EXHIBIT 4.2
THE SECURITIES REPRESENTED BY THIS WARRANT CERTIFICATE WERE
ORIGINALLY ISSUED ON MAY 16, 2000 AND HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED OR ANY APPLICABLE STATE
SECURITIES LAW. THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS
WARRANT CERTIFICATE IS SUBJECT TO THE CONDITIONS SET FORTH IN THE
SECURITIES PURCHASE AGREEMENT, DATED AS OF MAY 16, 2000, BETWEEN THE
ISSUER (THE "COMPANY") AND THE PURCHASER NAMED THEREIN. THE COMPANY
RESERVES THE RIGHT TO REFUSE ANY TRANSFER OF SUCH SECURITIES UNTIL
SUCH CONDITIONS HAVE BEEN FULFILLED WITH RESPECT TO SUCH TRANSFER. A
COPY OF SUCH CONDITIONS SHALL BE FURNISHED WITHOUT CHARGE TO THE
HOLDER HEREOF UPON WRITTEN REQUEST TO THE COMPANY.
__________________________________________
FIRST SCIENTIFIC, INC.
(a Delaware corporation)
Warrant Certificate
for the Purchase of Common Stock
Dated: May 16, 2000 Number of Series 2000-A Warrants: _____
This certifies that, for value received, the sufficiency of
which is hereby acknowledged, ASPEN CAPITAL RESOURCES, LLC or its
assigns (the "Holder"), a Utah limited liability company with an
address at 0000 Xxxxx Xxxxxxxxx Xxxxxx, Xxxxx, Xxxx 00000, is the
owner of the number of Series 2000-A Warrants (the "Warrants") set
forth above, each of which represents the right to purchase one
fully paid and nonassessable share of the common stock, $.001 par
value, (the "Shares") of FIRST SCIENTIFIC, INC. (the "Company"), a
Delaware corporation with an address at 0000 Xxxx 0000 Xxxxx, Xxxxx
000, Xxxxx, Xxxx 00000, at the initial exercise price (the "Initial
Exercise Price") of $3.00 per share. The Initial Exercise Price and
number of Shares (and the amount and kind of other securities) for
which this Warrant is exercisable shall be subject to adjustment as
provided herein.
This Warrant Certificate relates to Warrants of the Company
issued pursuant to a Securities Purchase Agreement, dated as of May
16, 2000 (as amended and modified from time to time, the "Purchase
Agreement"), between the Company and the Holder, and the Warrants
are those Warrants referred to in the Purchase Agreement. The
Purchase Agreement contains terms governing the rights of the Holder
of this Warrant Certificate, and all provisions of the Purchase
Agreement are hereby incorporated herein in full by reference.
1. Duration. Warrants may be exercised at any time and from
time to time on or after December 1, 2000 (the "Exercise
Commencement"), but not after May 16, 2004 (the "Exercise
Deadline"). Notwithstanding the foregoing, all of the Warrants shall
be immediately exercisable (i) upon the occurrence of an Event of
Default as defined in the Debentures, or (ii) if there is a change
in control of the Company.
2. Exercise.
A. All or any number of the Warrants may be exercised by
surrendering the Warrant Certificate(s) representing the Warrants to
be exercised to the Company, together with (i) an Election to
Exercise (in the form attached hereto and incorporated herein by
reference) completed and signed by the person exercising the
Warrants, (ii) if the person exercising the Warrants is not the
registered Holder, an Assignment (in the form attached hereto and
incorporated herein by reference) evidencing assignment of the
Warrants to the person exercising them, and (iii) payment in full of
the aggregate Exercise Price of the Warrants to be exercised, either
by (x) a check payable to the Company, (y) the surrender to the
Company of securities of the Company having a value equal to the
aggregate Exercise Price of the Warrants to be exercised (which
value in the case of debt securities shall be the principal amount
thereof and accrued and unpaid interest thereon and in the case of
Shares shall be the Fair Market Value thereof), or (z) the delivery
of a notice to the Company that the Company is authorized to reduce
the number of Shares issuable upon exercise of the Warrants by the
number of Shares having an aggregate Fair Market Value (as defined
herein) equal to the aggregate Exercise Price of the Warrants to be
exercised. "Fair Market Value" means the closing bid price of a
share of Common Stock quoted on the NASDAQ Stock Market System or
reported on the NASD's OTC Bulletin Board on the trading day next
preceding the Exercise Date (as defined herein). However, until a
share of Common Stock is first quoted on the NASDAQ Stock Market
System or reported on the NASD's OTC Bulletin Board after the date
of this Agreement, "Fair Market Value" means $3.00 per share. A
Warrant shall be deemed exercised when all of the foregoing have
been delivered to the Company (the "Exercise Date").
B. Upon the exercise of less than all of the Warrants
evidenced by this Warrant Certificate, there shall be issued to the
Holder a new Warrant Certificate in respect of the Warrants not
exercised. No fractional Shares will be issued upon the exercise of
Warrants. As to any final fraction of a share which the Holder of
one or more Warrant Certificates, the rights under which are
exercised in the same transaction, would otherwise be entitled to
purchase upon such exercise, the Company shall pay the cash value.
Within two (2) business days after the Exercise Date, the Company,
without cost to the Holder, shall issue and shall deliver to the
Holder of the exercised Warrants or the person specified by such
Holder a certificate or certificates for the number of full Shares
issuable upon exercise registered in the name of such Holder or such
other person as shall have been specified by such Holder.
C. The Shares issuable upon the exercise of Warrants shall
be deemed to have been issued to the Holder on the Exercise Date,
and the Holder shall be deemed for all purposes to have become the
owner of such Shares on the Exercise Date.
D. The Company covenants that all Shares which may be issued
upon exercise of Warrants will, upon payment of the Exercise Price
therefor, be fully paid and nonassessable and the Company will pay
all taxes, liens and charges and any other costs incurred by the
Company in connection with the exercise of the Warrants and the
issuance and delivery of Shares pursuant thereto.
E. The Company shall not close its books against the
transfer of Warrants or of any Shares issued or issuable upon the
exercise of Warrants in any manner which interferes with the timely
exercise of Warrants.
F. The Company shall assist and cooperate with any
reasonable request by the Holder which is required to make any
governmental filings or obtain any governmental approvals prior to
or in connection with any exercise of Warrants.
G. The Company shall at all times reserve and keep available
out of its authorized but unissued Shares solely for the purpose of
issuance upon the exercise of Warrants, the maximum number of Shares
issuable upon the exercise of all Warrants. All Shares which are so
issuable shall, when issued and upon the payment of the applicable
Exercise Price, be duly and validly issued, fully paid and
nonassessable and free from all taxes, liens and charges. The
Company shall take all such actions as may be necessary to ensure
that all such Shares may be so issued without violation by the
Company of any applicable law or governmental regulation or any
requirements of any domestic securities exchange upon which Shares
or other securities constituting Shares may be listed (except for
official notice of issuance which shall be immediately delivered by
the Company upon each such issuance). The Company will use its best
efforts to cause the Shares issuable upon exercise, immediately upon
such exercise, to be listed on any domestic securities exchange upon
which Shares are listed at the time of such exercise.
H. The Company shall not, and shall not permit its
subsidiaries to, directly or indirectly, by any action (including,
without limitation, reincorporation in a jurisdiction other than
Utah, amending its Certificate of Incorporation or through any
issuance or sale of securities or any other voluntary action) avoid
or seek to avoid the observance or performance of any of the terms
of this Warrant Certificate or impair or diminish its value (except
for any action which ratably affects all Shares), but shall at all
times in good faith assist in the carrying out of all such terms of
this Warrant Certificate. Without limiting the generality of the
foregoing, the Company shall (a) obtain all such authorizations,
exemptions or consents from any public regulatory body having
jurisdiction thereof as may be necessary to enable the Company to
perform its obligations under this Warrant Certificate and (b) not
undertake any reverse stock split, combination, reorganization or
other reclassification of its capital stock which would have the
effect of making Warrants exercisable for less than one Share for
each Holder.
3. Adjustment of Exercise Price and Number of Shares. In
order to prevent dilution of the rights granted under this Warrant
Certificate, the Initial Exercise Price shall be subject to
adjustment from time to time as provided in this Section 3 (the
"Exercise Price"), and the number of Shares issuable upon exercise
of Warrants shall be subject to adjustment from time to time, each
as provided in this Section 3.
A. Adjustment of Exercise Price and Number of Shares upon
Issuance of Shares. If and whenever, on or after the first date upon
which a Warrant is granted by the Company to a Holder, the Company
issues or sells (or in accordance with Section 3B is deemed to have
issued or sold) (specifically excluding those shares of Common Stock
issued and sold upon the exercise of options and warrants granted
prior to the date of the Purchase Agreement and options granted
after the date of the Purchase Agreement relating to shares of
Common Stock heretofore allocated pursuant to the Company's employee
stock option plan if issued and sold for a consideration per share
greater than or equal to the Fair Market Value on the date of
grant), other than (i) as described in Section 3C or (ii) pursuant
to the Purchase Rights covered by Section 4, any Shares for a
consideration per share less than the Fair Market Value per Share
determined as of the earlier of (x) the announcement of such
issuance or sale, or (y) the date of such issuance or sale, then
immediately upon such issuance or sale the Exercise Price shall be
reduced to equal the amount determined by multiplying the Exercise
Price in effect immediately prior to such issuance or sale by a
fraction, the numerator of which will be the sum of (1) the number
of Shares deemed outstanding (including Shares deemed outstanding
pursuant to Section 3.B.(i)) immediately prior to such issuance or
sale multiplied by the Fair Market Value per Share determined as of
the date of such issuance or sale, plus (2) the consideration, if
any, received by the Company upon such issuance or sale, and the
denominator of which will be the product derived by multiplying such
Fair Market Value per Share by the number of Shares deemed
outstanding (including Shares deemed outstanding pursuant to Section
3.B.(i)) immediately after such issuance or sale. Upon each such
adjustment of the Exercise Price hereunder, the number of Shares
acquirable upon exercise of this Warrant shall be adjusted to equal
the number of shares determined by multiplying the Exercise Price in
effect immediately prior to such adjustment by the number of Shares
acquirable upon exercise of this Warrant immediately prior to such
adjustment and dividing the product thereof by the Exercise Price
resulting from such adjustment.
B. Effect on Exercise Price of Certain Events. For purposes
of determining the adjusted Exercise Price under Section 3A, the
following shall be applicable:
(i) Issuance of Rights or Options or Convertible Securities.
If the Company in any manner grants any rights or options, whether
or not immediately exercisable, to subscribe for or to purchase
Shares or any stock or other securities convertible into or
exchangeable for Shares (including without limitation convertible
common stock) (such rights or options being herein called "Options"
and such convertible or exchangeable stock or securities being
herein called "Convertible Securities") or if the Company in any
manner issues or sells any Convertible Securities, whether or not
immediately convertible or exchangeable, and the price per share for
which Shares are issuable upon the exercise of such Options or upon
conversion or exchange of such Convertible Securities is less than
the Fair Market Value per Share in effect on the earlier of (x) the
announcement of such grant or issuance or sale and (y) the date of
such grant or issuance or sale, then the total maximum number of
Shares issuable upon the exercise of such Options or upon conversion
or exchange of the total maximum amount of such Convertible
Securities issuable upon the exercise of such Options of upon
conversion or exchange of such Convertible Securities shall be
deemed to be outstanding and to have been issued and sold by the
Company for such price per share. For purposes of this paragraph,
the "price per share for which Shares are issuable upon exercise of
such Options or upon conversion or exchange of such Convertible
Securities" is determined by dividing (A) the total amount, if any,
received or receivable by the Company as consideration for the
granting of such Options, plus the minimum aggregate amount of
additional consideration payable to the Company upon the exercise of
all such Options, plus in the case of such Options which relate to
Convertible Securities, the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the issuance or
sale of such Convertible Securities and the conversion or exchange
thereof, by (B) the total maximum number of Shares issuable upon
exercise of such Options or upon the conversion or exchange of all
such Convertible Securities issuable upon the exercise of such
Options. No further adjustment of the Exercise Price shall be made
upon the actual issuance of such Shares or of such Convertible
Securities upon the exercise of such Options or upon the actual
issuance of such Shares upon conversion or exchange of such
Convertible Securities.
(ii) Change in Option Price or Conversion Rate. If either
the purchase price provided for in any Options, the additional
consideration, if any, payable upon the issue, conversion or
exchange of any Convertible Securities, or the rate at which any
Convertible Securities are convertible into or exchangeable for
Shares shall change at any time to an amount which is less than the
Fair Market Value, then the Exercise Price in effect at the time of
such change shall be adjusted to the Exercise Price which would have
been in effect at such time had such Options or Convertible
Securities still outstanding provided for such changed purchase
price, additional consideration or changed conversion rate, as the
case may be, at the time initially granted, issued or sold and the
number of Shares issuable upon exercise of the Warrants shall be
correspondingly readjusted.
C. Subdivision or Combination of Shares. If the Company at
any time subdivides (by any stock split, stock dividend,
recapitalization, or otherwise) the outstanding Shares into a
greater number of Shares, or pays a dividend or makes a distribution
to holders of outstanding Shares in the form of Shares, or combines
(by reverse stock split or otherwise) the outstanding Shares into a
smaller number of shares, the Exercise Price of the Warrants in
effect immediately prior to such event and the number of Shares
obtainable upon exercise of Warrants shall be proportionately
adjusted so that the Holder of the Warrants thereafter surrendered
for exercise shall be entitled to receive after the occurrence of
any of the events described the proportionate number of Shares to
which the Holder would have been entitled had such Warrant been
exercised immediately prior to the occurrence of such event, such
adjustment to become effective immediately after the opening of
business on the day following the date upon which such subdivision
or combination or reclassification, as the case may be, becomes
effective.
D. Liquidation of the Company. In the event of the
liquidation, dissolution, or winding up of the Company, a notice
thereof shall be sent to the Holder at least 15 days before the
record date specified for determining holders of the Shares entitled
to receive any distribution upon such liquidation, dissolution, or
winding up.
E. Consolidation of Company. In the case of any
consolidation or merger of the Company with or into another
corporation (other than a consolidation or merger in which the
Company is the surviving corporation and which does not result in
any reclassification or change of outstanding shares of the class
issuable upon exercise of the Warrants), or in case of any sale or
transfer to another corporation of the property of the Company as an
entirety or substantially as an entirety, the Holder of each Warrant
then outstanding shall have the right to exercise such Warrant for
the purchase of the kind and amount of Shares and other securities
and property receivable upon such consolidation, merger, sale, or
transfer by a holder of the number of Shares which would have been
issuable if the conversion of the Warrants had occurred immediately
prior to such consolidation, merger, sale, or transfer.
F. Certain Events. If any event occurs of the type
contemplated by the provisions of this Section 3 but not expressly
provided for by such provisions (including, without limitation, the
granting of stock appreciation rights, phantom stock rights or other
rights with equity features), then the Company's Board of Directors
shall exercise their reasonable judgment consistent with the
fundamental intent of such provisions in making an appropriate
adjustment in the Exercise Price and the number of Shares issuable
upon exercise of Warrants so as to protect the rights of the Holder
of Warrants.
G. Notices.
(i) Immediately upon any adjustment of the Exercise Price,
the Company shall give written notice thereof to the Holder, setting
forth in reasonable detail and certifying the calculation of such
adjustment.
(ii) The Company shall give written notice to the Holder at
least 30 days prior to the date on which the Company closes its
books or takes a record (A) with respect to any dividend or
distribution upon the Shares, (B) with respect to any pro rata
subscription offer to holders of Shares, or (C) for determining
rights to vote with respect to any recapitalization, reorganization,
reclassification, consolidation, merger, sale of all or
substantially all of the Company's assets, dissolution or liquidation.
(iii) The Company shall also give written notice to the
Holder at least 30 days prior to the date on which any
recapitalization, reorganization, reclassification, consolidation,
merger, sale of all or substantially all of the Company's assets,
dissolution or liquidation shall take place.
4. Purchase Rights. If at any time the Company grants, issues
or sells any options, convertible securities or rights to purchase
stock, warrants, securities or other property pro rata to the record
holders of the Shares (the "Purchase Rights"), then the Company
shall grant, issue or sell (as the case may be) to the Holder the
aggregate Purchase Rights which such Holder would have acquired if
such Holder had held the maximum number of Shares issuable upon
complete exercise of all Warrants immediately before the date on
which a record is taken for the grant, issuance or sale of such
Purchase Rights or, if no such record is taken, the date as of which
the record holders of the Shares are to be determined for the grant,
issue or sale of such Purchase Rights.
5. Exchange. Prior to the Exercise Deadline the Holder shall
be entitled to exchange this Warrant Certificate with or without
other Warrant Certificates for another Warrant Certificate or
Warrant Certificates for the same aggregate number of Warrants,
without charge to the Holder, upon surrender of this Warrant
Certificate at the office of the Company; provided that such
certificates may be redistributed to other Holders only in
compliance with applicable federal and state securities laws. The
date the Company initially issues this Warrant Certificate shall be
deemed to be the date of issuance hereof regardless of the number of
times new certificates representing the unexpired and unexercised
rights formerly represented by this Warrant Certificate shall be
issued.
6. Transfer. Prior to the Exercise Deadline the Holder shall
be entitled to transfer this Warrant Certificate and all rights
hereunder, in whole or in part, without charge to the Holder, upon
surrender of this Warrant Certificate, together with an Assignment
(in the form attached hereto and incorporated herein by reference)
duly executed, at the office of the Company; provided that such
transfer is in compliance with applicable federal and state
securities laws and the Holder provides documentation of such
compliance to the reasonable satisfaction of the Company. Upon any
such transfer, a new Warrant Certificate or Warrant Certificates
representing the same aggregate number of Warrants will be issued in
accordance with instructions in the assignment.
7. Replacement Certificates. Upon receipt of evidence
reasonably satisfactory to the Company (an affidavit of the Holder
shall be satisfactory) of the ownership and the loss, theft,
destruction or mutilation of any certificate evidencing Warrants,
and in the case of any such loss, theft or destruction, upon receipt
of indemnity reasonably satisfactory to the Company (provided that
if the Holder is a financial institution or other institutional
investor its own agreement shall be satisfactory), or, in the case
of any such mutilation upon surrender of such certificate, the
Company shall (at its expense) execute and deliver in lieu of such
certificate a new certificate of like kind representing the same
rights represented by such lost, stolen, destroyed or mutilated
certificate and dated the date of such lost, stolen, destroyed or
mutilated certificate.
8. General Provisions:
A. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of Utah without
regard to principles of conflicts of law. The parties hereby consent
to the jurisdiction of any court of competent jurisdiction in the
state of Utah, and consent to venue in Salt Lake County, Utah.
B. Notices. Any notice or demand required by this Warrant
Certificate to be given or made shall be sufficiently given or made
if in writing and (i) delivered in person, (ii) transmitted by
telecopy, (iii) sent by registered or certified mail, postage
prepaid with return receipt requested, or (iv) sent by reputable
overnight courier service, fees prepaid, to the parties at their
addresses as they appear in this Warrant Certificate. Notices shall
be deemed given upon personal delivery, upon receipt of return
receipt in the case of delivery by mail, upon acknowledgment by the
receiving telecopier or one day following deposit with an overnight
courier service.
C. Enforcement. The Company shall reimburse or pay, on
demand, to or on behalf of the Purchaser the costs and expenses,
including reasonable fees and expenses of counsel(s) to the
Purchaser, incurred by the Purchaser in connection with the
enforcement, whether with or without suit, of this Agreement and any
of the Related Documents.
D. Amendments and Waivers. This Warrant Certificate may be
amended or modified only with the written consent of the Holder. No
change or modification of this Warrant Certificate shall be valid
unless with the written consent of the Holder. Any default may be
waived only with the written consent of the Holder.
E. Descriptive Headings. The descriptive headings of the
several Sections and paragraphs of this Warrant Certificate are
inserted for convenience only and do not constitute a part of this
Warrant Certificate.
F. Timeliness. The parties agree that time is of the essence
for the performance of each and every covenant and the satisfaction
of each and every condition contained in this Warrant Certificate.
G. Execution. A facsimile copy of this Warrant Certificate
shall be deemed an original, all with the same full force and effect
as though it were an original.
IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be executed by its duly authorized officers or agents
as of the day and year first above written.
FIRST SCIENTIFIC, INC.
By: /s/ Xxxxxxx X. Xxxxx
------------------------------
Xxxxxxx X. Xxxxx,
President and Chief
Executive Officer
By: /s/ Xxxxxx X. Xxxxx
------------------------------
Xxxxxx X. Xxxxx, Vice
President, Chief Financial
Officer and Corporate Secretary
STATE OF UTAH )
: ss.
COUNTY OF SALT LAKE )
On May 16, 2000, personally appeared before me Xxxxxxx X.
Xxxxx, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to
the within instrument and acknowledged to me that he executed the
same in his authorized capacity, and that by his signature on the
instrument the person, or the entity upon behalf of which the person
acted, executed the instrument.
WITNESS my hand and official seal. /s/ Xxxxxxx X. Xxxxx
------------------------
NOTARY PUBLIC
STATE OF UTAH )
: ss.
COUNTY OF SALT LAKE )
On May 16, 2000, personally appeared before me Xxxxxx X.
Xxxxx, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to
the within instrument and acknowledged to me that he executed the
same in his authorized capacity, and that by his signature on the
instrument the person, or the entity upon behalf of which the person
acted, executed the instrument.
WITNESS my hand and official seal. /s/ Xxxxxxx X. Xxxxx
------------------------
NOTARY PUBLIC
ELECTION TO EXERCISE
The undersigned hereby elects to exercise __________ of the
Warrants represented by the Warrant Certificate attached and to
purchase the Shares issuable upon the exercise of such Warrants, and
requests that certificates for such Shares be issued and delivered
to the undersigned as follows:
______________________________________________________________________________
name
______________________________________________________________________________
address, including zip code
______________________________________________________________________________
social security or other tax identifying number
If the number of Warrants hereby exercised is less than all
of the Warrants represented by this Warrant Certificate, the
undersigned directs that a new Warrant Certificate representing the
number of full Warrants not exercised be issued and delivered to the
undersigned.
In full payment of the purchase price with respect to the
Warrants exercised and transfer taxes, if any, the undersigned
hereby tenders payment of $ _______ by certified check or money
order payable in United States currency to the order of the Company.
Dated: __________________
____________________________________
Signature
____________________________________
Name
____________________________________
Address
ASSIGNMENT
FOR VALUE RECEIVED, _____________________________ hereby
sells, assigns and transfers all of the rights of the undersigned
under the attached Warrant Certificate with respect to the number of
the Warrants covered thereby set forth below, unto:
Name of Assignee Address No. of Warrants
____________________________________________________________________________
____________________________________________________________________________
Dated: ___________________ ___________________________________
Signature
____________________________________
Witness
