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EXHIBIT 10.2
6,000,000 SHARES
AMERICAN MULTIPLEXER CORPORATION
WARRANT TO PURCHASE COMMON SHARES
MAY 14th 1999
THESE SECURITIES AND THE SECURITIES ISSUABLE UPON THEIR EXERCISE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE TRANSFERRED UNLESS
COVERED BY AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT, A "NO ACTION"
LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION WITH RESPECT TO SUCH
TRANSFER, A TRANSFER MEETING THE REQUIREMENTS OF RULE 144 OF THE SECURITIES AND
EXCHANGE COMMISSION, OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER TO THE
EFFECT THAT ANY SUCH TRANSFER IS EXEMPT FROM SUCH REGISTRATION.
THIS IS TO CERTIFY THAT, for value received, Edward S C Tan, President
and CEO of American Multiplexer Corporation, ("the holder") is entitled to
purchase from American Multiplexer Corporation (the "Company"), a corporation
organized under the laws of North Carolina, at any time or from time to time
during the period (the "Exercise Period") commencing on the date hereof (the
"Commencement Date") until 5:00 p.m., California Time, on May 14th, 2004 (the
"Expiration Date"), up to 6,000,000 fully paid and non-assessable common shares,
no par value, of the Company (the "Common Shares"), as now constituted, all per
share in accordance with the terms and provisions hereof. The number of Common
Shares to be received upon the exercise of this Warrant and the price to be paid
for each Common Share shall be adjusted from time to time as hereinafter set
forth. The Common Shares or other securities or property deliverable upon such
exercise, as adjusted from time to time, are hereinafter sometimes referred to
as "Warrant Shares" and the exercise price of a Common Share in effect at any
time and as adjusted from time to time is hereinafter sometimes referred to as
the "Exercise Price". Unless the context otherwise requires, the term "Warrant"
or "Warrants" as used herein includes this Warrant and any other Warrant or
Warrants which may be issued pursuant to the provisions of this Warrant, whether
upon transfer, assignment, partial exercise, divisions, combinations, exchange,
or otherwise, and the term- "Holder" includes any transferee or transferees or
assignee or assignees of the Holder named above, all of whom shall be subject to
the provisions of the Warrant, and, when used with reference to Warrant Shares,
means the holder or holders of such Warrant Shares.
Subject to Paragraph 5 hereof, this Warrant is exercisable at a purchase
price of $1.00 per share (the "Exercise Price").
The Common Shares issuable upon exercise of this Warrant have not been
registered with the Securities and Exchange Commission. This Warrant was
originally issued pursuant to and in satisfaction of all the work put in by
Edward Tan including bringing in funds for the company.
1. EXERCISE OF WARRANTS
The purchase rights represented by this Warrant are exercisable from time
to time at the option of the Holder hereof; in whole or in part (but not as to
fractional Common Shares), during the Exercise Period until 5:00 p.m. California
time on the Expiration Date by presentation and surrender to Company at its
principal office, with the warrant exercise form attached hereto, duly executed
and
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accompanied by payment (either in cash or by certified or official bank check,
payable to the order of the Company) of the Exercise Price for the number of the
Warrant Shares specified in such form. In case of the purchase of fewer than all
of the Common Shares purchasable under this Warrant, the Company shall cancel
this Warrant upon the surrender thereof and shall execute and deliver a new
Warrant of like tenor, dated the date hereof; for the balance of the Common
Shares purchasable hereunder. Each person in whose name any certificate for
Common Shares is issued shall, for all purposes, be deemed to have become the
Holder of record of such shares on the date of exercise of this Warrant,
irrespective of the date of delivery of such certificate, except that if the
stock transfer books of the Company are closed on such exercise date, such
person shall be deemed to have become the Holder of record of such shares at the
close of business on the next succeeding date on which the stock transfer books
are open. The Company shall take all actions necessary to ensure that all Common
Shares issued upon the exercise of this Warrant are, when they are issued as
provided herein, duly and validly authorized and issued, fully paid and
non-assessable.
2. ISSUANCE OF STOCK CERTIFICATES
The issuance of certificates for Common Shares upon the exercise of
this Warrant shall be made without charge to the Holder hereof and such
certificates shall be issued in the name of; or in such names as may be directed
by, the Holder hereof; provided, however, that the Company shall not be required
to pay any transfer tax that may be payable in respect of any transfer involved
in the issuance and delivery of any such certificate in a name other than that
of the Holder, and the Company shall not be required to issue or deliver such
certificates unless or until the person or person requesting the issuance
thereof shall have paid to the Company the amount of such transfer tax or shall
have established to the satisfaction of the Company that such transfer tax has
been paid or that no such tax is due.
3. RIGHTS OF HOLDER
Nothing in this Warrant shall be construed as conferring upon the
Holder hereof any rights as shareholder of the Company. No provision of this
Warrant, in the absence of affirmative action by the Holder to purchase Common
Shares, and no mere enumeration herein of the rights or privileges of the
Holder, shall give rise to any liability of the holder for the Exercise Price or
as a shareholder of the Company, whether such liability is asserted by the
Company or by creditors thereof.
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4. RESTRICTIONS ON TRANSFERABILITY: REDEMPTION
Any such assignment shall be effected by the Holder (i) executing the
form of assignment at the end hereof and (ii) surrendering this Warrant for
cancellation at the office or agency of the Company, accompanied by a
certificate (signed by the holder, or an officer of the Holder if the Holder is
a corporation), stating that each transferee is a permitted transferee under
this paragraph 4; whereupon the Company shall issue, in the name or names
specified by the Holder (including the Holder) a new Warrant or Warrants of
like tenor and representing in the aggregate rights to purchase the same number
of Common Shares as are purchasable hereunder.
5. ADJUSTMENT OF EXERCISE PRICE AND WARRANT SHARES PURCHASABLE
(a) The Exercise Price at which Common Shares shall be purchasable,
as set forth in Section 1 hereof; shall be $1.00 per share, subject to
adjustment from time to time, if the Company shall declare a dividend payable
in Common Shares, subdivide or combine the outstanding Common Shares, the
Exercise Price shall be adjusted (to the nearest whole cent) to that price
determined by multiplying the Exercise Price in effect immediately prior to
such event by a fraction (i) the numerator of which shall be the number of
Common Shares outstanding immediately prior to such event and (ii) the
denominator of which shall be the number of Common Shares outstanding
immediately after such event. Appropriate readjustment of the Exercise Price
shall be made if any dividend referred to above shall be abandoned.
(b) In the event of an adjustment of the Exercise Price, the number
of Common Shares (or reclassified stock) issuable upon exercise of this Warrant
after such adjustment shall be equal to the number determined by dividing (i)
an amount equal to the product of (1) the number of Common Shares issuable upon
exercise of this Warrant immediately prior to such adjustment, and (2) the
Exercise Price immediately prior to such adjustment; by (ii) the Exercise Price
immediately after such adjustment.
(c) In the event of any reorganization or reclassification of the
outstanding Common Shares (other than a change in par value, or from par value
to no par value, or from no par value to par value, or as a result of a
subdivision or combination) or in the event of any consolidation of the Company
with, or merger of the Company with, another entity after which no securities
of the Company will be publicly held, or in the event of any sale, lease or
conveyance of all, or substantially all, of the property, assets, business and
goodwill of the Company as an entity, the Holder of this Warrant shall
thereupon or thereafter, at any time after the Commencement Date and prior to
the Expiration Date, have the right, but not the obligation, to exercise this
Warrant. Upon such exercise, the Holder shall have the right to purchase and/or
receive the kind and amount of stock and other securities, cash or other
property receivable upon such reorganization, reclassification, consolidation,
merger or sale by a holder of the number of Common Shares which the Holder of
this Warrant would have received had he exercised this Warrant immediately
prior to such reorganization, reclassification, consolidation, merger or sale,
at a price equal to the aggregate Exercise Price then in effect pertaining
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to this Warrant (the kind, amount and price of such stock and other securities
to be subject to adjustment as herein provided). After any such reorganization,
reclassification, consolidation, merger or sale which shall result in any cash
distribution in excess of the Exercise Price provided for by this Warrant, the
Holder of this Warrant may at his option exercise the same without making
payment of the Exercise Price and in such case the Company shall upon the
distribution to said Holder, consider that said Exercise Price has been paid in
full to it and in making settlement to said Holder, shall deduct from the
amount payable to such Holder an amount equal to such Exercise Price.
(d) In the event the Company shall, at any time after the
Commencement Date and prior to the Expiration Date and prior to the exercise
thereof dissolve, liquidate or wind up its affairs, the Holder of this Warrant
shall thereupon or thereafter at any time be entitled, but not obligated, to
exercise this Warrant, and upon the exercise thereof; to receive, in lieu of
the Common Shares of the Company which he would have been entitled to receive,
the same kind and amount of assets as would have been issued, distributed or
paid to him upon any such dissolution, liquidation or winding up with respect
to such Common Shares of the Company, had he been the holder of record of such
Common Shares receivable upon the exercise of this Warrant on the record date
for the determination of those entitled to receive any such liquidating
distribution. After any such dissolution, liquidation or winding up which shall
result in any cash distribution in excess of the Exercise Price provided for by
this Warrant, the Holder of this Warrant may at his option exercise the same
without making payment of the Exercise Price, and in such case the Company
shall upon the distribution to said Holder consider that said Exercise Price
has been paid in full to it and in making settlement to said Holder shall
deduct from the amount payable to such Holder an amount equal to such Exercise
Price.
(e) Irrespective of any adjustments in the Exercise Price or the
number or kind of shares purchasable upon exercise of this Warrant, this
Warrant may continue to express the same price and number and kind of shares as
when originally issued.
(f) The Company may retain a firm of independent public accountants
of recognized standing (who may be any such firm regularly employed by the
Company) to make any computation required under this Section, and a Certificate
signed by such firm shall be conclusive evidence of the correctness of any
computation made under this Paragraph.
(g) Notwithstanding anything contained herein to the contrary, no
adjustment of the Exercise Price or the number of shares issuable upon exercise
of this Warrant shall be made for any action taken by the Company pursuant to
written agreements in existence on the original issue date of this Warrant.
6. OFFICER'S CERTIFICATE
Whenever the Exercise Price shall be adjusted as required by the
provisions of Paragraphs, the Company shall forthwith file in the custody of
its Secretary or an Assistant Secretary at its principal office and, in the
event it shall have informed the Holder that an agent has been designated as an
agent for the exercise or transfer of this Warrant, with such warrant transfer
agent, an
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officer's certificate showing the adjusted Exercise Price determined as therein
provided, setting forth in reasonable detail the facts requiring such
adjustment, including a statement of the number of additional Common Shares, if
any, the consideration for such shares, determined as provided in Paragraph 5,
and such other facts as shall be necessary to show the officer's certificate
shall be made available at all reasonable times for inspection by the Holder of
this Warrant and the Company shall, forthwith after each such adjustment, mail
copy of such certificate to such Holder by certified mail, return receipt
requested.
7. NOTICES TO WARRANT HOLDER
So long as this Warrant shall be outstanding, (i) if the Company
shall pay any dividend or make any distribution upon the Common Shares
otherwise than in cash and out of earned surplus, or (ii) if the Company shall
offer to the holders of Common Shares for subscription or purchase by them any
shares of any class or any other rights, or (iii) if there shall be any
reclassification of the capital stock of the Company, consolidation or merger
of the Company with or into another corporation, sale, lease or transfer of all
or substantially all of the property and assets of the Company, or voluntary or
involuntary dissolution, liquidation or winding up of the Company shall be
effected, then in any such event, the Company shall cause to be mailed by
certified mail to the Holder, at least thirty days prior to the date specified
in (x) or (y) below, as the case may be, a notice containing a brief
description of the proposed action and stating the date or expected date on
which (x) a record is to be taken for the purpose of such dividend distribution
or rights, or (y) such reclassification, reorganization, consolidation, merger,
conveyance, lease or transfer, dissolution, liquidation or winding up is to
take place and the date, if any, is to be fixed, or expected date as of which
the holders of Common Shares of record shall be entitled to exchange their
Common Shares for securities or other property deliverable upon such
reclassification, reorganization, consolidation, merger, conveyance, lease or
transfer, dissolution, liquidation or winding up.
8. REGISTRATION
8.1 Definitions. For purposes of this paragraph 8:
(a) The term "Act" means the Securities Act of 1933, as amended;
(b) The terms "register", "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Act and the declaration or ordering of effectiveness of
such registration statement;
(c) The term "Registrable Securities" means this Warrant, the Warrant
Shares and any capital stock of the Company issued as a dividend or other
distribution with respect to, or in exchange or in replacement of; this Warrant
and/or the Warrant Shares; and
(d) The term "Holder" means any holder of this Warrant and/or Warrant
Shares.
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(e) The term "Warrant" shall mean this Warrant with all other
purchase warrants of like tenor, (differing, however, as to date, identity of
holders and number of shares purchasable) originally issued simultaneously with
the original predecessor of this Warrant.
8.2 Piggy-back. During the three-year period commencing on the
Commencement Date of this Warrant and ending on the Expiration Date of this
Warrant, the Company shall advise each holder of Warrants or Warrant Shares, at
least thirty (30) days prior to any date on which the Company proposes to
register any of its equity securities under the Act on a registration form
usable for resales (other than on Form S-8 or other form similar thereto
relating to employee benefit plans or Form S-4 or similar forms used in
connection with business combinations). Upon the written request of any Holder
given within twenty (20) days after receipt of any such notice by the Company,
the Company shall use its best efforts to cause to be registered under the Act
all of the Registrable Securities that each such Holder has requested be
registered.
Notwithstanding the foregoing, if the underwriter of such offering
determines that the total amount of securities which it and any other persons
or entities intend to include in such offering would adversely affect the
success of such offering, then the amount or kind of securities to be offered
by the holders of Warrant Shares and the holders of any other securities (the
"Other Securities") seeking to have such securities included in such
registration statement pursuant to the incidental registration rights of such
other holders shall be determined as follows: (i) there shall first be included
all Registrable Securities sought to be registered by holders thereof before
any Other Securities are included in such registration statement and there
shall then be included the Other Securities, and (ii) in the event that all
Registrable Securities cannot be so included, there shall be included
Registrable Securities pro rata to the extent necessary to reduce the total
amount recommended by such underwriters or excluded in their entirety, as the
case may be. In addition, if such registration statement relates to an
underwritten public offering and the number of shares to be offered is reduced
by the underwriter(s) subsequent to the initial filing thereof with the
Securities and Exchange Commission, the number of Registrable Securities to be
registered under such registration statement will be reduced pro rata.
Further, the Company shall have the right at any time it shall have
given written notice pursuant to this Paragraph 8.2 (irrespective of whether a
written request for inclusion of Registrable Securities shall have been made)
to elect not to file any such proposed registration statement, or to withdraw
the same after the filing thereof.
8.3 Covenants with Respect to Registration. In connection with any
registration under Paragraph 8.2, the Company covenants and agrees as follows:
(a) The Company shall use its best efforts to have any
registration statement declared effective remain effective for a period
adequate for all Holders to dispose of their Registrable Securities; provided,
however, that in connection with any proposed registration (i) intended to
permit an offering of any securities from time to time (i.e., a so-called
"shelf registration"), the Company shall in no event be obligated to cause any
such registration to remain effective for more
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than two hundred seventy (270) days, or (ii) covering the resales of the
Warrant Shares which are underwritten, the Company shall in no event be
obligated to cause any such registration to remain effective for longer than
the expiration of the distribution period of the Warrant Shares.
(b) The Company shall, to the extent provided for in this
agreement, prepare and file with the Securities and Exchange Commission ("SEC")
such amendments and supplements to such registration statement and the
prospectus used in connection with such registration statement as may be
necessary to comply with the provisions of the Act with respect to the
disposition of all securities covered by such registration statement.
(c) The Company shall furnish to the Holders such numbers of
copies of a prospectus, including a preliminary prospectus, in conformity with
the requirements of the Act, and such other documents as they may reasonably
request in order to facilitate the disposition of Registrable Securities owned
by them.
(d) The Company shall use its best efforts to register and
qualify the securities covered by such registration statement under such other
securities or Blue Sky laws of such jurisdictions as shall be reasonably
appropriate for the distribution of the securities covered by the registration
statement, provided that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such states or jurisdictions, and
further provided that (anything in this Agreement to the contrary
notwithstanding with respect to the bearing of expenses) if any jurisdiction
in which the securities shall be qualified shall required that expenses
incurred in connection with the qualification of the securities in that
jurisdiction be borne by selling shareholders, then such expenses shall be
payable by selling shareholders pro rata, to the extent required by such
jurisdiction.
8.4 Information Regarding Holder. It shall be a condition precedent to
the obligations of the Company to take any action pursuant to this Paragraph
that the Holders shall furnish to the Company such information regarding them,
the Registrable Securities held by them, and the intended method of disposition
of such securities as the Company shall reasonably request and as shall be
required in connection with the action to be taken by the Company.
8.5 Expenses. The Company shall pay all expenses incurred in connection
with a registration pursuant to the paragraph, including without limitation all
registration and qualification fees, printers' and accounting fees, fees and
disbursements of counsel for the Company, except for (i) the fees and
disbursements of counsel for the Holders, if any (ii) state transfer taxes;
(iii) underwriting discounts and commissions and (iv) brokerage commissions.
9. COVENANTS OF THE COMPANY
The Company covenants and agrees that all Common Shares which may be
issued upon the exercise of this Warrant will, upon full payment therefor, be
duly authorized, validly issued, fully
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paid and non-assessable (free from all taxes, liens, and charges with respect to
the issue thereof (other than taxes in respect of any transfer occurring
contemporaneously with each issue)). Without limiting the generality of the
foregoing, the Company will from time to time take all such action as may be
required to assure that the par value, if any, per share of the Common Shares is
at all times not in excess of the applicable Exercise Price. The Company further
covenants and agrees that during the period within which this Warrant may be
exercised, the Company will at all times reserve for issue and delivery upon
exercise of this Warrant such number of Common Shares as shall be required for
issue and delivery upon exercise in full of this Warrant.
10. EXCHANGE AND REPLACEMENT OF WARRANT
This Warrant is exchangeable without expense to Holder, upon the surrender
hereof by Holder at the principal executive office of the Company, for a new
Warrant or Warrants of like tenor and date representing in the aggregate the
right to purchase the same number of shares as are purchasable hereunder in such
denominations as shall be designated by the registered holder hereof at the time
of such surrender.
Upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of this Warrant, and (in the cases of
loss, theft or destruction) of reasonably satisfactory indemnity, or security
reasonably satisfactory to it, and reimbursement to the Company of all
reasonable expense incidental thereto, and upon surrender and cancellation of
this Warrant of like tenor and date, in lieu of this Warrant and any such lost,
stolen or destroyed Warrant shall thereupon become void.
11. NON ISSUANCE OF FRACTIONAL INTERESTS
No fractional shares or scrip representing fractional shares shall be
issued upon the exercise of this Warrant. With respect to any fraction of a
share called for upon exercise hereof; the Company shall pay to the Holder an
amount in cash equal to such fraction multiplied by the current market value of
such fractional share, determined as follows:
(a) If the Warrant Shares are listed on a national securities
exchange or admitted to unlisted trading privileges on such exchange, the
current value shall be the last reported sale price of the Warrant Shares on
such exchange on the last business day prior to the date of exercise of this
Warrant or if no such sale is made on such day, or the Warrant Shares are listed
on The Nasdaq National Market or Small Cap Market (collectively "NASDAQ"), the
average closing bid and asked prices of the Warrant Shares for such day on such
exchange or NASDAQ, as the case may be; or
(b) If the Common Shares are not so listed or admitted to unlisted
trading privileges, the current value shall be the mean of the last reported
high bid and low asked prices of the Common Shares reported by the National
Quotation Bureau, Inc. or a comparable firm selected by the
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Board of Directors of the Company, on the last business day prior to the date of
the exercise of this Warrant; or
(c) If the Common Shares are not so listed or admitted to unlisted
trading privileges and bid and asked prices are not so reported, the current
value shall be an amount, not less than book value per share of Common Shares,
determined in such reasonable manner as may be prescribed by the Board of
Directors of the Company.
12. NOTICES
All notices, requests, consents and other communications hereunder shall be
in writing and shall be deemed to have been duly made when delivered, or mailed
by registered or certified mail, return receipt requested:
(a) If to the Holder of this Warrant, at 124 Mountain Road, So. San
Francisco, CA 94080 or such other address of which the Company has received
written notice; or
(b) If to the Company, at 575 N Pastoria Avenue, Sunnyvale, CA 94086
or such other address of which the Company gives written notice to the
registered Holder of this Warrant.
13. SUCCESSORS
All the covenants, agreements, representations and warranties contained in this
Warrant shall bind the parties hereto and their respective heirs, executors,
administrators, distributees, successors and assigns, provided, however, that
except as otherwise provided herein this Warrant may not be sold, transferred,
assigned, pledged, hypothecated or otherwise disposed of without the prior
written consent of the Company.
14. HEADINGS
The Article and paragraph headings in this Warrant are inserted for purposes of
convenience only and have no substantive effect.
15. LAW GOVERNING
This Warrant shall be construed and enforced in accordance with, and governed
by, the laws of the State of California.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its
duly authorized officers as of the day and year first above written.
AMERICAN MULTIPLEXER CORPORATION
By: /s/ EDWARD TAN
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Edward Tan, President
ATTEST:
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[SEAL]
