THIS WARRANT AND THE SHARES OF STOCK TO BE RECEIVED UPON ITS EXERCISE HAVE BEEN
ACQUIRED FOR INVESTMENT AND NEITHER HAVE BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 NOR QUALIFIED UNDER APPLICABLE STATE SECURITIES ACTS. THIS WARRANT
AND SUCH STOCK MAY NOT BE SOLD, TRANSFERRED, PLEDGED, OFFERED FOR SALE OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION AND QUALIFICATION UNDER
SUCH ACTS OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL THAT SUCH
REGISTRATION AND QUALIFICATION IS NOT REQUIRED.
Right to purchase ________ shares
of Common Stock (subject to
adjustment) of Pixsys, Inc.
PIXSYS, INC.
COMMON STOCK PURCHASE WARRANT
Pixsys, Inc., a Colorado corporation (the "Company"), hereby certifies
that, for value received, _____________________________________________, or
registered assigns, is entitled, subject to the terms set forth below, to
purchase at any time after the date hereof and on or before March 15, 2000,
__________ fully paid and nonassessable shares of common stock, no par value
(the "Common Stock"), of the Company at $1.00 per share (the "Exercise Price").
The Exercise Price and number of shares are subject to adjustment as
provided herein.
1. EXERCISE OF WARRANT.
(a) This Warrant may be exercised in full or in part by the
holder hereof by surrender of this Warrant, with the form of subscription at the
end hereof duly executed by such holder, to the Company, at its principal
office, accompanied by payment, in cash or by check payable to the order of the
Company, in the amount obtained by multiplying the number of shares so purchased
times the Exercise Price.
(b) In lieu of delivering the Exercise Price in cash or check
the holder may elect to receive shares equal to the value of the Warrant or
portion thereof being exercised ("Net Issue Exercise"). If the holder wishes to
elect the Net Issue Exercise, the holder shall notify the Company of its
election in writing at the time it delivers to the Company the subscription
form. In the event the holder shall elect Net Issue Exercise, the holder shall
receive the number of shares of Common Stock equal to the product of (i) the
number of shares of Common Stock purchasable under the Warrant, or portion
thereof being exercised, and (ii) the current market price per share, as defined
below, of one share of Common Stock minus the Exercise Price, divided by (iii)
the current market price per share, as defined below, of one share of Common
Stock. For the purpose of the above computation, the current market price per
share of Common Stock at any date shall be deemed to be the lower of (i) the
average of the daily closing prices for 30 consecutive business days before
such date or (ii) the closing price on the business day immediately preceding
date. The closing price for each day shall be the last sale price regular way
or, in case no such reported sale takes place on such day, the average of the
last reported bid and asked prices regular way, in either case on the principal
national securities exchange on which the Common Stock is admitted to trading or
listed, or if not listed or admitted to trading on such exchange, the average of
the highest reported bid and lowest reported asked prices as reported by NASDAQ,
or other similar organization if NASDAQ is no longer reporting such information,
or if not so available, the fair market price as determined by the Board of
Directors.
(c) If this Warrant is exercised for less than all the shares of
the Common Stock covered hereby, the holder shall be entitled to receive a new
Warrant covering the number of shares for which this Warrant shall not have been
exercised. This Warrant will expire at 5:00 p.m., Boulder, Colorado Time on
March 15, 2000, at which time all rights evidenced by this Warrant shall cease
and this Warrant shall become null and void.
2. DELIVERY OF STOCK CERTIFICATES, ETC., ON EXERCISE. As soon as
practicable after the exercise of this Warrant, the Company will cause to be
issued in the name of and delivered to the holder hereof, or as such holder may
direct (subject to the legend set forth on the face hereof), a certificate or
certificates for the number of fully paid and nonassessable shares of Common
Stock to which such holder shall be entitled upon such exercise. The Company
may place a legend on any certificate issued hereunder which it, in its sole
discretion, deems necessary to comply with any applicable law and the Company
may provide any conditions to exercise that it, in its sole discretion, deems
necessary to comply with any applicable law, including, a requirement that the
holder represent that the Common Stock is being purchased only for investment
and without any present intention to sell or distribute the same. All
documentary stamp taxes payable on account of such issue shall be paid for by
the Company.
3. RESERVATION OF COMMON STOCK. The Company will at all times keep
reserved out of the authorized and unissued shares of Common Stock a number of
shares sufficient to provide for the exercise of the Warrant.
4. ANTI-DILUTION PROVISIONS. The Exercise Price in effect at any
time and the number of securities purchasable upon the exercise of the Warrant
shall be subject to adjustment from time to time upon the happening of certain
events as follows:
(a) In case the Company shall (i) declare a dividend or make a
distribution on its outstanding shares of Common Stock in shares of Common
Stock, (ii) subdivide or reclassify its outstanding shares of Common Stock into
a greater number of shares, or (iii) combine or reclassify its outstanding
shares of Common Stock into a smaller number of shares, the Exercise Price in
effect at the time of the record date for such dividend or distribution or of
the effective date of such subdivision, combination or reclassification shall be
adjusted so that it shall equal the price determined by multiplying the Exercise
Price by a fraction, the denominator of which shall be the number of shares of
Common Stock outstanding after giving effect to such action, and the numerator
of which shall be the number of shares of Common Stock outstanding immediately
prior to such action. Such adjustment shall be made successively whenever any
event listed above shall occur.
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(b) In case the Company shall issue shares of its Common Stock
[excluding shares issued (i) in any of the transactions described in Subsection
(a) above or Subsection (c) below, (ii) upon exercise of options granted to the
Company's officers, employees, directors and consultants under a plan or plans
adopted by the Company's Board of Directors, if such shares would otherwise be
included in this Subsection (b), (iii) upon exercise of options and warrants
outstanding at March 15, 1995, and this Warrant (and any warrants with the same
terms as this Warrant) and (iv) to shareholders of any corporation which merges
into the Company in proportion to their stock holdings of such corporation
immediately prior to such merger, upon such merger, but only if as a result of
such merger no adjustment is required pursuant to any other specific subsection
of this Section 4 (without regard to Subsection (f) below) with respect to the
transaction giving rise to such rights] for a consideration per share (the
"Offering Price") less than the Exercise Price, the Exercise Price shall be
adjusted immediately thereafter so that it shall equal the price determined by
multiplying the Exercise Price in effect immediately prior to the date of
issuance by a fraction, the numerator of which shall be the sum of the number of
shares of Common Stock outstanding immediately prior to the issuance of such
additional shares and the number of shares of Common Stock which the aggregate
consideration received (determined as provided in Subsection (e) below) for the
issuance of such additional shares would purchase at the Exercise Price in
effect immediately prior to the date of such issuance, and the denominator of
which shall be the number of shares of Common Stock outstanding immediately
after the issuance of such additional shares. Such adjustment shall be made
successively whenever such an issuance is made.
(c) In case the Company shall issue any securities convertible
into or exchangeable for its Common Stock [excluding options and warrants which
are governed by Subsection (b) above] for a consideration per share of Common
Stock (the "Conversion Price") initially deliverable upon conversion or exchange
of such securities (determined as provided in Subsection (e) below) less than
the Exercise Price, the Exercise Price shall be adjusted immediately thereafter
so that it shall equal the price determined by multiplying the Exercise Price in
effect immediately prior to the date of issuance by a fraction, the numerator of
which shall be the sum of the number of shares of Common Stock outstanding
immediately prior to the issuance of such securities and the number of shares of
Common Stock which the aggregate consideration received (determined as provided
in Subsection (e) below) for such securities would purchase at the Exercise
Price in effect immediately prior to the date of such issuance, and the
denominator of which shall be the sum of the number of shares of Common Stock
outstanding immediately prior to the issuance of such securities and the maximum
number of shares of Common Stock of the Company deliverable upon conversion of
or in exchange for such securities at the initial conversion or exchange price
or rate. Such adjustment shall be made successively whenever such an issuance
is made.
(d) Whenever the Exercise Price payable upon exercise of the
Warrant is adjusted pursuant to Subsections (a), (b) and (c) above, the number
of Shares purchasable upon exercise of this Warrant shall simultaneously be
adjusted by multiplying the number of Shares initially issuable upon exercise of
this Warrant by the Exercise Price in
-3-
effect on the date hereof and dividing the product so obtained by the Exercise
Price, as adjusted.
(e) For purposes of any computation respecting consideration
received pursuant to Subsections (b) and (c) above, the following shall apply:
(1) In the case of the issuance of shares of Common Stock
for cash, the consideration shall be the amount of such cash, provided that in
no case shall any deduction be made for any commissions, discounts or other
expenses incurred by the Company for any underwriting of the issue or otherwise
in connection therewith;
(2) In the case of the issuance of shares of Common Stock
for a consideration in whole or in part other than cash, the consideration other
than cash shall be deemed to be the fair market value thereof as determined in
good faith by the Board of Directors of the Company (irrespective of the
accounting treatment thereof), whose determination shall be conclusive; and
(3) In the case of the issuance of securities convertible
into or exchangeable for shares of Common Stock, the aggregate consideration
received therefor shall be deemed to be the consideration received by the
Company for the issuance of such securities plus the additional minimum
consideration, if any, to be received by the Company upon the conversion or
exchange thereof (the consideration in each case to be determined in the same
manner as provided in clauses (1) and (2) of this Subsection (e)).
(f) No adjustment in the Exercise Price shall be required unless
such adjustment would require an increase or decrease of at least five cents
($0.05) in such price; provided, however, that any adjustments which by reason
of this Subsection (f) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment required to be made hereunder.
All calculations under this Section 4 shall be made to the nearest cent or to
the nearest share, as the case may be.
(g) The anti-dilution provisions set forth in Subsections 4(b)
and 4(c) above shall terminate (and such Subsections shall thereafter have no
force or effect) immediately prior to the closing of an underwritten public
offering of the Common Stock of the Company pursuant to a registration statement
filed under the Securities Act of 1933. All calculations of the number of
shares of Common Stock outstanding for purposes of this Section 4 shall assume
the conversion of all outstanding Series Preferred Stock, and any other
preferred stock of the Company, into Common Stock.
5. LIQUIDATION, MERGER, ETC. Upon the effective date of the
liquidation, dissolution or winding-up of the Company or of a merger or
consolidation of the Company with one or more corporations in which the Company
is not the surviving corporation, the Warrant and any right to purchase shares
thereunder shall terminate, but the holder shall have the right immediately
prior to such effective date to purchase the full (or any part thereof) number
of shares under the Warrant which the holder would otherwise have been entitled
to purchase during the remaining term of the Warrant.
6. NOTICE. The Company may not (i) declare any dividends (other
than stock dividends) or make any other distributions upon its Common Stock,
(ii) liquidate, dissolve or wind up, or (iii) merge or consolidate with or into
another corporation where it is not the surviving entity, without in each case
giving the holder hereof 20 days' written notice
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in advance of such event. All notices shall be in writing and shall be deemed
given when delivered personally or when deposited in the United States mail,
postage prepaid, addressed to the holder at such holder's address appearing on
the books of the Company.
7. TRANSFER OF WARRANTS, ETC. This Warrant is issued upon the
following terms, to all of which each holder or owner hereof by the taking
hereof consents and agrees:
(a) Transfer of this Warrant is subject to the legend set forth
on the face hereof;
(b) Subject to the foregoing, title to this Warrant may be
transferred on the books of the Company, which the Company will maintain for
such purpose at its principal office, by the registered holder hereof or by such
registered holder's attorney; and
(c) Until this Warrant is transferred on the books of the
Company, the Company may treat the registered holder hereof as the absolute
owner and holder hereof for all purposes, notwithstanding any notice to the
contrary.
This Warrant does not confer upon the holder hereof any right whatsoever as a
stockholder of the Company.
8. REGISTRATION RIGHTS. The holder hereof shall have the
registration rights provided in Section 1(c) of that certain Registration Rights
Agreement, dated as of July 8, 1994, between the Company and the holders of its
Series A Preferred Stock and such registration rights shall be subject to the
other applicable provisions therein, subject to the following: (i) the term
"Registrable Securities" for purposes herein shall mean any shares of the
Company's Common Stock issued or issuable upon exercise of the Warrant; and (ii)
the termination date for the registration rights set forth in subpart (i) of
Section 1(k) of the Registration Rights Agreement is changed from July 7, 1999
to March 15, 2000.
IN WITNESS WHEREOF, Pixsys, Inc. has caused this Warrant to be signed
by its President and attested by its Secretary.
Dated as of , 1995.
-----------------------------
PIXSYS, INC.
By:
-----------------------------------------
President
(Corporate Seal)
ATTEST:
- ----------------------------------
Secretary
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FORM OF SUBSCRIPTION
To: Pixsys, Inc.
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise the purchase right represented by such Warrant for, and to
purchase thereunder, __________ shares of Common Stock of Pixsys, Inc. and
herewith makes payment of $__________ therefor, and requests that the
certificates for such shares be issued in the name of, and delivered to,
___________________________________________, whose address is
_____________________________________________________________________________.
Dated: ____________________________________, ______.
-------------------------------------------------
(The signature must conform in all respects to the
name of holder as specified on the face of the
Warrant.)