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EXHIBIT 10.4
THIS WARRANT AND THE SECURITIES PURCHASED ON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR ANY STATE SECURITIES LAW, AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF UNTIL EITHER (i) A REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS SHALL HAVE BECOME
EFFECTIVE WITH REGARD THERETO, OR (ii) THE CORPORATION SHALL HAVE RECEIVED AN
OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE CORPORATION AND ITS COUNSEL THAT
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OR APPLICABLE STATE
SECURITIES LAWS IS AVAILABLE IN CONNECTION THEREWITH.
Warrant to Purchase Warrant No. ROV-1
218,953 Shares
WARRANT TO PURCHASE COMMON STOCK
OF
AER ENERGY RESOURCES, INC.
THIS CERTIFIES that RAYOVAC CORPORATION, a Wisconsin corporation
("Holder"), or any subsequent holder hereof, has the right to purchase from AER
Energy Resources, Inc., a Georgia corporation (the "Company"), up to two hundred
eighteen thousand nine hundred fifty three (218,953) fully paid and
nonassessable shares of the Company's Common Stock, no par value ("Common
Stock") (subject to adjustment from time to time, as provided in Section 5), at
the Exercise Price (as defined herein), at any time on or before 5:00 p.m.,
Atlanta, Georgia time, on April 27, 2005 ("Exercise Period").
This Warrant is subject to all of the conditions, limitations and
provisions set forth herein.
1. Exercise.
Holder may exercise this Warrant as to at least 25,000 shares
of Common Stock or, if less, all remaining shares of Common Stock covered hereby
at any time and from time to time after the date of issuance to and including
the Exercise Period, upon surrender of this Warrant, with the Subscription Form
attached hereto duly executed, together with the full Exercise Price in cash, or
by certified or official bank check payable in New York Clearing House Funds or
wire transfer payable in immediately available federal funds for each share of
Common Stock as to which this Warrant is exercised, at the office of the
Company, AER Energy Resources, Inc., ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇, or at such other office or agency as the Company may designate in writing
(such surrender and payment hereinafter called the "Exercise of this Warrant").
The "Date of Exercise" of the Warrant shall be defined as the date that the
original Warrant and Subscription Form are received by the Company. This Warrant
shall be canceled upon its Exercise, and, as soon as practicable thereafter, the
Holder
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hereof shall be entitled to receive a certificate or certificates for the number
of shares of Common Stock purchased upon such Exercise and a new Warrant or
Warrants (containing terms identical to this Warrant) representing any
unexercised portion of this Warrant. Each person in whose name any certificate
for shares of Common Stock is issued shall, for all purposes, be deemed to have
become the Holder of record of such shares on the Date of Exercise of this
Warrant, irrespective of the date of delivery of such certificate. Nothing in
this Warrant shall be construed as conferring upon the Holder hereof any rights
as a shareholder of the Company until the Date of Exercise.
2. Exercise Price.
The Exercise Price shall be $0.4567 per share, subject to adjustment as
set forth in Section 4.
3. Transfer and Registration.
Subject to the provisions of Section 7 of this Warrant, this
Warrant and all rights hereunder may be transferred on the books of the Company,
wholly or in part, in person or by attorney, without charge to the Holder, upon
surrender of this Warrant properly endorsed, with signature guaranteed. This
Warrant shall be canceled upon such surrender and, as soon as practicable
thereafter, the person to whom such transfer is made shall be entitled to
receive a new Warrant or Warrants (with all rights hereunder) as to the portion
of this Warrant transferred, and the Holder of this Warrant shall be entitled to
receive a new Warrant or Warrants (with all rights hereunder) as to the portion
hereof retained.
4. Anti-Dilution Adjustments.
(a) If the Company shall at any time declare a dividend payable in
shares of Common Stock, then the Holder hereof, upon Exercise of this
Warrant after the record date for the determination of holders of
Common Stock entitled to receive such dividend, shall be entitled to
receive upon Exercise of this Warrant, in addition to the number of
shares of Common Stock as to which this Warrant is Exercised, such
additional shares of Common stock as such Holder would have received
had this Warrant been Exercised immediately prior to such record date.
(b) If the Company shall at any time effect a recapitalization or
reclassification (including stock splits, reverse stock splits, stock
dividends or otherwise) of such character that the shares of Common
stock shall be changed into or become exchangeable for a larger or
smaller number of shares, then upon the effective date thereof, the
number of shares of Common Stock which the Holder hereof shall be
entitled to purchase upon Exercise of this Warrant shall be increased
or decreased, as the case may be, in direct proportion to the increase
or decrease in the number of shares of Common Stock by reason of such
recapitalization or reclassification, and the Exercise Price shall be,
in the case of an increase in the number of shares, proportionately
decreased and, in the case of a decrease in the number of shares,
proportionally increased.
(c) If the Company shall at any time distribute to holders of Common
Stock cash,
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evidences of indebtedness or other securities or assets (other than
cash dividends or distributions payable out of earned surplus or net
profits for the current or preceding year) then, in any such case, the
Holder of this Warrant shall be entitled to receive, upon Exercise of
this Warrant, with respect to each share of Common Stock issuable upon
such Exercise, the amount of cash or evidences of indebtedness or other
securities or assets which such Holder would have been entitled to
receive with respect to each such share of Common Stock as a result of
the happening of such event had this Warrant been Exercised immediately
prior to the record date or other date for fixing shareholders to be
affected by such event (the "Determination Date") or, in lieu thereof,
if the Board of Directors of the Company should so determine at the
time of such distribution, a reduced Exercise Price determined by
multiplying the Exercise Price on the Determination Date by a fraction,
the numerator of which is the result of such Exercise Price reduced by
the value of such distribution applicable to one share of Common Stock
(such value to be determined by the Board in its discretion) and the
denominator of which is such Exercise Price.
(d) If the Company shall at any time consolidate or merge with any
other corporation or transfer all or substantially all of its assets or
dissolve, then the Company shall deliver written notice to the Holder
of such merger, consolidation or sale of assets or dissolution at least
thirty (30) days prior to the closing of such merger, consolidation or
sale of assets or dissolution, and this Warrant shall terminate and
expire immediately prior to the closing of such merger, consolidation
or sale of assets or dissolution.
(e) As used in this Warrant, the term "Exercise Price" shall mean the
purchase price per share specified in Section 2 of this Warrant until
the occurrence of an event stated in Section 4(b) or 4(c) and
thereafter shall mean said price as adjusted from time to time in
accordance with the provisions of said sections. No such adjustment
pursuant to Section 4(b) or 4(c) shall be made unless such adjustment
would change the Exercise Price at the time by $.01 or more; provided,
however, that all adjustments not so made shall be deferred and made
when the aggregate thereof would change the Exercise Price at the time
by $.01 or more. No adjustment made pursuant to any provision of this
Section 4 shall have the effect of increasing the total consideration
payable upon Exercise of this Warrant in respect of all the Common
Stock as to which this Warrant may be exercised.
(f) In the event that at any time, as a result of an adjustment made
pursuant to this Section 4, the Holder of this Warrant shall, upon
Exercise of this Warrant, become entitled to receive shares and/or
other securities or assets (other than Common Stock) then, wherever
appropriate, all references herein to shares of Common Stock shall be
deemed to refer to and include such shares and/or other securities or
assets; and thereafter the number of such shares and/or other
securities or assets shall be subject to adjustment from time to time
in a manner and upon terms as nearly equivalent as practicable to the
provisions of this Section 4.
5. Fractional Interests.
No fractional shares or scrip representing fractional shares
shall be issuable upon the Exercise of this Warrant, but on Exercise of this
Warrant, the Holder hereof may purchase
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only a whole number of shares of Common Stock. The Company shall, within 5 days
after the Date of Exercise, deliver to Holder a payment in cash in respect of
any fractional shares which might otherwise be issuable upon Exercise of this
Warrant, calculated by multiplying the fractional share amount by the market
price of the Company's Common Stock on the Date of Exercise as reported on the
Nasdaq National Market or such other exchange or system on which the Company's
Common Stock is traded.
6. Reservation of Shares.
The Company shall at all times reserve for issuance and keep
available out of its authorized and unissued shares of Common Stock (or other
securities substituted therefor as herein above provided) solely for the purpose
of issuance upon the Exercise of this Warrant, such number of shares of Common
Stock issuable upon exercise of the Warrant. The Company covenants and agrees
that upon Exercise of this Warrant, all shares of Common Stock issuable upon
such Exercise shall be duly and validly issued, fully paid, nonassessable and
free from all taxes, liens and preemptive rights. The Company shall take all
such actions as may be necessary to assure that all such shares of Common Stock
may be so issued without violation of any applicable law or governmental
regulation or any requirements of any domestic securities exchange, quotation
system or over-the-counter market upon which shares of Common Stock may be
listed or quoted (except for official notice of issuance which shall be
immediately delivered by the Company upon each such issuance, if required). The
Company shall not take any action which would cause the number of authorized but
unissued shares of Common Stock to be less than the number of such shares
required to be reserved hereunder for issuance upon exercise of the Warrant.
7. Restrictions on Transfer.
This Warrant and the Common Stock issuable on Exercise hereof
have been or will be acquired by the Holder hereof for investment for its own
account and not with a view to the distribution thereof, have not been
registered under the Securities Act of 1933, as amended (the "Act"), or under
any state securities laws (the "State Acts") and may not be sold, transferred,
pledged, hypothecated or otherwise disposed of in the absence of registration or
the availability of an exemption from registration under the Act and any
applicable State Acts and, in the event a Holder believes an exemption from the
registration requirements of the Act and any applicable State Acts is available,
the Holder must deliver a legal opinion reasonably satisfactory in form and
substance to the Company and its counsel, stating that such exemption is
available. All shares of Common Stock issued upon Exercise of this Warrant shall
bear an appropriate legend to such effect. Holder has represented to the Company
that it and any transferee of all or any portion of this Warrant is and will
remain at all times while this Warrant is outstanding an "accredited investor"
as defined in Rule 501 of Regulation D promulgated under the Act.
8. Benefits of this Warrant.
Nothing in this Warrant shall be construed to confer upon any
person other than the Company and the Holder of this Warrant any legal or
equitable right, remedy or claim under this Warrant and this Warrant shall be
for the sole and exclusive benefit of the Company and the Holder of this
Warrant.
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9. Applicable Law.
This Warrant is issued under and shall for all purposes be
governed by and construed in accordance with the laws of the State of Georgia.
Jurisdiction for any dispute regarding this Warrant lies in Georgia.
10. Loss of Warrant.
Upon receipt by the Company of evidence of the loss, theft,
destruction or mutilation of this Warrant, and (in the case of loss, theft or
destruction) of indemnity or security reasonably satisfactory to the Company,
and upon surrender and cancellation of this Warrant, if mutilated, the Company
shall (at its expense) execute and deliver a new warrant of like kind
representing the same rights represented by this Warrant.
11. Notice to Company and Holder.
Notices or demands pursuant to this Warrant to be given or
made by the Holder of this Warrant to or on the Company shall be sent by
certified or registered mail, return receipt requested, postage prepaid, or sent
by reputable overnight courier service (charges prepaid), and deemed to have
been given when so delivered or deposited in U.S. Mail, addressed, until another
address is designated in writing by the Company, to AER Energy Resources, Inc.,
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Chief Executive
Officer. Notices or demands pursuant to this Warrant to be given or made by the
Company to or on the Holder of this Warrant shall be sufficiently given or made
if sent by certified or registered mail, return receipt requested, postage
prepaid, or sent by reputable overnight courier service (charges prepaid), and
deemed to have been given when so delivered or deposited in U.S. Mail, addressed
to the Holder as follows: Rayovac Corporation, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: President.
(signature follows on next page)
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IN WITNESS WHEREOF, this Warrant is hereby executed effective as of the
date set forth below.
Dated as of April 27, 2001.
AER ENERGY RESOURCES, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President
[Corporate Seal]
Attest:
/s/ ▇.▇. ▇▇▇▇▇
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▇.▇. ▇▇▇▇▇, Secretary
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SUBSCRIPTION FORM
TO: AER ENERGY RESOURCES, INC.
The undersigned hereby irrevocably exercises the right to purchase
_______________ shares of Common Stock of AER Energy Resources, Inc., a Georgia
corporation, evidenced by the attached Warrant, and herewith makes payment of
the Exercise Price with respect to such shares in full, all in accordance with
the conditions and provisions of said Warrant.
The undersigned represents that it is an "accredited investor" as
defined in Rule 501 of Regulation D under the Securities Act of 1933, as
amended, agrees not to offer, sell, transfer or otherwise dispose of any of such
Common Stock, except in accordance with the provisions of Section 8 of the
Warrant, and consents that the following legend may be affixed to the
certificates for the Common Stock hereby subscribed for, if such legend is
applicable:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Securities Act"), or any state securities law, and may not be sold,
transferred, pledged, hypothecated or otherwise disposed of until
either (i) a registration statement under the Securities Act and
applicable state securities laws shall have become effective with
regard thereto, or (ii) the corporation shall have received an opinion
of counsel reasonably acceptable to the corporation and its counsel
that an exemption from registration under the Securities Act or
applicable state securities laws is available in connection therewith."
The undersigned requests that certificates for such shares be issued,
and a warrant representing any unexercised portion thereof be issued, pursuant
to the Warrant in the name of the Registered Holder and delivered to the
undersigned at the address set forth below:
Dated:
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Signature of Registered Holder
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Name of Registered Holder (Print)
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Address
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The attached Warrant and the securities issuable on exercise thereof have not
been registered under the Securities Act of 1933, as amended, or any state
securities law and may not be sold, transferred, pledged, hypothecated or
otherwise disposed of in the absence of registration or the availability of an
exemption from registration under said Act or any state securities law.
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ASSIGNMENT
(To be executed by the registered Holder
desiring to transfer the Warrant)
FOR VALUE RECEIVED, the undersigned Holder of the attached Warrant hereby sells,
assigns and transfers unto the person or persons below named the right to
purchase ____________ shares of the Common Stock of AER ENERGY RESOURCES, INC.
evidenced by the attached Warrant and does hereby irrevocably constitute and
appoint ___________________________ as attorney to transfer the said Warrant on
the books of the Company, with full power of substitution in the premises.
Dated:
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Signature
Fill in for new Registration of Warrant: Signature Guarantee:
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Name Name of Guarantor
By:
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Name:
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Address Title:
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Please print name and address of assignee
(including zip code)
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NOTICE
The signature to the foregoing Subscription Form or Assignment must correspond
to the name as written upon the face of the attached Warrant in every
particular, without alteration or enlargement or any change whatsoever.