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Exhibit 10.2
WARRANT AGREEMENT
THIS WARRANT AGREEMENT ("Agreement") dated as of January 18, 2001,
among WATERLINK, INC., a Delaware corporation (the "Company"), and each of the
Warrantholders named on the execution page hereof (the "Warrantholders").
R E C I T A L S:
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This Agreement is entered into in connection with the Warrantholders
lending to the Company an aggregate principal amount of $1,000,000, as evidenced
by those certain 13.00% Subordinated Notes of the Company, of even date herewith
(the "Notes"). In order to induce the Warrantholders to make their loans, the
Warrantholders have required the Company, and the Company has agreed, to issue
certain warrants to purchase shares of the Company's common stock, $.01 par
value per share ("Common Stock").
NOW, THEREFORE, for good and valuable consideration the receipt of
which is hereby acknowledged and the promises and the mutual agreements set
forth herein, the parties hereto agree as follows:
1. ISSUANCE OF WARRANTS; FORM OF WARRANTS.
1.1 GENERAL. The Company hereby agrees to issue (pro rata in proportion
to the amount of the Warrantholder's loan to the Company) to the
Warrantholders, at the times and upon the conditions specified below,
warrants (the "Warrants") to purchase, in the aggregate, up to 100,000
shares of the Common Stock. Each Warrant, once issued, will initially
entitle the holder thereof to purchase one share of Common Stock for
the purchase price set forth in Section 5 below, as adjusted from time
to time pursuant to the provisions of Section 9 below.
1.2 ISSUANCE OF THE WARRANTS. The Warrants shall be issued in the
amounts set forth on Schedule 1 hereto on the date hereof if, and as
soon as, the Notes are issued in accordance with their terms, and the
corresponding funds have been delivered to the Company.
2. FORM OF WARRANTS. The text of the Warrants and of the form of
election to purchase Common Stock underlying the Warrants (the "Warrant Stock")
to be set forth on the reverse thereof shall be substantially as set forth in
the Warrant Certificate ("Warrant Certificate"), attached as Exhibit A to this
Agreement. Each Warrant Certificate shall be executed on behalf of the Company
by the President or Vice President of the Company and attested by the Secretary
or an Assistant Secretary of the Company. Warrant Certificates shall be dated as
of the date of the execution thereof by the Company either upon initial issuance
or upon division, exchange, substitution or transfer as may be permitted
hereunder, provided that all such issuances of Warrants shall be deemed
effective upon the date that the conditions to their issuance are satisfied.
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3. REGISTRATION. The Warrant Certificates shall be numbered and shall
be registered on the books of the Company (the "Warrant Register") as they are
issued. The Company shall be entitled to treat the registered holder of any
Warrant Certificate on the Warrant Register (the "Holder") as the owner in fact
thereof for all purposes and shall not be bound to recognize any equitable or
other claim to or interest in such Warrant Certificate, or the Warrants'
represented thereby, on the part of any other person, and shall not be liable
for any registration or transfer of Warrant Certificates which are registered or
to be registered in the name of a fiduciary or the nominee of a fiduciary unless
made with the actual knowledge that a fiduciary or nominee is committing a
breach of trust in requesting such registration or transfer, or with knowledge
of such facts that the Company's participation therein amounts to bad faith.
4. TRANSFER OF WARRANT CERTIFICATE. The Warrant Certificate shall be
transferable only on the Warrant Register upon delivery of the Warrant
Certificate duly endorsed by the Holder or by its duly authorized attorney or
representative (with evidence reasonably satisfactory to the Company of such
authorization), or accompanied by evidence reasonably satisfactory to the
Company of succession, assignment or authority to transfer. Notwithstanding the
foregoing, the Company shall have no obligation to cause Warrant Certificates to
be transferred on the Warrant Register to any person, unless the Holder of such
Warrants shall furnish to the Company evidence satisfactory to the Company of
(i) compliance with the registration provisions of Section 5 of the Securities
Act of 1933, as amended (the "Act"), or (ii) the availability of an exemption
from compliance with the registration provisions of Section 5 of the Act.
5. TERM OF WARRANTS; EXERCISE OF WARRANTS.
5.1 TERM AND EXERCISE PRICE. Each outstanding Warrant entitles the
registered owner thereof to purchase one (1) share of Warrant Stock at
any time prior to the close of business on the fifth (5th) anniversary
of the date hereof (the "Expiration Date") at an initial purchase price
per share of Warrant Stock of $0.01, subject to adjustment pursuant to
the provisions of Section 9 of this Agreement (the "Warrant Price").
5.2 GENERAL.
(a) Subject to the provisions of this Agreement, each Holder
shall have the right to purchase from the Company (and the
Company shall issue and sell to such Holder) the number of
fully paid and nonassessable shares of Warrant Stock specified
in such Holder's Warrant Certificate(s) (as adjusted from time
to time in accordance with the provisions of Section 9 of this
Agreement), upon surrender of such Warrant Certificate(s) to
the Company or its duly authorized agent, and upon payment to
the Company of the Warrant Price, or, at the option of the
Holder, by conversion of unpaid principal and accrued interest
on the Notes, if then outstanding, in an amount equal to the
Warrant Price, as adjusted in accordance with the provisions
of Section 9 of this Agreement, for the number of shares of
Warrant Stock in respect of which such Warrants are then
exercised. The date of exercise (the "Exercise Date") of any
Warrant shall be deemed to be the date of
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receipt by the Company of the Warrant Certificate duly filled
in and signed and accompanied by proper payment as hereinafter
provided. Payment of the Warrant Price shall be made as set
forth in the Warrant Certificate.
(b) Subject to Section 6 of this Agreement, upon such exercise
of Warrants, and payment of the Warrant Price as aforesaid,
the Company shall issue and cause to be delivered with all
reasonable dispatch (but in any event within twenty (20)
business days) to or (subject to the provisions of Section 4
of this Agreement) upon the written order of the Holder, a
certificate for the number of full shares of Warrant Stock so
purchased upon the exercise of such Warrants, together with
cash, as provided in Section 9 of this Agreement, in respect
of any fraction of a share of such stock otherwise issuable
upon such exercise. Except under circumstances described in
the following sentence, the shares of Warrant Stock purchased
pursuant to the immediately preceding sentence shall be deemed
to be issued to the Holder as the record owner of such shares
as of the close of business on the Exercise Date.
Notwithstanding the foregoing, if the Company determines, on
or after the date of exercise of any Warrant, that issuance of
the Warrant Stock represented thereby would violate an
applicable order, law, rule, or regulation, including federal
or state securities laws, the Company shall so notify
immediately the exercising Holder and shall in good faith, and
as expeditiously as possible, endeavor to issue the Warrant
Stock without such violation. The right of purchase
represented by the Warrants shall be exercisable, at the
election of the Holder thereof, either in full or from time to
time in part and, in the event that any Warrant is exercised
in respect of less than all of the shares of Warrant Stock
purchasable on such exercise at any time prior to the
Expiration Date, a new Warrant Certificate evidencing the
remaining Warrants shall be issued.
6. PAYMENT OF TAXES. The Company shall pay all documentary stamp taxes,
if any, attributable to the initial issuance of Warrant Stock upon the exercise
of Warrants PROVIDED, HOWEVER, that the Company shall not be required to pay any
tax or taxes which may be payable in respect of any permitted transfer involved
in the issue or delivery of any Warrant Certificates or Warrant Stock in a name
other than that of the registered Holder of such Warrants.
7. MUTILATED OR MISSING WARRANTS. Upon (i) receipt by the Company of
evidence reasonably satisfactory to it of the loss, theft, destruction or
mutilation of a Warrant Certificate, (ii) if requested by the Company, the
posting of a bond in an amount equal to the value of the lost, stolen or
destroyed Warrant Certificate, (iii) reimbursement to the Company of all
reasonable expenses incident thereto, and (iv) surrender and cancellation of
such Warrant Certificate, if mutilated, the Company will make and deliver in
lieu of such Warrant Certificate a new Warrant Certificate of like tenor and
representing an equivalent right or interest. The term "outstanding" when used
herein with reference to the Warrant Certificate as of any particular time shall
not include any Warrant Certificate in lieu of which a new Warrant Certificate
has been made and delivered by the Company in accordance with the provisions
hereof.
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8. RESERVATION OF WARRANT STOCK.
(a) The Company represents that there has been reserved out of
the authorized and unissued shares of Common Stock, a number
of shares sufficient to provide for the exercise of the right
of purchase represented by the Warrant Certificates as
initially issued, and the Company, which currently acts as the
transfer agent for its Common Stock ("Transfer Agent") and
every subsequent Transfer Agent for any shares of the
Company's capital stock issuable upon the exercise of any of
the Warrants are hereby irrevocably authorized and directed at
all times until the Expiration Date or earlier termination of
this Agreement to reserve such number of authorized and
unissued shares of Common Stock as shall be required for such
purpose. The Company will keep a copy of this Agreement on
file with every subsequent Transfer Agent for any shares of
the Company's capital stock issuable upon the exercise of the
Warrants. The Company will supply any such subsequent Transfer
Agent with duly executed stock certificates for issuance on
exercise of Warrants and will itself provide or make available
any cash which may be required by Section 10 of this
Agreement. The Company will furnish to any such subsequent
Transfer Agent a copy of all notices of adjustments, and
certificates related thereto, transmitted to each Holder
pursuant to Section 9.3 of this Agreement. All Warrant
Certificates surrendered in the exercise of the rights thereby
evidenced shall be canceled.
(b) The Company covenants that it shall endeavor to comply
with all securities laws regulating the offer and delivery of
shares of Common Stock upon exercise of the Warrants; and that
if any shares of Common Stock required to be reserved for
purposes of exercising the Warrants hereunder require
registration with or approval of any governmental authority
under any Federal or state law before such shares may be
validly issued or delivered upon exercise of the Warrants, the
Company shall, in good faith and as expeditiously as possible,
endeavor to secure such registration or approval, as the case
may be. The Company covenants that all shares of Common Stock
which shall be issued upon exercise of the Warrants shall upon
issue and payment therefor be validly issued, fully paid and
nonassessable.
9. ADJUSTMENTS OF WARRANT PRICE, PREPAYMENT EVENT PRICE AND NUMBER OF
SHARES OF WARRANT STOCK. The number and kind of securities purchasable upon the
exercise of each Warrant and the Warrant Price related thereto shall be subject
to adjustment from time to time upon the happening of certain events, as
hereinafter defined, but (with respect to Warrants) only as to Warrants
outstanding at the time of such adjustment. Upon each adjustment of the Warrant
Price pursuant to the provisions of Section 9.1(b), the Holder of such Warrant
shall thereafter, prior to the Expiration Date thereof, be entitled to purchase
at the Warrant Price resulting from such adjustment, the number of shares of
Warrant Stock obtained by multiplying the Warrant Price in effect immediately
prior to such adjustment by the number of shares of Warrant Stock
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issuable upon exercise of such Warrant immediately prior to such adjustment and
dividing the product thereof by the Warrant Price resulting from such
adjustment.
9.1 ADJUSTMENT OF THE NUMBER OF SHARES OF WARRANT STOCK AND THE WARRANT
PRICE. The number of shares of Warrant Stock and the Warrant Price
shall be subject to adjustment as follows:
(a) In case the Company shall at any time after the date of
issuance of a Warrant (A) pay a dividend or make a
distribution on its Common Stock in shares of its capital
stock (whether in shares of Common Stock or of capital stock
of any other class), (B) subdivide its outstanding shares of
Common Stock into a greater number of shares, (C) combine its
outstanding shares of Common Stock into a smaller number of
shares, or (D) reclassify, reorganize or effect any similar
transaction with respect to any of its shares of Common Stock,
or in substitution or exchange therefor (other than a change
in par value, or from par value to no par value, or from no
par value to par value), then the number and, if applicable,
kind of shares of Warrant Stock to be received by any Holder
shall be adjusted so that the Holder will be entitled to
receive on exercise the number and kind of shares of capital
stock which it would have owned immediately following such
action had its Warrants been exercised immediately prior
thereto. An adjustment made pursuant to this subsection (a)
shall become effective immediately after the payment date in
the case of a dividend or distribution and shall become
effective immediately after the effective date in the case of
a subdivision, combination, reclassification, reorganization
or similar transaction. If, as a result of an adjustment made
pursuant to this subsection (a), a Holder shall become
entitled to receive shares of two or more classes of capital
stock of the Company, the Board of Directors or a duly
authorized committee thereof shall in good faith determine
(which determination shall be conclusive and binding) the
allocation of the Warrant Price between or among shares of
such classes of capital stock. After such allocation, the
Warrant Price and number of shares of each class of capital
stock that is part of the Warrant Stock shall thereafter be
subject to adjustment in a manner and on terms determined by
the Board of Directors (which determination shall be
conclusive and binding) to be as nearly equivalent as
practicable to those applicable to Common Stock under this
Section 9.
(b) If the Company shall issue any shares of Common
Stock other than Excluded Shares (as hereinafter defined) for
consideration per share less than the Warrant Price per share
in effect immediately prior to such issuance, the Warrant
Price in effect immediately prior to such issuance shall be
reduced (but shall not be increased) to the price (calculated
to the nearest cent) determined: by dividing (A) an amount
equal to the sum of (1) the number of shares of Common Stock
outstanding on a fully diluted basis immediately prior to such
issuance multiplied by the Warrant Price per share in effect
immediately prior to such issuance and (2) the consideration,
if any, received by the Company upon such issuance by (B) the
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number of shares of Common Stock outstanding on a fully
diluted basis immediately after such issuance.
(c) CERTAIN ADJUSTMENT FACTORS. For the purposes of any
adjustment of the Warrant Price pursuant to paragraph (b) above,
the following provisions shall be applicable:
(x) CASH. In the case of the issuance of shares of
Common Stock for cash, the amount of the
consideration received by the Company shall be deemed
to be the amount of the cash proceeds received by the
Company for such shares of Common Stock before
deducting therefrom any discounts, commissions, taxes
or other expenses allowed, paid or incurred by the
Company for any underwriting or otherwise in
connection with the issuance and sale thereof; and
(y) CONSIDERATION OTHER THAN CASH. In the case of the
issuance of shares of Common Stock (other than upon
the conversion of shares of capital stock or other
securities of the Company) for consideration in whole
or in part other than cash, including securities
acquired in exchange therefor (other than securities
by their terms so exchangeable), the consideration
other than cash shall be deemed to be the fair value
thereof (as determined by the Board of Directors of
the Company based on an opinion of an outside
financial advisor of recognized regional or national
standing, which may, but need not, be the independent
public accountants who serve as the regular auditors
of the Company (the "Financial Advisor"), whose
determination shall be conclusive and binding),
irrespective of any accounting treatment; and
(z) OPTIONS AND CONVERTIBLE SECURITIES. In the case
of the issuance of (i) options, warrants or other
rights to purchase or acquire shares of Common Stock
(whether or not exercisable immediately following
such issuance), (ii) securities by their terms
convertible into or exchangeable for shares Common
Stock (whether or not so convertible or exchangeable
immediately following such issuance), or (iii)
options, warrants or rights to purchase such
convertible or exchangeable securities (whether or
not exercisable immediately following such issuance):
(1) the aggregate maximum number of shares
of Common Stock deliverable upon exercise of
such options, warrants or other rights to
purchase or acquire shares of Common Stock
shall be deemed to have been issued at the
time such options, warrants or other rights
are first issued and for a consideration
equal to the consideration (determined in
the manner provided in clauses (x) and (y)
above), if any, received by the Company upon
the issuance
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of such options, warrants or other rights
plus the purchase price provided in such
options, warrants or other rights for the
shares of Common Stock covered thereby (if
the purchase price per share of Common Stock
is expressed as a range, the purchase price
per share for purposes of this subparagraph
(z)(1) shall be the average of such range of
prices);
(2) the aggregate maximum number of shares
of Common Stock deliverable upon conversion
of or in exchange for any such convertible
or exchangeable securities, or upon the
exercise of options, warrants or other
rights to purchase or acquire such
convertible or exchangeable securities and
the subsequent conversion or exchange
thereto shall be deemed to have been issued
at the time such convertible or exchangeable
securities or such options, warrants or
other rights are first issued and for a
consideration equal to the consideration, if
any, received by the Company for any such
convertible or exchangeable securities or
options, warrants or other rights (excluding
any cash received on account of accrued
interest or accumulated dividends), plus the
additional consideration, if any, to be
received by the Company upon the conversion
or exchange of such securities and the
exercise of any options, warrants or other
rights (the consideration in each case to be
determined in the manner provided in clauses
(x) and (y) above);
(3) on any change in the number of shares of
Common Stock deliverable upon exercise of
any such options, warrants or other rights
which have become exercisable or conversion
of or exchange of such convertible or
exchangeable securities which have become
convertible or exchangeable, or any change
in the consideration to be received by the
Company upon such exercise, conversion or
exchange, the Warrant Price as then in
effect shall forthwith be readjusted to such
Warrant Price as would have been obtained
had such adjustment been made upon the
original issuance of such options, warrants
or other rights; provided, however, no
adjustment shall be made with respect to
such options, warrants or other rights
exercised prior to such change, or
securities converted or exchanged prior to
such change;
(4) on the expiration or cancellation of any
such options, warrants or other rights, or
the termination of the right to convert or
exchange such convertible or exchangeable
securities, if the Warrant Price shall have
been adjusted upon such securities being
issued or becoming exercisable, convertible
or exchangeable, such
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Warrant Price shall forthwith be readjusted
to such Warrant Price as would have been
obtained had an adjustment been made on the
basis of the issuance of only the number of
shares of Common Stock actually issued upon
the exercise of such options, warrants or
other rights, or upon the conversion or
exchange of such securities; and
(5) if the Warrant Price shall have been
adjusted when such options, warrants or
other rights were first issued or such
convertible or exchangeable securities were
first issued, no further adjustment of the
Warrant Price shall be made for the actual
issuance of shares of Common Stock upon the
exercise, conversion or exchange thereof.
(d) EXCLUDED SHARES. "Excluded Shares" shall mean (i) any
shares of Common Stock issued in a transaction described in
Section 9.1(a) of this Agreement; and (ii) issuances of shares
of Common Stock from time to time pursuant to stock option or
bonus plans authorized by the Board of Directors of the
Company as of the date hereof; (iii) issuances of Common
Stock, or warrants, options or rights to acquire shares of
Common Stock, or securities convertible into or exchangeable
for Common Stock pursuant to the terms of any acquisition by
the Company of all or substantially all of the operating
assets, or more than fifty percent (50%) of the voting capital
stock or other management interest of any business entity in a
transaction negotiated on an arms'-length basis and expressly
approved in advance by the Board of Directors of the Company;
(iv) issuances of shares of Common Stock from time to time
upon the exercise, exchange or conversion of warrants,
options, convertible securities, the Notes (whether or not
outstanding as of the date hereof) or other securities
outstanding as of the date hereof; and (v) issuances of shares
of Common Stock from time to time pursuant to the
anti-dilution provisions of other securities.
(e) No adjustment in the Warrant Price shall be required
unless such adjustment would require an increase or decrease
of at least 2.2% in such price; PROVIDED, HOWEVER, that any
adjustments which by reason of this subsection (f) are not
required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under
this Section 9.1 shall be made to the nearest tenth of a cent
or to the nearest one-hundredth of a share, as the case may
be.
(f) The number of shares of Common Stock outstanding at any
given time shall not include shares owned or held by or for
the account of the Company, and the disposition of any such
shares shall be considered an issuance of Common Stock for the
purposes of this Section 9.
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9.2 RIGHTS TO PURCHASE OTHER SECURITIES. If any of the following
shall occur:
(a) any consolidation or merger to which the Company is a
party, other than a consolidation or a merger in which the
Company is the continuing or surviving Company and which does
not result in any reclassification of, or change (other than
as a result of a subdivision or combination) in, outstanding
shares of the Common Stock, or
(b) any sale or transfer to another corporation or entity
of all or substantially all of the assets of the
Company;
then, and in either such case, the Holder of each Warrant then
outstanding shall have the right to purchase the kind and amount of
shares of stock and/or other securities and property receivable upon
such consolidation, merger, sale or transfer by a holder of the number
of shares of Common Stock issuable upon exercise of such Warrant
immediately prior to such consolidation, merger, sale, or transfer. The
provisions of this Section 9.2 shall similarly apply to successive
consolidations, mergers, sales or transfers.
9.3 NOTICE OF ADJUSTMENT. Whenever the number of shares of Warrant
Stock purchasable upon the exercise of each Warrant or the Warrant
Price of such Warrant Stock is adjusted or reduced, as herein provided,
the Company shall mail by first class, postage prepaid, to each Holder
(a) notice of any reduction on or before the day the reduction takes
effect, which shall state the reduced Warrant Price and the period
during which it will be in effect and/or (b) a certificate setting
forth the number of shares of Warrant Stock purchasable upon the
exercise of each Warrant and the Warrant Price on such Warrant Stock
after adjustment setting forth a brief statement of the facts requiring
such adjustment and setting forth the computation by which such
adjustment was made.
9.4 NO ADJUSTMENT FOR DIVIDENDS. No adjustment in respect of any cash
dividends shall be made during the term of a Warrant or upon the
exercise or conversion of a Warrant.
9.5 CERTAIN EVENTS. If any event occurs as to which in the reasonable
judgment of the Board of Directors of the Company, in good faith, the
other provisions of this Section 9 are not strictly applicable but the
lack of any adjustment would not in the opinion of the Board of
Directors of the Company fairly reflect the purchase rights of the
Holders of the Warrants in accordance with the basic intent and
principles of the provisions of this Agreement then the Board of
Directors of the Company shall appoint a Financial Advisor which shall
give its opinion upon the adjustment, if any, on a basis consistent
with the basic intent and principles established and the other
provisions of this Section 9, necessary to preserve, without dilution,
the exercise rights of the Holders. Upon receipt of such opinion, the
Company shall forthwith make the adjustments described therein which
adjustments shall be conclusive and binding.
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10. ELIMINATION OF FRACTIONS. The Company shall not be required to
issue certificates representing fractional shares of Common Stock upon any
exercise of Warrants, but will make a payment in cash, in lieu of issuing such
fractional shares, based on the Current Market Price per share at the time.
11. CERTIFICATES TO BEAR LEGENDS. The Warrant Certificates and
certificates representing shares of Warrant Stock shall be subject to a
stop-transfer order and each such certificate shall bear the following legends
by which each Holder shall be found:
THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 ("ACT"). THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THE SECURITIES UNDER THE ACT OR
AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED. THESE SECURITIES HAVE BEEN
ISSUED UNDER AND ARE GOVERNED BY AND ARE SUBJECT TO THAT
CERTAIN WARRANT AGREEMENT DATED AS OF JANUARY 18, 2001 (THE
WARRANT AGREEMENT). A COPY OF THE WARRANT AGREEMENT CAN BE
OBTAINED FROM THE SECRETARY OF THE COMPANY.
12. NO RIGHTS AS STOCKHOLDERS; NOTICES TO HOLDERS; UNISSUED WARRANTS.
Nothing contained in this Agreement or in any of the Warrant Certificates shall
be construed conferring upon the Holders or their transferees the right to vote
or to receive dividends or to consent to or receive notice as stockholders in
respect of any meeting of stockholders for the election of directors of the
Company or on any other matter, or any rights whatsoever as stockholders of the
Company. Warrants as to which the conditions precedent to issuance are not
satisfied shall be void and of no effect, and no Purchaser or other party shall
have any rights with respect thereto.
13. INVESTMENT INTENT. The Warrants to be purchased pursuant to this
Agreement are being purchased for each Purchaser's own account and with no
intention of distributing or reselling the Warrants. The Holder understands that
neither the Warrants nor the Common Stock have been registered under the Act or
any applicable state securities laws and that neither the Warrants nor the
Common Stock can be sold, transferred or otherwise disposed of without
registration under the Act and applicable state securities laws, unless it has
been established to the satisfaction of the Company that they may be sold,
transferred or otherwise disposed of without such registration.
14. NOTICES. Any notice pursuant to this Agreement to be given or made
by the Holder of any Warrant Certificate to or on the Company shall be
sufficiently given or made if delivered personally or sent by telecopier or by
certified mail, addressed to the Chief Financial Officer of the Company at the
Company's principal executive offices at 0000 Xxxxxxx Xxxxxx, X.X., Xxxxx 000,
Xxxxxx, Xxxx 00000 (unless notice has been given of a change of such
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address), and shall be effective three (3) days after having been mailed or upon
receipt if delivered personally or sent by telecopier, with receipt confirmed.
Notices or demands authorized by this Agreement to be given or made to the
Holder of any Warrant Certificate shall be sufficiently given or made if
delivered personally or sent by certified mail or by telecopier, addressed to
such Holder at the address of such Holder as shown on the Warrant Register, and
shall be effective three (3) days after having been mailed or upon receipt if
delivered personally or sent by telecopier, with receipt confirmed.
15. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Ohio.
16. SUPPLEMENTS, AMENDMENTS AND WAIVERS. Any supplement or amendment
to, or any waiver of any provision of, this Agreement shall be effective when
consented to in writing by the Holders of a majority of the Warrants then
outstanding (determined as though there were one Warrant for each share of
Common Stock issuable on the exercise of the then outstanding Warrants) and by
the Company.
17. SUCCESSORS. All the covenants and provisions of this Agreement by
or for the benefit of the Company or the Holders shall bind and inure to the
benefit of their respective successors and assigns hereunder.
18. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original; but
such counterparts together shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on the day, month and year first above written.
WATERLINK, INC.
By:/s/ Xxxx X. Xxxxx
Its: Chief Financial Officer
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WARRANT AGREEMENT SIGNATURE PAGE
Accepted and agreed as of the date first above written:
XXXXXXXX VENTURE PARTNERS III, L.P.
By: XXXXXXXX VENTURE MANAGEMENT III, L.P.,
as General Partner
By: PINKAS FAMILY PARTNERS, L.P.,
a General Partner
By: /s/ XXXXXX X. XXXXXX
-----------------------------
[Please Sign Above This Line]
Name: Xxxxxx X. Xxxxxx
Title: General Partner
Address: 00000 Xxxxxxx Xxxx.
Xxxxx 0000
Xxxxxxxxx, Xxxx 00000
Telephone No.: (000) 000-0000
Taxpayer Identification No.: 00-0000000
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WARRANT AGREEMENT SIGNATURE PAGE
Accepted and agreed as of
the date first above written:
CID EQUITY CAPITAL V, L.P.
By: CID EQUITY PARTNERS V,
As General Partner
By: /s/ Xxxx X. Xxxxxxx
-------------------------
[Please Sign Above This Line]
Name: Xxxx X. Xxxxxxx
Title: Managing General Partner
Address: Xxx Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxx 00000
Xxxxxxxxxxxx, Xxxxxxx 00000
Telephone No.: (000) 000-0000
Taxpayer Identification No.: 00-0000000
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SCHEDULE 1
Number of
Warrantholder Warrants
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Xxxxxxxx Venture Partners III, L.P. 50,000
CID Equity Capital V, L.P. 50,000
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EXHIBIT A
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
("ACT"). THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER THE
ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION
IS NOT REQUIRED.
THESE SECURITIES HAVE BEEN ISSUED UNDER AND ARE GOVERNED BY AND ARE SUBJECT TO
THAT CERTAIN WARRANT AGREEMENT DATED AS OF JANUARY 18, 2001 (THE "WARRANT
AGREEMENT"). A COPY OF THE WARRANT AGREEMENT CAN BE OBTAINED FROM THE SECRETARY
OF THE COMPANY.
WARRANT TO PURCHASE COMMON STOCK OF
WATERLINK, INC.
WARRANT NO. D-
This certifies that, for value received, ____________________, or its
permitted assigns, is entitled, subject to the terms set forth below, to
purchase from WATERLINK, INC., a Delaware corporation (the "Company"),
______________ shares (the "Shares") (subject to adjustment as provided in
Section 9 of the Warrant Agreement) of fully paid and nonassessable common
stock, $.01 par value per share, of the Company (the "Common Stock"), at the
purchase price of $0.01 per share (the "Purchase Price"), at any time or from
time to time up until 5:00 P.M. Cleveland, Ohio time on January 17, 2006.
1. EXERCISE PROVISIONS.
(a) MANNER OF EXERCISE. This Warrant may be exercised by the holder of
this Warrant surrendering to the Company at its principal office at
0000 Xxxxxxx Xxxxxx, X.X., Xxxxx 000, Xxxxxx, Xxxx 00000, or such other
address as to which the Company may hereafter give notice to the
holder, this Warrant, together with the exercise form attached to this
Warrant duly executed by the holder together with payment to the
Company in the amount obtained by multiplying the Purchase Price by the
number of shares of Common Stock designated in the exercise form.
Payment may be in cash or by cashier's or certified bank check payable
to the order of the Company, or by conversion of the unpaid principal
and accrued interest under the Notes in the manner set forth in the
Notes and the Warrant Agreement.
(b) PARTIAL EXERCISE. On any partial exercise, the Company shall
promptly issue and deliver to the holder of this Warrant a new Warrant
or Warrants of like tenor in the name
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of that holder providing for the right to purchase that number of
shares of Common Stock as to which this Warrant has not been exercised.
2. DELIVERY OF STOCK CERTIFICATES. Within a reasonable time after full
or partial exercise of this Warrant, the Company at its expense will cause to be
issued in the name of and delivered to the holder of this Warrant in accordance
with the requirements of the Warrant Agreement, a certificate or certificates
for the number of fully paid and nonassessable shares of Common Stock to which
that holder shall be entitled upon such exercise.
3. COMPLIANCE WITH SECURITIES ACT; DISPOSITION OF WARRANT OR SHARES OF
COMMON STOCK. The holder of this Warrant, by acceptance hereof, agrees that this
Warrant and the Shares of Common Stock to be issued upon exercise hereof are
being acquired for investment and that the holder will not offer, sell or
otherwise dispose of this Warrant or any Shares of Common Stock to be issued
upon exercise hereof, except under circumstances which will not result in a
violation of the Securities Act of 1933, as amended (the "Act") nor violate the
terms of the Warrant Agreement. In addition, any permitted Warrant transferee
will be required to agree to the provisions of this Section 3. The provisions of
this Section 3 shall not apply to any shares of Common Stock, the issuance or
resale of which is registered under the Act.
4. MISCELLANEOUS PROVISIONS.
(a) RESERVATION OF STOCK. The Company covenants that it will at all
times reserve and keep available, solely for issuance upon exercise of
this Warrant, all shares of Common Stock or other securities from time
to time issuable upon exercise of this Warrant.
(b) MODIFICATION. This Warrant and any of its terms may be changed,
waived, or terminated only by a written instrument signed by the party
against whom enforcement of that change, waiver or termination is
sought.
(c) REPLACEMENT. On receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction, or mutilation of this Warrant
and subject to the requirements of the Warrant Agreement, the Company
will execute and deliver, in lieu of this Warrant, a new Warrant of
like tenor.
(d) WARRANT AGENT. The Company may, on written notice to the holder of
this Warrant, appoint an agent having an office in Cleveland, Ohio, for
the purposes of issuing Common Stock upon the exercise of this Warrant
and of replacing or exchanging this Warrant, and after that appointment
any such issuance, replacement, or exchange shall be made at that
office by that agent.
(e) NO RIGHTS AS STOCKHOLDER. No holder of this Warrant, as such,
shall, solely by holding this Warrant, be entitled to vote or receive
dividends or be considered a stockholder of the Company for any
purpose, nor shall anything in this Warrant be
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construed to confer on any holder of this Warrant as such, any rights
of a stockholder of the Company or any right to vote, to give or
withhold consent to any corporate action, to receive notice of meeting
of stockholders, to receive dividends or subscription rights or
otherwise.
(f) ANTI-DILUTION RIGHTS. The holder hereof shall have certain
anti-dilution protection as to the Shares of Common Stock to be issued
upon exercise as specifically set forth in the Warrant Agreement which
may result in the adjustment from time to time of the Purchase Price
and/or the number of shares of Common Stock issuable upon the exercise
hereof.
(g) NOTICES. Notices hereunder to the holder of this Warrant shall be
sent as provided in the Warrant Agreement.
Dated: _______________, ______ WATERLINK, INC.
By:
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FORM OF EXERCISE
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(To be signed only upon exercise of Warrant)
To: WATERLINK, INC.
The undersigned holder of the attached Warrant hereby irrevocably
elects to exercise the right to purchase _______________ shares of Common Stock
of WATERLINK, INC., and herewith makes payment of $___________________ for those
shares, and requests that the certificate for those shares be issued in the name
of the undersigned and delivered to the address below the signature of the
undersigned. The undersigned hereby affirms the statements and covenants all as
set forth in Section 3 of the Warrant.
Dated:_______________, _____
(Signature must conform in all respects to
name of holder as specified on the face of
the attached Warrant)
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