<PAGE> 1
EXHIBIT 10.3
THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (the "ACT"), AND MAY NOT BE SOLD,
PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF
UNDER SUCH ACT OR PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE CORPORATION AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT
REQUIRED.
WARRANT TO PURCHASE STOCK
Corporation: NEXTRON COMMUNICATIONS, INC., a California corporation
Number of Shares*: The Number of Shares as determined in accordance with
SECTION 1.1
Class of Stock*: Common
Exercise Price*: The Fair Market Value of the Shares as determined in
accordance with SECTION 1.4
Issue Date: September 24, 1999
Expiration Date: September 24, 2006 (subject to SECTION 4.1)
* Subject to SECTION 1.8
THIS WARRANT CERTIFIES THAT, for the agreed upon value of $1.00 and for
other good and valuable consideration, BANK OF AMERICA N.A. ("Holder") is
entitled to purchase the number of fully paid and nonassessable shares of the
class of securities (the "Shares") of the corporation (the "Company") at the
Exercise Price (as defined below) per Share (the "Warrant Price") all as set
forth above and as adjusted pursuant to ARTICLES 1 AND 2 of this Warrant,
subject to the provisions and upon the terms and conditions set forth in this
Warrant.
ARTICLE 1. EXERCISE.
1.1 NUMBER OF SHARES. Subject to adjustments pursuant to ARTICLES 1 AND
2, the number of Shares subject to this Warrant shall equal Four Hundred Fifty
Thousand Dollars ($450,000), divided by the Exercise Price.
1.2 METHOD OF EXERCISE. Holder may exercise this Warrant by delivering a
duly executed Notice of Exercise in substantially the form attached as APPENDIX
1 to the principal office of the Company. Unless Holder is exercising the
conversion right set forth in SECTION 1.3, Holder shall also deliver to the
Company a check for the aggregate Warrant Price for the Shares being purchased.
1.3 CONVERSION RIGHT. In lieu of exercising this Warrant as specified in
SECTION 1.2, Holder may from time to time convert this Warrant, in whole or in
part, into a number of Shares determined by dividing (a) the aggregate fair
market value of the Shares or other securities otherwise issuable upon exercise
of this Warrant minus the aggregate Warrant Price of such Shares by (b) the fair
market value of one Share. The fair market value of the Shares shall be
determined pursuant to SECTION 1.4.
1.4 FAIR MARKET VALUE. If the Shares are traded in a public market, the
fair market value of the Shares shall be the closing price of the Shares (or the
closing price of the Company's
1.
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stock into which the Shares are convertible) reported for the business day
immediately before Holder delivers its Notice of Exercise to the Company. If the
Shares are not traded in a public market, the Company and Holder shall mutually
agree upon the fair market value. If the Company and Holder are unable to
mutually agree upon the fair market value, then they shall promptly agree upon
an appraiser, such as a reputable investment banking or valuations firm or
independent accounting firm of national reputation, to undertake the valuation.
The fees and expenses of such investment banking firm or accounting firm shall
be split equally between the Company and Holder.
1.5 DELIVERY OF CERTIFICATE AND NEW WARRANT. Promptly after Holder
exercises or converts this Warrant, the Company shall deliver to Holder
certificates for the Shares acquired and, if this Warrant has not been fully
exercised or converted and has not expired, a new Warrant representing the
Shares not so acquired.
1.6 REPLACEMENT OF WARRANTS. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of loss, theft or destruction, on delivery of an
indemnity agreement reasonably satisfactory in form and amount to the Company
or, in the case of mutilation, or surrender and cancellation of this Warrant,
the Company at its expense shall execute and deliver, in lieu of this Warrant, a
new warrant of like tenor.
1.7 REPURCHASE ON SALE, MERGER, OR CONSOLIDATION OF THE COMPANY.
1.7.1 "ACQUISITION". For the purpose of this Warrant, "Acquisition"
means any sale, license, or other disposition of all or substantially all of the
assets of the Company, or any reorganization, consolidation, or merger of the
Company where the holders of the Company's securities before the transaction
beneficially own less than 50% of the outstanding voting securities of the
surviving entity after the transaction.
1.7.2 ASSUMPTION OF WARRANT. Upon the closing of any Acquisition
the successor entity shall assume the obligations of this Warrant, and this
Warrant shall be exercisable for the same securities, cash, and property as
would be payable for the Shares issuable upon exercise of the unexercised
portion of this Warrant as if such Shares were outstanding on the record date
for the Acquisition and subsequent closing. The Warrant Price shall be adjusted
accordingly.
1.7.3 PURCHASE RIGHT. Notwithstanding the foregoing, at the
election of Holder, the Company shall purchase the unexercised portion of this
Warrant for cash upon the closing of any Acquisition for an amount equal to (a)
the fair market value of any consideration that would have been received by
Holder in consideration of the Shares had Holder exercised the unexercised
portion of this Warrant immediately before the record date for determining the
shareholders entitled to participate in the proceeds of the Acquisition, less
(b) the aggregate Warrant Price of the Shares, but in no event less than zero.
1.8 ADJUSTMENT TO PREFERRED STOCK AND EXERCISE PRICE. (a) If on or
before November 24, 1999, the Company issues equity securities other than Common
Stock (the "Preferred Stock") to Safeguard Scientifics (Delaware), Inc. or its
assigns ("Safeguard") in
2.
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connection with the conversion of the Company's indebtedness to Safeguard, this
Warrant shall instead be exercisable for shares of the same series and class and
bearing the same rights, preferences, and privileges of such shares of Preferred
Stock (including, without limitation, any rights, preferences or privileges
available to any such investors under an "investors rights", "registration
rights" or other similar agreement with the Company) with the Warrant Price
hereunder adjusted to equal $4.00 per share, and the number of such shares
subject to this Warrant adjusted to equal 112,500; provided, however, that
during the period of thirty (30) days after the issuance of such Preferred Stock
to Safeguard (the "Election Period"), Holder may elect to cause this Warrant to
continue to be exercisable for Common Stock, rather than Preferred Stock, in
accordance with the terms and conditions set forth in this Warrant. Holder's
election, if any, pursuant to this SECTION 1.8 to cause this Warrant to continue
to be exercisable for Common Stock must be communicated to the Company in
writing during the Election Period and shall cause this SECTION 1.8 to
thereafter be of no further force or effect. In the event that the Company
issues more than one class or series of equity securities to Safeguard, then
Holder may select, in its sole discretion, which of such classes or series will
be deemed the "Preferred Stock" referenced in this Warrant.
(b) At all times while this Warrant is exercisable for Preferred
Stock, the terms and conditions set forth in SECTION 3.5 of this Warrant shall
be inapplicable and of no force or effect.
ARTICLE 2. ADJUSTMENTS TO THE SHARES.
2.1 STOCK DIVIDENDS, SPLITS, ETC. If the Company declares or pays a
dividend on its common stock (or the Shares if the Shares are securities other
than common stock) payable in common stock, or other securities, subdivides the
outstanding common stock into a greater amount of common stock, or, if the
Shares are securities other than common stock, subdivides the Shares in a
transaction that increases the amount of common stock into which the Shares are
convertible, then upon exercise of this Warrant, for each Share acquired, Holder
shall receive, without cost to Holder, the total number and kind of securities
to which Holder would have been entitled had Holder owned the Shares of record
as of the date the dividend or subdivision occurred.
2.2 RECLASSIFICATION, EXCHANGE OR SUBSTITUTION. Upon any
reclassification, exchange, substitution, or other event that results in a
change of the number and/or class of the securities issuable upon exercise or
conversion of this Warrant, Holder shall be entitled to receive, upon exercise
or conversion of this Warrant, the number and kind of securities and property
that Holder would have received for the Shares if this Warrant had been
exercised immediately before such reclassification, exchange, substitution, or
other event. Such an event shall include any automatic conversion of the
outstanding or issuable securities of the Company of the same class or series as
the Shares to common stock pursuant to the terms of the Company's Articles of
Incorporation upon the closing of a registered public offering of the Company's
common stock. The Company or its successor shall promptly issue to Holder a new
Warrant for such new securities or other property. The new Warrant shall provide
for adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this ARTICLE 2 including, without limitation,
adjustments to the Warrant Price and to the number of securities or property
issuable upon exercise of the new Warrant. The
3.
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provisions of this SECTION 2.2 shall similarly apply to successive
reclassifications, exchanges, substitutions, or other events.
2.3 ADJUSTMENTS FOR COMBINATIONS, ETC. If the outstanding Shares are
combined or consolidated, by reclassification or otherwise, into a lesser number
of shares, the Warrant Price shall be proportionately increased.
2.4 NO IMPAIRMENT. The Company shall not, by amendment of its Articles
of Incorporation or through a reorganization, transfer of assets, consolidation,
merger, dissolution, issue, or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed under this Warrant by the Company, but shall at all times
in good faith assist in carrying out of all the provisions of this ARTICLE 2 and
in taking all such action as may be necessary or appropriate to protect Holder's
rights under this Section against impairment. If the Company takes any action
affecting the Shares or its common stock other than as described above that
adversely affects Holder's rights under this Warrant, the Warrant Price shall be
adjusted downward and the number of Shares issuable upon exercise of this
Warrant shall be adjusted upward in such a manner that the aggregate Warrant
Price of this Warrant is unchanged.
2.5 FRACTIONAL SHARES. No fractional Shares shall be issuable upon
exercise or conversion of the Warrant and the number of Shares to be issued
shall be rounded down to the nearest whole Share. If a fractional share interest
arises upon any exercise or conversion of the Warrant, the Company shall
eliminate such fractional share interest by paying Holder amount computed by
multiplying the fractional interest by the fair market value of a full Share.
2.6 CERTIFICATE AS TO ADJUSTMENTS. Upon each adjustment of the Warrant
Price, the Company at its expense shall promptly compute such adjustment, and
furnish Holder with a certificate of its Chief Financial Officer setting forth
such adjustment and the facts upon which such adjustment is based. The Company
shall, upon written request, furnish Holder a certificate setting forth the
Warrant Price in effect upon the date thereof and the series of adjustments
leading to such Warrant Price.
ARTICLE 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY.
3.1 REPRESENTATIONS AND WARRANTIES. The Company hereby represents and
warrants to the Holder as follows:
(a) All Shares which may be issued upon the exercise of the
purchase right represented by this Warrant, and all securities, if any, issuable
upon conversion of the Shares, shall, upon issuance, be duly authorized, validly
issued, fully paid and nonassessable, and free of any liens and encumbrances
except for restrictions on transfer provided for herein or under applicable
federal and state securities laws.
(b) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of California; has all
requisite power and authority to own or lease and operate its properties and to
carry on its business as now conducted; and is duly qualified or licensed to do
business as a foreign corporation in good standing in all jurisdictions in which
it owns or leases property or in which the conduct of its
4.
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business requires it to so qualify or be licensed, except for such jurisdictions
where the failure to so qualify or be licensed would not have a material adverse
effect on the business or financial condition of the Company.
(c) The Company has all requisite power and authority to enter into
and perform all of its obligations under this Warrant, to issue the Shares and
to carry out the transactions contemplated hereby.
(d) The Company has taken all corporate actions necessary to
authorize it to enter into and perform its obligations under this Warrant, to
issue the Shares and to consummate the transactions contemplated hereby. This
Warrant is the legal, valid and binding obligation of the Company, enforceable
in accordance with its terms, except for (i) the effect upon this Warrant of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting the rights of creditors generally
and (ii) limitations imposed by equitable principles or principles of public
policy upon the specific enforceability of any of the remedies, covenants or
other provisions of this Warrant and upon the availability of injunctive relief
or other equitable remedies.
(e) The authorized capital stock of the Company consists of
10,000,000 shares of common stock ("COMMON STOCK"), of which, immediately after
the Issue Date, 1,997,419 shares will be outstanding on a fully diluted basis,
and 25,000 shares of preferred stock (the "Series A Stock"), of which,
immediately after the Issue Date, 33,333 shares will be outstanding on a fully
diluted basis, (taking into account all outstanding warrants, options and other
rights to purchase the Common Stock and the Series A Stock). When the Warrant
has been delivered as provided herein, the Shares (i) together with all
outstanding shares of Common Stock and Series A Stock, and shares of Common
Stock and Series A Stock issuable upon exercise of all outstanding options of
the Company will not exceed the number of shares that have been authorized by
the Company's Articles of Incorporation, (ii) will have been duly authorized to
be issued by the Company's board of directors, (iii) will, upon payment therefor
in accordance with the terms of this Warrant, be duly and validly issued, fully
paid and nonassessable and (iv) will have been reserved for issuance pursuant to
the terms of this Warrant.
(f) (i) There are no outstanding subscriptions, warrants, options,
calls, preemptive rights, commitments or rights of first refusal of any
character relating to or entitling any person to purchase or otherwise acquire
any capital stock of the Company, (ii) there are no obligations or securities
convertible into or exchangeable or exercisable for shares of any capital stock
of the Company or any commitments of any character relating to or entitling any
person to purchase or otherwise acquire any such obligations or securities,
(iii) the Company has no obligation to repurchase any of its capital stock, and
(iv) the Company has not entered into any agreement to register its securities
under the Act.
(g) Neither the issuance nor the exercise of this Warrant will
cause the rate at which any of the Company's outstanding securities are
ultimately convertible into Common Stock to change, nor will such issuance or
exercise invoke any antidilution feature of any of the Company's outstanding
securities or rights to purchase securities.
5.
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3.2 The Company covenants and agrees that at all times it will have
authorized and reserved a sufficient number of the Shares (and the securities,
including Common Stock, issuable, directly or indirectly, upon conversion of the
Shares) to provide for the exercise of the rights represented by this Warrant.
3.3 If the Company proposes at any time (a) to declare any dividend or
distribution upon its Common Stock, whether in cash, property, stock, or other
securities and whether or not a regular cash dividend; (b) to offer for
subscription pro rata to the holders of any class or series of its stock any
additional shares of stock of any class or series or other rights; (c) to effect
any reclassification or recapitalization of Common Stock; (d) to merge or
consolidate with or into any other corporation, or sell, lease, license, or
convey all or substantially all of its assets, or to liquidate, dissolve or wind
up; or (e) offer holders of registration rights the opportunity to participate
in an underwritten public offering of the company's securities for cash, then,
in connection with each such event, the Company shall give Holder (1) at least
20 days prior written notice of the date on which a record will be taken for
such dividend, distribution, or subscription rights (and specifying the date on
which the holders of common stock will be entitled thereto) or for determining
rights to vote, if any, in respect of the matters referred to in (c) and (d)
above; (2) in the case of the matters referred to in (c) and (d) above at least
20 days prior written notice of the date when the same will take place (and
specifying the date on which the holders of Common Stock will be entitled to
exchange their Common Stock for securities or other property deliverable upon
the occurrence of such event); and (3) in the case of the matter referred to in
(e) above, the same notice as is given to the holders of such registration
rights.
3.4 INFORMATION RIGHTS. So long as the Holder holds this Warrant and/or
any of the Shares, the Company shall deliver to the Holder (a) promptly after
mailing, copies of all notices or other written communications to the
shareholders of the Company, and (b) within forty-five (45) days after the end
of each of fiscal quarter, the Company's quarterly, unaudited financial
statements.
3.5 REGISTRATION RIGHTS. Except as set forth in SECTION 1.8(b) of this
Warrant:
(a) If at any time prior to the Expiration Date, the Company shall
determine to register any of its Common Stock, for its own account or for the
account of others on a Registration Statement on Form S-1 or Form S-3, the
Company will:
(1) promptly give Holder written notice thereof (which shall
include a list of the jurisdictions in which the Company intends to attempt to
qualify such securities under the applicable blue sky or other state
securities); and
(2) include in such registration (and any related
qualification under blue sky laws or other compliance), and in any underwriting
involved therein, all shares of Common Stock of the Company obtained upon
exercise of this Warrant (the "Registrable Securities") specified in a written
request or requests by Holder, received by the Company within twenty (20) days
after such written notice is given, requesting inclusions in such registration.
(b) If the registration of which the Company gives notice is for a
registered public offering involving an underwriting, the Company shall so
advise Holder as a part of the
6.
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written notice given pursuant to SECTION 3.5(a)(1). In such event, the right of
Holder to registration pursuant to this SECTION 3.5 shall be conditioned upon
Holder's participation in such underwriting and the inclusion of Holder's
Registrable Securities in the underwriting to the extent provided herein.
Holder shall (together with the Company and the other holders
distributing their securities through such underwriting) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting by the Company. Notwithstanding any other
provision of this SECTION 3.5, if the underwriter determines that marketing
factors require a limitation of the number of shares to be underwritten, the
underwriter may exclude some or all the Registrable Securities from such
registration and underwriting.
If Holder disapproves of the terms of any such underwriting, Holder may
select to withdraw therefrom by written notice to the Company and the
underwriter. Any Registrable Securities so withdrawn from such underwriting
shall also be withdrawn from such registration.
(c) The Company shall bear registration expenses (exclusive of
underwriting discounts and commissions) for the Form S-1 or Form S-3
registration.
(d) If requested by the underwriters, Holder, or any assignee of
Holder, will not sell or otherwise transfer or dispose of any securities of the
Company held by Holder for a period of up to one hundred eighty (180) days
following a public offering by the Company of its capital stock.
(e) (1) The Company will indemnify Holder, each of Holder's
officers, directors, partners and agents, and each person controlling Holder,
with respect to which registration, qualification or compliance has been
effected pursuant to this SECTION 3.5, and each underwriter, if any, and each
person who controls any underwriter against all claims, losses, damages and
liabilities (or actions in respect thereof) including any of the foregoing
incurred in settlement of any litigation commenced or threatened arising out of
or based on (i) any untrue statement (or alleged untrue statement) of a material
fact contained in any prospectus, offering circular or other similar document
(including any related registration statement, notification or the like)
incident to any such registration, qualification or compliance, or based on any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances under which they were made, or (ii) any violation (or
alleged violation) by the Company of any federal, state or common law rule or
regulation applicable to the Company in connection with any such registration,
qualification or compliance, and will reimburse Holder, each of its officers,
directors, partners and agents, and each person controlling Holder, each such
underwriter and each person who controls any such underwriter, for any legal and
any other expenses reasonably incurred in connection with investigating or
defending any such claim, loss, damage, liability or action, as incurred,
provided that the Company will not be liable in any such case to the extent that
any such claim, loss, damage, liability or expense arises out of or is based on
any untrue statement (or alleged untrue statement) or omission (or alleged
omission) based upon written information furnished to the Company by an
instrument duly executed by Holder or such underwriter and stated to be
specifically for use therein.
7.
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(2) Holder will, if Registrable Securities held by Holder
are included in the securities as to which such registration, qualification or
compliance is being effected, indemnify the Company, each of its directors and
officers, each legal counsel and independent accountant of the Company, each
underwriter, if any, of the Company's securities covered by such a registration
statement, each person who controls the Company or such underwriter within the
meaning of the Securities Act, and each other such holder, each of its
directors, officers, and partners and agents and each person controlling such
other holder, against all claims, losses, damages and liabilities (or actions in
respect thereof) including any of the foregoing incurred in settlement of any
litigation commenced or threatened arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any such
registration statement, prospectus, offering circular or other similar document
(including any related registration statement, notification or the like)
incident to any such registration, qualification or compliance, or any omission
(or alleged omission) to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading in the light
of the circumstances under which they were made, and will reimburse the Company,
its directors, officers, legal counsel, accountants, underwriters, control
persons and such other holders and each such holder's directors, officers,
partners, agents and control persons for any legal and any other expenses
reasonably incurred in connection with investigating or defending any such
claim, loss, damage, liability or action, as incurred, in each case to the
extent, but only to the extent, that such untrue statement (or alleged untrue
statement) or omission (or alleged omission) is made in such registration
statement, prospectus, offering circular or other document in reliance upon and
in conformity with written information furnished to the Company by an instrument
duly executed by Holder and stated to be specifically for use therein; provided,
however, that the obligations of Holder hereunder shall be limited to an amount
equal to the proceeds to Holder for Registrable Securities sold as contemplated
herein.
(3) Each party entitled to indemnification under this
SECTION 3.5(e) (the "Indemnified Party") shall give notice to the party required
to provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has received written notice of any claim as to which indemnity
may be sought, and shall permit the Indemnifying Party to assume the defense of
any such claim or any litigation resulting therefrom, provided that counsel for
the Indemnifying Party, who shall conduct the defense of such claim or
litigation, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld). The Indemnified Party may participate in such defense
at the Indemnified Party's expense; provided, however, that the Indemnifying
Party shall bear the expense of such defense of the Indemnified Party if
representation of both parties by the same counsel would be inappropriate due to
actual or potential conflicts of interest. The failure of any Indemnified Party
to give notice as provided herein shall relieve the Indemnifying Party of its
obligations under this SECTION 3.5(e) only to the extent that such failure to
give notice shall materially adversely prejudice the Indemnifying Party in the
defense of any such claim or any such litigation. No Indemnifying Party, in the
defense of any such claim or litigation, shall, except with the consent of each
Indemnified Party, consent to entry of any judgment or enter into any settlement
which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnified Party of a release from all liability
in respect to such claim or litigation.
8.
<PAGE> 9
ARTICLE 4. MISCELLANEOUS.
4.1 TERM; NOTICE OF EXPIRATION. This Warrant is exercisable, in whole or
in part, at any time and from time to time on or before the Expiration Date set
forth above. The Company shall give Holder written notice of Holder's right to
exercise this Warrant in the form attached as APPENDIX 2 not more than 90 days
and not less than 30 days before the Expiration Date. If the notice is not so
given, the Expiration Date shall automatically be extended until 30 days after
the date the Company delivers the notice to Holder.
4.2 LEGENDS. This Warrant and the Shares (and the securities issuable,
directly or indirectly, upon conversion of the Shares, if any) shall be
imprinted with a legend in substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR PURSUANT TO RULE 144 OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE CORPORATION AND ITS COUNSEL
THAT SUCH REGISTRATION IS NOT REQUIRED.
4.3 COMPLIANCE WITH SECURITIES LAWS ON TRANSFER. This Warrant and the
Shares issuable upon exercise this Warrant (and the securities issuable,
directly or indirectly, upon conversion of the Shares, if any) may not be
transferred or assigned in whole or in part without compliance with applicable
federal and state securities laws by the transferor and the transferee
(including, without limitation, the delivery of investment representation
letters and legal opinions reasonably satisfactory to the Company, as reasonably
requested by the Company). The Company shall not require Holder to provide an
opinion of counsel if the transfer is to an affiliate of Holder or if there is
no material question as to the availability of current information as referenced
in Rule 144(c), Holder represents that it has complied with Rule 144(d) and (e)
in reasonable detail, the selling broker represents that it has complied with
Rule 144(f), and the Company is provided with a copy of Holder's notice of
proposed sale.
4.4 TRANSFER PROCEDURE. Subject to the provisions of SECTION 4.3, Holder
may transfer all or part of this Warrant or the Shares issuable upon exercise of
this Warrant (or the securities issuable, directly or indirectly, upon
conversion of the Shares, if any) by giving the Company notice of the portion of
the Warrant being transferred setting forth the name, address and taxpayer
identification number of the transferee and surrendering this Warrant to the
Company for reissuance to the transferee(s) (and Holder if applicable). Unless
the Company is filing financial information with the SEC pursuant to the
Securities Exchange Act of 1934, the Company shall have the right to refuse to
transfer any portion of this Warrant to any person who directly competes with
the Company.
4.5 NOTICES. All notices and other communications from the Company to
the Holder, or vice versa, shall be deemed delivered and effective when given
personally or mailed by first-class registered or certified mail, postage
prepaid, at such address as may have been furnished to the Company or the
Holder, as the case may be, in writing by the Company or such holder from time
to time.
9.
<PAGE> 10
4.6 WAIVER. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought.
4.7 ATTORNEYS' FEES. In the event of any dispute between the parties
concerning the terms and provisions of this Warrant, the party prevailing in
such dispute shall be entitled to collect from the other party all costs
incurred in such dispute, including reasonable attorneys' fees.
4.8 GOVERNING LAW. This Warrant shall be governed by and construed in
accordance with the laws of the State of California, without giving effect to
its principles regarding conflicts of law.
NEXTRON COMMUNICATIONS, INC.
By: /s/ JEFFRY M. TABLAK
---------------------------------
Name: Jeffry M. Tablak
-------------------------------
(Print)
Title: Chairman of the Board,
President, or Vice President
By: /s/ ROBERT JAMES
---------------------------------
Name: Robert James
-------------------------------
(Print)
Title: V.P. Finance,
Secretary Assistant Treasurer,
or Assistant Secretary
10.
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APPENDIX 1
NOTICE OF EXERCISE
1. The undersigned hereby elects to purchase ____________shares of
the_______________ Stock of NEXTRON COMMUNICATIONS, INC. pursuant to the terms
of the attached Warrant, and tenders herewith payment of the purchase price of
such shares in full.
2. The undersigned hereby elects to convert the attached Warrant into
Shares in the manner specified in the Warrant. This conversion is exercised with
respect to _________ of the Shares covered by the Warrant.
[Strike paragraph (1 or 2) that does not apply.]
3. Please issue a certificate or certificates representing said shares
in the name of the undersigned or in such other name as is specified below:
------------------------------------
(Name)
------------------------------------
------------------------------------
(Address)
4. The undersigned represents it is acquiring the shares solely for its
own account and not as a nominee for any other party and not with a view toward
the resale or distribution thereof except in compliance with applicable
securities laws.
------------------------------------
(Signature)
-------------------
(Date)
11.
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APPENDIX 2
NOTICE THAT WARRANT IS ABOUT TO EXPIRE
_________________,_____
(Name of Holder)
(Address of Holder)
Attn: Chief Financial Officer
Dear________________:
This is to advise you that the Warrant issued to you described below
will expire on November 24, 2006.
Issuer: NEXTRON COMMUNICATIONS, INC.
Issue Date: September 24, 1999
Class of Security Issuable:
Exercise Price per Share:
Number of Shares Issuable:
Procedure for Exercise:
Please contact [name of contact person at (phone number)] with any
questions you may have concerning exercise of the Warrant. This is your only
notice of pending expiration.
NEXTRON COMMUNICATIONS, INC.
By:
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Its:
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12.
