WARRANT AGREEMENT
AGREEMENT, dated as of this _____ day of
_____________________, 1996, by and between MICROENERGY, INC., a
Delaware corporation ("Company"), and AMERICAN STOCK TRANSFER &
TRUST COMPANY, as Warrant Agent (the "Warrant Agent").
WITNESSETH:
WHEREAS, in connection with a public offering of up to 430,000
shares of Series A Cumulative Preferred Stock, $.01 par value of
the Company ("Shares"), and 215,000 Class A Redeemable Preferred
Stock Purchase Warrants ("Warrants") pursuant to an underwriting
agreement (the "Underwriting Agreement") dated
_____________________, 1996 between the Company and I. A.
Xxxxxxxxxx & Co. ("Xxxxxxxxxx") and the issuance to Xxxxxxxxxx or
its designees of a Purchase Option to purchase 43,000 Shares and
21,500 Warrants (the "Purchase Option"), and the issuance to
certain bridge lenders of 880,000 Warrants, the Company will issue
up to 1,116,500 Warrants; and
WHEREAS, the Company desires the Warrant Agent to act on
behalf of the Company, and the Warrant Agent is willing to so act,
in connection with the issuance, registration, transfer, exchange
and redemption of the Warrants, the issuance of certificates
representing the Warrants, the exercise of the Warrants, and the
rights of the holders thereof;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements hereinafter set forth and for the purpose of
defining the terms and provisions of the Warrants and the
certificates representing the Warrants and the respective rights
and obligations thereunder of the Company, the holders of
certificates representing the Warrants and the Warrant Agent, the
parties hereto agree as follows:
I. Definitions. As used herein, the following terms shall have
the following meanings, unless the context shall otherwise
require:
1. "Corporate Office" shall mean the office of the
Warrant Agent (or its successor) at which at any particular time
its principal business shall be administered, which office is
located at the date hereof at 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000.
2. "Exercise Date" shall mean, as to any Warrant, the
date on which the Warrant Agent shall have received both (a) the
Warrant Certificate representing such Warrant, with the exercise
form thereon duly executed by the Registered Holder thereof or his
attorney duly authorized in writing, and (b) payment in cash, or
by official bank or certified check made payable to the Company,
of an amount in lawful money of the United States of America equal
to the applicable Purchase Price.
3. "Initial Warrant Exercise Date" shall mean
_____________________, 1997.
4. "Preferred Stock" shall mean Series A Cumulative
Convertible Preferred Stock of the Company, $.01 par value, and
shall also include any capital stock of any class of the Company
thereafter authorized which shall not be limited to a fixed sum or
percentage in respect to the rights of the holders thereof to
participate in dividends and in the distribution of assets upon
the voluntary liquidation, dissolution, or winding up of the
Company; provided, however, that the shares issuable upon exercise
of the Warrants shall include (i) only shares of such class
designated in the Company's Certificate of Incorporation as
Preferred Stock on the date of the original issue of the Warrants
or (ii), in the case of any reclassification, change,
consolidation, merger, sale, or conveyance of the character
referred to in Section 9(c) hereof, the stock, securities, or
property provided for in such section or (iii), in the case of any
reclassification or change in the outstanding shares of Preferred
Stock issuable upon exercise of the Warrants as a result of a
subdivision or combination of shares or consisting of a change in
par value, or from par value to no par value, or from no par value
to par value, such shares of Preferred Stock as so reclassified or
changed.
5. "Purchase Price" shall mean the purchase price per
share to be paid upon exercise of each Warrant in accordance with
the terms hereof, which price shall be $5.25 per share, subject to
adjustment from time to time pursuant to the provisions of
Section 9 hereof, and subject to the Company's right, in its sole
discretion, to reduce the Purchase Price upon notice to all
warrantholders.
6. "Redemption Price" shall mean the price at which the
Company may, at its option, redeem the Warrants, in accordance
with the terms hereof, which price shall be $0.01 per Warrant.
7. "Registered Holder" shall mean as to any Warrant and
as of any particular date, the person in whose name the
certificate representing the Warrant shall be registered on that
date on the books maintained by the Warrant Agent pursuant to
Section 6.
8. "Transfer Agent" shall mean American Stock
Transfer & Trust Company, as the Company's transfer agent, or its
authorized successor, as such.
9. "Warrant Expiration Date" shall mean 5:00 P.M. (New
York time) on _____________________, 2000 or the Redemption Date
as defined in Section 8, whichever is earlier; provided that if
such date shall in the State of New York be a holiday or a day on
which banks are authorized or required to close, then 5:00 P.M.
(New York time) on the next following day which in the State of
New York is not a holiday or a day on which banks are authorized
or required to close. Upon notice to all warrantholders the
Company shall have the right to extend the warrant expiration
date.
A. Warrants and Issuance of Warrant Certificates.
1. A Warrant initially shall entitle the Registered
Holder of the Warrant Certificate representing such Warrant to
purchase one (1) share of Preferred Stock upon the exercise
thereof, in accordance with the terms hereof, subject to
modification and adjustment as provided in Section 9.
2. Upon execution of this Agreement, Warrant
Certificates representing the number of Warrants sold pursuant to
the Underwriting Agreement shall be executed by the Company and
delivered to the Warrant Agent. Upon written order of the Company
signed by its President or Chairman or a Vice President and by its
Secretary or an Assistant Secretary, the Warrant Certificates
shall be countersigned, issued, and delivered by the Warrant
Agent.
3. From time to time, up to the Warrant Expiration
Date, the Transfer Agent shall countersign and deliver stock
certificates in required whole number denominations representing
up to an aggregate of 1,116,500 shares of Preferred Stock, subject
to adjustment as described herein, upon the exercise of Warrants
in accordance with this Agreement.
4. From time to time, up to the Warrant Expiration
Date, the Warrant Agent shall countersign and deliver Warrant
Certificates in required whole number denominations to the persons
entitled thereto in connection with any transfer or exchange
permitted under this Agreement; provided that no Warrant
Certificates shall be issued except (i) those initially issued
hereunder, (ii) those issued on or after the Initial Warrant
Exercise Date, upon the exercise of fewer than all Warrants
represented by any Warrant Certificate, to evidence any
unexercised warrants held by the exercising Registered Holder,
(iii) those issued upon any transfer or exchange pursuant to
Section 6; (iv) those issued in replacement of lost, stolen,
destroyed, or mutilated Warrant Certificates pursuant to
Section 7; (v) those issued pursuant to the Purchase Option; and
(vi) those issued at the option of the Company, in such form as
may be approved by the its Board of Directors, to reflect any
adjustment or change in the Purchase Price, the number of shares
of Preferred Stock purchasable upon exercise of the Warrants or
the Redemption Price therefor made pursuant to Section 9 hereof.
5. Pursuant to the terms of the Purchase Option,
Xxxxxxxxxx may purchase up to 21,500 Warrants.
B. Form and Execution of Warrant Certificates.
1. The Warrant Certificates shall be substantially in
the form annexed hereto as Exhibit A (the provisions of which are
hereby incorporated herein) and may have such letters, numbers, or
other marks of identification or designation and such legends,
summaries, or endorsements printed, lithographed, or engraved
thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be
required to comply with any law or with any rule or regulation
made pursuant thereto or with any rule or regulation of any stock
exchange on which the Warrants may be listed, or to conform to
usage or to the requirements of Section 2(b). The Warrant
Certificates shall be dated the date of issuance thereof (whether
upon initial issuance, transfer, exchange, or in lieu of
mutilated, lost, stolen, or destroyed Warrant Certificates) and
issued in registered form. Warrant Certificates shall be numbered
serially with the letters WA.
2. Warrant Certificates shall be executed on behalf of
the Company by its Chairman of the Board, President, or any Vice
President and by its Secretary or an Assistant Secretary, by
manual signatures or by facsimile signatures printed thereon, and
shall have imprinted thereon a facsimile of the Company's seal.
Warrant Certificates shall be manually countersigned by the
Warrant Agent and shall not be valid for any purpose unless so
countersigned. In case any officer of the Company who shall have
signed any of the Warrant Certificates shall cease to be an
officer of the Company or to hold the particular office referenced
in the Warrant Certificate before the date of issuance of the
Warrant Certificates or before countersignature by the Warrant
Agent and issue and delivery thereof, such Warrant Certificates
may nevertheless be countersigned by the Warrant Agent, issued and
delivered with the same force and effect as though the person who
signed such Warrant Certificates had not ceased to be an officer
of the Company or to hold such office. After countersignature by
the Warrant Agent, Warrant Certificates shall be delivered by the
Warrant Agent to the Registered Holder without further action by
the Company, except as otherwise provided by Section 4 hereof.
C. Exercise. Each Warrant may be exercised by the
Registered Holder thereof at any time on or after the Initial
Exercise Date, but not after the Warrant Expiration Date, upon the
terms and subject to the conditions set forth herein and in the
applicable Warrant Certificate. A Warrant shall be deemed to have
been exercised immediately prior to the close of business on the
Exercise Date and the person entitled to receive the securities
deliverable upon such exercise shall be treated for all purposes
as the holder of those securities upon the exercise of the Warrant
as of the close of business on the Exercise Date. As soon as
practicable on or after the Exercise Date the Warrant Agent shall
deposit the proceeds received from the exercise of a Warrant and
shall notify the Company in writing of the exercise of the
Warrant. Promptly following, and in any event within five days
after the date of such notice from the Warrant Agent, the Warrant
Agent, on behalf of the Company, shall cause to be issued and
delivered by the Transfer Agent, to the person or persons entitled
to receive the same, a certificate or certificates for the
securities deliverable upon such exercise (plus a certificate for
any remaining unexercised Warrants of the Registered Holder),
provided that the Warrant Agent shall refrain from causing such
issuance of certificates pending clearance of checks received in
payment of the Purchase Price pursuant to such Warrants. Upon the
exercise of any Warrant and clearance of the funds received, the
Warrant Agent shall promptly remit the payment received for the
Warrant (the "Warrant Proceeds") to the Company or as the Company
may direct in writing.
D. Reservation of Shares; Listing; Payment of Taxes, etc.
1. The Company covenants that it will at all times
reserve and keep available out of its authorized Preferred Stock
and Common Stock, solely for the purpose of issue upon exercise of
Warrants, such number of shares of Preferred Stock and Common
Stock as shall then be issuable upon the exercise of all
outstanding Warrants or upon conversion of the Preferred Stock.
The Company covenants that all shares of Preferred Stock and
Common Stock which shall be issuable upon exercise of the Warrants
or upon conversion of the Preferred Stock shall, at the time of
delivery, be duly and validly issued, fully paid, nonassessable,
and free from all taxes, liens, and charges with respect to the
issue thereof, (other than those which the Company shall promptly
pay or discharge) and that upon issuance such shares shall be
listed on each national securities exchange or eligible for
inclusion in each automated quotation system, if any, on which the
other shares of outstanding Preferred Stock or Common Stock of the
Company are then listed or eligible for inclusion.
2. The Company covenants that if any securities to be
reserved for the purpose of exercise of Warrants hereunder require
registration with, or approval of, any governmental authority
under any federal securities law before such securities may be
validly issued or delivered upon such exercise, then the Company
will, to the extent the Purchase Price is less than the Market
Price (as hereinafter defined), in good faith and as expeditiously
as reasonably possible, endeavor to secure such registration or
approval and will use its reasonable efforts to obtain appropriate
approvals or registrations under state "blue sky" securities laws.
With respect to any such securities, however, Warrants may not be
exercised by, or shares of Preferred Stock (or Common Stock if
Common Stock is issuable under the Warrants as provided in 5(e)
below) issued to, any Registered Holder in any state in which such
exercise would be unlawful.
3. The Company shall pay all documentary, stamp, or
similar taxes and other governmental charges that may be imposed
with respect to the issuance of Warrants, or the issuance, or
delivery of any shares upon exercise of the Warrants; provided,
however, that if the shares of Preferred Stock or Common Stock are
to be delivered in a name other than the name of the Registered
Holder of the Warrant Certificate representing any Warrant being
exercised, then no such delivery shall be made unless the person
requesting the same has paid to the Warrant Agent the amount of
transfer taxes or charges incident thereto, if any.
4. The Warrant Agent is hereby irrevocably authorized
to requisition the Company's Transfer Agent from time to time for
certificates representing shares of Preferred Stock and Common
Stock issuable upon exercise of the Warrants (or upon conversion
of the Preferred Stock), and the Company will authorize the
Transfer Agent to comply with all such proper requisitions. The
Company will file with the Warrant Agent a statement setting forth
the name and address of the Transfer Agent of the Company for
shares of Preferred Stock and Common Stock issuable upon exercise
of the Warrants (or upon conversion of the Preferred Stock).
5. In the even the Company has exercised its option to
convert the Preferred Stock into the Company's Common Stock, each
Warrant will thereafter entitle the holder to purchase one share
of Common Stock.
E. Exchange and Registration of Transfer.
1. Warrant Certificates may be exchanged for other
Warrant Certificates representing an equal aggregate number of
Warrants of the same class or may be transferred in whole or in
part. Warrant Certificates to be exchanged shall be surrendered
to the Warrant Agent at its Corporate Office, and upon
satisfaction of the terms and provisions hereof, the Company shall
execute and the Warrant Agent shall countersign, issue, and
deliver in exchange therefor the Warrant Certificate or
Certificates which the Registered Holder making the exchange shall
be entitled to receive.
2. The Warrant Agent shall keep at its office books in
which, subject to such reasonable regulations as it may prescribe,
it shall register Warrant Certificates and the transfer thereof in
accordance with its regular practice. Upon due presentment for
registration of transfer of any Warrant Certificate at such
office, the Company shall execute and the Warrant Agent shall
issue and deliver to the transferee or transferees a new Warrant
Certificate or Certificates representing an equal aggregate number
of Warrants.
3. With respect to all Warrant Certificates presented
for registration or transfer, or for exchange or exercise, the
subscription form on the reverse thereof shall be duly endorsed,
or be accompanied by a written instrument or instruments of
transfer and subscription, in form satisfactory to the Company and
the Warrant Agent, duly executed by the Registered Holder or his
attorney-in-fact duly authorized in writing.
4. A service charge may be imposed by the Warrant Agent
for any exchange or registration of transfer of Warrant
Certificates. In addition, the Company may require payment by
such holder of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith.
5. All Warrant Certificates surrendered for exercise
or for exchange in case of mutilated Warrant Certificates shall be
promptly cancelled by the Warrant Agent and thereafter retained by
the Warrant Agent until termination of this Agreement or
resignation as Warrant Agent, or disposed of or destroyed, at the
direction of the Company.
6. Prior to due presentment for registration of
transfer thereof, the Company and the Warrant Agent may deem and
treat the Registered Holder of any Warrant Certificate as the
absolute owner thereof and of each Warrant represented thereby
(notwithstanding any notations of ownership or writing thereon
made by anyone other than a duly authorized officer of the Company
or the Warrant Agent) for all purposes and shall not be affected
by any notice to the contrary. The Warrants which are being
publicly offered with shares of Preferred Stock pursuant to the
Underwriting Agreement are being offered separately from the
Preferred Stock and transferable separately therefrom.
F. Loss or Mutilation. Upon receipt by the Company and the
Warrant Agent of evidence satisfactory to them of the ownership of
and loss, theft, destruction, or mutilation of any Warrant
Certificate and (in case of loss, theft, or destruction) of
indemnity satisfactory to them, and (in the case of mutilation)
upon surrender and cancellation thereof, the Company shall execute
and the Warrant Agent shall (in the absence of notice to the
Company and/or Warrant Agent that the Warrant Certificate has been
acquired by a bona fide purchaser) countersign and deliver to the
Registered Holder in lieu thereof a new Warrant Certificate of
like tenor representing an equal aggregate number of Warrants.
Applicants for a substitute Warrant Certificate shall comply with
such other reasonable regulations and pay such other reasonable
charges as the Warrant Agent may prescribe.
G. Redemption.
1. Subject to the provisions of paragraph 2(e) hereof,
on not less than thirty (30) days notice given at any time after
the Initial Warrant Exercise Date, the Warrants may be redeemed,
at the option of the Company, at a redemption price of $0.01 per
Warrant, provided the Market Price of the Common Stock receivable
upon exercise of the Warrant shall equal or exceed $7.00 (the
"Target Price"), subject to adjustment as set forth in
Section 8(f) below. Market Price for the purpose of this
Section 8 shall mean the average closing bid price for any five
(5) consecutive trading days ending within fifteen (15) days prior
to the date of the notice of redemption, which notice shall be
mailed no later than five days thereafter, of the Common Stock as
reported by the National Association of Securities Dealers, Inc.,
Automatic Quotation System, or the National Quotation Bureau
Incorporated.
2. If the conditions set forth in Section 8(a) are met,
and the Company desires to exercise its right to redeem the
Warrants, it shall mail a notice of redemption to each of the
Registered Holders of the Warrants to be redeemed, first class,
postage prepaid, not later than the thirtieth day before the date
fixed for redemption, at such holder's last address as shall
appear on the records maintained pursuant to Section 6(b). Any
notice mailed in the manner provided herein shall be conclusively
presumed to have been duly given whether or not the Registered
Holder receives such notice.
3. The notice of redemption shall specify (i) the
redemption price, (ii) the date fixed for redemption, (iii) the
place where the Warrant Certificates shall be delivered and the
redemption price paid, and (iv) that the right to exercise the
Warrant shall terminate at 5:00 p.m. (New York time) on the
business day immediately preceding the date fixed for redemption.
The date fixed for the redemption of the Warrant shall be the
Redemption Date. No failure to mail such notice nor any defect
therein or in the mailing thereof shall affect the validity of the
proceedings for such redemption except as to a Registered Holder
(a) to whom notice was not mailed or (b) whose notice was
defective. An affidavit of the Warrant Agent or of the Secretary
or an Assistant Secretary of the Company that notice of redemption
has been mailed shall, in the absence of fraud, be prima facie
evidence of the facts stated therein.
4. Any right to exercise a Warrant shall
terminate at 5:00 p.m. (New York time) on the business day immediately
preceding the Redemption Date. On and after the Redemption Date,
Holders of the Warrants shall have no further rights except to
receive, upon surrender of the Warrant, the Redemption Price.
5. From and after the Redemption Date,
the Company shall, at the place specified in the notice of redemption, upon
presentation and surrender to the Company by or on behalf of the
Registered Holder thereof of one or more Warrant Certificates
evidencing Warrants to be redeemed, deliver or cause to be
delivered to or upon the written order of such Holder a sum in
cash equal to the redemption price of each such Warrant. From and
after the Redemption Date and upon the deposit or setting aside by
the Company of a sum sufficient to redeem all the Warrants called
for redemption, such Warrants shall expire and become void and all
rights hereunder and under the Warrant Certificates, except the
right to receive payment of the redemption price, shall cease.
6. If the shares of the Company's Preferred Stock are
subdivided or combined into a greater or smaller number of shares
of Preferred Stock, the Target Price shall be proportionally
adjusted by the ratio which the total number of shares of
Preferred Stock outstanding immediately prior to such event bears
to the total number of shares of Preferred Stock to be outstanding
immediately after such event.
H. Adjustment of Exercise Price and Number of Shares of
Preferred Stock, Preferred Stock, or Warrants.
1. Subject to the exceptions referred to in
Section 9(g) below, in the event the Company shall, at any time or
from time to time after the date hereof, sell any shares of
Preferred Stock for a consideration per share less than the Market
Price of the Preferred Stock (as defined in Section 8) on the date
of the sale or issue of any shares of Preferred Stock as a stock
dividend to the holders of Preferred Stock, or subdivide or
combine the outstanding shares of Preferred Stock into a greater
or lesser number of shares (any such sale, issuance, subdivision,
or combination being herein called a "Change of Shares"), then,
and thereafter upon each further Change of Shares, the Purchase
Price in effect immediately prior to such Change of Shares shall
be changed to a price (including any applicable fraction of a
cent) determined by multiplying the Purchase Price in effect
immediately prior thereto by a fraction, the numerator of which
shall be the sum of the number of shares of Preferred Stock
outstanding immediately prior to the issuance of such additional
shares and the number of shares of Preferred Stock which the
aggregate consideration received (determined as provided in
subsection 9(f) below) for the issuance of such additional shares
would purchase at such current market price per share of Preferred
Stock, and the denominator of which shall be the sum of the number
of shares of Preferred Stock outstanding immediately after the
issuance of such additional shares. Such adjustment shall be made
successively whenever such an issuance is made.
Upon each adjustment of the Purchase Price pursuant
to this Section 9, the total number of shares of Preferred Stock
purchasable upon the exercise of each Warrant shall (subject to
the provisions contained in Section 9(b) hereof) be such number of
shares (calculated to the nearest tenth) purchasable at the
Purchase Price in effect immediately prior to such adjustment
multiplied by a fraction, the numerator of which shall be the
Purchase Price in effect immediately prior to such adjustment and
the denominator of which shall be the Purchase Price in effect
immediately after such adjustment.
2. The Company may elect, upon any adjustment of the
Purchase Price hereunder, to adjust the number of Warrants
outstanding, in lieu of the adjustment in the number of shares of
Preferred Stock purchasable upon the exercise of each Warrant as
hereinabove provided, so that each Warrant outstanding after such
adjustment shall represent the right to purchase one share of
Preferred Stock. Each Warrant held of record prior to such
adjustment of the number of Warrants shall become that number of
Warrants (calculated to the nearest tenth) determined by
multiplying the number one by a fraction, the numerator of which
shall be the Purchase Price in effect immediately prior to such
adjustment and the denominator of which shall be the Purchase
Price in effect immediately after such adjustment. Upon each
adjustment of the number of Warrants pursuant to this Section 9,
the Company shall, as promptly as practicable, cause to be
distributed to each Registered Holder of Warrant Certificates on
the date of such adjustment Warrant Certificates evidencing,
subject to Section 10 hereof, the number of additional Warrants to
which such Holder shall be entitled as a result of such adjustment
or, at the option of the Company, cause to be distributed to such
Holder in substitution and replacement for the Warrant
Certificates held by him prior to the date of adjustment (and upon
surrender thereof, if required by the Company) new Warrant
Certificates evidencing the number of Warrants to which such
Holder shall be entitled after such adjustment.
3. In case of any reclassification, capital
reorganization, or other change of outstanding shares of Preferred
Stock, or in case of any consolidation or merger of the Company
with or into another corporation (other than a consolidation or
merger in which the Company is the continuing corporation and
which does not result in any reclassification, capital
reorganization, or other change of outstanding shares of Preferred
Stock), or in case of any sale or conveyance to another
corporation of the property of the Company as, or substantially
as, an entirety (other than a sale/leaseback, mortgage, or other
financing transaction), the Company shall cause effective
provision to be made so that each holder of a warrant then
outstanding shall have the right thereafter, by exercising such
Warrant, to purchase the kind and number of shares of stock or
other securities or property (including cash) receivable upon such
reclassification, capital reorganization, or other change,
consolidation, merger, sale, or conveyance by a holder of the
number of shares of Preferred Stock that might have been purchased
upon exercise of such Warrant immediately prior to such
reclassification, capital reorganization, or other change,
consolidation, merger, sale, or conveyance. Any such provision
shall include provision for adjustments that shall be as nearly
equivalent as may be practicable to the adjustments provided for
in this Section 9. The Company shall not effect any such
consolidation, merger, or sale unless prior to or simultaneously
with the consummation thereof the successor (if other than the
Company) resulting from such consolidation or merger or the
corporation purchasing assets or other appropriate corporation or
entity shall assume, by written instrument executed and delivered
to the Warrant Agent, the obligation to deliver to the holder of
each Warrant such shares of stock, securities, or assets as, in
accordance with the foregoing provisions, such holders may be
entitled to purchase and the other obligations under this
Agreement. The foregoing provisions shall similarly apply to
successive reclassifications, capital reorganizations, and other
changes of outstanding shares of Preferred Stock and to successive
consolidations, mergers, sales, or conveyances.
4. Irrespective of any adjustments or changes in the
Purchase Price or the number of shares of Preferred Stock
purchasable upon exercise of the Warrants, the Warrant
Certificates theretofore and thereafter issued shall, unless the
Company shall exercise its option to issue new Warrant
Certificates pursuant to Section 2(d) hereof, continue to express
the Purchase Price per share, the number of shares purchasable
thereunder, and the Redemption Price therefor as the Purchase
Price per share, the number of shares purchasable thereunder and
the Redemption Price therefor were expressed in the Warrant
Certificates when the same were originally issued.
5. After each adjustment of the Purchase Price pursuant
to this Section 9, the Company will promptly prepare a certificate
signed by the Chairman or President, and by the Treasurer or an
Assistant Treasurer or the Secretary or an Assistant Secretary, of
the Company setting forth: (i) the Purchase Price as so adjusted,
(ii) the number of shares of Preferred Stock purchasable upon
exercise of each Warrant after such adjustment, and, if the
Company shall have elected to adjust the number of Warrants, the
number of Warrants to which the registered holder of each Warrant
shall then be entitled, and the adjustment in Redemption Price
resulting therefrom, and (iii) a brief statement of the facts
accounting for such adjustment. The Company will promptly file
such certificate with the Warrant Agent and cause a brief summary
thereof to be sent by ordinary first class mail to Xxxxxxxxxx and
to each registered holder of Warrants at his last address as it
shall appear on the registry books of the Warrant Agent. No
failure to mail such notice nor any defect therein or in the
mailing thereof shall affect the validity thereof except as to the
holder to whom the Company failed to mail such notice, or except
as to the holder whose notice was defective. The affidavit of an
officer of the Warrant Agent or the Secretary or an Assistant
Secretary of the Company that such notice has been mailed shall,
in the absence of fraud, be prima facie evidence of the facts
stated therein.
6. For purposes of Section 9(a) and 9(b) hereof, the
following provisions (i) to (vii) shall also be applicable:
a. The number of shares of Preferred Stock
outstanding at any given time shall include shares of Preferred
Stock owned or held by or for the account of the Company, and the
sale or issuance of such treasury shares or the distribution of
any such treasury shares shall not be considered a Change of
Shares for purposes of said sections.
b. No adjustment of the Purchase Price shall be
made unless such adjustment would require an increase or decrease
of at least $.10 in such price; provided that any adjustments
which by reason of this subsection (ii) are not required to be
made shall be carried forward and shall be made at the time of and
together with the next subsequent adjustment which, together with
any adjustment(s) so carried forward, shall require an increase or
decrease of at least $.10 in the Purchase Price then in effect
hereunder.
c. In case of (1) the sale by the Company for cash
of any rights or warrants to subscribe for or purchase, or any
options for the purchase of, Preferred Stock or any securities
convertible into or exchangeable for Preferred Stock without the
payment of any further consideration other than cash, if any (such
convertible or exchangeable securities being herein called
"Convertible Securities"), or (2) the issuance by the Company,
without the receipt by the Company of any consideration therefor,
of any rights or warrants to subscribe for or purchase, or any
options for the purchase of, Preferred Stock or Convertible
Securities, in each case, if (and only if) the consideration
payable to the Company upon the exercise of such rights, warrants,
or options shall consist of cash, whether or not such rights,
warrants, or options, or the right to convert or exchange such
Convertible Securities, are immediately exercisable, and the price
per share for which Preferred Stock is issuable upon the exercise
of such rights, warrants, or options or upon the conversion or
exchange of such Convertible Securities (determined by dividing
(x) the minimum aggregate consideration payable to the Company
upon the exercise of such rights, warrants, or options, plus the
consideration received by the Company for the issuance or sale of
such rights, warrants, or options, plus, in the case of such
Convertible Securities, the minimum aggregate amount of additional
consideration, if any, other than such Convertible Securities,
payable upon the conversion or exchange thereof, by (y) the total
maximum number of shares of Preferred Stock issuable upon the
exercise of such rights, warrants, or options or upon the
conversion or exchange of such Convertible Securities issuable
upon the exercise of such rights, warrants, or options) is less
than the fair market value of the Preferred Stock on the date of
the issuance or sale of such rights, warrants, or options, then
the total maximum number of shares of Preferred Stock issuable
upon the exercise of such rights, warrants, or options or upon the
conversion or exchange of such Convertible Securities (as of the
date of the issuance or sale of such rights, warrants, or options)
shall be deemed to be outstanding shares of Preferred Stock for
purposes of Sections 9(a) and 9(b) hereof and shall be deemed to
have been sold for cash in an amount equal to such price per
share.
d. In case of the sale by the Company for cash of
any Convertible Securities, whether or not the right of conversion
or exchange thereunder is immediately exercisable, and the price
per share for which Preferred Stock is issuable upon the
conversion or exchange of such Convertible Securities (determined
by dividing (x) the total amount of consideration received by the
Company for the sale of such Convertible Securities, plus the
minimum aggregate amount of additional consideration, if any,
other than such Convertible Securities, payable upon the
conversion or exchange thereof, by (y) the total maximum number of
shares of Preferred Stock issuable upon the conversion or exchange
of such Convertible Securities) is less than the fair market value
or the Preferred Stock on the date of the sale of such Convertible
Securities, then the total maximum number of shares of Preferred
Stock issuable upon the conversion or exchange of such Convertible
Securities (as of the date of the sale of such Convertible
Securities) shall be deemed to be outstanding shares of Preferred
Stock for purposes of Sections 9(a) and 9(b) hereof and shall be
deemed to have been sold for cash in an amount equal to such price
per share.
e. In case the Company shall modify the rights of
conversion, exchange, or exercise of any of the securities
referred to in subsection (iii) above or any other securities of
the Company convertible, exchangeable, or exercisable for shares
of Preferred Stock, for any reason other than an event that would
require adjustment to prevent dilution, so that the consideration
per share received by the Company after such modification is less
than the market price on the date prior to such modification, the
Purchase Price to be in effect after such modification shall be
determined by multiplying the Purchase Price in effect immediately
prior to such event by a fraction, of which the numerator shall be
the number of shares of Preferred Stock outstanding multiplied by
the market price on the date prior to the modification plus the
number of shares of Preferred Stock which the aggregate
consideration receivable by the Company for the securities
affected by the modification would purchase at the market price
and of which the denominator shall be the number of shares of
Preferred Stock outstanding on such date plus the number of shares
of Preferred Stock to be issued upon conversion, exchange, or
exercise of the modified securities at the modified rate. Such
adjustment shall become effective as of the date upon which such
modification shall take effect.
f. On the expiration of any such right, warrant,
or option or the termination of any such right to convert or
exchange any such Convertible Securities, the Purchase Price then
in effect hereunder shall forthwith be readjusted to such Purchase
Price as would have obtained (a) had the adjustments made upon the
issuance or sale of such rights, warrants, options, or Convertible
Securities been made upon the basis of the issuance of only the
number of shares of Preferred Stock theretofore actually delivered
(and the total consideration received therefor) upon the exercise
of such rights, warrants, or options or upon the conversion or
exchange of such Convertible Securities and (b) had adjustments
been made on the basis of the Purchase Price as adjusted under
clause (a) for all transactions (which would have affected such
adjusted Purchase Price) made after the issuance or sale of such
rights, warrants, options, or Convertible Securities.
g. In case of the sale for cash of any shares of
Preferred Stock, any Convertible Securities, any rights or
warrants to subscribe for or purchase, or any options for the
purchase of, Preferred Stock or Convertible Securities, the
consideration received by the Company therefore shall be deemed to
be the gross sales price therefor without deducting therefrom any
expense paid or incurred by the Company or any underwriting
discounts or commissions or concessions paid or allowed by the
Company in connection therewith.
7. No adjustment to the Purchase Price of the Warrants
or to the number of shares of Preferred Stock purchasable upon the
exercise of each Warrant will be made, however,
a. upon the sale or exercise of the Warrants,
including without limitation the sale or exercise of any of the
Warrants comprising the Purchase Option; or
b. upon the sale of any shares of Preferred Stock
in the Company's initial public offering, including, without
limitation, shares sold upon the exercise of any over-allotment
option granted to Xxxxxxxxxx in connection with such offering; or
c. upon the issuance or sale of Preferred Stock
or Convertible Securities upon the exercise of any rights or
warrants to subscribe for or purchase, or any options for the
purchase of, Preferred Stock or Convertible Securities, whether or
not such rights, warrants, or options were outstanding on the date
of the original sale of the Warrants or were thereafter issued or
sold; or
d. upon the issuance or sale of Preferred Stock
upon conversion or exchange of any Convertible Securities, whether
or not any adjustment in the Purchase Price was made or required
to be made upon the issuance or sale of such Convertible
Securities and whether or not such Convertible Securities were
outstanding on the date of the original sale of the Warrants or
were thereafter issued or sold; or
e. upon the issuance or sale of Preferred Stock
or Convertible Securities in a private placement unless the
issuance or sale price is less than 85% of the fair market value
of the Preferred Stock on the date of issuance, in which case the
adjustment shall only be for the difference between 85% of the
fair market value and the issue or sale price; or
f. upon the issuance or sale of Preferred Stock
or Convertible Securities to shareholders of any corporation which
merges into the Company, or from which the Company acquires assets
and some or all of the consideration consists of equity securities
of the Company if such issuance or sale to such shareholders is in
proportion to their stock holdings of such corporation immediately
prior to the acquisition but only if no adjustment is required
pursuant to any other provision of this Section 9.
8. As used in this Section 9, the term "Preferred
Stock" shall mean and include the Company's Series A Cumulative
Convertible Preferred Stock authorized on the date of the original
issue of the Preferred Stock and shall also include any capital
stock of any class of the Company thereafter authorized which
shall not be limited to a fixed sum or percentage in respect of
the rights of the holders thereof to participate in dividends and
in the distribution of assets upon the voluntary liquidation,
dissolution, or winding up of the Company; provided, however, that
the shares issuable upon exercise of the Warrants shall include
only shares of such class designated in the Company's Certificate
of Incorporation as Preferred Stock on the date of the original
issue of the Preferred Stock or (i), in the case of any
reclassification, change, consolidation, merger, sale, or
conveyance of the character referred to in Section 9(c) hereof,
the stock, securities, or property provided for in such section or
(ii), in the case of any reclassification or change in the
outstanding shares of Preferred Stock issuable upon exercise of
the Warrants as a result of a subdivision or combination or
consisting or a change in par value, or from par value to no par
value, or from no par value to par value, such shares of Preferred
Stock as so reclassified or changed.
9. Any determination as to whether an adjustment in the
Purchase Price in effect hereunder is required pursuant to
Section 9, or as to the amount of any such adjustment, if
required, shall be binding upon the holders of the Warrants and
the Company if made in good faith by the Board of Directors of the
Company.
10. If and whenever the Company shall grant to the
holders of Preferred Stock, as such, rights or warrants to
subscribe for or to purchase, or any options for the purchase of,
Preferred Stock or securities convertible into or exchangeable for
or carrying a right, warrant, or option to purchase Preferred
Stock, the Company shall concurrently therewith grant to each
Registered Holder as of the record date for such transaction of
the Warrants then outstanding, the rights, warrants, or options to
which each Registered Holder would have been entitled if, on the
record date used to determine the stockholders entitled to the
rights, warrants, or options being granted by the Company, the
Registered Holder were the holder of record of the number of whole
shares of Preferred Stock then issuable upon exercise (assuming,
for purposes of this section 9(j), that exercise of warrants is
permissible during periods prior to the Initial Warrant Exercise
Date) of his Warrants. Such grant by the Company to the holders
of the Warrants shall be in lieu of any adjustment which otherwise
might be called for pursuant to this Section 9.
11. Upon the conversion by the Company of the Preferred
Stock into shares of Common Stock, all provisions of this Section
9 relating to adjustment shall be applicable, commencing the date
of such conversion, to the Common Stock.
I. Reduction of Purchase Price and Extension of Expiration
Date Notwithstanding anything herein to the contrary, the Company
shall have the right, subject to compliance with Rule 13e-4
promulgated under the Securities Exchange Act of 1934 and the
filing of Schedule 13e-4 with the Securities and Exchange
Commission, and upon not less than thirty (30) days' written
notice given to every holder of a Warrant, to reduce the Purchase
Price and/or to extend the Warrant Expiration Date.
J. Fractional Warrants and Fractional Shares.
1. If the number of shares of (or Common Stock, as the
case may be) Preferred Stock purchasable upon the exercise of each
Warrant is adjusted pursuant to Section 9 hereof, the Company
nevertheless shall not be required to issue fractions of shares,
upon exercise of the Warrants or otherwise, or to distribute
certificates that evidence fractional shares. With respect to any
fraction of a share called for upon any exercise hereof, the
Company shall pay to the Holder an amount in cash equal to such
fraction multiplied by the current market value of such fractional
share, determined as follows:
a. If the Preferred Stock (or the Common Stock,
as the case may be) is listed on a National Securities Exchange or
admitted to unlisted trading privileges on such exchange or listed
for trading on the NASDAQ Quotation System, the current value
shall be the last reported sale price of the Preferred Stock (or
the Common Stock, as the case may be) on such exchange on the last
business day prior to the date of exercise of this Warrant or if
no such sale is made on such day, the average of the closing bid
and asked prices for such day on such exchange; or
b. If the Preferred Stock (or the Common Stock,
as the case may be) is not listed or admitted to unlisted trading
privileges, the current value shall be the mean of the last
reported bid and asked prices reported by the National Quotation
Bureau, Inc. on the last business day prior to the date of the
exercise of this Warrant; or
c. If the Preferred Stock (or the Common Stock,
as the case may be) is not so listed or admitted to unlisted
trading privileges and bid and asked prices are not so reported,
the current value shall be an amount determined in such reasonable
manner as may be prescribed by the Board of Directors of the
Company.
K. Warrant Holders Not Deemed Stockholders. No holder of
Warrants shall, as such, be entitled to vote or to receive
dividends or be deemed the holder of Preferred Stock (or the
Common Stock, as the case may be) that may at any time be issuable
upon exercise of such Warrants for any purpose whatsoever, nor
shall anything contained herein be construed to confer upon the
holder of Warrants, as such, any of the rights of a stockholder of
the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action (whether
upon any recapitalization, issue or reclassification of stock,
change of par value or change of stock to no par value,
consolidation, merger, or conveyance or otherwise), or to receive
notice of meetings, or to receive dividends or subscription
rights, until such Holder shall have exercised such Warrants and
been issued shares of Preferred Stock (or Common Stock, as the
case may be) in accordance with the provisions hereof.
L. Rights of Action. All rights of action with respect to
this Agreement are vested in the respective Registered Holders of
the Warrants, and any Registered Holder of a Warrant, without
consent of the Warrant Agent or of the holder of any other
Warrant, may, in his own behalf and for his own benefit, enforce
against the Company his right to exercise his Warrants for the
purchase of shares of Preferred Stock (or the Common Stock, as the
case may be) in the manner provided in the Warrant Certificate and
this Agreement.
M. Agreement of Warrant Holders. Every holder of a Warrant,
by his acceptance thereof, consents and agrees with the Company,
the Warrant Agent and every other holder of a warrant that:
1. The Warrants are transferable only on the registry
books of the Warrant Agent by the Registered Holder thereof in
person or by his attorney duly authorized in writing and only if
the Warrant Certificates representing such Warrants are
surrendered at the office of the Warrant Agent, duly endorsed or
accompanied by a proper instrument of transfer satisfactory to the
Warrant Agent and the Company in their sole discretion, together
with payment of any applicable transfer taxes; and
2. The Company and the Warrant Agent may deem and treat
the person in whose name the Warrant Certificate is registered as
the holder and as the absolute, true, and lawful owner of the
Warrants represented thereby for all purposes, and neither the
Company nor the Warrant Agent shall be affected by any notice or
knowledge to the contrary, except as otherwise expressly provided
in Section 7 hereof.
N. Cancellation of Warrant Certificates. If the Company
shall purchase or acquire any Warrant or Warrants, the Warrant
Certificate or Warrant Certificates evidencing the same shall
thereupon be delivered to the Warrant Agent and cancelled by it
and retired. The Warrant Agent shall also cancel Preferred Stock
following exercise of any or all of the Warrants represented
thereby or delivered to it for transfer, splitup, combination, or
exchange.
O. Concerning the Warrant Agent. The Warrant Agent acts
hereunder as agent and in a ministerial capacity for the Company,
and its duties shall be determined solely by the provisions
hereof. The Warrant Agent shall not, by issuing and delivering
Warrant Certificates or by any other act hereunder be deemed to
make any representations as to the validity, value, or
authorization of the Warrant Certificates or the Warrants
represented thereby or of any securities or other property
delivered upon exercise of any Warrant or whether any stock issued
upon exercise of any Warrant is fully paid and nonassessable.
The Warrant Agent shall not at any time be under any duty
or responsibility to any holder of Warrant Certificates to make or
cause to be made any adjustment of the Purchase Price or the
Redemption Price provided in this Agreement, or to determine
whether any fact exists which may require any such adjustments, or
with respect to the nature or extent of any such adjustment, when
made, or with respect to the method employed in making the same.
It shall not (i) be liable for any recital or statement of facts
contained herein or for any action taken, suffered, or omitted by
it in reliance on any warrant Certificate or other document or
instrument believed by it in good faith to be genuine and to have
been signed or presented by the proper party or parties, (ii) be
responsible for any failure on the part of the Company to comply
with any of its covenants and obligations contained in this
Agreement or in any Warrant Certificate, or (iii) be liable for
any act or omission in connection with this Agreement except for
its own negligence or wilful misconduct.
The Warrant Agent may at any time consult with counsel
satisfactory to it (who may be counsel for the Company) and shall
incur no liability or responsibility for any action taken,
suffered or omitted by it in good faith in accordance with the
opinion or advice of such counsel.
Any notice, statement, instruction, request, direction,
order, or demand of the Company shall be sufficiently evidenced by
an instrument signed by the Chairman of the Board, President, any
Vice President, its Secretary, or Assistant Secretary, (unless
other evidence in respect thereof is herein specifically
prescribed). The Warrant Agent shall not be liable for any action
taken, suffered or omitted by it in accordance with such notice,
statement, instruction, request, direction, order, or demand
believed by it to be genuine.
The Company agrees to pay the Warrant Agent reasonable
compensation for its services hereunder and to reimburse it for
its reasonable expenses hereunder; it further agrees to indemnify
the Warrant Agent and save it harmless against any and all losses,
expenses, and liabilities, including judgments, costs, and counsel
fees, for anything done or omitted by the Warrant Agent in the
execution of its duties and powers hereunder except losses,
expenses, and liabilities arising as a result of the Warrant
Agent's negligence or wilful misconduct.
The Warrant Agent may resign its duties and be discharged
from all further duties and liabilities hereunder (except
liabilities arising as a result of the Warrant Agent's own
negligence or wilful misconduct), after giving 30 days' prior
written notice to the Company. At least 15 days prior to the date
such resignation is to become effective, the Warrant Agent shall
cause a copy of such notice of resignation to be mailed to the
Registered Holder of each Warrant Certificate at the Company's
expense. Upon such resignation, or any inability of the Warrant
Agent to act as such hereunder, the Company shall appoint a new
warrant agent in writing. If the Company shall fail to make such
appointment within a period of 15 days after it has been notified
in writing of such resignation by the resigning Warrant Agent,
then the Registered Holder of any Warrant Certificate may apply to
any court of competent jurisdiction for the appointment of a new
warrant agent. Any new warrant agent, whether appointed by the
Company or by such a court, shall be a bank or trust company
having a capital and surplus, as shown by its last published
report to its stockholders, of not less than $10,000,000 or a
stock transfer company. After acceptance in writing of such
appointment by the new warrant agent is received by the Company,
such new warrant agent shall be vested with the same powers,
rights, duties, and responsibilities as if it had been originally
named herein as the Warrant Agent, without any further assurance,
conveyance, act, or deed; but if for any reason it shall be
necessary or expedient to execute and deliver any further
assurance, conveyance, act, or deed, the same shall be done at the
expense of the Company and shall be legally and validly executed
and delivered by the resigning Warrant Agent. Not later than the
effective date of any such appointment the Company shall file
notice thereof with the resigning Warrant Agent and shall
forthwith cause a copy of such notice to be mailed to the
Registered Holder of each Warrant Certificate.
Any corporation into which the Warrant Agent or any new
warrant agent may be converted or merged or any corporation
resulting from any consolidation to which the Warrant Agent or any
new warrant agent shall be a party or any corporation succeeding
to the trust business of the Warrant Agent shall be a successor
warrant agent under this Agreement without any further act,
provided that such corporation is eligible for appointment as
successor to the Warrant Agent under the provisions of the
preceding paragraph. Any such successor warrant agent shall
promptly cause notice of its succession as warrant agent to be
mailed to the Company and to the Registered Holder of each Warrant
Certificate.
The Warrant Agent, its subsidiaries and affiliates, and
any of its or their officers or directors, may buy and hold or
sell Warrants or other securities of the Company and otherwise
deal with the Company in the same manner and to the same extent
and with like effects as though it were not Warrant Agent.
Nothing herein shall preclude the Warrant Agent from acting in any
other capacity for the Company or for any other legal entity.
P. Modification of Agreement. The Warrant Agent and the
Company may by supplemental agreement make any changes or
corrections in this Agreement (i) that they shall deem appropriate
to cure any ambiguity or to correct any defective or inconsistent
provision or manifest mistake or error herein contained; or (ii)
that they may deem necessary or desirable and which shall not
adversely affect the interests of the holders of Warrant
Certificates; provided, however, that this Agreement shall not
otherwise be modified, supplemented, or altered in any respect
except with the consent in writing of the Registered Holders of
Warrant Certificates representing not less than 50% of the
Warrants then outstanding; and provided, further, that no change
in the number or nature of the securities purchasable upon the
exercise of any Warrant, or the Purchase Price therefor, or the
acceleration of the Warrant Expiration Date, shall be made without
the consent in writing of the Registered Holder of the Warrant
Certificate representing such Warrant, other than such changes as
are specifically prescribed by this Agreement as originally
executed or are made in compliance with applicable law.
Q. Notices. All notices, requests, consents, and other
communications hereunder shall be in writing and shall be deemed
to have been made when delivered or mailed first class, registered
or certified mail, postage prepaid as follows: if to the
Registered Holder of a Warrant Certificate, at the address of such
holder as shown on the registry books maintained by the Warrant
Agent; if to the Company, 000 Xxxxx Xxxx, Xxxxx Xxxxxx, Xxxxxxxx
00000, Attention: President, with a copy sent to Xxxxxxxx, Xxxxx
& Xxxx, 00 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention: Xxxxxx
Xxxxxx, Esq.; or at such other address as may have been furnished
to the Warrant Agent in writing by the Company; and if to the
Warrant Agent, at its Corporate office.
R. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York,
without reference to principles of conflict of laws.
S. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the Company, the Warrant Agent and their
respective successors and assigns, and the holders from time to
time of Warrant Certificates. Nothing in this Agreement is
intended or shall be construed to confer upon any other person any
right, remedy, or claim, in equity or at law, or to impose upon
any other person any duty, liability, or obligation.
T. Termination. This Agreement shall terminate at the close
of business on the Warrant Expiration Date of all the Warrants or
such earlier date upon which all Warrants have been exercised,
except that the Warrant Agent shall account to the Company for
cash held by it and the provisions of Section 15 hereof shall
survive such termination.
U. Counterparts. This Agreement may be executed in several
counterparts, which taken together shall constitute a single
document.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
MICROENERGY, INC.
By: ______________________________
Its
AMERICAN STOCK TRANSFER & TRUST
COMPANY
By: ______________________________
Its
Authorized Officer
EXHIBIT A
[Form of Face of Class A Warrant Certificate]
No.
Void after _____________________, 2000
CLASS A REDEEMABLE PREFERRED STOCK PURCHASE WARRANT CERTIFICATE
FOR PURCHASE OF PREFERRED STOCK
MICROENERGY, INC.
This certifies that For Value Received
or registered assigns (the "Registered Holder") is the owner of the
number of Class A Redeemable Preferred Stock Purchase Warrants
("Warrants") specified above. Each Warrant initially entitles the
Registered Holder to purchase, subject to the terms and conditions
set forth in this Certificate and the Warrant Agreement (as
hereinafter defined), one (1) fully paid and nonassessable share of
Series A Cumulative Convertible Preferred Stock, $.01 par value, of
MICROENERGY, INC., a Delaware corporation (the "Company"), at any
time after _____________________, 1997 (the "Separation Date") and
prior to the Expiration Date (as hereinafter defined), upon the
presentation and surrender of this Warrant Certificate with the
Subscription Form on the reverse hereof duly executed, at the
corporate office of AMERICAN STOCK TRANSFER & TRUST COMPANY as
Warrant Agent, or its successor (the "Warrant Agent"), accompanied by
payment of $5.25 (the "Purchase Price") in lawful money of the United
States of America in cash or by official bank or certified check made
payable to MicroEnergy, Inc.
This Warrant Certificate and each Warrant represented hereby are
issued pursuant to and are subject in all respects to the terms and
conditions set forth in the Warrant Agreement (the "Warrant
Agreement") dated _____________________, 1996, by and between the
Company and the Warrant Agent.
In the event of certain contingencies provided for in the
Warrant Agreement, the Purchase Price or the number of shares of
Preferred Stock subject to purchase upon the exercise of each Warrant
represented hereby are subject to modifications or adjustment.
Each Warrant represented hereby is exercisable at the option of
the Registered Holder, but no fractional shares of Preferred Stock
will be issued. In the case of the exercise of less than all the
Warrants represented hereby, the Company shall cancel this Warrant
Certificate upon the surrender hereof and shall execute and deliver a
new Warrant Certificate or Warrant Certificates of like tenor, which
the Warrant Agent shall countersign, for the balance of such
Warrants.
The term "Expiration Date" shall mean 5:00 p.m. (New York time)
on _____________________, 2000, or such earlier date as the Warrants
shall be redeemed. If such date shall in the State of New York be a
holiday or a day on which the banks are authorized to close, then the
Expiration Date shall mean 5:00 p.m. (New York time) the next
following day which in the State of New York is not a holiday or a
day on which banks are authorized to close.
The Company shall not be obligated to deliver any securities
pursuant to the exercise of this Warrant unless a registration
statement under the Securities Act of 1933, as amended, with respect
to such securities is effective. The Company has covenanted and
agreed that it will file a registration statement and will use its
best efforts to cause the same to become effective and to keep such
registration statement current while any of the Warrants are
outstanding. This Warrant shall not be exercisable by a Registered
Holder in any state in which it would be unlawful for the Company to
deliver the shares of Preferred Stock upon exercise of this Warrant.
This Warrant Certificate is exchangeable, upon the surrender
hereof by the Registered Holder at the corporate office of the
Warrant Agent, for a new Warrant Certificate or Warrant Certificates
of like tenor representing an equal aggregate number of Warrants,
each of such new Warrant Certificates to represent such number of
Warrants as shall be designated by such Registered Holder at the time
of such surrender. Upon due presentment of this Warrant Certificate
at such office for registration of transfer, together with any
transfer fee in addition to any tax or other governmental charge
imposed in connection with such transfer, a new Warrant Certificate
or Warrant Certificates representing an equal aggregate number of
Warrants will be issued to the transferee in exchange therefor,
subject to the limitations provided in the Warrant Agreement.
Prior to the exercise of any Warrant represented hereby, the
Registered Holder shall not be entitled to any rights of a
stockholder of the Company, including, without limitation, the right
to vote or to receive dividends or other distributions, and shall not
be entitled to receive any notice of any proceedings of the Company,
except as provided in the Warrant Agreement.
This Warrant may be redeemed at the option of the Company, at a
redemption price of $.01 per Warrant at any time after
_____________________, 1997, provided the Market Price (as defined in
the Warrant Agreement) for the Company's Common Stock shall exceed
$7.00 per share (as provided for in the Warrant Agreement). Notice
of redemption shall be given not later than the thirtieth day before
the date fixed for redemption, all as provided in the Warrant
Agreement. On and after the date fixed for redemption, the
Registered Holder shall have no rights with respect to this Warrant
except to receive the $.01 per Warrant upon surrender of this
Certificate.
If the Company exercises its right to convert all of the issued
and outstanding Preferred Stock of the Company into shares of Common
Stock, this Warrant will entitle the holder to purchase one (1) share
of Common Stock at a price equal to the Purchase Price.
Prior to due presentment for registration of transfer hereof,
the Company and the Warrant Agent may deem and treat the Registered
Holder as the absolute owner hereof and of each Warrant represented
hereby (notwithstanding any notations of ownership or writing hereon
made by anyone other than a duly authorized officer of the Company or
the Warrant Agent) for all purposes and shall not be affected by any
notice to the contrary.
This Warrant Certificate shall be governed by and construed in
accordance with the laws of the State of New York.
This Warrant Certificate is not valid unless countersigned by
the Warrant Agent.
IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be duly executed, manually or in facsimile by two of
its officers thereunto duly authorized, and a facsimile of its
corporate seal to be imprinted hereon.
MICROENERGY, INC.
By ______________________________
Its
By ______________________________
Its
Date: ______________________________
[Seal]
Countersigned:
AMERICAN STOCK TRANSFER & TRUST COMPANY,
as Warrant Agent
By ______________________________
Its
Authorized Officer
[Form of Reverse of Class A Warrant Certificate]
SUBSCRIPTION FORM
To Be Executed by the Registered Holder in Order to Exercise Warrants
THE UNDERSIGNED REGISTERED HOLDER hereby irrevocably elects to
exercise _____ Warrants represented by this Warrant Certificate, and
to purchase the securities issuable upon the exercise of such
Warrants, and requests that certificates for such securities shall be
issued in the name of
____________________________________________
(please insert social security or other identifying number)
and be delivered to
____________________________________________
____________________________________________
____________________________________________
____________________________________________
(please print or type name and address)
and if such number of Warrants shall not be all the Warrants
evidenced by this Warrant Certificate, that a new Warrant Certificate
for the balance of such Warrants be registered in the name of, and
delivered to, the Registered Holder at the address stated below:
____________________________________________
____________________________________________
____________________________________________
(Address)
_________________________________
(Date)
_________________________________
(Taxpayer Identification Number)
Signature Guaranteed
ASSIGNMENT
To Be Executed by the Registered Holder in Order to Assign Warrants
FOR VALUE RECEIVED, the undersigned registered holder hereby
sells, assigns, and transfers unto
____________________________________________
(please insert social security or other identifying number)
____________________________________________
____________________________________________
____________________________________________
____________________________________________
(please print or type name and address)
all (if not all, insert number of Warrants to be transferred
_________) of the Warrants represented by this Warrant Certificate,
and hereby irrevocably constitutes and appoints
_________________________________ Attorney to transfer this Warrant
Certificate on the books of the Company, with full power of
substitution in the premises.
_________________________________
(Date)
_________________________________
Signature of Registered Holder
Signature Guaranteed
The signature to the assignment or the Subscription Form must
correspond to the name as written upon the face of this Warrant
Certificate in every particular, without alteration or enlargement or
any change whatsoever, and must be guaranteed by a commercial bank or
trust company or a member firm of the American Stock Exchange,
New York Stock Exchange, Pacific Stock Exchange or Midwest Stock
Exchange.
