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EXHIBIT 4.1
NEITHER THIS STOCK PURCHASE WARRANT NOR THE SECURITIES
WHICH MAY BE PURCHASED PURSUANT HERETO HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS. SUCH SECURITIES
MAY NOT BE OFFERED, SOLD OR TRANSFERRED IN THE ABSENCE
OF REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS OR AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
SUCH REGISTRATION IS NOT REQUIRED. THIS STOCK PURCHASE
WARRANT AND THE SECURITIES WHICH MAY BE PURCHASED
PURSUANT HERETO ARE ALSO SUBJECT TO THE RESTRICTIONS ON
TRANSFER AND ASSIGNABILITY SET FORTH IN SECTION 7
HEREOF.
STOCK PURCHASE WARRANT
TO SUBSCRIBE FOR AND PURCHASE SHARES
OF COMMON STOCK, NO PAR VALUE, OF
NEMATRON CORPORATION
March 31, 1997
THIS STOCK PURCHASE WARRANT ("Warrant") CERTIFIES THAT, for value
received, subject to the provisions hereinafter set forth,
(the "Holder") is entitled to purchase from Nematron Corporation, a
Michigan corporation, and its successors and assigns (the "Company") up to
shares (the "Warrant Shares") of common stock of the Company,
no par value (the "Common Stock"), at the price of $6.73 per share (the
"Per Share Warrant Price") at any time and from time to time after the date
hereof and until February 20, 2000 (the "Expiration Date") subject to the
provisions and adjustments and on the terms and conditions hereinafter set
forth. The Per Share Warrant Price, when multiplied by the number of
shares purchasable hereunder shall be referred to as the "Aggregate Warrant
Price." The number of shares purchasable hereunder and the Per Share
Warrant Price are subject to adjustment, as hereinafter provided.
The Company has issued the Warrants pursuant to the terms of an
Agreement and Plan of Merger among the Company, NemaSoft, Inc., Intec
Controls Corp., Xxxxxx X. Xxxxx and Xxxxxx X. Xxxx, dated as of February
20, 1997 (the "Merger Agreement"). This Warrant is one of several warrants
issued by the Company for the purchase of an aggregate of 125,000 shares of
Common Stock issued to the persons listed on Schedule A to this Warrant as
part of the consideration paid by the Company pursuant to the Merger
Agreement.
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The following is a statement of the rights of the Holder of this
Warrant and the terms and conditions to which this Warrant is subject, to
which terms the Holder hereof, by acceptance of this Warrant, assents.
1. EXERCISE OF WARRANT
(a) Subject to the conditions set forth herein, this Warrant may be
exercised in whole at any time or in part from time to time by the Holder
hereof by the surrender of this Warrant at the principal office of the
Company on or before the Expiration Date and upon payment to the Company of
the Aggregate Warrant Price (or the proportionate part thereof if exercised
in part) for the shares so purchased. Such payment shall be made by the
Holder in the form of a certified or cashier's check. If this Warrant is
exercised with respect to less than all of the Warrant Shares at the time
purchasable hereunder, the Holder hereof shall be entitled to receive a new
Warrant covering the number of shares in respect of which this Warrant
shall not have been exercised.
(b) Notwithstanding anything to the contrary contained in this Section
1, the holder of this Warrant may elect to receive Warrant Shares on a "net
exercise" basis in an amount equal to the value of the Warrant by surrender
of the Warrant at the principal office of the Company together with notice
of such election, in which event the Company shall issue to the holder of
this Warrant a number of shares of Common Stock computed using the
following formula:
X = Y(A-B)
------
A
Where: X = the number of Warrant Shares to be
issued to the Holder;
Y = the number of Warrant Shares issuable
upon exercise of the Warrant;
A = the Fair Market Value of one share of
Common Stock; and
B = Per Share Warrant Price.
As used herein, "Fair Market Value" shall mean the average of the last
reported sale prices per share of the Common Stock on the Nasdaq Stock
Market (or, if the Common Stock is then listed for trading on a national
securities exchange, such exchange) for the ten consecutive trading day
period ending on the trading day immediately preceding the date on which
the Warrant is exercised, or, if there have been no reported sales on any
such day, the average of the reported highest bid and lowest asked prices
at the end of such day, or, if on any day the
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Common Stock is not listed for trading on the Nasdaq Stock Market or a
national securities exchange, the average of the highest bid and lowest
asked price on such day in the domestic over-the-counter market as reported
by the National Quotation Bureau, Incorporated, or any similar successor
organization. If at any time the Common Stock is not listed on a national
securities exchange or the Nasdaq Stock Market or quoted in the
over-the-counter market, the "Fair Market Value" shall be the highest price
per share which the Company could obtain from a willing buyer (other than a
current employee or director) for shares of Common Stock sold by the
Company from authorized but unissued shares, as determined in good faith by
the Board of Directors of the Company, unless the Company shall become
subject to a merger, acquisition or other consolidation pursuant to which
the Company is not the surviving party, in which case the "Fair Market
Value" shall be deemed to be the value received by the holders of the
Company's Common Stock for each share of Common Stock in such merger,
acquisition or other consolidation.
(c) The Company shall keep a warrant registry book of the names of all
the holders of its registered warrants (including the Holder) and their
registered assigns.
2. RESERVATION OF SHARES OF COMMON STOCK
The Company agrees that during the period within which this Warrant
may be exercised, the Company will at all times have authorized, and hold
in reserve for issuance upon exercise of this Warrant, a sufficient number
of shares of Common Stock to provide for the exercise of this Warrant.
3. ADJUSTMENTS
The number and kind of Warrant Shares shall be subject to adjustment
from time to time as follows:
(a) In the event the Company shall (i) take a record of the holders of
Common Stock for the purpose of entitling them to receive a dividend
payable in shares of Common Stock, (ii) subdivide its outstanding shares of
Common Stock into a greater number of shares, (iii) combine its outstanding
shares of Common Stock into a smaller number of shares, or (iv) issue by
reclassification of its Common Stock any shares of the Company of any class
or series, the holder of this Warrant shall thereafter be entitled to
receive upon the exercise of this Warrant the number of shares of Common
Stock (or other class or series of capital stock of the Company) which he
would have owned immediately after such event had the Warrant been
exercised immediately prior to the happening of such event. Such
adjustment shall become effective immediately after the opening of business
on the day following such record date or the day upon which such
subdivision, combination or reclassification becomes effective.
(b) In the event that the Company takes a record of holders of Common
Stock for the purpose of entitling them to receive a dividend payable in
any security convertible into
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Common Stock and the holder of this Warrant thereafter exercises the
purchase rights hereunder, such holder shall be entitled to receive upon
such exercise, in addition to the shares of Common Stock deliverable to him
in accordance with the provisions hereof, the number of shares or principal
amount of such security convertible into Common Stock as he would have been
entitled to receive if he had converted immediately prior to the taking of
such record.
(c) No adjustment in the number of Warrant Shares shall be required
unless such adjustment would require an increase or decrease of at least
one-tenth of a share in the number of Warrant Shares; provided, however,
that any adjustment which by reason hereof is not required to be made shall
be carried forward and taken into account in any subsequent adjustment.
(d) No fractional shares of Common Stock shall be issued upon exercise
of this Warrant, but, instead, to the extent that any fraction of a share
would otherwise be issuable, the Aggregate Warrant Price shall be
proportionately reduced.
(e) The Company shall not, by amendment of its Articles of
Incorporation or through any reorganization, recapitalization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or
any other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms to be observed or performed hereunder by
the Company, but will at all times in good faith assist in the carrying out
of all of the provisions of this Section 3 and in the taking of all such
action as may be necessary or appropriate in order to protect the rights of
the holder of this Warrant against impairment.
(f) Whenever the Per Share Warrant Price or the number of Warrant
Shares shall be adjusted pursuant to the provisions hereof, the Company
shall within thirty (30) days of such adjustment deliver a certificate
signed by its chief financial officer to the registered holder hereof
setting forth, in reasonable detail, the event requiring the adjustment,
the amount of the adjustment, the method by which such adjustment was
calculated, and the Per Share Warrant Price after giving effect to such
adjustment.
(g) In the event of any taking by the Company of a record of its
shareholders for the purpose of determining shareholders who are entitled
to receive payment of any dividend or other distribution, the Company shall
mail to the holder of this Warrant, at least ten (10) days prior to such
record date a notice specifying such record date and the amount and
character of such dividend or distribution.
4. FULLY PAID STOCK; TAXES
The Company agrees that the Warrant Shares delivered upon exercise of
this Warrant as herein provided shall, at the time of such delivery, be
fully paid and non-assessable, and free from all liens and charges with
respect to the purchase thereof. Each and every certificate representing
Warrant Shares to be delivered upon exercise of this Warrant shall bear
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the legend regarding restrictions on transferability set forth in Section
3(e) of the Merger Agreement. The Company further agrees that it will pay
when due and payable any and all federal and state taxes which may be
payable by the Company in respect of the issue of this Warrant, or any
Common Stock or certificates therefor upon the exercise of this Warrant,
pursuant to the provisions thereof. The Company shall not, however, be
required to pay any tax which may be payable in respect of any attempted
transfer, in whole or in part, of this Warrant (including the issuance of
new Warrants in connection therewith) or the delivery of stock certificates
in a name other than that of the Holder of this Warrant presented for
exercise, and any such tax shall be paid by such Holder at the time of
presentation.
5. CLOSING OF TRANSFER BOOKS
The right to exercise this Warrant shall not be suspended during any
period while the stock transfer books of the Company for its Common Stock
may be closed. The Company shall not be required, however, to deliver
certificates of its Common Stock upon the exercise of this Warrant while
such books are duly closed for any purpose, but the Company may postpone
the delivery of the certificates for such Common Stock until the opening of
such books, and they shall, in such case, be delivered forthwith upon the
opening thereof, or as soon as practicable thereafter.
6. LOST OR STOLEN WARRANTS
In case any Warrant shall be mutilated, lost, stolen or destroyed, the
Company shall issue a new Warrant of like date, tenor, and denomination and
deliver the same in exchange and substitution for and upon surrender and
cancellation of any mutilated Warrant, or in lieu of any Warrant lost,
stolen or destroyed, upon an indemnity agreement or bond reasonably
satisfactory to the Company.
7. ASSIGNMENT
This Warrant is not assignable or transferable except by will or the
laws of descent and distribution and any such attempted assignment or
transfer shall be null and void. The Company may deem and treat the
registered holder hereof as the absolute owner of this Warrant
(notwithstanding any notations of ownership or writing hereon made by
anyone other than the Company) for all purposes and shall not be affected
by any notice to the contrary.
8. SECURITIES MATTERS
Neither this Warrant nor the Warrant Shares have been registered under
the Securities Act of 1933 (the "Act"), as amended, or any applicable "Blue
Sky" laws. By acceptance of this Warrant, the Holder represents and
warrants to the Company that Holder (a) is receiving this Warrant and, upon
exercise, is acquiring the Warrant Shares for Holder's own account and not
on behalf of others, and is not taking this Warrant or any of the Warrant
Shares
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with a view to the "distribution" thereof (as that term is defined in the
Act and the rules and regulations of the Securities and Exchange Commission
thereunder) and (b) will not offer, distribute, sell, transfer or otherwise
dispose of the Warrant Shares except pursuant to (i) an effective
registration statement under the Act and any applicable Blue Sky laws with
respect thereto, (ii) an opinion, satisfactory to the Company, addressed to
the Company, of counsel satisfactory to the Company, that such offering,
distribution, sale, transfer or disposition is exempt from registration
under the Act and any applicable Blue Sky laws, or (iii) a letter from the
staff of the Securities and Exchange Commission or any state securities
commissioner, as the case may be, to the effect that it will recommend that
no action be taken with respect to such transaction. The Holder agrees, by
acceptance of this Warrant, to execute any and all documents deemed
necessary by the Company or required by the regulatory authority of any
state in connection with any public offering by the Company of the Warrant
Shares.
10. MISCELLANEOUS
(a) Successors and Assigns. All covenants and agreements of the
Company in this Warrant shall be binding upon the Company's successors and
assigns.
(b) Governing Law. This Warrant shall be construed and enforced in
accordance with the laws of the State of Michigan.
(c) Amendments. The Company may, with the consent of the holders of
Warrants representing the right to purchase not less than a majority of the
aggregate number of shares of Common Stock purchasable upon the exercise of
all Warrants issued pursuant to the Merger Agreement, add any provision to,
change in any manner or eliminate any provision from this Warrant;
provided, that no such amendment shall change the number of Warrant Shares
issuable upon the exercise of any Warrant or the amount of any payment due
upon exercise without the prior written consent of the Holder.
(d) Notices. Any notices or other communications required or
permitted hereunder shall be sufficiently given if in writing and sent by
registered mail, postage prepaid, and if to the Holder, addressed to the
Holder at the Holder's address appearing on the warrant registry book of
the Company, and if to the Company, addressed to it at 0000 Xxxxxxxxx
Xxxxx, Xxx Xxxxx, Xxxxxxxx 00000, Attention: President, or to such other
address or attention as shall be furnished in writing by the Company or the
Holder, and any such notice shall be deemed to have been given as of the
date received.
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IN WITNESS WHEREOF, the undersigned has caused this Warrant to be
signed by a duly authorized officer and this Warrant to be dated the date
set forth above.
NEMATRON CORPORATION
By:
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Xxxxx X. Xxxxx, III
President
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