Exhibit 4.4
[Form of Representative's Warrant Agreement -
Subject to Additional Review]
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COMMODORE SEPARATION TECHNOLOGIES, INC.
AND
NATIONAL SECURITIES CORPORATION
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REPRESENTATIVE'S
WARRANT AGREEMENT
Dated as of January __, 1997
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REPRESENTATIVE'S WARRANT AGREEMENT dated as of _______, 1997
between COMMODORE SEPARATION TECHNOLOGIES, INC., a Delaware corporation (the
"Company"), and NATIONAL SECURITIES CORPORATION (hereinafter referred to
variously as the "Holder" or the "Representative").
W I T N E S S E T H:
WHEREAS, the Company proposes to issue to the Representative
(and/or its designees) warrants ("Warrants") to purchase up to an aggregate
150,000 shares of Convertible Preferred Stock, $.001 par value, of the Company,
150,000 shares of Common Stock, $.001 par value, of the Company and/or 300,000
redeemable common stock purchase warrants of the Company ("Redeemable
Warrants"), each Redeemable Warrant to purchase one additional share of Common
Stock, or any combination of such securities at the exercise prices set forth
herein; and
WHEREAS, the Representative has agreed pursuant to the
underwriting agreement (the "Underwriting Agreement") dated as of the date
hereof among the Company, Commodore Applied Technologies, Inc. and the several
Underwriters listed therein to act as the Representative in connection with the
Company's proposed public offering of units consisting of 1,500,000 shares of
Convertible Preferred Stock and 1,500,000 Redeemable Warrants ("Public
Warrants") and units consisting of 1,500,000 shares of Common Stock and
1,500,000 Public Warrants at an initial public offering price of $____ per share
of Convertible Preferred
Stock, $____ per share of Common Stock and $.10 per Public Warrant (the "Public
Offering"); and
WHEREAS, the Warrants to be issued pursuant to this Agreement
will be issued on the Closing Date (as such term is defined in the Underwriting
Agreement) by the Company to the Representative in consideration for, and as
part of the Representative's compensation in connection with, the Representative
acting as the Representative pursuant to the Underwriting Agreement;
NOW, THEREFORE, in consideration of the premises, the payment
by the Representative to the Company of an aggregate fifteen dollars ($15.00),
the agreements herein set forth and other good and valuable consideration,
hereby acknowledged, the parties hereto agree as follows:
1. Grant. The Representative (and/or its designees) is hereby
granted the right to purchase, at any time from _______, 1998 [one year from the
effective date of the Registration Statement], until 5:30 P.M., New York time,
on _______, 2002 [five years from the effective date of the Registration
Statement], up to an aggregate of (a) 150,000 shares of Convertible Preferred
Stock (the "Preferred Shares") at an initial exercise price (subject to
adjustment as provided in Section 8 hereof) of $____ per share of Convertible
Preferred Stock [120% of the initial public offering price per share of
Convertible Preferred Stock], or in the event the Convertible Preferred Stock
has been redeemed by the Company or converted into shares of Common Stock in
accordance with the terms of the Convertible Preferred Stock, up to __________
shares (subject to adjustment as provided in Section 8 hereof) of Common Stock
(the "Conversion Shares") at an initial exercise price (subject to adjustment as
provided in
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Section 8 hereof) of $_____ per share of Common Stock [120% of the initial
public offering price per share of Convertible Preferred Stock divided by the
then current Conversion Price, as defined in and calculated pursuant to that
certain Certificate of Designation, Preferences and Rights of 10% Senior
Convertible Redeemable Preferred Stock of Commodore Separation Technologies,
Inc. (the "Certificate of Designation"), dated as of ____________, 1997 and
filed with the Secretary of State of the State of Delaware], (b) 150,000 shares
of Common Stock (the "Common Shares") at an initial exercise price (subject to
adjustment as provided in Section 8 hereof) of $____ per share of Common Stock
[120% of the initial public offering price per share of Common Stock] and/or (c)
300,000 Redeemable Warrants at an initial exercise price (subject to adjustment
as provided in Section 8 hereof) of $____ per Redeemable Warrant [120% of the
initial public offering price per Redeemable Warrant], or any combination of
such Preferred Shares, Conversion Shares, Common Shares and/or Redeemable
Warrants at such exercise prices set forth herein, all subject to the terms and
conditions of this Agreement. One Redeemable Warrant is exercisable to purchase
one additional share of Common Stock at an initial exercise price of $_____
[140% of the initial public offering price per share of Common Stock] from
_______, 1998 [one year from the effective date of the registration statement]
until 5:30 p.m. New York time on _____, 2002 [five years from the effective date
of the registration statement], at which time the Redeemable Warrants shall
expire.
It is expressly understood that this Agreement entitles the
Representative to ten percent (10%) of the number of securities offered to the
public on an as converted basis (subject to adjustment as provided in Section 8
hereof). Therefore, in the case of the Warrants to purchase shares of
Convertible Preferred Stock, each share of Convertible Preferred Stock
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purchased hereunder will reduce the number of Preferred Shares purchasable by
the Representative by ____ (__) (subject to adjustment as provided in Section 8
hereof). Similarly, each Conversion Share purchased hereunder will reduce the
number of Preferred Shares purchasable by the Representative by ____ of a share
of Convertible Preferred Stock and will reduce the number of Conversion Shares
purchasable by the Representative by one (subject to adjustment as provided in
Section 8 hereof). Except as set forth herein, the shares of Convertible
Preferred Stock, shares of Common Stock and Redeemable Warrants issuable upon
exercise of the Warrants are in all respects identical to the shares of
Convertible Preferred Stock, shares of Common Stock and Public Warrants being
purchased by the Underwriters for resale to the public pursuant to the terms and
provisions of the Underwriting Agreement. The Preferred Shares, the Conversion
Shares, the Common Shares and the Redeemable Warrants issuable upon exercise of
the Warrants are sometimes hereinafter referred to collectively as the
"Securities."
2. Warrant Certificates. The warrant certificates (the
"Warrant Certificates") delivered and 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 Warrant.
Section 3.1 Method of Exercise. The Warrants initially are
exercisable at an aggregate initial exercise price (subject to adjustment as
provided in Section 8 hereof) per Preferred Share, Conversion Share, Common
Share and Redeemable Warrant set forth in Section 6 hereof payable by certified
or official bank check in New York Clearing House funds, subject to adjustment
as
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provided in Section 8 hereof. Upon surrender of a Warrant Certificate with the
annexed Form of Election to Purchase duly executed, together with payment of the
Exercise Price (as hereinafter defined) for the Preferred Shares, Conversion
Shares, Common Shares and/or Redeemable Warrants purchased at the Company's
principal executive offices in New York (presently located at 000 Xxxx 00xx
Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 10155) the registered holder of a Warrant
Certificate ("Holder" or "Holders") shall be entitled to receive a certificate
or certificates for the Securities so purchased. The purchase rights represented
by each Warrant Certificate are exercisable at the option of the Holder thereof,
in whole or in part (but not as to fractional shares of the Preferred Shares,
Conversion Shares, Common Shares and Redeemable Warrants underlying the
Warrants). In the event the Company redeems all of the shares of Convertible
Preferred Stock and/or Public Warrants (other than the Preferred Shares and
Redeemable Warrants underlying the Warrants), then the Warrants may only be
exercised if such exercise is accompanied by the simultaneous conversion of the
Preferred Shares and/or exercise of the Redeemable Warrants, as the case may be,
underlying the Warrants being so exercised. Warrants may be exercised to
purchase all or part of the Preferred Shares, Conversion Shares, Common Shares
and/or Redeemable Warrants purchasable thereunder. In the case of the purchase
of less than all the Securities purchasable under any Warrant Certificate, the
Company shall cancel said Warrant Certificate upon the surrender thereof and
shall execute and deliver a new Warrant Certificate of like tenor for the
balance of the Securities purchasable thereunder.
Section 3.2 Exercise by Surrender of Warrant. In addition to
the method of payment set forth in Section 3.1 and in lieu of any cash payment
required thereunder, the Holder(s) of
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the Warrants shall have the right at any time and from time to time to exercise
the Warrants in full or in part by surrendering the Warrant Certificate in the
manner specified in Section 3.1 in exchange for the number of shares of Common
Stock equal to the quotient derived from dividing the numerator (x) an amount
equal to the difference between (A) the sum of (1) the number of Preferred
Shares as to which the Warrants are being exercised multiplied by the per
Preferred Share Market Price, (2) the number of Conversion Shares as to which
the Warrants are being exercised multiplied by the per Conversion Share Market
Price, (3) the number of Common Shares as to which the Warrants are being
exercised multiplied by the per Common Share Market Price, (4) the number of
Redeemable Warrants as to which the Warrants are being exercised multiplied by
the per Redeemable Warrant Market Price, and (5) the number of shares of Common
Stock issuable upon exercise of the Redeemable Warrants underlying the Warrants
being exercised multiplied by the per Common Share Market Price, and (B) the sum
of (1) the number of Warrants which are being exercised multiplied by the
Exercise Price, (2) the number of Preferred Shares included in the Warrants
which are being exercised multiplied by the Conversion Rate per Preferred Share
(as calculated pursuant to the Certificate of Designation) as then in effect,
and (3) the number of Redeemable Warrants included in the Warrants which are
being exercised multiplied by the exercise price per Redeemable Warrant (as
calculated pursuant to the Redeemable Warrant Agreement (hereinafter defined))
as then in effect, by the denominator (y) the per share Market Price of the
Common Stock. Solely for the purposes of this paragraph, Market Price shall be
calculated either (i) on the date on which the form of election attached hereto
is deemed to have been sent to the Company pursuant to Section 14
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hereof ("Notice Date") or (ii) as the average of the Market Prices for each of
the five trading days preceding the Notice Date, whichever of (i) or (ii) is
greater.
Section 3.3 Definition of Market Price. As used herein, the
phrase "Market Price" at any date shall be deemed to be (i) when referring to
the Preferred Shares, the last reported sale price, or, in case no such reported
sale takes place on such day, the average of the last reported sale prices for
the last three (3) trading days, in either case as officially reported by the
Nasdaq SmallCap Market ("Nasdaq/SC") or the principal securities exchange on
which the Convertible Preferred Stock is listed or admitted to trading, or, if
the Convertible Preferred Stock is not listed or admitted to trading on
Nasdaq/SC or any national securities exchange or quoted by the National
Association of Securities Dealers Automated Quotation System ("Nasdaq"), the
average closing bid price as furnished by the National Association of Securities
Dealers, Inc. ("NASD") through Nasdaq or similar organization if Nasdaq is no
longer reporting such information, or if the Convertible Preferred Stock is not
quoted on Nasdaq, as determined in good faith (using customary valuation
methods) by resolution of the members of the Board of Directors of the Company,
based on the best information available to it; (ii) when referring to the
Conversion Shares or the Common Shares, the last reported sale price, or, in
case no such reported sale takes place on such day, the average of the last
reported sale prices for the last three (3) trading days, in either case as
officially reported by Nasdaq/SC or 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 Nasdaq/SC or any national securities
exchange or quoted by Nasdaq, the average closing bid price as furnished by the
NASD through Nasdaq or similar organization if Nasdaq is no longer reporting
such information, or if the Common Stock is not quoted on
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Nasdaq, as determined in good faith (using customary valuation methods) by
resolution of the members of the Board of Directors of the Company, based on the
best information available to it; or (iii) when referring to a Redeemable
Warrant, the last reported sale price, or, in the case no such reported sale
takes place on such day, the average of the last reported sale prices for the
last three (3) trading days, in either case as officially reported by Nasdaq/SC
or the principal securities exchange on which the Redeemable Warrants are listed
or admitted to trading, or, if the Redeemable Warrants are not listed or
admitted to trading on Nasdaq/SC or any national securities exchange or quoted
by Nasdaq, the average closing bid price as furnished by the NASD through Nasdaq
or similar organization if Nasdaq is no longer reporting such information, or if
the Redeemable Warrants are not quoted on Nasdaq or are no longer outstanding,
the Market Price of a Redeemable Warrant shall equal the difference between the
Market Price of the Common Stock and the Exercise Price of the Redeemable
Warrant.
4. Issuance of Certificates. Upon the exercise of the
Warrants, the issuance of certificates for the Securities and/or other
securities, properties or rights underlying such Warrants and, upon the
redemption or conversion of the Preferred Shares and/or the exercise of the
Redeemable Warrants, the issuance of certificates for shares of Common Stock
and/or other securities, properties or rights underlying such Preferred Shares
and/or Redeemable Warrants, as the case may be, shall be made forthwith (and in
any event within five (5) business days thereafter) without charge to the Holder
thereof including, without limitation, any tax which may be payable in respect
of the issuance 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
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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 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 Warrant Certificates and the certificates representing the
Securities underlying the Warrants and the shares of Common Stock underlying the
Preferred Shares and Redeemable Warrants (and/or other securities, properties or
rights issuable upon the redemption or conversion of the Preferred Shares or the
exercise of the Warrants or the Redeemable Warrants) shall be executed on behalf
of the Company by the manual or facsimile signature of the then Chairman or Vice
Chairman of the Board of Directors or President or Vice President of the
Company. Warrant Certificates shall be dated the date of execution by the
Company upon initial issuance, division, exchange, substitution or transfer or
in lieu of mutilated, lost, stolen or destroyed Warrant Certificates.
Certificates representing the Securities, and the shares of Common Stock
underlying each Preferred Share and Redeemable Warrant (and/or other securities,
properties or rights issuable upon the redemption or conversion of the Preferred
Shares or exercise of the Warrants or the Redeemable Warrants) shall be dated as
of the Notice Date (regardless of when executed or delivered) and dividend
bearing securities so issued shall accrue dividends from the Notice Date.
5. Restriction On Transfer of Warrants. The Holder of a
Warrant Certificate, by its acceptance thereof, covenants and agrees that the
Warrants are being acquired as an investment and not with a view to the
distribution thereof; that the Warrants may not be sold,
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transferred, assigned, hypothecated or otherwise disposed of, in whole or in
part, for a period of one (1) year from the date hereof, except to officers of
the Representative.
6. Exercise Price.
Section 6.1 Initial and Adjusted Exercise Price. Except as
otherwise provided in Section 8 hereof, the initial exercise price of each
Warrant shall be $____ [120% of the initial public offering price] per share of
Convertible Preferred Stock, $_____ [120% of the initial public offering price
per share of Convertible Preferred Stock divided by the then current Conversion
Price, as defined in and calculated pursuant to the Certificate of Designation]
per Conversion Share, $____ [120% of the initial public offering price] per
share of Common Stock and $_____ per Redeemable Warrant [120% of the initial
public offering price per Public Warrant]. The adjusted exercise price shall be
the price which shall result from time to time from any and all adjustments of
the initial exercise price in accordance with the provisions of Section 8
hereof. Any transfer of a Warrant shall constitute an automatic transfer and
assignment of the registration rights set forth in Section 7 hereof with respect
to the Securities or other securities, properties or rights underlying the
Warrants.
Section 6.2 Exercise Price. The term "Exercise Price" herein
shall mean the initial exercise price or the adjusted exercise price, depending
upon the context or unless otherwise specified.
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7. Registration Rights.
Section 7.1 Registration Under the Securities Act of 1933. The
Warrants, the Securities issuable upon exercise of the Warrants, the shares of
Common Stock issuable upon redemption or conversion of the Preferred Shares, the
shares of Common Stock issuable upon exercise of the Redeemable Warrants
underlying the Warrants and any of the other securities issuable upon redemption
or conversion of the Preferred Shares or exercise of the Warrants or Redeemable
Warrants (collectively, the "Warrant Securities") have been registered under the
Securities Act of 1933, as amended (the "Act"), pursuant to the Company's
Registration Statement on Form S-1 (Registration No. 333-11813) (the
"Registration Statement"). All of the representations and warranties of the
Company contained in the Underwriting Agreement relating to the Registration
Statement, the Preliminary Prospectus and Prospectus (as such terms are defined
in the Underwriting Agreement) and made as of the dates provided therein, are
incorporated by reference herein. The Company agrees and covenants promptly to
file post-effective amendments to such Registration Statement as may be
necessary in order to maintain its effectiveness and otherwise to take such
action as may be necessary to maintain the effectiveness of the Registration
Statement as long as any Warrants are outstanding. In the event that, for any
reason whatsoever, the Company shall fail to maintain the effectiveness of the
Registration Statement, the certificates representing the Warrant Securities
shall bear the following legend:
The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended
("Act"), and may not be offered or sold except pursuant to (i)
an effective registration statement under the Act, (ii) to the
extent applicable, Rule 144 under the Act (or any similar rule
under such Act relating to the disposition of securities), or
(iii) an opinion of
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counsel, if such opinion shall be reasonably satisfactory to
counsel to the issuer, that an exemption from registration
under such Act is available.
Section 7.2 Piggyback Registration.
(a) If, at any time commencing after the date hereof and
expiring seven (7) years thereafter, the Company proposes to register any of its
securities under the Act (other than pursuant to Form X-0, Xxxx X-0 or a
comparable registration statement) it will give written notice by registered
mail, at least thirty (30) days prior to the filing of each such registration
statement, to the Representative and to all other Holders of the Warrants and/or
the Warrant Securities of its intention to do so. If the Representative or other
Holders of the Warrants and/or Warrant Securities notify the Company within
twenty (20) business days after receipt of any such notice of its or their
desire to include any such securities in such proposed registration statement,
the Company shall afford the Representative and such Holders of the Warrants
and/or Warrant Securities the opportunity to have any such Warrant Securities
registered under such registration statement (a "Piggyback Registration");
provided, however, that the Representative and/or such Holders of the Warrants
and/or Warrant Securities shall furnish the Company with appropriate information
in connection therewith as the Company may request in writing.
(b) If, at any time after giving written notice of its
intention to register any securities in a Piggyback Registration but prior to
the effective date of the related registration statement, the Company shall
determine for any reason not to register such securities, the Company shall give
written notice of such determination to the Representative and to each Holder of
Warrants and/or Warrant Securities and, thereupon, shall be relieved of its
obligation
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to register any Warrant Securities in connection with such Piggyback
Registration, irrespective of whether a written request for inclusion of any
such securities shall have been made. All best efforts obligations of the
Company pursuant to Section 7.4(a) shall cease if the Company determines to
terminate prior to such effective date any registration where Warrant Securities
are being registered pursuant to Section 7.2(a).
(c) If a Piggyback Registration involves an offering by or
through underwriters, then (i) the Representative and all Holders of Warrants
and/or Warrant Securities requesting to have their Warrant Securities included
in the Company's registration statement must sell their Warrant Securities to
the underwriters selected by the Company on the same terms and conditions as
apply to other selling shareholders and (ii) the Representative and any Holder
of Warrants and/or Warrant Securities requesting to have such Holder's Warrant
Securities included in such registration statement may elect in writing, not
later than three (3) business days prior to the effectiveness of the
registration statement filed in connection with such registration, not to have
such Holder's Warrant Securities so included in connection with such
registration.
(d) If a Piggyback Registration involves an offering by or
through underwriters, the Company shall not be required to include Warrant
Securities therein if and to the extent the underwriter managing the offering
reasonably believes in good faith and advises the Representative and each Holder
of Warrants and/or Warrant Securities requesting to have Warrant Securities
included in the Company's registration statement that such inclusion would
materially adversely affect such offering; provided that if other selling
shareholders, including employees, officers or directors of the Company, have
requested registration of
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securities in the proposed offering, the Company will reduce or eliminate such
other selling shareholders' securities pro rata to the Warrant Securities in
proportion to the respective number of shares they have requested to be
registered, and in such event, the Representative and such Holders of Warrants
and/or Warrant Securities may delay any offering by them of all Warrant
Securities requested to be included or that portion of such Warrant Securities
eliminated for such period, not to exceed 60 days, as the managing underwriter
shall request, and the Company shall file such supplements and post-effective
amendments and take such other action necessary under Federal and State law or
regulation as may be necessary to permit the Representative and such Holders of
Warrants and/or Warrant Securities to make their proposed offering for a period
of 90 days following such period of delay.
Section 7.3 Demand Registration.
(a) At any time commencing after the date hereof and expiring
five (5) years thereafter, the Holders of the Warrants and/or Warrant Securities
representing a "Majority" (as hereinafter defined) of such securities (assuming
the exercise of all of the Warrants) shall have the right (which right is in
addition to the registration rights under Section 7.2 hereof), exercisable by
written notice to the Company, to have the Company prepare and file with the
Securities and Exchange Commission (the "Commission"), on one occasion only, a
registration statement and such other documents, including a prospectus, as may
be necessary in the opinion of both counsel for the Company and counsel for the
Representative and Holders, in order to comply with the provisions of the Act,
so as to permit a public offering and sale of their respective Warrant
Securities for nine (9) consecutive months by such Holders and any other Holders
of the Warrants and/or Warrant Securities who notify the Company within ten
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(10) days after receiving notice from the Company of such request; provided,
however, the Company shall be entitled to defer such registration for a period
of up to 90 days if and to the extent that its Board of Directors shall
determine in good faith with an opinion of counsel for the Company that such
registration would interfere with a pending corporate transaction.
(b) The Company covenants and agrees to give written notice of
any registration request under this Section 7.3 by any Holder or Holders to all
other registered Holders of the Warrants and the Warrant Securities within ten
(10) days from the date of the receipt of any such registration request.
(c) In addition to the registration rights under Section 7.2
and subsection (a) of this Section 7.3, at any time commencing after the date
hereof and expiring five (5) years thereafter, any Holder of Warrants and/or
Warrant Securities shall have the right, exercisable by written request to the
Company, to have the Company prepare and file, on one occasion only, with the
Commission a registration statement so as to permit a public offering and sale
for nine (9) consecutive months by any such Holder of its Warrant Securities
provided, however, that the provisions of Section 7.4(b) hereof shall not apply
to any such registration request and registration and all costs incident thereto
shall be at the expense of the Holder or Holders making such request.
(d) Notwithstanding anything to the contrary contained herein,
if the Company shall not have filed a registration statement for the Warrant
Securities within the time period specified in Section 7.4(a) hereof pursuant to
the written notice specified in Section 7.3(a) of a Majority of the Holders of
the Warrants and/or Warrant Securities, the Company may, at its option, upon the
written notice of election of a Majority of the Holders of the
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Warrants and/or Warrant Securities requesting such registration, repurchase (i)
any and all Warrant Securities of such Holders at the higher of the Market Price
per Preferred Share, Conversion Share, Common Share and per Redeemable Warrant,
as the case may be, on (x) the date of the notice sent pursuant to Section
7.3(a) or (y) the expiration of the period specified in Section 7.4(a) and (ii)
any and all Warrants of such Holders at such Market Price less the Exercise
Price of such Warrant. Such repurchase shall be in immediately available funds
and shall close within two (2) days after the later of (i) the expiration of the
period specified in Section 7.4(a) or (ii) the delivery of the written notice of
election specified in this Section 7.3(d).
Section 7.4 Covenants of the Company With Respect to
Registration. In connection with any registration under Sections 7.2 or 7.3
hereof, and except as otherwise provided in this Agreement, the Company
covenants and agrees as follows:
(a) The Company shall use its best efforts to file a
registration statement within thirty (30) days of receipt of any demand
therefor, shall use its best efforts to have any registration statements
declared effective at the earliest possible time, and shall furnish each Holder
desiring to sell Warrant Securities such number of prospectuses as shall
reasonably be requested.
(b) The Company shall pay all costs (excluding fees and
expenses of Holder(s)' counsel and any underwriting or selling commissions),
fees and expenses in connection with all registration statements filed pursuant
to Sections 7.2 and 7.3(a) hereof including, without limitation, the Company's
legal and accounting fees, printing expenses, blue sky fees and expenses. The
Holder(s) whose Warrant Securities are the subject of such
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registration statement will pay all costs, fees and expenses in connection with
any registration statement filed pursuant to Section 7.3(c).
(c) The Company will take all necessary action which may be
required in qualifying or registering the Warrant 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 Holder(s), provided that
the Company shall not be obligated to execute or file any general consent to
service of process or to qualify as a foreign corporation to do business under
the laws of any such jurisdiction.
(d) The Company shall indemnify the Holder(s) of the Warrant
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 ("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 each of the Underwriters contained in Section 7
of the Underwriting Agreement.
(e) The Holder(s) of the Warrant Securities to be sold
pursuant to a registration statement, and their successors and assigns, shall
severally, and not jointly, 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, expense or liability (including all expenses reasonably incurred
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in investigating, preparing or defending against any claim whatsoever) 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 7 of the
Underwriting Agreement pursuant to which the Underwriters have agreed to
indemnify the Company.
(f) Nothing contained in this Agreement shall be construed as
requiring the Holder(s) to exercise their Warrants prior to the initial filing
of any registration statement or the effectiveness thereof.
(g) The Company shall not permit the inclusion of any
securities other than the Warrant Securities to be included in any registration
statement filed pursuant to Section 7.3 hereof, or permit any other registration
statement to be or remain effective during the effectiveness of a registration
statement filed pursuant to Section 7.3 hereof, without the prior written
consent of the Holders of the Warrants and Warrant Securities representing a
Majority of such securities, which consent shall not be unreasonably withheld.
(h) The Company shall furnish to each Holder participating in
the offering and to each underwriter, if any, a signed counterpart, addressed to
such Holder or 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) a "cold comfort" letter
dated the effective date of such registration statement (and, if such
registration includes an underwritten public offering, a letter dated the date
of the closing under the underwriting
- 18 -
agreement) signed by the independent public accountants who have 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' letter, with respect to 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.
(i) The Company shall as soon as practicable after the
effective 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 11(a) of the Act and covering a period of at
least 12 consecutive months beginning after the effective date of the
registration statement.
(j) The Company shall deliver promptly to each Holder
participating in the offering requesting the correspondence and memoranda
described below and to the managing underwriters, copies of all correspondence
between the Commission and the Company, its counsel or auditors and all
memoranda relating to discussions with the Commission or its staff 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 NASD. Such
investigation shall include access to books, records and properties and
opportunities to discuss the business of the Company with
- 19 -
its officers and independent auditors, all to such reasonable extent and at such
reasonable times and as often as any such Holder or underwriter shall reasonably
request.
(k) The Company shall enter into an underwriting agreement
with the managing underwriters selected for such underwriting by Holders holding
a Majority of the Warrant Securities requested to be included in such
underwriting, which may be the Representative. Such agreement shall be
satisfactory in form and substance to the Company, each Holder and such managing
underwriter(s), 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(s). The Holders shall be parties
to any underwriting agreement relating to an underwritten sale of their Warrant
Securities and may, at their option, require that any or all of the
representations, warranties and covenants of the Company to or for the benefit
of such underwriter(s) 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 underwriter(s) except as
they may relate to such Holders and their intended methods of distribution.
(l) In addition to the Warrant Securities, upon the written
request therefor by any Holder(s), the Company shall include in the registration
statement any other securities of the Company held by such Holder(s) as of the
date of filing of such registration statement, including without limitation
restricted shares of Convertible Preferred Stock, Common Stock, options,
warrants or any other securities convertible into shares of Common Stock.
(m) For purposes of this Agreement, the term "Majority" in
reference to the Holders of Warrants or Warrant Securities, shall mean in excess
of fifty percent (50%) of the
- 20 -
then outstanding Warrants or Warrant Securities that (i) are not held by the
Company, an affiliate, officer, creditor, employee or agent thereof or any of
their respective affiliates, members of their family, persons acting as nominees
or in conjunction therewith and (ii) have not been resold to the public pursuant
to a registration statement filed with the Commission under the Act.
8. Adjustments to Exercise Price and Number of Securities.
Section 8.1 Subdivision and Combination. In case the Company
shall at any time subdivide or combine the outstanding shares of Convertible
Preferred Stock or Common Stock, the Exercise Price shall forthwith be
proportionately decreased in the case of subdivision or increased in the case of
combination.
Section 8.2 Stock Dividends and Distributions. In case the
Company shall pay a dividend in, or make a distribution of, shares of
Convertible Preferred Stock, Common Stock or of the Company's capital stock
convertible into Common Stock, the Exercise Price shall forthwith be
proportionately decreased. An adjustment made pursuant to this Section 8.2 shall
be made as of the record date for the subject stock dividend or distribution.
Section 8.3 Adjustment in Number of Securities. Upon each
adjustment of the Exercise Price pursuant to the provisions of this Section 8,
the number of Warrant Securities issuable upon the exercise at the adjusted
exercise price of each Warrant shall be adjusted to the nearest full amount by
multiplying a number equal to the Exercise Price in effect immediately prior to
such adjustment by the number of Warrant Securities issuable upon exercise of
the Warrants immediately prior to such adjustment and dividing the product so
obtained by the adjusted Exercise Price.
- 21 -
Section 8.4 Definition of Common Stock and Convertible
Preferred Stock. (a) For the purpose of this Agreement, the term "Common Stock"
shall mean (i) the class of stock designated as Common Stock in the Certificate
of Incorporation of the Company as may be amended as of the date hereof, or (ii)
any other class of stock resulting from successive changes or reclassifications
of such Common Stock consisting solely of changes in par value, or from par
value to no par value, or from no par value to par value. In the event that the
Company shall after the date hereof issue securities with greater or superior
voting rights than the shares of Common Stock outstanding as of the date hereof,
the Holder, at its option, may receive upon exercise of any Warrant either the
Warrant Securities or a like number of such securities with greater or superior
voting rights.
(b) For the purpose of this Agreement, the term "Convertible
Preferred Stock" shall mean the Convertible Preferred Stock purchased by the
Underwriters for resale to the public in the Public Offering pursuant to the
terms of the Underwriting Agreement, as such Convertible Preferred Stock is more
particularly described in the Certificate of Designation, as the same may be
amended from time to time. The Preferred Shares issuable upon exercise of the
Warrants shall be identical to the Convertible Preferred Stock described in the
Certificate of Designation except that such Preferred Shares cannot be redeemed.
In the event of any change after the date hereof in the Conversion Rate (as
defined in and calculated pursuant to the Certificate of Designation) or, the
time period for conversion of, or the number or class of securities issuable
upon conversion of, the Convertible Preferred Stock, the Holder of any Warrant
shall receive upon exercise thereof Preferred Shares with a conversion ratio
(and an effective conversion price) equal to the Conversion Rate (and an
effective Conversion
- 22 -
Price) then in effect for, convertible for such number and class of securities
as would be issuable upon the conversion of, and convertible for such period of
time as, shares of Convertible Preferred Stock issued and outstanding on the
date hereof after giving effect to such change. In addition, in the event that
the Company grants to the holders of Convertible Preferred Stock upon the
conversion thereof any benefits or inducements not set forth in the Certificate
of Designation, the Holder shall be entitled to receive such benefit or
inducement upon the exercise by such Holder of any Warrant(s) to purchase
Preferred Shares or Conversion Shares.
Section 8.5 Merger or Consolidation. 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
which does not result in any reclassification or change of the outstanding
Common Stock or Convertible Preferred Stock or other securities issuable upon
exercise of the Warrants or Redeemable Warrants or redemption or conversion of
the Convertible Preferred Stock), or in the case of any sale or conveyance to
another person, corporation or other entity of the property of the Company as an
entirety or substantially as an entirety, then, as a condition of such
consolidation, merger, sale or conveyance, the Company or such successor or
purchasing entity, as the case may be, shall execute and deliver to the Holder a
supplemental warrant agreement providing that the holder of each Warrant then
outstanding or to be outstanding shall have the right thereafter (until the
expiration of such Warrant) to receive, upon exercise of such Warrant, the kind
and amount of shares of stock and other securities and property receivable upon
such consolidation or merger, by a holder of the number of securities of the
Company for which such Warrant might have been exercised
- 23 -
immediately prior to such consolidation, merger, sale or transfer. Such
supplemental warrant agreement shall provide for adjustments which shall be
identical to the adjustments provided in Section 8. The above provision of this
subsection shall similarly apply to successive consolidations, mergers, sales or
conveyances.
Section 8.6 No Adjustment of Exercise Price in Certain Cases.
No adjustment of the Exercise Price shall be made:
(a) Upon the issuance or sale of the Warrants or the
Warrant Securities issuable upon the exercise of the Warrants;
(b) If the amount of said adjustment shall be less
than ten cents (10(cent)) per Warrant Security, provided,
however, that in such case any adjustment that would otherwise
be required then to be made shall be carried forward and shall
be made at the time of and together with the next subsequent
adjustment which, together with any adjustment so carried
forward, shall amount to at least ten cents (10(cent)) per
Warrant Security. Section 8.7 Form of Warrant After
Adjustments.
Section 8.7 Form of Warrant. The form of the Warrant
Certificates need not be changed because of any adjustments in the Exercise
Price or number of Warrant Securities, and warrant certificates theretofore or
thereafter issued may continue to express the same Exercise Price and number of
Warrant Securities as are stated in the respective Warrant Certificates, as
initially issued.
9. Exchange and Replacement of Warrant Certificates. Each
Warrant Certificate is exchangeable without expense, upon the surrender thereof
by the registered Holder at the principal executive office of the Company, for a
new Warrant Certificate of like
- 24 -
tenor and date representing in the aggregate the right to purchase the same
number of Warrant Securities in such denominations as shall be designated by the
Holder thereof at the time of such surrender. The Company may require such
Holder to pay only those expenses which represent a sum sufficient to cover any
tax or governmental charge that may be imposed in connection with any such
exchange.
Upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of any 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 Warrants, if mutilated, the Company will make and deliver a new 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
Convertible Preferred Stock, shares of Common Stock or Redeemable Warrants upon
the exercise of the Warrants, nor shall it be required to issue scrip or pay
cash in lieu of fractional interests, it being the intent of the parties that
all fractional interests shall be eliminated by rounding any fraction up to the
nearest whole number of shares of Convertible Preferred Stock, shares of Common
Stock or Redeemable Warrants or other securities, properties or rights.
11. Reservation and Listing of Securities. The Company shall
at all times reserve and keep available out of its authorized shares of
Convertible Preferred Stock and Common Stock, solely for the purpose of issuance
upon the exercise of the Warrants and the Redeemable Warrants, such number of
shares of Convertible Preferred Stock and Common
- 25 -
Stock or other securities, properties or rights as shall be issuable upon the
exercise, conversion or redemption thereof. The Company covenants and agrees
that, upon exercise of the Warrants and payment of the Exercise Price therefor,
all shares of Convertible Preferred Stock, shares of Common Stock, Redeemable
Warrants 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. The Company further covenants and agrees that upon
exercise of the Redeemable Warrants underlying the Warrants and/or redemption or
conversion of the Preferred Shares, and payment of the respective Exercise Price
therefor, all shares of Common Stock and other securities issuable upon such
exercise, redemption or conversion, as the case may be, shall be duly and
validly issued, fully paid, non-assessable and not subject to the preemptive
rights of any stockholder. As long as the Warrants shall be outstanding, the
Company shall use its best efforts to cause all shares of Convertible Preferred
Stock and Common Stock issuable upon the exercise of the Warrants and Redeemable
Warrants, all shares of Common Stock issuable upon conversion or redemption of
the Preferred Shares and all Redeemable Warrants underlying the Warrants to be
listed (subject to official notice of issuance) on all securities exchanges on
which the Convertible Preferred Stock, Common Stock and/or the Public Warrants
issued to the public in connection herewith may then be listed and/or quoted on
Nasdaq.
12. Notices to 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,
- 26 -
however, at any time prior to the expiration of the 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 or capital surplus
(in accordance with applicable law), as indicated by the
accounting treatment of such dividend or distribution on 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 thirty (30) 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
- 27 -
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. Redeemable Warrants.
The form of the certificate representing Redeemable Warrants
(and the form of election to purchase shares of Common Stock upon the exercise
of Redeemable Warrants and the form of assignment printed on the reverse
thereof) shall be substantially as set forth in Exhibit "A" to the Warrant
Agreement dated as of the date hereof by and among the Company, the
Representative and The Bank of New York (the "Redeemable Warrant Agreement").
Each Redeemable Warrant issuable upon exercise of the Warrants shall evidence
the right to initially purchase a fully paid and non-assessable share of Common
Stock at an initial purchase price of $______ [140% of the initial public
offering price per share] from ______ 1998 [one year from the effective date of
the Registration Statement] until 5:30 p.m. New York time on _________ 2002 [5
years from the effective date of the Registration Statement] at which time the
Redeemable Warrants, unless the exercise period has been extended, shall expire.
The exercise price of the Redeemable Warrants and the number of shares of Common
Stock issuable upon the exercise of the Redeemable Warrants are subject to
adjustment, whether or not the Warrants have been exercised and the Redeemable
Warrants have been issued, in the manner and upon the occurrence of the events
set forth in Section 8 of the Redeemable Warrant Agreement, which is hereby
incorporated herein by reference and made a part hereof as if set forth in its
entirety herein. Subject to the provisions of this Agreement and upon issuance
of
- 28 -
the Redeemable Warrants underlying the Warrants, each registered holder of such
Redeemable Warrant shall have the right to purchase from the Company (and the
Company shall issue to such registered holders) up to the number of fully paid
and non-assessable shares of Common Stock (subject to adjustment as provided
herein and in the Redeemable Warrant Agreement), free and clear of all
preemptive rights of stockholders, provided that such registered holder complies
with the terms governing exercise of the Redeemable Warrant set forth in the
Redeemable Warrant Agreement, and pays the applicable exercise price, determined
in accordance with the terms of the Redeemable Warrant Agreement. Upon exercise
of the Redeemable Warrants, the Company shall forthwith issue to the registered
holder of any such Redeemable Warrant in his name or in such name as may be
directed by him, certificates for the number of shares of Common Stock so
purchased. Except as otherwise provided in this Agreement, the Redeemable
Warrants underlying the Warrants shall be governed in all respects by the terms
of the Redeemable Warrant Agreement. The Redeemable Warrants shall be
transferable in the manner provided in the Redeemable Warrant Agreement, and
upon any such transfer, a new Redeemable Warrant Certificate shall be issued
promptly to the transferee. The Company covenants to, and agrees with, the
Holder(s) that without the prior written consent of the Holder(s), which will
not be unreasonably withheld, the Redeemable Warrant Agreement will not be
modified, amended, canceled, altered or superseded, and that the Company will
send to each Holder, irrespective of whether or not the Warrants have been
exercised, any and all notices required by the Redeemable Warrant Agreement to
be sent to holders of Redeemable Warrants.
- 29 -
14. Notices.
All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed to have been duly made and
sent when delivered, or mailed by registered or certified mail, return receipt
requested:
(a) If to the registered Holder of the Warrants, to
the address of such Holder as shown on the books of the
Company;
(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; or
(c) If to the Representative, to National Securities
Corporation, 0000 Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx,
Xxxxxxxxxx 00000, Attention: General Counsel.
15. Supplements and Amendments. The Company and the
Representative may from time to time supplement or amend this Agreement in a
writing signed by both parties without the approval of any Holders of Warrant
Certificates (other than the Representative) 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
Representative may deem necessary or desirable and which the Company and the
Representative deem shall not adversely affect the interests of the Holders of
Warrant Certificates.
- 30 -
16. Successors. All the covenants and provisions of this
Agreement shall be binding upon and inure to the benefit of the Company, the
Representative, the Holders and their respective successors and assigns
hereunder.
17. Termination. This Agreement shall terminate at the close
of business on _______, 2004. Notwithstanding the foregoing, the indemnification
provisions of Section 7 shall survive such termination until the close of
business on _______, 2010.
18. Governing Law; Submission to Jurisdiction. This Agreement
and each 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 laws of said State without giving effect to the
rules of said State governing the conflicts of laws.
The Company, the Representative and the Holders hereby 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 Representative 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
Representative 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 14 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. The Company, the Representative and the Holders
agree that the
- 31 -
prevailing party(ies) in any such action or proceeding shall be entitled to
recover from the other party(ies) all of its/their reasonable legal costs and
expenses relating to such action or proceeding and/or incurred in connection
with the preparation therefor.
19. Entire Agreement; Modification. This Agreement (including
the Underwriting Agreement and the Redeemable Warrant 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 may not
be modified or amended except by a writing duly signed by the party against whom
enforcement of the modification or amendment is sought.
20. Severability. If any provision of this Agreement shall be
held to be invalid or unenforceable by a court of competent jurisdiction, such
invalidity or unenforceability shall not affect any other provision of this
Agreement.
21. 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.
22. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any person or corporation other than the Company
and the Representative and any other registered Holder(s) of the Warrant
Certificates or Warrant Securities any legal or equitable right, remedy or claim
under this Agreement; and this Agreement shall be for the sole benefit of the
Company and the Representative and any other registered Holders of Warrant
Certificates or Warrant Securities.
- 32 -
23. 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.
- 33 -
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, as of the day and year first above written.
COMMODORE SEPARATION TECHNOLOGIES, INC.
By: _____________________________________
Name:
Title:
Attest:
______________________
Secretary
NATIONAL SECURITIES CORPORATION
By: _____________________________________
Name:
Title:
EXHIBIT A
[FORM OF WARRANT CERTIFICATE]
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES ISSUABLE
UPON EXERCISE THEREOF MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (i) AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, (ii) TO THE
EXTENT APPLICABLE, RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE UNDER SUCH ACT
RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF
SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL FOR THE ISSUER, THAT AN
EXEMPTION FROM REGISTRATION UNDER SUCH 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 ON OR BEFORE
5:30 P.M., NEW YORK TIME, __________, 2002
No. W- Warrants to Purchase
____ Shares of Convertible Preferred Stock,
____ Shares of Common Stock and/or
____ Redeemable Warrants
WARRANT CERTIFICATE
This Warrant Certificate certifies that ___________ , or
registered assigns, is the registered holder of __________ Warrants to purchase
initially, at any time from __________, 1998 [one year from the effective date
of the Registration Statement] until 5:30 p.m. New York time on ___________,
2002 [five years from the effective date of the Registration Statement]
("Expiration Date"), up to __________ fully-paid and non-assessable shares of
10% Senior Convertible Redeemable Preferred Stock, $.001 par value ("Convertible
Preferred Stock"), of COMMODORE SEPARATION TECHNOLOGIES, INC., a Delaware
corporation (the "Company")(or in accordance with the Warrant Agreement (as
hereinafter defined), such number of shares of Common Stock, other securities
and/or property of the Company into which a share of Convertible Preferred Stock
may be converted or redeemed (collectively, "Conversion Shares")), __________
fully-paid and non-assessable shares of common stock,
A-1
$.001 par value ("Common Stock"), of the Company and/or _____ redeemable common
stock purchase warrants of the Company ("Redeemable Warrants") (one Redeemable
Warrant entitling the owner to purchase one fully-paid and non-assessable share
of Common Stock) at the initial exercise price, subject to adjustment in certain
events (the "Exercise Price"), of $______ [120% of the initial public offering
price] per share of Convertible Preferred Stock, $______ per Conversion Share
[120% of the initial public offering price per share of Convertible Preferred
Stock divided by the then current Conversion Price, as defined in and calculated
pursuant to the Certificate of Designation], $______ [120% of the initial public
offering price] per share of Common Stock and $____ [120% of the initial public
offering price] per Redeemable Warrant upon surrender of this Warrant
Certificate and payment of the Exercise Price at an office or agency of the
Company, but subject to the conditions set forth herein and in the warrant
agreement dated as of _______, 1997 between the Company and NATIONAL SECURITIES
CORPORATION (the "Warrant Agreement"). Payment of the Exercise Price shall be
made by certified or official bank check in New York Clearing House funds
payable to the order of the Company or by surrender of this Warrant Certificate.
No Warrant may be exercised after 5:30 p.m., New York time, on
the Expiration Date, at which time all Warrants evidenced hereby, unless
exercised prior thereto, hereby 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,
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 Exercise Price and the type and/or number of the Company's
securities issuable thereupon 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 Exercise 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 for this Warrant Certificate, subject to the limitations provided
herein and in the Warrant Agreement, without any charge except for any tax or
other governmental charge imposed in connection with such transfer.
A-2
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.
IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be duly executed under its corporate seal.
Dated as of ___________, 1997
COMMODORE SEPARATION TECHNOLOGIES, INC.
By: _____________________________________
Name:
Title:
A-3
[FORM OF ELECTION TO PURCHASE PURSUANT TO SECTION 3.1]
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase:
[ ] __________ shares of Convertible Preferred Stock;
[ ] __________ shares of Common Stock;
[ ] __________ Redeemable Warrants;
[ ] __________ shares of Convertible Preferred Stock together with an equal
number of shares of Common Stock and Redeemable
Warrants; or
[ ] __________ shares of Convertible Preferred Stock together with
__________ shares of Common Stock and
__________ Redeemable Warrants.
and herewith tenders in payment for such securities a certified or official bank
check payable in New York Clearing House funds to the order of Commodore
Separation Technologies, Inc. in the amount of $_______________________, all in
accordance with the terms of Section 3.1 of the Representative's Warrant
Agreement dated as of ______________________, 1997 between Commodore Separation
Technologies, Inc. and National Securities Corporation. The undersigned requests
that a certificate for such securities be registered in the name of ___________
___________________________ whose address is _______________________ and that
such Certificate be delivered to ______________________________ whose address is
__________.
Dated:
Signature _________________________________
(Signature must conform in all
respects to name of holder as
specified on the face of the
Warrant Certificate.)
_________________________________
(Insert Social Security or Other
Identifying Number of Holder)
A-4
[FORM OF ELECTION TO PURCHASE PURSUANT TO SECTION 3.2]
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase:
[ ] _____________ shares of Common Stock.
and herewith tenders in payment for such securities ________ Warrants all in
accordance with the terms of Section 3.2 of the Representative's Warrant
Agreement dated as of __________________, 1997 between Commodore Separation
Technologies, Inc. and National Securities Corporation. The undersigned requests
that a certificate for such securities be registered in the name of
___________________________ whose address is __________________ and that such
Certificate be delivered to ___________________________ whose address is
_____________________________.
Dated:
Signature _________________________________
(Signature must conform in all
respects to name of holder as
specified on the face of the
Warrant Certificate.)
_________________________________
(Insert Social Security or Other
Identifying Number of Holder)
A-5
[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 the within-named
Company, with full power of substitution.
Dated: ________________ Signature _________________________________
(Signature must conform in all
respects to name of holder as
specified on the face of the
Warrant Certificate.)
_________________________________
(Insert Social Security or Other
Identifying Number of Holder)
A-6
