Document:

exv10w18

 

Exhibit 10.18

No. CW-___

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR ANY STATE SECURITIES LAWS. SUCH
SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
THEREFROM UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

WARRANT TO PURCHASE                     

SHARES OF COMMON STOCK OF

STARVOX COMMUNICATIONS, INC.

Void after                    , 2008

     This certifies that                                        , or its permitted assigns (the “Holder”), for value
received, is entitled to purchase from STARVOX COMMUNICATIONS, INC., a California corporation (the
“Company”), having a place of business at 2202 N. First Street, San Jose, California 95131 a
maximum of                      (___) fully paid and nonassessable shares of the Company’s Common
Stock, par value $.001 per share (the “Warrant Shares”), at a price per share of $                     (the
“Stock Purchase Price”) at any time or from time to time up to and including 5:00 p.m. (Pacific
time)                     , 2008 (the “Expiration Date”), upon surrender to the Company at its principal office
(or at such other location as the Company may advise the Holder in writing) of this Warrant
properly endorsed with the Form of Subscription attached hereto as Annex A duly filled in
and signed and, if applicable, upon payment of the aggregate Stock Purchase Price for the number of
shares for which this Warrant is being exercised determined in accordance with the provisions
hereof. The Stock Purchase Price may be paid by cash, check, wire transfer or by the surrender of
promissory notes or other instruments representing indebtedness of the Company to the Holder. The
Stock Purchase Price and the number of shares purchasable hereunder are subject to adjustment as
provided in Section 3 of this Warrant.

     This Warrant is subject to the following terms and conditions:

     1. EXERCISE; ISSUANCE OF CERTIFICATES; PAYMENT FOR SHARES.

          1.1 General. This Warrant is exercisable at the option of the holder of record hereof, at any
time or from time to time, up to the Expiration Date for all or any part of the shares of Common
Stock (but not for a fraction of a share) which may be purchased hereunder. The Company agrees that
the Warrant Shares shall be and are deemed to be issued to the Holder hereof as the record owner of
the Warrant Shares as of the close of business on the date on which this Warrant shall have been
surrendered, properly endorsed, the completed, executed Form of Subscription delivered and payment
made for the Warrant Shares. Certificates for Warrant Shares so purchased, together with any other
securities or property to which the Holder hereof is

 

 

entitled upon such exercise, shall be delivered to the Holder hereof by the Company at the
Company’s expense within a reasonable time after the rights represented by this Warrant have been
so exercised. In case of a purchase of less than all the shares which may be purchased under this
Warrant, the Company shall cancel this Warrant and execute and deliver a new Warrant or Warrants of
like tenor for the balance of the shares purchasable under the Warrant surrendered upon such
purchase to the Holder hereof within a reasonable time. Each stock certificate so delivered shall
be in such denominations of Warrant Shares as may be requested by the Holder hereof and shall be
registered in the name of such Holder.

          1.2 Net Issue Exercise. Notwithstanding any provisions herein to the contrary, in lieu of
exercising this Warrant in the manner provided above, the Holder may elect to receive shares equal
to the value (as determined below) of this Warrant (or the portion thereof being canceled) by
surrender of this Warrant at the principal office of the Company together with the properly
endorsed Form of Subscription and notice of such election in which event the Company shall issue to
the Holder a number of shares of Common Stock computed using the following formula:

	 	 	 	 	 	 	 
	 

	 	X =
	 	Y (A-B)
 

A
	 	 

     Where X = the number of Warrant Shares to be issued to the Holder

Y = the number of Warrant Shares purchasable under the Warrant or, if only a
portion of the Warrant is being exercised, the portion of the Warrant being
exercised (at the date of such calculation)

A = the fair market value of one Warrant Share (at the date of such calculation)

B = Stock Purchase Price (as adjusted to the date of such calculation)

For purposes of this Section 1.2, the fair market value of each Warrant Share on the date of
calculation shall mean with respect to each Warrant Share:

               (a) if the exercise is in connection with an initial public offering of the Company’s Common
Stock, and if the Company’s Registration Statement relating to such public offering has been
declared effective by the Securities and Exchange Commission, then the fair market value per share
shall be the product of (x) the initial “Price to Public” specified in the final prospectus with
respect to the offering and (y) the number of shares of Common Stock into which each Warrant Share
is convertible at the date of calculation;

               (b) if this Warrant is exercised after, and not in connection with, the Company’s initial
public offering, and if the Company’s Common Stock is traded on a securities exchange or The Nasdaq
Stock Market or actively traded over-the-counter:

                    (1) if the Company’s Common Stock is traded on a securities exchange or The Nasdaq Stock
Market, the fair market value shall be deemed to be the product of (x) the average of the closing
prices over a thirty (30) day period ending three days before date

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of calculation and (y) the number of shares of Common Stock into which each Warrant Share is
convertible on such date; or

                    (2) if the Company’s Common Stock is actively traded over-the-counter, the fair market value
shall be deemed to be the product of (x) the average of the closing bid or sales price (whichever
is applicable) over the thirty (30) day period ending three days before the date of calculation and
(y) the number of shares of Common Stock into which each Warrant Share is convertible on such date;
or

               (c) if neither (a) nor (b) is applicable, the fair market value of each Warrant Share shall be
the highest price per share which the Company could obtain on the date of calculation from a
willing buyer (not a current employee or director) for Warrant Shares sold by the Company, from
authorized but unissued shares, as determined in good faith by the Board of Directors, unless the
Company is at such time in the process of an Organic Change (as described in Section 3.3 below), in
which case the fair market value of each Warrant Share shall be deemed to be the value received by
the holders of such stock in connection with such event.

     2. RESERVATION OF SHARES. The Company further covenants and agrees that, during the period
within which the rights represented by this Warrant may be exercised, the Company will at all times
have authorized and reserved, for the purpose of issue or transfer upon exercise of the
subscription rights evidenced by this Warrant, a sufficient number of shares of authorized but
unissued Common Stock, or other securities and property, when and as required to provide for the
exercise of the rights represented by this Warrant. The Company will take all such action as may be
necessary to assure that such Warrant Shares may be issued as provided herein without violation of
any applicable law or regulation, or of any requirements of any domestic securities exchange upon
which the Common Stock may be listed; provided, however, that the Company shall not
be required to effect a registration under federal or state securities laws with respect to such
exercise.

     3. ADJUSTMENT OF STOCK PURCHASE PRICE AND NUMBER OF SHARES. The. Stock Purchase Price and the
number of shares purchasable upon the exercise of this Warrant shall be subject to adjustment from
time to time upon the occurrence of certain events described in this Section 3. Upon each
adjustment of the Stock Purchase Price, the Holder of this Warrant shall thereafter be entitled to
purchase, at the Stock Purchase Price resulting from such adjustment, the number of shares obtained
by multiplying the Stock Purchase Price in effect immediately prior to such adjustment by the
number of shares purchasable pursuant hereto immediately prior to such adjustment, and dividing the
product thereof by the Stock Purchase Price resulting from such adjustment.

          3.1 Subdivision or Combination of Stock. In case the Company shall at any time subdivide its
outstanding shares of Common Stock into a greater number of shares, the Stock Purchase Price in
effect immediately prior to such subdivision shall be proportionately reduced, and conversely, in
case the outstanding Warrant Shares of the Company shall be combined into a smaller number of
shares, the Stock Purchase Price in effect immediately prior to such combination shall be
proportionately increased.

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          3.2 Dividends in Common Stock, Other Stock, Property, Reclassification. If at any time or from
time to time the Holders of Common Stock (or any shares of stock or other securities at the time
receivable upon the exercise of this Warrant) shall have received or become entitled to receive,
without payment therefor,

               (a) Common Stock or any rights or options to subscribe for, purchase or otherwise acquire
Common Stock by way of dividend or other distribution,

               (b) any cash paid or payable otherwise than as a cash dividend, or

               (c) Common. Stock or additional stock or other securities or property (including cash) by way
of spin-off, split-up, reclassification, combination of shares or similar corporate rearrangement,
(other than shares of Common Stock issued as a stock split or adjustments in respect of which shall
be covered by the terms of Section 3.1 above), then and in each such case, the Holder hereof shall,
upon the exercise of this Warrant, be entitled to receive, in addition to the number of shares of
Common Stock receivable thereupon, and without payment of any additional consideration therefor,
the amount of stock and other securities and property (including cash in the cases referred to in
clause (b) above and this clause (c)) which such Holder would hold on the date of such exercise had
he been the holder of record of such Common Stock as of the date on which holders of Common Stock
received or became entitled to receive such shares or all other additional stock and other
securities and property.

          3.3 Reorganization, Reclassification, Consolidation, Merger or Sale. If any recapitalization,
reclassification or reorganization of the capital stock of the Company, or any consolidation or
merger of the Company with . another corporation, or the sale of all or substantially all of its
assets or other transaction shall be effected in such a way that holders of Common Stock shall be
entitled to receive stock, securities, or other assets or property (an “Organic Change”), then, as
a condition of such Organic Change, lawful and adequate provisions shall be made by the Company
whereby the Holder hereof shall thereafter have the right to purchase and receive (in lieu of the
Warrant Shares issuable upon the exercise of the rights represented hereby immediately prior to
such event) such shares of stock, securities or other assets or property as may be issued or
payable with respect to or in exchange for a number of outstanding shares of such Common Stock
equal to the number of shares of such stock issuable upon the exercise of the rights represented
hereby immediately prior to such event. In the event of any Organic Change, appropriate provision
shall be made by the Company with respect to the rights and interests of the Holder of this Warrant
to the end that the provisions hereof (including, without limitation, provisions for adjustments of
the Stock Purchase Price and of the number of shares purchasable and receivable upon the exercise
of this Warrant) shall thereafter be applicable, in relation to any shares of stock, securities or
assets thereafter deliverable upon the exercise hereof. The Company will not effect any such
consolidation, merger or sale unless, prior to the consummation thereof, the successor corporation
(if other than the Company) resulting from such consolidation or the corporation purchasing such
assets shall assume by written instrument reasonably satisfactory in form and substance to the
Holders hereof, executed and mailed or delivered to the registered Holder hereof at the last
address of such Holder appearing on the books of the Company, the obligation to deliver to such
Holder such shares of stock,

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securities or assets as, in accordance with the foregoing provisions, such Holder may be
entitled to purchase.

          3.4 Certain Events. If any change in the outstanding Common Stock of the Company or any other
event occurs as to which the other provisions of this Section 3 are not strictly applicable or if
strictly applicable would not fairly protect the purchase rights of the Holder of the Warrant in
accordance with such provisions, then the Board of Directors of the Company shall make an
adjustment in the number and class of shares available under the Warrant, the Stock Purchase Price
or the application of such provisions, so as to protect such purchase rights as aforesaid. The
adjustment shall be such as will give the Holder of the Warrant upon exercise for the same
aggregate Stock Purchase Price the total number, class and kind of shares as it would have owned
had the Warrant been exercised prior to the event and had it continued to hold such shares until
after the event requiring adjustment.

          3.5 Notices of Change.

               (a) Immediately upon any adjustment in the number or class of shares subject to this Warrant
and of the Stock Purchase Price, the Company shall give written notice thereof to the Holder,
setting forth in reasonable detail and certifying the calculation of such adjustment.

               (b) The Company shall give written notice to the Holder at least 10 business days prior to the
date on which the Company closes its books or takes a record for determining rights to receive any
dividends or distributions.

               (c) The Company shall also give written notice to the Holder at least 30 business days prior
to the date on which an Organic Change shall take place.

     4. ISSUE TAX. The issuance of certificates for shares of Common Stock upon the exercise of the
Warrant shall be made without charge to the Holder of the Warrant for any issue tax (other than any
applicable income taxes) in respect thereof; provided, however, that the Company
shall not be required to pay any tax which may be payable in respect of any transfer involved in
the issuance and delivery of any certificate in a name other than that of the then Holder of the
Warrant being exercised.

     5. CLOSING OF BOOKS. The Company will at no time close its transfer books against the transfer
of any warrant or of any shares of Common Stock issued or issuable upon the exercise of any warrant
in any manner which interferes with the timely exercise of this Warrant.

     6. NO VOTING OR DIVIDEND RIGHTS; LIMITATION OF LIABILITY. Nothing contained in this Warrant
shall be construed as conferring upon the Holder hereof the right to vote or to consent or to
receive notice as a shareholder of the Company or any other matters or any rights whatsoever as a
shareholder of the Company. No dividends or interest shall be payable or accrued in respect of this
Warrant or the interest represented hereby or the shares purchasable hereunder until, and only to
the extent that, this Warrant shall have been exercised. No provisions hereof, in the absence of
affirmative action by the holder to purchase shares of

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Common Stock, and no mere enumeration herein of the rights or privileges of the holder hereof,
shall give rise to any liability of such Holder for the Stock Purchase Price or as a shareholder of
the Company, whether such liability is asserted by the Company or by its creditors.

     7. TRANSFERABILITY OF WARRANT. This Warrant may not be transferred.

     8. NO IMPAIRMENT. The Company will not, by amendment of its charter or through reorganization,
consolidation, merger, dissolution, sale of assets or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms of the Warrant, but will at all times in
good faith assist in carrying out of all such terms and in the taking of such action as may be
necessary or appropriate in order to protect the rights of the holder of this Warrant against
impairment.

     9. RIGHTS AND OBLIGATIONS SURVIVE EXERCISE OF WARRANT. The rights and obligations of the
Company, of the holder of this Warrant and of the holder Warrant Shares, shall survive the exercise
of this Warrant.

     10. MODIFICATION AND WAIVER. This Warrant and any provision hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party against which
enforcement of the same is sought.

     11. NOTICES. Any notice, request or other document required or permitted to be given or
delivered to the holder hereof or the Company shall be delivered or shall be sent by certified
mail, postage prepaid, to each such holder at its address as shown on the books of the Company or
to the Company at the address indicated therefor in the first paragraph of this Warrant or such
other address as either may from time to time provide to the other. All notices to Holder should be
sent to                                                             .

     12. BINDING EFFECT ON SUCCESSORS. This Warrant shall be binding upon any corporation
succeeding the Company by merger, consolidation or acquisition of all or substantially all of the
Company’s assets. All of the obligations of the Company relating to the Common Stock issuable upon
the exercise of this Warrant shall survive the exercise and termination of this Warrant. All of the
covenants and agreements of the Company shall inure to the benefit of the successors and assigns of
the holder hereof.

     13. DESCRIPTIVE HEADINGS AND GOVERNING LAW. The description headings of the several sections
and paragraphs of this Warrant are inserted for convenience only and do not constitute a part of
this Warrant. This Warrant shall be construed and enforced in accordance with, and the rights of
the parties shall be governed by, the laws of the State of California.

     14. LOST WARRANTS. The Company represents and warrants to the Holder hereof that upon receipt
of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation
of this Warrant and, in the case of any such loss, theft or destruction, upon receipt of an
indemnity reasonably satisfactory to the Company, or in the case of any such mutilation upon
surrender and cancellation of such Warrant, the Company, at its expense, will

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make and deliver a new Warrant, of like tenor, in lieu of the lost, stolen, destroyed or
mutilated Warrant.

     15. FRACTIONAL SHARES. No fractional shares shall be issued upon exercise of this Warrant. The
Company shall, in lieu of issuing any fractional share, pay the holder entitled to such fraction a
sum in cash equal to such fraction multiplied by the then effective Stock Purchase Price.

[The next page is the signature page]

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     IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its officer,
thereunto duly authorized this ___day of ___, 2005.

	 	 	 	 	 	 	 	 	 
	 	 	 	 	STARVOX COMMUNICATIONS, INC.,

a California corporation	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	Name:
	 	 

	 	 
	 

	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 
	ATTEST:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

Secretary

	 	 	 	 	 	 	 	 

 

 

ANNEX A

SUBSCRIPTION FORM

Date:                     ,2005

StarVox Communications, Inc.

2202 N. First Street

San Jose, California 95131

Attn: President Ladies and Gentlemen:

	o	 	The undersigned hereby elects to exercise the warrant issued to it by StarVox
Communications, Inc. (the “Company”) and dated                     , 2005 Warrant No. CW-___(the
“Warrant”) and to purchase thereunder                     shares of the Common Stock of the Company,
par value $.001 per share (the “Shares”), at a purchase price of $  per Share or an
aggregate purchase price of                                                             Dollars ($               
     ) (the
“Purchase Price”).
	 
	o	 	The undersigned hereby elects to convert                                          percent (_%) of the value
of the Warrant pursuant to the provisions of Section 1.2 of the Warrant.

     Pursuant to the terms of the Warrant the undersigned has delivered the Purchase Price herewith
in mil in cash or by certified check or wire transfer.

	 	 	 	 	 	 	 
	 	 	Very truly yours,	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title:exv10w19

 

Exhibit 10.19

THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON ANY EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY APPLICABLE
STATE SECURITIES LAWS AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED TO ANY PERSON, INCLUDING A
PLEDGEE, UNLESS (i) EITHER (A) A REGISTRATION STATEMENT WITH RESPECT THERETO SHALL BE EFFECTIVE
UNDER THE SECURITIES ACT, OR (B) THE COMPANY SHALL HAVE RECEIVED AN OPINION OF COUNSEL SATISFACTORY
TO THE COMPANY THAT AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT IS AVAILABLE, AND (ii)
THERE SHALL HAVE BEEN COMPLIANCE WITH ALL APPLICABLE STATE SECURITIES OR “BLUE-SKY” LAWS.

			
	 	 	 
	No.                     
	 	For the Purchase

of up to 2,500,000 shares

of Common Stock

WARRANT TO PURCHASE

COMMON STOCK

OF

STARVOX COMMUNICATIONS, INC.

(A CALIFORNIA CORPORATION)

     StarVox Communications, Inc., a California corporation (the “Company”), for value received,
the sufficiency of which is hereby acknowledged, certifies that Trinad Capital L.P., or its
permitted assigns (the “Holder”), is entitled, subject to the terms set forth below, to purchase
from the Company, at any time or from time to time at or before 5:00 p.m. New York City local time
on January 22, 2010 (the “Expiration Date”), up to 2,500,000 shares of common stock, par value
$0.001 per share, of the Company (“Common Stock”), at a purchase price per share equal to $0.525
per share (the “Base Price”), as adjusted upon the occurrence of certain events as set forth in
Section 2 of this Warrant. The shares of Common Stock issuable upon exercise of this Warrant, and
the purchase price per share, are hereinafter referred to as “Warrant Stock” and the “Purchase
Price,” respectively.

     1. Exercise.

     1.1 Manner of Exercise; Payment in Cash. This Warrant may be exercised by the
Holder, in whole or in part, by surrendering this Warrant, with the purchase form appended
hereto as Exhibit A duly executed by the Holder, at the principal office of the
Company, or at such other place as the Company may designate, accompanied by payment in full
of the Purchase Price payable in respect of the number of shares of Warrant Stock

 

 

purchased upon such exercise. Payment of the Purchase Price shall be in cash or by
certified or official bank check payable to the order of the Company.

     1.2 Effectiveness. Each exercise of this Warrant shall be deemed to have been
effected immediately prior to the close of business on the day on which this Warrant shall
have been surrendered to the Company as provided in Section 1.1 above. At such time, the
person or persons in whose name or names any certificates for Warrant Stock shall be
issuable upon such exercise as provided in Section 1.3 below shall be deemed to have become
the holder or holders of record of the Warrant Stock represented by such certificates.

     1.3. Delivery of Certificate(s). As soon as practicable after the exercise of
this Warrant in full or in part, and in any event within three (3) business days thereafter,
the Company, at its sole expense, will cause to be issued in the name of, and delivered to,
the Holder, or, subject to the terms and conditions hereof, as such Holder (upon payment by
such Holder of any applicable transfer taxes) may direct:

     (a) A certificate or certificates for the number of full shares of Warrant
Stock to which such Holder shall be entitled upon such exercise, plus, in lieu of
any fractional share to which such Holder would otherwise be entitled, cash in an
amount determined pursuant to Section 1.4 hereof, and

     (b) In case such exercise is in part only, a new warrant or warrants (dated the
date hereof) of like tenor, calling in the aggregate on the face or faces thereof
for the number of shares of Warrant Stock (without giving effect to any adjustment
therein) equal to the number of such shares called for on the face of this Warrant
minus the number of such shares purchased by the Holder upon such exercise as
provided in Section 1.1 above.

     1.4. Fractional Shares. The Company shall not be required upon the exercise of
this Warrant to issue any fractional shares, but shall make an adjustment therefor in cash
on the basis of the fair market value of the Warrant Stock reasonably determined by the
Board of Directors of the Company (and, in the case of a conversion of this Warrant, in
accordance with Section 1.5(c)).

     1.5 Right to Convert Warrant into Stock; Net Issuance.

     (a) Right to Convert. In addition to and without limiting the rights of the
Holder under the terms of this Warrant, the Holder shall have the right to convert this
Warrant or any portion thereof (the “Conversion Right”) into shares of Warrant Stock as
provided in this Section 1.5 at any time or from time to time during the term of this
Warrant. Upon exercise of the Conversion Right with respect to a particular number of
shares subject to this Warrant (the “Converted Warrant Shares”), the Company shall deliver
to the Holder (without payment by the Holder of any Purchase Price or any cash or other
consideration) that number of shares of fully paid and nonassessable Warrant Stock equal to
the quotient obtained by dividing (X) the value of this Warrant (or the specified portion
hereof) on the Conversion Date (as defined in subsection (b) hereof), which value shall be
determined by subtracting (A) the aggregate Purchase Price of the

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Converted Warrant Shares immediately prior to the exercise of the Conversion Right from
(B) the aggregate fair market value of the Converted Warrant Shares issuable upon exercise
of this Warrant (or the specified portion hereof) on the Conversion Date (as herein defined)
by (Y) the fair market value of one share of Warrant Stock on the Conversion Date (as herein
defined).

     Expressed as a formula, such conversion shall be computed as follows:

	 	 	 	 	 	 	 
	 

	 	N   =
	 	B-A

Y
	 	 

	 	 	 	 	 	 	 
	 

	 	where:
	 	N =
	 	the number of shares of Warrant Stock that may be issued to Holder
	 
	 	 	 	 	 	 
	 

	 	 	 	Y =
	 	the fair market value (FMV) of one share of
Warrant Stock
	 
	 	 	 	 	 	 
	 

	 	 	 	A =
	 	the aggregate Warrant Price (Converted
Warrant Shares x Purchase Price)
	 
	 	 	 	 	 	 
	 

	 	 	 	B =
	 	the aggregate FMV (i.e., FMV x Converted Warrant Shares)

No fractional shares shall be issuable upon exercise of the Conversion Right, and, if the
number of shares to be issued determined in accordance with the foregoing formula is other
than a whole number, the Company shall pay to the Holder an amount in cash equal to the fair
market value of the resulting fractional share of the Conversation Date (as herein defined).

     (b) Method of Exercise. The Conversion Right may be exercised by the Holder by
the surrender of this Warrant at the principal office of the Company together with the
Subscription Form in the form attached hereto, duly completed and executed and indicating
the number of shares subject to this Warrant which are being surrendered (referred to in
Section 1.5(a) hereof as the Converted Warrant Shares) in exercise of the Conversion Right.
Such conversion shall be effective upon receipt by the Company of this Warrant, together
with the aforesaid written statement, or on such later date as is specified therein (the
“Conversion Date”), and, at the election of the Holder hereof, may be made contingent upon
the occurrence of any of the events specified in Section 2.4. Certificates for the shares
issuable upon exercise of the Conversion Right and, if applicable, a new warrant (dated the
date hereof) evidencing the balance of the shares remaining subject to this Warrant, shall
be issued as of the Conversion Date and shall be delivered to the Holder within thirty (30)
days following the Conversion Date.

     (c) Determination of Fair Market Value. For purposes of this Section 1.5,
“fair market value” of a share of Warrant Stock as of a particular date (the “Determination
Date”) shall mean:

     (1) If the Company’s Common Stock is traded on an exchange or is quoted
on the Nasdaq National or Small Cap Market, then the

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average closing prices over the three-day period ending on the day
prior to the Determination Date;

     (2) If the Company’s Common Stock is not traded on an exchange or on
the Nasdaq National or Small Cap Market but is traded in the
over-the-counter market, then the average closing prices over the three-day
period ending on the day prior to the Determination Date;

     (3) In the event that the Determination Date is the date of a
liquidation, dissolution or winding up, or any event deemed to be a
liquidation, dissolution or winding up with respect to the Warrant Stock
under the Company’s Articles of Incorporation, then the fair market value
per share of the Warrant Stock shall be determined by aggregating all
amounts to be payable per share to holders of the Warrant Stock in the event
of such liquidation, dissolution or winding up; or

     (4) In all other cases, the fair market value per share of the Warrant
Stock shall be determined in good faith by the Company’s Board of Directors
upon review of relevant factors.

     2. Certain Adjustments. The Purchase Price and the number of shares of Warrant Stock
deliverable upon exercise of the Warrant shall be subject to adjustment from time to time as
follows:

     2.1 Subdivision, Reclassification or Change in Common Stock. In the event of
any subdivision, reclassification or change of the Common Stock into a greater number or
different class or classes of stock, the number of shares of Warrant Stock deliverable upon
exercise of this Warrant shall be determined in accordance with the terms of the Articles of
Incorporation, and the Purchase Price for such Warrant Stock shall be proportionately
reduced. 

     2.2 Consolidation, Reclassification or Change in Common Stock. In the event of
any consolidation, reclassification or change of the Common Stock into a lesser number or
different class or classes of stock, the number of shares of Warrant Stock deliverable upon
exercise of this Warrant shall be determined in accordance with the terms of the Articles of
Incorporation, and the Purchase Price for such Warrant Stock shall be proportionately
increased.

     2.3 Reorganizations. If there shall occur any capital reorganization of the
Common Stock (other than a subdivision, combination, reclassification or change in par
value), then, as part of any such reorganization, lawful provision shall be made so that the
Holder shall have the right thereafter to receive upon the exercise of this Warrant the kind
and amount of shares of stock or other securities or property which such Holder would have
been entitled to receive if, immediately prior to any such reorganization, such Holder had
held the number of shares of Common Stock which were then purchasable upon the exercise of
this Warrant. In any such case, appropriate adjustment (as reasonably determined by the
Board of Directors of the Company) shall be made in the application of the provisions set

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forth herein with respect to the rights and interests thereafter of the Holder such that the
provisions set forth in this Section 2 (including provisions with respect to adjustment of
the Purchase Price) shall thereafter be applicable, as nearly as is reasonably practicable,
in relation to any shares of stock or other securities or property thereafter deliverable
upon the exercise of this Warrant.

     2.4 Merger, Consolidation or Sale of Assets. If there shall be a merger or
consolidation of the Company with or into another corporation (other than a merger or
reorganization involving only a change in the state of incorporation of the Company or the
acquisition by the Company of other businesses where the Company survives as a going
concern), or the sale of all or substantially all of the Company’s capital stock or assets
to any other person, then as a part of such transaction, provision shall be made so that the
Holder shall thereafter be entitled to receive the number of shares of stock or other
securities or property of the Company, or of the successor corporation resulting from the
merger, consolidation or sale, to which the Holder would have been entitled if the Holder
had exercised its rights pursuant to this Warrant immediately prior thereto.
Notwithstanding anything to the contrary set forth in this Warrant, in the event that the
Company completes a transaction described in this Section 2.4 with U.S. Wireless Data, Inc.,
then the terms of such transaction shall provide that this Warrant be assumed by the parent
corporation surviving such transaction so that the Holder shall thereafter be entitled to
receive the number of shares of stock or other securities or property of such corporation to
which the Holder would have been entitled if the Holder had exercised its rights pursuant to
this Warrant immediately prior thereto. In any such case, appropriate adjustment shall be
made in the application of the provisions of this Section 2 to the end that the provisions
of this Section 2 shall be applicable after that event in as nearly equivalent a manner as
may be practicable.

     2.5 Certificate of Adjustment. When any adjustment is required to be made in
the Purchase Price, the Company shall promptly mail to the Holder a certificate setting
forth the Purchase Price after such adjustment and setting forth a brief statement of the
facts requiring such adjustment. Such certificate shall also set forth the kind and amount
of stock or other securities or property into which this Warrant shall be exercisable
following the occurrence of any of the events specified in this Section 2.

     3. Compliance with Securities Act.

     3.1 Unregistered Securities. The Holder acknowledges that this Warrant and the
Warrant Stock have not been registered under the Securities Act, and agrees not to sell,
pledge, distribute, offer for sale, transfer or otherwise dispose of this Warrant or any
Warrant Stock in the absence of (i) an effective registration statement under the Securities
Act covering this Warrant or such Warrant Stock and registration or qualification of this
Warrant or such Warrant Stock under any applicable “blue-sky” or state securities law then
in effect, or (ii) an opinion of counsel, satisfactory to the Company, that such
registration and qualification are not required. The Company may delay issuance of the
Warrant Stock until completion of any action or obtaining of any consent, which the Company
deems necessary under any applicable law (including without limitation state securities or
“blue-sky” laws).

-5-

 

     3.2 Legend. Certificates delivered to the Holder pursuant to Section 1.3 shall
bear the following legend or a legend in substantially similar form:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS, OR (B) AN OPINION OF COUNSEL, IN A REASONABLY ACCEPTABLE FORM,
THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE
SECURITIES LAWS, OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID
ACT.”

     4. Reservation of Stock. The Company agrees that, prior to the expiration of this
Warrant, the Company will at all times have authorized and in reserve, and will keep available,
solely for issuance or delivery upon the exercise of this Warrant, the shares of Common Stock and
other securities and properties as from time to time shall be receivable upon the exercise of this
Warrant, free and clear of all restrictions on sale or transfer and free and clear of all
preemptive rights and rights of first refusal.

     5. Replacement of Warrants. Upon 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) upon delivery of an indemnity agreement (with surety if reasonably required)
in an amount reasonably satisfactory to the Company, or (in the case of mutilation) upon surrender
and cancellation of this Warrant, the Company will issue, in lieu thereof, a new Warrant of like
tenor.

     6. Registration Rights.

     6.1. “Piggy Back” Registration. If at any time the Company shall determine to
register under the Securities Act, any of its Common Stock, other than on Form S-8 or its
then equivalent, it shall send to the Holder written notice of such determination and, if
within thirty (30) days after receipt of such notice, the Holder shall so request in
writing, the Company shall use its best efforts to include in such registration statement
all or any part of the Warrant Stock except that if, in connection with any offering
involving an underwriting of Common Stock to be issued by the Company, the managing
underwriter shall impose a limitation on the number of shares of such Common Stock which may
be included in any such registration statement because, in its judgment, such limitation is
necessary to effect an orderly public distribution, and such limitation is imposed
pro rata among the holders of such Common Stock having an incidental (“piggy
back”) right to include such Common Stock in the registration statement according to the
amount of such Common Stock which each holder had requested to be included pursuant to such
right, then the Company shall be obligated to include in such registration statement only

-6-

 

such limited portion of the Warrant Stock with respect to which the Holder has requested
inclusion hereunder.

     6.2. Effectiveness. The Company will use its best efforts to maintain the
effectiveness for up to twelve (12) months of any registration statement pursuant to which
any of the Warrant Stock is being offered, and from time to time will amend or supplement
such registration statement and the prospectus contained therein as and to the extent
necessary to comply with the Securities Act and any applicable state securities statute or
regulation. The Company will also provide the Holder with as many copies of the prospectus
contained in any such registration statement as it may reasonably request.

     6.3. Indemnification of Holder. In the event that the Company registers any
of the Warrant Stock under the Securities Act, the Company will indemnify and hold harmless
the Holder from and against any and all losses, claims, damages, expenses or liabilities, to
which it becomes subject under the Securities Act or under any other statute or at common
law or otherwise, and, except as hereinafter provided, will reimburse the Holder for any
legal or other expenses reasonably incurred by it in connection with investigating or
defending any actions whether or not resulting in any liability, insofar as such losses,
claims, damages, expenses, liabilities or actions arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the registration
statement, in any preliminary or amended preliminary prospectus or in the prospectus (or the
registration statement or prospectus as from time to time amended or supplemented by the
Company) or arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary in order to make the statements
therein not misleading or any violation by the Company of any rule or regulation promulgated
under the Securities Act applicable to the Company and relating to action or inaction
required of the Company in connection with such registration, unless such untrue statement
or omission was made in such registration statement, preliminary or amended, preliminary
prospectus or prospectus in reliance upon and in conformity with information furnished in
writing to the Company in connection therewith by the Holder expressly for use therein.
Promptly after receipt by the Holder of notice of the commencement of any action in respect
of which indemnity may be sought against the Company, the Holder will notify the Company in
writing of the commencement thereof, and, subject to the provisions hereinafter stated, the
Company shall assume the defense of such action (including the employment of counsel, who
shall be counsel reasonably satisfactory to the Holder), and the payment of expenses insofar
as such action shall relate to any alleged liability in respect of which indemnity may be
sought against the Company. The Holder shall have the right to employ separate counsel in
any such action and to participate in the defense thereof but the fees and expenses of such
counsel shall not be at the expense of the Company unless representation of the Holder by
the counsel retained by the Company would be inappropriate due to actual or potential
differing interests between such indemnified party and any other party represented by such
counsel in such proceeding or employment of such counsel has been specifically authorized by
the Company. The Company shall not be liable to indemnify any person for any settlement of
any such action effected without the Company’s consent, which consent shall not be
unreasonably withheld, conditioned or delayed. The

-7-

 

failure to deliver written notice to the Company within a reasonable time of the
commencement of any such action, if prejudicial to its ability to defend such action, shall
relieve the Company of liability to the Holder under this Section 6.3 to the extent of such
prejudice, but the omission so to deliver written notice to the Company will not relieve it
of any liability that it may have to any Holder otherwise than under this Section 6.3.

     6.4. Indemnification of Company. In the event that the Company registers any
of the Warrant Stock under the Securities Act, the Holder will indemnify and
hold harmless the Company, each of its directors, each of its officers who have
signed the registration statement, each underwriter of the shares so registered
(including any broker or dealer through whom such of the shares may be sold)
and each person, if any, who controls the Company within the meaning of Section
15 of the Securities Act from and against any and all losses, claims, damages,
expenses or liabilities, joint or several, to which they or any of them may
become subject under the Securities Act or under any other statute or at common
law or otherwise, and, except as hereinafter provided, will reimburse the
Company and each such director, officer, underwriter or controlling person for
any legal or other expenses reasonably incurred by them or any of them in
connection with investigating or defending any actions whether or not resulting
in any liability, insofar as such losses, claims, damages, expenses,
liabilities or actions arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in the registration
statement, in any preliminary or amended preliminary prospectus or in the
prospectus (or in the registration statement or prospectus as from time to time
amended or supplemented) or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary in order to make the statements therein not misleading, but only
insofar as any such statement or omission was made in reliance upon and in
conformity with information furnished in writing to the Company in connection
therewith by the Holder expressly for use therein. Promptly after receipt of
notice of the commencement of any action in respect of which indemnity may be
sought against the Holder, the Company will notify the Holder in writing of the
commencement thereof, and the Holder shall, subject to the provisions
hereinafter stated, assume the defense of such action (including the employment
of counsel, who shall be counsel reasonably satisfactory to the Company) and
the payment of expenses insofar as such action shall relate to the alleged
liability in respect of which indemnity may be sought against the Holder. The
Company and each such director, officer, underwriter or controlling person
shall have the right to employ separate counsel in any such action and to
participate in the defense thereof but the fees and expenses of such counsel
shall not be at the expense of the Holder unless representation of the Company
by the counsel retained by the Holder would be inappropriate due to actual or
potential differing interests between such indemnified party and any other
party represented by such counsel in such proceeding or employment of such
counsel has been specifically authorized by the Holder. The Holder shall not
be liable to indemnify any person for any settlement of any such action
effected without the Holder’s consent, which consent shall not be unreasonably
withheld, conditioned or delayed. The failure to deliver written notice to the
Holder within a reasonable time of the commencement of any such action, if
prejudicial to its ability to defend such action, shall relieve the Holder of
liability to the Company under this Section 6.4 to the extent of such
prejudice, but the omission so to

-8-

 

deliver written notice to the Holder will not relieve it of any liability that
it may have to the Company otherwise than under this Section 6.4.

     6.5 Termination of Obligation. The Company’s
obligation to register Holder’s
Warrant Stock
pursuant to this
Section 6 shall
terminate at such
time as the Company’s
shares are publicly
traded and all shares
of Common Stock of
the Company issuable
or issued upon
conversion of the
Warrant Stock held by
Holder (and its
affiliates) may be
sold pursuant to Rule
144 during any ninety
(90) day period.

     7. Transferability. Except as otherwise set forth in Section 3, this Warrant is not
transferable by the Holder. Any attempted transfer, assignment, pledge, hypothecation or other
disposition of this Warrant or of any rights granted hereunder contrary to the provisions of this
Section 7, or the levy of any attachment or similar process upon this Warrant or such rights, shall
be null and void.

     8. No Rights as Shareholder. Until the exercise of this Warrant, the Holder shall not
have or exercise any rights by virtue hereof as a shareholder of the Company.

     9. Notices. All notices, requests and other communications hereunder shall be in
writing, shall be either (i) delivered by hand, (ii) made by telex, telecopy or facsimile
transmission, (iii) sent by overnight courier, or (iv) sent by registered mail, postage prepaid,
return receipt requested. In the case of notices from the Company to the Holder, they shall be
sent to the address furnished to the Company in writing by the last Holder who shall have furnished
an address to the Company in writing. All notices from the Holder to the Company shall be
delivered to the Company at its offices at 2728 Orchard Parkway, San Jose, California 95134,
Attention: Chief Executive Officer, or such other address as the Company shall so notify the
Holder. All notices, requests and other communications hereunder shall be deemed to have been
given (i) by hand, at the time of the delivery thereof to the receiving party at the address of
such party described above, (ii) if made by telex, telecopy or facsimile transmission, at the time
that receipt thereof has been acknowledged by electronic confirmation or otherwise, (iii) if sent
by overnight courier, on the next business day following the day such notices is delivered to the
courier service, or (iv) if sent by registered mail, on the fifth business day following the day
such mailing is made.

     10. Waivers and Modifications. Any term or provision of this Warrant may be waived
only by written document executed by the party entitled to the benefits of such terms or
provisions.

     The terms and provisions of this Warrant may be modified or amended only by written agreement
executed by the parties hereto.

     11. Headings. The headings in this Warrant are for convenience of reference only and
shall in no way modify or affect the meaning or construction of any of the terms or provisions of
this Warrant.

     12. Governing Law. This Warrant will be governed by and construed in accordance with
and governed by the laws of California without giving effect to the conflict of law principles
thereof.

[Signature Page Follows]

-9-

 

     IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed, by one of its
officers thereunto duly authorized.

	 	 	 	 	 
	 	STARVOX COMMUNICATIONS, INC.

 	 
	 	By:  	/s/Thomas Rowley
 	 
	 	 	Name:  	Thomas Rowley 	 
	 	 	Title:  	Chief Executive Officer 	 

 

 

	 	 	 	 	 

EXHIBIT A

PURCHASE FORM

To:      STARVOX COMMUNICATIONS, INC.

The undersigned pursuant to the provisions set forth in the attached Warrant hereby irrevocably
elects to (check one):

	 	 	 	 	 
	 

	 	                    
	 	(A) purchase                                                                         shares of Common Stock, par
value $0.001 per share, of StarVox Communications, Inc.
(the “Common Stock”), covered by such Warrant and herewith
makes payment of $                                        , representing the full
purchase price for such shares at the price per share
provided for in such Warrant; or
	 
	 	 	 	 
	 

	 	                    
	 	(B) convert                                                                      
            Warrant Shares into that
number of shares of fully paid and nonassessable shares of
Common Stock, determined pursuant to the provisions of
Section 1.5 of the Warrant.

     Common Stock for which the Warrant may be exercised or converted shall be known herein as
“Warrant Stock.”

     The undersigned is aware that Warrant Stock has not been and will not be registered under the
Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws. The
undersigned understands that reliance by the Company on exemptions under the Securities Act is
predicated in part upon the truth and accuracy of the statements of the undersigned in this
Purchase Form.

     The undersigned represents and warrants that (i) he has been furnished with all information
which he deems necessary to evaluate the merits and risks of the purchase of Warrant Stock, (ii) he
has had the opportunity to ask questions concerning Warrant Stock and the Company and all questions
posed have been answered to his satisfaction, (iii) he has been given the opportunity to obtain any
additional information he deems necessary to verify the accuracy of any information obtained
concerning Warrant Stock and the Company and (iv) he has such knowledge and experience in financial
and business matters that he is able to evaluate the merits and risks of purchasing Warrant Stock
and to make an informed investment decision relating thereto.

     The undersigned hereby represents and warrants that he is purchasing Warrant Stock for his own
account for investment and not with a view to the sale or distribution of all or any part of
Warrant Stock.

     The undersigned understands that because Warrant Stock has not been registered under the
Securities Act, he must continue to bear the economic risk of the investment for an indefinite

 

 

period of time and Warrant Stock cannot be sold unless it is subsequently registered under
applicable federal and state securities laws or an exemption from such registration is available.

     The undersigned agrees that he will in no event sell or distribute or otherwise dispose of all
or any part of Warrant Stock unless (i) there is an effective registration statement under the
Securities Act and applicable state securities laws covering any such transaction involving Warrant
Stock, or (ii) the Company receives an opinion of legal counsel reasonably acceptable to the
Company stating that such transaction is exempt from registration. The undersigned consents to the
placing of a legend on his certificate for Warrant Stock stating: (i) that the resale or transfer
of the Warrant Stock has not been registered and setting forth the restriction on transfer
contemplated hereby; and (ii) to the placing of a stop-transfer order on the books of the Company
and with any transfer agents against Warrant Stock until Warrant Stock may be legally resold or
distributed without restriction.

     The undersigned has considered the federal and state income tax implications of the exercise
of the Warrant and the purchase and subsequent sale of the Warrant Stock.

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 	 	Signature	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 	 	Print Name	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	or	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Entity Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	Signature	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 	 	Print Name	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 	 	Title	 	 

-2-

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