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EXHIBIT 4.7
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR QUALIFIED UNDER ANY STATE SECURITIES LAW,
AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS THEY HAVE BEEN
REGISTERED UNDER SUCH LAWS OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
WARRANT TO PURCHASE COMMON STOCK
DATE: Effective as of October 20, 1998 200,000 Shares
ALPHA MICROSYSTEMS
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ALPHA MICROSYSTEMS, a California corporation (the "Company"),
grants to PRINCETON SECURITIES or permitted transferees or assigns (the
"Holder"), for good and valuable consideration the receipt and sufficiency are
hereby acknowledged, the right, subject to the terms of this Warrant, to
purchase, at any time and from time to time during the period commencing as of
the date of issue and ending at 5:00 p.m. New York City Time on August 7, 2003,
unless extended or terminated as provided herein (the "Expiration Date"), up to
Two Hundred Thousand (200,000) shares of the Company's Common Stock (the
"Shares") at $3.23 per share (the "Exercise Price").
SECTION 1
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DEFINITIONS
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As used in this Warrant, unless the context otherwise requires:
1.1 "Blue Sky Application" means an application or other document
filed pursuant to a Blue Sky Law to register, qualify or obtain an exemption for
any offer or sale by or for the account of the Holder of all or part of this
Warrant or any of the Shares.
1.2 "Blue Sky Law" means the laws and regulations of any state or
other jurisdiction applicable to any sale by or for the account of the Holder of
all or part of this Warrant or any of the Shares.
1.3 "Common Stock" means the Common Stock of the Company existing
on the Grant Date.
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1.4 "Exercise Date" means the date on which this Warrant is
exercised, in whole or in part, in the manner indicated in Sections 2.1 and 2.2.
1.5 "Exercise Price" means $3.23, the price at which each share
of Common Stock may be purchased upon exercise of this Warrant.
1.6 "Expiration Date" means the Expiration Date indicated on the
first page of this Warrant.
1.7 "Grant Date" means September 1, 1998, the date this Warrant
was first granted.
1.8 "Purchase Agreement" means the Securities Purchase Agreement
dated as of August 7, 1998, by and between the Company and ING Equity Partners
II, L.P.
1.9 "Prospectus" means a preliminary prospectus or final
prospectus (including any supplement) or any offering circular or similar
offering document, included in a Registration Statement.
1.10 "Registrable Securities" means Shares of Common Stock issued
upon the exercise of the Warrant.
1.11 "Registration Statement" means a Registration or Offering
Statement, a pre-effective or post-effective amendment to a Registration
Statement or other document proposed for filing or filed by the Company under
the Securities Act which is or would be available under applicable laws, rules
and regulations to register for a public offering or sale any shares of Common
Stock. The term "Registration Statement" shall not apply to any registration
statement relating to the sale of securities to participants in a Company stock
or option plan or a registration on any form which does not include
substantially the same information as would be required to be included in a
registration statement covering the sale of Registrable Securities (as defined
in Section 1.10 above).
1.12 "Securities Act" means the Securities Act of 1933, as
amended from time to time, and all rules and regulations promulgated thereunder,
or any act, rules or regulations which replace the Securities Act or any such
rules and regulations.
1.13 "Warrant" means this Warrant.
SECTION 2
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DURATION AND EXERCISE OF WARRANT
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2.1 Exercise Period. The Warrants may be exercised at any time
after the Grant Date and on or before the Expiration Date. After the Expiration
Date this Warrant shall become void, and all rights to purchase Shares hereunder
shall thereupon cease.
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2.2 Method of Exercise. This Warrant may be exercised by the
Holder, in whole or in part, by (i) surrendering this Warrant to the Company,
and (ii) tendering to the Company payment of the Exercise Price for the Shares
for which exercise is made. Upon proper exercise, the Holder shall be deemed to
be the holder of record of the Shares for which exercise is made, even though
the transfer or register books of the Company may then be closed or certificates
representing such Shares may not then be actually delivered to the Holder.
2.3 Certificates. Within a reasonable time but no more than five
(5) business days after exercise, certificates for the shares of Common Stock
comprising such Shares shall be delivered to the Holder.
SECTION 3
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VALIDITY SHARES
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The Company covenants that all shares of Common Stock issued upon
exercise of this Warrant will be validly issued, fully paid, nonassessable and
free of pre-emptive rights.
SECTION 4
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FRACTIONAL SHARES
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No fractional Shares shall be issued upon the exercise of this
Warrant. With respect to any fraction of a Share otherwise issuable upon any
such exercise, the Company shall pay to the Holder an amount in cash equal to
such fraction multiplied by the Exercise Price.
SECTION 5
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LIMITED RIGHTS OF THE WARRANT HOLDER
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The Holder shall not, solely by virtue of being the Holder of
this Warrant, have any of the rights of a holder of Common Stock of the Company,
either at law or equity, until such Warrant shall have been exercised and the
Holder shall be deemed to be the holder of record of Shares as provided in this
Warrant.
SECTION 6
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EXCHANGE, TRANSFER OR LOSS OF WARRANT
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6.1 Exchange. This Warrant is exchangeable, without expense to
the Holder and upon surrender hereof to the Company, for Warrants of different
denominations entitling the Holder to purchase Shares equal in total number and
identical in type to the Shares covered by this Warrant.
6.2 Transfer. Subject to the provisions of Section 7, upon
surrender of this Warrant to the Company with assignment duly executed and the
tender of funds sufficient to pay
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any transfer tax, the Company shall, without charge, execute and deliver a new
Warrant to the assignee named in such Assignment Form, and this Warrant shall be
canceled concurrent with such issuance.
6.3 Loss, Theft, Destruction or Mutilation. Upon receipt by the
Company of satisfactory evidence of the loss, theft, destruction or mutilation
of this Warrant and either (in the case of loss, theft or destruction)
reasonable indemnification or (in the case of mutilation) the surrender of this
Warrant for cancellation, the Company will execute and deliver to the Holder,
without charge, a new Warrant of like denomination.
SECTION 7
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SECURITIES LAW COMPLIANCE
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Except pursuant to the requirements of Rule 144 of the Securities
Act, neither this Warrant nor the Shares issuable under this Warrant may be
sold, transferred, assigned or otherwise disposed except as follows:
(a) to a person who, in the opinion of counsel reasonably
satisfactory to the Company, is a person to whom this Warrants or the Shares may
legally be transferred without registration and without the delivery of a
current prospectus or offering circular with respect thereto; or
(b) to any person upon delivery of a prospectus or
offering circular then meeting the requirements of the Securities Act relating
to such securities (as to which a registration statement or notification under
the Securities Act shall then be in effect) and the offering thereof for such
sale or disposition.
SECTION 8
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REGISTRATION OF THE SHARES
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8.1 Registration Rights.
(a) Piggy-back Registration. The Company shall advise each
Holder of Registrable Securities by written notice at least five days prior to
the filing of any Registration Statement pertaining to securities to be offered
to the public solely for cash, and will, upon the request of any such Holders,
and without any charge to them, include in any such Registration Statement such
information as may be required to permit a public offering of their Registrable
Securities. If any such Registration Statement or notification is being filed by
the Company in connection with an underwritten public offering of securities of
the Company, the Company shall have the right to require such Holders (provided
that Rule 415 applies to the sale of the Registrable Securities) to postpone the
offering of their securities for a period of ninety (90) days following the
effective date of such Registration Statement or notification. If any such
Registration Statement or notification is being filed by the Company solely for
the benefit of selling security holders, the Company will permit such Holders of
the Registrable Securities to
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include for sale with such shareholders in such Registration Statement or
notification at least a pro rata portion (based upon the ratio of the number of
shares of Common Stock which such selling security holders desire to sell to the
number of Registrable Securities which such Holders of the Registrable
Securities desire to sell) of the total Registrable Securities being registered,
and the offering of the balance of the Registrable Securities owned by holders
of the Registrable Securities may then be postponed by the Company for a period
of ninety (90) days following effectiveness of the Registration Statement or
notification.
(b) General Provisions. The following provisions shall
also be applicable to any such Registration:
(i) The Holders whose Registrable Securities are
to be included therein (each a "Seller and collectively the "Sellers") shall
furnish the Company with such appropriate information (relating to the
intentions of such Holders) in connection therewith as the Company shall
reasonably request in writing. Following the effective date of such Registration
Statement or notification, the Company shall, upon the request of the Seller,
forthwith supply such number of Prospectuses or offering circulars meeting the
requirements of the Securities Act as shall be reasonably requested by such
Seller to permit such Seller to make a public offering of all such securities of
such Seller included therein. The Company shall, at the expense of the Holders,
file such Blue Sky Applications and use its best efforts to qualify such
securities included therein for sale in such states as the Sellers shall
reasonably designate.
(ii) Excepting as specifically set forth herein,
the Company shall bear the cost and expense directly relating to any
registration securities pursuant to this Section 8.1. The Company shall not be
required to pay any selling commissions, but shall pay all applicable listing
fees.
(iii) The Company shall indemnify and hold
harmless each Seller who may purchase from or sell for any Seller any
Registrable Securities from and against any and all losses, claims, damages and
liabilities caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any Prospectus included
therein, required to be filed or furnished by reason of this Section 8.1, or
caused by any omission or alleged omissions to state therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or alleged untrue statement
or omission or alleged omission which was based upon information furnished or
required to be furnished in writing to the Company by and about such Seller
expressly for use therein, which indemnification shall include each person, if
any, who controls any such Seller within the meaning of the Securities Act;
provided, however, that the Company shall not be obliged so to indemnify any
such Seller or controlling persons unless such Seller shall at the same time
indemnify the Company, its directors, each officer signing a Registration
Statement or notification and each person, if any who controls the Company
within the meaning of the Securities Act from and against any and all losses,
claims, damages and liabilities caused by any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement or
notification or any Prospectus or offering circular required to be filed or
furnished
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by reason of this Section 8.1, or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statement therein, in light of the circumstances under which they were made,
not misleading, insofar as such losses, claims, damages or liabilities are
caused by any untrue statement or alleged untrue statement or omission or
alleged omission which was based upon information furnished in writing to the
Company by and about such Seller expressly for use therein.
(iv) Notwithstanding anything herein, the Company
shall not be required to keep the Registration Statement or notification
effective, or to prepare and file any amendments or supplements, later than nine
months after the date on which the Registration Statement or notification
becomes effective under the Securities Act.
(v) The Company shall, in case of a registration
or notification, furnish to the Holders of the Registrable Securities for whom
such Registrable Securities are registered or are to be registered or are filed
for notification, at the time such Registration Statement becomes effective, an
opinion of counsel, dated such date, for the Company reasonably acceptable to
the Holders to the effect that a Registration Statement or notification covering
the Registrable Securities has been filed with the commission under the
Securities Act and has become effective, that a prospectus or offering circular
complying in form with the requirements of the Securities Act is available for
delivery, that to the best of such counsel's knowledge, no stop order has been
issued by the Commission suspending the effectiveness of the Registration
Statement or suspending the availability of the offering exemption and that, to
the best of the counsel's knowledge, no proceedings for the issuance of a stop
order are threatened or contemplated, and that the Registrable Securities have
been registered or qualified under the securities or Blue Sky Laws of each state
in which the Company is required, pursuant to subsection (b)(i) of this Section
8.1 to register or qualify the Registrable Securities.
(vi) It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Section 8.1 with
respect to the Registrable Securities of any selling Holder that such Holder
shall furnish to the Company such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such securities
as shall be reasonably required to effect the Registration of such Holder's
Registrable Securities.
8.2 Exchange Listing. In connection with the issuance of any
Shares upon the exercise of this Warrant, the Company shall secure the listing
of the underlying shares of Common Stock upon any securities exchange upon which
shares of the Company's Common Stock are listed.
8.3 No Obligations to Sell. Neither the giving of any notice nor
the making of any request hereunder shall impose any obligation on the selling
Holder to sell any Registrable Securities.
8.4 Registration Rights Survive Exercise. The Company's
obligations under this Section 8 shall continue in effect, regardless of the
exercise or surrender of this Warrant. The Company's obligations under this
Section 8 shall expire, however, with respect to a Warrant
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or Shares which have been sold by a broker or dealer or in a public offering
registered under the Securities Act or a public offering exempt from such
registration.
SECTION 9
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MISCELLANEOUS
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9.1 Successors and Assigns. All the covenants and provisions of
this Warrant which are by or for the benefit of the Company or the Holder shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
9.2 Notice. Notice or demand pursuant to this Warrant to be given
or made by the Holder to or on the Company shall be sufficiently given or made
if sent by registered mail, postage prepaid, receipt requested, addressed, until
another address is designated in writing by the Company, as follows:
Alpha Microsystems
2722 South Fairview Street
Santa Ana, California 92704
Any notice or demand authorized by this Warrant to be given or made by the
Company to or on the Holder shall be given to the Holder by registered mail,
postage prepaid, receipt requested, addressed at his last known address as it
shall appear on the books of the Company, until another address is designated in
writing by like mail.
9.3 Applicable Law. The validity, interpretation and performance
of this Warrant shall be governed by the laws of the State of California.
9.4 Headings. The Article headings herein are for convenience
only and are not part of this Warrant and shall not affect the interpretation
thereof.
9.5 Vesting of Warrant. The Company acknowledges that it agreed
to grant to the Holder the right, pursuant to the terms of this Warrant, to
purchase upon the closing of the first and second tranches of the investment as
contemplated by that certain Securities Purchase Agreement dated as of August 7,
1998, (the "Purchase Agreement") by and between ALPHA MICROSYSTEMS, a California
corporation (the "Company"), and ING Equity Partners II, L.P. 50,000 and 150,000
shares, respectively, of the Company's Common Stock. As of this date, both the
first tranche and the second tranche of investment pursuant to the Purchase
Agreement have been completed, and accordingly, this Warrant reflects the
Company's agreement to grant to the Holder and the Holder's right to purchase
200,000 shares in the aggregate.
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Dated as of October 20, 1998 ALPHA MICROSYSTEMS
By: _____________________________
Douglas J. Tullio, President
ATTEST:
_______________________________
Secretary
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EXERCISE FORM
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(To be Executed by the Warrant Holder if It, He, or She
Desires to Exercise the Warrant in Whole or in Part)
To: Alpha Microsystems
The undersigned (______________________________________________________________)
Please insert name and Social Security or number
E.I.N. of Holder
hereby irrevocably elects to exercise the rights of purchase represented by the
within Warrant for, and to purchase thereunder, ___________ Shares provided for
therein and tenders payment herewith to the order of Alpha Microsystems 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 shall 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.
Address:________________________________________________________________________
Dated:________________,19_____
Signature:___________________________________
Note: Signature must correspond with the name
as written upon the face of this Warrant in
every particular, without alteration or
enlargement or any change whatsoever.
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FORM OF ASSIGNMENT
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(To be Signed Only Upon Assignment)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
_______________ the right to purchase _______ Shares evidenced by the within
Warrant, and appoints ____________________ to transfer the same on the books of
Alpha Microsystems with the full power of substitution in the premises.
Dated:________________,19_____
Signature:___________________________________
Note: Signature must correspond with the name
as written upon the face of this Warrant in
every particular, without alteration or
enlargement or any change whatsoever, and the
signature must be guaranteed in the usual
manner.
Signature Guaranteed:
_________________________________________
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