THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT FILED UNDER SUCH ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER SUCH ACT.
*****************************************
ZAP POWER SYSTEMS
COMMON STOCK PURCHASE WARRANT
*****************************************
This certifies that, for good and valuable consideration, ZAP Power Systems, a
California corporation (the "Company"), grants to Ridgewood ZAP, LLC, a Delaware
limited liability company (the "Warrantholder"), the right to subscribe for and
purchase from the Company the number of fully paid and nonassessable shares (the
"Warrant Shares") of the Company's Common Stock, no par value (the "Common
Stock") specified herein, at the purchase price per share Exercise Price
determined as set forth herein, exercisable, subject to the restrictions set
forth herein, during the Exercise Period (as such term is defined in Section 1.4
hereof), all subject to the terms, conditions and adjustments herein set forth.
Capitalized terms used herein shall have the meanings assigned to them in
Section 8 hereof.
1. Exercise of Warrant.
1.1 Duration and Exercise of Warrant.
(a) Cash Exercise. This Warrant may be exercised by the Warrantholder at any
time during the Exercise Period by (i) the surrender of this Warrant to the
Company, with a duly executed Exercise Form (attached hereto as Exhibit A)
specifying the number of Warrant Shares to be purchased, during normal business
hours on any Business Day during the Exercise Period and (ii) the delivery of
payment to the Company, for the account of the Company, by wire transfer of
immediately available funds to a bank account specified by the Company or by
certified or bank cashier's check, of the Exercise Price for the number of
Warrant Shares specified in the Exercise Form in lawful money of the United
States of America.
The Company agrees that Warrant Shares shall be deemed to be issued to the
Warrantholder as the record holder of such Warrant Shares as of the close of
business on the date on which this Warrant shall have been surrendered and
payment made for the Warrant Shares as aforesaid. 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 Warrantholder a stock certificate
or certificates for the Warrant Shares specified in the Exercise Form. If this
Warrant shall have been exercised only in part, the Company shall, at the time
of delivery of the stock certificate or certificates, deliver to the
Warrantholder a new Warrant evidencing the rights to purchase the remaining
Warrant Shares, which new Warrant shall in all other respects be identical with
this Warrant. No adjustments shall be made on Warrant Shares issuable on the
exercise of this Warrant for any cash dividends paid or payable to holders of
record of Common Stock prior to the date as of which the Warrantholder shall be
deemed to be the record holder of such Warrant Shares.
1.2 Number of Warrant Shares. This Warrant shall entitle the Warrantholder to
purchase that number of Warrant Shares as is determined according to the
following formula, as such number shall be adjusted from time to time pursuant
to Section 6 hereof:
X= $2,000,000 divided by the Exercise Price (as defined below) Where X = the
number of shares of Common Stock which may be purchased.
1.3 Exercise Price. The price at which this Warrant may be exercised shall be an
amount equal to eighty-five percent (85%) of the average daily closing price of
the Common Stock for the twenty (20) days prior to the date of exercise (or, for
purposes of Section 6 hereof, twenty (20) days prior to the relevant measurement
date) (provided that, for purposes of this calculation, the average closing
price shall be no higher than $4.50 per share and no lower than $3.50 per
share), as such exercise price shall be adjusted from time to time pursuant to
Section 6 hereof (the "Exercise Price").
1.4 Term of Warrant and Exercisability.
(a) 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 date hereof and ending at 5 p.m., Pacific Standard Time on December 29, 1999
and shall be void thereafter (the "Exercise Period").
(b) Exercisability. This Warrant shall be exercisable in whole or in part during
the Exercise Period.
1.5 Payment of Taxes. The issuance of certificates for Warrant Shares shall be
made without charge to the Warrantholder for any stock transfer or other
issuance tax in respect thereto; provided, however, that the Warrantholder shall
be required to pay any and all taxes which may be payable in respect of any
transfer involved in the issuance and delivery of any certificate in a name
other than that of the then Warrantholder as reflected upon the books of the
Company.
1.6 Information. Upon receipt of a written request from a Warrantholder, the
Company agrees to deliver promptly to such Warrantholder a copy of its currently
available financial statements and to provide such other information concerning
the Company as such Warrantholder may reasonably request in order to assist the
Warrantholder in evaluating the merits and risks of exercising the Warrant and
to make an informed investment decision in connection with such exercise.
2. Restrictions on Transfer; Restrictive Legends.
2.1 Restrictions on Transfer; Compliance with Securities Laws. This Warrant and
the Warrant Shares issued upon the exercise of the 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 transferee
(including the delivery of investment representation letters and legal opinions
reasonably satisfactory to the Company, if such are requested by the Company).
The Warrantholder, by acceptance hereof, acknowledges that this Warrant and the
Warrant Shares to be issued upon exercise hereof are being acquired solely for
the Warrantholder's own account and not as a nominee for any other party, and
for investment, and that the Warrantholder will not offer, sell or otherwise
dispose of any Warrant Shares to be issued upon exercise hereof except under
circumstances that will not result in a violation of the Securities Act or any
state securities laws. Upon exercise of this Warrant, the Warrantholder shall,
if requested by the Company, confirm in writing, in a form satisfactory to the
Company, that the Warrant Shares so purchased are being acquired solely for the
Warrantholder's own account and not as a nominee for any other party, for
investment, and not with a view toward distribution or resale.
2.2 Restrictive Legends. This Warrant shall (and each Warrant issued upon
transfer in whole or in part of this Warrant pursuant to this Section 2 or
issued in substitution for this Warrant pursuant to Section 4 shall) be stamped
or otherwise imprinted with a legend in substantially the following form:
"THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT FILED UNDER SUCH ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER SUCH ACT."
Except as otherwise permitted by this Section 2, each stock certificate for
Warrant Shares issued upon the exercise of any Warrant and each stock
certificate issued upon the direct or indirect transfer of any such Warrant
Shares shall be stamped or otherwise imprinted with a legend in substantially
the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT FILED UNDER SUCH ACT OR
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT." Notwithstanding the
foregoing, the Warrantholder may require the Company to issue a stock
certificate for Warrant Shares without a legend if (i) such Warrant Shares, as
the case may be, have been registered for resale under the Securities Act or
sold pursuant to Rule 144 under the Securities Act (or a successor rule thereto)
or (ii) the Warrantholder has received an opinion of counsel reasonably
satisfactory to the Company that such registration is not required with respect
to such Warrant Shares.
3. Reservation and Registration of Shares, Etc.
The Company covenants and agrees that all Warrant Shares which are issuable upon
the exercise of this Warrant will, upon issuance, be validly issued, fully paid
and nonassessable and free from all taxes, liens, security interests, charges
and other encumbrances with respect to the issue thereof, other than taxes in
respect of any transfer occurring contemporaneously with such issue. The Company
further covenants and agrees that, during the Exercise Period, the Company will
at all times have authorized and reserved, and keep available free from
preemptive rights, a sufficient number of shares of Common Stock to provide for
the exercise of the rights represented by this Warrant and will, at its expense,
upon each such reservation of shares, procure such listing of such shares of
Common Stock (subject to issuance or notice of issuance) as then may be required
on all stock exchanges on which the Common Stock is then listed or on Nasdaq.
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.
4. Exchange, Loss or Destruction of Warrant.
Upon receipt by the Company of evidence satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant and, in the case of loss, theft or
destruction, of such bond or indemnification as the Company may require, and, in
the case of such mutilation, upon surrender and cancellation of this Warrant,
the Company will execute and deliver a new Warrant of like tenor and amount. The
term "Warrant" as used in this Agreement shall be deemed to include any Warrants
issued in substitution or exchange for this Warrant.
5. Ownership of Warrant.
The Company may deem and treat the person in whose name this Warrant is
registered as the holder and owner hereof (notwithstanding any notations of
ownership or writing hereon made by anyone other than the Company) for all
purposes and shall not be affected by any notice to the contrary.
6. Certain Adjustments. The Exercise Price and the number of shares
purchasable hereunder are subject to adjustment from time to time as follows:
6.1 Merger, Sale of Assets, etc. If at any time while this Warrant, or any
portion thereof, is outstanding and unexpired there shall be (a) a
reorganization (other than a combination, reclassification, exchange or
subdivision of shares otherwise provided for herein), (b) 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 (c) 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 6. The foregoing provisions of this Section 6.1 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.
6.2 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 6.
6.3 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, then (a) in the case of a split or subdivision, the Exercise Price for
such securities shall be proportionately decreased and the securities issuable
upon exercise of this Warrant shall be proportionately increased, and (b) in the
case of a combination, the Exercise Price for such securities shall be
proportionately increased and the securities issuable upon exercise of this
Warrant shall be proportionately decreased.
6.4 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 6.
6.5 Certificate as to Adjustments. Upon the occurrence of each adjustment or
readjustment pursuant to this Section 6, 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: (a) such adjustments and
readjustments; (b) the Exercise Price at the time in effect; and (c) 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.
6.6 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 6 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.
6.7 Fractional Shares. No fractional shares of Common Stock or scrip shall be
issued to any Warrantholder in connection with the exercise of this Warrant.
Instead of any fractional shares of Common Stock that would otherwise be
issuable to such Warrantholder, the Company will pay to such Warrantholder a
cash adjustment in respect of such fractional interest in an amount equal to
that fractional interest of the fair market value of one share of Common Stock
as of the date of exercise. 6.8 Xxxxxxxxx. Notwithstanding any other provision
of this Section 6, no adjustment shall be made to the number of shares of Common
Stock to be delivered to the Warrantholder (or to the Exercise Price) if such
adjustment represents less than 1% of the number of shares to be so delivered,
but any lesser adjustment shall be carried forward and shall be made at the time
and together with the next subsequent adjustment which together with any
adjustments so carried forward shall amount to 1% or more of the number of
shares to be so delivered.
7. Notices of Corporate Action.
In the event of:
(a) any taking by the Company of a record of the holders of any class of
securities for the purpose of determining the holders thereof who are entitled
to receive any dividend or other distribution, or any right to subscribe for,
purchase or otherwise acquire any shares of stock of any class or any other
securities or property, or to receive any other right, or
(b) any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any Change of Control,
or
(c) any voluntary or involuntary dissolution, liquidation or winding-up of
the Company, or
(d) any redemption or conversion of any outstanding Preferred Stock or
Common Stock, or
(e) the filing of the Company's first registration statement with the SEC,
the Company will mail to the Warrantholder a notice specifying (i) the date or
expected date on which any such record is to be taken for the purpose of such
dividend, distribution or right and the amount and character of any such
dividend, distribution or right, (ii) the date or expected date on which any
such reorganization, reclassification, recapitalization, Change of Control,
dissolution, liquidation or winding-up is to take place and the time, if any
such time is to be fixed, as of which the holders of record of Common Stock (or
other securities) shall be entitled to exchange their shares of Common Stock (or
other securities) for the securities or other property deliverable upon such
reorganization, reclassification, recapitalization, Change of Control,
dissolution, liquidation or winding-up and (iii) that in the event of a Change
of Control, the Warrants are exercisable immediately prior to the consummation
of such Change of Control. Such notice shall be mailed at least 20 days prior to
the date therein specified, in the case of any date referred to in the foregoing
subdivision (i), and at least 20 days prior to the date therein specified, in
the case of the date referred to in the foregoing subdivision (ii).
8. Definitions.
As used herein, unless the context otherwise requires, the following terms have
the following respective meanings:
Business Day: any day other than a Saturday, Sunday or a day on which national
banks are authorized by law to close in the City of
San Francisco, State of California.
Change of Control: shall mean (i) the consolidation of the Company with or
merger of the Company with or into any other person in which the Company is not
the surviving corporation, (ii) the sale of all or substantially all of the
assets of the Company to any other person or (iii) any sale or transfer of any
capital stock of the Company after the date of this Warrant, following which 50%
of the combined voting power of the Company becomes beneficially owned by one
person or group (other than the Warrantholder) acting together. For purposes of
this definition of Change of Control, "group" shall have the meaning as such
term is used in Section 13(d)(1) under the Exchange Act.
Common Stock: the meaning specified on the cover of this Warrant.
Company: ZAP Power Systems, a California corporation.
Exchange Act: the Securities Exchange Act of 1934, as amended, or any successor
federal statute, and the rules and regulations of the SEC thereunder, all as the
same shall be in effect at the time. Reference to a particular section of the
Securities Exchange Act of 1934, as amended, shall include a reference to a
comparable section, if any, of any successor federal statute.
Exercise Form: an Exercise Form in the form annexed hereto as Exhibit A.
Exercise Period: the meaning specified in Section 1.4(a).
Exercise Price: the meaning specified on the cover of this Warrant, as such
price may be adjusted pursuant to Section 1 or Section 6
hereof.
Nasdaq: the Nasdaq National Market or the Nasdaq SmallCap Market.
Preferred Stock: shall mean any and all series of Preferred Stock of the
Company, whether currently existing or created in the
future.
SEC: the Securities and Exchange Commission or any other federal agency at the
time administering the Securities Act or the Exchange Act, whichever is the
relevant statute for the particular purpose.
Securities Act: the Securities Act of 1933, as amended, or any successor federal
statute, and the rules and regulations of the Commission thereunder, all as the
same shall be in effect at the time. Reference to a particular section of the
Securities Act of 1933, as amended, shall include a reference to the comparable
section, if any, of any successor federal statute.
Trading Day: any day other than a day on which securities are not traded,
listed or reported on the principal securities exchange or
securities market on which the Common Stock is traded, listed or reported.
Warrantholder: the meaning specified on the cover of this Warrant.
Warrant Shares: the meaning specified on the cover of this Warrant, subject to
the provisions of Section 1 or Section 6 hereof.
9. Miscellaneous.
9.1 Entire Agreement. This Warrant constitutes the entire agreement between
the Company and the Warrantholder with respect to
this Warrant.
9.2 Binding Effects; Benefits. This Warrant shall inure to the benefit of and
shall be binding upon the Company and the Warrantholder and their respective
successors. Nothing in this Warrant, expressed or implied, is intended to or
shall confer on any person other than the Company and the Warrantholder, or
their respective successors, any rights, remedies, obligations or liabilities
under or by reason of this Warrant.
9.3 Amendments and Waivers. This Warrant may not be modified or amended except
by an instrument or instruments in writing signed by the Company and the
Warrantholder. Either the Company or the Warrantholder may, by an instrument in
writing, waive compliance by the other party with any term or provision of this
Warrant on the part of such other party hereto to be performed or complied with.
The waiver by any such party of a breach of any term or provision of this
Warrant shall not be construed as a waiver of any subsequent breach.
9.4 Section and Other Headings. The section and other headings contained in this
Warrant are for reference purposes only and shall not be deemed to be a part of
this Warrant or to affect the meaning or interpretation of this Warrant.
9.5 Further Assurances. Each of the Company and the Warrantholder shall do and
perform all such further acts and things and execute and deliver all such other
certificates, instruments and documents as the Company or the Warrantholder may,
at any time and from time to time, reasonably request in connection with the
performance of any of the provisions of this Agreement.
9.6 Notices. All notices and other communications required or permitted to be
given under this Warrant shall be in writing and shall be deemed to have been
duly given if delivered personally or sent by United States mail, postage
prepaid, or by facsimile (with electronic confirmation of successful
transmission) to the parties hereto at the following addresses or to such other
address as any party hereto shall hereafter specify by notice to the other party
hereto:
(a) if to the Company, addressed to:
ZAP Power Systems
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Managing Director
Telecopier: (000) 000-0000
(b) if to the Warrantholder, addressed to:
Ridgewood ZAP, LLC
c/o Ridgewood Capital Corporation
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: President
Telecopier: (000) 000-0000
Except as otherwise provided herein, all such notices and communications shall
be deemed to have been received on the date of delivery thereof, if delivered
personally, or on the third Business Day after the mailing thereof.
9.7 Separability. Any term or provision of this Warrant which is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the terms and provisions of this Warrant or affecting the
validity or enforceability of any of the terms or provisions of this Warrant in
any other jurisdiction.
9.8 Governing Law. This Warrant shall be deemed to be a contract made under the
laws of the State of California (irrespective of its choice of law principles).
9.9 No Rights or Liabilities as Stockholder. Nothing contained in this Warrant
shall be determined as conferring upon the Warrantholder any rights as a
stockholder of the Company or as imposing any liabilities on the Warrantholder
to purchase any securities whether such liabilities are asserted by the Company
or by creditors or stockholders of the Company or otherwise.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly
authorized officer.
Dated: March 29, 1999.
ZAP POWER SYSTEMS
By:__________________________
Xxxx Xxxxx
Managing Director
Exhibit A
THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT FILED UNDER SUCH ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER SUCH ACT.
EXERCISE FORM
(To be executed upon exercise of this Warrant)
The undersigned hereby irrevocably elects to exercise the right, represented by
this Warrant, to purchase Warrant Shares:
___ herewith tenders payment for _______ of the Warrant Shares to the order of
ZAP Power Systems in the amount of $_________ in accordance with the terms of
this Warrant.
The undersigned requests that a certificate (or certificates) for such Warrant
Shares be registered in the name of the undersigned and that such certificate
(or certificates) be delivered to the undersigned's address below.
In exercising this Warrant, the undersigned hereby confirms and acknowledges
that the Warrant Shares are being acquired solely for the account of the
undersigned and not as a nominee for any other party, or for investment, and
that the undersigned will not offer, sell or otherwise dispose of any such
Warrant Shares except under circumstances that will not result in a violation of
the Securities Act of 1933, as amended, or any state securities laws.
Dated: ___________________.
RIDGEWOOD ZAP, LLC
By:_____________________
Name:___________________
Title:____________________
If said number of shares shall not be all the shares purchasable under the
within Warrant, a new Warrant is to be issued in the name of said undersigned
for the balance remaining of the shares purchasable thereunder.
::ODMA\PCDOCS\BURLINGTON\126822\3
