EXHIBIT 4 (a)
THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER ARE TRANSFERABLE PURSUANT TO
ARTICLE 4 OF THIS WARRANT.
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE AND/OR CONVERSION OF
THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS OF APPLICABLE STATES.
WARRANT TO PURCHASE COMMON STOCK
OF
Farmstead Telephone GROUP, INC.
Number of Shares: 400,000 Shares
Class of Stock: Common Stock
Exercise Price: $ 0.39 per share (see below)
Issue Date: October 1, 2004
(Date of Execution and Delivery)
Expiration Date: Forty-five (45) days after October 1, 2009
THIS WARRANT CERTIFIES THAT, for good and valuable consideration, the
receipt of which is hereby acknowledged, ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ (the
"Holder") is entitled to purchase Four Hundred Thousand (400,000) fully
paid and nonassessable shares (the "Shares") of the Common Stock, par value
$0.01 per share, of Farmstead Telephone Group , Inc. (the "Company") at the
Exercise Price (as defined below) per share all as set forth herein,
subject to the provisions and upon the terms and conditions set forth in
this Warrant. For purposes of this Warrant, the "Exercise Price" per Share
shall be the closing price of the Company's Common Stock on the last
trading day prior to the date of issuance of this Warrant.
ARTICLE 1. EXERCISE
1.1. Term/ Method of Exercise. The Holder's rights hereunder are
fully vested and non-forfeitable. 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. Holder may exercise this Warrant by delivering a duly
executed Notice of Exercise in substantially the form attached as Appendix
1 to the Treasurer of the Company at the principal office of the Company.
The Notice of Exercise shall be accompanied by payment of the aggregate
Exercise Price as to all Exercised Shares. This Warrant shall be deemed to
be exercised upon receipt by the Company of such fully executed Notice of
Exercise accompanied by the aggregate Exercise Price.
1.2. No Rights of Shareholder until Exercise. This Warrant does not
entitle Holder to any voting rights as a shareholder of the Company prior
to the exercise hereof. This Warrant shall be deemed to have been exercised
immediately as of the time of its surrender for exercise as provided above,
and the person entitled to receive the Shares issuable upon such exercise
shall be treated for all purposes as the holder of record of such Shares as
of such date and time.
1.3. Delivery of Certificate and New Warrant. Promptly after Holder
exercises this Warrant, the Company shall deliver to Holder certificates
for the Shares acquired and, if this Warrant has not been fully exercised
and has not expired, a new Warrant representing the Shares not so acquired
shall be delivered to Holder.
1.4. 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.
1.5. Dividends, Splits, Combinations. If the Company declares or
pays a dividend on the Company's outstanding Common Stock payable in Common
Stock or other securities of the Company or subdivides or combines the
Company's outstanding Common Stock, then upon exercise or conversion of
this Warrant, 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 Common Stock of record as of the date the dividend,
subdivision or combination occurred.
1.6. 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 (other than Sale of the Company, a merger,
consolidation or reorganization described in Section 1.7 below, or a
dividend, split, or combination described in Section 1.5 above), 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 Warrant Shares if this Warrant had been exercised
immediately before such reclassification, exchange, substitution or other
event. The Exercise Price shall be adjusted accordingly. The Company shall
promptly issue to Holder a new Warrant for such new securities or other
property. The new Warrant shall provide for adjustments that shall be as
nearly equivalent as may be practicable to the adjustments provided for in
this Article 1 including, without limitation, appropriate adjustments to
the Warrant Price and to the number of securities or property issuable upon
exercise or conversion of the new Warrant.
1.7. Assumption of Warrant. Upon the closing of any merger,
consolidation, reorganization or other similar event that does not, by its
terms, constitute a "Change of Control" as defined in Section 5.1 of the
Employment Agreement of even date between the Company and the Undersigned,
the successor entity shall assume the obligations of this Warrant, and this
Warrant shall be exercisable for the same securities or 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
such merger, consolidation, reorganization or other event and subsequent
closing thereof. The Exercise Price shall be adjusted accordingly. 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 that shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 1.7 including, without limitation,
appropriate adjustments to the Warrant Price and to the number of
securities or property issuable upon exercise or conversion of the new
Warrant.
1.8. Adjustments of Warrant Price. If the Company's outstanding
Common Stock is combined or consolidated, by reclassification or otherwise,
into a lesser number of shares, the Exercise Price shall be proportionately
increased. If the Company's outstanding Common Stock are divided by
reclassification or otherwise, into a greater number of shares, the
Exercise Price shall be proportionately decreased.
ARTICLE 2. NOTICE OF CERTAIN EVENTS.
If the Company proposes at any time (a) to declare any dividend or
distribution upon the Common Stock, whether in cash, property, stock, or
other securities and whether or not a regular cash dividend; (b) to effect
any reclassification or recapitalization of the Common Stock; or (c) to
enter into any merger, consolidation or other reorganization, or to effect
a Sale of the Company, or to sell, lease, license, or convey all or
substantially all of its assets, or to liquidate, dissolve or wind up,
then, in connection with each such event, the Company shall give Holder (1)
at least twenty (20) days prior written notice of the date on which a
record will be taken for such dividend, distribution or for determining
rights to vote, if any, in respect of the matters referred to in (b) above
or (2) in the case of the matters referred to in (c) above at least twenty
(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).
ARTICLE 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY
3.1. Representations and Warranties. The Company hereby represents
and warrants to the Holder that all Shares which may be issued upon the
exercise of the purchase right represented by this Warrant, and all
securities, 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. The Company shall at all times reserve a
sufficient number of shares of Common Stock for issuance upon Holder's
exercise of its rights hereunder and conversion of the Shares.
ARTICLE 4. TRANSFER OF WARRANT OR UNDERLYING SECURITIES
4.1 Warrant and Shares Not Registered Securities. Neither the
Warrant nor the Shares are registered under the Act or applicable state
securities laws. Holder understands that the certificate evidencing the
Shares will be imprinted with any legend required under applicable state
securities laws unless such Shares are registered at the time Holder elects
to exercise this Warrant. (The Corporation shall seek such authority as may
lawfully be required to offer and sell the shares covered by this Warrant
in each jurisdiction in which the Holder resides.)
4.2 Transfer of Warrant and Shares. This Warrant and the underlying
Shares are freely transferable. Holder agrees to sell or transfer his
Warrant or Shares by providing the Company with an instrument of transfer
and an opinion of legal counsel reasonably satisfactory to the Company,
that such sale/transfer is in compliance with or exempt from the
registration and prospectus requirements of the Act and any applicable
state securities laws.
ARTICLE 5. GENERAL PROVISIONS.
5.1. Notices. Unless otherwise provided herein, any notice required
or permitted under this Warrant shall be given in writing and shall be
deemed effectively given (i) at the time of personal delivery, if delivery
is in person; (ii) one (1) business day after deposit with an express
overnight courier for United States deliveries, or two (2) business days
after such deposit for deliveries outside of the United States, with proof
of delivery from the courier requested; or (iii) five (5) business days
after deposit in the United States mail by certified mail (return receipt
requested) for United States deliveries when addressed to the party to be
notified at the address indicated for such party on Exhibit A .
5.2. Governing Law. This Warrant shall be governed by and construed
under the internal laws of the State of Delaware for all purposes and all
respects, without regard to the conflicts of laws provisions thereof.
5.3. Headings. The headings and captions used in this Warrant are
used only for convenience and are not to be considered in construing or
interpreting this Warrant. All references in this Warrant to sections and
exhibits shall, unless otherwise provided, refer to sections hereof and
exhibits attached hereto, all of which exhibits are incorporated herein by
this reference.
5.4. Counterparts. This Warrant may be executed in any number of
counterparts, each of which when so executed and delivered will be deemed
an original, and all of which together shall constitute one and the same
agreement.
5.5. Severability. If one or more provisions of this Warrant are
held to be unenforceable under applicable law, such provision(s) shall be
excluded from this Warrant and the balance of the Warrant shall be
interpreted as if such provision(s) were so excluded and shall be
enforceable in accordance with its terms.
5.6. Entire Agreement. This Warrant and the documents referred to
herein constitute the entire agreement and understanding of the parties
with respect to the subject matter of this Warrant, and supersede all prior
understandings and agreements, whether oral or written, between or among
the parties hereto with respect to the specific subject matter hereof.
5.7. 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.
FARMSTEAD TELEPHONE GROUP, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
-----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., Chairman
Date: 10-1-04
ACCEPTED AND AGREED:
/s/ ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ Date: 10-1-04
EXHIBIT A
ADDRESS OF HOLDER:
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇. ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
ADDRESS OF COMPANY:
FARMSTEAD TELEPHONE GROUP, INC.
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ATTENTION: TREASURER
MAIN: 860-610-6000
TOLL FREE: ▇▇▇-▇▇▇-▇▇▇▇
FAX: ▇▇▇-▇▇▇-▇▇▇▇
WITH A COPY TO:
APPENDIX 1
NOTICE OF EXERCISE
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1. The undersigned hereby elects to purchase _____ shares of the
Common Stock of Farmstead Telephone Group, Inc. pursuant to the terms of
the attached Warrant, and tenders herewith payment of the purchase price of
such shares in full in the amount of $________.
2. Please issue a certificate or certificates representing said
shares in the name of the undersigned or in such other name as is specified
below:
___________________
___________________
___________________
3. The undersigned represents he is acquiring the Shares solely for
his 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 and the attached Warrant.
__________________________
(Signature)
__________________________
Date
