1
EXHIBIT 4.12
CPR (USA) INC.
THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). SUCH SECURITIES MAY
NOT BE OFFERED OR SOLD OR TRANSFERRED IN THE UNITED STATES OR TO U.S. PERSONS IN
THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT WHICH,
EXCEPT IN THE CASE OF AN EXEMPTION PURSUANT TO RULE 144 UNDER SAID ACT, IS
CONFIRMED IN A LEGAL OPINION SATISFACTORY TO THE COMPANY.
STOCK PURCHASE WARRANT
To Purchase 450,000 Shares of Common Stock of
SPATIALIZER AUDIO LABORATORIES, INC.
THIS STOCK PURCHASE WARRANT (this "Warrant") certifies that, for value
received, CPR (USA) INC. (the "Investor"), is entitled, upon the terms and
subject to the conditions hereinafter set forth, at any time after the date
hereof and on or prior to December 31, 2002 (the "Termination Date") but not
thereafter, to subscribe for and purchase from SPATIALIZER AUDIO LABORATORIES,
INC., a Delaware corporation (the "Company"), Four Hundred Fifty Thousand
(450,000) shares of Common Stock (the "Warrant Shares"). The purchase price of
one share of Common Stock (the "Exercise Price") under this Warrant shall be
Sixty-seven United States Cents (US$0.67). The Exercise Price and the number of
shares for which the Warrant is exercisable shall be subject to adjustment as
provided herein. This Warrant is being issued in connection with the Common
Stock Subscription Agreement (the "Agreement"), dated as of December 29, 1999,
in the amount of Two Hundred Twenty-five Thousand United States Dollars
(US$225,000) between the Company, the Investor, LIBERTYVIEW FUNDS, L.P., and
LIBERTYVIEW FUND, LLC, and is subject to its terms. Capitalized terms not
otherwise defined herein shall have that meaning as set forth in the Agreement.
In the event of any conflict between the terms of this Warrant and the
Agreement, the Agreement shall control.
1. Title of Warrant. This Warrant shall be issued in the name of the
Investor. This Warrant is not transferable or assignable other than to an
affiliate of the Investor.
2. Authorization of Shares. The Company covenants that all shares of
Common Stock which may be issued upon the exercise of rights represented by this
Warrant will, upon exercise of the rights represented by this Warrant, be duly
authorized, validly issued, fully paid and nonassessable and free from all
taxes, liens and charges in respect of the issue thereof (other than taxes in
respect of any transfer occurring contemporaneously with such issue).
3. Exercise of Warrant. Exercise of the purchase rights represented by
this Warrant may be made at any time or times one day after the date hereof, in
whole or in part, before the close of business on the Termination Date, or such
earlier date on which this Warrant may terminate as provided in Section 12
below, by the surrender of this Warrant and the Notice of Exercise annexed
hereto duly executed, 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 Investor
at the address of the Investor appearing on the books of the Company) and upon
payment of the Exercise Price of
2
CPR (USA) INC.
the shares thereby purchased; whereupon the Investor shall be entitled to
receive a certificate for the number of shares of Common Stock so purchased.
Certificates for shares purchased hereunder shall be delivered to the Investor
within five business days after the date on which this Warrant shall have been
exercised as aforesaid. Payment of the Exercise Price of the shares may be by
certified check or cashier's check or by wire transfer to an account designated
by the Company in an amount equal to the Exercise Price multiplied by the number
of shares being purchased.
4. No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant.
5. Charges, Taxes and Expenses. Issuance of certificates for shares of
Common Stock upon the exercise of this Warrant shall be made without charge to
the Investor for any issue or transfer tax or other incidental expense in
respect of the issuance of such certificate, all of which taxes and expenses
shall be paid by the Company, and such certificates shall be issued in the name
of the Investor.
6. Restrictions on Transfer of Warrant Shares.
(a) Warrant Shares may not be sold, transferred, pledged,
hypothecated or otherwise disposed of except in accordance with applicable
federal and state securities laws.
(b) Unless the Warrant Shares have been registered under the Act,
or are exempt from registration, upon exercise of the Warrant or any portion
thereof and the issuance of any Warrant Shares, all certificates representing
Warrant Shares shall bear on the face thereof substantially the following
legend:
THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"). SUCH SECURITIES MAY NOT BE OFFERED OR SOLD OR TRANSFERRED
IN THE UNITED STATES OR TO U.S. PERSONS IN THE ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT WHICH,
EXCEPT IN THE CASE OF AN EXEMPTION PURSUANT TO RULE 144 UNDER
SAID ACT, IS CONFIRMED IN A LEGAL OPINION SATISFACTORY TO THE
COMPANY.
The Investor agrees and acknowledges that this Warrant is being purchased for
its own account, for investment purposes only, and not for the account of any
other person, and not with a view to distribution, assignment, pledge or resale
to others or to fractionalization in whole or in part. The Investor further
represents, warrants and agrees as follows: no other person has or will have a
direct or indirect beneficial interest in this Warrant and the Investor will not
sell, hypothecate or otherwise transfer the Warrant except in accordance with
the Act thereunder and applicable state securities laws or unless, in the
opinion of counsel for the Investor acceptable to the Company, an exemption from
the registration requirements of the Act and such laws is available.
7. Closing of Books. The Company will at no time close its stockholder
books or records in any manner which interferes with the timely exercise of this
Warrant.
2
3
CPR (USA) INC.
8. No Rights as Stockholder until Exercise. This Warrant does not
entitle the Investor to any voting rights or other rights as a stockholder of
the Company prior to the exercise thereof. If, however, at the time of the
surrender of this Warrant and purchase of Warrant Shares the Investor shall be
entitled to exercise this Warrant, the shares so purchased shall be and be
deemed to be issued to the Investor as the record owner of such shares as of the
close of business on the date on which this Warrant shall have been exercised.
9. Loss, Theft, Destruction or Mutilation of Warrant. The Company
represents and warrants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of any Warrant,
and in case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it, and upon reimbursement to the Company of all reasonable
expenses incidental thereto, and upon surrender and cancellation of such
Warrant, if mutilated, the Company will make and deliver a new Warrant of like
tenor and dated as of such cancellation, in lieu of this Warrant.
10. Saturdays, Sundays, Holidays, etc. If the last or appointed day for
the taking of any action or the expiration of any right required or granted
herein shall be a Saturday, Sunday or a legal holiday, then such action may be
taken or such right may be exercised on the next succeeding day not a Saturday,
Sunday or legal holiday.
11. Effect of Certain Events.
(a) If at any time the Company proposes to sell or otherwise
convey all or substantially all of its assets, a sale in which the consideration
to be received by the Company or its stockholders consists solely of cash, the
Company shall give the Investor thirty (30) days' notice of the proposed
effective date of the transaction specifying that the Warrant shall terminate if
the Warrant has not been exercised by the effective date of the transaction.
(b) In case the Company shall at any time effect any merger,
consolidation, exchange of shares, recapitalization, reorganization, or other
similar event, as a result of which shares of Common Stock shall be changed into
the same or a different number of shares of the same or another class or classes
of stock or securities of the Company or another entity, or other property, the
Investor shall have the right thereafter to purchase, by exercise of this
Warrant and payment of the aggregate Exercise Price in effect immediately prior
to such action, the kind and amount of shares and other securities and property
which it would have owned or have been entitled to receive after the happening
of such transaction had this Warrant been exercised immediately prior thereto.
(c) The Investor shall be granted registration rights for the
Warrant Shares pursuant to a Registration Rights Agreement dated of even date
herewith.
12. Adjustments of Exercise Price and Number of Warrant Shares. The
number and kind of securities purchasable upon the exercise of this Warrant and
the Exercise Price shall be subject to adjustment from time to time upon the
happening of any of the following:
In case the Company shall (i) declare or pay a dividend in shares of
Common Stock or make a distribution in shares of Common Stock to holders of its
outstanding Common Stock, (ii) subdivide its outstanding shares of Common Stock,
(iii) combine its outstanding shares of
3
4
CPR (USA) INC.
Common Stock into a smaller number of shares of Common Stock or (iv) issue any
shares of its capital stock in a reclassification of the Common Stock, then, in
such events, the number of Warrant Shares purchasable upon exercise of this
Warrant immediately prior thereto shall be adjusted so that the Investor shall
be entitled to receive the kind and number of Warrant Shares or other securities
of the Company which he would have owned or have been entitled to receive had
such Warrant been exercised in advance thereof. An adjustment made pursuant to
this Section 12 shall become effective immediately after the effective date of
such event retroactive to the record date, if any, for such event.
13. Voluntary Adjustment by the Company. The Company may at its
discretion, at any time during the term of this Warrant, reduce the then current
Exercise Price to any amount and for any period of time deemed appropriate by
the Board of Directors of the Company.
14. Notice of Adjustment. Whenever the number of Warrant Shares or
number or kind of securities or other property purchasable upon the exercise of
this Warrant or the Exercise Price is adjusted, as herein provided, the Company
shall promptly mail by registered or certified mail, return receipt requested,
to the Investor notice of such adjustment or adjustments setting forth the
number of Warrant Shares (and other securities or property) purchasable upon the
exercise of this Warrant and the Exercise Price of such Warrant Shares after
such adjustment, setting forth a brief statement of the facts requiring such
adjustment and setting forth computation by which such adjustment was made. Such
notice, in absence of manifest error, shall be conclusive evidence of the
correctness of such adjustment.
15. Authorized Shares. The Investor hereby acknowledges that, as of the
Closing Date (as defined in the Agreement), the Company may not be able to
reserve from its authorized but unissued shares of Common Stock a sufficient
number of shares of Common Stock to permit the exercise in full of all of the
outstanding Warrants. The Company shall use its best efforts to reserve, prior
to February 15, 2000, a sufficient number of shares of Common Stock from its
authorized but unissued shares of Common Stock to permit the exercise in full of
all of the outstanding Warrants. The Company covenants that, after such time as
it has increased the number of authorized shares of Common Stock and for the
remainder of the period the Warrant is outstanding, it will reserve from its
authorized and unissued Common Stock a sufficient number of shares to provide
for the issuance of the Warrant Shares upon the exercise of any rights under
this Warrant. Subject to the foregoing, the Company further covenants 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 the Company's Common Stock upon the
exercise of the purchase rights under this Warrant. The Company will take all
such reasonable action as may be necessary to assure that such shares of Common
Stock may be issued as provided herein without violation of any applicable law
or regulation, or of any requirements of the OTC Bulletin Board or any domestic
securities exchange upon which the Common Stock may be listed.
16. Miscellaneous.
(a) Issue Date; Jurisdiction. The provisions of this Warrant
shall be construed and shall be given effect in all respects as if it had been
issued and delivered by the Company on the date hereof. This Warrant shall be
binding upon any successors or assigns of the parties
4
5
CPR (USA) INC.
hereto. This Warrant shall constitute a contract under the laws and jurisdiction
of California and for all purposes shall be construed in accordance with and
governed by the laws of said state without regard to its conflict of law,
principles or rules.
(b) Restrictions. The Investor acknowledges that the Common Stock
acquired upon the exercise of this Warrant, if not registered, may have
restrictions upon its resale imposed by state and federal securities laws.
(c) Modification and Waiver. This Warrant and any provisions
hereof may be changed, waived, discharged or terminated only by an instrument in
writing signed by the party against which enforcement of the same is sought.
(d) Notices. Any notice, request or other document required or
permitted to be given or delivered to the Investor or the Company shall be
delivered or shall be sent by certified or registered mail, postage prepaid, to
the Investor at its address as shown on the books of the Company or to the
Company at the address set forth in the Agreement.
[Remainder of Page Intentionally Left Blank]
5
6
CPR (USA) INC.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its officers thereunto duly authorized.
Dated as of: December 29, 1999
SPATIALIZER AUDIO LABORATORIES, INC.
By: /S/ Xxxxx X. Xxxxxxx
--------------------
Name: Xxxxx X. Xxxxxxx
----------------
Title: Interim Chief Executive Officer
-------------------------------
6
7
CPR (USA) INC.
NOTICE OF EXERCISE
To: Spatializer Audio Laboratories, Inc.
(1) The undersigned hereby elects to purchase _________________
shares of Common Stock of Spatializer Audio Laboratories, Inc. pursuant to the
terms of the attached Warrant, and tenders herewith payment of the purchase
price in full, together with all applicable transfer taxes, if any.
(2) Please issue a certificate or certificates representing said
shares of Common Stock in the name of the undersigned.
Dated:_______________ CPR (USA) INC.
By:_______________________________
Name:_____________________________
Title:____________________________
NOTE: Signature must conform in all respects to xxxxxx's name as specified on
the face of the attached warrant.
7
