Exhibit 10.5
------------
BRIDGE LOAN WARRANT
THIS SECURITY AND ANY SHARES ISSUED UPON EXERCISE OF THIS SECURITY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS THE APPLICABLE SECURITY HAS BEEN REGISTERED UNDER THE ACT AND
SUCH LAWS OR (1) REGISTRATION UNDER SUCH LAWS IS NOT REQUIRED AND (2) AN OPINION
OF COUNSEL SATISFACTORY TO THE COMPANY IS FURNISHED TO THE COMPANY TO THE EFFECT
THAT REGISTRATION UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS IS NOT
REQUIRED.
AMERIGON INCORPORATED
WARRANT TO PURCHASE COMMON STOCK
This Warrant (this "Warrant") represents and certifies that, for value
received, Big Beaver Investments LLC, a Delaware limited liability company (the
"Holder"), is entitled to subscribe for and purchase shares (subject to
adjustment from time to time pursuant to the provisions of Section 5 hereof) of
fully paid and nonassessable Common Stock of Amerigon Incorporated, a California
corporation (the "Company"), of an amount equal to eighteen percent (18%) of the
principal amount of the Loan (as defined below) divided by the relevant Exercise
Price specified in Section 2 hereof, as such Exercise Price may be adjusted from
time to time pursuant to Section 5 hereof, at a purchase price per share equal
to such Exercise Price, subject to the provisions and upon the terms and
conditions hereinafter set forth.
As used herein, the term "Loan" shall mean the One Million Five
Hundred Thousand Dollars ($1,500,000) bridge facility to be advanced pursuant to
the terms and conditions of the Credit Agreement dated as of September 20, 2001
(as amended, modified, renewed or extended from time to time, the "Credit
Agreement") between the Company and the Holder. The date (if any) on which the
Holder makes the first advance of proceeds under the Loan is referred to herein
as the "Closing Date."
As used herein, the term "Common Stock" shall mean the Company's
presently authorized Common Stock, no par value, and any securities or other
property into or for which such Common Stock may hereafter be converted or
exchanged.
As used herein, the term "Market Price of the Common Stock" shall mean
(i) the average closing bid price of the Common Stock, for ten (10) consecutive
business days ending on the Closing Date, as reported by Nasdaq, if the Common
Stock is traded on the Nasdaq SmallCap Market, or (ii) the average last reported
sale price of the Common Stock, for ten (10) consecutive business days ending on
the Closing Date, as reported by the primary exchange on which the Common Stock
is traded, if the Common Stock is traded on a national securities exchange, or
by Nasdaq, if the Common Stock is traded on the Nasdaq National Market;
provided, however, that such price shall not be greater than the average closing
bid price or the
last reported sale price, as the case may be, for the ninety (90) calendar days
ending on the Closing Date.
1. TERM OF WARRANT.
The purchase right represented by this Warrant is exercisable, in
whole or in part, at any time during a period beginning on the date hereof and
ending five (5) years after such date (the "Warrant Term").
2. EXERCISE PRICE.
The "Exercise Price" shall be the Market Price of the Common Stock,
provided that the Exercise Price shall be subject to adjustment from time to
time pursuant to the provisions of Section 5 hereof.
3. METHOD OF EXERCISE OR CONVERSION; PAYMENT; ISSUANCE OF NEW WARRANT.
a. EXERCISE. Subject to Section 1 hereof, the purchase right
represented by this Warrant may be exercised by the Holder, in whole or in part,
by the surrender of this Warrant (with the notice of exercise form attached
hereto as Exhibit 1 duly executed) at the principal office of the Company and by
---------
the payment to the Company, by cashier's check or wire transfer, of an amount
equal to the then applicable Exercise Price per share multiplied by the number
of shares then being purchased. The Company agrees that the shares so purchased
shall be deemed to be issued to the Holder as the record owner of such shares as
of the close of business on the date on which this Warrant shall have been
surrendered and payment made for such shares as aforesaid. In the event of any
exercise of this Warrant, a certificate or certificates for the shares of stock
so purchased shall be delivered to the Holder within fifteen (15) business days
thereafter and, unless this Warrant has been fully exercised or expired, a new
Warrant representing the portion of the shares, if any, with respect to which
this Warrant shall not then have been exercised, shall also be issued to the
Holder within such fifteen (15) business day period.
b. CONVERSION. Subject to Section 1 hereof, the Holder may convert
this Warrant (the "Conversion Right"), in whole or in part, into the number of
shares (less the number of shares which have been previously exercised or as to
which the Conversion Right has been previously exercised) calculated pursuant to
the following formula by surrendering this Warrant (with the notice of exercise
form attached hereto as Exhibit 1 duly executed) at the principal office of the
---------
Company specifying the number of shares the rights to purchase which the Holder
desires to convert:
2
X = Y
---
B
where: X = the number of shares of Common Stock to be issued to
the Holder;
Y = 18% of the principal amount of the Loan (i.e.,
270,000); and
B = the Exercise Price, as such price may be adjusted from
time to time pursuant to Section 5 hereof.
The Company agrees that the shares so converted shall be deemed issued
to the Holder as the record owner of such shares as of the close of
business on the date on which this Warrant shall have been surrendered
as aforesaid. In the event of any conversion of this Warrant, a
certificate or certificates for the shares of stock so converted shall
be delivered to the holder hereof within fifteen (15) business days
thereafter and, unless this Warrant has been fully converted or
expired, a new Warrant representing the portion of the shares, if any,
with respect to which this Warrant shall not then have been converted,
shall also be issued to the holder hereof within such fifteen (15)-day
period.
4. STOCK FULLY PAID; RESERVATION OF SHARES.
All Common Stock which may be issued upon the exercise of the rights
represented by this Warrant will, upon issuance, be fully paid and
nonassessable, and free from all liens, charges and United States taxes with
respect to the issue thereof. During the period within which the rights
represented by this Warrant may be exercised, the Company will at all times have
authorized, and reserved for the purpose of the issuance upon exercise of the
purchase rights evidenced by this Warrant, a sufficient number of shares of its
Common Stock to provide for the exercise of the rights represented by this
Warrant.
5. ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES.
a. ADDITIONAL SHARES. In the event that the Company, during the
Warrant Term, issues additional shares of Common Stock, or other securities
exchangeable for, exercisable for, or convertible into additional shares of
Common Stock, in each case in an equity offering in excess of One Million Five
Hundred Thousand Dollars ($1,500,000), for consideration per share less than the
Exercise Price, then and in such event, the per share Exercise Price shall be
reduced concurrently with such issuance or sale to a price equal to the
consideration per share of such issuance; provided that such Exercise Price
shall not be so reduced at such time if the amount of such reduction would be an
amount less than $0.01, but any such amount shall be carried forward and
reduction with respect thereto made at the time of and together with any
subsequent reduction which, together with such amount and any other amount or
amounts so carried forward, shall aggregate $0.01 or more. No adjustment in the
Exercise Price shall be made on account of (i) the grant of options exercisable
for, or sales of,
3
Common Stock pursuant to employee benefit plans previously approved by the
Company's shareholders, (ii) the issuance of stock, warrants or other securities
or rights to persons or entities with which the Company has business
relationships provided such issuances are for other than primarily equity
financing purposes and provided that (x) any such issuance does not exceed two
percent (2%) of the then outstanding Common Stock of the Company (assuming full
conversion and exercise of all convertible and exercisable securities) and (y)
the aggregate of all such issuances since the date of this Warrant do not exceed
five percent (5%) of the then outstanding Common Stock of the Company (assuming
full conversion and exercise of all convertible and exercisable securities).
b. STOCK SPLITS AND COMBINATIONS. If the Company at any time or from
time to time after the date this Warrant is issued effects a subdivision of the
outstanding Common Stock pursuant to a stock split or similar event, the
Exercise Price shall be proportionately decreased, and conversely, if the
Company at any time or from time to time after the date this Warrant is issued
combines the outstanding shares of Common Stock into a smaller number of shares
in a reverse stock split or similar event, the Exercise Price shall be
proportionately increased. Upon the adjustment of the Exercise Price pursuant to
the foregoing provisions, the number of shares of Common Stock subject to the
exercise of the Warrant shall be adjusted to the nearest full share by
multiplying the shares subject to the Warrant by a fraction, the numerator of
which is the Exercise Price immediately prior to such adjustment and the
denominator of which is the Exercise Price immediately after such adjustment.
Any adjustment under this subsection (b) shall be effective at the close of
business on the date the subdivision or combination becomes effective.
c. CERTAIN DIVIDENDS AND DISTRIBUTIONS. If the Company at any time
or from time to time after the date this Warrant is issued makes or fixes a
record date for the determination of holders of Common Stock entitled to receive
a dividend or other distribution payable in additional shares of Common Stock,
then and in each such event the number of shares of Common Stock subject to this
Warrant shall be increased and the Exercise Price then in effect shall be
decreased as of the date of such issuance or, in the event such record date is
fixed, as of the close of business on such record date, by:
(i) multiplying the Exercise Price then in effect by a
fraction (A) the numerator of which is the total number of shares of Common
Stock issued and outstanding immediately prior to the time of such issuance
or the close of business on such record date, and (B) the denominator of
which shall be the total number of shares of Common Stock issued and
outstanding immediately prior to the time of such issuance or the close of
business on such record date plus the number of shares of Common Stock
issuable in payment of such dividend or distribution; and
(ii) multiplying the number of shares of Common Stock subject
to the Warrant by a fraction (A) the numerator of which is the total number
of shares of Common Stock issued and outstanding immediately prior to the
time of such issuance or the close of business on such record date plus the
number of shares of Common Stock issuable in payment of such dividend or
distribution, and (B) the denominator of which shall be the total number of
shares of Common Stock issued and outstanding immediately prior to the time
of such issuance or the close of business on such record date.
4
If, however, such record date is fixed and such dividend is not fully
paid or if such distribution is not fully made on the date fixed therefor, the
number of shares of Common Stock subject to the Warrant and the Exercise Price
thereof shall be recomputed accordingly as of the close of business on such
record date and thereafter shall be adjusted pursuant to this subsection (c) as
of the time of actual payment of such dividends or distributions.
d. OTHER ADJUSTMENTS. In the event the Company at any time or from
time to time after the date this Warrant is issued:
(i) makes a dividend or other distribution payable in
securities of the Company other than shares of Common Stock, or
(ii) changes any Common Stock into the same or a different
number of shares of any class or classes of stock, whether by
recapitalization, reclassification or otherwise (other than a subdivision
or combination of shares or stock dividend or a reorganization, merger,
consolidation or sale of assets provided for elsewhere in this Section 5),
or
(iii) effects a capital reorganization of the Common Stock (other
than a recapitalization, subdivision, combination, reclassification or
exchange of shares provided for elsewhere in this Section 5) or merger or
consolidation of the Company with or into another corporation or entity, or
the sale of all or substantially all of the Company's properties and assets
to any other person,
then, in each such event, any and all new, substituted or additional
securities to which the Holder is or would be entitled by reason of its
ownership of the shares underlying this Warrant shall be immediately subject to
this Warrant and be included in the shares underlying this Warrant for all
purposes hereunder. After each such event, the Exercise Price per share shall
be proportionately adjusted so that the aggregate Exercise Price upon exercise
of this Warrant shall remain the same as before such event.
6. NOTICE OF ADJUSTMENTS.
Whenever any Exercise Price shall be adjusted pursuant to Section 5
hereof, the Company shall prepare a certificate signed by its chief financial
officer setting forth, in reasonable detail, the event requiring the adjustment,
the amount of the adjustment, the method by which such adjustment was
calculated, the Exercise Price after giving effect to such adjustment and the
number of shares then purchasable upon exercise of this Warrant, and shall cause
copies of such certificate to be mailed (by first class mail, postage prepaid)
to the Holder of this Warrant at the address specified in Section 9(c) hereof,
or at such other address as may be provided to the Company in writing by the
Holder of this Warrant.
7. FRACTIONAL SHARES.
No fractional shares of Common Stock will be issued in conjunction
with any exercise hereunder, but in lieu of such fractional shares the Company
shall make a cash payment therefore on the basis of the Exercise Price then in
effect.
5
8. COMPLIANCE WITH SECURITIES ACT.
The Holder of this Warrant, by acceptance hereof, agrees that this
Warrant and the shares of Common Stock to be issued on exercise hereof are being
acquired for investment and that it will not offer, sell or otherwise dispose of
this Warrant or any shares of Common Stock to be issued upon exercise hereof
except under circumstances which will not result in a violation of the
Securities Act of 1933, as amended (the "Act"). This Warrant and all shares of
Common Stock issued upon exercise of this Warrant (unless registered under the
Act) shall be stamped and imprinted with a legend substantially in the following
form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"), OR APPLICABLE STATE SECURITIES LAWS AND
MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS IT HAS BEEN
REGISTERED UNDER THE ACT AND SUCH LAWS OR (1) REGISTRATION UNDER SUCH LAWS
IS NOT REQUIRED AND (2) AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
IS FURNISHED TO THE COMPANY TO THE EFFECT THAT REGISTRATION UNDER THE ACT
AND THE APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED."
9. MISCELLANEOUS.
a. NO RIGHTS AS SHAREHOLDER. The Holder of this Warrant shall not be
entitled to vote or receive dividends or be deemed the Holder of Common Stock or
any other securities of the Company that may at any time be issuable on the
exercise hereof for any purpose, nor shall anything contained herein be
construed to confer upon the Holder of this Warrant, as such, any of the rights
of a shareholder of the Company or any right to vote for the election of
directors or upon any matter submitted to shareholders at any meeting thereof,
or to give or withhold consent to any corporate action (whether upon any
recapitalization, issuance of stock, reclassification of stock, change of par
value or change of stock to no par value, consolidation, merger, conveyance or
otherwise) or to receive notice of meetings, or to receive dividends or
subscription rights or otherwise, until the Warrant shall have been exercised
and the shares purchasable upon the exercise hereof shall have become
deliverable, as provided herein.
b. REPLACEMENT. On receipt of evidence reasonably satisfactory to
the Company of the loss, theft, destruction, or mutilation of this Warrant and,
in the case of mutilation, on surrender and cancellation of this Warrant, the
Company, at the Holder's expense, will execute and deliver, in lieu of this
Warrant, a new Warrant of like tenor.
c. NOTICE. Any notice given to either party under this Warrant shall
be in writing, and any notice hereunder shall be deemed to have been given upon
the earlier of delivery thereof by hand delivery, by courier, or by standard
form of telecommunication or three (3) business days after the mailing thereof
in the U.S. mail if sent registered mail with postage prepaid, addressed to the
Company at its principal executive offices and to the Holder at its address set
forth in the Company's books and records or at such other address as the Holder
may have provided to the Company in writing.
6
d. GOVERNING LAW. This Warrant shall be governed and construed under
the laws of the State of California.
This Warrant is executed as of this 20th day of September, 2001.
AMERIGON INCORPORATED, a California
corporation
By: /s/ Richard A. Weisbart
----------------------------------
Richard A. Weisbart,
President & CEO
7
EXHIBIT 1
---------
NOTICE OF EXERCISE
------------------
TO: AMERIGON INCORPORATED
1. Check Box that Applies:
[_] The undersigned hereby elects to purchase __________ shares of
Common Stock of AMERIGON INCORPORATED pursuant to the terms of
the attached Warrant, and tenders herewith payment of the
purchase price of such shares in full.
[_] The undersigned hereby elects to convert the attached warrant
into ________ shares of Common Stock of AMERIGON INCORPORATED
pursuant to the terms of the attached Warrant.
2. Please issue a certificate or certificates representing said shares of
Common Stock in the name of the undersigned or in such other name as is
specified below:
__________________________________
(Name)
__________________________________
__________________________________
(Address)
3. The undersigned represents that the aforesaid shares of Common Stock
are being acquired for the account of the undersigned for investment and not
with a view to, or for resale in connection with, the distribution thereof and
that the undersigned has no present intention of distributing or reselling such
shares.
______________________________
Signature
8