EXHIBIT 10.3
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR
EXEMPTION FROM REGISTRATION UNDER THE FOREGOING LAWS. ACCORDINGLY, THIS WARRANT
MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF WITHOUT (1) AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO FIELDWORKS, INCORPORATED THAT SUCH SALE,
TRANSFER OR OTHER DISPOSITION MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER
THE SECURITIES ACT OF 1933 AND APPLICABLE STATE SECURITIES LAWS OR (2) SUCH
REGISTRATION.
THIS WARRANT AND THE SECURITIES THAT MAY BE ACQUIRED UPON THE EXERCISE OF THIS
WARRANT ARE SUBJECT TO A PURCHASE AND OPTION AGREEMENT DATED JUNE 29, 2000, A
COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY. SUCH PURCHASE
AGREEMENT PROVIDES, AMONG OTHER THINGS, FOR CERTAIN RESTRICTIONS UPON THE
EXERCISE, SALE, TRANSFER, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE
SECURITIES EVIDENCED BY THIS CERTIFICATE.
FIELDWORKS, INCORPORATED
WARRANT
TO PURCHASE
SHARES OF COMMON STOCK
For value received, FWRKS Acquisition Corp., a Delaware corporation and
wholly-owned subsidiary of Kontron Embedded Computers AG, a German corporation
(together with its successors or assigns, the "Holder"), is entitled to purchase
from FieldWorks, Incorporated, a Minnesota corporation (the "Company"), up to
1,250,000 fully paid and nonassessable shares of the Company's common stock,
$.001 par value per share (the "Common Stock"), or such greater or lesser number
of such shares as may be determined by application of the anti-dilution
provisions of this Warrant, at the price of $1.00 per share, subject to
adjustments as noted below (the "Exercise Price").
This Warrant is being issued by the Company pursuant to a Purchase and
Option Agreement (the "Purchase Agreement"), dated June 29, 2000, between the
Company and FWRKS Acquisition Corp. Subject to Section 10.1 of the Purchase
Agreement, this Warrant may be exercised by Holder at any time or from time to
time prior to the close of business on November 15, 2000. Notwithstanding
anything to the contrary herein, if the Closing Date (as such term is defined in
the Purchase Agreement) does not occur on or prior to November 15, 2000, this
Warrant shall not vest and shall immediately terminate.
This Warrant is subject to the following terms and conditions:
1. Exercise. The rights represented by this Warrant may be exercised by
the Holder, in whole or in part, by written election, in the form set forth
below, by the surrender of this Warrant (properly endorsed if required) at the
principal office of the Company, and by payment to it by cash, certified check
or bank draft of the Exercise Price for the shares to be purchased. The shares
so purchased shall be deemed to be issued as of the close of business on the
date on which this Warrant has been exercised by payment to the Company of the
Exercise Price. Certificates for the shares of stock so purchased, bearing the
restrictive legend set forth at the end of this Warrant, shall be delivered to
the Holder within 15 days after the rights represented by this Warrant shall
have been so exercised, and, unless this Warrant has expired, a new Warrant
representing the number of shares, if any, with respect to which this Warrant
has not been exercised shall also be delivered to the Holder hereof within such
time.
2. Payment of Exercise Price. The Exercise Price may either be paid as
described in Section 1 above or, at Holder's option, all or any portion of the
Exercise Price may be paid (i) by delivery by the Holder to the Company of such
principal amount of Notes (as defined in the Purchase Agreement) which, together
with accrued interest thereon, equals or exceeds the aggregate Exercise Price,
in which case the Company shall issue a replacement Note to the Holder for any
amount in excess of such Exercise Price, or (ii) by surrendering a portion of
the shares issuable upon exercise of this Warrant. In the latter case, the value
of the shares so surrendered shall be the closing price of the Common Stock on
the date of Holder's notice of exercise, or, if the Common Stock is not then
listed or admitted for trading on any national securities exchange or automated
quotation system or quoted in the over-the-counter market, the fair value
thereof (as of a date that is within 20 days of the date as of which the
determination is to be made) determined in good faith by the Board of Directors
of the Company.
3. Shares. All shares of Common Stock that may be issued upon the
exercise of the rights represented by this Warrant shall, upon issuance, be duly
authorized and issued, fully paid and nonassessable shares. During the period
within which the rights represented by this Warrant may be exercised, the
Company shall 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 its Common Stock to provide for the exercise of
the rights represented by this Warrant.
4. Adjustment. The Exercise Price shall be subject to adjustment from
time to time as hereinafter provided in this Section 4:
(a) If the Company at any time divides the outstanding shares
of its Common Stock into a greater number of shares (whether pursuant
to a stock split, stock dividend or otherwise), and conversely, if the
outstanding shares of its Common Stock are combined into a smaller
number of shares, the Exercise Price in effect immediately prior to
such division or combination shall be proportionately adjusted to
reflect the reduction or increase in the value of each such share of
Common Stock.
(b) If any capital reorganization or reclassification of the
capital stock of the Company, or consolidation or merger of the Company
with another corporation, or sale of
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all or substantially all of its assets to another corporation shall be
effected in such a way that holders of the Company's Common Stock shall
be entitled to receive stock, securities or assets with respect to or
in exchange for such Common Stock, then, as a condition of such
reorganization, reclassification, consolidation, merger or sale, the
Holder shall have the right to purchase and receive upon the basis and
upon the terms and conditions specified in this Warrant and in lieu of
the shares of the Common Stock immediately theretofore purchasable and
receivable upon the exercise of the rights represented hereby, such
shares of stock, other securities or assets as would have been issued
or delivered to the Holder if Holder had exercised this Warrant and had
received such shares of Common Stock immediately prior to such
reorganization, reclassification, consolidation, merger or sale. The
Company shall 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 merger or the
corporation purchasing such assets shall assume by written instrument
executed and delivered to the Holder at the last address of the Holder
appearing on the books of the Company the obligation to deliver to the
Holder such shares of stock, securities or assets as, in accordance
with the foregoing provisions, the Holder may be entitled to purchase.
(c) If and whenever the Company shall (1) issue or sell any
shares of its Common Stock for a consideration per share less than the
Exercise Price in effect immediately prior to the time of such issuance
or sale, (2) issue or sell any warrants, options or other rights to
acquire shares of its Common Stock (each, an "Option") at a purchase
price less than the Exercise Price in effect immediately prior to the
time of such issuance or sale or (3) issue or sell any other securities
that are convertible into shares of its Common Stock (each, a
"Convertible Security") for a purchase or exchange price less than the
Exercise Price in effect immediately prior to the time of such issuance
or sale (except for the issuance or sale of shares of the Company's
Common Stock pursuant to stock option plans, purchase plans or other
employee stock incentive programs adopted by the Board prior to the
date hereof), then, upon such issuance or sale, the Exercise Price
shall be reduced to the price (calculated to the nearest cent)
determined by dividing (A) an amount equal to the sum of (1) the number
of shares of the Common Stock outstanding immediately prior to such
issue or sale multiplied by the then existing Exercise Price and (2)
the consideration, if any, received by the Company upon such issue or
sale plus the consideration to be received by the Company upon the
exercise of such Options by (B) an amount equal to the sum of (1) the
number of shares of its Common Stock outstanding immediately prior to
such issue or sale and (2) the number of its shares of Common Stock
thus issued or sold or issuable or saleable upon the exercise of such
Options or the conversion of such Convertible Securities; provided,
however, that in the event that any such Option expires or is
terminated prior to the exercise of this Warrant, the Exercise Price
shall be recalculated by deleting such Option and provided further that
if an adjustment is made to the Exercise Price as a result of the
issuance or sale of any such Options or Convertible Securities, no
further adjustment shall be made to the Exercise Price at the time such
Options are exercised or Convertible Securities are converted.
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(d) Upon each adjustment of the Exercise Price, the Holder
shall thereafter be entitled to purchase, at the Exercise Price
resulting from such adjustment, the number of shares obtained by
multiplying the Exercise 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 Exercise Price resulting from such adjustment.
(e) If any Common Stock, Option or Convertible Security is
issued or sold or deemed to have been issued or sold for cash, the
consideration received therefor shall be deemed to be the amount
received by the Company therefor (net of discounts, commissions and
related expenses). If any Common Stock, Option or Convertible Security
is issued or sold for a consideration other than cash, the amount of
the consideration other than cash received by the Company shall be the
fair value of such consideration as of the date of receipt. If any
Common Stock, Option or Convertible Security is issued to the owners of
the non-surviving entity in connection with any merger in which the
Company is the surviving company, the amount of consideration therefor
shall be deemed to be the fair value of such portion of the net assets
and business of the non-surviving entity as is attributable to such
Common Stock, Option or Convertible Security, as the case may be. The
fair value of any consideration other than cash and securities shall be
determined jointly by the Company and Holders representing a majority
of the holders of the Warrants issued pursuant to the Purchase
Agreement. If such parties are unable to reach agreement within a
reasonable period of time, the Holders representing a majority of the
holders of the Warrants issued pursuant to the Purchase Agreement may,
upon a reasonable good faith determination by such Holder that an
appraisal is necessary, request in a timely manner that the fair value
of such consideration be determined by an independent appraiser
experienced in valuing such type of consideration jointly selected by
the Company and the registered Holder of this Warrant. The
determination of such appraiser shall be final and binding upon the
parties, and the fees and expenses of such appraiser shall be borne by
the Company.
(f) In case any Option is issued in connection with the issue
or sale of other securities of the Company, together comprising one
integrated transaction in which no specific consideration is allocated
to such Option by the parties thereto, the Option shall be deemed to
have been issued for a consideration of $.001.
(g) In the event that the Company shall at any time prior to
the exercise of all Warrants declare a dividend (other than a dividend
consisting solely of shares of Common Stock) or otherwise distribute to
its stockholders any assets, property, rights, evidences or
indebtedness, securities (other than shares of Common Stock), whether
issued by the Company or by another, or any other thing of value, the
Holder of the unexercised Warrants shall thereafter be entitled, in
addition to the shares of Common Stock or other securities and property
receivable upon the exercise thereof, to receive, upon the exercise of
such Warrants, the same property, assets, rights, evidences of
indebtedness, securities or any other thing of value that they would
have been entitled to receive at the time of such dividend or
distribution as if the Warrants had been exercised immediately prior to
the record date for
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such dividend or distribution. At the time of any such dividend or
distribution, the Company shall make appropriate reserves to ensure the
timely performance of the provisions of this Section 4(g).
(h) Upon any adjustment of the Exercise Price, the Company
shall give prompt written notice thereof to the Holder stating the
Exercise Price resulting from such adjustment and the increase or
decrease, if any, in the number of shares 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.
5. Elimination of Fractional Interests. The Company shall not be
required to issue certificates representing fractions of shares of Common Stock
upon the exercise of this Warrant, and shall not be required to issue scrip or
pay cash in lieu of fractional interests, it being the intent of the parties
that all fractional interests shall be eliminated by rounding any fraction up to
the nearest whole number of shares of Common Stock or other securities,
properties or rights.
6. Exchange and Replacement of Warrant. Each certificate representing a
Warrant is exchangeable without expense, upon the surrender thereof by the
registered Holder at the principal executive office of the Company, for a new
Warrant certificate of like tenor and date representing in the aggregate the
right to purchase the same number of securities in such denominations as shall
be designated by the Holder thereof at the time of such surrender.
Upon receipt by the Company of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of any Warrant certificate, and,
in the case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it, and upon surrender and cancellation of the Warrants, if
mutilated, the Company will make and deliver a new Warrant certificate of like
tenor, in lieu thereof.
7. No Avoidance or Impairment. The Company will not, by amendment of
its Articles of Incorporation, including, without limitation, amendment of the
par value of its Common Stock, or through reorganization, consolidation, merger,
dissolution, issuance of capital stock or sale of treasury stock (otherwise than
upon exercise of this Warrant) or sale of assets, by effecting any subdivision
of or stock split or stock dividend with respect to its Common Stock, or by any
other voluntary act or deed, avoid or seek to avoid the performance or
observance of any of the covenants, stipulations or conditions in this Warrant
to be observed or performed by the Company. The Company will at all times in
good faith assist, insofar as it is able, in the carrying out of all of the
provisions of this Warrant (including, but not limited to, the provisions of
Section 4) in a reasonable manner and in the taking of all other action that may
be necessary in order to protect the rights of the Holder, including, but not
limited to protection against dilution in the manner required by the provisions
of this Warrant. In the event that the Company shall after the date hereof issue
securities with greater or superior voting rights than the shares of Common
Stock outstanding as of the date hereof, the Holder, at its option, may receive
upon exercise of any Warrant either shares of Common Stock or a like number of
such securities with greater or superior voting rights.
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8. No Rights as Shareholder. This Warrant shall not entitle the Holder
to any voting rights or other rights as a shareholder of the Company.
9. Registration Rights. The Holder shall be entitled to the benefit of
the provisions of that certain Registration Rights Agreement between the Company
and FWRKS Acquisition Corp. dated June 29, 2000.
10. Transfer. Subject to certain restrictions set forth in the Purchase
Agreement, this Warrant and all rights hereunder are transferable, in whole or
in part, at the principal office of the Company by the holder hereof in person
or by duly authorized attorney, upon surrender of this Warrant properly endorsed
to any person or entity who represents in writing that such person or entity is
acquiring the Warrant for investment and without any view to the sale or other
distribution thereof. Each holder of this Warrant, by taking or holding the
same, consents and agrees that the bearer of this Warrant, when endorsed, may be
treated by the Company and all other persons dealing with this Warrant as the
absolute owner hereof for any purpose and as the person entitled to exercise the
rights represented by this Warrant, or to the transfer hereof on the books of
the Company, any notice to the contrary notwithstanding; but until such transfer
on such books, the Company may treat the registered owner hereof as the owner
for all purposes. Any transferee of this Warrant and any rights hereunder, by
acceptance thereof, agrees to assume all of the obligations of the Holder and to
be bound by all of the terms and provisions of this Warrant.
11. Notices. All demands and notices to be given hereunder shall be
delivered or sent by first class mail, postage prepaid; in the case of the
Company, addressed to its corporate headquarters, Attention: Chief Financial
Officer, 0000 Xxxxxxx Xxxxx, Xxxx Xxxxxxx, XX 00000, until a new address shall
have been substituted by like notice; and in the case of Holder, addressed to
Holder at the address written below, until a new address shall have been
substituted by like notice.
[The remainder of this page intentionally is left blank; signature page follows]
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IN WITNESS WHEREOF, the Company has caused this warrant to be executed
and delivered by a duly authorized officer.
Dated: June 29, 2000
FIELDWORKS, INCORPORATED
By /s/ Xxxxx X. Xxxx
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Name: Xxxxx X. Xxxx
Title: President and Chief
Executive Officer
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RESTRICTION ON TRANSFER
The shares represented by this certificate have not been registered
under the Securities Act of 1933, as amended, or the securities laws of any
state and may not be sold, transferred or otherwise disposed of except pursuant
to an effective registration statement or exemption from registration under the
foregoing laws. Accordingly, the shares represented by this certificate may not
be sold, transferred or otherwise disposed of without (i) an opinion of counsel
reasonably satisfactory to FieldWorks, Incorporated that such sale, transfer or
other disposition may lawfully be made without registration under the Securities
Act of 1933 and applicable state securities laws or (ii) such registration.
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WARRANT EXERCISE
(To be signed only upon exercise of this warrant)
The undersigned, the Holder of the foregoing warrant, hereby
irrevocably elects to exercise the purchase right represented by such warrant
for, and to purchase thereunder, __________ shares of common stock of
FieldWorks, Incorporated, to which such warrant relates and herewith makes
payment herewith in full therefore at a price per share provided by such
Warrant. The undersigned hereby requests that the certificates for such shares
be issued in the name of, and be delivered to ____________________, whose
address is set forth below the signature of the undersigned.
Dated: ____________________
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Name:
Title:
If shares are to be issued Social Security or other Tax
other than to Holder: Identification No.
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Please print present name and address
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WARRANT ASSIGNMENT
(To be signed only upon transfer of this warrant)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto _______________ the right represented by the foregoing warrant to purchase
the shares of common stock of FieldWorks, Incorporated, and appoints
____________________ attorney to transfer such right on the books of FieldWorks,
Incorporated, with full power of substitution in the premises.
Dated:__________________________
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Name:
Title:
------------------------------------- Social Security or other Tax
Identification No.
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Please print present name and complete address
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