Exhibit 3.09
THIS WARRANT WAS ORIGINALLY ISSUED ON SEPTEMBER 24, 1999 AND HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES
LAWS, AND MAY NOT BE TRANSFERRED IN VIOLATION OF SUCH ACT, THE RULES AND
REGULATIONS THEREUNDER, THE PROVISIONS OF THIS WARRANT OR ANY APPLICABLE STATE
LAWS.
Dated: September 24, 1999
Certificate No. WC-4
ID TECHNOLOGIES CORPORATION
COMMON STOCK PURCHASE WARRANT
THIS CERTIFIES THAT for value received, subject to the terms and
conditions hereinafter set forth, Centennial Venture Partners, LLC, a North
Carolina limited liability company, or assigns (the "HOLDER"), is entitled to
purchase shares of Common stock (the "COMMON STOCK") of ID Technologies
Corporation, a North Carolina corporation (the "COMPANY"), up to an amount of
Five Hundred Thousand and 00/100 Dollars ($500,000.00) upon presentation of this
Warrant and payment of the Purchase Price (as defined below) for the shares of
Common Stock purchased at the principal office of the Company or at such other
place as shall have been designated by the Company. The purchase price per share
(as such purchase price may be adjusted from time to time as herein provided)
(the "PURCHASE PRICE") shall be either (a) the fair market value of each such
share as of the date of the then most recent financing by institutional
investors, if such financing occurred within the twelve (12) month period
immediately preceding the date of the exercise of this Warrant, or (b) if no
such financing has occurred within such twelve (12) month period, the Purchase
Price shall be the fair market value of each such share as determined by a
third-party valuation expert to be appointed by the Board of Directors of the
Company and approved as provided in that certain Debenture Purchase Agreement
dated September 24, 1999 between the Company and certain purchasers named
therein (such third-party valuation expert shall determine the fair market value
of such shares without considering the Exercise Event, as defined below). The
number of shares of Common Stock which are purchasable hereunder, as adjusted
pursuant to the provisions below, is hereinafter referred to as the "WARRANT
SHARES."
This Warrant is made and given in connection with the closing of the
sale and issuance by the Company of Convertible Debentures in the aggregate
original principal amount of Three Hundred Thousand Dollars ($300,000.00) on the
date hereof (each of such Convertible Debentures, a "DEBENTURE" and,
collectively, the "DEBENTURES", and each holder of such Debentures, a "DEBENTURE
HOLDER").
This Warrant is subject to the following provisions:
1. Exercise of Warrant.
a. This Warrant may be exercised, in whole or in part, at any
time following the occurrence of an Exercise Event (as defined below)
and prior to closing (to the extent it occurs) of the underlying
transaction relating to such Exercise (the "EXPIRATION TIME"), by the
delivery to the Company of written notice of such exercise and the
tender to the Company of the Purchase Price for the Warrant Shares
purchasable pursuant to such exercise of this Warrant. This Warrant
shall expire with respect to any Warrant Shares which have not been
purchased prior to the Expiration Time. In case of the exercise to
purchase less than all Warrant Shares purchasable hereunder, the
Company shall cancel this Warrant and shall execute and deliver a new
Warrant of like tenor for the balance of the shares which may be
purchased hereunder. As used herein, "EXERCISE EVENT" means the making
or receiving by the Company of any offer, proposal or commitment, or
entering into any letter of intent, contract or agreement, relating to
any of the following transactions, or any earlier announcement by the
Company or any other party to any such transaction (or any public
announcement), or any earlier filing with or notice to the Securities
and Exchange Commission ("SEC") or any other governmental agency or
authority, in any such case relating to any of the following
transactions: (i) any merger or other corporate reorganization which
results in the failure of the holders of the capital stock of the
Company to hold greater than 50% of the votes attributable to the
shares of voting stock of the surviving company; (ii) any transaction
resulting in a change in the ownership of greater than 50% of the
Common Stock (determined on an as-converted, as-exercised,
fully-diluted basis, which for purposes of this Warrant shall not
include the Warrant Shares hereunder to the extent this Warrant is not
exercised); (iii) any transaction resulting in the sale of all or
substantially all of the assets of the Company; or (iv) a Qualified
Public Offering (as defined below). As used herein, "QUALIFIED PUBLIC
OFFERING" means an underwritten public offering of securities of Maker
registered under the Securities Act of 1933 (the "1933 ACT") (other
than a registration relating solely to employee benefit plans or to a
transaction under Rule 145 under the 1933 Act or any successor rule
thereto) in which (before deduction of underwriter commissions and
selling expenses) the public offering price is equal to or exceeds Five
Dollars ($5.00) per share of Common Stock (subject to adjustment for
stock splits, reverse stock splits and other similar corporate
reorganizations) and the gross proceeds to Maker equal or exceed
Fifteen Million Dollars ($15,000,000.00). The Company shall notify the
Holder in writing immediately upon the occurrence of an Exercise Event
and in any event within sixty (60) days prior to the closing the
underlying transaction relating to such Exercise Event, and the
Company, within such time, shall notify the other parties to such
transaction of the warrants held by the Holder. Upon exercise of the
warrants by the Holder, such Holder shall be entitled to participate in
any such transaction as a shareholder.
b. In lieu of exercising this Warrant in accordance with
Section 1.a. hereof, the Holder may elect to receive, at any time
following the occurrence of an Exercise Event and prior to the
Expiration Time, without the payment of such Holder of any additional
consideration, shares equal to the value of this Warrant or any portion
hereof exercised, as determined below, by the surrender of this Warrant
to the Company (with the notice of exercise form attached hereto as
Exhibit A duly executed), at the principal office of the Company.
Thereupon, the Company shall within thirty (30) days after
request by Holder issue to such Holder such number of fully paid and
nonassessable Warrant Shares as is computed using the following
formula:
X = Y(A-B)
------
A
Where X = the number of shares to be issued to such
Holder pursuant to Section 1.a.
Y = the number of shares covered by
this Warrant in respect of which the
election is made pursuant to Section
1.b.
A = the Market Price of one share of
Common Stock at the time the
election is made pursuant to Section
1.b.
B = the Purchase Price in effect under
this Warrant at the time the
election is made pursuant to Section
1.b.
For purposes hereof, the term "MARKET PRICE" shall mean the
average of the daily closing prices per shares of the Common Stock for
the ten (10) consecutive trading days immediately preceding the day as
of which Market Price is being determined. The closing price for each
day shall be the last sale price regular way or, in case no such sale
takes place on such day, the average of the closing bid and asked
prices regular way, in either case on the New York Stock Exchange, or,
if shares of the Common Stock are not listed or admitted to trading on
the New York Stock Exchange, on the principal national securities
exchange on which the shares are listed or admitted to trading, or if
the shares are not so listed or admitted to trading, the average of the
closing bid and asked prices as quoted on NASDAQ. If shares of the
Common Stock are not listed or admitted to trading on any exchange or
quoted on NASDAQ, the Market Price shall be deemed to be the fair
market value of each such share as of the date of the then most recent
financing by institutional investors, if such financing occurred within
the twelve (12) month period immediately preceding the date of the
exercise of this Warrant. If shares of the Common Stock are not listed
or admitted to trading on any exchange or quoted on NASDAQ and there
has been no financing by institutional investors within the twelve (12)
month period immediately preceding the date of the exercise of this
Warrant, the Market Price shall be deemed to be the higher of (A) the
book value of a share of the Common Stock as determined by any firm of
independent public accountants of recognized standing, selected by the
board of directors of the Company, as at the last day of any month
ending within sixty (60) days preceding the date as of which the
determination is to be made, (B) the fair value thereof determined in
good faith by an independent brokerage firm or Standard & Poor's
Corporation as of a date which is within fifteen (15) days of the date
as of which the determination is to be made (the fees and expenses of
any brokerage firm or other firm engaged pursuant to this Section 1.b.
to be paid by the Company), or (C) the value attributable to a share of
Common Stock in connection with the transaction relating to the
applicable Exercise Event. The Board of Directors of the Company shall
promptly respond in writing to any inquiry by the Holder as to the
Market Price of one share of
Common Stock made pursuant to this Section 1.b. Notwithstanding the
provisions of Section 1.b. and unless as otherwise agreed in writing,
the Holder shall not have any registration rights with respect to the
Warrant or the Warrant Shares.
c. Additionally, in lieu of exercising this Warrant in
accordance with Section 1.a. hereof, the Holder may elect to receive,
at any time following the occurrence of an Exercise Event and prior to
the Expiration Time, an amount equal to the amount that the Holder
would have realized if it had (a) exercised this Warrant to purchase
all or any portion of the shares of Common Stock purchasable under this
Warrant (the exact amount of shares to be stated by Holder in its
notice to the Company) for an amount per share of Common Stock equal to
the Purchase Price of each such share and (b) sold such shares of
Common Stock at the Market Price (to be determined as provided in
Section 1.b. above) of each such share as of the date immediately
following the date of closing of the particular transaction related to
the Exercise Event, by surrender of this Warrant to the Company (with
the notice of exercise form attached hereto as Exhibit A duly executed)
at the principal office of the Company. Thereupon, within thirty (30)
days from the date of surrender of this Warrant by Holder pursuant to
this Section 1.c., the Company shall pay to such Holder the amount the
Holder would have realized if it had taken the actions set forth in
items (a) and (b) of this Section 1.c. In case of an election by Holder
pursuant to this Section 1.c. with respect to less than all Warrant
Shares purchasable hereunder, the Company shall cancel this Warrant and
shall execute and deliver a new Warrant of like tenor for the balance
of the shares which may be purchased hereunder.
2. Compliance with Securities Laws: The Holder of this Warrant, by its
acceptance of this instrument, represents and acknowledges that this Warrant is
acquired for the Holder's own account for investment purposes and that this
Warrant and the Warrant Shares issuable upon exercise hereof, respectively, have
not been registered under the Securities Act of 1933, as amended. Accordingly,
any transfer of this Warrant and such Warrant Shares shall be subject to legal
restrictions. The Holder agrees that it will not offer for sale or sell, assign
or otherwise dispose of (except exercise) this Warrant or any Warrant Shares
issued to it pursuant to exercise hereof, except in accordance with applicable
securities laws.
3. Shares of Common Stock in Reserve: The Company agrees at all times
to reserve a sufficient number of authorized but unissued shares of Common Stock
for the purposes of this Warrant, and to take such action as may be necessary to
ensure that all Warrant Shares issued upon exercise of this Warrant will be duly
and validly authorized and issued and fully paid and nonassessable.
4. No Voting or Dividend Rights: This Warrant shall not entitle the
Holder hereof to any voting rights or other rights as a shareholder of the
Company, and no dividend or interest shall be payable or accrued in respect of
this Warrant or the interest represented hereby or the Warrant Shares which may
be purchased hereunder until and unless, and except to the extent that, this
Warrant shall be exercised.
5. Adjustment of Purchase Price and Number of Shares:
a. The Purchase Price hereof shall be subject to adjustment
from time to time as follows:
i. In case the Company shall (a) pay a dividend on
its Common Stock in Common Stock, (b) subdivide its
outstanding shares of Common Stock, or (c) combine its
outstanding shares of Common Stock into a smaller number of
shares, then, in such an event, the Purchase Price in effect
immediately prior thereto shall be adjusted proportionately so
that the adjusted Purchase Price will bear the same relation
to the Purchase Price in effect immediately prior to any such
event as the total number of shares of Common Stock
outstanding immediately prior to any such event shall bear to
the total number of shares of Common Stock outstanding
immediately after such event. An adjustment made pursuant to
this subdivision i. (a) shall become effective retroactively
immediately after the record date in the case of a dividend
and (b) shall become effective immediately after the effective
date in the case of a subdivision or combination. The Purchase
Price, as so adjusted, shall be readjusted in the same manner
upon the happening of any successive event or events described
herein.
ii. No adjustment of the Purchase Price shall be made
if the amount of such adjustment shall be less than $0.01 per
share, but in such case any adjustment that would otherwise be
required then to be made shall be carried forward and shall be
made at the time of and together with the next subsequent
adjustment, which, together with any adjustment so carried
forward, shall amount to not less than $0.01 per share. In
case the Company shall at any time issue Common Stock by way
of dividend on any stock of the Company or subdivide or
combine the outstanding shares of the Common Stock, said
amount of $0.01 per share (as theretofore increased or
decreased, if the same amount shall have been adjusted in
accordance with the provisions of this subparagraph) shall
forthwith be proportionately increased in the case of a
combination or decreased in the case of such a subdivision or
stock dividend so as appropriately to reflect the same.
b. Upon each adjustment of the Purchase Price pursuant to
subdivision i. of Subsection 5.a., the number of shares of Common Stock
purchasable upon exercise of this Warrant shall be adjusted to the
number of shares of Common Stock, calculated to the nearest one
hundredth of a share, obtained by multiplying the number of shares of
Common Stock purchasable immediately prior to such adjustment upon the
exercise of this Warrant by the Purchase Price in effect prior to such
adjustment and dividing the product so obtained by the new Purchase
Price.
c. In case of any capital reorganization of the Company, or of
any reclassification of the Common Stock, this Warrant shall be
exercisable after such capital reorganization or reclassification upon
the terms and conditions specified in this Warrant, for the number of
shares of stock or other securities which the Common Stock issuable (at
the time of such capital reorganization or reclassification) upon
exercise of this Warrant would have been entitled to receive upon such
capital reorganization or reclassification if such exercise had taken
place immediately prior to such action. The
subdivision or combination of shares of Common Stock at any time
outstanding into a greater or lesser number of shares of Common Stock
shall not be deemed to be a reclassification of the Common Stock of the
Company for the purposes of this Subsection 5.c.
d. Whenever the Purchase Price is adjusted as herein provided,
the Company shall compute the adjusted Purchase Price in accordance
with Subsection 5.a. and shall prepare a certificate signed by its
President and its chief financial officer setting forth the adjusted
Purchase Price and showing in reasonable detail the method of such
adjustment and the fact requiring the adjustment and upon which such
calculation is based, and such certificate shall forthwith be forwarded
to the Holder.
e. The form of this Warrant need not be changed because of any
change in the Purchase Price pursuant to this Section 5 and any Warrant
issued after such change may state the same Purchase Price and the same
number of shares of Common Stock as are stated in this Warrant as
initially issued. However, the Company may at any time in its sole
discretion (which shall be conclusive) make any change in the form of
this Warrant that it may deem appropriate and that does not affect the
substance thereof. Any Warrant thereafter issued or countersigned,
whether in exchange or substitution for an outstanding Warrant or
otherwise, may be in the form as so changed.
6. Notices to Warrant Holder in Certain Events: Without limiting the
other provisions of this Warrant, in case -
a. Dividends or Distributions: the Company shall declare a
dividend (or any other distribution) payable upon its Common Stock
otherwise than in cash or in its Common Stock;
b. Issuance of Stock: the Company shall authorize the issuance
of any additional shares of Common Stock or Convertible Securities
(including any public offering or private placement);
c. Reorganization Transactions: the Board of Directors or
shareholders of the Company shall vote upon any capital reorganization
of the Company, reclassification of the capital stock of the Company,
consolidation or merger of the Company with or into another
corporation, or conveyance of all or substantially all of the assets of
the Company to another corporation; or
d. Dissolution or Liquidation: the commencement of voluntary
or involuntary dissolution, liquidation or winding up of the Company;
-- then, and in any such case, the Company shall cause to be delivered
to the Holder at least sixty (60) days prior to the date hereinafter specified,
a notice stating (as applicable): (i) the date on which a record is to be taken
for the purpose of such dividend, distribution or rights, or, if a record is not
to be taken, the date as of which the holders of Common Stock of record to be
entitled to such dividend, distribution or rights are to be determined, or (ii)
the date on which
additional shares of Common Stock or Convertible Securities are to be issued,
and the adjustments in Purchase Price and Warrant Shares to be made hereunder;
or (iii) the date on which such reclassification, reorganization, consolidation,
merger, conveyance, dissolution, liquidation or winding up is to take place, and
the date, if any, to be fixed as of which holders of Common Stock of record
shall be entitled to exchange their shares of Common Stock for securities or
other property deliverable upon such reclassification, reorganization,
consolidation, merger, conveyance, dissolution, liquidation or winding up.
7. Replacement Warrant for Lost Certificate: Upon notice from the
Holder to the Company of the loss, theft, destruction or mutilation of this
Warrant, and, in case of loss, theft or destruction, of indemnity or security
reasonably satisfactory to the Company, and reimbursement to the Company of all
reasonable expenses incidental thereto (and upon surrender and cancellation of
this Warrant if mutilated), the Company will execute and deliver a new Warrant
of like tenor, in lieu of this Warrant.
8. Assignability; Binding Effect; Amendments; Waivers: This Warrant
shall be binding upon and inure to the benefit of any and all successors and
assigns of the Holder and the Company; PROVIDED, HOWEVER, that no Assignment may
be made by the Holder hereof except for an Assignment to an Approved Party (as
defined below). Each Person to whom all or any part of the Warrant is assigned
shall execute and deliver to the Company a counterpart of the Investor Rights
Agreement as a condition to receipt of a Warrant in the assignee's name. Any
Assignment made without first complying with the provisions of this Section 8
shall be void and of no legal effect. This Warrant may be amended or modified,
or any of its provisions waived, only with the prior written consent of
Debenture Holders holding Debentures representing greater than fifty percent
(50%) of the aggregate outstanding principal balance of all Debentures.
9. As used herein:
a. "AFFILIATES" means with respect to any Person, any Person
directly or indirectly controlling, controlled by, or under common
control with such Person. For the purposes of this definition,
"CONTROL" (including with correlative meanings, the terms "CONTROLLING"
"CONTROLLED BY" and "UNDER COMMON CONTROL WITH"), as applied to any
Person, means the possession, directly, indirectly or beneficially, of
either: (i) 50% equity ownership; or (ii) the power to direct or cause
the direction of the management and policies of that Person, whether
through the ownership of voting securities or by contract or otherwise.
b. "APPROVED PARTY" means: (i) Affiliates; (ii) parents
(including step-parents and adoptive parents) and children (including
step-children, adopted children and children of the half-blood); (iii)
partners or retired partners of a partnership, or members or retired
members in a limited liability company; or (iv) Persons to whom an
Assignment is made with the prior written approval of the Company. The
Company's approval shall not be unreasonably withheld, provided that it
may refuse such approval if the proposed assignee is reasonably
believed by the Company to be a competitor of the Company.
c. "ASSIGNMENT" means any sale, assignment, gift, pledge,
encumbrance or other transfer or disposition of this Warrant;
d. "PERSON" means an individual, a partnership, a corporation,
a limited liability company, an association, a joint stock company, a
trust, a joint venture, an unincorporated organization and a
governmental entity or any department, agency or political subdivision
thereof.
[THE NEXT PAGE IS THE SIGNATURE PAGE]
IN WITNESS WHEREOF, the Company has executed this Warrant under seal
effective as of the date first above written.
COMPANY:
ID TECHNOLOGIES CORPORATION
ATTEST:
By: /s/ X. Xxxxxxxx X. Xxxxxxxx
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X. Xxxxxxxx X. Xxxxxxxx, President
/s/ Xxxxxxx X. Xxxx
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(Assistant) Secretary
(Affix Corporate Seal)
