NEITHER THIS WARRANT NOR THE SECURITIES INTO WHICH THIS WARRANT IS EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS THEREUNDER AND IN
COMPLIANCE WITH APPLICABLE STATE SECURITIES OR BLUE SKY LAWS.
International DisplayWorks, Inc.
WARRANT
-------
Warrant No.[________] Number of Shares:_________
International DisplayWorks, Inc. (the "Corporation"), hereby certifies
that, for value received, _____________________, or his/her/its registered
assigns (the Holder), is entitled, subject to the terms set forth below, to
purchase on the Vesting Date (as defined in Section 1 of this Warrant) from the
Corporation upon surrender of this Warrant, up to a total of ________________
(______) shares of Common Stock, no par value (the "Common Stock"), of the
Corporation (each such share, a "Warrant Share" and all such shares, the
"Warrant Shares") at the "Exercise Price" (as defined herein) at any time, but
not after 11:59 PM Pacific Standard Time on the Expiration Date (as defined in
Section 1 of this Warrant).
1. EXERCISE OF WARRANT.
1.1 Issuance Date. The Issuance Date shall be _________________.
1.2 Warrant Exercise Price. The Exercise Price shall be $0.35 per
share, subject to adjustments in section 4 of this Warrant.
1.3 Vesting Date. The Vesting Date shall be Issuance Date, as
provided in section 1.1.
1.4 Method Of Exercise. The Holder of this Warrant, on the Vesting Date
and from time to time until 11:59 PM Pacific Standard Time on the day three
year(s) after the Vesting Date (the "Exercise Period"), may exercise in whole or
in part the purchase rights evidenced by this Warrant, provided that the Holder
exercises the purchase rights evidenced by this Warrant with respect to at least
One Thousand (1,000) shares of Common Stock, unless the remaining balance of
such shares is less than One Thousand (1,000). Such exercise shall be effected
by:
(a) the surrender of the Warrant, together with a duly
executed copy of the form of Subscription attached
hereto, to the Assistant Secretary of the
Corporation at its principal offices;
(b) the payment to the Corporation in U.S. funds, by
check or bank draft payable to its order or the
cancellation of indebtedness of the Company to the
Holder, of an amount equal to the aggregate share
purchase price for the number of shares which the
purchase rights hereunder are being exercised; and
(c) the delivery to the Corporation, if necessary, to
assure compliance with federal and state
securities laws, of an instrument executed by the
Holder certifying that the shares are being
acquired for the sole account of the Holder and
not with a view to any resale or distribution
prior to the filing of a registration statement.
1.5 Satisfaction with Requirements of Securities Act of 1933.
Notwithstanding the provisions of Subsection 1.4 and Section 7, each and every
exercise of this Warrant is contingent upon the Corporation's satisfaction that
the issuance of Common Stock upon the exercise is exempt from the requirements
of the Securities Act and all applicable state securities laws at the relevant
time(s). The Holder of this Warrant agrees to execute any and all documents
deemed necessary by the Corporation to effect the exercise of this Warrant.
1.6 Issuance of Shares and New Warrant. In the event the purchase
rights evidenced by this Warrant are exercised in whole or in part, one or more
certificates for the purchased shares shall be issued as soon as practicable
thereafter to the person exercising such rights. Such Holder shall also be
issued at such time a new Warrant representing the number of shares (if any) for
which the purchase rights under this Warrant remain unexercised and continue in
force and effect.
2. TRANSFERS.
2.1 Transfers. Subject to Section 7 hereof, this Warrant and all rights
hereunder are transferable. To transfer rights, the transfer form below must be
completed. The transfer shall be recorded on the books of the Corporation upon
the surrender of this Warrant, properly endorsed, to the Secretary of the
Corporation at its principal offices and the payment to the Corporation of all
transfer taxes and other governmental charges imposed on such transfer. In the
event of a partial transfer, the Corporation shall issue to the several Holders
one or more appropriate new forms of Warrant.
2.2 Registered Holder. The Holder agrees that until such time as any
transfer pursuant to Subsection 2.1 is recorded on the books of the Corporation,
the Corporation may treat the registered Holder of this Warrant as the absolute
owner; provided that nothing herein affects any requirement that the transfer of
any share of Common Stock issued or issuable upon the exercise hereof be subject
to securities law compliance.
2.3 Form of New Warrant. All new forms of Warrant issued in connection
with transfers of this Warrant shall bear the same date as this Warrant and
shall be substantially identical in form and provision to this Warrant except
for the number of shares purchasable thereunder.
3. FRACTIONAL SHARES.
Notwithstanding that the number of shares purchasable upon the exercise
of this Warrant may have been adjusted pursuant to the terms hereof, the
Corporation shall nonetheless not be required to issue fractions of shares upon
the exercise of this Warrant or to distribute certificates that evidence
fractional shares nor shall the Corporation be required to make any cash
payments in lieu thereof upon exercise of this Warrant. Holder hereby waives any
right to receive fractional shares.
4. ANTI-DILUTION PROVISIONS.
4.1 Stock Splits and Combinations. If the Corporation shall at any time
subdivide or combine its outstanding shares of Common Stock, this Warrant shall,
after that subdivision or combination, evidence the right to purchase the number
of shares of Common Stock that would have been issuable as a result of that
change with respect to the shares of Common Stock that were purchasable under
this Warrant immediately before that subdivision or combination. If the
Corporation shall at any time subdivide the outstanding shares of Common Stock,
the Exercise Price then in effect immediately before that subdivision shall be
proportionately decreased, and, if the Corporation shall at any time combine the
outstanding shares of Common Stock, the Exercise Price then in effect
immediately before that combination shall be proportionately increased. Any
adjustment under this Section 4.1 shall become effective at the close of
business on the date the subdivision or combination becomes effective.
4.2 Reclassification, Exchange, and Substitution. If the Common Stock
issuable upon exercise of this Warrant shall be changed into the same or a
different number of shares of any other class or classes of stock, whether by
capital reorganization, reclassification, or otherwise (other than a subdivision
or combination of shares provided for above), the Holder of this Warrant shall,
on its exercise, be entitled to purchase for the same aggregate consideration,
in lieu of the Common Stock that the Holder would have become entitled to
purchase but for such change, a number of shares of such other class or classes
of stock equivalent to the number of shares of Common Stock that would have been
subject to purchase by the Holder on exercise of this Warrant immediately before
that change.
4.3 Reorganizations, Mergers, Consolidations, or Sale of Assets. If at
any time there shall be a capital reorganization of the Corporation's Common
Stock (other than a subdivision, stock split, combination, reclassification,
exchange, or substitution of shares provided for elsewhere above) or merger or
consolidation of the Corporation with or into another corporation, or the sale
of substantially all of the Corporation's properties and assets as, or
substantially as, an entirety to any other person, then, as a part of such
reorganization, merger, consolidation, or sale, lawful provision shall be made
so that the Holder of this Warrant shall thereafter be entitled to receive upon
exercise of this Warrant, during the period specified in this Warrant and upon
payment of the Exercise Price then in effect, the number of shares of Common
Stock or other securities or property of the Corporation, or of the successor
corporation resulting from such merger or consolidation, to which a Holder of
the Common Stock deliverable upon exercise of this Warrant would have been
entitled in such capital reorganization, merger, consolidation, or sale if this
Warrant had been exercised immediately before that capital reorganization,
merger, consolidation, or sale. In any such case, appropriate adjustment (as
determined in good faith by the Corporation's Board of Directors) shall be made
in the application of the provisions of this Warrant with respect to the rights
and interests of the Holder of this Warrant after the reorganization, merger,
consolidation, or sale to the end that the provisions of this Warrant (including
adjustment of the stock purchase price then in effect and number of shares
purchasable upon exercise of this Warrant) shall be applicable after that event,
as near as reasonably may be, in relation to any shares or Stock Purchase
Warrants or other property deliverable after that event upon exercise of this
Warrant. The Corporation shall, within thirty (30) days after making such
adjustment, give written notice (by first class mail, postage prepaid) to the
registered holder of this Warrant at the address of that Holder shown on the
Corporation's books. That notice shall set forth, in reasonable detail, the
event requiring the adjustment and the method by which the adjustment was
calculated and specify the Stock Purchase Price then in effect after the
adjustment and the increased or decreased number of shares purchasable upon
exercise of this Warrant. When appropriate, that notice may be given in advance
and included as part of the notice required under other provisions of this
Warrant.
4.4 Common Stock Dividends; Distributions. In the event the Corporation
should at any time prior to the expiration of this Warrant fix a record date for
the determination of the Holders of Common Stock entitled to receive a dividend
or other distribution (excluding a cash dividend or distribution) payable in
additional shares of Common Stock or other securities or rights convertible into
or entitling the Holder thereof to receive, directly or indirectly, additional
shares of Common Stock (hereinafter referred to as the "Common Stock
Equivalents") without payment of any consideration by such Holder for the
additional shares of Common Stock or Common Stock Equivalents (including the
additional shares of Common Stock issuable upon conversion or exercise thereof),
then, as of such record date (or the date of such distribution, split, or
subdivision if no record date is fixed), the Exercise Price shall be
appropriately decreased and the number of shares of Common Stock issuable upon
exercise of the Warrant shall be appropriately increased in proportion to such
increase of outstanding shares.
4.5 Adjustments Of Other Distributions. In the event the Corporation
shall declare a distribution payable in securities of other persons, evidences
of indebtedness issued by the Corporation or other persons, assets (excluding
cash dividends), or options or rights not referred to in Subsection 4.4, then,
in each such case for the purpose of this Subsection 4.5, upon exercise of this
Warrant, the Holder hereof shall be entitled to a proportionate share of any
such distribution as though such Holder was the Holder of the number of shares
of Common Stock of the Corporation into which this Warrant may be exercised as
of the record date fixed for the determination of the Holders of Common Stock of
the Corporation entitled to receive such distribution.
4.6 Certificate as to Adjustments. In the case of each adjustment or
readjustment of the Exercise Price pursuant to this Section 4, the Corporation
will promptly compute such adjustment or readjustment in accordance with the
terms hereof and cause a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or
readjustment is based, to be delivered to the Holder of this Warrant. The
Corporation will, upon the written request at any time of the Holder of this
Warrant, furnish or cause to be furnished to such Holder a certificate setting
forth:
(a) such adjustments and readjustments;
(b) the stock purchase price at the time in effect; and
(c) the number of shares of Common Stock issuable upon
exercise of the Warrant and the amount, if any, of
other property at the time receivable upon the
exercise of the Warrant.
4.7 Reservation of Stock Issuable Upon Exercise. The Corporation shall
at all times reserve and keep available out of its authorized but un-issued
shares of Common Stock solely for the purpose of effecting the exercise of this
Warrant such number of its shares of Common Stock as shall from time to time be
sufficient to effect the exercise of this Warrant, and if at any time the number
of authorized but unissued shares of Common Stock shall not be sufficient to
effect the exercise of this Warrant, in addition to such other remedies as shall
be available to the Holder of this Warrant, the Corporation will use its best
efforts to take such corporate action as may, in the opinion of its counsel, be
necessary to increase its authorized but unissued shares of Common Stock to such
number of shares as shall be sufficient for such purposes.
5. RIGHTS PRIOR TO EXERCISE OF WARRANT.
This Warrant does not entitle the Holder to any of the rights of a
stockholder of the Corporation, including, without limitation, the right to
receive dividends or other distributions, to exercise any preemptive rights, to
vote, or to consent or to receive notice as a stockholder of the Corporation.
If, however, at any time prior to the expiration of this Warrant and prior to
its exercise, any of the following events shall occur:
(a) the Corporation shall declare any dividend payable in
any securities upon its shares of Common Stock or
make any distribution (other than a regular cash
dividend) to the Holders of its shares of Common
Stock; or
(b) the Corporation shall offer to the Holders of its
shares of Common Stock any additional shares of
Common Stock or securities convertible into or
exchangeable for shares of Common Stock or any right
to subscribe for or purchase any thereof; or
(c) a dissolution, liquidation, or winding up of the
Corporation (other than in connection with a
consolidation, merger, sale, transfer, or lease of
all or substantially all of its property, assets, and
business as an entirety) shall be proposed and action
by the Corporation with respect thereto has been
approved by the Corporation's Board of Directors,
then in any one or more of said events the Corporation shall give notice in
writing of such event to the Holder at his last address as it shall appear on
the Corporation's records at least twenty (20) days prior to the date fixed as a
record date or the date of closing the transfer books for the determination of
the stockholders entitled to such dividends, distribution, or subscription
rights, or for the determination of stockholders entitled to vote on such
proposed dissolution, liquidation, or winding up. Such notice shall specify such
record date or the date of closing the transfer books, as the case may be.
Failure to publish, mail, or receive such notice or any defect therein or in the
publication or mailing thereof shall not affect the validity of any action taken
in connection with such dividend, distribution, or subscription rights, or such
proposed dissolution, liquidation, or winding up. Each person in whose name any
certificate for shares of Common Stock is to be issued shall for all purposes be
deemed to have become the Holder of record of such shares on the date on which
this instrument was surrendered and payment of the stock purchase price was
made, irrespective of the date of delivery of such stock certificate, except
that, if the date of such surrender and payment is a date when the stock
transfer books of the Corporation are closed, such person shall be deemed to
have become the Holder of such shares of Common Stock at the close of business
on the next succeeding date on which the stock transfer books are open.
6. CORPORATION'S RIGHT TO REDEEM WARRANTS.
The Warrants will not be subject to redemption.
7. RESTRICTED SECURITIES.
In order to enable the Corporation to comply with the Securities Act and
applicable state laws, the Corporation may require the Holder as a condition of
the transfer or exercise of this Warrant to give written assurances satisfactory
to the Corporation that the Warrant is being acquired, or in the case of an
exercise hereof, that the shares subject to this Warrant are being acquired, for
its own account, for investment only, with no view to the distribution of the
same, and that any disposition of all or any portion of this Warrant or the
shares issuable upon the due exercise of this Warrant shall not be made, unless
and until:
(a) there is then in effect a registration statement
under the Securities Act covering such proposed
disposition and such disposition is made in
accordance with such registration statement; or
(b)(i) the Holder has notified the Corporation of the
proposed disposition and shall have furnished the
Corporation with a detailed statement of the
circumstances surrounding the proposed disposition,
and
(ii) the Holder has furnished the Corporation with an
opinion of counsel, satisfactory to the Corporation,
that such disposition will not require registration
of such securities under the Securities Act and
applicable state law.
The Holder acknowledges that this Warrant is, and each of the shares of
Common Stock issuable upon the due exercise hereof will be, restricted
securities, that it understands the provisions of Rule 144 of the Securities and
Exchange Commission, and that the certificate or certificates evidencing such
shares of Common Stock will bear a legend substantially similar to the
following:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES
LAWS OF ANY STATE. THEY MAY NOT BE SOLD, TRANSFERRED, OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
COVERING THESE SECURITIES UNDER THE SAID ACT OR LAWS, OR AN OPINION OF
COUNSEL SATISFACTORY TO THE CORPORATION AND ITS COUNSEL THAT
REGISTRATION IS NOT REQUIRED THEREUNDER."
8. SUCCESSORS AND ASSIGNS.
The terms and provisions of this Warrant shall inure to the benefit
of, and be binding upon, the Corporation and the Holder thereof and their
respective successors and permitted assigns.
9. LOSS OR MUTILATION.
Upon receipt by the Corporation of satisfactory evidence of the
ownership of and the loss, theft, destruction, or mutilation of any Warrant, and
(i) in the case of loss, theft, or destruction, upon receipt by the Corporation
of indemnity satisfactory to it, or (ii) in the case of mutilation, upon receipt
of such Warrant and upon surrender and cancellation of such Warrant, the
Corporation shall execute and deliver in lieu thereof a new Warrant representing
the right to purchase an equal number of shares of Common Stock.
10. NOTICES.
All notices, requests, demands, and other communications under this
Warrant shall be in writing and shall be deemed to have been duly given on the
date of service if served personally on the party to whom notice is to be given,
or on the date of mailing if mailed to the party to whom notice is to be given,
by first class mail, registered or certified, postage prepaid, and properly
addressed as follows:
If to the Corporation: Xxxxxxx X. Xxxxxxx
Chairman
International DisplayWorks, Inc.
000 Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
With a Copy to: Xxxxx X. Xxxxx.
Xxxxxx Eng & Xxxxxxxx
000 Xxxxxxx Xxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxxxxxxx 00000
If to the Holder: _____________________________
_____________________________
_____________________________
_____________________________
11. GOVERNING LAW.
This Warrant and any dispute, disagreement, or issue of construction
or interpretation arising hereunder whether relating to its execution, its
validity, the obligations provided herein, or performance, shall be governed or
interpreted according to the internal laws of the State of California without
regard to conflicts of law.
12. ARBITRATION.
Disputes arising under this Warrant shall be settled by one arbitrator
pursuant to the rules of the American Arbitration Association (the "AAA") for
Commercial Arbitration (the "Rules"). Such arbitration shall be held in
Sacramento County, California, or at such other location as mutually agreed to
by the parties to the dispute. Subject to any applicable limitations contained
in this Warrant, arbitration may be commenced at any time by any party giving
notice to the other party that a dispute has been referred to arbitration under
this Section. The arbitrator shall be selected by the joint agreement of the
parties hereto, but if they do not so agree within Twenty (20) days after the
date of the notice referred to above, the selection shall be made pursuant to
the Rules from the panel of arbitrators maintained by the AAA. Any award of the
arbitrator shall be accompanied by a written opinion giving the reasons for the
award. The expense of the arbitration shall be borne by the parties in the
manner determined in writing by the arbitrator. This arbitration provision shall
be specifically enforceable by the parties. The determination of the arbitrator
pursuant to this Section shall be final and binding on the parties and may be
entered for enforcement before any court of competent jurisdiction.
IN WITNESS WHEREOF, this Warrant has been executed as of the date first
written above.
International DisplayWorks, Inc.
By: _________________________________
Xxxxxxx X. Xxxxxxx
Chairman & CEO
SUBSCRIPTION
Xxxx X. Xxxxx
Corporate Controller / Assistant Secretary
International DisplayWorks, Inc.
000 Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
Dear Xx. Xxxxx:
I, ___________________ hereby elect to purchase, pursuant to the provisions
of the foregoing Warrant held by the undersigned, ____________________ (_______)
shares of the Common Stock of International DisplayWorks, Inc.
Payment of the total Exercise Price required under such Warrant accompanies
this Subscription.
DATED: _____________________
____________________________
By:
-------------------------------------------------
(Signature)
Its:
------------------------------------------------
Printed Name:
------------------------------------------------
TRANSFER OF WARRANT
Xx. Xxxx X. Xxxxx
Corporate Controller & Assistant Secretary
International DisplayWorks, Inc.
000 Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000-0000
Dear Xx. Xxxxx:
For value received, _______________ hereby assigns this Warrant, IDW-011)
to ________________ ________________________________________, (the "Assignee")
whose address is_______________________________________________________________.
The Assignee recognizes and accepts that it will be subject to the same
terms, covenants and restrictions contained in the Warrant which is subject of
this transfer.
DATED: _____________________.
________________________________________
________________________________________
