EXHIBIT 10.1
WARRANT
FOR
SHARES OF COMMON STOCK
OF
FIELDWORKS, INC.
For value received, _____________, an individual resident of the State
of _________, or his successors or assigns ("Investor"), is entitled to
subscribe for and purchase from Fieldworks, Inc., a Minnesota corporation (the
"Company"), up to ____________________ (______) fully paid and nonassessable
shares of the Company's common stock, or such greater of lesser number of such
shares as may be determined by application of the anti-dilution provisions of
this warrant, at the price of ____________ ($_____) per share, subject to
adjustments as noted below (the warrant exercise price").
This warrant may be exercised by Investor at any time or from time to
time on or prior to ________, 19xx.
This warrant is subject to the following provisions, terms and
conditions:
1. (a) The rights represented by this warrant may be exercised by
the holder hereof, in whole or in part, by written notice of exercise delivered
to the Company at least twenty (20) days prior to the intended date of exercise
and by the surrender of this warrant (properly endorsed if required) at the
principal office of the Company and upon payment to it by cash, certified check
or bank draft of the purchase price for such shares. 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 warrant
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 fifteen (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. No fractional shares shall be issued upon the exercise of this
warrant.
(b) In lieu of payment, the rights represented by this warrant
may also be exercised by a written notice of exercise specifying that the
Investor wishes to convert all of this warrant (the "Conversion Right") into
that number of shares of the Company's common stock as follows: the number of
shares of the Company's common stock equal to the quotient obtained by dividing
(x) the value of the shares subject to the warrant (determined by subtracting
the aggregate warrant exercise price in effect immediately prior to the exercise
of the Conversion Right from the aggregate fair market value of the shares of
common stock issuable upon exercise of this warrant immediately
prior to the exercise of the Conversion Right) by (y) the fair market value of
one share of Company common stock immediately prior to the exercise of the
Conversion Right. For purposes of this section 1(b), the fair market value of
a share of Company common stock as of a particular date (the "Determination
Date") shall mean:
(i) If the Company's common stock is traded on an exchange
or is quoted on the National Association of Securities Dealers, Inc.
Automated Quotation ("NASDAQ") National Market System, then the
closing or last sale price, respectively, reported for the business
day immediately preceding the Determination Date.
(ii) If the Company's common stock is not traded on an
exchange or on the NASDAQ National Market System but is quoted on
NASDAQ, then the mean of the closing bid and asked prices reported for
the business day immediately preceding the Determination Date.
(iii) If the Company's common stock is not publicly traded,
then as determined in good faith by the Company's Board of Directors
upon a review of relevant factors.
2. The Company covenants and agrees that all shares 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.
The Company further covenants and agrees that during the period within which the
rights represented by this warrant may be exercised, the Company 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 its common stock to provide for the exercise of the rights
represented by this warrant.
3. The warrant exercise price shall be subject to adjustment form
time to time as hereinafter provided in this section 3.
(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 warrant
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 common share.
(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 the sale of all or substantially all of its assets to
another corporation shall be effected in
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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 shares, then, as a condition of such reorganization, reclassification,
consolidation, merger or sale, the holder of this warrant 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 of the
Company 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 of this warrant if it had
exercised this warrant and had received such shares of common stock 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 mailed to the registered
holder of this warrant at the last address of such holder appearing on the books
of the Company, the obligation to deliver to such holder such shares of stock,
securities or assets as, in accordance with the foregoing provisions, such
holder may be entitled to purchase.
(c) Upon each adjustment of the warrant exercise price, the
holder of this warrant shall thereafter be entitled to purchase, at the warrant
exercise price resulting from such adjustment, the number of shares obtained by
multiplying the warrant 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 warrant exercise
price resulting from such adjustment.
(d) Upon any adjustment of the warrant exercise price, the
Company shall give written notice thereof, by first class mail, postage prepaid,
addressed to the registered holder of this warrant at the address of such holder
as shown on the books of the Company, which notice shall state the warrant
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.
4. This warrant shall not entitle the holder hereof to any
voting rights or other rights as a shareholder of the Company.
5. The holder of this warrant, by acceptance hereof, agrees to
give written notice to the Company before transferring this warrant or
transferring any shares of the Company's common stock issuable or issued upon
the exercise of this warrant of the holder's intention to do so, describing
briefly the manner of any proposed transfer of this warrant or such holder's
intention as to the shares of common stock issuable upon the exercise hereof or
the intended disposition to be made of shares of common stock upon such
exercise. Promptly upon receiving such written notice, the Company shall present
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copies thereof to counsel for the Company. If, in the opinion of such counsel,
the proposed transfer of this warrant or disposition of shares may be effected
without registration or qualification (under any federal or state law) of this
warrant or the shares of common stock issuable or issued upon the exercise
hereof, the Company, as promptly as practicable, shall notify such holder of
such opinion, whereupon such holder shall be entitled to transfer this warrant,
or to exercise this warrant in accordance with its terms and dispose of the
shares received upon such exercise or to dispose of shares of common stock
received upon the previous exercise of this warrant, all in accordance with the
terms of the notice delivered by such holder to the Company, provided that an
appropriate legend in substantially the form set forth at the end of this
warrant respecting the foregoing restrictions on transfer and disposition may be
endorsed on this warrant or the certificates for such shares.
6. Subject to the provisions of section 5, 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 he/it 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.
7. Neither this warrant nor any term hereof may be changed,
waived, discharged or terminated orally but only by an instrument in writing
signed by the party against which enforcement of the change, waiver, discharge
or termination is sought.
8. The Company further grants to Investor the registration
rights, as provided in Exhibit A, with respect to the common stock purchased
pursuant to the exercise of the rights contained herein.
IN WITNESS WHEREOF, the Company has caused this warrant to be signed and
delivered by a duly authorized officer as of the ____ of _______, 19xx..
FIELDWORKS, INC.
By ______________________________
Xxxx X. Xxxxxx, President
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RESTRICTION ON TRANSFER
The security evidenced hereby has not been registered under the
Securities Act of 1933 or any state securities laws and may not be sold,
transferred assigned, offered, pledged or otherwise distributed for value unless
there is an effective registration statement under such act or laws covering
such security or the Company receives an opinion of counsel for the holder of
this security (concurred in by counsel for the Company) stating that such sale,
transfer, assignment, pledge or distribution is exempt from the registration and
prospectus delivery requirements of the Securities Act of 1933 and all
applicable state securities laws.
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FORM OF SUBSCRIPTION
--------------------
(To be executed only upon exercise (or conversion) of warrant)
The undersigned registered holder of the within warrant hereby
irrevocably elects to exercise the purchase right represented by such warrant
for, and purchases thereunder, _______ shares of the Common Stock of FieldWorks,
Inc. receivable upon such exercise and herewith makes payment of $_______
therefor in cash or by check or elects to exercise the Conversion Right provided
for in such warrant with respect to _______ shares of the Common Stock subject
thereto. The undersigned further requests that the certificates for such shares
be issued in the name of and delivered to __________________, whose address is
______________________________________.
Dated:
___________________________________
(Signature must conform in all respects to
name of holder as specified on the face of
this warrant)
____________________________________
(Street Address)
____________________________________
(City) (State) (Zip Code)
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FORM OF ASSIGNMENT
------------------
(To be executed only upon transfer of warrant)
For value received, the undersigned registered holder of the within
warrant hereby sells, assigns and transfers unto _____________________________,
whose address is ________________________________________, the right represented
by such warrant to purchase _______ shares of the Common Stock of FieldWorks,
Inc. to which such warrant relates, and appoints ____________________ Attorney
to make such transfer on the books of _______________ maintained for such
purpose, with full power of substitution in the premises.
Dated: ______________________
__________________________________________
(Signature must conform in all respects to
name of holder as specified on the face of
this warrant)
__________________________________________
(Street Address)
__________________________________________
(City) (State) (Zip Code)
Signed in the presence of:
_______________________________
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EXHIBIT A
REGISTRATION RIGHTS PROVISIONS
1. Registration of Stock.
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1.1 Definitions.
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"Commission" shall mean the Securities and Exchange Commission or any
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other federal agency at the time administering the Securities Act.
"Company" shall mean FieldWorks, Inc., a Minnesota corporation.
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"Common Shares" shall mean the shares of Common Stock authorized by
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the Company's Restated Articles of Incorporation and any additional shares of
Common Stock which may be authorized in the future by the Company, and any stock
into which such Common Shares may hereafter be changed.
"Registrable Securities" shall mean (i) the Common Stock issued upon
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conversion of the Warrant, issued to _______________, dated __________, 19xx,
and (ii) any additional securities issued with respect to the above described
securities upon any stock split, stock dividend, recapitalization or similar
event, provided, however, that none of the above described securities shall be
treated as Registrable Securities if (a) they have been sold to or through a
broker or dealer or underwriter in a public distribution or a public securities
transaction, or (b) they have been sold in a transaction exempt from the
registration and prospectus delivery requirements of the Securities Act so that
all transfer restrictions and restrictive legends with respect thereto are
removed upon the consummation of such sale amended.
"Securities Act" shall mean the Securities Act of 1933, as
--------------
amended.
1.2 Piggyback Registration. Each time the Company shall determine to
-----------------------
proceed with the actual preparation and filing of a registration statement under
the Securities Act in connection with the proposed offer and sale for money of
any of its securities by it or any of its security holders (other than a
registration statement on Form S-8 or other limited purpose form), the Company
will give written notice of its determination to all record holders of
Registrable Securities. Upon the written request of a record holder of any
shares of Registrable Securities given within 30 days after receipt of any such
notice from the Company, the Company will, except as herein provided, cause all
Common Shares of the Registrable Securities, the record holders of which have so
requested
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registration thereof, to be included in such registration statement, all to the
extent requisite to permit the sale or other disposition by the prospective
seller or sellers of the Common Shares to be so registered; provided, however,
that nothing herein shall prevent the Company from, at any time, abandoning or
delaying any registration; provided further, however, that if the Company
determines not to proceed with a registration after the registration statement
has been filed with the Commission and the Company's decision not to proceed is
primarily based upon the anticipated public offering price of the securities to
be sold by the Company, the Company shall promptly complete the registration for
the benefit of those selling security holders who wish to proceed with a public
offering of their Common Shares of the Registrable Securities and who bear all
expenses in excess of $25,000 incurred by the Company as the result of such
registration after the Company has decided not to proceed. If any registration
pursuant to this Section shall be underwritten in whole or in part, the Company
may require that the Common Shares requested for inclusion pursuant to this
Section be included in the underwriting on the same terms and conditions as the
securities otherwise being sold through the underwriters. If in the good faith
judgment of the managing underwriter of such public offering the inclusion of
all of the Common Shares originally covered by requests for registration would
reduce the number of shares to be offered by the Company or interfere with the
successful marketing of the shares of stock offered by the Company, the number
of Common Shares to be included in the underwritten public offering may be
reduced in the following manner: the Common Shares held by directly by officers
and directors of the Company (other than Registrable Securities) shall be
excluded from such underwritten public offering to the extent required by the
managing underwriter, and if a further reduction in the number of shares is
required, such shares shall be selected pro rata among the holders thereof
requesting inclusion in such registration. Those Common Shares which are thus
excluded from the underwritten public offering shall be withheld from the market
by the holders thereof for a period, not to exceed 90 days, which the managing
underwriter reasonably determines is necessary in order to effect the
underwritten public offering.
1.3 Registration Procedures. If and whenever the Company required by the
-----------------------
provisions of Section 1.2 to effect the registration of shares of Registrable
Securities under the Securities Act, the Company will:
(a) prepare and file with the Commission a registration statement
with respect to such securities, and use its best efforts to cause such
registration statement to become and remain effective for such period as may be
reasonably necessary to effect the sale of such securities, not to exceed nine
months;
(b) prepare and file with the Commission such amendments to such
registration statement and supplements to the prospectus contained therein
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as may be necessary to keep such registration statement effective for such
period as may be reasonably necessary to effect the sale of such securities, not
to exceed nine months;
(c) furnish to the security holders participating in such
registration and to the underwriters of the securities being registered such
reasonable number of copies of the registration statement, preliminary
prospectus, final prospectus and such other documents as such underwriters may
reasonably request in order to facilitate the public offering of such
securities;
(d) use its best efforts to register or qualify the securities
covered by such registration statement under such state securities or blue sky
laws of such jurisdictions as such participating holders may reasonably request
within 20 days following the original filing of such registration statement,
except that the Company shall not for any purpose be required to execute a
general consent to service of process or to qualify to do business as a foreign
corporation in any jurisdiction wherein it is not so qualified;
(e) notify the security holders participating in such registration,
promptly after it shall receive notice thereof, of the time when such
registration statement has become effective or a supplement to any prospectus
forming a part of such registration statement has been filed;
(f) notify such holders promptly of any request by the Commission for
the amending or supplementing of such registration statement or prospectus or
for additional information;
(g) prepare and file with the Commission, promptly upon the request
of any such holders, any amendments or supplements to such registration
statement or prospectus which, in the opinion of counsel for such holders (and
concurred in by counsel for the Company), is required under the Securities Act
or the rules and regulations thereunder in connection with the distribution of
the Conversion Shares by such holder;
(h) prepare and promptly file with the Commission and promptly notify
such holders of the filing of such amendment or supplement to such registration
statement or prospectus as may be necessary to correct any statements or
omissions if, at the time when a prospectus relating to such securities is
required to be delivered under the Securities Act, any event shall have occurred
as the result of which any such prospectus or any other prospectus as then in
effect would include an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances in which they were made, not misleading;
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(i) advise such holders, promptly after it shall receive notice or
obtain knowledge thereof, of the issuance of any stop order by the Commission
suspending the effectiveness of such registration statement or the initiation or
threatening of any proceeding for that purpose and promptly use its best efforts
to prevent the issuance of any stop order or to obtain its withdrawal if such
stop order should be issued;
(j) not file any amendment or supplement to such registration
statement or prospectus to which a majority in interest of such holders shall
have reasonably objected on the grounds that such amendment or supplement does
not comply in all material respects with the requirements of the Securities Act
or the rules and regulations thereunder, after having been furnished with a copy
thereof at least five business days prior to the filing thereof, unless in the
opinion of counsel for the Company the filing of such amendment or supplement is
reasonably necessary to protect the Company from any liabilities under any
applicable federal or state law and such filing will not violate applicable law;
and
(k) at the request of any such holder, furnish on the effective date
of the registration statement and, if such registration includes an underwritten
public offering, at the closing provided for in the underwriting agreement: (i)
opinions, dated such respective dates, of the counsel representing the Company
for the purposes of such registration, addressed to the underwriters, if any,
and to the holder or holders making such request, covering such matters as such
underwriters and holder or holders may reasonably request, and (ii) letters,
dated such respective dates, from the independent certified public accountants
of the Company, addressed to the underwriters, if any, and to the holder or
holders making such request, covering such matters as such underwriters and
holder or holders may reasonably request, in which letters such accountants
shall state (without limiting the generality of the foregoing) that they are
independent certified public accountants within the meaning of the Securities
Act and that in the opinion of such accountants the financial statements and
other financial data of the Company included in the registration statement or
any amendment or supplement thereto comply in all material respects with the
applicable accounting requirements of the Securities Act.
1.4 Expenses. With respect to each inclusion of Registrable Securities in
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a registration statement pursuant to section 1.2, the Company shall bear the
following fees, costs and expenses: all registration, filing and NASD fees,
printing expenses, fees and disbursements of counsel and accountants for the
Company and all legal fees and disbursements and other expenses of complying
with state securities or blue sky laws of any jurisdictions in which the
securities to be offered are to be registered or qualified. Fees and
disbursements of counsel and accountants for the selling security holders in
excess of $15,000, underwriting discounts and commissions and transfer taxes for
selling security holders and any other expenses incurred by the selling security
holders not expressly included above shall be borne by the selling security
holders.
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1.5 Indemnification.
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(a) The Company will indemnify and hold harmless each holder of shares
of Registrable Securities that are included in a registration statement pursuant
to the provisions of this Agreement and any underwriter (as defined in the
Securities Act) for such holder and each person, if any, who controls such
holder or such underwriter within the meaning of the Securities Act, from and
against any and all loss, damage, liability, cost and expense to which such
holder or any such underwriter or controlling person may become subject under
the Securities Act or otherwise, insofar as such losses, damages, liabilities,
costs or expenses are caused by any untrue statement or alleged untrue statement
of any material fact contained in such registration statement, any prospectus
contained therein or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading; provided,
however, that the Company will not be liable in any such case to the extent that
any such loss, damage, liability, cost or expense arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged omission
so made in conformity with written information furnished by such holder, such
underwriter or such controlling person specifically for use in the preparation
thereof.
(b) Each holder of shares of Registrable Securities which are included
in a registration pursuant to the provisions of this Section 1 will indemnify
and hold harmless the Company, any controlling person and any underwriter from
and against any and all loss, damage, liability, cost or expense to which the
Company or any controlling person and/or any underwriter may become subject
under the Securities Act or otherwise, insofar as such losses, damages,
liabilities, costs or expenses are caused by any untrue or alleged untrue
statement of any material fact contained in such registration statement, any
prospectus contained therein or any amendment or supplement thereto, or arise
out of or are based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they were made, not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was so made in
reliance upon and in strict conformity with written information furnished by
such holder specifically for use in the preparation thereof.
(c) Promptly after receipt by an indemnified party pursuant to the
provisions of paragraph (a) or (b) of this section of notice of the commencement
A-5
of any action involving the subject matter of the foregoing indemnity
provisions, such indemnified party will, if a claim thereof is to be made
against the indemnifying party pursuant to the provisions of said paragraph (a)
or (b), promptly notify the indemnifying party of the commencement thereof; but
the omission to so notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than hereunder.
In case such action is brought against any indemnified party and it notifies the
indemnifying party of the commencement thereof, the indemnifying party shall
have the right to participate in, and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party; provided, however,
if the defendants in any action include both the indemnified party and the
indemnifying party and there is a conflict of interest which would prevent
counsel for the indemnifying party from also representing the indemnified party,
the indemnified party or parties shall have the right to select separate counsel
to participate in the defense of such action on behalf of such indemnified party
or parties. After notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party will
not be liable to such indemnified party pursuant to the provisions of said
paragraph (a) or (b) for any legal or other expense subsequently incurred by
such indemnified party in connection with the defense thereof other than
reasonable costs of investigation, unless (i) the indemnified party shall have
employed counsel in accordance with the proviso of the preceding sentence, (ii)
the indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after the notice of the commencement of the action, or (iii) the indemnifying
party has authorized the employment of counsel for the indemnified party at the
expense of the indemnifying party.
1.6 Stand-Off Agreement. Each holder of Registrable Securities
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agrees, so long as such holder holds at least 1% of the Company's outstanding
voting equity securities, in connection with the Company's initial public
offering of the Company's Common Shares that, upon request of the Company or the
underwriters managing the underwritten offering of the Company's securities, not
to sell, make any short sale of, loan, grant any option for the purchase of, or
otherwise dispose of any Common Shares of the Company other than those included
in the registration without the prior written consent of the Company or such
underwriters, as the case may be, for such period of time (not exceeding 120
days) from the effective date of such registration as may be requested by the
underwriters; provided, that all other holders of at least 1% of the Company's
outstanding voting equity securities and all of the officers and directors of
the Company who own stock of the Company also agree to such restrictions.
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