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EXHIBIT 4.1
NEITHER
THIS WARRANT NOR THE SECURITIES ISSUABLE HEREUNDER HAVE BEEN
REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “SECURITIES ACT”), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT 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 ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE
REASONABLY ACCEPTABLE TO THE COMPANY. THESE SECURITIES MAY BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A
REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL
INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS
DEFINED IN RULE 501(A) UNDER THE SECURITIES ACT.
eMagin Corporation
Form of Warrant
Warrant
No.________
Original
Issue Date: April 2, 2008
eMagin Corporation , a Delaware corporation (the “
Company
”), hereby certifies that, for value received, [ PURCHASER
] or its
registered assigns (the “ Holder
”), is entitled to purchase from the Company up to a total of
[
N
UMBER OF
SHARES EQUAL TO 50% OF SHARES ISSUABLE TO SUCH PURCHASER ON CLOSING
DATE UNDER SECURITIES PURCHASE AGREEMENT ].
Shares of Common Stock (each such share, a “ Warrant
Share ” and all such shares, the “ Warrant
Shares ”), at any time and from time to time from and
after April 2, 2008 and through and including April 2, 2013 (the
“ Expiration
Date ”), and subject to the following terms and
conditions:
Section 1.
Definitions . As used in this Warrant, the
following terms shall have the respective definitions set forth in
this Section 1. Capitalized terms that are used but not
defined in this Warrant that are defined in the Securities Purchase
Agreement (as defined below) shall have the respective definitions
set forth in the Securities Purchase Agreement.
“
Alternate
Consideration ” shall have the meaning ascribed
to it in Section 9(b).
“
Below
Market Issuance ” shall have the meaning ascribed
to it in Section 9(c)(ii).
“
Business
Day ” means any day except Saturday, Sunday and
any day that is a federal legal holiday in the United States
or a day on which banking institutions in the State of New
York or the State of Washington are authorized or required by
law or other government action to close.
“
Buy-In
” shall have the meaning ascribed to it in Section
5(c).
“
Common
Stock ” means the common stock of the Company,
par value $0.001 per share, and any securities into which such
common stock may hereafter be reclassified.
“
Company
” shall have the meaning ascribed to it in the first
paragraph.
“
Convertible
Securities ” shall have the meaning ascribed to
it in Section 9(c)(i).
“
Date
of Exercise “ means the date on which the Holder
shall have delivered to the Company: (i) the Exercise Notice
(with the Warrant Shares Exercise Log attached to it),
appropriately completed and duly signed and (ii) if such
Holder is not utilizing the cashless exercise provisions set
forth in this Warrant, payment of the Exercise Price for the
number of Warrant Shares so indicated by the Holder to be
purchased.
“
Dilutive
Issuance ” shall have the meaning ascribed to it
in Section 9(c)(i).
“
Disregarded
Securities ” shall have the meaning ascribed to
it in Section 9(c)(iii)(D).
“
Excluded
Securities ” shall have the meaning ascribed to
it in Section 9(c)(iv).
“
Exercise
Notice ” is the form of Exercise Notice attached
hereto.
“
Exercise
Price ” means $
1.30 , subject to adjustment in
accordance with Section 9.
“
Expiration
Date ” shall have the meaning ascribed to it in
the first paragraph.
“
Fair
Market Value ” shall equal the closing price for
the Trading Day immediately prior to (but not including) the
Exercise Date. For purposes of Rule 144 promulgated
under the Securities 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.
“
Form
of Assignment ” is the form of Form of Assignment
attached hereto.
“
Fundamental
Transaction ” means any of the following: (1) the
Company effects any merger or consolidation of the Company
with or into another Person, (2) the Company effects any sale
of all or substantially all of its shares or assets in one or
a series of related transactions, (3) any tender offer or
exchange offer (whether by the Company or another Person) is
completed pursuant to which holders of Common Stock are
permitted to tender or exchange their shares for other
securities, cash or property, or (4) 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.
“
Holder
” shall have
the meaning ascribed to it in the first
paragraph.
“
Market
Price ” shall have the meaning ascribed to it in
Section 9(c)(ii).
“
New
Warrant ” shall have the meaning ascribed to it
in Section 3.
“
New
York Courts ” means the state and federal courts
sitting in the City of New York, Borough of
Manhattan.
“
Original
Issue Date ” means the Original Issue Date first
set forth on the first page of this Warrant.
“
Person
” means an individual or corporation, partnership,
trust, incorporated or unincorporated association, joint
venture, limited liability company, joint stock company,
government (or an agency or subdivision thereof) or other
entity of any kind.
“
Proceedings
” shall have the meaning ascribed to it in Section
15(b).
“
Purchase
Rights ” shall have the meaning ascribed to it in
Section 9(c)(i).
“
Securities
Purchase Agreement ” means the Securities
Purchase Agreement, dated April 2, 2008, to which the Company
and the original holder of the Warrant are
parties.
“
Trading
Day ” means (i) a day on which the Common Stock
is traded on a Trading Market, or (ii) if the Common Stock is
not quoted or listed on any Trading Market, a day on which the
Common Stock is quoted in the over-the-counter market;
provided
, that in the event that the Common Stock is not listed or
quoted as set forth in (i) and (ii) hereof, then Trading Day
shall mean a Business Day.
“
Trading
Market ” means whichever of the New York Stock
Exchange, the American Stock Exchange, the NASDAQ National
Market, the NASDAQ SmallCap Market or OTC Bulletin Board on
which the Common Stock is listed or quoted for trading on the
date in question.
“
Variable
Rate Convertible Security ” shall have the
meaning ascribed to it in Section 9(c)(iii)(B).
“
Warrant
Shares Exercise Log ” is the form of Warrant
Shares Exercise Log attached hereto.
“
Warrant
Register ” shall have the meaning ascribed to it
in Section 2.
“
Warrant
Shares ” shall have the meaning ascribed to it in
the first paragraph.
Section 2.
Registration of Warrant . The Company shall
register this Warrant upon records to be maintained by the Company
for that purpose (the “ Warrant
Register ”), in the name of the record Holder hereof
from time to time. The Company may deem and treat the
registered Holder of this Warrant as the absolute owner hereof for
the purpose of any exercise hereof or any distribution to the
Holder, and for all other purposes, absent actual notice to the
contrary.
Section 3.
Registration of Transfers . Subject to the
Holder’s compliance with any applicable securities laws,
including the Holder providing the Company with an opinion of
counsel reasonably acceptable to the Company that the proposed
assignment does not violate any applicable securities laws and any
other supporting documentation that the Company may reasonably
require, the Company shall register the transfer of any portion of
this Warrant in the Warrant Register, upon surrender of this
Warrant, with the Form of Assignment duly completed and signed, to
the Company at its address specified herein. Upon any
such registration or 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 the New Warrant by the
transferee thereof shall be deemed the acceptance by such
transferee of all of the rights and obligations of a holder of a
Warrant. The rights of the original Holder under the
Registration Rights Agreement shall be transferred with such
transfer of Warrant.
Section 4.
Exercise and Duration of Warrants . This Warrant
shall be exercisable by the registered Holder at any time and from
time to time for which this Warrant is exercisable through and
including the Expiration Date. At 6:30 p.m., New York
City time on the Expiration Date, the portion of this Warrant not
exercised prior thereto shall be and become void and of no
value. The Company may not call or redeem any portion of
this Warrant without the prior written consent of the
Holder.
Section 5.
Delivery of Warrant Shares .
(a)
To
effect exercises hereunder, the Holder shall not be required to
physically surrender this Warrant unless the aggregate Warrant
Shares represented by this Warrant is being
exercised. Upon delivery of the Exercise Notice to the
Company (with the Warrant Shares Exercise Log) at its address for
notice set forth herein and upon payment of the Exercise Price
multiplied by the number of Warrant Shares that the Holder intends
to purchase hereunder, the Company shall promptly (but in no event
later than three Trading Days after the Date of Exercise) issue and
deliver to the Holder, a certificate for the Warrant Shares
issuable upon such exercise.
(b)
If
by the third Trading Day after a Date of Exercise the Company fails
to deliver the required number of Warrant Shares in the manner
required pursuant to Section 5(a), then the Holder will have the
right to rescind such exercise.
(c)
If
by the third Trading Day after a Date of Exercise the Company fails
to deliver the required number of Warrant Shares in the manner
required pursuant to Section 5(a), and if after such third Trading
Day and prior to the receipt of such Warrant Shares, the Holder
purchases (in an open market transaction or otherwise) shares of
Common Stock to deliver in satisfaction of a sale by the Holder of
the Warrant Shares which the Holder anticipated receiving upon such
exercise (a “ Buy-In
”), then the Company shall (i) pay in cash to 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 amount obtained by multiplying
(1) the number of Warrant Shares that the Company was required to
deliver to the Holder in connection with the exercise at issue by
(2) the closing bid price of the Common Stock on the Date of
Exercise and (ii) at the option of the Holder, either reinstate the
portion of the Warrant and equivalent number of Warrant Shares for
which such exercise was not honored or deliver to the Holder the
number of shares of Common Stock that would have been issued had
the Company timely complied with its exercise and delivery
obligations hereunder. The Holder shall provide the Company written
notice indicating the amounts payable to the Holder in respect of
the Buy-In.
(d)
The
Company’s obligations to issue and deliver Warrant Shares in
accordance with the terms hereof are absolute and unconditional,
irrespective of any action or inaction by the Holder to enforce the
same, any waiver or consent with respect to any provision hereof,
the recovery of any judgment against any Person or any action to
enforce the same, or any setoff, counterclaim, recoupment,
limitation or termination, or any breach or alleged breach by the
Holder or any other Person of any obligation to the Company or any
violation or alleged violation of law by the Holder or any other
Person, and irrespective of any other circumstance which might
otherwise limit such obligation of the Company to the Holder in
connection with the issuance of Warrant Shares. Nothing
herein shall limit a Holder’s right to pursue any other
remedies available to it hereunder, at law or in equity including,
without limitation, a decree of specific performance and/or
injunctive relief with respect to the Company’s failure to
timely deliver certificates representing Warrant Shares upon
exercise of the Warrant as required pursuant to the terms
hereof.
Section 6.
Charges, Taxes and Expenses . Issuance and
delivery of Warrant Shares upon exercise of this Warrant shall be
made without charge to the Holder for any issue or transfer tax,
withholding tax, transfer agent fee or other incidental tax or
expense in respect of the issuance of such certificates, all of
which taxes and expenses shall be paid by the Company; provided ,
however , that
the Company shall not be required to pay any tax which may be
payable in respect of any transfer involved in the registration of
any certificates for Warrant Shares or Warrants in a name other
than that of the Holder. The Holder shall be responsible for all
other tax liability that may arise as a result of holding or
transferring this Warrant or receiving Warrant Shares upon exercise
hereof.
Section 7.
Replacement of Warrant . If this Warrant is
mutilated, lost, stolen or destroyed, the Company shall issue or
cause to be issued in exchange and substitution for and upon
cancellation hereof, or in lieu of and substitution for this
Warrant, a New Warrant, but only upon receipt of evidence
reasonably satisfactory to the Company of such loss, theft or
destruction and customary and reasonable indemnity (which shall not
include a surety bond), if requested. Applicants for a
New Warrant under such circumstances shall also comply with such
other reasonable regulations and procedures and pay such other
reasonable third-party costs as the Company may
prescribe. If a New Warrant is requested as a result of
a mutilation of this Warrant, then the Holder shall deliver such
mutilated Warrant to the Company as a condition precedent to the
Company’s obligation to issue the New Warrant.
Section 8.
Reservation of Warrant Shares . The Company
covenants that it will at all times reserve and keep available out
of the aggregate of its authorized but unissued and otherwise
unreserved Common Stock, solely for the purpose of enabling it to
issue Warrant Shares upon exercise of this Warrant as herein
provided , the
number of Warrant Shares which are then issuable and deliverable
upon the exercise of this entire Warrant, free from preemptive
rights or any other contingent purchase rights of Persons other
than the Holder (taking into account the adjustments and
restrictions of Section 9). The Company covenants that
all Warrant Shares so issuable and deliverable shall, upon issuance
and the payment of the applicable Exercise Price in accordance with
the terms hereof, be duly and validly authorized, issued and fully
paid and nonassessable.
Section 9.
Certain Adjustments . The Exercise Price and
number of Warrant Shares issuable upon exercise of this Warrant are
subject to adjustment from time to time as set forth in this
Section 9 .
(a)
Stock Dividends and Splits . If the Company, at
any time while this Warrant is outstanding, (i) pays a stock
dividend on its Common Stock or otherwise makes a distribution on
any class of capital stock that is payable in shares of Common
Stock, (ii) subdivides outstanding shares of Common Stock into a
larger number of shares, or (iii) combines outstanding shares of
Common Stock into a smaller number of shares, then, in each such
case, the Exercise Price shall be adjusted by multiplying the
Exercise Price in effect immediately prior to such event by a
fraction of which the numerator shall be the number of shares of
Common Stock outstanding immediately before such event and of which
the denominator shall be the number of shares of Common Stock
outstanding immediately after such event and the product so
obtained shall thereafter be the Exercise Price then in effect. Any
adjustment made pursuant to clause (i) of this paragraph shall
become effective immediately after the record date for the
determination of stockholders entitled to receive such dividend or
distribution, and any adjustment pursuant to clause (ii) or (iii)
of this paragraph shall become effective immediately after the
effective date of such subdivision or combination.
(b)
Fundamental Transactions . If, at any time while
this Warrant is outstanding there is a Fundamental Transaction,
then the Holder shall have the right thereafter to receive, upon
exercise of this Warrant, the same amount and kind of securities,
cash or property as it would have been entitled to receive upon the
occurrence of such Fundamental Transaction if it had been,
immediately prior to such Fundamental Transaction, the holder of
the number of Warrant Shares then issuable upon exercise in full of
this Warrant (the “ Alternate
Consideration ”). For purposes of any such
exercise, the determination of the Exercise 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 Exercise 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. In the event of a Fundamental Change, the
Company or the successor or purchasing Person, as the case may be,
shall execute with the Holder a written agreement providing
that:
(i)
this
Warrant shall thereafter entitle the Holder to purchase the
Alternate Consideration in accordance with this Section
9(b),
(ii)
in
the case of any such successor or purchasing Person, upon such
consolidation, merger, statutory exchange, combination, sale or
conveyance such successor or purchasing Person shall be jointly and
severally liable with the Company for the performance of all of the
Company’s obligations under this Warrant, the Securities
Purchase Agreement and the Registration Rights Agreement,
and
(iii)
if
registration or qualification is required under the Exchange Act or
applicable state law for the public resale by the Holder of shares
of stock and other securities so issuable upon exercise of this
Warrant, such registration or qualification shall be completed
prior to such reclassification, change, consolidation, merger,
statutory exchange, combination or sale.
If,
in the case of any Fundamental Change, the Alternate
Consideration includes shares of stock, other securities,
other property or assets of a Person other than the Company or
any such successor or purchasing Person, as the case may be,
in such Fundamental Change, then such written agreement shall
also be executed by such other Person and shall contain such
additional provisions to protect the interests of the Holder
as the Board of Directors of the Company shall reasonably
consider necessary by reason of the foregoing. At the
Holder’s option and request, any successor to the
Company or surviving entity in such Fundamental Transaction
shall, either (i) issue to the Holder a new warrant
substantially in the form of this Warrant and consistent with
the foregoing provisions and evidencing the Holder’s
right to purchase the Alternate Consideration for the
aggregate Exercise Price upon exercise thereof, or (ii)
purchase the Warrant from the Holder for a purchase price,
payable in cash within five Trading Days after such request
(or, if later, on the effective date of the Fundamental
Transaction), equal to the Black Scholes value of the
remaining unexercised portion of this Warrant on the date of
such request. 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 paragraph
(b) and
insuring that the Warrant (or any such replacement security)
will be similarly adjusted upon any subsequent transaction
analogous to a Fundamental Transaction.
(c)
Dilutive Issuances .
(i)
Adjustment Upon Dilutive Issuance . If, at any
time after the date hereof, the Company issues or sells, or
in
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