THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD OR
TRANSFERRED UNLESS SUCH SALE OR TRANSFER IS IN ACCORDANCE WITH THE REGISTRATION
REQUIREMENTS OF SUCH ACT AND APPLICABLE LAWS OR SOME OTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF SUCH ACT AND APPLICABLE LAWS IS AVAILABLE WITH
RESPECT THERETO.
COMMON STOCK PURCHASE WARRANT
Warrant No. W-CS-6 Number of Shares: 50,000
DynaGen, Inc.
Void after January 15, 2002
(except as otherwise set forth in Section 2 below)
1. Issuance. This Warrant is issued to Xxxxxxxx X. Xxxxxxx by DynaGen,
Inc., a Delaware corporation (hereinafter with its successors called the
"Company"). THIS WARRANT IS EXERCISABLE IN INSTALLMENTS, SUBJECT TO THE
SATISFACTION OF CERTAIN CONDITIONS AS SET FORTH IN SECTION 2 BELOW. NO PORTION
OF THIS WARRANT MAY BE EXERCISED UNLESS SUCH CONDITIONS HAVE BEEN SATISFIED WITH
RESPECT TO THE CONDITIONS REGARDING EXERCISABILITY.
2. Purchase Price; Number of Shares. Subject to the terms and
conditions hereinafter set forth, the registered holder of this Warrant (the
"Holder") is entitled upon surrender of this Warrant with the subscription form
annexed hereto duly executed, at the office of the Company, 00 Xxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxxxxxxx 00000, or such other office as the Company shall notify
the Holder of in writing, to purchase from the Company at a price per share (the
"Purchase Price") of $1.97 an aggregate of fifty thousand (50,000) fully paid
and nonassessable shares of Common Stock, $.01 par value, of the Company (the
"Common Stock"), subject to the conditions stated immediately below. Commencing
on the date hereof, the Holder may exercise this Warrant for 25,000 of such
shares. If, within six months of the date hereof, the Company renews or extends
the original term of the Consulting Agreement between the Company and L.G.
Zangani, Inc. (the "Agreement"), then, commencing on the date that is six months
from the date hereof, the Holder may exercise this Warrant for the remaining
shares of Common Stock subject hereto. If the Company does not renew or extend
the original term of the Agreement within six months of the date hereof, such
remaining shares shall not be exercisable, and the portion of the Warrant
relating to such remaining shares shall be automatically canceled and
extinguished and shall be without further effect. Furthermore, if the Company
does not renew or extend the original term of the Agreement within six months
hereof, notwithstanding anything to the contrary herein, this Warrant shall
expire at the close of business on December 31, 1999 and shall be void
thereafter. Until such time as this Warrant is exercised in full or expires, the
Purchase Price and the securities issuable upon exercise of this Warrant are
subject to adjustment as hereinafter provided.
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3. Payment of Purchase Price. Except as set forth in Section 4 below,
the Purchase Price shall be paid in cash or by check.
4. Net Issue Election. The Holder may elect to receive, without the
payment by the Holder of any additional consideration, shares equal to the value
of this Warrant or any portion hereof by the surrender of this Warrant or such
portion to the Company, with the net issue election notice annexed hereto duly
executed, at the office of the Company. Thereupon, the Company shall issue to
the Holder such number of fully paid and nonassessable shares of Common Stock as
is computed using the following formula:
X = Y (A-B)
A
where X = the number of shares to be issued to the Holder
pursuant to this Section 4.
Y = the number of shares covered by this Warrant, subject
to Section 2 hereof, in respect of which the net
issue election is made pursuant to this Section 4.
A = The "Fair Market Value" of one share of Common Stock.
B = the Purchase Price in effect under this Warrant at
the time the net issue election is made pursuant to
this Section 4.
For purposes of this Section 4, the "Fair Market Value" of a share of
Common Stock as of a particular date (the "Determination Date") means:
(i) if the Company's Common Stock is then traded on any
nationally recognized stock exchange or quoted on the Nasdaq National Market
System or SmallCap Market, the average of the closing sale prices for the 10
trading days preceding the Determination Date, as reported by such exchange or
system, as reported in The Wall Street Journal or any other publication,
including the NASD;
(ii) if the Company's Common Stock is then traded on the
over-the-counter market, the average of the closing bid and closing asked prices
for the 15 trading days preceding the Determination Date, as reported in The
Wall Street Journal or by any market maker; or
(iii) if quotations for the Company's Common Stock are not
readily available as set forth in (i) or (ii) above, then as determined in good
faith by the Company's Board of Directors upon a review of all relevant factors,
including, without limitation, the price at which shares of the Company's Common
Stock could reasonably be expected to be sold in an arms-length transaction, for
cash, other than on an installment basis, to a person not employed by,
controlled by, in control of or under common control with the Company, which
determination by the Board of Directors shall give due consideration to recent
transactions involving shares of
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the Common Stock, if any, revenues and earnings of the Company to the date of
such determination, if any, projected revenues and earnings of the Company, the
effect of the transfer restrictions to which the shares are subject under law,
the absence of a public market for the Common Stock, and such other matters as
the Board of Directors deems pertinent. Such determination by the Board of
Directors shall be conclusive and binding.
5. Partial Exercise. This Warrant may be exercised in part, and the
Holder shall be entitled to receive a new warrant, which shall be dated as of
the date of this Warrant, covering the number of shares in respect of which this
Warrant shall not have been exercised.
6. Issuance Date. The person or persons in whose name or names any
certificate representing shares of Common Stock is issued hereunder shall be
deemed to have become the holder of record of the shares represented thereby as
at the close of business on the date this Warrant is exercised with respect to
such shares, whether or not the transfer books of the Company shall be closed.
7. Expiration Date. This Warrant shall expire at the close of business
on January 15, 2002 (unless it expires earlier under Section 2 hereof) and shall
be void thereafter.
8. Reserved Shares; Valid Issuance. The Company covenants that it will
at all times from and after the date hereof reserve and keep available such
number of its authorized shares of Common Stock, free from all preemptive or
similar rights therein, as will be sufficient to permit the exercise of this
Warrant in full. The Company further covenants that such shares as may be issued
pursuant to the exercise of this Warrant will, upon issuance, be duly and
validly issued, fully paid and nonassessable and free from all taxes, liens and
charges with respect to the issuance thereof.
9. Registration Rights. The Company hereby grants the following
registration rights with respect to the shares covered by this Warrant (subject
to Section 2 hereof):
9.1 "Piggy-Back" Registrations. If at any time the Company
shall determine to register in a public offering for the account of selling
stockholders (and not for its own account) under the Securities Act of 1933, as
amended, any of its Common Stock, it shall send to the Holder written notice of
such determination and, if within 15 days after receipt of such notice, the
Holder shall so request in writing, the Company shall use its best efforts to
include in such registration statement all or any part of the shares covered by
this Warrant that the Holder requests to be registered. This right shall not
apply to a registration of shares of Common Stock on Form S-8 or Form S-4 (or
their then equivalents) relating to shares of Common Stock to be issued by the
Company in connection with any acquisition of any entity or business or shares
of Common Stock issuable in connection with any stock option, stock purchase or
other employee benefit plan. Notwithstanding anything to the contrary in this
Section 9, the Company shall not be required to effect a registration pursuant
to this Section 9 for fewer than the total number of shares issuable or issued
pursuant to this Warrant (as set forth in Section 2 hereof) at the time of
filing of such registration statement.
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If, in connection with any offering of Common Stock
to be sold by selling stockholders, the managing underwriter or the Company
shall impose a limitation on the number of shares of Common Stock that may be
included in any such registration statement because, in its judgment, such
limitation is necessary to effect an orderly public distribution of the Common
Stock and to maintain a stable market for the equity securities of the Company,
then the Company shall be obligated to include in such registration statement
only such limited portion of the shares covered by this Warrant with respect to
which the Holder has requested inclusion hereunder.
9.2 Expenses. In the case of a registration under this Section
9, the Company shall bear all costs and expenses of each such registration,
including, but not limited to, printing, legal and accounting expenses,
Securities and Exchange Commission and National Association of Securities
Dealers filing fees and all related "Blue Sky" fees and expenses; provided,
however, that the Company shall have no obligation to pay or otherwise bear any
portion of the underwriters' commissions or discounts attributable to the shares
covered by this Warrant being offered and sold by the Holder, or the fees and
expenses of any counsel for the Holder in connection with the registration of
such shares.
9.3 Expiration of Registration Rights. The obligations of the
Company under this Section 9 shall expire on the earlier of (i) the date on
which the shares covered by this Warrant shall have become transferable (whether
or not so transferred) in accordance with the resale provisions of Rule 144, or
any successor rule or provision, under the Securities Act of 1933, as amended,
and (ii) the date that this Warrant terminates.
10. Dividends. If after the date hereof the Company shall subdivide the
Common Stock, by split-up or otherwise, or combine the Common Stock, or issue
additional shares of Common Stock in payment of a stock dividend on the Common
Stock, the number of shares issuable on the exercise of this Warrant shall
forthwith be proportionately increased in the case of a subdivision or stock
dividend, or proportionately decreased in the case of a combination, and the
Purchase Price shall forthwith be proportionately decreased in the case of a
subdivision or stock dividend, or proportionately increased in the case of a
combination.
11. Mergers and Reclassifications. If after the date hereof there shall
be any reclassification, capital reorganization or change of the Common Stock
(other than as a result of a subdivision, combination or stock dividend provided
for in Section 10 hereof), or any consolidation of the Company with, or merger
of the Company into, another corporation or other business organization (other
than a consolidation or merger in which the Company is the continuing
corporation and which does not result in any reclassification or change of the
outstanding Common Stock), or any sale or conveyance to another corporation or
other business organization of all or substantially all of the assets of the
Company (each an "Acquisition Event"), then, as a condition of such Acquisition
Event, lawful provisions shall be made, and duly executed documents evidencing
the same from the Company or its successor shall be delivered to the Holder, so
that the Holder shall have the right to purchase, at a total price not to exceed
that payable upon the exercise of this Warrant in full, the kind and amount of
shares of stock and other securities and property receivable upon such
Acquisition Event by a holder of the
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number of shares of Common Stock which might have been purchased by the Holder
immediately prior to such Acquisition Event, and in any such case appropriate
provisions shall be made with respect to the rights and interest of the Holder
to the end that the provisions hereof (including without limitation, provisions
for the adjustment of the Purchase Price and the number of shares issuable
hereunder) shall thereafter be applicable in relation to any shares of stock or
other securities and property thereafter deliverable upon exercise hereof.
Notwithstanding anything to the contrary herein, the Holder must
exercise this Warrant prior to the consummation of the Acquisition Event, and if
this Warrant is not so exercised, it shall terminate upon the consummation of
such Acquisition Event.
12. Fractional Shares. In no event shall any fractional share of Common
Stock be issued upon any exercise of this Warrant. If, upon exercise of this
Warrant as an entirety, the Holder would, except as provided in this Section 12,
be entitled to receive a fractional share of Common Stock, then the Company
shall issue the next higher number of full shares of Common Stock, issuing a
full share with respect to such fractional share.
13. Certificate of Adjustment. Whenever the Purchase Price is adjusted,
as herein provided, the Company shall promptly deliver to the Holder a
certificate of the principal financial or accounting officer of the Company
setting forth the Purchase Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment.
14. Notices of Record Date, Etc. In the event of:
(a) any taking by the Company of a record of the holders of
any class of securities for the purpose of determining the holders thereof who
are entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right,
(b) any reclassification of the capital stock of the Company,
capital reorganization of the Company, consolidation or merger involving the
Company, or sale or conveyance of all or substantially all of its assets, or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company,
then and in each such event the Company will mail or cause to be mailed to the
Holder a notice specifying (i) the date on which any such record is to be taken
for the purpose of such dividend, distribution or right, and stating the amount
and character of such dividend, distribution or right, or (ii) the date on which
any such reclassification, reorganization, consolidation, merger, sale or
conveyance, dissolution, liquidation or winding-up is to take place, and the
time, if any is to be fixed, as of which the holders of record in respect of
such event are to be determined. Such notice shall be mailed at least 20 days
prior to the date specified in such notice on which any such action is to be
taken.
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15. Amendment. The terms of this Warrant may be amended, modified or
waived only with the written consent of the Company.
16. Warrant Register; Transfers, Etc.; Warrantholder Not Deemed
Stockholder.
A. The Company will maintain a register containing the name
and address of the Holder and its assignees, if applicable. The Holder may
change its address as shown on the warrant register by written notice to the
Company requesting such change. Any notice or written communication required or
permitted to be given to the Holder may be given by certified mail or delivered
to the Holder at its address as shown on the warrant register.
B. Without the prior written consent of the Company, this
Warrant may not be transferred by the Holder.
C. In case this Warrant shall be mutilated, lost, stolen or
destroyed, the Company shall issue a new warrant of like tenor and denomination
and deliver the same (i) in exchange and substitution for and upon surrender and
cancellation of any mutilated Warrant, or (ii) in lieu of any Warrant lost,
stolen or destroyed, upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft or destruction of such Warrant (including a
reasonably detailed affidavit with respect to the circumstances of any loss,
theft or destruction) and of indemnity reasonably satisfactory to the Company.
D. No holder of this Warrant shall, as such, be deemed the
holder of the Common Stock that may at any time be issuable upon exercise of
this Warrant for any purpose whatsoever, nor shall anything contained herein be
construed to confer upon such holder, as such, any of the rights of a
stockholder of the Company until such holder has delivered formal notice to the
Company of an intention to exercise this Warrant, tendered promptly the
consideration required for exercise (whether cash or securities), exercised the
Warrant, and been issued shares of Common Stock in accordance with the
provisions hereof.
17. Governing Law. The provisions and terms of this Warrant shall be
governed by and construed in accordance with the internal laws of the
Commonwealth of Massachusetts.
18. Business Days. If the last or appointed day for the taking of any
action required or the expiration of any right granted herein shall be a
Saturday or Sunday or a legal holiday in Massachusetts, then such action may be
taken or right may be exercised on the next succeeding day which is not a
Saturday or Sunday or such a legal holiday.
Dated: January 15, 1997 DYNAGEN, INC.
(Corporate Seal) By: /s/ Xxxxxxxxx X. Xxxxxxx
Attest: Title: Executive Vice President
/s/ Xxxxxx X. Xxxxxxxx
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Form of Subscription
To:____________________ Date:_________________________
The undersigned hereby subscribes for __________ shares of Common Stock
covered by this Warrant. The certificate(s) for such shares shall be issued in
the name of the undersigned or as otherwise indicated below:
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Signature
Form of Net Issue Election Notice
To:____________________ Date:_________________________
The undersigned hereby elects under Section 4 to surrender the right to
purchase _______ shares of Common Stock pursuant to this Warrant. The
certificate(s) for the shares issuable upon such net issue election shall be
issued in the name of the undersigned or as otherwise indicated below.
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Signature
