EXHIBIT 4.1
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WARRANT AGREEMENT
dated as of November 16, 2001
FOR
WARRANTS
TO PURCHASE
UP TO 1,880,565 SHARES OF COMMON STOCK
EXPIRING NOVEMBER 15, 2004
between
INNOVATIVE MICRO TECHNOLOGY, INC.
and
THE HOLDERS LISTED ON ANNEX I HERETO
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THE SECURITIES SUBJECT TO THIS AGREEMENT.
ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
WARRANT AGREEMENT
THIS WARRANT AGREEMENT, dated as of November 16, 2001, is made between
Innovative Micro Technology, Inc. a Delaware corporation (the "Company"), and
the Persons listed on Annex I hereto (the "Initial Holders")
WHEREAS, pursuant to that certain Third Amended Debtor's Plan of
Reorganization Under Chapter 11 of the Bankruptcy Code Dated as of September 24,
2001 (the "Plan"), the Company has agreed to issue to the Initial Holders
warrants (the "Warrants") to purchase up to an aggregate of 1,880,564 shares of
the Company's common stock, par value $.0001 per share (the "Common Stock");
WHEREAS, in accordance with the Plan, the Initial Holders and the
allocation of shares of Common Stock to be purchasable by each are set forth on
Annex I hereto;
WHEREAS, the Company has duly authorized the execution and delivery of
this Warrant Agreement to provide for the issuance of the Warrants, on such
terms and conditions as shall be fixed as hereinafter provided.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:
ARTICLE I
ISSUANCE, FORM, EXECUTION, DELIVERY AND
REGISTRATION OF WARRANT CERTIFICATES
Section 1.1 Issuance of Warrants. On the earliest practicable date
hereafter, the Company shall issue to the Initial Holders Warrants to purchase a
total of 1,880,564 shares of Common Stock, allocated on the basis of 1,000,000
Warrant Units. Each "Warrant Unit" represents 0.946805 shares of Common Stock at
an initial exercise price of $20.00 per share, 0.423822 shares of Common Stock
at an initial exercise price of $22.50 per share, and 0.509937 shares of Common
Stock at an initial exercise price of $27.00 per share. Each Initial Holder
shall receive, subject to the provisions contained herein and in the certificate
therefor, a Warrant to purchase the number of Warrant Units set forth beside
such Initial Holder's name on Annex I.
Section 1.2 Terms of Warrants. The shares of Common Stock purchasable
upon exercise of the Warrants are hereinafter referred to as the "Warrant
Shares" and, where appropriate, such term shall also mean the other securities
or property purchasable and deliverable upon exercise of a Warrant as provided
in Section 2.6.3 at the price specified herein and therein, in each case subject
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to adjustment as provided herein and therein. The initial exercise price or, if
such price has been adjusted, the price per Share as last adjusted pursuant to
the terms hereof, is referred to as the "Exercise Price" herein.
Section 1.3 Form of Warrant Certificates. As soon as practicable after
the date hereof the Company shall execute and deliver to each Holder a Warrant
Certificate substantially in the form set forth in Exhibit A attached hereto,
dated the date on which countersigned, evidencing the Warrant to be issued to
such Holder.
Section 1.4 Registrar And Warrant Register. The Company will keep, at
the office or agency maintained by the Company for such purpose, a register or
registers in which, subject to such reasonable regulations as it may prescribe,
the Company shall provide for the registration of, and registration of transfer
and exchange of, Warrants as provided in this Article. Each Person designated by
the Company from time to time as a Person authorized to register the transfer
and exchange of the Warrants is hereinafter called, individually and
collectively, the "Registrar." The Company will at all times designate one
Person (who may be the Company and who need not be a Registrar) to act as
repository of a master list of names and addresses of the Holders (the "Warrant
Register"). The Company will act as such repository unless and until some other
Person is designated by the Company to act as such.
ARTICLE II
DURATION, EXERCISE OF WARRANTS AND EXERCISE PRICE
Section 2.1 Duration of Warrants. Subject to the terms and conditions
established herein, the Warrants shall expire at 5:00 p.m., Los Angeles time on
November 15, 2004 (the "Expiration Date"). Each Warrant may be exercised on any
Business Day (as hereinafter defined) on or after its issue date. Any Warrant
not exercised before the close of business on the Expiration Date shall become
void, and all rights of the Holder under the Warrant Certificate evidencing such
Warrant and under this Warrant Agreement shall cease.
Section 2.2 Exercise; Issuance of Certificates; Payment for Shares.
Each Warrant may be exercised by the Holder, in whole or in part (but not as to
a fractional Share), and on one or more occasions, by sending written notice
(using the form set forth in Exhibit B hereto) to the Company at its principal
office at ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (or such other office or
agency of the Company as it may from time to time designate by notice in writing
to the Holder) at any time within the period above named and by payment to the
Company by cashier's check or wire transfer of the aggregate Exercise Price for
the number of Shares for which the Warrant is exercised (but not more than the
number of Shares for which the Warrant then remains unexercised). The Company
agrees that the Shares so purchased will be deemed to have been issued to the
Holder as the record owner of such Shares as of the close of business on the
date on which such notice is received and payment made as aforesaid.
Certificates for the Shares so purchased will be delivered to the Holder within
a reasonable time, not exceeding fifteen (15) Business Days, after the Warrant
has been exercised, and, unless the Warrant has expired, it will continue in
effect with respect to the number of Shares, if any, as to which it has not then
been exercised.
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Section 2.3 Automatic Exercise. Upon the occurrence of a Corporate
Transaction, as defined below, the Warrants shall automatically and immediately
be deemed exercised by each Holder as of the effective date of such Corporate
Transaction. The effect of the automatic exercise shall be as follows:
(a) if, within twenty (20) days of mailing by the Company of the
notice of the automatic exercise, the Holder delivers the Exercise Price of any
Warrant or portion thereof to the Company, the resulting Warrant Shares shall be
issued to the Holder.
(b) as to any Warrant for which the Holder has not tendered the
Exercise Price within twenty (20) days of mailing by the Company of the notice
of the automatic exercise, each such Warrant or portion of a Warrant having an
Exercise Price that is less than the Fair Market Value of the Common Stock
("In-the-Money Warrant") shall be deemed exercised, with the result that each
such Warrant shall be canceled and a number of Warrant Shares shall be issued as
of the effective date of the Corporate Transaction to the Holder equal to the
PRODUCT of:
(W) the number of Warrant Shares issuable upon a cash
exercise of the In-the-Money Warrant MULTIPLIED by
(X) the QUOTIENT of:
(i) the DIFFERENCE of:
(Y) the aggregate Fair Market Value of the Common
Stock (after taking into account the related Corporate Transaction) issuable
upon the exercise of the In-the-Money Warrant on the Effective Date; MINUS
(Z) the aggregate Exercise Price of the
In-the-Money Warrant on the Effective Date; DIVIDED by
(ii) the aggregate Fair Market Value of the Common
Stock (after taking into account the occurrence of the related Corporation
Transaction) issuable upon the exercise of the In-the-Money Warrant on the
Effective Date;
(c) as to any Warrant for which the Holder has not tendered the
Exercise Price within twenty (20) days of mailing by the Company of the notice
of the automatic exercise, each such Warrant or portion of a Warrant whose
Exercise Price is equal to or greater than the Fair Market Value of the Common
Stock (after taking into account the occurrence of the related Corporate
Transaction) shall be deemed canceled and thereafter be void for all purposes.
Section 2.4 Shares to be Fully Paid; Reservation of Shares. The Company
covenants and agrees as follows:
2.4.1 All Shares issued upon the exercise of a Warrant will, upon
issuance, be fully paid and nonassessable and free from all taxes, liens and
charges with respect to the issue thereof.
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2.4.2 The Company will from time to time take all actions
required to assure that the par value (if any) per Share issuable upon exercise
of any Warrant is at all times equal to or less than the Exercise Price per
Share.
2.4.3 During the period within which any Warrant may be
exercised, the Company will at all times have authorized and reserved for the
purpose of issuance or transfer upon exercise of the Warrants a sufficient
number of Shares to provide for the exercise of all outstanding Warrants.
Section 2.5 Adjustment of Price and Number of Purchasable Shares. The
Warrants shall be subject to adjustment in Exercise Prices and number of
purchasable shares as provided below.
2.5.1 Liquidating Dividends. If the Company declares a dividend
upon the Common Stock payable otherwise than out of consolidated earnings or
consolidated earned surplus determined in accordance with generally accepted
accounting principles, including the making of appropriate deductions for
minority interests, if any, in subsidiaries, and such dividend is payable in
cash or property other than securities of the Company, the Company will pay each
Holder on the dividend payment date, the amount of cash or such property the
Holder would have received if the Holder had exercised its Warrant in full to
purchase Shares and had been the record holder of such Shares on the record date
for such dividend, or, if a record is not taken, the date as of which the
holders of Shares of record entitled to such dividend are determined. For the
purposes of the foregoing, a dividend other than in cash will be considered
payable out of earnings or surplus (other than revaluation or paid-in surplus)
only to the extent that such earnings or surplus are charged an amount equal to
the fair value of such dividend as determined in good faith by the Board of
Directors of the Company.
2.5.2 Subdivision or Combination of Shares. If the Company at any
time while any Warrant, or any portion thereof, remains outstanding and
unexpired shall split, subdivide or combine the securities as to which purchase
rights under the Warrant exist, into a different number of securities of the
same class, or declare a dividend in securities of the same class, the Exercise
Price for such securities shall be proportionately decreased in the case of a
split or subdivision or stock dividend or proportionately increased in the case
of a combination. Upon each adjustment of the Exercise Price under this Section
2.5.2, the Holder will 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 before such adjustment by the number of
Shares purchasable pursuant to the Warrant immediately before such adjustment
and dividing the product by the Exercise Price resulting from such adjustment.
2.5.3 Reclassification. If the Company, at any time while a
Warrant, or any portion thereof, remains outstanding and unexpired, by
reclassification of securities or otherwise shall change any of the securities
as to which purchase rights under any Warrant exist into the same or a different
number of securities of any other class or classes, each Warrant shall
thereafter represent the right to acquire such number and kind of securities as
would have been issuable as the result of such change with respect to the
securities that were subject to the purchase rights under the Warrant
immediately prior to such reclassification or other change and the Exercise
Price therefor shall be appropriately adjusted.
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2.5.4 Adjustments for Dividends in Stock or Other Securities or
Property. If while any Warrant, or any portion thereof, remains outstanding and
unexpired, the holders of the securities as to which purchase rights under the
Warrant exist at the time shall have received, or, on or after the record date
fixed for the determination of eligible stockholders, shall have become entitled
to receive, without payment therefor, other or additional stock or other
securities or property (other than cash or securities of the same class as those
subject to the Warrant) of the Company by way of dividend, then and in each
case, the Warrant shall represent the right to acquire, in addition to the
number of shares of the security receivable upon exercise of the Warrant, and
without payment of any additional consideration therefor, the amount of such
other or additional stock or other securities or property (other than cash or
securities of the same class as those subject to the Warrant) of the Company
that such holder would hold on the date of such exercise had it been the holder
of record of the security receivable upon exercise of the Warrant on the date
hereof and had thereafter, during the period from the date hereof and including
the date of such exercise, retained such shares and/or all other additional
stock available by it as aforesaid during such period, giving effect to all
adjustments called for during such period.
2.5.5 Reorganization, Reclassification, Consolidation, Merger or
Sale. If any capital reorganization or reclassification of the Shares of the
Company, or any consolidation or merger of the Company with another Person, or
the sale of all or substantially all of the Company's assets to another
corporation (other than a Corporate Transaction) will be effected in such a way
that holders of Shares will be entitled to receive Shares, securities or assets
with respect to or in exchange for Shares, then, upon any actual or deemed
exercise of a Warrant, the Holder will thereafter have the right to receive such
Shares, securities or assets as may be issued or payable with respect to or in
exchange for a number of outstanding Shares equal to the number of Shares
immediately theretofore purchasable and receivable upon the exercise of the
Warrant. If a purchase, tender or exchange offer is made to and accepted by the
holders of more than 50% of the outstanding Shares of the Company, the Company
will not effect any consolidation, merger or sale with the Person, as defined
below, making such offer or with any Affiliate, as defined below, of such
Person, unless, before the consummation of such consolidation, merger or sale,
the Holder of a Warrant is given at least ten (10) business days notice prior to
the scheduled closing date (the "Closing Date") of such transaction (which
notice shall specify the material terms of such transaction and the proposed
Closing Date). In the event the Holder elects to exercise a Warrant or any
portion thereof following such notice and such consolidation, merger or sale is
not consummated within ten (10) days of the proposed Closing Date (or any
subsequent proposed Closing Date), then the Holder may rescind its exercise of
the Warrant by providing written notice thereof to the Company, the Company
shall take all actions consistent therewith (including without limitation the
immediate return of the Exercise Price paid with respect to such rescinded
exercise) and the Warrant shall continue in full force and effect.
2.5.6 Notice of Adjustment. Upon any adjustment of the Exercise
Price, the Company will give written notice thereof, by first-class mail,
postage prepaid, addressed to the Holder at the address of such Holder as shown
on the books of the Company, which notice will state (i) 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 the Warrant,
setting forth in reasonable detail the method of
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calculation and the facts upon which such calculation is based, and (ii)
whether, after giving effect to such adjustment, the maximum number of Shares
issuable upon the exercise of the Warrant will constitute more than 5% of the
total number of then issued and outstanding Shares (including in such total
number the maximum number of Shares issuable upon the exercise of the Warrant).
Section 2.6 Closing of Books. The Company will at no time close its
transfer books against the transfer of the Warrants or of any Shares issued or
issuable upon the exercise of a Warrant in any manner which interferes with the
timely exercise of the Warrant.
Section 2.7 No Voting Rights. The Warrants will not entitle any Holder
to any voting rights or other rights as a stockholder of the Company.
Section 2.8 Vesting. The Warrants shall vest immediately upon issuance
and be fully exercisable by the Holder without condition.
ARTICLE III
CASH ASSET SALE DISTRIBUTION
Section 3.1 Cash Asset Sale Distribution. If the Company completes a
Cash Asset Sale, then for each Warrant Share issuable but not yet issued under
any unexercised Warrant or portion thereof (an "Unexercised Warrant Share"), and
in lieu of any other rights under such Warrant, the Holder shall receive,
immediately after the consummation of a Cash Asset Sale, a distribution of an
amount of cash (the "Cash Asset Sale Distribution") as follows:
3.1.1 If the Net Cash Proceeds in the Cash Asset Sale are less
than $18.33 per share of Common Stock of the Company, the Cash Asset Sale
Distribution will be zero.
3.1.2 If the Net Cash Proceeds in the Cash Asset Sale are greater
than $18.33 per share of Common Stock of the Company but less than $25 per
share, the Cash Asset Sale Distribution shall be the Net Cash Proceeds per share
minus $18.34, multiplied by 0.461829.
3.1.3 If the Net Cash Proceeds in the Cash Asset Sale are equal
to or greater than $25 per share of Common Stock of the Company, the Cash Asset
Sale Distribution shall be $6.666, multiplied by 0.461829.
ARTICLE IV
MISCELLANEOUS
Section 4.1 Defined Terms. Unless otherwise defined in this Warrant
Agreement, the capitalized terms set forth below and used in this Warrant
Agreement shall have the meanings given to such terms below:
"Affiliate" of a Person means any Person directly or indirectly
controlling, controlled by or under direct or indirect common control with, such
other Person. A Person will be deemed to control a corporation or other business
entity if such Person possesses, directly or indirectly, the power to direct or
cause the
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direction of the management and policies of such corporation, whether through
the ownership of voting securities, by contract or otherwise.
"Business Day" means any Monday, Tuesday, Wednesday, Thursday and
Friday on which (i) banks in Goleta, California or the city in which the
principal office of the Company is located, and (ii) the principal national
securities exchange or market, if any, on which the Common Stock is listed or
admitted to trading, in each case, are not obligated by law or executive order
to be closed.
"Cash Asset Sale" means a sale for cash of all, or substantially all,
of the assets of the Company that is consummated before the Expiration Date.
"Cash Asset Sale Distribution" has the meaning set forth in Section
3.1.
"Closing Price" means, per share of Common Stock or any other security,
on any date specified herein:
(i) the last sale price, regular way, on such date or, if no
such sale takes place on such date, the average of the closing bid and asked
prices on such date, in each case as officially reported on the principal
national securities exchange on which the Common Stock or other security is then
listed or admitted to trading; and
(ii) if the Common Stock or other security is not then listed
or admitted to trading on any national securities exchange, but is quoted for
trading on the National Association of Securities Dealers Annotated Quotation
System ("NASDAQ"), the average of the reported closing bid and asked prices on
such date.
"Corporate Transaction" means, (i) other than a Cash Asset Sale, a sale
of all or substantially all of the assets of the Company (in one or a series of
transactions), (ii) a transaction or a series of transactions whereby fifty
percent (50%) of the issued and outstanding shares of Common Stock (prior to any
dilution for unvested shares of Restricted Stock or unexercised Options) are
held by a Person (including such Person's affiliates), excluding that percent of
the issued and outstanding shares of Common Stock held by such Person as of the
Effective Date, unless such Person acquires additional shares of Common Stock
after the Effective Date and such shares of Common Stock, when combined with the
shares of Common Stock held by such Person as of the Effective Date, aggregate
more than 49.9% of the issued and outstanding shares of Common Stock (prior to
any dilution for unexercised Options), or (iii) a transaction or series of
transactions whereby fifty-one percent (51%) of the issued and outstanding
shares of Common Stock vote to sell the equity interests in or merge the Company
and such sale or merger results in Persons holding fifty percent (50%) or more
of the Common Stock of the Company that are other than the Persons holding fifty
percent (50%) or more of the Common Stock of the Company immediately prior to
such sale or merger.
"Exercise Price" has the meaning set forth in Section 1.2.
"Fair Market Value" means, per share of Common Stock or any other
security, as of any date of determination, the arithmetic mean of the daily
Closing Prices for the five (5) consecutive trading days
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before such date of determination; provided, however, that if the Common Stock
or such other security is then neither listed or admitted to trading on any
national securities exchange, or quoted for trading on NASDAQ, then "Fair Market
Value" means the fair market value of one share of the Common Stock as
reasonably determined by the Board of the Directors of the Company.
"Holder" means any record holder of a Warrant.
"Initial Holder" has the meaning set forth in the preamble to this
Warrant Agreement.
"Net Cash Proceeds" means the gross cash received from a Cash Asset
Sale less (i) all costs associated with the Cash Asset Sale paid by the Company,
(ii) all liabilities that must be paid by the Company prior to making
distributions to stockholders, including reserves for contingent liabilities,
and (iii) all costs of liquidating the Company, including the costs of making
distributions to stockholders.
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Shares" means the Company's authorized common stock, $.0001 par value
per share, as constituted on the date hereof and also includes any shares of any
class of stock or other equity securities of the Company thereafter authorized
which will not be limited to a fixed sum or percentage of par value in respect
of the rights of the holders thereof to participate in dividends or in the
distribution of assets upon the voluntary or involuntary liquidation,
dissolution or winding up of the Company; provided that, except as provided in
Section 2.5.4, the Shares purchasable pursuant to a Warrant will include only
Shares designated as "common shares" of the Company or, in the case of any
reclassification of the outstanding Shares, the Shares, securities or assets
provided for in Section 2.5.3
"Warrant Unit" means has the meaning set forth in Section 1.1.
Section 4.2 Amendment. This Warrant Agreement and the terms of the
Warrants may be amended by the Company without the consent of any Holder, for
the purpose of curing any ambiguity, or for curing, correcting or supplementing
any defective or inconsistent provision contained herein or therein or in any
other manner which the Company may deem necessary or desirable and which shall
not adversely affect in any respect the interests of the Holders, including
without limitation changes required by a transfer agent or depositary as a
condition to effecting and recording transactions in the Warrants. The Company
may modify this Warrant Agreement and the terms of the Warrants with the consent
of the Holders of not less than a majority in interest thereof (based on the
number of remaining shares of Common Stock purchasable under the then
outstanding Warrants, without regard to exercise price) for the purpose of
adding any provision to or changing in any manner or eliminating any of the
provisions of this Warrant Agreement or modifying in any manner the rights of
the Holders; provided, however, that no such modification that increases the
Exercise Price, reduces the period of time during which the Warrants are
exercisable hereunder, otherwise adversely affects the exercise rights of the
Holders, reduces the percentage required for modification, or effects any
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change to this Section 4.2, may be made with respect to an outstanding Warrant
without the consent of the Holder of such Warrant.
Any modification or amendment made in accordance with this
Warrant Agreement will be conclusive and binding on all present and future
Holders whether or not they have consented to such modification or amendment or
waiver and whether or not notation of such modification or amendment is made
upon such Warrant Certificates. Any instrument given by or on behalf of any
Holder in connection with any consent to any modification or amendment will be
conclusive and binding on all subsequent Holders.
Section 4.3 Address for Notices to the Company and for Transmission of
Documents. All notices hereunder to the Company shall be deemed to have been
given when sent by certified mail, postage prepaid, or by telecopy, confirmed by
First Class mail, postage prepaid, addressed as follows:
Corporate Secretary
Innovative Micro Technology, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Section 4.4 Notices to Holders. Notices to Holders shall be mailed to
such Holders at their addresses shown in the Warrant Registry, which shall
reflect the addresses of the Holders as they appear on Annex I hereto or as such
Holders or transferees thereof have subsequently notified the Company in
writing. Any such notice by the Company to Holders shall be sufficiently given
if sent by first-class mail, postage prepaid.
Section 4.5 Applicable Law. The validity, interpretation and
performance of this Warrant Agreement and each warrant issued hereunder and of
the respective terms and provisions thereof shall be governed by the laws of the
state of Delaware.
Section 4.6 Headings. The descriptive headings of the several Articles
and Sections of this Warrant Agreement are inserted for convenience of reference
only and shall not control or affect the meaning or construction of any of the
provisions hereof.
The next page is the signature page.
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IN WITNESS WHEREOF, this Warrant Agreement has been duly
executed by the Company as of the day and year first above written.
INNOVATIVE MICRO TECHNOLOGY, INC.
By: ------------------------------
▇▇▇▇ ▇▇▇▇▇▇
Chief Executive Officer
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EXHIBIT A
FORM OF WARRANT CERTIFICATE
A-1
[FACE]
No. [ ]
WARRANT CERTIFICATE
INNOVATIVE MICRO TECHNOLOGY, INC.
This Warrant Certificate certifies that [______________] is the
registered holder of a warrant (the "Warrant") to purchase shares of common
stock, par value $0.0001 per share (the "Common Stock"), of Innovative Micro
Technology, Inc., a Delaware corporation (the "Company"). The Warrant entitles
the holder to purchase from the Company at any time on or after the date hereof
and until 5:00 p.m., Los Angeles time, on November 15, 2004 (the "Expiration
Date"), the number of fully paid and non-assessable shares of Common Stock set
forth below (as such number may be adjusted from time to time, the "Warrant
Shares," which may also include any other securities or property issuable upon
exercise of a Warrant, such adjustment and inclusion each as provided in the
Warrant Agreement) at the Exercise Price set forth below per Warrant Share upon
surrender of this Warrant Certificate and payment of the Exercise Price at any
office or agency maintained for that purpose by the Company, subject to the
conditions set forth herein and in the Warrant Agreement:
_____ Warrant Shares at $20.00 per share
_____ Warrant Shares at $22.50 per share
_____ Warrant Shares at $27.50 per share
For each unexercised Warrant or unexercised portion thereof (and in
lieu of any other rights under such Warrant), the Holder is entitled to receive
the Cash Asset Sale Distribution provided for in Article III of the Warrant
Agreement if the Company completes an applicable Cash Asset Sale.
The Exercise Price shall be payable in cash or by certified or official
bank check in the lawful currency of the United States of America that as of the
time of payment is legal tender for payment of public or private debts. The
Company has initially designated its principal executive offices in Goleta,
California as the address for delivery of the Exercise Price. The number of
Warrant Shares issuable upon exercise of the Warrant is subject to adjustment
upon the occurrence of certain events set forth in the Warrant Agreement.
The Warrant is immediately exercisable from the date hereof.
Any Warrant or portion thereof not exercised on or prior to 5:00 p.m.,
Los Angeles time, on November 15, 2004 shall thereafter be void.
Reference is hereby made to the further provisions on the reverse
hereof, which provisions shall for all purposes have the same effect as though
fully set forth at this place.
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All capitalized terms used in this Warrant Certificate and not
otherwise defined herein shall have the meanings ascribed thereto in the Warrant
Agreement.
THE WARRANT REPRESENTED BY THIS WARRANT CERTIFICATE SHALL BE GOVERNED
BY THE LAWS OF THE STATE OF DELAWARE.
WITNESS the corporate seal of the Company and the signatures of its
duly authorized officers.
Dated: _______________, 2002
INNOVATIVE MICRO TECHNOLOGY, INC.
By:
Name:
Title:
A-3
[REVERSE SIDE]
INNOVATIVE MICRO TECHNOLOGY, INC.
The Warrant evidenced by this Warrant Certificate is part of a duly
authorized issue of Warrants, each of which represents the right to purchase at
any time on or after the date hereof and until 5:00 p.m., Los Angeles time, on
November 15, 2004, that number of shares of Common Stock for the Exercise
Price(s) set forth on the face thereof, subject to adjustment as set forth in
the Warrant Agreement dated as of November 16, 2001 (the "Warrant Agreement"),
which Warrant Agreement is hereby incorporated by reference in and made a part
of this instrument and is hereby referred to for a description of the rights,
limitation of rights, obligations, duties and immunities thereunder of the
Company and the Holders. The Warrant may be exercised by (i) surrendering to the
Company this Warrant Certificate with the form of Notice of Exercise set forth
hereon duly completed and executed and (ii) tendering payment in full of the
Exercise Price for the Warrant or portion thereof exercised and any other
amounts required to be paid pursuant to the Warrant Agreement. If all of the
items referred to in the preceding sentence are received by the Company prior to
5:00 p.m. on any Business Day on or prior to the Expiration Date, the exercise
of the Warrant to which such items relate will be effective on such Business
Day.
Subject to the terms of the Warrant Agreement, as soon as practicable
after the exercise of the Warrant or any portion thereof, the Company shall
issue or cause to be issued to or upon the written order of the Holder of this
Warrant Certificate, a certificate or certificates evidencing the Warrant Share
or Warrant Shares to which such holder is entitled, registered in such name or
names as may be directed by such holder pursuant to the Notice of Exercise, as
set forth on the reverse of this Warrant Certificate. Such certificate or
certificates evidencing the Warrant Share or Warrant Shares shall be deemed to
have been issued and any Persons who are designated to be named therein shall be
deemed to have become the holder of record of such Warrant Share or Warrant
Shares as of the close of business on the date upon which the exercise of this
Warrant was deemed to be effective as provided in the preceding paragraph. Upon
a partial exercise, the Company shall issue to the Holder a new Warrant
Certificate providing for the number of Warrant Shares remaining for purchase
thereunder or return this certificate amended to so provide.
The Company will not be required to issue fractional shares of Common
Stock upon exercise of the Warrant or distribute Warrant Certificates that
evidence fractional shares of Common Stock. In lieu of fractional shares of
Common Stock, there shall be paid to the Holder of this Warrant Certificate at
the time such Warrant Certificate is exercised an amount in cash equal to the
same fraction of the Fair Market Value per share of Common Stock as determined
in accordance with the Warrant Agreement.
A-4
EXHIBIT B
NOTICE OF EXERCISE
TO BE EXECUTED UPON EXERCISE OF WARRANT or a portion thereof ON THE EXERCISE
DATE
The undersigned hereby irrevocably elects to exercise the Warrant or a
portion thereof represented by this Warrant Certificate and to purchase from the
Warrant Shares issuable upon the exercise of the Warrant the following whole
number of Warrant Shares:
______________ Warrant Shares at $20.00 per share;
______________ Warrant Shares at $22.50 per share;
______________ Warrant Shares at $27.00 per share;
The undersigned herewith tenders payment for such Warrant Shares in the amount
of $_____________ by wire transfer or by certified or official bank check,
pursuant to Section 2.2 of the Warrant Agreement.
The undersigned requests that a certificate representing such Warrant
Shares be registered in the name of ___________________, whose address is
____________________, and that such certificate be delivered to
_____________________, whose address is ____________________. Any cash payments
to be paid in lieu of a fractional Warrant Share should be made to
__________________, whose address is ____________________, and the check
representing payment thereof should be delivered to ____________________, whose
address is
---------------------.
Name of holder of Warrant Certificate:
(Please Print)
Tax Identification or Social Security Number:
Signature:
Note: The above signature must correspond with the name as written upon
the face of this Warrant Certificate in every particular, without
alteration or enlargement or any change whatever.
Dated: ___________, ____
* Indicate, as applicable, the form of consideration being provided.
B-1
EXHIBIT C
FORM OF ASSIGNMENT
For value received, ____________________ hereby sells, assigns and
transfers unto ____________________ the within Warrant Certificate, together
with all right, title and interest therein, and does hereby irrevocably
constitute and appoint ____________________ attorney, to transfer said Warrant
Certificate on the books of the within-named Company, with full power of
substitution in the premises.
Dated: _____________, ____
Signature: ___________________________________
Note: The above signature must correspond with the name as written upon
the face of this Warrant Certificate in every particular, without
alteration or enlargement or any change whatever.
The Company shall not be required to effect any assignment of this
Warrant if, in the opinion of the Company or its counsel, such assignment would
be in violation of the Securities Act of 1933, as amended, or any applicable
state law.
C-1
ANNEX I
SCHEDULE OF HOLDERS
(to be completed on execution of Warrant Agreement and issuance of Warrants)
Each Warrant Unit represents 0.946805 shares of Common Stock at an initial
exercise price of $20.00 per share, 0.423822 shares of Common Stock at an
initial exercise price of $22.50 per share, and 0.509937 shares of Common Stock
at an initial exercise price of $27.00 per share.
Name and Address No. of Warrant Units
I-1
TABLE OF CONTENTS
Page
ARTICLE I ISSUANCE, FORM, EXECUTION, DELIVERY
AND REGISTRATION OF WARRANT CERTIFICATES.................1
Section 1.1 Issuance of Warrants.....................................1
Section 1.2 Terms of Warrants........................................1
Section 1.3 Form of Warrant Certificates.............................1
Section 1.4 Registrar And Warrant Register...........................1
ARTICLE II DURATION, EXERCISE OF WARRANTS AND
EXERCISE PRICE...........................................1
Section 2.1 Duration of Warrants.....................................1
Section 2.2 Exercise; Issuance of Certificates; Payment for Shares...1
Section 2.3 Automatic Exercise.......................................1
Section 2.4 Shares to be Fully Paid; Reservation of Shares...........1
Section 2.5 Adjustment of Price and Number of Purchasable Shares.....1
Section 2.6 Closing of Books.........................................1
Section 2.7 No Voting Rights.........................................1
Section 2.8 Vesting..................................................1
ARTICLE III CASH ASSET SALE DISTRIBUTION.............................1
Section 3.1 Cash Asset Sale Distribution.............................1
ARTICLE IV MISCELLANEOUS............................................1
Section 4.1 Defined Terms............................................1
Section 4.2 Amendment................................................1
Section 4.3 Address for Notices to the Company and for
Transmission of Documents..............................1
Section 4.4 Notices to Holders.......................................1
Section 4.5 Applicable Law...........................................1
Section 4.6 Headings.................................................1
-i-
EXHIBITS AND ANNEXES
EXHIBIT A - FORM OF WARRANT CERTIFICATE......................................A-1
EXHIBIT B - NOTICE OF EXERCISE...............................................B-1
EXHIBIT C - FORM OF ASSIGNMENT ..............................................C-1
ANNEX I - SCHEDULE OF HOLDERS................................................I-1
-ii-
