EXHIBIT 10.17
EXHIBIT B
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS.
IT MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SUCH ACT AND
APPLICABLE LAWS, OR UNLESS THE COMPANY HAS RECEIVED AN
OPINION OF COUNSEL OR OTHER EVIDENCE, SATISFACTORY TO THE COMPANY
AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.
TRANSFER OF THIS WARRANT IS NOT VALID EXCEPT TO THE EXTENT
THAT SUCH TRANSFER HAS BEEN MADE IN COMPLIANCE WITH THE
PROVISIONS REGARDING TRANSFER CONTAINED HEREIN.
PCD INC.
COMMON STOCK PURCHASE WARRANT
Warrant Number 1 Maximum Number of Shares: 525,000
This Warrant is issued to ▇▇▇▇▇▇▇ Electric Co., a Missouri
corporation (the "Holder") by PCD Inc., a Massachusetts
corporation (the "Company").
For value received and subject to the terms and conditions
(a) contained in the Subordinated Debenture and Warrant Purchase
Agreement dated as of December 26, 1997 (the "Purchase
Agreement"), between the Company and the Holder, pursuant to
which this Warrant is issued, and (b) hereinafter set forth, the
Holder of this Warrant is entitled upon surrender hereof, with
the Notice of Exercise in the form annexed hereto duly executed,
at the office of the Company, ▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or such other office as the Company shall
notify to the Holder hereof in writing, to purchase from the
Company at an exercise price of One Dollar ($1.00) per share
(subject to adjustment as provided below, the "Exercise
Price"), up to 525,000 fully paid and non-assessable shares
(subject to adjustment as provided below) of common stock, $0.01
par value (the "Common Stock"), of the Company, exercisable as
follows: (i) on and after the date hereof, this Warrant shall be
exercisable to the extent of 150,000 shares of Common Stock;
(ii) if the principal of and accrued interest under the debenture
(the "Debenture") issued pursuant to the Purchase Agreement
have not been paid in full at the close of business on
December 31, 1998, this Warrant shall be exercisable to the
extent of an additional 225,000 shares of Common Stock; and
(iii) if the principal of and accrued interest under the
Debenture have not been paid in full at the close of business on
December 31, 1999, this Warrant shall be exercisable to the
extent of an additional 150,000 shares of Common Stock.
1. TERM OF WARRANT. Subject to the provisions of
Section 13 hereof, this Warrant shall expire at the close of
business on the later of (a) December 31, 2000 and (b) thirty
(30) days after the date when that certain Subordinated Debenture
dated December 26, 1997 issued by the Company to the Holder
pursuant to the Purchase Agreement shall have been paid in full
or converted in full into Common Stock pursuant to the terms
thereof. This Warrant shall be void thereafter.
2. EXERCISE OF WARRANT.
(a) The purchase rights represented by this Warrant
are exercisable by the Holder in whole or in part, but not for
less than 50,000 shares at a time (or such lesser number of
shares which may then constitute the maximum number purchasable;
such number being subject to adjustment as provided in Section 4
below), at any time, or from time to time, during the term hereof
as described in Section 1 above, by the surrender of this Warrant
and the Notice of Exercise annexed hereto duly completed and
executed on behalf of the Holder, at the office of the Company
(or such other office or agency of the Company as it may
designate by notice in writing to the Holder at the address of
the Holder appearing on the books of the Company), accompanied by
payment (in the form specified in the Notice of Exercise) of the
purchase price of the shares to be purchased (i) by cash, money
order, certified or bank cashier's check, or wire transfer, (ii)
by cancellation by the Holder of indebtedness or other
obligations of the Company to the Holder, (iii) by surrender to
the Company of shares of Common Stock of the Company having an
aggregate Fair Market Value equal to the aggregate purchase
price, (iv) by reducing the number of shares of Common Stock
issuable upon exercise by the number of shares having an
aggregate Fair Market Value equal to the aggregate purchase
price, or (v) by a combination of (i) through (iv) above. For
the purposes of this provision, the "Fair Market Value" of one
share of Common Stock shall mean the closing price of the Common
Stock as reported on the Nasdaq National Market for the relevant
date as provided in paragraph 2(b) below (or, if such date is not
a trading date or if no trades took place on such date, then such
closing price for the last previous trading date or the last
previous date on which a trade occurred, as the case may be);
provided that if the Common Stock is no longer traded on the
Nasdaq National Market on the relevant date, then the Fair Market
Value as of such date shall be such closing price as reported on
such other stock exchange on which the Common Stock is traded;
provided further that if the Common Stock is no longer traded on
the Nasdaq National Market or other stock exchange on the
relevant date, then the Fair Market Value as of such date shall
be determined by an appraiser mutually agreed upon by the Holder
and the Company.
(b) This Warrant shall be deemed to have been
exercised immediately before the close of business on the date of
its surrender for exercise as provided above, and the person
entitled to receive the shares of Common Stock issuable upon such
exercise shall be treated for all purposes as the holder of
record of such shares as of the close of business on such date.
As promptly as practicable on or after such date and in any event
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within ten (10) business days thereafter, the Company at its
expense shall issue and deliver to the person or persons entitled
to receive the same a certificate or certificates for the number
of shares issuable upon such exercise. In the event that this
Warrant is exercised in part, the Company at its expense will
execute and deliver a new Warrant of like tenor exercisable for
the remaining number of shares for which this Warrant may then be
exercised.
(c) Notwithstanding any other provision of this
Warrant, until the Company has obtained the approval of its
stockholders pursuant to the rules of the Nasdaq Stock Market,
Inc., or has obtained a waiver in respect of such rules, as
contemplated under the Purchase Agreement, the Holder and any
subsequent holder of this Warrant shall be permitted to convert
into Common Stock an amount of principal and accrued interest
under the Debenture, or exercise a portion of this Warrant, only
to the extent that all such conversions and exercises together
result in the issuance of up to and no more than 4.99% of the
Common Stock outstanding as of the Closing.
(d) Notwithstanding any other provision of this
Warrant, in accordance with Section 1.6 of the Purchase
Agreement, the Holder and any subsequent holder of this Warrant
shall be permitted to exercise a portion of this Warrant only to
the extent that the Purchaser and the Company have obtained any
required consent, authorization, order, approval, exemption or
waiver under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended.
3. RESERVATION OF STOCK. The Company covenants that it
will at all times reserve and keep available a number of its
authorized but unissued or treasury shares of its Common Stock,
free from all preemptive rights therein, which will be sufficient
to permit the exercise of this Warrant. The Company further
covenants that such Common Stock as may be issued pursuant to the
exercise of this Warrant will, upon issuance, be duly and validly
issued, fully paid and non-assessable and free from all taxes,
liens and charges with respect to the issue thereof.
4. ADJUSTMENTS.
(a) RECLASSIFICATION, MERGER, SALE OF ASSETS, ETC.
Subject to the provisions of Section 13 hereof, in case of any
reclassification, capital reorganization, or change of the
outstanding Common Stock of the Company (other than as a result
of a subdivision, combination or stock dividend), or in case of
any consolidation of the Company with, or merger of the Company
into, another corporation or other business organization (other
than a consolidation or merger in which the holders of the
outstanding voting stock of the Company immediately before the
consummation of such transaction shall, immediately after such
transaction, hold, as a group, at least a majority of the voting
securities of the surviving or successor entity), or in case of
any sale or conveyance to another corporation or other business
organization of the property of the Company, as an entirety or
substantially as an entirety, at any time before the expiration
of this Warrant, then, as a condition of such reclassification,
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reorganization, change, consolidation, merger, sale or
conveyance, lawful provision shall be made and duly executed
documents evidencing the same from the Company or its successor
shall be delivered to the Holder of this Warrant, so that the
Holder of this Warrant shall have the right before the expiration
of this Warrant to purchase, at a total price not to exceed that
payable upon the exercise of the unexercised portion of this
Warrant, the kind and amount of shares of stock and other
securities and property receivable upon such reclassification,
reorganization, change, consolidation, merger, sale or conveyance
by a holder of the number of shares of Common Stock of the
Company which might have been purchased by the Holder of this
Warrant immediately before such reclassification, reorganization,
change, consolidation, merger, sale or conveyance, and in any
such case appropriate provisions shall be made with respect to
the rights and interest of the Holder of this Warrant to the end
that the provisions hereof shall thereafter be applicable in
relation to any shares of stock, and other securities and
property thereafter deliverable upon exercise hereof.
(b) SPLIT, SUBDIVISION OR COMBINATION OF SHARES. If
the Company shall at any time before the expiration of this
Warrant subdivide its outstanding Common Stock, by split-up or
otherwise, or combine its outstanding Common Stock, or issue
additional shares of its capital stock in payment of a stock
dividend in respect of its Common Stock, the number of shares
issuable on the exercise of the unexercised portion 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, and the Exercise Price then
applicable to shares covered by the unexercised portion of this
Warrant shall forthwith be proportionately decreased in the case
of a subdivision or stock dividend, or proportionately increased
in the case of a combination.
(c) ADJUSTMENTS FOR DIVIDENDS IN STOCK OR OTHER
SECURITIES OR PROPERTY. If while this Warrant, or any portion
thereof, remains outstanding and unexpired, the holders of the
securities as to which purchase rights under this Warrant exist
at the time shall receive, or, on or after the record date fixed
for the determination of eligible stockholders, shall have become
entitled to receive, without payment therefor, other or
additional stock or other securities or property (other than
cash) of the Company by way of dividend, then and in each case,
this Warrant shall represent the right to acquire, in addition to
the number of shares of the security receivable upon exercise of
this Warrant, and without payment of any additional consideration
therefor, the amount of such other or additional stock or other
securities or property (other than cash) of the Company that such
holder would hold on the date of such exercise had it been the
holder of record of the security receivable upon exercise of this
Warrant on the record date of such dividend, giving effect to all
adjustments called for during such period by the provisions of
this Section 4.
(d) NO IMPAIRMENT. The Company will not, by
amendment of its Articles of Organization or through any
reorganization, transfer of assets, consolidation, merger,
dissolution, issuance or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or
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performance 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 Section 4 and in the
taking of all such action as may be necessary or appropriate in
order to protect the rights of the Holder against impairment.
5. NO FRACTIONAL SHARES. In no event shall any
fractional share of Common Stock of the Company be issued upon
any exercise of the warrant granted hereunder. If, upon exercise
of this Warrant as an entirety, the Holder would, except as
provided in this Section 5, be entitled to receive a fractional
share of Common Stock, then the Company shall issue a full share
with respect to such fractional share.
6. REPLACEMENT OF WARRANT. In case this Warrant shall be
mutilated, lost, stolen, or destroyed, the Company may issue a
new warrant of like tenor and denomination and deliver the same
(a) in exchange and substitution for and upon surrender and
cancellation of any mutilated Warrant, or (b) in lieu of any
Warrant lost, stolen, or destroyed, upon receipt of evidence
satisfactory to the Company of the loss, theft or destruction of
such Warrant (including a reasonably detailed affidavit with
respect to the circumstances of any loss, theft, or destruction)
and of indemnity satisfactory to the Company.
7. RIGHTS OF STOCKHOLDERS. Except as provided in
Section 4 above, this Warrant shall not entitle its Holder to any
of the rights of a stockholder of the Company.
8. TRANSFER OF WARRANT.
(a) WARRANT REGISTER. The Company will maintain a
register (the "Warrant Register") containing the name and
address of the Holder of this Warrant. The Holder of this Warrant
may change its address as shown on the Warrant Register by
written notice to the Company requesting such change. Any notice
or written communication required or permitted to be given to the
Holder may be given by registered mail, or delivered to such
Holder at its address as shown on the Warrant Register.
(b) WARRANT AGENT. The Company may, by written
notice to the Holder, appoint an agent for the purpose of
maintaining the Warrant Register referred to in Section 8(a)
above, issuing the Common Stock issuable upon the exercise of
this Warrant, exchanging this Warrant, replacing this Warrant, or
any or all of the foregoing. Thereafter, any such registration,
issuance, exchange or replacement, as the case may be, shall be
made at the office of such agent.
(c) TRANSFERABILITY OF WARRANT. This Warrant may be
transferred or assigned in whole or in part by the Holder either
to an affiliate (as that term is defined in the Securities Act of
1933, as amended (the "Securities Act") of the Holder or if the
Holder has complied with the terms and conditions of (i) the
Purchase Agreement, (ii) this Warrant and (iii) all applicable
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federal and state securities laws. Such compliance shall
include, without limitation, the delivery of investment
representation letters and legal opinions reasonably satisfactory
to the Company. Subject to the provisions of this Warrant with
respect to compliance with the Securities Act, title to this
Warrant may be transferred by endorsement (by the Holder
executing the Form of Assignment annexed hereto) and delivery in
the same manner as a negotiable instrument transferable by
endorsement and delivery.
(d) EXCHANGE OF WARRANT UPON A TRANSFER. On
surrender of this Warrant for exchange, properly endorsed on the
Form of Assignment and subject to the provisions of this Warrant
with respect to compliance with the Act and with the limitations
on assignments and transfers contained in this Section 8, the
Company at its expense shall issue to or on the order of the
Holder a new warrant or warrants of like tenor, in the name of
the Holder or as the Holder (on payment by the Holder of any
applicable transfer taxes) may direct, for the number of shares
issuable upon exercise hereof.
(e) COMPLIANCE WITH SECURITIES LAWS.
(i) The Holder of this Warrant, by acceptance
hereof, acknowledges that this Warrant and the shares of Common
Stock to be issued upon exercise hereof are being acquired solely
for the Holder's own account and not as a nominee for any other
party, and for investment, and that the Holder will not offer,
sell or otherwise dispose of this Warrant or any shares of Common
Stock to be issued upon exercise hereof except under
circumstances that will not result in a violation of the Act or
any state securities laws. Upon exercise of this Warrant, the
Holder shall, if requested by the Company, confirm in writing, in
a form satisfactory to the Company, that the shares of Common
Stock so purchased are being acquired solely for the Holder's own
account and not as a nominee for any other party, for investment,
and not with a view toward distribution or resale.
(ii) This Warrant and all shares of Common
Stock issued upon exercise hereof shall be stamped or imprinted
with a legend in substantially the following form (in addition to
any legend required by state securities laws):
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS. IT
MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, OR HYPOTHECATED
UNLESS AND UNTIL REGISTERED UNDER SUCH ACT AND APPLICABLE LAWS,
OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL OR
OTHER EVIDENCE, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT
SUCH REGISTRATION IS NOT REQUIRED.
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9. CERTIFICATE OF ADJUSTMENT OF WARRANT PRICE. Whenever
the Warrant price is adjusted, as herein provided, the Company
shall promptly deliver to the Holder of this Warrant a
certificate setting forth the Warrant price after such adjustment
and setting forth a brief statement of the facts requiring such
adjustment, as certified by the Company's independent public
accountants.
10. NOTICE OF DIVIDEND OR DISTRIBUTION. If at any time
before the expiration or exercise of this Warrant, the Company
shall propose to pay any dividend or make any distribution upon
its Common Stock or make any subdivision or combination of, or
other change in its Common Stock, the Company shall cause notice
thereof to be mailed, first class, postage prepaid, to the Holder
of this Warrant at least twenty (20) days before the date as of
which holders of Common Stock who shall participate in such
dividend or distribution are to be determined. Failure to give
such notice, or any defect therein, shall not affect the legality
or validity of any dividend or distribution.
11. "MARKET STAND OFF" AGREEMENT. The Holder, if
requested by the Company or any managing underwriter of the
Company's securities, shall agree not to sell or otherwise
transfer or dispose of any Common Stock of the Company held by
the Holder during the period up to 180 days, as requested by the
Company or such underwriter, following the effective date of a
registration statement of the Company filed under the Securities
Act (except for any Company securities held by the Holder sold
pursuant to such registration statement). Such agreement shall
be in writing in form satisfactory to the Company and such
underwriter. The Company may impose stop-transfer instructions
with respect to such Common Stock subject to the foregoing
restriction until the end of such period.
12. REGISTRATION RIGHTS AGREEMENT. The Holder, upon
exercise of the Warrant, will be entitled to the benefits of the
Registration Rights Agreement dated as of the date of the
Purchase Agreement, by and between the Company and the Holder.
13. TERMINATION UPON CONSOLIDATION OR MERGER.
Notwithstanding any other provision of this Warrant, if the
Company is to be consolidated with or acquired by another entity
in a merger or other reorganization in which the holders of the
outstanding voting stock of the Company immediately before the
consummation of such transaction shall immediately after such
transaction hold, as a group, less than a majority of the voting
securities of the surviving or successor entity, or in the event
of a sale of all or substantially all of the Company's assets or
otherwise, the Company may upon notice to the Holder provide that
this Warrant must be exercised within a specified number of days
of the date of such notice, at the end of which period this
Warrant shall terminate.
14. GOVERNING LAW. The provisions and terms of this
Warrant shall be construed in accordance with the laws of the
Commonwealth of Massachusetts.
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IN WITNESS WHEREOF, the Company has caused this Warrant to
be executed under seal this 26th day of December, 1997.
PCD INC.
By: /S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
---------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Chairman of the Board
Address: ▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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NOTICE OF WARRANT EXERCISE
Date _____________________
PCD Inc.
▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(1) The undersigned hereby elects to purchase __________
shares of Common Stock of PCD Inc., pursuant to the provisions of
Section 2 of the attached Warrant, and tenders herewith payment
of the Exercise Price for such shares in accordance with
Section 2(a) of such Warrant, as follows:
_____________________
_________________________________________________________________
______________.
(2) In exercising this Warrant, the undersigned hereby
confirms and acknowledges that the shares of Common Stock are
being acquired solely for the account of the undersigned and not
as a nominee for any other party (other than affiliates as
permitted under Section 8(c) of the attached Warrant), and for
investment, and that the undersigned will not offer, sell or
otherwise dispose of any such shares of Common Stock except under
circumstances that will not result in a violation of the
Securities Act of 1933, as amended or any applicable state
securities laws.
(3) 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:
__________________________________
Certificate Name
(4) Please issue a new Warrant for the unexercised
portion of the attached Warrant in the name of the undersigned or
in such other name as is specified below.
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▇▇▇▇▇▇▇ ELECTRIC CO.
By:____________________________________
Name:__________________________________
Title:_________________________________
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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FORM OF ASSIGNMENT
For value received ▇▇▇▇▇▇▇ Electric Co. hereby sells, assigns and
transfers unto
_________________________________________________________________
_________________________________________________________________
(Please print or typewrite name and address of Assignee)
warrants to purchase _________________________ (___________)
shares of the Common Stock of PCD Inc., represented by the within
Warrant, and does hereby irrevocably constitute and appoint
________________________________________ Attorney to transfer
the within Warrant on the books of the PCD Inc. with full power
of substitution on the premises.
Dated:_________________________
▇▇▇▇▇▇▇ ELECTRIC CO.
By:____________________________
Name:__________________________
Title:_________________________
Address: 8000 West Florissant
▇.▇. ▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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