Document:

EXHIBIT 10.3

 

 

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS
EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
REASONABLY ACCEPTABLE TO THE COMPANY TO SUCH EFFECT, THE SUBSTANCE OF WHICH
SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. 
THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL
INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER
THE SECURITIES ACT.

 

COMMON STOCK PURCHASE WARRANT

 

To Purchase ______________ Shares of Common
Stock of

 

APOGEE TECHNOLOGY, INC.

 

THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) CERTIFIES
that, for value received, ______________ (the “Holder”), is entitled,
upon the terms and subject to the limitations on exercise and the conditions
hereinafter set forth, at any time on or after the date of issuance of this
Warrant (the “Initial Exercise Date”) and on or prior to the five year
anniversary of the Initial Exercise Date (the “Termination Date”) but
not thereafter, to subscribe for and purchase from Apogee Technology, Inc., a
Delaware corporation (the “Company”), up to ______________ shares (the “Warrant
Shares”) of Common Stock, par value $0.01 per share, of the Company (the “Common
Stock”).  The purchase price of one
share of Common Stock (the “Exercise Price”) under this Warrant shall be
$5.70(1), subject to
adjustment hereunder.  Capitalized terms used and not otherwise defined herein shall have the
meanings set forth in that certain Securities Purchase Agreement (the “Purchase
Agreement”), dated August 24, 2004 among the Company and the purchasers
signatory thereto.

 

(1)           120% of the Per
Share Purchase Price.

 

1

 

1.     Title to Warrant.  Prior to the Termination Date and subject to
compliance with applicable laws and Section 7 of this Warrant, this Warrant and
all rights hereunder are transferable, in whole or in part, to up to three (3)
Persons in any 12 month period, at the office or agency of the Company by the
Holder in person or by duly authorized attorney, upon surrender of this Warrant
together with the Assignment Form annexed hereto properly endorsed.  The transferee shall sign an investment letter
in form and substance reasonably satisfactory to the Company.

 

2.     Authorization of Shares.  The Company covenants that all Warrant Shares
which may be issued upon the exercise of the purchase rights represented by
this Warrant will, upon exercise of the purchase rights represented by this
Warrant, be duly authorized, validly issued, fully paid and nonassessable and
free from all taxes, liens and charges in respect of the issue thereof (other
than taxes in respect of any transfer occurring contemporaneously with such
issue).

 

3.     Exercise of Warrant.

 

(a) 
Exercise of the purchase rights represented by this Warrant may be made
at any time or times on or after the Initial Exercise Date and on or before the
Termination Date by delivery to the Company of a duly executed facsimile copy
of the Notice of Exercise Form annexed hereto, at the office of the Company (or
such other office or agency of the Company as it may designate by notice in
writing to the registered Holder at the address of such Holder appearing on the
books of the Company); provided, however, within 5 Trading Days of the date
said Notice of Exercise is delivered to the Company, the Holder shall have
surrendered this Warrant to the Company and the Company shall have received
payment of the aggregate Exercise Price of the shares thereby purchased by wire
transfer or cashier’s check drawn on a United States bank.  Certificates for shares purchased hereunder
shall be delivered to the Holder within 3 Trading Days from the latest to occur
of delivery to the Company of the Notice of Exercise Form, surrender of this
Warrant and payment of the aggregate Exercise Price as set forth above (“Warrant
Share Delivery Date”).  This Warrant
shall be deemed to have been exercised on the date the Exercise Price is received
by the Company.  The Warrant Shares shall
be deemed to have been issued, and Holder or any other person so designated to
be named therein shall be deemed to have become a holder of record of such
shares for all purposes, as of the date the Warrant has been exercised by
payment to the Company of the Exercise Price and all taxes required to be paid
by the Holder, if any, pursuant to Section 5 prior to the issuance of such
shares, have been paid.  If the Company fails
to deliver to the Holder a certificate or certificates representing the Warrant
Shares pursuant to this Section 3(a) by the Warrant Share Delivery Date, then
the Holder will have the right to rescind such exercise.  In addition to any other rights available to
the Holder, if the Company fails to deliver to the Holder a certificate or
certificates representing the Warrant Shares pursuant to an exercise by the
Warrant Share Delivery Date, and if after such day the Holder is required by
its broker to purchase (in an open market transaction or otherwise) shares of
Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant
Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”),
then the Company shall (1) pay in cash to the Holder

 

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the amount by which (x) the Holder’s total
purchase price (including brokerage commissions, if any) for the shares of
Common Stock so purchased exceeds (y) the amount obtained by multiplying (A)
the number of Warrant Shares that the Company was required to deliver to the
Holder in connection with the exercise at issue times (B) the price at which
the sell order giving rise to such purchase obligation was executed, and (2) at
the option of the Holder, either reinstate the portion of the Warrant and
equivalent number of Warrant Shares for which such exercise was not honored or
deliver to the Holder the number of shares of Common Stock that would have been
issued had the Company timely complied with its exercise and delivery obligations
hereunder.  For example, if the Holder
purchases Common Stock having a total purchase price of $11,000 to cover a
Buy-In with respect to an attempted exercise of shares of Common Stock with an
aggregate sale price giving rise to such purchase obligation of $10,000, under
clause (1) of the immediately preceding sentence the Company shall be required
to pay the Holder $1,000. The Holder shall provide the Company written notice
indicating the amounts payable to the Holder in respect of the Buy-In, together
with applicable confirmations and other evidence reasonably requested by the
Company.  Nothing herein shall limit a
Holder’s right to pursue any other remedies available to it hereunder, at law
or in equity including, without limitation, a decree of specific performance
and/or injunctive relief with respect to the Company’s failure to timely
deliver certificates representing shares of Common Stock upon exercise of the
Warrant as required pursuant to the terms hereof.

 

(b)           If
this Warrant shall have been exercised in part, the Company shall, at the time
of delivery of the certificate or certificates representing Warrant Shares,
deliver to Holder a new Warrant evidencing the rights of Holder to purchase the
unpurchased Warrant Shares called for by this Warrant, which new Warrant shall
in all other respects be identical with this Warrant.

 

(c)           The
Holder shall not have the right to exercise any portion of this Warrant,
pursuant to Section 3(a) or otherwise, to the extent that after giving effect
to such issuance after exercise, the Holder (together with the Holder’s
affiliates), as set forth on the applicable Notice of Exercise, would
beneficially own in excess of 4.99% of the number of shares of the Common Stock
outstanding immediately after giving effect to such issuance.  For
purposes of the foregoing sentence, the number of shares of Common Stock
beneficially owned by the Holder and its affiliates shall include the number of
shares of Common Stock issuable upon exercise of this Warrant with respect to
which the determination of such sentence is being made, but shall exclude the
number of shares of Common Stock which would be issuable upon (A) exercise of
the remaining, nonexercised portion of this Warrant beneficially owned by the
Holder or any of its affiliates and (B) exercise or conversion of the
unexercised or nonconverted portion of any other securities of the Company
(including, without limitation, any other Warrants) subject to a limitation on
conversion or exercise analogous to the limitation contained herein
beneficially owned by the Holder or any of its affiliates.  Except as set
forth in the preceding sentence, for purposes of this Section 3(c), beneficial
ownership shall be calculated in accordance with Section 13(d) of the Exchange
Act, it being acknowledged by Holder that the Company is not representing to
Holder that such calculation is in compliance with Section 13(d) of the
Exchange Act and Holder is solely responsible for

 

3

 

any schedules
required to be filed in accordance therewith. 
To the extent that the limitation contained in this Section 3(c)
applies, the determination of whether this Warrant is exercisable (in relation
to other securities owned by the Holder) and of which a portion of this Warrant
is exercisable shall be in the sole discretion of such Holder, and the
submission of a Notice of Exercise shall be deemed to be such Holder’s
determination of whether this Warrant is exercisable (in relation to other
securities owned by such Holder) and of which portion of this Warrant is
exercisable, in each case subject to such aggregate percentage limitation, and
the Company shall have no obligation to verify or confirm the accuracy of such
determination.  For purposes of this
Section 3(c), in determining the number of outstanding shares of Common Stock,
the Holder may rely on the number of outstanding shares of Common Stock as
reflected in (x) the Company’s most recent Form 10-Q or Form 10-K, as the case
may be, (y) a more recent public announcement by the Company or (z) any other
notice by the Company or the Company’s Transfer Agent setting forth the number
of shares of Common Stock outstanding.  Upon the written or oral request
of the Holder, the Company shall within two Trading Days confirm orally and in
writing to the Holder the number of shares of Common Stock then
outstanding.  In any case, the number of outstanding shares of Common
Stock shall be determined after giving effect to the conversion or exercise of
securities of the Company, including this Warrant, by the Holder or its
affiliates since the date as of which such number of outstanding shares of
Common Stock was reported.

 

(d) If at any time after one year from the
date of issuance of this Warrant there is no effective Registration Statement
registering the resale of the Warrant Shares by the Holder at such time, this
Warrant may also be exercised at such time by means of a “cashless exercise” in
which the Holder shall be entitled to receive a certificate for the number of
Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A),
where:

 

(A)  =                 the Closing Price
on the Trading Day immediately preceding the date of such election;

 

(B)  =                   the Exercise
Price of this Warrant, as adjusted; and

 

(X)  =                  the number of
Warrant Shares issuable upon exercise of this Warrant in accordance with the
terms of this Warrant by means of a cash exercise rather than a cashless
exercise.

 

(e) Subject to the provisions of this Section 3, if after the 12 month
anniversary of the Effective Date, the Closing Price for each of ten (10)
consecutive Trading Days (the “Measurement Period”, which period shall
not have commenced until after such Effective Date) exceeds 175% of the
Exercise Price (the “Threshold Price”) (subject to adjustment for reverse
and forward stock splits, stock dividends, stock combinations and other similar
transactions of the Common Stock that occur after the date of the Purchase
Agreement), then the Company may, within two (2) Trading Days of such period,
call for cancellation of all or any portion of this Warrant for which a Notice
of Exercise has not yet been delivered (such right, a “Call”).  To exercise this right, the Company must
deliver to the Holder an irrevocable written notice (a “Call Notice”),

 

4

 

indicating
therein the portion of unexercised portion of this Warrant to which such notice
applies.  If the conditions set forth
below for such Call are satisfied from the period from the date of the Call
Notice through and including the Call Date (as defined below), then any portion
of this Warrant subject to such Call Notice for which a Notice of Exercise
shall not have been received from and after the date of the Call Notice will be
cancelled at 6:30 p.m. (New York City time) on the fifteenth (15th) Trading Day
after the date the Call Notice is received by the Holder (such date, the “Call
Date”).  Any unexercised portion of
this Warrant to which the Call Notice does not pertain will be unaffected by
such Call Notice.  In furtherance
thereof, the Company covenants and agrees that it will honor all Notices of
Exercise with respect to Warrant Shares subject to a Call Notice that are
tendered from the time of delivery of the Call Notice through 6:30 p.m. (New
York City time) on the Call Date.  The
parties agree that any Notice of Exercise delivered following a Call Notice
shall first reduce to zero the number of Warrant Shares subject to such Call
Notice prior to reducing the remaining Warrant Shares available for purchase
under this Warrant.  For example, if (x)
this Warrant then permits the Holder to acquire 100 Warrant Shares, (y) a Call
Notice pertains to 75 Warrant Shares, and (z) prior to 6:30 p.m. (New York City
time) on the Call Date the Holder tenders a Notice of Exercise in respect of 50
Warrant Shares, then (1) on the Call Date the right under this Warrant to
acquire 25 Warrant Shares will be automatically cancelled, (2) the Company, in
the time and manner required under this Warrant, will have issued and delivered
to the Holder 50 Warrant Shares in respect of the exercise following receipt of
the Call Notice, and (3) the Holder may, until the Termination Date, exercise
this Warrant for 25 Warrant Shares (subject to adjustment as herein provided
and subject to subsequent Call Notices). 
Subject again to the provisions of this Section 3(e), the Company may
deliver subsequent Call Notices for any portion of this Warrant for which the
Holder shall not have delivered a Notice of Exercise.  Notwithstanding anything to the contrary set
forth in this Warrant, the Company may not deliver a Call Notice or require the
cancellation of this Warrant (and any Call Notice will be void), unless, from
the beginning of the ten (10) consecutive Trading Days used to determine
whether the Common Stock has achieved the Threshold Price through the Call
Date, (i) the Company shall have honored in accordance with the terms of this
Warrant all Notices of Exercise delivered by 6:30 p.m. (New York City time) on
the Call Date, (ii) the Registration Statement shall be effective as to all
Warrant Shares and the prospectus thereunder available for use by the Holder
for the resale of all such Warrant Shares and (iii) the Common Stock shall be
listed or quoted for trading on the Trading Market.  The Company’s right to Call the Warrant shall
be exercised ratably among the Purchasers based on each Purchaser’s initial
purchase of Common Stock pursuant to the Purchase Agreement.

 

4.     No Fractional Shares or Scrip.  No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant.  As to any fraction of a share which Holder
would otherwise be entitled to purchase upon such exercise, the Company shall
pay a cash adjustment in respect of such final fraction in an amount equal to
such fraction multiplied by the Exercise Price.

 

5.     Charges, Taxes and Expenses.  Issuance of certificates for Warrant Shares
shall be made without charge to the Holder for any issue or transfer tax or
other incidental expense in respect of the issuance of such certificate, all of
which taxes and expenses shall be paid by the Company, and such certificates
shall be

 

5

 

issued in the name of the
Holder or in such name or names as may be directed by the Holder; provided,
however, that in the event certificates for Warrant Shares are to be
issued in a name other than the name of the Holder, this Warrant when
surrendered for exercise shall be accompanied by the Assignment Form attached
hereto duly executed by the Holder; and the Company may require, as a condition
thereto, the payment of a sum sufficient to reimburse it for any transfer tax
incidental thereto.

 

6.     Closing of Books.  The Company will not close its stockholder
books or records in any manner which prevents the timely exercise of this
Warrant, pursuant to the terms hereof.

 

7.     Transfer, Division and Combination.

 

(a)   Subject to compliance with
any applicable securities laws and the conditions set forth in Sections 1 and
7(e) hereof and to the provisions of Section 4.1 of the Purchase Agreement,
this Warrant and all rights hereunder are transferable, in whole or in part,
upon surrender of this Warrant at the principal office of the Company, together
with a written assignment of this Warrant substantially in the form attached
hereto duly executed by the Holder or its agent or attorney and funds
sufficient to pay any transfer taxes payable upon the making of such
transfer.  Upon such surrender and, if
required, such payment, the Company shall execute and deliver a new Warrant or
Warrants in the name of the assignee or assignees and in the denomination or
denominations specified in such instrument of assignment, and shall issue to
the assignor a new Warrant evidencing the portion of this Warrant not so
assigned, and this Warrant shall promptly be cancelled.  A Warrant, if properly assigned, may be
exercised by a new holder for the purchase of Warrant Shares without having a
new Warrant issued.

 

(b)   This Warrant may be divided
or combined with other Warrants upon presentation hereof at the aforesaid
office of the Company, together with a written notice specifying the names and
denominations in which new Warrants are to be issued, signed by the Holder or
its agent or attorney.  Subject to
compliance with Section 7(a), as to any transfer which may be involved in such
division or combination, the Company shall execute and deliver a new Warrant or
Warrants in exchange for the Warrant or Warrants to be divided or combined in
accordance with such notice.

 

(c)   The Company shall prepare,
issue and deliver at its own expense (other than transfer taxes) the new
Warrant or Warrants under this Section 7.

 

(d)   The Company agrees to
maintain, at its aforesaid office, books for the registration and the
registration of transfer of the Warrants.

 

(e)   If, at the time of the
surrender of this Warrant in connection with any transfer of this Warrant, the
transfer of this Warrant shall not be registered pursuant to an effective
registration statement under the Securities Act and under applicable state
securities or blue sky laws, the Company may require, as a condition of
allowing such transfer (i) that the Holder or transferee of this Warrant, as
the case may be, furnish to the Company a written opinion of counsel (which
opinion shall be in form, substance and

 

6

 

scope
customary for opinions of counsel in comparable transactions) to the effect
that such transfer may be made without registration under the Securities Act
and under applicable state securities or blue sky laws, (ii) that the holder or
transferee execute and deliver to the Company an investment letter in form and
substance acceptable to the Company and (iii) that the transferee be an
“accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7), or
(a)(8) promulgated under the Securities Act or a qualified institutional buyer
as defined in Rule 144A(a) under the Securities Act.

 

8.     No Rights as Shareholder until Exercise.  This Warrant does not entitle the Holder to
any voting rights or other rights as a shareholder of the Company prior to the
exercise hereof.  Upon the surrender of
this Warrant and the payment of the aggregate Exercise Price (or upon a
cashless exercise pursuant to Section 3(d)), the Warrant Shares so purchased
shall be and be deemed to be issued to such Holder as the record owner of such
shares as of the close of business on the later of the date of such surrender
or payment.

 

9.     Loss, Theft, Destruction or Mutilation
of Warrant.  The Company covenants
that upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of this Warrant or any stock
certificate relating to the Warrant Shares, and in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it (which, in
the case of the Warrant, shall not include the posting of any bond), and upon
surrender and cancellation of such Warrant or stock certificate, if mutilated,
the Company will make and deliver a new Warrant or stock certificate of like
tenor and dated as of such cancellation, in lieu of such Warrant or stock
certificate.

 

10.   Saturdays, Sundays, Holidays, etc.  If the last or appointed day for the taking
of any action or the expiration of any right required or granted herein shall
be a Saturday, Sunday or a legal holiday, then such action may be taken or such
right may be exercised on the next succeeding day not a Saturday, Sunday or
legal holiday.

 

11.   Adjustments of Exercise Price and Number
of Warrant Shares; Stock Splits, etc. 
The number and kind of securities purchasable upon the exercise of this
Warrant and the Exercise Price shall be subject to adjustment from time to time
upon the happening of any of the following. 
In case the Company shall (i) pay a dividend in shares of Common Stock
or make a distribution in shares of Common Stock to holders of its outstanding
Common Stock, (ii) subdivide its outstanding shares of Common Stock into a
greater number of shares, (iii) combine its outstanding shares of Common Stock
into a smaller number of shares of Common Stock, or (iv) issue any shares of
its capital stock in a reclassification of the Common Stock, then the number of
Warrant Shares purchasable upon exercise of this Warrant immediately prior thereto
shall be adjusted so that the Holder shall be entitled to receive the kind and
number of Warrant Shares or other securities of the Company which it would have
owned or have been entitled to receive had such Warrant been exercised in
advance thereof.  Upon each such
adjustment of the kind and number of Warrant Shares or other securities of the
Company which are purchasable hereunder, the Holder shall thereafter be
entitled to purchase the number of Warrant Shares or other securities resulting
from such adjustment at an Exercise Price per Warrant Share or other security
obtained by multiplying the Exercise Price in effect immediately prior to such
adjustment by the number of Warrant Shares purchasable pursuant hereto
immediately prior to such adjustment and dividing by the number of Warrant
Shares or other securities of the Company that

 

7

 

are purchasable pursuant hereto
immediately after such adjustment.  An
adjustment made pursuant to this paragraph shall become effective immediately
after the effective date of such event retroactive to the record date, if any,
for such event.

 

12.   Reorganization, Reclassification, Merger,
Consolidation or Disposition of Assets. 
In case the Company shall reorganize its capital, reclassify its capital
stock, consolidate or merge with or into another corporation (where the Company
is not the surviving corporation or where there is a change in or distribution
with respect to the Common Stock of the Company), or sell, transfer or
otherwise dispose all or substantially all of its property, assets or business
to another corporation and, pursuant to the terms of such reorganization,
reclassification, merger, consolidation or disposition of assets, shares of
common stock of the successor or acquiring corporation, or any cash, shares of
stock or other securities or property of any nature whatsoever (including
warrants or other subscription or purchase rights) in addition to or in lieu of
common stock of the successor or acquiring corporation (“Other Property”), are to be received by or distributed to the holders
of Common Stock of the Company, then the Holder shall have the right thereafter
to receive, upon exercise of this Warrant, the number of shares of Common Stock
of the successor or acquiring corporation or of the Company, if it is the
surviving corporation, and Other Property receivable upon or as a result of
such reorganization, reclassification, merger, consolidation or disposition of
assets by a Holder of the number of shares of Common Stock for which this
Warrant is exercisable immediately prior to such event. In case of any such
reorganization, reclassification, merger, consolidation or disposition of
assets, the successor or acquiring corporation (if other than the Company) shall
expressly assume the due and punctual observance and performance of each and
every covenant and condition of this Warrant to be performed and observed by
the Company and all the obligations and liabilities hereunder, subject to such
modifications as may be deemed appropriate (as determined in good faith by
resolution of the Board of Directors of the Company) in order to provide for
adjustments of Warrant Shares for which this Warrant is exercisable which shall
be as nearly equivalent as practicable to the adjustments provided for in this
Section 12.  For purposes of this Section
12, “common stock of the successor or acquiring corporation” shall include
stock of such corporation of any class which is not preferred as to dividends
or assets over any other class of stock of such corporation and which is not
subject to redemption and shall also include any evidences of indebtedness,
shares of stock or other securities which are convertible into or exchangeable
for any such stock, either immediately or upon the arrival of a specified date
or the happening of a specified event and any warrants or other rights to
subscribe for or purchase any such stock. 
The foregoing provisions of this Section 12 shall similarly apply to
successive reorganizations, reclassifications, mergers, consolidations or
disposition of assets.

 

13.   Voluntary Adjustment by the Company.  The Company may at any time during the term
of this Warrant reduce the then current Exercise Price to any amount and for
any period of time deemed appropriate by the Board of Directors of the Company.

 

14.   Notice of Adjustment.  Whenever the number of Warrant Shares or
number or kind of securities or other property purchasable upon the exercise of
this Warrant or the Exercise Price is adjusted, as herein provided, the Company
shall give notice thereof to the Holder, which notice shall state the number of
Warrant Shares (and other securities or property) purchasable upon the exercise
of this Warrant and the Exercise Price of such Warrant Shares (and other

 

8

 

securities or property) after
such adjustment, setting forth a brief statement of the facts requiring such
adjustment and setting forth the computation by which such adjustment was made.

 

15.   Notice of Corporate Action.  If at any time:

 

(a)   the Company shall take a record of the
holders of its Common Stock for the purpose of entitling them to receive a
dividend or other distribution, or any right to subscribe for or purchase any
evidences of its indebtedness, any shares of stock of any class or any other
securities or property, or to receive any other right, or

 

(b)   there shall be any capital reorganization of
the Company, any reclassification or recapitalization of the capital stock of
the Company or any consolidation or merger of the Company with (other than a
consolidation or merger in which the Company is the surviving corporation), or
any sale, transfer or other disposition of all or substantially all the
property, assets or business of the Company to, another corporation or,

 

(c)   there shall be a voluntary or involuntary
dissolution, liquidation or winding up of the Company;

 

then, in any one or more of such cases, the Company shall give to
Holder (i) at least 20 days’ prior written notice of the date on which a record
date shall be selected for such dividend, distribution or right or for
determining rights to vote in respect of any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
liquidation or winding up, and (ii) in the case of any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up, at least 20 days’ prior written notice
of the date when the same shall take place. 
Such notice in accordance with the foregoing clause also shall specify
(i) the date on which any such record is to be taken for the purpose of such
dividend, distribution or right, the date on which the holders of Common Stock
shall be entitled to any such dividend, distribution or right, and the amount
and character thereof, and (ii) the date on which any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up is to take place and the time, if any such
time is to be fixed, as of which the holders of Common Stock shall be entitled
to exchange their Warrant Shares for securities or other property deliverable
upon such disposition, dissolution, liquidation or winding up.  Each such written notice shall be sufficiently
given if addressed to Holder at the last address of Holder appearing on the
books of the Company and delivered in accordance with Section 17(d).

 

16.   Authorized Shares.  The Company covenants that during the period
the Warrant is outstanding, it will reserve from its authorized and unissued
Common Stock a sufficient number of shares to provide for the issuance of the
Warrant Shares upon the exercise of any purchase rights under this
Warrant.  The Company further covenants
that its issuance of this Warrant shall constitute full authority to its
officers who are charged with the duty of executing stock certificates to
execute and issue the necessary certificates for the Warrant Shares upon the
exercise of the purchase rights under this Warrant.  The Company will take all such reasonable
action as may be necessary to assure that such Warrant Shares may be issued as

 

9

 

provided herein without
violation of any applicable law or regulation, or of any requirements of the
Trading Market upon which the Common Stock may be listed.

 

Except and to the extent as waived or
consented to by the Holder, the Company shall not by any action, including,
without limitation, amending its certificate of incorporation or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue
or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, but will at all
times in good faith assist in the carrying out of all such terms and in the
taking of all such actions as may be necessary or appropriate to protect the
rights of Holder as set forth in this Warrant against impairment.  Without limiting the generality of the foregoing,
the Company will (a) not increase the par value of any Warrant Shares above the
amount payable therefor upon such exercise immediately prior to such increase
in par value, (b) take all such action as may be necessary or appropriate in
order that the Company may validly and legally issue fully paid and
nonassessable Warrant Shares upon the exercise of this Warrant, and (c) use
commercially reasonable efforts to obtain all such authorizations, exemptions
or consents from any public regulatory body having jurisdiction thereof as may
be necessary to enable the Company to perform its obligations under this
Warrant.

 

Before taking any action which would result
in an adjustment in the number of Warrant Shares for which this Warrant is
exercisable or in the Exercise Price, the Company shall obtain all such
authorizations or exemptions thereof, or consents thereto, as may be necessary
from any public regulatory body or bodies having jurisdiction thereof.

 

17.   Miscellaneous.

 

(a)   Jurisdiction.  All questions concerning the construction,
validity, enforcement and interpretation of this Warrant shall be determined in
accordance with the provisions of the Purchase Agreement.

 

(b)   Restrictions.  The Holder acknowledges that the Warrant
Shares acquired upon the exercise of this Warrant, if not registered, will have
restrictions upon resale imposed by state and federal securities laws.

 

(c)   Nonwaiver and Expenses.  No course of dealing or any delay or failure
to exercise any right hereunder on the part of Holder shall operate as a waiver
of such right or otherwise prejudice Holder’s rights, powers or remedies,
notwithstanding the fact that all rights hereunder terminate on the Termination
Date.  If the Company willfully and
knowingly fails to comply with any provision of this Warrant, which results in
any material damages to the Holder, the Company shall pay to Holder such
amounts as shall be sufficient to cover any costs and expenses including, but
not limited to, reasonable attorneys’ fees, including those of appellate proceedings,
incurred by Holder in collecting any amounts due pursuant hereto or in
otherwise enforcing any of its rights, powers or remedies hereunder.

 

(d)   Notices.  Any notice, request or other document
required or permitted to be given or delivered to the Holder by the Company
shall be delivered in accordance with the notice provisions of the Purchase
Agreement; provided that upon any permitted

 

10

 

assignment of
this Warrant, the assignee shall promptly provide the Company with its contact
information.

 

(e)   Limitation of Liability.  No provision hereof, in the absence of any
affirmative action by Holder to exercise this Warrant or purchase Warrant
Shares, and no enumeration herein of the rights or privileges of Holder, shall
give rise to any liability of Holder for the purchase price of any Common Stock
or as a stockholder of the Company, whether such liability is asserted by the
Company or by creditors of the Company.

 

(f)    Remedies.  Holder, in addition to being entitled to
exercise all rights granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this Warrant.  The Company agrees that monetary damages
would not be adequate compensation for any loss incurred by reason of a breach
by it of the provisions of this Warrant and hereby agrees to waive the defense
in any action for specific performance that a remedy at law would be adequate.

(g)   Successors and Assigns.  Subject to applicable securities laws, this
Warrant and the rights and obligations evidenced hereby shall inure to the
benefit of and be binding upon the successors of the Company and the successors
and permitted assigns of Holder.  The
provisions of this Warrant are intended to be for the benefit of all Holders
from time to time of this Warrant and shall be enforceable by any such Holder
or holder of Warrant Shares.

 

(h)   Amendment.  This Warrant may be modified or amended or
the provisions hereof waived with the written consent of the Company and the
Holder.

 

(i)    Severability.  Wherever possible, each provision of this
Warrant shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provisions or the remaining provisions of this Warrant.

 

(j)    Headings.  The headings used in this Warrant are for the
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.

 

********************

 

11

 

IN WITNESS
WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto
duly authorized.

 

Dated: 
August ____, 2004

 

	
   

  	
  APOGEE TECHNOLOGY, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

12

 

NOTICE OF EXERCISE

 

To:          Apogee
Technology, Inc.

 

(1)   The undersigned hereby
elects to purchase _________ Warrant Shares of the Company pursuant to the
terms of the attached Warrant (only if exercised in full), and tenders herewith
payment of the exercise price in full, together with all applicable transfer
taxes, if any.

 

(2)   Payment shall take the form
of (check applicable box):

 

[  ] in lawful money of the United States; or

 

[ ] the
cancellation of such number of Warrant Shares as is necessary, in accordance
with the formula set forth in subsection 3(d), to exercise this Warrant with
respect to the maximum number of Warrant Shares purchasable pursuant to the
cashless exercise procedure set forth in subsection 3(d).

 

(3)   Please issue a certificate
or certificates representing said Warrant Shares in the name of the undersigned
or in such other name as is specified below:

 

	
   

  	
   

  	
   

  
	
  The Warrant Shares shall be delivered to
  the following:

  
	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

(4)  Accredited Investor.  The undersigned is an “accredited investor”
as defined in Regulation D under the Securities Act of 1933, as amended.

 

	
   

  	
  [PURCHASER]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  Dated:

  	
   

  	
   

  
						

 

 

ASSIGNMENT FORM

 

(To assign the
foregoing warrant, execute

this form and supply required information. 

Do not use this form to exercise the warrant.)

 

 

FOR VALUE
RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby
assigned to

 

	
   

  	
   

  	
  whose address is

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Dated:

  	
   

  	
  ,

  	
   

  	
   

  
										

 

 

	
   

  	
  Holder’s Signature:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Holder’s Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Signature Guaranteed:

  	
   

  	
   

  
						

 

NOTE: 
The signature to this Assignment Form must correspond with the name as
it appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company.  Officers of corporations and those acting in
a fiduciary or other representative capacity should file proper evidence of
authority to assign the foregoing Warrant.Exhibit
10.4

 

Jesup & Lamont

 

SECURITIES
CORPORATION

 

650 FIFTH AVENUE

NEW YORK, NY  10019

 

	
  NASD

  	
   

  	
  TELEPHONE:

  	
  (212) 307-2660

  
	
  SIPC

  	
   

  	
  FAX:

  	
  (212) 757-7478

  

 

August 20, 2004

 

Re:  Apogee Technology Inc.

 

Dear
Investor:

 

We
recently received your subscription documents and funds to participate in a
private placement offering (the “Offering”) of Apogee Technology, Inc. (the
“Company”). By this letter, we hereby advise you that the Company is re-pricing
this transaction prior to closing.  The
following are the revised terms of the Offering.  All capitalized terms used but not defined herein shall have the
meanings ascribed to such terms in the Securities Purchase Agreement.

 

1)              The Per Share Purchase Price for each share
of Common Stock is changed from $5.25 to $4.75.

 

2)              The Additional Investment Right has been
removed from the Offering.

 

3)              The
Securities Purchase Agreement previously provided that within 3 Trading Days of
the Closing Date, the Company shall deliver or cause to be delivered to each
Purchaser, a Warrant, pursuant to which such Purchaser shall have the right to
acquire up to the number of shares of Common Stock equal to 35% of the Shares to be issued to such
Purchaser, which warrant shall be exercisable immediately upon issuance for a
term of 5 years and have an exercise price equal to $6.30.  The Securities Purchase Agreement was
amended to provide that within 3 Trading Days of the Closing Date, the Company
shall deliver or cause to be delivered to each Purchaser, a Warrant, pursuant
to which such Purchaser shall have the right to acquire up to the number of
shares of Common Stock equal to 50%
of the Shares to be issued to such Purchaser, which warrant shall be
exercisable immediately upon issuance for a term of 5 years and have an
exercise price equal to $5.70.

 

4)              In
addition, the Company added to the Offering a participation right, whereby from
the Closing Date until 12 months after the Effective Date of the Registration
Statement, upon any financing by the Company of its Common Stock or Common
Stock Equivalents (a “Subsequent Financing”), each Purchaser shall have the
right to participate in up to 100% of such Subsequent Financing.

 

We
will be mailing you shortly the amended documents for your review.  However, because all of these changes are
deemed favorable to the investor, we would like to facilitate this process and
ask that you authorize us to use your previous signature pages.

 

This
pricing will change your number of shares. 
We will round your investment down and return any balance owed.

 

You
previously subscribed as follows:

 

	
  Date
  of Securities Purchase Agreement:

  	
   

  	
   

  
	
  Subscription
  Amount:

  	
   

  	
   

  
	
  Shares:

  	
   

  	
   

  
	
  Warrants:

  	
   

  	
   

  

 

 

	
  Additional
  Investment Rights:

  	
   

  	
   

  

 

 

You
are now subscribing as follows:

 

	
  Subscription
  Amount:

  	
   

  	
   

  
	
  Shares:

  	
   

  	
   

  
	
  Warrants:

  	
   

  	
   

  

 

Should
you have any questions regarding the above, please feel free to contact me at
(212) 918-0401.

 

If
you are in agreement with these changes, please sign below acknowledging that
you authorize us to use your previously executed documents to close this transaction.

 

Thank
you for your participation in this private placement.

 

	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
  Stephen
  J. DeGroat

  
	
   

  	
  Chairman

  

 

ACCEPTED AND AGREED

This 20th day of August, 2004.:

 

	
  Print
  Name of

  	
   

  
	
  Investing
  Entity: 

  	
   

  	
   

  
	
   

  	
   

  
	
  Signature:

  	
   

  	
   

  	
   

  
	
  Print
  Name:

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