EXHIBIT 4.1
TRANSFER OF THIS WARRANT IS PROHIBITED, EXCEPT AS PROVIDED IN SECTION 2. THE
SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AS AMENDED, OR UNDER THE LAWS OF ANY STATE, AND THUS MAY
NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION UNDER
SUCH LAWS OR AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY TO THE EFFECT THAT
SUCH REGISTRATION IS NOT REQUIRED.
WARRANT
Warrant No. 4 Warrant to Purchase 233,333
Warrant Shares (subject to
adjustment)
XXXXXXXXXXXX.XXX HOLDINGS CORP.
a Washington corporation
xxxxxxxxxxxx.xxx Holdings Corp., a Washington corporation (the "Company"), for
value received, hereby grants to Xxxxxx X. Xxxxxxxxx (the "Holder"), the right,
subject to the terms and conditions set forth herein, to purchase from the
Company, at any time and from time to time, up to Two Hundred Thirty-Three
Thousand Three Hundred Thirty-Three (233,333) duly authorized, validly issued,
fully paid and non-assessable shares (the "Warrant Shares") of the common stock,
par value $.01 per share, of the Company (the "Common Stock"), at a per share
exercise price of fifty-one and three-quarter cents ($0.5175) subject to
adjustment as provided in Section 3 hereof (the "Exercise Price"). This Warrant
shall terminate if not exercised in full on or prior to October 15, 2000. The
number and character of the securities purchasable upon exercise of such rights
of purchase, and the Exercise Price, are subject to adjustment as provided
herein. The term "Warrant" as used herein shall include this Warrant, any
Warrant or Warrants issued in substitution for or replacement of this Warrant,
or any Warrant or Warrants into which this Warrant may be divided or exchanged.
The term "Warrant Shares" shall mean the Common Stock issuable upon exercise of
this Warrant.
1. METHOD OF EXERCISE; PAYMENT OF EXERCISE PRICE
(a) Subject to the other terms and conditions of this Warrant, the
purchase rights evidenced by this Warrant may be exercised in whole or
in part, from time to time, subject to the conditions set forth above,
by the Holder's presentation of this Warrant to the Company at its
principal offices, accompanied by a duly executed Notice of Exercise,
in the form attached hereto as Exhibit I and by this reference
incorporated herein, and by payment of the aggregate Exercise Price in
the manner specified in Section 1(b) hereof, for the number of Warrant
Shares specified in the Notice of Exercise.
(b) The aggregate Exercise Price for the number of Warrant Shares
specified in any Notice of Exercise may be paid in cash by certified
check or bank cashier's check or wire transfer of immediately
available funds. Alternatively, this Warrant may be exercised by
surrendering this Warrant in exchange for the number of Warrant Shares
equal to the product of (x) the number of shares of Common Stock as to
which this Warrant is being exercised, multiplied by (y) a fraction,
the numerator of which is the Market Price (as defined below) of one
share of Common Stock minus the Exercise Price of one Warrant Share
and the denominator of which is the Market Price per share of Common
Stock. Solely for the purposes of this Section 1 Market Price shall be
calculated either (i) on the date on which the form of election
attached hereto is deemed to have been sent to the Company pursuant to
this Section 1 ("Notice Date") or (ii) as the average of the Market
Price for each of the five trading days immediately preceding the
Notice Date, whichever of (i) or (ii) results in a greater Market
Price. As used herein, the phrase "Market Price" at any date shall be
deemed to be the last reported sale price, or, in case no such
reported sale takes place on such day, the average of the last
reported sale prices for the last three (3) trading days, in either
case as officially reported by the principal securities exchange on
which the Common Stock is listed or admitted to trading, or, if the
Common Stock is not listed or admitted to trading on any national
securities exchange, the average closing sale price as furnished by
the NASD through The Nasdaq Stock Market, Inc. ("Nasdaq") or by the
OTC Electronic Bulletin Board or similar organization if Nasdaq is no
longer reporting such information, or if the Common Stock is not
publicly quoted, as determined in good faith by resolution of the
Board of Directors of the Company, based on the best information
available to it.
(c) In the event of any exercise of the rights represented by this
Warrant, a certificate or certificates for the Warrant Shares so
purchased shall be dated the date of such exercise and delivered to
the Holder hereof within a reasonable time, not exceeding fifteen (15)
days after such exercise. If this Warrant is exercised in part only,
as soon as is practicable after the presentation and surrender of this
Warrant to the Company for exercise, the Company shall execute and
deliver to the Holder a new Warrant, containing the same terms and
conditions as this Warrant, evidencing the right of the Holder to
purchase the number of Warrant Shares as to which this Warrant has not
been exercised. Upon receipt of this Warrant by the Company at its
principal offices accompanied by the items required for exercise
specified in subsection (a) above, the Holder shall be deemed to be
the holder of record of the Warrant Shares issuable upon such exercise
and a shareholder of the Company, notwithstanding that the stock
transfer books of the Company may then be closed or that certificates
representing such Warrant Shares may not then be actually delivered to
the Holder.
2. TRANSFERABILITY, EXCHANGE OR LOSS OF WARRANT
(a) Except as provided herein, the Warrants shall not be transferable, in
whole or in part. The Warrants may be transferred to any person
receiving the Warrants from the Holder at the Holder's death pursuant
to a will or trust or the laws of intestate succession.
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(b) This Warrant, alone or with any other Warrant owned by the same Holder
containing substantially the same terms and conditions, is
exchangeable at the option of the Holder but at the Company's sole
expense, at any time prior to its expiration either by its terms or by
its exercise in full, upon presentation and surrender to the Company
at its principal offices, for another Warrant or other Warrants, of
different denominations but containing the same terms and conditions
as this Warrant, entitling the Holder to purchase the same aggregate
number of Warrant Shares that were purchasable pursuant to the Warrant
or Warrants presented and surrendered. At the time of presentation and
surrender by the Holder to the Company, the Holder shall also deliver
to the Company a written notice, signed by the Holder, specifying the
denominations in which new Warrants are to be issued to the Holder.
(c) The Company shall execute and deliver to the Holder a new Warrant
containing the same terms and conditions as this Warrant upon receipt
by the Company of evidence reasonably satisfactory to it of the loss,
theft, destruction or mutilation of this Warrant, provided that: (i)
in the case of loss, theft or destruction, the Company receives from
the Holder a reasonably satisfactory indemnification; and (ii) in the
case of mutilation, the Company receives from the Holder a reasonably
satisfactory form of indemnity and the Holder presents and surrenders
this Warrant to the Company for cancellation. Any new Warrant executed
and delivered shall constitute an additional contractual obligation on
the part of the Company regardless of whether the Warrant that was
lost, stolen, destroyed, or mutilated is enforceable by anyone at any
time.
(d) The Company will, at the time of or at any time after each exercise of
this Warrant, upon the request of the Holder hereof or of any Warrant
Shares issued upon such exercise, acknowledge in writing its
continuing obligation to afford to such Holder all rights to which
such Holder shall continue to be entitled after such exercise in
accordance with the terms of this Warrant, provided, that if any such
Holder shall fail to make any such request, the failure shall not
affect the continuing obligation of the Company to afford such rights
to such Holder.
3. ADJUSTMENTS OF EXERCISE PRICE
(a) Except as provided herein, upon the occurrence of any of the events
specified in this Section 3, the Exercise Price in effect at the time
of such event and the number of Warrant Shares then purchasable
pursuant to this Warrant at that time shall be proportionately
adjusted as provided herein.
(b) If the number of shares of Common Stock outstanding at any time after
the date hereof is increased by a stock dividend payable in shares of
Common Stock or by a subdivision or split-up of shares of Common
Stock, then, on the date such payment is made or such change is
effective, the Exercise Price shall be appropriately decreased so that
the number of Warrant Shares issuable on the exercise of this Warrant
shall be increased in proportion to such increase of outstanding
shares.
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(c) If the number of shares of Common Stock outstanding at any time after
the date hereof is decreased by a combination of the outstanding
shares of Common Stock, then, on the effective date of such
combination, the Exercise Price shall be appropriately increased so
that the number of Warrant Shares issuable on the exercise of this
Warrant shall be decreased in proportion to such decrease of
outstanding shares.
(d) All calculations under this Section 3 shall be made to the nearest one
hundredth (1/100) cent or to the nearest one hundredth (1/100) of a
share, as the case may be. In no event shall the Exercise Price be
reduced to less than $.01.
(e) No adjustment in the Exercise Price need be made if such adjustment
would result in a change in the Exercise Price of less than $0.01. Any
adjustment of less than $0.01 which is not made shall be carried
forward and shall be made at the time of and together with any
subsequent adjustment which, on a cumulative basis, amounts to an
adjustment of $0.01 or more in the Exercise Price.
(f) Upon the occurrence of each adjustment or readjustment of the Exercise
Price pursuant to this Section 3, the Company at its expense shall
promptly compute such adjustment or readjustment in accordance with
the terms hereof and prepare and furnish to the Holder hereof a
certificate of an Officer of the Company setting forth such adjustment
or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based. The Company shall, upon written
request at any time of any Holder hereof, furnish or cause to be
furnished to such Holder a like certificate setting forth (i) such
adjustments and readjustments, (ii) the Exercise Price at the time in
effect, and (iii) the number of Warrant Shares and the amount, if any,
of other property which at the time would be received upon the
exercise of this Warrant.
(g) In the event of any taking by the Company of a record of the holders
of any class of securities for the purpose of determining the holders
thereof who are entitled to receive any dividend (other than a cash
dividend) or other distribution, any right to subscribe for, purchase
or otherwise acquire any shares of stock of any class or any other
securities or property or to receive any right, the Company shall mail
to the Holder hereof at least ten (10) days prior to such record date,
a notice specifying the date on which any such record is to be taken
for the purpose of such dividend or distribution or right, and the
amount and character of such dividend, distribution or right.
(h) For purposes of this Section 3, equity securities owned or held at any
relevant time by or for the account of the Company in its treasury
shall not be deemed to be outstanding for purposes of the calculations
and adjustments described.
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4. STOCK FULLY PAID; RESERVATION OF WARRANT STOCK
The Company covenants and agrees that all Warrant Shares that may be issued upon
the exercise of this Warrant will, upon issuance, be fully paid and
non-assessable and free from all taxes, liens and charges with respect to
issuance. The Company further covenants and agrees that during the period within
which this Warrant may be exercised, the Company will at all times have
authorized and reserved for the purpose of the issue upon exercise of the rights
evidenced by this Warrant a sufficient number of shares of Common Stock to
provide for the exercise of this Warrant.
5. TRANSFER TO COMPLY WITH THE SECURITIES ACT OF 1933
(a) This Warrant is non-transferable. The Warrant Shares, and all other
equity securities issued or issuable upon exercise of this Warrant,
may not be offered, sold or transferred, in whole or in part, in the
absence of an effective registration statement under the Securities
Act of 1933, as amended (the "Act"), and all applicable state
securities statutes, or an opinion of counsel acceptable to the
Company to the effect that such registration is not required.
(b) The Company shall cause the following legends to be set forth on each
certificate representing the Warrant Shares issuable upon exercise of
this Warrant:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, (THE
"SECURITIES ACT"), AND MAY NOT BE SOLD, PLEDGED, ASSIGNED, OR
OTHERWISE TRANSFERRED UNLESS (A) COVERED BY AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, (B) IN COMPLIANCE WITH RULE 144
UNDER THE SECURITIES ACT, OR (C) THE COMPANY HAS BEEN FURNISHED WITH
AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY THAT NO
REGISITRATION IS REQUIRED IN CONNECTION WITH SUCH SALE, ASSIGNMENT OR
TRANSFER OR THAT AN EXEMPTION TO SUCH REGISTRATION IS AVAILABLE."
6. FRACTIONAL SHARES
No fractional shares of Warrant Shares or scrip representing fractional shares
of Warrant Shares shall be issued upon the exercise of all or any part of this
Warrant. With respect to any fraction of a unit or any security called for upon
any exercise of this Warrant, the Company shall pay to the Holder an amount in
money equal to that fraction multiplied by the then Current Market Price. For
purposes of this Agreement, the term "Current Market Price" shall mean the
average for the 20 consecutive trading days immediately preceding the date in
question of the daily per share closing prices of the Common Stock as reported
by the OTC Bulletin Board or the Nasdaq SmallCap Market or the principal
securities exchange on which it is listed, as the case made be. The closing
price referred to above shall be the last reported sale price or, if no such
reported sale takes place on such day, the average of the reported closing bid
and asked prices, in either case as reported by the
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OTC Bulletin Board of the Nasdaq SmallCap Market or the principal securities
exchange on which it is listed, as the case may be.
7. RIGHTS OF THE HOLDER
Prior to the exercise hereof, the Holder shall not be entitled to any rights as
a shareholder of the Company by reason of this Warrant, either at law or equity.
8. NOTICES
Except as may be otherwise expressly provided herein, any notice, consent, or
other communication required or permitted to be given hereunder shall be in
writing and shall be deemed to have been given: (i) five business days after the
date sent by United States certified mail, return receipt requested, with proper
postage thereon; (ii) one day after sent if sent by overnight courier of
national cognition; or (iii) when transmitted or delivered, if sent by facsimile
or personally delivered (as the case may be), and shall be addressed as follows:
(a) if to the Company, at 000 Xxxxxxxx Xxxxx 000, Xxx Xxxx, Xxx Xxxx
00000, and
(b) if to the Holder, at 0000 Xxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000
or, in any such case, at such other address or addresses as shall have been
furnished in writing by such party to the others.
9. APPLICABLE LAW
Washington law shall govern the interpretation, construction, and enforcement of
this Warrant and all transactions and agreements contemplated hereby,
notwithstanding any state's choice of law rules to the contrary.
10. MISCELLANEOUS PROVISIONS
(a) Subject to the terms and conditions contained herein, this Warrant
shall be binding on the Company and its successors and shall inure to
the benefit of the original Holder, its successors and assigns and all
holders of Warrant Shares.
(b) This Warrant may not be modified or terminated, nor may any
performance or condition hereof be waived in whole or in part except
by an agreement in writing signed by the party against whom
enforcement of such modification, termination, or waiver is sought.
(c) If any provision of this Warrant is held by a court of competent
jurisdiction to be invalid, illegal or unenforceable, such provision
shall be severed, enforced to the extent possible, or modified in such
a way as to make it enforceable, and the invalidity, illegality or
unenforceability thereof shall not affect the remainder of this
Warrant.
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(d) Paragraph headings used in this Warrant are for convenience only and
shall not be taken or construed to define or limit any of the terms of
this Warrant. Unless otherwise provided herein, or unless the context
otherwise requires, the use of the singular shall include the plural
and the use of any gender shall include all genders.
ISSUED and executed as of the 4th day of February, 2000.
XXXXXXXXXXXX.XXX HOLDINGS CORP.
By: /s/ MORI S. NINOMIYA
---------------------------------
Name: Mori S. Ninomiya
Title: President and CEO
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EXHIBIT I
NOTICE OF EXERCISE
(To be executed by a Holder desiring to exercise the right to purchase Warrant
Shares pursuant to the Warrant.)
XXXXXXXXXXXX.XXX HOLDINGS CORP.
The undersigned Holder of the Warrant hereby:
1. irrevocably elects to exercise the Warrant to the extent of purchasing
_____________Warrant Shares;
2. makes payment in full of the aggregate Exercise Price for those Warrant
Shares in the amount of $________________ by certified check or wire
transfer of immediately available funds;
3. requests, if the number of Warrant Shares purchased are not all the Warrant
Shares purchasable pursuant to the Warrant, that a new Warrant of like
tenor for the remaining Warrant Shares purchasable pursuant to the Warrant
be issued and delivered to the undersigned at the address indicated below.
Dated: Holder:
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By:
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Its:
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Address:
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