EXHIBIT 10.2
NEITHER THIS WARRANT NOR ANY OF THE SHARES OF CAPITAL STOCK ISSUED UPON ANY
EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR ANY APPLICABLE STATE SECURITIES LAWS, AND NONE OF SUCH
SECURITIES MAY BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE
OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THIS WARRANT OR SUCH
SHARES, AS APPLICABLE, UNDER SUCH ACT AND APPLICABLE LAWS OR SOME OTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND APPLICABLE LAWS OR
AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED. THIS LEGEND SHALL BE ENDORSED UPON ANY WARRANT ISSUED IN EXCHANGE FOR
THIS WARRANT.
Warrant to Purchase Shares of Common Stock
WARRANT TO PURCHASE COMMON STOCK
OF
XENONICS HOLDINGS, INC.
Warrant No. 00-__
This certifies that, for value received, Patriot Associates LLC (the
"Holder"), or its registered assigns, is entitled, subject to the terms set
forth below, to purchase from Xenonics Holdings, Inc., a Nevada corporation (the
"Company"), at any time, and from time to time, during the term set forth in
Section 1 below, fully paid, validly issued and nonasessable shares of the
Company's $0.001 par value common stock (the "Common Stock"), upon surrender
hereof, at the principal office of the Company, with the subscription form
attached hereto duly executed, and simultaneous payment therefor in lawful money
of the United States, at the Exercise Price as set forth in Section 2 below. The
Exercise Price of such shares of Common Stock is subject to adjustment as
provided in Section 2 and Section 11 of this Warrant. The term "Warrant" as used
herein shall include this Warrant, and any warrants or warrant delivered in
substitution or exchange therefor.
1. Term of Warrant. Subject to the terms and conditions set forth
herein, this Warrant shall be exercisable, in whole or in part, at any time or
from time to time, during the term commencing on September 9, 2005 and ending
September 8, 2010.
2. Number of Shares of Common Stock; Exercise Price.
(a) During the term of this Warrant, this Warrant may be
exercised for the purchase of shares of Common Stock.
(b) The number of shares of Common Stock that can be purchased
upon the exercise of this Warrant shall be four hundred thirty seven thousand
five hundred (437,500) (as appropriately adjusted for any anti-dilution rights,
stock dividends, splits or similar events).
(c) The Exercise Price at which this Warrant may be exercised
shall be $2.00 per share (as appropriately adjusted for any anti-dilution
rights, stock dividends, splits or similar events).
3. Exercise of Warrant.
(a) The purchase rights represented by this Warrant are
exercisable by the Holder in whole or in part, but not for less than one
thousand (1,000) shares at a time (or such lesser number of shares which may
then constitute the maximum number purchasable; such number being subject to
adjustment as provided in Section 11 below), at any time, or from time to time,
during the term hereof as described in Section 1 above, by the surrender of this
Warrant and the Notice of Exercise annexed hereto duly completed and executed on
behalf of the Holder, at the office of the Company (or such other office or
agency of the Company as it may designate by notice in writing to the Holder at
the address of the Holder appearing on the books of the Company), upon payment
in cash or by check acceptable to the Company of the purchase price of the
shares of Common Stock to be purchased.
(b) This Warrant shall be deemed to have been exercised
immediately prior to the close of business on the date of its surrender for
exercise as provided above, and the person entitled to receive the shares of
Common Stock issuable upon such exercise shall be treated for all purposes as
the holder of record of such shares as of the close of business on such date. As
promptly as practicable on or after such date and in any event within ten (10)
days thereafter, the Company at its expense shall issue and deliver to the
person or persons entitled to receive the same a certificate or certificates for
the number of shares of Common Stock issuable upon such exercise. In the event
that this Warrant is exercised in part, the Company at its expense will execute
and deliver a new Warrant of like tenor exercisable for the number of shares of
Common Stock for which this Warrant may then be exercised.
(c) All or any portion of the Exercise Price may be paid by
surrendering Warrants effected by presentation and surrender of this Warrant to
the Company (or such other office or agency of the Company as it may designate
by notice in writing to the Holder at the address of the holder appearing on the
books of the Company), with a Notice of Exercise Form annexed hereto duly
executed (a "Cashless Exercise"). Such presentation and surrender shall be
deemed a waiver by the Company of the Holder's obligation to pay all or any
portion of the aggregate Exercise Price. In the event of a Cashless Exercise,
the Holder shall exchange its Warrant for that number of shares of Common Stock
determined by multiplying the number of shares of Common Stock for which the
Holder desires to exercise this Warrant by a fraction, the numerator of which
shall be the difference between the then current market price per share of the
Common Stock and the Exercise Price, and the denominator of which shall be the
then current market price per share of Common Stock. For purposes of any
computation under this Section 3(c), the then current market price per share of
Common Stock at any date shall be deemed to be the average for the ten
consecutive business days immediately prior to the Cashless Exercise of the
daily closing prices of the Common Stock on the principal national securities
exchange on which the Common Stock is admitted to trading or listed, or if not
listed or admitted to trading on any such exchange, the closing prices as
reported by the Nasdaq National Market or, if applicable, the Nasdaq SmallCap
Market, or if not then included for quotation on the Nasdaq National Market or
the Nasdaq SmallCap Market, the average of the highest reported bid and lowest
reported asked prices as reported by the OTC Bulletin Board or the National
Quotations Bureau, as the case may be, or if not then publicly traded, the fair
market price, not less than book value thereof, of the Common Stock as
determined in good faith by the Board of Directors of the Company.
4. No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. In lieu of any fractional share to which the Holder would otherwise be
entitled, the Company shall make a cash payment equal to the Exercise Price then
in effect multiplied by such fraction.
5. Replacement of Warrant. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of any such loss, theft or destruction, upon
delivery of an indemnity agreement reasonably satisfactory in form and substance
to the Company or, in the case of mutilation, upon surrender or cancellation of
this Warrant, the Company at its expense shall execute and deliver, in lieu of
this Warrant, a new warrant of like tenor representing the right to subscribe
for and purchase the shares of Common Stock which may be subscribed for and
purchased hereunder. Any such new Warrant executed and delivered shall
constitute an additional contractual obligation of the Company, whether or not
this Warrant so lost, stolen, destroyed or mutilated shall be at any time
enforceable by anyone.
6. Rights of Stockholders. The Holder shall not be entitled to vote
or receive dividends or be deemed the holder of Common Stock or any other
securities of the Company that may at any time be issuable on the exercise
hereof for any purpose, nor shall anything contained herein be construed to
confer upon the Holder, 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, issuance of stock,
reclassification of stock, change of par value, or change of stock to no par
value, consolidation, merger, conveyance, or otherwise) or to receive notice of
meetings, or to receive dividends or subscription rights or otherwise until this
Warrant shall have been exercised as provided herein.
7. Transfer of Warrant.
(a) Warrant Register. The Company will maintain a register
(the "Warrant Register") containing the names and addresses of the Holder or
Holders. Any Holder of this Warrant or any portion hereof may change its address
as shown on the Warrant Register by written notice to the Company requesting
such change. Any notice or written communication required or permitted to be
given to the Holder may be delivered or given by mail to such Holder as shown on
the Warrant Register and at the address shown on the Warrant Register. Until
this Warrant is transferred on the Warrant Register of the Company, the Company
may treat the Holder as shown on the Warrant Register as the absolute owner of
this Warrant for the purpose of any exercise hereof or any distribution to the
Holder and for all other purposes, notwithstanding any notice to the contrary.
(b) Warrant Agent. The Company may, by written notice to the
Holder, appoint an agent for the purpose of maintaining the Warrant Register
referred to in Section 7(a) above, issuing the Common Stock or other securities
then issuable upon the exercise of this Warrant, exchanging this Warrant,
replacing this Warrant, or any or all of the foregoing. Thereafter, any such
registration, issuance, exchange, or replacement, as the case may be, shall be
made at the office of such agent.
(c) Transferability and Nonnegotiability of Warrant. This
Warrant may not be transferred or assigned in whole or in part without
compliance with all applicable federal and state securities laws by the
transferor and the transferee (including the delivery of investment
representation letters and legal opinions reasonably satisfactory to the
Company, if such are requested by the Company). Subject to the provisions of
this Warrant with respect to compliance with the Securities Act of 1933, as
amended (the "Act"), title to this Warrant may be transferred by endorsement (by
the Holder executing the Assignment Form annexed hereto) and delivery in the
same manner as a negotiable instrument transferable by endorsement and delivery.
(d) Exchange of Warrant Upon a Transfer. On surrender of this
Warrant for exchange, properly endorsed on the Assignment Form and subject to
the provisions of this Warrant with respect to compliance with the Act, the
Company at its expense shall issue to or on the order of the Holder a new
warrant or warrants to purchase Common Stock, in substantially the form of this
Warrant, in the name of the Holder or as the Holder (on payment by the Holder of
any applicable transfer taxes) may direct, for the number of shares issuable
upon exercise hereof. In the event of a partial transfer by a Holder, the
Company shall issue to the holders one or more appropriate new warrants. The
acceptance of the new warrant by the transferee thereof shall be deemed the
acceptance by such transferee of all of the rights and obligations of a holder
of a warrant.
(e) Compliance with Securities Laws. All shares of Common
Stock issued upon exercise hereof shall be stamped or imprinted with a legend in
substantially the following form (in addition to any legend required by state
securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND
NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF, AND
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH
SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS THE SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS
DELIVERY REQUIREMENTS OF SAID ACT.
Upon the registration, under the Act, of the securities issued upon exercise of
the Warrant such legend shall be removed from the certificate evidencing such
securities.
8. Reservation of Stock. The Company covenants that during the term
this Warrant is exercisable, the Company will reserve, free from preemptive
rights, from its authorized and unissued Common Stock a sufficient number of
shares to provide for the issuance of Common Stock upon the exercise of this
Warrant and, from time to time, will take all steps necessary to amend its
charter documents to provide sufficient reserves of shares of Common Stock
issuable upon exercise of this Warrant. The Company further covenants that all
shares that may be issued upon the exercise of rights represented by this
Warrant and payment of the Exercise Price, all as set forth herein, will be free
from all taxes, liens, charges and security interests in respect of the issue
thereof (other than taxes in respect of any transfer occurring contemporaneously
or otherwise specified herein). The Company agrees that its issuance of this
Warrant shall constitute full authority to its officers who are charged with the
duty of executing stock certificates to execute and issue the necessary
certificates for shares of Common Stock upon the exercise of this Warrant. The
Company covenants that all such shares of Common Stock will, when issued, be
duly and validly issued, fully paid and nonassessable.
9. Notices.
(a) Whenever the Exercise Price or number of shares
purchasable hereunder shall be adjusted pursuant to Section 11 hereof, the
Company shall issue a certificate signed by a duly authorized officer 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
Exercise Price and number of shares purchasable hereunder after giving effect to
such adjustment, and shall cause a copy of such certificate to be mailed (by
first-class mail, postage prepaid) to the Holder of this Warrant.
(b) In case:
(i) the Company shall take a record of the holders of
its Common Stock (or other stock or securities at the time receivable upon the
exercise of this Warrant) for the purpose of entitling them to receive any
dividend or other distribution, or any right to subscribe for or purchase any
shares of stock of any class or any other securities, or to receive any other
right, or
(ii) of any capital reorganization of the Company, any
reclassification of the capital stock of the Company, any consolidation or
merger of the Company with or into another corporation, or any conveyance of all
or substantially all of the assets of the Company to another corporation, or
(iii) of any voluntary dissolution, liquidation or
winding-up of the Company,
then, and in each such case, the Company will mail or cause to be mailed to the
Holder or Holders a notice specifying, as the case may be, (A) the date on which
a record is to be taken for the purpose of such dividend, distribution or right,
and stating the amount and character of such dividend, distribution or right, or
(B) the date on which such reorganization, reclassification, consolidation,
merger, conveyance, dissolution, liquidation or winding-up is to take place, and
the time, if any is to be fixed, as of which the holders of record of Common
Stock (or such stock or securities at the time receivable upon the exercise of
this Warrant) shall be entitled to exchange their shares of Common Stock (or
such other stock or securities) for securities or other property deliverable
upon such reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding-up. Such notice shall be mailed at least 15
days prior to the date therein specified.
(c) All such notices, advices and communications shall be
deemed to have been received (i) in the case of personal delivery, on the date
of such delivery and (ii) in the case of mailing, on the first business day
following the date of such mailing.
10. Waivers and Amendments.
(a) Any term of this Warrant may be amended or waived only
with the written consent of the Company and the Holder.
(b) No waivers of, or exceptions to, any term, condition or
provision of this Warrant, in any one or more instances, shall be deemed to be,
or construed as, a further or continuing waiver of any such term, condition or
provision.
11. Adjustments. The Exercise Price and the number of shares
purchasable hereunder are subject to adjustment from time to time as follows:
(a) Merger, Sale of Assets, etc. If at any time while this
Warrant, or any portion hereof, is outstanding and unexpired there shall be a:
(i) reorganization (other than a combination, reclassification, exchange or
subdivision of shares otherwise provided for herein), (ii) merger or
consolidation of the Company with or into another corporation in which the
Company is not the surviving entity, or a reverse triangular merger in which the
Company is the surviving entity but the shares of the Company's capital stock
outstanding immediately prior to the merger are converted by virtue of the
merger into other property, whether in the form of securities, cash or
otherwise, or (iii) sale or transfer of the Company's properties and assets as,
or substantially as, an entirety to any other person, then, as a part of such
reorganization, merger, consolidation, sale or transfer, 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 herein and
upon payment of the Exercise Price then in effect, the number of shares of
Common Stock or other securities or property of the successor corporation
resulting from such reorganization, merger, consolidation, sale or transfer that
a holder of the shares deliverable upon exercise of this Warrant would have been
entitled to receive in such reorganization, consolidation, merger, sale or
transfer if this Warrant had been exercised immediately before such
reorganization, merger, consolidation, sale or transfer, all subject to further
adjustment as provided in this Section 11. The foregoing provisions of this
Section 11 shall similarly apply to successive reorganizations, consolidations,
mergers, sales and transfers and to the stock or securities of any other
corporation that are at the time receivable upon the exercise of this Warrant.
If the per share consideration payable to the Holder hereof for shares in
connection with any such transaction is in a form other than cash or marketable
securities, then the value of such consideration shall be determined in good
faith by the Company's Board of Directors. In all events, appropriate adjustment
(as determined in good faith by the Company'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 after the transaction, to the end that the
provisions of this Warrant shall be applicable after that event, as near as
reasonably may be, in relation to any shares or other property deliverable after
that event upon exercise of this Warrant.
(b) Reclassification, etc. If the Company, at any time while
this Warrant, or any portion hereof, remains outstanding and unexpired by
reclassification of securities or otherwise, shall change any of the securities
as to which purchase rights under this Warrant exist into the same or a
different number of securities of any other class or classes, this Warrant shall
thereafter represent the right to acquire such number and kind of securities as
would have been issuable as the result of such change with respect to the
securities that were subject to the purchase rights under this Warrant
immediately prior to such reclassification or other change and the Exercise
Price therefor shall be appropriately adjusted, all subject to further
adjustment as provided in this Section 11.
(c) Split, Subdivision or Combination of Shares. If the
Company at any time while this Warrant, or any portion hereof, remains
outstanding and unexpired shall split, subdivide or combine the securities as to
which purchase rights under this Warrant exist, into a different number of
securities of the same class, then (i) the Exercise Price for such securities
shall be proportionately decreased in the case of a split or subdivision or
proportionately increased in the case of a combination, and (ii) the number of
shares issuable hereunder shall be proportionately increased or decreased, as
the case may be, in both cases according to the ratio which the total number of
shares of such security to be outstanding immediately after such event bears to
the total number of shares of such security outstanding immediately prior to
such event.
(d) Adjustments for Dividends in Stock or Other Securities or
Property. If while this Warrant, or any portion hereof, remains outstanding and
unexpired, the holders of the securities as to which purchase rights under this
Warrant exist at the time shall have received, or, on or after the record date
fixed for the determination of eligible stockholders, shall have become entitled
to receive, without payment therefor, other or additional stock or other
securities or property (other than cash) of the Company by way of dividend, then
and in each case, this Warrant shall represent the right to acquire, in addition
to the number of shares of the security receivable upon exercise of this
Warrant, and without payment of any additional consideration therefor, the
amount of such other or additional stock or other securities or property (other
than cash) of the Company that such holder would hold on the date of such
exercise had it been the holder of record of the security receivable upon
exercise of this Warrant on the date hereof and had thereafter, during the
period from the date hereof to and including the date of such exercise, retained
such shares and/or all other additional stock available by it as aforesaid
during such period, giving effect to all adjustments called for during such
period by the provisions of this Section 11.
(e) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment pursuant to this Section 11, the Company at its
expense shall promptly compute such adjustment or readjustment in accordance
with the terms hereof and furnish to each Holder of this Warrant a certificate
setting forth such adjustment or readjustment and showing in detail the facts
upon which such adjustment or readjustment is based.
(f) No Impairment. The Company will not, by amendment of its
charter documents or through any reorganization, transfer of assets,
consolidation, merger, dissolution, or any other similar voluntary action, avoid
or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at times in good faith assist in the carrying out of all such
terms and in the taking of all such action as may be necessary or appropriate in
order to protect the rights of the holder of this Warrant against impairment due
to such event. Without limiting the generality of the foregoing, the Company (i)
will take all action that may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable shares of
stock, free from all taxes, liens and charges with respect to the issue thereof,
on the exercise of all of the Warrants from time to time outstanding, and (ii)
will not consolidate with or merge into any other person or permit any such
person to consolidate with or merge into the Company (if the Company is not the
surviving person), unless such other person shall expressly assume in writing
and agree to be bound by all the terms of this Warrant.
12. Descriptive Headings and Governing Law. The descriptive headings
of the several sections and paragraphs of this Warrant are inserted for
convenience only and do not constitute a part of this Warrant. This Warrant
shall be construed and enforced in accordance with, and the rights of the
parties shall be governed by, the laws of the State of California without regard
to conflicts of law provisions.
13. Speculative Value of Warrant. It is understood and agreed by the
Company and Xxxxxx that the Warrant as of the date of issuance has a speculative
value and no definitive value can be expressed.
14. Notices. All notices and other communications hereunder shall be
delivered by hand, by depositing the notice in the United States mail postage
prepaid and properly addressed to the recipient or by facsimile transmission to
the parties as follow:
(a) If to the Company: Xenonics Holdings, Inc.
0000 Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Telephone:
Fax:
(b) If to the Holder: Patriot Associates LLC
000 X. 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone:
Fax:
[Signature page follows]
IN WITNESS WHEREOF, XENONICS HOLDINGS, INC. has caused this Warrant to be
executed by its officer thereunto duly authorized.
Dated: September 9, 2005
XENONICS HOLDINGS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
Name: Xxxxxxx X. Xxxxxxxx
Title: Chief Executive Officer
