OPTEX SYSTEMS HOLDINGS, INC. COMMON STOCK WARRANT
WARRANT
NEITHER
THIS SECURITY NOR ANY SECURITIES WHICH MAY BE ISSUED UPON EXERCISE OF THIS
SECURITY HAVE BEEN REGISTERED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY U.S. STATE OR OTHER JURISDICTION OR ANY
EXCHANGE OR SELF-REGULATORY ORGANIZATION, IN RELIANCE UPON EXEMPTIONS FROM
REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED, AND SUCH OTHER
LAWS AND REQUIREMENTS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD, EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR LISTING OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, SUCH REGISTRATION
AND/OR LISTING REQUIREMENTS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE
TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH WILL BE REASONABLY ACCEPTABLE
TO THE COMPANY.
OPTEX
SYSTEMS HOLDINGS, INC.
COMMON
STOCK WARRANT
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No.
____________
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______________,
200_
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Optex Systems Holdings, Inc.,
a Delaware corporation whose shares of Common Stock (defined below) (the
"Company"), hereby certifies that _________________________, its permissible
transferees, designees, successors and assigns (collectively, the "Holder"), for
value received, is entitled to purchase from the Company at any time commencing
on the effective date (the "Effective Date"), which shall be the date of the
first Closing (as defined in that certain Confidential Private Placement
Memorandum of the Company, dated as of December 9, 2008), and terminating on the
5th
anniversary of such date (the "Termination Date") up to shares (each, a "Share"
and collectively the "Shares") of the Company's common stock, no par value (the
"Common Stock"), at an exercise price per Share equal to $0.45 (the "Exercise
Price"). The number of Shares purchasable hereunder and the Exercise Price are
subject to adjustment as provided in Section 4 hereof.
1. Method of Exercise;
Payment.
(a) Cash Exercise. The
purchase rights represented by this Warrant may be exercised, for cash only, by
the Holder, in whole or in part, at any time, or from time to time, by the
surrender of this Warrant (with the notice of exercise form (the "Notice of
Exercise") attached hereto as Exhibit A duly executed) at the principal office
of the Company, and by payment to the Company of an amount equal to the Exercise
Price multiplied by the number of the Shares being purchased, which amount may
be paid, at the election of the Holder, by wire transfer or certified check
payable to the order of the Company. The person or persons in whose name(s) any
certificate(s) representing 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.
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(b) Stock Certificates.
In the event of any exercise of the rights represented by this Warrant, as
promptly as practicable after this Warrant is surrendered and delivered to the
Company along with all other appropriate documentation on or after the date of
exercise and in any event within ten (I0) 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 this Warrant is exercised in part, the Company at its
expense will execute and deliver a new Warrant of like tenor exercisable for the
number of Shares for which this Warrant may then be exercised.
(c) Taxes. The issuance
of the Shares upon the exercise of this Warrant, and the delivery of
certificates or other instruments representing such Shares, shall be made
without charge to the Holder for any tax or other charge in respect of such
issuance.
2. Warrant.
(a) Exchange, Transfer and
Replacement. At any time prior to the exercise hereof, this Warrant may
be exchanged upon presentation and surrender to the Company, alone or with other
warrants of like tenor of different denominations registered in the name of the
same Holder, for another warrant or warrants of Iike tenor in the name of such
Holder exercisable for the aggregate number of Shares as the warrant or warrants
surrendered.
(b) Replacement of
Warrant. Upon receipt of evidence reasonably satisfactory to the Company
of the loss, theft, destruction, or mutilation of this Warrant and, in the case
of any such bass, theft, or destruction, upon delivery of an indemnity agreement
reasonably satisfactory in form and amount to the Company, or, in the case of
any such mutilation, upon surrender and cancellation of this Warrant, the
Company, at its expense, will execute and deliver in lieu thereof, a new Warrant
of like tenor.
(c) Cancellation; Payment of
Expenses. Upon the surrender of this Warrant in connection with any
transfer, exchange or replacement as provided in this Section 2, this Warrant
shall be promptly canceled by the Company. The Holder shall pay all taxes and
all other expenses (including legal expenses, if any, incurred by the Holder or
transferees) and charges payable in connection with the preparation, execution
and delivery of Warrants pursuant to this Section 2.
(d) Warrant Register. The
Company shall maintain, at its principal executive offices (or at the offices of
the transfer agent for the Warrant or such other office or agency of the Company
as it may designate by notice to the holder hereof), a register for this Warrant
(the "Warrant Register"), in which the Company shall record the name and address
of the person in whose name this Warrant has been issued, as well as the name
and address of each transferee and each prior owner of this
Warrant.
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3. Rights and Obligations of
Holders of this Warrant. The Holder of this Warrant shall not, by virtue
hereof, be entitled to any rights of a stockholder in the Company, either at law
or in equity; provided, however, that in the event any certificate representing
shares of Common Stock or other securities is issued to the holder hereof upon
exercise of this Warrant, such holder shall, for all purposes, be deemed to have
become the holder of record of such Common Stock on the date on which this
Warrant, together with a duly executed Election to Purchase, was surrendered and
payment of the aggregate Exercise Price was made, irrespective of the date of
delivery of such Common Stock certificate.
4. Adjustments.
(a) Stock Dividends,
Reclassifications, Recapitalizations, Etc. While this Warrant is
outstanding, in the event the Company: (i) pays a dividend in Common Stock or
makes a distribution in Common Stock, (ii) subdivides its outstanding Common
Stock into a greater number of shares, (iii) combines its outstanding Common
Stock into a smaller number of shares or (iv) increases or decreases the number
of shares of Common Stock outstanding by reclassification of its Common Stock
(including a recapitalization in connection with a consolidation or merger in
which the Company is the continuing corporation), then (1) the Exercise Price on
the record date of such division or distribution or the effective date of such
action shall be adjusted by multiplying such Exercise Price by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately before such event and the denominator of which is the number of
shares of Common Stock outstanding immediately after such event, and (2) the
number of shares of Common Stock for which this Warrant may be exercised
immediately before such event shall be adjusted by multiplying such number by a
fraction, the numerator of which is the Exercise Price immediately before such
event and the denominator of which is the Exercise Price immediately after such
event.
(b) Combination:
Liquidation. While this Warrant is outstanding, (i) In the event of a
Combination (as defined below), each Holder shall have the right to receive upon
exercise of the Warrant the kind and amount of shares of capital stock or other
securities or property which such Holder would have been entitled to receive
upon or as a result of such Combination had such Warrant been exercised
immediately prior to such event (subject to further adjustment in accordance
with the terms hereof). Unless paragraph (ii) is applicable to a Combination,
the Company shall provide that the surviving or acquiring Person (the "Successor
Company") in such Combination will assume by written instrument the obligations
under this Section 4 and the obligations to deliver to the Holder such shares of
stock, securities or assets as, in accordance with the foregoing provisions, the
Holder may be entitled to acquire. "Combination" means an event in which the
Company consolidates with, mergers with or into, or sells all or substantially
all of its assets to another Person, where "Person" means any individual,
corporation, partnership, joint venture, limited liability company, association,
joint-stock company, trust, unincorporated organization, government or any
agency or political subdivision thereof or any other entity; (ii) In the event
of (x) a Combination where consideration to the holders of Common Stock in
exchange for their shares is payable solely in cash or (y) the dissolution,
liquidation or winding-up of the Company, the Holders shall be entitled to
receive, upon surrender of their Warrant, distributions on an equal basis with
the holders of Common Stock or other securities issuable upon exercise of the
Warrant, as if the Warrant had been exercised immediately prior to such event,
less the Exercise Price. In case of any Combination described in this Section 4,
the surviving or acquiring Person and, in the event of any dissolution,
liquidation or winding-up of the Company, the Company, shall deposit promptly
with an agent or trustee for the benefit of the Holders of the funds, if any,
necessary to pay to the Holders the amounts to which they are entitled as
described above. After such funds and the surrendered Warrant are received, the
Company is required to deliver a check in such amount as is appropriate (or, in
the case or consideration other than cash, such other consideration as is
appropriate) to such Person or Persons as it may be directed in writing by the
Holders surrendering such Warrant.
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(c) Notice of Adjustment.
Whenever the Exercise Price or the number of shares of Common Stock and other
property, if any, issuable upon exercise of the Warrant is adjusted, as herein
provided, the Company shall deliver to the holders of the Warrant in accordance
with Section 10 a certificate of the Company's Chief Financial Officer setting
forth, in reasonable detail, the event requiring the adjustment and the method
by which such adjustment was calculated (including a description of the basis on
which (i) the Board of Directors determined the fair value of any evidences of
indebtedness, other securities or property or warrants, options or other
subscription or purchase rights and (ii) the Current Market Value of the Common
Stock was determined, if either of such determinations were required), and
specifying the Exercise Price and number of shares of Common Stock issuable upon
exercise of Warrant after giving effect to such adjustment.
(d) Notice of Certain
Transactions. While this Warrant is outstanding, in the event that the
Company shall propose (a) to pay any dividend payable in securities of any class
to the holders of its Common Stock or to make any other non-cash dividend or
distribution to the holders of its Common Stock, (b) to offer the holders of its
Common Stock rights to subscribe for or to purchase any securities convertible
into shares of Common Stock or shares of stock of any class or any other
securities, rights or options, (c) to effect any capital reorganization,
reclassification, consolidation or merger affecting the class of Common Stock,
as a whole, or (d) to effect the voluntary or involuntary dissolution,
liquidation or winding-up of the Company, the Company shall, within the time
limits specified below, send to each Holder a notice of such proposed action or
offer. Such notice shall be mailed to the Holders at their addresses as they
appear in the Warrant Register (as defined in Section 2(d)), which shall specify
the record date for the purposes of such dividend, distribution or rights, or
the date such issuance or event is to take place and the date of participation
therein by the holders of Common Stock, if any such date is to be fixed, and
shall briefly indicate the effect of such action on the Common Stock and on the
number and kind of any other shares of stock and on other property, if any, and
the number of shares of Common Stock and other property, if any, issuable upon
exercise of each Warrant and the Exercise Price after giving effect to any
adjustment pursuant to Section 4 which will be required as a result of such
action. Such notice shall be given as promptly as possible and (x) in the case
of any action covered by clause (a) or (b) above, at least ten (10) days prior
to the record date for determining holders of the Common Stock for purposes of
such action or (y) in the case of any other such action, at least twenty (20)
days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of Common Stock, whichever shall be the
earlier.
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(e) Current Market Value.
"Current Market Value" per share of Common Stock or any other security at any
date means (i) if the security is not registered under the Securities Exchange
Act of 1934 and/or traded on a national securities exchange, quotation system or
bulletin board, as amended (the "Exchange Act"), (a) the value of the security,
determined in good faith by the Board of Directors of the Company and certified
in a board resolution, based on the most recently completed arm's-length
transaction between the Company and a Person other than an affiliate of the
Company or between any two such Persons and the closing of which occurs on such
date or shall have occurred within the six-month period preceding such date, or
(b) if no such transaction shall have occurred within the six-month period, the
value of the security as determined by an independent financial expert or an
agreed upon financial valuation model or (ii) if the security is registered
under the Exchange Act and/or traded on a national securities exchange,
quotation system or bulletin board, the average of the daily closing bid prices
(or the equivalent in an over-the-counter market) for each day on which the
Common Stock is traded for any period on the principal securities exchange or
other securities market on which the common Stock is being traded (each, a
"Trading Day") during the period commencing thirty (30) days before such date
and ending on the date one day prior to such date.
5. Registration Rights.
The Holder is entitled to the benefit of such registration rights in respect of
the Shares as are set forth in the Subscription Agreement dated as of
__________________, 200____, by and between the Company and the
Holder.
6. Fractional
Shares. In lieu of issuance of a fractional share upon any
exercise hereunder, the Company will issue an additional whole share in lieu of
that fractional share, calculated on the basis of the Exercise
Price.
7. Legends. Prior to
issuance of the shares of Common Stock underlying this Warrant, all such
certificates representing such shares shall bear a restrictive legend to the
effect that the Shares represented by such certificate have not been registered
under the 1933 Act, and that the Shares may not be sold or transferred in the
absence of such registration or an exemption therefrom, such legend to be
substantially in the form of the bold-face language appearing at the top of Page
1 of this Warrant.
8. Disposition of Warrants or
Shares. The Holder of this Warrant, each transferee hereof and any holder
and transferee of any Shares, by his or its acceptance thereof, agrees that no
public distribution of Warrants or Shares will be made in violation of the
provisions of the 1933 Act. Furthermore, it shall be a condition to the transfer
of this Warrant that any transferee thereof deliver to the Company his or its
written agreement to accept and be bound by all of the terms and conditions
contained in this Warrant.
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9. Merger or
Consolidation. The Company will not merge or consolidate with or into any
other corporation, or sell or otherwise transfer its property, assets and
business substantially as an entirety to another corporation, unless the
corporation resulting from such merger or consolidation (if not the Company), or
such transferee corporation, as the case may be, shall expressly assume, by
supplemental agreement reasonably satisfactory in form and substance to the
Holder, the due and punctual performance and observance of each and every
covenant and condition of this Warrant to be performed and observed by the
Company.
10. Notices. Except as
otherwise specified herein to the contrary, all notices, requests, demands and
other communications required or desired to be given hereunder shall only be
effective if given in writing by certified or registered U.S. mail with return
receipt requested and postage prepaid; by private overnight delivery service
(e.g. Federal Express); by facsimile transmission (if no original documents or
instruments must accompany the notice); or by personal delivery. Any such notice
shall be deemed to have been given (a) on the business day immediately following
the mailing thereof, if mailed by certified or registered U.S. mail as specified
above; (b) on the business day immediately following deposit with a private
overnight delivery service if sent by said service; (c) upon receipt of
confirmation of transmission if sent by facsimile transmission; or (d) upon
personal delivery of the notice. All such notices shall be sent to the following
addresses (or to such other address or addresses as a party may have advised the
other in the manner provided in this Section 10):
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if
to the Company:
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Optex
Systems Holdings, Inc.
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▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Richardson,
TX 75081-2439
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Attention:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President
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Facsimile:
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With
a copy to:
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▇▇▇▇▇
▇. ▇▇▇▇, Esq.
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▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
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New
York, NY 10006
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Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
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if
to Holder:
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Attention:
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Facsimile:
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Notwithstanding
the time of effectiveness of notices set forth in this Section, an Election to
Purchase shall not be deemed effectively given until it has been duly completed
and submitted to the Company together with this original Warrant and payment of
the Exercise Price in a manner set forth in this Section.
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11. Limitation on
Exercise. Notwithstanding anything to the contrary contained herein, the
number of shares of Common Stock that may be acquired by the Holder upon any
exercise of this Warrant (or otherwise in respect hereof) shall be limited to
the extent necessary to insure that, following such exercise (or other
issuance), the total number of shares of Common Stock then beneficially owned by
such Holder and its affiliates and any other persons whose beneficial ownership
of Common Stock would be aggregated with the Holder's for purposes of Section
13(d) of the Exchange Act, does not exceed 4.99% of the total number of issued
and outstanding shares of Common Stock (including for such purpose the shares of
Common Stock issuable upon such exercise). For such purposes, beneficial
ownership shall be determined in accordance with Section 13(d) of the Exchange
Act and the rules and regulations promulgated thereunder. Each delivery of an
Exercise Notice hereunder will constitute a representation by the Holder that it
has evaluated the limitation set forth in this paragraph and determined that
issuance of the full number of Warrant Shares requested in such Exercise Notice
is permitted under this paragraph. This provision shall not restrict the number
of shares of Common Stock which a Holder may receive or beneficially own in
order to determine the amount of securities or other consideration that such
Holder may receive in the event of a merger or other business combination or
reclassification involving the Company. This restriction may not be waived
without the consent of the. Holder.
12. Governing Law. This
Warrant shall be governed by and construed in accordance with the laws of the
State of Delaware applicable to contracts made and to be performed in the State
of Delaware.
13. Successors and.
Assigns. This Warrant shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and
assigns.
14. Headings. The
headings of various sections of this Warrant have been inserted for reference
only and shall not affect the meaning or construction of any of the provisions
hereof.
15. Severability. If any
provision of this Warrant is held to be unenforceable under applicable law, such
provision shall be excluded from this Warrant, and the balance hereof shall be
interpreted as if such provision were so excluded.
16. Modification and
Waiver. This Warrant and any provision hereof may be amended, waived,
discharged or terminated only by an instrument in writing signed by the Company
and the Holder.
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17. Specific Enforcement.
The Company and the Holder acknowledge and agree that irreparable damage would
occur in the event that any of the provisions of this Warrant were not performed
in accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent or cure breaches of the provisions of this Warrant and to
enforce specifically the terms and provisions hereof, this being in addition to
any other remedy to which either of them may be entitled by law or
equity.
18. Assignment. Subject
to prior written approval by the Company, this Warrant may be transferred or
assigned, in whole or in part, at any time and from time to time by the then
Holder by submitting this Warrant to the Company together with a duly executed
Assignment in substantially the form and substance of the Form of Assignment
which accompanies this Warrant, as Exhibit B hereto, and, upon the Company's
receipt hereof, and in any event, within five (5) business days thereafter, the
Company shall issue a warrant to the Holder to evidence that portion of this
Warrant, if any as shall not have been so transferred or assigned.
(signature
page immediately follows)
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IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly executed,
manually or by facsimile, by one of its officers thereunto duly
authorized.
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Optex
Systems Holdings, Inc.
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By:
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Name:
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Title:
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Date:________________,
200_
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9
EXHIBIT
A
TO
WARRANT
CERTIFICATE
ELECTION
TO PURCHASE
To Be
Executed by the Holder in Order to Exercise the Warrant
The
undersigned Holder hereby elects to purchase ___________ Shares pursuant to the
attached Warrant, and requests that certificates for securities be issued in the
name of:
____________________________________
(Please
type or print name and address)
______________________________________________
______________________________________________
______________________________________________
(Social
Security or Tax Identification Number)
and
delivered to:
(Please
type or print name and address if different from above)
If such
number of Shares being purchased hereby shall not be all the Shares that may be
purchased pursuant to the attached Warrant, a new Warrant for the balance of
such Shares shall be registered in the name of, and delivered to, the Holder at
the address set forth below.
In full
payment of the purchase price with respect to the Shares purchased and transfer
taxes, if any, the undersigned hereby tenders payment of $______________ by
check, money order or wire transfer payable in United States currency to the
order of Optex Systems Holdings, Inc.
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HOLDER:
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By:
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Name:
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Title:
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Address:
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Dated:
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EXHIBIT
B
TO
WARRANT
FORM OF
ASSIGNMENT
(To be
signed only on transfer of Warrant)
For value
received, the undersigned hereby sells, assigns, and transfers unto
________________ the right represented by the within Warrant to purchase
__________ shares of Common Stock of Optex Systems Holdings, Inc., a Delaware
corporation, to which the within Warrant relates, and appoints
_______________________ Attorney to transfer such right on the books of Optex
Systems Holdings, Inc., a Delaware corporation, with full power of substitution
of premises.
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By:
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Name:
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Title:
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(signature
must conform to name of holder as specified on the fact of the
Warrant)
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Address:
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Dated:
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Signed in
the presence of:
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Dated:
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