Exhibit 4.5
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED ("THE ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
SOLD, TRANSFERRED; ASSIGNED OR OTHERWISE DISPOSED OF UNLESS THIS WARRANT
SHALL HAVE BEEN REGISTERED UNDER THE ACT AND ANY APPLICABLE STATE
SECURITIES LAWS OR OF THIS OR SUCH SALE, TRANSFER, ASSIGNMENT OR
DISPOSITION WILL NOT INVOLVE ANY VIOLATION OF THE REGISTRATION PRO VISIONS
OF THE ACT OR OF ANY APPLICABLE STATE SECURITIES LAW.
PERFORMANCE INTERCONNECT CORP.
(a Texas corporation)
Warrant for the purchase of securities of Performance Interconnect Corp.
VOID AFTER 5:00 P.M., EASTERN TIME, ON OCTOBER 22, 2002.
FOR VALUE RECEIVED, Performance Interconnect Corp., a Texas
corporation (the "Company"), hereby grants to USA Funding, Inc., or
its assigns (the "Holder"), the right, subject to the provisions of
this Warrant, to purchase from the Company at any time during the
period commencing on the date hereof and expiring at 5:00 p.m.,
Eastern Time, on October 22, 2002 (the "Expiration Date"), 4,000,000
fully paid and nonassessable shares of the Company's authorized but
unissued Common Stock (as hereinafter defined) at a price (the
"Exercise Price") of $0.50 per share (such Exercise Price and the
number of shares of Common Stock purchasable hereunder being subject
to adjustment as provided herein).
The term "Common Stock" means the common stock of the Company,
together with any other equity securities that may be issued by the
Company in respect thereof or in substitution therefor. The shares of
Common Stock deliverable or delivered upon such exercise, as adjusted
from time to time, are hereinafter referred to as "Warrant Stock."
Upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant
certificate and (in the case of loss, theft or destruction) of
reasonably satisfactory indemnification and upon surrender and
cancellation of this Warrant certificate, if mutilated, the Company
shall execute and deliver a new Warrant of like tenor and date.
1. Exercise of Warrant. This Warrant may be exercised, subject to
the requirements set forth below, in whole or in part at any time or
from time to time prior to 5:00 p.m., Central Time, on the Expiration
Date, or, if such a day is a day on which banking institutions in
Dallas, Texas are authorized by law to close, then on the next
succeeding day that shall not be such a day, by presentation and
surrender of this Warrant certificate to the Company at its principal
office, or at the office of its stock transfer agent, if any, with the
Warrant Exercise Form attached hereto duly executed and accompanied by
payment (either in cash or by certified or official bank check,
payable to the order of the Company) of the Exercise Price. Upon
receipt by the Company of this Warrant certificate, together with the
Exercise Price, at its office, or by the stock transfer agent if any,
of the Company or at its offices, in proper form for exercise as
described above, the Holder shall be deemed to be the holder of record
for the shares of Common Stock issuable upon such exercise, even if
the stock transfer books of the Company shall then be closed or
certificates representing such shares of Common Stock shall not have
been delivered to the Holder. The Holder shall pay any and all
documentary stamp or similar issue or transfer taxes payable in
respect of the issue or delivery of shares of Common Stock on
exercise of this Warrant The Company shall promptly thereafter issue
certificate(s) evidencing the Common Stock so purchased.
2. Reservation of Shares. The Company shall at all times
reserve for issuance and delivery upon exercise of this Warrant all
shares of Common Stock or other shares of capital stock of the Company
(and other securities) from time to time receivable upon exercise of
this Warrant. All such shares (and other securities) shall be duly
authorized and, when issued upon exercise, shall be validly issued,
fully paid and nonassessable.
3. No Fractional Shares Issued. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of
this Warrant, but the Company shall pay the Holder an amount equal to
the Fair Value (as hereinafter defined), on the business day prior to
the exercise of this Warrant, of such fractional share of Common Stock
in lieu of each fraction of a share otherwise called for upon exercise
of this Warrant.
4. Transfer.
(a) Securities Law. Neither this Warrant nor the Warrant
Stock issuable upon the exercise hereof has been registered under the
Securities Act of 1933, as amended (the "Act"), or under any state
securities laws and, unless so registered, may not be transferred,
sold, pledged, hypothecated or otherwise disposed of unless an
exemption for such registration is available. In the event Holder
desires to transfer this Warrant or any of the Warrant Stock issued
upon the exercise hereof, the Holder must give the Company prior
written notice of such proposed transfer including the name and address
of the proposed transferee. Such transfer may be made only either (i)
upon registration of the Warrants or Warrant Stock pursuant to the Act
and applicable state securities laws, (ii) upon publication by the
Securities and Exchange Commission (the "Commission") of a ruling,
interpretation, opinion or "no action letter" based upon facts
presented to the Commission, or (iii) upon receipt by the Company of an
opinion of counsel, reasonably satisfactory to the Company, in the case
of either (ii) or (iii), to the effect that the proposed transfer will
not involve any violation of the registration provisions of the Act or
of any applicable state securities laws.
(b) Transfer. Except as restricted hereby, this Warrant and
the Warrant Stock may be transferred by the Holder only in whole at any
time. Upon surrender of this Warrant certificate to the Company with
the Assignment Form annexed hereto duly executed and funds sufficient
to pay any transfer tax, the Company shall, without charge, execute and
deliver a new Warrant certificate in the name of the assignee named in
such instrument of assignment, and this Warrant certificate shall
promptly be canceled. Any assignment, transfer, pledge, hypothecation
or other disposition of this Warrant attempted contrary to the
provisions of this Warrant, or any levy of execution, attachment or
other process attempted upon this Warrant, shall be null and void and
without effect.
(c) Rule 144A The Company will take, or will cause to be
taken, such action as the Holder may reasonably request from time to
time to facilitate any sale or disposition by the Holder of this
Warrant or any Warrant Stock without registration under the Act and/or
any applicable state securities laws within the limitations of the
exemptions of any rule or regulation thereunder, including, without
limitation, Rule 144A under the Act.
5. Rights of Holder. The Holder shall not, by virtue hereof, be
entitled to any rights of a stockholder in the Company, either at law or
in equity, and the rights of the Holder are limited to those expressed in
this Warrant.
6. Anti-Dilution Provisions.
6.1. Adjustment of Number of Shares Purchasable. Upon any amendment
to the Company's articles of incorporation changing the number of shares
of Common Stock that the Company is authorized to issue, the number of
shares of Common Stock purchasable hereunder automatically shall be
adjusted to an amount (calculated to the nearest 1/100th of a share)
equal to ten percent of the number of shares of Common Stock that the
Company is then authorized to issue. Prior to the earlier of the
Expiration Date or the exercise of this Warrant, the Company shall not
amend its articles of incorporation to authorize the issuance of shares
of capital stock with rights and benefits substantially equivalent to the
Common Stock.
6.2. Adjustment of Exercise Price. Upon and in connection with any
adjustment in the number of shares of Common Stock purchasable hereunder,
the Exercise Price automatically shall be adjusted to an amount (rounded
to the nearest $0.01) equal to the quotient obtained by dividing
$2,000,000 by the number of shares of Common Stock purchasable hereunder
after such adjustment.
6.3. Certificates and Notices.
(a) Adjustments to Exercise Price. As promptly as
practicable (but in any event not later than five days) after the
occurrence of any event requiring any adjustment under this Section 6 to
the Exercise Price (or to the number or kind of securities or other
property deliverable upon the exercise of this Warrant), the Company
shall, at its expense, deliver to the Holder of this Warrant an officer's
certificate, setting forth in reasonable detail the events requiring the
adjustment and the method by which such adjustment was calculated and
specifying the adjusted Exercise Price and the number of shares of Common
Stork purchasable upon exercise of this Warrant after giving effect to
such adjustment.
(b) Extraordinary Corporate Events. If and whenever the
Company subsequent to the date hereof shall propose to (i) pay any
dividend to the holders of shares of Common Stock or to make any other
distribution to the holders of shares of Common Stock (including, without
limitation, any cash dividend), (ii) offer to the holders of shares of
Common Stock rights to subscribe for or purchase any additional shares of
any class of stock or any other rights or options, (iii) effect any
reclassification of the Common Stock (other than a reclassification
involving merely the subdivision or combination of outstanding shares of
Common Stock), (iv) engage in any reorganization or recapitalization or
any consolidation or merger (other than a merger in which no distribution
of securities or other property is to be made to holders of shares of
Common Stock), (v) consummate any sale, transfer or other disposition of
its property, assets and business or the property, assets and business of
any subsidiary of the Company as an entirety or substantially as an
entirety, or (vi) commence or effect the liquidation, dissolution or
winding up of the Company, then, in each such case, the Company shall
deliver to the holder of this Warrant an officer's certificate giving
notice of such proposed action, specifying (A) the date on which the
stock transfer books of the Company shall close, or a record shall be
taken, for determining the holders of Common Stock entitled to receive
such dividend or other distribution or such rights or options, or the
date on which such reclassification, reorganization, recapitalization,
consolidation, merger, sale, transfer, other disposition, transaction,
liquidation, dissolution or winding up shall take place or commence, as
the case may be, and (B) the date as of which it is expected that holders
of Common Stock of record shall be entitled to receive securities or
other property deliverable upon such action, if any such date is to be
fixed. Such officer's certificate shall be delivered in the case of any
action covered by clause (i) or (ii) above, at least 20 days prior to the
record date for determining holders of Common Stock for purposes of
receiving such payment or offer, and, in any other case, at least 20 days
prior to the date upon which such action takes place and 20 days prior to
any record date to determine holders of Common Stock entitled to receive
such securities or other property.
(c) Effect of Failure. Failure to give any certificate or
notice, or any defect in any certificate or notice required under this
Section 6.3 shall not affect the legality or validity of the adjustment
of the Exercise Price or the number of shares of Warrant Stock
purchasable upon exercise of this Warrant.
7. Various Covenants of the Company.
7.1. No Impairment or Amendment The Company shall not, and shall
not permit Xxxxx Investments, Inc. ("Xxxxx") or I-Con Industries, Inc.
("I-Con") to, by any action including, without limitation, amending its
charter, any reorganization, recapitalization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, (a) avoid or seek. to avoid the observance or
performance of any of the terms of this Warrant or (b) impair or seek to
impair the value 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 to protect the rights of
the holder hereof against impairment. Without limiting the generality of
the foregoing, the Company (a) will not permit the par value of any
shares of Warrant Stock issuable upon exercise of this Warrant to be
greater than the amount payable therefor upon such exercise, (b) will
take all such action as may be necessary or appropriate in order that the
Company may validly issue fully paid and nonassessable shares of Warrant
Stock, (c) will obtain and maintain all such authorizations, exemptions
or consents from.any public regulatory body having jurisdiction as may be
necessary to enable the Company to perform its obligations under this
Warrant, (d) will not issue any capital stock or enter into any agreement
the terms of which would have the effect, directly or indirectly, of
preventing the Company from honoring its obligations hereunder, (e) will
not engage in any transaction with its officers, directors, employees,
directors or stockholders or their respective "associates" and
"affiliates" (as such terms are used in the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder)
on less than fair and reasonable terms or otherwise on less then an
arm's-length basis, (f) will cause Xxxxx and I-Con to take, or will not
permit Xxxxx or I-Con to take, any of the actions referred to in clauses
(a), (b), (c), (d) or (e) above, and (g) will remain the sole holder of
all of the issued and outstanding capital stock of Xxxxx and all options,
warrants or other rights to acquire any such capital stock, and (h) will
cause Xxxxx to remain the sole holder of all of the issued and
outstanding capital stock of I-Con and all options, warrants or other
rights to acquire any such capital stock. Without the prior written
approval of the bolder hereof, which approval may be withheld in such
holder's sole and absolute discretion, the Company shall not form or
become the owner or holder of the capital stock of any subsidiary other
than Xxxxx and I-Con, and will not permit Xxxxx or I-Con to form or
become the owner or holder of any capital stock of any subsidiary other
than, in the case Xxxxx, I-Con.
So long as any Warrants or shares of Warrant Stock are outstanding,
the Company will acknowledge in writing, in form satisfactory to any
holder of any such security, the continued validity of the Company's
obligations hereunder.
7.2. Listing on Securities Exchanges, etc. At all times following
the exercise of this Warrant, the Company will use commercially
reasonable efforts to maintain the listing of all shares of Warrant Stock
on each securities exchange or market or trading system on which the
Common Stock is then or at any time thereafter listed or traded.
8. Legend and Stop Transfer Orders. Unless the shares of Warrant
Stock have been registered under the Act, upon exercise of any of this
Warrant and the issuance of any of the shares of Warrant Stock all
certificates representing shares of Warrant Stock shall bear on the face
thereof substantially the following legend, insofar as is consistent with
applicable law:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1993, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD, OFFERED
FOR SALE, ASSIGNED, TRANSFERRED, OR OTHERWISE DISPOSED OF UNLESS
REGISTERED PURSUANT TO THE PROVISIONS OF THAT ACT AND APPLICABLE
STATE. SECURITIES LAWS OR AN OPINION OF COUNSEL, SATISFACTORY TO
THE COMPANY, IS OBTAINED STATING THAT SUCH DISPOSITION WILL NOT
INVOLVE ANY VIOLATION OF THE REGISTRATION PROVISIONS OF THE OR OF
ANY APPLICABLE STATE SECURITIES LAW."
9. Registration.
(a) Piggyback Registrations. Notwithstanding the provisions
set forth above, the Company shall notify the Holder in writing at least
thirty (30) days prior to filing any registration statement under the Act
for purposes of a public offering of securities of the Company
(including, but not limited to, registration statements relating to
secondary offerings of securities of the Company, but excluding
registration statements relating to employee benefit plans) and will
afford each such Holder an opportunity to include in such registration
statement the Warrant Stock. If the registration statement is for an
underwritten offering, the Company shall so advise the Holder and the
right of Holder to be included in a registration shall be subject to
reduction in the discretion of the underwriter (provided that any
reduction by such underwriter shall be effected pro rata with respect to
all persons or entities entitled to piggy-back registration of their
securities in such offering) and conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's
Warrant Stock and Holder's execution of the underwriting agreement.
(b) Payment of Expenses. All expenses incurred in connection
with registration (excluding underwriters' discounts and commissions and
the fees and expenses of counsel for the Holder), including, without
limitation, all registration, blue sky and qualification fees, printers'
and accounting fees, and fees and disbursements of counsel for the
Company shall be borne by the Company.
(c) Obligations of the Company. Whenever required to effect
the registration of the Warrant Stock, the Company shall, as
expeditiously as reasonably possible:
(i) Prepare and file a registration statement with respect
thereto and use its best efforts to cause such
registration statement to become effective, and keep
such registration statement effective for up to one
hundred fifty (150) days.
(ii) Prepare and file such amendments and supplements to
such registration statement and the prospectus used in
connection wit such registration statement as may be
necessary to comply wit the provisions of the Act.
(iii). Furnish to the Holder such number of copies of a
prospectus, including a preliminary prospectus, in
conformity with the requirements of the Act, and such
other documents as may be reasonably requested.
(iv) Use its best efforts to register and quality the
securities covered by such registration statement under
such other securities or Blue Sky laws of such
jurisdictions as shall be reasonably requested by the
Holder, provided that the Company shall not be required
in connection therewith or as a condition thereto to
quality to do business or to file a general consent to
service of process in any such states or jurisdictions.
(v) In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting
agreement in usual and customary form, with the managing
underwriter(s) of such offering. The Holder
participating in such underwriting shall also enter into
and perform its obligations under such an agreement
(vi) Notify the Holder at any time when a prospectus
relating thereto is required to be delivered under the
Act of the happening of any event as a result of which
the prospectus included in such registration statement
or any document incorporated therein by reference, as
then in effect includes an untrue statement of a
material fact or omits to state a material fact required
to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances
then existing.
(vii) Furnish, at the request of any Holder requesting
registration on the date that such Warrant Stock is
delivered to the underwriters for sale, if such
securities are being sold through underwriters, or, if
such securities are not being sold through underwriters,
on the date that the registration statement with respect
to such securities becomes effective, (i) an opinion,
dated as of such date, of the counsel representing the
Company for the purposes of such registration hi. form
and substance as is customarily given to underwriters in
an underwritten public offering and reasonably
satisfactory to the Holder, addressed to the
underwriters, if any, and to the Holder and (ii) a
letter dated as of such date, from the independent
certified public accountants of the Company, in form and
substance as is customarily given by independent
certified public accountants to underwriters in an
underwritten public offering and reasonably satisfactory
to the Holder, addressed to the underwriters, if any,
and to the Holder.
(viii) Afford to the Holder all rights (including the
right to conduct "due diligence" with respect to the
Company) customarily afforded to selling stockholders in
an underwritten public offering.
(d) Indemnification. The Company will indemnify and hold
harmless the Holder, the partners, officers and directors of the Holder,
any underwriter (as defined in the Act) for such Holder and each person,
if any, who controls such Holder or underwriter within the meaning of the
Act or the Securities Exchange Act of 1934, as amended (the "1934 Act"),
against any losses, claims, damages, or liabilities (joint and several)
to which they may become subject under the Act, the 1934 Act or other
federal or state law, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereof) arise out of or are based
upon any of the following statements, omissions or violations
(collectively a "violation"): (i) any untrue statement or alleged untrue
statement of a material fact contained in such registration statement,
including any Preliminary Prospectus or final Prospectus contained
therein or any amendments or supplements thereto, or any documents
incorporated therein by reference, (ii) the omission or alleged omission
to state therein a material fact required to be stated therein, or
necessary to make the statements therein not misleading, or (iii) any
violation or alleged violation by the Company of the Act, the 1934 Act,
any state securities law or Me or regulation promulgated under the Act,
the 1934 Act or any state securities law in connection with the offering
covered by such registration statement and the Company, at its option,
shall either assume the defense thereof or will reimburse the Holder,
partner, officer, or director, underwriter or controlling person for any
legal or other expenses reasonably incurred by them, as incurred, in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided. however that the indemnity agreement
contained in this subsection shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if the
Holder fails to promptly notify the Company of such claim or such
settlement is effected without the consent of the Company (which consent
shall not be unreasonably withheld), nor shall the Company be liable in
any such case for any such loss, claim, damage, liability or action to
the extent that it arises out of or is based upon a violation which
occurs in reliance upon and in conformity with written information
furnished expressly for use in connection with such registration by such
Holder, partner, officer, director, underwriter or controlling person of
such Holder. The obligations of the Company under this paragraph shall
survive the completion of any offering of Warrant Stock.
(e) Survival. The Company's obligations under this Section
9 shall survive. until the third anniversary of the date hereof.
10. Representations and Warranties. The Company represents and
warrants to the Holder that:
(a) The authorized capital stock of the Company consists of
40,000,000 shares of Common Stock, of which 25,000,000 shares of Common
Stock were issued and outstanding on the date hereof. Except as disclosed
by the Company to the Holder in wilting prior to the date of the issuance
of this Warrant, as of the date of the issuance of this Warrant, (i)
there are no outstanding rights, options, warrants or agreements for the
purchase from, or sale or issuance by, the Company or any of the
Company's subsidiaries of any capital stock or equity interests or
securities convertible into or exercisable or exchangeable for such stock
or equity interests; (ii) there are no agreements on the part of the
Company or any of the Company's subsidiaries to issue, sell or distribute
any securities or equity interests or any assets of the Company or any of
the Company's subsidiaries; (iii) none of the Company or any of the
Company's subsidiaries has any obligation (contingent or otherwise) to
purchase, redeem or otherwise acquire any of its securities or equity
interests or any interest therein or to pay any dividend or make any
distribution in respect thereof; and (iv) no person or entity is entitled
to (A) any preemptive or similar right with respect to the issuance of
any securities or equity interests of the Company or any of the Company's
subsidiaries, or (B) any rights with respect to the registration of any
securities or equity interests of the Company or any of the Company's
subsidiaries under the Act.
(b) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the state of its
incorporation, with all requisite power and authority to execute, deliver
and perform its obligations under this Warrant and to conduct its
business as presently conducted. The Company is duly qualified and
authorized to do business as a foreign corporation and is in good
standing in all states in which such qualification and good standing are
necessary or desirable for the conduct by the Company of its business or
the performance by the Company of its obligations hereunder. The
execution, delivery and performance by the Company of this Warrant do not
and will not constitute (a) a violation of any applicable law or the
Company's articles or certificate of incorporation or bylaws or (b) a
material breach of any other document, agreement or instrument to which
the Company is a party or by which the Company is bound. This Warrant
has been duly authorized, executed and delivered by the Company, and is
the legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms. No consent of,
approval by, registration or filing with or authorization from any
governmental authority or agency is required in connection with the
execution, delivery or performance by the Company of this Warrant.
11. Notice. All notices hereunder shall be in wilting and shall
be deemed given (a) when delivered personally, (b) the next business day
when sent by nationally recognized overnight courier service procuring a
return receipt, or (c) within three business days after mailing when by
certi5ed or registered mail, return receipt requested, to the Company at
0000 Xxxxxx Xxxxx, Xxxxxx, Xxxxx 00000, or to the Holder at its address
on the Company's records or at such other address of which the Company or
Holder has been advised by notice hereunder.
12. Applicable Law. This Warrant is issued under and shall for
all purposes governed by and construed in accordance with the laws of the
State of Texas.
13. Miscellaneous. This Warrant represents the entire agreement
of the Company with respect to the subject matter hereof and may be
changed only by a written agreement executed by the Company and the
Holder.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed
on its behalf in its corporate name, by its duly authorized officer, all
as of October 22, 1997.
PERFORMANCE INTERCONNECT CORP.
By: /s/
--------------------------
Name: ____________________
Title:
--------------------
ASSIGNMENT FORM
For value received, the undersigned _______________, hereby sells,
assigns and transfers all of the rights of the undersigned under the within
Warrant, with respect to the number of shares of the capital stock covered
thereby set forth below, unto:
Name and address of Assignee Number of Shares
---------------------------- ----------------
Date:
Name of Holder:
By: ____________________________
WARRANT EXERCISE FORM
1. The undersigned Warrant Holder of the attached original,
executed Warrant hereby elects to exercise its purchase right under such
Warrant with respect to the Warrant Stock, as defined in the Warrant of
Performance Interconnect Corp. (the "Company").
2. The undersigned Warrant Holder elects to pay the aggregate
exercise price for such Warrant Stock in the following manner
(a) by lawful money of the United States or the enclosed
certified check or postal or express money order payable in
United States dollars to the order of the Company in the
amount of $______________; or
(b) by wire transfer of United States funds to the account of
the Company in the amount of $_____________, which transfer
has been made before or simultaneously with the delivery
of this Warrant Exercise Form pursuant to the instructions
of the Company.
3. Please issue a stock certificate or certificates representing
the appropriate number of shares of Warrant Stock in the name of the
undersigned or in such names as is specified below:
Name: ___________________________________________
Address: ________________________________________
Tax Identification No. __________________________
HOLDER:__________________________________________
By: _____________________________________________
Date: ___________________________________________
Note: The signature of the Warrant Holder must conform in all respects to
the Warrant Holder as specified on the face of the Warrant, or
Assignment, without alteration, enlargement or any change whatsoever
