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Exhibit 10.52
Exhibit
A to Amendment 4 to Note Purchase Agreement
EXTENSION
WARRANT
NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR
ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL
BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM,
THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II)
UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.
NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED
IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR
FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
[Alternate Legend for Non-U.S. Purchasers]
[THIS
WARRANT AND THE SECURITIES ISSUABLE UPON CONVERSION HEREOF
HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE “ACT”), NOR UNDER ANY STATE
SECURITIES LAWS. NEITHER THIS WARRANT NOR THE SECURITIES
ISSUABLE UPON CONVERSION HEREOF MAY BE REOFFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT
OR BENEFIT OF ,
U.S. PERSONS, OTHER THAN TO DISTRIBUTORS (AS DEFINED IN
REGULATION S PROMULGATED UNDER THE ACT) IN THE ABSENCE OF SUCH
REGISTRATION UNTIL (A) A REGISTRATION STATEMENT WITH RESEPCT
THERETO IS EFFECTIVE UNDER THE ACT OR (2) THE COMPANY RECEIVES
AN OPINION OF COUNSEL TO THE COMPANY OR OTHER COUNSEL TO THE
HOLDER OF SUCH WARRANT WHICH OTHER COUNSEL IS SATISFACTORY TO
THE COMPANY THAT SUCH WARRANT AND/OR THE SECURITIES ISSUABLE
UPON CONVERSION HEREOF MAY BE PLEDGED, SOLD ASSIGNED,
HYPOTHECATED OR TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT.]
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Right
to Purchase ____________ shares of Common Stock
of
Neonode
Inc. (subject to adjustment as provided herein)
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COMMON STOCK PURCHASE WARRANT
No. 2008-D-001
Issue
Date: May ___, 2008
NEONODE
INC., a corporation organized under the laws of the State of
Delaware (the “Company”), hereby certifies that,
for value received, __________________________________,
_____________________________________________________________,
or its assigns (the “Holder”), is entitled,
subject to the terms set forth below, to purchase from the
Company at any time commencing six months after the Issue Date
until 5:00 p.m., E.S.T on the third anniversary of the Issue
Date (the “Expiration Date”), up to ____________
fully paid and nonassessable shares of Common Stock at a per
share purchase price of $______. The aforedescribed purchase
price per share, as adjusted from time to time as herein
provided, is referred to herein as the "Purchase Price." The
number and character of such shares of Common Stock and the
Purchase Price are subject to adjustment as provided herein.
The Company may reduce the Purchase Price for some or all of
the Warrants, temporarily or permanently. This Warrant is one
of the Warrants issued pursuant to that certain Amendment 4 to
Note Purchase Agreement (the “Amendment 4 to Note
Purchase Agreement”), dated as of May ___, 2008, entered
into by the Company and certain holders of New Notes as
described therein. Capitalized terms used and not otherwise
defined herein shall have the meanings set forth in the
Amendment 4 to Note Purchase Agreement.
As
used herein the following terms, unless the context otherwise
requires, have the following respective meanings:
(a)
The
term “Company” shall include Neonode Inc. and any
corporation which shall succeed or assume the obligations of
Neonode Inc. hereunder.
(b)
The
term “Common Stock” includes (i) the
Company's Common Stock, $0.01 par value per share, as
authorized on the date of the Amendment 4 to Note Purchase
Agreement, and (ii) any other securities into which or for
which any of the securities described in (i) may be
converted or exchanged pursuant to a plan of recapitalization,
reorganization, merger, sale of assets or
otherwise.
(c)
The
term “Other Securities” refers to any stock (other
than Common Stock) and other securities of the Company or any
other person (corporate or otherwise) which the holder of the
Warrant at any time shall be entitled to receive, or shall
have received, on the exercise of the Warrant, in lieu of or
in addition to Common Stock, or which at any time shall be
issuable or shall have been issued in exchange for or in
replacement of Common Stock or Other Securities pursuant to
Section 4 or otherwise.
(d)
The
term “Warrant Shares” shall mean the Common Stock
issuable upon exercise of this Warrant.
1.
Exercise of Warrant .
1.1.
Number of Shares Issuable upon Exercise .
From and after the Issue Date through and including the Expiration
Date, the Holder hereof shall be entitled to receive, upon exercise
of this Warrant in whole in accordance with the terms of
subsection 1.2 or upon exercise of this Warrant in part in
accordance with subsection 1.3, shares of Common Stock of the
Company, subject to adjustment pursuant to Sections 3 and
4.
1.2.
Full Exercise .
This Warrant may be exercised in full by the Holder hereof by
delivery of an original or facsimile copy of the form of
subscription attached as Exhibit A hereto (the
“Subscription Form”) duly executed by such Holder and
delivery within two days thereafter of payment, in cash, wire
transfer or by certified or official bank check payable to the
order of the Company, in the amount obtained by multiplying the
number of shares of Common Stock for which this Warrant is then
exercisable by the Purchase Price then in effect. The original
Warrant is not required to be surrendered to the Company until it
has been fully exercised.
1.3.
Partial Exercise .
This Warrant may be exercised in part (but not for a fractional
share) by delivery of a Subscription Form in the manner and at the
place provided in subsection 1.2 except that the amount
payable by the Holder on such partial exercise shall be the amount
obtained by multiplying (a) the number of whole shares of
Common Stock designated by the Holder in the Subscription Form by
(b) the Purchase Price then in effect. On any such partial
exercise provided the Holder has surrendered the original Warrant,
the Company, at its expense, will forthwith issue and deliver to or
upon the order of the Holder hereof a new Warrant of like tenor, in
the name of the Holder hereof or as such Holder (upon payment by
such Holder of any applicable transfer taxes) may request, the
whole number of shares of Common Stock for which such Warrant may
still be exercised for the balance of.
1.4.
Fair Market Value .
Fair Market Value of a share of Common Stock as of a particular
date (the "Determination Date") shall mean:
(a)
If
the Company's Common Stock is traded on an exchange or is
quoted on the NASDAQ Global Market, Nasdaq Global Select
Market, the NASDAQ Capital Market, the New York Stock Exchange
or the American Stock Exchange, LLC, then the average of the
closing or last sale prices, respectively, reported for the
ten trading days immediately preceding the Determination
Date;
(b)
If
the Company's Common Stock is not traded on an exchange or on
the NASDAQ Global Market, Nasdaq Global Select Market, the
NASDAQ Capital Market, the New York Stock Exchange or the
American Stock Exchange, LLC, but is traded in the
over-the-counter market, then the average of the closing bid
and ask prices reported for the ten trading days immediately
preceding the Determination Date;
(c)
Except
as provided in clause (d) below and Section 3.1, if the
Company's Common Stock is not publicly traded, then as the
Holder and the Company agree, or in the absence of such an
agreement, by arbitration in accordance with the rules then
standing of the American Arbitration Association, before a
single arbitrator to be chosen from a panel of persons
qualified by education and training to pass on the matter to
be decided; or
(d)
If
the Determination Date is the date of a liquidation,
dissolution or winding up, or any event deemed to be a
liquidation, dissolution or winding up pursuant to the
Company's charter, then all amounts to be payable per share to
holders of the Common Stock pursuant to the charter in the
event of such liquidation, dissolution or winding up, plus all
other amounts to be payable per share in respect of the Common
Stock in liquidation under the charter, assuming for the
purposes of this clause (d) that all of the shares of
Common Stock then issuable upon exercise of all of the
Warrants are outstanding at the Determination
Date.
1.5.
Company Acknowledgment .
The Company will, at the time of the exercise of the Warrant, upon
the request of the Holder hereof acknowledge in writing its
continuing obligation to afford to such Holder any rights to which
such Holder shall continue to be entitled after such exercise in
accordance with the provisions of this Warrant. If the Holder shall
fail to make any such request, such failure shall not affect the
continuing obligation of the Company to afford to such Holder any
such rights.
1.6.
Trustee for Warrant Holders .
In the event that a bank or trust company shall have been appointed
as trustee for the Holder of the Warrants pursuant to
Subsection 3.2, such bank or trust company shall have all the
powers and duties of a warrant agent (as hereinafter described) and
shall accept, in its own name for the account of the Company or
such successor person as may be entitled thereto, all amounts
otherwise payable to the Company or such successor, as the case may
be, on exercise of this Warrant pursuant to this
Section 1.
1.7
Delivery of Stock Certificates, etc. on Exercise
.
The Company agrees that the shares of Common Stock purchased upon
exercise of this Warrant shall be deemed to be issued to the Holder
hereof as the record owner of such shares as of the close of
business on the date on which delivery of a Subscription Form shall
have occurred and payment made for such shares as aforesaid. As
soon as practicable after the exercise of this Warrant in full or
in part, and in any event within three (3) business
days
thereafter (“Warrant Share Delivery Date”), the Company
at its expense (including the payment by it of any applicable issue
taxes) will cause to be issued in the name of and delivered to the
Holder hereof, or as such Holder (upon payment by such Holder of
any applicable transfer taxes) may direct in compliance with
applicable securities laws, a certificate or certificates for the
number of duly and validly issued, fully paid and non-assessable
shares of Common Stock (or Other Securities) to which such Holder
shall be entitled on such exercise, plus, in lieu of any fractional
share to which such Holder would otherwise be entitled, cash equal
to such fraction multiplied by the then Fair Market Value of one
full share of Common Stock, together with any other stock or other
securities and property (including cash, where applicable) to which
such Holder is entitled upon such exercise pursuant to
Section 1 or otherwise. The Company understands that a delay
in the delivery of the Warrant Shares after the Warrant Share
Delivery Date could result in economic loss to the Holder. As
compensation to the Holder for such loss, the Company agrees to pay
(as liquidated damages and not as a penalty) to the Holder for late
issuance of Warrant Shares upon exercise of this Warrant the
proportionate amount of $100 per business day after the Warrant
Share Delivery Date for each $10,000 of Purchase Price of Warrant
Shares for which this Warrant is exercised which are not timely
delivered. The Company shall pay any payments incurred under this
Section in immediately available funds upon demand. Furthermore, in
addition to any other remedies which may be available to the
Holder, in the event that the Company fails for any reason to
effect delivery of the Warrant Shares by the Warrant Share Delivery
Date, the Holder may revoke all or part of the relevant Warrant
exercise by delivery of a notice to such effect to the Company,
whereupon the Company and the Holder shall each be restored to
their respective positions immediately prior to the exercise of the
relevant portion of this Warrant, except that the liquidated
damages described above shall be payable through the date notice of
revocation or rescission is given to the Company.
1.8
Buy-In .
In addition to any other rights available to the Holder, if the
Company fails to deliver to a Holder the Warrant Shares as required
pursuant to this Warrant, within seven (7) business days after the
Warrant Share Delivery Date and the Holder or a broker on the
Holder’s behalf, purchases (in an open market transaction or
otherwise) shares of common stock to deliver in satisfaction of a
sale by such Holder of the Warrant Shares which the Holder was
entitled to receive from the Company (a "
Buy-In "),
then the Company shall pay in cash to the Holder (in addition to
any remedies available to or elected by the Holder) the amount by
which (A) the Holder's total purchase price (including brokerage
commissions, if any) for the shares of common stock so purchased
exceeds (B) the aggregate Purchase Price of the Warrant
Shares required
to have been delivered together
with interest thereon at a rate of 15% per annum, accruing until
such amount and any accrued interest thereon is paid in full (which
amount shall be paid as liquidated damages and not as a
penalty). For
example, if a Holder purchases shares of Common Stock having a
total purchase price of $11,000 to cover a Buy-In with respect to
$10,000 of Purchase Price of Warrant Shares to have been received
upon exercise of this Warrant, the Company shall be required to pay
the Holder $ 1,000,
plus interest. The
Holder shall provide the Company written notice indicating the
amounts payable to the Holder in respect of the
Buy-In.
2.
Cashless Exercise .
(a)
If
a registration statement covering all the Warrant Shares
(“Registration Statement”) is effective and the
Holder may sell its Warrant Shares pursuant to the
Registration Statement, this Warrant may be exercisable in
whole or in part for cash only as set forth in Section 1
above. If such Registration Statement is not available, then
commencing one year after the Issue Date, payment upon
exercise may be made at the option of the Holder either in
(i) cash, wire transfer or by certified or official bank
check payable to the order of the Company equal to the
applicable aggregate Purchase Price, (ii) by delivery of
Common Stock issuable upon exercise of the Warrants in
accordance with Section (b) below or (iii) by a
combination of any of the foregoing methods, for the number of
Common Stock specified in such form (as such exercise number
shall be adjusted to reflect any adjustment in the total
number of shares of Common Stock issuable to the holder per
the terms of this Warrant) and the holder shall thereupon be
entitled to receive the number of duly authorized, validly
issued, fully-paid and non-assessable shares of Common Stock
(or Other Securities) determined as provided
herein.
(b)
Subject
to the provisions herein to the contrary, if the Fair Market
Value of one share of Common Stock is greater than the
Purchase Price (at the date of calculation as set forth
below), in lieu of exercising this Warrant for cash, the
holder may elect to receive shares equal to the value (as
determined below) of this Warrant (or the portion thereof
being cancelled) by surrender of this Warrant at the principal
office of the Company together with the properly endorsed
Subscription Form in which event the Company shall issue to
the holder a number of shares of Common Stock computed using
the following formula:
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Where
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X=
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the
number of shares of Common Stock to be issued to the
holder
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Y=
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the
number of shares of Common Stock purchasable under the Warrant
or, if only a portion of the Warrant is being exercised, the
portion of the Warrant being exercised (at the date of such
calculation)
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A=
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the
average of the closing sale prices of the Common Stock for the
five (5) Trading Days immediately prior to (but not including)
the Exercise Date, or Fair Market Value, whichever is
less
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B=
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Purchase
Price (as adjusted to the date of such
calculation)
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For
purposes of Rule 144 promulgated under the Securities Act of
1933, as amended (the “1933 Act”), it is intended,
understood and acknowledged that the Warrant Shares issued in
a cashless exercise transaction shall be deemed to have been
acquired by the Holder, and the holding period for the Warrant
Shares shall be deemed to have commenced, on the date this
Warrant was originally issued pursuant to the Amendment 4 to
Senior Secured Notes.
3.
Adjustment for Reorganization, Consolidation, Merger,
etc.
3.1.
Fundamental Transaction .
If, at any time while this Warrant is outstanding, (A) the
Company effects any merger or consolidation of
the Company with or into another entity, (B) the Company
effects any sale of all or substantially all of
its assets in one or a series of related
transactions, (C) any tender offer
or exchange offer (whether by the Company or
another entity) is completed pursuant to which holders of Common
Stock are permitted to tender or exchange
their shares for other
securities, cash or property, (D) the Company
consummates a stock purchase agreement or other business
combination (including, without limitation, a reorganization,
recapitalization, spin-off or scheme of arrangement) with one or
more persons or entities whereby such other persons or entities
acquire more than the 50% of the outstanding shares of Common Stock
(not including any shares of Common Stock held by such other
persons or entities making or party to, or associated or affiliated
with the other persons or entities making or party to, such stock
purchase agreement or other business combination), (E) any "person"
or "group" (as these terms are used for purposes of Sections 13(d)
and 14(d) of the 1934 Act) is or shall become the "beneficial
owner" (as defined in Rule 13d-3 under the 1934 Act), directly or
indirectly, of 50% of the aggregate Common Stock of the
Company, or (F) the Company effects any
reclassification of the Common Stock or any
compulsory share exchange pursuant to
which the Common Stock is effectively converted into
or exchanged for other securities, cash or property
(in any such case, a "Fundamental
Transaction"), then, upon any subsequent exercise of
this Warrant, the Holder shall have the right to receive, for each
Warrant Share that would have been issuable upon such
exercise immediately prior to the occurrence of such
Fundamental Transaction, at the option of the Holder, (a)
upon exercise of this Warrant, the number of shares of Common
Stock of the successor
or acquiring corporation or of the Company, if
it is the surviving corporation, and any additional
consideration (the "Alternate
Consideration") receivable upon or as
a result of such reorganization,
reclassification, merger, consolidation or disposition of assets
by a Holder of the number of shares of Common Stock for
which this Warrant is exercisable immediately prior to
such event or (b) if the Company is acquired in
(1) a transaction where the consideration paid to the holders of
the Common Stock consists solely of cash, (2) a “Rule 13e-3
transaction” as defined in Rule 13e-3 under the 1934 Act, or
(3) a transaction involving a person or entity not traded on a
national securities exchange, the Nasdaq Global Select Market, the
Nasdaq Global Market or the Nasdaq Capital
Market, cash equal to the Black-Scholes Value.
For purposes of any such exercise, the
determination of the Purchase Price shall
be appropriately adjusted to apply to such Alternate
Consideration based on the amount of Alternate Consideration
issuable in respect of one share of Common Stock in such
Fundamental Transaction, and the Company shall apportion the
Purchase Price among the Alternate Consideration in a reasonable
manner reflecting the relative value of any different components of
the Alternate Consideration. If holders of Common Stock are given
any choice as to the securities, cash or property to be received in
a Fundamental Transaction, then the Holder shall be given the same
choice as to the Alternate Consideration it receives upon any
exercise of this Warrant following such Fundamental Transaction. To
the extent necessary to effectuate the foregoing provisions, any
successor to the Company or surviving entity in such Fundamental
Transaction shall issue to the Holder a new warrant consistent with
the foregoing provisions and evidencing the Holder's right to
exercise such warrant into Alternate Consideration. The terms of
any agreement pursuant to which a Fundamental Transaction is
effected shall include terms requiring any such successor or
surviving entity to comply with the provisions of this Section 3.1
and insuring that this Warrant (or any such replacement security)
will be similarly adjusted upon any subsequent transaction
analogous to a Fundamental Transaction. “Black-Scholes
Value” shall be determined in accordance with the
Black-Scholes Option Pricing Model obtained from the
“OV” function on Bloomberg L.P. using (i) a price per
share of Common Stock equal to the VWAP of the Common Stock for the
Trading Day immediately preceding the date of consummation of the
applicable Fundamental Transaction, (ii) a risk-free interest rate
corresponding to the U.S. Treasury rate for a period equal to the
remaining term of this Warrant as of the date of such request and
(iii) an expected volatility equal to the 100 day volatility
obtained from the HVT function on Bloomberg L.P. determined as of
the Trading Day immediately following the public announcement of
the applicable Fundamental Transaction.
3.2.
Dissolution .
In the event of any dissolution of the Company following the
transfer of all or substantially all of its properties or assets,
the Company, prior to such dissolution, shall at its expense
deliver or cause to be delivered the stock and other securities and
property (including cash, where applicable) receivable by the
Holder of the Warrants after the effective date of such dissolution
pursuant to this Section 3 to a bank or trust company (a
"Trustee") having its principal office in New York, NY, as
trustee for the Holder of the Warrants. Such property shall be
delivered only upon payment of the Warrant exercise
price.
3.3.
Continuation of Terms .
Upon any reorganization, consolidation, merger or transfer (and any
dissolution following any transfer) referred to in this
Section 3, this Warrant shall continue in full force and
effect and the terms hereof shall be applicable to the Other
Securities and property receivable on the exercise of this Warrant
after the consummation of such reorganization, consolidation or
merger or the effective date of dissolution following any such
transfer, as the case may be, and shall be binding upon the issuer
of any Other Securities, including, in the case of any such
transfer, the person acquiring all or substantially all of the
properties or assets of the Company, whether or not such person
shall have expressly assumed the terms of this Warrant as provided
in Section 4. In the event this Warrant does not continue in
full force and effect after the consummation of the transaction
described in this Section 3, then only in such event will the
Company's securities and property (including cash, where
applicable) receivable by the Holder of the Warrants be delivered
to the Trustee as contemplated by Section 3.2.
4.
Other Adjustments .
4.
1
.
General .
Commencing after Stockholder Approval (as defined in the
Subscription Agreement), in any case to which the provisions of
Sections 3 or 5 hereof are not applicable, where the Company shall
issue or sell shares of its Common Stock after the Original Issue
Date for a consideration per share less than the Purchase Price per
share in effect pursuant to the terms of this Warrant at the time
of issuance or sale of such additional shares (the “Lower
Exercise Price”), then the
Purchase Price in effect hereunder shall simultaneously with such
issuance or sale be reduced to the Lower Exercise Price
In
the event of an adjustment to the Purchase Price under this Section
4, the number of shares of Underlying Securities issuable upon
exercise hereof shall be increased so that the aggregate exercise
price of this Warrant is not reduced as a result of such reduction
of Purchase Price. The Company shall not issue or sell shares of
its Common Stock after the Original Issue Date and prior to
Stockholder Approval at a Lower Exercise Price.
4.
2
.
Convertible Securities .
( a
)
In
case the Company shall issue or sell any securities convertible
into Common Stock of the Company (“Convertible
Securities”) after the date hereof, there shall be determined
the price per share for whi
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