THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR ANY STATE SECURITIES LAWS. THESE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE DISPOSED
OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR PURSUANT TO AN EXEMPTION UNDER THE SECURITIES ACT
AND APPLICABLE STATE SECURITIES LAWS.
VOID
AFTER 5:00 P.M., NEW YORK, NEW YORK TIME, ON THE EXPIRATION DATE
(AS DEFINED BELOW).
|
Date
of Issuance: February 12, 2009
|
Number
of Shares: 30,000,000
|
WARRANT
TO PURCHASE
SHARES
OF CLASS A COMMON STOCK OF
DELTATHREE,
INC.
This
certifies that, for value received, D4 Holdings, LLC, a Delaware
limited liability company, and its permitted assigns or successors
in interest (the “ Holder ”), is entitled to
purchase from deltathree, Inc., a Delaware corporation (the “
Company ”), subject to the terms and conditions
hereof, at any time on or after the date of this Warrant and before
5:00 P.M., New York, New York time on the date which is ten (10)
years after the date hereof (the “ Expiration Date
”), that number of fully paid and non-assessable shares of
the Company’s Class A common stock, par value $0.001 (the
“ Common Stock ”), as set forth in and subject
to the limitations of Section 2 hereof.
This
Warrant is issued by the Company pursuant to the terms and
conditions of that certain Securities Purchase Agreement, dated as
of February 10, 2009, by and between the Company and the Holder
(the “ Purchase Agreement ”).
1.
Definitions
. As
used in this Warrant, the following terms shall have the meanings
set forth below:
(a)
“ Affiliate ” means any person that, directly or
indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, a person, as such
terms are used and construed under Rule 144 promulgated under the
Securities Act.
(b)
“ Exercise Price ” means $0.04 per share (as the
same may be adjusted from time to time pursuant to the terms of
this Warrant).
(c)
“ Fair Market Value ” means, on any particular
date (a) if the Common Stock is then traded on a securities
exchange, the average of the closing prices of such Common Stock on
such exchange over the five trading day period ending on such date,
(b) if the Common Stock is then regularly traded over-the-counter,
the average of the closing sale prices or secondarily the closing
bid of such Common Stock over the five trading day period ending on
such date, or (c) if there is no active public trading market for
the Common Stock, the fair market value of one share of the Warrant
Shares as determined in good faith by the Board of Directors of the
Company.
(d)
“ Person ” (whether or not capitalized) means an
individual, entity, partnership, limited liability company,
corporation, association, trust, joint venture, unincorporated
organization or any other form of entity not specifically listed
herein, and any government, governmental department or agency or
political subdivision thereof.
(e)
“ Securities Act ” means the Securities Act of
1933, as amended, and all of the rules and regulations promulgated
thereunder.
(f)
“ Warrant ” means this Warrant and all stock
purchase warrants issued in exchange therefor pursuant to the terms
thereof.
(g)
“ Warrant Shares ” means the shares of
Common Stock issuable upon exercise of this Warrant.
(a)
Number of Shares Underlying Warrant . This
Warrant shall be exercisable for up to 30,000,000 shares of
Common Stock, as adjusted from time to time pursuant to the terms
of this Warrant.
(b)
Exercisability of Warrant . The Holder may
exercise the purchase rights represented by this Warrant, in whole
or in part, at any time, from time to time on or after the date
that is thirty (30) days following the date of this Warrant, and
before 5:00 P.M. New York, New York time, on the Expiration Date
(the “ Exercise Period ”).
(i)
The
purchase rights represented by this Warrant may be exercised by the
Holder, in whole or in part, by delivery of a notice of exercise in
the form set forth on the last page hereof (the “ Exercise
Notice ”) at the principal office of the Company, and by
the payment to the Company of the aggregate Exercise Price (in
accordance with the next sentence) in an amount equal to the
Exercise Price per share multiplied by the number of Warrant Shares
then being purchased. The aggregate purchase price for
Warrant Shares being purchased hereunder pursuant to such exercise
may be paid either (A) by cash or wire transfer of immediately
available funds, (B) by cancellation of indebtedness, or (C) any
combination of the foregoing.
(ii)
No
fractional shares arising out of the above formula for determining
the number of shares to be issued to the Holder shall be issued,
and the Company shall in lieu thereof make payment to the Holder of
cash in the amount of such fraction multiplied by the Fair Market
Value of one (1) share of the Warrant Shares on the date of
exercise.
(iii)
In the
event of any exercise of the rights represented by this Warrant,
certificates for the Warrant Shares so purchased shall be delivered
to the Holder as soon as practicable and, unless this Warrant has
been fully exercised or has expired, a new Warrant representing the
portion of the Warrant Shares, if any, with respect to which this
Warrant shall not then have been exercised shall also be issued to
the Holder as soon as practicable. Such exercise shall
be deemed to have been made immediately prior to the close of
business on the date the Holder delivers the Exercise Notice with
respect to such exercise. The Person or Persons
entitled to receive the Warrant Shares shall be treated for all
purposes as the record holder of such Warrant Shares as of such
date.
(iv)
The
issuance of certificates for Warrant Shares upon exercise of this
Warrant will be made without charge to the Holder for any issuance
tax in respect thereof or any other cost incurred by the Company in
connection with such exercise.
3.
Reservation of Warrant
Shares; Stock Fully Paid . During
the Exercise Period, the Company shall reserve and keep available
for issuance upon the exercise of the Warrant such number of its
authorized but unissued shares of Common Stock as will be
sufficient to permit the exercise in full of all outstanding
Warrants. The Warrant Shares, upon issuance in
accordance with the terms of this Warrant, will be validly issued,
fully paid and nonassessable, and free from all taxes, liens and
charges with respect to the issuance thereof.
4.
No Voting Rights; Limitations of Liability
. This
Warrant will not entitle the Holder to any voting rights or other
rights as a shareholder of the Company. No provision of
this Warrant, in the absence of affirmative action by the Holder to
purchase Warrant Shares, and no enumeration in this Warrant of the
rights or privileges of the Holder, will give rise to any liability
of such Holder as a stockholder of the Company.
5.
Restrictions on Transfer
.
(a)
The
Holder agrees that the Holder will not transfer, sell or otherwise
dispose of this Warrant without the express consent of the Company
in its reasonable discretion. Notwithstanding the
foregoing, the Holder may transfer all or any portion of this
Warrant to an affiliate (as such term is defined in Rule 405
promulgated under the Securities Act) of the Holder.
(b)
The
Holder agrees not to sell, pledge, distribute, offer for sale,
transfer or otherwise dispose of this Warrant or any Warrant Shares
issued upon its exercise except under circumstances which will not
result in a violation of the Securities Act. Upon
exercise of this Warrant, the Holder shall confirm in writing, by
executing the form attached hereto, that the securities purchased
thereby are being acquired for investment solely for the
Holder’s own account and no
