Exhibit 4.1
THIS WARRANT AND THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE TRANSFERRED IN
VIOLATION OF SUCH ACT OR STATE LAW, THE RULES AND REGULATIONS THEREUNDER OR THE
PROVISIONS OF THIS WARRANT.
WARRANT
To Purchase Common Stock of
XXXXXX ELECTRONICS, INC.
------------------------
Expiring March 31, 2002
THIS IS TO CERTIFY THAT, for value received, XXXXXXXX CAPITAL
LIMITED, or registered assigns, is entitled, at any time and from time to
time prior to the Expiration Date (as hereinafter defined), to purchase from
XXXXXX ELECTRONICS, INC., a Delaware corporation ("Company"), at the Exercise
Price (as hereinafter defined and subject to adjustment as provided herein) a
number of shares of Common Stock (as hereinafter defined) equal to the
quotient of 2,000,000 divided by the Exercise Price, all on the terms and
conditions hereinafter set forth.
ARTICLE I
CERTAIN DEFINITIONS
"Affiliate" of any Person means any Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such Person. For purposes of this definition, "control," when used with respect
to any Person, means the power to direct the management and policies of such
Person, whether though the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Business Day" means any day which is not a Saturday, a Sunday, or any
other day on which banking institutions are authorized or required to be closed
in the City of Los Angeles.
"Change of Control" has the meaning specified in Article VI.
"Closing Date" means June 13, 1997.
-2-
"Closing Price" means with respect to the Common Stock on any Trading
Day, the last reported sales price regular way or, in case no such reported sale
takes place on such date, the average of the reported closing bid and asked
prices regular way, in either case on Nasdaq, or if the Common Stock is not
listed or admitted to trading on Nasdaq, on the principal securities exchange on
which the Common Stock is listed or admitted to trading or, if not listed or
admitted to trading on any securities exchange, the closing sale price of the
Common Stock, or in case no reported sale takes place, the average of the
closing bid and asked prices, on an interdealer quotation system or any
comparable system, or if the Common Stock is not so quoted, the Closing Price
shall be as determined in good faith by Company's Board of Directors.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the shares of common stock, par value $0.001 per
share, of Company.
"Company" has the meaning specified in the preamble to this Warrant
and shall include its successors.
"Current Market Value" means as of any specified date, the average of
the daily Closing Prices for the Common Stock for the ten (10) consecutive
Trading Days immediately preceding such date, except in the event of a Change of
Control in which case such term shall have the meaning specified in Article VI.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exercise Price" has the meaning specified in Section 2.1 hereof.
"Expiration Date" means March 31, 2002.
"Holder" means Xxxxxxxx Technologies Inc. and any other Person in
whose name this Warrant is subsequently registered on the books of Company
maintained for such purpose; provided that for purposes of Article IV hereof,
Holder means only Xxxxxxxx Technologies Inc.
"Nasdaq" means The Nasdaq Stock Market.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof or any other entity.
"Payment Shares" has the meaning specified in Section 2.3 hereof.
"Permitted Transferee" has the meaning specified in Section 3.2.
-3-
"Securities Act" means the Securities Act of 1933, as amended.
"Trading Day" means (i) if the Common Stock is listed or admitted for
trading on a national securities exchange, a day on which such exchange is open
for business or (ii) if the Common Stock is quoted on the Nasdaq National
Market, a day on which trades may be made thereon or (iii) if the Common Stock
is not so listed, admitted for trading or quoted, any Business Day.
"Transfer" means any sale, transfer, gift, donation, assignment,
pledge, encumbrance, hypothecation, grant of security interest or other
disposition of any nature whatsoever.
"Warrant" means this Warrant, and any amendments hereto, and all
warrants issued upon transfer or in substitution for this Warrant.
"Warrant Shares" means the shares of Common Stock issuable upon
exercise of this Warrant.
ARTICLE II
EXERCISE OF WARRANT
Section 2.1 EXERCISE PRICE. The exercise price per share of Common
Stock shall be equal to 125% of the average of the Closing Price of the Common
Stock for the ten consecutive Trading Days immediately preceding the fifth
Trading Day following the Closing Date (the "Exercise Price"). The Exercise
Price and the number of shares issuable upon exercise of this Warrant are
subject to adjustment upon the occurrence of certain events pursuant to the
provisions of Article V of this Warrant.
Section 2.2 MANNER OF EXERCISE. In order to exercise this Warrant, in
whole or in part, Holder shall deliver to Company, at any time on or before 5:00
p.m. California time on the Expiration Date: (i) a written notice of Holder's
election to exercise this Warrant, which notice shall specify the number of
shares of Common Stock to be purchased (which shall not include any fraction of
a share), (ii) payment of the Exercise Price with respect to such shares and
(iii) this Warrant. Such notice shall be substantially in the form of the
subscription notice appearing at the end of this Warrant as Exhibit A, duly
executed by Holder. Upon receipt thereof, Company shall, as promptly as
practicable, and in any event within five (5) Business Days thereafter, execute
and deliver to Holder a certificate or certificates representing the aggregate
number of shares of Common Stock issuable upon such exercise. The stock
certificate or certificates so delivered shall be, to the extent possible, in
such denomination or denominations as Holder shall request in the notice and
shall be registered in the name of Holder or, subject to Article III, such other
name as shall be designated in the notice. This Warrant shall be deemed to have
been exercised and such certificate or certificates shall be deemed to have been
issued, and Holder or any other Person so designated to be named
-4-
therein shall be deemed to have become a holder of record of such shares for all
purposes, as of the date the notice, together with payment as set forth below,
and this Warrant are received by Company as described above and all taxes
required to be paid by Holder, if any, pursuant to Section 2.4 prior to the
issuance of such shares have been paid or Holder has agreed to pay such taxes
when finally determined. If this Warrant shall have been exercised in part,
Company shall, at the time of delivery of the certificate or certificates
representing Warrant Shares, deliver to Holder a new Warrant evidencing the
rights of Holder to purchase the unpurchased shares of Common Stock called for
by this Warrant, which new warrant shall in all other respects be identical to
this Warrant, or, at the request of Holder, appropriate notation may be made on
this Warrant and the same returned to Holder. Notwithstanding any provision
herein to the contrary, Company shall not be required to register shares in the
name of any Person who acquired this Warrant or any Warrant Shares otherwise
than in accordance with this Warrant.
Section 2.3 PAYMENT OF EXERCISE PRICE. Payment of the Exercise Price
shall be made by wire transfer or certified check payable to the order of
Company; PROVIDED, HOWEVER, that Holder shall have the right, at its election,
in lieu of delivering the Exercise Price in cash, to instruct Company in the
subscription notice to retain, in payment of the Exercise Price, a number of
shares of Common Stock (the "Payment Shares") equal to the quotient of the
aggregate Exercise Price of the shares as to which this Warrant is then being
exercised divided by the Current Market Value per share of Common Stock as of
the date the notice of exercise is received by Company and to deduct the number
of Payment Shares from the shares to be delivered to Holder.
Section 2.4 PAYMENT OF TAXES. All shares of Common Stock issuable upon
the exercise of this Warrant pursuant to the terms hereof shall be validly
issued, fully paid and nonassessable and, to the extent permitted by law,
without any preemptive rights. Company shall pay all expenses in connection
with, and all taxes and other governmental charges that may be imposed with
respect to, the issue or delivery thereof, unless such tax or charge is imposed
by law upon Holder, in which case such taxes or charges shall be paid by Holder.
Company shall not be required, however, to pay any tax or other charge imposed
in connection with any Transfer involved in the issue of any certificate for
shares of Common Stock issuable upon exercise of this Warrant in any name other
than that of Holder, and in such case Company shall not be required to issue or
deliver any stock certificate until such tax or other charge has been paid or it
has been established to the satisfaction of Company that no such tax or other
charge is due.
ARTICLE III
TRANSFERS
Section 3.1 TRANSFERS GENERALLY. This Warrant may not be Transferred by
Holder, in whole or in part, except as expressly permitted by this Article III.
Any attempted Transfer that is not permitted under the terms of this Warrant
shall be null and void, and Company shall not give effect to any such attempted
Transfer on its register.
-5-
Section 3.2 PERMITTED TRANSFERS. Notwithstanding the foregoing, subject
to the further provisions of this Article, Transfers of this Warrant, in whole
but not in part, to the following transferees (collectively, "Permitted
Transferees") are expressly permitted:
(a) Any Affiliate of Holder; and
(b) A bona fide pledgee as security for any indebtedness incurred by
Holder, provided that such pledgee shall, prior to such pledge, execute and
deliver to Company, a written agreement not to dispose of this Warrant or
Warrant Shares so pledged, or retain this Warrant or Warrant Shares in full or
partial satisfaction of such indebtedness, without complying with the provisions
of this Warrant.
Section 3.3 NO REGISTRATION RIGHTS. It is understood and agreed that
Company does not intend to, and shall have no obligation to, file a registration
statement with the Commission under the Securities Act or to comply with any
state securities laws in connection with any proposed Transfer of the Warrant or
the Warrant Shares. Accordingly, a Transfer of the Warrant (which satisfies the
requirements of Section 3.2) or the Warrant Shares shall only be permitted when
Company shall have received an opinion of counsel of Holder reasonably
satisfactory to Company that such registration and qualification are not
required in order to ensure compliance with the Securities Act and applicable
securities laws. In addition, in the event of any such Transfer of the Warrant
or the Warrant Shares to a transferee, such transferee shall be bound by the
terms and provisions of this Warrant, including this Article III.
Section 3.4 MANNER OF TRANSFER OF WARRANT. Subject to compliance with
this Article III, a Transfer of this Warrant and all rights hereunder, in whole
but not in part, shall be registered on the books of Company, upon surrender of
this Warrant to Company, together with a written assignment of this Warrant
substantially in the form of Exhibit B hereto duly executed by Holder and funds
sufficient to pay any transfer taxes payable upon the making of such Transfer.
Upon such surrender and such payment, Company shall execute and deliver a new
warrant, identical in all respects to this Warrant, in the name of the assignee
and this Warrant shall promptly be canceled. This Warrant, if properly assigned
in compliance with this Article III, may be exercised by a new Holder for the
purchase of shares of Common Stock without having a new warrant issued.
Section 3.5 TRANSFER RESTRICTION LEGEND. Each certificate for Warrant
Shares initially issued upon exercise of this Warrant, and each certificate for
Warrant Shares issued to any subsequent transferee of any such certificate,
shall bear the following legend (and any additional legend required under
applicable law, rule or regulation) on the face thereof unless otherwise agreed
by Company by written notice thereof to its stock transfer agent:
THE COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN REGISTERED OR
QUALIFIED FOR SALE UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE
-6-
SECURITIES LAWS OF ANY STATE AND MAY BE SOLD OR OTHERWISE TRANSFERRED
ONLY IF REGISTERED OR QUALIFIED UNDER APPLICABLE FEDERAL AND STATE
SECURITIES LAWS OR IF AN EXEMPTION FROM SUCH REGISTRATION OR
QUALIFICATION IS AVAILABLE.
ARTICLE IV
REPRESENTATIONS
Holder hereby represents and warrants as follows and acknowledges that
Company is relying on such representations and warranties in connection with its
sale of the Warrant to Holder:
(a) The Warrant and the Warrant Shares which may be purchased upon
exercise of the Warrant are being acquired by Holder for its own account, for
investment and not with a view to the distribution thereof, nor with any present
intention of distributing the same.
(b) Holder understands that neither the Warrant nor the Warrant
Shares have been or will be registered or qualified under the Securities Act or
any applicable state securities laws, by reason of their issuance in a
transaction exempt from the registration or qualification requirements of the
Securities Act and such laws, and that the Warrant and the Warrant Shares must
be held indefinitely unless, subject to the provisions of Article III, a
subsequent disposition thereof is registered or qualified under the Securities
Act and such laws or is exempt from such registration or qualification. Holder
further understands and agrees that Company does not intend to, and shall have
no obligation to, file a registration statement with the Commission under the
Securities Act or to comply with any state securities laws in connection with
any proposed Transfer by Holder of the Warrant or the Warrant Shares.
Accordingly, the Warrant and the Warrant Shares must be held by Holder
indefinitely unless, subject to the provisions of Article III, an exemption from
such registration or qualification is available.
(c) Holder is an "accredited investor" (as defined in Rule 501(a) of
Regulation D under the Securities Act). Holder (i) has been furnished with or
has had access to all information that Holder has requested from Company
regarding Company or otherwise deemed necessary in order to make an informed
decision with respect to this Warrant and (ii) has generally such knowledge and
experience in business and financial matters and with respect to investments in
securities, such as this Warrant, so as to enable Holder to understand and
evaluate the risks of, and make an informed investment decision with respect to,
this Warrant.
-7-
ARTICLE V
ADJUSTMENTS
Section 5.1 WARRANT SUBJECT TO DILUTION. The number of shares of Common
Stock for which this Warrant is exercisable and the Exercise Price shall not be
subject to adjustment, except as expressly provided herein. Accordingly, except
as expressly provided herein, Holder's rights under this Warrant shall be
subject to dilution, including, without limitation, by reason of capital
reorganizations or reclassifications, issuance of additional Common Stock in
private placements or public offerings, issuances of rights, options, warrants
or convertible or exchangeable securities and other events.
Section 5.2 STOCK DIVIDENDS, SUBDIVISIONS OR COMBINATIONS. If Company
shall hereafter (i) pay a dividend or make a distribution payable in shares of
Common Stock to all holders of Common Stock, (ii) subdivide its outstanding
Common Stock into a larger number of shares or (iii) combine its outstanding
Common Stock into a smaller number of shares, then (x) the number of shares of
Common Stock purchasable upon exercise of this Warrant immediately after the
record date or the effective date for any such event shall be adjusted to equal
the number of shares of Common Stock which a record holder of the same number of
shares of Common Stock for which this Warrant is exercisable immediately prior
to the occurrence of such event would own or be entitled to receive after the
happening of such event and (y) the Exercise Price shall be adjusted to equal
the then current Exercise Price multiplied by a fraction, the numerator of which
shall be the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to the adjustment and the denominator of which
shall be the number of shares for which this Warrant is exercisable immediately
after such adjustment. All calculations shall be made to the nearest full
share.
Section 5.3 NOTICE OF ADJUSTMENT. Whenever the number of shares of
Common Stock purchasable upon the exercise of this Warrant is adjusted as herein
provided, Company shall promptly give Holder notice thereof, setting forth a
brief statement of the facts requiring such adjustment and setting forth the
computation by which such adjustment was made.
Section 5.4 STATEMENT ON WARRANTS. Irrespective of any adjustment in
the number of shares purchasable upon the exercise of this Warrant, this Warrant
may continue to express the same number of shares as are stated herein.
-8-
ARTICLE VI
CHANGE OF CONTROL
If Company consolidates or merges into any other corporation, or
conveys, transfers or leases all or substantially all of its assets to any
Person, or any other corporation merges into Company, and in the case of any
such transaction, the outstanding Common Stock is changed or exchanged into
other securities and/or property (including cash) (any such event being called a
"Change of Control"), then, Holder shall be deemed (i) to have exercised this
Warrant and in connection therewith to have instructed Company to retain Payment
Shares in payment of the Exercise Price and (ii) to have received the remaining
number of shares of Common Stock, all immediately prior to such Change of
Control. For purposes of calculating the number of such Payment Shares, the
Current Market Value per share of Common Stock shall be the fair market value of
such other securities and/or property (including cash) into which the Common
Stock is to be changed or exchanged as determined in good faith by Company's
Board of Directors. Notwithstanding anything to the contrary contained herein,
if such Current Market Value as so determined is less than the Exercise Price,
this Warrant shall be deemed to have expired without being exercised,
immediately prior to such Change of Control. Without limiting the foregoing, it
is expressly understood and agreed that Holder shall not under any circumstances
be entitled to exercise this Warrant following a Change of Control.
ARTICLE VII
LOSS OR MUTILATION
Upon receipt by Company of evidence satisfactory to Company of the
loss, theft, destruction or mutilation of this Warrant and, in the case of any
such loss, theft or destruction, upon receipt of indemnity or security
satisfactory to Company, or, in the case of mutilation, upon cancellation of
such Warrant, the Company will deliver, in lieu of such lost, stolen, destroyed
or mutilated Warrant, a new warrant which shall in all respects be identical to
this Warrant.
ARTICLE VIII
RESERVATION OF COMMON STOCK
Company shall at all times reserve and keep available for issue upon
the exercise of this Warrant such number of its authorized but unissued shares
of Common Stock as will be sufficient to permit the exercise in full of this
Warrant.
-9-
ARTICLE IX
WARRANT HOLDER NOT DEEMED STOCKHOLDER
Company may deem and treat the registered Holder of this Warrant as the
absolute owner thereof (notwithstanding any notation of ownership or other
writing thereon made by anyone), for the purpose of any exercise thereof and for
all other purposes, and Company shall not be affected by any notice to the
contrary. Prior to the exercise of this Warrant, Holder, as such, shall not be
entitled to any rights of a stockholder of Company, including, without
limitation, the right to vote or to consent to any action of the stockholders,
to receive dividends or other distributions, to exercise any preemptive right or
to receive any notice of meetings of stockholders and, except as otherwise
provided in this Warrant, shall not be entitled to receive any notice of any
proceedings of Company.
ARTICLE X
MISCELLANEOUS
Section 10.1 NOTICES. All notices or other communications required or
permitted to be given hereunder shall be in writing and shall be mailed,
telecopied, dispatched by reputable commercial courier or delivered by hand as
follows:
If to Company, addressed to it at:
Xxxxxx Electronics, Inc.
0000 Xxxxxxx Xxx
Xxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: President
Telecopier: 000-000-0000
With copies to:
Xxxxx Wales
Xxxxx Xxxxxxxxxx
000 Xxxxx Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telecopier: 000-000-0000
Xxxxxxx Xxxxxx
Xxxxxx Xxxx & Xxxx
0 Xxxxx Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx X0X 0X0
Telecopier: 000-000-0000
-10-
If to the initial Holder, addressed to it at:
Xxxxxxxx Technologies Inc.
000 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxx X0X 0X0
Attention: President
Telecopier: 000-000-0000
With a copy to:
Xxxx Xxxxx
Gowling, Strathy & Xxxxxxxxx
Suite 4900, Commerce Court West
Toronto, Ontario M5L IJ3
Telecopier: 416-862-7661
Any notices to any subsequent Holder of this Warrant shall be sent to its last
known address or facsimile transmission number appearing on the books of Company
maintained for such purpose. If any notice or other communication required or
permitted to be given hereunder is given by mail, it will be effective on the
fifth calendar day after deposit in the mail with first class postage prepaid,
except in the event of an actual or threatened disruption in postal services, in
which case notices shall be given by telecopier, courier or personal delivery
until the resumption of normal postal service; if given by telecopier on a
Business Day during regular business hours of the recipient, when sent and, if
not so given, then, at the opening of the recipient's business on the next
Business Day; if dispatched by reputable commercial courier, on the scheduled
delivery date; or if given by personal delivery, when delivered.
Section 10.2 GOVERNING LAW. This Warrant shall be governed by the laws
of the State of California applicable to contracts made and to be performed
entirely in that state, without regard to the principles thereof regarding
conflict of laws.
Section 10.3 BINDING EFFECT. Subject to the provisions of Article III,
this Warrant shall be binding upon and inure to the benefit of Company and its
successors and Holder and its successors and assigns.
Section 10.4 SEVERABILITY. Wherever possible, each provision of this
Warrant shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Warrant.
-11-
Section 10.5 AMENDMENT. This Warrant may be modified or amended or the
provisions hereof waived with the written consent of Company and Holder.
Section 10.6 HEADINGS. The headings and subheadings in this Warrant are
included for convenience and identification only and are in no way intended to
describe, interpret, define or limit the scope, extent or intent of this Warrant
or any provision hereof.
[Signature Page Follows]
IN WITNESS WHEREOF, Xxxxxxxx Capital Limited, as Holder of this
Warrant, hereby consents to the provisions contained in this Warrant, and
the Company has caused this Warrant to be duly executed.
Dated: June 13, 1997.
XXXXXX ELECTRONICS, INC.
By____________________________
Xxxxxxx X. Xxxxxx
Vice President and
Chief Financial Officer
XXXXXXXX CAPITAL LIMITED
By _____________________________
Xxxxx X. X'Xxxx
Executive Vice President and
Secretary
[SIGNATURE PAGE TO WARRANT]
EXHIBIT A
SUBSCRIPTION NOTICE
[To be executed only upon exercise of Warrant]
The undersigned registered owner of the attached Warrant irrevocably
exercises such Warrant for the purchase of ___________ shares of Common Stock of
Xxxxxx Electronics, Inc. and herewith makes payment therefor, all at the price
and on the terms and conditions specified in such Warrant and requests that
certificates for the shares of Common Stock hereby purchased be issued in the
name of and delivered to __________________________________ whose address is
___________________________________ and, if such shares of Common Stock shall
not include all of the shares of Common Stock issuable as provided in such
Warrant, that a new Warrant of like tenor and date for the balance of the shares
of Common Stock issuable hereunder be delivered to the undersigned.
/ / If this box is checked, then Holder is utilizing the procedure
specified in Section 2.3 hereof, and Company shall withhold the Payment Shares
in lieu of Holder delivering the Exercise Price in cash.
Dated:
_________________________________
(Name of Registered Owner)
_________________________________
(Signature of Registered Owner)
_________________________________
(Street Address)
_________________________________
(City) (State) (Zip Code)
NOTICE: The signature on this subscription must correspond with the name as
written upon the face of the attached Warrant in every particular,
without alteration or enlargement or any change whatsoever.
EXHIBIT B
ASSIGNMENT FORM
FOR VALUE RECEIVED the undersigned registered owner of the attached
Warrant hereby sells, assigns and transfers unto the Assignee named below all of
the rights of the undersigned under this Warrant:
NAME AND ADDRESS OF ASSIGNEE
and does hereby irrevocably constitute and appoint ________________
attorney-in-fact to register such transfer on the books of Xxxxxx Electronics,
Inc. maintained for such purpose, with full power of substitution in the
premises.
Dated: ____________________ Print Name: ________________________
Signature: _________________________
Witness: ___________________________
NOTICE: The signature of this assignment must correspond with the name as
written upon the face of the attached Warrant in every particular,
without alteration or enlargement or any change whatsoever.
