EXHIBIT 10.14
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of December 2, 1996 (the
"Agreement"), by and between Commodore Environmental Services, Inc., a Delaware
corporation ("Commodore"), and Commodore Applied Technologies, Inc., a Delaware
corporation and 69.3%-owned subsidiary of Commodore ("Applied").
W I T N E S S E T H:
WHEREAS, Commodore is the owner of (i) 10,000,000 shares of
common stock, par value $.001 per share (the "Separation Stock"), of Commodore
Separation Technologies, Inc., a Delaware corporation ("Separation"), and (ii)
100 shares of common stock, par value $.001 per share (the "Refrigerant Stock"),
of Commodore CFC Technologies, Inc., a Delaware corporation ("Refrigerant" and,
together with Separation, the "Subsidiaries");
WHEREAS, Commodore desires to implement a corporate
restructuring to consolidate all of its current environmental technology
businesses within Applied; and
WHEREAS, in order to accomplish said corporate restructuring,
Commodore desires to sell, and Applied desires to purchase, all of the
Separation Stock and the Refrigerant Stock on the terms and conditions set forth
herein;
NOW, THEREFORE, in consideration of the mutual covenants
herein contained and other good and valuable consideration, the receipt and
sufficiency of which is hereby mutually acknowledged, the parties agree as
follows:
1. Purchased Shares and Note
Subject to the terms and conditions herein stated, Commodore
hereby sells, assigns, transfers and delivers to Applied, and Applied hereby
purchases from Commodore, all right, title and interest of Commodore in and to
(a) the Separation Stock and the Refrigerant Stock (together, the "Purchased
Shares"), and (b) the demand promissory note, dated as of September 30, 1996
(the "Note"), issued by Separation to Commodore in the original principal amount
of $408,000 and having a current principal balance of $______ and unpaid accrued
interest thereunder of $_________, for a total purchase price of (i) Three
Million Dollars ($3,000,000) and, (ii) subject to compliance with any applicable
stockholder approval or notice requirements, the issuance of a warrant to
purchase 7,500,000 shares of common stock, par value $.001 per share, of
Applied, at an exercise price of $15.00 per share and expiring on December 1,
2003 (the "Applied Warrant"), a copy of which is attached as Exhibit A hereto.
2. Payment of Consideration
In furtherance of the consummation of the transactions
contemplated hereby, simultaneously with the execution and delivery of this
Agreement, Applied is (i) paying the cash
portion of the purchase price by delivering to Commodore Applied's check in the
amount of $3,000,000 payable to the order of Commodore, or by wire transferring
such amount in immediately available funds to Commodore's designated account
and, (ii) subject to compliance with any applicable stockholder approval or
notice requirements, delivering to Commodore the Applied Warrant, and (b)
Commodore is delivering to Applied (i) the certificates representing the
Separation Stock and the Refrigerant Stock, and (ii) the original executed Note,
in each case properly endorsed and/or accompanied by instruments of transfer
duly executed in blank.
3. Closing Date
The consummation of the transactions contemplated by this
Agreement (the "Closing") is taking place simultaneously with the execution and
delivery of this Agreement on December 2, 1996 (the "Closing Date") at the
principal executive offices of Commodore in New York, New York.
4. Representations and Warranties
4.1 By Commodore. Commodore represents and warrants as follows
and acknowledges that Applied is relying upon such representations and
warranties in connection with the purchase by Applied of the Purchased Shares:
(a) The Subsidiaries are corporations duly incorporated,
validly existing and in good standing under the laws
of State of Delaware;
(b) The authorized capital stock of (i) Separation
consists of 50,000,000 shares of common stock and
5,000,000 shares of preferred stock, and (ii)
Refrigerant consists of 1,000 shares of common stock;
and of such authorized capital, only the Purchased
Shares have been duly issued and are outstanding and
are fully paid and non-assessable;
(c) No person, corporation or other entity has any
agreement, option or warrant, or any right or
privilege (whether by law, pre-emptive or
contractual, or whether by means of any exercise,
conversion or other right or action) which has the
effect of or is capable of becoming an agreement,
option or warrant, for the purchase from either of
the Subsidiaries of any securities (including
convertible securities) of the Subsidiaries;
(d) All of the Purchased Shares and the Note are owned by
Commodore as the registered and beneficial owner of
record, with good and marketable title thereto, free
and clear of all mortgages, liens, charges, security
interests, adverse claims, pledges, encumbrances,
restrictions and demands whatsoever (other than
restrictions imposed by federal or state securities
laws);
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(e) No person, corporation or other entity (other than
the Applied pursuant to this Agreement) has any
agreement, option or warrant, or any right or
privilege (whether by law, pre-emptive or
contractual, or whether by means of any exercise,
conversion or other right or action) which has the
effect of or is capable of becoming an agreement,
option or warrant, for the purchase of any of the
Purchased Shares or the Note;
(f) Neither Commodore nor the Subsidiaries is party to,
bound or affected by or subject to any indenture,
mortgage, lease, agreement, instrument, charter or
by-law provision, statute, regulation, order,
judgment, decree or law which would be violated,
contravened or breached by, or under which any
default would occur as a result of, the consummation
of the transactions provided for herein;
(g) Commodore has all requisite corporate power and
authority to execute, deliver and perform its
obligations under this Agreement; the execution,
delivery and performance of this Agreement by
Commodore has been duly authorized by all necessary
corporate action on the part of Commodore; and this
Agreement constitutes the legal, valid and binding
obligation of Commodore, enforceable against
Commodore in accordance with its terms; and
(h) The current principal balance of, and unpaid accrued
interest under, the Note are as set forth in Section
1 hereof.
4.2 By Applied. Applied represents and warrants as follows and
acknowledges that Commodore is relying upon such representations and warranties
in connection with the sale by Commodore of the Purchased Shares:
(a) Applied is a corporation duly incorporated, validly
existing and in good standing under the laws of the
State of Delaware;
(b) Applied has all requisite corporate power and
authority to execute, deliver and perform its
obligations under this Agreement; the execution,
delivery and performance of this Agreement by Applied
(except the issuance and delivery of the Applied
Warrant hereunder, which is subject to compliance
with any applicable stockholder approval or notice
requirements) has been duly authorized by all
necessary corporate action on the part of Applied;
and this Agreement and the Applied Warrant constitute
the legal, valid and binding obligations of Applied,
enforceable against Applied in accordance with their
respective terms;
(c) Applied is not a party to, bound or affected by or
subject to any indenture, mortgage, lease, agreement,
instrument, charter or by-law
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provision, statute, regulation, order, judgment,
decree or law which would be violated, contravened or
breached by, or under which any default would occur
as a result of, the consummation of the transactions
provided for herein; and
(d) Applied is purchasing the Purchased Shares and the
Note for its own account for investment purposes, and
not with a view to the distribution thereof in
violation of any applicable securities laws.
5. Survival of Representations and Warranties
5.1 Commodore. The representations and warranties of Commodore
contained in this Agreement, or any agreement, certificate or other document
delivered or given pursuant to this Agreement, shall survive the consummation of
the transactions contemplated by this Agreement and, notwithstanding such
completion or any investigation made by or on behalf of Applied, shall continue
in full force and effect for the benefit of Applied and any claim in respect
thereof shall be made in writing:
(a) with respect to representations and warranties of
Commodore, relating to matters other than tax
matters, for a period of three years after the
Closing Date; and
(b) with respect to representations and warranties of
Commodore, relating to tax liability or other tax
matters, within the period commencing on the Closing
Date and expiring on the date on which the last
applicable limitation period (without giving effect
to any voluntary extension(s) hereafter granted by or
on behalf of either of the Subsidiaries) under any
applicable taxation legislation expires with respect
to any fiscal year of the Subsidiaries which is
relevant in determining any relevant tax liability of
the Subsidiaries.
5.2 Applied. The representations and warranties of Applied
contained in this Agreement, or any agreement, certificate or other document
delivered or given pursuant to this Agreement, shall survive the completion of
the transactions contemplated by this Agreement and, notwithstanding such
completion or any investigation made by or on behalf of Commodore, shall
continue in full force and effect for the benefit of Commodore and any claim in
respect thereof shall be made in writing for a period of three years after the
Closing Date.
5.3 General. The provisions of this Section 5 respecting the
expiration of claims periods is expressly subject to Section 8.3 hereof.
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6. Transfer and Assumption
6.1 Transfer. This Agreement shall operate as an immediate and
effective transfer and assignment of the Purchased Shares and the Note by
Commodore to Applied as at the date hereof. The parties agree to do all such
other acts and things as may be necessary to give effect to the provisions
hereof, and without limiting the generality of the foregoing, to validly and
effectively transfer the Purchased Shares and the Note from Commodore to Applied
as at the Closing Date, and to validly and effectively issue the Applied Warrant
to Commodore as at the date hereof. Commodore hereby irrevocably constitutes and
appoints the Secretary of each of the Subsidiaries as its attorney to transfer
the Purchased Shares to Applied as at the date hereof on the books of the
Subsidiaries, with full power of substitution in the premises.
6.2 Assumption. In addition to the transfer and assignment of
the Purchased Shares and the Note, this Agreement shall serve to constitute an
immediate assignment by Commodore to Applied, and an assumption by Applied, of
any and all further lending and/or funding obligations (whether written or
verbal) of Commodore in favor of the Subsidiaries; and from and after the date
hereof, Commodore shall have no further obligation to extend any loans, advances
or other financial accommodations to either of the Subsidiaries (any and all of
which obligations are hereby assumed by Applied).
7. Additional Covenants
7.1 Each of Commodore and Applied shall take or cause to be
taken all necessary or desirable actions, steps and corporate proceedings to
approve or authorize the transactions contemplated by this Agreement and the
execution and delivery of this Agreement and other agreements and documents
contemplated hereby, and shall cause all necessary meetings of directors and
stockholders of the Subsidiaries to be held for such purpose.
7.2 In connection with the next annual meeting of Applied's
stockholders, Applied shall cause to be included in management's proxy materials
a proposal, with management's recommendation, for Applied's stockholders to
ratify the Applied Warrant and the issuance thereof to Commodore pursuant to
this Agreement.
8. Indemnification
8.1 Each party hereto agrees to indemnify and hold harmless
the other party from and in respect of any cost, claim, loss, damage, liability
or expense which such other party may suffer or incur, whether at law or in
equity, arising out, resulting from or in connection with the inaccuracy of any
representation or warranty contained herein, for the time periods provided in
Section 4.1 hereof.
8.2 No claim for indemnification will arise until written
notice thereof is given to the party from whom indemnification is sought or
claimed (the "Indemnitor"). Such notice shall be sent within a reasonable time
following the determination by the party seeking
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indemnification (the "Indemnitee") that a claim for indemnity may exist. In the
event that any legal proceedings shall be instituted or any claim or demand is
asserted by any third person in respect of which either party may seek any
indemnification from the other party, the Indemnitee shall give or cause to be
given to the Indemnitor written notice thereof and the Indemnitor shall have the
right, at its option and expense, to be present at the defense of such
proceedings, claim or demand, but not to control the defense, negotiation or
settlement thereof, which control shall at all times remain with the Indemnitee,
unless the Indemnitor irrevocably acknowledges full and complete responsibility
for indemnification of the Indemnitee in respect of the subject claim, in which
case the Indemnitor may assume such control through counsel of its choice,
provided however, that no settlement shall be entered into without the
Indemnitee's prior written consent (which shall not be unreasonably withheld).
The parties agree to cooperate fully with each other in connection with the
defense, negotiation or settlement of any such third party legal proceeding,
claim or demand.
8.3 Notwithstanding anything in this Agreement to the
contrary, the indemnity provided for in this Section 8 shall apply to any loss,
claim, cost, damage, expense or liability, whether or not the actual amount
thereof shall have been ascertained prior to the final day upon which a claim
for indemnity with respect thereto may be made hereunder in accordance with
Section 5 hereof, so long as written notice thereof shall have been given to the
party from whom indemnification is sought prior to said date, setting forth
specifically and in reasonable detail, so far as is known, the matter as to
which indemnification is being sought, but nothing herein shall be construed to
require payment of any claim for indemnity until the actual amount payable shall
have been finally ascertained.
9. Tax Treatment
It is the intention of the parties for the transaction
contemplated by this Agreement to qualify as a tax-free reorganization pursuant
to Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended,
thereby resulting in no currently recognized gain or loss to either Commodore or
Applied.
10. Governing Law
This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
11. Entire Agreement
This Agreement, together with the Applied Warrant, constitutes
the entire agreement between the parties relating to the subject matter hereof.
There are no verbal statements, representations, warranties, undertakings or
agreements between the parties. This agreement may be amended only by an
instrument in writing signed by both parties.
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12. Time of the Essence
Time shall be of the essence of this Agreement.
13. Assignment
Neither this Agreement nor any rights or obligations hereunder
may be assigned by either party without the prior written consent of the other
party, which consent may be withheld in either party's sole and absolute
discretion.
14. Binding Effect
This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and permitted assigns.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
COMMODORE ENVIRONMENTAL SERVICES, INC.
By: /s/ Xxxx X. Xxxxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Chairman of the Board
COMMODORE APPLIED TECHNOLOGIES, INC.
By: /s/ Xxxx X. Xxxxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Chairman of the Board
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EXHIBIT A
NEITHER THE WARRANTS REPRESENTED BY THIS CERTIFICATE NOR THE
SHARES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NEITHER THE
WARRANTS NOR SUCH SHARES MAY BE OFFERED OR SOLD EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
ACT, OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT.
COMMODORE APPLIED TECHNOLOGIES, INC.
WARRANT FOR THE PURCHASE OF SHARES OF COMMON STOCK
No. 1 7,500,000 Shares
THIS CERTIFIES that, for value received, Commodore Environmental
Services, Inc. (the "Holder"), is entitled to subscribe for and purchase from
Commodore Applied Technologies, Inc., a Delaware corporation (the "Company"),
subject to compliance with any applicable stockholder approval or notice
requirements, and upon the terms and conditions set forth herein, at any time or
from time to time after the date hereof, and before 5:00 P.M. on December 1,
2003, New York time (the "Exercise Period"), Seven Million Five Hundred Thousand
(7,500,000) shares, par value $.001 per share, of the Company ("Common Stock"),
at an exercise price of $15.00 per share (the "Exercise Price"). This Warrant is
issued in connection with the sale of 100% of the capital stock of Commodore
Separation Technologies, Inc. and Commodore CFC Technologies, Inc. by the Holder
to the Company pursuant to a Stock Purchase Agreement, dated as of December 1,
1996, by and between the Holder and the Company. As used herein the term "this
Warrant" shall mean and include this Warrant and any Warrant or Warrants
hereafter issued as a consequence of the exercise or transfer of this Warrant in
whole or in part.
The number of shares of Common Stock issuable upon exercise of the
Warrants (the "Warrant Shares") and the Exercise Price may be adjusted from time
to time as hereinafter set forth.
1. This Warrant may be exercised during the Exercise Period, as to the
whole or any lesser number of the respective whole Warrant Shares, by the
surrender of this Warrant (with the election at the end hereof duly executed) to
the Company at its office as set forth in the form of election attached hereto,
or at such other place as is designated in writing by the Company, together with
a certified or bank cashier's check payable to the order of the Company in an
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amount equal to the Exercise Price multiplied by the number of respective
Warrant Shares for which this Warrant is being exercised.
2. Upon each exercise of the Holder's rights to purchase Warrant Shares
and payment of the Exercise Price, the Holder shall be deemed to be the holder
of record of the Warrant Shares issuable upon such exercise, notwithstanding
that the transfer books of the Company shall then be closed or certificates
representing such Warrant Shares shall not then have been actually delivered to
the Holder. As soon as practicable after each such exercise of this Warrant and
payment of the Holder a certificate or certificates for the Warrant Shares
issuable upon such exercise, registered in the name of the Holder or its
designee. If the Warrant should be exercised in part only, the Company shall,
upon surrender of this Warrant for cancellation, execute and deliver a new
Warrant evidencing the right of the Holder to purchase the balance of the
Warrant Shares (or portions thereof) subject to purchase hereunder.
3. Any Warrants issued upon the transfer or exercise in part of this
Warrant shall be numbered and shall be registered in a Warrant Register as they
are issued. The Company shall be entitled to treat the registered holder of any
Warrant on the Warrant Register as the Owner in fact thereof for all purposes
and shall not be bound to recognize any equitable or other claim to or interest
in such Warrant on the part of any other person, and shall not be liable for any
registration or transfer of Warrants which are registered or to be registered in
the name of a fiduciary or the nominee of a fiduciary unless made with the
actual knowledge that a fiduciary or nominee is committing a breach of trust in
requesting such registration or transfer, or with the knowledge of such facts
that its participation therein amounts to bad faith. This Warrant shall be
transferable only on the books of the Company upon delivery thereof duly
endorsed by the Holder or by his duly authorized attorney or representative, or
accompanied by proper evidence of succession, assignment, or authority to
transfer. In all cases or transfer by an attorney, executor, administrator,
guardian, or other legal representative, duly authenticated evidence of his or
its authority shall be produced. Upon any registration of transfer, the Company
shall deliver a new Warrant or Warrants to the person entitled thereto. This
Warrant may be exchanged, at the option of the Holder thereof, for another
Warrant, or other Warrants of different denominations, of like tenor and
representing in the aggregate the right to purchase a like number of Warrant
Shares (or portions thereof), upon surrender to the Company or its duly
authorized agent. Notwithstanding the foregoing, the Company shall have no
obligation to cause Warrants to be transferred on its books to any person if, in
the opinion of counsel to the Company, such transfer does not comply with the
provisions of the Securities Act of 1933, as amended (the "Act"), and the rules
and regulations thereunder.
4. The Company shall at all times reserve and keep available out of its
authorized and unissued Common Stock, solely for the purpose of providing for
the exercise of the rights to purchase all Warrant Shares granted pursuant to
the Warrants, such number of shares of Common Stock as shall, from time to time,
be sufficient therefor. The Company covenants that all shares of Common Stock
issuable upon exercise of this Warrant, upon receipt by the
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Company of the full Exercise Price therefor, shall be validly issued, fully
paid, nonassessable, and free of preemptive rights.
5. (a) In case the Company shall at any time after the date the
Warrants were first issued (i) declare a dividend on the outstanding Common
Stock payable in shares of its capital stock, (ii) subdivide the outstanding
Common Stock, (iii) combine the outstanding Common Stock into a smaller number
of shares, or (iv) issue any shares of its capital stock by reclassification of
the Common Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing corporation),
then, in each case, the Exercise Price, and the number of Warrant Shares
issuable upon exercise of this Warrant, in effect at the time of the record date
for such dividend or of the effective date of such subdivision, combination, or
reclassification, shall be proportionately adjusted so that the Holder after
such time shall be entitled to receive the aggregate number and kind of shares
which, if such Warrant had been exercised immediately prior to such time, he
would have owned upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination, or reclassification. Such adjustment
shall be made successively whenever any event listed above shall occur.
(b) In case the Company shall issue or fix a record date for
the issuance to all holders of Common Stock of rights, options, or warrants to
subscribe for or purchase Common Stock (or securities convertible into or
exchangeable for Common Stock) at a price per share (or having a conversion or
exchange price per share, if a security convertible into or exchangeable for
Common Stock) less than the Exercise Price per share of Common Stock on such
record date, then, in each case, the Exercise Price shall be adjusted by
multiplying the Exercise Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the number of shares of Common
Stock outstanding on such record date plus the number of shares of Common Stock
which the aggregate offering price of the total number of shares of Common Stock
so to be offered (or the aggregate initial conversion or exchange price of the
convertible or exchangeable securities so to be offered) would purchase at such
current Exercise Price and the denominator of which shall be the number of
shares of Common Stock outstanding on such record date plus the number of
additional shares of Common Stock to be offered for subscription or purchase (or
into which the convertible or exchangeable securities so to be offered are
initially convertible or exchangeable). Such adjustment shall become effective
at the close of business on such record date; provided, however, that, to the
extent the shares of Common Stock (or securities convertible into or
exchangeable for shares of Common Stock) are not delivered, the Exercise Price
shall be readjusted after the expiration of such rights, options, or warrants
(but only with respect to Warrants exercised after such expiration), to the
Exercise Price which would then be in effect had the adjustments made upon the
issuance of such rights, options, or warrants been made upon the basis of
delivery of only the number of shares of Common Stock (or securities convertible
into or exchangeable for shares of Common Stock) actually issued. In case any
subscription price may be paid in a consideration part or all of which shall be
in a form other than cash, the value of such consideration shall be as
determined in good faith by the board of directors of the Company, whose
determination shall be conclusive
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absent manifest error. Shares of Common Stock owned by or held for the account
of the Company or any majority-owned subsidiary shall not be deemed outstanding
for the purpose of any such computation.
(c) In case the Company shall distribute to all holders of
Common Stock (including any such distribution made to the stockholders of the
Company in connection with a consolidation or merger in which the Company is the
continuing corporation) evidences of its indebtedness or assets (other than cash
dividends or distributions and dividends payable in shares of Common Stock), or
rights, options, or warrants to subscribe for or purchase Common Stock, or
securities convertible into or exchangeable for shares of Common Stock
(excluding those with respect to the issuance of which an adjustment of the
Exercise Price is provided pursuant to Section 5(b) hereof), then, in each case,
the Exercise Price shall be adjusted by multiplying the Exercise Price in effect
immediately prior to the record date for the determination of stockholders
entitled to receive such distribution by a fraction, the numerator of which
shall be the Exercise Price per share of Common Stock on such record date, less
the fair market value (as determined in good faith by the board of directors of
the Company, whose determination shall be conclusive absent manifest error) of
the portion of the evidences of indebtedness or assets so to be distributed, or
of such rights, options, or warrants or convertible or exchangeable securities,
applicable to one share, and the denominator of which shall be such current
Exercise Price per share of Common Stock. Such adjustment shall be made whenever
any such distribution is made, and shall become effective on the record date for
the determination of shareholders entitled to receive such distribution.
(d) In case the Company shall issue shares of Common Stock or
rights, options, or warrants to subscribe for or purchase Common Stock, or
securities convertible into or exchangeable for Common Stock (excluding shares,
rights, options, warrants, or convertible or exchangeable securities issued or
issuable (i) in any of the transactions with respect to which an adjustment of
the Exercise Price is provided pursuant to Sections 5(a), 5(b) or 5(c) above,
(ii) upon exercise of the Warrants or (iii) to management or employees of the
Company up to a maximum amount of shares of Common Stock), at a price per share
(determined, in the case of such rights, options, warrants, or convertible or
exchangeable securities, by dividing (x) the total amount received or receivable
by the Company in consideration of the sale and issuance of such rights,
options, warrants, or convertible or exchangeable securities, plus the minimum
aggregate consideration payable to the Company upon exercise, conversion, or
exchange thereof, by (y) the maximum number of shares covered by such rights,
options, warrants, or convertible or exchangeable securities) lower than the
Exercise Price per share of Common Stock in effect immediately prior to such
issuance, then the Exercise Price shall be reduced on the date of such issuance
to a price (calculated to the nearest cent) determined by multiplying the
Exercise Price in effect immediately prior to such issuance by a fraction, (iii)
the numerator of which shall be an amount equal to the sum of (A) the number of
shares of Common Stock outstanding immediately prior to such issuance plus (B)
the quotient obtained by dividing the consideration received by the Company upon
such issuance by such current Exercise Price, and (iv) the denominator of which
shall be the total number of shares of Common Stock outstanding
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immediately after such issuance. For the purposes of such adjustments, the
maximum number of shares which the holders of any such rights, options,
warrants, or convertible or exchangeable securities shall be entitled to
initially subscribe for or purchase or convert or exchange such securities into
shall be deemed to be issued and outstanding as of the date of such issuance,
and the consideration received by the Company therefor shall be deemed to be the
consideration received by the Company for such rights, options, warrants, or
convertible or exchangeable securities, plus the minimum aggregate consideration
or premiums stated in such rights, options, warrants, or convertible or
exchangeable securities to be paid for the shares covered thereby. No further
adjustment of the Exercise Price shall be made as a result of the actual
issuance of shares of Common Stock on exercise of such rights, options, or
warrants or on conversion or exchange of such convertible or exchangeable
securities. On the expiration or the termination of such rights, options, or
warrants, or the termination of such right to convert or exchange, the Exercise
Price shall be readjusted (but only with respect to Warrants exercised after
such expiration or termination) to such Exercise Price as would have obtained
had the adjustments made upon the issuance of such rights, options, warrants, or
convertible or exchangeable securities been made upon the basis of the delivery
of only the number of shares of Common Stock actually delivered upon the
exercise of such rights, options, or warrants or upon the conversion or exchange
of any such securities; and on any change of the number of shares of Common
Stock deliverable upon the exercise of any such rights, options, or warrants or
conversion or exchange of such convertible or exchangeable securities or any
change in the consideration to be received by the Company upon such exercise,
conversion, or exchange, including, but not limited to, a change resulting from
the antidilution provisions thereof, the Exercise Price, as then in effect,
shall forthwith be readjusted (but only with respect to Warrants exercised after
such change) to such Exercise Price as would have been obtained had an
adjustment been made upon the issuance of such rights, options, or warrants not
exercised prior to such change, or securities not converted or exchanged prior
to such change, on the basis of such change. In case the Company shall issue
shares of Common Stock or any such rights, options, warrants, or convertible or
exchangeable securities for a consideration consisting, in whole or in part, of
property other than cash or its equivalent, then the "price per share" and the
"consideration received by the Company" for purposes of the first sentence of
this Section 5(d) shall be as determined in good faith by the board of directors
of the Company, whose determination shall be conclusive absent manifest error.
Shares of Common Stock owned by or held for the account of the Company or any
majority-owned subsidiary shall not be deemed outstanding for the purpose of any
such computation.
(e) No adjustment in the Exercise Price shall be required if
such adjustment is less than $.05; provided, however, that any adjustments which
by reason of this Section 5 are not required to be made shall be carried forward
and taken into account in any subsequent adjustment. All calculations under this
Section 5 shall be made to the nearest cent or to the nearest one-thousandth of
a share, as the case may be.
(f) In any case in which this Section 5 shall require that an
adjustment in the Exercise Price be made effective as of a record date for a
specified event, the Company may
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elect to defer, until the occurrence of such event, issuing to the Holder, if
the Holder exercised this Warrant after such record date, the shares of Common
Stock, if any, issuable upon such exercise over and above the shares of Common
Stock, if any, issuable upon such exercise on the basis of the Exercise Price in
effect prior to such adjustment; provided, however, that the Company shall
deliver to the Holder a due xxxx or other appropriate instrument evidencing the
Holder's right to receive such additional shares upon the occurrence of the
event requiring such adjustment.
(g) Upon each adjustment of the Exercise Price as a result of
the calculations made in Sections 5(b), 5(c) or 5(d) hereof, this Warrant shall
thereafter evidence the right to purchase, at the adjusted Exercise Price, that
number of shares (calculated to the nearest thousandth) obtained by dividing (A)
the product obtained by multiplying the number of shares purchasable upon
exercise of this Warrant prior to adjustment of the number of shares by the
Exercise Price in effect prior to adjustment of the Exercise Price by (B) the
Exercise Price in effect after such adjustment of the Exercise Price.
(h) Whenever there shall be an adjustment as provided in this
Section 5, the Company shall promptly cause written notice thereof to be sent by
registered mail, postage prepaid, to the Holder, at its address as it shall
appear in the Warrant Register, which notice shall be accompanied by an
officer's certificate setting forth the number of Warrant Shares purchasable
upon the exercise of this Warrant and the Exercise Price after such adjustment
and setting forth a brief statement of the facts requiring such adjustment and
the computation thereof, which officer's certificate shall be conclusive
evidence of the correctness of any such adjustment absent manifest error.
6. (a) In case of any consolidation with or merger of the Company with
or into another corporation (other than a merger or consolidation in which the
Company is the surviving or continuing corporation), or in case of any sale,
lease, or conveyance to another corporation of the property and assets of any
nature of the Company as an entirety or substantially as an entirety, such
successor, leasing, or purchasing corporation, as the case may be, shall (i)
execute with the Holder an agreement providing that the Holder shall have the
right thereafter to receive upon exercise of this Warrant solely the kind and
amount of shares of stock and other securities, property, cash, or any
combination thereof receivable upon such consolidation, merger, sale, lease, or
conveyance by a holder of the number of shares of Common Stock for which this
Warrant;might have been exercised immediately prior to such consolidation,
merger, sale, lease, or conveyance and (ii) make effective provision in its
certificate of incorporation or otherwise, if necessary, to effect such
agreement. Such agreement shall provide for adjustments which shall be as nearly
equivalent as practicable to the adjustments in Section 5.
(b) In case of any reclassification or change of the shares of
Common Stock issuable upon exercise of this Warrant (other than a change in par
value or from no par value to a specified par value, or as a result of a
subdivision or combination, but including any change in the shares into two or
more classes or series of shares), or in case of any consolidation or
6
merger of another corporation into the Company in which the Company is the
continuing corporation and in which there is a reclassification or change
(including a change to the right to receive cash or other property) of the
shares of Common Stock (other than a change in par value, or from no par value
to a specified par value, or as a result of a subdivision or combination, but
including any change in the shares into two or more classes or series of
shares), the Holder shall have the right thereafter to receive upon exercise of
this Warrant solely the kind and amount of shares of stock and other securities,
property, cash, or any combination thereof receivable upon such
reclassification, change, consolidation, or merger by a holder of the number of
shares of Common Stock for which this Warrant might have been exercised
immediately prior to such reclassification, change, consolidation, or merger.
Thereafter, appropriate provision shall be made for adjustments which shall be
as nearly equivalent as practicable to the adjustments in Section 5.
(c) The above provisions of this Section 6 shall similarly
apply to successive reclassifications and changes of shares of Common Stock and
to successive consolidations, mergers, sales, leases, or conveyances.
7. In case at any time the Company shall propose
(a) to pay any dividend or make any distribution on shares of
Common Stock in shares of Common Stock or make any other distribution
(other than regularly scheduled cash dividends which are not in a
greater amount per share than the most recent such cash dividend) to
all holders of Common Stock; or
(b) to issue any rights, warrants, or other securities to all
holders of Common Stock entitling them to purchase any additional
shares of Common Stock or any other rights, warrants, or other
securities; or
(c) to effect any reclassification or change of outstanding
shares of Common Stock, or any consolidation, merger, sale, lease, or
conveyance of property, described in Section 6; or
(d) to effect any liquidation, dissolution, or winding-up of
the Company; or
(e) to take any other action which would cause an adjustment
to the Exercise Price;
then, and in any one or more of such cases, the Company shall give written
notice thereof, by registered mail, postage prepaid, to the Holder at the
Holder's address as it shall appear in the Warrant Register, mailed at least 15
days prior to (i) the date as of which the holders of record of shares of Common
Stock to be entitled to receive any such dividend, distribution, rights,
warrants, or other securities are to be determined, (ii) the date on which any
such reclassification, change of outstanding shares of Common Stock,
consolidation, merger, sale,
7
lease, conveyance of property, liquidation, dissolution, or winding-up is
expected to become effective, and the date as of which it is expected that
holders of record of shares of Common Stock shall be entitled to exchange their
shares for securities or other property, if any, deliverable upon such
reclassification, change of outstanding shares, consolidation, merger, sale,
lease, conveyance of property, liquidation, dissolution, or winding-up, or (iii)
the date of such action which would require an adjustment to the Exercise Price.
8. (a) If at any time prior to the expiration of the Exercise Period,
the Company shall file a registration statement (other than a registration
statement on Form X-0, Xxxx X-0, or any successor form) with the Securities and
Exchange Commission (the "Commission") while any Registrable Securities (as
hereinafter defined) are outstanding, the Company shall give all the then
holders of any Registrable Securities (the "Eligible Holders") at least 30 days
prior written notice of the filing of such registration statement. If requested
by any Eligible Holder in writing within 20 days after receipt of any such
notice, the Company shall, at the Company's sole expense (other than the fees
and disbursements of counsel for the Eligible Holders and the underwriting
discounts, if any, payable in respect of the Registrable Securities sold by any
Eligible Holder), register or qualify all or, at each Eligible Holder's option,
any portion of the Registrable Securities of any Eligible Holders who shall have
made such request, concurrently with the registration of such other securities,
all to the extent requisite to permit the public offering. and sale of the
Registrable Securities through the facilities of all appropriate securities
exchanges and the over-the-counter market, and will use its best efforts through
its officers, directors, auditors, and counsel to cause such registration
statement to become effective as promptly as practicable. Notwithstanding the
foregoing, if the managing underwriter of any such offering shall advise the
Company in writing that, in its opinion, the distribution of all or a portion of
the Registrable Securities requested to be included in the registration
concurrently with the securities being registered by the Company would
materially adversely affect the distribution of such securities by the Company
for its own account, then any Eligible Holder who shall have requested
registration of his or its Registrable Securities shall delay the offering and
sale of such Registrable Securities (or the portions thereof so designated by
such managing underwriter) for such period, not to exceed 90 days (the "Delay
Period"), as the managing underwriter shall request, provided that no such delay
shall be required as to any Registrable Securities if any securities of the
Company are included in such registration statement and eligible for sale during
the Delay Period for the account of any person other than the Company and any
Eligible Holder unless the securities included in such registration statement
and eligible for sale during the Delay Period for such other person shall have
been reduced pro rata to the reduction of the Registrable Securities which were
requested to be included and eligible for sale during the Delay Period in such
registration. As used herein' "Registrable Securities" shall mean the Warrants
and the Warrant Shares which, in each case, have not been previously sold
pursuant to a registration statement or Rule 144 promulgated under the Act.
(b) If, at any time prior to the expiration of the Exercise
Period, the Company shall receive a written request, from Eligible Holders who
in the aggregate own (or upon exercise of all Warrants then outstanding or
issuable would own) 50% of the total number of
8
shares of Common Stock then included (or upon such exercises would be included)
in the Registrable Securities (the "Majority Holders"), to register the sale of
all or part of such Registrable Securities, the Company shall, as promptly as
practicable, prepare and file with the Commission a registration statement
sufficient to permit the public offering and sale of the Registrable Securities
through the facilities of all appropriate securities exchanges and the
over-the-counter market, and will use its best efforts through its officers,
directors, auditors, and counsel to cause such registration statement to become
effective as promptly as practicable; provided, however, that the Company shall
only be obligated to file one such registration statement for which all expenses
incurred in connection with such registration (other than the fees and
disbursements of counsel for the Eligible Holders and underwriting discounts, if
any, payable in respect of the Registrable Securities sold by the Eligible
Holders) shall be borne by the Company. The Company shall not be obligated to
effect any registration of its securities pursuant to this Section 8(b) within
six months after the effective date of a previous registration statement
prepared and filed in accordance with Sections 8(a) or 8(b). Within three
business days after receiving any request contemplated by this Section 8(b), the
Company shall give written notice to all the other Eligible Holders, advising
each of them that the Company is proceeding with such registration and offering
to include therein all or any portion of any such other Eligible Holder's
Registrable Securities, provided that the Company receives a written request to
do so from such Eligible Holder within 30 days after receipt by him or it of the
Company's notice.
(c) In the event of a registration pursuant to the provisions
of this Section 8, the Company shall use its best efforts to cause the
Registrable Securities so registered to be registered or qualified for sale
under the securities or blue sky laws of such jurisdictions as the Eligible
Holder or such holders may reasonably request; provided, however, that the
Company shall not be required to qualify to do business in any state by reason
of this Section 8(c) in which it is not otherwise required to qualify to do
business.
(d) The Company shall keep effective any registration or
qualification contemplated by this Section 8 and shall from time to time amend
or supplement each applicable registration statement, preliminary prospectus,
final prospectus, application, document, and communication for such period of
time as shall be required to permit the Eligible Holders to complete the offer
and sale of the Registrable Securities covered thereby. The Company shall in no
event be required to keep any such registration or qualification in effect for a
period in excess of nine months from the date on which the Eligible Holders are
first free to sell such Registrable Securities; provided, however, that, if the
Company is required to keep any such registration or qualification in effect
with respect to securities other than the Registrable Securities beyond such
period, the Company shall keep such registration or qualification in effect as
it relates to the Registrable Securities for so long as such registration or
qualification remains or is required to remain in effect in respect of such
other securities.
(e) In the event of a registration pursuant to the provisions
of this Section 8, the Company shall furnish to each Eligible Holder such number
of copies of the registration
9
statement and of each amendment and supplement thereto (in each case, including
all exhibits), such reasonable number of copies of each prospectus contained in
such registration statement and each supplement or amendment thereto (including
each preliminary prospectus), all of which shall conform to the requirements of
the Act and the rules and regulations thereunder, and such other documents, as
any Eligible Holder may reasonably request to facilitate the disposition of the
Registrable Securities included in such registration.
(f) In the event of a registration pursuant to the provisions
of this Section 8, the Company shall furnish each Eligible Holder of any
Registrable Securities so registered with an opinion of its counsel (reasonably
acceptable to the Eligible Holders) to the effect that (i) the registration
statement has become effective under the Act and no order suspending the
effectiveness of the registration statement, preventing or suspending the use of
the registration statement, any preliminary prospectus, any final prospectus, or
any amendment or supplement thereto has been issued, nor has the Commission or
any securities or blue sky authority of any jurisdiction instituted or
threatened to institute any proceedings with respect to such an order, (ii) the
registration statement and each prospectus forming a part thereof (including
each preliminary prospectus), and any amendment or supplement thereto, complies
as to form with the Act and the rules and regulations thereunder, and (iii) such
counsel has no knowledge of any material misstatement or omission in such
registration statement or any prospectus, as amended or supplemented. Such
opinion shall also state the jurisdictions in which the Registrable Securities
have been registered or qualified for sale pursuant to the provisions of Section
8(c).
(g) In the event of a registration pursuant to the provision
of this Section 8, the Company shall enter into a cross-indemnity agreement and
a contribution agreement, each in customary form, with each underwriter, if any,
and, if requested, enter into an underwriting agreement containing conventional
representations, warranties, allocation of expenses, and customary closing
conditions, including, but not limited to, opinions of counsel and accountants'
cold comfort letters, with any underwriter who acquires any Registrable
Securities.
(h) In the event of a registration pursuant to the provisions
of this Section 8:
(i) Each Eligible Holder shall furnish to the Company in
writing such appropriate information (relating to such Eligible Holder and the
intention of such Eligible Holder as to proposed methods of sale or other
disposition of their shares of Common Stock) and the identity of and
compensation to be paid to any proposed underwriters to be employed in
connection therewith as the Company, any underwriter, or the Commission or any
other regulatory authority may request;
(ii) the Eligible Holders shall enter into the usual and
customary form of underwriting agreement agreed to by the Company and any
underwriter with respect to any such offering, if required, and such
underwriting agreement shall contain the customary rights of indemnity between
the Company, the underwriters, and such Eligible Holders;
10
(iii) each Eligible Holder shall agree that he shall
execute, deliver and/or file with or supply the Company, any underwriters, the
Commission and/or any state or other regulatory authority such information,
documents, representations, undertakings and/or agreements necessary to carry
out the provisions of the registration covenants contained in this Section 8
and/or to effect the registration or qualification of his or its Registrable
Securities under the Act and/or any of the laws and regulations of any state of
governmental instrumentality;
(iv) the Company's obligation to include any Registrable
Securities in a registration statement shall be subject to the written agreement
of each holder thereof to offer such securities in the same manner and on the
same terms and conditions as the other securities of the same class are being
offered pursuant to the registration statement, if such shares are being
underwritten;
(v) in the event that all the Registrable Securities have
not been sold on or prior to the expiration of the period specified in Section
8(d) above, the Company may de-register by post-effective amendment any
Registrable Securities covered by the registration statement, but not sold on or
prior to such date. The Company agrees that it will notify each holder of
Registrable Securities of the filing and effective date of such post-effective
amendment; and
(vi) each Eligible Holder agrees that upon notification by
the Company that the prospectus in respect to any public offering covered by the
provisions hereof is in need of revision, such Eligible Holder shall immediately
upon receipt of such notification (x) cease to offer or sell any securities of
the Company which must be accompanied by such prospectus, (y) return all such
prospectuses in such Eligible Holder's hands to the Company, and (z) not offer
or sell any securities of the Company until such Holder has been provided with a
current prospectus and the Company has given such Eligible Holder notification
permitting such Eligible Holder to resume offers and sales.
(i) The Company agrees that until all the Registrable
Securities have been sold under a registration statement or pursuant to Rule 144
under the Act, it shall keep current in filing all reports, statements and other
materials required to be filed with the Commission to permit holders of the
Registrable Securities to sell such securities under Rule 144.
(j) Except for rights granted to holders of the Warrants, the
Company will not, without the written consent of the Majority Holders, grant to
any persons the right to request the Company to register any securities of the
Company, provided that the Company may grant such registration rights to other
persons so long as such rights are subordinate or pari passu to the rights of
the Eligible Holders.
9. (a) Subject to the conditions set forth below, the Company agrees to
indemnify and hold harmless each Eligible Holder, its officers, directors,
partners, employees, agents and
11
counsel, and each person, if any, who controls any such person within the
meaning of Section 15 of the Act or Section 20(a) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), from and against any and all loss,
liability, charge, claim, damage, and expense whatsoever (which shall include,
for all purposes of this Section 9, but not be limited to, attorneys' fees and
any and all reasonable expense whatsoever incurred in investigating, preparing,
or defending against any litigation, commenced or threatened, or any claim
whatsoever, and any and all amounts paid in settlement of any claim or
litigation), as and when incurred, arising out of, based upon, or in connection
with: (i) any untrue statement or alleged untrue statement of a material fact
contained (A) in any registration statement, preliminary prospectus, or final
prospectus (as from time to time amended and supplemented), or any amendment or
supplement thereto, relating to the sale of any of the Registrable Securities,
or (B) in any application or other document or communication (in this Section 9
collectively called an "application") executed by or on behalf of the Company or
based upon written information furnished by or on behalf of the Company filed in
any jurisdiction in order to register or qualify any of the Registrable
Securities under the securities or blue sky laws thereof or filed with the
Commission or any securities exchange; or (ii) any omission or alleged omission
to state a material fact required to be stated in any document referenced in
clause (A) or (B) above or necessary to make the statements therein not
misleading, unless such statement or omission was made in reliance upon and in
conformity with written information furnished to the Company with respect to
such Eligible Holder by or on behalf of such person expressly for inclusion in
any registration statement, preliminary prospectus, or final prospectus, or any
amendment or supplement thereto, or in any application, as the case may be; or
(iii) any breach of any representation, warranty, covenant, or agreement of the
Company contained in this Warrant. The foregoing agreement to indemnify shall be
in addition to any liability the Company may otherwise have, including
liabilities arising under this Warrant.
If any action is brought against any Eligible Holder or any of
its officers, directors, partners, employees, agents, or counsel, or any
controlling persons of such person (an "indemnified party") in respect of which
indemnity may be sought against the Company pursuant to the foregoing paragraph,
such indemnified party or parties shall promptly notify the Company in writing
of the institution of such action (but the failure so to notify shall not
relieve the Company from any liability other than pursuant to this Section 9(a),
except to the extent it may have been prejudiced in any material respect by such
failure) and the Company shall promptly assume the defense of such action,
including the employment of counsel (reasonably satisfactory to such indemnified
party or parties) and payment of expenses. Such indemnified party or parties
shall have the right to employ its or their own counsel in any such case, but
the fees and expenses of such counsel shall be at the expense of such
indemnified party or parties unless the employment of such counsel shall have
been authorized in writing by the Company in connection with the defense of such
action or the Company shall not have promptly employed counsel reasonably
satisfactory to such indemnified party or parties to have charge of the defense
of such action or such indemnified party or parties shall have reasonably
concluded that there may be one or more legal defenses available to it or them
or to other indemnified parties which are different from or additional to those
available to the Company, in any of which events such fees
12
and expenses shall be borne by the Company and the Company shall not have the
right to direct the defense of such action on behalf of the indemnified party or
parties. Anything in this Section 10 to the contrary notwithstanding, the
Company shall not be liable for any settlement of any such claim or action
effected without its written consent, which shall not be unreasonably withheld.
The Company shall not, without the prior written consent of each indemnified
party that is not released as described in this sentence, settle or compromise
any action, or permit a default or consent to the entry of judgment in or
otherwise seek to terminate any pending or threatened action, in respect of
which indemnity may be sought hereunder (whether or not any indemnified party is
a party thereto), unless such settlement, compromise, consent, or termination
includes an unconditional release of each indemnified party from all liability
in respect of such action. The Company agrees promptly to notify the Eligible
Holders of the commencement of any litigation or proceedings against the Company
or any of its officers or directors in connection with the sale of any
Registrable Securities or any preliminary prospectus, prospectus, registration
statement, or amendment or supplement thereto, or any application relating to
any sale of any Registrable Securities.
(b) The Holder agrees to indemnify and hold harmless the
Company, each director of the Company, each officer of the Company who shall
have signed any registration statement covering Registrable Securities held by
the Holder, each other person, if any, who controls the Company within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, and its
or their respective counsel, to the same extent as the foregoing indemnity from
the Company to the Holder in Section 9(a), but only with respect to statements
or omissions, if any, made in any registration statement, preliminary
prospectus, or final prospectus (as from time to time amended and supplemented),
or any amendment or supplement thereto, or in any application, in reliance upon
and in conformity with written information furnished to the Company with respect
to the Holder by or on behalf of the Holder expressly for inclusion in any such
registration statement, preliminary prospectus, or final prospectus, or any
amendment or supplement thereto, or in any application, as the case may be. If
any action shall be brought against the Company or any other person so
indemnified based on any such registration statement, preliminary prospectus, or
final prospectus, or any amendment or supplement thereto, or in any application,
and in respect of which indemnity may be sought against the Holder pursuant to
this Section 9(b), the Holder shall have the rights and duties given to the
Company, and the Company and each other person so indemnified shall have the
rights and duties given to the indemnified parties, by the provisions of Section
9(a).
(c) To provide for just and equitable contribution, if (i) an
indemnified party makes a claim for indemnification pursuant to Section 9(a) or
9(b) (subject to the limitations thereof) but it is found in a final judicial
determination, not subject to further appeal, that such indemnification may not
be enforced in such case, even though this Agreement expressly provides for
indemnification in such case, or (ii) any indemnified or indemnifying party
seeks contribution under the Act, the Exchange Act or otherwise, then the
Company (including for this purpose any contribution made by or on behalf of any
director of the Company, any officer of the Company who signed any such
registration statement, any controlling person of the
13
Company, and its or their respective counsel), as one entity, and the Eligible
Holders of the Registrable Securities included in such registration in the
aggregate (including for this purpose any contribution by or on behalf of an
indemnified party), as a second entity, shall contribute to the losses,
liabilities, claims, damages, and expenses whatsoever to which any of them may
be subject, on the basis of relevant equitable considerations such as the
relative fault of the Company and such Eligible Holders in connection with the
facts which resulted in such losses, liabilities, claims, damages, and expenses.
The relative fault, in the case of an untrue statement, alleged untrue
statement, omission, or alleged omission, shall be determined by, among other
things, whether such statement, alleged statement, omission, or alleged omission
relates to information supplied by the Company or by such Eligible Holders, and
the parties' relative intent, knowledge, access to information, and opportunity
to correct or prevent such statement, alleged statement, omission, or alleged
omission. The Company and the Holder agree that it would be unjust and
inequitable if the respective obligations of the Company and the Eligible
Holders for contribution were determined by pro rata or per capita allocation of
the aggregate losses, liabilities, claims, damages, and expenses (even if the
Holder and the other indemnified parties were treated as one entity for such
purpose) or by any other method of allocation that does not reflect the
equitable considerations referred to in this Section 9(c). In no case shall any
Eligible Holder be responsible for a portion of the contribution obligation
imposed on all Eligible Holders in excess of its pro rata share based on the
number of shares of Common Stock owned (or which would be owned upon exercise of
the Registrable Securities) by it and included in such registration as compared
to the number of shares of Common Stock owned (or which would be owned upon
exercise of the Registrable Securities) by all Eligible Holders and included in
such registration. No person guilty of a fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who is not guilty of such fraudulent misrepresentation. For purposes
of this Section 9(c), each person, if any, who controls any Eligible Holder
within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act
and each officer, director, partner, employee, agent, and counsel of each such
Eligible Holder or control person shall have the same rights to contribution as
such Eligible Holder or control person and each person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, each officer of the Company who shall have signed any such
registration statement, each director of the Company, and its or their
respective counsel shall have the same rights to contribution as the Company,
subject in each case to the provisions of this Section 9(c). Anything in this
Section 9(c) to the contrary notwithstanding, no party shall be liable for
contribution with respect to the settlement of any claim or action effected
without its written consent. This Section 9(c) is intended to supersede any
right to contribution under the Act, the Exchange Act or otherwise.
10. The issuance of any shares or other securities upon the exercise of
this Warrant, and the delivery of certificates or other instruments representing
such shares or other securities, shall be made without charge to the Holder for
any tax or other charge in respect of such issuance. The Company shall not,
however, be required to pay any tax which may be payable in respect of any
transfer involved in the issue and delivery of any certificate in a name other
14
than that of the Holder and the Company shall not be required to issue or
deliver any such certificate unless and until the person or persons requesting
the issue thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.
11. Certificates evidencing the Warrant Shares issued upon exercise of
the Warrants shall bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
SUCH SHARES MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT, OR
AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT."
12. Upon receipt of evidence satisfactory to the Company of the loss,
theft, destruction, or mutilation of any Warrant (and upon surrender of any
Warrant if mutilated), and upon reimbursement of the Company's reasonable
incidental expenses, the Company shall execute and deliver to the Holder thereof
a new Warrant of like date, tenor, and denomination.
13. The Holder of any Warrant shall not have, solely on account of such
status, any rights of a stockholder of the Company, either at law or in equity,
or to any notice of meetings of stockholders or of any other proceedings of the
Company, except as provided in this Warrant.
14. Any notice or other communication required or permitted to be given
hereunder shall be in writing and shall be mailed by certified mail, return
receipt requested or sent by Federal Express, Express Mail, or similar overnight
delivery or courier service or delivered (in person or by telecopy, telex, or
similar telecommunications equipment) against receipt to the party to whom it is
to be given, if sent to the Company, at: 000 Xxxx 00xx Xxxxxx, Xxxxx 0000, Xxx
Xxxx, Xxx Xxxx 00000, Attention: The Chairman or the Chief Executive Officer; or
if sent to the Holder, at the Holder's address as it shall appear on the Warrant
Register; or to such other address as the party shall have furnished in writing
in accordance with the provisions of this Section 14. Any notice or other
communication given by certified mail shall be deemed given at the time of
certification thereof, except for a notice changing a party's address which will
be deemed given at the time of receipt thereof. Any notice given by other means
permitted by this Section 14 shall be deemed given at the time of receipt
thereof.
15. This Warrant shall be binding upon the Company and its successors
and assigns and shall inure to the benefit of the Holder and its successors and
assigns.
16. This Warrant shall be construed in accordance with the laws of the
State of New York applicable to contracts made and performed within such State,
without regard to principles of conflicts of law.
15
17. The Company irrevocably consents to the jurisdiction of the courts
of the State of New York and of any federal court located in such State in
connection with any action or proceeding arising out of or relating to this
Warrant, any document or instrument delivered pursuant to, in connection with or
simultaneously with this Warrant, or a breach of this Warrant or any such
document or instrument. In any such action or proceeding, the Company waives
personal service of any summons, complaint or other process.
Dated: _________________, 1997
COMMODORE APPLIED TECHNOLOGIES, INC.
By: __________________________________
Name:
Title:
[Seal]
------------------------------
Secretary
16
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer the
attached Warrant.)
FOR VALUE RECEIVED, ______________________________ hereby sells,
assigns, and transfers unto _____________________ a Warrant to purchase Shares,
par value $.001 per share, of Commodore Applied Technologies, Inc. (the
"Company"), together with all right, title, and interest therein, and does
hereby irrevocably constitute and appoint ___________________ attorney to
transfer such Warrant on the books of the Company, with full power of
substitution.
Dated: ________________________
Signature____________________________
NOTICE
The signature on the foregoing Assignment must correspond to the name
as written upon the face of this Warrant in every particular, without alteration
or enlargement or any change whatsoever.
17
To: Commodore Applied Technologies, Inc.
000 Xxxx 00xx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
ELECTION TO EXERCISE
The undersigned hereby exercises its rights to purchase ______________
Warrant Shares covered by the within warrant and tenders payment herewith in the
amount of $ _____________ in accordance with the terms thereof, and requests
that certificates for such securities be issued in the name of, and delivered
to:
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Print Name, Address and Social Security
or Tax Identification Number)
and, if such number of Warrant Shares shall not be all the Warrant Shares
covered by the within Warrant, that a new Warrant for the balance of the Warrant
Shares covered by the within Warrant be registered in the name of, and delivered
to, the undersigned at the address stated below.
Dated:_________________________ Name_______________________________
(Print)
Address:_______________________________________________________________________
_______________________________
(Signature)
18
