<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 31, 1998
REGISTRATION NO. 333-
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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
SI TECHNOLOGIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 3596 95-3381440
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>
4611 SOUTH 134TH PLACE
TUKWILA, WASHINGTON 98168
(206) 244-6100
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
PAUL CAVANAUGH, CHIEF FINANCIAL OFFICER
4611 SOUTH 134TH PLACE
TUKWILA, WASHINGTON 98168
(206) 244-6100
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------
COPIES TO:
BENJAMIN F. STEPHENS
WILLIAM W. BARKER
GRAHAM & JAMES LLP/RIDDELL WILLIAMS P.S.
1001 FOURTH AVENUE PLAZA, SUITE 4500
SEATTLE, WASHINGTON 98154
TEL: (206) 624-3600
FAX: (206) 389-1708
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC:
As soon as practicable after this Registration Statement becomes effective.
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act,
check the following box: [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<S> <C> <C> <C> <C>
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PROPOSED MAXIMUM
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO BE PROPOSED MAXIMUM AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED OFFERING PRICE(1) PRICE REGISTRATION FEE
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Common stock, $.01 par value(2)... 1,087,632 $6.625 $7,205,562 $2,125
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</TABLE>
(1) Estimated pursuant to Rule 457(c) under the Securities Act solely for the
purpose of calculating the registration fee, based upon the last reported
sale of the common stock $6.625 as quoted on Nasdaq on July 28, 1998.
(2) Consists of 839,664 shares of outstanding common stock issued in the April
1998 Financing and registered for resale hereby; 168,000 shares of common
stock issuable upon exercise of warrants issued in the April 1998 Financing
and registered for resale hereby; and 79,968 shares of common stock
registered for resale issuable upon exercise of warrants issued to the
placement agent in connection with the April 1998 Financing.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED JULY 30, 1998
PROSPECTUS
1,087,632 SHARES
SI TECHNOLOGIES
COMMON STOCK
------------------------
All of the 1,087,632 shares of common stock of SI Technologies, Inc.
("Company") offered hereby are being offered for resale by selling stockholders
without the participation of an underwriter ("Selling Stockholders") pursuant to
contractual registration rights. See "Recent Events -- April 1998 Financing."
The Company will not receive any proceeds from the sale of the common stock by
Selling Stockholders. The common stock is quoted on the Nasdaq Small Cap Market
under the symbol "SISI." On July 29, 1998 the last reported sale price for the
common stock was $7.00.
The common stock being registered hereby may be sold in transactions on the
Nasdaq Stock Market at market prices then prevailing, in negotiated
transactions, or otherwise. See "Plan of Distribution."
------------------------
THE COMMON STOCK OFFERED HEREBY INVOLVES MATERIAL RISKS. SEE "RISK FACTORS"
BEGINNING ON PAGE 5.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
THE DATE OF THIS PROSPECTUS IS , 1998.
<PAGE> 3
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the U.S.
Securities and Exchange Commission ("Commission"). Reports, proxy statements and
other information filed with the Commission by the Company can be inspected and
copied at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's regional
offices located at 500 West Madison Street, Room 1400, Chicago, Illinois 60661
and at 7 World Trade Center, Suite 1300, New York, NY 10048. Copies of such
material can be obtained from the Public Reference Section of the Commission at
450 Fifth Street, Washington, D.C. 20549, at prescribed rates, or from the
Commission's web site at www.sec.gov.
The Company has filed a registration statement on Form S-3, together with
all exhibits and amendments thereto ("Registration Statement"), of which this
Prospectus ("Prospectus") is a part, under the Securities Act of 1933
("Securities Act") with the Commission with respect to the common stock offered
hereby. This Prospectus does not contain all of the information set forth in the
Registration Statement, certain portions of which are omitted in accordance with
the rules and regulations of the Commission. Statements made in this Prospectus
concerning documents, while complete in material respects, are nonetheless
summaries. Reference is made to each exhibit for a full description of each such
document, and in each case summary descriptions are qualified by reference to
complete exhibits filed with the Commission. For further information with
respect to the Company and its common stock, reference is made to the
Registration Statement, exhibits and schedules thereto, which may be inspected
without charge at the public reference facilities maintained by the Commission
at 450 Fifth Street N.W., Washington, D.C. 20549.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed with the Commission (File No.
0-12370) and are incorporated herein by reference into this Prospectus:
(a) Annual Report on Form 10-KSB for the fiscal year ended July 31, 1997;
(b) Quarterly Report on Form 10-QSB, for the period ended April 30, 1998;
(c) Quarterly Report on Form 10-QSB for the period ended January 31, 1998;
(d) Quarterly Report on Form 10-QSB for the period ended October 31, 1997;
(e) Forms 8-Ks filed on each of February 27, 1998, May 21, 1998 and July
29, 1998.
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act prior to the termination of the offering
to which this Prospectus relates shall be deemed to be incorporated by reference
into this Prospectus and to be part of this Prospectus from the date of filing
thereof.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, a copy of any
information that has been incorporated by reference in this Prospectus (not
including exhibits to information that is incorporated by reference unless such
exhibits are specifically incorporated by reference into the information that
this Prospectus incorporates), upon request to Paul Cavanaugh, Chief Financial
Officer, SI Technologies, Inc., 4611 South 134th Place, Tukwila, Washington
98168, (206) 244-6100.
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<PAGE> 4
FORWARD-LOOKING STATEMENTS
This Prospectus and the documents incorporated by reference herein contain
projections and forward-looking statements within the meaning of Section 27A of
the Securities Act and Section 21E of the Exchange Act, which statements involve
substantial risks and uncertainties. The words "anticipate," "believe,"
"estimate," "expect" and similar terms are intended to identify these
projections and forward-looking statements. Actual results could differ
materially from the results expressed in or implied by these projections and
forward-looking statements as the result of certain factors, including those
factors discussed in "Risk Factors," contained herein, and in "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
"Business" in the periodic reports incorporated herein by reference.
3
<PAGE> 5
THE COMPANY
The Company, together with its subsidiaries, is an industry leader in the
design, manufacturing and marketing of equipment and engineered systems that
enhance the processing, handling, movement and transportation of goods and
materials. Its products and applied technology solutions include dynamic and
stationary weighing systems, load handling and moving systems, measurement
devices, instrumentation and operations information systems. These products are
intended to enhance the operational control, safety, efficiency and
profitability of the Company's customers. Key markets served by the Company
include aerospace, agriculture, automotive, aviation, construction, forestry,
freight transportation, maritime, mining, and waste management. The Company
markets its equipment and systems throughout the world. In recent years, the
Company has been capitalizing on its technology and existing customer
relationships through product and market expansion in the industrial weighing
and material handling equipment industry. Driving the business expansion of the
Company are both an aggressive internal product development program and the
acquisition of businesses with complementary technology and products.
The Company was incorporated in California on May 29, 1979 as IDEA
(Invention, Design, Engineering Associates, Inc.), and was reincorporated in
Delaware on April 20, 1983. In February 1996, the Company changed its name to SI
Technologies, Inc. The principal executive offices and headquarters of the
Company are located at 4611 South 134th Place, Tukwila, Washington, and its
telephone number is (206) 244-6100. The Company's web site for weighing systems
is located at .com. The Company's web site for its AeroGo subsidiary is located
at . Information located on the Company's web sites is not a part of this
prospectus.
RECENT EVENTS
APRIL 1998 FINANCING
In April 1998 the Company raised $4.2 million (approximately $3.8 million
net of expenses) through the sale of "Units" in a private financing to three
accredited investors in reliance upon Section 4(2) and Rule 506 under the
Securities Act (the "April 1998 Financing"). 168 Units were sold in the April
1998 Financing, each Unit consisting of 4,998 shares of common stock and
two-year Warrants to purchase 1,000 shares of common stock at $8.00 per share.
The common stock registered for resale in this offering is being registered
pursuant to the registration rights agreements entered into between the Company
and the Selling Stockholders in connection with the April 1998 Financing. The
proceeds of the April 1998 Financing were used for the repayment of
indebtedness. In connection with the financing, the Company issued to the Boston
Group, as placement agent, a Warrant to purchase 79,968 shares of common stock
at $5.50 per share, exercisable for five years.
4
<PAGE> 6
RISK FACTORS
Investment in the Company's common stock offered hereby involves material
risks. Investors should consider the following risks in addition to other
information in this Prospectus.
Risks Associated With Fluctuations in Quarterly Results; Uncertainty of
Future Results. The Company's quarterly operating results have fluctuated in the
past and are expected to fluctuate significantly in the future as a result of a
variety of factors. Product and price competition, research and development
requirements, volume and timing of projects and orders, announcements or
introductions of new products or technologies by the Company or its competitors,
foreign currency exchange rates, investments in marketing and distribution,
price increases by suppliers, and national and global economic conditions may be
expected to cause significant variations in the Company's quarterly operating
results, including possible declines in profit margins. Revenues in any quarter
from the sale of the Company's weighing and information systems are dependent on
orders booked and shipped in that quarter. Net sales for any future quarter are
not predictable with any degree of accuracy. It is likely that in some future
quarter the Company's operating results will be below the expectations of
analysts. In such event, the price of the common stock would likely be
materially adversely affected.
A substantial portion of the revenues generated by the Company are derived
from a small number of large, custom orders for material handling systems and
related process weighing systems. A delay, rescheduling or cancellation of one
or more purchase orders for these products may have a material impact on the
Company's financial condition and results of operation. A delay in a shipment
near the end of a particular quarter due to, for example, an unanticipated
shipment rescheduling, a cancellation or deferral by a customer, competitive or
economic factors, unexpected manufacturing or other difficulties, delays in
deliveries of parts by suppliers, or the failure to receive an anticipated
order, may cause sales in a particular period to fall significantly below
expectations and may have a material adverse effect on the Company's financial
condition and results of operations for that period.
Risks Associated With Acquisitions; Integration of Operations. A major
portion of the Company's growth in recent years has resulted from acquisitions.
The Company's acquisition strategy involves risks inherent in assessing the
value, strengths, weaknesses, contingent or other liabilities, and potential
profitability of acquisition candidates, and in integrating the operations of
acquired companies with the Company's operations. Operational risks associated
with acquisitions include the possibility that an acquisition will not provide
the benefits anticipated by Company management. Financial risks involve
incurring additional indebtedness in order to effect the acquisition and the
risk that the Company will be unable to service such indebtedness. In addition,
the issuance of stock in connection with acquisitions involves dilution to
existing stockholders. There can be no assurance that the Company will be
successful in identifying attractive acquisition candidates, that the Company
will have access to the capital required to finance potential acquisitions, will
complete acquisitions on favorable terms, or that any business acquired will be
integrated successfully with the Company's operations, or be profitable.
Risks Associated with Leverage and Liquidity. At July 15, 1998 the Company
had total indebtedness of approximately $18.5 million and debt as a percentage
of capitalization of 62%. The degree to which the Company will be leveraged in
the future could have important consequences including: (i) impairment of the
Company's ability to obtain financing for working capital, capital expenditures,
financing acquisitions, and general corporate purposes; (ii) possible inability
to generate sufficient cash flow to pay principal and interest on its
indebtedness; and (iii) increased vulnerability of the Company to economic
downturns and in ability to withstand competitive pressures. There can be no
assurance that the Company's business will continue to generate cash flow at
levels sufficient to service its debt.
Limited Intellectual Property Protection. The Company's success depends in
part on its ability to protect its technology and trade secrets. To develop and
maintain its competitive position, the Company relies upon continuing
technological innovations, trade secrets and know-how. The Company also relies
on a combination of patent, copyright and trademark laws, and confidentiality
agreements to protect its proprietary rights. The Company has limited patent
protection, however. There can be no assurance that any patent applications
relating to its technology will be granted, or that any patents that are granted
will afford protection against
5
<PAGE> 7
competitors, or will not be successfully challenged or circumvented by
competitors. There can be no assurance that the trade secret protection and
other measures taken by the Company will prevent or deter misappropriation of
its technology or that competitors will not be able to independently develop
technologies having similar functions or performance characteristics. In
addition, the laws of some foreign countries do not protect proprietary rights
to the same extent as do the laws of the United States. Therefore, there can be
no assurance that the Company will have an adequate legal remedy to prevent or
seek redress for future unauthorized misappropriations of the Company's
technology.
Although the Company believes that it currently owns or has adequate rights
to utilize all material technologies relating to its existing products, third
parties have in the past made patent infringement claims against the Company. In
certain cases, the Company has resolved these claims by obtaining a license to
the technology. There can be no assurance as to the outcome of any pending or
future claims, litigation or proceedings involving Company's proprietary rights.
Risks Associated With Competition. Competition in the weighing and material
handling equipment and system industry is intense. There are approximately 5,000
manufacturers and a greater number of distributors and service companies in
competition with the Company. Many of the Company's competitors have
substantially greater technical, financial and marketing resources, larger
customer bases, and greater name recognition than the Company. The Company
expects that its competitors will continue to improve the performance and lower
the price of their current products and to introduce new products or new
technologies. Failure of the Company to improve its products and introduce new
products and new technologies that are superior to competitors' products at
competitive prices could cause a significant decline in sales. Increased
competition could result in price reductions, reduced margins or loss of market
share, any of which could have a material adverse effect on the Company's
business, financial condition and results of operations.
Risks Associated With International Sales. Approximately 40% of the
Company's sales in fiscal 1997 were made to customers located outside of the
United States. The Company anticipates that international sales will continue to
account for a significant percentage of its sales for the foreseeable future.
The Company's international sales may be denominated in foreign or United States
currencies. The Company does not currently engage in foreign currency hedging
transactions as currency fluctuations have not had a material effect on the
Company's financial results. However, if a material amount of future sales are
denominated in foreign currency, a decrease in the value of foreign currency
relative to the United States dollar could result in losses from such
transactions. In such event, the Company might seek to limit its exposure to
foreign currency transactions by hedging strategies. There can be no assurance
that any such strategy would be successful in avoiding exchange rate related
losses. With respect to the Company's international sales that are United States
dollar denominated, such a decrease could make the Company's systems less price
competitive, or could cause distributors or customers to renegotiate prices for
subsequent purchases. Either occurrence could have a material adverse effect
upon the Company's business, financial condition and results of operations.
Additional risks inherent in the Company's international business activities
include changes in regulatory requirements, tariffs and other trade barriers,
political and economic instability, difficulties in staffing and managing
foreign operations, difficulties in managing distributors, customs requirements,
potentially adverse tax consequences, the burden of complying with a wide
variety of complex foreign laws and treaties, difficulties in obtaining
necessary equipment authorizations and the possibility of difficulty in accounts
receivable collections. Foreign laws which may differ significantly from U.S.
laws may govern distribution and sales agreements entered into with foreign
customers. Therefore, the Company may be limited in its ability to enforce its
rights under such agreements and to collect damages, if awarded. These factors
may have a material adverse effect on the Company's business, financial
condition and results of operations.
6
<PAGE> 8
Risks of Operation in Foreign Countries. The Company currently operates
facilities in The Netherlands through its subsidiary, Revere Transducers Europe,
B.V. The Company's international operations are subject to the general risks of
remote management as well as other risks associated with the conduct of business
in foreign countries, including economic, legal and regulatory uncertainties;
currency fluctuations, which the Company generally does not attempt to hedge;
restrictions on repatriation of earnings; export-import regulations; customs
matters; foreign collection problems; military, political and transportation
risks; and foreign laws and governmental regulation.
Risks Associated With Management of Growth. The Company expects to continue
to expand product lines, invest in marketing and distribution and pursue
strategic acquisitions. The Company must successfully manage the integration of
acquired entities, control of overhead expenses and inventories and development,
introduction, marketing and sales of new products and product enhancements,
management and training of its employees, and monitoring of third-party
contractors and suppliers. The Company may need to significantly expand its
internal management and information systems and implement necessary procedures
and controls. There can be no assurance that the Company will be able to achieve
its planned expansion goals or manage its growth effectively. The failure to
develop and implement these systems, procedures and controls in a timely manner
could have a material adverse effect on the Company's financial condition or
results of operations.
Risks Associated With Environmental Regulations. The Company is subject to
various foreign, federal, state and local laws and regulations relating to the
protection of the environment. These laws may provide for retroactive, strict
liability for damages to natural resources or threats to public health and
safety, rendering a party liable for environmental damage without regard to its
negligence or fault. Sanctions for noncompliance may include revocation of
permits, corrective action orders, administrative or civil penalties in criminal
prosecution. The business of the Company involves environmental management and
issues typically associated with historical manufacturing operations. To date,
the cost of complying with environmental laws and regulations by the Company has
not been material, but the fact that such laws or regulations are changed
frequently makes it difficult to predict the costs or impact of such laws and
regulations in the future. The modification of existing laws or regulations or
the adoption of new laws or regulations affecting the Company's operations could
have a material adverse effect on Company's business, financial condition, and
results of operations.
Risks Associated With Dependence on Key Personnel. The Company's success
depends to a significant extent upon the efforts and abilities of members of its
senior management, including Rick A. Beets, the President and Chief Executive
Officer of the Company. The loss of the services of one or more of the senior
management of the Company could have a material adverse effect on the Company's
business, financial condition and results of operations. The success of the
Company will depend on its ability to hire, train and retain skilled personnel
in all areas of its business. There can be no assurance that the Company will be
able to attract, train and retain sufficient qualified personnel to achieve its
business objectives.
Control by Existing Shareholders. Members of the board of directors and
officers of the Company beneficially own approximately 45% of the outstanding
shares of common stock of the Company. Accordingly, these stockholders will be
able to significantly influence the election of the members of the Company's
board of directors and significantly influence the outcome of corporate actions
requiring shareholder approval, such as mergers and acquisitions. This level of
ownership, together with certain provisions of the Company's certificate of
incorporation, bylaws and Delaware law, may have a significant effect in
delaying, deferring, or preventing a change in control of the Company and may
adversely effect the voting and other rights of other shareholders of common
stock.
Possible Issuance of Preferred Stock. The Company is authorized to issue up
to 2,000,000 shares of Preferred Stock, which may be issued in one or more
series and the terms of which may be determined at the time of issuance by the
Board of Directors without further action by stockholders. The issuance of
Preferred Stock may adversely affect the market price of, and the voting and
other rights of the holders of, the Common Stock.
7
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Limited Public Trading Market. Trading of the Company's Common Stock has
been limited, and no assurance can be given that an active public trading market
for the Common Stock will develop, or if developed, be sustained.
Risks Associated With Year 2000. Where necessary, the Company is in the
process of modifying, upgrading, or replacing its computer software applications
and internal information systems to accommodate the year 2000 dating changes
necessary to permit correct recording of year dates for 2000 and later years.
The Company does not expect that the cost of its year 2000 compliance program
will be material to its business, financial condition or results of operations.
The Company believes that it will be able to achieve any necessary compliance by
the end of 1999, and does not currently anticipate any material disruption in
its operations as the result of any failure by the Company to be in compliance.
If, however, any of the Company's significant suppliers or customers do not
successfully and timely achieve year 2000 compliance, the Company's business or
operations could be adversely affected.
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SELLING STOCKHOLDERS
The 1,087,572 shares of common stock being registered hereby for resale in
this offering are owned by the Selling Stockholders listed below. Except as
described below, none of the Selling Stockholders has had a material
relationship with the Company or any predecessors or affiliates within the past
three years.
<TABLE>
<CAPTION>
AS OF JULY 30, 1998
-----------------------------------------------------------
NUMBER OF BENEFICIAL OWNERSHIP
SHARES AFTER THE OFFERING
BENEFICIAL OWNERSHIP OFFERED (ASSUMING SALE OF ALL
PRIOR TO THE OFFERING HEREBY SHARES OFFERED)
--------------------- --------- ---------------------
NAME AND ADDRESS SHARES PERCENTAGE SHARES PERCENTAGE
---------------- ------- ---------- ------- ----------
<S> <C> <C> <C> <C> <C>
The Cuttyhunk Fund Limited(1)(2)...... 479,840 13.8 479,840 0 0
73 Front Street
Hamilton 4M12
BERMUDA
Tonga Partners, L.P.(1)(2)............ 479,840 13.8 479,840 0 0
Cannell Capital Management
750 Battery Street
San Francisco, CA 94111
The Boston Group, L.P.(3)............. 79,968 2.3 79,968 0 0
2049 Century Park East
30th Floor
Los Angeles, CA 90067
Rick A. Beets(4)...................... 328,984 9.5 47,984 281,000 7.6
President, CEO and Director
c/o SI Technologies
4611 South 134th Place
Tukwila, WA 98168
</TABLE>
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(1) Includes 80,000 shares issuable upon exercise of warrants to purchase Common
Stock.
(2) J. Carlo Cannell dba Cannell Capital Management is the General Partner of
Tonga Partners, L.P. and has sole voting and dispositive powers over the
referenced shares and is the investment advisor to The Cuttyhunk Fund, and
shares voting and investment control with such fund over the shares held by
such fund.
(3) Consists entirely of shares issuable upon exercise of warrants to purchase
Common Stock.
(4) Includes 80,000 shares subject to currently exercisable options. Includes
20,000 shares of record held by Mr. Beets' wife, Mara J. Beets. Mr. Beets
has shared voting and investment power with respect to such shares. Also
includes 40,000 shares held of record by Mr. Beets' children for whom he
acts as custodian. Does not include 20,000 unvested option shares granted in
1994. Includes 8,000 shares issuable upon exercise of warrants.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the common stock
by Selling Stockholders.
PLAN OF DISTRIBUTION
The common stock offered hereby by the Selling Stockholders may be sold
from time to time by the Selling Stockholders, or by pledgees, donees,
transferees or other successors in interest. Such sales may be made on one or
more exchanges or in the over-the-counter market (including The Nasdaq Stock
Market), in privately negotiated transactions, at prices and at terms then
prevailing or at prices related to the then current market price, in negotiated
transactions, or otherwise. In addition, any shares of common stock covered by
this Prospectus that qualify for sale pursuant to Rule 144 might be sold under
Rule 144 rather than pursuant to this Prospectus, assuming that there is an
available exemption. The Common Stock may be sold to or through brokers or
dealers who may act as agent or principal, or in direct transactions between the
Selling Stockholders and purchasers. In addition, the Selling Stockholders may,
from time to time, sell the common stock short
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and, in such instances, this Prospectus may be delivered in connection with such
short sales and the common stock offered hereby used to cover such short sales.
The Selling Stockholders may sell the common stock to or through dealers,
who may receive compensation in the form of discounts, concessions or
commissions from the Selling Stockholders and/or commissions from the purchasers
for whom they may act as agent. Dealers participating in the distribution of the
common stock may be deemed to be underwriters, and any discounts and commissions
received by them and any profit realized by them on resale of the common stock
may be deemed to be underwriting discounts and commissions. Upon the Company
being notified by a Selling Shareholder that any material arrangement has been
entered into with a broker or dealer for the sale of common stock through a
block trade, special offering, exchange distribution or secondary distribution a
purchase by a broker or dealer, a prospectus supplement will be filed, if
required, pursuant to Rule 424(c) under the Securities Act, disclosing (a) the
name of each such broker-dealer, (b) the number of shares of common stock
involved, (c) the price at which such shares of common stock were sold, (d) the
commissions paid or discounts or concessions allowed to such broker-dealer,
where applicable, (e) that such broker-dealer did not conduct any investigation
to verify the information set out or incorporated by reference in this
Prospectus, as supplemented, and (f) other facts material to the transaction.
In connection with distributions of the Common Stock, the Selling
Stockholders may enter into hedging transactions with brokers or dealers and the
brokers or dealers may engage in short sales of the common stock in the course
of hedging the positions they assume with the Selling Stockholders. The Selling
Stockholders also may enter into option or other transactions with brokers or
dealers that involve the delivery of the common stock to the brokers or dealers,
who may then resell or otherwise transfer such common stock. The Selling
Stockholders also may loan or pledge the common stock to a broker or dealer and
the broker or dealer may sell the common stock so loaned or upon default may
sell or otherwise transfer the pledged common stock.
The Company is bearing all costs relating to the registration of the common
stock other than fees and expenses, if any, of counsel or other advisors to the
Selling Stockholders. Any commissions, discounts or other fees payable to
brokers or dealers in connection with any sale of common stock will be borne by
the Selling Stockholders, the purchasers participating in such transaction, or
both.
The Company has agreed to indemnify the Selling Stockholders in specified
circumstances, against certain liabilities, including liabilities arising under
the Securities Act. Each Selling Shareholder has agreed to indemnify the
Company, its directors and its officers who sign the Registration Statement
against certain liabilities, including liabilities arising under the Securities
Act.
Notwithstanding the preceding information, the resale of common stock
registered hereby is subject to lock-up agreements with The Boston Group, L.P.
("The Boston Group"), the dealer manager in the April 1998 Financing, for a
period of one year following the initial closing date of the April 1998
Financing. As a result, absent waiver by the Boston Group, the common stock
registered hereby may not be resold until April 17, 1999.
LEGAL MATTERS
The validity of the securities offered hereby will be passed upon for the
Company by Graham & James LLP/Riddell Williams P.S., Seattle, Washington.
EXPERTS
The consolidated financial statements of SI Technologies, Inc. appearing in
its Annual Report on Form 10-KSB for the year ended July 31, 1997 have been
audited by Grant Thornton LLP, independent auditors, as set forth in their
reports and incorporated herein by reference in reliance upon the authority of
such firm as experts in accounting and auditing.
10
<PAGE> 12
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. EXPENSES OF ISSUANCE AND DISTRIBUTION*.
<TABLE>
<S> <C>
SEC registration fee........................................ $ 2,125
Accounting fees and expenses................................ 5,000
Legal fees and expenses..................................... 10,000
Miscellaneous............................................... 2,875
-------
Total............................................. $20,000
=======
</TABLE>
- ---------------
* Except for the SEC registration fee, amounts shown are estimates.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law authorizes a court to
award or a corporation's Board of Directors to grant indemnity to directors and
officers in terms sufficiently broad to permit such indemnification under
certain circumstances for liabilities (including reimbursement for expenses
incurred) arising under the Securities Act. The Company's Certificate of
Incorporation, as amended, and the Bylaws, as amended, provide for
indemnification of its directors, officers, employees and other agents to the
maximum extent permitted by the Delaware General Corporation law. In addition,
the Company has entered into Indemnification Agreements with its officers and
directors. The Company also currently maintains an officers' and directors'
liability insurance policy that insures, subject to the exclusions and
limitations of the policy, officers and directors of the Company against certain
liabilities that might be incurred by them solely in such capacities.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling the registrant
pursuant to the foregoing provisions, the registrant has been informed that in
the opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<C> <S>
4.1 Form of Subscription Agreement entered into by participants
in the Company's April 1998 financing
4.2 Form of Subscription Agreement Supplement incorporated by
reference into the Company's Subscription Agreement
4.3 Form of Warrant issued in connection with the Company's
April 1998 financing
4.4 Form of Placement Agent Warrant issued in connection with
the Company's April 1998 financing
4.5 Registration Rights Agreement entered into by and between
the Company and participants in the Company's April 1998
financing
5.1* Opinion of Graham & James LLP/Riddell Williams P.S.
23.1* Consent of Grant Thornton LLP, Independent Auditors
23.2* Consent of Graham & James/Riddell Williams P.S. (included in
Exhibit 5.1 hereto)
</TABLE>
- ---------------
* To be filed by amendment.
II-1
<PAGE> 13
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement: (i) to
include any prospectus required by Section 10(a)(3) of the Securities Act
of 1933; (ii) to reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20 % change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective Registration Statement; (iii) to include any material
information with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material change to such
information in the Registration Statement; provided, however, that (i) and
(ii) do not apply if the Registration Statement is on Form S-3, Form S-8 or
Form F-3, and the information required to be included in a post-effective
amendment by (i) and (ii) is contained in periodic reports filed with or
furnished to the Commission by the Registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) If the Registrant is a foreign private issuer, to file a
post-effective amendment to the registration statement to include any
financial statements required by Rule 3-19 of this chapter at the start of
any delayed offering or throughout a continuous offering. Financial
statements and information otherwise required by Section 10(a)(3) of the
Act need not be furnished, provided, that the Registrant includes in the
prospectus, by means of a post-effective amendment, financial statements
required pursuant to this paragraph (4) and other information necessary to
ensure that all other information in the prospectus is at least as current
as the date of those financial statements. Notwithstanding the foregoing,
with respect to registration statements on Form F-3, a post-effective
amendment need not be filed to include financial statements and information
required by Section 10(a)(3) of the Act or Rule 3-19 of this chapter if
such financial statements and information are contained in periodic reports
filed with or furnished to the Commission by the Registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Form F-3.
(5) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Registration's annual report
pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act
of 1934 (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the Registration Statement shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described above, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the
II-2
<PAGE> 14
event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
The undersigned Registrant hereby further undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE> 15
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Tukwila, State of
Washington, on July 30, 1998.
SI TECHNOLOGIES, INC.
By: /s/ RICK A. BEETS
------------------------------------
Rick A. Beets
Chief Executive Officer
Each person whose signature appears below authorizes and appoints Rick A.
Beets and Paul Cavanaugh and each of them, as his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any or all amendments (including post-effective amendments)
to this Registration Statement and a new Registration Statement filed pursuant
to Rule 462(b) under the Securities Act of 1933, as amended, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the foregoing, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or their substitutes, may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated below.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ RICK A. BEETS President, Chief Executive July 30, 1998
- ----------------------------------------------------- Officer and Director
Rick A. Beets
/s/ PAUL CAVANAUGH Chief Financial Officer July 30, 1998
- ----------------------------------------------------- (Principal Financial and
Paul Cavanaugh Accounting Officer)
/s/ RALPH E. CRUMP Chairman of the Board, Treasurer July 30, 1998
- ----------------------------------------------------- and Director
Ralph E. Crump
/s/ S. SCOTT CRUMP Director July 30, 1998
- -----------------------------------------------------
S. Scott Crump
/s/ HEINZ ZWEIPFENNIG Director July 30, 1998
- -----------------------------------------------------
Heinz Zweipfennig
/s/ EDWARD A. ALKIRE Secretary and Director July 30, 1998
- -----------------------------------------------------
Edward A. Alkire
/s/ D. DEAN SPATZ Director July 30, 1998
- -----------------------------------------------------
D. Dean Spatz
</TABLE>
II-4
<PAGE> 16
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<C> <S>
4.1 Form of Subscription Agreement entered into by participants
in the Company's April 1998 financing
4.2 Form of Subscription Agreement Supplement incorporated by
reference into the Company's Subscription Agreement
4.3 Form of Warrant issued in connection with the Company's
April 1998 financing
4.4 Form of Placement Agent Warrant issued in connection with
the Company's April 1998 financing
4.5 Registration Rights Agreement entered into by and between
the Company and participants in the Company's April 1998
financing
5.1* Opinion of Graham & James LLP/Riddell Williams P.S.
23.1* Consent of Grant Thornton LLP, Independent Auditors
23.2* Consent of Graham & James/Riddell Williams P.S. (included in
Exhibit 5.1 hereto)
</TABLE>
- ---------------
* To be filed by amendment.
<PAGE> 1
EXHIBIT 4.1
SUBSCRIPTION
DOCUMENT
- --------------------------------------------------------------------------------
SI TECHNOLOGIES, INC.
- --------------------------------------------------------------------------------
Please read all instructions and the terms and conditions of your Private
Placement Memorandum (the "Offering Memorandum") and all its attachments
carefully before filling out this application. Furthermore, please review the
Subscription Supplement which is attached as an Exhibit to the Offering
Memorandum and the terms of which are incorporated by reference into and made
part of this Subscription Document. Capitalized terms used and not otherwise
defined herein shall have the meanings set forth in the Offering Memorandum. If
you need assistance, please call the Dealer Manager, as defined in the Offering
Memorandum.
[x] When application is complete, send or wire your investment to:
ALL DOCUMENTS AND CHECKS (EXCEPT WIRES) WIRE INSTRUCTIONS:
SHOULD BE SENT TO:
[x] Make Checks payable to
<TABLE>
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
I. ACCOUNT REGISTRATION - CHECK ONE
- ------------------------------------------------------------------------------------------------------------------------------------
[ ] INDIVIDUAL [ ] JOINT REGISTRATION [ ] PENSION OR PROFIT [ ] CORPORATION, PARTNERSHIP,
ACCOUNT SHARING TRUST, ASSOCIATION OR
OTHER ENTITY
[ ] Joint Tenant with [ ] IRA
Right of Survivorship
[ ] Tenants in Common
[ ] Tenants by Entirety
[ ] Community Property
________________________________________________________________
Name of APPLICANT, CUSTODIAN, CORPORATION, TRUST or BENEFICIARY
M or F _____________ _______________________ [ ] PLEASE PUT A CHECK NEXT
Date of Birth Soc. Sec. or Tax ID # TO THE SOC. SEC. # OR TAX
ID. # RESPONSIBLE FOR
TAXES. WE WILL REPORT
THIS NUMBER TO THE IRS.
________________________________________________________________________________
Name of JOINT TENANT or TRUSTEE (if applicable)
M or F _____________ _______________________ [ ]
Date of Birth Soc. Sec. or Tax ID #
________________________________________________________________________________ ____________________________________
Name of ADDITIONAL TRUSTEE (if applicable) Date of Trust
Marital Status (please check one) [ ] Single [ ] Married [ ] Separated [ ] Divorced
$________________ INVESTMENT AMOUNT (Number of Units X $25,000 per Unit; Minimum of $25,000
unless approved by SI Technologies, Inc. (the "Corporation")).
</TABLE>
<PAGE> 2
- --------------------------------------------------------------------------------
I. ACCOUNT REGISTRATION - (CONTINUED)
- --------------------------------------------------------------------------------
HOME ADDRESS
________________________________________________________________________________
Street Address Unit Number
______________________________________________________ ___________---________
City State ZIP+4
___________________________________________
Home Phone Number (with Area Code)
BUSINESS ADDRESS
________________________________________________________________________________
Name of Company
________________________________________________________________________________
Street Address Suite Number
______________________________________________________ ___________---________
City State ZIP+4
___________________________________________
Business Phone Number (with Area Code)
- --------------------------------------------------------------------------------
II. ALTERNATIVE DISTRIBUTION INFORMATION
- --------------------------------------------------------------------------------
To direct distributions to a party other than the registered owner, complete the
information below.
Name of Firm (Bank or Brokerage):_______________________________________________
Account Name:___________________________________________________________________
Account Number:_________________________________________________________________
Address:________________________________________________________________________
City, State ZIP:________________________________________________________________
- --------------------------------------------------------------------------------
III. SUBSCRIPTION DOCUMENT
- --------------------------------------------------------------------------------
You as an individual or you on behalf of the subscribing entity are being
asked to complete this Subscription Document so a determination can be made as
to whether or not you (it) are qualified to purchase Units under applicable
federal and state securities laws.
YOUR ANSWERS TO THE QUESTIONS CONTAINED HEREIN MUST BE TRUE AND CORRECT IN
ALL RESPECTS, AND A FALSE REPRESENTATION BY YOU MAY CONSTITUTE A VIOLATION OF
LAW FOR WHICH A CLAIM FOR DAMAGES MAY BE MADE AGAINST YOU.
Your answers will be kept strictly confidential; however, by signing this
Subscription Document, you will be authorizing the Corporation to present a
completed copy of this Subscription Document to such parties as they may deem
appropriate in order to make certain that the offer and sale of the Units will
not result in a violation of the Securities Act of 1933, as amended, or of the
securities laws of any state.
This Subscription Document does not constitute an offer to sell or a
solicitation of an offer to buy Units or any other security.
ALL QUESTIONS MUST BE ANSWERED. If the appropriate answer is "None" or "Not
Applicable", please state so. Please print or type your answers to all questions
and attach additional sheets if necessary to complete your answers to any item.
Please initial any correction.
________________________________________________________________________________
INDIVIDUAL SUBSCRIBERS:
If the Units subscribed for are to be owned by more than one person, you and the
other co-subscriber must each complete a separate Subscription Document (except
if the co-subscriber is your spouse) and sign the Signature Page annexed hereto.
If your spouse is a co-subscriber, you must indicate your spouse's name and
social security number.
CORPORATIONS, PARTNERSHIPS, PENSION PLANS AND TRUSTS:
The information requested herein relates to the subscribing entity and not to
you personally (unless otherwise determined in the ACCREDITED INVESTOR STATUS
section).
2
<PAGE> 3
- --------------------------------------------------------------------------------
IV. ACCREDITED INVESTOR STATUS
- --------------------------------------------------------------------------------
IF YOU MEET ANY OF THE FOLLOWING TESTS, PLEASE CHECK THE APPROPRIATE
SPACES BELOW.
I. INDIVIDUAL ACCOUNTS
I certify that I am an "accredited investor" because:
A. _______ I had an individual income of more than $200,000 in each of the
two most recent calendar years, and I reasonably expect to have an
individual income in excess of $200,000 in the current calendar year; or
my spouse and I had joint income in excess of $300,000 in each of the two
most recent calendar years, and we reasonably expect to have a joint
income in excess of $300,000 in the current calendar year.
B. _______ I have an individual net worth, or my spouse and I have a joint
net worth, in excess of $1,000,000 (including home and personal
property).
For purposes of this Subscription Document, "individual income" means
"adjusted gross income" as reported for Federal income tax purposes, exclusive
of any income attributable to a spouse or to property owned by a spouse, and
increased by the following amounts: (i) the amount of any interest income
received which is tax-exempt under Section 103 of the Internal Revenue Code of
1986, as amended (the "Code"), (ii) the amount of losses claimed as a limited
partner in a limited partnership (as reported on Schedule E of form 1040), (iii)
any deduction claimed for depletion under Section 611 et seq. of the Code and
(iv) any amount by which income from long-term capital gains has been reduced in
arriving at adjusted gross income pursuant to the provisions of Sections 1202 of
the Internal Revenue Code as it was in effect prior to enactment of the Tax
Reform Act of 1986.
For purposes of this Subscription Document, "joint income" means, "adjusted
gross income," as reported for Federal income tax purposes, including any income
attributable to a spouse or to property owned by a spouse, and increased by the
following amounts: (i) the amount of any interest income received which is
tax-exempt under Section 103 of the Internal Revenue Code of 1896, as amended
(the "Code"), (ii) the amount of losses claimed as a limited partner in a
limited partnership (as reported on Schedule E of Form 1040), (iii) any
deduction claimed for depletion under Section 611 et seq. of the Code and (iv)
any amount by which income from long-term capital gains has been reduced in
arriving at adjusted gross income pursuant to the provisions of Section 1202 of
the Internal Revenue Code as it was in effect prior to enactment of the Tax
Reform Act of 1986.
For the purposes of the Subscription Document, "net worth" means (except as
otherwise specifically defined) the excess of total assets at fair market value,
including home and personal property, over total liabilities, including
mortgages and income taxes on unrealized appreciation of assets.
II. CORPORATIONS, PARTNERSHIPS, EMPLOYEE BENEFIT PLANS OR IRAS
A. Has the subscribing entity been formed for the specific purpose of
investing in the Units? [ ] YES [ ] NO
If your answer to question A is "No" CHECK whichever of the following
statements (1-5) is applicable to the subscribing entity. If your answer to
question A is "Yes" the subscribing entity must be able to certify to statement
(B) below in order to qualify as an "accredited investor".
The undersigned entity certifies that it is an "accredited investor"
because it is:
1. _______ an employee benefit plan within the meaning of Title I of the
Employee Retirement Income Security Act of 1974, provided that the investment
decision is made by a plan fiduciary, as defined in section 3(21) of such
Act, and the plan fiduciary is a bank, savings and loan association,
insurance company or registered investment adviser; OR
2. _______ an employee benefit plan within the meaning of Title I of the
Employee Retirement Income Security Act of 1974 that has total assets in
excess of $5,000,000; OR
3. _______ each of its shareholders, partners, or beneficiaries meets at
least one of the following conditions described above under INDIVIDUAL
ACCREDITED INVESTOR STATUS. Please also CHECK the appropriate space in that
section; OR (NOTE: INCOME STATEMENT MUST BE COMPLETED FOR EACH SHAREHOLDER,
PARTNER OR BENEFICIARY)
4. _______ the plan is a self directed employee benefit plan and the
investment decision is made solely by a person that meets at least one of the
conditions described above under INDIVIDUAL ACCREDITED INVESTOR STATUS; OR
(NOTE: INCOME STATEMENT MUST BE COMPLETED FOR EACH SUCH PERSON)
5. _______ a corporation, a partnership or a Massachusetts or similar
business trust with total assets in excess of $5,000,000.
B. If the answer to Question A above is "Yes", please certify the statement
below is true and correct:
_______ The undersigned entity certifies that it is an accredited investor
because each of its shareholders or beneficiaries meets at least one of the
following conditions described above under INDIVIDUAL ACCREDITED INVESTOR
STATUS. Please also CHECK the appropriate space in that section.
III. TRUST ACCOUNTS
A. Has the subscribing entity been formed for the specific purpose of
investing in the Units? [ ] YES [ ] NO
If your answer to question A is "No" CHECK whichever of the following statements
(1-3) is applicable to the subscribing entity. If your answer to question A is
"Yes" the subscribing entity must be able to certify to the statement (3) below
in order to qualify as an "accredited investor".
The undersigned trustee certifies that the trust is an "accredited investor"
because:
_______ 1) the trust has total assets in excess of $5,000,000 and the investment
decision has been made by a "sophisticated person"; OR
_______ 2) the trustee making the investment decision on its behalf is a bank as
defined in Section 3(a)(2) of the Act, a savings and loan association or other
institution as defined in Section 3(a)(5)(A) of the Securities Act, acting in
its fiduciary capacity; OR
_______ 3) the undersigned trustee certifies that the trust is an accredited
investor because the grantor(s) of the trust may revoke the trust at any time
and regain title to the trust assets and has (have) retained sole investment
control over the assets of the trust and the (each) grantor(s) meets at least
one of the following conditions described above under INDIVIDUAL ACCREDITED
INVESTOR STATUS. Please also CHECK the appropriate space in that section. (NOTE:
FOR EACH GRANTOR AN INCOME STATEMENT MUST BE COMPLETED)
3
<PAGE> 4
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------
V. INCOME STATEMENT - (ROUND OFF TO THE NEAREST $5,000)
- --------------------------------------------------------------------------------
Please specify the amount of your: [ ] Individual [ ] Joint [ ] Trust
[ ] Beneficiary [ ] Shareholder [ ] Partner
income (defined in page 2: Accredited Investor Status) in calendar years 1996
and 1997 and your projected income for 1998.
1996 $____________________
1997 $____________________
1998 $____________________ (projected)
Current occupation (position or title and duties):
Name of Business:____________________________________
Name of Employer:____________________________________ Telephone number (___)________-________
Former employment (if current employment is less than five years):
Name of Employer:____________________________________ Position or Title:_____________________
Nature of Duties:____________________________________ Period Employed:___________to__________
- --------------------------------------------------------------------------------
VI. INVESTMENT EXPERIENCE
- --------------------------------------------------------------------------------
The following information is to be provided by the individual making the
investment decision or the person acting on behalf of the corporation,
partnership, individual retirement account, employee benefit plan or trust.
1. Business or professional education (school, dates of attendance, degrees):
________________________________________________________________________________
________________________________________________________________________________
2. Details of any training or experience in financial, business or tax matters
not disclosed in Item 1 immediately above:
________________________________________________________________________________
________________________________________________________________________________
3. Please indicate the frequency of your investment in marketable securities:
[ ] Often [ ] Occasionally [ ] Seldom [ ] Never
4. Please state the approximate number and total dollar amount of the following
types of investments in which you have participated:
a. restricted (non-traded) stock or notes:
Number ___________________ Amount Invested: $ ___________________
b. private placements of securities sold in reliance upon non-public offering
exemption from registration under the Securities Act of 1933:
Number ___________________ Amount Invested: $ ___________________
5. Please initial the appropriate alternative:
_______ ALTERNATIVE ONE: I have such knowledge and experience in financial and
business matters and in private placement investments in particular that I am
capable of evaluating the merits and risks of an investment in the Units and do
not desire to use a purchaser representative in connection with evaluating such
merits and risks. I understand, however, that the Corporation may request that I
use a purchaser representative.
_______ ALTERNATIVE TWO: I intend to use the services of a purchaser
representative(s) in connection with evaluating the merits and risks of an
investment in the securities and hereby appoint such person(s) to act as my
purchaser representative(s) in connection with my proposed purchase of Units.
(PLEASE CONTACT THE CORPORATION FOR FURTHER INSTRUCTIONS.) Name of Purchaser
Representative If Alternative Two chosen:
_________________________________________________________ Telephone number (_____)__________-__________
</TABLE>
4
<PAGE> 5
- --------------------------------------------------------------------------------
VII. CERTIFICATIONS
- --------------------------------------------------------------------------------
I certify that the information contained herein above is complete and
accurate and may be relied on by the Corporation. I will notify the Corporation
promptly of any material change in any of such information.
Under penalties of perjury, I certify that (1) my taxpayer identification
number shown in this Subscription Document is correct and (2) I am not subject
to backup withholding because (a) I have not been notified that I am subject to
backup withholding as a result of a failure to report all interest and dividends
or (b) the Internal Revenue Service has notified me that I am no longer subject
to backup withholding. (If you have been notified that you are subject to backup
withholding and the Internal Revenue Service has not advised you that backup
withholding has been terminated, strike out item (2).)
BY SIGNING, I ACKNOWLEDGE THAT I HAVE CAREFULLY REVIEWED THE OFFERING MEMORANDUM
INCLUDED HEREWITH AND AM BOUND BY THE TERMS OF THIS SUBSCRIPTION DOCUMENT AND
SUBSCRIPTION SUPPLEMENT.
. . . . . . . . . . . . . . .
[THIS SPACE INTENTIONALLY LEFT BLANK]
5
<PAGE> 6
- --------------------------------------------------------------------------------
VIII. SIGNATURES
- --------------------------------------------------------------------------------
THE SUBSCRIPTION DOCUMENT CONTAINS VARIOUS STATEMENTS AND REPRESENTATIONS BY
SUBSCRIBERS AND SHOULD BE CAREFULLY REVIEWED IN ITS ENTIRETY BEFORE EXECUTING
THIS SIGNATURE PAGE.
I hereby certify that I have reviewed and am familiar with the terms of the
Subscription Document. THIS SUBSCRIPTION DOCUMENT INCORPORATES BY REFERENCE THE
FORM OF SUBSCRIPTION SUPPLEMENT ATTACHED AS AN EXHIBIT TO THE OFFERING
MEMORANDUM. I AGREE TO BE BOUND BY ALL OF THE TERMS AND CONDITIONS OF THIS
SUBSCRIPTION DOCUMENT AND THE SUBSCRIPTION SUPPLEMENT.
Dated_______________________________ 199_____
________________________________________________________________________________
Print name of individual subscriber, custodian, corporation, trustee
________________________________________________________________________________
Signature of individual subscriber, authorized person, trustee
________________________________________________________________________________
Print name of co-subscriber, authorized person, co-trustee if required by trust
instrument
________________________________________________________________________________
Signature of co-subscriber, authorized person, co-trustee if required by trust
instrument
________________________________________________________________________________
INVESTMENT AUTHORIZATION. The undersigned corporation, partnership, benefit plan
or IRA has all requisite authority to acquire the Units hereby subscribed for
and to enter into the Subscription Document, and further, the undersigned
officer, partner or fiduciary of the subscribing entity has been duly authorized
by all requisite action on the part of such entity to execute these documents on
its behalf. Such authorization has not been revoked and is still in full force
and effect.
Check Box: [ ] Yes [ ] No [ ] Not Applicable
- --------------------------------------------------------------------------------
IX. NOTARIZATION
- --------------------------------------------------------------------------------
STATE OF )
) ss.
COUNTY OF )
On _________________________________, 199____, before me,____________________
____________________________________, personally appeared ,
________________________________________________________________________________
[ ] personally known to me
[ ] proved to me on the basis of satisfactory evidence
to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
Signature of Notary
CAPACITY CLAIMED BY SIGNER:
[ ] Individual(s) [ ] Attorney-In-Fact
[ ] Partner(s) [ ] Subscribing Witness
[ ] Trustee(s) [ ] Guardian/Conservator
[ ] Corporate______________________ [ ] Other:_________________________
Officer(s)_____________________ ___________________________________
Title(s) ___________________________________
SIGNER IS REPRESENTING:
Name of Person(s) or Entity(ies):_______________________________________________
________________________________________________________________________________
Notary: Please fill in state, county, date and names of all persons signing and
affix notarial seal.
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<PAGE> 7
- --------------------------------------------------------------------------------
X. VERIFICATION OF ACCOUNT EXECUTIVE
- --------------------------------------------------------------------------------
I state that I am familiar with the financial affairs and investment
objectives of the investor named above and reasonably believe that a purchase of
the Units is a suitable investment for this investor and that the investor,
either individually or together with his or her purchaser representative,
understands the terms of and is able to evaluate the merits of this offering.
I acknowledge:
(a) that I have reviewed the Subscription Document, Subscription Supplement,
and attachments (if any) thereto;
(b) that the Subscription Document and attachments thereto have been fully
completed and executed by the appropriate party; and
(c) that the subscription will be deemed received by SI Technologies, Inc.
upon completion of the Subscription Document.
<TABLE>
<S> <C>
Broker/Dealer Account Executive
_________________________________________ _________________________________________
(Name of Broker/Dealer) (Signature)
_________________________________________ _________________________________________
(Street Address of AE Office) (Print Name)
_________________________________________ _________________________________________
(City of AE Office) (State) (Zip) (Representative I.D. Number)
(_____) _____________-_____________ _________________________________________
(Telephone Number of AE Office) (Date)
</TABLE>
7
<PAGE> 1
EXHIBIT 4.2
SUBSCRIPTION SUPPLEMENT
This Subscription Supplement (the "Subscription Supplement"),
containing terms applicable to the Subscription Document, has been incorporated
by reference into the Subscription Document accompanying the Private Placement
Memorandum of SI Technologies, Inc. dated March 16, 1998. Each investor should
therefore carefully review this Subscription Supplement before signing the
Subscription Document. Terms used herein and not otherwise defined shall have
the meanings ascribed to them in the Memorandum (as defined below).
1. Subscription For Units. I subscribe for the number of Units of SI
Technologies, Inc., a Delaware corporation (the "Company"), set forth in the
Subscription Document, priced at $25,000 per Unit.
2. Review of Memorandum. I HAVE CAREFULLY REVIEWED THE PRIVATE
PLACEMENT MEMORANDUM OF SI TECHNOLOGIES, INC., DATED MARCH 16, 1998, IN
CONNECTION WITH THE OFFERING OF UNITS AND ANY SUPPLEMENT(S) THERETO PROVIDED BY
THE COMPANY (COLLECTIVELY THE "MEMORANDUM"). I HAVE BEEN FURNISHED WITH AND HAVE
CAREFULLY READ THE DOCUMENTS REFERENCED IN THE MEMORANDUM AND I AM A SUITABLE
INVESTOR AS DESCRIBED IN THE MEMORANDUM.
3. Irrevocability of Subscription. I agree to pay for the Units in the
manner set forth in the Subscription Document. I agree that this subscription is
and shall be irrevocable, but my obligations hereunder will terminate if this
subscription is not accepted by the Company.
4. Illiquid Investment. I understand that investment in the Units is an
ILLIQUID INVESTMENT. In particular, I recognize that I must bear the economic
risk of investment in the Units for an indefinite period of time, since neither
the Shares, the Warrants nor the Warrant Shares have been registered under the
Securities Act of 1933 as amended (the "Securities Act") and therefore cannot be
sold unless either they are subsequently registered under the Securities Act or
an exemption from such registration is available and a favorable opinion of
counsel satisfactory to the Company to that effect is obtained (if requested by
the Company).
5. Consent to Legends. I consent to the affixing by the Company of such
legends on certificates representing the Shares, the Warrants and the Warrant
Shares as any applicable federal or state securities law may require from time
to time.
6. Subscriber's Representations and Warranties. I represent and warrant
to the Company that:
(a) The financial information provided in the Subscription
Document is complete, true and correct;
(b) I and my investment advisors, if any, have CAREFULLY
REVIEWED AND UNDERSTAND the risks of, and other considerations relating to, a
purchase of Units, including, but not limited to, the risks set forth under
"RISK FACTORS" in the Memorandum;
1
<PAGE> 2
(c) I and my investment advisors, if any, have been afforded
the opportunity to obtain any information necessary to verify the accuracy of
any representations or information set forth in the Memorandum and have had all
inquiries to the Company answered, and have been furnished all requested
materials, relating to the Company and the offering and sale of the Units and
anything else set forth in the Memorandum;
(d) Neither I nor my investment advisors, if any, have been
furnished any offering literature by the Company or any of its affiliates,
associates or agents other than the Memorandum, and the documents referenced
therein;
(e) I am acquiring the Units for which I am subscribing for my
own account, as principal, for investment and not with a view to the resale or
distribution of all or any part of the Shares, the Warrants or the Warrant
Shares;
(f) The undersigned, if a corporation, partnership, trust or
other form of business entity, (i) is authorized and otherwise duly qualified to
purchase and hold the Units, (ii) has obtained such additional tax and other
advice that it has deemed necessary, (iii) has its principal place of business
at its address set forth in this Subscription Document, and (iv) has not been
formed for the specific purpose of acquiring the Units (although this may not
necessarily disqualify the subscriber as a purchaser). The persons executing the
Subscription Document, as well as all other documents related to the offering of
Units contemplated by the Memorandum (the "Offering"), represent that they are
duly authorized to execute all such documents on behalf of the entity. (If the
undersigned is one of the aforementioned entities, it agrees to supply to the
Company any additional written information that may be required.);
(g) All of the information which I have furnished to the
Company or which is set forth in the Subscription Document (including this
Subscription Supplement) is correct and complete as of the date of the
Subscription Document. If any material change in this information should occur
prior to my subscription being accepted, I will immediately furnish the revised
or corrected information to the Company;
(h) I further agree to be bound by all of the terms and
conditions of the Offering described in the Memorandum; and
(i) I am the only person with a direct or indirect interest in
the Units subscribed for by the Subscription Document.
7. Certification of Information. I certify, to the best of my
information and belief, that the above information that I have supplied is true
and correct in all material respects.
8. Indemnification of Company. I agree to indemnify and hold harmless
the Company, The Boston Group, L.P. and their respective officers, directors,
agents, attorneys, accountants and affiliates from and against all damages,
losses, costs and expenses (including reasonable attorneys' fees) that they may
incur by reason of the failure of the undersigned to fulfill any of the terms or
conditions of this Subscription Supplement or the Subscription Document, or by
reason of any breach of the representations and warranties made by the
2
<PAGE> 3
undersigned herein or in the undersigned's related Subscription Document, or in
any document provided by the undersigned to the Company.
9. Nontransferability of Subscription. This subscription is not
transferable or assignable by me without the written consent of the Company.
10. Subscribers' Joint and Several Liability. If more than one person
is executing the Subscription Document, the obligations of each shall be joint
and several and the representations and warranties contained in this
Subscription Supplement and related Subscription Document shall be deemed to be
made by, and be binding upon, each of these persons and his or her heirs,
executors, administrators, successors and assigns.
11. Successors and Assigns. This subscription, upon acceptance by the
Company, shall be binding upon my heirs, executors, administrators, successors
and assigns.
12. Governing Law. This Subscription Supplement and related
Subscription Document shall be construed in accordance with and governed in all
respects by the laws of the State of Delaware.
13. Registration Rights. I acknowledge and agree that I will have the
registration rights set forth in the Registration Rights Agreement to be
executed by me and the Company with respect to the Shares and the Warrant Shares
and that other investors in the Offering will execute the Registration Rights
Agreement as well.
14. Lock Up. I acknowledge and agree that I shall be subject to a
lock-up agreement with the Dealer Manager restricting me from disposing of
Shares or Warrant Shares until the first anniversary of the initial closing of
the Offering without the Dealer Manager's prior written consent. Such "lock-up"
agreement shall be in form and substance satisfactory to the Dealer Manager.
Furthermore, any sales of Shares or Warrant Shares by any investor shall be
effected through the Dealer Manager or any other broker authorized by the Dealer
Manager as its broker in connection such sale and shall be subject to its
customary brokerage commissions in compliance with applicable regulations of the
National Association of Securities Dealers, Inc. and the Securities and Exchange
Commission. An appropriate legend shall be marked on the stock certificates
representing all Shares and Warrant Shares subject to such "lock-up" agreements.
3
<PAGE> 1
EXHIBIT 4.3
THIS WARRANT AND THE SHARES OF COMMON STOCK PURCHASABLE HEREUNDER HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933. SUCH WARRANTS AND SHARES MAY NOT BE
SOLD, OFFERED FOR SALE, TRANSFERRED OR HYPOTHECATED IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO SUCH SECURITIES UNDER SAID ACT
AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL SATISFACTORY
TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
SI TECHNOLOGIES, INC.
WARRANT
DATED: April ___, 1998
---------------
Holder:
Number of Warrants:
---------------
THIS CERTIFIES THAT Holder is the owner of the number of Warrants set
forth above of SI Technologies, Inc., a Delaware corporation (hereinafter called
the "Company"). Each Warrant entitles the registered holder (the "Holder") to
purchase one share of Common Stock of the Company ("Common Stock"). This Warrant
is issued in connection with an offering (the "Offering") by the Company of up
to 160 Units, each Unit consisting of 4,998 shares of Common Stock priced at
$5.00 per share and Warrants to purchase 1,000 shares of Common Stock at $.01
per Warrant ("Warrant Shares"), at an aggregate offering price of $25,000 per
Unit (the "Offering"), pursuant to the terms of that certain Private Placement
Memorandum, dated March 16, 1998 (the "Memorandum"), and is subject to the terms
of a Subscription Document between the Company and the Holder (the "Subscription
Document"), a form of which is included as part of such Memorandum.
1. Warrant to Purchase Common Stock. Each Warrant evidenced by this Certificate
shall constitute a Warrant to purchase one share of Company Common Stock at an
exercise price of $8.00 per share, subject to adjustment as set forth herein.
2. Certain Definitions. As used in this Warrant, the following terms shall have
the following respective meanings:
1
<PAGE> 2
"Act" means the Securities Act of 1933, as amended, or any similar
federal statute enacted hereafter, and the rules and regulations of the SEC
thereunder, all as the same shall be in effect from time to time.
"Affiliate" of any person means any person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such person. For purposes of this definition, "control," when used with respect
to any person means the power to direct the management and policies of such
person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Common Stock" means the common stock, par value $0.01 per share, of
the Company, and any other capital stock of the Company into which such common
stock may be converted or reclassified or that may be issued in respect of, in
exchange for or in substitution for, such common stock by reason of reason of
any stock splits, stock dividends, distributions, mergers, consolidations or
other like events.
"Company" means SI Technologies Inc., a Delaware corporation.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Holder" or "Holders" means each registered holder of this Warrant and
each holder of Common Stock issued pursuant to this Warrant; provided, however,
that any person who acquires any of the Warrant Shares in a distribution
pursuant to a registration statement filed by the Company under the Act shall
not be deemed a Holder.
"NASDAQ" means the Nasdaq Market.
"Person" means any individual, corporation, partnership, joint venture,
association, joint--stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Purchase Price" means $8.00 per share, subject to adjustment as set
forth in this Warrant.
"Register," "Registered" and "Registration" refer to a registration
effective by preparing and filing a registration statement in compliance with
the Act and the declaration or ordering of effectiveness of such registration
statement by the SEC.
"SEC" means the Securities and Exchange Commission.
"Transfer Agent" means Continental Stock Transfer & Trust Company, or
any duly appointed successor transfer agent for the Common Stock.
"Warrant Shares" means the shares of Common Stock issuable or issued
upon the exercise of this Warrant.
2
<PAGE> 3
3. Right to Exercise Warrants. The rights represented by this Warrant are
exercisable for two years from the date hereof; provided that the Company shall
have the right, upon sixty (60) days prior written notice, to redeem for $0.01
per Warrant all or any portion of this Warrant at any time after the first
anniversary of the date of issuance of the Warrant if (i) the Company has filed
a registration statement registering the Warrant Shares for resale (the
"Registration Statement"), (ii) the Registration Statement has been effective
during the ninety (90) day period immediately preceding the date that such
notice is given by the Company (the "Notice Date"), and (iii) the closing bid of
the Company's Common Stock quoted on NASDAQ or a national securities exchange
for each of the twenty (20) consecutive business days ending on a date no
earlier than five (5) days prior to the Notice Date is at least $10.00 per
share.
4. Exercise of Warrants. Subject to Paragraph 3 and the other provisions of this
Warrant, the rights represented by this Warrant may be exercised by (i)
surrender of this Warrant (with the purchase form at the end hereof properly
executed) at the principal executive office of the Company (or such other office
or agency of the Company as the Company may designate by notice in writing to
Holder at the address of Holder appearing on the books of the Company); (ii)
payment to the Company of the Purchase Price for the number of shares specified
in the above-mentioned purchase form together with applicable stock transfer
taxes, if any; and (iii) delivery to the Company of a statement by Holder (in a
form acceptable to the Company and its counsel) that such shares are being
acquired by Holder for investment and not with a view to their distribution or
resale except a sale pursuant to the Registration Statement. This Warrant shall
be deemed to have been exercised immediately prior to the close of business on
the date the Warrant is surrendered and payment is made in accordance with the
foregoing provisions of this Paragraph 4, and the person or persons in whose
name or names the certificates for Warrant Shares shall be issuable upon such
exercise shall become the holder or holders of record of such Warrant Shares at
that time and date. The certificates for the Warrant Shares so purchased shall
be delivered to Holder within a reasonable time, not exceeding three (3)
business days, after the rights represented by this Warrant shall have been so
exercised. If the Warrant is exercised prior to the effective date of a
registration statement to be filed by the Company under the terms of the
Registration Rights Agreement entered into between the Holder and the Company in
connection with the Offering (the "Registration Rights Agreement"), the Warrant
Shares shall bear a legend substantially similar to the following restrictive
legend:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
AND MAY NOT BE SOLD OR OFFERED FOR SALE UNLESS REGISTERED UNDER SAID ACT AND ANY
APPLICABLE STATE SECURITIES LAWS OR UNLESS THE COMPANY HAS RECEIVED AN OPINION
OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
If fewer than all of the Warrants represented by this Warrant are
exercised, this Warrant shall be surrendered and, subject to the provisions as
provided herein, a new Warrant of the same tenor and for the number of Warrants
that were not exercised shall be signed by the Company and delivered by the
Company to the person or persons entitled to receive the same.
3
<PAGE> 4
No service charge shall be required of a Holder for any registration of
transfer or exchange of this Warrant. The Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of this Warrant.
5. Assignment. This Warrant may not be transferred, sold, assigned or
hypothecated, except pursuant to a valid and effective registration statement or
if the Company has received from its counsel a written opinion to the effect
that registration of the Warrant is not necessary in connection with such
transfer, sale, assignment or hypothecation. Any such assignment shall be
effected by Holder by (i) executing the form of assignment at the end hereof;
(ii) surrendering the Warrant for cancellation at the office or agency of the
Company referred to in Paragraph 4 hereof, accompanied by the opinion of counsel
referred to above; and (iii) delivery to the Company of a statement by the
transferee Holder (in a form acceptable to the Company and its counsel) that
such Warrant is being acquired by such Holder for investment and not with a view
to its distribution or resale; whereupon the Company shall issue, in the name or
names specified by Holder (including Holder), new Warrants representing in the
aggregate rights to purchase the same number of Warrant Shares as are
purchasable under the Warrant surrendered. The term "Holder" shall be deemed to
include any person to whom this Warrant is transferred in accordance with the
terms herein. Notwithstanding anything contained in this Warrant to the
contrary, Holder is subject to a lock-up agreement with The Boston Group, L.P.
(the "Dealer Manager") restricting holder from disposing of the Warrant Shares
until the first anniversary of the initial closing of the Offering without the
Dealer Manager's consent. Furthermore, any sales of Warrant Shares by Holder
shall be effected through the Dealer Manager or any other broker authorized by
the Dealer Manager as its broker in connection such sale and shall be subject to
its customary brokerage commissions in compliance with applicable regulations of
the National Association of Securities Dealers, Inc. and the SEC. An appropriate
legend shall be marked on the stock certificates representing all Warrant Shares
subject to such "lock-up" agreements.
6. Registration of Warrant Shares. The Company has no obligation to register the
Warrant Shares except as provided in the Registration Rights Agreement.
7. Warrant Shares. The Company covenants and agrees that all Warrant Shares
which may be issued upon exercise hereof will, upon issuance, be duly and
validly issued, fully paid and non-assessable and no personal liability will
attach to the holder thereof and that upon issuance such shares shall be listed
on each national securities exchange, if any, or approved for trading on any
market on which any other shares of outstanding Common Stock of the Company are
then listed or approved for trading. The Company further covenants and agrees
that, during the periods within which this Warrant may be exercised, the Company
will at all times have authorized and reserved a sufficient number of shares of
Common Stock, free of preemptive rights, for issuance upon exercise of this
Warrant and all other Warrants.
8. No Stockholder Rights. This Warrant shall not entitle Holder to any voting
rights or other rights as a stockholder of the Company, including, without
limitation, the right to receive dividends or subscription rights, the right to
vote, to consent, to exercise any preemptive right, to receive any notice of
meetings of stockholders for the election of directors of the Company or
4
<PAGE> 5
any other matter or to receive any notice of any proceedings of the Company,
except as may be specifically provided for herein. To the extent such documents
are required to be sent by the Company to the holders of its outstanding Common
Stock, the Company shall provide Holder, within 15 days after it files them with
the SEC, copies of its annual report and of the information, documents and other
reports (or copies of such portions of any of the foregoing as the SEC may by
rules and regulations prescribe) which the Company may be required to file with
the SEC pursuant to Section 13 or 15(d) of the Exchange Act.
9. Adjustment of Rights. In the event that the outstanding shares of Common
Stock of the Company are at any time increased or decreased or changed into or
exchanged for a different number or kind of share or other security of the
Company or of another corporation through reorganization, merger, consolidation,
liquidation, recapitalization, stock split, combination of shares or stock
dividends payable with respect to such Common Stock, appropriate adjustments in
the number and kind of such securities then subject to this Warrant shall be
made effective as of the date of such occurrence so that the position of Holder
upon exercise will be the same as it would have been had Holder owned
immediately prior to the occurrence of such events the Warrant Shares subject to
this Warrant. Such adjustment shall be made successively whenever any event
listed above shall occur and the Company will notify Holder of the Warrant of
each such adjustment. Any fraction of a share resulting from any adjustment
shall be eliminated and the price per share of the remaining shares subject to
this Warrant adjusted accordingly. If, as a result of an adjustment made
pursuant to this paragraph, the Holder of any Warrant thereafter exercised shall
become entitled to receive shares of two or more classes of capital stock of the
Company, the Board of Directors (whose determination shall be conclusive) shall
determine the allocation of the adjusted Purchase Price between or among shares
of such classes of capital stock. This provision shall not limit the rights of
Holder as specified herein to exercise this Warrant prior to any of the events
described herein.
In the event of a complete liquidation of the Company, or a merger,
reorganization, consolidation of the Company with any other corporation in which
the Company is not the surviving corporation or the Company becomes a
wholly-owned subsidiary of another corporation, or the Company sells all or
substantially all of its assets (each such event referred to herein as a
"Corporate Event"), the Company shall provide written notice of the proposed
Corporate Event to all Holders of Warrants thirty-five (35) days prior to the
occurrence of any such Corporate Event, describing all material terms of the
proposed Corporate Event and providing the opportunity to all Holders to review
all relevant documents in connection with the Corporate Event.
The Company shall not be required to issue fractional shares of Common
Stock on the exercise of this Warrant. If any fraction of a share of Common
Stock would, except for the provisions of this Section, be issuable on the
exercise of any Warrant (or specified portion thereof), the Company shall pay to
Holder an amount in cash calculated by the Company to equal the then current
market value per share multiplied by such fraction computed to the nearest whole
cent. Holder, by acceptance of this Warrant, expressly waives any and all rights
to receive any fraction of a share of Common Stock or a stock certificate
representing a fraction of a share of Common Stock.
5
<PAGE> 6
10. Notices. Notices and other communications provided for herein shall be in
writing and may be given by mail, courier, confirmed telex or facsimile
transmission and shall, unless otherwise expressly required, be deemed given
when received, when delivery thereof is refused, or when mailed first class,
postage prepaid and addressed as provided herein, whichever is earlier. In the
case of Holder, such notices and communications shall be addressed to its
address as shown on the books maintained by the Company, unless Holder shall
notify the Company that notices and communications should be sent to a different
address (or telex or facsimile number) in which case such notices and
communications shall be sent to the address (or telex or facsimile number)
specified by Holder. Notices and communications to the Company shall be sent to:
SI Technologies, Inc., 4611 South 134th Place, Tukwila, Washington 98168, unless
Company notifies Holder that notices and communications shall be sent to another
address (or telex or facsimile number) specified by the Company in which case
such notices and communications shall be sent to the address (or telex or
facsimile number) specified by the Company.
11. Governing Law. This Warrant shall be governed by and construed in accordance
with the internal laws of Delaware.
12. Right of Action. All rights of action in respect of this Warrant are vested
in Holder, and Holder, without the consent of the holder of any other warrant,
may, on Holder's own behalf and for Holder's own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company
suitable to enforce, or otherwise in respect of, Holder's rights hereunder,
including the right to exercise, exchange or surrender for purchase such Warrant
in the manner provided herein.
13. Payment of Taxes. The Company will pay all taxes and other governmental
charges that may be imposed on the Company or on this Warrant or on any
securities deliverable upon exercise of this Warrant with respect thereto. The
Company will not be required, however, to pay any tax or other charge imposed in
connection with any transfer involved in the issue of any certificate for shares
of Common Stock or other securities underlying this Warrant or payment of cash
or other securities underlying this Warrant or payment of cash or other property
to any person other than Holder upon the exercise hereof and in case of such
transfer or payment, the Company shall not be required to issue any stock
certificate or security or pay any cash or distribute any property until any tax
or charge which the Company advises the Holder is due has been paid or it has
been established to the Company's satisfaction that no such tax or other charge
is due.
14. Mutilated, Destroyed, Lost and Stolen Warrant Certificates. If (a) this
Warrant is mutilated and it is surrendered to the Company or (b) the Company
receives evidence to its satisfaction of the destruction, loss or theft of this
Warrant, and there is delivered to the Company such security or indemnity as may
be reasonably required by the Company to save it harmless, then, in the absence
of notice to the Company that this Warrant has been acquired by a bona fide
purchaser, the Company shall execute and deliver, in exchange for the mutilated
Warrant or in lieu of the destroyed, lost or stolen Warrant, a new Warrant of
like tenor and for a like aggregate number of Warrants.
6
<PAGE> 7
Upon the issuance of any new Warrant under this Section 14, the Company
may require the payment by Holder of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and other expenses
(including the reasonable fees and expenses of counsel to the Company in
connection therewith).
Every new Warrant executed and delivered pursuant to this Section 14 in
lieu of any destroyed, lost or stolen Warrant shall constitute an original
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Warrant shall be at any time enforceable by anyone, and shall be entitled
to the benefits hereof equally and proportionately with any and all other
Warrant issued in connection with the Offering.
The provisions of this Section 14 are exclusive and shall preclude (to
the extent lawful) all other rights or remedies with respect to the replacement
of the mutilated, destroyed, lost or stolen Warrant.
15. Miscellaneous Rights. The rights of Holder upon the occurrence of the events
set forth in this Warrant are cumulative. If more than one such event shall
occur and the periods following the occurrence of such events and prior to the
closing of the transactions that are the subject of such events overlap, Holder
may exercise such rights arising therefrom as Holder may elect without any
condition imposed upon such exercise not contained in this Warrant.
Neither the Company nor any of its Affiliates involved in any proposed
transaction that is the subject of such an event shall have any obligation to
Holder to consummate any such proposed transaction once an agreement or
agreement in principle or decision to proceed with respect thereto is reached,
whether on the terms first proposed or as revised, or to include Holder in, or
apprise Holder of, any negotiations or discussions concerning any such proposed
transaction among the prospective parties thereto, except as expressly provided
herein.
16. Persons Benefiting. This Warrant shall be binding upon and inure to the
benefit of the Company and its respective successors, assigns, beneficiaries,
executors and administrators, and the Holder from time to time of the Warrant.
Nothing in this Warrant is intended or shall be construed to confer upon any
person, other than the Company and the Holder of this Warrant, any right, remedy
or claim under or by reason of this Warrant or any part hereof.
17. Counterparts. This Warrant may be executed in any number of counterparts,
each of which shall be deemed an original, but all of which together constitute
one and the same instrument.
18. Amendments. The Company may, without the consent of the Holder, by
supplemental agreement or otherwise, make any changes or corrections in this
Warrant that it shall have been advised by counsel (a) are required to cure any
ambiguity or to correct or supplement any provision herein which may be
defective or inconsistent with any other provision herein or (b) add to the
covenants and agreements of the Company for the benefit of Holder, or surrender
any rights or power reserved to or conferred upon the Company in this Warrant;
provided that, in the case of (a) or (b), such changes or corrections shall not
adversely affect the interests of Holder in any material respect. Except as
otherwise provided in this Warrant, this Warrant or any
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<PAGE> 8
provision hereof may be changed, waived, discharged or terminated only by a
statement in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought.
19. Headings. The descriptive headings of the several Sections of this Warrant
are inserted for convenience and shall not control or affect the meaning or
construction of any of the provisions hereof.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officers, and to be dated as of the date set forth above.
SI TECHNOLOGIES, INC., a Delaware
corporation
By:_____________________________________
Name: Rick A. Beets
Title: President
HOLDER:
________________________________________
Signature
________________________________________
Print or Type Name
________________________________________
Social Security Number or
Tax Identification Number
8
<PAGE> 9
PURCHASE FORM
(To be signed only upon exercise of Warrant)
1. The undersigned, the holder of the foregoing Warrant, hereby irrevocably
elects to exercise the purchase rights represented by such Warrant to exercise
___________ Warrants for, and to the purchase thereunder, __________ shares of
Common Stock of SI Technologies Inc., a Delaware corporation, and herewith makes
payment of $____________ thereof, and requests that the certificates for shares
of Common Stock be issued in the name(s) of, and delivered to _______________
whose address(es) is (are) _________________________.
2. The undersigned hereby certifies that the undersigned is an "Accredited
Investor" (as defined in Regulation D promulgated pursuant to the Securities Act
of 1933, as amended).
3. The undersigned acknowledges that if a registration statement covering the
shares to be issued upon the exercise of the Warrant is not effective as of the
date of the exercise, a legend in substantially the following form will be
placed on the certificates representing the Common Stock along with any other
legend required by any applicable state securities laws:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
AND MAY NOT BE SOLD OR OFFERED FOR SALE UNLESS REGISTERED UNDER SAID
ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR UNLESS THE COMPANY HAS
RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
Dated: ____________, ____
________________________________________
(Signature)
________________________________________
(Print or Type Name)
________________________________________
Address
________________________________________
Social Security Number or
Tax Identification Number
<PAGE> 10
TRANSFER FORM
(To be signed only upon transfer of Warrant)
For value received, the undersigned hereby sells, assigns, and
transfers unto _______________ the right to purchase shares of Common Stock
represented by _________________________ Warrants, and appoints
_________________________ attorney to transfer such rights on the books of
_________________________, with full power of substitution in the premises.
Dated: ____________, _____
________________________________________
Holder's Signature
________________________________________
(Print or Type Name)
________________________________________
Address
________________________________________
In the presence of:
________________________________________
(Signature)
________________________________________
(Print or Type Name)
<PAGE> 1
EXHIBIT 4.4
THIS WARRANT AND THE SHARES OF COMMON STOCK PURCHASABLE HEREUNDER HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933. SUCH WARRANTS AND SHARES MAY NOT BE
SOLD, OFFERED FOR SALE, TRANSFERRED OR HYPOTHECATED IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO SUCH SECURITIES UNDER SAID ACT
AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL SATISFACTORY
TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
SI TECHNOLOGIES, INC.
WARRANT
DATED: April 17, 1998
---------------
Holder: The Boston Group, L.P.
Number of Warrants: 79,968
---------------
THIS CERTIFIES THAT Holder is the owner of the number of Warrants set
forth above of SI Technologies, Inc., a Delaware corporation (hereinafter called
the "Company"). Each Warrant entitles the registered holder (the "Holder") to
purchase one share of Common Stock of the Company ("Common Stock"). This Warrant
is issued pursuant to Section 1.8.2 of the Dealer Manager Agreement dated as of
March 23, 1998 between the Company and the Holder.
1. Warrant to Purchase Common Stock. Each Warrant evidenced by this
Certificate shall constitute a Warrant to purchase one share of Company Common
Stock at an exercise price of $5.50 per share, subject to adjustment as set
forth herein.
2. Certain Definitions. As used in this Warrant, the following terms
shall have the following respective meanings:
"Act" means the Securities Act of 1933, as amended, or any similar
federal statute enacted hereafter, and the rules and regulations of the SEC
thereunder, all as the same shall be in effect from time to time.
"Affiliate" of any person means any person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such person. For purposes of this definition, "control," when used with respect
to any person means the power to direct the management and policies of such
person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
1
<PAGE> 2
"Common Stock" means the common stock, par value $0.01 per share, of
the Company, and any other capital stock of the Company into which such common
stock may be converted or reclassified or that may be issued in respect of, in
exchange for or in substitution for, such common stock by reason of reason of
any stock splits, stock dividends, distributions, mergers, consolidations or
other like events.
"Company" means SI Technologies Inc., a Delaware corporation.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Holder" or "Holders" means each registered holder of this Warrant and
each holder of Common Stock issued pursuant to this Warrant; provided, however,
that any person who acquires any of the Warrant Shares in a distribution
pursuant to a registration statement filed by the Company under the Act shall
not be deemed a Holder.
"NASDAQ" means the Nasdaq Market.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Purchase Price" means $5.50 per share, subject to adjustment as set
forth in this Warrant.
"Register," "Registered" and "Registration" refer to a registration
effective by preparing and filing a registration statement in compliance with
the Act and the declaration or ordering of effectiveness of such registration
statement by the SEC.
"SEC" means the Securities and Exchange Commission.
"Transfer Agent" means Continental Stock Transfer & Trust Company, or
any duly appointed successor transfer agent for the Common Stock.
"Warrant Shares" means the shares of Common Stock issuable or issued
upon the exercise of this Warrant.
3. Right to Exercise Warrants. The rights represented by this Warrant
are exercisable for five years from the date hereof.
4. Exercise of Warrants. (a) Subject to Paragraph 3 and the other
provisions of this Warrant, the rights represented by this Warrant may be
exercised by (i) surrender of this Warrant (with the purchase form at the end
hereof properly executed) at the principal executive office of the Company (or
such other office or agency of the Company as the Company may designate by
notice in writing to Holder at the address of Holder appearing on the books of
the Company); (ii) payment to the Company of the Purchase Price for the number
of shares specified in the above-mentioned purchase form together with
applicable stock transfer taxes, if any; or conversion of this Warrant as
provided in Paragraph 4(b) hereof and (iii) delivery to the Company of a
statement by Holder (in a form acceptable to the Company and its counsel) that
such shares are being acquired by Holder for investment and not with a view to
their distribution or resale except a sale pursuant to a registration statement
("Registration Statement"). This Warrant shall be deemed to have been exercised
immediately prior to the close of business on the date the Warrant is
surrendered and payment is made in accordance with the foregoing provisions of
this Paragraph 4, and the person or persons in whose name or names the
certificates for Warrant Shares shall
2
<PAGE> 3
be issuable upon such exercise shall become the holder or holders of record of
such Warrant Shares at that time and date. The certificates for the Warrant
Shares so purchased shall be delivered to Holder within a reasonable time, not
exceeding three (3) business days, after the rights represented by this Warrant
shall have been so exercised. If the Warrant is exercised prior to the effective
date of a registration statement to be filed by the Company under the terms of
the Registration Rights Agreement (as defined below), the Warrant Shares shall
bear a legend substantially similar to the following restrictive legend:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
AND MAY NOT BE SOLD OR OFFERED FOR SALE UNLESS REGISTERED UNDER SAID
ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR UNLESS THE COMPANY HAS
RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
If fewer than all of the Warrants represented by this Warrant are
exercised, this Warrant shall be surrendered and, subject to the provisions as
provided herein, a new Warrant of the same tenor and for the number of Warrants
that were not exercised shall be signed by the Company and delivered by the
Company to the person or persons entitled to receive the same.
No service charge shall be required of a Holder for any registration of
transfer or exchange of this Warrant. The Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of this Warrant.
(b) At the option of the Holder, to the extent the Holder could
otherwise exercise this Warrant, the Holder shall have the right to convert this
Warrant, in whole or in part, at any time and from time to time prior to the
expiration of this Warrant, by surrender of this Warrant and the above-mentioned
purchase form in accordance with the same procedures contemplated for exercise
of this Warrant, into Warrant Shares as provided in this Paragraph 4(b) (a "Net
Exercise"). Upon exercise of this conversion right (and without payment by the
Holder of the Purchase Price), Holder shall be entitled to receive that number
of Warrant Shares computed using the following formula:
X = Y (A-B)
-------
A
Where: X = The number of Warrant Shares to be issued to
Holder.
Y = The number of Warrant Shares purchasable
under this Warrant (at the date of such
calculation).
A = The "Current Market Price" (as defined
below) of one Warrant Share (at the date of
such calculations).
B = The Purchase Price (as adjusted to the date
of such calculation).
For the purposes of this Paragraph 4(b), the term "Current Market
Price" shall mean (i) if the Company's Common Stock is traded on the Nasdaq
National Market ("NNM") or on a national securities exchange, the per share
closing price of the Common Stock on the date of exercise of this Warrant or
(ii) if the Company's Common Stock is traded in the over-the-counter market and
not in the NNM or a national securities exchange, the average of the per share
closing bid prices of the Common Stock during
3
<PAGE> 4
the thirty (30) consecutive trading days immediately preceding the date in
question, as reported by the Nasdaq SmallCap Market (or an equivalent generally
accepted reporting service if quotations are not reported on the Nasdaq SmallCap
Market). The closing price referred to in clause (i) above shall be the last
reported sale price or, in case no such reported sale takes place on such day,
the average of the reported closing bid and asked prices, in either case in the
NNM or on the principal stock exchange on which the Common Stock is then listed.
For purposes of clause (ii) above, if trading in the Common Stock is not
reported by the Nasdaq SmallCap Market, the bid price referred to in said clause
shall be the lowest bid price as reported in the Nasdaq Electronic Bulletin
Board or, if not reported thereon, as reported in the "pink sheets" published by
Nasdaq, an if the Common Stock is not so reported, shall be determined by the
price of a share of Common Stock determined by the Company's Board of Directors
in good faith.
5. Assignment. This Warrant may not be transferred, sold, assigned or
hypothecated, except pursuant to a valid and effective registration statement or
if the Company has received from its counsel a written opinion to the effect
that registration of the Warrant is not necessary in connection with such
transfer, sale, assignment or hypothecation. Any such assignment shall be
effected by Holder by (i) executing the form of assignment at the end hereof;
(ii) surrendering the Warrant for cancellation at the office or agency of the
Company referred to in Paragraph 4 hereof, accompanied by the opinion of counsel
referred to above; and (iii) delivery to the Company of a statement by the
transferee Holder (in a form acceptable to the Company and its counsel) that
such Warrant is being acquired by such Holder for investment and not with a view
to its distribution or resale; whereupon the Company shall issue, in the name or
names specified by Holder (including Holder), new Warrants representing in the
aggregate rights to purchase the same number of Warrant Shares as are
purchasable under the Warrant surrendered. The term "Holder" shall be deemed to
include any person to whom this Warrant is transferred in accordance with the
terms herein.
6. Registration of Warrant Shares. The Company has no obligation to
register the Warrant Shares, except as provided in the Registration Rights
Agreement (the "Registration Rights Agreement") among the Company and the
purchasers of Units, as described and pursuant to that certain SI Technologies,
Inc. Private Placement Memorandum dated March 16, 1998. The Holder hereby
becomes a signatory to the Registration Rights Agreement subject to the
restrictions and benefits thereof as if Holder were a "Holder" as defined in the
Registration Rights Agreement and the Warrant Shares were "Warrant Shares" as
defined in the Registration Rights Agreement.
7. Warrant Shares. The Company covenants and agrees that all Warrant
Shares which may be issued upon exercise hereof will, upon issuance, be duly and
validly issued, fully paid and non-assessable and no personal liability will
attach to the holder thereof and that upon issuance such shares shall be listed
on each national securities exchange, if any, or approved for trading on any
market on which any other shares of outstanding Common Stock of the Company are
then listed or approved for trading. The Company further covenants and agrees
that, during the periods within which this Warrant may be exercised, the Company
will at all times have authorized and reserved a sufficient number of shares of
Common Stock, free of preemptive rights, for issuance upon exercise of this
Warrant and all other Warrants.
8. No Stockholder Rights. This Warrant shall not entitle Holder to any
voting rights or other rights as a stockholder of the Company, including,
without limitation, the right to receive dividends or subscription rights, the
right to vote, to consent, to exercise any preemptive right, to receive any
notice of meetings of stockholders for the election of directors of the Company
or any other matter or to receive any notice of any proceedings of the Company,
except as may be specifically provided for herein. To the
4
<PAGE> 5
extent such documents are required to be sent by the Company to the holders of
its outstanding Common Stock, the Company shall provide Holder, within 15 days
after it files them with the SEC, copies of its annual report and of the
information, documents and other reports (or copies of such portions of any of
the foregoing as the SEC may by rules and regulations prescribe) which the
Company may be required to file with the SEC pursuant to Section 13 or 15(d) of
the Exchange Act.
9. Adjustment of Rights. In the event that the outstanding shares of
Common Stock of the Company are at any time increased or decreased or changed
into or exchanged for a different number or kind of share or other security of
the Company or of another corporation through reorganization, merger,
consolidation, liquidation, recapitalization, stock split, combination of shares
or stock dividends payable with respect to such Common Stock, appropriate
adjustments in the number and kind of such securities then subject to this
Warrant shall be made effective as of the date of such occurrence so that the
position of Holder upon exercise will be the same as it would have been had
Holder owned immediately prior to the occurrence of such events the Warrant
Shares subject to this Warrant. Such adjustment shall be made successively
whenever any event listed above shall occur and the Company will notify Holder
of the Warrant of each such adjustment. Any fraction of a share resulting from
any adjustment shall be eliminated and the price per share of the remaining
shares subject to this Warrant adjusted accordingly. If, as a result of an
adjustment made pursuant to this paragraph, the Holder of any Warrant thereafter
exercised shall become entitled to receive shares of two or more classes of
capital stock of the Company, the Board of Directors (whose determination shall
be conclusive) shall determine the allocation of the adjusted Purchase Price
between or among shares of such classes of capital stock. This provision shall
not limit the rights of Holder as specified herein to exercise this Warrant
prior to any of the events described herein.
In the event of a complete liquidation of the Company, or a merger,
reorganization, consolidation of the Company with any other corporation in which
the Company is not the surviving corporation or the Company becomes a
wholly-owned subsidiary of another corporation, or the Company sells all or
substantially all of its assets (each such event referred to herein as a
"Corporate Event"), the Company shall provide written notice of the proposed
Corporate Event to all Holders of Warrants thirty-five (35) days prior to the
occurrence of any such Corporate Event, describing all material terms of the
proposed Corporate Event and providing the opportunity to all Holders to review
all relevant documents in connection with the Corporate Event.
The Company shall not be required to issue fractional shares of Common
Stock on the exercise of this Warrant. If any fraction of a share of Common
Stock would, except for the provisions of this Section, be issuable on the
exercise of any Warrant (or specified portion thereof), the Company shall pay to
Holder an amount in cash calculated by the Company to equal the then current
market value per share multiplied by such fraction computed to the nearest whole
cent. Holder, by acceptance of this Warrant, expressly waives any and all rights
to receive any fraction of a share of Common Stock or a stock certificate
representing a fraction of a share of Common Stock.
10. Notices. Notices and other communications provided for herein shall
be in writing and may be given by mail, courier, confirmed telex or facsimile
transmission and shall, unless otherwise expressly required, be deemed given
when received, when delivery thereof is refused, or when mailed first class,
postage prepaid and addressed as provided herein, whichever is earlier. In the
case of Holder, such notices and communications shall be addressed to its
address as shown on the books maintained by the Company, unless Holder shall
notify the Company that notices and communications should be sent to a different
address (or telex or facsimile number) in which case such notices and
communications shall be sent to the address (or telex or facsimile number)
specified by Holder. Notices and communications
5
<PAGE> 6
to the Company shall be sent to: SI Technologies, Inc., 4611 South 134th Place,
Tukwila, Washington 98168, unless Company notifies Holder that notices and
communications shall be sent to another address (or telex or facsimile number)
specified by the Company in which case such notices and communications shall be
sent to the address (or telex or facsimile number) specified by the Company.
11. Governing Law. This Warrant shall be governed by and construed in
accordance with the internal laws of Delaware.
12. Right of Action. All rights of action in respect of this Warrant
are vested in Holder, and Holder, without the consent of the holder of any other
warrant, may, on Holder's own behalf and for Holder's own benefit, enforce, and
may institute and maintain any suit, action or proceeding against the Company
suitable to enforce, or otherwise in respect of, Holder's rights hereunder,
including the right to exercise, exchange or surrender for purchase such Warrant
in the manner provided herein.
13. Payment of Taxes. The Company will pay all taxes and other
governmental charges that may be imposed on the Company or on this Warrant or on
any securities deliverable upon exercise of this Warrant with respect thereto.
The Company will not be required, however, to pay any tax or other charge
imposed in connection with any transfer involved in the issue of any certificate
for shares of Common Stock or other securities underlying this Warrant or
payment of cash or other securities underlying this Warrant or payment of cash
or other property to any person other than Holder upon the exercise hereof and
in case of such transfer or payment, the Company shall not be required to issue
any stock certificate or security or pay any cash or distribute any property
until any tax or charge which the Company advises the Holder is due has been
paid or it has been established to the Company's satisfaction that no such tax
or other charge is due.
14. Mutilated, Destroyed, Lost and Stolen Warrant Certificates. If (a)
this Warrant is mutilated and it is surrendered to the Company or (b) the
Company receives evidence to its satisfaction of the destruction, loss or theft
of this Warrant, and there is delivered to the Company such security or
indemnity as may be reasonably required by the Company to save it harmless,
then, in the absence of notice to the Company that this Warrant has been
acquired by a bona fide purchaser, the Company shall execute and deliver, in
exchange for the mutilated Warrant or in lieu of the destroyed, lost or stolen
Warrant, a new Warrant of like tenor and for a like aggregate number of
Warrants.
Upon the issuance of any new Warrant under this Section 14, the Company
may require the payment by Holder of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and other expenses
(including the reasonable fees and expenses of counsel to the Company in
connection therewith).
Every new Warrant executed and delivered pursuant to this Section 14 in
lieu of any destroyed, lost or stolen Warrant shall constitute an original
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Warrant shall be at any time enforceable by anyone.
The provisions of this Section 14 are exclusive and shall preclude (to
the extent lawful) all other rights or remedies with respect to the replacement
of the mutilated, destroyed, lost or stolen Warrant.
15. Miscellaneous Rights. The rights of Holder upon the occurrence of
the events set forth in this Warrant are cumulative. If more than one such event
shall occur and the periods following the occurrence of such events and prior to
the closing of the transactions that are the subject of such events
6
<PAGE> 7
overlap, Holder may exercise such rights arising therefrom as Holder may elect
without any condition imposed upon such exercise not contained in this Warrant.
Neither the Company nor any of its Affiliates involved in any proposed
transaction that is the subject of such an event shall have any obligation to
Holder to consummate any such proposed transaction once an agreement or
agreement in principle or decision to proceed with respect thereto is reached,
whether on the terms first proposed or as revised, or to include Holder in, or
apprise Holder of, any negotiations or discussions concerning any such proposed
transaction among the prospective parties thereto, except as expressly provided
herein.
16. Persons Benefiting. This Warrant shall be binding upon and inure to
the benefit of the Company and its respective successors, assigns,
beneficiaries, executors and administrators, and the Holder from time to time of
the Warrant. Nothing in this Warrant is intended or shall be construed to confer
upon any person, other than the Company and the Holder of this Warrant, any
right, remedy or claim under or by reason of this Warrant or any part hereof.
17. Counterparts. This Warrant may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together constitute one and the same instrument.
18. Amendments. The Company may, without the consent of the Holder, by
supplemental agreement or otherwise, make any changes or corrections in this
Warrant that it shall have been advised by counsel (a) are required to cure any
ambiguity or to correct or supplement any provision herein which may be
defective or inconsistent with any other provision herein or (b) add to the
covenants and agreements of the Company for the benefit of Holder, or surrender
any rights or power reserved to or conferred upon the Company in this Warrant;
provided that, in the case of (a) or (b), such changes or corrections shall not
adversely affect the interests of Holder in any material respect. Except as
otherwise provided in this Warrant, this Warrant or any provision hereof may be
changed, waived, discharged or terminated only by a statement in writing signed
by the party against which enforcement of the change, waiver, discharge or
termination is sought.
19. Headings. The descriptive headings of the several Sections of this
Warrant are inserted for convenience and shall not control or affect the meaning
or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officers, and to be dated as of the date set forth above.
SI TECHNOLOGIES, INC., a Delaware corporation
By: _________________________________________
Name:________________________________________
Title:_______________________________________
HOLDER: THE BOSTON GROUP, L.P.
7
<PAGE> 8
________________________________________
Signature
________________________________________
Print or Type Name
________________________________________
Social Security Number or
Tax Identification Number
8
<PAGE> 9
PURCHASE FORM
(To be signed only upon exercise of Warrant)
1. The undersigned, the holder of the foregoing Warrant, hereby
irrevocably elects to exercise the purchase rights represented by such Warrant
to exercise ___________ Warrants for, and to the purchase thereunder, __________
shares of Common Stock of SI Technologies Inc., a Delaware corporation, and
herewith makes payment of $____________ thereof, or elects to convert the
Warrant into such number of shares of Common Stock as determined pursuant to
Paragraph 4(b) of the Warrant, and requests that the certificates for shares of
Common Stock be issued in the name(s) of, and delivered to _______________ whose
address(es) is (are) _________________________.
2. The undersigned hereby certifies that the undersigned is an
"Accredited Investor" (as defined in Regulation D promulgated pursuant to the
Securities Act of 1933, as amended).
3. The undersigned acknowledges that if a registration statement
covering the shares to be issued upon the exercise of the Warrant is not
effective as of the date of the exercise, a legend in substantially the
following form will be placed on the certificates representing the Common Stock
along with any other legend required by any applicable state securities laws:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
AND MAY NOT BE SOLD OR OFFERED FOR SALE UNLESS REGISTERED UNDER SAID
ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR UNLESS THE COMPANY HAS
RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
Dated:____________, ____
________________________________________
(Signature)
________________________________________
(Print or Type Name)
________________________________________
Address
________________________________________
Social Security Number or
Tax Identification Number
<PAGE> 10
TRANSFER FORM
(To be signed only upon transfer of Warrant)
For value received, the undersigned hereby sells, assigns, and
transfers unto _______________ the right to purchase shares of Common Stock
represented by _________________________ Warrants, and appoints
_________________________ attorney to transfer such rights on the books of
_________________________, with full power of substitution in the premises.
Dated:____________, _____
________________________________________
Holder's Signature
________________________________________
(Print or Type Name)
________________________________________
Address
________________________________________
In the presence of:
________________________________________
(Signature)
________________________________________
(Print or Type Name)
<PAGE> 1
EXHIBIT 4.5
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of April 17, 1998, is
entered into by and between SI Technologies, Inc., a Delaware corporation (the
"Company"), and each person whose name appears on the signature page attached
hereto (individually a "Holder" and collectively, with the holders of other
securities issued in the Offering (as hereinafter defined), the "Holders").
WHEREAS, pursuant to a Subscription Document between the Company and
Holder (the "Subscription Document"), the Holder has offered to purchase Units
(the "Units") from the Company, each Unit consisting of 4,998 shares of Common
Stock priced at $5.00 per share (the "Original Shares") and Warrants (the
"Warrants") to purchase 1,000 shares of Common Stock at $.01 per Warrant, at an
aggregate offering price of $25,000 per Unit (the "Offering"), pursuant to the
terms of that certain Private Placement Memorandum, dated March 16, 1998.
WHEREAS, in order to induce the Holders to enter into the Subscription
Document and to purchase the Units, the Company and the Holders have agreed to
enter into this Agreement;
WHEREAS, it is intended by the Company and the Holders that this
Agreement shall become effective immediately upon the acquisition by the Holders
of the Units;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the Company and each of the Holders hereby agree as
follows:
1.Registration Rights
(a) Registration of Shares. The Company will file a registration
statement seeking to register all Original Shares and shares of Common Stock
which have been or are to be issued pursuant to the exercise of the Warrants
(the "Warrant Shares," and collectively with the Original Shares, the "Shares"),
on Form S-3 or other comparable form, with the Securities and Exchange
Commission (the "Commission") no later than 90 days after the completion of the
Offering (the "Registration Statement") and will cause such Registration
Statement to become effective within 150 days after the completion of the
Offering and to remain effective until all the Shares are sold or become capable
of being publicly sold without registration under the Securities Act of 1933, as
amended (the "Act") pursuant to Rule 144(k) promulgated thereunder.
(b) Cooperation with Company. The Holders will cooperate with the
Company in all respects in connection with this Agreement, including, timely
supplying all information reasonably requested by the Company necessary to
complete the Registration Statement in connection with the registration and sale
of the Shares.
2.Registration Procedures. In order to fulfill its obligations under this
Agreement to register Shares under the Act, the Company shall (except as
otherwise provided in this Agreement), as expeditiously as possible:
(a) Prepare and file with the Commission a Registration Statement and
such other documents, including a prospectus, as is necessary to permit the
public offering and sale of the Shares, and cause such Registration Statement to
become effective within 150 days after the completion of the Offering and to
remain effective until all the Shares are sold or become capable of being
publicly sold without registration under the Act pursuant to Rule 144(k)
promulgated thereunder.
<PAGE> 2
(b) Prepare and file with the Commission such amendments and
supplements to such Registration Statement and the prospectus used in connection
therewith, as may be necessary to keep such Registration Statement effective and
to comply with the provisions of the Act with respect to the sale or other
disposition of all securities covered by such Registration Statement whenever
the Holder or Holders of such securities shall desire to sell or otherwise
dispose of the same (including prospectus supplements with respect to the sales
of Shares or the Warrant Shares from time to time in connection with a
Registration Statement pursuant to Rule 415 of the Commission);
(c) Notify each Holder of Shares covered by such Registration
Statement, at any time when a prospectus relating thereto covered by such
Registration Statement is required to be delivered under the Act, of the
happening of any event of which it has knowledge as a result of which the
prospectus included in such Registration Statement, as then in effect, includes
any untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing; and
(d) Take such other actions as shall be reasonably requested by any
Holder to facilitate the registration and sale of the Shares; provided, however,
that the Company shall not be obligated to take any actions not specifically
required elsewhere herein which in the aggregate would cost in excess of $5,000.
(e) Take such steps as are necessary to list the Shares for trading on
the Nasdaq Market within the time frames provided in 2(a) above.
3.Sale of Shares. The Shares may be sold from time to time by the Holders, or by
pledgees, donees, transferees or other successors in interest. Such sales may be
made on one or more exchanges or in the over-the-counter-market, or otherwise at
prices and at terms then prevailing or at prices related to the then current
market price, or in negotiated transactions. The Shares may be sold by one or
more of the following: (a) a block trade in which the broker or dealer so
engaged will attempt to sell the Shares as agent but may position and resell a
portion of the block as principal to facilitate the transaction; (b) purchases
by a broker or dealer as principal and resale by such broker or dealer for its
account; (c) an exchange distribution in accordance with the rules of such
exchange; and (d) ordinary brokerage transactions and transactions in which the
broker solicits purchasers. In effecting sales, brokers or dealers engaged by
the Holders may arrange for other brokers or dealers to participate. Brokers or
dealers will receive commissions or discounts from Holders in amounts to be
negotiated immediately prior to the sale. Such brokers or dealers and any other
participating brokers or dealers may be deemed to be "underwriters" within the
meaning of the Act in connection with such sales. In addition, any Shares
covered by this Agreement which qualify for sale pursuant to Rule 144 may be
sold under Rule 144 rather than pursuant to this Agreement.
4.Expenses. All expenses, filing fees and other costs incurred by the Company in
any registration of the Holders' Shares under this Agreement shall be paid by
the Company, including, without limitation, printing expenses, fees and
disbursements of counsel for the Company, expenses of any audits to which the
Company shall agree or which shall be necessary to comply with governmental
requirements in connection with any such registration, all registration and
filing fees for the Holders' Shares under federal and state securities laws;
provided, however, the Company shall not be liable for (a) any discounts or
commissions to any underwriter or broker/dealer (such discounts and commissions
to be paid by Holders); (b) any stock transfer taxes incurred with respect to
Shares sold in the Offering; or (c) the fees and expenses of counsel for any
Holder.
5.Indemnification. In the event any Shares are included in a Registration
Statement pursuant to this Agreement:
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(a) Company Indemnity. The Company will indemnify each Holder, each of
its officers, directors and partners and such Holder's legal counsel and
independent accountants, and each person controlling such Holder within the
meaning of Section 15 of the Act, with respect to which registration,
qualification or compliance has been effected pursuant to this Agreement, and
each underwriter, if any, and each person who controls any underwriter within
the meaning of Section 15 of the Act, against all expenses, claims, losses,
damages and liabilities (or actions in respect thereof), including any of the
foregoing incurred in settlement of any litigation, based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
registration statement, prospectus, offering circular or other document, or any
amendment or supplement thereto, incident to any such registration,
qualification or compliance, or based on any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances in which they were made,
not misleading, or any violation by the Company of any rule or regulation
promulgated under the Act applicable to the Company and relating to action or
inaction required of the Company in connection with any such registration,
qualification or compliance, and will reimburse each such Holder, each of its
officers, directors and partners and such Holder's legal counsel and independent
accountants, and each person controlling such Holder, each such underwriter and
each person who controls any such underwriter, for any legal and any other
expenses reasonably incurred in connection with investigating, preparing or
defending any such claim, loss, damage, liability or action, provided that the
Company will not be liable in any such case to the extent that any such claim,
loss, damage, liability or expense arises out of or is based on any untrue
statement or omission or alleged untrue statement or omission, made in reliance
upon and in conformity with written information furnished to the Company by an
instrument duly executed by such Holder or underwriter and stated to be
specifically for use therein.
(b) Holder Indemnity. Each Holder will, if Shares held by such Holder
are included in the securities as to which such registration, qualification or
compliance is being effected, indemnify the Company, each of its directors and
officers and its legal counsel and independent accountants, each underwriter, if
any, of the Company's securities covered by such a registration statement, each
person who controls the Company or such underwriter within the meaning of
Section 15 of the Act, and each other such Holder, each of its officers and
directors and each person controlling such Holder within the meaning of Section
15 of the Act, against all expenses, claims, losses, damages and liabilities (or
actions in respect thereof), including any of the foregoing incurred in
settlement of any litigation, based on any untrue statement (or alleged untrue
statement) of a material fact contained in any such registration statement,
prospectus, offering circular or other document, or any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse the
Company, such Holders, such directors, officers, legal counsel, independent
accountants, underwriters or control persons for any legal or any other expenses
reasonably incurred in connection with investigating or defending any such
claim, loss, damage, liability or action, in each case to the extent, but only
to the extent, that such untrue statement (or alleged untrue statement) or
omission (or alleged omission) is made in such registration statement,
prospectus, offering circular or other document in reliance upon and in
conformity with written information furnished to the Company by an instrument
duly executed by such Holder and stated to be specifically for use therein;
provided, however, that the obligations of such Holders hereunder shall be
limited to an amount equal to the gross proceeds before expenses and commissions
to each such Holder of Shares sold as contemplated herein.
(c) Notice; Right to Defend. Each party entitled to indemnification
under this Section 5 (the "Indemnified Party") shall give notice to the party
required to provide indemnification (the "Indemnifying Party") promptly after
such Indemnified Party has actual knowledge of any claim as to which indemnity
may be sought, and shall permit the Indemnifying Party to assume the defense of
any such claim or any litigation resulting therefrom, provided that counsel for
the Indemnifying Party, who shall conduct the defense of such claim or
litigation, shall be approved by the Indemnified Party (whose approval shall not
be unreasonably withheld), and the Indemnified Party may participate in such
defense at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as
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provided herein shall not relieve the Indemnifying Party of its obligations
under this Agreement, except to the extent, but only to the extent, that the
Indemnifying Party's ability to defend against such claim or litigation is
impaired as a result of such failure to give notice. No Indemnifying Party, in
the defense of any such claim or litigation, shall, except with the consent of
each Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect to such claim or litigation.
(d) Contribution. If the indemnification provided for in this Agreement
is held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, liability, claim, damage or expense referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party thereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage or expense
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other
hand in connection with the statements or omissions which resulted in such loss,
liability, claim, damage or expense as well as any other relevant equitable
considerations. The relevant fault of the indemnifying party and the indemnified
party shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission to state a
material fact relates to information supplied by the indemnifying party or by
the indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
Notwithstanding the foregoing, the amount any Holder shall be obligated to
contribute pursuant to this Section 5(d) shall be limited to an amount equal to
the proceeds to such Holder of the Shares sold pursuant to the Registration
Statement which gives rise to such obligation to contribute (less the aggregate
amount of any damages which the Holder has otherwise been required to pay in
respect of such loss, claim, damage, liability or action or any substantially
similar loss, claim, damage, liability or action arising from the sale of such
Shares).
(e) Survival of Indemnity. The indemnification provided by this
Agreement shall be a continuing right to indemnification and shall survive the
registration and sale of any registrable securities by any person entitled to
indemnification hereunder and the expiration or termination of this Agreement.
6.Remedies.
(a) Time Is of Essence. The Company agrees that time is of the essence
for each of the covenants contained herein and that, in the event of a dispute
hereunder, this Agreement is to be interpreted and construed in a manner that
will enable the Holders to sell their Shares as quickly as possible after such
Holders have indicated to the Company that they desire their Shares to be
registered. Any material delay on the part of the Company not expressly
permitted under this Agreement shall be deemed a material breach of this
Agreement.
(b) Penalty. If the Company is in breach of its commitments under this
Agreement, each investor in the Offering shall be entitled to receive Warrants
to purchase an additional 200 shares of Common Stock on the same terms and
conditions and with the same rights as the Warrants being sold as part of the
Units for each 30 day period that the Registration Statement is not effective;
provided that, notwithstanding anything to the contrary in this Agreement, the
majority of the holders of Warrants may upon the request of the Company waive
the right of all investors to receive additional Warrants at any time during the
period commencing from the completion of the Offering and one year thereafter.
(c) Remedies Upon Default or Delay. The Company acknowledges that the
breach of any part of this Agreement may cause irreparable harm to a Holder and
that monetary damages alone may be inadequate. The Company therefore agrees that
the Holder shall be entitled to injunctive relief or such other applicable
remedy as a court of competent jurisdiction may provide. Nothing contained
herein will
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be construed to limit a Holder's right to any remedies at law, including
recovery of damages for breach of any part of this Agreement.
(d) Arbitration. Each Holder and the Company agree that any controversy
arising out of or relating to this Agreement or the Offering shall be settled by
arbitration in Seattle, Washington, in accordance with the rules then in effect
for the National Association of Securities Dealers, Inc. and judgment upon the
award rendered by the arbitrator(s) may be entered in any court having
jurisdiction thereof.
7.Notices.
(a) All communications under this Agreement shall be in writing and
shall be mailed by first class mail, postage prepaid, or telegraphed or telexed
with confirmation of receipt or delivered by hand or by overnight delivery
service,
(1) if to the Company, at:
SI Technologies, Inc.
4611 South 134th Place
Tukwila, Washington 98168
or at such other address as it may have furnished in writing to the Holders of
the Shares at the time outstanding, or
(2) if to any Holder of Shares, to the address
of such Holder as it appears in the stock or warrant ledger of the Company.
(b) Any notice shall be deemed given when received, when delivery
thereof is refused, or when mailed first class, postage pre-paid and addressed
as provided herein, whichever is earlier.
8.Entire Agreement/Successors and Assigns. This Agreement constitutes the full
and entire understanding and agreement between the parties regarding rights to
registration. Except as otherwise expressly provided herein, this Agreement
shall inure to the benefit of and be binding upon the successors and permitted
assigns of the Company and each of the Holders.
9.Amendment, Waiver and Consent. This Agreement may be amended, and the
observance of any term of this Agreement may be waived, but only with the
written consent of the Company and the Holders of securities representing a
majority of the Shares; provided, however, that no such amendment or waiver
shall take away any registration right of any Holder of Shares or reduce the
amount of reimbursable costs to any Holder of Shares in connection with any
registration hereunder without the consent of such Holder; further provided,
however, that without the consent of any other Holder of Shares, any Holder may
from time to time enter into one or more agreements amending, modifying or
waiving the provisions of this Agreement if such action does not adversely
affect the rights or interest of any other Holder of Shares. No delay on the
part of any party in the exercise of any right, power or remedy shall operate as
a waiver thereof, nor shall any single or partial exercise by any party of any
right, power or remedy preclude any other or further exercise thereof, or the
exercise of any other right, power or remedy. Each Holder hereby consents to
execution of this Agreement by all other investors in the Offering.
10.Counterparts. One or more counterparts of this Agreement may be signed by the
parties, each of which shall be an original but all of which together shall
constitute one and same instrument.
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11.Governing Law. This Agreement shall be construed in accordance with and
governed by the laws of the State of Delaware, without giving effect to
conflicts of law principles.
12.Invalidity of Provisions. If any provision of this Agreement is or becomes
invalid, illegal or unenforceable in any respect, the validity and
enforceability of the remaining provisions contained herein shall not be
affected thereby.
13.Headings. The headings in this Agreement are for convenience of reference
only and shall not be deemed to alter or affect the meaning or interpretation of
any provisions hereof.
IN WITNESS WHEREOF, undersigned have executed this Registration Rights
Agreement as of the 17th day of April, 1998.
COMPANY: HOLDER:
SI TECHNOLOGIES, INC.
By:___________________________________ ___________________________________
Rick A. Beets, President Signature of Holder
___________________________________
Print Name of Holder
___________________________________
___________________________________
Print Address of Holder
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