COMMON STOCK PURCHASE WARRANT To Purchase [__] Shares of Common Stock of BRILLIAN CORPORATION
EXHIBIT 4.11
NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN
REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS
SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.
COMMON STOCK PURCHASE WARRANT
To Purchase [__] Shares of Common Stock of
BRILLIAN CORPORATION
THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received,
Syntax Groups Corporation, a California corporation (the “Holder”), is entitled, upon the
terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any
time on or after the 181st day after the date hereof (the “Initial Exercise Date”) and on
or prior to the close of business on the fifth anniversary of the Initial Exercise Date (the
“Termination Date”) but not thereafter, to subscribe for and purchase from Brillian
Corporation, a Delaware corporation (the “Company”), up to [___] shares (the “Warrant
Shares”) of Common Stock, par value $0.001 per share, of the Company (the “Common
Stock”). The purchase price of one share of Common Stock under this Warrant shall be equal to
the Exercise Price, as defined in Section 2(b).
Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall
have the meanings set forth in that certain Securities Purchase Agreement (the “Purchase
Agreement”), dated as of September 16, 2005, between the Company and the Holder.
Section 2. Exercise.
(a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant
may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on
or before the Termination Date by delivery to the Company of a duly executed facsimile copy of the
Notice of Exercise Form annexed hereto (or such other office or agency of the Company as it may
designate by notice in writing to the registered Holder at the address of such Holder appearing on
the books of the Company); provided, however, within five Trading Days of the
date said Notice of Exercise is delivered to the Company, the Holder shall have surrendered this
Warrant to the Company and the Company shall have received payment of the
aggregate Exercise Price
of the shares thereby purchased by wire transfer or cashier’s check drawn on a United States bank.
(b) Exercise Price. The exercise price of the Common Stock under this Warrant shall
be equal the VWAP plus $0.13 determined as of the issuance date or, if the issuance date is not a
Trading Day, the Trading Day immediately preceding the issuance date, subject to adjustment
hereunder (the “Exercise Price”).
(c) Cashless Exercise. If at any time after one year from the date of issuance of
this Warrant there is no effective registration statement under the Securities Act registering, or
no current prospectus available for, the resale of the Warrant Shares by the Holder, then this
Warrant may also be exercised at such time by means of a “cashless exercise” in which the Holder
shall be entitled to receive a certificate for the number of Warrant Shares equal to the quotient
obtained by dividing [(A-B) (X)] by (A), where:
| (A) | = the VWAP on the Trading Day immediately preceding the date of such election; | ||
| (B) | = the Exercise Price of this Warrant, as adjusted; and | ||
| (X) | = the number of Warrant Shares issuable upon exercise of this Warrant in accordance with the terms of this Warrant by means of a cash exercise rather than a cashless exercise. |
Notwithstanding anything herein to the contrary, on the Termination Date, this Warrant shall
be automatically exercised via cashless exercise pursuant to this Section 2(c).
(d) Exercise Limitations.
(i) Holder’s Restrictions. A Holder shall not have the right to exercise any portion
of this Warrant, pursuant to Section 2(c) or otherwise, to the extent that after giving effect to
such issuance after exercise, such Holder (together with such Holder’s affiliates), as set forth on
the applicable Notice of Exercise, would beneficially own in excess of 4.99% of the number of
shares of the Common Stock outstanding immediately after giving effect to such issuance. For
purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by such
Holder and its affiliates shall include the number of shares of Common Stock issuable upon exercise
of this Warrant with respect to which the determination of such sentence is being made, but shall
exclude the number of shares of Common Stock which would be issuable upon (A)
exercise of the remaining, nonexercised portion of this Warrant beneficially owned by such
Holder or any of its affiliates and (B) exercise or conversion of the unexercised or nonconverted
portion of any other securities of the Company (including, without limitation, any Note or
Warrants) subject to a limitation on conversion or exercise analogous to the limitation contained
herein beneficially owned by such Holder or any of its affiliates. Except as set forth in the
preceding sentence, for purposes of this Section 2(d), beneficial ownership shall be calculated in
accordance with Section 13(d) of the Exchange Act, it being acknowledged by a Holder that the
Company is not representing to such Holder that such calculation is in compliance with Section
13(d) of the Exchange Act and such Holder is solely responsible for any schedules required to be
filed in accordance therewith. To the extent that the limitation
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contained in this Section 2(d)
applies, the determination of whether this Warrant is exercisable (in relation to other securities
owned by such Holder) and of which a portion of this Warrant is exercisable shall be in the sole
discretion of a Holder, and the submission of a Notice of Exercise shall be deemed to be each
Holder’s determination of whether this Warrant is exercisable (in relation to other securities
owned by such Holder) and of which portion of this Warrant is exercisable, in each case subject to
such aggregate percentage limitation, and the Company shall have no obligation to verify or confirm
the accuracy of such determination. For purposes of this Section 2(d), in determining the number
of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of
Common Stock as reflected in (x) the Company’s most recent Form 10-Q or Form 10-K, as the case may
be, (y) a more recent public announcement by the Company, or (z) any other notice by the Company or
the Company’s Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon
the written or oral request of a Holder, the Company shall within two Trading Days confirm orally
and in writing to such Holder the number of shares of Common Stock then outstanding. In any case,
the number of outstanding shares of Common Stock shall be determined after giving effect to the
conversion or exercise of securities of the Company, including this Warrant, by such Holder or its
affiliates since the date as of which such number of outstanding shares of Common Stock was
reported. The provisions of this Section 2(d) may be waived by such ▇▇▇▇▇▇, at the election of
such Holder, upon not less than 61 days’ prior notice to the Company, and the provisions of this
Section 2(d) shall continue to apply until such 61st day (or such later date, as determined by such
Holder, as may be specified in such notice of waiver).
(ii) Trading Market Restrictions. If the Company has not obtained Shareholder
Approval (as defined below) if required by the applicable rules and regulations of the Trading
Market (or any successor entity), then the Company may not issue upon exercise of this Warrant a
number of shares of Common Stock, which, when aggregated with any shares of Common Stock issued (A)
as payment of interest on the Note issued pursuant to the Purchase Agreement, and (B) upon prior
exercise of this or any other Warrant issued pursuant to the Purchase Agreement, would exceed
19.999% of the number of shares of Common Stock outstanding on the Trading Day immediately
preceding the Closing Date (such number of shares, the “Issuable Maximum”). If on any
attempted exercise of this Warrant, the issuance of Warrant Shares would exceed the Issuable
Maximum and the Company shall not have previously obtained the vote of shareholders (the
“Shareholder Approval”), if any, as may be required by the applicable rules and regulations
of the Nasdaq National Market (or any successor entity) to approve the issuance of shares of Common
Stock in excess of the Issuable Maximum pursuant to the terms hereof, then the
Company shall issue to the Holder requesting a Warrant exercise such number of Warrant Shares
as may be issued below the Issuable Maximum and, with respect to the remainder of the aggregate
number of Warrant Shares, this Warrant shall not be exercisable until and unless Shareholder
Approval has been obtained.
(e) Mechanics of Exercise.
(i) Authorization of Warrant Shares. The Company covenants that all Warrant Shares
which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon
exercise of the purchase rights represented by this Warrant, be duly authorized, validly issued,
fully paid and nonassessable and free from all taxes, liens and charges
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in respect of the issue
thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).
(ii) Delivery of Certificates Upon Exercise. Certificates for shares purchased
hereunder shall be transmitted by the transfer agent of the Company to the Holder by crediting the
account of the Holder’s prime broker with the Depository Trust Company through its Deposit
Withdrawal Agent Commission (“DWAC”) system if the Company is a participant in such system,
and otherwise by physical delivery to the address specified by the Holder in the Notice of Exercise
within three Trading Days from the delivery to the Company of the Notice of Exercise Form,
surrender of this Warrant and payment of the aggregate Exercise Price as set forth above
(“Warrant Share Delivery Date”). This Warrant shall be deemed to have been exercised on
the date the Exercise Price is received by the Company. The Warrant Shares shall be deemed to have
been issued, and Holder or any other person so designated to be named therein shall be deemed to
have become a holder of record of such shares for all purposes, as of the date the Warrant has been
exercised by payment to the Company of the Exercise Price and all taxes required to be paid by the
Holder, if any, pursuant to Section 2(e)(vii) prior to the issuance of such shares, have been paid.
(iii) Delivery of New Warrants Upon Exercise. If this Warrant shall have been
exercised in part, the Company shall, at the time of delivery of the certificate or certificates
representing Warrant Shares, deliver to Holder a new Warrant evidencing the rights of Holder to
purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all
other respects be identical with this Warrant.
(iv) Rescission Rights. If the Company fails to cause its transfer agent to transmit
to the Holder a certificate or certificates representing the Warrant Shares pursuant to this
Section 2(e)(iv) by the Warrant Share Delivery Date, then the Holder will have the right to rescind
such exercise.
(v) Compensation for Buy-In on Failure to Timely Deliver Certificates Upon Exercise.
In addition to any other rights available to the Holder, if the Company fails to cause its transfer
agent to transmit to the Holder a certificate or certificates representing the Warrant Shares
pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the
Holder is required by its broker to purchase (in an open market transaction or otherwise) shares of
Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the
Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (1)
pay in cash to the Holder the amount by which (x) the Holder’s total purchase price (including
brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount
obtained by multiplying (A) the number of Warrant Shares that the Company was required to deliver
to the Holder in connection with the exercise at issue times (B) the price at which the sell order
giving rise to such purchase obligation was executed, and (2) at the option of the Holder, either
reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such
exercise was not honored or deliver to the Holder the number of shares of Common Stock that would
have been issued had the Company timely complied with its exercise and delivery obligations
hereunder. For example, if the Holder purchases Common Stock having a total purchase price of
$11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an
aggregate sale price giving rise to such purchase
4
obligation of $10,000, under clause (1) of the
immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder
shall provide the Company written notice indicating the amounts payable to the Holder in respect of
the Buy-In, together with applicable confirmations and other evidence reasonably requested by the
Company. Nothing herein shall limit a ▇▇▇▇▇▇’s right to pursue any other remedies available to it
hereunder, at law or in equity including, without limitation, a decree of specific performance or
injunctive relief with respect to the Company’s failure to timely deliver certificates representing
shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.
(vi) No Fractional Shares or Scrip. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share
which Holder would otherwise be entitled to purchase upon such exercise, the Company shall pay a
cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by
the Exercise Price.
(vii) Charges, Taxes and Expenses. Issuance of certificates for Warrant Shares shall
be made without charge to the Holder for any issue or transfer tax or other incidental expense in
respect of the issuance of such certificate, all of which taxes and expenses shall be paid by the
Company, and such certificates shall be issued in the name of the Holder or in such name or names
as may be directed by the Holder; provided, however, that in the event certificates
for Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when
surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed
by the Holder; and the Company may require, as a condition thereto, the payment of a sum sufficient
to reimburse it for any transfer tax incidental thereto.
(viii) Closing of Books. The Company will not close its stockholder books or records
in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.
Section 3. Certain Adjustments.
(a) Stock Dividends and Splits. If the Company, at any time while this Warrant is
outstanding: (A) pays a stock dividend or otherwise make a distribution or distributions on shares
of its Common Stock or any other equity or equity equivalent securities payable in shares of Common
Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the
Company pursuant to this Warrant), (B) subdivides outstanding shares of Common Stock into a larger
number of shares, (C) combines (including by way of reverse stock split) outstanding shares of
Common Stock into a smaller number of shares, or (D) issues by reclassification of shares of the
Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall
be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock
(excluding treasury shares, if any) outstanding immediately before such event and of which the
denominator shall be the number of shares of Common Stock outstanding immediately after such event
and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted.
Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the
record date for the determination of stockholders entitled to receive such dividend or distribution
and shall become
5
effective immediately after the effective date in the case of a subdivision,
combination or re classification.
(b) Pro Rata Distributions. If the Company, at any time prior to the Termination
Date, shall distribute to all holders of Common Stock (and not to Holders of the Warrants)
evidences of its indebtedness or assets (including cash and cash dividends) or rights or warrants
to subscribe for or purchase any security other than the Common Stock (which shall be subject to
Section 3(b)), then in each such case the Exercise Price shall be adjusted by multiplying the
Exercise Price in effect immediately prior to the record date fixed for determination of
stockholders entitled to receive such distribution by a fraction of which the denominator shall be
the VWAP determined as of the record date mentioned above, and of which the numerator shall be such
VWAP on such record date less the then per share fair market value at such record date of the
portion of such assets or evidence of indebtedness so distributed applicable to one outstanding
share of the Common Stock as determined by the Board of Directors in good faith. In either case
the adjustments shall be described in a statement provided to the Holder of the portion of assets
or evidences of indebtedness so distributed or such subscription rights applicable to one share of
Common Stock. Such adjustment shall be made whenever any such distribution is made and shall
become effective immediately after the record date mentioned above.
(c) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company effects any merger or
consolidation of the Company with or into another Person (other than the contemplated merger among
the Company, the Holder and BRMC Corporation), (ii) the Company effects any sale of all or
substantially all of its assets in one or a series of related transactions, (iii) any tender offer
or exchange offer (whether by the Company or another Person) is completed pursuant to which holders
of Common Stock are permitted to tender or exchange their shares for other securities, cash or
property, or (iv) the Company effects any reclassification of the Common Stock or any compulsory
share exchange pursuant to which the Common Stock is effectively converted into or exchanged for
other securities, cash or property (in any such case, a “Fundamental Transaction”), then,
upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each
Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence
of such Fundamental Transaction, at the option of the Holder, (1) upon exercise of this Warrant,
the number of shares of Common Stock of the successor or acquiring corporation or of the Company,
if it is the surviving corporation, and any additional consideration (the “Alternate
Consideration”) receivable upon or as a result of such reorganization, reclassification,
merger, consolidation or disposition of assets by a Holder of the number of shares of Common Stock
for which this Warrant is exercisable immediately prior to such event, or (2) if the Company is
acquired in an all cash transaction, cash equal to the value of this Warrant as determined in
accordance with the Black-Scholes option pricing formula. For purposes of any such exercise, the
determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate
Consideration based on the amount of Alternate Consideration issuable in respect of one share of
Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price
among the Alternate Consideration in a reasonable manner reflecting the relative value of any
different components of the Alternate Consideration. If holders of Common Stock are given any
choice as to the securities, cash or property to be received in a Fundamental Transaction, then the
Holder shall be given the same choice as to the Alternate Consideration it receives upon any
exercise of
6
this Warrant following such Fundamental Transaction. To the extent necessary to
effectuate the foregoing provisions, any successor to the Company or surviving entity in such
Fundamental Transaction shall issue to the Holder a new warrant consistent with the foregoing
provisions and evidencing the Holder’s right to exercise such warrant into Alternate Consideration.
The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include
terms requiring any such successor or surviving entity to comply with the provisions of this
Section 3(d) and insuring that this Warrant (or any such replacement security) will be similarly
adjusted upon any subsequent transaction analogous to a Fundamental Transaction.
(d) Calculations. All calculations under this Section 3 shall be made to the nearest
cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the
number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be
the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and
outstanding.
(e) Voluntary Adjustment By Company. The Company may at any time during the term of this Warrant reduce the then current
Exercise Price to any amount and for any period of time deemed appropriate by the Board of
Directors of the Company.
(f) Notice to Holders.
(i) Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to
this Section 3, the Company shall promptly mail to each Holder a notice setting forth the Exercise
Price after such adjustment and setting forth a brief statement of the facts requiring such
adjustment.
(ii) Notice to Allow Exercise by ▇▇▇▇▇▇. If (A) the Company shall declare a dividend
(or any other distribution) on the Common Stock; (B) the Company shall declare a special
nonrecurring cash dividend on or a redemption of the Common Stock; (C) the Company shall authorize
the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any
shares of capital stock of any class or of any rights; (D) the approval of any stockholders of the
Company shall be required in connection with any reclassification of the Common Stock, any
consolidation or merger to which the Company is a party, any sale or transfer of all or
substantially all of the assets of the Company, of any compulsory share exchange whereby the Common
Stock is converted into other securities, cash or property; or (E) the Company shall authorize the
voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company;
then, in each case, the Company shall cause to be mailed to the Holder at its last address as it
shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the
applicable record or effective date hereinafter specified, a notice stating (1) the date on which a
record is to be taken for the purpose of such dividend, distribution, redemption, rights or
warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock
of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be
determined or (2) the date on which such reclassification, consolidation, merger, sale, transfer or
share exchange is expected to become effective or close, and the date as of which it is expected
that holders of the Common Stock of record shall be entitled to exchange their shares of the Common
Stock for securities, cash or other property deliverable upon such reclassification, consolidation,
merger, sale, transfer or
7
share exchange; provided, that the failure to mail such notice or
any defect therein or in the mailing thereof shall not affect the validity of the corporate action
required to be specified in such notice. The Holder is entitled to exercise this Warrant during
the 20-day period commencing on the date of such notice to the effective date of the event
triggering such notice.
Section 4. Transfer of Warrant.
(a) Transferability. Subject to compliance with any applicable securities laws and
the conditions set forth in Sections 5(a) and 4(d) hereof and to the provisions of Section 4.1 of
the Purchase Agreement, this Warrant and all rights hereunder are transferable, in whole or in part, upon
surrender of this Warrant at the principal office of the Company, together with a written
assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or
its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of
such transfer. Upon such surrender and, if required, such payment, the Company shall execute and
deliver a new Warrant or Warrants in the name of the assignee or assignees and in the denomination
or denominations specified in such instrument of assignment, and shall issue to the assignor a new
Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be
cancelled. A Warrant, if properly assigned, may be exercised by a new holder for the purchase of
Warrant Shares without having a new Warrant issued.
(b) New Warrants. This Warrant may be divided or combined with other Warrants upon
presentation hereof at the aforesaid office of the Company, together with a written notice
specifying the names and denominations in which new Warrants are to be issued, signed by the Holder
or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be
involved in such division or combination, the Company shall execute and deliver a new Warrant or
Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such
notice.
(c) Warrant Register. The Company shall register this Warrant, upon records to be
maintained by the Company for that purpose (the “Warrant Register”), in the name of the
record Holder hereof from time to time. The Company may deem and treat the registered Holder of
this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any
distribution to the Holder, and for all other purposes, absent actual notice to the contrary.
(d) Transfer Restrictions. If, at the time of the surrender of this Warrant in
connection with any transfer of this Warrant, the transfer of this Warrant shall not be registered
pursuant to an effective registration statement under the Securities Act and under applicable state
securities or blue sky laws, the Company may require, as a condition of allowing such transfer (i)
that the Holder or transferee of this Warrant, as the case may be, furnish to the Company a written
opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of
counsel in comparable transactions) to the effect that such transfer may be made without
registration under the Securities Act and under applicable state securities or blue sky laws, (ii)
that the holder or transferee execute and deliver to the Company an investment letter in form and
substance acceptable to the Company, and (iii) that the transferee be an “accredited investor” as
defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7), or (a)(8) promulgated under the Securities Act
or a qualified institutional buyer as defined in Rule 144A(a) under the Securities Act.
8
Section 5. Miscellaneous.
(a) Title to WarrantPrior to the Termination Date and subject to compliance with applicable laws and Section 4
of this Warrant, this Warrant and all rights hereunder are transferable, in whole or in part, at
the office or agency of the Company by the Holder in person or by duly authorized attorney, upon
surrender of this Warrant together with the Assignment Form annexed hereto properly endorsed. The
transferee shall sign an investment letter in form and substance reasonably satisfactory to the
Company.
(b) No Rights as Shareholder Until Exercise. This Warrant does not entitle the Holder
to any voting rights or other rights as a shareholder of the Company prior to the exercise hereof.
Upon the surrender of this Warrant and the payment of the aggregate Exercise Price (or by means of
a cashless exercise), the Warrant Shares so purchased shall be and be deemed to be issued to such
Holder as the record owner of such shares as of the close of business on the later of the date of
such surrender or payment.
(c) Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that
upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares,
and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it
(which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender
and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and
deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu
of such Warrant or stock certificate.
(d) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of
any action or the expiration of any right required or granted herein shall be a Saturday, Sunday or
a legal holiday, then such action may be taken or such right may be exercised on the next
succeeding day not a Saturday, Sunday or legal holiday.
(e) Authorized Shares. The Company covenants that during the period the Warrant is
outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of
shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights
under this Warrant. The Company further covenants that its issuance of this Warrant shall
constitute full authority to its officers who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates for the Warrant Shares upon the
exercise of the purchase rights under this Warrant. The Company will take all such reasonable
action as may be necessary to assure that such Warrant Shares may be issued as provided herein
without violation of any applicable law or regulation, or of any requirements of the Trading Market
upon which the Common Stock may be listed.
Except and to the extent as waived or consented to by the Holder, the Company shall not by any
action, including, without limitation, amending 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 of this Warrant, but will at all times in good
faith assist in the carrying out of all such terms and in the taking of all such actions as may be
9
necessary or appropriate to protect the rights of ▇▇▇▇▇▇ as set forth in this Warrant against
impairment. Without limiting the generality of the foregoing, the Company will (a) not increase
the par value of any Warrant Shares above the amount payable therefor upon such exercise
immediately prior to such increase in par value, (b) take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid and nonassessable
Warrant Shares upon the exercise of this Warrant, and (c) use commercially reasonable efforts to
obtain all such authorizations, exemptions or consents from any public regulatory body having
jurisdiction thereof as may be necessary to enable the Company to perform its obligations under
this Warrant.
Before taking any action which would result in an adjustment in the number of Warrant Shares
for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such
authorizations or exemptions thereof, or consents thereto, as may be necessary from any public
regulatory body or bodies having jurisdiction thereof.
(f) Jurisdiction. All questions concerning the construction, validity, enforcement
and interpretation of this Warrant shall be determined in accordance with the provisions of the
Purchase Agreement.
(g) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the
exercise of this Warrant, if not registered, will have restrictions upon resale imposed by state
and federal securities laws.
(h) Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise
any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise
prejudice Holder’s rights, powers or remedies, notwithstanding the fact that all rights hereunder
terminate on the Termination Date. If the Company willfully and knowingly fails to comply with any
provision of this Warrant, which results in any material damages to the Holder, the Company shall
pay to Holder such amounts as shall be sufficient to cover any costs and expenses including, but
not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by
Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights,
powers or remedies hereunder.
(i) Notices. Any notice, request or other document required or permitted to be given
or delivered to the Holder by the Company shall be delivered in accordance with the notice
provisions of the Purchase Agreement.
(j) Limitation of Liability. No provision hereof, in the absence of any affirmative
action by Holder to exercise this Warrant or purchase Warrant Shares, and no enumeration herein of
the rights or privileges of Holder, shall give rise to any liability of Holder for the purchase
price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by
the Company or by creditors of the Company.
(k) Remedies. Holder, in addition to being entitled to exercise all rights granted by
law, including recovery of damages, will be entitled to specific performance of its rights under
this Warrant. The Company agrees that monetary damages would not be adequate compensation for any
loss incurred by reason of a breach by it of the provisions of this Warrant
10
and ▇▇▇▇▇▇ agrees to
waive the defense in any action for specific performance that a remedy at law would be adequate.
(l) Successors and Assigns. Subject to applicable securities laws, this Warrant and
the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the
successors of the Company and the successors and permitted assigns of Holder. The provisions of
this Warrant are intended to be for the benefit of all Holders from time to time of this Warrant
and shall be enforceable by any such Holder or holder of Warrant Shares.
(m) Amendment. This Warrant may be modified or amended or the provisions hereof
waived with the written consent of the Company and the Holder.
(n) Severability. Wherever possible, each provision of this Warrant shall be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of
such provisions or the remaining provisions of this Warrant.
(o) Headings. The headings used in this Warrant are for the convenience of reference
only and shall not, for any purpose, be deemed a part of this Warrant.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer
thereunto duly authorized.
Dated: ___________, 2005
| BRILLIAN CORPORATION | ||||
| By: | ||||
| ▇▇▇▇▇ ▇▇▇▇▇, VP & CFO | ||||
11
NOTICE OF EXERCISE
TO: BRILLIAN CORPORATION
(1) The undersigned hereby elects to purchase ___Warrant Shares of the Company pursuant
to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of
the exercise price in full, together with all applicable transfer taxes, if any.
(2) Payment shall take the form of (check applicable box):
| [ ] in lawful money of the United States; or | |||
| [ ] the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c). |
(3) Please issue a certificate or certificates representing said Warrant Shares in the name of
the undersigned or in such other name as is specified below:
The Warrant Shares shall be delivered to the following:
(4) Accredited Investor. The undersigned is an “accredited investor” as defined in
Regulation D promulgated under the Securities Act of 1933, as amended.
[SIGNATURE OF HOLDER]
Name of Investing Entity: |
||
Signature of Authorized Signatory of Investing Entity: |
||
Name of Authorized Signatory: |
||
Title of Authorized Signatory: |
||
Date: |
||
ASSIGNMENT FORM
(To assign the foregoing warrant, execute
this form and supply required information.
Do not use this form to exercise the warrant.)
this form and supply required information.
Do not use this form to exercise the warrant.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned
to
_______________________________________________ whose address is
_______________________________________________________________.
_______________________________________________________________
| Dated: ___, ___ |
| Holder’s Signature: | ||||||
| Holder’s Address: | ||||||
Signature Guaranteed: |
||
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 whatsoever, and must be
guaranteed by a bank or trust company. Officers of corporations and those acting in a fiduciary or
other representative capacity should file proper evidence of authority to assign the foregoing
Warrant.