EXHIBIT 4.3
THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT").
THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS WARRANT UNDER THE ACT
OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO SBE, INC. THAT SUCH
REGISTRATION IS NOT REQUIRED.
SBE, INC.
WARRANT TO PURCHASE COMMON STOCK
NO. 2002-2 APRIL 30, 2002
THIS CERTIFIES THAT, for value received, VINTAGE PARTNERS LLC, with its
residence at 50 Rockefeller Plaza, Suite 1038, New York, New York 10020, or
assigns (the "Holder"), is entitled to subscribe for and purchase at the
Exercise Price (defined below) from SBE, Inc., a Delaware corporation, with its
principal office at 2305 Camino Ramon, Suite 200, San Ramon, California 94583
(the "Company") up to eleven thousand four hundred twenty-nine (11,429) shares
of the Common Stock of the Company (the "Common Stock").
1. DEFINITIONS. As used herein, the following terms shall have the
following respective meanings:
(a) "Exercise Period" shall mean the period commencing with the date hereof
and ending three years from the date hereof, unless sooner terminated as
provided below.
(b) "Exercise Price" shall mean $3.50 per share, subject to adjustment
pursuant to Section 5 below.
(c) "Exercise Shares" shall mean the shares of the Company's Common Stock
issuable upon exercise of this Warrant.
2. EXERCISE OF WARRANT. The rights represented by this Warrant may be
exercised in whole or in part at any time during the Exercise Period, by
delivery of the following to the Company at its address set forth above (or at
such other address as it may designate by notice in writing to the Holder):
(a) An executed Notice of Exercise in the form attached here to;
(b) Payment of the Exercise Price either (i) in cash or by check, or (ii)
by cancellation of indebtedness; and
(c) This Warrant.
Upon the exercise of the rights represented by this Warrant, a certificate
or certificates for the Exercise Shares so purchased, registered in the name of
the Holder or persons affiliated with the Holder, if the Holder so designates,
shall be issued and delivered to the Holder within a reasonable time after the
rights represented by this Warrant shall have been so exercised.
The person in whose name any certificate or certificates for Exercise
Shares are to be issued upon exercise of this Warrant shall be deemed to have
become the holder of record of such shares on the date on which this Warrant was
surrendered and payment of the Exercise Price was made, irrespective of the date
of delivery of such certificate or certificates, except that, if the date of
such surrender and payment is a date when the stock transfer books of the
Company are closed, such person shall be deemed to have become the holder of
such shares at the close of business on the next succeeding date on which the
stock transfer books are open.
2.1 NET EXERCISE. Notwithstanding any provisions herein to the contrary and
except as may be limited by the Board of Directors of the Company as set forth
below, if the fair market value of one share of the Company's Common Stock is
greater than the Exercise Price (at the date of calculation as set forth below),
in lieu of exercising this Warrant by payment of cash, the Holder may elect to
receive shares equal to the value (as determined below) of this Warrant (or the
portion thereof being canceled) by surrendering this Warrant at the principal
office of the Company together with the properly endorsed Notice of Exercise in
which event the Company shall issue to the Holder a number of shares of Common
Stock computed using the following formula:
X = Y (A-B)
--------
A
Where X = the number of shares of Common Stock to be issued to the Holder
Y = the number of shares of Common Stock purchasable under the
Warrant or, if only a portion of the Warrant is being exercised, the
portion of the Warrant being canceled (at the date of such
calculation)
A = the fair market value of one share of the Company's Common
Stock (at the date of such calculation)
B = Exercise Price (as adjusted to the date of such
calculation);
For purposes of the above calculation, if the Company's Common Stock is
listed on any established stock exchange or traded on the Nasdaq National Market
or the Nasdaq SmallCap Market, the fair market value of one share of Common
Stock shall be the closing sales price for such stock (or the mid-point of the
bid and ask price at the closing, if no sales were reported) as quoted on such
exchange or market (or the exchange or market with the greatest volume of
trading in the Common Stock) on the last market trading day prior to the day of
determination, as reported in the Wall Street Journal or such other source as
the Company's Board of Directors deems reliable.
3. COVENANTS OF THE COMPANY.
3.1 COVENANTS AS TO EXERCISE SHARES. The Company covenants and agrees that
all Exercise Shares that may be issued upon the exercise of the rights
represented by this Warrant will, upon issuance, be validly issued and
outstanding, fully paid and nonassessable, and free from all taxes, liens and
charges with respect to the issuance thereof. The Company further covenants and
agrees that the Company will at all times during the Exercise Period, have
authorized and reserved, free from preemptive rights, a sufficient number of
shares of its Common Stock to provide for the exercise of the rights represented
by this Warrant. If at any time during the Exercise Period the number of
authorized but unissued shares of Common Stock shall not be sufficient to permit
exercise of this Warrant, the Company will take such corporate action as may, in
the opinion of its counsel, be necessary to increase its authorized but unissued
shares of Common Stock to such number of shares as shall be sufficient for such
purposes.
3.2 NO IMPAIRMENT. Except and to the extent as waived or consented to by
the Holder, the Company will not, by amendment of its Certificate of
Incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed hereunder by the Company, but will at all times in good
faith assist in the carrying out of all the provisions of this Warrant and in
the taking of all such action as may be necessary or appropriate in order to
protect the exercise rights of the Holder against impairment.
3.3 NOTICES OF RECORD DATE. In the event of any taking by the Company of a
record of the holders of any class of securities for the purpose of determining
the holders thereof who are entitled to receive any dividend (other than a cash
dividend which is the same as cash dividends paid in previous quarters) or other
distribution, the Company shall mail to the Holder, at least fifteen (15) days
prior to the date specified herein, a notice specifying the date on which any
such record is to be taken for the purpose of such dividend or distribution.
4. REPRESENTATIONS OF HOLDER.
4.1 ACQUISITION OF WARRANT FOR PERSONAL ACCOUNT. The Holder represents and
warrants that it is acquiring the Warrant solely for its account for investment
and not with a view to or for sale or distribution of said Warrant or any part
thereof. The Holder also represents that the entire legal and beneficial
interests of the Warrant and Exercise Shares the Holder is acquiring is being
acquired for, and will be held for, its account only.
4.2 SECURITIES ARE NOT REGISTERED.
(a) The Holder understands that the Warrant and the Exercise Shares have
not been registered under the Securities Act of 1933, as amended (the "Act") on
the basis that no distribution or public offering of the Exercise Shares of the
Company is to be effected. The Holder realizes that the basis for the exemption
may not be present if, notwithstanding its representations, the Holder has a
present intention of acquiring the securities for a fixed or determinable period
in the future, selling (in connection with a distribution or otherwise),
granting any participation in, or otherwise distributing the securities. The
Holder has no such present intention.
(b) The Holder recognizes that the Warrant and the Exercise Shares must be
held indefinitely unless they are subsequently registered under the Act or an
exemption from such registration is available.
(c) The Holder is aware that neither the Warrant nor the Exercise Shares
may be sold pursuant to Rule 144 adopted under the Act unless certain conditions
are met, including, among other things, the existence of a public market for the
shares, the availability of certain current public information about the
Company, the resale following the required holding period under Rule 144 and the
number of shares being sold during any three month period not exceeding
specified limitations. Holder is aware that, while a public market for the
shares currently exists and the required public information is currently
available, the Holder must meet the holding period requirement for resale under
Rule 144 and the conditions for resale set forth in Rule 144 may not be
satisfied in the future.
4.3 DISPOSITION OF WARRANT AND EXERCISE SHARES.
(a) The Holder further agrees not to make any disposition of all or any
part of the Warrant or Exercise Shares in any event unless and until:
(i) There is then in effect a registration statement under the Act covering
such proposed disposition and such disposition is made in accordance with said
registration statement; or
(ii) (A) the Holder shall have notified the Company of the proposed
disposition and shall have furnished the Company with a detailed statement of
the circumstances surrounding the proposed disposition, and if reasonably
requested by the Company and (B) the Holder shall have furnished the Company
with an opinion of counsel, reasonably satisfactory to the Company, for the
Holder to the effect that such disposition will not require registration of such
Warrant or Exercise Shares under the Act or any applicable state securities
laws, provided however, it is agreed that the Company will not require opinions
of counsel for transactions made pursuant to Rule 144 except in unusual
circumstances; or
(iii) Notwithstanding the provisions of paragraphs (i) or (ii) above, no
such letter from the SEC, registration statement, or opinion of counsel shall be
necessary for a transfer by a Holder which is (A) a partnership to its partners
or former partners in accordance with partnership interests, (B) a limited
liability company to its members or former members in accordance with their
interest in the limited liability company, or (C) to the Holder's family member
or trust for the benefit of an individual Holder; provided that in each case the
Holder shall have notified the Company of the proposed transfer or disposition
at least 10 days prior to such transfer and the transferee will be subject to
the terms of this Agreement to the same extent as if he were an original Holder
hereunder.
(b) The Holder understands and agrees that all certificates evidencing the
shares to be issued to the Holder may bear the following legends:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THESE SHARES
MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO SBE, INC. THAT SUCH
REGISTRATION IS NOT REQUIRED.
THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO THIS WARRANT UNDER THE ACT OR AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO SBE, INC. THAT SUCH REGISTRATION IS NOT
REQUIRED.
5. ADJUSTMENT OF EXERCISE PRICE. In the event of changes in the outstanding
Common Stock of the Company by reason of stock dividends, split-ups,
recapitalizations, reclassifications, combinations or exchanges of shares,
separations, reorganizations, liquidations, or the like, the number and class of
shares available under the Warrant in the aggregate and the Exercise Price shall
be correspondingly adjusted to give the Holder of the Warrant, on exercise for
the same aggregate Exercise Price, the total number, class, and kind of shares
as the Holder would have owned had the Warrant been exercised prior to the event
and had the Holder continued to hold such shares until after the event requiring
adjustments. The form of this Warrant need not be changed because of any
adjustment in the number of Exercise Shares subject to this Warrant.
6. FRACTIONAL SHARES. No fractional shares shall be issued upon the
exercise of this Warrant as a consequence of any adjustment pursuant hereto. All
Exercise Shares (including fractions) issuable upon exercise of this Warrant may
be aggregated for purposes of determining whether the exercise would result in
the issuance of any fractional share. If, after aggregation, the exercise would
result in the issuance of a fractional share, the Company shall, in lieu of
issuance of any fractional share, pay the Holder otherwise entitled to such
fraction a sum in cash equal to the product resulting from multiplying the then
current fair market value of an Exercise Share by such fraction.
7. EARLY TERMINATION OR SALE, MERGER OR CONSOLIDATION OF THE COMPANY. In
the event of, at any time during the Exercise Period, any capital
reorganization, or any reclassification of the capital stock of the Company
(other than a change in par value or from par value to no par value or no par
value to par value or as a result of a stock dividend or subdivision, split-up
or combination of shares) ("Recapitalization"), or the consolidation or merger
of the Company with or into another where the holders of the Company's
securities before the transaction beneficially own less than 50% of the
outstanding voting securities of the surviving entity after the transaction
("Acquisition"), or the sale or other disposition of all or substantially all
the properties and assets of the Company in its entirety to any other person
("Asset Sale"), the Company shall provide to the Holder fifteen (15) days
advance written notice of such Recapitalization, Acquisition or Asset Sale. If
this Warrant is not exercised prior to the occurrence of such Asset Sale, then
this Warrant shall terminate. If this Warrant is not exercised prior to the
occurrence of such Recapitalization or Acquisition, then it shall survive the
closing of such Recapitalization or Acquisition and shall be exercisable for the
same securities, cash and property as would be payable for the Common Stock
issuable upon exercise of the unexercised portion of this Warrant as if such
shares of Common Stock were outstanding on the record date for the
Recapitalization or Acquisition. The Exercise Price shall be adjusted
accordingly.
8. NO STOCKHOLDER RIGHTS. This Warrant in and of itself shall not entitle
the Holder to any voting rights or other rights as a stockholder of the Company.
9. TRANSFER OF WARRANT. Subject to applicable laws and the restriction on
transfer set forth on the first page of this Warrant, this Warrant and all
rights hereunder are transferable, by the Holder in person or by duly authorized
attorney, upon delivery of this Warrant and the form of assignment attached
hereto to any transferee designated by Holder. The transferee shall sign an
investment letter in form and substance satisfactory to the Company.
10. LOST, STOLEN, MUTILATED OR DESTROYED WARRANT. If this Warrant is lost,
stolen, mutilated or destroyed, the Company may, on such terms as to indemnity
or otherwise as it may reasonably impose (which shall, in the case of a
mutilated Warrant, include the surrender thereof), issue a new Warrant of like
denomination and tenor as the Warrant so lost, stolen, mutilated or destroyed.
Any such new Warrant shall constitute an original contractual obligation of the
Company, whether or not the allegedly lost, stolen, mutilated or destroyed
Warrant shall be at any time enforceable by anyone.
11. NOTICES, ETC. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (a) upon personal delivery to the
party to be notified, (b) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient, if not, then on the next business
day, (c) five (5) days after having been sent by registered or certified mail,
return receipt requested, postage prepaid, or (d) one (1) day after deposit with
a nationally recognized overnight courier, specifying next day delivery, with
written verification of receipt. All communications shall be sent to the Company
at 2305 Camino Ramon, Suite 200, San Ramon, California 94583, Attention: Chief
Financial Officer (fax: (925) 355-2033) with a copy to Laura Randall Woodhead,
Cooley Godward LLP, One Maritime Plaza, 20th Floor, San Francisco, CA 94111, and
to Holder at 50 Rockefeller Plaza, Suite 1038, New York, New York 10020 or at
such other address as the Company or Holder may designate by ten (10) days
advance written notice to the other parties hereto.
12. ACCEPTANCE. Receipt of this Warrant by the Holder shall constitute
acceptance of and agreement to all of the terms and conditions contained herein.
13. GOVERNING LAW. This Warrant and all rights, obligations and liabilities
hereunder shall be governed by the laws of the State of Delaware.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by
its duly authorized officer as of April 30, 2002.
SBE, INC.
By:/s/ William B. Heye
----------------------
Title: President & CEO
-----------------
ATTEST:
/s/ David W. Brunton
- -----------------------
Secretary
NOTICE OF EXERCISE
TO: SBE, INC.
(1) ____ The undersigned hereby elects to purchase ________ shares of
the Common Stock of SBE, Inc. (the "Company") pursuant to the terms of the
attached Warrant, and tenders herewith payment of the exercise price in full,
together with all applicable transfer taxes, if any.
____ The undersigned hereby elects to purchase ______ shares of the
Common Stock of SBE, Inc. (the "Company") pursuant to the terms of the net
exercise provisions set forth in Section 2.1 of the attached Warrant, and shall
tender payment of all applicable transfer taxes, if any.
(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 (i) 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
in violation of applicable securities laws; (ii) the undersigned is aware of the
Company's business affairs and financial condition and has acquired sufficient
information about the Company to reach an informed and knowledgeable decision
regarding its investment in the Company; (iii) the undersigned is experienced in
making investments of this type and has such knowledge and background in
financial and business matters that the undersigned is capable of evaluating the
merits and risks of this investment and protecting the undersigned's own
interests; (iv) other than rights that may have been granted to the undersigned
pursuant to the Registration Rights Agreement dated between the undersigned and
the Company, the undersigned understands that the Company has no obligation to
register the shares of Common Stock issuable upon exercise of this Warrant under
the Securities Act of 1933, as amended (the "Securities Act"), and unless the
shares are registered under the Securities Act, they must be held indefinitely
unless subsequently registered under the Securities Act or an exemption from
such registration is available; (v) the undersigned is aware that the aforesaid
shares of Common Stock may not be sold pursuant to Rule 144 adopted under the
Securities Act unless certain conditions are met and until the undersigned has
held the shares for the number of years prescribed by Rule 144; and (vi) the
undersigned agrees not to make any disposition of all or any part of the
aforesaid shares of Common Stock unless and until there is then in effect a
registration statement under the Securities Act covering such proposed
disposition and such disposition is made in accordance with said registration
statement, or the Company is otherwise satisfied that such registration is not
required.
_______________________________
____________________________ (Signature)
(Date)
_______________________________
(Print name)
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this
form and supply required information. Do not use
this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby
are hereby assigned to
Name: _____________________________________________________
(Please Print)
Address: __________________________________________________
(Please Print)
Dated: __________, 20__
Holder's
Signature: ___________________________
Holder's
Address: ___________________________
NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatever. Officers of corporations and those acting in a fiduciary or
other representative capacity should file proper evidence of authority to assign
the foregoing Warrant.