EXHIBIT 4.7
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933. SUCH SECURITIES AND ANY SECURITIES OR SHARES ISSUED HEREUNDER MAY
NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
THEREFROM UNDER SAID ACT. COPIES OF THE AGREEMENT COVERING THE PURCHASE OF THESE
SECURITIES AND RESTRICTING THEIR TRANSFER OR SALE MAY BE OBTAINED AT NO COST BY
WRITTEN REQUEST MADE BY THE HOLDER OF RECORD HEREOF TO THE SECRETARY OF THE
COMPANY AT ITS PRINCIPAL EXECUTIVE OFFICES.
No. WI-1 Warrant to Purchase 45,695 Shares of
Series I Preferred Stock
WARRANT TO PURCHASE SERIES I PREFERRED STOCK
OF
LOGICVISION, INC.
Void after January 28, 2005
This certifies that, for value received, Xxxxxxx & Company or registered
assigns ("Holder") is entitled, subject to the terms set forth below, to
purchase from LogicVision, Inc. (the "Company"), a Delaware corporation, forty-
five thousand six hundred and ninety-five (45,695) shares of the Series I
Preferred Stock of the Company, as constituted on the date hereof (the "Warrant
Issue Date"), upon surrender hereof, at the principal office of the Company
referred to below, with the subscription form attached hereto duly executed, and
simultaneous payment therefor in lawful money of the United States or otherwise
as hereinafter provided, at the Exercise Price as set forth in Section 2 below.
The number, character and Exercise Price of such shares of Series I Preferred
Stock are subject to adjustment as provided below. The term "Warrant" as used
herein shall include this Warrant, which is one of a series of warrants issued
for the Series I Preferred Stock of the Company, and any warrants delivered in
substitution or exchange therefor as provided herein.
1. Term of Warrant. Subject to the terms and conditions set forth herein,
---------------
this Warrant shall be exercisable, in whole or in part, during the term
commencing on the Warrant Issue Date and ending at 5:00 P.M., Pacific time, on
January 28, 2005, and shall be void thereafter.
2. Exercise Price. The Exercise Price at which this Warrant may be
--------------
exercised shall be $4.25 per share of Series I Preferred Stock, as adjusted from
time to time pursuant to Section 11 hereof.
3. Exercise of Warrant.
-------------------
(a) The purchase rights represented by this Warrant are exercisable by the
Holder in whole or in part 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 (i) in cash or by check acceptable to the
Company, (ii) by cancellation by the Holder of indebtedness of the Company to
the Holder, or (iii) by a combination of (i) and (ii), of the purchase price of
the shares 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 Series I Preferred 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 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 for which this
Warrant may then be exercised.
(c) In the event the Holder is exercising the Warrant as of or following
the time the Company becomes subject to the reporting requirements of Section 13
or 15(d) of the Securities Exchange Act of 1934, as amended, the Holder may
elect to receive shares equal to the value of this Warrant (or the portion
thereof being canceled) by surrender of this Warrant at the principal office of
the Company together with notice of such election, in which event the Company
shall issue to the Holder a number of shares computed using the following
formula:
X = Y(A - B)
--------
A
X = The number of shares of Series I Preferred Stock to be issued to
the Holder.
Y = The number of shares of Series I Preferred Stock purchasable
under this Warrant (at the date of exercise), or, if this Warrant
is exercised in part, the number of shares for which this Warrant
is then being exercised.
A = The fair market value of one share of Series I Preferred Stock
(at the date of exercise).
B = The Exercise Price (in effect on the date of exercise).
For purposes of this Section 3(c):
(i) If this Warrant is being exercised in connection with and
contingent upon a public offering of the Company's Common Stock (the
"Common Stock"), the fair market value per share shall be the product of
(A) the number of shares of Common Stock into which each share of Series I
Preferred Stock is convertible at the time of exercise and (B) the "price
to public" per share as set forth in the final prospectus relating to such
offering.
(ii) If this Warrant is not being exercised in connection with and
contingent upon a public offering of the Common Stock, the fair market
value per share shall be the product of (A) the number of shares of Common
Stock into which each share of Series I Preferred Stock is convertible at
the time of exercise and (B):
(1) If the Common Stock is traded on a securities exchange
or The Nasdaq Stock Market, the last reported sale price of the Common
Stock on such exchange or Market on the trading day immediately prior
to the date of exercise;
(2) If traded over-the-counter other than on The Nasdaq
Stock Market, the average of the closing bid and ask prices of the
Common Stock on the trading day immediately prior to the date of
exercise; or
(3) If there is no public market for the Common Stock, then
such price as shall be determined by mutual agreement of the Holder
and the Company, and if the Holder and the Company are unable to so
agree, at the Company's sole expense, by an investment banker of
national reputation selected by the Company and reasonably acceptable
to the Holder.
(iii) If this Warrant is converted into a warrant to purchase Common
Stock in accordance with Section 11.1 hereof, the fair market value per
share determined pursuant to clause (i) or (ii) above shall be as set forth
in subclause (B) of such clauses without regard to subclause (A) of such
clauses.
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
multiplied by such fraction.
5. Replacement of Warrant. On receipt of evidence reasonably satisfactory
----------------------
to the Company of the loss, theft, destruction or mutilation of this Warrant
and, in the case of loss, theft or destruction, on delivery of an indemnity
agreement reasonably satisfactory in form and substance to the Company or, in
the case of mutilation, on surrender and cancellation of this Warrant, the
Company at its expense shall execute and deliver, in lieu of this Warrant, a new
warrant of like tenor and amount.
6. Rights of Stockholders. Subject to Sections 9 and 11 of this Warrant,
----------------------
the Holder shall not be entitled to vote or receive dividends or be deemed the
holder of Series I Preferred 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 the 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 thereof may change his 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 all 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 Series I Preferred 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 and with the limitations
on assignments and transfers and contained in this Section 7, the Company at its
expense shall issue to or on the order of the Holder a new warrant or warrants
of like tenor, 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.
(e) Compliance with Securities Laws.
-------------------------------
(i) The Holder of this Warrant, by acceptance hereof, acknowledges
that this Warrant and the shares of Series I Preferred Stock or Common
Stock to be issued upon exercise hereof or conversion thereof are being
acquired solely for the Holder's own account and not as a nominee for any
other party, and for investment, and that the Holder will not offer, sell
or otherwise dispose of this Warrant or any shares of Series I Preferred
Stock or Common Stock to be issued upon exercise hereof or conversion
thereof except under circumstances that will not result in a violation of
the Act or any state securities laws. Upon exercise of this Warrant, the
Holder shall, if requested by
the Company, confirm in writing, in a form satisfactory to the Company,
that the shares of Series I Preferred Stock or Common Stock so purchased
are being acquired solely for the Holder's own account and not as a nominee
for any other party, for investment, and not with a view toward
distribution or resale.
(ii) This Warrant and all shares of Series I Preferred Stock or
Common Stock issued upon exercise hereof or conversion thereof shall be
stamped or imprinted with a legend in substantially the following form (in
addition to any legend required by state securities laws):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933. SUCH SECURITIES AND ANY SECURITIES OR SHARES
ISSUED HEREUNDER MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT. COPIES OF THE
AGREEMENT COVERING THE PURCHASE OF THESE SECURITIES AND RESTRICTING
THEIR TRANSFER OR SALE MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST
MADE BY THE HOLDER OF RECORD HEREOF TO THE SECRETARY OF THE COMPANY AT
ITS PRINCIPAL EXECUTIVE OFFICES.
8. Reservation of Stock. The Company covenants that during the term this
--------------------
Warrant is exercisable, the Company will reserve from its authorized and
unissued Series I Preferred Stock a sufficient number of shares to provide for
the issuance of Series I Preferred Stock upon the exercise of this Warrant (and
shares of its Common Stock for issuance on conversion of such Series I Preferred
Stock) and, from time to time, will take all steps necessary to amend its
Articles of Incorporation (the "Articles") to provide sufficient reserves of
shares of Series I Preferred Stock issuable upon exercise of the Warrant (and
shares of its Common Stock for issuance on conversion of such Series I Preferred
Stock). The Company further covenants that all shares that may be issued upon
the exercise of rights represented by this Warrant, upon exercise of the rights
represented by this Warrant and payment of the Exercise Price, all as set forth
herein, will be free from all taxes, liens and charges 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 Series I Preferred Stock upon the exercise of this
Warrant.
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 its Chief Financial 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 Series I
Preferred Stock or 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 Series I Preferred Stock or 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 third business day following the date of
such mailing.
10. Amendments.
----------
(a) Any term of this Warrant may be amended with the written consent of
the Company and the holders of warrants representing not less than sixty percent
(60%) of the shares of Series I Preferred Stock issuable upon exercise of any
and all outstanding Series I Preferred Stock warrants (the "Series I Preferred
Stock Warrants"), even without the consent of the Holder. Any amendment effected
in accordance with this Section 10 shall be binding upon each holder of any of
the Series I Preferred Stock Warrants, each future holder of all such Series I
Preferred Stock Warrants, and the Company; provided, however, that no special
consideration or inducement may be given to any such holder in connection with
such consent that is not given ratably to all such holders, and that such
amendment must apply to all such holders equally and ratably in accordance with
the number of shares of Series I Preferred Stock issuable upon exercise of their
Series I Preferred Stock Warrants. The Company shall promptly give notice to all
holders of Series I Preferred Stock Warrants of any amendment effected in
accordance with this Section 10.
(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:
11.1 Conversion or Redemption of Series I Preferred Stock. Should all
----------------------------------------------------
of the Company's Series I Preferred Stock be, or if outstanding would be, at any
time prior to the expiration of this Warrant or any portion thereof, redeemed or
converted into shares of the Company's Common Stock in accordance with Section 5
of the Articles, then this Warrant shall immediately become exercisable for that
number of shares of the Company's Common Stock equal to the number of shares of
the Common Stock that would have been received if this Warrant had been
exercised in full and the Series I Preferred Stock received thereupon had been
simultaneously converted immediately prior to such event, and the Exercise Price
shall be immediately adjusted to equal the quotient obtained by dividing (x) the
aggregate Exercise Price of the maximum number of shares of Series I Preferred
Stock for which this Warrant was exercisable immediately prior to such
conversion or redemption, by (y) the number of shares of Common Stock for which
this Warrant is exercisable immediately after such conversion or redemption. For
purposes of the foregoing, the "Articles" shall mean the Articles of
Incorporation of the Company as amended and/or restated and effective
immediately prior to the redemption or conversion of all of the Company's Series
I Preferred Stock.
11.2 Merger, Sale of Assets, etc. If at any time while this Warrant,
---------------------------
or any portion thereof, is outstanding and unexpired there shall be (i) a
reorganization (other than a combination, reclassification, exchange or
subdivision of shares otherwise provided for herein), (ii) a 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) a 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 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 11.2 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.
11.3 Reclassification, etc. If the Company, at any time while this
---------------------
Warrant, or any portion thereof, 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. No adjustment shall be made pursuant
to this Section 11.3, upon any conversion or redemption of the Series I
Preferred Stock which is the subject of Section 11.1.
11.4 Split, Subdivision or Combination of Shares. If the Company at
-------------------------------------------
any time while this Warrant, or any portion thereof, 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, 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.
11.5 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.
11.6 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. The Company shall, upon the
written request, at any time, of any such Holder, furnish or cause to
be furnished to such Holder a like certificate setting forth: (i) such
adjustments and readjustments; (ii) the Exercise Price at the time in effect;
and (iii) the number of shares and the amount, if any, of other property that at
the time would be received upon the exercise of the Warrant.
11.7 No Impairment. The Company will not, by any 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 the provisions of this Section 11 and in
the taking of all such action as may be necessary or appropriate in order to
protect the rights of the Holders of this Warrant against impairment.
12. Registration Rights. Upon exercise of this Warrant, the Holder shall
-------------------
shall have and be entitled to exercise, together with all other holders of
Registrable Securities possessing registration rights under that certain Sixth
Amended and Restated Registration Rights Agreement, dated as of January 28,
2000, between the Company and the parties who have executed the counterpart
signature pages thereto or are otherwise bound thereby (the "Registration Rights
Agreement"), the rights of registration granted under the Registration Rights
Agreement to Registrable Securities (with respect to the Shares issued on
exercise of this Warrant). By its receipt of this Warrant, Holder agrees to be
bound by the Registration Rights Agreement upon exercise of this Warrant as a
party thereto.
13. Miscellaneous.
-------------
IN WITNESS WHEREOF, LogicVision, Inc. has caused this Warrant to be
executed by its officers thereunto duly authorized.
Dated as of January 28, 2000.
LOGICVISION, INC.
By /s/ Xxxx X. Xxxxxx
------------------------------
Chief Financial Officer
