EXHIBIT 4.1
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED
OR EXERCISED UNLESS AND UNTIL SUCH WARRANT AND/OR SHARES OF COMMON STOCK IS
REGISTERED UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
IS OBTAINED TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED. THIS WARRANT
AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT ARE
SUBJECT TO THE RESTRICTIONS ON TRANSFER SET FORTH IN SECTIONS 4 AND 10 OF THIS
WARRANT.
Warrant No. _______ Number of Shares: _______
Date of Issuance: June 5, 2001
IRVINE SENSORS CORPORATION
Common Stock Purchase Warrant
(Void after Five Years)
Irvine Sensors Corporation, a Delaware corporation (the "Company"), for
value received, hereby certifies that ________________., or its registered
assigns (the "Registered Holder"), is entitled, subject to the terms and
conditions set forth below, to purchase from the Company, at any time or from
time to time commencing on or after the first anniversary of the date of
issuance (the "Original Issuance Date") and on or before 5:00 p.m. (Eastern
time) on June 5, 2006 (the "Termination Date") shares of Common Stock of the
Company, at a purchase price of $1.35 per share. The shares purchasable upon
exercise of this Warrant, and the purchase price per share, each as adjusted
from time to time pursuant to the provisions of this Warrant, are hereinafter
referred to as the "Warrant Shares" and the "Purchase Price," respectively.
1. Exercise.
This Warrant may be exercised by the Registered Holder, in whole or in
part, by surrendering this Warrant, with the purchase form appended hereto as
Exhibit I duly executed by the Registered Holder or by the Registered Holder's
duly authorized attorney, at the principal office of the Company, or at such
other office or agency as the Company may designate, accompanied by payment in
full, in lawful money of the United States, of the Purchase Price payable in
respect of the number of Warrant Shares purchased upon such exercise.
(b) Each exercise of this Warrant shall be deemed to have been effected
immediately prior to the close of business on the day on which this Warrant
shall have been surrendered to the Company as provided in subsection 1(a) above
accompanied by payment in full of the Purchase Price (the "Exercise Date"). At
such time, the person or persons in whose name or names any certificates for
Warrant Shares shall be issuable upon such exercise as provided in subsection
1(c) below shall be deemed to have become the holder or holders of record of the
Warrant Shares represented by such certificates.
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(c) As soon as practicable after the exercise of this Warrant in full or in
part, and in any event within 5 business days thereafter, the Company, at its
expense, will cause to be issued in the name of, and delivered to, the
Registered Holder, or as such Holder (upon payment by such Holder of any
applicable transfer taxes) may direct:
(i) a certificate or certificates for the number of full Warrant
Shares to which the Registered Holder shall be entitled upon such exercise
plus, in lieu of any fractional share to which the Registered Holder would
otherwise be entitled, cash in an amount determined pursuant to Section 3
hereof; and
(ii) in case such exercise is in part only, a new warrant or
warrants (dated the date hereof) of like tenor, calling in the aggregate on
the face or faces thereof for the number of remaining Warrant Shares.
2. Adjustments.
(a) Adjustment for Stock Splits and Combinations. If the Company shall at
any time or from time to time after the date on which this Warrant was first
issued (the "Original Issue Date") effect a subdivision of the outstanding
Common Stock, the Purchase Price then in effect immediately before that
subdivision shall be proportionately decreased. If the Company shall at any time
or from time to time after the Original Issue Date combine the outstanding
shares of Common Stock, the Purchase Price then in effect immediately before the
combination shall be proportionately increased. Any adjustment under this
paragraph shall become effective at the close of business on the date the
subdivision or combination becomes effective.
(b) Adjustment for Certain Dividends and Distributions. In the event the
Company at any time, or from time to time after the Original Issue Date shall
make or issue, or fix a record date for the determination of holders of Common
Stock entitled to receive, a dividend or other distribution payable in
additional shares of Common Stock, then and in each such event the Purchase
Price then in effect immediately before such event shall be decreased as of the
time of such issuance or, in the event such a record date shall have been fixed,
as of the close of business on such record date, by multiplying the Purchase
Price then in effect by a fraction:
(1) the numerator of which shall be the total number of shares
of Common Stock issued and outstanding immediately prior to the time of
such issuance or the close of business on such record date, and
(2) the denominator of which shall be the total number of
shares of Common Stock issued and outstanding immediately prior to the
time of such issuance or the close of business on such record date plus
the number of shares of Common Stock issuable in payment of such
dividend or distribution;
provided, however, if such record date shall have been fixed and such dividend
is not fully paid or if such distribution is not fully made on the date fixed
therefor, the Purchase Price shall be recomputed accordingly as of the close of
business on such record date and thereafter the
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Purchase Price shall be adjusted pursuant to this paragraph as of the time of
actual payment of such dividends or distributions.
(c) Adjustment in Number of Warrant Shares. When any adjustment is required
to be made in the Purchase Price pursuant to subsections 2(a) or 2(b), the
number of Warrant Shares purchasable upon the exercise of this Warrant shall be
changed to the number determined by dividing (i) an amount equal to the number
of shares issuable upon the exercise of this Warrant immediately prior to such
adjustment, multiplied by the Purchase Price in effect immediately prior to such
adjustment, by (ii) the Purchase Price in effect immediately after such
adjustment.
(d) Adjustments for Other Dividends and Distributions. In the event the
Company at any time or from time to time after the Original Issue Date shall
make or issue, or fix a record date for the determination of holders of Common
Stock entitled to receive, a dividend or other distribution payable in
securities of the Company (other than shares of Common Stock) or in cash or
other property (other than cash out of earnings or earned surplus, determined in
accordance with generally accepted accounting principles), then and in each such
event provision shall be made so that the Registered Holder shall receive upon
exercise hereof, in addition to the number of shares of Common Stock issuable
hereunder, the kind and amount of securities of the Company and/or cash and
other property which the Registered Holder would have been entitled to receive
had this Warrant been exercised into Common Stock on the date of such event and
had the Registered Holder thereafter, during the period from the date of such
event to and including the Exercise Date, retained any such securities
receivable, giving application to all adjustments called for during such period
under this Section 2 with respect to the rights of the Registered Holder.
(e) Adjustment for Mergers or Reorganizations, etc. If there shall occur
any reorganization, recapitalization, consolidation or merger involving the
Company in which the Common Stock is converted into or exchanged for securities,
cash or other property (other than a transaction covered by subsections 2(a),
2(b) or 2(d)), then, following any such reorganization, recapitalization,
consolidation or merger, the Registered Holder shall receive upon exercise
hereof the kind and amount of securities, cash or other property which the
Registered Holder would have been entitled to receive if, immediately prior to
such reorganization, recapitalization, consolidation or merger, the Registered
Holder had held the number of shares of Common Stock subject to this Warrant.
Notwithstanding the foregoing sentence, if (x) there shall occur any
reorganization, recapitalization, consolidation or merger involving the Company
in which the Common Stock is converted into or exchanged for anything other than
solely equity securities, and (y) the common stock of the acquiring or surviving
company is publicly traded, then, as part of any such reorganization,
recapitalization, consolidation or merger, (i) the Registered Holder shall have
the right thereafter to receive upon the exercise hereof such number of shares
of common stock of the acquiring or surviving company as is determined by
multiplying (A) the number of shares of Common Stock then subject to this
Warrant by (B) a fraction, the numerator of which is the Fair Market Value per
share of Common Stock as of the effective date of such transaction, and the
denominator of which is the fair market value per share of common stock of the
acquiring or surviving company as of the effective date of such transaction, as
determined in good faith by the Board of Directors of the Company, and (ii) the
exercise price per share of common stock of the acquiring or surviving company
shall be the Purchase Price divided by the fraction referred to in clause (B)
above. In any such case, appropriate adjustment (as determined
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in good faith by the Board of Directors of the Company) shall be made in the
application of the provisions set forth herein with respect to the rights and
interests thereafter of the Registered Holder, to the end that the provisions
set forth in this Section 2 (including provisions with respect to changes in and
other adjustments of the Purchase Price) shall thereafter be applicable, as
nearly as reasonably may be, in relation to any securities, cash or other
property thereafter deliverable upon the exercise of this Warrant.
The Fair Market Value per share of Common Stock shall be determined as
follows:
(i) If the Common Stock is listed on a national securities exchange,
the Nasdaq Stock Market or another nationally recognized trading system
(including, without limitation, the OTC Bulletin Board and, if the average daily
trading volume for the preceding 10 days has been at least 100,000 shares, the
Pink Sheets) as of the Exercise Date, the Fair Market Value per share of Common
Stock shall be deemed to be the average of the high and low reported sale prices
per share of Common Stock thereon on the trading day immediately preceding the
effective date of the transaction (provided that if no such price is reported on
such day, the Fair Market Value per share of Common Stock shall be determined
pursuant to clause (ii)).
(ii) If the Common Stock is not listed on a national securities
exchange, the Nasdaq Stock Market or another nationally recognized trading
system, the Fair Market Value per share of Common Stock shall be deemed to be
the amount most recently determined by the Board of Directors to represent the
fair market value per share of the Common Stock.
(f) Certificate as to Adjustments. Upon the occurrence of each adjustment
or readjustment of the Purchase Price pursuant to this Section 2, the Company at
its expense shall promptly compute such adjustment or readjustment in accordance
with the terms hereof and furnish to the Registered Holder a certificate setting
forth such adjustment or readjustment (including the kind and amount of
securities, cash or other property for which this Warrant shall be exercisable
and the Purchase Price) and showing in detail the facts upon which such
adjustment or readjustment is based. The Company shall, upon the written request
at any time of the Registered Holder, furnish or cause to be furnished to the
Registered Holder a certificate setting forth (i) the Purchase Price then in
effect and (ii) the number of shares of Common Stock and the amount, if any, of
other securities, cash or property which then would be received upon the
exercise of this Warrant.
3. Fractional Shares.
The Company shall not be required upon the exercise of this Warrant to
issue any fractional shares, but shall make an adjustment therefor in cash on
the basis of the Fair Market Value per share of Common Stock, as determined
pursuant to the following.
(a) If the Common Stock is listed on a national securities exchange, the
Nasdaq Stock Market or another nationally recognized trading system (including,
without limitation, the OTC Bulletin Board and, if the average daily trading
volume for the preceding 10 days has been at least 100,000 shares, the Pink
Sheets) as of the Exercise Date, the Fair Market Value per share of Common Stock
shall be deemed to be the average of the high and low reported sale prices per
share of Common Stock thereon on the trading day immediately preceding the
Exercise Date (provided that if no such price is reported on such day, the Fair
Market Value per share of
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Common Stock shall be determined pursuant to clause (b)).
(b) If the Common Stock is not listed on a national securities exchange,
the Nasdaq Stock Market or another nationally recognized trading system as of
the Exercise Date, the Fair Market Value per share of Common Stock shall be
deemed to be the amount most recently determined by the Board of Directors to
represent the fair market value per share of the Common Stock (including without
limitation a determination for purposes of granting Common Stock options or
issuing Common Stock under an employee benefit plan of the Company).
4. Requirements for Transfer.
(a) This Warrant and the Warrant Shares shall not be sold or transferred
unless either (i) they first shall have been registered under the Securities Act
of 1933, as amended (the "Act"), or (ii) the Company first shall have been
furnished with an opinion of legal counsel, reasonably satisfactory to the
Company, to the effect that such sale or transfer is exempt from the
registration requirements of the Act.
(b) Notwithstanding the foregoing, no registration or opinion of counsel
shall be required for (i) a transfer by a Registered Holder which is a
corporation to a wholly owned subsidiary of such corporation, a transfer by a
Registered Holder which is a partnership to a partner of such partnership or a
retired partner of such partnership or to the estate of any such partner or
retired partner, a transfer by a Registered Holder which is a limited liability
company to a member of such limited liability company or a retired member or to
the estate of any such member or retired member, or a transfer by a Registered
Holder which is a member of the National Association of Securities Dealers (the
"NASD") to an officer or employee of the Registered Holder as permitted by NASD
rules, provided that the transferee in each case agrees in writing to be subject
to the terms of this Section 4, or (ii) a transfer made in accordance with Rule
144 under the Act.
(c) Each certificate representing Warrant Shares shall bear a legend
substantially in the following form:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and
may not be offered, sold or otherwise transferred, pledged or
hypothecated unless and until such securities are registered
under such Act or an opinion of counsel satisfactory to the
Company is obtained to the effect that such registration is
not required."
The foregoing legend shall be removed from the certificates representing any
Warrant Shares, at the request of the holder thereof, at such time as they
become eligible for resale pursuant to Rule 144(k) under the Act or if an
effective registration statement is then in effect permitting the resale of the
Warrant Shares.
(d) With respect to the Warrant Shares (but not the Warrants), the
Registered Holder shall have one "demand" registration right, under which it
shall have the right, at any time that the Company is eligible to use Form S-3
for resales by selling stockholders, to request that the Company effect such
registration as soon as practicable following the notice of such demand. This
demand right shall remain in effect until June 5, 2006. The Registered Holder
shall also
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have unlimited "piggyback" registration rights to request that the Warrant
Shares (but not the Warrants) be registered for resale on any registration
statement which the Company files for any purpose on a form available for such
registration by selling stockholders after the Original Issue Date. Such
registration shall be subject to customary obligations by the Registered Holder
to provide information to the Company and by the Company to indemnify the
Registered Holder against Securities Act liabilities, and shall be subject to
customary underwriter cutbacks as a result of market conditions, provided that
all requesting selling stockholders are treated on a pro rata allocation basis
as determined by the number of securities requested to be included in the
registration statement subject to the cutback.
5. No Impairment.
The Company will not, by amendment of its charter or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, but will at all
times in good faith assist in the carrying out of all such terms and in the
taking of all such action as may be necessary or appropriate in order to protect
the rights of the holder of this Warrant against impairment.
6. Notices of Record Date, etc.
In the event:
(a) the Company shall take a record of the holders of its Common Stock
(or other stock or securities at the time deliverable upon the exercise of this
Warrant) for the purpose of entitling or enabling them to receive any dividend
or other distribution, or to receive any right to subscribe for or purchase any
shares of stock of any class or any other securities, or to receive any other
right; or of any capital reorganization of the Company, any reclassification of
the Common Stock of the Company, any consolidation or merger of the Company with
or into another corporation (other than a consolidation or merger in which the
Company is the surviving entity and its Common Stock is not converted into or
exchanged for any other securities or property), or any transfer of all or
substantially all of the assets of the Company; or
(b) of the voluntary or involuntary dissolution, liquidation or winding-
up of the Company,
then, and in each such case, the Company will mail or cause to be mailed to the
Registered Holder a notice specifying, as the case may be, (i) the record date
for such dividend, distribution or right, and the amount and character of such
dividend, distribution or right, or (ii) the effective date on which such
reorganization, reclassification, consolidation, merger, transfer, dissolution,
liquidation or winding-up is to take place, and the time, if any is to be fixed,
as of which the holders of record of Common Stock (or such other stock or
securities at the time deliverable upon the exercise of this Warrant) shall be
entitled to exchange their shares of Common Stock (or such other stock or
securities) for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, transfer, dissolution,
liquidation or
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winding-up. Such notice shall be mailed at least ten days prior to the record
date or effective date for the event specified in such notice.
7. Reservation of Stock.
The Company will at all times reserve and keep available, solely for
issuance and delivery upon the exercise of this Warrant, such number of Warrant
Shares and other securities, cash and/or property, as from time to time shall be
issuable upon the exercise of this Warrant.
8. Exchange of Warrants.
Upon the surrender by the Registered Holder, properly endorsed, to the
Company at the principal office of the Company, the Company will, subject to the
provisions of Section 4 hereof, issue and deliver to or upon the order of such
Holder, at the Company's expense, a new Warrant or Warrants of like tenor, in
the name of the Registered Holder or as the Registered Holder (upon payment by
the Registered Holder of any applicable transfer taxes) may direct, calling in
the aggregate on the face or faces thereof for the number of shares of Common
Stock (or other securities, cash and/or property) then issuable upon exercise of
this Warrant.
9. Replacement of Warrants.
Upon receipt of evidence reasonably satisfactory to the Company of the
loss, theft, destruction or mutilation of this Warrant and (in the case of loss,
theft or destruction) upon delivery of an indemnity agreement (with surety if
reasonably required) in an amount reasonably satisfactory to the Company, or (in
the case of mutilation) upon surrender and cancellation of this Warrant, the
Company will issue, in lieu thereof, a new Warrant of like tenor.
10. Transfers, etc.
(a) The Company will maintain a register containing the name and
address of the Registered Holder of this Warrant. The Registered Holder may
change its or his address as shown on the warrant register by written notice to
the Company requesting such change.
(b) Subject to the provisions of Section 4 hereof, this Warrant and all
rights hereunder are transferable, in whole or in part, upon surrender of this
Warrant with a properly executed assignment (in the form of Exhibit II hereto)
at the principal office of the Company.
(c) Until any transfer of this Warrant is made in the warrant register,
the Company may treat the Registered Holder as the absolute owner hereof for all
purposes; provided, however, that if and when this Warrant is properly assigned
in blank, the Company may (but shall not be obligated to) treat the bearer
hereof as the absolute owner hereof for all purposes, notwithstanding any notice
to the contrary.
11. Representations of the Registered Holder.
The Registered Holder of this Warrant represents and warrants to the
Company as follows:
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(a) Investment. The Registered Holder is acquiring this Warrant and the
Warrant Shares issuable upon the exercise of this Warrant, for its own account
for investment and not with a view to, or for sale in connection with, any
distribution thereof, nor with any present intention of distributing or selling
the same, except as otherwise may be permitted under applicable securities laws.
(b) Authority. The Registered Holder has full power and authority to
enter into and to perform this Warrant in accordance with its terms. The
Registered Holder has not been organized specifically for the purpose of
investing in the Company.
(c) Accredited Investor. The Registered Holder is an Accredited
Investor within the definition set forth in Rule 501(a) promulgated under the
Securities Act.
12. Mailing of Notices, etc.
All notices and other communications from the Company to the Registered
Holder shall be mailed by first-class certified or registered mail, postage
prepaid, to the address last furnished to the Company in writing by the
Registered Holder. All notices and other communications from the Registered
Holder or in connection herewith to the Company shall be mailed by first-class
certified or registered mail, postage prepaid, to the Company at its principal
office set forth below. If the Company should at any time change the location of
its principal office to a place other than as set forth below, it shall give
prompt written notice to the Registered Holder and thereafter all references in
this Warrant to the location of its principal office at the particular time
shall be as so specified in such notice.
13. No Rights as Stockholder.
Until the exercise of this Warrant, the Registered Holder shall not
have or exercise any rights by virtue hereof as a stockholder of the Company.
Notwithstanding the foregoing, in the event (i) the Company effects a split of
the Common Stock by means of a stock dividend and the Purchase Price of and the
number of Warrant Shares are adjusted as of the date of the distribution of the
dividend (rather than as of the record date for such dividend), and (ii) the
Registered Holder exercises this Warrant between the record date and the
distribution date for such stock dividend, the Registered Holder shall be
entitled to receive, on the distribution date, the stock dividend with respect
to the shares of Common Stock acquired upon such exercise, notwithstanding the
fact that such shares were not outstanding as of the close of business on the
record date for such stock dividend.
14. Change or Waiver.
Any term of this Warrant may be changed or waived only by an instrument
in writing signed by the party against which enforcement of the change or waiver
is sought.
15. Section Headings.
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The section headings in this Warrant are for the convenience of the
parties and in no way alter, modify, amend, limit or restrict the contractual
obligations of the parties.
16. Governing Law.
This Warrant will be governed by and construed in accordance with the
internal laws of the State of California (without reference to the conflicts of
law provisions thereof).
EXECUTED as of the Date of Issuance indicated above.
IRVINE SENSORS CORPORATION
By: _______________________________
Title: ____________________________
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