Exhibit 10.9
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON ITS EXERCISE
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS (I)
PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT OR (II) IN COMPLIANCE WITH AN
EXEMPTION THEREFROM AND ACCOMPANIED BY AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH AN
EXEMPTION THEREFROM (UNLESS SUCH TRANSFER IS TO AN AFFILIATE OF THE REGISTERED
HOLDER).
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUED UPON ITS
EXERCISE ARE SUBJECT TO THE RESTRICTIONS ON
TRANSFER SET FORTH IN SECTION 3 OF THIS WARRANT
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Warrant No. ____ Date of Issuance: _________ ___, 200_
Number of Shares: ____________ (subject to adjustment)
NORTHGATE INNOVATIONS, INC.
COMMON STOCK PURCHASE WARRANT
THIS CERTIFIES that J & M Interests, LLC (the "Holder"), is entitled, subject to
the terms and subject to the conditions hereinafter set forth, on or prior to
the close of business on December 9, 2008 (the "Termination Date") but not
thereafter, to subscribe for and purchase from Northgate Innovations, Inc., a
Delaware corporation (the "Company"), in whole or in part, up to ______________
shares (subject to adjustment) (the "Warrant Shares") of Common Stock, $.03 par
value per share, of the Company (the "Common Stock"). The purchase price of one
share of Common Stock (the "Exercise Price") under this warrant ("Warrant")
shall be $.50, as provided for in that certain Consulting Agreement dated as of
December 9, 2003 between the Company and the Holder (the "Consulting Agreement")
pursuant to which this Warrant has been issued to the Holder. The Exercise Price
and the number of shares for which this Warrant is exercisable shall be subject
to adjustment as provided herein. In the event of any conflict between the terms
of this Warrant and the Consulting Agreement, the Consulting Agreement shall
control. Capitalized terms used and not otherwise defined herein shall have the
meanings set forth for such terms in the Consulting Agreement.
1. Exercise of Warrant.
(a) This Warrant may be exercised by the Holder for not less than
50,000 shares at a time (as such number is adjusted pursuant to Section 7
hereof) by surrendering this Warrant, along with the purchase form appended
hereto as Exhibit A duly executed and completed by the Holder or by the Holder's
duly authorized attorney, at the principal office of the Company, or at such
other office or agency as the Company may designate by notice in writing to the
Holder, accompanied by either (i)(a) cash or certified cashier's check payable
to the Company (or wire transfer of immediately available funds), in lawful
money of the United States, of the Exercise Price payable in respect of the
number of Warrant Shares purchased upon such exercise; or (ii) a written notice
to the Company that the Holder is exercising this Warrant on a "cashless"
exercise basis whereby the Holder shall be entitled to receive a certificate for
the number of shares equal to the quotient obtained by dividing [(A-B) (X)] by
(A), where:
(A) = the closing sales price per share of the Company's
Common Stock on the principal national securities exchange on which it
is listed (or if not so listed, another equivalent means reasonably
determined by the Company) on the business day immediately preceding
the date of such election;
(B) = the Exercise Price of the Warrant; and
(X) = the number of shares with respect to which the Holder is
exercising this Warrant in accordance with the terms of this Warrant.
(b) Each exercise of this Warrant shall be deemed to have been effected
immediately prior to the close of business on the day on which this Warrant
shall have been surrendered to the Company as provided in subsection 1(a) above
(the "Exercise Date"). At such time, the person or persons in whose name or
names any certificates for Warrant Shares shall be issuable upon such exercise
as provided in subsection 1(c) below shall be deemed to have become the holder
or holders of record of the Warrant Shares represented by such certificates.
(c) Within ten (10) days after the Exercise Date, the Company, at its
expense, will cause to be issued in the name of, and delivered to, the Holder,
or as such Holder (upon payment by such Holder of any applicable transfer taxes)
may direct by submission of the assignment in the form appended hereto as
Exhibit B, a certificate or certificates for the number of full Warrant Shares
to which the Holder shall be entitled upon such exercise plus, in lieu of any
fractional share to which the Holder would otherwise be entitled, cash in an
amount determined pursuant to Section 2 hereof; provided, however, that the
Company shall not be required to pay any tax that may be payable in respect of
any transfer involving the issuance and delivery of any such certificate upon
exercise in a name other than that of the Holder and the Company shall not be
required to issue or deliver certificates until the person or person requesting
the issuance thereof shall have paid the Company the amount of tax or shall have
established to the Company that such tax has been paid. Notwithstanding the
foregoing, the Holder shall be solely responsible for any income taxes payable
and arising from the issuance or exercise of this Warrant, or any ad valorem
property or intangible tax assessed against the Holder.
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2. No Fractional Shares or Scrip. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. As to any
fraction of a share which Holder would otherwise be entitled to purchase upon
such exercise, the Company shall pay a cash adjustment in respect of such final
fraction in an amount equal to such final fraction multiplied by the Exercise
Price.
3. Transfer, Division and Combination; Register.
(a) The Holder (and its transferees and assigns), by acceptance of this
Warrant, covenants and agrees that it is acquiring the Warrants evidenced
hereby, and, upon exercise hereof, the Warrant Shares, for its own account as an
investment and not with a view to distribution thereof. Neither this Warrant nor
the Warrant Shares issuable thereunder have been registered under the Securities
Act or any state securities laws and no transfer of this Warrant or any Warrant
Shares shall be permitted unless the Company has received notice of such
transfer, at the address of its principal office set forth in the Consulting
Agreement, in the form of the assignment attached hereto as Exhibit B,
accompanied by an opinion of counsel reasonably satisfactory to the Company that
an exemption from registration of such Warrant or Warrant Shares under the
Securities Act is available for such transfer, except that no such opinion shall
be required after the registration for resale by the Holder of the Warrant
Shares. Upon any exercise of the Warrants, certificates representing the Warrant
Shares shall bear a restrictive legend substantially identical to that set forth
on the face of this Warrant certificate. Any purported transfer of any Warrant
or Warrant Shares not in compliance with the provisions of this section shall be
null and void.
(b) This Warrant may be divided or combined with other Warrants upon
presentation and surrender hereof at the aforesaid office of the Company,
together with a written notice specifying the names and denominations in which
new Warrants are to be issued, signed by Holder or its agent or attorney.
Subject to compliance with Section 3(a), as to any transfer which may be
involved in such division or combination, the Company shall execute and deliver
a new Warrant or Warrants of like tenor in exchange for the Warrant or Warrants
to be divided or combined in accordance with such notice.
(c) The Company shall maintain a register at its principal executive
office containing the name and address of the Holder of this Warrant. The Holder
may change such Holder's address as shown on the warrant register by written
notice to the Company requesting such change.
(d) The Company shall not close its books against the transfer of this
Warrant or any share of Common Stock issued or issuable upon the exercise of
this Warrant in any manner which interferes with the timely exercise of this
Warrant. The Company shall from time to time take all such action as may be
necessary to ensure that the par value per share of the unissued Common Stock
acquirable upon exercisable of this Warrant is at all times equal to or less
than the Exercise Price then in effect.
4. No Rights as Shareholder until Exercise. This Warrant does not entitle the
holder hereof to any voting rights or other rights as a shareholder of the
Company prior to the exercise hereof. Upon the surrender of this Warrant and the
payment of the aggregate Exercise Price, the
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Warrant Shares so purchased shall be and be deemed to be issued to such holder
as the record owner of such shares as of the close of business on the later of
the date of such surrender or payment.
5. Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that
upon receipt by the Company of (i) evidence reasonably satisfactory to it of the
ownership and loss, theft, destruction or mutilation of this Warrant or any
stock certificate relating to the Warrant Shares, and (ii) in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to it,
and/or (iii) if mutilated, upon surrender and cancellation of such Warrant or
stock certificate, the Company will make and deliver a new Warrant or stock
certificate of like tenor and dated as of such cancellation, in lieu of such
Warrant or stock certificate.
6. 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.
7. Adjustments of Exercise Price and Number of Warrant Shares. In order to
prevent dilution of the rights granted under this Warrant and to grant the
Holder certain additional rights, the Exercise Price shall be subject to
adjustment from time to time as provided in this Section 7 and the number of
Warrant Shares shall be subject to adjustment from time to time as provided in
this Section 7.
(a) Stock Splits, Distributions, Issuances upon Reclassifications. 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) 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 into a greater number of shares of Common Stock, (iii) combine
its outstanding shares of 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 the number of Warrant Shares purchasable upon exercise of
this Warrant immediately prior thereto shall be adjusted so that the holder of
this Warrant shall be entitled to receive the kind and number of Warrant Shares
or other securities of the Company which he would have been entitled to receive
had such Warrant been exercised in advance thereof. Upon each such adjustment of
the kind and number of Warrant Shares or other securities of the Company which
are purchasable hereunder, the holder of this Warrant shall thereafter be
entitled to purchase the number of Warrant Shares or other securities resulting
from such adjustment at an Exercise Price per Warrant Share or other security
obtained by multiplying the Exercise Price in effect immediately prior to such
adjustment by the number of Warrant Shares purchasable pursuant hereto
immediately prior to such adjustment and dividing by the number of Warrant
Shares or other securities of the Company resulting from such adjustment. An
adjustment made pursuant to this paragraph shall become effective immediately
after the effective date of such event retroactive to the record date, if any,
for such event.
(b) Reorganization, Reclassification, Merger, Consolidation or
Disposition of Assets. In case the Company shall reorganize its capital,
reclassify its capital stock, consolidate
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or merge with or into another corporation (where the Company is not the
surviving corporation or where there is a change in or distribution with respect
to the Common Stock of the Company), or sell, transfer or otherwise dispose of
all or substantially all its property, assets or business to another corporation
and, pursuant to the terms of such reorganization, reclassification, merger,
consolidation or disposition of assets, shares of common stock of the successor
or acquiring corporation, or any cash, shares of stock or other securities or
property of any nature whatsoever (including warrants or other subscription or
purchase rights) in addition to or in lieu of common stock of the successor or
acquiring corporation ("Other Property"), are to be received by or distributed
to the holders of Common Stock of the Company, then Holder shall have the right
thereafter to receive, upon exercise of this Warrant, the number of shares of
common stock of the successor or acquiring corporation or of the Company, if it
is the surviving corporation, and Other Property receivable upon or as a result
of such reorganization, reclassification, merger, consolidation or disposition
of assets by a holder of the number of shares of Common Stock for which this
Warrant is exercisable immediately prior to such event. In case of any such
reorganization, reclassification, merger, consolidation or disposition of
assets, the successor or acquiring corporation (if other than the Company) shall
expressly assume the due and punctual observance and performance of each and
every covenant and condition of this Warrant to be performed and observed by the
Company and all the obligations and liabilities hereunder, subject to such
modifications as may be deemed appropriate (as determined in good faith by
resolution of the Board of Directors of the Company) in order to provide for
adjustments of shares of Common Stock for which this Warrant is exercisable
which shall be as nearly equivalent as practicable to the adjustments provided
for in this Section 7. For purposes of this Section 7, "common stock of the
successor or acquiring corporation" shall include stock of such corporation of
any class which is not preferred as to dividends or assets over any other class
of stock of such corporation and which is not subject to redemption and shall
also include any evidences of indebtedness, shares of stock or other securities
which are convertible into or exchangeable for any such stock, either
immediately or upon the arrival of a specified date or the happening of a
specified event and any warrants or other rights to subscribe for or purchase
any such stock. The foregoing provisions of this Section 7 shall similarly apply
to successive reorganizations, reclassifications, mergers, consolidations or
disposition of assets.
(c) Voluntary Adjustment by the Company. The Company may 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.
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8. 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 holder of
this Warrant 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 (and
other securities or property) after such adjustment, setting forth a brief
statement of the facts requiring such adjustment and setting forth the
computation by which such adjustment was made. Such notice, in the absence of
manifest error, shall be conclusive evidence of the correctness of such
adjustment.
9. Notice of Corporate Action. If at any time:
(a) the Company shall take a record of the holders of its Common Stock
for the purpose of entitling them to receive a dividend or other distribution,
or any right to subscribe for or purchase any evidences of its indebtedness, any
shares of stock of any class or any other securities or property, or to receive
any other right, or
(b) there shall be any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or any
consolidation or merger of the Company with, or any sale, transfer or other
disposition of all or substantially all the property, assets or business of the
Company to, another corporation or,
(c) there shall be a voluntary or involuntary dissolution, liquidation
or winding up of the Company;
then, in any one or more of such cases, the Company shall give to Holder (i) at
least 10 days' prior written notice of the record date for such dividend,
distribution or right or for determining rights to vote in respect of any such
reorganization, reclassification, merger, consolidation, sale, transfer,
disposition, liquidation or winding up, and (ii) in the case of any such
reorganization, reclassification, merger, consolidation, sale, transfer,
disposition, dissolution, liquidation or winding up, at least 10 days' prior
written notice of the date when the same shall take place. Such notice in
accordance with the foregoing clause also shall specify (i) the date on which
any such record is to be taken for the purpose of such dividend, distribution or
right, the date on which the holders of Common Stock shall be entitled to any
such dividend, distribution or right, and the amount and character thereof, and
(ii) the date on which any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, 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 Common Stock shall be entitled to exchange their shares of Common
Stock for securities or other property deliverable upon such disposition,
dissolution, liquidation or winding up. Each such written notice shall be
sufficiently given if addressed to Holder at the last address of Holder
appearing on the books of the Company and delivered in accordance with Section
18. The failure to mail such notice or any defect therein or in the mailing
thereof shall not affect the validity of the corporate action required to be
specified in such notice. Nothing herein shall prohibit the Holder from
exercising this Warrant during the ten (10) day period commencing on the date of
such notice.
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10. Reservation of Stock. The Company covenants that during 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 purchase rights under this Warrant. 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 the Warrant
Shares 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
Warrant Shares may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of the principal national
securities exchange upon which the Common Stock may be listed.
11. No Impairment. The Company shall not by any action, including, without
limitation, amending its certificate of incorporation or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, but will at all
times in good faith assist in the carrying out of all such terms and in the
taking of all such actions as may be necessary or appropriate to protect the
rights of Holder against impairment. Without limiting the generality of the
foregoing, the Company will (a) not increase the par value of any shares of
Common Stock receivable upon the exercise of this Warrant above the amount
payable therefor upon such exercise immediately prior to such increase in par
value, (b) take all such action as may be necessary or appropriate in order that
the Company may validly and legally issue fully paid and nonassessable shares of
Common Stock upon the exercise of this Warrant, and (c) use its best efforts to
obtain all such authorizations, exemptions or consents from any public
regulatory body having jurisdiction thereof as may be necessary to enable the
Company to perform its obligations under this Warrant.
12. Registration Rights. Holder shall be entitled to the registration rights for
the Warrant Shares as set forth in that certain Registration Rights Agreement
dated as of December 9, 2003 between Glenbrook Group, LLC and the Company.
13. Information To Be Provided by the Holders. Each Holder whose Registrable
Securities are included in any registration pursuant to this Warrant shall
furnish the Company such information regarding such Holder and the distribution
proposed by such Holder as may be reasonably requested in writing by the Company
and as shall be required in connection with such registration or the
registration or qualification of such securities under any applicable state
securities law.
14. Miscellaneous.
(a) Jurisdiction. This Warrant shall be binding upon any successors or
assigns of the Company. This Warrant shall constitute a contract under the laws
of California without regard to its conflicts of law principles or rules.
(b) Restrictions. The holder hereof acknowledges that the Warrant
Shares acquired upon the exercise of this Warrant, if not registered, will have
restrictions upon resale imposed by state and federal securities laws.
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(c) Nonwaiver. No course of dealing or any delay or failure to exercise
any right hereunder on the part of Holder shall operate as a waiver of such
right or otherwise prejudice Holder's rights, powers or remedies.
Notwithstanding the foregoing, the Holder's rights to subscribe for and purchase
the Warrant Shares issuable under this Warrant shall terminate on the
Termination Date.
(d) Notices. Any notice, request or other document required or
permitted to be given or delivered to the holder hereof by the Company shall be
delivered in accordance with the notice provisions of the Consulting Agreement.
(e) Limitation of Liability. No provision hereof, in the absence of
affirmative action by Holder to purchase shares of Common Stock, and no
enumeration herein of the rights or privileges of Holder hereof, shall give rise
to any liability of Holder for the purchase price of any Common Stock or as a
stockholder of the Company, whether such liability is asserted by the Company or
by creditors of the Company.
(f) Remedies. Holder, in addition to being entitled to exercise all
rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Warrant. The Company agrees that
monetary damages would not be adequate compensation for any loss incurred by
reason of a breach by it of the provisions of this Warrant and hereby agrees to
waive the defense in any action for specific performance that a remedy at law
would be adequate.
(g) Successors and Assigns. Subject to applicable securities laws, this
Warrant and the rights and obligations evidenced hereby shall inure to the
benefit of and be binding upon the successors of the Company and the successors
and permitted assigns of Holder. The provisions of this Warrant are intended to
be for the benefit of all Holders from time to time of this Warrant and shall be
enforceable by any such Holder or holder of Warrant Shares.
(h) Indemnification. The Company agrees to indemnify and hold harmless
Holder from and against any liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, claims, costs, attorneys' fees, expenses
and disbursements of any kind which may be imposed upon, incurred by or asserted
against Holder in any manner relating to or arising out of any failure by the
Company to perform or observe in any material respect any of its covenants,
agreements, undertakings or obligations set forth in this Warrant; provided,
however, that the Company will not be liable hereunder to the extent that any
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, attorneys' fees, expenses or disbursements are found in a final
non-appealable judgment by a court to have resulted from Holder's negligence,
bad faith or willful misconduct.
(i) Amendment. This Warrant may be modified or amended or the
provisions hereof waived with the written consent of the Company and the Holder.
(j) Severability. Wherever possible, each provision of this Warrant
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be prohibited by or
invalid under applicable law, such provision shall
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be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions or the remaining provisions of
this Warrant.
(k) Headings. The headings used in this Warrant are for the convenience
of reference only and shall not, for any purpose, be deemed a part of this
Warrant.
[Remainder of page intentionally blank; signature page follows.]
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IN WITNESS WHEREOF, the Company has caused this Warrant to be
executed by its officer thereunto duly authorized.
Dated: , 200
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NORTHGATE INNOVATIONS, INC.
By:
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Name:
Title:
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EXHIBIT A
PURCHASE FORM
To: Northgate Innovations, Inc. Dated:
--------------------
The undersigned, pursuant to the provisions set forth in the
attached Warrant (No. ____), hereby irrevocably elects to purchase
________ shares of the Common Stock covered by such Warrant.
The undersigned herewith makes payment of the full exercise
price for such shares at the price per share provided for in such
Warrant, which is $.50 per share in lawful money of the United States.
[------------------------------]
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Name:
Title:
Address:
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EXHIBIT B
ASSIGNMENT FORM
(To assign the foregoing warrant, execute
this form and supply required information.
Do not use this form to exercise the warrant.)
FOR VALUE RECEIVED,
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hereby sells, assigns and transfers all of the rights of the undersigned under
the attached Warrant (No. _____) with respect to the number of shares of Common
Stock covered thereby set forth below, unto:
Name of Assignee Address No. of Shares
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Dated:
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[ ]
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By:
--------------------------------
Name:
Title:
Signature Guaranteed:
By:
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The signature should be guaranteed by an eligible guarantor institution (banks,
stockbrokers, savings and loan associations and credit unions with membership in
an approved signature guarantee medallion program) pursuant to Rule 17Ad-15
under the Securities Exchange Act of 1934.
EXHIBIT C
CONSULTING AGREEMENT
