Exhibit 10.44
INDENTURE
THIS INDENTURE (this "Indenture") is made and entered into as of the first
day of October, 2002 by and between Molecular Diagnostics, Inc., a Delaware
corporation (hereinafter called the "Company"), having its principal office at
000 X. Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, and each of the holders of the
Company's 12% Convertible Secured Promissory Notes hereinafter authorized (said
Notes being hereinafter referred to as the "Notes" and said holders being
hereinafter referred to as the "Noteholders").
In consideration of the acceptance by the Noteholders of the Notes, the
Company hereby covenants and agrees with the Noteholders as follows:
1. Creation and Authorization of Notes. The Company hereby
authorizes the issuance of the Notes, in aggregate principal amount of up to
$4,000,000 (the "Offering"). Each Note shall:
a. be substantially in the form attached hereto as Exhibit A;
b. be issuable for cash and/or the surrender by the Noteholder of
outstanding obligations of the Company to the Noteholder;
c. mature on July 31, 2003 (the "Maturity Date");
d. bear interest payable in kind on the Maturity Date in the form of
shares of common stock of the Company ("Common Stock"), valued as provided in
the Note (such shares being referred to as "Interest Shares");
e. be convertible as to principal into shares of Common Stock at the
times and as valued in the Note (such shares being referred to as "Conversion
Shares");
f. be subject to optional prepayment by the Company at any time, in
whole or in part; provided that in the event of any prepayment, the Company
shall prepay all Notes outstanding under this Indenture ratably;
g. be subject to either automatic conversion or mandatory prepayment
(as set forth in the Note) upon the closing of a Qualified Financing
Transaction (as defined in the Note);
h. be secured by a security interest in the Company's intellectual
property subject to the terms and conditions of the Security Agreement in the
Form of Exhibit B (the "Security Agreement"), which shall be allocated among
the Noteholders in proportion to the principal amount of Notes they hold
pursuant to the Collateral Sharing Agreement in the form of Exhibit C (the
"Collateral Sharing Agreement");
i. be registered on the books of the Company by the Secretary of the
Company in the name of the Noteholders;
j. be executed on behalf of the Company by the manual signature of the
Chief Executive Officer of the Company;
k. be issued in reliance on one or more exemptions from registration
under the Securities Act of 1933, as amended (the "Securities Act") and
applicable state securities laws and shall contain a legend to that effect as
set forth on each Note; and
l. be issued in accordance with the terms of this Indenture, pursuant
to the exemption from qualification under the Trust Indenture Act of 1939 set
forth in Section 304(a)(9) of said Act.
EACH NOTEHOLDER, BY HIS ACCEPTANCE OF HIS NOTE, AND ANY TRANSFEREE OF HIS
NOTE, WITHOUT FURTHER ACTION, SHALL BE DEEMED AUTOMATICALLY TO HAVE BECOME A
PARTY TO, AND TO HAVE AGREED TO BE BOUND BY, THE SECURITY AGREEMENT AND THE
COLLATERAL SHARING AGREEMENT IN THE SAME AS IF THE NOTEHOLDER HAD BEEN A
SIGNATORY THERETO.
2. Warrants. In addition to the Notes, the Company shall, upon the
closing of its PIPE Financing (as defined below), issue each Noteholder a
warrant substantially in the form of Exhibit D hereto to purchase a number of
shares of Common Stock equal to one share of Common Stock for each 4 shares of
common stock into which the principal amount of the Note is convertible (a
"Warrant"), having an exercise price of: [$0.15 per share (for the first One
Million Dollars ($1,000,000) principal amount of cash subscriptions received by
the Company)] or [$0.20 per share (for subscriptions received after the first
One Million Dollars ($1,000,000) principal amount of subscriptions have been
received by the Company)] (as set forth and subject to adjustment as provided
in the Warrant) and a term expiring five years from the date of issue. The
shares of Common Stock issuable upon exercise of Warrants are referred to as
"Warrant Shares." For purposes of this Indenture, the term "PIPE Financing"
means an Six Million Dollar ($6,000,000) private placement of the Company's
equity securities to occur after the Company has completed the sale of its 12%
Convertible Secured Promissory Notes in the aggregate principal amount of
approximately Four Million Dollars (U.S. $4,000,000).
3. Securities Act Compliance. The Interest Shares, the Conversion
Shares, the Warrants and the Warrant Shares shall, like the Notes, be issued in
accordance with one or more exemptions from registration under the Securities
Act and applicable state securities laws and shall bear a legend to such effect
comparable to the legend borne by the Notes.
4. Issuance of Conversion Shares. Any Noteholders who desire to
convert his Note, in whole or in part, into Conversion Shares shall deliver his
Note to the Company, together with a properly completed Notice of Conversion
whereupon:
a. the Company shall cause its transfer agent to deliver to the
Noteholder one or more certificates representing the applicable number of
Conversion Shares; and
b. if the Noteholder is converting less than the entire principal
amount of his Note:
i. if the conversion occurs prior to the Maturity Date, issue to
the Noteholder a replacement Note representing the unconverted principal
amount of the Note; and
ii. if the conversion occurs on the Maturity Date, pay to the
Noteholder an amount of cash equal to the unconverted principal amount
of, and the accrued interest on, the Note.
5. Conclusive Effect of Registry. The ownership of the Notes and the
address for payment thereof shall be proved by reference to the registry of
Notes maintained by the Secretary of the Company and, prior to due presentment
for registration of transfer, or receipt of notification of change of address,
the Company may treat the person in whose name any Note shall be registered
upon the books of the Company as the absolute owner thereof, and the address
appearing in the books of the Company as the appropriate address for the
purpose of paying principal of and interest on the Notes, for issuing
Conversion Shares, and for all other purposes. All payments so made to any
such registered Noteholder at such address shall be valid and, to the extent of
the amount or amounts so paid, effectual to satisfy and discharge the liability
of the Company for monies payable on any such Note.
6. Changes in Registered Address. Any Noteholder who shall desire to
change the address for payment of principal of and interest on his Note or
delivery of Conversion Shares may notify the Secretary of the Company of the
changed address.
7. Transfer of Notes. Any Noteholder desiring to sell, transfer or
otherwise distribute his Note shall present the Note to the Secretary of the
Company for transfer, accompanying the Note with either (a) evidence of
compliance with the registration provisions of the Securities Act and
applicable state securities laws, or (b) an opinion of counsel reasonably
satisfactory to the Company to the effect that such proposed sale, transfer or
other distribution may be made in reliance upon an applicable exemption from
the provisions of the Securities Act and applicable state securities laws.
Promptly upon receipt of the Note and such documentation, the Company shall, if
such documentation is satisfactory in form and substance to the Company and its
counsel, cancel the Note and issue a new Note registered in the name of the
transferee. The determination of the Company and its counsel with respect to
any proposed transfer shall be final and binding upon the Noteholder.
8. Transfer of Warrants and Warrant Shares. Each Warrant and the
Warrant Shares shall be subject to the restrictions on transfer set forth in
Section 8.1 and 11 of the Warrant.
9. Transfer of Interest Shares and Conversion Shares. Any holder of
Interest Shares or Conversion Shares desiring to sell, transfer or otherwise
distribute such shares shall present the certificate(s) representing such
shares to the transfer agent of the Company for transfer, accompanying the
certificate(s) with either (a) evidence of compliance with the registration
provisions of the Securities Act and applicable state securities laws, or (b)
an opinion of counsel reasonably satisfactory to the Company to the effect that
such proposed sale, transfer or other distribution may be made in reliance upon
an applicable exemption from the provisions of the Securities Act and
applicable state securities laws. Promptly upon receipt of notification from
the transfer agent that the certificate(s) have been delivered to it, the
Company shall, if such documentation is satisfactory in form and substance to
the Company and its counsel, direct the transfer agent to effect the requested
transfer. The determination of the Company and its counsel with respect to any
proposed transfer shall be final and binding upon the holder of the shares.
10. Registration Rights. The Interest Shares, Conversion Shares and
Warrant Shares (collectively, the "Investment Shares") shall be subject to the
registration rights set forth in this Section 10.
a. Piggy-Back Registration Rights. If, at any time prior to the fifth
anniversary of the closing of the PIPE Financing, the Company files a
registration statement with the U.S. Securities and Exchange Commission (the
"Commission") pursuant to the Securities Act, or pursuant to any other act
passed after the date of this Indenture, which filing provides for the sale of
securities by the Company to the public, or files a Regulation A offering
statement under the Securities Act, the Company shall offer to the Noteholders
and the holders of any Investment Shares the opportunity to register or qualify
the Investment Shares at the Company's sole expense, regardless of whether the
Noteholders or holders of Investment Shares or both may have previously availed
themselves of any of the registration rights described in this Section 10;
provided, however, that in the case of a Regulation A offering, the opportunity
to qualify shall be limited to the amount of the available exemption after
taking into account the securities that the Company wishes to qualify.
Notwithstanding anything to the contrary, this Section 10 shall not be
applicable to a registration statement registering securities issued pursuant
to an employee benefit plan or as to a transaction subject to Rule 145
promulgated under the Securities Act or for which a form S-4 registration
statement could be used.
The Company shall deliver written notice to the Noteholders and to any
holders of the Investment Shares of its intention to file a registration
statement or Regulation A offering statement under the Securities Act at least
60 days prior to the filing of such registration statement or offering
statement, and the Noteholders and holders of Investment Shares shall have 30
days thereafter to request in writing that the Company register or qualify the
Investment Shares in accordance with this Section 10. Upon the delivery of a
written request within the specified time, the Company shall be obligated to
include in its contemplated registration statement or offering statement all
information necessary or advisable to register or qualify the Investment Shares
for a public offering, if the Company does file the contemplated registration
statement or offering statement; provided, however, that neither the delivery
of the notice by the Company nor the delivery of a request by a Noteholder or
holder of Investment Shares shall in any way obligate the Company to file a
registration statement or offering statement. Furthermore, notwithstanding the
filing of a registration statement or offering statement, the Company may, at
any time prior to the effective date thereof, determine not to offer the
securities to which the registration statement or offering statement relates,
other than the Investment Shares. Notwithstanding the foregoing, if, as a
qualification of any offering in any state or jurisdiction in which the Company
(by vote of its Board of Directors) or any underwriter determines in good faith
that it wishes to offer securities registered in the offering, it is required
that offering expenses be allocated in a manner different than as provided in
this Section 10, then the offering expenses shall be allocated in whatever
manner is most nearly in compliance with the provisions of this Section 10.
If the registration for which the Company gives notice is for a
registered public offering involving an underwriting, the Company shall so
advise as part of its written notice to Noteholders and holders of Investment
Shares given pursuant to this Section. In that event, the right of any
Noteholder or holder of Investment Shares to registration pursuant to this
Section 10 shall be conditioned upon the holder's participation in the
underwriting, and the inclusion of Investment Shares in the underwriting shall
be limited to the extent provided herein. All holders proposing to distribute
their Investment Shares through the underwriting shall (together with the
Company and the other holders who desire to distribute their shares through the
underwriting) enter into an underwriting agreement in customary form with the
managing underwriter selected by the Company. Notwithstanding any other
provision of this Section, if the managing underwriter determines that
marketing factors require a limitation of the number of shares to be
underwritten, the underwriter may limit the amount of securities to be included
in the registration and underwriting by the holders of Company securities
exercising "piggy-back" registration rights (including the Noteholders and
holders of Investment Shares). The Company shall so advise all holders, and
the number of shares that may be included in the registration and underwriting
shall be allocated among all of the holders desiring to have their shares
registered, in proportion, as nearly as practicable, to the respective amounts
of shares requested by each holder to be included in the registration,
provided, however, that no holder of shares or other securities to be
registered (other than one exercising a demand registration right) shall have
superior rights with respect to inclusion in a registration than those of the
Noteholders and holders of Investment Shares, and if any party is granted
superior rights hereafter the Noteholder and each holder of Investment Shares
shall be deemed to be automatically granted similar rights. The Company shall
advise all Noteholders and holders of Investment Shares if any limitation in
accordance with this Section is necessary and the number or Investment Shares
that may be included in the registration. Any securities excluded or withdrawn
from the underwriting shall not be transferred prior to one hundred twenty
(120) days after the effective date of the registration statement relating
thereto, or any shorter period of time the underwriters may require.
The Company shall comply with the requirements of this Section 10 at its
own expense. That expense shall include, but not be limited to, legal,
accounting, consulting, printing, federal and state filing fees, NASD fees,
out-of-pocket expenses incurred by counsel, accountants and consultants
retained by the Company, and miscellaneous expenses directly related to the
registration statement or offering statement and the offering. However, this
expense shall not include the portion of any underwriting commissions, transfer
taxes and the underwriter's accountable and nonaccountable expense allowances
attributable to the offer and sale of the Investment Shares, all of which
expenses shall be borne by the holders of Investment Shares that are registered
or qualified.
b. Inclusion of Information. If the Company registers or qualifies
the Investment Shares in accordance with this Section 10, the Company shall
include in the registration statement or qualification, and the prospectus
included therein, all information and materials necessary or advisable to
comply with the applicable statutes and regulations so as to permit the public
sale of the Investment Shares.
c. Condition of Company's Obligations. As to each registration
statement or offering statement, the Company's obligations contained in this
Section 10 shall be conditioned upon a timely receipt by the Company in writing
of the following:
(i) Information as to the terms of the contemplated public
offering furnished by and on behalf of each Noteholder or holder of
Investment Shares intending to make a public distribution of the
Investment Shares; and
(ii) Any other information the Company may reasonably require
from the Noteholders or holders of Investment Shares, or any underwriter
for any of them, for inclusion in the registration statement or offering
statement.
d. Additional Requirements. In each instance in which the Company
shall take any action to register or qualify the Investment Shares pursuant to
this Section 10, the Company shall do the following:
(i) supply the Noteholders and holders of Investment Shares
that are being registered or qualified, two (2) manually signed copies of
each registration statement or offering statement, and all amendments
thereto, and a reasonable number of copies of the preliminary, final or
other prospectus or offering circular, all prepared in conformity with
the requirements of the Securities Act and the rules and regulations
promulgated thereunder, and any other documents that the Noteholders and
holders of Investment Shares may reasonably request;
(ii) cooperate with respect to (A) all necessary or advisable
actions relating to the preparation and the filing of any registration
statements or offering statements, and all amendments thereto, arising
from the provisions of this Section 10, (B) all reasonable efforts to
establish an exemption from the provisions of the Securities Act or any
other federal or state securities statutes, (C) all necessary or
advisable actions to register or qualify the public offering at issue
pursuant to federal securities statutes and the state "blue sky"
securities statutes of each jurisdiction that the Noteholders or holders
of Investment Shares shall reasonably request, and (D) all other
necessary or advisable actions to enable the holders of Investment Shares
to complete the contemplated disposition of their securities in each
reasonably requested jurisdiction; and
(iii) keep all registration statements or offering statements
to which this Section 10 applies, and all amendments thereto, effective
under the Securities Act for a period of at least 8 months after their
initial effective date and cooperate with respect to all necessary or
advisable actions to permit the completion of the public sale or other
disposition of the securities subject to a registration statement or
offering statement.
e. Reciprocal Indemnification Agreements. In each instance in which
the Company shall take any action to register or qualify the Investment Shares
pursuant to this Section 10, prior to the effective date of any registration
statement or offering statement, the Company and each Noteholder or holder of
Investment Shares being registered or qualified shall enter into reciprocal
indemnification agreements, in the form customarily used by reputable
investment bankers with respect to public offerings of securities. The
indemnification agreements also shall contain an agreement by the Noteholders
and holders of Investment Shares at issue to indemnify and hold harmless the
Company, its officers and directors from and against any and all losses,
claims, damages and liabilities, including, but not limited to, all expenses
reasonably incurred in investigating, preparing, defending or settling any
claim, directly resulting from any untrue statements of material facts, or
omissions to state a material fact necessary to make a statement not
misleading, contained in a registration statement or offering statement to
which this Section 10 applies, if, and only if, the untrue statement or
omission directly resulted from information provided in writing to the Company
by the indemnifying Noteholder or holder of Investment Shares expressly for use
in the registration statement or offering statement at issue.
f. Indemnification by the Company. In connection with the filing of
any registration statement covering any Investment Shares, the Company shall
indemnify and hold harmless each holder thereof against any and all loss,
claim, damage, liability, joint or several (which shall for all purposes
include, but not be limited to, all costs of defense and investigation and all
attorneys' fees) to which the holder may become subject under the Securities
Act or otherwise, insofar as the loss, claim, damage or liability (or action
with respect thereto) arises out of or is based upon (i) any untrue statement
or alleged untrue statement of a material fact contained in the registration
statement, any preliminary prospectus, the effective prospectus or the final
prospectus, or any amendment or supplement thereto or (ii) the omission or
alleged omission to state in the registration statement, any preliminary
prospectus, the effective prospectus or the final prospectus, or any amendment
or supplement to any of the foregoing, a material fact required to be stated
therein or necessary to make the statements therein not misleading; except that
the Company shall not be liable in any such case to the extent, but only to the
extent, that any loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in reliance upon and in conformity with written information
furnished to the Company by the Noteholders or any holder of Investment Shares
for use in the preparation of the registration statement, any preliminary
prospectus, the effective prospectus or the final prospectus, or any amendment
or supplement to any of the foregoing. This indemnity will be in addition to
any liability the Company may otherwise have.
g. Indemnification by the Holders of Investment Shares. The holders
of any Investment Shares covered by a registration statement prepared by the
Company shall severally, but not jointly, indemnify and hold harmless the
Company, each other Person referred to in subparts (1), (2) and (3) of Section
11(a) of the Securities Act in respect of the registration statement, against
any and all loss, claim, damage or liability, joint or several, (which shall
for all purposes include, but not be limited to, all costs of defense and
investigation and all attorneys' fees) to which the Company may become subject
under the Securities Act or otherwise, insofar as the loss, claim, damage or
liability (or action with respect thereto) arises out of or is based upon (i)
any untrue statement or alleged untrue statement of a material fact contained
in the registration statement, any preliminary prospectus, the effective
prospectus or the final prospectus, or any amendment or supplement to any of
the foregoing, or (ii) the omission or alleged omission to state in the
registration statement, any preliminary prospectus, the effective prospectus or
the final prospectus, or any amendment or supplement to any of the foregoing, a
material fact required to be stated therein or necessary to make the statements
therein not misleading; except that the indemnification shall be available in
each case to the extent, but only to the extent, that the untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company by any
holder of Investment Shares for use in the preparation of the registration
statement, any preliminary prospectus, the effective prospectus or the final
prospectus, or any amendment or supplement thereto. This indemnity will be in
addition to any liability the Noteholders and holders of Investment Shares may
otherwise have.
h. Indemnification Procedures. Promptly after receipt by an
indemnified party under Sections 10(f) or 10(g), of written notice of
commencement of any action, the indemnified party shall, if the indemnifying
party intends to assert a claim in respect thereof against the indemnifying
party under the relevant section hereof, notify the indemnifying party in
writing of the claim or commencement of the action, provided that, failure to
notify the indemnifying party shall not relieve the indemnifying party of any
obligation it may have to the indemnified party, except to the extent that the
indemnifying party did not otherwise have notice of the action, and the failure
to notify the indemnifying party prejudiced the indemnifying party's ability to
defend itself in the action, and even in that event, the failure to notify
shall not relieve the indemnifying party of any other liability the
indemnifying party may have to the indemnified party. If any claim or action
is brought against an indemnified party and the indemnified party notifies the
indemnifying party thereof, the indemnifying party shall have the right to
participate in the claim or action, jointly with any other indemnifying party,
if any, and to assume the defense of the claim or action using counsel
reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party that it intends to assume the
defense of the claim or action, the indemnifying party shall not be liable for
any legal fees or other costs or expenses incurred by the indemnified party
after receipt of the notice, other that for reasonable costs of investigation
in connection with the claim or action.
i. Contribution. If the indemnification provided in Sections 10(f) or
10(g) is unavailable or insufficient to hold harmless the indemnified party,
then each indemnifying party shall contribute to the amount paid or payable by
the indemnified party as a result of the indemnified losses, claims, damages or
liabilities (i) in an appropriate proportion to reflect the relative benefits
received by the Company on the one hand and the Noteholders and holders of
Investment Shares on the other hand, or (ii) if the allocation provided by
clause (i) of this Section 10(i) is not permitted by applicable law, then in a
proportion appropriate to reflect the relative benefits referred to in clause
(i) of this Section 10(i), but also the relative fault of the Company on the
one hand and the Noteholders and holders of Investment Shares on the other
hand, in connection with the indemnified losses, claims and damages incurred,
as well as any other relevant equitable considerations. The relative benefits
received by the Company and the Noteholders shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company bear to the total underwriting discounts and
un-itemized expenses received by the underwriters, in each case as set forth in
the final prospectus. Relative fault shall be determined by reference to,
among other things, whether the untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
Company or the underwriter and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent the untrue statement or
omission. For purposes of this Section 10(i), the term "damages" shall include
any counsel fees or other expenses reasonably incurred by the Company or the
underwriters in connection with investigating or defending any action or claim
that is the subject of the contribution provisions of this Section 10(i). No
Person adjudged guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
Person who was not guilty of the fraudulent misrepresentation.
j. Notice of Contribution. Each party entitled to contribution agrees
that upon the service of a summons or other initial legal process upon it or in
any action instituted against it in respect of which contribution may be
sought, it shall promptly give written notice of the service to the party or
parties from whom the contribution may be sought, but the failure to notify a
party or parties of the service shall not relieve any party from whom
contribution may be sought from any obligation it may have hereunder or
otherwise (except as specifically provided in Section 10(i).
k. Holdback. (i) Each Noteholder agrees that, upon receipt of any
notice from the Company of the happening of any event requiring the preparation
of a supplement or amendment to a registration statement or any prospectus
relating thereto, the Noteholder will forthwith discontinue disposition of
Investment Shares thereunder until the holder has received copies of the
supplemented or amended registration statement or prospectus from the Company
and, if so directed by the Company, each Noteholder shall deliver to the
Company all copies, other than permanent file copies then in the Noteholder's
possession, of the previous versions of the registration statement and any
prospectus covering the Investment Shares; and
(ii) Each Noteholder shall suspend, upon request of the Company, any
disposition of Investment Shares pursuant to a registration statement and
prospectus contemplated by this Section 10 during (A) any period not to exceed
two 30-day periods within any one 12-month period the Company requires in
connection with an underwritten offering of equity securities and (B) any
period, not to exceed a 60-day period per circumstance or development, when the
Company determines in good faith that offers and sales pursuant thereto should
not be made by reason of the presence of material undisclosed circumstances or
developments with respect to which the disclosure that would be required in
such a prospectus is premature, would have an adverse effect on the Company or
is otherwise inadvisable.
l. Provision of Information to Company. As a condition to the
inclusion of its Investment Shares in any registration statement, each
Noteholder shall furnish to the Company any information regarding the
Noteholder and the distribution proposed by the Noteholder that the Company may
request in writing or as shall be required in connection with any registration,
qualification or compliance referred to in this Section 10.
m. Limitation on Transfer of Investment Shares. Each Noteholder
acknowledges and agrees that the Investment Shares sold pursuant to any
registration statement described in this Section are not transferable on the
books of the Company unless the stock certificate submitted to the transfer
agent evidencing the Investment Shares is accompanied by a certificate
reasonably satisfactory to the Company to the effect that (i) the Investment
Shares have been sold in accordance with the registration statement and (ii)
the requirement of delivering a current prospectus has been satisfied.
n. Regulation M. Each Noteholder agrees not to take any action with
respect to any distribution deemed to be made pursuant to a registration
statement that would constitute a violation of Regulation M under the
Securities Exchange Act of 1934 or any other applicable rule, regulation or
law.
o. Cessation of Disposition of Investment Shares. At the end of the
period during which the Company is obligated to keep any registration statement
current and effective as described in this Section 10, the holders of
Investment Shares included in the registration statement shall discontinue
sales of shares pursuant to the registration statement upon receipt of notice
from the Company of its intention to remove from registration the shares
covered by the registration statement which remain unsold, and the holders
shall notify the Company of the number of shares registered that remain unsold
immediately upon receipt of notice from the Company.
p. Rule 144 Undertakings. With a view to making available to the
Noteholders the benefits of certain rules and regulations of the Commission
that at any time permit the sale of the Investment Shares to the public without
registration, the Company shall use reasonable efforts to:
i.make and keep public information available, as those
terms are understood and defined in Rule 144 under the
Securities Act, at all times;
ii. file with the Comission in a timely manner all reports
and other documents required of the Company under the
Exchange Act; and
xxx.xx long as a Noteholder owns any unregistered
Investment Shares, furnish to the Noteholder, upon any
reasonable request, a written statement by the Company as
to its compliance with Rule 144 under the Act, and of the
Exchange Act, a copy of the most recent annual or
quarterly report of the Company, and any other reports
and documents of the Company the Noteholder may
reasonably request in availing itself of any rule or
regulation of the Commission allowing a Noteholder to
sell any securities without registration.
q. Waiver or Amendment of this Section. With the written consent of
the Company and Noteholders holding at least a majority of the Investment
Shares that are then outstanding, any provision of this Section 10 may be
waived (either generally or in a particular instance, either retroactively or
prospectively and either for a specified period of time or indefinitely) or
amended. Upon the effectuation of each waiver or amendment, the Company shall
promptly give written notice thereof to the Noteholders, if any, who have not
previously received notice thereof or consented thereto in writing.
r. No Restraint or Delay. The Noteholders shall have no right to take
any action to restrain, enjoin or otherwise delay any registration pursuant to
this Section 10 as a result of any controversy that may arise with respect to
the interpretation or implementation of this Indenture.
11. Amendments and Modifications. At any time and from time to time
this Indenture may be amended or modified by the Company as follows:
a. Subject to such governmental approvals as may be required by law,
but without the consent of the Noteholders, this Indenture may be amended from
time to time for any one or more of the following purposes:
i. to evidence the succession of another corporation or other
legal entity to the Company and the assumption by such successor of the
respective covenants, agreements and obligations of the Company
hereunder;
ii. to add to the covenants and agreements of the Company herein
contained any further covenants and agreements to be thereafter observed
or to surrender any right or power herein reserved to the Company;
iii. to cure any ambiguity or any defective or inconsistent
provision contained in this Indenture; or
iv. to make any provision with respect to the matters or
questions arising under this Indenture that may be necessary or
desirable.
b. With the consent of the Collateral Agent, acting in accordance with
the provisions of the Collateral Sharing Agreement, this Indenture may be
amended for the purpose of adding any provision to, changing or modifying in
any manner the rights and obligations of the Noteholders and of the Company.
Notwithstanding anything in this Indenture to the contrary, this
Indenture may in no event be amended to increase the aggregate principal amount
of the Notes to more than Four Million Dollars (US $4,000,000).
12. Miscellaneous.
a. Successors and Assigns. Nothing in this Indenture shall prevent
any consolidation or merger of the Company with or into any other corporation
or other legal entity, or the sale or transfer of all or substantially all of
the assets of the Company or other legal entity, to any other corporation
lawfully entitled to acquire the same; provided, however, that any such
consolidation, merger, sale or transfer shall be on the condition that the due
and punctual payment of the principal of and interest on all the Notes, and the
due and punctual performance and observance of all of the covenants and
agreements of this Indenture required to be kept or performed by the Company,
shall be assumed by such other corporation or other legal entity,.
b. Liability. No recourse for the payment of the principal of or
interest on any Note shall be had against any incorporator, past, present or
future shareholder, officer or director of the Company or any successor entity
and any and all such personal liability of such incorporator, shareholder,
officer or director, hereby expressly waived and released by every Noteholder
as a condition to, and as a consideration for, the issuance of the Note to
Noteholder.
c. Notices. Any notice or demand required or permitted to be given
or served under this Indenture may be delivered by first class mail, prepaid,
and addressed, if to a Noteholder, to the Noteholder at his address as
reflected in the books of the Company, and, if to the Company, to the attention
of the Secretary of the Company and the Company's principal office.
d. Severability. In the event that one or more of the provisions of
this Indenture or of the Notes for any reason shall be held invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Indenture or of the Notes which
shall remain in full force and effect.
e. Governing Law. This Indenture and the Note shall be governed by
and construed in accordance with the laws of the State of Illinois.
f. Number and Gender. Unless the context otherwise requires, wherever
used herein, the singular shall include the plural and the plural shall include
the singular, and the use of one gender shall denote the other where
appropriate.
[signature page follows]
IN WITNESS WHEREOF, the Company has executed this Indenture as of the
date first written above.
MOLECULAR DIAGNOSTICS, INC.
By: ________________________________
Xxxxx X. Xxxxxxxx
Chief Executive Officer
EXHIBIT A
THIS NOTE AND THE INTEREST SHARES AND CONVERSION SHARES, AS DEFINED HEREIN,
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER
ANY STATE SECURITIES LAWS, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR
OTHERWISE DISPOSED, EXCEPT IN ACCORDANCE WITH THE SECURITIES ACT OF 1933, AS
AMENDED, AND APPLICABLE STATE SECURITIES LAWS.
12% CONVERTIBLE SECURED PROMISSORY NOTE
Chicago, Illinois
$______________________ _______________________, 200__
FOR VALUE RECEIVED, MOLECULAR DIAGNOSTICS, INC, a Delaware corporation
having its principal office at, 000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx,
Xxxxxxxx 00000, acting for itself and for all its successors and assigns, (the
"Company") promises to pay to the order of ("Holder"), at , or at such other
place as Holder may from time to time designate in writing, the principal sum
of Dollars (US $) in the lawful money of the United States of America,
together with interest on so much thereof as is from time to time outstanding
at the rate hereinafter provided, and payable as hereinafter provided. This
Note is one of a series of Notes having the same terms and conditions and
issued pursuant to that certain Indenture dated as of October 1, 2002 (the
"Indenture"), the terms of which are incorporated herein by reference.
1. Interest Rate. The unpaid principal balance of this Note shall
bear simple interest at the rate of twelve percent (12%) per annum. Interest
shall be payable in kind on the Maturity Date (as defined below) in shares of
common stock of the Company ("Common Stock") valued at:
[For cash subscriptions for the first One Million Dollars ($1,000,000)
principal amount of Notes being offered (determined on a "first come - first
served" basis): $0.10 per share]
[For subscribers who subscribe after cash subscriptions for the first One
Million Dollars ($1,000,000) principal amount of Notes have been received by
the Company (determined on a "first come - first served" basis): $0.15 per
share]
(subject to adjustment to reflect any stock splits, reverse stock splits and
similar recapitalization events occurring after the date hereof).
2. Maturity Date. The total outstanding principal balance hereof,
together with accrued and unpaid interest, shall be due and payable on July 31,
2003 (the "Maturity Date").
3. Conversion.
[For cash subscriptions for the first One Million Dollars ($1,000,000)
principal amount of Notes being offered (determined on a "first come - first
served" basis): This Note shall convert automatically into shares of Common
Stock valued at $0.10 per share (subject to adjustment to reflect any stock
splits, reverse stock splits and similar recapitalization events occurring
after the date hereof) upon the earliest to occur of: (a) the closing of the
Company's Six Million Dollar ($6,000,000) "PIPE" Financing (as defined in the
Indenture); or (b) a "Qualified Financing Transaction," which, for purposes
hereof, means a transaction in which the Company closes a new debt or equity
financing after the date hereof and prior to the Maturity Date that results in
net proceeds to the Company of at least Four Million Dollars (US $4,000,000).]
[For subscribers who subscribe after cash subscriptions for the first One
Million Dollars ($1,000,000) principal amount of Notes have been received by
the Company (determined on a "first come - first served" basis): This Note may
be converted as to both principal and accrued interest, in whole or in part, at
the option of the Holder, at any time on or prior to the Maturity Date, into
shares of Common Stock, valued at $0.15 per share (subject to adjustment to
reflect any stock splits, reverse stock splits and similar recapitalization
events occurring after the date hereof).]
4. Prepayment. This Note shall be subject to prepayment as follows:
a. Optional Prepayment. This Note may be prepaid, in whole or
in part, at any time prior to the Maturity Date at the option of the
Company; provided, however, that unless this Note is prepaid in full, all
Interest Shares shall be issued on the Maturity Date.
[For subscribers who subscribe after cash subscriptions for the first One
Million Dollars ($1,000,000) principal amount of Notes have been received
by the Company (determined on a "first come - first served" basis):
b. Mandatory Prepayment. This Note shall be subject to
mandatory prepayment in full upon the closing of a "Qualified Financing
Transaction," which, for purposes hereof, means a transaction in which
the Company closes a new debt or equity financing after the date hereof
and prior to the Maturity Date that results in net proceeds to the
Company of at least Four Million Dollars (US $4,000,000).]
5. Default Interest and Attorney Fees. Upon declaration of a default
hereunder, the balance of the principal remaining unpaid, interest accrued
thereon, and all other costs and fees shall bear interest at the rate of
fifteen percent (15%) per annum (the "Default Rate") from the date of default.
In the event of default, the Company and all other parties liable hereon agree
to pay all costs of collection, including reasonable attorneys' fees.
6. Interest Calculation. Daily interest shall be calculated on a
365-day year and the actual number of days in each month.
7. Costs of Collection. The Company agrees that if, and as often as,
this Note is placed in the hands of an attorney for collection or to defend or
enforce any of Holder's rights hereunder or under any instrument securing
payment of this Note, the Company shall pay to Holder its reasonable attorneys'
fees and all court costs and other expenses incurred in connection therewith,
regardless of whether a lawsuit is ever commenced or whether, if commenced, the
same proceeds to judgment or not. The costs and expenses shall include,
without limitation, all costs, reasonable attorneys' fees, and expenses
incurred by Holder in connection with any insolvency, bankruptcy,
reorganization, foreclosure, deed in lieu of foreclosure or similar proceedings
involving Company or any endorser, surety, guarantor or other person liable for
this Note which in any way affect the exercise by Holder of its rights and
remedies under this Note, or any other document or instrument securing,
evidencing or relating to the indebtedness evidenced by this Note.
8. Default. The events constituting an "Event of Default" hereunder
are defined in the Security Agreement (as defined in the Indenture). Upon the
occurrence of an Event of Default, the Holder shall have such rights and
remedies as are set forth in the Indenture, the Security Agreement and the
Collateral Sharing Agreement (as defined in the Indenture).
9. Application of Payments. Any payment made against the indebtedness
evidenced by this Note shall be applied against the following items in the
following order: (a) costs of collection, including reasonable attorneys' fees
incurred or paid and all costs, expenses, default interest, late charges and
other expenses incurred by Holder and reimbursable to Holder pursuant to this
Note (as described herein); (b) Default Interest accrued to the date of said
payment; (c) ordinary interest accrued to the date of said payment; and
finally, (d) outstanding principal.
10. Transfer. This Note may be transferred only in accordance with the
provisions of the Indenture.
11. Maximum Interest. In no event whatsoever shall the amount paid, or
agreed to be paid, to Holder for the use, forbearance, or retention of the
money to be loaned hereunder ("Interest") exceed the maximum amount permissible
under applicable law. If the performance or fulfillment of any provision
hereof, or any agreement between the Company and Holder, shall result in
Interest exceeding the limit for Interest prescribed by law, then the amount of
such Interest shall be reduced to such limit. If, from any circumstance
whatsoever, Holder should receive as Interest an amount that would exceed the
highest lawful rate, the amount that would be excessive Interest shall be
applied to the reduction of the principal balance owing hereunder (or, at the
option of Holder, be paid over to the Company) and not to the payment of
Interest.
12. Purpose of Loan. The Company certifies that the loan evidenced by
this Note is obtained for business or commercial purposes and that the proceeds
will not be used primarily for personal, family, household, or agricultural
purposes.
13. Governing Law. As an additional consideration for the extension of
credit, Holder, Company and each endorser, surety, guarantor, and any other
person who may become liable for all or any part of this obligation understand
and agree that the loan evidenced by this Note is made in the State of Illinois
and the provisions hereof will be construed in accordance with the laws of the
State of Illinois, and such parties further agree that upon the occurrence of
an Event of Default, this Note may be enforced in any court of competent
jurisdiction in the State of Illinois, and they do hereby submit to the
jurisdiction of such court regardless of their residence or where this Note was
executed or any endorsement hereof may be executed.
14. Binding Effect. The term "Company" as used herein shall include
the original Company of this Note and any party who may subsequently become
liable for the payment hereof as an assumer with the consent of the Holder,
provided that Holder may, at its option, consider the original Company of this
Note alone as the Company unless Holder has consented in writing to the
substitution of another party as the Company. The term "Holder" as used herein
shall mean Holder or, if this Note is transferred, the subsequent Holder of
this Note.
15. Relationship of Parties. Nothing herein contained shall create or
be deemed or construed to create a joint venture or partnership between the
Company and any Holder. Holder is acting hereunder as a lender only.
16. Severability. Invalidation of any of the provisions of this Note
or of any paragraph, sentence, clause, phrase, or word herein, or the
application thereof in any given circumstance, shall not affect the validity of
the remainder of this Note.
17. Amendment. This Note may not be amended, modified, or changed,
except by an instrument in writing signed by the Company and the Noteholder, in
accordance with the provisions of the Indenture.
18. Time of the Essence. Time is of the essence for the performance of
each and every obligation of Company hereunder.
19. Agreement to be Bound by Security Agreement and Collateral Sharing
Agreement. HOLDER, BY HIS ACCEPTANCE OF THIS NOTE, AND ANY TRANSFEREE OF THIS
NOTE, WITHOUT FURTHER ACTION, AUTOMATICALLY SHALL BE DEEMED TO HAVE BECOME A
PARTY TO, AND TO HAVE AGREED TO BE BOUND BY, THE SECURITY AGREEMENT AND THE
COLLATERAL SHARING AGREEMENT IN THE SAME CAPACITY AS IF HOLDER HAD BEEN A
SIGNATORY THERETO.
IN WITNESS WHEREOF, the undersigned has executed this Note as of
_________________, 200__.
MOLECULAR DIAGNOSTICS, INC.
By: ________________________________
Xxxxx X. Xxxxxxxx
Chief Executive Officer
EXHIBIT A
CONVERSION NOTICE
Dated _________, 200__
The undersigned hereby irrevocably elects to convert the Note to which
this Conversion Notice is attached into shares of the Common Stock of Molecular
Diagnostics, Inc., as follows:
AMOUNT CONVERTED
(check as applicable)
_____The entire principal amount of the Note
_____ $_____________ principal amount of the Note
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name _______________________________________________________
(Please type or print in block letters)
Address______________________________________________________
EXHIBIT B
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "Agreement"), dated as of October 1, 2002 is made
by Molecular Diagnostics, Inc., a Delaware corporation ("Debtor"), in favor of
B. Xxxxxxx Xxxxxx, residing at 00 Xxxx Xxxx, Xxxxx Xxxxx, Xxx Xxxxxx 00000
("Secured Party"), as Collateral Agent under a Collateral Sharing Agreement of
even date herewith (the "Collateral Sharing Agreement") for the holders of the
12% Convertible Secured Promissory Notes issued by the Company (the "Notes")
pursuant to an Indenture of even date herewith (the "Indenture").
For valuable consideration, Debtor agrees as follows:
1. Security Interest. Debtor hereby grants to Secured Party a
continuing security interest in and to the following property or types of
property now owned by Debtor or hereafter created or acquired by Debtor (the
"Collateral" provided however, that the Collateral shall not include any
property owned by any of Debtor's subsidiaries):
(a) All intellectual property of Debtor, including without
limitation inventions, designs, patents, patent applications, trademarks,
trade names, copyrights, licenses and computer software;
(b) All materials and records, pertaining to any of the
foregoing;
(c) All documents of title evidencing or issued with respect to
any of the foregoing; and
(d) All proceeds and products of all of the foregoing, including
without limitation proceeds of insurance policies insuring the foregoing.
2. Liabilities. The Collateral shall ratably secure the payment and
performance of all 12% Convertible Secured Promissory Notes issued by the
Company pursuant to an Indenture of even date herewith, as may be renewed,
replaced, modified, waived or extended from time to time (the "Liabilities").
3. Warranties of Debtor. Debtor warrants and represents that as of
the date hereof:
(a) Debtor has the legal capacity and power to execute, deliver,
and perform this Agreement and any other documents executed or to be
executed in connection herewith; such actions have been duly authorized
and do not and will not contravene or conflict with any provisions of law
or any agreement or instrument affecting Debtor or its property.
(b) No financing statement, mortgage, notice of judgment, or any
similar instrument (unless filed on behalf of Secured Party) covering any
of the Collateral is on file in any public office, except for a financing
statement evidencing a first priority lien on all of Debtor's assets in
favor of Round Valley Capital, LLC.
(c) Debtor is the lawful owner of all Collateral owned by it,
free and clear of all liens, pledges, charges, mortgages, and claims
other than the security interest hereunder, except liens for current
taxes not delinquent and for a lien on all the assets of Debtor in favor
of Round Valley Capital, LLC (collectively, "Permitted Liens").
(d) Debtor is a corporation duly formed and in good standing
under the laws of the State of Delaware. The exact legal name of Debtor
and the name under which Debtor conducts business are set forth in the
first paragraph of this Agreement and Debtor does not conduct business
under any other name.
4. Covenants of Debtor. Debtor agrees that, until payment in full of
the Liabilities, it will:
(a) Not change its name, its jurisdiction of organization or its
legal structure, without obtaining the prior written consent of Secured
Party.
(b) Take reasonable action to defend the Collateral against the
claims and demands of all persons other than Secured Party and promptly
pay all taxes, assessments, and charges upon the Collateral, and not
authorize or execute any documents creating or perfecting a lien upon or
security interest in any of the Collateral except in favor of Secured
Party and except for Permitted Liens, or otherwise create, suffer, or
permit to exist any liens or security interests upon any Collateral other
than in favor of Secured Party, and except for Permitted Liens.
(c) Execute such documents and do such other acts as Secured
Party may reasonably request to establish and maintain a valid and
perfected security interest in the Collateral free and clear of all other
liens and claims except for lines in favor of the Secured Party and
except for Permitted Liens, including, but not limited to, paying the
cost of filing and recording a financing statement in all public offices
reasonably deemed necessary by Secured Party. Debtor hereby irrevocably
authorizes Secured Party at any time, so long as any Liabilities remain
outstanding, to file in any jurisdiction any initial financing statements
and amendments thereto that (a) describe the Collateral and (b) contain
any other information required by Part 5 of Article 9 of the Uniform
Commercial Code of the jurisdiction wherein such financing statement or
amendment is filed regarding the sufficiency or filing office acceptance
of any financing statement or amendment. The Debtor agrees to furnish
any such information to the Secured Party promptly upon request. Debtor
hereby also irrevocably authorizes Secured Party to make such filings
with the U.S. Patent and Trademark Office, the U.S. Copyright Office and
other regulatory agencies as Secured Party deems necessary or appropriate
to provide notice of the security interest in the Collateral granted to
Secured Party hereunder.
(d) After the occurrence of an Event of Default, furnish to
Secured Party, immediately upon the request of Secured Party, any
evidence of ownership of the Collateral.
(e) Keep at its office, at the address set forth under its
signature hereto, its records concerning the Collateral, which records
shall be of such character as will enable Secured Party to determine at
any time the status of the Collateral. After the occurrence of an Event
of Default, furnish to Secured Party such information concerning Debtor
and the Collateral as Secured Party may from time to time reasonably
request and permit Secured Party from time to time to inspect the
Collateral and to inspect, audit, and make copies of, and extracts from,
all records and all other papers in the possession of Debtor pertaining
to the Collateral.
(f) Take all actions as may be necessary to maintain and preserve
the Collateral.
(g) Make appropriate entries upon its financial statements and
its books and records disclosing Secured Party's security interest in the
Collateral.
(h) Provide to Secured Party such financial statements of Debtor
and information from time to time as Secured Party shall reasonably
request.
(i) Immediately notify Secured Party in reasonable detail (i) of
any material loss or depreciation in the value of the Collateral and (ii)
of the occurrence of any event, which, after any notice and passage of
any cure period, may become an Event of Default.
(j) Not sell, transfer, or otherwise dispose of any Collateral
without Secured Party's prior written consent.
(k) Preserve and maintain its existence, rights, franchise,
licenses and privileges and will not liquidate, dissolve or merge or
consolidate with or into any other entity, unless the Secured Party has
provided its prior written consent.
(l) Not make any distribution of Debtor's property or assets to
its stockholders, except as expressly permitted by Secured Party.
(m) Except in the ordinary course of business or as otherwise
expressly permitted in this Agreement, and except for the Permitted
Liens, not pledge, mortgage, grant a security interest in, encumber,
assign, sell, lease or otherwise dispose of or transfer, whether by sale,
merger, consolidation, liquidation, dissolution, or otherwise, any of the
Debtor's assets.
5. Events Of Default. The occurrence of any of the following shall
constitute an "Event of Default" under this Agreement and under the Notes:
(a) Payment Default. Debtor fails to pay principal or interest
on the Notes on the Maturity Date (as defined in the Notes);
(b) Covenant Default. Debtor fails to perform any of its other
covenants hereunder or under the Notes or Indenture that are material to
Debtor or the rights of Secured Party hereunder and such failure
continues for ten (10) days after receipt of written notice thereof.
(c) Insolvency. Debtor admits in writing its inability to pay
its debts generally as they become due, or makes an assignment for the
benefit of creditors or files any petition or action for relief under any
bankruptcy, reorganization, insolvency or moratorium law, or any other
law or laws for the relief of, or relating to, debtors.
(d) Bankruptcy. An involuntary petition is filed under any
bankruptcy or insolvency statute against the Debtor or a custodian,
receiver or trustee has been appointed to take possession of any property
or other assets of Debtor, unless the petition or appointment is or has
been set aside or withdrawn or ceases or has ceased to be in effect
within thirty (30) days from the date of said filing or appointment.
6. Remedies on Default. Notwithstanding any provision of any document
or instrument evidencing or relating to the Liabilities, (i) upon the
occurrence of any Event of Default specified in Sections 5(a) or (b) above,
Secured Party may, to the extent authorized by the Noteholders to do so under
the Collateral Sharing Agreement, declare all of the Liabilities immediately
due and payable without notice or demand of any kind, and (ii) upon the
occurrence of an Event of Default specified in Sections 5(c) or (d) above, all
of the Liabilities shall be immediately and automatically due and payable
without action of any kind on the part of Secured Party. Debtor expressly
waives protest, notice, presentment, dishonor and demand of any kind. In its
capacity as Collateral Agent for the holders of the Notes under the Collateral
Sharing Agreement, Secured Party may exercise from time to time any rights and
remedies available under the Uniform Commercial Code of Illinois, including the
right to have Debtor assemble the Collateral and deliver it to a place
designated by Secured Party. Debtor shall pay all related expenses, including
reasonable attorneys' fees. If any notification of intended disposition of any
of the Collateral is required by law, such notification, if mailed, shall be
deemed reasonably and properly given if mailed at least ten (10) days before
the disposition, postage prepaid, addressed to Debtor at the address set forth
under its signature hereto. Secured Party shall, in addition to and not in
limitation of all rights of offset under applicable law, have the right to
appropriate and apply all of the Collateral in its possession to payment of the
Liabilities subject to the rights of any other secured party permitted
hereunder. Secured Party may proceed to sell or otherwise dispose of the
Collateral at public or private sale for cash or credit; provided, however,
that Debtor shall be credited with proceeds of such sale only when the proceeds
are actually received by Secured Party. Any proceeds of the Collateral may be
applied by Secured Party to the payment of expenses and costs to exercise of
Secured Party's rights hereunder, and any balance of such proceeds shall be
applied toward the Liabilities pro rata for the benefit of all holders of the
Notes. Any balance remaining shall be returned to the Debtor.
7. Rights of Secured Party. Secured Party may at its option (but
shall have no duty to):
(a) During the continuance of an Event of Default, perform any
agreement of Debtor hereunder that Debtor shall have failed to perform;
(b) During the continuance of an Event of Default, take any other
action that Secured Party reasonably deems necessary or desirable for the
preservation of the Collateral or Secured Party's interest herein,
including without limiting the generality of the foregoing: (i) any
action to realize upon the Collateral; (ii) the discharge of taxes,
liens, security interests or other encumbrances at any time levied or
placed on the Collateral subject to the rights of any other secured party
permitted hereunder; or (iii) the discharge or keeping current of any
obligation of Debtor having effect on the Collateral; and
(c) At any time and from time to time, so long as any Liabilities
are outstanding, file, or cause to be filed, any financing statement or
other notification with any governmental authority respecting any right
of Secured Party in the Collateral.
Effective during the continuance of an Event of Default, Debtor hereby
appoints Secured Party as its attorney-in-fact, which appointment is
irrevocable and coupled with an interest, for purposes of performing acts and
signing and delivering any agreement, document, or instrument, on behalf of
Debtor in accordance with this Section. Debtor immediately will reimburse
Secured Party for all expenses so incurred by Secured Party, together with
interest thereon at the default Rate (as defined in the Notes).
8. General.
(a) Nonwaiver; Cumulative Remedies. No delay or omission on the
part of Secured Party in the exercise of any right or remedy shall
operate as a waiver thereof, and no single or partial exercise by Secured
Party of any right or remedy shall preclude other or further exercise
thereof or the exercise of any other right or remedy. The rights and
remedies herein provided to Secured Party are cumulative and not
exclusive of any rights or remedies provided by law.
(b) Notices. All notices, requests, and demands to or upon
Secured Party or Debtor shall be deemed to have been given or made when
deposited in the mail, postage prepaid, addressed to Debtor at the
address set forth under its signature or to Secured Party at the address
listed in the heading of this Agreement.
(c) Successors. This Agreement shall, upon execution and
delivery by the Debtor, become effective and shall be binding upon and
inure to the benefit of Debtor, Secured Party, and their respective
successors and assigns, except that Debtor may not transfer or assign any
of its rights or interest hereunder without the consent of Secured Party.
(d) Number and Gender. Unless the context otherwise requires,
wherever used herein the singular shall include the plural and the plural
shall include the singular, and the use of one gender shall denote the
other where appropriate.
(e) Enforcement Costs. Debtor agrees to pay or reimburse Secured
Party upon demand for all reasonable costs, expenses, and fees (including
legal costs and fees and reasonable time charges of attorneys) incurred
by Secured Party in preparing, negotiating, enforcing, or preserving its
rights under, this Agreement or any note, document, or other instrument
executed in connection herewith.
(f) Provisions Severable; References. If any term or provision
of this Agreement shall be unenforceable or invalid, such
unenforceability or invalidity shall not render any other term or
provision hereof unenforceable or invalid, and all other terms and
provisions of this Agreement shall be enforceable and valid. References
to Sections herein shall be to Sections of this Agreement unless
otherwise specified
(g) Construction; Jurisdiction. This Agreement and the rights
and obligations of the parties hereunder shall be governed by, and
construed and interpreted in accordance with, the laws of the State of
Illinois. Debtor hereby irrevocably consents to the jurisdiction and
venue of any state or federal court sitting in the State of Illinois, and
agrees that any litigation involving this Agreement (including without
limitation ancillary claims) may be conducted in any such court at the
sole option of Secured Party. Debtor hereby waives any right or claim it
may have to transfer or change the venue of any suit, action, or other
proceeding brought against Debtor by Secured Party in accordance with
this Section or to claim that any such proceeding has been brought in an
inconvenient forum. THE DEBTOR AGREES TO WAIVE ANY RIGHT IT MAY HAVE TO
A TRIAL BY JURY IN ANY SUCH SUIT ACTION OR PROCEEDING.
[signature page follows]
EXHIBIT B
IN WITNESS WHEREOF, the Company has executed this Security Agreement for
the benefit of the Secured Party, as Collateral Agent for the holders of the
Notes under the Collateral Sharing Agreement as of the date first written
above.
MOLECULAR DIAGNOSTICS, INC.
By: ____________________________________
Xxxxx X. Xxxxxxxx
Chief Executive Officer
Address: 000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
EXHIBIT C
COLLATERAL SHARING AGREEMENT
This Collateral Sharing Agreement (this "Agreement") is entered into as
of this 1st day of October, 2002 among B. Xxxxxxx Xxxxxx, residing at 00 Xxxx
Xxxx, Xxxxx Xxxxx, Xxx Xxxxxx 00000 (the "Collateral Agent") and the holders
(the "Noteholders") of the 12% Convertible Secured Promissory Notes (the
"Notes") issued by Molecular Diagnostics, Inc., a Delaware corporation (the
"Borrower"), pursuant to an Indenture of even date herewith (the "Indenture").
RECITALS
WHEREAS, the Notes are secured by a security interest in certain
Collateral (as defined below) granted to the Collateral Agent pursuant to a
Security Agreement of even date herewith (the "Security Agreement"); and
WHEREAS, the parties desire by this Agreement to set forth the basis by
which the Collateral Agent will hold the security interest and exercise its
rights under the Security Agreement for the benefit of all of the Noteholders.
NOW THEREFORE, in exchange for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties agree as
follows:
AGREEMENT
1. Defined Terms. Capitalized terms used herein and not otherwise
defined herein shall have the meanings attributed to such terms in the Security
Agreement. In addition, the following terms shall have the following meanings:
"Agent's Expenses" means all of the reasonable fees, costs and expenses
of the Collateral Agent (including, without imitation, the reasonable fees and
disbursements of its counsel) (a) arising in connection with the preparation,
execution, delivery, modification, restatement, amendment or termination of
this Agreement and each Collateral Document or the enforcement (whether in the
context of a civil action, adversary proceeding, workout or otherwise) of any
of the provisions hereof or thereof, or (b) incurred or required to be advanced
in connection with the sale or other disposition or the custody, preservation
or protection of Collateral pursuant to any Collateral Document and the
exercise or enforcement of the Collateral Agent's rights under this Agreement
and in and to the Collateral.
"Collateral" means all property of the Borrower in which the Collateral
Agent shall have been granted a security interest or lien under any of the
Collateral Documents.
"Collateral Account" means the collateral account established and
maintained by the Collateral Agent pursuant to Section 8.
"Collateral Documents" means the Security Agreement and any other
agreements, instruments and documents incidental thereto.
"Distribution Date" means the first day of every month following receipt
by the Collateral Agent of a Notice of Default.
"Notice of Default" means a written notice to the Collateral Agent from
any Noteholder or Noteholders certifying that an Event of Default has occurred
and is continuing. A "Notice of Default" may be included in a written
direction to the Collateral Agent from the Requisite Noteholders pursuant to
Section 5.
"Pro Rata Share" means, with respect to any Noteholder at any time, a
fraction (expressed as a percentage), the numerator of which shall be the
outstanding amount payable to the Noteholder under the Notes held by the
Noteholder, and the denominator of which shall be the aggregate outstanding
amount payable to all Noteholders under the Notes.
"Requisite Noteholders" means, at any time, Noteholders holding an
aggregate Pro Rata Share greater than 66-2/3%, provided that "Requisite
Noteholders" shall mean all of the Noteholders (other than any Noteholder that
has given notice to the Collateral Agent in accordance with the last sentence
of Section 10) with respect to (a) the release by the Collateral Agent of any
Collateral, other than a release in connection with the disposition of
Collateral by either the Collateral Agent or the Borrower and the receipt by
the Collateral Agent of the proceeds of disposition, (b) any amendment to,
waiver of or departure from the terms of this Agreement or any of the
Collateral Documents that would change the definition of "Requisite
Noteholders," change any of the powers or duties of the Collateral Agent or
change any of the rights of any of the Noteholders under this Agreement or any
of the Collateral Documents.
2. Appointment, Nature of Relationship. Each of the Noteholders
hereby designates and appoints the Collateral Agent, in the Collateral Agent's
individual capacity and not as lender, as the Collateral Agent for the
Noteholder under this Agreement and the Collateral Documents, and each
Noteholder hereby irrevocably authorizes the Collateral Agent to take any
action on the Noteholder's behalf under the provisions of this Agreement and
the Collateral Documents and to exercise any powers as are set forth herein or
therein, together with any other powers as are incidental thereto. The
Collateral Agent agrees to act on the express terms and conditions contained in
this Agreement. Notwithstanding the use of the defined term "Collateral
Agent," it is expressly understood and agreed that the Collateral Agent shall
not have any fiduciary responsibilities to any Noteholder by reason of this
Agreement or the other Collateral Documents and that the Collateral Agent is
merely acting as the representative of the Noteholders with only the duties
that are expressly set forth in this Agreement and the Collateral Documents.
In its capacity as the Noteholders' contractual representative, the Collateral
Agent (a) does not assume any fiduciary duties to any of the Noteholders,
(b) is a "representative" of the Noteholders within the meaning of Section 9-
105 of the Uniform Commercial Code and (c) is acting as an independent
contractor, the rights and duties of which are limited to those expressly set
forth in this Agreement and the Collateral Documents. Each of the Noteholders
agrees not to assert any claim against the Collateral Agent on any agency
theory or any other theory of liability for breach of fiduciary duty, all of
which claims each Noteholder hereby expressly waives.
3. Powers and Duties. The Collateral Agent shall have and may
exercise the powers under the Collateral Documents that are specifically
delegated to the Collateral Agent by the terms hereof and thereof, together
with powers that are reasonably incidental thereto. The Collateral Agent shall
have no implied duties to the Noteholders, or any obligation to the Noteholders
to take any action hereunder or under any of the Collateral Documents, except
any action specifically required by this Agreement or any of the Collateral
Documents to be taken by the Collateral Agent or directed by the Requisite
Noteholders in accordance with the terms hereof.
4. Authorization to Execute Collateral Documents. Each of the
Noteholders authorizes and directs the Collateral Agent, for the benefit of the
Noteholders, to execute and deliver each of the Collateral Documents requiring
execution and delivery by the Collateral Agent and to accept delivery from the
Borrower of those Collateral Documents that do not require execution by the
Collateral Agent.
5. Direction by Requisite Noteholders. Except as otherwise provided
in this Section 5, the Collateral Agent shall take any action with respect to
the Collateral and the Collateral Documents directed in writing by the
Requisite Noteholders. Notwithstanding the foregoing, the Collateral Agent
shall not be obligated to take any action (a) that is in conflict with any
provisions of applicable law or of this Agreement or any Collateral Document or
(b) with respect to which the Collateral Agent, in its sole opinion, shall not
have been provided adequate security and indemnity against the costs, expenses
and liabilities that may be incurred by it as a result of compliance with the
direction. Under no circumstances shall the Collateral Agent be liable for
following the written direction of the Requisite Noteholders. In each instance
in which the Requisite Noteholders deliver a written direction to the
Collateral Agent pursuant hereto, the Requisite Noteholders shall promptly send
a copy of the written direction to each other Noteholder.
6. Notice of Default. Any Noteholder or Noteholders may give the
Collateral Agent a Notice of Default in the manner provided in Section 2, and
upon receipt of thereof, the Collateral Agent shall give a copy of the Notice
of Default to each other Noteholder. If, and only if, the Collateral Agent
shall have received a Notice of Default, the Collateral Agent shall, upon the
written direction of the Requisite Noteholders, exercise the rights and
remedies provided in this Agreement and in any of the Collateral Documents.
7. Remedies. Each of the Noteholders hereby irrevocably agrees that
the Collateral Agent shall be authorized, after the occurrence of a Default and
at the direction of the Requisite Noteholders or incidental to any such
direction, for the purpose of carrying out the terms of this Agreement and any
of the Collateral Documents, to take any and all appropriate action and to
execute any and all documents and instruments that may be necessary or
desirable to accomplish the purposes hereof and thereof, including, without
limiting the generality of the foregoing, to the extent permitted by applicable
law, to do the following:
(a) to ask for, demand, xxx for, collect, receive and give
acquittance for any and all moneys due or to become due with
respect to the Collateral,
(b) to receive, take, endorse, assign and deliver any and
all checks, notes, drafts, acceptances, documents and other
negotiable and nonnegotiable instruments, documents and chattel
paper taken or received by the Collateral Agent in connection with
this Agreement or any of the Collateral Documents,
(c) to commence, file, prosecute, defend, settle,
compromise or adjust any claim, suit, action or proceeding with
respect to the Collateral,
(d) to sell, transfer, assign or otherwise deal in or with
the Collateral or any part thereof pursuant to the terms and
conditions of this Agreement and the Collateral Documents, and
(e) to do, at its option and at the expense and for the
account of the Noteholders (to the extent the Collateral Agent
shall not be reimbursed by the Borrower), at any time or from time
to time, all acts and things which the Collateral Agent deems
reasonably necessary to protect or preserve the Collateral and to
realize upon the Collateral.
8. The Collateral Account. Upon receipt by the Collateral Agent of a
Notice of Default, the Collateral Agent shall open and maintain an
interest-bearing bank account that shall be entitled the "Molecular
Diagnostics, Inc. 12% Convertible Secured Note Collateral Account." All moneys
received by the Collateral Agent with respect to Collateral after receipt of a
Notice of Default shall be deposited in the Collateral Account and thereafter
shall be held, applied and/or disbursed by the Collateral Agent in accordance
with Section 9. In no event shall moneys other than proceeds of Collateral
(and interest thereon) be deposited in the Collateral Account. The Collateral
Account at all times shall be subject to the exclusive dominion and control of
the Collateral Agent.
9. Application of Moneys. All moneys held by the Collateral Agent in
the Collateral Account shall be distributed by the Collateral Agent on each
Distribution Date as follows:
FIRST: To the Collateral Agent in an amount equal to the
Agent's Expenses that are unpaid as of the Distribution Date, and
to any Noteholder that has theretofore advanced or paid any Agent's
Expenses in an amount equal to the amount so advanced or paid by
the Noteholder prior to the Distribution Date;
SECOND: To the Noteholders in accordance with their
respective Pro Rata Shares as of such Distribution Date; and
THIRD: Any surplus remaining after payment in full in cash
of all Agent's Expenses and all Liabilities shall be paid to the
Borrower, or to whomever may be lawfully entitled to receive the
same, or as a court of competent jurisdiction may direct.
Notwithstanding the foregoing, except for any surplus under clause THIRD above,
the Collateral Agent shall not be required to make a distribution on any
Distribution Date if the balance in the Collateral Account available for
distribution on the Distribution Date is less than $1,000. The Collateral
Agent shall not be responsible for any Noteholder's application (or order of
application) of payments received by the Noteholder from the Collateral Agent
hereunder to the Liabilities owing to such Noteholder. The Collateral Agent
waives any right of set-off it may have against monies in the Collateral
Account to the extent the set-off results in a distribution of monies other
than as set forth in the foregoing provisions for application of monies in the
Collateral Account.
10. Information from Noteholders. Each of the Noteholders hereby
agrees, promptly upon request by the Collateral Agent, to provide to the
Collateral Agent in writing any information regarding the Notes held by the
Noteholder as may be reasonably required by the Collateral Agent at any time to
determine the Noteholder's Pro Rata Share or to calculate distributions to the
Noteholder from the Collateral Account. Each Noteholder shall notify the
Collateral Agent in writing promptly following the repayment in full of the
Noteholder's Note.
11. Limitation on Collateral Agent's Duties in Respect of Collateral.
Other than the Collateral Agent's duties set forth in this Agreement and the
Collateral Documents as to the custody of moneys, stock certificates and stock
powers received by the Collateral Agent hereunder and thereunder and the
accounting to the Borrower and the Noteholders therefor, the Collateral Agent
shall have no duty to the Borrower or the Noteholders with respect to any
Collateral in its possession or control or in the possession or control of its
agent or nominee, any income thereon, or the preservation of rights against
prior parties or any other rights pertaining thereto.
12. Noteholder Credit Decision. Each Noteholder acknowledges that it
has, independently and without reliance upon the Collateral Agent or any other
Noteholder, and based on the financial information provided by the Borrower and
any other documents and information the Noteholder has deemed appropriate, made
its own credit analysis and decision to acquire the Notes. Each Noteholder
also acknowledges that it will, independently and without reliance upon the
Collateral Agent or any other Noteholder, and based on any documents and
information the Noteholder deems appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement.
13. Exculpation. Neither the Collateral Agent nor any of its
employees, agents or affiliates shall be responsible for or have any duty to
ascertain, inquire into, or verify (a) any statement, warranty or
representation made by the Borrower in connection with any Collateral Document;
(b) the performance or observance of any of the covenants or agreements of the
Borrower under any Collateral Document; (c) the validity, enforceability,
effectiveness or genuineness of any Collateral Document or any other instrument
or writing furnished in connection therewith; (d) the validity, perfection or
priority of any security interest or lien created under any Collateral
Document; or (e) the financial condition of the Borrower.
14. Employment of Agents and Counsel. The Collateral Agent may execute
any of its duties as the Collateral Agent hereunder and under any Collateral
Document by or through employees, agents, and attorneys-in-fact and shall not
be answerable to the Noteholders, except as to money or securities received by
it or its authorized agents, for the default or misconduct of any such agents
or attorneys-in-fact selected by it. The Collateral Agent shall be entitled to
advice of counsel in all matters pertaining to the Collateral Agent's duties
hereunder and under the Collateral Documents.
15. Reliance on Documents and Counsel. The Collateral Agent shall be
entitled to rely upon any notice, consent, certificate, affidavit, letter,
telegram, statement, paper or document believed by it to be genuine and correct
and to have been signed or sent by the proper person or persons, and, in
respect to legal matters, upon the opinion of counsel selected by the
Collateral Agent, which may be employees of the Collateral Agent.
16. Collateral Agent's Reimbursement and Indemnification. The
Noteholders agree to reimburse and indemnify the Collateral Agent ratably in
proportion to their respective Pro Rata Shares as of the date hereof (a) for
any amounts not reimbursed by the Borrower under the Collateral Documents,
(b) for any other expenses incurred by the Collateral Agent on behalf of the
Noteholders, in connection with the preparation, execution, delivery,
administration and enforcement of the Collateral Documents and (c) for any
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind and nature whatsoever which
may be imposed on, incurred by or asserted against the Collateral Agent in any
way relating to or arising out of the Collateral Documents or any other
document delivered in connection therewith or the transactions contemplated
thereby, or the enforcement of any of the terms thereof, provided that no
Noteholder shall be liable for any of the foregoing to the extent any of the
foregoing is found in a final non-appealable judgment by a court of competent
jurisdiction to have arisen from the gross negligence or willful misconduct of
the Collateral Agent. The agreements in this Section 16 shall survive the
repayment of the Liabilities and the termination of the other provisions of
this Agreement.
17. Rights as a Noteholder. Notwithstanding that the Collateral Agent
is acting as the Collateral Agent hereunder, the Collateral Agent in its
individual capacity as a Noteholder shall have the same rights and powers
hereunder as any Noteholder and may exercise the same as though it were not the
Collateral Agent, and the term "Noteholder" or "Noteholders" shall include the
Collateral Agent in its capacity as a Noteholder.
18. Successor Collateral Agent. The Collateral Agent may resign at any
time by giving written notice thereof to the Noteholders and the Borrower, and
the Collateral Agent may be removed at any time, with or without cause, by
written notice received by the Collateral Agent from the Requisite Noteholders.
Upon any resignation or removal, the Requisite Noteholders shall have the right
to appoint, on behalf of the Noteholders, a successor Collateral Agent. If no
successor Collateral Agent shall have been so appointed by the Requisite
Noteholders and shall have accepted the appointment within 30 days after the
departure of the Collateral Agent, then the departing Collateral Agent may
appoint, on behalf of the Noteholders, a successor Collateral Agent. Upon the
acceptance of any appointment as the Collateral Agent hereunder by a successor
Collateral Agent, the successor Collateral Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the
departing Collateral Agent, and the departing Collateral Agent shall be
discharged from its duties and obligations hereunder and under the Collateral
Documents. After any departing Collateral Agent's resignation or removal
hereunder as Collateral Agent, the provisions of this Agreement shall continue
in effect for its benefit in respect of any actions taken or omitted to be
taken by it while it was acting as the Collateral Agent hereunder and under the
Collateral Documents.
19. Release and Termination. All of the Collateral shall be released
and this Agreement shall be terminated on the earlier of:
(a) the date on which (i) the Collateral Agent shall have
received from each of the Noteholders written notice that all
Liabilities owing to the Noteholder have been paid in full and
(ii) all Agent's Expenses shall have been paid in full; or
(b) the date on which (i) the Collateral Agent shall have
received written instructions from all of the Noteholders (other
than any Noteholder that has given notice to the Collateral Agent
in accordance with the last sentence of Section 10) directing the
Collateral Agent to release the Collateral and (ii) all Agent's
Expenses shall have been paid in full.
20. Amendments and Waivers. No amendment to or waiver of any departure
from the terms of this Agreement shall be effective unless in writing and
signed by all of the parties hereto. The Collateral Agent shall not execute or
deliver any amendment or waiver with respect to any Collateral Document except
at the direction or with the consent of the Requisite Noteholders.
21. Notices. All Notices hereunder shall be given in the manner and to
the respective addresses for the Noteholders contained by the Note registry
maintained by the Secretary of the Company in accordance the Indenture.
22. Headings. Section headings used in this Agreement are for
convenience only and shall not affect the construction of this Agreement.
23. Severability. Any provision of this Agreement that is prohibited
or unenforceable in any jurisdiction shall not invalidate the remaining
provisions hereof, and any prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable the provision in any other
jurisdiction.
24. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of each of the parties hereto and their respective successors and
assigns.
25. Governing Law. The provisions of this Agreement shall be governed
by and construed in accordance with the internal laws (as opposed to conflicts
of law provisions) and decisions of the State of Illinois.
26. Number and Gender. Unless the context otherwise requires, wherever
used herein the singular shall include the plural and the plural shall include
the singular, and the use of one gender shall denote the other where
appropriate.
IN WITNESS WHEREOF, this Collateral Sharing Agreement has been duly
executed as of by the date first written above.
____________________________________
B. Xxxxxxx Xxxxxx
Collateral Agent
PURSUANT TO THE INDENTURE, EACH
NOTEHOLDER'S ACCEPTANCE OF HIS NOTE
CONSTITUTES HIS AGREEMENT TO BE A
PARTY TO, AND BE BOUND BY THE
PROVISIONS OF THIS AGREEMENT, THE
SAME AS IF A SIGNATORY HERETO.
EXHIBIT D
THIS WARRANT AND THE UNDERLYING SHARES OF COMMON STOCK REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
"ACT"), AND ARE "RESTRICTED SECURITIES" AS THAT TERM IS DEFINED IN RULE 144
UNDER THE ACT. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
ACT, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT, THE
AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF MOLECULAR
DIAGNOSTICS, INC.
Warrant No. 200__- [ ]
WARRANT TO PURCHASE SHARES OF COMMON STOCK
WARRANT TO PURCHASE _______ SHARES
(SUBJECT TO ADJUSTMENT AS SET FORTH HEREIN)
[For cash subscriptions for the first One Million Dollars ($1,000,000)
principal amount of Notes being offered (determined on a "first come - first
served" basis):
EXERCISE PRICE $0.15 PER SHARE
(SUBJECT TO ADJUSTMENT AS SET FORTH HEREIN)]
[For subscribers who subscribe after cash subscriptions for the first One
Million Dollars ($1,000,000) principal amount of Notes have been received by
the Company (determined on a "first come - first served" basis):
EXERCISE PRICE $0.20 PER SHARE
(SUBJECT TO ADJUSTMENT AS SET FORTH HEREIN)]
ISSUE DATE:
VOID AFTER 3:00 P.M., CENTRAL TIME, ON THE FIFTH ANNIVERSARY OF THE
ISSUE DATE
THIS CERTIFIES THAT , , is entitled to purchase from Molecular
Diagnostics, Inc., a Delaware corporation (hereinafter called the "Company")
with its principal office located at 000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxx, Xxxxxxxx 00000, at any time after the Exercise Date (as defined
below), but before 3:00 P.M., Central Time, on the Expiration Date (as defined
below), at the Exercise Price (as defined below), the number of shares (the
"Warrant Shares") of the Company's common stock, par value $0.001 per share
(the "Common Stock") set forth above. The number of Shares purchasable upon
exercise of this Warrant and the Exercise Price per Share shall be subject to
adjustment from time to time as set forth in Section 4 below.
SECTION 1. DEFINITIONS
The following terms used in this Warrant shall have the following
meanings (unless otherwise expressly provided herein):
The "Act." The Securities Act of 1933, as amended.
The "Commission." The Securities and Exchange Commission.
The "Company." Molecular Diagnostics, Inc.
"Common Stock." The Company's Common Stock, par value $0.001 per share.
"Current Market Price." The Current Market Price shall be determined as
follows:
(a) if the security at issue is listed on a national securities
exchange or admitted to unlisted trading privileges on such an exchange
or quoted on either the National Market System or the Small Cap Market of
the automated quotation service operated by The Nasdaq Stock Market, Inc.
("Nasdaq"), the current value shall be the last reported sale price of
that security on such exchange or system on the day for which the Current
Market Price is to be determined or, if no such sale is made on such day,
the average of the highest closing bid and lowest asked price for such
day on such exchange or system; or
(b) if the security at issue is not so listed or quoted or
admitted to unlisted trading privileges, the Current Market Value shall
be the average of the last reported highest bid and lowest asked prices
quoted on the Nasdaq Electronic Bulletin Board, or, if not so quoted,
then by the National Quotation Bureau, Inc. on the last business day
prior to the day for which the Current Market Price is to be determined;
or
(c) if the security at issue is not so listed or quoted or
admitted to unlisted trading privileges and bid and asked prices are not
reported, the current market value shall be determined in such reasonable
manner as may be prescribed from time to time by the Board of Directors
of the Company, subject to the objection procedures hereinafter
described.
"Exercise Date." July 31, 2003.
"Exercise Price." [$0.15] or [$0.20] per Share, as modified from time to
time in accordance with the provisions of this Warrant.
"Expiration Date." The fifth anniversary of the Issue Date indicated on
the first page of this Warrant.
"Holder" or "Warrantholder." The person to whom this Warrant is issued
and any valid transferee thereof pursuant to Section 3.1 below.
"NASD." The National Association of Securities Dealers, Inc.
"Nasdaq." The automated quotation system operated by the Nasdaq Stock
Market, Inc.
"Termination of Business." Any sale, lease or exchange of all, or
substantially all, of the Company's assets or business or any dissolution,
liquidation or winding up of the Company.
"Warrant." This Warrant and any other warrants issued in substitution
for or replacement thereof, including those evidenced by a certificate or
certificates originally issued or issued upon division, exchange, substitution
or transfer pursuant to this Warrant.
"Warrant Shares." The Common Stock purchasable upon exercise of this
Warrant including the Common Stock underlying unexercised portions of this
Warrant.
SECTION 2. TERM OF WARRANTS; EXERCISE OF WARRANT
2.1. Exercise of Warrant.
(a) Subject to the terms of this Warrant, the Holder shall have
the right, at any time beginning on the Exercise Date but prior to 3:00
p.m., Central Time, on the Expiration Date, to purchase from the Company
up to the number of fully paid and nonassessable Warrant Shares to which
the Holder may at the time be entitled to purchase pursuant to this
Warrant, upon surrender to the Company, at its principal office, of the
Warrant to be exercised, together with the purchase form on the reverse
thereof, duly filled in and signed, and upon payment to the Company of
the Exercise Price for the number of Warrant Shares in respect of which
the Warrant is then exercised, but in no event for less than 100 Warrant
Shares (unless fewer than an aggregate of 100 Warrant Shares are then
purchasable under all outstanding Warrants held by a Holder).
(b) In lieu of payment of the Exercise Price, the Holder may
require the Company to convert this Warrant into shares of Common Stock
(the "Conversion Right") as provided for in this Section 2.1(b). Upon
exercise of the Conversion Right, the Company shall deliver to the Holder
(without payment by the Holder of any of the Exercise Price) that number
of shares of Common Stock equal to the quotient obtained by dividing (x)
the value of the Warrant at the time the Conversion Right is exercised
(determined by subtracting the aggregate Exercise Price in effect
immediately prior to the exercise of the Conversion Right from the
aggregate Current Market Price for the Common Stock immediately prior to
the exercise of the Conversion Right by (y) the Current Market Price of
the Common Stock.
2.2. Payment of Exercise Price. Payment of the aggregate Exercise Price
may be made in cash or by check, or any combination thereof.
2.3. Issuance of Shares. Upon surrender of this Warrant and payment of
the applicable Exercise Price, the Company shall issue and cause to be
delivered with all reasonable dispatch to or upon the written order of the
Holder and in the name or names the Holder may designate, a certificate or
certificates for the number of full Warrant Shares so purchased upon the
exercise of this Warrant, together with cash, as provided in Section 12 hereof,
in respect of any fraction of a Warrant Share that would otherwise have been
issuable upon exercise of this Warrant.
2.4. Status as Holder of Shares. Upon receipt of this Warrant by the
company following any exercise by the Holder, the Holder shall be deemed to be
the holder of record of the Warrant Shares issuable upon exercise,
notwithstanding that the transfer books of the Company may then be closed or
that certificates representing the Warrant Shares may not have been prepared or
actually delivered to the Holder.
SECTION 3. TRANSFERABILITY AND FORM OF WARRANT
3.1. Limitation on Transfer. Any assignment or transfer of this Warrant
shall be made by presentation and surrender hereof to the Company at its
principal office or the office of its transfer agent, if any, accompanied by a
duly executed Assignment Form. Upon the presentation and surrender of these
items to the Company, the Company, at its sole expense, shall execute and
deliver to the transferee or transferees of this Warrant a new Warrant or
Warrants, in the name of the transferee or transferees named in the Assignment
Form, and this Warrant shall at that time be canceled.
3.2. Exchange of Certificate. This Warrant may be exchanged for another
Warrant or Warrants entitling the Warrantholder to purchase a like aggregate
number of Warrant Shares as the Warrant or Warrants surrendered then entitled
the Warrantholder to purchase. Any Warrantholder desiring to exchange a
Warrant shall make a request in writing delivered to the Company, and shall
surrender, properly endorsed, with signatures guaranteed, the Warrant to be
exchanged. Thereupon, the Company shall execute and deliver to the person
entitled thereto a new Warrant as requested.
3.3. Mutilated, Lost, Stolen, or Destroyed Certificate. In case the
certificate evidencing this Warrant shall be mutilated, lost, stolen or
destroyed, the Company shall, at the request of the Warrantholder, issue and
deliver in exchange and substitution for and upon cancellation of the mutilated
certificate, or in lieu of and substitution for the certificate lost, stolen or
destroyed, a new Warrant of like tenor representing an equivalent right or
interest, but only upon receipt of evidence satisfactory to the Company of the
loss, theft or destruction of the Warrant and a bond of indemnity, if
requested, also satisfactory in form and amount, at the applicant's cost.
Applicants for substitute Warrants shall also comply with any other reasonable
regulations and pay any other reasonable charges the Company may request.
SECTION 4. ADJUSTMENT OF NUMBER OF SHARES
The number and kind of securities purchasable upon the exercise of this
Warrant and the Exercise Price payable shall be subject to adjustment from time
to time upon the happening of certain events, as follows:
4.1. Adjustments. The number of Warrant Shares purchasable upon the
exercise of this Warrant and the Exercise Price shall be subject to adjustments
as follows:
(a) In case the Company shall (i) pay a dividend in Common Stock
or make a distribution to its stockholders in Common Stock, (ii)
subdivide its outstanding Common Stock, (iii) combine its outstanding
Common Stock into a smaller number of shares of Common Stock, or (iv)
issue by classification of its Common Stock other securities of the
Company, then in any of the foregoing cases, the number of Warrant Shares
purchasable upon exercise of the Warrant immediately prior thereto shall
be adjusted so that the Warrantholder shall be entitled to receive the
kind and number of Warrant Shares or other securities of the Company that
it would have owned or would have been entitled to receive immediately
after the happening of any of the events described above, had the Warrant
been exercised immediately prior to the happening of the event or any
record date with respect thereto. Any adjustment made pursuant to this
subsection 4.1(a) shall become effective immediately after the effective
date of the event retroactive to the record date, if any, for the event.
(b) If the Company shall issue rights, options, warrants, or
convertible securities to all or substantially all holders of its Common
Stock, without any charge to the holders, entitling them to subscribe for
or purchase Common Stock at a price per share that is lower at the record
date mentioned below than the then Current Market Price, the number of
Warrant Shares thereafter purchasable upon the exercise of this Warrant
shall be determined by multiplying the number of Warrant Shares
theretofore purchasable upon exercise of this Warrant by a fraction, the
numerator of which shall be the number of shares of Common Stock
outstanding immediately prior to the issuance of the rights, options,
warrants or convertible securities, plus the number of additional shares
of Common Stock offered for subscription or purchase, and the denominator
of which shall be the number of shares of Common Stock outstanding
immediately prior to the issuance of the rights, options, warrants, or
convertible securities, plus the number of shares of Common Stock that
the aggregate offering price of the total number of shares offered would
purchase at the Current Market Price as of the record date. The
adjustment shall be made whenever rights, options, warrants, or
convertible securities are issued, and shall become effective immediately
and retroactively to the record date for the determination of
stockholders entitled to receive the rights, options, warrants, or
convertible securities.
(c) If the Company shall distribute to all or substantially all
holders of its Common Stock evidences of its indebtedness or assets
(excluding cash dividends or distributions out of earnings) or rights,
options, warrants, or convertible securities containing the right to
subscribe for or purchase Common Stock (excluding those referred to in
subsection 4.1(b) above), then in each case the number of Warrant Shares
thereafter purchasable upon the exercise of this Warrant shall be
determined by multiplying the number of Warrant Shares theretofore
purchasable upon exercise of this Warrant by a fraction, of which the
numerator shall be the then Current Market Price on the date of
distribution, and the denominator of which shall be the Current Market
Price on the date of distribution minus the then fair value (determined
as provided in subparagraph (e) below) of the portion of the assets or
evidences of indebtedness so distributed or of the subscription rights,
options, warrants, or convertible securities applicable to one share.
The adjustment shall be made whenever any distribution is made and shall
become effective on the date of distribution retroactive to the record
date for the determination of stockholders entitled to receive the
distribution.
(d) No adjustment in the number of Warrant Shares purchasable
pursuant to this Warrant shall be required unless the adjustment would
require an increase or decrease of at least one percent in the number of
Warrant Shares then purchasable upon the exercise of this Warrant or, if
this Warrant is not then exercisable, the number of Warrant Shares
purchasable upon the exercise of this Warrant on the first date
thereafter that this Warrant becomes exercisable; provided, however, that
any adjustments which by reason of this subsection (4.1(d)) are not
required to be made immediately shall be carried forward and taken into
account in any subsequent adjustment.
(e) Whenever the number of Warrant Shares purchasable upon the
exercise of this Warrant is adjusted, as herein provided, the Exercise
Price payable upon exercise of this Warrant shall be adjusted by
multiplying the Exercise Price immediately prior to the adjustment by a
fraction, the numerator of which shall be the number of Warrant Shares
purchasable upon the exercise of the Warrant immediately prior to the
adjustment, and the denominator of which shall be the number of Warrant
Shares so purchasable immediately thereafter.
(f) Whenever the number of Warrant Shares purchasable upon
exercise of this Warrant is adjusted as herein provided, the Company
shall cause to be promptly mailed to the Warrantholder by first class
mail, postage prepaid, notice of the adjustment and a certificate of the
chief financial officer of the Company setting forth the number of
Warrant Shares purchasable upon the exercise of this Warrant after the
adjustment, a brief statement of the facts requiring the adjustment and
the computation by which the adjustment was made.
(g) For the purpose of this Section 4.1, the term "Common Stock"
shall mean (i) the class of stock designated as the Common Stock of the
Company as of the Issue Date of this Warrant, or (ii) any other class of
stock resulting from successive changes or reclassifications of the
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. If, at any time, as
a result of an adjustment made pursuant to this Section 4, the
Warrantholder shall become entitled to purchase any securities of the
Company other than Common Stock, then (y) if the Warrantholder's right to
purchase is on any other basis than that available to all holders of the
Company's Common Stock, the Company shall obtain an opinion of an
independent investment banking firm valuing the other securities and (z)
thereafter the number of other securities so purchasable upon exercise of
this Warrant shall be subject to adjustment from time to time in a manner
and on terms as nearly equivalent as practicable to the provisions with
respect to the Warrant Shares contained in this Section 4.
(h) Upon the expiration of any rights, options, warrants, or
conversion privileges, if they shall have not been exercised, the number
of Warrant Shares purchasable upon exercise of the Warrants, to the
extent the Warrants have not then been exercised, shall, upon such
expiration, be readjusted and shall thereafter be as they would have been
had they been originally adjusted (or had the original adjustment not
been required, as the case may be) on the basis of (i) the fact that the
only shares of Common Stock so issued were the shares of Common Stock, if
any, actually issued or sold upon the exercise of the rights, options,
warrants, or conversion privileges, and (ii) the fact that the shares of
Common Stock, if any, were issued or sold for the consideration actually
received by the Company upon the exercise plus the consideration, if any,
actually received by the Company for the issuance, sale or grant of all
such rights, options, warrants, or conversion privileges whether or not
exercised; provided, however, that no readjustment shall have the effect
of decreasing the number of Warrant Shares purchasable upon exercise of
this Warrant by an amount in excess of the amount of the adjustment
initially made in respect of the issuance, sale, or grant of such rights,
options, warrants, or conversion rights.
4.2. No Adjustment for Dividends. Except as provided in Section 4.1, no
adjustment in respect of any dividends or distributions out of earnings shall
be made during the term, or upon the exercise, of this Warrant.
4.3. No Adjustment in Certain Cases. No adjustments shall be made
pursuant to Section 4 hereof in connection with the issuance of the Common
Stock upon the conversion, if any, of the Company's 12% Secured Convertible
Promissory Notes or exercise of any warrants issued to the holders thereof in
connection therewith. No adjustments shall be made pursuant to Section 4
hereof in connection with the grant or exercise of presently authorized or
outstanding options to purchase, or the issuance of shares of Common Stock
under, the Company's director or employee benefit plan.
4.4. Preservation of Purchase Rights upon Reclassification,
Consolidation, etc. In case of any consolidation of the Company with or merger
of the Company into another corporation, or in case of any sale or conveyance
to another corporation of the property, assets, or business of the Company as
an entirety or substantially as an entirety, the Company or successor or
purchasing corporation, as the case may be, shall execute with the
Warrantholder an agreement that the Warrantholder shall have the right
thereafter upon payment of the Exercise Price in effect immediately prior to
the action to purchase, upon exercise of this Warrant, the kind and amount of
shares and other securities and property that it would have owned or have been
entitled to receive after the happening of the consolidation, merger, sale, or
conveyance had this Warrant been exercised immediately prior to the action. In
the event of a merger described in Section 368(a)(2)(E) of the Internal Revenue
Code of 1986, in which the Company is the surviving corporation, the right to
purchase Shares under the Warrants shall terminate on the date of such merger
and thereupon the Warrants shall become null and void, but only if the
controlling corporation shall agree to substitute for the Warrants, its
warrants which entitle the holder thereof to purchase upon their exercise the
kind and amount of shares and other securities and property which it would have
owned or been entitled to receive had the Warrants been exercised immediately
prior to such merger. Any such agreements referred to in this Section 4.4
shall provide for adjustments, which shall be as nearly equivalent as may be
practicable to the adjustments provided for in Section 4 hereof. The
provisions of this Section (4.4) shall similarly apply to successive
consolidations, mergers, sales, or conveyances.
4.5. Par Value of Shares of Common Stock. Before taking any action
which would cause an adjustment effectively reducing the portion of the
Exercise Price allocable to each Share below the par value per share of the
Common Stock issuable upon exercise of the Warrants, the Company will take any
corporate action which may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue fully paid and
nonassessable Common Stock upon exercise of the Warrants.
4.6. Independent Public Accountants. The Company may retain a firm of
independent public accountants of recognized national standing (which may be
any such firm regularly employed by the Company) to make any computation
required under this Section 4, and a certificate signed by the firm shall be
conclusive evidence of the correctness of any computation made under this
Section 4.
4.7. Treasury Stock. For purposes of this Section 4, shares of Common
Stock owned or held at any relevant time by, or for the account of, the
Company, in its treasury or otherwise, shall not be deemed to be outstanding
for purposes of the calculations and adjustments described.
SECTION 5. NOTICE TO HOLDERS
If, prior to the expiration of this Warrant either by its terms or by its
exercise in full, any of the following shall occur:
(a) the Company shall declare a dividend or authorize any other
distribution on its Common Stock; or
(b) the Company shall authorize the granting to the shareholders
of its Common Stock of rights to subscribe for or purchase any securities
or any other similar rights; or
(c) any reclassification, reorganization or similar change of the
Common Stock, or any consolidation or merger to which the Company is a
party, or the sale, lease, or exchange of any significant portion of the
assets of the Company; or
(d) the voluntary or involuntary dissolution, liquidation or
winding up of the Company; or
(e) any purchase, retirement or redemption by the Company of its
Common Stock;
then, and in any such case, the Company shall deliver to the Holder or Holders
written notice thereof at least 30 days prior to the earliest applicable date
specified below with respect to which notice is to be given, which notice shall
state the following:
(x) the date on which a record is to be taken for the purpose of
the dividend, distribution or rights, or, if a record is not to be taken,
the date as of which the holders of Common Stock of record entitled to
the dividend, distribution or rights will be determined;
(y) the date on which any reclassification, reorganization,
consolidation, merger, sale, transfer, dissolution, liquidation, winding
up or purchase, retirement or redemption is expected to become effective,
and the date, if any, as of which the Company's holders of Common Stock
of record shall be entitled to exchange their Common Stock for securities
or other property deliverable upon the reclassification, reorganization,
consolidation, merger, sale, transfer, dissolution, liquidation, winding
up, purchase, retirement or redemption; and
(z) if any matters referred to in the foregoing clauses (x) and
(y) are to be voted upon by holders of Common Stock, the date as of which
the shareholders entitled to vote will be determined.
SECTION 6. OFFICERS' CERTIFICATE
Whenever the Exercise Price or the aggregate number of Warrant Shares
purchasable pursuant to this Warrant shall be adjusted as required by the
provisions of Section 4 above, the Company shall promptly file with its
Secretary or an Assistant Secretary at its principal office, and with its
transfer agent, if any, an officers' certificate executed by the Company's
President and Secretary or Assistant Secretary, describing the adjustment and
setting forth, in reasonable detail, the facts requiring the adjustment and the
basis for and calculation of the adjustment in accordance with the provisions
of this Warrant. Each such officers' certificate shall be made available to
the Holder or Holders of this Warrant for inspection at all reasonable times,
and the Company, after each adjustment, shall promptly deliver a copy of the
officers' certificate relating to that adjustment to the Holder or Holders of
this Warrant. The officers' certificate described in this Section 6 shall be
deemed to be conclusive as to the correctness of the adjustment reflected
therein if, and only if, no Holder of this Warrant delivers written notice to
the Company of an objection to the adjustment within 30 days after the
officers' certificate is delivered to the Holder or Holders of this Warrant.
The Company will make its books and records available for inspection and
copying during normal business hours by the Holder so as to permit a
determination as to the correctness of the adjustment. Failure to prepare or
provide the officers' certificate shall not modify the parties' rights
hereunder.
SECTION 7. RESERVATION OF WARRANT SHARES
There has been reserved, and the Company shall at all times keep reserved
so long as this Warrant remains outstanding, out of its authorized and unissued
Common Stock, a number of shares of Common Stock sufficient to support the full
exercise hereof. Every transfer agent for the Common Stock and other
securities of the Company issuable upon the exercise of this Warrant will be
irrevocably authorized and directed at all times to reserve a number of
authorized shares and other securities as shall be requisite for such purpose.
The Company will keep a copy of this Warrant on file with every transfer agent
for the Common Stock and other securities of the Company issuable upon the
exercise of this Warrant. The Company will supply every transfer agent with
duly executed stock and other certificates, as appropriate, for such purpose
and will provide or otherwise make available any cash which may be payable as
provided in Section 11 hereof.
SECTION 8. RESTRICTIONS ON TRANSFER.
The Warrantholder agrees that prior to making any disposition of this
Warrant or the Warrant Shares, the Warrantholder shall give written notice to
the Company describing briefly the manner in which any proposed disposition is
to be made; and no disposition shall be made if the Company has notified the
Warrantholder that, in the opinion of counsel reasonably satisfactory to the
Warrantholder, a registration statement or other notification or post-effective
amendment thereto (hereinafter collectively a "Registration Statement") under
the Act is required with respect to the disposition and no Registration
Statement has been filed by the Company with, and declared effective, if
necessary, by, the Commission.
SECTION 9. PAYMENT OF TAXES
The Company will pay all documentary stamp taxes, if any, attributable to
the initial issuance of this Warrant or the shares of Common Stock comprising
the Warrant Shares; provided, however, the Company shall not be required to pay
any tax that may be payable in respect of any transfer of the Warrants or
Warrant Shares.
SECTION 10. TRANSFER TO COMPLY WITH THE SECURITIES ACT OF 1933
This Warrant, the Warrant Shares, and any other securities issued or
issuable upon exercise of this Warrant, may not be offered, sold or
transferred, in whole or in part, except in compliance with the Act, and except
in compliance with all applicable state securities laws. The Company may cause
substantially the following legends, or their equivalents, to be set forth on
each certificate representing the Warrant Shares and any other security issued
or issuable upon exercise of this Warrant, not theretofore distributed to the
public or sold to underwriters, as defined by the Act, for distribution to the
public:
(a) "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES
LAWS AND MAY NOT BE SOLD, EXCHANGED, HYPOTHECATED OR TRANSFERRED IN ANY
MANNER EXCEPT IN COMPLIANCE WITH SUCH LAWS AND THE WARRANT PURSUANT TO
WHICH THEY WERE ISSUED."
(b) Any legend required by applicable state securities laws.
Any certificate issued at any time in exchange or substitution for any
certificate bearing such legends (except a new certificate issued upon
completion of a public distribution pursuant to a registration statement under
the Securities Act of 1933, as amended (the "Act"), or the securities
represented thereby) shall also bear the above legends unless, in the opinion
of the Company's counsel, the securities represented thereby need no longer be
subject to such restrictions.
SECTION 11. FRACTIONAL SHARES
No fractional shares or scrip representing fractional shares shall be
issued upon the exercise of all or any part of this Warrant. With respect to
any fraction of a share of any security called for upon any exercise of this
Warrant, the Company shall pay to the Holder an amount in money equal to that
fraction multiplied by the Current Market Price of that share.
SECTION 12. NO RIGHTS AS STOCKHOLDER; NOTICES TO WARRANTHOLDER
Nothing contained in this Warrant shall be construed as conferring upon
the Warrantholder or its transferees any rights as a stockholder of the
Company, including the right to vote, receive dividends, consent or receive
notices as a stockholder in respect to any meeting of stockholders for the
election of directors of the Company or any other matter. The Company
covenants, however, that for so long as this Warrant is at least partially
unexercised, it will furnish any Holder of this Warrant with copies of all
reports and communications furnished to the shareholders of the Company. In
addition, if at any time prior to the expiration of the Warrants and prior to
their exercise, any one or more of the following events shall occur:
(a) any action which would require an adjustment pursuant to
Section 4.1 (except subsections 4.1(e) and 4.1(h) or 4.4; or
(b) a dissolution, liquidation, or winding up of the Company
(other than in connection with a consolidation, merger, or sale of its
property, assets, and business as an entirety or substantially as an
entirety) shall be proposed:
then the Company shall give notice in writing of the event to the
Warrantholder, as provided in Section 15 hereof, at least 20 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 any relevant dividend,
distribution, subscription rights or other rights or for the determination of
stockholders entitled to vote on such proposed dissolution, liquidation, or
winding up. The notice shall specify the record date or the date of closing
the transfer books, as the case may be. Failure to mail or receive notice or
any defect therein shall not affect the validity of any action taken with
respect thereto.
SECTION 13. CHARGES DUE UPON EXERCISE
The Company shall pay any and all issue or transfer taxes, including, but
not limited to, all federal or state taxes, that may be payable with respect to
the transfer of this Warrant or the issue or delivery of Warrant Shares upon
the exercise of this Warrant.
SECTION 14. WARRANT SHARES TO BE FULLY PAID
The Company covenants that all Warrant Shares that may be issued and
delivered to a Holder of this Warrant upon the exercise of this Warrant and
payment of the Exercise Price will be, upon such delivery, validly and duly
issued, fully paid and nonassessable.
SECTION 15. NOTICES
Any notice pursuant to this Warrant by the Company or by a Warrantholder
or a holder of Shares shall be in writing and shall be deemed to have been duly
given if delivered or mailed by certified mail, return receipt requested:
(i) If to a Warrantholder or a holder of Shares, addressed to the
address set forth above.
(ii) If to the Company addressed to it at 000 Xxxxx Xxxxxxx Xxxxxx,
Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000, Attention: President.
Each party may from time to time change the address to which notices to
it are to be delivered or mailed hereunder by notice in accordance herewith to
the other party.
SECTION 16. MERGER OR CONSOLIDATION OF THE COMPANY
The Company will not merge or consolidate with or into any other
corporation or sell all or substantially all of its property to another
corporation, unless in connection therewith, the Company complies with the
provisions of Section 4.4 hereof.
SECTION 17. APPLICABLE LAW
This Warrant shall be governed by and construed in accordance with the
internal laws (as opposed to conflicts of law provisions) of the State of
Illinois, and courts located in Illinois shall have exclusive jurisdiction over
all disputes arising hereunder.
SECTION 18. ACCEPTANCE OF TERMS; SUCCESSORS.
By its acceptance of this Warrant, the Holder accepts and agrees to
comply with all of the terms and provisions hereof. All the covenants and
provisions of this Warrant by or for the benefit of the Company or the Holder
shall bind and inure to the benefit of their respective successors and assigns
hereunder.
SECTION 19. MISCELLANEOUS PROVISIONS
(a) Subject to the terms and conditions contained herein, this Warrant
shall be binding on the Company and its successors and shall inure to the
benefit of the original Holder, its successors and assigns and all holders of
Warrant Shares and the exercise of this Warrant in full shall not terminate the
provisions of this Warrant as it relates to holders of Warrant Shares.
(b) If the Company fails to perform any of its obligations hereunder,
it shall be liable to the Holder for all damages, costs and expenses resulting
from the failure, including, but not limited to, all reasonable attorney's fees
and disbursements.
(c) This Warrant cannot be changed or terminated or any performance or
condition waived in whole or in part except by an agreement in writing signed
by the party against whom enforcement of the change, termination or waiver is
sought; provided, however, that any provisions hereof may be amended, waived,
discharged or terminated upon the written consent of the Company and the
Company.
(d) If any provision of this Warrant shall be held to be invalid,
illegal or unenforceable, the provision shall be severed, enforced to the
extent possible, or modified in such a way as to make it enforceable, and the
invalidity, illegality or unenforceability shall not affect the remainder of
this Warrant.
(e) The Company agrees to execute any further agreements, conveyances,
certificates and other documents as may be reasonably requested by the Holder
to effectuate the intent and provisions of this Warrant.
(f) Paragraph headings used in this Warrant are for convenience only
and shall not be taken or construed to define or limit any of the terms or
provisions of this Warrant. Unless otherwise provided, or unless the context
shall otherwise require, the use of the singular shall include the plural and
the use of any gender shall include all genders.
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed and issued as of the Issue Date first set forth above.
MOLECULAR DIAGNOSTICS, INC.
By: _______________________________
Xxxxx X. Xxxxxxxx
Chief Executive Officer
PURCHASE FORM
Dated _________, ____
The undersigned hereby irrevocably elects to exercise this Warrant to the
extent of purchasing ______________ shares of the Common Stock of Molecular
Diagnostics, Inc. and tenders payment of the exercise price thereof.
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name _______________________________________________________
(Please type or print in block letters)
Address______________________________________________________
................................................................................
ASSIGNMENT FORM
FOR VALUE RECEIVED, _________________, hereby sells, assigns and
transfers unto
Name _______________________________________________________
(Please type or print in block letters)
Address______________________________________________________
the right to purchase shares Common Stock of Molecular Diagnostics,
Inc. (the "Company") represented by this Warrant and does hereby irrevocably
constitute and appoint the Company as its attorney-in-fact, to transfer the
same on the books of the Company with full power of substitution in the
premises.
Signature Dated
NOTICE: THE SIGNATURE ON THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS IT
APPEARS UPON THE FACE OF THIS WARRANT IN EVERY PARTICULAR, WITHOUT ALTERATION
OR ENLARGEMENT OR ANY CHANGE WHATEVER.
