WARRANT
To Purchase Shares of Common Stock
of
MULTIBAND CORPORATION
This Warrant and the Securities issuable upon exercise of
this Warrant have not been registered under the Securities
Act of 1933 (the "1933 Act") or under any state securities
or "Blue Sky" laws ("Blue Sky Laws"). No transfer, sale,
assignment, pledge, hypothecation or other disposition of
this Warrant or the Securities issuable upon exercise of
this Warrant or any interest therein may be made except (a)
pursuant to an effective registration statement under the
1933 Act and any applicable Blue Sky Laws or (b) if the
Corporation has been furnished with an opinion of counsel
for the holder, which opinion and counsel shall be
reasonably satisfactory to the Corporation, to the effect
that no registration is required because of the availability
of an exemption from registration under the 1933 Act and
applicable Blue Sky laws.
THIS CERTIFIES THAT, for good and valuable consideration ,
(the "Holder"), or the Holder's registered assigns, is entitled to subscribe for
and purchase from Multiband Corporation, a Minnesota corporation (the
"Corporation"), fully paid and nonassessable shares of the Common Stock of the
Corporation at the price of $2.00 per share (the "Warrant Exercise Price"),
subject to the anti-dilution provisions of this Warrant.
The shares which may be acquired upon exercise of this Warrant
are referred to herein as the "Warrant Shares." As used herein, the term
"Holder" means the Holder, any party who acquires all or a part of this Warrant
as a registered transferee of the Holder, or any record holder or holders of the
Warrant Shares issued upon exercise, whether in whole or in part, of the
Warrant. The term "Common Stock" means the common stock, no par value per share,
of the Corporation.
This Warrant is subject to the following provisions, terms and
conditions:
1. EXERCISE; TRANSFERABILITY.
(a) The rights represented by this Warrant may be exercised by
the Holder hereof, in whole or in part (but not as to a fractional share of
Common Stock), by written notice of exercise (in the form attached hereto)
delivered to the Corporation at the principal office of the Corporation prior to
the expiration of this Warrant and accompanied or preceded by the surrender of
this Warrant along with a check in payment of the Warrant Exercise Price for
such Warrant Shares.
(b) Except as provided in Section 7 hereof, this Warrant may
not be sold, transferred, assigned, hypothecated or divided into two or more
Warrants of smaller denominations, nor may any Warrant Shares issued pursuant to
exercise of this Warrant be transferred.
(c) Term: The term of this warrant shall commence On December
2004 and shall expire at 5 pm central time June 2010.
(d) Time of Exercise: The purchase rights exercised by this
warrant may be exercised in whole or in part commencing on June 2005 and
expiring at 5 PM Central Time June 2010.
2. EXCHANGE AND REPLACEMENT. Subject to Sections 1 and 7 hereof,
this Warrant is exchangeable upon the surrender hereof by the Holder to the
Corporation at its office for new Warrants of like tenor and date representing
in the aggregate the right to purchase the number of Warrant Shares purchasable
hereunder, each of such new Warrants to represent the right to purchase such
number of Warrant Shares (not to exceed the aggregate total number purchasable
hereunder) as shall be designated by the Holder at the time of such surrender.
Upon receipt by the Corporation of evidence reasonably satisfactory to it of the
loss, theft, destruction, or mutilation of this Warrant, and, in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to it,
and upon surrender and cancellation of this Warrant, if mutilated, the
Corporation will make and deliver a new Warrant of like tenor, in lieu of this
Warrant. This Warrant shall be promptly canceled by the Corporation upon the
surrender hereof in connection with any exchange or replacement. The Corporation
shall pay all expenses, taxes (other than stock transfer taxes), and other
charges payable in connection with the preparation, execution, and delivery of
Warrants pursuant to this Section 2.
3. ISSUANCE OF THE WARRANT SHARES.
(a) The Corporation agrees that the Warrant Shares shall be
and are deemed to be issued to the Holder as of the close of business on the
date on which this Warrant shall have been surrendered and the payment made for
such Warrant Shares as aforesaid. Subject to the provisions of paragraph (b) of
this Section 3, certificates for the Warrant Shares so purchased shall be
delivered to the Holder within a reasonable time after the rights represented by
this Warrant shall have been so exercised, and, unless this Warrant has expired,
a new Warrant representing the right to purchase the number of Warrant Shares,
if any, with respect to which this Warrant shall not then have been exercised
shall also be delivered to the Holder.
(b) Notwithstanding the foregoing, however, the Corporation
shall not be required to deliver any certificate for Warrant Shares upon
exercise of this Warrant except in accordance with exemptions from the
applicable securities registration requirements or registrations under
applicable securities laws. Nothing herein shall obligate the Corporation to
effect registrations under federal or state securities laws. If registrations
are not in effect and if exemptions are not available when the Holder seeks to
exercise the Warrant, the Warrant exercise period will be extended, if need be,
to prevent the Warrant from expiring, until such time as either registrations
become effective or exemptions are available, and the Warrant shall then remain
exercisable for a period of at least 30 calendar days from the date the
Corporation delivers to the Holder written notice of the availability of such
registrations or exemptions. The Holder agrees to execute such documents and
make such representations, warranties, and agreements as may be required solely
to comply with the exemptions relied upon by the Corporation, or the
registrations made, for the issuance of the Warrant Shares.
- 2 -
4. COVENANTS OF THE CORPORATION. The Corporation covenants and
agrees that all Warrant Shares will, upon issuance, be duly authorized and
issued, fully paid, non-assessable and free from all taxes, liens and charges
with respect to the issue thereof. The Corporation further covenants and agrees
that during the period within which the rights represented by this Warrant may
be exercised, the Corporation 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 Common Stock to
provide for the exercise of the rights represented by this Warrant.
5. ANTI-DILUTION ADJUSTMENTS. The provisions of this Warrant are
subject to adjustment as provided in this Section 5.
(a) The Warrant Exercise Price shall be adjusted from time to
time such that in case the Corporation shall hereafter:
(i) subdivide its then outstanding shares of Common Stock
into a greater number of shares; or
(ii) combine outstanding shares of Common Stock, by
reclassification or otherwise;
then, in any such event, the Warrant Exercise Price in effect immediately prior
to such event shall (until adjusted again pursuant hereto) be adjusted
immediately after such event to a price (calculated to the nearest full cent)
determined by dividing (A) the number of shares of Common Stock outstanding
immediately prior to such event, multiplied by the then existing Warrant
Exercise Price, by (B) the total number of shares of Common Stock outstanding
immediately after such event (including in each case the maximum number of
shares of Common Stock issuable in respect of any securities convertible into
Common Stock), and the resulting quotient shall be the adjusted Warrant Exercise
Price per share. An adjustment made pursuant to this Subsection shall become
effective immediately after the record date in the case of a dividend or
distribution and shall become effective immediately after the effective date in
the case of a subdivision, combination or reclassification. If, as a result of
an adjustment made pursuant to this Subsection, the Holder of any Warrant
thereafter surrendered for exercise shall become entitled to receive shares of
two or more classes of capital stock or shares of Common Stock and other capital
stock of the Corporation, the Board of Directors (whose determination shall be
conclusive) shall determine the allocation of the adjusted Warrant Exercise
Price between or among shares of such classes of capital stock or shares of
Common Stock and other capital stock. All calculations under this Subsection
shall be made to the nearest cent or to the nearest 1/100 of a share, as the
case may be. In the event that at any time as a result of an adjustment made
pursuant to this Subsection, the holder of any Warrant thereafter surrendered
for exercise shall become entitled to receive any shares of the Corporation
other than shares of Common Stock, thereafter the Warrant Exercise Price of such
other shares so receivable upon exercise of any Warrant shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to Common Stock contained in this
Section.
- 3 -
(b) Upon each adjustment of the Warrant Exercise Price
pursuant to Section 5(a) above, the Holder of each Warrant shall thereafter
(until another such adjustment) be entitled to purchase at the adjusted Warrant
Exercise Price the number of shares, calculated to the nearest full share,
obtained by multiplying the number of shares specified in such Warrant (as
adjusted as a result of all adjustments in the Warrant Exercise Price in effect
prior to such adjustment) by the Warrant Exercise Price in effect prior to such
adjustment and dividing the product so obtained by the adjusted Warrant Exercise
Price.
(c) In case of any consolidation or merger to which the
Corporation is a party other than a merger or consolidation in which the
Corporation is the continuing corporation, or in case of any sale or conveyance
to another corporation of the property of the Corporation as an entirety or
substantially as an entirety, or in the case of any statutory exchange of
securities with another corporation (including any exchange effected in
connection with a merger of a third corporation into the Corporation), there
shall be no adjustment under Subsection (a) of this Section 5 but the Holder of
each Warrant then outstanding shall have the right thereafter to convert such
Warrant into the kind and amount of shares of stock and other securities and
property which he would have owned or have been entitled to receive immediately
after such consolidation, merger, statutory exchange, sale, or conveyance had
such Warrant been converted immediately prior to the effective date of such
consolidation, merger, statutory exchange, sale, or conveyance and, in any such
case, if necessary, appropriate adjustment shall be made in the application of
the provisions set forth in this Section with respect to the rights and
interests thereafter of any Holders of the Warrant, to the end that the
provisions set forth in this Section shall thereafter correspondingly be made
applicable, as nearly as may reasonably be, in relation to any shares of stock
and other securities and property thereafter deliverable on the exercise of the
Warrant. The provisions of this Subsection shall similarly apply to successive
consolidations, mergers, statutory exchanges, sales or conveyances.
(d) Upon any adjustment of the Warrant Exercise Price, then
and in each such case, the Corporation shall give written notice thereof, by
first-class mail, postage prepaid, addressed to the Holder as shown on the books
of the Corporation, which notice shall state the Warrant Exercise Price
resulting from such adjustment and the increase or decrease, if any, in the
number of shares of Common Stock purchasable at such price upon the exercise of
this Warrant, setting forth in reasonable detail the method of calculation and
the facts upon which such calculation is based.
6. NO VOTING RIGHTS. This Warrant shall not entitle the Holder to
any voting rights or other rights as a shareholder of the Corporation. However,
holder may at its option assign this Warrant and the rights contained therein.
- 4 -
7. NOTICE OF TRANSFER OF WARRANT OR RESALE OF THE WARRANT SHARES.
(a) Subject to the sale, assignment, hypothecation, or other
transfer restrictions set forth in Section 1 hereof, the Holder, by acceptance
hereof, agrees to give written notice to the Corporation before transferring
this Warrant or transferring any Warrant Shares of such ▇▇▇▇▇▇'s intention to do
so, describing briefly the manner of any proposed transfer. Promptly upon
receiving such written notice, the Corporation shall present copies thereof to
the Corporation's counsel. If in the opinion of such counsel the proposed
transfer may be effected without registration or qualification (under any
federal or state securities laws), the Corporation, as promptly as practicable,
shall notify the Holder of such opinion, whereupon the Holder shall be entitled
to transfer this Warrant or to dispose of Warrant Shares received upon the
previous exercise of this Warrant, all in accordance with the terms of the
notice delivered by the Holder to the Corporation; provided that an appropriate
legend may be endorsed on this Warrant or the certificates for such Warrant
Shares respecting restrictions upon transfer thereof necessary or advisable in
the opinion of counsel and satisfactory to the Corporation to prevent further
transfers which would be in violation of Section 5 of the 1933 Act and
applicable state securities laws; and provided further that the prospective
transferee or purchaser shall execute such documents and make such
representations, warranties, and agreements as may be required solely to comply
with the exemptions relied upon by the Corporation for the transfer or
disposition of the Warrant or Warrant Shares.
(b) If, in the opinion of the Corporation's counsel, the
proposed transfer or disposition of this Warrant or such Warrant Shares
described in the written notice given pursuant to this Section 7 may not be
effected without registration or qualification of this Warrant or such Warrant
Shares, the Corporation shall promptly give written notice thereof to the
Holder, and the Holder will limit its activities in respect to such transfer or
disposition as, in the opinion of such counsel, are permitted by law.
8. FRACTIONAL SHARES. Fractional shares shall not be issued upon
the exercise of this Warrant, but in any case where the holder would, except for
the provisions of this Section, be entitled under the terms hereof to receive a
fractional share, the Corporation shall, upon the exercise of this Warrant for
the largest number of whole shares then called for, pay a sum in cash equal to
the sum of (a) the excess, if any, of the Market Price of such fractional share
over the proportional part of the Warrant Exercise Price represented by such
fractional share, plus (b) the proportional part of the Warrant Exercise Price
represented by such fractional share. For purposes of this Section, the term
"Market Price" with respect to shares of Common Stock of any class or series
means the last reported sale price or, if none, the average of the last reported
closing bid and asked prices on any national or regional securities exchange or
quoted in the National Association of Securities Dealers, Inc.'s Automated
Quotations System ("Nasdaq"), or if not listed on a national or regional
securities exchange or quoted in Nasdaq, the average of the last reported
closing bid and asked prices as reported by Metro Data Corporation, Inc. or the
Electronic Bulletin Board of the National Association of Securities Dealers,
Inc. from quotations by market makers in such Common Stock on the
Minneapolis-St. ▇▇▇▇ local over-the-counter market, or if no quotations in such
Common Stock are available, the fair market value of the shares as determined in
good faith by the Board of Directors of the Corporation.
- 5 -
IN WITNESS WHEREOF, Multiband Corporation has caused this
Warrant to be signed by its duly authorized officer and this Warrant to be dated
December , 2004.
Multiband Corporation
Chief Executive Officer
MPL1: 267347-1
- 6 -
EXERCISE FORM
(To Be Executed by the Registered Holder in Order to Exercise the Warrant)
To: Multiband Corporation
The undersigned hereby irrevocably elects to exercise the attached Warrant to
purchase for cash, ________________ of the shares issuable upon the exercise of
such Warrant, and requests that certificates for such shares (together with a
new Warrant to purchase the number of shares, if any, with respect to which this
Warrant is not exercised) shall be issued in the name of:
NAME:
----------------------------------
SOC. SEC. or
TAX I.D. NO.
----------------------------------
ADDRESS:
----------------------------------
----------------------------------
Date: _________, 20___.
----------------------------------
Signature *
* The signature on the Notice of Exercise of Warrant must correspond to
the name as written upon the face of the Warrant in every particular
without alteration or enlargement or any change whatsoever. When
signing on behalf of a corporation, partnership, trust or other entity,
please indicate your position(s) and title(s) with such entity.
ASSIGNMENT FORM
(To be Executed by the Registered Holder in Order to Transfer the Warrant)
To: Multiband Corporation
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and
transfers unto _________________________________ the right to purchase the
securities of Multiband Corporation to which the within Warrant relates and
appoints _______________________, attorney, to transfer said right on the books
of Multiband Corporation with full power of substitution in the premises.
Dated: _________________.
-----------------------------------------
(Signature)
Address:
-----------------------------------------
-----------------------------------------
