notice later than 5:00 p.m., eastern time, on any date and earlier
than 11:59 p.m., eastern time, on such date, (iii) the Trading Day following the
date of mailing, if sent by overnight delivery by nationally recognized
overnight courier service or (iv) actual receipt by the party to whom such
notice is required to be given. The addresses for such communications shall be
with respect to the Holder of this Warrant or of Warrant Stock issued pursuant
hereto, addressed to such Holder at its last known address or facsimile number
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appearing on the books of the Issuer maintained for such purposes, or with
respect to the Issuer, addressed to:
Glowpoint, Inc.
225 Long Avenue
Hillside, New Jersey 07205
Attention: Chief Financial Officer
Tel. No.: 973-391-2000
Fax No.: 973-923-3352
Copies of notices to the Issuer shall be sent to Morrison & Foerster LLP, 1290
Avenue of the Americas, New York, New York 10104, Attention: Michael J.W.
Rennock, Esq. Tel. No.: (212) 468-8288, Fax No.: (212) 468-7900. Any party
hereto may from time to time change its address for notices by giving at least
ten (10) days written notice of such changed address to the other party hereto.
13. Warrant Agent. The Issuer may, by written notice to each Holder of
this Warrant, appoint an agent having an office in New York, New York for the
purpose of issuing shares of Warrant Stock on the exercise of this Warrant
pursuant to subsection (b) of Section 2 hereof, exchanging this Warrant pursuant
to subsection (d) of Section 2 hereof or replacing this Warrant pursuant to
subsection (d) of Section 3 hereof, or any of the foregoing, and thereafter any
such issuance, exchange or replacement, as the case may be, shall be made at
such office by such agent.
14. Remedies. The Issuer stipulates that the remedies at law of the
Holder of this Warrant in the event of any default or threatened default by the
Issuer in the performance of or compliance with any of the terms of this Warrant
are not and will not be adequate and that, to the fullest extent permitted by
law, such terms may be specifically enforced by a decree for the specific
performance of any agreement contained herein or by an injunction against a
violation of any of the terms hereof or otherwise.
15. Successors and Assigns. This Warrant and the rights evidenced
hereby shall inure to the benefit of and be binding upon the successors and
assigns of the Issuer, the Holder hereof and (to the extent provided herein) the
Holders of Warrant Stock issued pursuant hereto, and shall be enforceable by any
such Holder or Holder of Warrant Stock.
16. Modification and Severability. If, in any action before any court
or agency legally empowered to enforce any provision contained herein, any
provision hereof is found to be unenforceable, then such provision shall be
deemed modified to the extent necessary to make it enforceable by such court or
agency. If any such provision is not enforceable as set forth in the preceding
sentence, the unenforceability of such provision shall not affect the other
provisions of this Warrant, but this Warrant shall be construed as if such
unenforceable provision had never been contained herein.
17. Headings. The headings of the Sections of this Warrant are for
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.
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IN WITNESS WHEREOF, the Issuer has executed this Warrant as of the day
and year first above written.
GLOWPOINT, INC.
By:
-----------------------------------
Gerard E. Dorsey
Chief Financial Officer,
Executive Vice President, Finance
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EXERCISE FORM
GLOWPOINT, INC.
The undersigned _______________, pursuant to the provisions of the within
Warrant, hereby elects to exercise this Warrant for _____ shares of Common Stock
of Glowpoint, Inc.
Dated: ____________________ Signature _________________________________
Address ___________________________________
___________________________________
Number of shares of Common Stock beneficially owned or deemed beneficially owned
by the Holder on the date of Exercise: _________________________
ASSIGNMENT
FOR VALUE RECEIVED, _________________ hereby sells, assigns and transfers unto
__________________ the within Warrant and all rights evidenced thereby and does
irrevocably constitute and appoint _____________, attorney, to transfer the said
Warrant on the books of the within named corporation.
Dated: ____________________ Signature _________________________________
Address ___________________________________
___________________________________
PARTIAL ASSIGNMENT
FOR VALUE RECEIVED, _________________ hereby sells, assigns and transfers unto
__________________ the right to purchase _________ shares of Warrant Stock
evidenced by the within Warrant together with all rights therein, and does
irrevocably constitute and appoint ___________________, attorney, to transfer
that part of the said Warrant on the books of the within named corporation.
Dated: ____________________ Signature _________________________________
Address ___________________________________
___________________________________
16
FOR USE BY THE ISSUER ONLY:
This Warrant No. W-___ canceled (or transferred or exchanged) this _____ day of
___________, _____, shares of Common Stock issued therefor in the name of
_______________, Warrant No. W-_____ issued for ____ shares of Common Stock in
the name of _______________.
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