1
EXHIBIT 4.7
(WARRANT HOLDER)
WARRANT AGREEMENT
BETWEEN CONVERTIBLE SUBORDINATED NOTE HOLDER
AND
NEMATRON CORPORATION
2
THIS STOCK PURCHASE WARRANT HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES
LAWS. IT MAY NOT BE OFFERED, SOLD OR TRANSFERRED IN THE
ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS OR AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED. THIS WARRANT IS ALSO SUBJECT TO
THE RESTRICTIONS ON TRANSFER SET FORTH IN SECTION 6 HEREOF.
WARRANT TO PURCHASE SHARES
OF COMMON STOCK, NO PAR VALUE, OF
NEMATRON CORPORATION
March , 2001
THIS STOCK PURCHASE WARRANT ("Warrant") CERTIFIES THAT, for value
received, subject to the provisions hereinafter set forth, __________ (THE
"HOLDER") is entitled to purchase from Nematron Corporation, a Michigan
corporation, and its successors and assigns (the "Company") up to ______________
SHARES (the "Warrant Shares") of common stock of the Company, no par value (the
"Common Stock"), at the price of $0.30 per share (the "Per Share Warrant Price")
at any time and from time to time after the date hereof and until March 31, 2006
(the "Expiration Date") subject to the provisions and adjustments and on the
terms and conditions hereinafter set forth. The Per Share Warrant Price, when
multiplied by the number of shares purchasable hereunder shall be referred to as
the "Aggregate Warrant Price." The number of shares purchasable hereunder and
the Per Share Warrant Price are subject to adjustment, as hereinafter provided.
The Company has issued this Warrant in connection with its issuance to the
Holder of a Convertible Subordinated Promissory Note on the date of this
Warrant.
The following is a statement of the rights of the Holder of this
Warrant and the terms and conditions to which this Warrant is subject, to which
terms the Holder hereof, by acceptance of this Warrant, assents.
1. EXERCISE OF WARRANT
(a) Subject to the conditions set forth herein, this Warrant may be
exercised in whole at any time or in part from time to time by the Holder hereof
by the surrender of this Warrant at the principal office of the Company on or
before the Expiration Date and upon payment to the Company of the Aggregate
Warrant Price (or the proportionate part thereof if exercised in part) for the
shares so purchased. Such payment shall be made by the Holder in the form of a
certified or cashier's check. If this Warrant is exercised with respect to less
than all of the Warrant Shares at the time purchasable hereunder, the Holder
hereof shall be entitled to receive a new Warrant covering the number of shares
in respect of which this Warrant shall not have been exercised.
3
(b) The Company shall keep a warrant registry book of the names of all the
holders of its registered warrants (including the Holder) and their
registered assigns.
2. ADJUSTMENTS
(a) If at any time prior to the exercise of the Warrant, the daily
closing price for the Company's Common Stock is less than $0.30 per share for
five consecutive trading days (provided, however, that the Common Stock is
traded on such trading day, the Per Share Warrant Price shall be the lowest such
price during such period. The Company currently intends to issue equity
securities in a private offering (the "Proposed Equity Offering") on or before
August 31, 2001 on terms and conditions to be determined at the time of such
offering (the "Proposed Shares"). In the event the Company completes the
Proposed Equity Offering prior to the exercise of this Warrant, the Holder may
exchange this Warrant for a warrant to purchase that number of Proposed Shares
equal to the Aggregate Warrant Price divided by the per Proposed Share price set
forth in the Proposed Equity Offering. The exercise price of the new warrant
shall be the per Proposed Share price set forth in the Proposed Equity Offering.
(b) In the event the Company shall (i) pay a dividend to the holders of
Common Stock in shares of Common Stock, (ii) subdivide its outstanding shares of
Common Stock into a greater number of shares, (iii) combine its outstanding
shares of Common Stock into a smaller number of shares, then (A) the number of
Warrant Shares shall be adjusted so that the Holder shall thereafter be entitled
to receive upon the exercise of this Warrant the number of shares of Common
Stock which he would have owned immediately after such event had the Warrant
been exercised immediately prior to the occurrence of such event and (B) the Per
Share Warrant Price shall be adjusted to that price determined by multiplying
the Per Share Warrant Price in effect immediately prior to such event by a
fraction (x) the numerator of which is the total number of outstanding shares of
Common Stock immediately prior to such event, and (y) the denominator of which
shall be the total number of outstanding shares of Common Stock immediately
after such event. Such adjustment shall become effective immediately after the
opening of business on the day following such record date or the day upon which
such subdivision, combination or reclassification becomes effective.
(c) In the event the Company shall (i) issue by reclassification of its
Common Stock any shares of the Company of any class or series, (ii) merge or
consolidate with or into another entity (other than a merger in which the
Company is the surviving entity and which does not result in any
reclassification of the outstanding shares of Common Stock), (iii) sell or
otherwise convey to another entity all or substantially all of the assets of the
Company followed by the distribution of the proceeds thereof to the shareholders
of the Company, or (iv) engage in a share exchange involving all or
substantially all of the stock of the Company, then the Holder shall thereafter
be entitled to receive upon the exercise of this Warrant, instead of the Warrant
Shares, the consideration which he would have owned immediately after such event
had the Warrant been exercised immediately prior to the occurrence of such
event.
(d) No adjustment shall be required unless such adjustment would
require an increase or decrease of at least one-tenth of a share in the number
of Warrant Shares or at
4
least one-tenth of a cent in the Per Share Warrant Price; provided, however,
that any adjustment which by reason hereof is not required to be made shall be
carried forward and taken into account in any subsequent adjustment.
(e) No fractional shares of Common Stock shall be issued upon exercise
of this Warrant. The number of shares issued shall instead be rounded down to
the nearest whole share and any fractional share disregarded.
(f) The Company shall not, by amendment of its Articles of
Incorporation or through any reorganization, recapitalization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, avoid or seek to avoid the observance or performance of
any of the terms to be observed or performed hereunder by the Company, but will
at all times in good faith assist in the carrying out of all of the provisions
of this Section 3 and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Holder against impairment.
(g) Whenever the Per Share Warrant Price or the number of Warrant
Shares shall be adjusted pursuant to the provisions hereof, the Company shall
within 30 days of such adjustment deliver a certificate signed by its chief
financial officer to the registered holder hereof setting forth, in reasonable
detail, the event requiring the adjustment, the amount of the adjustment, the
method by which such adjustment was calculated, and the Per Share Warrant Price
after giving effect to such adjustment.
3. FULLY PAID STOCK
The Company agrees that the Warrant Shares delivered upon exercise of
this Warrant as herein provided shall, at the time of such delivery, be fully
paid and non-assessable, and free from all liens and charges with respect to the
purchase thereof. During the period within which this Warrant may be exercised,
the Company will at all times have authorized, and hold in reserve for issuance
upon exercise of this Warrant, a sufficient number of shares of Common Stock to
provide for the exercise of this Warrant.
4. CLOSING OF TRANSFER BOOKS
The right to exercise this Warrant shall not be suspended during any
period while the stock transfer books of the Company for its Common Stock may be
closed. The Company shall not be required, however, to deliver certificates of
its Common Stock upon the exercise of this Warrant while such books are duly
closed for any purpose, but the Company may postpone the delivery of the
certificates for such Common Stock until the opening of such books, and they
shall, in such case, be delivered forthwith upon the opening thereof, or as soon
as practicable thereafter.
5. LOST OR STOLEN WARRANTS
In case any Warrant shall be mutilated, lost, stolen or destroyed, the
Company shall issue a new Warrant of like date, tenor, and denomination and
deliver the same in exchange and substitution for and upon surrender and
cancellation of any mutilated Warrant, or in lieu of any Warrant lost, stolen or
destroyed, upon an indemnity agreement or bond reasonably satisfactory to the
Company.
5
6. ASSIGNMENT
This Warrant is not assignable or transferable except by will or the
laws of descent and distribution and any such attempted assignment or transfer
shall be null and void. The Company may deem and treat the registered holder
hereof as the absolute owner of this Warrant (notwithstanding any notations of
ownership or writing hereon made by anyone other than the Company) for all
purposes and shall not be affected by any notice to the contrary.
7. SECURITIES MATTERS
Neither this Warrant nor the Warrant Shares have been registered under
the Securities Act of 1933 (the "Act"), as amended, or any applicable "Blue Sky"
laws. By acceptance of this Warrant, the Holder represents and warrants to the
Company that Holder (a) is receiving this Warrant and, upon exercise, is
acquiring the Warrant Shares for Holder's own account and not on behalf of
others, and is not taking this Warrant or any of the Warrant Shares with a view
to the "distribution" thereof (as that term is defined in the Act and the rules
and regulations of the Securities and Exchange Commission thereunder) and (b)
will not offer, distribute, sell, transfer or otherwise dispose of this Warrant
or the Warrant Shares except pursuant to (i) an effective registration statement
under the Act and any applicable Blue Sky laws with respect thereto, or (ii) an
opinion, satisfactory to the Company, addressed to the Company, of counsel
satisfactory to the Company, that such offering, distribution, sale, transfer or
disposition is exempt from registration under the Act and any applicable Blue
Sky laws. Each and every certificate representing Warrant Shares to be delivered
upon exercise of this Warrant shall bear the following legend:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. SUCH
SECURITIES MAY NOT BE OFFERED, SOLD OR TRANSFERRED IN THE ABSENCE OF
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY
APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL SATISFACTORY
TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
8. NO RIGHTS AS SHAREHOLDER
Nothing contained in this Warrant shall be construed as conferring upon
the Holder any rights as a shareholder of the Company.
9. MISCELLANEOUS
(a) All covenants and agreements of the Company in this Warrant shall
be binding upon the Company's successors and assigns.
6
(b) This Warrant shall be construed and enforced in accordance with the
laws of the State of Michigan.
(c) This Warrant may be amended, except as provided in Section 2, only
with the written consent of the Company and the Holder.
(d) Any notices or other communications required or permitted hereunder
shall be sufficiently given if in writing and sent by registered mail, postage
prepaid, and if to the Holder, addressed to the Holder at the Holder's address
appearing on the warrant registry book of the Company, and if to the Company,
addressed to it at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
President, or to such other address or attention as shall be furnished in
writing by the Company or the Holder, and any such notice shall be deemed to
have been given as of the date received.
(e) The Company will pay when due and payable any and all federal and
state taxes which may be payable by the Company in respect of the issue of this
Warrant, or any Common Stock or certificates therefor upon the exercise of this
Warrant, pursuant to the provisions thereof. The Company shall not, however, be
required to pay any tax which may be payable in respect of any attempted
transfer, in whole or in part, of this Warrant (including the issuance of new
Warrants in connection therewith) or the delivery of stock certificates in a
name other than that of the Holder presented for exercise, and any such tax
shall be paid by the Holder at the time of presentation.
IN WITNESS WHEREOF, the undersigned has caused this Warrant to be
signed by a duly authorized officer and this Warrant to be dated the date set
forth above.
NEMATRON CORPORATION ACCEPTED AND AGREED:
By: [Holder]
--------------------------- -------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, SECRETARY
By:
----------------------------------
[Signature]
Name:
--------------------------------
Its:
---------------------------------
Schedule of Warrant holders and Amount of Warrants
Date Name Amount
03-21-01 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 200,000
03-23-02 North Coast Technology
Investors LP 500,000
03-29-01 The Stag Group 33,333
04-09-01 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 66,667
--------
800,000
========