THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR APPLICABLE STATE SECURITIES LAWS.
NEITHER THIS WARRANT NOR THE COMMON STOCK ISSUABLE UPON EXERCISE HEREOF MAY BE
SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THE APPLICABLE SECURITIES UNDER SUCH ACT OR LAWS OR
AN OPINION OF COUNSEL FOR THE HOLDER REASONABLY SATISFACTORY TO THE ISSUER
STATING THAT SUCH REGISTRATION IS NOT REQUIRED.
No. 2000-W-4. WARRANT TO PURCHASE 413,200
SHARES OF COMMON STOCK
AMENDED AND RESTATED STOCK PURCHASE WARRANT
TO PURCHASE SHARES OF COMMON STOCK
OF MICROFIELD GRAPHICS, INC.
For value received, Microfield Graphics, Inc., an Oregon corporation
(the "Company"), grants to Xxxxxx X. Xxxxxxx (the "Holder") the right, subject
to the terms of this Warrant, to purchase at any time during the period
commencing on the "Initial Exercise Date" (as defined below), and ending on the
"Expiration Date" (as defined below), 413,200 fully paid and nonassessable
shares of Common Stock of the Company at the "Exercise Price" (as defined
below). This Warrant may be exercised in whole and not in part. The number of
shares that may be purchased are subject to adjustment under the terms of this
Warrant.
Section 1. DEFINITIONS. As used in this Warrant, unless the context
otherwise requires:
"EXERCISE AMOUNT" means 413,200 shares (adjusted as necessary in
accordance with Section 7).
"EXERCISE PRICE" means $0.50 per share (adjusted as necessary in
accordance with Section 7).
"COMMON STOCK" means the Common Stock of the Company.
"COMPANY" has the meaning specified in the introductory paragraph.
"EXERCISE DATA" means any date when this Warrant is exercised in the
manner indicated in Sections 2.1 and 2.2.
"EXPIRATION DATE" means 12:00 midnight (Portland time) on June 30,
2005.
"HOLDER" has the meaning specified in the introductory paragraph.
"INITIAL EXERCISE DATE" means June 30, 2000.
"PERSON" means an individual, corporation, partnership, trust, joint
venture or other form of business entity.
1 - AMENDED AND RESTATED STOCK PURCHASE WARRANT
PDX/112816/141153/DLH/1395913.1
"SECURITIES ACT" means the Securities Act of 1933, as amended from time
to time, and all rules and regulations promulgated thereunder, or any act, rules
or regulations which replace the Securities Act or any such rules and
regulations.
"WARRANT SHARES" means the shares of Common Stock issued or issuable
upon exercise of this Warrant, adjusted as necessary in accordance with Section
7.
Section 2. DURATION AND EXERCISE OF WARRANT.
2.1 EXERCISE PERIOD. Subject to the provisions hereof, this
Warrant may be exercised at any time during the period commencing on the Initial
Exercise Date and ending on the Expiration date for the Exercise Amount. After
the Expiration Date, this Warrant shall become void and all rights to purchase
Warrant Shares hereunder shall thereupon cease.
2.2 METHODS OF EXERCISE. This Warrant may be exercised by the
Holder, in whole and not in part, by (i) surrendering this Warrant to the
Secretary of the Company, (ii) payment of any applicable consideration, and
(iii) executing and delivering to the Secretary of the Company the attached
Exercise Form, which must select one of the following exercise methods, to be at
the Holder's option:
2.2.1 EXERCISE FOR CASH. if the Holder elects to exercise
the Warrant for cash, the Holder shall tender to the Company payment in full by
cash, check, or wire transfer of the Exercise Price for the Warrant Shares.
2.2.2 SAME DAY SALE EXERCISE. In lieu of exercising this
Warrant by payment of cash, when permitted by law and applicable regulations
(including Nasdaq and NASD rules), the Holder may pay the Exercise Price through
a "same day sale" commitment from the Holder and a broker-dealer that is a
member of the National Association of Securities Dealers (an "NASD Dealer")
whereby the Holder irrevocably elects to exercise the Warrant and to sell a
portion of the Warrant Shares so purchased to pay for the Exercise Price and
whereby the NASD Dealer irrevocably commits upon receipt of such Warrant Shares
to forward the Exercise Price directly to the Company.
2.2.3 NET EXERCISE. The Holder may elect to receive,
without the payment by the Holder of any additional consideration, shares of
Common Stock equal to the value of this warrant by the surrender of all of this
Warrant to the Company with a written notice of exercise specifying reliance on
this Section 2.2.3. Thereupon, the Company shall issue to the Holder such number
of fully paid and nonassessable shares of Common Stock as is computed using the
following formula:
X = Y (A-B)
-------
A
where X = the number of shares to be issued to the Holder
pursuant to this Section 2.3.
Y = the number of Warrant Shares underlying the Warrant
the Holder elects to exercise pursuant to this Section
2.2.3.
2 - AMENDED AND RESTATED STOCK PURCHASE WARRANT
PDX/112816/141153/DLH/1395913.1
A = the average closing ask price for one share of Common
Stock for the 10 trading days preceding the day the net
exercise election is made pursuant to this Section
2.2.3.
B = the Exercise Price in effect under this Warrant at the
time the net exercise election is made pursuant to this
Section 2.2.3.
2.3 CERTIFICATES. As soon as practicable after exercise of this
Warrant (but in no event later than five business days), (a) certificates for
Warrant Shares shall be delivered, at the Company's expense, to the Holder or
the transferee thereof set forth in the attached Exercise Form and (b) a new
Warrant of like tenor to purchase up to that number, if any, not previously
purchased by the Holder (if this Warrant has not expired) shall be delivered, at
the Company's expense, to the Holder.
2.4 EFFECTIVE DATE OF EXERCISE. 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. The person entitled to receive the
Warrant Shares shall be treated for all purposes as the holder of record of such
shares as of the close of business on the date the Holder is deemed to have
exercised this Warrant.
2.5 SECURITIES ACT COMPLIANCE. Unless the Warrant Shares are no
longer subject to Rule 144 under the Securities Act or to the Lock-up Agreement
dated as of August 15, 2002 among the Company and certain investors in the
Company's securities, the Company may place conspicuously upon each certificate
representing the Warrant Shares a legend substantially in the following forms,
the terms of which arc agreed to by the Holder:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY
APPLICABLE STATE LAW, AND NO INTEREST THEREIN MAY BE SOLD, DISTRIBUTED,
ASSIGNED, OFFERED, PLEDGED OR OTHERWISE TRANSFERRED UNLESS (A) THERE IS
AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS COVERING ANY SUCH TRANSACTION INVOLVING THESE
SECURITIES OR (B) THE COMPANY RECEIVES AN OPINION OF LEGAL COUNSEL FOR
THE HOLDER OF THESE SECURITIES (CONCURRED IN BY LEGAL COUNSEL FOR THE
COMPANY) STATING THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION OR
(C) THE COMPANY OTHERWISE SATISFIES ITSELF THAT SUCH TRANSACTION IS
EXEMPT FROM REGISTRATION.
THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO A LOCK-UP
AGREEMENT DATED AS OF AUGUST _, 2002 AMONG THE COMPANY AND CERTAIN
INVESTORS IN THE COMPANY'S SECURITIES.
2.6 TAXES. The Company shall pay any tax and other governmental
charges which may be payable in respect of the issuance of the Warrant Shares,
provided, however, that in no
3 - AMENDED AND RESTATED STOCK PURCHASE WARRANT
PDX/112816/141153/DLH/1395913.1
case will the Company pay any taxes relating to income to the Holder resulting
from the issuance or exercise of this Warrant.
Section 3. WARRANT SHARES.
3.1 VALIDITY AND RESERVATION. The Company covenants that all
Warrant Shares issued upon exercise of this Warrant will be validly issued,
fully paid, nonassessable, free and clear of all liens, security interests,
charges and other encumbrances or restrictions on sale (except encumbrances or
restrictions arising under federal or state securities laws), and not subject to
preemptive rights. The Company agrees that, as long as this Warrant may be
exercised, the Company will have duly authorized and reserved for issuance upon
exercise of this Warrant a sufficient number of shares of Common Stock or other
shares of capital stock of the Company as are from time to time issuable upon
exercise of this Warrant and from time to time will take all steps necessary to
amend its Articles of Incorporation to provide sufficient reserves of Common
Stock issuable upon exercise of this Warrant. Issuance of this Warrant shall
constitute full authority to the Company's officers who are charged with the
duty of executing stock certificates to execute and issue the necessary
certificates for Common Stock upon the exercise of this Warrant.
3.2 LISTING OF WARRANT SHARES. The Company shall take all steps
necessary to cause the Warrant Shares issuable upon exercise of this Warrant to
be approved for listing on all securities exchanges or markets and all trading
or quotation facilities on which the Common Stock is listed as soon as possible
after the Initial Exercise Date and shall use commercially reasonable efforts to
maintain such listings until the earlier of the Expiration Date or the date this
Warrant is exercised in full.
Section 4. FRACTIONAL SHARES.
No fractional Warrant Shares shall be issued upon the exercise of this
Warrant, and the number of Warrant Shares to be issued shall be rounded to the
nearest whole number.
Section 5. LIMITED RIGHTS OF WARRANT HOLDER.
The Holder shall not, solely by virtue of being the Holder of this
Warrant, have any of the rights of a shareholder of the Company, either at law
or equity, until this Warrant shall have been exercised.
Section 6. LOSS OF WARRANT.
Upon receipt by the Company of satisfactory evidence of the loss,
theft, destruction or mutilation of this Warrant and either (in the case of
loss, theft or destruction) reasonable indemnification and a bond reasonably
satisfactory to the Company if requested by the Company or (in the case of
mutilation) the surrender of this Warrant for cancellation, the Company will
execute and deliver to the Holder, without charge, a new warrant of like
denomination.
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PDX/112816/141153/DLH/1395913.1
Section 7. CERTAIN ADJUSTMENTS.
7.1 ADJUSTMENT OF WARRANT SHARES. The number, class and Exercise
Price per share of securities for which this Warrant may be exercised are
subject to adjustment from time to time upon the happening of certain events as
hereinafter provided:
(a) RECAPITALIZATION. If the outstanding shares of the
Company's Common Stock are divided into a greater number of shares or if the
Company shall effect a stock dividend, the number of shares of Common Stock
purchasable upon the exercise of this Warrant shall be proportionately increased
and the Exercise Price per share shall be proportionately reduced. Conversely,
if the outstanding shares of Common Stock are combined into a smaller number of
shares of Common Stock, the number of shares of Common Stock purchasable upon
the exercise of this Warrant shall be proportionately reduced and the Exercise
Price per share shall be proportionately increased. The increases and reductions
provided for in this Section 7.1(a) shall be made with the intent and, as nearly
as practicable, the effect that neither the percentage of the total equity of
the Company obtainable on exercise of this Warrant nor the aggregate price
payable for such percentage shall be affected by any event described in this
Section 7.1(a).
(b) MERGER OR REORGANIZATION, ETC. In the event of any
change in the Common Stock through merger, consolidation, reclassification,
reorganization, partial or complete liquidation or other change in the capital
structure of the Company (not including the issuance of additional shares of
capital stock other than by stock dividend or stock split), then, the Holder of
this Warrant will have the right thereafter to receive upon the exercise of this
Warrant the kind and amount of shares of stock or other securities or property
to which it would have been entitled if, immediately before the merger,
consolidation, reclassification, reorganization, recapitalization or other
change in the capital structure, it had held the number of shares of Common
Stock obtainable upon the exercise of this Warrant. In any such case,
appropriate adjustment shall be made in the application of the provisions of
this Section 7 with respect to the rights of the Holder after the merger,
consolidation, reclassification, reorganization, recapitalization or other
change to the end that the provisions of this Section 7 (including adjustment of
the Exercise Price then in effect and the number of shares issuable upon
exercise of this Warrant) shall be applicable after that event as nearly
equivalent as may be practicable.
(c) ADJUSTMENT FOR DIVIDENDS OR DISTRIBUTIONS OF STOCK OR
OTHER SECURITIES OR PROPERTY. In case the Company shall make or issue, or shall
fix a record date for the determination of eligible holders entitled to receive,
a dividend or other distribution with respect to the Warrant Shares (or any
shares of stock or other securities at the time issuable upon exercise of the
Warrant) payable in (i) securities of the Company (other than as provided for in
Section 7.1(a) or (b) above) or any other entity or (ii) assets (excluding cash
dividends paid or payable solely out of retained earnings), then, in each such
case, upon exercise of this Warrant at any time after the consummation,
effective date or record date of such dividend or other distribution, the Holder
shall receive, in addition to the Warrant Shares (or such other stock or
securities) issuable on such exercise prior to such date, and without the
payment of additional consideration therefor, the securities or such other
assets of the Company to which such Holder would have been entitled upon such
date if such Holder had exercised this Warrant on the Initial Exercise Date and
had thereafter, during the period from the Initial Exercise Date to and
5 - AMENDED AND RESTATED STOCK PURCHASE WARRANT
PDX/112816/141153/DLH/1395913.1
including the date of such exercise, retained such shares and/or all other
additional stock or securities available by it as aforesaid during such period
giving effect to all adjustments called for by this Section 7.
(d) SALE OF SHARES BELOW EXERCISE PRICE.
(i) If the Company shall issue any Additional
Stock (as defined below) without consideration or for a consideration per share
less than the Exercise Price in effect immediately prior to the issuance of such
Additional Stock in a transaction not subject to Section 7.1(a), (b) or (c)
above, the Exercise Price in effect immediately prior to issuance of such
Additional Stock (except as otherwise provided in this Section 7.1(d)) shall be
adjusted down to a price equal to the quotient obtained by dividing the total
computed under clause (x) below by the total computed under clause (y) below as
follows:
(x) an amount equal to the sum of (1)
the result obtained by multiplying the number of shares of Common Stock deemed
outstanding immediately prior to such issuance (which shall include the actual
number of shares outstanding plus all shares issuable upon the conversion or
exercise of all outstanding convertible securities, warrants and options other
than shares excluded from the definition of Additional Stock by Section
7.1(d)(vi)) by the Exercise Price then in effect, and (2) the aggregate
consideration, if any, received by the Company upon the issuance of such
Additional Stock;
(y) the number of shares of Common
Stock of the Company outstanding immediately after such issuance (including the
shares deemed outstanding as provided in clause (x) above).
(ii) No adjustment of the Exercise Price shall be
made in an amount less than $0.01 per share; provided, however, that any
adjustments which are not required to be made by reason of this sentence shall
be carried forward and shall be taken into account in any subsequent adjustment
made to the Exercise Price. Except as provided in Sections 7.1(d)(v)(C) and (D)
below, no adjustment of the Exercise Price shall have the effect of increasing
the Exercise Price above the Exercise Price in effect immediately prior to such
adjustment.
(iii) In the case of the issuance of Common Stock
for cash, the consideration shall be deemed to be the amount of cash paid
therefor before deducting any discounts, commissions or other expenses allowed,
paid or incurred by the Company for any underwriting or otherwise in connection
with the issuance and sale thereof.
(iv) In the case of the issuance of Common Stock
for a consideration in whole or in part other than cash, the consideration other
than cash shall be deemed to be the fair value thereof as determined in good
faith by the Board of Directors irrespective of any accounting treatment.
(v) In the case of the issuance of options or
warrants to purchase or rights to subscribe for Common Stock, securities by
their terms convertible into or exchangeable for Common Stock, or options or
warrants to purchase or rights to subscribe for such convertible or exchangeable
securities (which options, warrants, rights, convertible or exchangeable
6 - AMENDED AND RESTATED STOCK PURCHASE WARRANT
PDX/112816/141153/DLH/1395913.1
securities are not excluded from the definition of Additional Stock except as
provided in Section 7.1(d)(vi)(B)), the following provisions shall apply:
(A) the aggregate maximum number of
shares of Common Stock deliverable upon exercise of such options or warrants to
purchase or rights to subscribe for Common Stock shall be deemed to have been
issued at the time such options, warrants, or rights were issued for a
consideration equal to the consideration (determined in the manner provided in
Sections 7.1(d)(iii) and (iv) above), if any, received by the Company upon the
issuance of such options, warrants or rights plus the minimum purchase price
provided in such options, warrants or rights for the Common Stock covered
thereby, but no further adjustment to the Exercise Price shall be made for the
actual issuance of Common Stock upon the exercise of such options, warrants or
rights in accordance with their terms;
(B) the aggregate maximum number of
shares of Common Stock deliverable upon conversion of or in exchange for any
such convertible or exchangeable securities or upon the exercise of options or
warrants to purchase or rights to subscribe for such convertible or exchangeable
securities and subsequent conversion or exchange thereof shall be deemed to have
been issued at the time such securities were issued or such options, warrants or
rights were issued for a consideration equal to the consideration received, if
any, by the Company for any such securities and any related options, warrants or
rights, plus the minimum additional consideration, if any, to be received by the
Company upon the conversion or exchange of such securities or the exercise of
any related options, warrants or rights (the consideration in each case to be
determined in the manner provided in Sections 7.1(d)(iii) and (iv) above), but
no further adjustment to the Exercise Price shall be made for the actual
issuance of Common Stock upon the conversion or exchange of such securities in
accordance with their terms;
(C) if such options, warrants, rights
or convertible or exchangeable securities by their terms provide, with the
passage of time or otherwise, for any change in the consideration payable to the
Company or in the number of shares of Common Stock issuable upon the exercise,
conversion or exchange thereof, including, without limitation, a change
resulting from the antidilution provisions thereof, the Exercise Price computed
upon the original issue thereof, and any subsequent adjustments based thereon,
shall, upon such change becoming effective, be recomputed to reflect such
change, but no further adjustment to the Exercise Price shall be made for the
actual issuance of Common Stock upon the exercise of any such options, warrants
or rights or the conversion or exchange of such securities in accordance with
their terms; and
(D) upon the expiration of any such
options, warrants or rights, the termination of any such rights to convert or
exchange or the expiration of any options, warrants or rights related to such
convertible or exchangeable securities, the Exercise Price shall forthwith be
readjusted to such Exercise Price as would have been obtained had the adjustment
which was made upon the issuance of such options, warrants, rights or securities
or options, warrants or rights related to such securities been made upon the
basis of the issuance of only the number of shares of Common Stock (and
convertible or exchangeable securities which remain in effect) actually issued
upon the exercise of such options, warrants or rights, upon the conversion or
exchange of such securities or upon the exercise of the options, warrants or
rights related to such securities.
7 - AMENDED AND RESTATED STOCK PURCHASE WARRANT
PDX/112816/141153/DLH/1395913.1
(vi) "Additional Stock" shall mean any shares of
Common Stock or securities convertible into or exchangeable or exercisable for
shares of Common Stock issued (or deemed to have been issued pursuant to Section
7.1(d)(v) above) by the Company after the Initial Exercise Date other than:
(A) Common Stock issued in connection
with a transaction described in Section 7.1(a), (b) or (c);
(B) shares of Common Stock (and options
to purchase shares of Common Stock) issued or issuable to employees, officers or
directors of, or consultants to, the Company directly or pursuant to a stock
option or restricted stock plan approved by the Company's Board of Directors;
(C) 280,000 shares of Common Stock
(adjusted appropriately for stock dividends, splits, combinations and similar
transactions) issued or issuable upon the exercise of warrants outstanding on
the Initial Exercise Date;
(D) shares of Common Stock issued or
issuable upon the exercise of any warrant issued pursuant to the Note and
Warrant Purchase Agreement by and among the Company and JMW Capital Partners,
Inc. dated as of the Initial Exercise Date.
(E) shares of Common Stock, or
securities convertible into or exchangeable or exercisable for shares of Common
Stock, issued to financial institutions or equipment lessors in connection with
commercial credit arrangements, equipment financings or similar transactions not
primarily for equity financing purposes and which have been approved by the
Company's Board of Directors; and
(F) shares of Common Stock, or
securities convertible into or exchangeable or exercisable for shares of Common
Stock, issued in connection with business combinations or corporate partnering
agreements approved by the Company's Board of Directors.
(e) OTHER IMPAIRMENTS. If any event shall occur as to
which the provisions of Section 7.1(a)-(d) are not strictly applicable but are
covered by the essential intent and principles of such sections, then, in each
such case, the Company will appoint the firm of independent certified public
accountants of recognized national standing with the largest U.S. revenues for
the prior year (but not the Company's regular auditors), which shall give their
opinion upon the adjustment, if any, on a basis consistent with the essential
intent and principles established in this Section 7.1, necessary to preserve the
rights represented by this Warrant. Upon receipt of such opinion, the Company
will promptly mail a copy thereof to the holder of this Warrant and shall make
the adjustments described therein.
7.2 NOTICE OF ADJUSTMENT. Whenever an event occurs requiring any
adjustment to be made pursuant to Section 7.1, the Company shall promptly file
with its Secretary or an assistant secretary at its principal office and with
its stock transfer agent, if any, a certificate of its President or Chief
Financial Officer specifying such adjustment, setting forth in reasonable detail
the acts requiring such adjustment, and stating such other facts as shall be
necessary to show the manner and figures used to compute such adjustment. Such
certificate shall be made available at
8 - AMENDED AND RESTATED STOCK PURCHASE WARRANT
PDX/112816/141153/DLH/1395913.1
all reasonable times for inspection by the Holder. Promptly (but in no event
more than 30 days) after each such adjustment, the Company shall give a copy of
such certificate by certified mail to the Holder.
Section 8. MISCELLANEOUS.
8.1 BINDING EFFECT; ASSIGNMENT. This Warrant shall inure to the
benefit of and be binding upon the Company and the Holder and their respective
successors, heirs, legal representatives and permitted assigns. This Warrant and
the Warrant Shares (collectively, "Securities") may only be disposed of 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 compliance with any applicable
federal and state securities laws. In connection with any transfer of Securities
other than pursuant to an effective registration statement, transfer may only be
made with the prior written consent of the Company, which shall not be
unreasonably withheld, and the Company may require the transferor to provide to
the Company an opinion of counsel selected by the transferor, the form and
substance of which opinion shall be reasonably satisfactory to the Company, to
the effect that such transfer does not require registration of such transferred
securities under the Securities Act; provided, however, that notwithstanding the
foregoing, no consent of the Company shall be required for the assignment or
transfer of rights hereunder by a Holder to such assignor's or transferor's
partners, shareholders or members or retired partners or former shareholders or
members, if any, or for any other assignment or transfer to the spouse,
ancestors, lineal descendants or siblings of such assignor or transferor,
provided the transferee(s) certify to the Company that each is an "accredited
investor" within the meaning of Rule 501(a) under the Securities Act and that it
is acquiring the Securities solely for investment purposes.
The Company shall register the transfer of any portion of this Warrant,
upon surrender of this Warrant with the Form of Assignment attached hereto duly
completed and signed, to the Company's transfer agent or to the Company at the
office specified in Section 8.2. Upon any such transfer, a new warrant to
purchase Common Stock, in substantially the form of this Warrant (any such new
warrant, a "New Warrant"), evidencing the portion of this Warrant so transferred
shall be issued to the transferee and a New Warrant evidencing the remaining
portion of this Warrant not so transferred, if any, shall be issued to the
transferring Holder. The acceptance of a New Warrant by the transferee shall be
deemed the acceptance of such transferee of all of the rights and obligations of
a holder of a Warrant.
This Warrant is exchangeable, upon the surrender hereof by the Holder
to the office of the Company specified in Section 8.2, for one or more New
Warrants evidencing in the aggregate the right to purchase the number of Warrant
Shares which may then be purchased hereunder. Any such New Warrant will be dated
the date of such exchange.
8.2 NOTICE. All notices required or permitted under this Warrant
shall be given in writing and shall be deemed effectively given (a) upon
personal delivery to the party to be notified, (b) three days after deposit with
the United States Post Office, by registered or certified mail, postage prepaid
and addressed to the party to be notified at the address for such party, (c) one
day after deposit with a nationally recognized air courier service such as DHL
or Federal Express, or (d) on the date of facsimile transmission, with confirmed
transmission.
9 - AMENDED AND RESTATED STOCK PURCHASE WARRANT
PDX/112816/141153/DLH/1395913.1
If to the Company:
------------------
Microfield Graphics, Inc.
00000 XX 00" Xxxxxx
Xxxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxx, Chief Executive Officer
Fax: (000) 000-0000
With a copy to:
--------------
Stoel Rives LLP
000 XX Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx
Fax: (000) 000-0000
If to the Holder:
-----------------
Xxxxxx X. Xxxxxxx
_______________________
_______________________
Fax: (000) 000-0000
With a copy to:
--------------
Xxxxxxx Coie LLP
Suite 1500
0000 XX Xxxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
Attn: Xxxxx Xxxxxxxx
Fax: (000) 000-0000
or such other address as such party may designate by 10 days' advance written
notice to the other party.
8.3 GOVERNING LAW. The validity, interpretation and performance of
this Warrant shall be governed by the laws of the state of Oregon, exclusive of
conflicts of law rules.
8.4 IMPAIRMENT. The Company will not, by amendment of its Articles
of Incorporation or Bylaws, or through reorganization, consolidation, merger,
dissolution, issue or sale of securities, sale of assets 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 action as may be necessary or
appropriate in order to protect the rights of the Holder of this Warrant against
impairment. Without limiting the generality of the foregoing, the Company (a)
will not increase the par value of any shares of stock issuable upon the
exercise of this Warrant above the amount payable therefore upon such exercise
and (b) will take all such action as may be necessary or
10 - AMENDED AND RESTATED STOCK PURCHASE WARRANT
PDX/112816/141153/DLH/1395913.1
appropriate in order that the Company may validly and legally issue fully paid
and nonassessable Warrant Shares upon exercise of this Warrant.
8.5 NOTICES OF RECORD DATE. After the Initial Exercise Date, in
case:
8.5.1 the Company shall take a record of the holders of its
Common Stock (or other stock or securities at the time receivable upon the
exercise of this Warrant) for the purpose of entitling them to receive any
dividend or other distribution, or any right to subscribe for or purchase any
shares of stock of any class or any securities or to receive any other right; or
8.5.2 of any consolidation or merger of the Company with or
into another corporation, any capital reorganization of the Company, any
reclassification of the capital stock of the Company, or any conveyance of all
or substantially all of the assets of the Company; or
8.5.3 of any voluntary dissolution, liquidation or
winding-up of the Company; or
8.5.4 of any redemption or conversion of all outstanding
Common Stock;
then, and in each such case, the Company will mail or cause to be mailed to the
Holder of this Warrant a notice specifying, as the case may be, (i) the date on
which a record is to be taken for the purpose of such dividend, distribution or
right, or (ii) the date on which such reorganization, reclassification,
consolidation, merger, conveyance, dissolution, liquidation, winding-up,
redemption or conversion is to take place, and the time, if any is to be fixed,
as of which the holders of record of Common Stock (or such stock or securities
as at the time are receivable upon the exercise of this Warrant) shall be
entitled to exchange their shares of Common Stock (or such other stock or
securities) for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding-up. Such notice shall be delivered at least
thirty (30) days before the consummation of the applicable event.
8.6 NO INCONSISTENT AGREEMENTS. The Company will not on or after
the date of this Warrant enter into any agreement with respect to its securities
which is inconsistent with the rights granted to the Holder of this Warrant or
otherwise conflicts with the provisions hereof. The rights granted to the Holder
hereunder do not in any way conflict with the rights granted to holders of the
Company's securities under any other agreements, except rights that have been
waived.
8.7 SATURDAYS, SUNDAYS AND HOLIDAYS. If the Expiration Date falls
on a Saturday, Sunday or legal holiday, the Expiration Date shall automatically
be extended until 5:00 p.m. Pacific Time the next business day.
8.8 HEADINGS. The headings herein are for convenience only and
shall not control or affect the meaning or construction of this Warrant.
8.9 PURCHASE AGREEMENT; REGISTRATION RIGHTS. This Warrant is one
of the Warrants referred in the Note and Warrant Purchase Agreement dated as of
June 30, 2000 between the Company and JMW Capital Partners, Inc. and shall
entitle the Holder to all of the rights granted
11 - AMENDED AND RESTATED STOCK PURCHASE WARRANT
PDX/112816/141153/DLH/1395913.1
to holders of the Warrants thereunder, including the registration rights
provided in the Registration Rights Agreement (as defined therein).
Dated as of: September 16, 2002.
MICROFIELD GRAPHICS, INC.
By: /s/ XXXX X. XXXXXX
---------------------------------------
Xxxx X. Xxxxxx
Chief Executive Officer
12 - AMENDED AND RESTATED STOCK PURCHASE WARRANT
PDX/112816/141153/DLH/1395913.1
EXERCISE FORM
(To Be Executed by the Warrant Holder
to Exercise the Warrant)
To: MICROFIELD GROUP, INC.
1. The undersigned hereby irrevocably elects to exercise the right
represented by Warrant No. 2004-W-__ to purchase _________ shares of
Common Stock provided for in the Warrant as follows [check one]:
[ ] Exercise for Cash: Pursuant to Section 2.2.1 of the Warrant,
the Holder hereby elects to exercise the Warrant for cash and tenders payment
herewith (or has made a wire transfer) to the order of Microfield Group, Inc. in
the amount of $____________.
[ ] Same Day Sale Exercise: Pursuant to Section 2.2.2 of the
Warrant, the Holder hereby elects to exercise the Warrant on a cashless basis.
[ ] Net Exercise: Pursuant to Section 2.2.3 of the Warrant, the
Holder hereby elects to exercise the Warrant on a net basis.
2. The undersigned requests that certificates for such shares of Common
Stock be issued and delivered as follows:
Name:
---------------------------------------------------------
Address:
------------------------------------------------------
Deliver to:
---------------------------------------------------
Address:
------------------------------------------------------
If the number of shares of Common Stock to be issued upon this exercise is not
all the shares that may be purchased pursuant to the Warrant, the undersigned
requests that a new warrant evidencing the right to purchase the balance of such
shares be registered in the name of, and be delivered to, the undersigned at the
foregoing address.
3. In connection with the exercise of the Warrant, the undersigned hereby
represents and warrants to you as follows:
(a) PURCHASE ENTIRELY FOR OWN ACCOUNT. The Common Stock will be
acquired for investment for the undersigned's own account and
not with a view to the resale or distribution of any part
thereof, and the undersigned has no intention of selling,
granting any participation in, or otherwise distributing the
same.
(b) RESTRICTED SECURITIES. The undersigned understands the Common
Stock may not be sold, transferred, or otherwise disposed of
without registration under the Securities Act or an exemption
therefrom and, in the absence of an effective registration
statement covering the Common Stock or an available exemption
from registration under the Securities Act, the Common Stock
must be held indefinitely.
1 - EXERCISE FORM
PDX/112816/141153/DLH/1395913.1
(c) INVESTMENT EXPERIENCE. The undersigned is experienced in
evaluating and investing in companies in the development
stage, can bear the economic risk of an investment in the
Common Stock, and has enough knowledge and experience in
financial and business matters to evaluate the merits and
risks of the investment in the Common Stock.
(d) INVESTOR QUALIFICATIONS. The undersigned is an Accredited
Investor as defined in Rule 501 promulgated under the
Securities Act or has such knowledge and experience in
financial and business matters that he or it is capable of
evaluating the merits and risks of investing in the Common
Stock.
(e) OPPORTUNITY TO REVIEW DOCUMENTS AND ASK QUESTIONS. The Company
has made available to the undersigned all documents and
information requested by the undersigned relating to an
investment in the Company. In addition, the undersigned has
had adequate opportunity to ask questions and to receive
answers from the management of the Company covering the terms
and conditions of the offering and the Company's business,
management, and financial affairs.
4. The undersigned understands, agrees, and recognizes that:
(a) No federal or state agency has made any finding or
determination as to the fairness of the investment or any
recommendation or endorsement of the Common Stock.
(b) All certificates evidencing the Common Stock shall bear a
legend substantially similar to the legend set forth in
Section 2.5 of the Warrant regarding resale restrictions.
5. The undersigned is a resident of the state of ________________________.
Dated: ______________________.
[HOLDER]
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
Note: Signature must correspond with the
name as written upon the face of the
Warrant in every particular, without
alteration or enlargement or any change
whatsoever.
2 - EXERCISE FORM
PDX/112816/141153/DLH/1395913.1
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, ______________________________________ hereby
sells, assigns and transfers to the assignee set forth below all of the rights
of the undersigned in and to the number of Warrant Shares (as defined in and
evidenced by the foregoing Warrant) set opposite the name of such assignee below
and in and to the foregoing Warrant with respect to said Warrant Shares:
-------------------------- -------------------------- --------------------------
NAME OF ASSIGNEE ADDRESS NUMBER OF SHARES
-------------------------- -------------------------- --------------------------
-------------------------- -------------------------- --------------------------
-------------------------- -------------------------- --------------------------
-------------------------- -------------------------- --------------------------
-------------------------- -------------------------- --------------------------
If the total of said Warrant Shares shall not be all such shares which
may be purchased pursuant to the foregoing Warrant, the undersigned requests
that a new Warrant evidencing the right to purchase the balance of such shares
be issued in the name of, and delivered to, the undersigned at the undersigned's
address stated below.
Dated:
--------------------------------------
Name of holder of Warrant:
---------------------------------------------
(please print)
Address:
---------------------------------------------------------------
Signature:
-------------------------------------------------------------
PDX/112816/141153/DLH/1395913.1
THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR APPLICABLE STATE SECURITIES LAWS.
NEITHER THIS WARRANT NOR THE COMMON STOCK ISSUABLE UPON EXERCISE HEREOF MAY BE
SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THE APPLICABLE SECURITIES UNDER SUCH ACT OR LAWS OR
AN OPINION OF COUNSEL FOR THE HOLDER REASONABLY SATISFACTORY TO THE ISSUER
STATING THAT SUCH REGISTRATION IS NOT REQUIRED.
No. 2000-W-8 WARRANT TO PURCHASE 413,200
SHARES OF COMMON STOCK
AMENDED AND RESTATED STOCK PURCHASE WARRANT
TO PURCHASE SHARES OF COMMON STOCK
OF MICROFIELD GRAPHICS, INC.
For value received, Microfield Graphics, Inc., an Oregon corporation
(the "Company"), grants to Xxxxxx X. Xxxxxxx (the "Holder") the right, subject
to the terms of this Warrant, to purchase at any time during the period
commencing on the "Initial Exercise Date" (as defined below), and ending on the
"Expiration Date" (as defined below), 413,200 fully paid and nonassessable
shares of Common Stock of the Company at the "Exercise Price" (as defined
below). This Warrant may be exercised in whole and not in part. The number of
shares that may be purchased are subject to adjustment under the terms of this
Warrant.
Section 1. DEFINITIONS. As used in this Warrant, unless the context
otherwise requires:
"EXERCISE AMOUNT" means 413,200 shares (adjusted as necessary in
accordance with Section 7).
"EXERCISE PRICE" means $0.38722 per share (adjusted as necessary in
accordance with Section 7).
"COMMON STOCK" means the Common Stock of the Company.
"COMPANY" has the meaning specified in the introductory paragraph.
"EXERCISE DATE" means any date when this Warrant is exercised in the
manner indicated in Sections 2.1 and 2.2.
"EXPIRATION DATE" means 12:00 midnight (Portland time) on June 30,
2005.
"HOLDER" has the meaning specified in the introductory paragraph.
"INITIAL EXERCISE DATE" means June 30, 2000.
"PERSON" means an individual, corporation, partnership, trust, joint
venture or other form of business entity.
1 - AMENDED AND RESTATED STOCK PURCHASE WARRANT
PDX/112816/141153/DLH/1395913.1
"SECURITIES ACT" means the Securities Act of 1933, as amended from time
to time, and all rules and regulations promulgated thereunder, or any act, rules
or regulations which replace the Securities Act or any such rules and
regulations.
"WARRANT SHARES" means the shares of Common Stock issued or issuable
upon exercise of this Warrant, adjusted as necessary in accordance with Section
7.
Section 2. DURATION AND EXERCISE OF WARRANT.
2.1 EXERCISE PERIOD. Subject to the provisions hereof, this
Warrant may be exercised at any time during the period commencing on the Initial
Exercise Date and ending on the Expiration date for the Exercise Amount. After
the Expiration Date, this Warrant shall become void and all rights to purchase
Warrant Shares hereunder shall thereupon cease.
2.2 METHODS OF EXERCISE. This Warrant may be exercised by the
Holder, in whole and not in part, by (i) surrendering this Warrant to the
Secretary of the Company, (ii) payment of any applicable consideration, and
(iii) executing and delivering to the Secretary of the Company the attached
Exercise Form, which must select one of the following exercise methods, to be at
the Holder's option:
2.2.1 EXERCISE FOR CASH. If the Holder elects to exercise
the Warrant for cash, the Holder shall tender to the Company payment in full by
cash, check, or wire transfer of the Exercise Price for the Warrant Shares.
2.2.2 SAME DAY SALE EXERCISE. In lieu of exercising this
Warrant by payment of cash, when permitted by law and applicable regulations
(including Nasdaq and NASD rules), the Holder may pay the Exercise Price through
a "same day sale" commitment from the Holder and a broker-dealer that is a
member of the National Association of Securities Dealers (an "NASD Dealer")
whereby the Holder irrevocably elects to exercise the Warrant and to sell a
portion of the Warrant Shares so purchased to pay for the Exercise Price and
whereby the NASD Dealer irrevocably commits upon receipt of such Warrant Shares
to forward the Exercise Price directly to the Company.
2.2.3 NET EXERCISE. The Holder may elect to receive,
without the payment by the Holder of any additional consideration, shares of
Common Stock equal to the value of this warrant by the surrender of all of this
Warrant to the Company with a written notice of exercise specifying reliance on
this Section 2.2.3. Thereupon, the Company shall issue to the Holder such number
of fully paid and nonassessable shares of Common Stock as is computed using the
following formula:
X = Y (A-B)
-------
A
where X = the number of shares to be issued to the Holder
pursuant to this Section 2.3.
Y = the number of Warrant Shares underlying the Warrant
the Holder elects to exercise pursuant to this Section
2.2.3.
2 - AMENDED AND RESTATED STOCK PURCHASE WARRANT
PDX/112816/141153/DLH/1395913.1
A = the average closing ask price for one share of Common
Stock for the 10 trading days preceding the day the net
exercise election is made pursuant to this Section
2.2.3.
B = the Exercise Price in effect under this Warrant at the
time the net exercise election is made pursuant to this
Section 2.2.3.
2.3 CERTIFICATES. As soon as practicable after exercise of this
Warrant (but in no event later than five business days), (a) certificates for
Warrant Shares shall be delivered, at the Company's expense, to the Holder or
the transferee thereof set forth in the attached Exercise Form and (b) a new
Warrant of like tenor to purchase up to that number, if any, not previously
purchased by the Holder (if this Warrant has not expired) shall be delivered, at
the Company's expense, to the Holder.
2.4 EFFECTIVE DATE OF EXERCISE. 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. The person entitled to receive the
Warrant Shares shall be treated for all purposes as the holder of record of such
shares as of the close of business on the date the Holder is deemed to have
exercised this Warrant.
2.5 SECURITIES ACT COMPLIANCE. Unless the Warrant Shares are no
longer subject to Rule 144 under the Securities Act or to the Lock-up Agreement
dated as of August 15, 2002 among the Company and certain investors in the
Company's securities, the Company may place conspicuously upon each certificate
representing the Warrant Shares a legend substantially in the following forms,
the terms of which are agreed to by the Holder:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY
APPLICABLE STATE LAW, AND NO INTEREST THEREIN MAY BE SOLD, DISTRIBUTED,
ASSIGNED, OFFERED, PLEDGED OR OTHERWISE TRANSFERRED UNLESS (A) THERE IS
AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS COVERING ANY SUCH TRANSACTION INVOLVING THESE
SECURITIES OR (B) THE COMPANY RECEIVES AN OPINION OF LEGAL COUNSEL FOR
THE HOLDER OF THESE SECURITIES (CONCURRED IN BY LEGAL COUNSEL FOR THE
COMPANY) STATING THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION OR
(C) THE COMPANY OTHERWISE SATISFIES ITSELF THAT SUCH TRANSACTION IS
EXEMPT FROM REGISTRATION.
THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO A LOCK-UP
AGREEMENT DATED AS OF AUGUST _, 2002 AMONG THE COMPANY AND CERTAIN
INVESTORS IN THE COMPANY'S SECURITIES.
2.6 TAXES. The Company shall pay any tax and other governmental
charges which may be payable in respect of the issuance of the Warrant Shares,
provided, however, that in no
3 - AMENDED AND RESTATED STOCK PURCHASE WARRANT
PDX/112816/141153/DLH/1395913.1
case will the Company pay any taxes relating to income to the Holder resulting
from the issuance or exercise of this Warrant.
Section 3. WARRANT SHARES.
3.1 VALIDITY AND RESERVATION. The Company covenants that all
Warrant Shares issued upon exercise of this Warrant will be validly issued,
fully paid, nonassessable, free and clear of all liens, security interests,
charges and other encumbrances or restrictions on sale (except encumbrances or
restrictions arising under federal or state securities laws), and not subject to
preemptive rights. The Company agrees that, as long as this Warrant may be
exercised, the Company will have duly authorized and reserved for issuance upon
exercise of this Warrant a sufficient number of shares of Common Stock or other
shares of capital stock of the Company as are from time to time issuable upon
exercise of this Warrant and from time to time will take all steps necessary to
amend its Articles of Incorporation to provide sufficient reserves of Common
Stock issuable upon exercise of this Warrant. Issuance of this Warrant shell
constitute full authority to the Company's officers who are charged with the
duty of executing stock certificates to execute and issue the necessary
certificates for Common Stock upon the exercise of this Warrant.
3.2 LISTING OF WARRANT SHARES. The Company shall take all steps
necessary to cause the Warrant Shares issuable upon exercise of this Warrant to
be approved for listing on all securities exchanges or markets and all trading
or quotation facilities on which the Common Stock is listed as soon as possible
after the Initial Exercise Date and shall use commercially reasonable efforts to
maintain such listings until the earlier of the Expiration Date or the date this
Warrant is exercised in full.
Section 4. FRACTIONAL SHARES.
No fractional Warrant Shares shall be issued upon the exercise of this
Warrant, and the number of Warrant Shares to be issued shall be rounded to the
nearest whole number.
Section 5. LIMITED RIGHTS OF WARRANT HOLDER.
The Holder shall not, solely by virtue of being the Holder of this
Warrant, have any of the rights of a shareholder of the Company, either at law
or equity, until this Warrant shall have been exercised.
Section 6. LOSS OF WARRANT.
Upon receipt by the Company of satisfactory evidence of the loss,
theft, destruction or mutilation of this Warrant and either (in the case of
loss, theft or destruction) reasonable indemnification and a bond reasonably
satisfactory to the Company if requested by the Company or (in the case of
mutilation) the surrender of this Warrant for cancellation, the Company will
execute and deliver to the Holder, without charge, a new warrant of like
denomination.
4 - AMENDED AND RESTATED STOCK PURCHASE WARRANT
PDX/112816/141153/DLH/1395913.1
Section 7. CERTAIN ADJUSTMENTS.
7.1 ADJUSTMENT OF WARRANT SHARES. The number, class and Exercise
Price per share of securities for which this Warrant may be exercised are
subject to adjustment from time to time upon the happening of certain events as
hereinafter provided:
(a) RECAPITALIZATION. If the outstanding shares of the
Company's Common Stock are divided into a greater number of shares or if the
Company shall effect a stock dividend, the number of shares of Common Stock
purchasable upon the exercise of this Warrant shall be proportionately increased
and the Exercise Price per share shall be proportionately reduced. Conversely,
if the outstanding shares of Common Stock are combined into a smaller number of
shares of Common Stock, the number of shares of Common Stock purchasable upon
the exercise of this Warrant shall be proportionately reduced and the Exercise
Price per share shall be proportionately increased. The increases and reductions
provided for in this Section 7.1(a) shall be made with the intent and, as nearly
as practicable, the effect that neither the percentage of the total equity of
the Company obtainable on exercise of this Warrant nor the aggregate price
payable for such percentage shall be affected by any event described in this
Section 7.1(a).
(b) MERGER OR REORGANIZATION, ETC. In the event of any
change in the Common Stock through merger, consolidation, reclassification,
reorganization, partial or complete liquidation or other change in the capital
structure of the Company (not including the issuance of additional shares of
capital stock other than by stock dividend or stock split), then, the Holder of
this Warrant will have the right thereafter to receive upon the exercise of this
Warrant the kind and amount of shares of stock or other securities or property
to which it would have been entitled if, immediately before the merger,
consolidation, reclassification, reorganization, recapitalization or other
change in the capital structure, it had held the number of shares of Common
Stock obtainable upon the exercise of this Warrant. In any such case,
appropriate adjustment shall be made in the application of the provisions of
this Section 7 with respect to the rights of the Holder after the merger,
consolidation, reclassification, reorganization, recapitalization or other
change to the end that the provisions of this Section 7 (including adjustment of
the Exercise Price then in effect and the number of shares issuable upon
exercise of this Warrant) shall be applicable after that event as nearly
equivalent as may be practicable.
(c) ADJUSTMENT FOR DIVIDENDS OR DISTRIBUTIONS OF STOCK OR
OTHER SECURITIES OR PROPERTY. In case the Company shall make or issue, or shall
fix a record date for the determination of eligible holders entitled to receive,
a dividend or other distribution with respect to the Warrant Shares (or any
shares of stock or other securities at the time issuable upon exercise of the
Warrant) payable in (i) securities of the Company (other than as provided for in
Section 7.1(a) or (b) above) or any other entity or (ii) assets (excluding cash
dividends paid or payable solely out of retained earnings), then, in each such
case, upon exercise of this Warrant at any time after the consummation,
effective date or record date of such dividend or other distribution, the Holder
shall receive, in addition to the Warrant Shares (or such other stock or
securities) issuable on such exercise prior to such date, and without the
payment of additional consideration therefor, the securities or such other
assets of the Company to which such Holder would have been entitled upon such
date if such Holder had exercised this Warrant on the Initial Exercise Date and
had thereafter, during the period from the Initial Exercise Date to and
5 - AMENDED AND RESTATED STOCK PURCHASE WARRANT
PDX/112816/141153/DLH/1395913.1
including the date of such exercise, retained such shares and/or all other
additional stock or securities available by it as aforesaid during such period
giving effect to all adjustments called for by this Section 7.
(d) SALE OF SHARES BELOW EXERCISE PRICE.
(i) If the Company shall issue any Additional
Stock (as defined below) without consideration or for a consideration per share
less than the Exercise Price in effect immediately prior to the issuance of such
Additional Stock in a transaction not subject to Section 7.1(a), (b) or (c)
above, the Exercise Price in effect immediately prior to issuance of such
Additional Stock (except as otherwise provided in this Section 7.1(d)) shall be
adjusted down to a price equal to the quotient obtained by dividing the total
computed under clause (x) below by the total computed under clause (y) below as
follows:
(x) an amount equal to the sum of (1)
the result obtained by multiplying the number of shares of Common Stock deemed
outstanding immediately prior to such issuance (which shall include the actual
number of shares outstanding plus all shares issuable upon the conversion or
exercise of all outstanding convertible securities, warrants and options other
than shares excluded from the definition of Additional Stock by Section
7.1(d)(vi)) by the Exercise Price then in effect, and (2) the aggregate
consideration, if any, received by the Company upon the issuance of such
Additional Stock;
(y) the number of shares of Common
Stock of the Company outstanding immediately after such issuance (including the
shares deemed outstanding as provided in clause (x) above).
(ii) No adjustment of the Exercise Price shall be
made in an amount less than $0.01 per share; provided, however, that any
adjustments which are not required to be made by reason of this sentence shall
be carried forward and shall be taken into account in any subsequent adjustment
made to the Exercise Price. Except as provided in Sections 7.1(d)(v)(C) and (D)
below, no adjustment of the Exercise Price shall have the effect of increasing
the Exercise Price above the Exercise Price in effect immediately prior to such
adjustment.
(iii) In the case of the issuance of Common Stock
for cash, the consideration shall be deemed to be the amount of cash paid
therefor before deducting any discounts, commissions or other expenses allowed,
paid or incurred by the Company for any underwriting or otherwise in connection
with the issuance and sale thereof.
(iv) In the case of the issuance of Common Stock
for a consideration in whole or in part other than cash, the consideration other
than cash shall be deemed to be the fair value thereof as determined in good
faith by the Board of Directors irrespective of any accounting treatment.
(v) In the case of the issuance of options or
warrants to purchase or rights to subscribe for Common Stock, securities by
their terms convertible into or exchangeable for Common Stock, or options or
warrants to purchase or rights to subscribe for such convertible or exchangeable
securities (which options, warrants, rights, convertible or exchangeable
6 - AMENDED AND RESTATED STOCK PURCHASE WARRANT
PDX/112816/141153/DLH/1395913.1
securities are not excluded from the definition of Additional Stock except as
provided in Section 7.1(d)(vi)(B)), the following provisions shall apply:
(A) the aggregate maximum number of
shares of Common Stock deliverable upon exercise of such options or warrants to
purchase or rights to subscribe for Common Stock shall be deemed to have been
issued at the time such options, warrants, or rights were issued for a
consideration equal to the consideration (determined in the manner provided in
Sections 7.1(d)(iii) and (iv) above), if any, received by the Company upon the
issuance of such options, warrants or rights plus the minimum purchase price
provided in such options, warrants or rights for the Common Stock covered
thereby, but no further adjustment to the Exercise Price shall be made for the
actual issuance of Common Stock upon the exercise of such options, warrants or
rights in accordance with their terms;
(B) the aggregate maximum number of
shares of Common Stock deliverable upon conversion of or in exchange for any
such convertible or exchangeable securities or upon the exercise of options or
warrants to purchase or rights to subscribe for such convertible or exchangeable
securities and subsequent conversion or exchange thereof shall be deemed to have
been issued at the time such securities were issued or such options, warrants or
rights were issued for a consideration equal to the consideration received, if
any, by the Company for any such securities and any related options, warrants or
rights, plus the minimum additional consideration, if any, to be received by the
Company upon the conversion or exchange of such securities or the exercise of
any related options, warrants or rights (the consideration in each case to be
determined in the manner provided in Sections 7.1(d)(iii) and (iv) above), but
no further adjustment to the Exercise Price shall be made for the actual
issuance of Common Stock upon the conversion or exchange of such securities in
accordance with their terms;
(C) if such options, warrants, rights
or convertible or exchangeable securities by their terms provide, with the
passage of time or otherwise, for any change in the consideration payable to the
Company or in the number of shares of Common Stock issuable upon the exercise,
conversion or exchange thereof, including, without limitation, a change
resulting from the antidilution provisions thereof, the Exercise Price computed
upon the original issue thereof, and any subsequent adjustments based thereon,
shall, upon such change becoming effective, be recomputed to reflect such
change, but no further adjustment to the Exercise Price shall be made for the
actual issuance of Common Stock upon the exercise of any such options, warrants
or rights or the conversion or exchange of such securities in accordance with
their terms; and
(D) upon the expiration of any such
options, warrants or rights, the termination of any such rights to convert or
exchange or the expiration of any options, warrants or rights related to such
convertible or exchangeable securities, the Exercise Price shall forthwith be
readjusted to such Exercise Price as would have been obtained had the adjustment
which was made upon the issuance of such options, warrants, rights or securities
or options, warrants or rights related to such securities been made upon the
basis of the issuance of only the number of shares of Common Stock (and
convertible or exchangeable securities which remain in effect) actually issued
upon the exercise of such options, warrants or rights, upon the conversion or
exchange of such securities or upon the exercise of the options, warrants or
rights related to such securities.
7 - AMENDED AND RESTATED STOCK PURCHASE WARRANT
PDX/112816/141153/DLH/1395913.1
(vi) "Additional Stock" shall mean any shares of
Common Stock or securities convertible into or exchangeable or exercisable for
shares of Common Stock issued (or deemed to have been issued pursuant to Section
7.1(d)(v) above) by the Company after the Initial Exercise Date other than:
(A) Common Stock issued in connection
with a transaction described in Section 7.1(a), (b) or (c);
(B) shares of Common Stock (and options
to purchase shares of Common Stock) issued or issuable to employees, officers or
directors of, or consultants to, the Company directly or pursuant to a stock
option or restricted stock plan approved by the Company's Board of Directors;
(C) 280,000 shares of Common Stock
(adjusted appropriately for stock dividends, splits, combinations and similar
transactions) issued or issuable upon the exercise of warrants outstanding on
the Initial Exercise Date;
(D) shares of Common Stock issued or
issuable upon the exercise of any warrant issued pursuant to the Note and
Warrant Purchase Agreement by and among the Company and JMW Capital Partners,
Inc. dated as of the Initial Exercise Date.
(E) shares of Common Stock, or
securities convertible into or exchangeable or exercisable for shares of Common
Stock, issued to financial institutions or equipment lessors in connection with
commercial credit arrangements, equipment financings or similar transactions not
primarily for equity financing purposes and which have been approved by the
Company's Board of Directors; and
(F) shares of Common Stock, or
securities convertible into or exchangeable or exercisable for shares of Common
Stock, issued in connection with business combinations or corporate partnering
agreements approved by the Company's Board of Directors.
(e) OTHER IMPAIRMENTS. If any event shall occur as to
which the provisions of Section 7.1(a)-(d) are not strictly applicable but are
covered by the essential intent and principles of such sections, then, in each
such case, the Company will appoint the firm of independent certified public
accountants of recognized national standing with the largest U.S. revenues for
the prior year (but not the Company's regular auditors), which shall give their
opinion upon the adjustment, if any, on a basis consistent with the essential
intent and principles established in this Section 7.1, necessary to preserve the
rights represented by this Warrant. Upon receipt of such opinion, the Company
will promptly mail a copy thereof to the holder of this Warrant and shall make
the adjustments described therein.
7.2 NOTICE OF ADJUSTMENT. Whenever an event occurs requiring any
adjustment to be made pursuant to Section 7.1, the Company shall promptly file
with its Secretary or an assistant secretary at its principal office and with
its stock transfer agent, if any, a certificate of its President or Chief
Financial Officer specifying such adjustment, setting forth in reasonable detail
the acts requiring such adjustment, and stating such other facts as shall be
necessary to show the manner and figures used to compute such adjustment. Such
certificate shall be made available at
8 - AMENDED AND RESTATED STOCK PURCHASE WARRANT
PDX/112816/141153/DLH/1395913.1
all reasonable times for inspection by the Holder. Promptly (but in no event
more than 30 days) after each such adjustment, the Company shall give a copy of
such certificate by certified mail to the Holder.
Section 8. MISCELLANEOUS.
8.1 BINDING EFFECT; ASSIGNMENT. This Warrant shall inure to the
benefit of and be binding upon the Company and the Holder and their respective
successors, heirs, legal representatives and permitted assigns. This Warrant and
the Warrant Shares (collectively, "Securities") may only be disposed of 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 compliance with any applicable
federal and state securities laws. In connection with any transfer of Securities
other than pursuant to an effective registration statement, transfer may only be
made with the prior written consent of the Company, which shall not be
unreasonably withheld, and the Company may require the transferor to provide to
the Company an opinion of counsel selected by the transferor, the form and
substance of which opinion shall be reasonably satisfactory to the Company, to
the effect that such transfer does not require registration of such transferred
securities under the Securities Act; provided, however, that notwithstanding the
foregoing, no consent of the Company shall be required for the assignment or
transfer of rights hereunder by a Holder to such assignor's or transferor's
partners, shareholders or members or retired partners or former shareholders or
members, if any, or for any other assignment or transfer to the spouse,
ancestors, lineal descendants or siblings of such assignor or transferor,
provided the transferee(s) certify to the Company that each is an "accredited
investor" within the meaning of Rule 501(a) under the Securities Act and that it
is acquiring the Securities solely for investment purposes.
The Company shall register the transfer of any portion of this Warrant,
upon surrender of this Warrant with the Form of Assignment attached hereto duly
completed and signed, to the Company's transfer agent or to the Company at the
office specified in Section 8.2. Upon any such transfer, a new warrant to
purchase Common Stock, in substantially the form of this Warrant (any such new
warrant, a "New Warrant"), evidencing the portion of this Warrant so transferred
shall be issued to the transferee and a New Warrant evidencing the remaining
portion of this Warrant not so transferred, if any, shall be issued to the
transferring Holder. The acceptance of a New Warrant by the transferee shall be
deemed the acceptance of such transferee of all of the rights and obligations of
a holder of a Warrant.
This Warrant is exchangeable, upon the surrender hereof by the Holder
to the office of the Company specified in Section 8.2, for one or more New
Warrants evidencing in the aggregate the right to purchase the number of Warrant
Shares which may then be purchased hereunder. Any such New Warrant will be dated
the date of such exchange.
8.2 NOTICE. All notices required or permitted under this Warrant
shall be given in writing and shall be deemed effectively given (a) upon
personal delivery to the party to be notified, (b) three days after deposit with
the United States Post Office, by registered or certified mail, postage prepaid
and addressed to the party to be notified at the address for such party, (c) one
day after deposit with a nationally recognized air courier service such as DHL
or Federal Express, or (d) on the date of facsimile transmission, with confirmed
transmission.
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If to the Company:
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Microfield Graphics, Inc.
00000 XX 00" Xxxxxx
Xxxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxx, Chief Executive Officer
Fax: (000) 000-0000
With a copy to:
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Stoel Rives LLP
000 XX Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx
Fax: (000) 000-0000
If to the Holder:
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Xxxxxx X. Xxxxxxx
_________________________
_________________________
Fax: (000) 000-0000
With a copy to:
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Xxxxxxx Coie LLP
Suite 1500
0000 XX Xxxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
Attn: Xxxxx Xxxxxxxx
Fax: (000) 000-0000
or such other address as such party may designate by 10 days' advance written
notice to the other party.
8.3 GOVERNING LAW. The validity, interpretation and performance of
this Warrant shall be governed by the laws of the state of Oregon, exclusive of
conflicts of law rules.
8.4 IMPAIRMENT. The Company will not, by amendment of its Articles
of Incorporation or Bylaws, or through reorganization, consolidation, merger,
dissolution, issue or sale of securities, sale of assets 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 action as may be necessary or
appropriate in order to protect the rights of the Holder of this Warrant against
impairment. Without limiting the generality of the foregoing, the Company (a)
will not increase the par value of any shares of stock issuable upon the
exercise of this Warrant above the amount payable therefore upon such exercise
and (b) will take all such action as may be necessary or
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PDX/112816/141153/DLH/1395913.1
appropriate in order that the Company may validly and legally issue fully paid
and non-assessable Warrant Shares upon exercise of this Warrant.
8.5 NOTICES OF RECORD DATE. After the Initial Exercise Date, in
case:
8.5.1 the Company shall take a record of the holders of its
Common Stock (or other stock or securities at the time receivable upon the
exercise of this Warrant) for the purpose of entitling them to receive any
dividend or other distribution, or any right to subscribe for or purchase any
shares of stock of any class or any securities or to receive any other right; or
8.5.2 of any consolidation or merger of the Company with or
into another corporation, any capital reorganization of the Company, any
reclassification of the capital stock of the Company, or any conveyance of all
or substantially all of the assets of the Company; or
8.5.3 of any voluntary dissolution, liquidation or
winding-up of the Company; or
8.5.4 of any redemption or conversion of all outstanding
Common Stock;
then, and in each such case, the Company will mail or cause to be mailed to the
Holder of this Warrant a notice specifying, as the case may be, (i) the date on
which a record is to be taken for the purpose of such dividend, distribution or
right, or (ii) the date on which such reorganization, reclassification,
consolidation, merger, conveyance, dissolution, liquidation, winding-up,
redemption or conversion is to take place, and the time, if any is to be fixed,
as of which the holders of record of Common Stock (or such stock or securities
as at the time are receivable upon the exercise of this Warrant) shall be
entitled to exchange their shares of Common Stock (or such other stock or
securities) for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding-up. Such notice shall be delivered at least
thirty (30) days before the consummation of the applicable event.
8.6 NO INCONSISTENT AGREEMENTS. The Company will not on or after
the date of this Warrant enter into any agreement with respect to its securities
which is inconsistent with the rights granted to the Holder of this Warrant or
otherwise conflicts with the provisions hereof. The rights granted to the Holder
hereunder do not in any way conflict with the rights granted to holders of the
Company's securities under any other agreements, except rights that have been
waived.
8.7 SATURDAYS, SUNDAYS AND HOLIDAYS. If the Expiration Date falls
on a Saturday, Sunday or legal holiday, the Expiration Date shall automatically
be extended until 5:00 p.m. Pacific Time the next business day.
8.8 HEADINGS. The headings herein are for convenience only and
shall not control or affect the meaning or construction of this Warrant.
8.9 PURCHASE AGREEMENT; REGISTRATION RIGHTS. This Warrant is one
of the Warrants referred in the Note and Warrant Purchase Agreement dated as of
June 30, 2000 between the Company and JMW Capital Partners, Inc. and shall
entitle the Holder to all of the rights granted
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to holders of the Warrants thereunder, including the registration rights
provided in the Registration Rights Agreement (as defined therein).
Dated as of: September 16, 2002.
MICROFIELD GRAPHICS, INC.
By: /s/ XXXX X. XXXXXX
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Xxxx X. Xxxxxx
Chief Executive Officer
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PDX/112816/141153/DLH/1395913.1
EXERCISE FORM
(To Be Executed by the Warrant Holder
to Exercise the Warrant)
To: MICROFIELD GROUP, INC.
1. The undersigned hereby irrevocably elects to exercise the right
represented by Warrant No. 2004-W-__ to purchase _________ shares of
Common Stock provided for in the Warrant as follows [check one]:
[ ] Exercise for Cash: Pursuant to Section 2.2.1 of the Warrant,
the Holder hereby elects to exercise the Warrant for cash and tenders payment
herewith (or has made a wire transfer) to the order of Microfield Group, Inc. in
the amount of $____________.
[ ] Same Day Sale Exercise: Pursuant to Section 2.2.2 of the
Warrant, the Holder hereby elects to exercise the Warrant on a cashless basis.
[ ] Net Exercise: Pursuant to Section 2.2.3 of the Warrant, the
Holder hereby elects to exercise the Warrant on a net basis.
2. The undersigned requests that certificates for such shares of Common
Stock be issued and delivered as follows:
Name:
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Address:
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Deliver to:
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Address:
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If the number of shares of Common Stock to be issued upon this exercise is not
all the shares that may be purchased pursuant to the Warrant, the undersigned
requests that a new warrant evidencing the right to purchase the balance of such
shares be registered in the name of, and be delivered to, the undersigned at the
foregoing address.
3. In connection with the exercise of the Warrant, the undersigned hereby
represents and warrants to you as follows:
(a) PURCHASE ENTIRELY FOR OWN ACCOUNT. The Common Stock will be
acquired for investment for the undersigned's own account and
not with a view to the resale or distribution of any part
thereof, and the undersigned has no intention of selling,
granting any participation in, or otherwise distributing the
same.
(b) RESTRICTED SECURITIES. The undersigned understands the Common
Stock may not be sold, transferred, or otherwise disposed of
without registration under the Securities Act or an exemption
therefrom and, in the absence of an effective registration
statement covering the Common Stock or an available exemption
from registration under the Securities Act, the Common Stock
must be held indefinitely.
2 - EXERCISE FORM
PDX/112816/141153/DLH/1395913.1
(c) INVESTMENT EXPERIENCE. The undersigned is experienced in
evaluating and investing in companies in the development
stage, can bear the economic risk of an investment in the
Common Stock, and has enough knowledge and experience in
financial and business matters to evaluate the merits and
risks of the investment in the Common Stock.
(d) INVESTOR QUALIFICATIONS. The undersigned is an Accredited
Investor as defined in Rule 501 promulgated under the
Securities Act or has such knowledge and experience in
financial and business matters that he or it is capable of
evaluating the merits and risks of investing in the Common
Stock.
(e) OPPORTUNITY TO REVIEW DOCUMENTS AND ASK QUESTIONS. The Company
has made available to the undersigned all documents and
information requested by the undersigned relating to an
investment in the Company. In addition, the undersigned has
had adequate opportunity to ask questions and to receive
answers from the management of the Company covering the terms
and conditions of the offering and the Company's business,
management, and financial affairs.
4. The undersigned understands, agrees, and recognizes that:
(a) No federal or state agency has made any finding or
determination as to the fairness of the investment or any
recommendation or endorsement of the Common Stock.
(b) All certificates evidencing the Common Stock shall bear a
legend substantially similar to the legend set forth in
Section 2.5 of the Warrant regarding resale restrictions.
5. The undersigned is a resident of the state of ________________________.
Dated: ______________________.
[HOLDER]
By:
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Name:
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Title:
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Note: Signature must correspond with the
name as written upon the face of the
Warrant in every particular, without
alteration or enlargement or any change
whatsoever.
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PDX/112816/141153/DLH/1395913.1
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, ______________________________________ hereby
sells, assigns and transfers to the assignee set forth below all of the rights
of the undersigned in and to the number of Warrant Shares (as defined in and
evidenced by the foregoing Warrant) set opposite the name of such assignee below
and in and to the foregoing Warrant with respect to said Warrant Shares:
-------------------------- -------------------------- --------------------------
NAME OF ASSIGNEE ADDRESS NUMBER OF SHARES
-------------------------- -------------------------- --------------------------
-------------------------- -------------------------- --------------------------
-------------------------- -------------------------- --------------------------
-------------------------- -------------------------- --------------------------
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If the total of said Warrant Shares shall not be all such shares which
may be purchased pursuant to the foregoing Warrant, the undersigned requests
that a new Warrant evidencing the right to purchase the balance of such shares
be issued in the name of, and delivered to, the undersigned at the undersigned's
address stated below.
Dated:
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Name of holder of Warrant:
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(please print)
Address:
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Signature:
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PDX/112816/141153/DLH/1395913.1
