EXHIBIT 99(Q)
THE TRANSFER OF THIS WARRANT IS SUBJECT TO
RESTRICTIONS CONTAINED HEREIN. THIS WARRANT
HAS BEEN ISSUED IN RELIANCE UPON THE
REPRESENTATION OF THE HOLDER THAT IT HAS BEEN
ACQUIRED FOR INVESTMENT PURPOSES AND NOT WITH
A VIEW TOWARDS THE RESALE OR OTHER DISTRIBUTION
THEREOF. NEITHER THIS WARRANT NOR THE SHARES
ISSUABLE UPON THE EXERCISE OF THIS WARRANT,
HAVE BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 OR ANY STATE SECURITIES LAWS.
GTI CORPORATION
COMMON STOCK PURCHASE WARRANT
To Subscribe for and Purchase February 10, 1997
Shares of Common Stock
of GTI CORPORATION
THIS CERTIFIES that, for value received, Telemetrix PLC, or its
registered assigns (the "Holder"), is entitled to subscribe for and purchase
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from GTI CORPORATION, a Delaware corporation (hereinafter called the
"Corporation"), up to One Hundred and Fifty Thousand (150,000) shares (subject
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to adjustment as hereinafter provided) of fully paid and non-assessable Common
Stock, $.04 par value, of the Corporation, (the "Common Stock"), at the price
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per share equal to Six Dollars ($6.00) per share (such price as from time to
time to be adjusted as hereinafter provided being hereinafter called the
"Warrant Price"), at any time subsequent to the initial exercise date specified
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in Section 5(b) hereof and prior to the expiration date specified in that
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Section (the "Exercise Period"), subject, however, to the provisions and upon
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the terms and conditions hereinafter set forth. This Warrant and any Warrant or
Warrants subsequently issued upon exchange hereof are hereinafter collectively
called the "Warrant." The shares of Common Stock which Holder is entitled to
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purchase pursuant to this Warrant, including the additional shares the Holder
may be entitled to purchase as provided in Section 5(a) hereof, are hereinafter
called the "Warrant Shares."
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Section 1. Exercise of Warrant. The rights represented by this Warrant
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may be exercised by the Holder during the Exercise Period, in whole or in part
(but not in increments less than 50,000 shares) at any time or from time to
time in part by the completion of the purchase form attached hereto and by the
surrender of this Warrant (properly endorsed) at the office of the Corporation
as it may designate by notice in writing to the Holder hereof at the address of
the Holder appearing on the books of the Corporation, and by payment to the
Corporation of the Warrant Price in cash or by certified or official bank check,
for each share being purchased. In the event of any exercise of the
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rights represented by this Warrant, a certificate or certificates for the shares
of Common Stock so purchased, registered in the name of the Holder, or its
nominee or other party designated in the purchase form by the Holder hereof,
will be delivered to the Holder within ten (10) business days after the date in
which the rights represented by this Warrant will have been so exercised; and,
unless this Warrant has expired or has been exercised in full, a new Warrant
representing the number of shares (except a remaining fractional share), if any,
with respect to which this Warrant will not then have been exercised will also
be issued to the Holder within such time. The Holder will for all purposes be
deemed to have become the Holder of record of such shares on the date on which
this Warrant was surrendered and payment of the Warrant Price, except that, if
the date of such surrender and payment is a date on which the stock transfer
books of the Corporation are closed, such person will be deemed to have become
the Holder of such shares at the start of business on the next succeeding date
on which the stock transfer books are open. No fractional shares will be issued
upon exercise of this Warrant and no payment or adjustment will be made upon any
exercise on account of any cash dividends on the Common Stock issued upon such
exercise. If any fractional interest in a share of Common Stock would, except
for the provision of this Section 1, be delivered upon such exercise, the
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Corporation, in lieu of delivery of a fractional share thereof, will pay to the
Holder an amount in cash equal to the current market price of such fractional
share as determined in good faith by the Board of Directors of the Corporation
(the "Board").
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Section 2. Adjustment of Purchase Price; Consolidation, Merger and Sale
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(a) In the event that after the issuance of this Warrant,
the Corporation shall (i) pay a dividend, or make a distribution, in shares of
capital stock of the Corporation, or (ii) subdivide its outstanding shares of
Common Stock, or (iii) combine its outstanding shares of Common Stock into a
smaller number of shares, or (iv) issue by reclassification of its shares of
Common Stock any shares of capital stock of the Corporation, the exercise right
and the Warrant Price in effect immediately prior to such action shall be
adjusted so that the Holder shall be entitled to receive the number of shares of
capital stock of the Corporation which he would have owned immediately
following such action had such Warrant been exercised immediately prior to the
record date of such action or, if there is no applicable record date,
immediately prior to such action. An adjustment made pursuant to this Section
2(a) shall, in the case of a subdivision, combination or reclassification become
effective retroactively immediately after the effective date thereof and shall,
in case of a dividend or distribution, become effective retroactively
immediately after the record date thereof. If, as a result of an adjustment
made pursuant to this Section 2(a), the holder of any Warrant thereafter
surrendered for exercise shall become entitled to receive shares of two or more
classes of capital stock of the Corporation, the Board of Directors of the
Corporation shall determine the allocation of the adjusted Warrant Price between
or among shares of such classes of capital stock.
(b) In case the Corporation after the date hereof shall
distribute to all the holders of Common Stock any dividend or other distribution
(other than a cash distribution made as a dividend payable out of earnings or
out of any earned surplus legally available for dividends under the laws of the
jurisdiction of incorporation of the Corporation) or any evidence of
indebtedness or any assets on or in respect to the Common Stock or rights to
subscribe or purchase
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shares of Common Stock at a price per share less than the current market price
per share of Common Stock (as defined below) at the record date set forth below,
then, and thereafter successively upon each such distribution, the Warrant Price
in effect immediately prior to such distribution shall forthwith be reduced to a
price determined by multiplying the Warrant Price in effect immediately prior to
such distribution by a fraction the numerator of which shall be the current
market price per share of Common Stock as defined below at the record date
mentioned below, less the then fair market value (as determined by the Board of
Directors of the Corporation, whose determination shall be conclusive) of the
portion of such evidences of indebtedness or such assets so distributed,
applicable to one share of Common Stock and the denominator of which shall be
such current market price per share of Common Stock. An adjustment made pursuant
to this Section 2(b) shall become effective retroactively immediately after the
record date for the determination of stockholders entitled to receive such
distribution.
(c) After each adjustment of the Purchase Price pursuant to Sections
2(a) and 2(b), the total number of shares of Common Stock or fractional part
thereof purchasable upon the exercise of each Warrant shall be proportionately
adjusted to such number of shares or fractional part thereof as the total
Warrant Price for the number of shares or fractional part thereof purchasable
immediately prior to such adjustment will buy at the adjusted Warrant Price.
(d) For the purposes of this Section 2, the term "Common Stock"
shall mean (i) the class of stock designated as the common stock, par value $.04
per share, of the Corporation, at the date of this Agreement or (ii) any other
class of stock resulting from successive changes or reclassifications of such
common stock consisting solely of changes in par value, or from par value to no
par value, or from no par value to par value. In the event that at any time, as
a result of an adjustment made pursuant to Section 2(a), shares of the
Corporation, other than shares of Common Stock are issuable upon exercise of the
Warrants, thereafter the number of such other shares so issuable shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Common Stock
contained in Section 2, and all other provisions of this Agreement with respect
to Common Stock shall apply on like terms to any such other shares.
(e) For the purposes of any computation under this Section 2, the
current market price per share of Common Stock at any date shall be deemed to be
the average of the daily closing prices for the 30 consecutive business days
commencing 45 business days before the day in question. The closing price for
each day shall be the last reported sale price regular way or, in case no such
reported sale takes place on such day, the average of the reported closing bid
and asked prices regular way, in either case as officially reported by the
principal stock exchange on which the Common Stock is listed or admitted to
trading, or, if the Common Stock is not listed or admitted to trading on any
national securities exchange, the average of the closing bid and asked prices as
furnished by the National Association of Securities Dealers, Inc. through NASDAQ
or similar organization if NASDAQ is no longer reporting such information.
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(f) If there shall be effected any consolidation or merger of
the Corporation with another corporation, or a sale of all or substantially all
of the Corporation's assets to another corporation, then (1) the Holder will
receive no less than ten (10) days advance notice of the closing of such
transaction, (2) this Warrant will become exercisable in full immediately prior
to the closing of such transaction and (3) this Warrant will terminate
immediately after the closing of such transaction.
Section 3. Stock to Be Reserved.
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(a) Subject to the receipt of the Stockholder Approval described
in subsection (b) below, the Corporation will at all times reserve and keep
available out of its authorized Common Stock, solely for the purpose of issue
upon the exercise of this Warrant as herein provided, such number of shares of
Common Stock as will then be issuable upon the exercise of this Warrant. The
Corporation covenants that all shares of Common Stock which will be so issued
will be duly and validly issued and fully paid and nonassessable and free from
all taxes, liens and charges with respect to the issue thereof, and, without
limiting the generality of the foregoing, the Corporation will take all such
action as may be necessary to assure that all such shares of Common Stock may be
so issued without violation of any applicable law or regulation, or of any
requirements of any national securities exchange upon which shares of capital
stock of the Corporation may be listed.
(b) The Holder understands and acknowledges that the Corporation
does not currently have enough authorized shares to enable it to reserve Common
Stock for issuance pursuant to exercise of the Warrant. Accordingly,
notwithstanding any other term and condition of this Warrant, the Holder agrees
that its right to exercise this Warrant will be conditioned upon approval by the
stockholders of the Corporation ("Stockholder Approval") of an amendment of the
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Corporation's certificate of incorporation to increase the number of authorized
shares of Common Stock to at least 12,500,000 shares of Common Stock creating
at least 250,000 shares of authorized and unissued shares of Common Stock which
thereupon will be reserved for issuance upon exercise of the Warrant as provided
in subsection (a) above. The Corporation shall submit a proposal to increase
the authorized shares in the foregoing amount for consideration by its
shareholders at its upcoming annual general meeting currently scheduled for May
15, 1997, but to be held not later than May 31, 1997, and shall recommend to its
stockholders approval of such increase. The Corporation shall cause the filing
of an amendment to its certificate of incorporation evidencing such increase,
such filing to occur on the date of Stockholder Approval or on the immediately
following business day.
Section 4. Issue Tax. The issuance of certificates for shares of Common
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Stock upon exercise of this Warrant will be made without charge to the Holders
of this Warrant for any issuance tax in respect thereof provided that the
Corporation will not be required to pay any tax 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 Holder of this Warrant.
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Section 5. Increase in Warrant Shares; Expiration Date.
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(a) The number of Warrant Shares shall be increased
automatically on April 1, 1997 from 150,000 shares to 250,000 shares unless one
of the following events occurs prior to April 1, 1997: (1) the Corporation
completes the sale to an independent third party for a fair value negotiated in
an arm's-length transaction and receives the full price payable by the purchaser
for the purchase of all of the capital stock which it owns of its majority-owned
subsidiary, Promptus Communications, Inc., a Rhode Island corporation
("Promptus"), (2) substantially all the assets of Promptus' NIC card business
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are sold to an independent third party for a fair value negotiated in an arm's
length transaction and the Corporation receives payment in full of the purchase
price, or (3) substantially all the assets of Promptus are sold to an
independent third party for a fair value negotiated in an arm's-length
transaction and the Corporation receives payment in full of the purchase price.
(b) The rights to purchase shares of Common Stock set forth
in this Warrant shall commence on the date of Stockholder Approval and shall
expire on the later of (i) 30 days following the repayment in full of the
$2,500,000 Secured Promissory Note, dated as of date of issuance of this Warrant
from the Company in favor of Holder or (ii) 30 days following the date of
Stockholder Approval.
Section 6. Notice of Record Dates. In the event of
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(1) any taking by the Corporation 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 (other than cash
dividends out of earned surplus), 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
(2) any capital reorganization of the Corporation, any
reclassification or recapitalization of the capital stock of the Corporation or
any transfer of all or substantially all the assets of the Corporation to or
consolidation or merger of the Corporation with or into any other corporation,
or
(3) any voluntary or involuntary dissolution, liquidation or
winding-up of the Corporation, then and in each such event the Corporation will
give notice to the Holder of this Warrant specifying (i) the date on which any
such 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, and (ii) the date on which any such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, 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 will be entitled to exchange their shares
of Common Stock for securities or other property deliverable upon such
reorganization, reclassification,
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recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up. Such notice will be given at least 15 days prior to the date
therein specified.
Section 7. No Shareholder Rights or Liabilities. This Warrant will not
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entitle the Holder hereof to any voting rights or other rights as a shareholder
of the Corporation. No provision hereof, in the absence of affirmative action
by the Holder hereof to purchase shares of Common Stock, and no mere enumeration
hereon of the rights or privileges of the Holder hereof, will give rise to any
liability of such Holder for the Warrant Price or as a shareholder of the
Corporation, whether such liability is asserted by the Corporation or by
creditors of the Corporation.
Section 8. Registration Rights Approval for Listing. The Holder will have
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the registration rights and other rights set forth in the Investor's Rights
Agreement, dated February 10, 1997 (the "Investor's Rights Agreement"). The
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Warrant Shares will, upon issuance, be approved for listing on the principal
stock exchange on which the Common Stock is listed or admitted to trading, or,
if the Common Stock is not listed or admitted to trading on an exchange, on the
NASDAQ National Market System.
Section 9. Representations of Holder.
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The Holder hereby represents and acknowledges to the Corporation that:
(1) this Warrant, the Warrant Shares, and any securities issued
with respect to any of them by way of a stock dividend or stock split or in
connection with a recapitalization, merger, consolidation or other
reorganization will be "restricted securities" as such term is used in the rules
and regulations under the Securities Act and that such securities have not been
registered under the Securities Act of 1933 (the "Securities Act") or any state
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securities law, and that such securities must be held indefinitely unless
registration is effected or transfer can be made pursuant to appropriate
exemptions;
(2) the Holder has read, and fully understands, the terms of
this Warrant set forth on its face and the attachments hereto, including the
restrictions on transfer contained herein;
(3) the Holder is purchasing for investment for its own account
and not with a view to or for sale in connection with any distribution of this
Warrant or the Warrant Shares and it has no intention of selling such securities
in a public distribution in violation of the federal securities laws or any
applicable state securities laws, provided that nothing contained herein will
prevent Holder from transferring such securities in compliance with the terms of
this Warrant and the applicable federal and state securities laws.
(4) the Holder is an "accredited investor" within the meaning of
paragraph (a) of Rule 501 of Regulation D promulgated by the Securities and
Exchange Commission (the "Commission") and an "excluded purchaser" within the
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meaning of Section 25102(f) of the California Corporate Securities Law of 1968;
and
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(5) the Corporation may affix the following legend (in addition to
any other legend(s), if any, required by applicable state corporate and/or
securities laws) to certificates for shares of Common Stock (or other
securities) issued upon exercise of this Warrant:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933 (the "Act") or registered
or qualified under any state securities laws ("State Securities
Laws"). They may not be sold, offered for sale, pledged or
hypothecated in the absence of a registration statement and/or
qualification in effect with respect to the sale of such securities
under the Act and/or State Securities Laws or an opinion of counsel
satisfactory to the Company that such registration and/or
qualification is not required".
Section 10. Notice of Proposed Transfers, Transfer and Assignment. The
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Holder, by acceptance hereof, agrees to comply in all respects with the
provisions of this Section 10. Prior to any proposed transfer of this Warrant
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or any Warrant Shares, unless there is in effect a registration statement under
the Securities Act, covering the proposed transfer, the Holder of such
securities will give written notice to the Corporation of such Xxxxxx's
intention to effect such transfer. Each such notice will describe the manner
and circumstances of the proposed transfer in sufficient detail, and will be
accompanied (except in a transaction in compliance with Rule 144) by either (i)
a written opinion of legal counsel who will be satisfactory to the Corporation's
counsel, to the effect that the proposed transfer of the Warrant and/or Warrant
Shares may be effected without registration under the Securities Act, or (ii) a
"no action" letter from the Commission to the effect that the transfer of such
securities without registration will not result in a recommendation by the staff
of the Commission that enforcement action be taken with respect thereto,
whereupon the Holder of such securities will be entitled to transfer such
securities in accordance with the terms of the notice delivered by the Holder to
the Corporation. Each new certificate evidencing the Warrant and/or Warrant
Shares so transferred will bear the appropriate restrictive legends set forth in
Section 9, except that such certificate will not bear such restrictive legend
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if, in the opinion of counsel for the Corporation, such legend is not required
in order to establish or assist in compliance with any provision of the
Securities Act or any applicable state securities laws. Notwithstanding the
foregoing, this Warrant may be transferred only to a corporation or other entity
controlling, controlled by or under common control with Holder, including,
without limitation, Telemetrix Investments Limited or Telemetrix Overseas
Investments B.V. For purposes of the foregoing sentence, the term "control"
shall mean (a) in respect of a corporation, that the controlling entity owns or
controls fifty percent (50%) or more of the voting power and has the ability to
elect at least a majority of the board of directors or similar managing body of
the controlled entity, or (b) in respect of an association, partnership, joint
venture or other business entity, that the controlling entity is entitled to
share in fifty percent (50%) or more of the profits and losses of the controlled
entity, however determined and has voting control with respect thereto.
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Section 11. Lost, Stolen, Mutilated or Destroyed Warrant. If this Warrant
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is lost, stolen, mutilated or destroyed, the Corporation may, on such terms as
to indemnity or otherwise as it may in its discretion reasonably impose (which
will, in the case of a mutilated Warrant, include the surrender thereof), issue
a new Warrant of like denomination and tenor as the Warrant so lost, stolen,
mutilated or destroyed. Any such new Warrant will constitute an original
contractual obligation of the Corporation, whether or not the allegedly lost,
stolen, mutilated or destroyed Warrant will be at any time enforceable by
anyone.
Section 12. Presentment. Prior to due presentment of this Warrant together
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with a completed assignment form attached hereto for registration of transfer,
the Corporation may deem and treat the Holder as the absolute owner of the
Warrant, notwithstanding any notation of ownership or other writing thereon, for
the purpose of any exercise thereof and for all other purposes, and the
Corporation will not be affected by any notice to the contrary.
Section 13. Notice. Notice or demand pursuant to this Warrant will be
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sufficiently given or made, if sent by first-class mail, postage prepaid,
addressed, if to the Holder of this Warrant, to the Holder at its last known
address as it will appear in the records of the Corporation, and if to the
Corporation, at 0000 Xxxxxxxx Xxxx Xxxxxx, Xxx Xxxxx, Xxxxxxxxxx 00000,
Attention: Secretary. The Corporation may alter the address to which
communications are to be sent by giving notice of such change of address in
conformity with the provisions of this Section 13 for the giving of notice.
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Section 14. Governing Law. The validity, interpretation and performance of
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this Warrant will be governed by the laws of the State of California without
regard to principles of conflicts of laws. In any action brought under or
arising out of this Warrant, the undersigned hereby consents to the jurisdiction
of any competent court within the State of California and consents to service of
process by any means authorized by California law.
Section 15. Amendment; Majority in Interest. This Warrant may be modified,
-------------------------------
amended or terminated only by a writing signed by the Corporation and Holder
hereof; (of if Warrants have been issued upon exchange or transfer hereof, the
holders of Warrants representing the majority of the Warrant Shares covered by
the outstanding Warrants ("Majority in Interest") thereof. Any action relating
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to the Warrants approved by a Majority in Interest will be binding upon all of
the holders of the Warrants irrespective of whether any holder individually
acted to approve or disapprove such action.
Section 16. Severability. Should any part but not the whole of this
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Warrant for any reason be declared invalid, such decision will not affect the
validly of any remaining portion, which remaining portion will remain in force
and effect as if this Warrant had been executed with the invalid portion thereof
eliminated, and it is hereby declared the intention of the parties hereto that
they would have executed the remaining portion of this Warrant without including
therein any such part which may, for any reason, be hereafter declared invalid.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Corporation has caused this Warrant to be duly
executed and delivered on and as of the day and year first above written by one
of its officers thereunto duly authorized.
GTI CORPORATION, a Delaware corporation
Dated: February 10, 1997 By: /s/ Xxxxxx Xxxx-Xxxxxxxx
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Xxxxxx Xxxx-Xxxxxxxx
Chief Executive Officer
and President
The undersigned Xxxxxx agrees and accepts this Warrant and acknowledges
that it has read and confirms each of the representations contained in Section
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9.
-
TELEMETRIX PLC
Dated: February 10, 1997 By: /s/ X.X. Xxxxxxx
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(Title) X.X. Xxxxxxx, Director
[SIGNATURE PAGE TO GTI CORPORATION
COMMON STOCK PURCHASE WARRANT]
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GTI CORPORATION
COMMON STOCK
PURCHASE WARRANT
EXERCISE FORM
(To be executed by the Warrant Holder if it desires to exercise the Warrant in
whole or in part)
To: GTI Corporation
The undersigned, whose taxpayer identification number is ______________
hereby irrevocably elects the right of purchase represented by the within
Warrant for, and to purchase thereunder, ___________________________shares of
securities provided for therein and tenders payment herewith to the order of
GTI Corporation
in the amount of
$________________
The undersigned requests that certificates for such shares be issued as follows:
Name: ____________________________
Address: _________________________
Deliver to: ______________________
Address: _________________________
and, if said number of shares will not be all the shares purchasable hereunder,
that a new Warrant for the balance remaining of the shares purchasable under the
within Warrant be registered in the name of, and delivered to, the undersigned
at the address stated below:
___________________________________________
___________________________________________
___________________________________________
Dated:________, 19__
_________________________________
(Signature must conform in all
respects to the name of the
Warrant Holder as specified on
the face of the Warrant, without
alteration, enlargement or any
change whatsoever. If the Warrant
Xxxxxx is other than an
individual, the signatory must
indicate his or her title.)
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ASSIGNMENT
(To be executed by the Warrant Holder if he desires to effect a transfer of the
Warrant)
FOR VALUE RECEIVED, the undersigned hereby sells, assign and transfers unto
___________________________________ whose Social Security or other
identification number is ___________________[residing/located] at _____________
the attached Warrant, and appoints __________ residing at __________ the
undersigned's attorney-in-fact to transfer said Warrant on the books of the
Corporation, with full power of substitution in the premises.
Dated:_________________, 199_
In the presence of:
______________________________
_______________________________
(Signature must conform in all
respects to the name of the
Warrant Holder as specified on
the face of the Warrant,
without alteration, enlargement
or any change whatsoever. If
the Warrant Xxxxxx is other
than an individual, the
signatory must indicate his or
her title.)
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