EXHIBIT 10.14
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WIRELESS FACILITIES, INC.,
A NEW YORK CORPORATION
WARRANT AGREEMENT
FOR THE ISSUANCE OF
50,000 SHARES OF COMMON STOCK
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THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 ("THE
ACT") OR UNDER THE SECURITIES OR BLUE SKY LAWS OF ANY STATE (THE "LAWS"). THESE
SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF A REGISTRATION AND QUALIFICATION OF THESE SECURITIES UNDER THE ACT
AND THE LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT SUCH
REGISTRATION AND QUALIFICATION ARE NOT REQUIRED UNDER THE ACT AND THE LAWS.
WARRANT AGREEMENT
THIS WARRANT AGREEMENT (this "Agreement") is entered into and
effective as of February 28, 1997 (the "Effective Date"), by and between
WIRELESS FACILITIES, INC., a New York corporation (the "Company"), and _________
("Warrantholder").
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained in this Agreement, the Company and the Warrantholder
certify and agree as follows:
1. Grant of the Right to Purchase Common Stock. For value received
in the form of agreeing to serve as a member of the Company's Board of Directors
(a "Director"), the Company hereby grants to Warrantholder, and Warrantholder is
entitled to, upon the terms and subject to the conditions set forth in this
Agreement, a warrant (the "Warrant") to subscribe for and purchase from the
Company fifty thousand (50,000) shares of the Company's Common Stock (the
"Shares"), at a purchase price of Two and 80/100 Dollars ($2.80) per Share (the
"Exercise Price").
2. Term of the Warrant Agreement. Except as otherwise provided in
this Agreement, the term of this Agreement and the right to purchase the Shares
as granted in this Agreement, shall occur as follows:
2.1 Effective Date Vesting. Commencing on the Effective Date,
the initial sixteen thousand six hundred sixty-seven (16,667) of the Shares
shall vest and be exercisable until the tenth (10th) anniversary of the
Effective Date, unless such exercise period shall be extended in writing by the
Company.
2.2 One Year Anniversary Vesting. Commencing on the first
anniversary of the Effective Date, if -- and only if -- Warrantholder is then a
Director, sixteen thousand six hundred sixty-seven (16,667) of the Shares shall
vest and be exercisable until the eleventh (11th) anniversary of the Effective
Date, unless such exercise period shall be extended in writing by the Company.
2.3 Two Year Anniversary Vesting. Commencing on the second
anniversary of the Effective Date, if -- and only if -- Warrantholder is then a
Director, the remaining sixteen thousand six hundred sixty-six (16,666) of the
Shares shall vest and be exercisable until the twelfth
(12th) anniversary of the Effective Date, unless such exercise period shall be
extended in writing by the Company.
3. Exercise of the Purchase Rights. Warrantholder's status as a
Director shall be an absolute condition precedent to the vesting of the Shares
on the first and second anniversaries of the Effective Date. Subject to this
Agreement, the purchase rights set forth in this Agreement are exercisable by
Warrantholder at any time prior to the expiration of the applicable term set
forth in Section 2, by tendering to the Company at its principal office a notice
of exercise in the form attached to this Agreement as Exhibit A (the "Notice of
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Exercise"), duly completed and executed, together with a cashier's check or wire
transfer (or other mode of payment acceptable to the Company) in the amount of
the aggregate purchase price of the Shares together with all applicable transfer
taxes, if any. Notwithstanding the foregoing, however, Warrantholder may not
purchase less than 1,000 of the Shares at one time. Upon receipt of the Notice
of Exercise and the payment of the purchase price therefor, the Company shall
issue to Warrantholder a share certificate for the number of Shares purchased.
4. Reservation of Shares. Following the Company's intended
reincorporation as a Delaware corporation, and for the duration of the term of
this Agreement, the Company shall at all times have authorized and reserved a
sufficient number of shares of its Common Stock to provide for the exercise of
the rights to purchase the Shares as provided in this Agreement. Warrantholder
acknowledges that the Company may not have a sufficient number of reserved
shares of its Common Stock until the effective date of the reincorporation.
5. No Rights as Shareholder. This Agreement does not entitle
Warrantholder to any voting rights or other rights as a shareholder of the
Company prior to the purchase of the Shares as provided in this Agreement.
6. Adjustment Rights. The Exercise Price and the number of Shares
purchasable hereunder are subject to adjustment from time to time as follows:
6.1 Merger and Sale of Assets. If at any time there shall be a
capital reorganization of the shares of the Company's Common Stock (other than a
combination, reclassification, exchange or subdivision of shares otherwise
provided for herein), or a merger or consolidation of the Company with or into
another corporation where the Company is not the surviving corporation, or the
sale of all or substantially all of the Company's properties and assets to any
other person, then, as a part of such reorganization, merger, consolidation or
sale, whether for stock, cash, or other consideration, lawful provision shall be
made so that Warrantholder shall thereafter be entitled to receive upon exercise
of its Warrants the number of shares of Common Stock or other securities of the
successor corporation resulting from such merger or consolidation to which
Warrantholder would have been entitled if the Warrants had been exercised
immediately prior to such capital reorganization, merger, consolidation or sale.
In any such case, appropriate adjustment (as determined in good faith by the
Company's Board of Directors) shall be made in the application of the provisions
of this Warrant Agreement with respect to the rights and interest of
Warrantholder
after such reorganization, merger, consolidation or sale so that the provisions
of this Warrant Agreement (including adjustments of the Exercise Price and the
number of Shares issuable pursuant to the terms and conditions of this Warrant
Agreement) shall be applicable after such event, as near as reasonably may be,
in relation to any shares deliverable after that event upon the exercise of the
Warrants.
6.2 Reclassification of Shares. If the Company at any time
shall, by combination, reclassification, exchange or subdivision of securities
or otherwise, change the Common Stock into the same or a different number of
securities of any other class or classes, this Warrant Agreement shall
thereafter represent the right to acquire such number and kind of securities as
would have been issuable hereunder had the Warrantholder exercised its rights
with respect to all of the shares then represented by this Warrant Agreement
immediately prior to such combination, reclassification, exchange, subdivision
or other change.
6.3 Subdivision or Combination of Shares. If the Company at any
time shall combine or subdivide its Common Stock, the Exercise Price shall be
proportionately decreased in the case of a subdivision, or proportionately
increased in the case of a combination.
6.4 Stock Dividends. If the Company at any time shall pay a
dividend payable in the Company's Common Stock, then the Exercise Price shall be
adjusted, from and after the date of determination of shareholders entitled to
receive such dividend, to a price determined by multiplying the Exercise Price
in effect immediately prior to such date of determination by a fraction (i) the
numerator of which shall be the total number of all shares of the Company's
Common Stock outstanding immediately prior to such dividend (assuming all
convertible securities are then converted into Common Stock) and (ii) the
denominator of which shall be the total number of all shares of the Company's
Common Stock outstanding immediately after such dividend (assuming all
convertible securities are then converted into Common Stock). Warrantholder
shall thereafter be entitled to purchase, at the Exercise Price resulting from
such adjustment, the number of shares of Common Stock (calculated to the nearest
whole share) obtained by multiplying the Exercise Price in effect immediately
prior to such adjustment by the number of shares of Common Stock issuable upon
the exercise hereof immediately prior to such adjustment and dividing the
product thereof by the Exercise Price resulting from such adjustment.
7. Warrant Nontransferable. The Warrant may not be sold, pledged,
assigned or transferred in any manner, except that the warrants may be
transferred by Warrantholder's will upon Warrantholder's death and/or may be
assigned to a trust for the benefit of Warrantholder and/or Warrantholder's
immediate family members.
8. Securities Issues. Warrantholder, intending that the Company rely
upon the following representations and covenants of Warrantholder, which by
execution of this Agreement, Warrantholder hereby confirms:
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8.1 Acquisition for Own Account. Warrantholder is entering into
this Agreement for Warrantholder's own account and not with a view to or for
sale in connection with any distribution of securities.
8.2 No Transfers Contemplated. Warrantholder does not presently
have any contracts, undertaking, agreement or arrangement with any person to
sell, transfer or grant participation to such person or to any third person,
with respect to any securities of the Company.
8.3 True Investment Purpose. Warrantholder has not been
organized for the purpose of entering into this Agreement.
8.4 Restrictions on Acquired Securities. Warrantholder
acknowledges that any securities acquired pursuant to this Agreement may not be
sold, pledged, assigned or transferred in any manner, except pursuant to
registration and qualification under applicable securities laws, or if an
exemption from such registration or qualification is applicable.
8.5 Investment Experience. Warrantholder is an investor in
securities of early stage companies and is able to fend for himself, bear the
economic risk of his investment and evaluate the merits and risks of the
transactions provided in this Agreement. All representations, warranties and
agreements of Warrantholder as stated in that certain Subscription and
Representation Agreement between the Warrantholder and the Company dated
effective as of February 28, 1997 (the "Subscription Agreement") are hereby
restated and incorporated herein by this reference.
8.6 Legend. Warrantholder understands that any Common Stock
issuable upon the exercise of the Warrant under this Agreement shall be subject
to transfer restrictions as provided in the Bylaws of the Company and under
applicable law and may bear a legend in the form substantially as follows:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
(THE "ACT") OR UNDER THE SECURITIES OR BLUE SKY LAWS OF ANY STATE (THE
"LAWS"). THESE SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF A REGISTRATION AND QUALIFICATION OF THESE
SECURITIES UNDER THE ACT AND THE LAWS OR AN OPINION OF COUNSEL
SATISFACTORY TO THE ISSUER THAT SUCH REGISTRATION AND QUALIFICATION ARE
NOT REQUIRED UNDER THE ACT AND THE LAWS.
8.7 No General Solicitation. Warrantholder has not seen or received
any advertisement or general solicitation in connection with this Agreement or
the Warrant.
9. Miscellaneous.
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9.1 Governing Law. This Agreement is entered into in San Diego,
California, shall be performed in California, and shall be interpreted and
enforced in San Diego, California under the internal laws of the State of
California without regard to California's conflict-of-law provisions.
9.2 Entire Agreement. This Agreement and the Subscription
Agreement constitute the final, complete and exclusive agreement between the
parties pertaining to the subject of this Agreement, and supersedes all prior
and contemporaneous agreements. None of the provisions of this Agreement shall
be deemed, or shall constitute, a waiver of any other provision, whether or not
similar, nor shall any waiver constitute a continuing waiver. No waiver shall be
binding unless executed in writing by the party making the waiver. Any changes
or supplements to this Agreement must be in writing and signed by both of the
parties.
9.3 Assignment. Not in derogation of Section 7 hereof, this
Agreement shall be binding on, and shall inure to the benefit of, the parties
and their respective heirs, legal representatives, successors and assigns.
9.4 Notices, Etc. All notices, requests, demands or other
communications that are required or permitted under this Agreement shall be in
writing and shall be deemed to have been given at the earlier of the date when
actually delivered to a party or three (3) days after being deposited in the
United States mail, postage prepaid, return receipt requested, and addressed as
follows, unless and until any of such parties notifies the others in accordance
with this Section of a change of address:
The "Company": Wireless Facilities, Inc.
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Ph.D. and
Xxxxxx Xxxxxx, Ph.D.
"Warrantholder":
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Copy to: Xxxxxxx X. Xxxxxx, Esq.
Xxxxxxxx, Xxxx, Hargreaves
& Savitch LLP
000 X Xxxxxx, Xxxxx 0000
Xxx Xxxxx, XX 00000
9.5 Attorneys' Fees. In any action at law, in equity, or
arbitration arising from or relating to this Agreement, the unsuccessful party
to such litigation or arbitration, as determined by the court or arbitrator in a
final judgment, decree or decision, shall pay the successful party or
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parties as determined by the court or arbitrator, all costs, expenses and
reasonable attorneys' fees incurred by the successful party or parties
(including without limitation costs, expenses and fees on any appeals), and if
the successful party recovers judgment in any such action or proceeding, such
costs, expenses and attorneys' fees shall be included as part of the judgment.
9.6 Severability. In the event that any one or more of the
provisions contained in this Agreement or in any other document referenced in
this Agreement, shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement or any other such
document.
9.7 Time is of the Essence. Time is absolutely of the essence in
construing each provision of this Agreement.
9.8 Interpretation/Conflict Waiver. The headings set forth in
this Agreement are for convenience only and shall not be used in interpreting
this Agreement. This Agreement has been drafted by Xxxxxxxx, Xxxx, Xxxxxxxxxx &
Xxxxxxx LLP ("Xxxxxxxx"), which has served as legal counsel for the Company only
in this transaction. However, the undersigned has been encouraged, and has had
the opportunity, to consult with the undersigned's own independent legal counsel
with respect to this Agreement. The parties acknowledge that each party and such
party's counsel have reviewed and revised, or have had an opportunity to review
and revise, this Agreement. Therefore, the normal rule of construction to the
effect that any ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of this Agreement. All parties acknowledge
they have been informed of Xxxxxxxx'x potential representation of the
undersigned or related entities and of the potential effects of such
representation, and nonetheless waive, to the fullest extent permitted by law,
any conflict-of-interest claims they may have against Xxxxxxxx and its
attorneys.
9.9 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument. A faxed signature shall
be as valid as an originally executed signature.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the Effective Date.
"Company"
WIRELESS FACILITIES, INC.,
a New York corporation
By:__________________________
Name:________________________
Title:_______________________
"Warrantholder"
_____________________________
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Exhibit A
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Notice of Exercise
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To: President
Wireless Facilities, Inc.
(1) The undersigned Warrantholder ("Warrantholder") hereby elects to purchase
____________________ (_______) shares of the Common Stock of Wireless
Facilities, Inc., a New York corporation (the "Company"), pursuant to the
terms of the Warrant Agreement dated as of February 28, 1997 (the "Warrant
Agreement") between the Company and Warrantholder, and tenders herewith
payment of the purchase price for such shares in full, together with all
applicable transfer taxes, if any.
(2) In exercising its rights to purchase the Common Stock of the Company, the
undersigned hereby confirms and acknowledges the representations made in
Section 8 of the Warrant Agreement.
(3) Please issue a certificate or certificates representing said shares of
Common Stock in the name of the undersigned or in such other name as is
specified below.
_________________________________
(Name)
_________________________________
(Address)
WARRANTHOLDER
By:______________________________
Name:_________________________
Title:________________________
Date:____________________________
