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EXHIBIT 4.3
NEITHER THIS WARRANT NOR THE SECURITIES INTO WHICH THIS WARRANT IS EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS THEREUNDER AND IN COMPLIANCE WITH
APPLICABLE STATE SECURITIES OR BLUE SKY LAWS.
ILLINOIS SUPERCONDUCTOR CORPORATION
WARRANT
Warrant No. WCN-00_ Dated May 15, 1998
Illinois Superconductor Corporation, a Delaware corporation (the
"Company"), hereby certifies that, for value received,
__________________________, or its registered assigns (the "Holder"), is
entitled, subject to the terms set forth below, to purchase from the Company up
to a total of _______ shares of Common Stock, $.001 par value per share (the
"Common Stock"), of the Company (each such share, a "Warrant Share" and all such
shares, the "Warrant Shares") at an exercise price equal to $3.75 per share (as
adjusted from time to time as provided in Section 8, the "Exercise Price"), at
any time and from time to time, subject to Section 3(e), on or after the 90th
day following the date hereof and through and including May 15, 2001 (the
"Expiration Date"), and subject to the following terms and conditions:
1. Registration of Warrant. The Company shall register this
Warrant, upon records to be maintained by the Company for that purpose (the
"Warrant Register"), in the name of the record Holder hereof from time to time.
The Company may deem and treat the registered Holder of this Warrant as the
absolute owner hereof for the purpose of any exercise hereof or any distribution
to the Holder, and for all other purposes, and the Company shall not be affected
by notice to the contrary.
2. Registration of Transfers and Exchanges.
(a) The Company shall register the transfer of any portion
of this Warrant in the Warrant Register, upon surrender of this Warrant, with
the Form of Assignment attached hereto duly completed and signed and a written
opinion of Holder's counsel that such transfer is exempt from registration under
the Securities Act, to the Company at the office specified in or pursuant to
Section 3(b), provided, however that the Holder shall not make any transfers to
any transferee pursuant to this Section for the right to acquire less than 1,000
Warrant Shares. Upon any such registration or transfer, a new warrant to
purchase Common Stock, in substantially the form of this Warrant (any such new
warrant, a "New Warrant"),
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evidencing the portion of this Warrant so transferred shall be issued to the
transferee and a New Warrant evidencing the remaining portion of this Warrant
not so transferred, if any, shall be issued to the transferring Holder. The
acceptance of the New Warrant by the transferee thereof shall be deemed the
acceptance of such transferee of all of the rights and obligations of a holder
of a Warrant. If this Warrant is duly assigned in accordance with the terms
hereof, then the Company agrees, upon the request of the assignee, to amend or
supplement promptly any effective registration statement covering the Warrant
Shares so that the direct assignee of the original Holder is added as a selling
stockholder thereunder.
(b) This Warrant is exchangeable, upon the surrender hereof
by the Holder to the office of the Company specified in or pursuant to Section
3(b) for one or more New Warrants in the name of such Holder, evidencing in the
aggregate the right to purchase the number of Warrant Shares which may then be
purchased hereunder. Any such New Warrant will be dated the date of such
exchange.
3. Duration and Exercise of Warrants.
(a) This Warrant shall be exercisable by the registered
Holder on any business day before 5:30 P.M., New York time, at any time and from
time to time on or after the 90th day following the date hereof to and including
the Expiration Date. At 5:30 P.M., New York time on the Expiration Date, the
portion of this Warrant not exercised prior thereto shall be and become void and
of no value.
(b) Upon surrender of this Warrant, with the Form of
Election to Purchase attached hereto duly completed and signed, to the Company
at its office at 451 Kingston Court, Mt. Prospect, Illinois 60056, Attention:
Chief Financial Officer, or at such other address as the Company may specify in
writing to the then registered Holder, and upon payment of the Exercise Price
multiplied by the number of Warrant Shares that the Holder intends to purchase
hereunder, in lawful money of the United States of America, in cash or by
certified or official bank check or checks or wire transfer of immediately
available funds, all as specified by the Holder in the Form of Election to
Purchase, the Company shall promptly (but in no event later than three (3)
trading days after the Date of Exercise (as defined herein)) issue or cause to
be issued and cause to be delivered to or upon the written order of the Holder
and in such name or names as the Holder may designate, a certificate for the
Warrant Shares issuable upon such exercise, free of restrictive legends other
than as required by the Securities Purchase Agreement, dated as of May 15, 1998,
between the Company and the Purchasers listed therein, including the initial
Holder of this Warrant (the "Purchase Agreement"). Any person so designated by
the Holder to receive Warrant Shares shall be deemed to have become holder of
record of such Warrant Shares as of the Date of Exercise of this Warrant.
A "Date of Exercise" means the date on which the Company
shall have received (i) this Warrant (or any New Warrant, as applicable), with
the Form of Election to Purchase attached hereto (or attached to such New
Warrant) appropriately completed and duly
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signed, and (ii) payment of the Exercise Price for the number of Warrant Shares
so indicated by the Holder hereof to be purchased.
(c) This Warrant shall be exercisable, either in its
entirety or, from time to time, for a portion of the number of Warrant Shares so
long as at least 1,000 Warrant Shares are purchased in any one exercise, unless
such exercise would result in the Holder holding less than 1,000 Warrant Shares.
If less than all of the Warrant Shares which may be purchased under this Warrant
are exercised at any time, the Company shall issue or cause to be issued to the
Holder, at its expense, a New Warrant evidencing the right to purchase the
remaining number of Warrant Shares for which no exercise has been evidenced by
this Warrant.
(d) If and while the Warrant Shares issuable upon the
exercise of this Warrant are not registered for public resale pursuant to an
effective registration statement with a current available prospectus, then upon
exercise of this Warrant the aggregate Exercise Price may be paid by the Holder
notifying the Company that it should subtract from the number of Warrant Shares
issuable to the Holder upon such exercise an amount of Warrant Shares, the
aggregate Per Share Market Value (as defined in the Purchase Agreement) of
which, as determined on the date immediately preceding the date of the Form of
Election to Purchase, equals such aggregate Exercise Price of the Warrant Shares
for which this Warrant is being exercised.
(e) Notwithstanding anything herein to the contrary, in the
event that within 90 days of the date hereof the Company or a third party
announces the occurrence of, or the intent to engage in:
(i) A transaction which will result in a Change in
Control (as defined in the Purchase Agreement);
(ii) A "going private" transaction under Rule 13e-3
promulgated pursuant to the Securities Exchange Act of 1934,
as amended (the "Exchange Act");
(iii) A tender offer by the Company under Rule 13e-4
promulgated pursuant to the Exchange Act;
(iv) That the Company (A) is or has become insolvent;
(B) admits in writing its inability to pay its debts generally
as they mature; (C) makes an assignment for the benefit of
creditors or commence proceedings for its dissolution; (D)
applies for or consent to the appointment of a trustee,
liquidator or receiver for it or for a substantial part of its
property or business;
(v) Bankruptcy, reorganization, insolvency or
liquidation proceedings or other proceedings, or relief under
any Bankruptcy Law (as defined herein) or any law for the
relief of debt shall be instituted by or against the
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Company (except for such proceedings that the Company in good
faith believes are without basis, actively contests and is
successful in having dismissed with prejudice within 30 days)
or the Company shall by any action or answer approve of,
consent to, or acquiesce in any such proceedings or admit to
any material allegations of, or default in answering a
petition filed in any such proceedings; or
(vi) Any material acquisition or disposition of assets,
or any merger or consolidation with any other company or
entity, if such transaction would be required by the rules and
regulations of the Exchange Act to be reported by the Company
on a Current Report on Form 8-K;
then upon such announcement, subject to Section 3.15 of the Purchase Agreement,
this Warrant may be fully converted into shares of Common Stock in accordance
with the terms hereof.
4. Piggyback Registration Rights. During the term of this
Warrant the Company may not file any registration statement with the Securities
and Exchange Commission (other than registration statements of the Company filed
on Form S-8 or Form S-4 each as promulgated under the Securities Act of 1933, as
amended, pursuant to which the Company is registering securities pursuant to a
Company employee benefit plan or pursuant to a merger, acquisition or similar
transaction) at any time during which there is not an effective registration
statement covering the resale of the Warrant Shares, unless the Company provides
the Holder with not less than five business days notice to each of the Holder
and Kleinberg, Kaplan, Wolff & Cohen, P.C., attention Stephen M. Schultz, of its
intention to file such registration statement and provides the Purchaser the
option to include any or all of the applicable Warrant Shares therein. The
piggyback registration rights granted to the Holder pursuant to this Section
shall continue until all of the Holder's Warrant Shares have been sold in
accordance with an effective registration statement, or sold pursuant to an
exemption from registration, or upon the expiration of this Warrant. The Company
will pay all registration expenses in connection therewith.
5. Payment of Taxes. The Company will pay all documentary
stamp taxes attributable to the issuance of Warrant Shares upon the exercise of
this Warrant; provided, however, that the Company shall not be required to pay
any tax which may be payable in respect of any transfer involved in the
registration of any certificates for Warrant Shares or Warrants in a name other
than that of the Holder, and the Company shall not be required to issue or cause
to be issued or deliver or cause to be delivered the certificates for Warrant
Shares unless or until the person or persons requesting the issuance thereof
shall have paid to the Company the amount of such tax or shall have established
to the satisfaction of the Company that such tax has been paid. The Holder shall
be responsible for all other tax liability that may arise as a result of holding
or transferring this Warrant or receiving Warrant Shares upon exercise hereof.
6. Replacement of Warrant. If this Warrant is mutilated, lost,
stolen or destroyed, the Company may in its discretion issue or cause to be
issued in exchange and substitution for and upon cancellation hereof, or in lieu
of and substitution for this Warrant, a
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New Warrant, but only upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction and indemnity. Applicants for a New
Warrant under such circumstances shall also comply with such other reasonable
regulations and procedures and pay such other reasonable charges as the Company
may prescribe.
7. Reservation of Warrant Shares. The Company covenants that
it will at all times reserve and keep available out of the aggregate of its
authorized but unissued Common Stock, solely for the purpose of enabling it to
issue Warrant Shares upon exercise of this Warrant as herein provided, the
number of Warrant Shares which are then issuable and deliverable upon the
exercise of this entire Warrant, free from preemptive rights or any other actual
contingent purchase rights of persons other than the Holders (taking into
account the adjustments and restrictions of Section 8). The Company covenants
that all Warrant Shares that shall be so issuable and deliverable shall, upon
issuance and the payment of the applicable Exercise Price in accordance with the
terms hereof, be duly authorized, validly issued, fully paid and nonassessable.
8. Certain Adjustments. The Exercise Price and number of
Warrant Shares issuable upon exercise of this Warrant are subject to adjustment
from time to time as set forth in this Section 8. Upon each such adjustment of
the Exercise Price pursuant to this Section 8, the Holder shall thereafter prior
to the Expiration Date be entitled to purchase, at the Exercise Price resulting
from such adjustment, the number of Warrant Shares obtained by multiplying the
Exercise Price in effect immediately prior to such adjustment by the number of
Warrant Shares issuable upon exercise of this Warrant immediately prior to such
adjustment and dividing the product thereof by the Exercise Price resulting from
such adjustment.
(a) If the Company, at any time while this Warrant is
outstanding, (i) shall pay a stock dividend (except scheduled dividends paid on
outstanding preferred stock as of the date hereof which contain a stated divided
rate) or otherwise make a distribution or distributions on shares of its Common
Stock (as defined below) or on any other class of capital stock and not the
Common Stock) payable in shares of Common Stock, (ii) subdivide outstanding
shares of Common Stock into a larger number of shares, or (iii) combine
outstanding shares of Common Stock into a smaller number of shares, the Exercise
Price shall be multiplied by a fraction of which the numerator shall be the
number of shares of Common Stock (excluding treasury shares, if any) outstanding
before such event and of which the denominator shall be the number of shares of
Common Stock (excluding treasury shares, if any) outstanding after such event.
Any adjustment made pursuant to this Section shall become effective immediately
after the record date for the determination of stockholders entitled to receive
such dividend or distribution and shall become effective immediately after the
effective date in the case of a subdivision or combination, and shall apply to
successive subdivisions and combinations.
(b) In case of any reclassification of the Common Stock,
any consolidation or merger of the Company with or into another person, the sale
or transfer of all or substantially all of the assets of the Company or any
compulsory share exchange pursuant to which the Common Stock is converted into
other securities, cash or property, then the Holder
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shall have the right thereafter to exercise this Warrant only into the shares of
stock and other securities and property receivable upon or deemed to be held by
holders of Common Stock following such reclassification, consolidation, merger,
sale, transfer or share exchange, and the Holder shall be entitled upon such
event to receive such amount of securities or property equal to the amount of
Warrant Shares such Holder would have been entitled to had such Holder exercised
this Warrant immediately prior to such reclassification, consolidation, merger,
sale, transfer or share exchange, subject to such further adjustments as set
forth in this Section 8. The terms of any such consolidation, merger, sale,
transfer or share exchange shall include such terms so as to continue to give to
the Holder the right to receive the securities or property set forth in this
Section 8(b) upon any exercise following any such reclassification,
consolidation, merger, sale, transfer or share exchange.
(c) If the Company, at any time while this Warrant is
outstanding, shall distribute to all holders of Common Stock evidences of its
indebtedness or assets or rights or warrants to subscribe for or purchase any
security (excluding those referred to in Section 8(a) and (b)), then in each
such case the Exercise Price shall be determined by multiplying the Exercise
Price in effect immediately prior to the record date fixed for determination of
stockholders entitled to receive such distribution by a fraction of which the
denominator shall be the Exercise Price determined as of the record date
mentioned above, and of which the numerator shall be such Exercise Price on such
record date less the then fair market value at such record date of the portion
of such assets or evidence of indebtedness so distributed applicable to one
outstanding share of Common Stock as determined by the Board of Directors of the
Company acting in good faith.
(d) For the purposes of this Section 8, the following
clauses shall also be applicable:
(i) Record Date. In case the Company shall take a
record of the holders of its Common Stock for the purpose of entitling them (A)
to receive a dividend or other distribution payable in Common Stock or in
securities convertible or exchangeable into shares of Common Stock, or (B) to
subscribe for or purchase Common Stock or securities convertible or exchangeable
into shares of Common Stock, then such record date shall be deemed to be the
date of the issue or sale of the shares of Common Stock deemed to have been
issued or sold upon the declaration of such dividend or the making of such other
distribution or the date of the granting of such right of subscription or
purchase, as the case may be.
(ii) Treasury Shares. The number of shares of Common
Stock outstanding at any given time shall not include shares owned or held by or
for the account of the Company, and the disposition of any such shares shall be
considered an issue or sale of Common Stock.
(e) All calculations under this Section 8 shall be made to
the nearest cent or the nearest 1/100th of a share, as the case may be.
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(f) Whenever the Exercise Price is adjusted pursuant to
Section 8(c) above, the Holders of Warrants representing a majority in interest
of the Warrant Shares, after receipt of the determination by the Company's Board
of Directors (the "Board"), shall have the right to select an appraiser at the
Holder's cost and expense (which shall be a nationally recognized accounting
firm), in which case the adjustment shall be equal to the average of the
adjustments recommended by each of the Board and such appraiser. The Holders
shall promptly mail or cause to be mailed to the Company, a notice setting forth
the Exercise Price after such adjustment and setting forth a brief statement of
the facts requiring such adjustment. Such adjustment shall become effective
immediately after the record date mentioned above.
(g) If:
(i) the Company shall declare a dividend (or any
other distribution) on its Common Stock; or
(ii) the Company shall declare a special nonrecurring
cash dividend on or a redemption of its Common
Stock; or
(iii) the Company shall authorize the granting to all
holders of the Common Stock rights or warrants to
subscribe for or purchase any shares of capital
stock of any class or of any rights; or
(iv) the approval of any stockholders of the Company
shall be required in connection with any
reclassification of the Common Stock of the
Company, any consolidation or merger to which the
Company is a party, any sale or transfer of all
or substantially all of the assets of the
Company, or any compulsory share exchange whereby
the Common Stock is converted into other
securities, cash or property; or
(v) the Company shall authorize the voluntary
dissolution, liquidation or winding up of the
affairs of the Company,
then the Company shall cause to be mailed to each Holder at their last addresses
as they shall appear upon the Warrant Register, at least 30 calendar days prior
to the applicable record or effective date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution, redemption, rights or warrants, or if a record is not to
be taken, the date as of which the holders of Common Stock of record to be
entitled to such dividend, distributions, redemption, rights or warrants are to
be determined or (y) the date on which such reclassification, consolidation,
merger, sale, transfer or share exchange is expected to become effective or
close, and the date as of which it is expected that holders of
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Common Stock of record shall be entitled to exchange their shares of Common
Stock for securities, cash or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer, share exchange,
dissolution, liquidation or winding up; provided, however, that 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.
9. Fractional Shares. The Company shall not be required to
issue or cause to be issued fractional Warrant Shares on the exercise of this
Warrant. The number of full Warrant Shares which shall be issuable upon the
exercise of this Warrant shall be computed on the basis of the aggregate number
of Warrant Shares purchasable on exercise of this Warrant so presented. If any
fraction of a Warrant Share would, except for the provisions of this Section 9,
be issuable on the exercise of this Warrant, the Company shall, at its option,
(i) pay an amount in cash equal to the Exercise Price multiplied by such
fraction or (ii) round the number of Warrant Shares issuable, up to the next
whole number.
10. Notices. Any and all notices or other communications or
deliveries hereunder shall be in writing and shall be deemed to have been
delivered (i) upon receipt, when delivered personally; (ii) when sent by
facsimile, upon receipt if received on a Business Day prior to 5:00 p.m.
(Central Time), or the first Business Day following such receipt if received on
a Business Day after 5:00 p.m. (Central Time); or (iii) on the Business Day
following the date of depositing with a nationally recognized overnight express
courier service, fully prepaid, in each case properly addressed to the party to
receive the same. The addresses and facsimile number for such communications
shall be: (1) if to the Company, to Illinois Superconductor Corporation, 451
Kingston Court, Mt. Prospect, Illinois 60056, Attention: Chief Financial
Officer, or to facsimile no. (847) 391-5015, or (ii) if to the Holder, to the
Holder at the address or facsimile number appearing on the Warrant Register or
such other address or facsimile number as the Holder may provide to the Company
in accordance with this Section 10.
11. Warrant Agent.
(a) The Company shall serve as warrant agent under this
Warrant. Upon thirty (30) days' notice to the Holder, the Company may appoint a
new warrant agent.
(b) Any corporation into which the Company or any new
warrant agent may be merged or any corporation resulting from any consolidation
to which the Company or any new warrant agent shall be a party or any
corporation to which the Company or any new warrant agent transfers
substantially all of its corporate trust or shareholders services business shall
be a successor warrant agent under this Warrant without any further act. Any
such successor warrant agent shall promptly cause notice of its succession as
warrant agent to be mailed (by first class mail, postage prepaid) to the Holder
at the Holder's last address as shown on the Warrant Register.
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12. Miscellaneous.
(a) This Warrant shall be binding on and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns. This Warrant may be amended only in writing signed by the Company and
the Holder.
(b) Subject to Section 12(a), above, nothing in this
Warrant shall be construed to give to any person or corporation other than the
Company and the Holder any legal or equitable right, remedy or cause under this
Warrant; this Warrant shall be for the sole and exclusive benefit of the Company
and the Holder.
(c) This Warrant shall be governed by and construed and
enforced in accordance with the internal laws of the State of New York without
regard to the principles of conflicts of law thereof.
(d) The headings herein are for convenience only, do not
constitute a part of this Warrant and shall not be deemed to limit or affect any
of the provisions hereof.
(e) In case any one or more of the provisions of this
Warrant shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Warrant shall not
in any way be affected or impaired thereby and the parties will attempt in good
faith to agree upon a valid and enforceable provision which shall be a
commercially reasonable substitute therefor, and upon so agreeing, shall
incorporate such substitute provision in this Warrant.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be
duly executed by its authorized officer as of the date first indicated above.
ILLINOIS SUPERCONDUCTOR CORPORATION
By: /s/ Edward W. Laves
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Name: Edward W. Laves
Title: President
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FORM OF ELECTION TO PURCHASE
(To be executed by the Holder to exercise the right to purchase shares of Common
Stock under the foregoing Warrant)
To Illinois Superconductor Corporation:
In accordance with the Warrant enclosed with this Form of Election to
Purchase, the undersigned hereby irrevocably elects to purchase _____________
shares of Common Stock ("Common Stock"), $.001 par value per share, of Illinois
Superconductor Corporation (the "Company") and encloses herewith $________ in
cash or certified or official bank check or checks or by wire transfer of
immediately available funds or (to the extent permitted by the terms of the
Warrant) hereby notifies the Company to effect a "cashless" exercise by
subtracting ___________ shares of Common Stock valued at $________ per share
from the shares of Common Stock issuable hereby, which sum represents the
aggregate Exercise Price (as defined in the Warrant) for the number of shares of
Common Stock to which this Form of Election to Purchase relates, together with
any applicable taxes payable by the undersigned pursuant to the Warrant.
The undersigned requests that certificates for the shares of Common
Stock issuable upon this exercise be issued in the name of
PLEASE INSERT SOCIAL SECURITY OR
TAX IDENTIFICATION NUMBER
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(Please print name and address)
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If the number of shares of Common Stock issuable upon this exercise
shall not be all of the shares of Common Stock which the undersigned is entitled
to purchase in accordance with the enclosed Warrant, the undersigned requests
that a New Warrant (as defined in the Warrant) evidencing the right to purchase
the shares of Common Stock not issuable pursuant to the exercise evidenced
hereby be issued in the name of and delivered to:
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(Please print name and address)
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Dated: , Name of Holder:
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(Print)
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(By:)
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(Name:)
(Title:)
(Signature must conform in all respects to
name of holder as specified on the face of the
Warrant)
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[To be completed and signed only upon transfer of Warrant]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ________________________________ the right represented by the within
Warrant to purchase ____________ shares of Common Stock of Illinois
Superconductor Corporation to which the within Warrant relates and appoints
________________ attorney to transfer said right on the books of Illinois
Superconductor Corporation with full power of substitution in the premises.
Dated:
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(Signature must conform in all respects to
name of holder as specified on the face of the
Warrant)
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Address of Transferee
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In the presence of:
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