EXHIBIT 10.4: Warrant to Purchase Common stock - Wescom Capital, Inc.
THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, OR AN OPINION
OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER
SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.
WARRANT TO PURCHASE
COMMON STOCK
OF
BGI, INC.
Void after July 26, 2006
Warrant no. (2)
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This Warrant is issued to Wescom Capital, Inc., of Seattle, Washington, or its
registered assigns ("Holder") by BGI, Inc., of Austin, Texas (the "Company"), on
August 29, 2002 (the "Warrant Issue Date").
1. Purchase Shares. Subject to the terms and conditions hereinafter set forth,
the Holder is entitled, upon surrender of this Warrant at the principal
office of the Company (or any such other place as the Company shall notify
the Holder hereof in writing), to purchase from the Company up to two
hundred fifty thousand (250,000) fully paid and non-assessable shares of
Common Stock of the Company, as constituted on the Warrant Issue Date (the
"Warrant Stock"). The number of shares of Warrant Stock issuable pursuant
to this Section 1 shall be subject to adjustment pursuant to Section 9
hereof.
2. Exercise Price. The purchase price shall be forty cents ($0.40) per share
of Warrant Stock, as adjusted from time to time pursuant to Section 9
hereof (the "Exercise Price").
3. Exercise Period. This Warrant shall be exercisable, in whole or in part,
during the term commencing on the Warrant Issue Date and ending at 5:00
p.m. Pacific Standard Time on July 26, 2006.
4. Method of Exercise. While this Warrant remains outstanding and exercisable
in accordance with Section 3 above, the Holder may exercise, in whole or in
part, the purchase rights evidenced hereby. Such exercise shall be effected
by:
a. The surrender of the Warrant, together with a duly executed copy of
the form of Notice of Election attached hereto as Exhibit B, to the
Secretary of the Company at its principal offices; and
b. The payment of the Company of an amount equal to the aggregate
Exercise Price for the number of shares of Warrant Stock being
purchased.
5. Net Exercise. In lieu of exercising the Warrant pursuant to Section 4, the
Holder may elect to receive, without the payment by the Holder of any
additional consideration, shares of Warrant Stock equal to the value of the
Warrant (or the portion thereof being cancelled) by surrender of this
Warrant at the principal office of the Company together with notice of such
election, in which event the Company shall issue to the Holder hereof a
number of shares of Warrant Stock computed using the following formula:
Y(A - B)
X = --------
A
Where: X = The number of shares of Warrant Stock
to be issued to the Holder pursuant to
this exercise;
Y = The number of shares of Warrant Stock in
respect of which the net issue election is
made;
A = The fair market value of one share of
the Warrant Stock at the time the net issue
election is made;
B = The Exercise Price (as adjusted to the
date of the net issuance).
For the purposes of this Section 5, the fair market value of one share of
Common Stock as of a particular date shall be determined as follows: (i) if
traded on a securities exchange or through the Nasdaq National Market, the
value shall be deemed to be the average of the closing prices of the
securities on such exchange over the thirty (30) day period ending three
(3) days prior to the net Exercise Election; (ii) if traded
over-the-counter, the value shall be deemed to be the average of the
closing bid or sale prices (whichever is applicable) over the thirty (30)
day period ending three (3) days prior to the net exercise; and (iii) if
there is no active public market, the value shall be the fair market value
thereof, as determined in good faith by the Board of Directors of the
Company.
6. Certificate for Shares. Upon the exercise of the purchase rights evidenced
by this Warrant, one or more certificates for the number of shares of
Warrant Stock so purchased shall be issued as soon as practicable
thereafter (with an appropriate restrictive legend, if applicable), and in
any event within thirty (30) days of the delivery of the subscription
notice.
7. Issuance of Shares. The Company covenants that the shares of Warrant Stock
when issued pursuant to the exercise of this Warrant, will be duly and
validly issued, fully paid and non-assessable and free from all taxes,
liens, and charges with respect to the issuance thereof.
8. Adjustment of Exercise Price and Number of Shares. The number of and kind
of securities purchasable upon excercise of this Warrant and the Exercise
Price shall be subject to adjustment from time to time as follows:
a. Subdivisions, Combination and Other Issuances. If the Company shall at
any time prior to the expiration of this Warrant subdivide its Common
Stock, by split-up or otherwise, or combine its Common Stock by
reverse-split or otherwise, or issue additional shares of its Common
Stock as a dividend with respect to any shares of its Common Stock,
the number of shares of Warrant Stock issuable on the exercise of this
Warrant shall forthwith be proportionately increased in the case of a
subdivision or stock dividend or proportionately decreased in the case
of a combination. Appropriate adjustments shall also be made to the
purchase price payable per share, but the aggregate purchase price
payable for the total number of shares of Warrant Stock purchasable
under this Warrant (as adjusted) shall remain the same. Any adjustment
under this Section 8(a) shall become effective at the close of
business on the date the subdivision or combination becomes effective,
or as of the record date of such dividend, or in the event that no
record date is fixed, upon the making of such dividend.
b. Reclassification, Reorganization and Consolidation. In case of any
reclassification, capital reorganization, or change in the Warrant
Stock of the Company (other than as a result of a subdivision,
combination, or stock dividend provided for in Section 8(a) above),
then as a condition of such reclassification, reorganization, or
change, lawful provision shall be made, and duly executed documents
evidencing the same from the Company or its successor shall be
delivered to the Holder, so that the Holder shall have the right at
any time prior to the expiration of this Warrant to purchase, at a
total price equal to that payable upon the exercise of this Warrant,
the kind and amount of shares of stock and other securities and
property receivable in connection with such reclassification,
reorganization, or change by a Holder of the same number of shares of
Warrant Stock as were purchasable by the Holder immediately prior to
such reclassification, reorganization, or change. In any such case,
appropriate provisions shall be made with respect to the rights and
interest of the Holder so that the provisions hereof shall thereafter
be applicable with respect to any shares of stock or other securities
and property deliverable upon exercise hereof, and appropriate
adjustments shall be made to the purchase price per share payable
hereunder, provided the aggregate purchase price shall remain the
same.
c. Notice of Adjustment. When any adjustment is required to be made in
the number or kind of shares purchasable upon exercise of the Warrant,
or in the Warrant Price, the Company shall promptly notify the Holder
of such event and the number of shares of Warrant Stock or other
securities or property thereafter purchasable upon exercise of this
Warrant.
9. No Fractional Shares or Scrip. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant, but in
lieu of such fractional shares, the Company shall make a cash payment
therefore on the basis of the Exercise Price then in effect.
10. No Stockholder Rights. Prior to exercise of this Warrant, the Holder shall
not be entitled to any rights of a stockholder with respect to the shares
of Warrant Stock, including (without limitation) the right to vote such
shares, receive dividends or other distributions thereon, exercise
preemptive rights or be notified of stockholder meetings, and such Holder
shall not be entitled to any notice or other communication concerning the
business affairs of the Company. However, nothing in this Section 10 shall
limit the right of the Holder to be provided the Notices expressly required
under this Warrant.
11. Transfers of Warrant. Subject to compliance with applicable federal and
state securities laws, this Warrant and all rights hereunder are
transferable in whole or in part by the Holder to any person or entity upon
written notice to the Company. The transfer shall be recorded on the books
of the Company upon the surrender of this Warrant, properly endorsed, to
the Company at its principal offices, and the payment to the Company of all
transfer taxes and other governmental charges imposed on such transfer. In
the event of a partial transfer, the Company shall issue to the Holders one
or more appropriate new warrants.
12. Registration Rights. This section has been intentionally left blank.
13. Successors and Assigns. The terms and provisions of this Warrant shall
inure to the benefit of, and be binding upon, the Company and the Holders
hereof and their respective successors and assigns.
14. Amendments and Waivers. Any term of this Warrant may be amended and the
observance of any term of this Warrant may be waived (either generally or
in a particular instance and either retroactively or prospectively) only
with the written consent of the Company and the Holder. Any waiver or
amendment effected in accordance with this Section shall be binding upon
each Holder of any shares of Warrant Stock purchased under this Warrant at
the time outstanding, each future Holder of all such shares of Warrant
Stock, and the Company.
15. Notices. All notices required under this Warrant shall be deemed to have
been given or made for all purposes: (i) upon personal delivery; (ii) upon
confirmation receipt that the communication was successfully sent to the
applicable number if sent by facsimile; (iii) one day after being sent,
when sent by professional overnight courier services; or (iv) five (5) days
after posting when sent by registered or certified mail. Notices to the
Company shall be sent to the principal office of the Company (or at such
other place as the Company shall notify the Holder hereof in writing).
Notices to the Holder shall be sent to the address of the Holder on the
books of the Company (or at such other place as the Holder shall notify the
Company hereof in writing).
16. Attorney's Fees. If any action of law or equity is necessary to enforce or
interpret the terms of this Warrant, the prevailing party shall be entitled
to its reasonable attorney's fees, costs and disbursements in addition to
any other relief to which it may be entitled.
17. Captions. The section and subsection headings of this Warrant are inserted
for convenience only and shall not constitute a part of this Warrant in
construing or interpreting any provision hereof.
18. Governing Law. This Warrant shall be governed by the laws of the State of
Texas, as applied to agreements among Texas residents made and to be
performed entirely within the State of Texas.
BGI, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: CFO
EXHIBIT A
REGISTRATION RIGHTS
This exhibit is intentionally left blank.
EXHIBIT B
NOTICE OF EXERCISE
To: BGI, Inc.
THE UNDERSIGNED HEREBY IRREVOCABLY ELECTS TO EXERCISE THE RIGHT, REPRESENTED BY
THIS WARRANT NOTICE OF EXERCISE, TO RECEIVE _______________________ SHARES OF
COMMON STOCK [alt. 1 language: AND HEREWITH TENDERS PAYMENT FOR SUCH SHARES TO
THE ORDER OF BGI, INC., IN THE AMOUNT OF $_____________________ IN ACCORDANCE
WITH THE TERMS HEREOF AND THE WARRANT AGREEEMENT NUMBER ___________ FROM BGI,
INC., DATED _____________] [alt. 2 language: IN ACCORDANCE WITH THE TERMS HEREOF
AND PURSUANT TO THE NET EXERCISE PROVISION IN SECTION 5 OF THE WARRANT AGREEMENT
NUMBER __________ FROM BGI, ING., DATED _______________].
THE UNDERSIGNED REQUESTS THAT A CERTIFICATE FROM SUCH SHARES BE REGISTERED IN
THE NAME OF _________________________________, WHOSE ADDRESS IS
____________________________________________________ AND THAT SUCH SHARES BE
DELIVERED TO ____________________________, WHOSE ADDRESS IS
___________________________________________________. IF SUCH NUMBER OF SHARES IS
LESS THAN ALL OF THE SHARES OF COMMON STOCK PURCHASABLE HEREUNDER AFTER GIVING
EFFECT TO ANY DELIVERY OF WARRANTS IN PAYMENT OF THE EXERCISE PRICE, THE
UNDERSIGNED REQUESTS THAT A NEW WARRANT CERTIFICATE REPRESENTING THE REMAINING
BALANCE OF SUCH SHARES BE REGISTERED IN THE NAME OF
_________________________________, WHOSE ADDRESS IS
________________________________________________ AND THAT SUCH WARRANT
CERTIFICATE BE DELIVERED TO ______________________, WHOSE ADDRESS IS
________________________________________________.
WARRANTHOLDER:
By: ________________________
Name: _______________________
Address: ______________________
Date: ______________________
