EXHIBIT 10.99
ALOE AND HERBS INTERNATIONAL INC.
STOCK PURCHASE WARRANT
granted to
XXXXXXXXXX LABORATORIES, INC.
November 23, 1998
TABLE OF CONTENTS
Page
----
1. Manner of Exercise; Issuance of Certificates; Payment for Shares . 1
2. Period of Exercise . . . . . . . . . . . . . . . . . . . . . . . . 2
3. Certain Representations and Agreements of the Company . . . . . . 2
(a) Corporate Organization . . . . . . . . . . . . . . . . . . . 2
(b) Authorized and Outstanding Capital Stock . . . . . . . . . . 2
(c) Shares to be Fully Paid . . . . . . . . . . . . . . . . . . . 3
(d) Reservation of Shares . . . . . . . . . . . . . . . . . . . . 3
(e) Continued Existence; Certain Actions Prohibited . . . . . . 3
(f) Corporate Authority . . . . . . . . . . . . . . . . . . . . . 3
(g) Noncontravention . . . . . . . . . . . . . . . . . . . . . . 3
(h) Governmental Approvals . . . . . . . . . . . . . . . . . . . 4
(I) Registration . . . . . . . . . . . . . . . . . . . . . . . . 4
(j) Financial Statements . . . . . . . . . . . . . . . . . . . . 4
(k) Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(l) Inspection . . . . . . . . . . . . . . . . . . . . . . . . . 5
(m) Records . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(n) Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4. Upward Adjustment in Exercise Price . . . . . . . . . . . . . . . 5
5. Antidilution Provisions . . . . . . . . . . . . . . . . . . . . . 6
(a) Stock Dividends; Subdivisions and Combinations . . . . . . . 6
(b) Extraordinary Dividends and Distributions . . . . . . . . . . 6
(c) Issuance of Capital Stock . . . . . . . . . . . . . . . . . . 7
(d) Computation of Market Price . . . . . . . . . . . . . . . . . 7
(e) Record Date Adjustments . . . . . . . . . . . . . . . . . . . 7
(f) Minimum Adjustment of Exercise Price . . . . . . . . . . . . 8
(g) Reorganization, Reclassification, Consolidation, Merger,
or Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(h) No Fractional Shares . . . . . . . . . . . . . . . . . . . . 9
(I) Notice of Adjustment . . . . . . . . . . . . . . . . . . . . 9
(j) Other Notices . . . . . . . . . . . . . . . . . . . . . . . . 9
(k) Certain Events . . . . . . . . . . . . . . . . . . . . . . 10
6. Registration Rights . . . . . . . . . . . . . . . . . . . . . . 10
(a) Right to Participate in Registrations . . . . . . . . . . . 10
(b) Registration Procedures . . . . . . . . . . . . . . . . . . 11
(c) Required Information . . . . . . . . . . . . . . . . . . . 12
(d) Expenses of Registration . . . . . . . . . . . . . . . . . 12
(e) Indemnification . . . . . . . . . . . . . . . . . . . . . . 12
7. Issue Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
8. Availability of Information . . . . . . . . . . . . . . . . . . 12
9. No Rights or Liabilities as a Shareholder . . . . . . . . . . . 13
10. Transfer, Exchange, and Replacement of Warrant . . . . . . . . . 13
(a) Transfer of Warrant . . . . . . . . . . . . . . . . . . . . 13
(b) Warrant Exchangeable for Different Denominations . . . . . 13
(c) Replacement of Warrant . . . . . . . . . . . . . . . . . . 13
(d) Cancellation; Payment of Expenses . . . . . . . . . . . . . 13
(e) Register . . . . . . . . . . . . . . . . . . . . . . . . . 13
(f) Exercise or Transfer Without Registration . . . . . . . . . 14
11. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
12. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . 14
13. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . 15
(a) Amendments . . . . . . . . . . . . . . . . . . . . . . . . 15
(b) Descriptive Headings . . . . . . . . . . . . . . . . . . . 15
(c) Successors and Assigns . . . . . . . . . . . . . . . . . . 15
(d) Remedies . . . . . . . . . . . . . . . . . . . . . . . . . 15
(e) Survival . . . . . . . . . . . . . . . . . . . . . . . . . 15
(f) Closing of Books . . . . . . . . . . . . . . . . . . . . . 15
(g) Amendments to Terms of Warrant Shares . . . . . . . . . . . 15
THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT
HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933
OR UNDER ANY SECURITIES OR BLUE SKY LAWS OF ANY STATE OF THE UNITED
STATES. NEITHER THIS WARRANT NOR ANY OF SUCH SHARES MAY BE SOLD,
ASSIGNED, TRANSFERRED, OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
REGISTRATION UNDER SAID ACT AND UNDER APPLICABLE STATE SECURITIES OR BLUE
SKY LAWS OR EXEMPTIONS FROM SUCH REGISTRATION. THIS WARRANT MAY NOT BE
SOLD, ASSIGNED, TRANSFERRED, OR OTHERWISE DISPOSED OF EXCEPT UPON THE
CONDITIONS SPECIFIED IN THIS WARRANT, AND NO SALE, ASSIGNMENT, TRANSFER,
OR OTHER DISPOSITION OF THIS WARRANT SHALL BE VALID OR EFFECTIVE UNLESS
AND UNTIL SUCH CONDITIONS SHALL HAVE BEEN COMPLIED WITH.
No. W-001 Right to Purchase 300,000 Shares
STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value received, XXXXXXXXXX LABORATORIES,
INC., a Texas corporation, is entitled to purchase from ALOE AND HERBS
INTERNATIONAL INC., a corporation organized under the laws of the
Republic of Panama (the "Company"), at any time or from time to time
during the period specified in Paragraph 2 hereof, THREE HUNDRED THOUSAND
(300,000) fully paid and nonassessable shares of the Company's Capital
Stock, par value U.S. $0.05 per share (the "Capital Stock"), at an
exercise price per share of Sixty-Five Cents (U.S. $0.65) (such exercise
price, as it may be adjusted hereunder, is herein called the "Exercise
Price"). The term "Warrant Shares", as used herein, refers to the shares
of Capital Stock purchasable hereunder. The Exercise Price will be
adjusted upward on June 2, 2000 as provided in Paragraph 4 hereof, and
the Warrant Shares and the Exercise Price are subject to further
adjustment as provided in Paragraph 5 hereof. This Stock Purchase
Warrant was originally issued in connection with a loan by the initial
holder hereof to the Company in the amount of U.S. $300,000. The term
"Warrants", as used herein, shall mean this Stock Purchase Warrant and
all other Stock Purchase Warrants issued in connection with any transfer,
exchange, or replacement thereof.
This Warrant is subject to the following terms, provisions, and
conditions:
1. Manner of Exercise; Issuance of Certificates; Payment for
Shares. Subject to the provisions hereof, this Warrant may be exercised
by the holder hereof in whole or in part (but not as to a fractional
Warrant Share). The holder hereof may exercise this Warrant by the
surrender of this Warrant, together with a completed Exercise Agreement
in the form attached hereto, to the Company during normal business hours
on any business day at any of the Company's principal offices in the
Republic of Panama, the Republic of Costa Rica, or St. Marys, West
Virginia, U.S.A. (or such other office or agency of the Company as may be
mutually agreed upon by the Company and the holder hereof), and upon
payment to the Company in cash, by wire transfer or by bank check, in
United States dollars, of the Exercise Price for the Warrant Shares
specified in said Exercise Agreement. The Warrant Shares so purchased
shall be deemed to be issued to the holder hereof or its designee as the
record owner of such shares as of the close of business on the date on
which this Warrant shall have been surrendered, the completed Exercise
Agreement delivered, and payment made for such shares as aforesaid.
Certificates for the Warrant Shares so purchased, representing the
aggregate number of shares specified in said Exercise Agreement, shall be
delivered to the holder hereof within a reasonable time, not exceeding
five business days, after this Warrant shall have been so exercised. The
certificates so delivered shall be in such denominations as may be
requested by the holder hereof and shall be registered in the name of
said holder or such other name as shall be designated by said holder. If
this Warrant shall have been exercised only in part, then, unless this
Warrant has expired, the Company shall, at its expense, at the time of
delivery of said certificates, deliver to said holder a new Warrant
representing the number of shares with respect to which this Warrant
shall not then have been exercised. The Company shall pay all taxes and
other expenses and charges payable in connection with the preparation,
execution, and delivery of stock certificates (and any new Warrants)
pursuant to this Paragraph 1 except that, in case such stock certificates
shall be registered in a name or names other than the holder of this
Warrant, funds sufficient to pay all stock transfer taxes which shall be
payable in connection with the execution and delivery of such stock
certificates shall be paid by the holder hereof to the Company at the
time of the delivery of such stock certificates by the Company as
mentioned above.
2. Period of Exercise. This Warrant is exercisable at any time or
from time to time after November 23, 1998, and before 5:00 p.m., local
time in Dallas, Texas, on November 24, 2003.
3. Certain Representations and Agreements of the Company. The
Company hereby represents and warrants to, and covenants and agrees with,
each holder of this Warrant as follows:
(a) Corporate Organization. The Company is a corporation duly
organized, validly existing, and in good standing under the laws of
the Republic of Panama and has all requisite power and authority to
own, lease, and operate its properties and to carry on its business
as now being conducted. No actions or proceedings to dissolve the
Company are pending or threatened. The Company has delivered to the
initial holder of this Warrant accurate and complete copies of the
Company's articles of incorporation and other charter documents as
currently in effect and the stock records of the Company. Such
records accurately reflect the stock ownership of the Company.
(b) Authorized and Outstanding Capital Stock. The authorized
capital stock of the Company consists of 15,000,000 shares of
Capital Stock, par value U.S. $0.05 per share, of which 7,765,000
shares are issued and outstanding as of the date of this Warrant.
All outstanding shares of Capital Stock have been validly issued and
are fully paid and nonassessable. Except as set forth above and as
provided in this Warrant, as of the date of this Warrant, there are
outstanding (I) no shares of capital stock or other voting
securities of the Company, (ii) no securities of the Company
convertible into or exchangeable for shares of capital stock or
other voting securities of the Company, (iii) no options or other
rights to acquire from the Company, and no obligation of the Company
to issue or sell, any shares of capital stock or other voting
securities of the Company or any securities of the Company
convertible into or exchangeable for such capital stock or voting
securities, and (iv) no equity equivalents, interests in the
ownership or earnings or other similar rights of or with respect to
the Company.
(c) Shares to be Fully Paid. All Warrant Shares will, upon
issuance, be validly issued, fully paid, and nonassessable and free
from all taxes, liens, and charges with respect to the issue
thereof.
(d) Reservation of Shares. During the period within which
this Warrant may be exercised (the "Exercise Period"), the Company
will at all times have authorized, and reserved for the purpose of
issue upon exercise of this Warrant, a sufficient number of shares
of Capital Stock to provide for the exercise of this Warrant.
(e) Continued Existence; Certain Actions Prohibited. During
the Exercise Period, the Company and its subsidiaries will maintain
in full force and effect their respective corporate existence and
all rights and franchises that are necessary to carry on their
respective businesses as then conducted. (I) The Company will not
increase the par value of the shares of Capital Stock receivable
upon the exercise of this Warrant above the Exercise Price then in
effect, (ii) before taking any action which would cause an
adjustment reducing the Exercise Price below the then par value of
the shares of Capital Stock so receivable, the Company will take all
such corporate action as may be necessary or appropriate in order
that the Company may validly and legally issue fully paid and
nonassessable shares of Capital Stock at such adjusted Exercise
Price upon the exercise of this Warrant and (iii) the Company will
not take any action which results in any adjustment of the Exercise
Price if the total number of shares of Capital Stock issuable after
the action upon the exercise of this Warrant would exceed the total
number of shares of Capital Stock then authorized by the Company's
articles of incorporation or other charter documents and available
for the purpose of issue upon such exercise.
(f) Corporate Authority. The Company has full power and
authority to execute, deliver, and perform this Warrant. The
execution, delivery, and performance by the Company of this Warrant
have been duly authorized by all necessary corporate action of the
Company. This Warrant has been duly executed and delivered by the
Company and constitutes a valid and legally binding obligation of
the Company, enforceable against the Company in accordance with its
terms.
(g) Noncontravention. The execution, delivery and performance
by the Company of this Warrant do not and will not (I) conflict with
or result in a violation of any provision of the Company's articles
of incorporation or other charter documents, (ii) conflict with or
result in a violation of any provision of, or constitute (with or
without the giving of notice or the passage of time or both) a
default under, or give rise (with or without the giving of notice
or the passage of time or both) to a right of termination,
cancellation, or acceleration under, or acquire any consent,
approval, authorization or waiver of, or notice to, any party to,
any bond, debenture, note, mortgage, indenture, lease, contract,
agreement, or other instrument or obligation to which the Company or
any of its subsidiaries is a party or by which the Company or any of
its subsidiaries or any of their respective properties may be bound
or any permit held by the Company or any of its subsidiaries, (iii)
result in the creation or imposition of any encumbrance upon the
properties of the Company or any of its subsidiaries or (iv) violate
any applicable law binding upon the Company or any of its
subsidiaries.
(h) Governmental Approvals. No consent, approval, order, or
authorization of, or declaration, filing, or registration with, any
governmental authority is required to be obtained or made by the
Company or any of its subsidiaries in connection with the execution,
delivery, or performance by the Company of this Warrant.
(i) Registration. If the issuance of any Warrant Shares
required to be reserved for purposes of exercise of this Warrant
requires registration with or approval of any governmental authority
under any federal, state, local or other law, rule or regulation of
the United States, the Republic of Panama or other country or any
state or political subdivision of any such country (other than any
registration under the United States Securities Act of 1933, as
amended (the "Securities Act"), or under applicable securities or
blue sky laws of any state of the United States, which registration
is subject to Paragraph 6 hereof) or listing on any securities
exchange or stock market, before such shares may be issued upon
exercise of this Warrant, the Company will, at its expense, use its
best efforts to cause such shares to be duly registered or approved,
or listed on the relevant securities exchange or stock market, as
the case may be, at such time, so that such shares may be issued in
accordance with the terms hereof.
(j) Financial Statements. During the Exercise Period, the
Company will keep true and correct books of account and prepare
financial statements in accordance with generally accepted
accounting principles consistently applied and shall cause to be
made available to the holder of this Warrant:
(i) as soon as practicable and in any event within
30 days after the end of each quarterly period (other
than the last quarterly period) in each fiscal year,
consolidated statements of operations, stockholders
equity and cash flows of the Company and its subsidiaries
for the period from the beginning of the current fiscal
year to the end of such quarterly period, and a
consolidated balance sheet of the Company and its
subsidiaries as at the end of such quarterly period,
setting forth in each case in comparative form figures for
the corresponding period in the preceding fiscal year, all
in reasonable detail and certified by an authorized
financial officer of the Company, subject to changes
resulting from year-end adjustments; and
(ii) as soon as practicable and in any event within
60 days after the end of each fiscal year, consolidating
and consolidated statements of operations, stockholders
equity and cash flows of the Company and its subsidiaries
for such year, and consolidating and consolidated balance
sheets of the Company and its subsidiaries as at the end
of such year, setting forth in each case in comparative
form corresponding consolidated figures from the preceding
annual audit, all in reasonable detail and reasonably
satisfactory in scope to the holder of this Warrant, and,
as to the consolidated statements, certified to the
Company by independent public accountants of recognized
United States national standing selected by the Company
and reasonably satisfactory to such holder.
(k) Laws. During the Exercise Period, the Company and its
subsidiaries will comply with all governmental statutes, regulations
and orders, domestic and foreign, applicable to the Company and its
subsidiaries, the noncompliance with which would have a material
adverse effect on the business, condition (financial or otherwise),
or operations of the Company and its subsidiaries taken as a whole
or the ability of the Company to perform its obligations under this
Warrant.
(l) Inspection. Upon reasonable notice to the Company, at any
reasonable time and from time to time during the Exercise Period,
the Company will permit any representative designated by the holder
of this Warrant to (I) visit and inspect any of the properties of
the Company or its subsidiaries; (ii) examine the corporate and
financial records of the Company and its subsidiaries and make
copies thereof or extracts therefrom; and (iii) discuss the affairs,
finances, and accounts of the Company and its subsidiaries with the
directors, officers, key employees, and independent accountants of
the Company and its subsidiaries (and the Company hereby authorizes
all independent accountants employed by the Company and its
subsidiaries to consult with and answer inquiries by such holder
with respect to the financial condition and matters of the Company
and its subsidiaries and with respect to any matters which have come
to their attention concerning the Company and its subsidiaries
during the course of their dealings with the Company and its
subsidiaries).
(m) Records. During the Exercise Period, the Company and its
subsidiaries shall keep books and records of account in which full,
true, and correct entries will be made of all dealings and
transactions in relation to their respective businesses and affairs
in accordance with generally accepted accounting principles applied
on a consistent basis.
(n) Taxes. During the Exercise Period, the Company and its
subsidiaries shall file all required tax returns (or requests for
extensions of time to file such returns), reports, and requests for
refunds on a timely basis and shall pay or discharge on a timely
basis all taxes imposed on them or on any of their respective
assets, income, or franchises.
4. Upward Adjustment in Exercise Price. Effective as of 12:01
a.m., local time in Dallas, Texas, on June 2, 2000 (the "Adjustment
Effective Time"), the Exercise Price shall be adjusted upward to an
amount (which shall be rounded downward to the nearest whole cent) equal
to the mathematical product of (x) the Exercise Price in effect
immediately prior to the Adjustment Effective Time multiplied by (y)
1.1538462. Such adjustment shall be effective for any exercise of this
Warrant that occurs at or after the Adjustment Effective Time, and shall
not apply to exercises prior to that time. Such adjustment shall not
affect the number of Warrant Shares purchasable hereunder.
5. Antidilution Provisions. The Exercise Price (including the
Exercise Price as adjusted pursuant to Paragraph 4 hereof) shall be
subject to adjustment from time to time as provided in this Paragraph 5.
Upon each adjustment of the Exercise Price pursuant to this Paragraph 5,
the holder of this Warrant shall thereafter be entitled to purchase, at
the Exercise Price resulting from such adjustment, the largest number of
Warrant Shares obtained by multiplying the Exercise Price in effect
immediately prior to such adjustment by the number of Warrant Shares
purchasable hereunder immediately prior to such adjustment and dividing
the product thereof by the Exercise Price resulting from such adjustment.
For purposes of this Paragraph 5, the term "Capital Stock", as used
herein, includes the Capital Stock and any additional class of stock of
the Company having no preference as to dividends or distributions on
liquidation which may be authorized in the future by the Company's
articles of incorporation or other charter documents, provided that the
shares purchasable pursuant to this Warrant shall include only shares of
the class designated as capital stock of the Company as of the date of
this Warrant, or shares resulting from any subdivision or combination
of such capital stock, or in the case of any reorganization,
reclassification, consolidation, merger, or sale of the character
referred to in Paragraph 5(g) hereof, the stock or other securities or
property provided for in said Paragraph.
(a) Stock Dividends; Subdivisions and Combinations. In case at any
time the Company shall (I) pay a dividend or make a distribution on
Capital Stock in Capital Stock, (ii) subdivide the outstanding shares of
Capital Stock into a greater number of shares, or (iii) combine the
outstanding shares of Capital Stock into a smaller number of shares, the
Exercise Price in effect immediately prior thereto shall be adjusted
proportionately so that the adjusted Exercise Price shall bear the same
relation to the Exercise Price in effect immediately prior to such event
as the total number of shares of Capital Stock outstanding immediately
prior to such event shall bear to the total number of shares of Capital
Stock outstanding immediately after such event. An adjustment made
pursuant to this Paragraph 5(a) shall become effective immediately after
the record date in the case of a dividend or distribution and shall
become effective immediately after the effective date in the case of a
subdivision or combination.
(b) Extraordinary Dividends and Distributions. In case at any time
the Company shall pay a dividend or make a distribution to all holders of
Capital Stock, as such, of shares of its stock (other than Capital
Stock), evidences of its indebtedness, assets (excluding dividends or
distributions payable in cash out of earnings or earned surplus), or
rights, options, or warrants to subscribe for or purchase such shares,
evidences of indebtedness, or assets, then in each such case the Exercise
Price shall be adjusted so that the same shall equal the price determined
by multiplying the Exercise Price in effect immediately prior to the
record date mentioned below by a fraction, the numerator of which shall
be the total number of shares of Capital Stock outstanding on such record
date multiplied by the market price per share of Capital Stock
(determined as provided in Paragraph 5(d) hereof) on such record date,
less the fair market value (as determined in good faith by the Board of
Directors of the Company) as of such record date of such shares of stock,
evidences of indebtedness, assets, or rights, options, or warrants so
paid or distributed, and the denominator of which shall be the total
number of shares of Capital Stock outstanding on such record date
multiplied by the market price per share of Capital Stock (determined as
provided in Paragraph 5(d) hereof) on such record date. Such adjustment
shall be made whenever such dividend is paid or such distribution is made
and shall become effective immediately after the record date for the
determination of shareholders entitled to receive such dividend or
distribution.
(c) Issuance of Capital Stock. If and whenever the Company shall
issue or sell any shares of Capital Stock (the "Dilutive Capital Stock")
for a consideration per share less than the Exercise Price in effect
immediately prior to the date of issuance or sale of the Dilutive Capital
Stock, the Exercise Price shall be adjusted to equal the consideration
per share received by the Company for the Dilutive Capital Stock.
(d) Computation of Market Price. For the purpose of any
computation under Paragraph 5(b) hereof, the market price of the security
in question on any day shall be deemed to be the average of the last
reported sale prices for the security for the 20 consecutive Trading Days
(as defined below) commencing 20 Trading Days before the day in question.
The last reported sale price for each day shall be (I) the last reported
sale price of the security on the Nasdaq National Market, the Nasdaq
Small Cap Issuer Market or any similar system of automated dissemination
of quotations of securities prices then in common use, if so quoted, or
(ii) if not quoted as described in clause (I) above, the mean between the
high bid and low asked quotations for the security as reported by the
National Quotation Bureau, Inc. if at least two securities dealers have
inserted both bid and asked quotations for such security on at least 10
of such 20 consecutive Trading Days, or (iii) if the security is listed
or admitted for trading on any national securities exchange, the last
sale price, or the closing bid price if no sale occurred, of such class
of security on the principal securities exchange on which such class of
security is listed or admitted to trading. If the security is quoted on
a national securities or central market system, in lieu of a market or
quotation system described above, the last reported sale price shall be
determined in the manner set forth in clause (ii) of the preceding
sentence if bid and asked quotations are reported but actual transactions
are not, and in the manner set forth in clause (iii) of the preceding
sentence if actual transactions are reported. If none of the conditions
set forth above is met, the last reported sale price of the security on
any day or the average of such last reported sale prices for any period
shall be the fair market value of such security as determined, at the
sole expense of the Company, by a member firm of the New York Stock
Exchange mutually selected by the Company and the holder of this Warrant.
If the fair market value is determined pursuant to the immediately
preceding sentence, such value shall continue to be used by the Company
and the holder for all purposes of this Paragraph 5(d) for the
immediately succeeding 90-day period; provided, however, the use of such
value during such 90-day period shall immediately cease if either (I)
the market price of such security can be determined in the manner
contemplated by the first three sentences of this Paragraph 5(d) or (ii)
the Company is unable to provide the holder with an officer's certificate
to the effect that there has been no change within the elapsed portion of
such 90-day period in the condition of the Company, financial or
otherwise, that would materially affect the market value of the
applicable security. The term "Trading Days", as used herein, means (I)
if the security is quoted on the Nasdaq National Market or any similar
system of automated dissemination of quotations of securities prices,
days on which trades may be made on such system, or (ii) if the security
is listed or admitted for trading on any national securities exchange,
days on which such national securities exchange is open for business.
(e) Record Date Adjustments. In any case in which this Paragraph 5
requires that a downward adjustment of the Exercise Price shall become
effective immediately after a record date for an event, the Company may
defer until the occurrence of such event (I) issuing to the holder of
this Warrant exercised after such record date and before the occurrence
of such event the additional Warrant Shares issuable upon such exercise
by reason of the adjustment required by such event over and above the
Warrant Shares issuable upon such exercise before giving effect to such
adjustment and (ii) paying to such holder any amount in cash in lieu of a
fractional share pursuant to Paragraph 5(h) hereof.
(f) Minimum Adjustment of Exercise Price. No adjustment of the
Exercise Price shall be made in an amount less than 0.25% of the Exercise
Price in effect at the time such adjustment is otherwise required to be
made, but any such lesser adjustment shall be carried forward and shall
be made at the time and together with the next subsequent adjustment
which, together with any adjustments so carried forward, shall amount to
not less than 0.25% of such Exercise Price; provided that, upon the
exercise of this Warrant, all adjustments carried forward and not
theretofore made up to and including the date of such exercise shall,
with respect to this Warrant then exercised, be made to the nearest .001
of a cent.
(g) Reorganization, Reclassification, Consolidation, Merger,
or Sale. If any capital reorganization of the Company, or any
reclassification of the Capital Stock, or any consolidation or merger of
the Company with or into another corporation or entity, or any sale of
all or substantially all the assets of the Company, shall be effected in
such a way that the holders of Capital Stock (or any other securities of
the Company then issuable upon the exercise of this Warrant) shall be
entitled to receive stock or other securities or property (including
cash) with respect to or in exchange for Capital Stock (or such
other securities), then, as a condition of such reorganization,
reclassification, consolidation, merger, or sale, lawful and adequate
provision shall be made whereby the holder of this Warrant shall
thereafter have the right to purchase and receive upon the basis and upon
the terms and conditions specified in this Warrant, and in lieu of
the shares of Capital Stock (or such other securities) immediately
theretofore purchasable and receivable upon the exercise hereof, such
stock or other securities or property (including cash) as may be issuable
or payable with respect to or in exchange for a number of outstanding
shares of Capital Stock (or such other securities) equal to the number
of shares of Capital Stock (or such other securities) immediately
theretofore purchasable and receivable upon the exercise of this Warrant,
had such reorganization, reclassification, consolidation, merger, or sale
not taken place. In any such case appropriate provision shall be made
with respect to the rights and interests of the holder of this Warrant to
the end that the provisions hereof (including, without limitation, the
provisions for adjustments of the Exercise Price and of the number of
Warrant Shares purchasable upon exercise hereof) shall thereafter be
applicable, as nearly as reasonably may be, in relation to the stock or
other securities or property thereafter deliverable upon the exercise
hereof (including an immediate adjustment of the Exercise Price if by
reason of or in connection with such consolidation, merger, or sale any
securities are issued or event occurs which would, under the terms
hereof, require an adjustment of the Exercise Price). In the event of a
consolidation or merger of the Company with or into another corporation
or entity as a result of which a greater or lesser number of shares of
common stock of the surviving corporation or entity are issuable to
holders of Capital Stock in respect of the number of shares of Capital
Stock outstanding immediately prior to such consolidation or merger, then
the Exercise Price in effect immediately prior to such consolidation or
merger shall be adjusted in the same manner as though there were a
subdivision or combination of the outstanding shares of Capital Stock.
The Company shall not effect any such consolidation, merger, or sale
unless prior to or simultaneously with the consummation thereof the
successor corporation or entity (if other than the Company) resulting
from such consolidation or merger or the corporation or entity purchasing
such assets and any other corporation or entity the shares of stock or
other securities or property of which are receivable thereupon by the
holder of this Warrant shall expressly assume, by written instrument
executed and delivered (and satisfactory in form and substance) to the
holder of this Warrant, (I) the obligation to deliver to such holder such
stock or other securities or property as, in accordance with the
foregoing provisions, such holder may be entitled to purchase and (ii)
all other obligations of the Company hereunder.
(h) No Fractional Shares. No fractional shares of Capital Stock
are to be issued upon the exercise of this Warrant, but the Company shall
pay a cash adjustment in United States dollars in respect of any
fractional share which would otherwise be issuable in an amount equal to
the same fraction of the current market value of a share of Capital
Stock, which current market value shall be the last reported sale price
(determined as provided in Paragraph 5(d) hereof) on the Trading Day
immediately preceding the date of the exercise.
(i) Notice of Adjustment. Upon the occurrence of any event which
requires any adjustment of the Exercise Price, then and in each such case
the Company shall give notice thereof to the holder of this Warrant,
which notice shall state the Exercise Price resulting from such
adjustment and the increase or decrease, if any, in the number of Warrant
Shares purchasable at such price upon exercise, setting forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based.
(j) Other Notices. In case at any time:
(i) the Company shall declare any dividend
upon the Capital Stock payable in shares of stock
of any class or make any other distribution
(including dividends or distributions payable in
cash) to the holders of the Capital Stock;
(ii) the Company shall offer for subscription
pro rata to the holders of the Capital Stock any
additional shares of stock of any class or other
rights;
(iii) t h ere shall be any capital
reorganization of the Company, or reclassification
of the Capital Stock, or consolidation or merger
of the Company with or into, or share exchange by
the holders of the Capital Stock with, or sale of
all or substantially all the assets of the Company
to, another corporation or entity or any other
person; or
(iv) there shall be a voluntary or
involuntary dissolution, liquidation, or
winding-up of the Company;
then, in each such case, the Company shall give to the holder of
this Warrant (a) notice of the date on which the books of the
Company shall close or a record shall be taken for determining
the holders of Capital Stock entitled to receive any such
dividend, distribution, or subscription rights or for determining
the holders of Capital Stock entitled to vote in respect of any
such reorganization, reclassification, consolidation, merger,
share exchange, sale, dissolution, liquidation, or winding-up and
(b) in the case of any such reorganization, reclassification,
consolidation, merger, share exchange, sale, dissolution,
liquidation, or winding-up, notice of the date (or, if not then
known, a reasonable approximation thereof by the Company) when
the same shall take place. Such notice shall also specify the
date on which the holders of Capital Stock shall be entitled to
receive such dividend, distribution, or subscription rights or to
exchange their Capital Stock for stock or other securities or
property deliverable upon such reorganization, reclassification,
consolidation, merger, share exchange, sale, dissolution,
liquidation, or winding-up, as the case may be. Such notice
shall be given at least 20 days prior to the record date or the
date on which the Company's books are closed in respect thereto.
(k) Certain Events. If any event occurs as to which, in the
good faith judgment of the Board of Directors of the Company, the
other provisions of this Paragraph 5 are not strictly applicable
or if strictly applicable would not fairly protect the exercise
rights of the holder of this Warrant in accordance with the
essential intent and principles of such provisions, then the
Board of Directors of the Company and the holder of this Warrant
shall, at the Company's expense, appoint a mutually agreed firm
of independent public accountants of recognized United States
national standing which shall give their opinion upon the
adjustment, if any, on a basis consistent with such essential
intent and principles, necessary to preserve, without dilution,
the rights of the holder of this Warrant. Upon receipt of such
opinion, the Board of Directors of the Company shall forthwith
make the adjustments described therein; provided, that no such
adjustment shall have the effect of increasing the Exercise Price
as otherwise determined pursuant to this Paragraph 5.
6. Registration Rights.
(a) Right to Participate in Registrations. If at any time
the Company proposes to register shares of its Capital Stock (as
defined in Paragraph 5 hereof) under the Securities Act on Form
X-0, X-0, or S-3 (or any form which replaces or is substantially
similar to such form), the Company shall each such time give
notice of such proposed registration to the holder of this
Warrant, if this Warrant has not yet expired, and to all holders
of Warrant Shares. Subject to the terms and provisions of this
Paragraph 6(a), upon the request of any such holder made within
20 days after the receipt of such notice by such holder, the
Company shall cause all Warrant Shares that have been acquired by
such holder pursuant to the exercise of this Warrant, all Warrant
Shares that will be acquired by such holder pursuant to the
exercise of this Warrant not later than the day prior to the
effectiveness of the registration statement under the Securities
Act, and any other shares of Capital Stock held by such holder,
which shares such holder shall have requested to be included in
the proposed registration (the "Registrable Shares"), to be
included as "piggy-back" shares in such registration (the
"Piggyback Registration") to the extent requisite to permit the
sale or other disposition by such holder of such Registrable
Shares. In the event the offering to be conducted pursuant to
the proposed registration is to be an underwritten public
offering, the registration rights provided in this Paragraph 6(a)
shall be subject to the approval of the managing underwriter or
underwriters of such offering, who shall determine the number of
Registrable Shares, if any, that may be included in such
registration without adversely affecting such offering; provided,
however, any such reduction by the underwriter or underwriters in
the number of shares of Capital Stock included in such offering
shall be applied and borne pro rata among all participants in
such offering other than the Company.
(b) Registration Procedures. If and whenever the Company is
required by the provisions of Paragraph 6(a) to cause Registrable
Shares to be included in the registration of securities of
the Company under the Securities Act, the Company will, as
expeditiously as possible:
(A) prepare and file with the United States Securities
and Exchange Commission (the "Commission") a registration
statement (the "Registration Statement") covering such
Registrable Shares and use its best efforts to cause the
Registration Statement to become effective and to remain
effective for so long as may reasonably be necessary to
complete the sale or other disposition of such Registrable
Shares, provided that the Company shall not in any event
be required to use its best efforts to maintain the
effectiveness of the Registration Statement for a period in
excess of 180 days;
(B) prepare and file with the Commission such
amendments and supplements to the Registration Statement and
the prospectus contained therein as may be necessary to keep
the Registration Statement effective, and comply with the
provisions of the Securities Act, with respect to the sale or
other disposition of such Registrable Shares;
(C) furnish to each holder of such Registrable Shares
such numbers of copies of the Registration Statement, the
prospectus contained therein (including each preliminary
prospectus), and each amendment and supplement to the
Registration Statement and such prospectus, in conformity
with the requirements of the Securities Act, and such other
documents, as such holder may reasonably request in order to
facilitate the sale or other disposition of such Registrable
Shares;
(D) use reasonable efforts to register or qualify such
Registrable Shares for sale under the securities or blue sky
laws of such jurisdictions as the holders thereof may
request, and do any and all other acts and things that may be
necessary under such securities or blue sky laws to enable
the holders of such Registrable Shares to consummate the sale
or other disposition of such Registrable Shares in such
jurisdictions, provided that the Company shall not in
any event be required to keep any such registration or
qualification in effect after the expiration of the period
during which the Company maintains the effectiveness of the
Registration Statement and shall not for any such purpose be
required to qualify to do business as a foreign corporation
in any jurisdiction wherein it is not so qualified or to
subject itself to taxation in any such jurisdiction; and
(E) before filing the Registration Statement, any
prospectus to be used in connection with the offering to be
conducted pursuant to such registration, or any amendments or
supplements to the Registration Statement or such prospectus
with the Commission, furnish counsel to the holders of such
Registrable Shares with copies of all such documents proposed
to be filed, which shall be subject to the reasonable
approval of such counsel.
(c) Required Information. The Company shall not be required
to include any Registrable Shares in a proposed registration of
its securities under the Securities Act unless and until (I) the
holder of such Registrable Shares furnishes to the Company such
information regarding such holder and such Registrable Shares and
the intended method of disposition of such Registrable Shares as
the Company shall reasonably request in order to satisfy the
requirements applicable to such registration, and (ii) in the
event of a Piggyback Registration that is part of an underwritten
public offering, such holder agrees to the terms of the
underwriting agreed to between the Company and the underwriter
or underwriters of such offering and executes all documents
reasonably required to effect such offering.
(d) Expenses of Registration. In the event of the inclusion
pursuant to Paragraph 6(a) of Registrable Shares in a Piggyback
Registration by the Company, each holder of such Registrable
Shares shall pay any brokerage and underwriting discounts and
commissions payable in respect of Registrable Shares sold on such
holder's behalf and all fees and expenses of any attorneys and
accountants employed by such holder, and the Company shall pay
any and all other fees and expenses of any nature whatsoever
incurred in connection with such Piggyback Registration.
(e) Indemnification. In connection with any registration of
Registrable Shares pursuant to the provisions of this Paragraph
6, the Company shall indemnify and hold harmless the holder of
such Registrable Shares to the extent that companies generally
indemnify and hold harmless underwriters in connection with
public offerings under the Securities Act, and such holder shall
indemnify and hold harmless the Company to the extent that
selling shareholders generally indemnify and hold harmless
issuers of securities in connection with public offerings under
the Securities Act with respect to the written information
provided by such holder for use by the Company in the preparation
of the Registration Statement.
7. Issue Tax. The issuance of certificates for Warrant
Shares upon the exercise of this Warrant shall be made without
charge to the holder of this Warrant or such shares for any
issuance tax in respect thereof, provided that the Company shall
not be required to pay any tax which may be payable in respect of
any transfer involved in the issuance and delivery of any
certificate in a name other than the holder of this Warrant.
8. Availability of Information. The Company will cooperate
with the holder of this Warrant and each holder of any Warrant
Shares in supplying such information as may be necessary for such
holder to complete and file any information reporting forms
presently or hereafter required by any governmental authority,
including the Commission, as a condition to (I) the sale or
transfer of this Warrant or any Warrant Shares or (ii) the
availability of an exemption from the Securities Act for the sale
or transfer of this Warrant or any Warrant Shares. The Company
will deliver to the holder of this Warrant, promptly upon their
becoming available, copies of all financial statements, reports,
notices, and proxy statements sent or made available generally by
the Company to its shareholders, and copies of all regular and
periodic reports, if any, and all registration statements and
prospectuses, if any, filed by the Company with any securities
exchange or governmental authority, including the Commission.
9. No Rights or Liabilities as a Shareholder. This Warrant
shall not entitle the holder hereof to any rights as a
shareholder of the Company. No provision of this Warrant, in the
absence of affirmative action by the holder hereof to purchase
Warrant Shares, and no mere enumeration herein of the rights or
privileges of the holder hereof, shall give rise to any liability
of such holder for the Exercise Price or as a shareholder of the
Company, whether such liability is asserted by the Company or by
creditors of the Company.
10. Transfer, Exchange, and Replacement of Warrant.
(a) Transfer of Warrant. The holder of this Warrant may not
assign, transfer, pledge, hypothecate or otherwise dispose of
this Warrant or any of its rights hereunder without the prior
written consent of the Company; provided, however, that (I) the
holder hereof may assign or otherwise transfer this Warrant, in
whole or in part, to any wholly owned subsidiary or other
corporate affiliate of the holder without the consent of the
Company and (ii) if the holder hereof merges or consolidates
with or into another entity, or transfers or sells all or
substantially all of its assets to a third party, the holder may
assign this Warrant to the party which is the successor to its
business and assets without the consent of the Company. Any
permitted transfer of this Warrant, in whole or in part, is
registrable at the offices or agency of the Company referred to
in Paragraph 10(e) hereof by the holder hereof in person or by
such holder's duly authorized attorney , upon surrender of this
Warrant properly endorsed. In the event that the holder of this
Warrant determines to assign, transfer, pledge, hypothecate or
otherwise dispose of this Warrant or any of its rights hereunder,
it shall give the Company ten (10) days advance written notice of
its intention so to do, identifying the other party or parties to
such proposed assignment, transfer, pledge, hypothecation or
other disposition and the essential terms thereof. No such
assignment, transfer, pledge, hypothecation or other disposition
will be effective as to the Company, nor shall the Company
be required to honor any such assignment, transfer, pledge,
hypothecation or other disposition in the absence of the advance
notice for which provision is made herein.
(b) Warrant Exchangeable for Different Denominations. This
Warrant is exchangeable, upon the surrender hereof by the holder
hereof at the offices or agency of the Company referred
to in Paragraph 10(e) hereof, for new Warrants of like tenor
representing in the aggregate the right to purchase the number of
shares of Capital Stock which may be purchased hereunder, each of
such new Warrants to represent the right to purchase such number
of shares as shall be designated by said holder hereof at the
time of such surrender.
(c) Replacement of Warrant. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft,
destruction, or mutilation of this Warrant and, in the case of
any such loss, theft, or destruction, upon delivery of an
indemnity agreement reasonably satisfactory in form and amount to
the Company, or, in the case of any such mutilation, upon
surrender and cancellation of this Warrant, the Company, at its
expense, will execute and deliver, in lieu thereof, a new Warrant
of like tenor.
(d) Cancellation; Payment of Expenses. Upon the surrender
of this Warrant in connection with any transfer, exchange, or
replacement as provided in this Paragraph 10, this Warrant shall
be promptly canceled by the Company. The Company shall pay all
taxes (other than securities transfer taxes) and all other
expenses and charges payable in connection with the preparation,
execution, and delivery of Warrants pursuant to this Paragraph
10.
(e) Register. The Company shall maintain, at its principal
offices in the Republic of Panama, the Republic of Costa Rica,
and St. Marys, West Virginia, U.S.A. (or such other office or
agency of the Company as may be mutually agreed upon by the
Company and the holder hereof), a register for this Warrant, in
which the Company shall record the name and address of the person
in whose name this Warrant has been issued, as well as the name
and address of each transferee and each prior owner of this
Warrant.
(f) Exercise or Transfer Without Registration. Anything in
this Warrant to the contrary notwithstanding, if, at the time of
the surrender of this Warrant in connection with any exercise,
transfer, or exchange of this Warrant, this Warrant shall not
be registered under the Securities Act and under applicable
securities or blue sky laws of any state of the United States,
the Company may require, as a condition of allowing such
exercise, transfer, or exchange, that (I) the holder or
transferee of this Warrant, as the case may be, furnish to the
Company a written opinion of counsel, which opinion and counsel
are reasonably acceptable to the Company, to the effect that such
exercise, transfer, or exchange may be made without registration
under said Act and under such applicable state securities or blue
sky laws and (ii) the holder or transferee execute and deliver to
the Company an investment letter in form and substance reasonably
acceptable to the Company. The holder of this Warrant, by taking
and holding the same, represents to the Company that such holder
is acquiring this Warrant for investment and not with a view to
the distribution thereof.
11. N o tices. All notices, requests, and other
communications required or permitted to be given or delivered
hereunder to the holder of this Warrant or to the holder of
shares acquired upon exercise of this Warrant shall be in
writing, and shall be personally delivered, sent by overnight
delivery service, or sent by facsimile transmission, to such
holder at the address shown for such holder on the books of the
Company (which address, in the case of the holder of this
Warrant, is set forth on the signature page hereof), or at such
other address as shall have been furnished to the Company by
notice from such holder. All notices, requests, and other
communications required or permitted to be given or delivered
hereunder to the Company shall be in writing, and shall be
personally delivered or sent by overnight delivery service,
United States mail, or facsimile transmission, to the office of
the Company at X.X. Xxx 000, Xx. Xxxxx, Xxxx Xxxxxxxx, X.X.X.
00000, Fax no. (000) 000-0000, Attention: President, or at such
other address as shall have been furnished to the holder of this
Warrant or to the holder of shares acquired upon exercise of this
Warrant by notice from the Company. Any such notice, request, or
other communication sent by facsimile transmission shall be
subsequently confirmed by a writing personally delivered or sent
by overnight delivery service or United States mail as provided
above. All such notices, requests, and other communications
shall be deemed to have been given at the time of the receipt by
the person entitled to receive such notice at the address of such
person for purposes of this Paragraph 11.
12. GOVERNING LAW. THIS WARRANT SHALL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF WEST VIRGINIA (WITHOUT REFERENCE TO THE CONFLICTS OF LAWS
PRINCIPLES THEREOF).
13. Miscellaneous.
(a) Amendments. This Warrant and any provision hereof may
not be changed, waived, discharged, or terminated orally, but
only by an instrument in writing signed by the party (or any
predecessor in interest thereof) against which enforcement of the
same is sought.
(b) Descriptive Headings. The descriptive headings of the
several paragraphs of this Warrant are inserted for purposes of
reference only, and shall not affect the meaning or construction
of any of the provisions hereof.
(c) Successors and Assigns. This Warrant shall be binding
upon any entity succeeding to the Company by merger,
consolidation, or acquisition of all or substantially all the
Company's assets.
(d) Remedies. The Company stipulates that the remedies at
law of the holder of this Warrant in the event of any default or
threatened default by the Company in the performance of or
compliance with any of the terms of this Warrant are not and will
not be adequate, and that such terms may be specifically enforced
by a decree for the specific enforcement of any agreement
contained herein or by an injunction against a violation of any
of the terms hereof or otherwise.
(e) Survival. All representations, covenants, and
agreements made by the Company in this Warrant or in any
certificate or other instrument delivered to the holder hereof by
or on behalf of the Company in connection with the execution and
delivery of this Warrant shall be considered to have been relied
upon by the holder of this Warrant and shall survive the
execution, delivery, and performance of this Warrant regardless
of any investigation made by the holder hereof.
(f) Closing of Books. The Company will at no time close its
transfer books against the transfer of this Warrant or any
Warrant Shares or in any manner which interferes with the timely
exercise of this Warrant.
(g) Amendments to Terms of Warrant Shares. The Company will
not amend the terms of the Warrant Shares as set forth in the
articles of incorporation of the Company as in effect on the date
of this Warrant, except with the prior written consent of the
holder of this Warrant.
IN WITNESS WHEREOF, the Company has caused this Warrant to be
signed by its duly authorized officer effective as of the 23rd
day of November, 1998.
ALOE AND HERBS INTERNATIONAL INC.
By: \s\ Xxxxxxx Xxxx
Name: Xxxxxxx Xxxx
Title: President
Address of Warrantholder:
XXXXXXXXXX LABORATORIES, INC.
0000 Xxxxxx Xxxx Xxxx
Xxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
Attention: President
FORM OF EXERCISE AGREEMENT
Dated:
To:
The undersigned, pursuant to the provisions set forth in the
within Warrant, hereby agrees to purchase shares of
Capital Stock covered by such Warrant, and makes payment herewith
in full therefor at the price per share provided by such Warrant
in cash, by wire transfer or by bank check in the amount of U.S.
$ . Please issue a certificate or certificates for
such shares of Capital Stock in the name of and pay any cash for
any fractional share to:
Name:
Signature:
Title of Signing Officer or Agent (if any):
Note: The above signature should correspond exactly with the
name on the face of the within Warrant or with the name
of the assignee appearing in the assignment form.
and, if said number of shares of Capital Stock shall not be all the
shares purchasable under the within Warrant, a new Warrant is to be
issued in the name of said undersigned covering the balance of the
shares purchasable thereunder less any fraction of a share paid in cash.
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and
transfers all the rights of the undersigned under the within Warrant,
with respect to the number of shares of Capital Stock covered thereby
set forth hereinbelow, to:
Name of Assignee Address No. of Shares
, and hereby irrevocably constitutes and appoints
as agent and attorney-in-fact to transfer said Warrant on
the books of the within-named corporation, with full power
of substitution in the premises.
Dated:
In the presence of
Name:
Signature:
Title of Signing Officer or Agent (if any):
Address:
Note: The above signature should correspond
exactly with the name on the face of the
within Warrant.
