EXHIBIT 10.04
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT") AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED UNLESS
REGISTERED UNDER THE ACT OR AN OPINION OF COUNSEL, SATISFACTORY TO THE
CORPORATION, IS OBTAINED TO THE EFFECT THAT SUCH SALE, TRANSFER OR ASSIGNMENT IS
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE ACT.
Shares Issuable Upon Exercise: (1) shares of Common Stock of Vivid
Technologies, Inc., subject to adjustment as
provided herein
WARRANT TO PURCHASE
SHARES OF COMMON STOCK
Expires (3)
THIS CERTIFIES THAT, for value received, (2), is entitled to subscribe for
and purchase (1) shares (the "Warrant Shares") of the fully paid and
nonassessable Common Stock, $.01 par value (the "Common Stock") of Vivid
Technologies, Inc., a Massachusetts corporation (the "Company"), at a price per
share of $1.50 (such price and such other price as shall result, from time to
time, from adjustments specified herein is herein referred to as the "Warrant
Price"), subject to the provisions and upon the terms and conditions hereinafter
set forth. As used herein, the term "Warrant Shares" shall mean the Company's
presently authorized Common Stock, or any stock into or for which such Common
Stock shall have been or may hereafter be converted or exchanged pursuant to the
Articles of Organization of the Company as from time to time amended as provided
by law and in such Articles (hereinafter the "Charter").
1. Term. Subject to the provisions of this Warrant, the purchase right
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represented by this Warrant is exercisable, in whole or in part, at any time and
from time to time from and after February 2, 1994 and prior to the earlier of
the expiration date set forth on the face of this Warrant or the fifth annual
anniversary date of the consummation of the Company's initial public offering of
its Common Stock, the aggregate proceeds from which (net of any fees,
commissions or underwriter's discounts) is at least $5,000,000.
2. Method of Exercise; Net Issue Exercise.
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2.1 Method of Exercise; Payment; Issuance of New Warrant. The
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purchase right represented by this Warrant may be exercised by the holder
hereof, in whole or in part and from time
to time, by either, at the election of the holder hereof, (a) the surrender of
this Warrant (with the notice of exercise form attached hereto as Exhibit A-1
duly executed) at the principal office of the Company and by the payment to the
Company, by certified or bank check or by wire transfer, of an amount equal to
the then applicable Warrant Price per share multiplied by the number of Warrant
Shares then being purchased or (b) if in connection with a registered public
offering of the Company's securities (provided that such offering includes the
Warrant Shares and that the holder shall have elected to participate therein
pursuant to the exercise of the registration rights referred to in Article 7 of
the Conversion Agreement of the Company dated as of February 2, 1994 pursuant to
which this Warrant has been issued), the surrender of this Warrant (with the
notice of exercise form attached hereto as Exhibit A-2 duly executed) at the
principal office of the Company together with notice of arrangements reasonably
satisfactory to the Company and any underwriter, in the case of an underwritten
registered public offering, for payment to the Company either by certified or
bank check or by wire transfer or from the proceeds of the sale of Warrant
Shares to be sold by the holder in such public offering of an amount equal to
the then applicable Warrant Price per Warrant Share multiplied by the number of
Warrant Shares then being purchased. The person or persons in whose name(s) any
certificate(s) representing Warrant Shares shall be issuable upon exercise of
this Warrant shall be deemed to have become the holder(s) of record of, and
shall be treated for all purposes as the record holder(s) of, the shares
represented thereby (and such shares shall be deemed to have been issued)
immediately prior to the close of business on the date or dates upon which this
Warrant is exercised and the then applicable Warrant Price paid. In the event of
any exercise of the rights represented by this Warrant, certificates for the
shares of stock so purchased shall be delivered to the holder hereof as soon as
possible and in any event within thirty days of receipt of such notice and
payment of the then applicable Warrant Price and, unless this Warrant has been
fully exercised or expired, a new Warrant representing the portion of the
Warrant Shares, if any, with respect to which this Warrant shall not then have
been exercised shall also be issued to the holder hereof as soon as possible and
in any event within such thirty-day period.
2.2 Net Issue Exercise.
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(a) If at the time the holder proposes to exercise this Warrant the
Company has theretofore effected a registered public offering of its Common
Stock under the Securities Act of 1933, as amended (the "Act") in lieu of
exercising this Warrant, the holder may elect to receive Warrant Shares equal to
the value of this 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
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shall issue to the holder a number of shares of the Warrant Shares computed
using the following formula:
X = Y (A - B)
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A
Where X - The number of Warrant Shares to be issued to the
holder.
Y - the number of Warrant Shares purchasable under
this Warrant.
A - the fair market value of one Warrant Share.
B - Warrant Price (as adjusted to the date of such
calculations).
(b) For purposes of this Section, fair market value of a Warrant Share
shall mean the average of the closing bid and asked prices of the Company's
Common Stock quoted in the Over-The-Counter Market Summary or the closing price
quoted on any exchange on which the Common Stock is listed, whichever is
applicable, as published in the Eastern Edition of The Wall Street Journal for
the ten trading days prior to the date of determination of fair market value, or
if no transactions have occurred during such period, the last closing price at
which such Common Stock has traded.
3. Stock Fully Paid; Reservation of Shares. All Warrant Shares that may
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be issued upon the exercise of the rights represented by this Warrant will, upon
issuance, be fully paid and nonassessable, and free from all taxes, liens and
charges with respect to the issue thereof. During the period within which the
rights represented by the Warrant may be exercised, the Company will at all
times have authorized and reserved for the purpose of issuance upon exercise of
the purchase rights evidenced by this Warrant, a sufficient number of Warrant
Shares to provide for the exercise of the right represented by this Warrant.
4. Adjustment of Warrant Price and Number of Shares. The number and kind
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of securities purchasable upon the exercise of the Warrant and the Warrant Price
shall be subject to adjustment from time to time upon the occurrence of certain
events, as follows:
4.1 Reclassification. In case of any reclassification, change or
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conversion of securities of the class of securities issuable upon exercise of
this Warrant (other than a change in par value, or from par value to no par
value, or from no par value to par value, or as a result of a subdivision or
combination), the Company, shall execute a new Warrant (in form and substance
reasonably satisfactory to the holder of this Warrant)
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providing that the holder of this Warrant shall have the right to exercise such
new Warrant and upon such exercise and payment of the then applicable Warrant
Price to receive, in lieu of each Warrant Share theretofore issuable upon
exercise of this Warrant, the kind and amount of shares of stock, other
securities, money and property receivable upon such reclassification or change
by a holder of one share of Common Stock. Such new Warrant shall provide for
adjustments that shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 4.1. The provisions of this Section 4.1
shall similarly apply to successive reclassifications and changes.
4.2 Subdivisions or Combinations of Shares. If the Company at any
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time while this Warrant remains outstanding and unexpired shall subdivide or
combine its Common Stock, the Warrant Price and the number of Warrant Shares
issuable upon exercise hereof shall be equitably adjusted.
4.3 Stock Dividends. If the Company at any time while this Warrant is
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outstanding and unexpired shall pay a dividend payable in shares of Common Stock
(except any distribution specifically provided for in the foregoing Sections 4.1
and 4.2), then the Warrant Price shall be adjusted, from and after the date of
determination of shareholders entitled to receive such dividend or distribution,
to that price determined by multiplying the Warrant Price in effect immediately
prior to such date of determination by a fraction (a) the numerator of which
shall be the total number of shares of Common Stock outstanding immediately
prior to such dividend or distribution, and (b) the denominator of which shall
be the total number of shares of Common Stock outstanding immediately after such
dividend or distribution and the number of Warrant Shares subject to this
Warrant shall be proportionately adjusted.
4.4 Dilutive Issuances. In the event the Company shall issue
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additional shares of Common Stock or any securities convertible into,
exchangeable for or exercisable for Common Stock (the "Additional Securities")
without consideration or for a consideration per share less than the applicable
Warrant Price in effect on the date of and immediately prior to such issue
(other than shares of Common Stock issued to employees and consultants of the
Company in accordance with Section 5.12 of the Company's Series C and Series D
Preferred Stock Purchase Agreement dated January 25, 1991 (the "Preferred Stock
Purchase Agreement"), up to a maximum of 1,000,000 shares as adjusted for any
dividend or distribution of shares of Common Stock), then and in such event,
such applicable Warrant Price shall be reduced, concurrently with such issue, to
a price (calculated to the nearest tenth of a cent) determined by multiplying
such applicable Warrant Price by a fraction, the numerator of which shall be the
number of shares of Common Stock outstanding immediately prior to such issue
plus the number of shares of Common Stock which the aggregate consi-
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deration received by the corporation for the total number of shares of
Additional Securities so issued would purchase at such applicable Warrant Price;
and the denominator of which shall be the number of shares of Common Stock
outstanding immediately prior to such issue plus the number of shares of such
Additional Securities so issued. For the purpose of performing the calculations
required by this Section 4.4, all shares of Common Stock issuable upon the
conversion, exchange or exercise of outstanding securities (including, without
limitation, options issued to employees and consultants) shall be deemed to be
outstanding, and immediately after the consideration for any shares of
Additional Securities has been received, they shall be deemed to be outstanding.
4.5 No Impairment. The Company will not, by amendment of its Charter
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or through any reorganization, recapitalization, 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
Article 4 and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the holder of this Warrant against
impairment.
4.6 Notices of Record Date. In the event of any taking by the Company
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of a record of its shareholders for the purpose of determining shareholders who
are entitled to receive payment of any dividend or other distribution, or for
the purpose of determining shareholders who are entitled to vote in connection
with any proposed merger or consolidation of the Company with or into any other
corporation, or any proposed sale, lease or conveyance of all or substantially
all of the assets of the Company, or any proposed liquidation, dissolution or
winding up of the Company, the Company shall mail to the holder of this Warrant,
at least fifteen (15) days prior to the date specified therein, a notice
specifying the date on which any such record is to be taken for the purpose of
such dividend, distribution or vote, and the amount and character of such
dividend, distribution or vote.
5. Notice of Adjustments. Whenever the Warrant Price shall be adjusted
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pursuant to the provisions hereof, the Company shall within thirty (30) days of
such adjustment deliver a certificate signed by its chief financial officer to
the registered holder(s) hereof setting forth, in reasonable detail, the event
requiring the adjustment, the amount of the adjustment, the method by which such
adjustment was calculated and the Warrant Price after giving effect to such
adjustment.
6. Fractional Shares. No fractional Warrant Shares will be issued in
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connection with any exercise hereunder, but in lieu of
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such fractional shares the Company shall make a cash payment therefor upon the
basis of the Warrant Price then in effect.
7. Compliance with Securities Act; Disposition of Warrant or Shares.
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7.1 Compliance with Securities Act. The holder of this Warrant, by
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acceptance hereof, confirms as to itself the representations made by each
Investor in the Conversion Agreement and agrees to the placement of a
restrictive transfer legend on this Warrant and the certificates representing
the Warrant Shares.
7.2 Disposition of Warrant and Shares. With respect to any offer,
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sale or other disposition of this Warrant or any Warrant Shares acquired
pursuant to the exercise of this Warrant prior to registration of such shares,
the holder hereof and each subsequent holder of this Warrant agrees to give
written notice to the Company prior thereto, describing briefly the manner
thereof, together with a written opinion of such holder's counsel, if reasonably
requested by the Company (and, in such case, such counsel and opinion must be
reasonably acceptable to the Company), to the effect that such offer, sale or
other disposition may be effected without registration or qualification (under
the Act) as then in effect or any federal or state law then in effect) of this
Warrant or such Warrant Shares and indicating whether or not under the Act
certificates for this Warrant or such Warrant Shares to be sold or otherwise
disposed of require any restrictive legend as to applicable restrictions on
transferability in order to insure compliance with the Act. Each certificate
representing this Warrant or the Warrant Shares thus transferred (except a
transfer pursuant to Rule 144) shall bear a legend as to the applicable
restrictions on transferability in order to insure compliance with the Act,
unless in the aforesaid opinion of counsel for the holder, such legend is not
required in order to insure compliance with the Act. Nothing herein shall
restrict the transfer of this Warrant or any portion hereof by the initial
holder hereof to any partner of the holder, any partnership affiliated with the
holder, or to any partner of any such partnership, provided such transfer may be
made in compliance with applicable federal and state securities laws. The
Company may issue stop transfer instructions to its transfer agent in connection
with the foregoing restrictions.
8. Rights as Shareholder; Additional Rights.
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8.1 Shareholder Rights. No holder of the Warrant, as such, shall be
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entitled to vote or receive dividends or be deemed the holder of Warrant Shares
or any other securities of the Company which may at any time be issuable on the
exercise thereof for any purpose, nor shall anything contained herein be
construed to confer upon the holder of this Warrant, as such, any of the rights
of a shareholder of the Company or any right to vote for
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the election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to receive notice of meetings (except as otherwise provided
in Section 4.7 of this Warrant), or to receive dividends or subscription rights
or otherwise until this Warrant shall have been exercised and the Warrant Shares
purchasable upon the exercise hereof shall have become deliverable, as provided
herein.
8.2 Mergers. Unless the Company provides the holder of this Warrant
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with at least the greater of (a) 30 days' notice or (b) such greater amount of
notice as Massachusetts law requires be given to shareholders with power to vote
at a meeting on any transaction described hereinafter of the terms and
conditions of the proposed transaction, the Company will not (i) sell, lease,
exchange, convey or otherwise dispose of all or substantially all of its
property or business, or (ii) merge into or consolidate with any other
corporation (other than a wholly-owned subsidiary of the Company), or effect any
transaction (including a merger or other reorganization) or series of related
transactions, in which more than 50% of the voting power of the Company is
disposed of. No transaction described in this Section 8.2 shall be consummated
unless either (a) the sale of this Warrant is arranged in connection with any
such transaction on terms satisfactory to the holder hereof or (b) the holder
hereof receives in connection with such transaction either (i) a new Warrant (in
form and substance satisfactory to the holder of this Warrant) exercisable for
the kind and amount of shares of stock, other securities, money and property
receivable upon such transaction by a holder of Common Stock or (ii) the
remainder of (x) securities, money or other property receivable upon such
transaction by a holder of Common Stock having the same number of shares of
Common Stock as the number for which this Warrant is exercisable pursuant to
Section 2.2 hereof immediately prior to such transaction, minus (y) the then
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applicable Warrant Price per share multiplied by such number of Warrant Shares.
9. Representations and Warranties. This Warrant is issued and delivered
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on the basis of the following:
9.1 Authorization and Delivery. This Warrant has been duly authorized
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and executed by the Company and when delivered will be the valid and binding
obligation of the Company enforceable in accordance with its terms;
9.2 Warrant Shares. The Warrant Shares have been duly authorized and
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reserved for issuance by the Company and, when issued and paid for in accordance
with the terms hereof, will be validly issued, fully paid and nonassessable;
9.3 Rights and Privileges. The rights, preferences, privileges and
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restrictions granted to or imposed upon the Warrant Shares and the holders
thereof are as set forth herein and
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in the Company's Charter and the Conversion Agreement, true and complete copies
of which have been delivered to the original warrantholder; and
9.4 No Inconsistency. The execution and delivery of this Warrant are
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not, and the issuance of the Warrant Shares upon exercise of this Warrant in
accordance with the terms hereof will not be, inconsistent with the Company's
Charter or by-laws, do not and will not contravene any law, governmental rule or
regulation, judgment or order applicable to the Company, and do not and will not
contravene any provision of, or constitute a default under, any indenture,
mortgage, contract or other instrument of which the Company is a party or by
which it is bound or require the consent or approval of, the giving of notice
to, the registration with or the taking of any action in respect of or by, any
Federal, state or local government authority or agency or other person.
10. Modification and Waiver. This Warrant and any provision hereof may be
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changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.
11. Notices. Any notice, request or other document required or permitted
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to be given or delivered to the holder hereof or the Company shall be delivered
by facsimile where confirmation of receipt by the receiving party's receiver can
be documented, or delivered by hand, or shall be sent by reputable overnight
courier, certified or registered mail, postage prepaid, to each such holder at
its address as shown on the books of the Company or to the Company at the
address indicated therefore on the signature page of this Warrant.
12. Binding Effect on Successors. Subject to the provisions of Section
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8.2, this Warrant shall be binding upon any corporation succeeding the Company
by merger or consolidation, and all of the obligations of the Company relating
to the Warrant Shares issuable upon the exercise of this Warrant shall be as set
forth in the Conversion Agreement, the Company's Charter and the Company's by-
laws (each as amended from time to time) and shall survive the exercise and
termination of this Warrant and all of the covenants and agreements herein and
in such other documents and instruments of the Company shall inure to the
benefit of the successors and assigns of the holder hereof. The Company will,
at the time of the exercise of this Warrant, in whole or in part, upon request
of the holder hereof but at the Company's expense, acknowledge in writing its
continuing obligation to the holder hereof in respect of any rights (including,
without limitation, any right to registration of the Warrant Shares) to which
the holder hereof shall continue to be entitled after such exercise in
accordance with this Warrant; provided, that the failure of the holder hereof to
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make any such request shall not affect the
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continuing obligation of the Company to the holder hereof in respect of such
rights.
13. Lost Warrants or Stock Certificates. The Company covenants to the
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holder hereof that upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction, or mutilation of this Warrant or any
stock certificate and, in the case of any such loss, theft or destruction, upon
receipt of an indemnity reasonably satisfactory to the Company, or in the case
of any such mutilation upon surrender and cancellation of such Warrant or stock
certificate, the Company will make and deliver a new Warrant or stock
certificate, or like tenor, in lieu of the lost, stolen, destroyed or mutilated
Warrant or stock certificate.
14. Descriptive Headings. The descriptive headings of the several
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paragraphs of this Warrant are inserted for convenience only and do not
constitute a part of this Warrant.
15. Governing Law. This Warrant shall be construed and enforced in
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accordance with, and the rights of the parties shall be governed by, the laws of
The Commonwealth of Massachusetts.
VIVID TECHNOLOGIES, INC.
By: ______________________________
S. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, President
Date: ____________________________
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EXHIBIT A-1
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Notice of Exercise
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To:
1. The undersigned hereby elects to purchase _______ shares of Common
Stock of Vivid Technologies, Inc. pursuant to the terms of the attached Warrant,
and tenders herewith payment of the purchase price of such shares in full.
2. Please issue a certificate or certificates representing said shares in
the name of the undersigned or, subject to compliance with the restrictions on
transfer set forth in Section 7 of the Warrant, in such other name or names as
are specified below:
______________________________
(Name)
______________________________
______________________________
______________________________
(Address)
3. The undersigned represents that the aforesaid shares 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 and that the undersigned has
no present intention of distributing or reselling such shares.
___________________________
Signature
____________________
Date
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EXHIBIT A-2
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Notice of Exercise
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To:
1. Contingent upon and effective immediately prior to the closing (the
"Closing") of the Company's public offering contemplated by the Registration
Statement on Form S-______, filed ____________________, 19__, the undersigned
hereby elects to purchase ___________ shares of Common Stock of the Company (or
such lesser number of shares as may be sold on behalf of the undersigned at the
Closing) pursuant to the terms of the attached Warrant.
2. Please deliver to the custodian for the selling shareholders a stock
certificate representing such ___________ shares.
3. The undersigned has instructed the custodian for the selling
shareholders to deliver to the Company $_______________ or, if less, the net
proceeds due the undersigned from the sale of shares in the aforesaid public
offering. If such net proceeds are less than the purchase price for such
shares, the undersigned agrees to deliver the difference to the Company prior to
the Closing.
___________________________
Signature
____________________
Date
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