1
EXHIBIT 4.2
ROCKWELL MEDICAL TECHNOLOGIES, INC.
AND
XXXXX XXXX & CO., INC.
UNDERWRITERS'
WARRANT AGREEMENT
2
UNDERWRITERS' WARRANT AGREEMENT dated as of ______________, 1997 by and
between ROCKWELL MEDICAL TECHNOLOGIES, INC. (the "Company") and XXXXX XXXX &
CO., INC. ("Xxxxx Xxxx" or the "Representative"), as the Representative of the
underwriting group. The underwriting group is referred to collectively herein as
the "Underwriters".
WITNESSETH:
WHEREAS, the Company proposes to issue to the Underwriters warrants
(the "Underwriters' Warrants") to purchase up to 180,000 shares of the Company's
common stock, no par value per share (the "Common Stock") and/or up to 270,000
Redeemable Common Stock Purchase Warrants (the "Redeemable Warrants") each
exercisable to purchase one share of Common Stock.
WHEREAS, the Underwriters have agreed, pursuant to the underwriting
agreement (the "Underwriting Agreement") dated _____________, 1997, by and
between the Underwriters and the Company, to act as the underwriters in
connection with the Company's proposed initial public offering (the "Initial
Public Offering") of 1,800,000 shares of Common Stock and 2,700,000 Redeemable
Warrants (the "Offering Securities"), such Offering Securities being; identical
to the securities issuable upon exercise of the Underwriters' Warrants (the
"Securities"); and
WHEREAS, the Underwriters' Warrants to be issued pursuant to this
Agreement will be issued on the First Closing Date (as such term is defined in
the Underwriting Agreement) by the Company to the Underwriters in consideration
for, and as part of, the Underwriters'
3
compensation in connection with the Underwriters acting as the underwriters
pursuant to the Underwriting Agreement;
NOW, THEREFORE, in consideration of the promises, the payment by the
Underwriters to the Company of Ten Dollars ($10.00), the agreements herein set
forth and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. Grant. The Holder (as defined in Section 3 below) is hereby granted
the right to purchase, at any time from ____________, 1998 until 5:00 p.m., New
York time, on __________, 2002, an aggregate of up to 180,000 shares of Common
Stock and/or 270,000 Redeemable Warrants, at an initial purchase price (subject
to adjustment as provided in Section 8 hereof) of $6.60 per share of Common
Stock and $.165 per Redeemable Warrant (165% of the Initial Public Offering
price per Offering Security), subject to the terms and conditions of this
Agreement. The Securities issuable upon exercise of the Underwriters' Warrants
are sometimes referred to herein as the "Underwriters' Securities."
2. Warrant Certificates. The warrant certificate (the "Underwriters'
Warrant Certificate") to be delivered pursuant to this Agreement shall be in the
form set forth in Exhibit A attached hereto and made a part hereof, with such
appropriate insertions, omissions, substitutions, and other variations as
required or permitted by this Agreement.
3. Exercise of Underwriters' Warrants. The Underwriters' Warrants are
exercisable during the term set forth in Section 1 hereof payable by certified
or cashier's check or money order in lawful money of the United States. Upon
surrender of an Underwriter's Warrant Certificate with the annexed Form of
Election to Purchase duly executed, together with
2
4
payment of the Purchase Price (as defined in Section 6 hereof) for the
Underwriter's Securities (and such other amounts, if any, arising pursuant to
Section 4 hereof) at the Company's principal office in Michigan located at 00000
Xxxxxxx Xxxx Xxxxx, Xxxxx, Xxxxxxxx 00000, the registered holder of an
Underwriters' Warrant Certificate ("Holder" or "Holders") shall be entitled to
receive a certificate or certificates for the Underwriters' Securities so
purchased. The purchase rights represented by each Underwriters' Warrant
Certificate are exercisable at the option of the Holder or Holders thereof, in
whole or in part as to Underwriters' Securities. The Underwriters' Warrants may
be exercised to purchase all or any part of the Underwriters' Securities
represented thereby. In the case of the purchase of less than all the
Underwriters' Securities purchasable on the exercise of the Underwriters'
Warrants represented by an Underwriters' Warrant Certificate, the Company shall
cancel the Underwriters' Warrant Certificate represented thereby upon the
surrender thereof and shall execute and deliver a new Underwriters' Warrant
Certificate of like tenor for the balance of the Underwriters' Securities
purchasable thereunder.
4. Issuance of Certificates. Upon the exercise of the Underwriters'
Warrants and payment of the Purchase Price therefor, the issuance of
certificates representing the Underwriters Securities or other securities,
properties or rights underlying such Underwriters' Warrants, shall be made
forthwith (and in any event within five (5) business days thereafter) without
further charge to the Holder thereof, and such certificates shall (subject to
the provisions of Sections 5 and 7 hereof) be issued in the name of, or in such
names as may be directed by, the Holder thereof, provided, however, that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the issuance and delivery of any such certificates in a
name other than that of the Holder, and the Company shall not be required to
3
5
issue or deliver such certificates unless or until the person or persons
requesting the issuance 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. The Underwriters' Warrant Certificates and the certificates
representing the Underwriters Securities or other securities, property or rights
(if such property or rights are represented by certificates) shall be executed
on behalf of the Company by the manual or facsimile signature of the then
present Chairman or Vice Chairman of the Board of Directors or President or Vice
President of the Company, attested to by the manual or facsimile signature of
the then present Secretary or Assistant Secretary or Treasurer or Assistant
Treasurer of the Company. Underwriters' Warrant Certificates shall be dated the
date of issuance thereof by the Company upon initial issuance, transfer or
exchange.
5. Restriction On Transfer of Underwriters' Warrants. The Holder of an
Underwriters' Warrant Certificate (and its Permitted Transferee, as defined
below), by its acceptance thereof, covenants and agrees that the Underwriters'
Warrants are being acquired as an investment and not with a view to the
distribution thereof; that the Underwriters' Warrants may be sold, transferred,
assigned, hypothecated or otherwise disposed of, in whole or in part, to any
person (a "Permitted Transferee"), provided such transfer, assignment,
hypothecation or other disposition is made in accordance with the provisions of
the Securities Act of 1933, as amended (the "Act"); and provided, further, that
until ____________, 1998 (one year following the effective date of the Initial
Public Offering), only officers and partners of the Underwriters, or any Initial
Public Offering selling group member and their respective officers and partners,
shall be Permitted Transferees.
4
6
6. Purchase Price.
(a) Initial and Adjusted Purchase Price. Except as otherwise
provided in Section 8 hereof, the initial purchase price of the Underwriters'
Securities shall be $6.60 per share of Common Stock and $.165 per Redeemable
Warrant. The adjusted purchase price shall be the price which shall result from
time to time from any and all adjustments of the initial purchase price in
accordance with the provisions of Section 8 hereof.
(b) Purchase Price. The term "Purchase Price" herein shall mean
the initial purchase price or the adjusted purchase price, depending upon the
context.
7. Registration Rights.
(a)Registration Under the Securities Act of 1933. The
Underwriters' Warrants have not been registered under the Act. The Underwriters'
Warrant Certificates shall bear the following legend:
The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Act"), and may not be offered for sale or sold except pursuant to
(i) an effective registration statement under the Act, or (ii) an
opinion of counsel, if such opinion and counsel shall be
reasonably satisfactory to counsel to the issuer, that an
exemption from registration under the Act is available.
(b) Demand Registration. (1) At any time commencing on the first
anniversary of and expiring on the fifth anniversary of the effective date of
the Company's Registration Statement relating to the Initial Public Offering
(the "Effective Date"), the Holders of a Majority (as hereinafter defined) in
interest of the Underwriters' Warrants, or the Majority in interest of the
Underwriters' Securities (assuming the exercise of all of the Underwriters'
5
7
Warrants) shall have the right, exercisable by written notice to the Company, to
have the Company prepare and file with the U.S. Securities and Exchange
Commission (the "Commission"), solely on one (1) occasion, a registration
statement on Form SB-2 (or other appropriate form), and such other documents,
including a prospectus, as may be necessary in the opinion of both counsel for
the Company and counsel for the Holders, in order to comply with the provisions
of the Act, so as to permit a public offering and sale, for a period of nine (9)
months, of the Underwriters' Securities by such Holders and any other Holders of
the Underwriters' Warrants and/or the Underwriters' Securities who notify the
Company within fifteen (15) business days after receipt of the notice described
in Section 7(b)(2). The Holders of the Underwriters' Warrants may demand
registration without exercising the Underwriters' Warrants, and are never
required to exercise same.
(2) The Company covenants and agrees to give written notice of any
registration request under this Section 7(b) by any Holders to all other
registered Holders of the Underwriters' Warrants and the Underwriters'
Securities within ten (10) business days from the date of the receipt of any
such registration request.
(3) For purposes of this Agreement, the term "Majority" in
reference to the Holders of the Underwriters' Warrants or Underwriters'
Securities, shall mean in excess of fifty percent (50%) of the then outstanding
Underwriters' Warrants or Underwriters' Securities that (i) are not held by the
Company, an affiliate, officer, employee or agent thereof or any of their
respective affiliates, members of their family, persons acting as nominees or in
conjunction therewith, or (ii) have not been resold to the public pursuant to a
registration statement filed with the Commission under the Act.
6
8
(c) Piggyback Registration. (1) If, at any time within the period
commencing on the first anniversary and expiring on the fifth anniversary of the
Effective Date, the Company should file a registration statement with the
Commission under the Act (other than in connection with a merger or other
business combination transaction or pursuant to Form S-8) it will give written
notice at least thirty (30) calendar days prior to the filing of each such
registration statement to the Underwriters and to all other Holders of the
Underwriters' Warrants and/or the Underwriters' Securities of its intention to
do so. If either of the Underwriters or other Holders of the Underwriters'
Warrants and/or the Underwriters' Securities notify the Company within twenty
(20) calendar days after receipt of any such notice of its or their desire to
include any Underwriters' Securities in such proposed registration statement,
the Company shall afford the Underwriters and such Holders of the Underwriters'
Warrants and/or Underwriters' Securities the opportunity to have any such
Underwriters' Securities registered under such registration statement.
Notwithstanding the provisions of this Section 7(c)(1) and the provisions of
Section 7(d), the Company shall have the right at any time after it shall have
given written notice pursuant to this Section 7(c)(1) (irrespective of whether a
written request for inclusion of any such securities shall have been made) to
elect not to file any such proposed registration statement, or to withdraw the
same after the filing but prior to the effective date thereof.
(2) If the underwriter of an offering to which the above piggyback
rights apply objects to such rights, such objection shall preclude such
inclusion. However, in such event, the Company will, within nine (9) months of
completion of such subsequent underwriting, file at the expense of the Company,
a registration statement so as to permit a public offering and sale, for a
period of nine (9) months, of such excluded Underwriters'
7
9
Securities, which shall be in addition to any registration statement required to
be filed pursuant to Section 7(b).
(d) Covenants of the Company With Respect to Registration. In
connection with any registrations under Sections 7(b) and 7(c) hereof, the
Company covenants and agrees as follows:
(1) The Company shall use its best efforts to file a
registration statement within forty-five (45) calendar days of receipt of any
demand therefor pursuant to Section 7(b); provided, however, that the Company
shall not be required to produce audited or unaudited financial statements for
any period prior to the date such financial statements are required to be filed
in a report on Form 10-KSB or Form 10-QSB, as the case may be. The Company shall
use its best efforts to have any registration statement declared effective at
the earliest possible time, and shall furnish each Holder desiring to sell
Underwriters' Securities such number of prospectuses as shall reasonably be
requested.
(2) The Company shall pay all costs (excluding fees and
expenses of Holders' counsel and any underwriting discounts or selling fees,
expenses or commissions), fees and expenses in connection with the first
registration statement filed pursuant to Sections 7(b) and 7(c) hereof
including, without limitation, the Company's legal and accounting fees, printing
expenses, blue sky fees and expenses.
(3) The Company will use its best efforts to qualify or
register the Underwriters' Securities included in a registration statement for
offering and sale under the securities or blue sky laws of such states as
reasonably are requested by the Holders, provided that the Company shall not be
obligated to execute or file any general consent to service of
8
10
process or to qualify as a foreign corporation to do business under the laws of
any such jurisdiction.
(4) The Company shall indemnify the Holders of the
Underwriters' Securities to be sold pursuant to any registration statement and
each person, if any, who controls such Holders 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"), against all loss, claim, damage, expense or liability
(including all expenses reasonably incurred in investigating, preparing or
defending against any claim whatsoever) to which any of them may become subject
under the Act, the Exchange Act or otherwise, arising from such registration
statement, but only to the same extent and with the same effect as the
provisions pursuant to which the Company has agreed to indemnify the
Underwriters contained in Section 8 of the Underwriting Agreement.
(5) The Holders of the Underwriters' Securities to be sold
pursuant to a registration statement, and their successors and assigns, shall
indemnify the Company, its officers and directors 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, against all loss, claim, damage or expense or
liability to which they may become subject under the Act, the Exchange Act or
otherwise, arising from information furnished by or on behalf of such Holders,
or their successors or assigns, for specific inclusion in such registration
statement to the same extent and with the same effect as the provisions
contained in Section 8 of the Underwriting Agreement pursuant to which the
Underwriters have agreed to indemnify the Company.
(6) Nothing contained in this Agreement shall be construed
as requiring the Holders to exercise their Underwriters' Warrants prior to the
initial filing of any
9
11
registration statement or the effectiveness thereof.
(7) The Company shall not be entitled to include any
securities other than the Underwriters' Securities in any registration statement
filed pursuant to Section 7(b) hereof without the prior written consent, which
consent shall not be unreasonably withheld, of the Holders of the Underwriters'
Warrants and Underwriters' Securities representing a Majority of such securities
(assuming exercise of all of the Underwriters' Warrants).
(8) The Company shall furnish to a designated representative
of the Holders participating in the offering and to each underwriter, if any, a
signed counterpart, addressed to the Company or the underwriter of (i) an
opinion of counsel to the Company, dated the effective date of such registration
statement (and if such registration includes an underwritten public offering, an
opinion dated the date of the closing under the underwriting agreement), and
(ii) if such registration includes an underwritten public offering a copy of the
"cold comfort" letter dated the effective date of such registration statement
signed by each independent public accountant who has issued a report on the
Company's financial statements included in such registration statement, in each
case covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) and, in the case of such
accountants' letters. with respect to events subsequent to the date of such
financial statements, as are duly covered in opinions of issuer's counsel and in
accountants' letters, with respect to customary events subsequent to the date of
such financial statements, as are customarily covered in opinions of issuer's
counsel and in accountants' letters delivered to underwriters in underwritten
public offerings of securities.
(9) The Company shall as soon as practicable after the
effective
10
12
date of the registration statement, and in any event within 15 months
thereafter, make "generally available to its security holders" (within the
meaning of Rule 158 under the Act) an earnings statement (which need not be
audited) complying with Section 1 (a) of the Act and covering a period of at
least 12 consecutive months beginning after the effective date of the
registration statement.
(10) The Company shall deliver promptly to each Holder
participating in the offering requesting the correspondence described below and
any managing underwriter copies of all correspondence between the Commission and
the Company, its counsel or auditors with respect to the registration statement
and permit each Holder and underwriter to do such investigation, upon reasonable
advance notice, with respect to information contained in or omitted from the
registration statement as it deems reasonably necessary to comply with
applicable securities laws or rules of the National Association of Securities
Dealers, Inc. ("NASD"). Such investigation shall include access to books,
records and properties and opportunities to discuss the business of the Company
with its officers and independent auditors, all to such reasonable extent and at
such reasonable times and as often as any such Holder shall reasonably request.
(11) The Company shall enter into an underwriting agreement
with the managing underwriter selected for such underwriting by Holders holding
a Majority of the Underwriters' Securities requested to be included in such
underwriting, provided, however that (i) such managing underwriter shall be
reasonably acceptable to the Company, except that in connection with an offering
for which the Holders have piggyback rights, the Company shall have the sole
right to select the managing underwriter or underwriters, and (ii) the Holders
shall
11
13
be responsible for any selling fees or commissions in connection with such
underwriting. Such underwriting agreement shall be satisfactory in form and
substance to the Company, a Majority of such Holders (in respect of a
registration under Section 7(b) only) and such managing underwriter, and shall
contain such representations, warranties and covenants by the Company and such
other terms as are customarily contained in agreements of that type used by the
managing underwriter. The Holders shall be parties to any underwriting agreement
relating to an underwritten sale of their Underwriters' Securities and may, at
their option, require that any or all the representations, warranties and
covenants of the Company to or for the benefit of such underwriters shall also
be made to and for the benefit of such Holders. Such Holders shall not be
required to make any representations or warranties to or agreements with the
Company or the underwriters except as they may relate to such Holders and their
intended methods of distribution.
e. Further Registrations. The Company will cooperate with the
Holders of the Underwriters' Warrants and Underwriters' Securities in preparing
and signing any registration statement, in addition to the registration
statements discussed above, required in order to sell or transfer the
Underwriters' Securities and will supply all information required therefor, but
all of such additional registration statement expenses including legal and
accounting fees will be prorated between the Company and the Holders of the
Underwriters' Warrants and Underwriters' Securities according to the aggregate
sales price of the securities being issued, and if the Company is not issuing
any securities pursuant to such registration statement, such expenses will be
borne entirely by the Holders of the Underwriters' Warrants and the
Underwriters' Securities. The provisions of Section 7(d) other than subsection
(2) shall apply to any such registration statement.
12
14
8. Adjustments to Purchase Price and Number of Securities.
(a) Price Computation of Adjusted Purchase. Except as hereinafter
provided, in case the Company shall at any time after the date hereof issue or
sell any shares of Common Stock (other than the issuances referred to in Section
8(g) hereof), including shares held in the Company's treasury, for a
consideration per share less than the lesser of the Purchase Price in effect
immediately prior to the issuance or sale of such shares or the "Market Price"
(as defined in Section 8(a)(6) hereof) per share of Common Stock on the date
immediately prior to the issuance or sale of such shares, or without
consideration, then forthwith upon any such issuance or sale, the Purchase Price
shall (until another such issuance or sale) be reduced to the price (calculated
to the nearest full cent) determined by dividing (1) the product of (a) the
Purchase Price in effect immediately before such issuance or sale and (b) the
sum of (i) the total number of shares of Common Stock outstanding immediately
prior to such issuance or sale, and (ii) the number of shares determined by
dividing (A) the aggregate consideration, if any, received by the Company upon
such sale or issuance, by (B) the lesser of (x) the Market Price, and (y) the
Purchase Price, in effect immediately prior to such issuance or sale; by (2) the
total number of shares of Common Stock outstanding immediately after such
issuance or sale provided, however, that in no event shall the Purchase Price be
adjusted pursuant to this computation to an amount in excess of the Purchase
Price in effect immediately prior to such computation, except in the case of a
combination of outstanding shares of Common Stock, as provided by Section 8(c)
hereof.
For the purposes of this Section 8, the term "Purchase Price"
shall mean the Purchase Price of the Underwriters' Securities set forth in
Section 6 hereof, as adjusted from time
13
15
to time pursuant to the provisions of this Section 8.
For the purposes of any computation to be made in accordance with this
Section 8(a), the following provisions shall be applicable:
(1) In case of the issuance or sale of shares of Common Stock for
a consideration part or all of which shall be cash, the amount of the cash
consideration therefor shall be deemed to be the amount of cash received by the
Company for such shares (or, if shares of Common Stock are offered by the
Company for subscription, the subscription price), before deducting therefrom
any compensation paid or discount allowed in the sale or purchase thereof by
underwriters or dealers or others performing similar services, or any expenses
incurred in connection therewith.
(2) In case of the issuance or sale (otherwise than as a dividend
or other distribution on any stock of the Company) of shares of Common Stock for
a consideration part or all of which shall be other than cash, the amount of the
consideration therefor other than cash shall be deemed to be the value of such
consideration as determined in good faith by the Board of Directors of the
Company.
(3) Shares of Common Stock issuable by way of dividend or other
distribution on any stock of the Company shall be deemed to have been issued
immediately after the opening of business on the day following the record date
for the determination of stockholders entitled to receive such dividend or other
distribution and shall be deemed to have been issued without consideration.
(4) The reclassification of securities of the Company other than
shares of Common Stock into securities including shares of Common Stock shall be
deemed to
14
16
involve the issuance of such shares of Common Stock for a consideration other
than cash immediately prior to the close of business on the date fixed for the
determination of security holders entitled to receive such shares, and the value
of the consideration allocable to such shares of Common Stock shall be
determined as provided in Section 8(a)(2).
(5) The number of shares of Common Stock at any one time deemed to
be issued and outstanding, as determined for the purposes of Sections 8(b)(1)
and 8(b)(2) hereof, shall include the aggregate number of shares of Common Stock
issued or issuable (subject to readjustment upon the actual issuance thereof)
upon the exercise of options, rights, warrants and upon the conversion or
exchange of convertible or exchangeable securities.
(6) As used herein, the phrase "Market Price" at any date shall be
deemed to be the last reported sale price, or, in the case no such reported sale
takes place on such day, the average of the last reported sales prices for the
last three (3) trading days, in either case as officially reported by the
principal securities exchange on which the Common Stock is listed or admitted to
trading, or, if the Common Stock is not listed or admitted to trading on any
national securities exchange, the average closing bid price as furnished by the
NASD through the NASD Automated Quotation System ("NASDAQ") or similar
organization if NASDAQ is no longer reporting such information, or if the Common
Stock is not quoted on NASDAQ, as determined in good faith by resolution of the
Board of Directors of the Company, based on the best information available to
it.
15
17
(b) Options, Rights, Warrants and Convertible and Exchangeable
Securities. Except in the case of the Company issuing rights to subscribe for
shares of Common Stock distributed to all the stockholders of the Company and
Holders of Underwriters' Warrants, if the Company shall at any time after the
date hereof issue options, rights or warrants to purchase shares of Common
Stock, or issue any securities convertible into or exchangeable for shares of
Common Stock (other than the issuances referred to in Section 8(g) hereof), (i)
for a consideration per share less than the lessor of (a) the Purchase Price in
effect immediately prior to the issuance of such options, rights or warrants, or
such convertible or exchangeable securities or (b) the Market Price, or (ii)
without consideration, the Purchase Price in effect immediately prior to the
issuance of such options, rights or warrants, or such convertible or
exchangeable securities, as the case may be, shall be reduced to a price
determined by making a computation in accordance with the provisions of Section
8(a) hereof, provided that:
(1) The aggregate maximum number of shares of Common Stock
issuable under such options, rights or warrants shall be deemed to be issued and
outstanding at the time such options, rights or warrants were issued, and for a
consideration equal to the minimum purchase price per share provided for in such
options, rights or warrants at the time of issuance, plus the consideration
(determined in the same manner as consideration received on the issue or sale of
shares in accordance with the terms of the Underwriters' Warrants), if any,
received by the Company for such options, rights or warrants; provided, however,
that upon the expiration or other termination of such options, rights or
warrants, if any thereof shall not have been exercised, the number of shares of
Common Stock deemed to be issued and outstanding pursuant to this Section
8(b)(1) (and for the purposes of Section 8(a)(5) hereof) shall be reduced
16
18
by such number of shares as to which options, warrants and/or rights shall have
expired or terminated unexercised, and such number of shares shall no -longer be
deemed to be issued and outstanding, and the Purchase Price then in effect shall
forthwith be readjusted and thereafter be the price which it would have been had
adjustment been made on the basis of the issuance only of shares actually issued
or issuable upon the exercise of those options, rights or warrants as to which
the exercise rights shall not be expired or terminated unexercised.
(2) The aggregate maximum number of shares of Common Stock
issuable upon conversion or exchange of any convertible or exchangeable
securities shall be deemed to be issued and outstanding at the time of issuance
of such securities, and for a consideration equal to the consideration
(determined in the same manner as consideration received on the issue or sale of
shares of Common Stock in accordance with the terms of the Underwriters'
Warrants) received by the Company for such securities, plus the minimum
consideration, if any, receivable by the Company upon the conversion or exchange
thereof; provided, however, that upon the termination of the right to convert or
exchange such convertible or exchangeable securities (whether by reason of
redemption or otherwise), the number of shares deemed to be issued and
outstanding pursuant to this Section 8(b)(2) (and for the purpose of Section
8(a)(5) hereof) shall be reduced by such number of shares as to which the
conversion or exchange rights shall have expired or terminated unexercised, and
such number of shares shall no longer be deemed to be issued and outstanding and
the Purchase Price then in effect shall forthwith be readjusted and thereafter
be the price which it would have been had adjustment been made on the basis of
the issuance only of the shares actually issued or issuable upon the conversion
or exchange of those convertible or exchangeable securities as to which the
conversion
17
19
or exchange rights shall not have expired or terminated unexercised.
(3) If any change shall occur in the price per share provided for
in any of the options, rights or warrants referred to in Section 8(b)(1), or in
the price per share at which the securities referred to in Section 8(b)(2) are
convertible or exchangeable, such options, rights or warrants or conversion or
exchange rights, as the case may be, shall be deemed to have expired or
terminated on the date when such price change became effective in respect of
shares not theretofore issued pursuant to the exercise or conversion or exchange
thereof, and the Company shall be deemed to have issued upon such date new
options, rights or warrants or convertible or exchangeable securities at the new
price in respect of the number of shares issuable upon the exercise of such
options, rights or warrants or the conversion or exchange of such convertible or
exchangeable securities.
(c) Subdivision and Combination. In case the Company shall at any time
issue any shares of Common Stock in connection with a stock dividend in shares
of Common Stock or subdivide or combine the outstanding shares of Common Stock,
the Purchase Price shall forthwith be proportionately decreased in the case of a
stock dividend or a subdivision or increased in the case of a combination.
(d) Adjustment in Number of Securities. Upon each adjustment of the
Purchase Price pursuant to the provisions of this Section 8, the number of
Underwriters' Securities issuable upon the exercise of the Underwriters' Warrant
shall be adjusted to the nearest whole share by multiplying a number equal to
the Purchase Price in effect immediately prior to such adjustment by the number
of Underwriters' Securities issuable upon exercise of the Underwriters' Warrants
immediately prior to such adjustment and dividing the product so
18
20
obtained by the adjusted Purchase Price.
(e) Definition of Common Stock. For the purpose of this Agreement,
the term "Common Stock" shall mean the class of stock designated as Common Stock
in the Articles of Incorporation, of the Company as it may be amended as of the
date hereof.
(f) Reclassification, Merger or Consolidation. The Company will
not merge, reorganize or take any other action which would terminate the
Underwriters' Warrants without first making adequate provision for the
Underwriters' Warrants. In case of any reclassification or change of the
outstanding shares of Common Stock (other than a change in par value to no par
value, or from no par value to par value, or as a result of a subdivision or
combination), or in case of any consolidation of the Company with, or merger of
the Company with, or merger of the Company into, another corporation (other than
a consolidation or merger in which the Company is the continuing corporation and
which does not result in any reclassification or change of the outstanding
Common Stock except a change as a result of a subdivision or combination of such
shares or a change in par value, as aforesaid), or in the case of a sale or
conveyance to another corporation or other entity of the property of the Company
as an entirety, the Holders of each Underwriters' Warrant then outstanding or to
be outstanding shall have the right thereafter (until the expiration of such
Underwriters' Warrant) to purchase, upon exercise of such Underwriters' Warrant,
the kind and number of shares of stock and other securities and property
receivable upon such reclassification, change, consolidation, merger, sale or
conveyance as if the Holders were the owner of the shares of Common Stock
underlying the Underwriters' Warrants immediately prior to any such events at a
price equal to the product of (x) the number of shares issuable upon exercise of
the Underwriters' Warrants and (y) the
19
21
Purchase Price in effect immediately prior to the record date for such
reclassification, change, consolidation, merger, sale or conveyance, as if such
Holders had exercised the Underwriters' Warrants. In the event of a
consolidation, merger, sale or conveyance of property, the corporation formed by
such consolidation or merger, or acquiring such property, shall execute and
deliver to the Holders a supplemental underwriter's warrant agreement to such
effect. Such supplemental underwriter's warrant agreement shall provide for
adjustments which shall be identical to the adjustments provided for in this
Section 8. The provisions of this Section 8(f) shall similarly apply to
successive consolidations or mergers.
(g) No Adjustment of Purchase Price in Certain Cases. Notwithstanding
any provision to the contrary contained herein, no adjustment of the Purchase
Price shall be made:
(1) Upon the issuance or sale of (i) the Underwriters' Warrants or
the securities underlying the Underwriters' Warrants, (ii) the securities sold
pursuant to the Initial Public Offering or securities underlying securities sold
in the Initial Public Offering or securities to be sold in a bona fide public
offering pursuant to a firm commitment underwriting or securities underlying
securities sold in such firm commitment underwriting and (iii) the shares
issuable pursuant to the options, warrants, rights, stock purchase agreements or
convertible or exchangeable securities outstanding or in effect on the date
hereof as described in the prospectus relating to the Initial Public Offering.
(2) If the amount of said adjustments shall aggregate less than
five ($.05) cents for one (1) share of Common Stock; provided, however, that in
such case any adjustment that would otherwise be required then to be made shall
be carried forward and shall
20
22
be made at the time of and together with the next subsequent adjustment which,
together with any adjustment so carried forward, shall aggregate at least five
($.05) cents for one (1) share of Common Stock.
9. Exchange and Replacement of Warrant Certificates. Each Underwriters'
Warrant Certificate is exchangeable without expense, upon the surrender thereof
by the registered Holders at the principal executive office of the Company, for
a new Underwriters' Warrant Certificate of like tenor and date representing in
the aggregate the right to purchase the same number of Underwriters' Securities
in such denominations as shall be designated by the Holders thereof at the time
of such surrender.
Upon receipt by the Company of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of any Underwriters' Warrant
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to it, and reimbursement to the Company of all
reasonable expenses incidental thereto, and upon surrender and cancellation of
the Underwriters' Warrant Certificates, if mutilated, the Company will make and
deliver a new Underwriters' Warrant Certificate of like tenor, in lieu thereof.
10. Elimination of Fractional Interests. The Company shall not be
required to issue certificates representing fractions of shares of Common Stock
and/or Redeemable Warrants upon the exercise of the Underwriters' Warrants, nor
shall it be required to issue scrip or pay cash in lieu of fractional interests;
provided, however, that if a Holder exercises all Underwriters' Warrants held of
record by such Holder the fractional interests shall be eliminated by rounding
any fraction to the nearest whole number of shares of Common Stock or other
securities, properties or rights.
21
23
11. Reservation and Listing of Securities. The Company shall at all
times reserve and keep available out of its authorized shares of Common Stock,
solely for the purpose of issuance upon the exercise of the Underwriters'
Warrants, such number of shares of Common Stock or other securities, properties
or rights as shall be issuable upon the exercise thereof and the exercise of the
Redeemable Warrants. The Company covenants and agrees that, upon exercise of the
Underwriters' Warrants and payment of the Purchase Price therefor, all the
shares of Common Stock and other securities issuable upon such exercise shall be
duly and validly issued, fully paid, non-assessable and not subject to the
preemptive rights of any stockholder. As long as the Underwriters' Warrants
shall be outstanding, the Company shall use its best efforts to cause the Common
Stock to be listed (subject to official notice of issuance) on all securities
exchanges on which the Common Stock issued in the Initial Public Offering may
then be listed or quoted.
12. Notices to Underwriters' Warrant Holders. Nothing contained in this
Agreement shall be construed as conferring upon the Holders the right to vote or
to consent or to receive notice as a stockholder in respect of any meetings of
stockholders for the election of directors or any other matter, or as having any
rights whatsoever as a stockholder of the Company. If, however, at any time
prior to the expiration of the Underwriters' Warrants and their exercise, any of
the following events shall occur:
(a) the Company shall take a record of the holders of its shares
of Common Stock for the purpose of entitling them to receive a dividend or
distribution payable otherwise than in cash, or a cash dividend or distribution
payable otherwise than out of current or retained earnings, as indicated by the
accounting treatment of such dividend or distribution on
22
24
the books of the Company; or
(b) the Company shall offer to all the holders of its Common Stock
any additional shares of capital stock of the Company or securities convertible
into or exchangeable for shares of capital stock of the Company, or any option,
right or warrant to subscribe therefor; or
(c) a dissolution, liquidation or winding up of the Company (other
than in connection with a consolidation or merger) or a sale of all or
substantially all of its property, assets and business as an entirety shall be
proposed; then, in any one or more of said events, the Company shall give
written notice of such event at least fifteen (15) calendar days prior to the
date fixed as a record date or the date of closing the transfer books for the
determination of the stockholders entitled to such dividend, distribution,
convertible or exchangeable securities or subscription rights, or entitled to
vote on such proposed dissolution, liquidation, winding up or sale. Such notice
shall specify such record date or the date of closing the transfer books, as the
case may be. Failure to give such notice or any defect therein shall not affect
the validity of any action taken in connection with the declaration or payment
of any such dividend, or the issuance of any convertible or exchangeable
securities, or subscription rights, options or warrants, or any proposed
dissolution, liquidation, winding up or sale.
13. Notices. All notices, requests, consents and other
communications hereunder shall be in writing and shall be deemed to have been
duly made when delivered, or mailed by registered or certified mail, return
receipt requested:
23
25
(a) If to the registered Holders of the Underwriters' Warrants, to
the address of such Holders as shown on the books of the Company; or
(b) If to the Company to the address set forth in Section 3 hereof
or to such other address as the Company may designate by notice to the Holders.
14. Supplements and Amendments. The Company and the Underwriters may
from time to time supplement or amend this Agreement without the approval of any
Holders of Underwriters' Warrant Certificates (other than the Underwriters) in
order to cure any ambiguity, to correct or supplement any provision contained
herein which may be defective or inconsistent with any provisions herein, or to
make any other provisions in regard to matters or questions arising hereunder
which the Company and the Underwriters may deem necessary or desirable and which
the Company and the Underwriters deem shall not adversely affect the interests
of the Holders of Underwriters' Warrant Certificates.
15. Binding Effect; Successors. All the covenants and provisions of
this Agreement shall be binding upon and inure to the benefit of the Company,
the Underwriters, the Holders and their respective successors and assigns
hereunder.
16. Termination. This Agreement shall terminate at the close of
business on ______________, 2002. Notwithstanding the foregoing, the
indemnification provisions of Section 7 shall survive such termination until the
close of business on the expiration of any applicable statute of limitations.
17. Governing Law; Submission to Jurisdiction. This Agreement and each
Underwriters' Warrant Certificate issued hereunder shall be deemed to be a
contract made under the laws of the State of New York and for all purposes shall
be construed in accordance with the
24
26
laws of said state without giving effect to the rules of said state governing
the conflicts of laws. The Company, the Underwriters and the Holders hereby each
agree that any action, proceeding or claim against it arising out of, or
relating in any way to, this Agreement shall be brought and enforced in the
courts of the State of New York or of the United States of America for the
Southern District of New York, and irrevocably submits to such jurisdiction,
which jurisdiction shall be exclusive. The Company, the Underwriters and the
Holders hereby irrevocably waive any objection to such exclusive Jurisdiction or
inconvenient forum. Any such process or summons to be served upon any of the
Company, the Underwriters and the Holders (at the option of the party bringing
such action, proceeding or claim) may be served by transmitting a copy thereof,
by registered or certified mail, return receipt requested, postage prepaid,
addressed to it at the address set forth in Section 13 hereof. Such mailing
shall be deemed personal service and shall be legal and binding upon the party
so served in any action, proceeding or claim.
18. Entire Agreement, Modification. This Agreement (including the
Underwriting Agreement, to the extent portions thereof are referred to herein)
contains the entire understanding between the parties hereto with respect to the
subject matter hereof and thereof. Subject to Section 14, this Agreement may not
be modified or amended except by a writing duly signed by the Company and the
Holders of a Majority in Interest of the Underwriters' Securities (for this
purpose, treating all then outstanding Underwriters' Warrants as if they had
been exercised).
19. Severability. If any provision of this Agreement shall be held to
be invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provision of this Agreement.
25
27
20. Captions. The caption headings of the Sections of this Agreement
are for convenience of reference only and are not intended, nor should they be
construed as, a part of this Agreement and shall be given no substantive effect.
21. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company and the
Underwriters and any other registered Holders of the Underwriters' Warrant
Certificates or Underwriters' Securities any legal or equitable right, remedy or
claim under this Agreement; and this Agreement shall be for the sole and
exclusive benefit of the Company and the Underwriters and any other Holders of
the Underwriter's Warrant Certificates or Underwriters' Securities.
22. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and such counterparts shall together constitute but one and the
same instrument.
26
28
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
ROCKWELL MEDICAL TECHNOLOGIES,
INC.
By:
-----------------------
Xxx Xxxxxx
President
XXXXX XXXX & CO., INC.
By:
-----------------------
Name:
Title:
27
29
EXHIBIT A
ROCKWELL MEDICAL TECHNOLOGIES, INC..
WARRANT CERTIFICATE
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE OFFERED FOR
SALE OR SOLD EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE ACT, OR (ii) AN OPINION OF COUNSEL, IF SUCH OPINION AND COUNSEL SHALL BE
REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER, THAT AN EXEMPTION FROM
REGISTRATION UNDER THE ACT IS AVAILABLE.
THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.
EXERCISABLE COMMENCING ____________, 1998 THROUGH
5:00 P.M., NEW YORK TIME ON _________, 2002
No. UW- __________ Warrants
This Warrant Certificate certifies that registered holder of Warrants
to purchase initially, at any time from , 1998, until 5:00 p.m., New York time
on , 2002 (the "Expiration Date"), up to 180,000 shares of Rockwell Medical
Technologies, Inc.'s (the "Company") Common Stock, no par value per share (the
"Common Stock"), and/or up to 270,000 Redeemable Warrants each exercisable to
purchase one share of Common Stock (the "Common Stock Warrants"), at a purchase
price of $6.60 per share of Common Stock and $.165 per Redeemable Warrant (the
"Purchase Price"), upon the surrender of this Warrant Certificate and payment of
the applicable Purchase Price at an office or agency of the Company, but subject
to the conditions set forth herein and in the underwriters' warrant agreement,
dated as of , 1997 (the "Warrant Agreement"), by and between the Company and
Xxxxx Xxxx & Co., Inc. ("Xxxxx Xxxx" or the "Representative"), as the
Representative of the several underwriters (the "Underwriting Group") named in
the Underwriting Agreement, dated , 1997 between the Company and Xxxxx Xxxx. The
Underwriting Group is collectively referred to herein as the "Underwriters."
Payment of the Purchase Price shall be made by certified or cashier's check or
money order payable to the order of the Company.
30
No Warrant may be exercised after 5:00 p.m., New York time, on the
Expiration Date, at which time all Warrants evidenced hereby, unless exercised
prior thereto, shall thereafter be void.
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants issued pursuant to the Warrant Agreement between
the Company and the Underwriters, which Warrant Agreement is hereby incorporated
by reference in and made a part of this instrument and is hereby referred to for
a description of the rights, limitation of rights, obligations, duties and
immunities thereunder of the Company and the holders (the words "holders" or
"holder" meaning the registered holders or registered holder) of the Warrants.
The Warrant Agreement provides that upon the occurrence of certain
events the respective Purchase Prices and the type and/or number of the
Company's securities issuable upon the exercise of these Warrants, may, subject
to certain conditions, be adjusted. In such event, the Company will, at the
request of the holder, issue a new Warrant Certificate evidencing the adjustment
in the Purchase Price and the number and/or type of securities issuable upon the
exercise of the Warrants; provided, however, that the failure of the Company to
issue such new Warrant Certificates shall not in any way change, alter, or
otherwise impair, the rights of the holder as set forth in the Warrant
Agreement.
Upon due presentment for registration of transfer of this Warrant
Certificate at an office or agency of the Company, a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like number
of Warrants shall be issued to the transferee(s) in exchange as provided herein,
without any charge except for any tax or other governmental charge imposed in
connection with such transfer.
Upon the exercise of less than all of the Warrants evidenced by this
Certificate, the Company shall forthwith issue to the holder hereof a new
Warrant Certificate representing such number of unexercised Warrants.
The Company may deem and treat the registered holder(s) hereof as the
absolute owner(s) of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, and of any distribution to the holder(s) hereof, and for all
other purposes, and the Company shall not be affected by any notice to the
contrary.
All terms used in this Warrant Certificate which are defined in the
Warrant Agreement shall have the meanings assigned to them in the Warrant
Agreement.
[THE REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
2
31
IN WITNESS WHEREOF, the undersigned has executed this certificate this
day ___of_________, 1997.
ROCKWELL MEDICAL TECHNOLOGIES,
INC.
By:
---------------------------
Xxx Xxxxxx, President
ATTEST:
By:
----------------
3
32
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Warrant Certificate.)
FOR VALUE RECEIVED ________________ hereby sells, assigns and transfers
unto _________________
(Please print name and address of transferee)
this Warrant Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint____________ Attorney, to
transfer the within Warrant Certificate on the books of Rockwell Medical
Technologies, Inc., with full power of substitution.
Dated:_____________
Signature ______________________________
(Signature mustconform in all respects to
the name of the holder as specified on
the face of the Warrant Certificate.)
______________________________________
(Insert Social Security or Other
Identifying Number of Holders)
33
FORM OF ELECTION TO PURCHASE
The undersigned hereby irrevocably elects to exercise the right, represented by
this Warrant Certificate, to purchase shares of Common Stock and/or Redeemable
Warrants and herewith tenders in payment of such securities a certified or
cashier's check or money order payable to the order of Rockwell medical
Technologies, Inc. in the amount of $______, all in accordance with the terms
hereof. The undersigned requests that certificates for such securities be
registered in the name of __________ whose address is and that such certificates
be delivered to ________whose address is _________ .
Dated:_________
Signature ______________________________
(Signature mustconform in all respects to
the name of the holder as specified on
the face of the Warrant Certificate.)
______________________________________
(Insert Social Security or Other
Identifying Number of Holders)
