Exhibit 10.3
THIS SECURITY AND THE SHARES OF COMMON STOCK
WHICH MAY BE PURCHASED UPON THE EXERCISE OF THIS SECURITY HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”), AND SUCH SECURITIES MAY NOT BE
OFFERED, SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE
OF SUCH REGISTRATION AND REGISTRATION UNDER APPLICABLE STATE
SECURITIES LAWS OR AN EXEMPTION THEREFROM UNDER THE ACT AND THE
RULES AND REGULATIONS THEREUNDER AND SUCH APPLICABLE STATE
SECURITIES LAWS.
WARRANT TO PURCHASE
SHARES OF
COMMON STOCK OF
XPLORE TECHNOLOGIES CORP.
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No.: [ ]
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Number of Warrant Shares:
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Date of Issuance: February 27,
2009
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FOR VALUE RECEIVED, subject to the
provisions hereinafter set forth, the undersigned, Xplore
Technologies Corp., a corporation incorporated under the laws of
the State of Delaware (together with its successors and assigns,
the “ Issuer ”), hereby certifies that
[ ] or its
registered assigns is entitled to subscribe for and purchase,
during the period specified in this Warrant, up to
[ ] shares of Common
Stock of the duly authorized, validly issued, fully paid and
nonassessable shares of Common Stock of the Issuer, at an exercise
price per share equal to the Warrant Price then in effect, subject,
however, to the provisions and upon the terms and conditions
hereinafter set forth.
This Warrant is issued pursuant to
the terms of a Note Purchase Agreement dated February 27,
2009, among the Issuer, Xplore Technologies Corporation of America,
a Delaware corporation and a wholly-owned subsidiary of the Issuer,
and the purchasers listed on Schedule I and Schedule II thereto
(the “ Note Purchase Agreement ”).
Capitalized terms used in this
Warrant and not otherwise defined herein shall have the respective
meanings specified in Section 8 hereof.
1.
Expiration Date
. This Warrant shall expire at
5:00 p.m. (Austin, Texas time) on February 27, 2012 (the
“ Expiration Date ”). On the Expiration
Date, all rights of the Holder to purchase Common Stock pursuant to
this Warrant shall immediately terminate.
2.
Method of Exercise; Issuance of
New Warrant; Transfer and Exchange .
(a)
Time of Exercise
. The purchase rights
represented by this Warrant may be exercised by the Holder, in
whole or in part, at any time prior to the Expiration
Date.
(b)
Method of Exercise
. The Holder hereof may
exercise this Warrant, in whole or in part, by the surrender of
this Warrant, with the exercise form in the form attached hereto as
Exhibit A , duly executed, at the principal office of
the Issuer, and by the payment to the Issuer of an amount of
consideration therefor equal to the Warrant Price in effect on the
date of
such exercise multiplied by the number of
Warrant Shares with respect to which this Warrant is then being
exercised. Payment may be made by (i) certified check payable
to the Issuer’s order or (ii) wire transfer of funds to
the Issuer.
(c)
Net Issue Election
. The Holder may elect to
receive, without the payment by the Holder of any additional
consideration, shares equal to the value of this Warrant or any
portion hereof by the surrender of this Warrant or such portion,
together with a duly executed notice of exercise in the form
attached hereto as Exhibit B , at the principal office
of the Issuer. Thereupon, the Issuer shall issue to the
Holder such number of shares of Common Stock as is computed using
the following formula:
X = Y (A-B)
A
Where
X =
the number of shares of Common Stock
to be issued to the Holder pursuant to this
Section 2(c) .
Y =
the number of shares of Common Stock
covered by this Warrant in respect of which the net issue election
is made pursuant to this Section 2(c) .
A =
the Per Share Market Value one share
of Common Stock as at the time the net issue election is made
pursuant to this Section 2(c) .
B =
the Exercise Price in effect under
this Warrant at the time the net issue election is made pursuant to
this Section 2(c) .
(d)
Issuance of Common Stock
Certificates . In
the event of any exercise of the rights represented by this Warrant
in accordance with and subject to the terms and conditions hereof,
(i) certificates for the Warrant Shares so purchased shall be
dated the date of such exercise and delivered to the Holder hereof
within a reasonable time, not exceeding five Trading Days after
such exercise, and the Holder hereof shall be deemed for all
purposes to be the Holder of the Warrant Shares so purchased as of
the date of such exercise, and (ii) unless this Warrant has
expired, a new Warrant representing the number of Warrant Shares,
if any, with respect to which this Warrant shall not then have been
exercised shall also be issued to the Holder hereof at the
Issuer’s expense within such time.
(e)
Transferability of
Warrant . Subject
to Section 2(f), this Warrant may be transferred by a Holder
without the consent of the Issuer, subject to applicable law and
the right of the Issuer to require that the transferee be an
“accredited investor” as defined in
Rule 501(a) promulgated under the Securities Act. If
transferred pursuant to this paragraph and subject to the
provisions of subsection (f) of this Section 2, this
Warrant may be transferred on the books of the Issuer by the Holder
hereof, upon surrender of this Warrant at the principal office of
the Issuer, properly endorsed by the Holder executing an assignment
in the form attached hereto. This Warrant is exchangeable at the
principal office of the Issuer for Warrants for the purchase of the
same aggregate number of Warrant Shares.
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(f)
Compliance with Securities
Laws .
(i)
The Holder of this Warrant, by
acceptance hereof, acknowledges that this Warrant is being acquired
by the Holder as principal and solely for the Holder’s own
account and not as a nominee for any other party, and for
investment, and that the Holder will not offer, sell, pledge or
otherwise dispose of this Warrant except pursuant to an effective
registration statement under the Securities Act, or an opinion of
counsel in a form reasonably satisfactory to the Issuer that such
registration is not required under the Securities Act, and in
accordance with the rules and regulations of all applicable
securities laws.
(ii)
The Holder acknowledges and agrees
that it will comply with all applicable stock exchange or quotation
system rules and any applicable securities legislation,
orders, rules or policy statements concerning the purchase of
Warrant Shares. All certificates representing Warrant Shares issued
upon exercise hereof shall be stamped or imprinted with a legend in
substantially the following form:
THIS SECURITY HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR ANY APPLICABLE STATE SECURITIES
LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR PURSUANT TO AN OPINION OF COUNSEL IN A
FORM REASONABLY SATISFACTORY TO THE CORPORATION THAT
REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT AND IN
COMPLIANCE WITH ALL APPLICABLE STATE SECURITIES LAWS.
!
3.
Shares Fully Paid; Covenants;
Loss of Warrants .
(a)
Shares Fully Paid
. The Issuer represents,
warrants, covenants and agrees that all Warrant Shares which may be
issued upon the exercise of this Warrant in accordance with the
terms hereof will, at the time of issuance, be duly authorized,
validly issued, fully paid and non-assessable and free from all
taxes, liens and charges created by Issuer. The Issuer further
covenants and agrees that during the period within which this
Warrant may be exercised, the Issuer will at all times have
authorized and reserved for the purpose of the issue upon exercise
of this Warrant a sufficient number of shares of Common Stock to
provide for the exercise of this Warrant.
(b)
Covenants . The Issuer shall not by any action
including, without limitation, amending the Articles of the Issuer,
or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other
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 actions as may be reasonably necessary or appropriate to
protect the rights of the Holder hereof against dilution (but only
to the extent specifically provided in Section 4 hereof) or
impairment. Without limiting the generality of the foregoing, the
Issuer will (i) take all such action as may be reasonably
necessary in order that the Issuer may validly and legally issue
fully paid and nonassessable shares of Common Stock, free and clear
of any liens, claims, encumbrances and restrictions
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(other than such restrictions as are expressly
set forth herein and subject to applicable securities laws) upon
the exercise of this Warrant; and (ii) use its reasonable best
efforts to obtain all such authorizations, exemptions or consents
from any public regulatory body having jurisdiction thereof as may
be reasonably necessary to enable the Issuer to perform its
obligations under this Warrant.
(c)
Loss, Theft, Destruction of
Warrants . Upon
receipt of evidence reasonably satisfactory to the Issuer of the
ownership of and the loss, theft, destruction or mutilation of any
Warrant and, in the case of any such loss, theft or destruction,
upon receipt of indemnity or security reasonably satisfactory to
the Issuer or, in the case of any such mutilation, upon surrender
and cancellation of such Warrant, the Issuer will make and deliver,
in lieu of such lost, stolen, destroyed or mutilated Warrant, a new
Warrant of like tenor and representing the right to purchase the
same number of shares of Common Stock.
4.
Adjustment of Warrant
Price . The Warrant
Price and kind of Securities purchasable upon the exercise of this
Warrant shall be subject to adjustment from time to time upon the
happening of certain events as follows:
(a)
Recapitalization; Reorganization;
Reclassification; Consolidation; Merger or Sale
.
(i)
In case the Issuer at any time prior
to the Expiration Date shall do any of the following (each, a
“ Triggering Event ”):
(A) consolidate with or merge into any other Person and the
Issuer shall not be the continuing or surviving corporation of such
consolidation or merger, or (B) permit any other Person to
consolidate with or merge into the Issuer and the Issuer shall be
the continuing or surviving Person but, in connection with such
consolidation or merger, any Capital Stock of the Issuer shall be
changed into or exchanged for Securities of any other Person or
cash or any other property, or (C) transfer, sell or otherwise
dispose all or substantially all of its properties or assets to any
other Person, then, and in the case of each such Triggering Event,
proper provision shall be made so that, upon the basis and the
terms and in the manner provided in this Warrant, the Holder of
this Warrant shall be entitled, upon the exercise hereof at any
time after the consummation of such Triggering Event, to the extent
this Warrant is not exercised prior to such Triggering Event, to
receive, and shall accept, at the Warrant Price in effect at the
time immediately prior to the consummation of such Triggering Event
in lieu of the shares of Common Stock issuable upon such exercise
of this Warrant prior to such Triggering Event, the Securities,
cash and property to which such Holder would have been entitled
upon the consummation of such Triggering Event if such Holder had
exercised the rights represented by this Warrant immediately prior
thereto, subject to adjustments and increases (subsequent to such
corporate action) as nearly equivalent as possible to the
adjustments provided for in this Section 4.
(ii)
Notwithstanding anything contained
in this Warrant to the contrary, the Issuer will not, at any time
prior to the Expiration Date, effect any Triggering Event (other
than a merger involving the Issuer and one or more of its
wholly-owned subsidiaries), unless, prior to the consummation
thereof, each Person (other than the Issuer) which as a result of
such Triggering Event may be required to deliver any Securities,
cash or property upon the exercise of this Warrant as provided
herein shall assume, by written instrument delivered to,
and
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reasonably satisfactory to, the Holder,
(A) the obligations of the Issuer under this Warrant (and if
the Issuer shall survive the consummation of such Triggering Event,
such assumption shall be in addition to, and shall not release the
Issuer from, any continuing obligations of the Issuer under this
Warrant) and (B) the obligation to deliver to such Holder such
Securities, cash or property as in accordance with the foregoing
provisions of this subsection (a).
(b)
Subdivision or Consolidation of
Common Stock . If
the Issuer, at any time prior to the Expiration Date, shall
subdivide or consolidate the outstanding shares of Common Stock
(A) in case of subdivision of shares, the Warrant Price shall
be proportionately reduced (as at the effective date of such
subdivision) to reflect the increase in the total number of shares
of Common Stock outstanding as a result of such subdivision, or
(B) in the case of a consolidation of the outstanding shares
of Common Stock, the Warrant Price shall be proportionately
increased (as at the effective date of such consolidation) to
reflect the reduction in the total number of shares of Common Stock
outstanding as a result of such consolidation.
(c)
Certain Dividends and
Distributions . If
the Issuer, at any time prior to the Expiration Date,
shall:
(i)
Stock Dividends
. Pay a stock dividend in, or
make any other distribution to its holders of Common Stock, the
Warrant Price shall be adjusted, as at the date of such payment or
other distribution, to that price determined by multiplying the
Warrant Price in effect immediately prior to such payment or other
distribution, by a fraction (1) the numerator of which shall
be the total number of shares of Common Stock outstanding
immediately prior to such dividend or distribution, and
(2) the denominator of which shall be the total number of
shares of Common Stock outstanding immediately after such dividend
or distribution (plus in the event that the Issuer paid cash for
fractional shares, the number of additional shares which would have
been outstanding had the Issuer issued fractional shares in
connection with said dividends); or
(ii)
Other Dividends
. Pay a cash dividend on, or
make any distribution of its assets upon or with respect to
(including, but not limited to, a distribution of its property as a
dividend in liquidation or partial liquidation or by way of return
of capital), the Common Stock (other than as described in clause
(i) of this subsection (c)), then on the record date for such
payment or distribution, this Warrant shall represent a right to
acquire upon exercise, in addition to the number of Warrant Shares
under this Warrant, and without payment of any addit
