Exhibit 4.1
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Form of Warrant
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THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR APPLICABLE STATE SECURITIES
LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED, ASSIGNED,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
FOR THE SECURITIES UNDER THE SECURITIES ACT, OR IRIS INTERNATIONAL, INC. (THE
"COMPANY") SHALL HAVE RECEIVED AN OPINION FROM COUNSEL REASONABLY SATISFACTORY
TO THE COMPANY THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND
UNDER THE PROVISIONS OF APPLICABLE FEDERAL AND STATE SECURITIES LAWS IS NOT
REQUIRED.
IRIS INTERNATIONAL, INC.
REDEEMABLE WARRANT TO PURCHASE __________ SHARES OF COMMON STOCK
Warrant No.:__________
Date of Issuance: April __, 2004
Iris International, Inc., a Delaware corporation (the "Company"), hereby
certifies that, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, ____________, the registered holder hereof or
its permitted assigns, is entitled, subject to the terms and conditions of this
Warrant and of that certain Securities Purchase Agreement, dated April 19, 2004
by and between the Company and the holder (as such agreement may be amended,
supplemented and modified from time to time, the "Purchase Agreement"), to
purchase from the Company, upon surrender of this Warrant (as defined below) at
its principal office in the United States located at 9172 Eton Avenue,
Chatsworth, California 91311 (or such other location as the Company may advise
the holder hereof in writing), at any time or times on or after the date hereof,
but not after 5:00 p.m., Eastern Standard Time, on the Expiration Date (as
defined below), ______________ fully paid nonassessable shares of Common Stock
(as defined below) of the Company at the Exercise Price per share provided in
Section 1 of this Warrant, such Exercise Price and such number of shares of
Common Stock to be delivered upon exercise of the Warrant being subject to
adjustment as provided in Section 9 of this Warrant. This Warrant is redeemable
by the Company in accordance with the terms and conditions set forth in Section
4 of this Warrant. Capitalized terms used herein but not defined shall have the
same meanings assigned to them in the Purchase Agreement.
Section 1. Definitions. The following terms as used in this Warrant shall have
the following meanings:
"Business Day" means any day other than Saturday, Sunday or other day on which
commercial banks in the City of New York, New York are required by law to remain
closed.
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"Common Stock" means (i) the common stock, par value $0.01 per share, of the
Company, and (ii) any capital stock into which such Common Stock shall have been
changed or any capital stock resulting from a reclassification of such Common
Stock.
"Exchange Act" means the Securities Exchange Act of 1934, as amended and the
rules and regulations promulgated thereunder.
"Exercise Delivery Documents" shall have the meaning specified in Section 2(a)
hereof.
"Exercise Price" shall be equal to $7.80, subject to further adjustment as
hereinafter provided.
"Expiration Date" means April 19, 2009 or, if such date does not fall on a
Business Day, then the next Business Day.
"Person" means an individual, a limited liability company, a partnership, a
joint venture, a corporation, a trust, an unincorporated organization or
association and a government or any department or agency thereof.
"Principal Market" means the Nasdaq National Market ("Nasdsaq") or if the Common
Stock is not traded on the Nasdaq, the then principal securities exchange or
trading market for the Common Stock.
"Securities Act" means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
"Trading Day" shall mean (x) a day on which the Principal Market is open for
business or (y) if the applicable security is not so listed on a Principal
Market or admitted for trading or quotation, a Business Day.
"Trading Price" of a security on any date of determination means:
(1) the closing sales price as reported by the Nasdaq National Market on
such date;
(2) if such security is not so reported, the closing sale price (or, if no
closing sale price is reported, the last reported sale price) of such
security (regular way) on the New York Stock Exchange on such date;
(3) if such security is not listed for trading on the New York Stock
Exchange on any such date, the closing sale price as reported in the
composite transactions for the principal U.S. securities exchange on which
such security is so listed;
(4) if such security is not listed on a U.S. national or regional
securities exchange, the last price quoted by Interactive Data Corporation
for such security on such date or, if Interactive Data Corporation is not
quoting such price, a similar quotation service selected by the Company;
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(5) if such security is not so quoted, the average of the mid-point of the
last bid and ask prices for such security on such date from at least two
dealers recognized as market-makers for such security selected by the
Company for this purpose; or
(6) if such security is not so quoted, the average of that last bid and
ask prices for such security on such date from a dealer engaged in the
trading of convertible securities selected by the Company for this
purpose.
"Transfer Agent" has the meaning specified in Section 2(a) hereof.
"Warrant" means this Warrant and the other warrants to purchase shares of Common
Stock issued pursuant to the Purchase Agreement and all warrants issued in
exchange, transfer or replacement thereof.
"Warrant Date" has the meaning specified in Section 3 hereof.
"Warrant Shares" means all shares of Common Stock issuable upon exercise of the
Warrants.
The definition of certain other terms are specified in Section 9 hereof.
Section 2. Exercise of Warrant.
(a) Subject to the terms and conditions hereof, including, without
limitation, Section 2(c), this Warrant may be exercised by the holder hereof
then registered as such on the books of the Company, in whole or in part, at any
time on any Business Day on or after the date hereof and prior to 5:00 p.m.,
Eastern Standard Time, on the Expiration Date by: (i) delivery of a written
notice, in the form of the subscription notice attached as Exhibit A hereto or a
reasonable facsimile thereof (the "Exercise Notice"), to the Company and the
Company's designated transfer agent (the "Transfer Agent"), of such holder's
election to exercise all or a portion of this Warrant; (ii) the surrender of
this Warrant to the Company; and (iii) the payment of the aggregate Exercise
Price to the Company by wire transfer or by certified bank check payable to the
order of the Company in United States dollars (the items to be delivered
pursuant to clauses (i), (ii) and (iii) above collectively are referred to
herein as the " Exercise Delivery Documents"); provided, however, that if such
Warrant Shares are to be issued in any name other than that of the registered
holder of this Warrant, such issuance shall be deemed a transfer and the
provisions of Section 8 of this Warrant shall be applicable. In the event of any
exercise of the rights represented by this Warrant in compliance with this
Section 2(a) and Section 2(c), the Company shall, within three (3) Business Days
after receipt of the Exercise Delivery Documents, issue and deliver to the
address specified in the Exercise Notice, a certificate or certificates in such
denominations as may be requested by the holder in the Exercise Notice,
registered in the name of the holder or its designee, for the number of shares
of Common Stock to which the holder shall be entitled upon such exercise. Upon
delivery of the Exercise Delivery Documents, the holder of this Warrant shall be
deemed for all corporate purposes to have become the holder of record of the
Warrant Shares with respect to which this Warrant has been exercised,
irrespective of the date of delivery the certificates evidencing such Warrant
Shares.
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(b) Unless the rights represented by this Warrant shall have expired or
shall have been fully exercised, the Company shall, within three (3) Business
Days after receipt of the Exercise Delivery Documents, and at its own expense,
issue a new Warrant identical in all respects to this Warrant exercised except
it shall represent rights to purchase the number of Warrant Shares purchasable
immediately prior to such exercise under this Warrant, less the number of
Warrant Shares with respect to which this Warrant is exercised.
(c) Notwithstanding anything contained in this Warrant to the contrary,
this Warrant cannot be exercised, either in whole or in part, except by a holder
who, at the time of exercise, is an "accredited investor," as such term is
defined in Rule 501(a) of Regulation D under the Securities Act.
(d) Notwithstanding anything contained in this Warrant to the contrary,
the Company shall not be required to issue fractions of shares of Common Stock
upon exercise of this Warrant or to distribute certificates evidencing such
fractional shares. If more than one Warrant shall be presented for exercise in
full at the same time by the same holder, the number of full shares of Common
Stock shall be issuable upon the exercise thereof shall be computed on the basis
of the aggregate number of shares of Common Stock purchasable on exercise of all
Warrants so presented. In lieu of any fractional shares, there shall be paid to
the holder an amount of cash equal to the same fraction of the current market
value of a share of Common Stock. For purposes of this Section 2(d), the current
market value of a share of Common Stock shall be the Trading Price of a share of
Common Stock for the Trading Day immediately prior to the date of such exercise.
(e) The holder may utilize a Cashless Exercise, as provided below, if the
Holder's Warrant Shares are not subject to an effective Registration Statement.
The holder, upon a Cashless Exercise of the Warrant, will receive upon such
exercise the "Net Number" of shares of Common Stock as determined according to
the following formula (a "Cashless Exercise"):
X = Y x (A - B)
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A
For purposes of the foregoing formula:
X = the Net Number of shares of Common Stock to be issued to the Holder.
Y = the number of shares of Common Stock subject to this Warrant for which
the Warrant is being exercised.
A = the Current Market Value of one share of Common Stock on the date this
Warrant is being exercised.
B = the Exercise Price then in effect for the applicable Warrant Shares at
the time of such exercise, as adjusted.
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(f) If by the third Trading Day after a Date of Exercise the Company fails
to deliver the required number of Warrant Shares in the manner required pursuant
to Section 2, then the holder will have the right to rescind such exercise.
(g) If by the third Trading Day after a Date of Exercise the Company fails
to deliver the required number of Warrant Shares in the manner required pursuant
to Section 2, and if after such third Trading Day and prior to the receipt of
such Warrant Shares, the holder purchases (in an open market transaction or
otherwise) shares of Common Stock to deliver in satisfaction of a sale by the
holder of the Warrant Shares which the holder anticipated receiving upon such
exercise (a "Buy-In"), then the Company shall (1) pay in cash to the holder the
amount by which (x) the holder's total purchase price (including brokerage
commissions, if any) for the shares of Common Stock so purchased exceeds (y) the
amount obtained by multiplying (A) the number of Warrant Shares that the Company
was required to deliver to the holder in connection with the exercise at issue
by (B) the closing bid price of the Common Stock at the time of the obligation
giving rise to such purchase obligation and (2) at the option of the holder,
either reinstate the portion of the Warrant and equivalent number of Warrant
Shares for which such exercise was not honored or deliver to the holder the
number of shares of Common Stock that would have been issued had the Company
timely complied with its exercise and delivery obligations hereunder. The holder
shall provide the Company written notice indicating the amounts payable to the
holder in respect of the Buy-In.
Section 3. Date; Duration. The issue date of this Warrant is April __, 2004 (the
"Warrant Date"). This Warrant, in all events, shall be wholly void and of no
effect at 5:00 pm Eastern Standard Time on the Expiration Date.
Section 4. Redemption. This Warrant may be redeemed at the option of the
Company, at a redemption price of $0.10 per share of Common Stock issuable upon
exercise of the Warrant (the "Redemption Price"), at any time after the first
anniversary of the Closing Date, provided that the Trading Price for the Common
Stock, as reported by the Principal Market, shall have equaled or exceeded 175%
of the then current Exercise Price (a "Qualifying Price") for any 20 Trading
Days in any 30 Trading Day period (a "Qualifying Period") ending within 5
Trading Days of the Notice of Redemption (as defined below), provided further
that (i) all of the shares of Common Stock issuable hereunder either (A) are
registered for resale pursuant to an effective Registration Statement (as
defined in the Purchase Agreement) which is available for sales of such shares
of Common Stock at all times commencing on the first day of the Qualifying
Period and ending on the redemption date or (B) no longer constitute Registrable
Shares (as defined in the Purchase Agreement) and (ii) the average daily trading
volume of the Common Stock during Qualifying Period is greater than 100,000
shares per day as reported by the Principal Market. In the event the Exercise
Price is adjusted pursuant to Section 9 hereof, the Redemption Price shall be
subject to adjustment by the same percentage change as the percentage change in
the Exercise Price. Holders shall be given notice of redemption ("Notice of
Redemption") at least 30 days prior to the date fixed for redemption of the
Warrant. Each Notice of Redemption shall state:
(i) the redemption date;
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(ii) the date by which the redemption right must be exercised;
(iii) the Redemption Price;
(iv) a description of the procedure which a holder of the Warrant
must follow to exercise a redemption right, and the place or places where such
Warrants are to be surrendered for payment of the Redemption Price;
(v) that on the redemption date the Redemption Price will become due
and payable upon each such Warrant designated by the holder to be repurchased;
and
(vi) the place or places that the Warrant certificate shall be
delivered.
On and after the date fixed for redemption set forth in the Notice of
Redemption, the holder of this Warrant shall have no rights with respect to the
Warrants except, upon surrender of this Warrant, to receive the Redemption Price
for each share of Common Stock issuable upon exercise of this Warrant. This
Warrant may be exercised up to and including the redemption date specified in
such Notice of Redemption.
Section 5. Taxes.
(a) The Company shall pay any and all documentary, stamp, transfer and
other similar taxes that may be payable with respect to the issuance and
delivery of Warrant Shares upon exercise of this Warrant.
(b) Notwithstanding any other provision of this Warrant, for income tax
purposes, the holder or any assignee or transferee shall agree that the Company
and the Transfer Agent shall be permitted to withhold from any amounts payable
to such assignee or transferee any taxes required by law to be withheld from
such amounts. Unless exempt from the obligation to do so, each assignee or
transferee shall execute and deliver to the Company or the Transfer Agent, as
applicable, a properly completed Form W-8 or W-9, indicating that such assignee
or transferee is not subject to back-up withholding for United States federal
income tax purposes. Each assignee or transferee that does not deliver such a
form pursuant to the preceding sentence shall have the burden of proving to the
Company's reasonable satisfaction that it is exempt from such requirement.
(c) The issuance of certificates for shares of Common Stock upon the
exercise of this Warrant shall be made without charge to the holder of this
Warrant for any issue tax in respect thereof; provided, however, that the
Company shall not be required to pay any tax that may be payable in respect of
any transfer involved in the issuance and delivery of any certificate in a name
other than that of the holder hereof, and the Company shall not be required to
issue or deliver such certificates or other securities unless and 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.
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Section 6. Warrant Holder Not Deemed a Stockholder. Except as otherwise
specifically provided herein, prior to the exercise of the Warrants represented
hereby, the holder of this Warrant shall not be entitled, as such, to any rights
of a stockholder of the Company, including, without limitation, the right to
vote or to consent to any action of the stockholders of the Company, to receive
dividends or other distributions, to exercise any preemptive right or to receive
any notice of meetings of stockholders of the Company, and shall not be entitled
to receive any notice of any proceedings of the Company. In addition, nothing
contained in this Warrant shall be construed as imposing any liabilities on such
holder to purchase any securities (upon exercise of this Warrant or otherwise)
or as a stockholder of the Company, whether such liabilities are asserted by the
Company or by creditors of the Company.
Section 7. Compliance with Securities Laws.
(a) The holder of this Warrant, by the acceptance hereof, represents and
warrants that it is acquiring this Warrant and the Warrant Shares issuable upon
exercise of this Warrant for its own account for investment only and not with a
view towards, or for resale in connection with, the public sale or distribution
thereof, except pursuant to sales registered or exempted under the Securities
Act; provided, however, that by making the representations herein, the holder
does not agree to hold this Warrant or any of the Warrant Shares for any minimum
or other specific term and reserves the right to dispose of this Warrant and the
Warrant Shares at any time in accordance with or pursuant to a registration
statement or an exemption under the Securities Act. The holder of this Warrant
further represents, by acceptance hereof, that, as of this date, such holder is
an "accredited investor" as such term is defined in Rule 501(a) of Regulation D
promulgated by the Securities and Exchange Commission under the Securities Act
and was not organized for the specific purpose of acquiring the Warrants or
Warrant Shares.
(b) The holder of this Warrant understands that, until the end of the
holding period under Rule 144(k) of the Securities Act (or any successor
provision) this Warrant (and all securities issued in exchange therefor or in
substitution thereof, other than Warrant Shares, which shall bear the legend set
forth in Section 7(c) of this Warrant, if applicable) shall bear a legend in
substantially the following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT, OR IRIS INTERNATIONAL, INC.
(THE "COMPANY") SHALL HAVE RECEIVED AN OPINION FROM COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY THAT REGISTRATION OF SUCH
SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF
APPLICABLE FEDERAL AND STATE SECURITIES LAWS IS NOT REQUIRED.
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The legend set forth above shall be removed and the Company shall issue a new
certificate evidencing a new Warrant of like tenor and aggregate number of
shares and which shall not bear the restrictive legends required by this Section
7(b): (i) if, in connection with a sale transaction, such holder provides the
Company with an opinion of counsel reasonably acceptable to the Company to the
effect that a public sale, assignment, pledge or transfer of the Warrant, as
appropriate, may be made without registration under the Securities Act, or (ii)
upon expiration of the two year holding period under Rule 144(k) of the
Securities Act (or any successor rule); provided that the holder of the Warrant
is not and has not been within 3 months prior to such date, an "affiliate" of
the Company (as such term is defined in Rule 144 of the Securities Act) (in
which event such holding period shall be deemed to have expired when such holder
has not been an "affiliate" of the Company for the preceding three-month period)
.. The Company shall not require such opinion of counsel for the sale of Warrants
in accordance with Rule 144 of the Securities Act in the event that the holder
provides such representations that the Company shall reasonably request
confirming compliance with the requirements of Rule 144.
(c) Subject to the terms of this clause (c), any certificate representing
the Warrant Shares shall bear a legend in substantially the following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED,
ASSIGNED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT, OR IRIS INTERNATIONAL,
INC. (THE "COMPANY") SHALL HAVE RECEIVED AN OPINION FROM COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY THAT REGISTRATION OF SUCH SECURITIES UNDER THE
SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE FEDERAL AND STATE
SECURITIES LAWS IS NOT REQUIRED.
The legend set forth above shall be removed and the Company shall issue the
Warrant Shares without such legend to the holder of the Warrant Shares upon
which it is stamped, (i) if the Warrant Shares have been resold or transferred
pursuant to a registration statement that was effective at the time of such
transfer, (ii) if, in connection with a sale transaction, such holder provides
the Company with an opinion of counsel reasonably acceptable to the Company to
the effect that a public sale, assignment, pledge or transfer of the Warrant
Shares may be made without registration under the Securities Act, or (iii) upon
expiration of the applicable two year holding period under Rule 144(k) of the
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Securities Act (or any successor rule); provided that the holder of the Warrant
Shares is not and has not been within 3 months prior to such date, an
"affiliate" of the Company (as such term is defined in Rule 144 of the
Securities Act) (in which event such holding period shall be deemed to have
expired when such holder has not been an "affiliate" of the Company for the
preceding three-month period). The Company shall not require such opinion of
counsel for the sale of the Warrant Shares in accordance with Rule 144 of the
Securities Act, provided that the holder provides such representations that the
Company shall reasonably request confirming compliance with the requirements of
Rule 144. The Company shall irrevocably instruct its transfer agent that, upon
presentation to the transfer agent of a completed Certificate of Subsequent Sale
(attached as Exhibit E to the Purchase Agreement), the transfer agent shall
thereupon re-issue a stock certificate representing the number of shares sold
without the legend set forth above.
Section 8. Ownership and Transfer.
(a) The Company shall maintain at its principal office designated on the
first page of this Agreement or such other office or agency of the Company as it
may designate by notice to the holder hereof (provided that such other
designated office shall be located in the United States) (a "Designated
Office"), a register for this Warrant (the "Warrant Register"), in which the
Company shall record the name and address of the person in whose name this
Warrant has been issued. Upon the transfer of any Warrants in accordance with
the provisions of clause (b) below, the Company shall record the name and
address of such new holder(s) as well as the name and address of each
transferee. The Company may treat the person in whose name any Warrant is
registered on the Warrant Register as the owner and holder thereof for all
purposes, notwithstanding any notice to the contrary, but in all events
recognizing any transfers made in accordance with the terms of this Warrant.
(b) This Warrant and all rights hereunder shall be assignable and
transferable by the holder hereof to a Permitted Transferee upon surrender of
this Warrant with a properly executed assignment (in the form of Exhibit B
hereto) at the Company's Designated Office. For the purposes of this Warrant, a
"Permitted Transferee" shall mean any person who (a) is an "accredited
investor," as that term is defined in Rule 501(a) of Regulation D under the
Securities Act and (b) delivers to the Company his, her or its written agreement
to accept and be bound by all of the terms and conditions contained in this
Warrant.
Section 9. Adjustment of Exercise Price and Number of Shares Issuable Upon
Exercise. The Exercise Price and the number of Warrant Shares issuable upon the
exercise of each Warrant are subject to adjustment from time to time upon the
occurrence of the events enumerated in this Section 9.
(a) In case the Company shall hereafter pay a dividend or make a
distribution to all holders of the outstanding Common Stock in shares of Common
Stock, the Exercise Price in effect at the opening of business on the date
following the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution shall be reduced by multiplying such
Exercise Price by a fraction of which (i) the numerator shall be the number of
shares of Common Stock outstanding at the close of business on the record date
of this Warrant fixed for such determination and (ii) the denominator shall be
the sum of such number of shares and the total number of shares referred to in
(i) above constituting such dividend or other distribution. Such reduction in
the Exercise Price shall become effective immediately after the opening of
business on the day following the record date. If any dividend or distribution
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of the type described in this Section 9(a) of this Warrant is declared but not
so paid or made, the Exercise Price shall again be adjusted to the Exercise
Price that otherwise then be in effect if such dividend or distribution had not
been declared.
(b) In case the outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the Exercise Price in effect at
the opening of business on the day following the day upon which such subdivision
becomes effective shall be proportionately reduced, and conversely, in case the
outstanding shares of Common Stock shall be combined into a smaller number of
shares of Common Stock, the Exercise Price in effect at the opening of business
on the day following the day upon which such combination becomes effective shall
be proportionately increased, such reduction or increase, as applicable, to
become effective immediately after the opening of business on the day following
the day upon which such subdivision or combination becomes effective.
(c) The Company may make such reductions in the Exercise Price, in
addition to those required by Sections 9(a) or (b) of this Warrant, as the Board
of Directors considers to be advisable to avoid or diminish any income tax to
holders of Common Stock or rights to purchase Common Stock resulting from any
dividend or distribution of stock (or rights to acquire stock) or from any event
treated as such for income tax purposes.
(d) No adjustment in the Exercise Price shall be required under this
Section 9 unless such adjustment would require an increase or decrease of at
least 1% in the Exercise Price; provided, however, that any adjustments which by
reason of this Section 9(d) are not required to be made shall be carried forward
and taken into account in any subsequent adjustment. All calculations under this
Section 9 shall be made by the Company and shall be made to the nearest cent or
to the nearest one hundredth of a share, as the case may be. No adjustment need
be made for a change in the no par value of the Common Stock.
(e) Notice to Holders of Warrants Prior to Certain Actions. In case:
(1) the Company shall declare a dividend (or any other distribution)
on its Common Stock that would require an adjustment in the Exercise Price
pursuant to this Section 9;
(2) of any reclassification of the Common Stock of the Company
(other than a subdivision or combination of its outstanding Common Stock, a
change in par value, a change from par value to no par value or a change from no
par value to par value), or any merger, consolidation, statutory share exchange
or combination to which the Company is a party and for which approval of any
stockholders of the Company is required, or the sale, transfer or conveyance of
all or substantially all of the assets of the Company; or
(3) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company;
the Company shall cause to be provided to the holder of this Warrant at such
address appearing in the Warrant Register at least ten (10) days prior to the
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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, rights or warrants, or, if a record is not to be taken, the date
as of which the holders of shares of Common Stock of record to be entitled to
such dividend, distribution, rights or warrants are to be determined, or (y) the
date on which such reclassification, merger, consolidation, statutory share
exchange, combination, sale, transfer, conveyance, dissolution, liquidation or
winding-up is expected to become effective, and the date as of which it is
expected that holders of Common Stock of record shall be entitled to exchange
their shares of Common Stock for securities, cash or other property deliverable
upon such reclassification, merger, consolidation, statutory share exchange,
combination, sale, transfer, dissolution, liquidation or winding-up. Failure to
give such notice, or any defect therein, shall not affect the legality or
validity of the proceedings or actions described in clauses (1) through (4) of
this Section 9(e). In addition, whenever the Exercise Price is adjusted as
provided in this Section 9, the Company shall prepare a notice of such
adjustment of the Exercise Price setting forth the adjusted Exercise Price and
the date on which each adjustment becomes effective and shall mail such notice
of such adjustment of the Exercise Price to the holder of each Warrant at his
last address in the Warrant Register within twenty (20) days of the effective
date of such adjustment. Failure to deliver such notice nor any defect therein
shall not effect the legality or validity of any such adjustment.
(f) In any case in which this Section 9 provides that an adjustment
shall become effective immediately after a record date for an event, the Company
may defer until the occurrence of such event (i) issuing to the holder of any
Warrant exercised after such record date and before the occurrence of such event
the additional shares of Common Stock issuable upon such exercise by reason of
the adjustment required by such event over and above the Common Stock issuable
upon such exercise before giving effect to such adjustment and (ii) paying to
such holder any amount in cash in lieu of any fraction pursuant to Section 2(c)
of this Warrant.
(g) Upon each adjustment of the Exercise Price pursuant to this
Section 9, each Warrant shall thereupon evidence the right to purchase that
number of Warrant Shares (calculated to the nearest hundredth of a share)
obtained by multiplying the number of Warrant Shares purchasable immediately
prior to such adjustment upon exercise of the Warrant by the Exercise Price in
effect immediately prior to such adjustment and dividing the product so obtained
by the Exercise Price in effect immediately after such adjustment. The
adjustment pursuant to this Section 9(g) to the number of Warrant Shares
purchasable upon exercise of a Warrant shall be made each time an adjustment of
the Exercise Price is made pursuant to this Section 9.
Section 10. Lost, Stolen, Mutilated or Destroyed Warrants. If this Warrant is
lost, stolen, mutilated or destroyed, the Company shall promptly, on receipt of
an indemnification undertaking or other form of security reasonably acceptable
to the Company (or in the case of a mutilated Warrant, the Warrant), issue a new
Warrant of like denomination and tenor as this Warrant so lost, stolen,
mutilated or destroyed.
Section 11. Notice. All notices, requests, consents and other communications
hereunder shall be in writing, shall be mailed (A) if within United States by
first-class registered or certified airmail, or nationally recognized overnight
express courier, postage prepaid, or by facsimile, or (B) if delivered from
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outside the United States, by International Federal Express or facsimile, and
shall be deemed given (i) if delivered by first-class registered or certified
mail domestic, three (3) business days after so mailed, (ii) if delivered by
nationally recognized overnight carrier, one business day after so mailed, (iii)
if delivered by International Federal Express, two (2) business days after so
mailed, and (iv) if delivered by facsimile, upon electric confirmation of
receipt, and shall be delivered as addressed as follows:
If to the Company:
Iris International, Inc.
9172 Eton Avenue
Chatsworth, California 91311
Attn: Mr. Cesar M. Garcia
Tel: 818-709-1244
Fax: 818-337-7400
with a copy to:
Sheppard Mullin Richter & Hampton, LLP
800 Anacapa Street
Santa Barbara, CA 93101
Attn: Joseph E. Nida, Esq.
Tel: (805) 879-1811
Fax: (805) 568-1955
If to the Transfer Agent:
Continental Stock and Transfer Co.
17 Battery Place
New York, New York 10004
Telephone: (212) 509-4000
Facsimile: (212) 616-7608
Attention: Richard Biscovich
If to a holder of this Warrant, to it at the address and facsimile number set
forth on the signature page to the Purchase Agreement or at such other address
and facsimile as shall be delivered to the Company upon the issuance or transfer
of this Warrant.
Section 12. Amendments. This Warrant and any term hereof may be amended,
changed, waived, discharged, or terminated only by an instrument in writing
signed by the Company and holders of a majority of Warrant Shares represented by
all Warrants. Such amendment, change, waiver, discharge or termination shall be
binding on the Company and all of the Warrant holder's assignees and
transferees. No waivers of any term, condition or provision of this Warrant in
any one or more instances shall be deemed to be or construed as a further or
continuing waiver of any such term, condition or provision.
Section 13. Obligations Binding on Successors. This Warrant will be binding upon
any entity succeeding to the Company in one or a series of transactions by
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merger, consolidation or acquisition of all or substantially all of the
Company's assets or other similar transactions and shall inure to the benefit of
the holder hereof and its successors, permitted assigns and legal
representatives.
Section 14. Limitation on Exercise.
(a) Notwithstanding anything to the contrary contained herein, the number
of Warrant Shares that may be acquired by the Holder upon any exercise of this
Warrant (or otherwise in respect hereof) shall be limited to the extent
necessary to insure that, following such exercise (or other issuance), the total
number of shares of Common Stock then beneficially owned by such Holder and its
Affiliates and any other Persons whose beneficial ownership of Common Stock
would be aggregated with the Holder's for purposes of Section 13(d) of the
Exchange Act, does not exceed 4.999% of the total number of issued and
outstanding shares of Common Stock (including for such purpose the shares of
Common Stock issuable upon such exercise). For such purposes, beneficial
ownership shall be determined in accordance with Section 13(d) of the Exchange
Act and the rules and regulations promulgated thereunder. By written notice to
the Company, the Holder may waive the provisions of this Section 14(a), but any
waiver will not be effective until the 61st day after delivery of such notice.
(b) Notwithstanding anything to the contrary contained herein, the number
of Warrant Shares that may be acquired by the Holder upon any exercise of this
Warrant (or otherwise in respect hereof) shall be limited to the extent
necessary to insure that, following such exercise (or other issuance), the total
number of shares of Common Stock then beneficially owned by such Holder and its
Affiliates and any other Persons whose beneficial ownership of Common Stock
would be aggregated with the Holder's for purposes of Section 13(d) of the
Exchange Act, does not exceed 9.999% of the total number of issued and
outstanding shares of Common Stock (including for such purpose the shares of
Common Stock issuable upon such exercise). For such purposes, beneficial
ownership shall be determined in accordance with Section 13(d) of the Exchange
Act and the rules and regulations promulgated thereunder. This restriction may
not be waived.
Section 15. Governing Law; Consent to Jurisdiction. This Warrant shall be
governed by, and construed in accordance with, the internal laws of the State of
New York, without giving effect to the principles of conflicts of law. The
Company, and by its acceptance hereof, the holder of this Warrant each
irrevocably submits to the exclusive jurisdiction of the courts of the State of
New York located in New York County and the United States District Court for the
Southern District of New York for the purpose of any suit, action, proceeding or
judgment relating to or arising out of this Warrant and the transactions
contemplated hereby. Service of process in connection with any such suit, action
or proceeding may be served on the Company and such holder anywhere in the world
by the same methods as are specified for the giving of notices under this
Warrant. The Company, and by its acceptance hereof, the holder of this Warrant
each irrevocably consents to the jurisdiction of any such court in any such
suit, action or proceeding and to the laying of venue in such court. The
Company, and by its acceptance hereof, the holder of this Warrant each
irrevocably waives any objection to the laying of venue of any such suit, action
or proceeding brought in such courts and irrevocably waives any claim that any
such suit, action or proceeding brought in any such court has been brought in an
inconvenient forum.
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Section 16. Descriptive Headings. The headings of this Warrant are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed as
of day and year first above written.
COMPANY:
IRIS INTERNATIONAL, INC.
By:
---------------------------------
Its:
--------------------------------
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EXHIBIT A TO WARRANT
FORM OF EXERCISE NOTICE
The undersigned holder hereby exercises the right to purchase ______________ of
the shares of Common Stock ("Warrant Shares") of Iris International, Inc., a
Delaware corporation (the "Company"), evidenced by the attached Warrant (the
"Warrant"). Capitalized terms used herein and not otherwise defined shall have
the respective meanings set forth in the Warrant. The undersigned holder hereby
represents and warrants to the Company as follows:
(a) The undersigned holder is an "accredited investor," as that term is
defined in Rule 501(a) of Regulation D under the Securities Act; and
(b) The undersigned holder has sold or will sell the shares of common
stock issuable pursuant to this Notice pursuant to a registration statement or
an exemption from registration under the Securities Act.
Date: _______________, ____
- ---------------------------------- --------------------------
Name of Registered Holder Tax ID of Registered Holder
(if applicable)
By:
---------------------------------
Its:
--------------------------------
ACKNOWLEDGMENT
The Company hereby acknowledges this Exercise Notice and hereby directs
Continental Stock and Transfer Co. to issue the above indicated number of shares
of Common Stock issuable upon exercise of the Warrant to the designated holder.
IRIS INTERNATIONAL, INC.
By:
---------------------------
Its:
--------------------------
EXHIBIT B TO WARRANT
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned does hereby assign and transfer to
________________, Federal Identification No. __________, a warrant to purchase
____________ shares of the common stock of IRIS INTERNATIONAL, INC., a Delaware
corporation, represented by warrant certificate no. _____, standing in the name
of the undersigned on the books of said corporation. The undersigned does hereby
irrevocably constitute and appoint ______________, attorney to transfer the
warrants of said corporation, with full power of substitution in the premises.
Dated: _________, 200_
------------------------------------
By:
---------------------------------
Its:
--------------------------------