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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
March 16, 2000
AMERICAN TECHNOLOGY CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 0-24248 87-0361799
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(State or other jurisdiction of (Commission (I.R.S. Empl. Ident. No.)
incorporation or organization) File Number)
13114 Evening Creek Drive South, San Diego, California 92128
(Address of principal executive offices) (Zip Code)
(858) 679-2114
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
On March 16, 2000 the Company completed the private offering and sale for cash
at $20.00 per share, a total of 300,000 shares of Series C Preferred Stock, par
value $.00001 per share ("Preferred Stock") to a limited number of investors
("Preferred Stockholders") for an aggregate of $6,000,000. The dollar amount of
Preferred Stock, increased by $1.20 per share of Preferred Stock per annum and
other adjustments, may be converted at the election of a Preferred Shareholder
one or more times into fully paid and non-assessable shares of common stock,
$.00001 par value, of the Company at a conversion price which is the lower of
(i) $8.00 per share or (ii) 92% of the volume rated average market price of the
common stock for the five trading days prior to conversion, but in no event less
than $5.75 per share. The conversion price cannot be lower than $8.00 per share
prior to August 31, 2000. The shares of Preferred Stock may be called by the
Company for conversion if the common stock market price exceeds $20.00 per share
for ten consecutive trading days and certain conditions are met. The Preferred
Stock will be subject to mandatory conversion on March 31, 2003, subject to
certain conditions.
Each purchaser was also granted a warrant to purchase one common share of the
Company at $11.00 per share until March 31, 2003 ("Warrant") for each share of
Preferred Stock (aggregate Warrants exercisable into 300,000 shares). These
securities were offered and sold without registration under the Securities Act
of 1933, as amended (the "Act"), in reliance upon the exemption provided by Rule
506 of Regulation D thereunder, and an appropriate legend was placed on the
Preferred Stock and Warrant and will be placed upon the shares issuable upon
conversion of the Preferred Stock or exercise of the Warrants unless registered
under the Act prior to issuance. The Company has agreed to file a registration
statement covering the stock issuable upon conversion of the Preferred Stock and
exercise of the Warrant.
Net proceeds from the sale of Preferred Stock of approximately $5,915,000 are
intended primarily for working capital to continue the Company's efforts to
develop audio technologies. There can be no guarantee that the Company will
successfully develop or exploit its various technologies. At March 31, 2000,
the Company had 11,863,914 common shares issued and outstanding.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of businesses acquired.
None
(b) Pro forma financial information.
None
(c) Exhibits
3.1.5 Corrected Certificate of Designation of Series C Preferred Stock
filed with Delaware on April 19, 2000.
4.9 Form of Stock Purchase Warrant exercisable at $11.00 per share until
March 31, 2003 granted to thirty six investors for an aggregate of 300,000
common shares.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AMERICAN TECHNOLOGY CORPORATION
Date: April 19, 2000 By: /s/ Renee Warden
---------------------------------------
Renee Warden
Chief Accounting Officer, Treasurer and
Secretary
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EXHIBIT 3.1.5
CORRECTED CERTIFICATE OF DESIGNATION
OF
SERIES C PREFERRED STOCK
OF
AMERICAN TECHNOLOGY CORPORATION,
A DELAWARE CORPORATION
------------------------
PURSUANT TO SECTIONS 103(F) AND 151 OF THE
GENERAL CORPORATION LAW OF THE STATE OF DELAWARE
-------------------------
American Technology Corporation, a Delaware corporation (the
"Corporation"), does hereby certify that:
Pursuant to authority vested in the Board of Directors of the Corporation
(the "Board of Directors" or the "Board") by the Certificate of Incorporation,
as amended, of the Corporation, the Board of Directors adopted a resolution
providing for the creation of a series of the Corporation's Preferred Stock,
$.00001 par value, which series was designated "Series C Preferred Stock." The
Corporation on March 15, 2000, filed with the Delaware Secretary of State its
"Certificate of Designation of Series C Preferred Stock" dated March 13, 2000
(the "Certificate of Designation").
Due to inadvertence resulting from clerical error, the Certificate of
Designation contains an error which now requires correction by this instrument.
The error was in paragraph (b) of Section 5 (Conversion Rights), which
incorrectly defined component (ii) of "Conversion Value" as "an amount which
accrues from the Original Issue Date at a rate of $0.60 per annum . . . ." The
rate of accrual should have been $1.20 per annum.
The Corporation now wishes, pursuant to Section 103(f), to file with the
Delaware Secretary of State a Corrected Certificate of Designation by setting
forth the entire Certificate of Designation in corrected form. This instrument
is not a "certificate of correction" as such term is used in Section 103(f).
Following is the entire text of the Certificate of Designation in corrected
form:
I. The name of the corporation is American Technology Corporation.
II. The Corporation certifies that pursuant to the authority contained in
its Certificate of Incorporation (the "Certificate of Incorporation") and in
accordance with the provisions of Section 151 of the General Corporation Law of
the State of Delaware, the Board of Directors
1.
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of the Corporation adopted the following resolution, which resolution remains in
full force and effect on the date hereof:
RESOLVED, that there is hereby established a series of authorized preferred
stock having a par value of $.00001 per share, which series shall be designated
as "Series C Preferred Stock," shall consist of 300,000 shares and shall have
the following voting powers, preferences and relative, participating, optional
and other special rights, and qualifications, limitations and restrictions
thereof as follows:
1. DESIGNATION AND AMOUNT. The designation of the series of Preferred Stock
shall be "Series C Preferred Stock," par value $.00001 per share (the "Series C
Preferred Stock"). The number of authorized shares of Series C Preferred Stock
shall be 300,000. The Series C Preferred Stock shall have an initial issue price
of $20.00 per share (the "Original Issue Price"). The date on which any shares
of Series C Preferred Stock are first issued is referred to herein as the
"Original Issue Date."
2. DIVIDENDS. The holders of record of shares of Series C Preferred Stock shall
be entitled to receive, on an as-if-converted to Common Stock basis, when, as
and if a cash dividend on the Corporation's common stock, par value $.00001 per
share (the "Common Stock"), is declared by the Board of Directors, out of funds
legally available therefor, a cash dividend at a per share rate equal to six
percent (6%) per annum of the Liquidation Amount (as defined in 3(a) hereof),
payable in preference and priority to any payment of any dividend on Common
stock of the Corporation for such year.
3. LIQUIDATION.
(a) Preference Upon Liquidation, Dissolution or Winding Up. In the event of
any liquidation, dissolution or winding up of the affairs of the Corporation
(any or all of such events, a "liquidation"), whether voluntary or involuntary,
subject to the prior preferences and other rights of any Senior Stock (as
defined below), if any, the holders of shares of Series C Preferred Stock then
outstanding shall be entitled pari passu as if members of a single class of
securities with the holders of any Parity Stock (as defined below), if any, to
be paid out of the assets of the Corporation before any payment shall be made to
the holders of Junior Stock (as defined below) an amount per share equal to the
Conversion Value (as defined in Section 5(a) below), plus any declared but
unpaid dividends (the "Liquidation Amount"). Except as provided in this Section
3(a), holders of Series C Preferred Stock shall not be entitled to any
distribution in the event of liquidation, dissolution or winding up of the
affairs of the Corporation. The term "Junior Stock" shall mean Common Stock or
any other class or series of stock ranking junior to the Series C Preferred
Stock in respect of the right to receive dividends or the right to participate
in any distribution upon liquidation, the term "Senior Stock" shall mean any
class or series of stock of the Corporation authorized before the date of
issuance of the Series C Preferred Stock ranking senior to the Series C
Preferred Stock in respect of the right to receive dividends or the right to
participate in any distribution upon liquidation, and the term "Parity Stock"
shall mean any class or series of stock of the Corporation authorized after the
date of issuance of the Series C
2.
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Preferred Stock ranking on a parity with the Series C Preferred Stock in respect
of the right to receive dividends or the right to participate in any
distribution upon liquidation.
(b) MERGER OR SALE OF ASSETS. A merger of the Corporation in which holders
of more than 50% of the outstanding Common Stock of the Corporation before the
merger do not hold more than 50% of the outstanding Common Stock of the
Corporation after the merger, or a sale of all or substantially all of the
Corporation's assets, shall be deemed to be a liquidation for purposes of this
Section 3; provided, however, that a merger, consolidation or reorganization
where the Corporation is the surviving entity, or a merger of the Corporation
into a wholly-owned subsidiary shall not be deemed a liquidation.
(c) INSUFFICIENT ASSETS. If, upon any liquidation of the Corporation, the
assets of the Corporation are insufficient to pay the holders of shares of the
Series C Preferred Stock and any Parity Stock, if any, then outstanding the full
amount to which they shall be entitled, such assets shall be distributed to each
holder of the Series C Preferred Stock and Parity Stock, if any, pro rata based
on the number of shares of Common Stock into which the Series C Preferred Stock
and Parity Stock, if any, held by each is convertible.
(d) RIGHTS OF OTHER HOLDERS. In the event of any liquidation, after payment
shall have been made to the holders of the Series C Preferred Stock and Parity
Stock, if any, of all preferential amounts to which they shall be entitled, the
holders of shares of Junior Stock and other capital stock of the Corporation
shall receive such amounts as to which they are entitled by the terms thereof.
4. VOTING RIGHTS.
(a) VOTING. Each holder of shares of Series C Preferred Stock shall be
entitled to one (1) vote for each share of Common Stock then issuable upon
conversion of each share of Series C Preferred Stock thereof held on any matter
submitted to the Corporation's stockholders for their approval or consent.
Except as otherwise required by law or expressly provided herein, the holders of
the Series C Preferred Stock shall vote equally with the shares of Common Stock
of the Company and not as a separate class on any matter to voted upon by the
stockholders of the Company.
(b) CERTIFICATE OF INCORPORATION; CERTAIN STOCK. The affirmative vote or
consent of the holders of a majority of the outstanding shares of Series C
Preferred Stock, voting separately as a class, will be required for (i) any
amendment, alteration, or repeal, whether by merger or consolidation or
otherwise, of the Corporation's Certificate of Incorporation if the amendment,
alteration, or repeal materially and adversely affects the powers, preferences,
or special rights of the Series C Preferred Stock, (ii) any amendment,
alteration, or repeal of this Certificate of Designations, or (iii) the creation
or issuance of any Senior Stock; provided, however, that any increase in the
authorized preferred stock of the Corporation or the creation and issuance of
any Junior Stock shall not be deemed to affect materially and adversely such
powers, preferences or special rights and any such increase or creation and
issuance may be made without any such vote by the holders of the Series C
Preferred Stock, except as otherwise required by law.
3.
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5. Conversion Rights.
(a) Optional Conversion of Series C Preferred Stock. The holder of any
shares of Series C Preferred Stock shall have the right, at such holder's
option, at any time or from time to time to convert any or all of such holder's
shares of Series C Preferred Stock into such number of fully paid and
nonassessable shares of Common Stock (the "Conversion Shares") as determined for
each share of Series C Preferred Stock by dividing the Conversion Value (as
defined below) by the Conversion Price (as defined below). The "Conversion
Value" per share means, as of any date, the sum of (i) $20.00; plus any accrued
but unpaid dividends, provided, however, that if the registration statement (the
"Registration Statement") required to be filed by the Company pursuant to
Section 6.2 of that certain Series C Preferred Stock and Warrant Purchase
Agreement between the Corporation and the original holders of shares of Series C
Preferred Stock is not declared effective by the Securities and Exchange
Commission (the "SEC") by July 31, 2000, then such $20.00 amount shall be
increased by one percent (1%) for the first thirty (30) day period after July
31, 2000 (pro-rated for any period less than 30 days) and by an additional three
percent (3%) for each thirty (30) day period after July 31, 2000 (pro-rated for
any period less than 30 days) until either such Registration Statement is
declared effective by the SEC or until December 31, 2000 (whichever occurs
earlier), plus (ii) an amount which accrues from the Original Issue Date at a
rate of $1.20 per annum, computed on the basis of a 360-day year to the date of
conversion. The "Conversion Price" shall be the lesser of (i) $8.00 per share
(as adjusted for any stock splits, reorganizations, dividends, recapitalizations
and the like), or (ii) ninety-two percent (92%) of the volume weighted average
price of the Corporation's Common Stock from the hours of 9:30 am to 4:00 pm on
the NASDAQ as quoted on the principal exchange or market on which such
securities are traded (the "Market Price") for the five (5) trading days
immediately preceding the date of conversion for which there are reported
transactions in the Common Stock; provided, however, that in no event shall the
Conversion Price be less than $5.75 per share; and provided, further, that no
such conversion shall be made prior to August 31, 2000 at a Conversion Price of
less than $8.00 per share (as adjusted for any stock splits, reorganizations,
dividends, recapitalizations and the like). Notwithstanding anything to the
contrary set forth above, each such conversion at the option of the holder
pursuant to this Section 5(a) shall cover at least the total number of shares of
Series C Preferred Stock then held by such holder or a number of shares of
Series C Preferred Stock having an aggregate Conversion Value of at least
$50,000. The Conversion Shares and the Conversion Price are subject to certain
adjustments as set forth herein, and the terms Conversion Shares and Conversion
Price as used herein shall as of any time be deemed to include all such
adjustments to be given effect as of such time in accordance with the terms
hereof.
Upon the exercise of the option of the holder of any shares of Series
C Preferred Stock to convert Series C Preferred Stock into Common Stock, the
holder of such shares of Series C Preferred Stock to be converted shall
surrender the certificates representing the shares of Series C Preferred Stock
so to be converted in the manner provided in Section 5(d) below. Immediately
following such conversion, the rights of the holders of the Series C Preferred
Stock that has been converted (other than the right to receive dividends unpaid
as of the date of such conversion) shall cease and the persons entitled to
receive the Common Stock upon the conversion of Series C Preferred Stock shall
be treated for all purposes (other than the right to
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receive dividends unpaid as of the date of such conversion) as having become the
owners of such Common Stock.
(b) AUTOMATIC CONVERSION. Each remaining outstanding share of Series C
Preferred Stock shall be automatically converted into shares of Common Stock on
March 31, 2003 in accordance with the provisions of Section 5(a) hereof.
Pursuant to this Section 5(b), on the Conversion Date (as defined below), all
outstanding shares of Series C Preferred Stock shall be converted into that
number of shares of Common Stock as determined in accordance with Section 5(a)
hereof as if the conversion of such number of shares of Series C Preferred Stock
were made by the holders thereof in accordance therewith without any further
action on the part of such holders.
(c) CONVERSION AT OPTION OF CORPORATION. If for any ten (10) consecutive
trading days the Market Price of the Corporation's Common Stock is at least
$20.00 per share (as adjusted for stock splits, reorganizations, dividends,
recapitalizations and the like), then at any time within ten (10) business days
after the end of such ten (10) trading day period, the Corporation shall have
the right to require the conversion of all outstanding shares of Series C
Preferred Stock into shares of Common Stock in accordance with the provisions of
Section 5(a) hereof; provided, however, in the event that the Corporation elects
to convert shares of Series C Preferred Stock to Common Stock pursuant to the
terms of this Section 5(c) prior to March 31, 2001, the Corporation shall only
be able to require such conversion if a Registration Statement (as defined in
Section 5(a)) filed with the SEC is then effective. For purposes of this Section
5(c), if on any date there shall be no reported closing bid price, the "Market
Price" on such date shall be the closing bid price on the date next preceding
such date on which a closing bid price for such security has been reported.
Pursuant to this Section 5(c), on the Conversion Date (as defined below), all
outstanding shares of Series C Preferred Stock shall be converted into that
number of shares of Common Stock as determined in accordance with Section 5(a)
hereof as if the conversion of such number of shares of Series C Preferred Stock
were made by the holders thereof in accordance therewith without any further
action on the part of such holders.
(d) DELIVERY OF STOCK CERTIFICATES. The holder of any shares of Series C
Preferred Stock may exercise the optional conversion right pursuant to Section
5(a) above by delivering to the Corporation or its duly authorized transfer
agent during regular business hours at the office of the Corporation the
certificate or certificates for the shares of Series C Preferred Stock to be
converted, duly endorsed or assigned either in blank or to the Corporation (if
required by it), accompanied by written notice (the "Conversion Notice") stating
that such holder elects to convert such shares of Series C Preferred Stock and
shall provide a certificate to the Corporation or its duly authorized transfer
agent as to the date of such conversion. Upon the occurrence of an automatic
conversion pursuant to Section 5(b) above or conversion at the option of the
Corporation pursuant to Section 5(c) above, the Corporation shall deliver notice
to each holder of Series C Preferred Stock and the holder of any shares of
Series C Preferred Stock shall deliver to the Corporation at the office of the
Corporation the certificate or certificates for all shares of Series C Preferred
Stock then held by such holder, duly endorsed or assigned either in blank or to
the Corporation (if requested by it). Conversion shall be deemed to have been
effected (1) in the case of an optional conversion pursuant to Section 5(a), on
the date when the aforesaid delivery
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of the Conversion Notice is made if such day is a business day and otherwise on
the business day following the date of the aforesaid delivery, and (2) in the
case of an automatic conversion pursuant to Section 5(b) on March 31 2003, or
(3) in the case of conversion at the option of the Corporation pursuant to
Section 5(c), upon the date of the notice, and in each case such date is
referred to herein as the "Conversion Date." As promptly as practicable
thereafter, the Corporation, through its transfer agent, if any, shall issue and
deliver to or upon the written order of such holder, to the place designated by
such holder, a certificate or certificates for the number of full shares of
Common Stock to which such holder is entitled and a check or cash in respect of
any fractional interest in a share of Common Stock, as provided below; provided,
however, that in the case of a conversion in connection with liquidation, no
such certificates need be issued. The person in whose name the certificate or
certificates for Common Stock are to be issued shall be deemed to have become
the stockholder of record in respect of such Common Stock on the applicable
Conversion Date unless the transfer books of the Corporation are closed on that
date, in which event such holder shall be deemed to have become the stockholder
of record in respect of such Common Stock on the next succeeding date on which
the transfer books are open, but the Conversion Value and the Conversion Price
shall be that in effect on the Conversion Date. Upon conversion of only a
portion of the number of shares covered by a stock certificate representing
shares of Series C Preferred Stock surrendered for conversion, the Corporation
shall issue and deliver to or upon the written order of the holder of the stock
certificate so surrendered for conversion, at the expense of the Corporation, a
new stock certificate covering the number of shares of Series C Preferred Stock
representing the unconverted portion of the certificate so surrendered. Any
transfer taxes applicable to the above described transactions shall be paid by
such transferee. The Corporation shall not be required to pay any tax which may
be payable in respect of any transfer involved in the issuance and delivery of
Common Stock or the reissuance of the Preferred Stock in a name other than that
in which the shares of Series C Preferred Stock so converted were registered,
and no such issuance or delivery shall be made unless and until the person
requesting such issuance has paid to the Corporation the amount of any such tax
or has established to the satisfaction of the Corporation that such tax has been
paid.
(e) NO FRACTIONAL SHARES OF COMMON STOCK.
(i) No fractional shares of Common Stock shall be issued upon conversion
of shares of Series C Preferred Stock and in lieu thereof, the Corporation shall
pay to the holder of such fractional share interest cash in respect of such
fractional interest in an amount equal to the Market Price on the Conversion
Date multiplied by such fractional interest. The holders of fractional interests
shall not be entitled to any rights as stockholders of the Corporation in
respect of such fractional interests. In determining the number of shares of
Common Stock and the payment, if any, in lieu of fractional shares that a holder
of Series C Preferred Stock shall receive, the total number of shares of Series
C Preferred Stock surrendered for conversion by such holder shall be aggregated.
(ii) On the date, if any, on which dividends are paid in full to all
holders of Series C Preferred Stock following the optional conversion pursuant
to Section 5(a) of all or any portion of the Series C Preferred Stock, the
Corporation shall pay any dividends on such converted Series C Preferred Stock
to the date of such conversion. Dividends, if any, with
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respect to all shares converted pursuant to Section 5(b) or 5(c) hereof shall be
paid in full on the Conversion Date out of funds legally available therefor.
(f) CHANGES IN COMMON STOCK. If any capital reorganization or
reclassification of the capital stock of the Corporation, or consolidation or
merger of the Corporation with another corporation, or the sale, transfer or
other disposition of all or substantially all of its assets to another
corporation for cash or stock of such other corporation, shall be effected,
then, as a condition of such reorganization, reclassification, consolidation,
merger, sale, transfer or other disposition, lawful and adequate provision shall
be made whereby each holder of Series C Preferred Stock shall thereafter have
the right to purchase and receive upon the basis and upon the terms and
conditions herein specified and in lieu of the shares of the Common Stock of the
Corporation immediately theretofore issuable upon conversion of the Series C
Preferred Stock, such shares of stock, securities or properties as may be
issuable or payable with respect to or in exchange for a number of outstanding
shares of such Common Stock equal to the number of shares of such Common Stock
immediately theretofore issuable upon conversion of the Series C Preferred Stock
had such reorganization, reclassification, consolidation, merger, sale, transfer
or other disposition not taken place, and in any such case appropriate
provisions shall be made with respect to the rights and interests of each holder
of Series C Preferred Stock to the end that the provisions hereof (including
without limitation provisions for adjustment of the Conversion Price) shall
thereafter be applicable, as nearly equivalent as may be practicable in relation
to any shares of stock, securities or properties thereafter deliverable upon the
exercise thereof. The Corporation shall not effect any such consolidation,
merger, sale, transfer or other disposition, unless prior to or simultaneously
with the consummation thereof the successor corporation (if other than the
Corporation) resulting from such consolidation or merger or the corporation
purchasing or otherwise acquiring such properties shall assume, by written
instrument executed and mailed or delivered to the holders of Series C Preferred
Stock at the last address of such holders appearing on the books of the
Corporation, the obligation to deliver to such holders such shares of stock,
securities or properties as, in accordance with the foregoing provisions, such
holders may be entitled to acquire. The above provisions of this subparagraph
shall similarly apply to successive reorganizations, reclassifications,
consolidations, mergers, sales, transfers, or other dispositions.
(g) STOCK TO BE RESERVED. The Corporation will at all times reserve and keep
available out of its authorized Common Stock, solely for the purpose of issue
upon the conversion of Series C Preferred Stock as herein provided, such number
of shares of Common Stock as shall then be issuable upon the conversion of all
outstanding Series C Preferred Stock. The Corporation covenants that all shares
of Common Stock which shall be so issuable shall, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable, free from preemptive
or similar rights on the part of the holders of any shares of capital stock or
securities of the Corporation, and free from all liens and charges with respect
to the issue thereof; and without limiting the generality of the foregoing, the
Corporation covenants that it will from time to time take all such action as may
be requisite to assure that the par value, if any, per share of the Common Stock
is at all times equal to or less than the then effective Conversion Price. The
Corporation will take all such action as may be necessary to assure that such
shares of Common Stock may be so issued without violation by the Corporation of
any applicable law or regulation
7.
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or agreement, or of any requirements of any domestic securities exchange upon
which the Common Stock may be listed. Without limiting the foregoing, the
Corporation will take all such action as may be necessary to assure that, upon
conversion of any of the Series C Preferred Stock, an amount equal to the lesser
of (i) the par value of each share of Common Stock outstanding immediately prior
to such conversion, or (ii) the Conversion Price shall be credited to the
Corporation's stated capital account for each share of Common Stock issued upon
such conversion, and that, if clause (i) above is applicable, the balance of the
Conversion Price of Series C Preferred Stock converted shall be credited to the
Corporation's capital surplus account.
(h) CLOSING OF BOOKS. The Corporation will at no time close its transfer
books against the transfer of any Series C Preferred Stock or of any shares of
Common Stock issued or issuable upon the conversion of any Series C Preferred
Stock in any manner which interferes with the timely conversion of such Series C
Preferred Stock.
(i) TAXES. The Corporation shall pay all documentary, stamp or other
transactional taxes attributable to the issuance or delivery of shares of
capital stock of the Corporation upon conversion of any shares of Series C
Preferred Stock. The Corporation shall not, however, be required to pay any tax
which may be payable in respect of any transfer involved in the issuance and
delivery of Common Stock or the reissuance of the Series C Preferred Stock in a
name other than that in which the shares of Series C Preferred Stock so
converted were registered, and no such issuance or delivery shall be made unless
and until the person requesting such issuance has paid to the Corporation the
amount of any such tax or has established to the satisfaction of the Corporation
that such tax has been paid.
(j) EXCLUSION OF OTHER RIGHTS. Except as may otherwise be required by law,
the shares of Series C Preferred Stock shall not have any voting powers,
preferences and relative, participating, optional or other special rights, other
than those specifically set forth in this Certificate of Designations and in the
Certificate of Incorporation.
(k) LIMITATION ON ISSUANCE OF CONVERSION SHARES; REDEMPTION. Notwithstanding
any adjustment of the Conversion Price made under this Section 5, and except as
provided below, the Corporation shall not be obligated to issue upon conversion
of the Series C Preferred Stock, in the aggregate, more than that number of
shares of Common Stock equal to 19.99% of the number of shares of Common Stock
of the Corporation outstanding on the Original Issue Date (such amount to be
proportionately and equitably adjusted from time to time in the event of stock
splits, stock dividends, combinations, reverse stock splits, reclassifications,
capital reorganization and similar events relating to the Common Stock) (the
"Maximum Share Amount") if the issuance of shares of Common Stock in excess of
the Maximum Share Amount (such number of excess shares referred to in the
aggregate as the "Excess Shares") would constitute a breach or violation of the
Corporation's obligations under the rules or regulations of Nasdaq or any other
principal securities exchange or market upon which the Common Stock is or
becomes traded (the "Exchange Rules"). To the extent the Corporation will be
required, or it appears likely to the Board of Directors of the Corporation that
it will be required, to issue any Excess Shares as a result of an adjustment to
the Conversion Price, the Corporation shall, at its option, either (i) promptly
take such action that would enable it to issue such Excess Shares
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without breaching or violating any Exchange Rules, including without limitation,
obtaining stockholder approval, or (ii) redeem the Excess Shares at a redemption
price equal to the Conversion Price. The number of shares comprising the Maximum
Share Amount (and if applicable, any Excess Shares to be issued) shall be
allocated among the holders of the shares of Series C Preferred Stock pro rata
based on the total number of shares of Series C Preferred Stock then
outstanding.
6. NO REDEMPTION. The Series C Preferred Stock shall not be redeemable by the
Corporation.
IN WITNESS WHEREOF, this Certificate has been subscribed this 17th day of April,
2000, by the undersigned who affirms that the statements made herein are true
and correct.
AMERICAN TECHNOLOGY CORPORATION
By:____________________________
Name: Renee Warden
Title: Secretary
9.
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EXHIBIT 4.9
NO. W-____
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT AND ANY
APPLICABLE STATE SECURITIES LAWS.
WARRANT TO PURCHASE _________ SHARES
OF COMMON STOCK OF
AMERICAN TECHNOLOGY CORPORATION
(Void after March 31, 2003)
This certifies that _________________________________ or its assigns (the
"Holder"), for value received, is entitled to purchase from AMERICAN TECHNOLOGY
CORPORATION, a Delaware corporation (the "Company"), having a place of business
at 13114 Evening Creek Drive South, San Diego, California 92128, a maximum of
______________ fully paid and nonassessable shares of the Company's Common Stock
("Common Stock") for cash at a price of $11.00 per share (the "Stock Purchase
Price") at any time or from time to time up to and including 5:00 p.m. (Pacific
time) on March 31, 2003 (the "Expiration Date"), upon surrender to the Company
at its principal office (or at such other location as the Company may advise the
Holder in writing) of this Warrant properly endorsed with the Form of
Subscription attached hereto duly filled in and signed and, if applicable, upon
payment in cash or by check of the aggregate Stock Purchase Price for the number
of shares for which this Warrant is being exercised determined in accordance
with the provisions hereof. The Stock Purchase Price and the number of shares
purchasable hereunder are subject to adjustment as provided in Section 3 of this
Warrant.
This Warrant is subject to the following terms and conditions:
1. EXERCISE; ISSUANCE OF CERTIFICATES; PAYMENT FOR SHARES.
1.1 GENERAL. This Warrant is exercisable at the option of the holder of
record hereof, at any time or from time to time, up to the Expiration Date for
all or any part of the shares of Common Stock (but not for a fraction of a
share) which may be purchased hereunder. The Company agrees that the shares of
Common Stock purchased under this Warrant shall be and are deemed to be issued
to the Holder hereof as the record owner of such shares as of the close of
business on the date on which this Warrant shall have been surrendered, properly
endorsed, the completed, executed Form of Subscription delivered and payment
made for such shares. Certificates for the shares of Common Stock so purchased,
together with any other securities or property to which the Holder hereof is
entitled upon such exercise, shall be delivered to the Holder hereof by the
Company at the Company's expense within five (5) business days after the rights
represented by this Warrant have been so exercised. In case of a purchase of
less than all the shares which may be purchased under this Warrant, the Company
shall cancel this Warrant
1.
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and execute and deliver a new Warrant or Warrants of like tenor for the balance
of the shares purchasable under the Warrant surrendered upon such purchase to
the Holder hereof within five (5) business days. Each stock certificate so
delivered shall be in such denominations of Common Stock as may be requested by
the Holder hereof and shall be registered in the name of such Holder.
Notwithstanding anything to the contrary set forth above, each exercise of the
Warrant shall cover at least the lesser of (i) 10,000 shares of Common Stock or
(ii) the total number of shares of Common Stock subject to the Warrant.
1.2 NET ISSUE EXERCISE.
(a) This Section 1.2 shall not apply and shall have no force or
effect if, in accordance with the terms of the Series C Preferred Stock and
Warrant Purchase Agreement dated as of even date herewith between the Company
and the original holder of this Warrant (the "Purchase Agreement"), the shares
of Common Stock issuable upon exercise of this Warrant have been registered for
resale under the Securities Act of 1933, as amended, on a registration statement
on Form S-3, or another appropriate form.
(b) Notwithstanding any provisions herein to the contrary, if the
fair market value of one share of the Company's Common Stock is greater than the
Stock Purchase Price (at the date of calculation as set forth below), in lieu of
exercising this Warrant for cash, the Holder may elect to receive shares equal
to the value (as determined below) of this Warrant (or the portion thereof being
canceled) by surrender of this Warrant at the principal office of the Company
together with the properly endorsed Form of Subscription and notice of such
election in which event the Company shall issue to the Holder a number of shares
of Common Stock computed using the following formula:
X = Y (A-B)
-------
A
Where X = the number of shares of Common Stock to be issued to the
Holder
Y = the number of shares of Common Stock purchasable
under the Warrant or, if only a portion of the Warrant
is being exercised, the portion of the Warrant being
canceled (at the date of such calculation)
A = the fair market value of one share of the Company's
Common Stock (at the date of such calculation)
B = Stock Purchase Price (as adjusted to the date of
such calculation)
For purposes of the above calculation, fair market value of one share of Common
Stock shall be the average of the closing bid price of the Company's Common
Stock for the ten (10) trading days immediately preceding the date of exercise
as quoted on the principal exchange or market on which such securities are
traded.
2.
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2. SHARES TO BE FULLY PAID; RESERVATION OF SHARES. The Company covenants
and agrees that all shares of Common Stock which may be issued upon the exercise
of the rights represented by this Warrant will, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable and free from all
preemptive rights of any stockholder and free of all taxes, liens and charges
with respect to the issue thereof. The Company further covenants and agrees
that, during the period within which the rights represented by this Warrant may
be exercised, the Company will at all times have authorized and reserved, for
the purpose of issue or transfer upon exercise of the subscription rights
evidenced by this Warrant, a sufficient number of shares of authorized but
unissued Common Stock, or other securities and property, when and as required to
provide for the exercise of the rights represented by this Warrant. The Company
will take all such action as may be necessary to assure that such shares of
Common Stock may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of any domestic securities
exchange upon which the Common Stock may be listed; provided, however, that the
Company shall not be required to effect a registration under Federal or State
securities laws with respect to such exercise other than as provided pursuant to
the Purchase Agreement. The Company will not take any action which would result
in any adjustment of the Stock Purchase Price (as set forth in Section 3 hereof)
if the total number of shares of Common Stock issuable after such action upon
exercise of all outstanding warrants, together with all shares of Common Stock
then outstanding and all shares of Common Stock then issuable upon exercise of
all options and upon the conversion of all convertible securities then
outstanding, would exceed the total number of shares of Common Stock then
authorized by the Company's Certificate of Incorporation.
3. ADJUSTMENT OF STOCK PURCHASE PRICE AND NUMBER OF SHARES. The Stock
Purchase Price and the number of shares purchasable upon the exercise of this
Warrant shall be subject to adjustment from time to time upon the occurrence of
certain events described in this Section 3. Upon each adjustment of the Stock
Purchase Price, the Holder of this Warrant shall thereafter be entitled to
purchase, at the Stock Purchase Price resulting from such adjustment, the number
of shares obtained by multiplying the Stock Purchase Price in effect immediately
prior to such adjustment by the number of shares purchasable pursuant hereto
immediately prior to such adjustment, and dividing the product thereof by the
Stock Purchase Price resulting from such adjustment.
3.1 SUBDIVISION OR COMBINATION OF STOCK. In case the Company shall at
any time subdivide its outstanding shares of Common Stock into a greater number
of shares, the Stock Purchase Price in effect immediately prior to such
subdivision shall be proportionately reduced, and conversely, in case the
outstanding shares of Common Stock of the Company shall be combined into a
smaller number of shares, the Stock Purchase Price in effect immediately prior
to such combination shall be proportionately increased.
3.2 DIVIDENDS IN COMMON STOCK, OTHER STOCK, PROPERTY, RECLASSIFICATION.
If at any time or from time to time the Holders of Common Stock (or any shares
of stock or other securities at the time receivable upon the exercise of this
Warrant) shall have received or become entitled to receive, without payment
therefor,
3.
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(a) Common Stock or any shares of stock or other securities which
are at any time directly or indirectly convertible into or exchangeable for
Common Stock, or any rights or options to subscribe for, purchase or otherwise
acquire any of the foregoing by way of dividend or other distribution,
(b) any cash paid or payable otherwise than as a cash dividend, or
(c) Common Stock or additional stock or other securities or
property (including cash) by way of spinoff, split-up, reclassification,
combination of shares or similar corporate rearrangement, (other than shares of
Common Stock issued as a stock split or adjustments in respect of which shall be
covered by the terms of Section 3.1 above), then and in each such case, the
Holder hereof shall, upon the exercise of this Warrant, be entitled to receive,
in addition to the number of shares of Common Stock receivable thereupon, and
without payment of any additional consideration therefor, the amount of stock
and other securities and property (including cash in the cases referred to in
clause (b) above and this clause (c)) which such Holder would hold on the date
of such exercise had he been the holder of record of such Common Stock as of the
date on which holders of Common Stock received or became entitled to receive
such shares or all other additional stock and other securities and property.
3.3 REORGANIZATION, RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE.
If any recapitalization, reclassification or reorganization of the capital stock
of the Company, or any consolidation or merger of the Company with another
corporation, or the sale of all or substantially all of its assets or other
transaction shall be effected in such a way that holders of Common Stock shall
be entitled to receive stock, securities, or other assets or property (an
"Organic Change"), then, as a condition of such Organic Change, lawful and
adequate provisions shall be made by the Company whereby the Holder hereof shall
thereafter have the right to purchase and receive (in lieu of the shares of the
Common Stock of the Company immediately theretofore purchasable and receivable
upon the exercise of the rights represented hereby) such shares of stock,
securities or other assets or property as may be issued or payable with respect
to or in exchange for a number of outstanding shares of such Common Stock equal
to the number of shares of such stock immediately theretofore purchasable and
receivable upon the exercise of the rights represented hereby; provided,
however, that in the event the value of the stock, securities or other assets or
property (determined in good faith by the Board of Directors of the Company)
issuable or payable with respect to one share of the Common Stock of the Company
immediately theretofore purchasable and receivable upon the exercise of the
rights represented hereby is in excess of the Stock Purchase Price hereof
effective at the time of a merger and securities received in such
reorganization, if any, are publicly traded, then this Warrant shall expire
unless exercised prior to or simultaneous with such Organic Change. In the event
of any Organic Change, appropriate provision shall be made by the Company with
respect to the rights and interests of the Holder of this Warrant to the end
that the provisions hereof (including, without limitation, provisions for
adjustments of the Stock Purchase Price and of the number of shares purchasable
and receivable upon the exercise of this Warrant) shall thereafter be
applicable, in relation to any shares of stock, securities or assets thereafter
deliverable upon the exercise hereof. The Company will not effect any such
consolidation, merger or sale unless, prior to the consummation thereof, the
successor corporation (if other than the Company) resulting from
4.
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such consolidation or the corporation purchasing such assets shall assume by
written instrument reasonably satisfactory in form and substance to the Holders
of a majority of the warrants to purchase Common Stock then outstanding,
executed and mailed or delivered to the registered Holder hereof at the last
address of such Holder appearing on the books of the Company, the obligation to
deliver to such Holder such shares of stock, securities or assets as, in
accordance with the foregoing provisions, such Holder may be entitled to
purchase.
3.4 CERTAIN EVENTS. If any change in the outstanding Common Stock of
the Company or any other event occurs as to which the other provisions of this
Section 3 are not strictly applicable or if strictly applicable would not fairly
protect the purchase rights of the Holder of the Warrant in accordance with such
provisions, then the Board of Directors of the Company shall make an adjustment
in the number and class of shares available under the Warrant, the Stock
Purchase Price or the application of such provisions, so as to protect such
purchase rights as aforesaid. The adjustment shall be such as will give the
Holder of the Warrant upon exercise for the same aggregate Stock Purchase Price
the total number, class and kind of shares as he would have owned had the
Warrant been exercised prior to the event and had he continued to hold such
shares until after the event requiring adjustment.
3.5 NOTICES OF CHANGE.
(a) Within 10 business days after any adjustment in the number or
class of the shares subject to this Warrant and of the Stock Purchase Price, the
Company shall give written notice thereof to the Holder, setting forth in
reasonable detail and certifying the calculation of such adjustment.
(b) The Company shall give written notice to the Holder at least 15
business days prior to the date on which the Company closes its books or takes a
record for determining rights to receive any dividends or distributions.
(c) The Company shall also give written notice to the Holder at
least 15 business days prior to the date on which an Organic Change shall take
place.
4. ISSUE TAX. The issuance of certificates for shares of Common Stock upon
the exercise of the Warrant shall be made without charge to the Holder of the
Warrant for any issue tax (other than any applicable income taxes) in respect
thereof; provided, however, that the Company shall not be required to pay any
tax which may be payable in respect of any transfer involved in the issuance and
delivery of any certificate in a name other than that of the then Holder of the
Warrant being exercised.
5. CLOSING OF BOOKS. The Company will at no time close its transfer books
against the transfer of any warrant or of any shares of Common Stock issued or
issuable upon the exercise of any warrant in any manner which interferes with
the timely exercise of this Warrant.
6. NO VOTING OR DIVIDEND RIGHTS; LIMITATION OF LIABILITY. Other than as set
forth herein, nothing contained in this Warrant shall be construed as conferring
upon the Holder hereof the right to vote or to consent or to receive notice as a
shareholder of the Company
5.
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or any other matters or any rights whatsoever as a shareholder of the Company.
No dividends or interest shall be payable or accrued in respect of this Warrant
or the interest represented hereby or the shares purchasable hereunder until,
and only to the extent that, this Warrant shall have been exercised. No
provisions hereof, in the absence of affirmative action by any holder, and no
mere enumeration herein of the rights or privileges of the holder hereof, shall
give rise to any liability of such Holder for the Stock Purchase Price or as a
shareholder of the Company, whether such liability is asserted by the Company or
by its creditors.
7. WARRANTS TRANSFERABLE. Subject to compliance with applicable federal and
state securities laws, this Warrant and all rights hereunder are transferable,
in whole or in part, without charge to the holder hereof (except for transfer
taxes), upon surrender of this Warrant properly endorsed. Each taker and holder
of this Warrant, by taking or holding the same, consents and agrees that this
Warrant, when endorsed in blank, shall be deemed negotiable, and that the holder
hereof, when this Warrant shall have been so endorsed, may be treated by the
Company, at the Company's option, and all other persons dealing with this
Warrant as the absolute owner hereof for any purpose and as the person entitled
to exercise the rights represented by this Warrant, or to the transfer hereof on
the books of the Company any notice to the contrary notwithstanding; but until
such transfer on such books, the Company may treat the registered owner hereof
as the owner for all purposes.
8. RIGHTS AND OBLIGATIONS SURVIVE EXERCISE OF WARRANT. The rights and
obligations of the Company, of the holder of this Warrant and of the holder of
shares of Common Stock issued upon exercise of this Warrant, shall survive the
exercise of this Warrant.
9. MODIFICATION AND WAIVER. This Warrant and any provision hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.
10. NOTICES. Any notice, request or other document required or permitted to
be given or delivered to the holder hereof or the Company shall be delivered or
shall be sent by certified mail, postage prepaid, to each such holder at its
address as shown on the books of the Company or to the Company at the address
indicated therefor in the first paragraph of this Warrant or such other address
as either may from time to time provide to the other.
11. BINDING EFFECT ON SUCCESSORS. This Warrant shall be binding upon any
corporation succeeding the Company by merger, consolidation or acquisition of
all or substantially all of the Company's assets. All of the obligations of the
Company relating to the Common Stock issuable upon the exercise of this Warrant
shall survive the exercise and termination of this Warrant. All of the covenants
and agreements of the Company shall inure to the benefit of the successors and
assigns of the holder hereof.
12. DESCRIPTIVE HEADINGS AND GOVERNING LAW. The description headings of the
several sections and paragraphs of this Warrant are inserted for convenience
only and do not constitute a part of this Warrant. This Warrant shall be
construed and enforced in accordance with, and the rights of the parties shall
be governed by, the laws of the State of California.
6.
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13. LOST WARRANTS. The Company represents and warrants to the Holder hereof
that upon receipt of evidence reasonably satisfactory to the Company of the
loss, theft, destruction, or mutilation of this Warrant and, in the case of any
such loss, theft or destruction, upon receipt of an indemnity reasonably
satisfactory to the Company, or in the case of any such mutilation upon
surrender and cancellation of such Warrant, the Company, at its expense, will
make and deliver a new Warrant, of like tenor, in lieu of the lost, stolen,
destroyed or mutilated Warrant.
14. FRACTIONAL SHARES. No fractional shares shall be issued upon exercise
of this Warrant. The Company shall, in lieu of issuing any fractional share, pay
the holder entitled to such fraction a sum in cash equal to such fraction
multiplied by the then effective Stock Purchase Price.
15. SPECIFIC PERFORMANCE. The parties hereto hereby declare that it is
impossible to measure in money the damages which will accrue to a party hereto
or to their heirs, personal representatives, or assigns by reason of a failure
to perform any of the obligations under this Warrant and agree that the terms of
this Warrant shall be specifically enforceable. If any party hereto or his
heirs, personal representatives, or assigns institutes any action or proceeding
to specifically enforce the provisions hereof, any person against whom such
action or proceeding is brought hereby waives the claim or defense therein that
such party or such personal representative has an adequate remedy at law, and
such person shall not offer in any such action or proceeding the claim or
defense that such remedy at law exists.
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed
by its officers, thereunto duly authorized this ______ day of March, 2000.
AMERICAN TECHNOLOGY CORPORATION,
a Delaware corporation
By:_____________________________
Cornelius J. Brosnan
President
ATTEST:
____________________________
Renee Warden
Secretary
7.
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EXHIBIT A
SUBSCRIPTION FORM
Date: _________________, _____
American Technology Corporation
13114 Evening Creek Drive South
San Diego, California 92128
Attn: President
Ladies and Gentlemen:
The undersigned hereby elects to exercise the warrant issued to it by
American Technology Corporation (the "Company") and dated March _____,
2000, Warrant No. W-___ (the "Warrant") and to purchase thereunder
__________________________________ shares of the Common Stock of the
Company (the "Shares") at a purchase price of Six Dollars ($11.00) per
Share or an aggregate purchase price of __________________________________
Dollars ($__________) (the "Purchase Price").
Pursuant to the terms of the Warrant the undersigned has delivered the aggregate
Purchase Price herewith in full in cash or by certified check or wire transfer.
Very truly yours,
_______________________________
By:
Title:
8.
