Exhibit 10.34
Neither this Warrant nor the shares of Common Stock issuable on exercise of
this Warrant have been registered under the Securities Act of 1933. None of such
securities may be transferred in the absence of registration under such Act or
an opinion of counsel to the effect that such registration is not required.
IDM ENVIRONMENTAL CORP.
WARRANT
DATED:
Number of Shares:
Holder:
Address:
_______________________________
1. THIS CERTIFIES THAT the Holder is entitled to purchase from IDM ENVIRONMENTAL
CORP., a New Jersey corporation (hereinafter called the "Company"), the number
of shares of the Company's common stock ("Common Stock") set forth above, at an
exercise price equal to $5.00, or, if less, the lowest Conversion Price at
which, prior to exercise, any Purchaser shall have converted any Preferred or
any portion of any Preferred. The terms "Conversion Price," "Preferred" and
"Purchaser" have the meanings attributed to them in the Subscription Agreement
(as hereinafter defined). This Warrant may be exercised in whole or in part at
any time prior to expiration. The exercise price for each exercise shall be
computed separately, so that if after any given exercise, a Preferred is
converted at a Conversion Price lower than $5.00, and lower than the exercise
price relating to such first exercise, the exercise price for the later exercise
shall be equal to such Conversion Price.
2. All rights granted under this Warrant shall expire on the fourth anniversary
of the date of issuance of this Warrant.
3. Notwithstanding anything to the contrary contained herein, Holder shall not
have the right to exercise this Warrant so long as and to the extent that at the
time of such exercise, such exercise would cause the Holder then to be the
"beneficial owner" of five percent (5%) or more of the Company's then
outstanding Common Stock. For purposes hereof, the term "beneficial owner" shall
have the meaning ascribed to it in Section 13(d) of the Securities Exchange Act
of 1934. The opinion of legal counsel to Xxxxxx, in form and substance
satisfactory to the Company and the Company's counsel, shall prevail in all
matters relating to the amount of Holder's beneficial ownership.
4. In the event the Company breaches its obligation to deliver irrevocable
instructions to its transfer agent as required under Section 14, or timely to
make any payment required under Section 7 for Common Stock under this Warrant
upon exercise, then, without limiting Holder's other rights and remedies, the
Company shall forthwith pay to the Holder an amount accruing at the rate of
$1,000 per day for each day of such breach for each 20,000 shares of common
stock subject to this Warrant, with pro rata payments for shares in an amount
less than 20,000.
5. This Warrant and the Common Stock issuable on exercise of this Warrant (the
"Underlying Shares") may be transferred, sold, assigned or hypothecated, only if
registered by the Company under the Securities Act of 1933 (the "Act") or if the
Company has received from counsel to the Company a written opinion to the effect
that registration of the Warrant or the Underlying Shares is not necessary in
connection with such transfer, sale, assignment or hypothecation. The Warrant
and the Underlying Shares shall be appropriately legended to reflect this
restriction and stop transfer instructions shall apply. The Holder shall through
its counsel provide such information as is reasonably necessary in connection
with such opinion.
6. The holder of this warrant is entitled to certain registration rights under
an Agreement dated of even date herewith (the "Subscription Agreement"). Upon
each permitted transfer of this Warrant after the registration statement has
been declared effective, the Company will within two business days after receipt
of notice thereof supplement the registration statement to reflect the name of
the transferee as a selling shareholder thereunder.
7. The Company covenants at its next annual meeting of shareholders to call for
shareholders to approve the issuance of shares on conversion of the Preferred
(as defined in the Subscription agreement) and Warrants issued to the Purchasers
(as defined in the Subscription Agreement). Xxxx Xxxxxxxx and Xxxxx Xxxxx have
on this date agreed to vote in favor of such approval, and the Board of
Directors of the Company will recommend that the shareholders of the Company
vote in favor of such approval. Until such approval is obtained, the maximum
number of shares which will be issued on conversion of the Preferred and
exercise of the Warrants is 3,285,438, issuable on a first converted-first
exercised basis. Should such approval not be obtained by June 30, 1998, then
until such approval is obtained, the Company shall on demand by Holder made at
any time or times redeem any portion of the Warrant designated for redemption
(the "Redeemed Portion") at a redemption price equal to the pre-tax profit
Holder would have earned had Holder, at the close of business on the date of its
demand for redemption, exercised the Redeemed Portion and simultaneously sold
the shares received on such exercise at the closing NASDAQ sales price on such
date. The redemption price shall be payable within five business days after
demand for redemption is made, and shall accrue interest payable on demand at
11% per annum.
8. Any permitted assignment of this Warrant shall be effected by the Holder by
(i) executing a standard form of assignment, (ii) surrendering the Warrant for
cancellation at the office of the Company, accompanied by the opinion of counsel
to the Company referred to above; and (iii) unless in connection with an
effective registration statement which covers the sale of this Warrant and or
the shares underlying the Warrant, delivery to the Company of a statement by the
transferee (in a form acceptable to the Company and its counsel) that such
Warrant is being acquired by the Holder for investment and not with a view to
its distribution or resale; whereupon the Company shall issue, in the name or
names specified by the Holder (including the Holder) new Warrants representing
in the aggregate rights to purchase the same number of Shares as are purchasable
under the Warrant surrendered. Such Warrants shall be exercisable immediately
upon any such assignment of the number of Warrants assigned. The transferor will
pay all relevant transfer taxes. Replacement warrants shall bear the same legend
as is borne by this Warrant.
9. The term "Holder" should be deemed to include any permitted record transferee
of this Warrant.
10. The Company covenants and agrees that all shares of Common Stock which may
be issued upon exercise hereof will, upon issuance, be duly and validly issued,
fully paid and non-assessable and no personal liability will attach to the
holder thereof. The Company further covenants and agrees that, during the
periods within which this Warrant may be exercised, the Company will at all
times have authorized and reserved a sufficient number of shares of Common Stock
for issuance upon exercise of this Warrant and all other Warrants.
11. This Warrant shall not entitle the Holder to any voting rights or other
rights as a stockholder of the Company.
12. In the event that as a result of reorganization, merger, consolidation,
liquidation, recapitalization, stock split, combination of shares or stock
dividends payable with respect to such Common Stock, the outstanding shares of
Common Stock of the Company are at any time increased or decreased or changed
into or exchanged for a different number or kind of share or other security of
the Company or of another corporation, then appropriate adjustments in the
number and kind of such securities then subject to this Warrant shall be made
effective as of the date of such occurrence so that the position of the Holder
upon exercise will be the same as it would have been had it owned immediately
prior to the occurrence of such events the Common Stock subject to this Warrant.
Such adjustment shall be made successively whenever any event listed above shall
occur and the Company will notify the Holder of the Warrant of each such
adjustment. Any fraction of a share resulting from any adjustment shall be
eliminated and the price per share of the remaining shares subject to this
Warrant adjusted accordingly.
13. The rights represented by this Warrant may be exercised at any time within
the period above specified by (i) surrender of this Warrant (with the purchase
form at the end hereof properly executed) at the principal executive office of
the Company (or such other office or agency of the Company as it may designate
by notice in writing to the Holder at the address of the Holder appearing on the
books of the Company); (ii) payment to the Company of the exercise price for the
number of Shares specified in the above-mentioned purchase form together with
applicable stock transfer taxes, if any; and (iii) unless in connection with an
effective registration statement which covers the sale of the shares underlying
the Warrant, the delivery to the Company of a statement by the Holder (in a form
acceptable to the Company and its counsel) that such Shares are being acquired
by the Holder for investment and not with a view to their distribution or
resale.
14. Within two business days following each receipt by the Company of the
documents required to exercise all any part of this Warrant as provided in
Section 13, the Company shall deliver irrevocable instructions to its transfer
agent (with a copy to Holder) to issue on an expedited basis certificates
evidencing the shares of common stock so purchased. Such certificates shall bear
appropriate restrictive legends in accordance with applicable securities laws,
but shall be unrestricted and bear no legends once the registration statement
referred to above has been declared effective.
15. This Warrant shall be governed by and construed in accordance with the laws
of the State of New Jersey. The federal and state courts in the city of Newark,
New Jersey shall have exclusive jurisdiction over this instrument and the
enforcement thereof. Service of process shall be effective if by certified mail,
return receipt requested. All notices shall be in writing and shall be deemed
given upon receipt by the party to whom addressed. This instrument shall be
enforceable by decrees of specific performances well as other remedies.
IN WITNESS WHEREOF, IDM Environmental Corp. has caused this Warrant to be
signed by its duly authorized officers under Its corporate seal, and to be dated
as of the date set forth above.
IDM ENVIRONMENTAL CORP.
By:
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