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EXHIBIT 4.3
THIS WARRANT AND THE SHARES OF STOCK ISSUABLE PURSUANT TO IT HAVE BEEN
ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933. SUCH SECURITIES MAY NOT BE SOLD, TRANSFERRED OR PLEDGED IN
THE ABSENCE OF SUCH REGISTRATION OR UNLESS THE COMPANY RECEIVES AN OPINION
OF COUNSEL (WHICH MAY BE COUNSEL FOR THE COMPANY) REASONABLY ACCEPTABLE TO
IT STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT.
AUTOMOTIVE PERFORMANCE GROUP, INC.
COMMON STOCK PURCHASE WARRANT
1. Number and Price of Shares Subject to Warrant. Subject to the terms and
conditions set forth herein, _____________________ ("HOLDER"), is entitled to
purchase from Automotive Performance Group, Inc., a Delaware corporation (the
"COMPANY"), at any time after the date hereof and on or before the date of
termination of this Warrant provided for in Section 15 hereof, up to
_____________ shares (which number of shares is subject to adjustment and
certain conditions as described below) of fully paid and nonassessable Common
Stock of the Company (the "SHARES") upon surrender hereof at the principal
office of the Company, and upon payment of the purchase price at said office in
cash or by check. Subject to adjustment as hereinafter provided, the purchase
price of one share of Common Stock (or such securities as may be substituted for
one share of Common Stock pursuant to the provisions hereinafter set forth)
shall be $_____. The purchase price of one share of Common Stock (or such
securities as may be substituted for one share of Common Stock pursuant to the
provisions hereinafter set forth) payable from time to time upon the exercise of
this Warrant (whether such price be the price specified above or an adjusted
price determined as hereinafter provided) is referred to herein as the "WARRANT
PRICE."
2. Adjustment of Warrant Price and Number of Shares. The number and kind
of securities issuable upon the exercise of this Warrant shall be subject to
adjustment from time to time and the Company agrees to provide notice upon the
happening of certain events as follows:
(a) Adjustment for Dividends in Stock. In case at any time or from
time to time on or after the date hereof the holders of the Common Stock of the
Company (or any shares of stock or other securities at the time receivable upon
the exercise of this Warrant) shall have received, or, on or after the record
date fixed for the determination of eligible stockholders, shall have become
entitled to receive, without payment therefor, other or additional securities or
other property of the Company by way of dividend or distribution, then and in
each case, the holder of this Warrant shall, upon the exercise hereof, be
entitled to receive, in addition to the number of shares of Common Stock
receivable thereupon, and without payment of any additional consideration
therefor, the amount of such other or additional securities or other property of
the Company which such holder
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would hold on the date of such exercise had it been the holder of record of such
Common Stock on the date hereof and had thereafter, during the period from the
date hereof to and including the date of such exercise, retained such shares
and/or all other additional securities or other property receivable by it as
aforesaid during such period, giving effect to all adjustments called for during
such period by this paragraph (a) and paragraphs (b) and (c) of this Section 2.
(b) Adjustment for Reclassification or Reorganization. In case of
any reclassification or change of the outstanding Common Stock of the Company or
of any reorganization of the Company on or after the date hereof (other than a
merger of the Company with and into another corporation), then and in each such
case the Company shall give the holder of this Warrant at least ten (10) days
notice of the proposed effective date of such transaction, and the holder of
this Warrant, upon the exercise hereof at any time after the consummation of
such reclassification, change or reorganization, shall be entitled to receive,
in lieu of the stock or other securities and property receivable upon the
exercise hereof prior to such consummation, the stock or other securities or
property to which such holder would have been entitled upon such consummation if
such holder had exercised this Warrant immediately prior thereto, all subject to
further adjustment as provided in paragraphs (a), (b) and (c); in each such
case, the terms of this Section 2 shall be applicable to the shares of stock or
other securities properly receivable upon the exercise of this Warrant after
such consummation.
(c) Stock Splits and Reverse Stock Splits. If at any time on or
after the date hereof the Company shall subdivide its outstanding shares of
Common Stock into a greater number of shares, the Warrant Price in effect
immediately prior to such subdivision shall thereby be proportionately reduced
and the number of shares receivable upon exercise of the Warrant shall thereby
be proportionately increased; and, conversely, if at any time on or after the
date hereof the outstanding number of shares of Common Stock shall be combined
into a smaller number of shares, the Warrant Price in effect immediately prior
to such combination shall thereby be proportionately increased and the number of
shares receivable upon exercise of this Warrant shall thereby be proportionately
decreased.
(d) Adjustment for Withholding. The Company may adjust the exercise
price upward to reimburse the Company for any withholding the Company reasonably
believes is required in connection with the grant of this Warrant or honoring
its exercise.
3. No Fractional Shares. No fractional shares of Common Stock will be
issued in connection with any subscription hereunder. In lieu of any fractional
shares which would otherwise be issuable, the Company shall pay cash equal to
the product of such fraction multiplied by the fair market value of one share of
Common Stock on the date of exercise, as determined in good faith by the
Company's Board of Directors.
4. No Shareholder Rights. This Warrant as such shall not entitle its
holder to any of the rights of a shareholder of the Company.
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5. Reservation of Stock. The Company covenants that during the period this
Warrant is exercisable, the Company will reserve from its authorized and
unissued Common Stock a sufficient number of shares to provide for the issuance
of Common Stock upon the exercise of this Warrant. The Company agrees 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 shares of Common Stock upon the exercise of this
Warrant.
6. Exercise of Warrant.
(a) Manner of Exercise. This Warrant may be exercised, in whole or
in part, by Holder by the surrender of this Warrant (with the notice of exercise
form attached hereto as Attachment A and the Investment Representation Statement
attached hereto as Attachment C duly executed) at the principal office of the
Company, accompanied by payment in full of the purchase price of the Shares
purchased thereby, as described above. This Warrant shall be deemed to have been
exercised immediately prior to the close of business on the date of its
surrender for exercise as provided above, and the person entitled to receive the
Shares or other securities issuable upon such exercise shall be treated for all
purposes as the holder of such shares of record as of the close of business on
such date. As promptly as practicable and in any event within five (5) days
after such date, the Company shall issue and deliver to the person or persons
entitled to receive the same a certificate or certificates for the number of
full shares of Common Stock issuable upon such exercise, together with cash in
lieu of any fraction of a share as provided above, and a Warrant in like tenor
as this Warrant to purchase the number of Shares in respect of which this
Warrant shall not have been exercised or waived.
(b) Net Exercise. In lieu of paying the aggregate Warrant Price for
the Shares by the payment method specified in Section 6(a) above, the
Warrantholder may elect to receive Shares equal to the value of this Warrant (or
the portion thereof being canceled) by surrender of this Warrant at the
principal office of the Company together with the net exercise form attached to
this Warrant as Attachment B and the Investment Representation Statement
attached hereto as Attachment C duly executed by the holder, in which event the
Company shall issue to the holder a number of shares of the Company's Common
Stock computed using the following formula:
Y (A-B)
X = ------------
A
Where X = the number of shares of Common Stock to be issued to Holder.
Y = the number of shares of Common Stock purchasable under this Warrant.
A = the fair market value of one share of the Company's Common Stock
(at the date of calculation).
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B = Warrant Price (as adjusted to the date of such calculations).
For the purposes of the above calculation, the fair market value of the
Common Stock shall mean with respect to each share of Common Stock:
(i) 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 Western Edition of the Wall Street Journal
for the ten trading days prior to the date of determination of
fair market value; or
(ii) if the Company's Common Stock is not traded
Over-The-Counter or on an exchange, fair market value of each
share of the Common Stock shall be determined in good faith by
the Company's Board of Directors, including a majority of
those directors who are not then, or have not previously been,
officers of the Company. Receipt and acknowledgment of this
Warrant by the holder shall be deemed to be an acknowledgment
and acceptance of any such fair market value determination by
the Company's Board of Directors as the final and binding
determination of such value for purposes of this Warrant.
7. Certificate of Adjustment. Whenever the Warrant Price or the number or
type of securities issuable upon exercise of this Warrant is adjusted, as herein
provided, the Company shall promptly deliver to the record holder of this
Warrant a certificate of an officer of the Company setting forth the nature of
such adjustment and a brief statement of the facts requiring such adjustment.
8. Acquisition for Own Account. This Warrant is being acquired for
investment for Holder's account, not as a nominee or agent, and not with a view
to the public resale or distribution thereof within the meaning of the 1933 Act,
and Holder has no present intention of selling, granting any participation in,
or otherwise distributing the same. Holder also represents that Holder has not
been formed for the specific purpose of acquiring this Warrant.
9. Disclosure of Information. Holder has received or has had full access
to all the information it considers necessary or appropriate to make an informed
investment decision with respect to this Warrant. Holder further has had an
opportunity to ask questions and receive answers from the Company regarding the
terms and conditions of the offering of this Warrant and to obtain additional
information (to the extent the Company possessed such information or could
acquire it without unreasonable effort or expense) necessary to verify any
information furnished to Holder or to which Holder had access.
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10. Investment Experience. Holder understands that an investment in this
Warrant involves substantial risk. Holder (i) has experience as an investor in
Securities of companies in the development stage and acknowledges that Holder is
able to fend for itself, can bear the economic risk of investing in this Warrant
and has such knowledge and experience in financial or business matters such that
Holder is capable of evaluating the merits and risks of this investment in this
Warrant and protecting its own interests in connection with this investment.
11. Restricted Securities. Holder understands that this Warrant is
characterized as a "restricted security" under the 1933 Act inasmuch as it is
being acquired from the Company in a transaction not involving a public offering
and that under the 1933 Act and applicable regulations thereunder such Warrant
may be resold without registration under the 1933 Act only in certain limited
circumstances. In this connection, Holder represents that Holder is familiar
with Rule 144 of the U.S. Securities and Exchange Commission (the "SEC"), as
presently in effect, and understands the resale limitations imposed thereby and
by the 1933 Act. Holder understands that no public market now exists for this
Warrant and that it is uncertain whether a public market will ever exist for
this Warrant or the Shares.
12. Transfer of Warrant. This Warrant may not be transferred by Holder
without the written consent of the Company, which consent will not be
unreasonably withheld. Any such transfer will require an opinion of counsel
reasonably acceptable to the Company stating that such transfer is exempt from
the registration requirements of the Securities Act of 1933.
13. Market Standoff Agreement. Each Holder agrees in connection with any
registration of the Company's securities (other than a registration of debt
securities, securities in a Rule 145 transaction or with respect to an employee
benefit plan), upon notice by the Company or the underwriters managing any
underwritten public offering of the Company's securities, not to sell, make any
short sale of, loan, pledge (or otherwise encumber or hypothecate), grant any
option for the purchase of, or otherwise directly or indirectly dispose of this
Warrant or any Shares without the prior written consent of the Company and such
managing underwriters for such period of time as the Board of Directors
establishes pursuant to its good faith negotiations with such managing
underwriters, which period shall not exceed 180 days. Each Holder hereby
consents to the placement of stop transfer orders with the Company's transfer
agent in order to enforce the foregoing provision.
14. Restrictive Legend. Each certificate representing (i) the Shares, and
(ii) any other securities issued in respect of the Shares upon any stock split,
stock dividend, recapitalization, merger, consolidation or similar event, shall
be stamped or otherwise imprinted with legends in the following form (in
addition to any legend required under applicable state securities laws):
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 (THE "SECURITIES ACT"). SUCH
SHARES MAY NOT BE SOLD, TRANSFERRED OR PLEDGED IN
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THE ABSENCE OF SUCH REGISTRATION OR UNLESS THE COMPANY RECEIVES AN
OPINION OF COUNSEL (WHICH MAY BE COUNSEL FOR THE COMPANY) REASONABLY
ACCEPTABLE TO IT STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM
THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE
SECURITIES ACT."
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A MARKET
STAND-OFF AGREEMENT IN THE EVENT OF A PUBLIC OFFERING, A COPY OF
WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY."
15. Termination. This Warrant (and the right to purchase securities upon
exercise hereof) shall terminate upon the earliest of (a) ______________, (b)
the sale of all or substantially all of the assets of the Company, or (c) the
acquisition of the Company by means of merger or consolidation resulting in the
exchange of the outstanding shares of the Company for securities or
consideration issued, or caused to be issued, by the acquiring corporation or
its subsidiary. The Company shall give Holder written notice of such sale,
merger or consolidation at least fifteen (15) and no more than ninety (90) days
prior to the closing of any such sale, merger or consolidation.
16. Miscellaneous. This Warrant shall be governed by the laws of the State
of Delaware. The headings in this Warrant are for purposes of convenience of
reference only, and shall not be deemed to constitute a part hereof. Neither
this Warrant nor any term hereof may be changed, waived, discharged or
terminated orally but only by an instrument in writing signed by the Company and
the registered holder hereof. All notices and other communications from the
Company to the holder of this Warrant shall be delivered personally or mailed by
first class mail, postage prepaid, to the address furnished to the Company in
writing by the last holder of this Warrant who shall have furnished an address
to the Company in writing, and if mailed shall be deemed given three days after
deposit in the U.S. Mail.
ISSUED this ________ day of ________, _____.
AUTOMOTIVE PERFORMANCE GROUP, INC.
a Delaware corporation
By:____________________________________
Name:
Title:
AGREED AND ACCEPTED:
________________________________
By:_____________________________
Name:
Title:
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