1
EXHIBIT 99.2
WARRANT PURCHASE AGREEMENT
THIS WARRANT PURCHASE AGREEMENT ("AGREEMENT") is dated APRIL
20, 2000, by and between DELPHI AUTOMOTIVE SYSTEMS CORPORATION, a Delaware
corporation ("HOLDER") and DURASWITCH INDUSTRIES, INC., a Nevada corporation
("COMPANY").
In consideration of the premises and the mutual
representations, warranties, covenants and agreements contained in this
Agreement, the parties, intending to be legally bound, agree as follows:
1. In consideration of Holder entering into a License
Agreement with Company dated as of the date of this Agreement, and other good
and valuable consideration, receipt of which is hereby acknowledged by Company,
Company hereby issues to Holder its warrant to purchase up to 225,000 shares of
its $.001 par value common stock (the "COMMON STOCK"), subject to adjustment as
provided therein (the "WARRANT").
2. Company represents and warrants to Holder that:
(a) Company will at all times have authorized, and reserved
sufficient shares of Common Stock for issuance pursuant to the Warrant;
it will take all actions necessary to ensure that all such shares are
issued in full compliance with all applicable laws and regulations, and
with any requirement of any securities exchange upon which any capital
stock of Company may be listed; and the issuance of the Warrant is, and
of such shares will be, exempt from registration under any federal or
state securities laws; and
(b) Company's authorized capitalization consists solely of
40,000,000 shares of Common Stock par value $.001 per share and
10,000,000 shares of Series A, no par value preferred stock; with
respect to each class of shares, Company's most recent SEC filing, Form
10-KSB describes outstanding shares and shares issuable based on all
existing options, warrants and other rights to acquire Company's Common
Stock or Preferred Stock (as the case may be), with no changes since
that filing, except as previously otherwise disclosed in writing to
Holder.
(c) Company has full power and authority to enter into this
Agreement and to consummate the transactions contemplated herein, and
this Agreement has been duly executed and delivered by Company and is a
valid and legally binding obligation of Company in accordance with its
terms under Nevada law.
3. Holder represents and warrants to Company that it is
acquiring the Warrant (and will acquire the Common Stock issuable upon exercise
of the Warrant) for its own account for investment and not with a view towards
distribution, except in compliance with all applicable laws.
4. Holder shall not sell or otherwise transfer the Warrant or
any Common Stock acquired upon the exercise of the Warrant except pursuant to an
effective registration under the Securities Act of 1933 (the "SECURITIES ACT")
or in a transaction which, in the opinion of counsel (which may be in-house
counsel to Holder), qualifies as an exempt transaction under the Securities Act
and the rules and regulations promulgated thereunder and any applicable state
securities laws. The certificates evidencing the Warrant and the Common Stock
issuable upon exercise of the Warrant may bear an appropriate legend reflecting
the foregoing restrictions on the transfer of such securities.
5. The provisions of Exhibit A hereto, pursuant to which
Company has granted certain registration rights to Holder, are incorporated
herein by reference as if stated in full in this Agreement.
6. This Agreement (including the Exhibits), together with the
Warrant (and Exhibits to the Warrant), constitutes the complete and entire
agreement between Holder and Company regarding the sale of the Warrant to Holder
by Company.
1
2
7. The interpretation, performance and enforcement of this
Agreement shall be governed by the laws of the State of Nevada without resort to
that state's conflict-of-laws principles.
8. This Agreement (including the registration rights set forth
in Exhibit A) shall inure to the benefit of and be binding upon the successors,
assigns and transferees of each of the parties, including, without limitation
and without the need for an express assignment, subsequent transferees of the
Warrant or any shares of Common Stock acquired upon the exercise of the Warrant;
but nothing herein shall be deemed to permit any assignment, transfer or other
disposition of the Warrant or any shares of Common Stock acquired upon the
exercise of the Warrant issued pursuant to this Agreement in violation of
applicable law.
IN WITNESS WHEREOF, each of the parties has duly executed this
Agreement as of this 20th day of April, 2000.
Signed:
DELPHI AUTOMOTIVE SYSTEMS DURASWITCH INDUSTRIES, INC.
CORPORATION
/s/ Xxxxx X. Xxxxxxx /s/ R. Xxxxxx Xxxxxx
----------------------------- ------------------------------
Xxxxx X. Xxxxxxx R. Xxxxxx Xxxxxx
President, Delphi Packard Electric Systems CEO and Chairman
2
3
EXHIBIT A
REGISTRATION RIGHTS
1. PIGGY-BACK RIGHTS.
(a) If Company decides, at any time prior to the second year
anniversary of the expiration of the Exercise Period (as defined in the
Warrant), to prepare and file a registration statement under the
Securities Act of 1933 (the "SECURITIES ACT") with respect to the
public offering for cash of any shares of its Common Stock (or of other
securities convertible into or exchangeable for Common Stock)
("REGISTRATION STATEMENT"), and which is not a registration solely to
implement an employee benefit plan or a transaction to which Rule 145
under the Securities Act is applicable, Company shall give 30 days'
prior written notice of such decision to Holder and shall, upon the
written request of Holder and subject to Paragraph 3 below, include in
the Registration Statement such number of Warrant Shares (as defined in
the Warrant) as Holder may request, together with any other shares of
Common Stock then beneficially owned by Holder or Holder's affiliates
(collectively "HOLDER'S SHARES"). If Company has not received a request
from Holder to include Warrant Shares within such 30-day period, then
Company shall have no obligation to include any such shares in the
offering. The registration rights granted in this section shall expire
if not exercised before the second year anniversary of the expiration
of the Exercise Period.
(b) Company shall keep such Registration Statement(s) and
other filings relating thereto effective and current under the
Securities Act permitting the sale of Holder's Shares included therein
for the same period that the registration is maintained effective in
respect of shares of other persons (including Company). In any
underwritten offering of Common Stock, any Holder's Shares which are
included will be sold at the same time and the same per-share price as
Company's shares. In connection with any Registration Statement or
subsequent amendment or similar document filed with respect thereto,
Company shall make Holder's Shares covered thereby eligible for public
offering and sale under the securities and Blue Sky laws of such
jurisdictions as may be specified by Holder before the effective date
of such Registration Statement; provided that Company shall not be
obligated to qualify to do business in any jurisdiction where it is not
so qualified as of such effectiveness, or to take any action which
would subject it to unlimited service of process in any jurisdiction
where it is not so subject at such time. Company shall keep such Blue
Sky filings current for the length of time it must keep effective any
Registration Statement, post-effective amendment, prospectus or
offering circular pursuant hereto.
(c) Upon receipt of any notice from Company that the
Registration Statement or any prospectus included therein must be
supplemented or amended, Holder will forthwith discontinue disposition
of any shares pursuant to such Registration Statement until Holder's
receipt of copies of a supplemented or amended prospectus covering such
shares, and, if so directed by Company, Holder will deliver to Company
(at Company's expense and as soon as possible) all copies, other than
permanent file copies then in Holder's possession, of the prospectus
covering such shares current at the time of its receipt of such notice.
Company shall use its best efforts to deliver and, if necessary, cause
to be made effective under the Securities Act, and any applicable state
securities laws, any such amended or supplemented prospectus as soon as
possible.
2. EXPENSES; CONSENT. In connection with any Registration
Statement or other filing described herein (including without limitation keeping
such filings effective as provided herein), Company shall bear all the expenses
and professional fees related to the registration including, but not limited to,
printing, filing, legal, accounting and registration fees (provided that Holder
shall be responsible for any legal expenses incurred by Holder relating to
registration of Holder's Shares). Company shall also provide Holder with such
number of printed copies of the prospectus, offering circulars and/or
supplemental or amended prospectuses in final and preliminary form as Holder may
reasonably request. Company consents to the use of each such prospectus or
offering circular in connection with the sale of the Holder's Shares.
3
4
3. UNDERWRITTEN OFFERINGS.
(a) If any registration in which Holder proposes to
participate pursuant to Paragraph 1 involves the distribution of any
securities through one or more underwriters, Company will, if requested
by Holder, arrange for such underwriters to include all of the Company
shares to be offered and sold by Holder among the securities of Company
to be distributed by such underwriters. The underwriters' obligation to
include such Shares shall be conditioned upon Holder's agreement to
enter into an agreement with the managing or lead underwriter, as is
customary for selling shareholders which are not affiliates of the
issuer, provided that Holder shall not be required to make any
representations or warranties to or agreements with Company or the
underwriters other than representations, warranties or agreements
regarding Holder, its shares and its intended method of distribution or
any other representations or warranties required by law or customarily
given by selling shareholders which are not affiliates of the Issuer in
an underwritten public offering.
(b) If any registration under Paragraph 1 involves an
underwritten offering and the managing underwriter of such offering
shall advise Company that, in its view, the number of securities
requested to be included in such registration exceeds the largest
number (the "MAXIMUM AMOUNT") that can be sold in an orderly manner in
such offerings, within a price range acceptable to Company, Company
shall include in such registration shares in the following priority:
first, all shares of Common Stock that the Company proposes to register
for its own account; and second, Holder's Shares requested by Holder to
be included in the Registration Statement, pro rata with the aggregate
of all shares of all other persons exercising similar registration
rights granted before the date hereof.
4. INDEMNIFICATION; CONTRIBUTION.
(A) INDEMNIFICATION BY COMPANY. Company shall indemnify, to
the fullest extent permitted by law, Holder, its directors,
stockholders, officers, affiliates, employees, agents and each person
who controls any of the foregoing within the meaning of the Securities
Act against all losses, claims, damages, liabilities and expenses
(including reasonable attorneys' fees) caused by, resulting from,
arising out of or related to any untrue or alleged untrue statement of
a material fact contained in any Registration Statement, prospectus or
preliminary prospectus or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements made therein not misleading, except insofar as the
same are caused by or contained in any information with respect to
Holder furnished in writing to Company by Holder specifically for use
therein or caused by Holder's failure to deliver a copy of the
Registration Statement or prospectus or any amendments or supplements
thereto in accordance with the requirements of the Securities Act after
Company has furnished such Holder with a copy of the same. Company
shall also indemnify any underwriter of Company's Common Stock, its
officers, employees and directors and each person who controls such
underwriter (within the meaning of the Securities Act) to the same
extent as provided above with respect to the indemnification of Holder.
(B) INDEMNIFICATION BY HOLDER. In connection with any
Registration Statement in which Holder is participating, such Holder
will furnish to Company in writing such information and affidavits as
Company reasonably requests in connection with preparation of the
Registration Statement, prospectus or preliminary prospectus and shall
indemnify, to the full extent permitted by law, Company, its directors,
each of its officers who have signed the Registration Statement and
each person who controls Company (within the meaning of the Securities
Act) against any losses, claims, damages, liabilities and expenses
(including reasonable attorneys' fees) caused by, resulting from,
arising out of or related to any untrue statement of a material fact or
any
4
5
omission of a material fact required to be stated in the
Registration Statement or prospectus or any amendment thereof or
supplement thereto, or necessary to make the statements therein (in the
case of a prospectus, in the light of the circumstances under which
they were made) not misleading, to the extent, but only to the extent,
that such untrue statement or omission is caused by or contained in any
information or affidavit furnished in writing by such Holder expressly
for use in such Registration Statement, prospectus, preliminary
prospectus or any amendment thereof. In no event shall the liability of
Holder hereunder exceed the amount of net proceeds received by it upon
the sale of securities pursuant to such offering.
(C) CONDUCT OF INDEMNIFICATION PROCEEDINGS. Any person
entitled to indemnification hereunder shall give prompt written notice
to the indemnifying party after the receipt by such person of any
written notice of the commencement of any action, suit, proceeding or
investigation or threat thereof made in writing for which such person
may claim indemnification or contribution pursuant to this Agreement
and, unless in the reasonable judgment of such indemnified party a
conflict of interest may exist between such indemnified party and the
indemnifying party with respect to such claim, permit the indemnifying
party to assume the defense of such claim with counsel satisfactory to
such indemnified party. If the indemnifying party is not entitled to,
or elects not to, assume the defense of a claim, it will not be
obligated to pay the fees and expenses of more than one counsel with
respect to such claim, unless in the reasonable judgment of counsel for
such indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with
respect to such claim, in which event the indemnifying party shall be
obligated to pay the reasonable fees and expenses of such additional
counsel or counsels. The indemnifying party will not be subject to any
liability for any settlement made without its consent.
(D) CONTRIBUTION.
(i) If the indemnification provided for in this
Paragraph 4 from the indemnifying party is unavailable to an
indemnified party in respect of any losses, claims, damages,
liabilities or expenses referred to herein, then the
indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages,
liabilities or expenses in such proportion as is appropriate
to reflect the relative fault of the indemnifying party and
indemnified parties in connection with the actions which
resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable
considerations. The relative fault of such indemnifying party
and indemnified party shall be determined by reference to,
among other things, whether any action in question, including
any untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact, has
been made by, or relates to information supplied by, such
indemnifying party or indemnified parties, and the parties'
relative intent, knowledge, access to information and
opportunity to correct or prevent such action. The amount paid
or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be
deemed to include, subject to the limitations set forth in
Subparagraph 4(c) hereof, any legal or other fees or expenses
reasonably incurred by such party in connection with any
investigation or proceeding.
(ii) The parties agree that it would not be just and
equitable if contribution pursuant to this Subparagraph 4(d)
were determined by pro rata allocation or by any other method
of allocation which does not take account of the equitable
considerations referred to in the immediately preceding
paragraph.
5
6
(iii) If indemnification is available under this
Paragraph 4, the indemnifying parties shall indemnify each
indemnified party to the full extent provided in Subparagraphs
4(a) and 4(b) hereof without regard to the relative fault of
said indemnifying party or indemnified party or any other
equitable consideration provided for in this Paragraph 4(d).
6
