EXHIBIT 10.23
THERMOENERGY CORPORATION
AND
CHASEMELLON SHAREHOLDER SERVICES
AND
NATIONAL SECURITIES CORPORATION
---------------------
WARRANT AGREEMENT
Dated as of August , 1996
AGREEMENT, dated this
day of August, 1997, among
THERMOENERGY CORPORATION, an Arkansas corporation (the
"Company"), CHASEMELLON SHAREHOLDER SERVICES, a New York banking
corporation, as Warrant Agent (the "Warrant Agent"), and NATIONAL
SECURITIES CORPORATION, its successors and assigns ("National" or
the "Representative").
W I T N E S S E T H:
WHEREAS, in connection with (i) the Company's offering to
the public of 1,100,000 shares of Common Stock (as defined in
Section 1), Series 1 redeemable common stock purchase warrants
(the "Series 1 Warrants"), each to purchase one share of Common
Stock and 1,100,000 Series 2 Redeemable Common Stock Purchase
Warrants (the "Series 2 Warrants"), each to purchase 1 share of
Common Stock. The Series 1 Warrants and the Series 2 Warrants
are sometimes referred to herein collectively as (the "Warrants")
and; (ii) the over-allotment option to purchase up to an
additional 165,000 shares of Common Stock, and/or 165,000 Series
1 Warrants, and/or 165,000 Series 2 Warrants, (the "Over-allotment Option");
and (iii) the sale to National of warrants
(the "Representative's Warrants") to purchase up to 1,465,000
shares of Common Stock and/or 160,000 Warrants, the Company will
issue up to 1,465,000 Series 1 Warrants and 1,465,000 Series 2
Warrants (subject to increase as provided in the Representative's
Warrant Agreement); and
WHEREAS, the Company desires to provide for the issuance of
certificates representing the Warrants; and
WHEREAS, the Company desires the Warrant Agent to act on
behalf of the Company, and the Warrant Agent is willing to so
act, in connection with the issuance, registration, transfer,
exchange and redemption of the Warrants, the issuance of
certificates representing the Warrants, the exercise of the
Warrants and the rights of the holders thereof.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements hereinafter set forth and for the purpose of
defining the terms and provisions of the Warrants and the
certificates representing the Warrants and the respective rights
and obligations thereunder of the Company, National, the holders
of certificates representing the Warrants and the Warrant Agent,
the parties hereto agree as follows:
SECTION 1. Definitions. As used herein, the following
terms shall have the following meanings, unless the context shall
otherwise require:
(a) "Act" shall mean the Securities Act of 1933, as
amended.
(b) "Common Stock" shall mean the authorized stock of
the Company of any class, whether now or hereafter authorized,
which has the right to participate in the voting and in the
distribution of earnings and assets of the Company without limit
as to amount or percentage which at the date hereof consists of
10,000,000 shares of Common Stock, no par value per share.
(c) "Commission" shall mean the Securities and
Exchange Commission.
(d) "Corporate Office" shall mean the office of the
Warrant Agent (or its successor) at which at any particular time
its business in New York, New York, shall be administered, which
office is located on the date hereof c/o American Stock Transfer
& Trust Company, 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
(e) "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended.
(f) "Exercise Date" shall mean, subject to the
provisions of Section 5(b) hereof, as to any Warrant, the date on
which the Warrant Agent shall have received both (i) the Warrant
Certificate representing such Warrant, with the exercise form
thereon duly executed by the Registered Holder hereof or his
attorney duly authorized in writing, and (ii) payment in cash or
by official bank or certified check made payable to the Warrant
Agent for the account of the Company, of the amount in lawful
money of the United States of America equal to the applicable
Exercise Price (as hereinafter defined) in good funds.
(g) "Exercise Price" shall mean, subject to
modification and adjustment as provided in Section 8, $ per
share and further subject to the Company's right, in its sole
discretion, to decrease the Exercise Price for a period of not
less than 30 days on not less than 30 days' prior written notice
to the Registered Holders and National.
(h) "Initial Warrant Exercise Date" shall mean August
, 1997.
(i) "Initial Warrant Redemption Date" shall mean
August , 1998.
(j) "Market Price" shall mean the last reported sale
price, or, in case no such reported sale takes place on such day,
the average of the last reported sales prices for the last three
(3) trading days, in either case as officially reported by the
principal securities exchange on which the Common Stock is listed
or admitted to trading or by the Nasdaq Stock Market, or, if the
Common Stock is not listed or admitted to trading on any national
securities exchange or quoted by the Nasdaq, the average closing
bid price as furnished by the Nasdaq through Nasdaq or similar
organization if Nasdaq is no longer reporting such information,
or if the Common Stock is not quoted on Nasdaq, as determined in
good faith (using customary valuation methods) by resolution of
the members of the Board of Directors of the Company, based on
the best information available to it.
(k) "Nasdaq" shall mean the National Association of
Securities Dealers, Inc.
(l) "Nasdaq" shall mean the Nasdaq Stock Market.
(m) "Redemption Date" shall mean the date (which may
not occur before the Initial Warrant Redemption Date) fixed for
the redemption of the Warrants in accordance with the terms
hereof.
(n) "Redemption Price" shall mean the price at which
the Company may, at its option, redeem the Warrants, in
accordance with the terms hereof, which price shall be $0.05 per
Warrant, subject to adjustment from time to time pursuant to the
provisions of Section 9 hereof.
(o) "Registered Holder" shall mean the person in whose
name any certificate representing the Warrants shall be
registered on the books maintained by the Warrant Agent pursuant
to Section 6.
(p) "Transfer Agent" shall mean ChaseMellon
Shareholder Services, or its authorized successor.
(q) "Underwriting Agreement" shall mean the
underwriting agreement dated August , 1997 between the Company
and the several underwriters listed therein relating to the
purchase for resale to the public of the 1,600,000 shares of
Common Stock and 1,600,000 Warrants.
(r) "Representative's Warrant Agreement" shall mean
the agreement dated as of August , 1997 between the Company
and National relating to and governing the terms and provisions
of the Representative's Warrants.
(s) "Warrant Certificate" shall mean a certificate
representing each of the Warrants substantially in the form
annexed hereto as Exhibit A.
(t) "Warrant Expiration Date" shall mean, unless the
Warrants are redeemed as provided in Section 9 hereof prior to
such date, 5:00 p.m. (New York time), on August , 2002, or the
Redemption Date as defined herein, whichever date is earlier;
provided that if such date shall in the State of New York be a
holiday or a day on which banks are authorized to close, then
5:00 p.m. (New York time) on the next following day which, in the
State of New York, is not a holiday or a day on which banks are
authorized to close. Upon five business days' prior written
notice to the Registered Holders, the Company shall have the
right to extend the Warrant Expiration Date.
SECTION 2. Warrants and Issuance of Warrant Certificates.
(a) Each Warrant shall initially entitle the
Registered Holder of the Warrant Certificate representing such
Warrant to purchase at the Exercise Price therefor from the
Initial Warrant Exercise Date until the Warrant Expiration Date
one share of Common Stock upon the exercise thereof in accordance
with the terms hereof, subject to modification and adjustment as
provided in Section 8.
(b) Upon execution of this Agreement, Warrant
Certificates representing the number of Warrants sold pursuant to
the Underwriting Agreement (subject to modification and
adjustment as provided in Section 8) shall be executed by the
Company and delivered to the Warrant Agent.
(c) Upon exercise of the Representative's Warrants as
provided therein, Warrant Certificates representing all or a
portion of 110,000 Warrants to purchase up to an aggregate of
330,000 shares of Common Stock, Warrants or any combination
thereof (subject to modification and adjustment as provided in
Section 8 hereof and in the Representative's Warrant Agreement),
shall be countersigned, issued and delivered by the Warrant Agent
upon written order of the Company signed by its Chairman of the
Board, Chief Executive Officer, President or a Vice President and
by its Treasurer or an Assistant Treasurer or its Secretary or an
Assistant Secretary.
(d) From time to time, up to the Warrant Expiration
Date or the Redemption Date, whichever date is earlier, the
Warrant Agent shall countersign and deliver Warrant Certificates
in required denominations of one or whole number multiples
thereof to the person entitled thereto in connection with any
transfer or exchange permitted under this Agreement. Except as
provided herein, no Warrant Certificates shall be issued except
(i) Warrant Certificates initially issued hereunder and those
issued on or after the Initial Warrant Exercise Date, upon the
exercise of fewer than all Warrants held by the exercising
Registered Holder, (ii) Warrant Certificates issued upon any
transfer or exchange of Warrants, (iii) Warrant Certificates
issued in replacement of lost, stolen, destroyed or mutilated
Warrant Certificates pursuant to Section 7, (iv) Warrant
Certificates issued pursuant to the Representative's Warrant
Agreement, and (v) at the option of the Company, Warrant
Certificates in such form as may be approved by its Board of
Directors, to reflect any adjustment or change in the Exercise
Price, the number of shares of Common Stock purchasable upon
exercise of the Warrants or the Redemption Price therefor made
pursuant to Section 8 hereof.
SECTION 3. Form and Execution of Warrant Certificates.
(a) The Warrant Certificates shall be substantially in
the form annexed hereto as Exhibit A (the provisions of which are
hereby incorporated herein) and may have such letters, numbers or
other marks of identification or designation and such legends,
summaries or endorsements printed, lithographed or engraved
thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be
required to comply with any law or with any rule or regulation
made pursuant thereto or with any rule or regulation of any stock
exchange on which the Warrants may be listed, or to conform to
usage. The Warrant Certificates shall be dated the date of
issuance thereof (whether upon initial issuance, transfer,
exchange or in lieu of mutilated, lost, stolen or destroyed
Warrant Certificates) and issued in registered form. Warrants
shall be numbered serially with the letter "W" on the Warrants.
(b) Warrant Certificates shall be executed on behalf
of the Company by its Chairman of the Board, Chief Executive
Officer, President or any Vice President and by its Treasurer or
an Assistant Treasurer or its Secretary or an Assistant
Secretary, by manual signatures or by facsimile signatures
printed thereon, and shall have imprinted thereon a facsimile of
the Company's seal. Warrant Certificates shall be manually
countersigned by the Warrant Agent and shall not be valid for any
purpose unless so countersigned. In any case any officer of the
Company who shall have signed any of the Warrant Certificates
shall cease to be such officer of the Company before the date of
issuance of the Warrant Certificates or before countersignature
by the Warrant Agent and issue and delivery thereof, such Warrant
Certificates, nevertheless, may be countersigned by the Warrant
Agent, issued and delivered with the same force and effect as
though the person who signed such Warrant Certificates had not
ceased to be such officer of the Company. After countersignature
by the Warrant Agent, Warrant Certificates shall be delivered by
the Warrant Agent to the Registered Holder promptly and without
further action by the Company, except as otherwise provided by
Section 4(a) hereof.
SECTION 4. Exercise.
(a) Warrants in denominations of one or whole number
multiples thereof may be exercised by the Registered Holder
thereof commencing at any time on or after the Initial Warrant
Exercise Date, but not after the Warrant Expiration Date, upon
the terms and subject to the conditions set forth herein and in
the applicable Warrant Certificate. A Warrant shall be deemed to
have been exercised immediately prior to the close of business on
the Exercise Date and the person entitled to receive the
securities deliverable upon such exercise shall be treated for
all purposes as the holder, upon exercise thereof, as of the
close of business on the Exercise Date. If Warrants in
denominations other than whole number multiples thereof shall be
exercised at one time by the same Registered Holder, the number
of full shares of Common Stock which shall be issuable upon
exercise thereof shall be computed on the basis of the aggregate
number of full shares of Common Stock issuable upon such
exercise. As soon as practicable on or after the Exercise Date
and in any event within five business days after such date, if
one or more Warrants have been exercised, the Warrant Agent on
behalf of the Company shall cause to be issued to the person or
persons entitled to receive the same a Common Stock certificate
or certificates for the shares of Common Stock deliverable upon
such exercise, and the Warrant Agent shall deliver the same to
the person or persons entitled thereto. Upon the exercise of any
one or more Warrants, the Warrant Agent shall promptly notify the
Company in writing of such fact and of the number of securities
delivered upon such exercise and, subject to subsection (b)
below, shall cause all payments of an amount in cash or by check
made payable to the order of the Company, equal to the Exercise
Price, to be deposited promptly in the Company's bank account.
(b) The Company shall engage National as a Warrant
solicitation agent, and, at any time upon the exercise of any
Warrants after one year from the date hereof, the Company shall
instruct the Warrant Agent to, and the Warrant Agent shall, on a
daily basis, within two business days after such exercise, notify
National of the exercise of any such Warrants and shall, on a
weekly basis (subject to collection of funds constituting the
tendered Exercise Price, but in no event later than five business
days after the last day of the calendar week in which such funds
were tendered), remit to National an amount equal to five percent
(5%) of the Exercise Price of such Warrants then being exercised
unless National shall have notified the Warrant Agent that the
payment of such amount with respect to such Warrant is violative
of the General Rules and Regulations promulgated under the
Exchange Act, or the rules and regulations of the Nasdaq or
applicable state securities or "blue sky" laws, or the Warrants
are those underlying the Representative's Warrants in which
event, the Warrant Agent shall have to pay such amount to the
Company; provided, that, the Warrant Agent shall not be obligated
to pay any amounts pursuant to this Section 4(b) during any week
that such amounts payable are less than $1,000 and the Warrant
Agent's obligation to make such payments shall be suspended until
the amount payable aggregates $1,000, and provided further, that,
in any event, any such payment (regardless of amount) shall be
made not less frequently than monthly. Notwithstanding the
foregoing, National shall be entitled to receive the commission
contemplated by this Section 4(b) as Warrant solicitation agent
only if: (i) National has provided actual services in connection
with the solicitation of the exercise of a Warrant by a
Registered Holder and (ii) the Registered Holder exercising a
Warrant affirmatively designates in writing on the exercise form
on the reverse side of the Warrant Certificate that the exercise
of such Registered Holder's Warrant was solicited by National.
(c) The Company shall not be required to issue
fractional shares on the exercise of Warrants. Warrants may only
be exercised in such multiples as are required to permit the
issuance by the Company of one or more whole shares. If one or
more Warrants shall be presented for exercise in full at the same
time by the same Registered Holder, the number of whole shares
which shall be issuable upon such exercise thereof shall be
computed on the basis of the aggregate number of shares
purchasable on exercise of the Warrants presented. If any
fraction of a share would, except for the provisions provided
herein, be issuable on the exercise of any Warrant (or specified
portion thereof), the Company shall pay an amount in cash equal
to such fraction multiplied by the then current market value of a
share of Common Stock, determined as follows:
(1) If the Common Stock is listed, or admitted to
unlisted trading privileges on a national securities exchange, or
is traded on Nasdaq, the current market value of a share of
Common Stock shall be the closing sale price of the Common Stock
at the end of the regular trading session on the last business
day prior to the date of exercise of the Warrants on whichever of
such exchanges or Nasdaq had the highest average daily trading
volume for the Common Stock on such day; or
(2) If the Common Stock is not listed or admitted to
unlisted trading privileges on any national securities exchange,
or listed, quoted or reported for trading on Nasdaq, but is
traded in the over-the-counter market, the current market value
of a share of Common Stock shall be the average of the last
reported bid and asked prices of the Common Stock reported by the
National Quotation Bureau, Inc. on the last business day prior to
the date of exercise of the Warrants; or
(3) If the Common Stock is not listed, admitted to
unlisted trading privileges on any national securities exchange,
or listed, quoted or reported for trading on Nasdaq, and bid and
asked prices of the Common Stock are not reported by the National
Quotation Bureau, Inc., the current market value of a share of
Common Stock shall be an amount, not less than the book value
thereof as of the end of the most recently completed fiscal
quarter of the Company ending prior to the date of exercise,
determined by the members of the Board of Directors of the
Company exercising good faith and using customary valuation
methods.
SECTION 5. Reservation of Shares; Listing; Payment of
Taxes; etc.
(a) The Company covenants that it will at all times
reserve and keep available out of its authorized Common Stock,
solely for the purpose of issue upon exercise of Warrants, such
number of shares of Common Stock as shall then be issuable upon
the exercise of all outstanding Warrants. The Company covenants
that all shares of Common Stock which shall be issuable upon
exercise of the Warrants shall, at the time of delivery thereof,
be duly and validly issued and fully paid and nonassessable and
free from all preemptive or similar rights, taxes, liens and
charges with respect to the issue thereof, and that upon issuance
such shares shall be listed on each securities exchange, if any,
on which the other shares of outstanding Common Stock of the
Company are then listed.
(b) The Company covenants that if any securities to be
reserved for the purpose of exercise of Warrants hereunder
require registration with, or approval of, any governmental
authority under any federal securities law before such securities
may be validly issued or delivered upon such exercise, then the
Company will file a registration statement under the federal
securities laws or a post-effective amendment, use its best
efforts to cause the same to become effective and to keep such
registration statement current while any of the Warrants are
outstanding and deliver a prospectus which complies with Section
10(a)(3) of the Act, to the Registered Holder exercising the
Warrant (except, if in the opinion of counsel to the Company,
such registration is not required under the federal securities
law or if the Company receives a letter from the staff of the
Commission stating that it would not take any enforcement action
if such registration is not effected). The Company will use its
best efforts to obtain appropriate approvals or registrations
under state "blue sky" securities laws with respect to any such
securities. However, Warrants may not be exercised by, or shares
of Common Stock issued to, any Registered Holder in any state in
which such exercise would be unlawful.
(c) The Company shall pay all documentary, stamp or
similar taxes and other governmental charges that may be imposed
with respect to the issuance of Warrants, or the issuance or
delivery of any shares of Common Stock upon exercise of the
Warrants; provided, however, that if shares of Common Stock are
to be delivered in a name other than the name of the Registered
Holder of the Warrant Certificate representing any Warrant being
exercised, then no such delivery shall be made unless the person
requesting the same has paid to the Warrant Agent the amount of
transfer taxes or charges incident thereto, if any.
(d) The Warrant Agent is hereby irrevocably authorized
as the Transfer Agent to requisition from time to time
certificates representing shares of Common Stock or other
securities required upon exercise of the Warrants, and the
Company will comply with all such requisitions.
SECTION 6. Exchange and Registration of Transfer.
(a) Warrant Certificates may be exchanged for other
Warrant Certificates representing an equal aggregate number of
Warrants of the same class or may be transferred in whole or in
part. Warrant Certificates to be exchanged shall be surrendered
to the Warrant Agent at its Corporate Office, and, upon
satisfaction of the terms and provisions hereof, the Company
shall execute and the Warrant Agent shall countersign, issue and
deliver in exchange therefor the Warrant Certificate or
Certificates which the Registered Holder making the exchange
shall be entitled to receive.
(b) The Warrant Agent shall keep, at its office, books
in which, subject to such reasonable regulations as it may
prescribe, it shall register Warrant Certificates and the
transfer thereof in accordance with customary practice. Upon due
presentment for registration of transfer of any Warrant
Certificate at such office, the Company shall execute and the
Warrant Agent shall issue and deliver to the transferee or
transferees a new Warrant Certificate or Certificates
representing an equal aggregate number of Warrants of the same
class.
(c) With respect to all Warrant Certificates presented
for registration of transfer, or for exchange or exercise, the
subscription or exercise form, as the case may be, on the reverse
thereof shall be duly endorsed or be accompanied by a written
instrument or instruments of transfer and subscription, in form
satisfactory to the Company and the Warrant Agent, duly executed
by the Registered Holder thereof or his attorney-in-fact duly
authorized in writing.
(d) A service charge may be imposed by the Warrant
Agent for any exchange or registration of transfer of Warrant
Certificates. In addition, the Company may require payment by
such holder of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith.
(e) All Warrant Certificates surrendered for exercise
or for exchange in case of mutilated Warrant Certificates shall
be promptly canceled by the Warrant Agent and thereafter retained
by the Warrant Agent until termination of this Agreement.
(f) Prior to due presentment for registration of
transfer thereof, the Company and the Warrant Agent may deem and
treat the Registered Holder of any Warrant Certificate as the
absolute owner thereof and of each Warrant represented thereby
(notwithstanding any notations of ownership or writing thereon
made by anyone other than a duly authorized officer of the
Company or the Warrant Agent) for all purposes and shall not be
affected by any notice to the contrary.
SECTION 7. Loss or Mutilation. Upon receipt by the Company
and the Warrant Agent of evidence satisfactory to them of the
ownership of and the loss, theft, destruction or mutilation of
any Warrant Certificate and (in the case of loss, theft or
destruction) of indemnity satisfactory to them, and (in case of
mutilation) upon surrender and cancellation thereof, the Company
shall execute and the Warrant Agent shall (in the absence of
notice to the Company and/or the Warrant Agent that a new Warrant
Certificate has been acquired by a bona fide purchaser)
countersign and deliver to the Registered Holder in lieu thereof
a new Warrant Certificate of like tenor representing an equal
aggregate number of Warrants. Applicants for a substitute
Warrant Certificate shall also comply with such other reasonable
regulations and pay such other reasonable charges as the Warrant
Agent may prescribe.
SECTION 8. Adjustment of Exercise Price and Number of
Shares of Common Stock Deliverable.
(a) Except as hereinafter provided, in the event the
Company shall, at any time or from time to time after the date
hereof and during the term of the Warrants, issue or sell any
shares of Common Stock for a consideration per share less than
the Exercise Price or issue any shares of Common Stock as a stock
dividend to the holders of Common Stock, or subdivide or combine
the outstanding shares of Common Stock into a greater or lesser
number of shares (any such issuance, subdivision or combination
being herein called a "Change of Shares"), then, and thereafter
upon each further Change of Shares, the Exercise Price for the
Warrants (whether or not the same shall be issued and
outstanding) in effect immediately prior to such Change of Shares
shall be changed to a price (including any applicable fraction of
a cent to the nearest cent) determined by dividing (i) the sum of
(a) the total number of shares of Common Stock outstanding
immediately prior to such Change of Shares, multiplied by the
Exercise Price in effect immediately prior to such Change of
Shares and (b) the consideration, if any, received by the Company
upon such sale, issuance, subdivision or combination, by (ii) the
total number of shares of Common Stock outstanding immediately
after such Change of Shares; provided, however, that in no event
shall the Exercise Price be adjusted pursuant to this computation
to an amount in excess of the Exercise Price in effect
immediately prior to such computation, except in the case of a
combination of outstanding shares of Common Stock.
For the purposes of any adjustment to be made in
accordance with this Section 8(a), the following provisions shall
be applicable:
(A) In case of the issuance or sale of shares of
Common Stock (or of other securities deemed hereunder to involve
the issuance or sale of shares of Common Stock) for a
consideration part or all of which shall be cash, the amount of
the cash portion of the consideration therefor deemed to have
been received by the Company shall be (i) the subscription price,
if shares of Common Stock are offered by the Company for
subscription, or (ii) the public offering price (before deducting
therefrom any compensation paid or discount allowed in the sale,
underwriting or purchase thereof by underwriters or dealers or
others performing similar services, or any expenses incurred in
connection therewith), if such securities are sold to
underwriters or dealers for public offering without a
subscription offering, or (iii) the gross amount of cash actually
received by the Company for such securities, in any other case.
(B) In case of the issuance or sale (otherwise
than as a dividend or other distribution on any stock of the
Company, and otherwise than on the exercise of options, rights or
warrants or the conversion or exchange of convertible or
exchangeable securities) of shares of Common Stock (or of other
securities deemed hereunder to involve the issuance or sale of
shares of Common Stock) for a consideration part or all of which
shall be other than cash, the amount of the consideration
therefor other than cash deemed to have been received by the
Company shall be the value of such consideration as determined in
good faith by the Board of Directors of the Company, using
customary valuation methods and on the basis of prevailing market
values for similar property or services.
(C) Shares of Common Stock issuable by way of
dividend or other distribution on any stock of the Company shall
be deemed to have been issued immediately after the opening of
business on the day following the record date for the
determination of shareholders entitled to receive such dividend
or other distribution and shall be deemed to have been issued
without consideration.
(D) The reclassification of securities of the
Company other than shares of Common Stock into securities
including shares of Common Stock shall be deemed to involve the
issuance of such shares of Common Stock for a consideration other
than cash immediately prior to the close of business on the date
fixed for the determination of security holders entitled to
receive such shares, and the value of the consideration allocable
to such shares of Common Stock shall be determined as provided in
subsection (B) of this Section 8(a).
(E) The number of shares of Common Stock at any
one time outstanding shall be deemed to include the aggregate
maximum number of shares issuable (subject to readjustment upon
the actual issuance thereof) upon the exercise of options, rights
or warrants and upon the conversion or exchange of convertible or
exchangeable securities.
(b) Upon each adjustment of the Exercise Price
pursuant to this Section 8, the number of shares of Common Stock
purchasable upon the exercise of each Warrant shall be the number
derived by multiplying the number of shares of Common Stock
purchasable immediately prior to such adjustment by the Exercise
Price in effect prior to such adjustment and dividing the product
so obtained by the applicable adjusted Exercise Price.
(c) In case the Company shall at any time after the
date hereof issue options, rights or warrants to subscribe for
shares of Common Stock, or issue any securities convertible into
or exchangeable for shares of Common Stock, for a consideration
per share (determined as provided in Sections 8(a) and 8(b) and
as provided below) less than the Exercise Price in effect
immediately prior to the issuance of such options, rights or
warrants, or such convertible or exchangeable securities, or
without consideration (including the issuance of any such
securities by way or dividend or other distribution), the
Exercise Price for the Warrants (whether or not the same shall be
issued and outstanding) in effect immediately prior to the
issuance of such options, rights or warrants, or such convertible
or exchangeable securities, as the case may be, shall be reduced
to a price determined by making the computation in accordance
with the provisions of Sections 8(a) and 8(b) hereof, provided
that:
(A) The aggregate maximum number of shares of
Common Stock, as the case may be, issuable or that may become
issuable under such options, rights or warrants (assuming
exercise in full even if not then currently exercisable or
currently exercisable in full) shall be deemed to be issued and
outstanding at the time such options, rights or warrants were
issued, for a consideration equal to the minimum purchase price
per share provided for in such options, rights or warrants at the
time of issuance, plus the consideration, if any, received by the
Company for such options, rights or warrants; provided, however,
that upon the expiration or other termination of such options,
rights or warrants, if any thereof shall not have been exercised,
the number of shares of Common Stock deemed to be issued and
outstanding pursuant to this subsection (A) (and for the purposes
of subsection (E) of Section 8(a) hereof) shall be reduced by the
number of shares as to which options, warrants and/or rights
shall have expired, and such number of shares shall no longer be
deemed to be issued and outstanding, and the Exercise Price then
in effect shall forthwith be readjusted and thereafter be the
price that it would have been had adjustment been made on the
basis of the issuance only of the shares actually issued plus the
shares remaining issuable upon the exercise of those options,
rights or warrants as to which the exercise rights shall not have
expired or terminated unexercised.
(B) The aggregate maximum number of shares of
Common Stock issuable or that may become issuable upon conversion
or exchange of any convertible or exchangeable securities
(assuming conversion or exchange in full even if not then
currently convertible or exchangeable in full) shall be deemed to
be issued and outstanding at the time of issuance of such
securities, for a consideration equal to the consideration
received by the Company for such securities, plus the minimum
consideration, if any, receivable by the Company upon the
conversion or exchange thereof; provided, however, that upon the
termination of the right to convert or exchange such convertible
or exchangeable securities (whether by reason of redemption or
otherwise), the number of shares of Common Stock deemed to be
issued and outstanding pursuant to this subsection (B) (and for
the purposes of subsection (E) of Section 8(a) hereof) shall be
reduced by the number of shares as to which the conversion or
exchange rights shall have expired or terminated unexercised, and
such number of shares shall no longer be deemed to be issued and
outstanding, and the Exercise Price then in effect shall
forthwith be readjusted and thereafter be the price that it would
have been had adjustment been made on the basis of the issuance
only of the shares actually issued plus the shares remaining
issuable upon conversion or exchange of those convertible or
exchangeable securities as to which the conversion or exchange
rights shall not have expired or terminated unexercised.
(C) If any change shall occur in the price per
share provided for in any of the options, rights or warrants
referred to in subsection (A) of this Section 8(c), or in the
price per share or ratio at which the securities referred to in
subsection (B) of this Section 8(c) are convertible or
exchangeable, such options, rights or warrants or conversion or
exchange rights, as the case may be, to the extent not
theretofore exercised, shall be deemed to have expired or
terminated on the date when such price change became effective in
respect of shares not theretofore issued pursuant to the exercise
or conversion or exchange thereof, and the Company shall be
deemed to have issued upon such date new options, rights or
warrants or convertible or exchangeable securities.
(d) In case of any reclassification or change of
outstanding shares of Common Stock issuable upon exercise of the
Warrants (other than a change in par value, or from par value to
no par value, or from no par value to par value or as a result of
a subdivision or combination), or in case of any consolidation or
merger of the Company with or into another corporation (other
than a merger with a Subsidiary in which merger the Company is
the continuing corporation) and which does not result in any
reclassification or change of the then outstanding shares of
Common Stock or other capital stock issuable upon exercise of the
Warrants (other than a change in par value, or from par value to
no par value, or from no par value to par value or as a result of
subdivision or combination) or in case of any sale or conveyance
to another corporation of the property of the Company as an
entirety or substantially as an entirety, then, as a condition of
such reclassification, change, consolidation, merger, sale or
conveyance, the Company, or such successor or purchasing
corporation, as the case may be, shall make lawful and adequate
provision whereby the Registered Holder of each Warrant then
outstanding shall have the right thereafter to receive on
exercise of such Warrant the kind and amount of securities and
property receivable upon such reclassification, change,
consolidation, merger, sale or conveyance by a holder of the
number of securities issuable upon exercise of such Warrant
immediately prior to such reclassification, change,
consolidation, merger, sale or conveyance and shall forthwith
file at the Corporate Office of the Warrant Agent a statement
signed by its Chief Executive Officer, President or a Vice
President and by its Treasurer or an Assistant Treasurer or its
Secretary or an Assistant Secretary evidencing such provision.
Such provisions shall include provision for adjustments which
shall be as nearly equivalent as may be practicable to the
adjustments provided for in Sections 8(a), (b) and (c). The
above provisions of this Section 8(d) shall similarly apply to
successive reclassifications and changes of shares of Common
Stock and to successive consolidations, mergers, sales or
conveyances.
(e) Irrespective of any adjustments or changes in the
Exercise Price or the number of shares of Common Stock
purchasable upon exercise of the Warrants, the Warrant
Certificates theretofore and thereafter issued shall, unless the
Company shall exercise its option to issue new Warrant
Certificates pursuant to Section 2(e) hereof, continue to express
the Exercise Price per share and the number of shares purchasable
thereunder as the Exercise Price per share and the number of
shares purchasable thereunder were expressed in the Warrant
Certificates when the same were originally issued.
(f) After each adjustment of the Exercise Price
pursuant to this Section 8, the Company will promptly prepare a
certificate signed by the Chairman, Chief Executive Officer or
President, and by the Treasurer or an Assistant Treasurer or the
Secretary or an Assistant Secretary, of the Company setting
forth: (i) the Exercise Price as so adjusted, (ii) the number of
shares of Common Stock purchasable upon exercise of each Warrant,
after such adjustment, and (iii) a brief statement of the facts
accounting for such adjustment. The Company will promptly file
such certificate with the Warrant Agent and cause a brief summary
thereof to be sent by ordinary first class mail to each
Registered Holder at his last address as it shall appear on the
registry books of the Warrant Agent. No failure to mail such
notice nor any defect therein or in the mailing thereof shall
affect the validity thereof except as to the holder to whom the
Company failed to mail such notice, or except as to the holder
whose notice was defective. The affidavit of an officer of the
Warrant Agent or the Secretary or an Assistant Secretary of the
Company that such notice has been mailed shall, in the absence of
fraud, be prima facie evidence of the facts stated herein.
(g) No adjustment of the Exercise Price shall be made
as a result of or in connection with (A) the issuance or sale of
shares of Common Stock pursuant to options, warrants, stock
purchase agreements and convertible or exchangeable securities
outstanding or in effect on the date hereof and on the terms
described in the final prospectus relating to the public offering
contemplated by the Underwriting Agreement; (B) the issuance or
sale of shares of Common Stock if the amount of said adjustment
shall be less than $.10, provided, however, that in such case,
any adjustment that would otherwise be required then to be made
shall be carried forward and shall be made at the time of and
together with the next subsequent adjustment that shall amount,
together with any adjustment so carried forward, to at least
$.10; (C) the issuance or sale of shares of Common Stock upon the
exercise of any "incentive stock options" (as such term is
defined in the Internal Revenue Code of 1986, as amended) or non-qualified
stock options under the Company's existing stock option
plans described in the final prospectus relating to the public
offering contemplated by the Underwriting Agreement provided the
exercise price of such options was not less than ten percent
(10%) of the Market Price on the date of grant; (D) the issuance
or sale of shares of Common Stock in an underwritten public
offering on behalf of the Company at a discount to the Market
Price of not more than seven percent (7%) per share; or (E) the
issuance or sale of shares of Common Stock for a bona fide
business purpose of the Company in an arm's length transaction
with an unaffiliated party involving a strategic alliance, joint
venture or licensing arrangement provided (i) the number of
shares so issued or sold do not exceed, individually or in the
aggregate at any time during the term of Warrants, more than
twenty percent (20%) of the then outstanding shares of Common
Stock; and (ii) such shares are issued or sold in exchange for
consideration valued by the Company's Board of Directors at not
less than ten percent (10%) of the Market Price on the date of
issuance and/or sale. In addition, Registered Holders shall not
be entitled to cash dividends paid by the Company prior to the
exercise of any Warrant or Warrants held by them.
SECTION 9. Redemption.
(a) Commencing on the Initial Warrant Redemption Date,
the Company may, on 30 days' prior written notice, redeem all the
Warrants at ten cents ($.10) per Warrant, provided, however, that
before any such call for redemption of Warrants can take place,
the average closing bid price for the Common Stock as reported by
Nasdaq, if the Common Stock is then traded on the Small Cap
Market (or the average closing sale price, if the Common Stock is
then traded on the Nasdaq National Market or on a national
securities exchange) shall have equaled or exceeded $ per
share for any twenty (20) trading days within a period of thirty
(30) consecutive trading days ending on the fifth trading day
prior to the date on which the notice contemplated by (b) and (c)
below is given (subject to adjustment in the event of any stock
splits or other similar events as provided in Section 8 hereof)
and if National gives its prior written consent to the giving of
the notice of redemption and the proposed redemption.
(b) In case the Company shall exercise its right to
redeem all of the Warrants, it shall give or cause to be given
notice to the Registered Holders of the Warrants, by mailing to
such Registered Holders a notice of redemption, first class,
postage prepaid, at their last address as shall appear on the
records of the Warrant Agent. Any notice mailed in the manner
provide herein shall be conclusively presumed to have been duly
given whether or not the Registered Holder receives such notice.
Not less than five (5) business days prior to the mailing to the
Registered Holders of the Warrants of the notice of redemption,
the Company shall deliver or cause to be delivered to National a
similar notice telephonically and confirmed in writing, and if
National is engaged as a Warrant solicitation agent, the Company
shall also deliver to cause to be delivered to National a list of
the Registered Holders (including their respective addresses and
number of Warrants beneficially owned) to whom such notice of
redemption has been or will be given.
(c) The notice of redemption shall specify (i) the
redemption price, (ii) the Redemption Date, which shall in no
event be less than thirty (30) days after the date of mailing of
such notice, (iii) the place where the Warrant Certificate shall
be delivered and the redemption price shall be paid, (iv) that
National shall receive the commission contemplated by Section
4(b) hereof, and (v) that the right to exercise the Warrant shall
terminate at 5:00 p.m. (New York time) on the business day
immediately preceding the date fixed for redemption. No failure
to mail such notice nor any defect therein or in the mailing
thereof shall affect the validity of the proceedings for such
redemption except as to a holder (a) to whom notice was not
mailed or (b) whose notice was defective. An affidavit of the
Warrant Agent or the Secretary or Assistant Secretary of the
Company that notice of redemption has been mailed shall, in the
absence of fraud, be prima facie evidence of the facts stated
therein.
(d) Any right to exercise a Warrant shall terminate at
5:00 p.m. (New York time) on the business day immediately
preceding the Redemption Date. The redemption price payable to
the Registered Holders shall be mailed to such persons at their
addresses of record.
(e) If National acts as the Warrant solicitation agent
for the Company, the Company shall indemnify National and each
person, if any, who controls National within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act
against all loss, claim, damage, expense or liability (including
all expenses reasonably incurred in investigating, preparing or
defending against any claim whatsoever) to which any of them may
become subject under the Act, the Exchange Act or otherwise,
arising from the registration statement or prospectus referred to
in Section 5(b) hereof to the same extent and with the same
effect (including the provisions regarding contribution) as the
provisions pursuant to which the Company has agreed to indemnify
National contained in Section 7 of the Underwriting Agreement.
(f) Five business days prior to the Redemption Date,
the Company shall furnish to National, as Warrant solicitation
agent, (i) an opinion of counsel to the Company, dated such date
and addressed to National, and (ii) a "cold comfort" letter dated
such date addressed to National, signed by the independent public
accountants who have issued a report on the Company's financial
statements included in such registration statement, in each case
covering substantially the same matters with respect to such
registration statement (and the prospectus included therein) and,
in the case of such accountants' letter, with respect to events
subsequent to the date of such financial statements, as are
customarily covered in opinions of issuer's counsel and in
accountants' letters delivered to underwriters in underwritten
public offerings of securities.
SECTION 10. Concerning the Warrant Agent.
(a) The Warrant Agent acts hereunder as agent and in a
ministerial capacity for the Company and National, and its duties
shall be determined solely by the provisions hereof. The Warrant
Agent shall not, by issuing and delivering Warrant Certificates
or by any other act hereunder, be deemed to make any
representations as to the validity or value or authorization of
the Warrant Certificates or the Warrants represented thereby or
of any securities or other property delivered upon exercise of
any Warrant or whether any stock issued upon exercise of any
Warrant is fully paid and nonassessable.
(b) The Warrant Agent shall not at any time be under
any duty or responsibility to any holder of Warrant Certificates
to make or cause to be made any adjustment of the Exercise Price
or the Redemption Price provided in this Agreement, or to
determine whether any fact exists which may require any such
adjustments, or with respect to the nature or extent of any such
adjustments, when made, or with respect to the method employed in
making the same. It shall not (i) be liable for any recital or
statement of fact contained herein or for any action taken,
suffered or omitted by it in reliance on any Warrant Certificate
or other document or instrument believed by it in good faith to
be genuine and to have been signed or presented by the proper
party or parties, (ii) be responsible for any failure on the part
of the Company to comply with any of its covenants and
obligations contained in this Agreement or in any Warrant
Certificate, or (iii) be liable for any act or omission in
connection with this Agreement except for its own negligence, bad
faith or willful misconduct.
(c) The Warrant Agent may at any time consult with
counsel satisfactory to it (who may be counsel for the Company or
for National) and shall incur no liability or responsibility for
any action taken, suffered or omitted by it in good faith in
accordance with the opinion or advice of such counsel.
(d) Any notice, statement, instruction, request,
direction, order or demand of the Company shall be sufficiently
evidenced by an instrument signed by the Chairman of the Board of
Directors, Chief Executive Officer, Chief Financial Officer,
President or any Vice President (unless other evidence in respect
thereof is herein specifically prescribed). The Warrant Agent
shall not be liable for any action taken, suffered or omitted by
it in accordance with such notice, statement, instruction,
request, direction, order or demand reasonably believed by it to
be genuine.
(e) The Company agrees to pay the Warrant Agent
reasonable compensation for its services hereunder and to
reimburse it for its reasonable expenses hereunder; the Company
further agrees to indemnify the Warrant Agent and save it
harmless from and against any and all losses, expenses and
liabilities, including judgments, costs and counsel fees, for
anything done or omitted by the Warrant Agent in the execution of
its duties and powers hereunder except losses, expenses and
liabilities arising as a result of the Warrant Agent's
negligence, bad faith or willful conduct.
(f) The Warrant Agent may resign its duties and be
discharged from all further duties and liabilities hereunder
(except liabilities resulting as a result of the Warrant Agent's
own gross negligence or willful misconduct), after giving 30
days' prior written notice to the Company. At least 15 days
prior to the date such resignation is to become effective, the
Warrant Agent shall cause a copy of such notice of resignation to
be mailed to the Registered Holder of each Warrant Certificate at
the Company's expense. Upon such resignation, or any inability
of the Warrant Agent to act as such hereunder, the Company shall
appoint in writing a new warrant agent. If the Company shall
fail to make such appointment within a period of 15 days after it
has been notified in writing of such resignation by the resigning
Warrant Agent, then the Registered Holder of any Warrant
Certificate may apply to any court of competent jurisdiction for
the appointment of a new warrant agent. Any new warrant agent,
whether appointed by the Company or by such a court, shall be a
bank or trust company having a capital and surplus, as shown by
its last published report to its stockholders, of not less than
$10,000,000 or a stock transfer company. After acceptance in
writing of such appointment by the new warrant agent is received
by the Company, such new warrant agent shall be vested with the
same powers, rights, duties and responsibilities as if it had
been originally named herein as the Warrant Agent, without any
further assurance, conveyance, act or deed; but if for any reason
it shall be necessary or expedient to execute and deliver any
further assurance, conveyance, act or deed, the same shall be
done at the expense of the Company and shall be legally and
validly executed and delivered by the resigning Warrant Agent.
Not later than the effective date of any such appointment the
Company shall file notice thereof with the resigning Warrant
Agent and shall forthwith cause a copy of such notice to be
mailed to the Registered Holder of each Warrant Certificate.
(g) Any corporation into which the Warrant Agent or
any new warrant agent may be converted or merged, any corporation
resulting from any consolidation to which the Warrant Agent or
any new warrant agent shall be a party, or any corporation
succeeding to the corporate trust business of the Warrant Agent
or any new warrant agent shall be a successor warrant agent under
this Agreement without any further act, provided that such
corporation is eligible for appointment as successor to the
Warrant Agent under the provisions of the preceding paragraph.
Any such successor warrant agent shall promptly cause notice of
its succession as warrant agent to be mailed to the Company and
to the Registered Holders of each Warrant Certificate.
(h) The Warrant Agent, its subsidiaries and
affiliates, and any of its or their officers or directors, may
buy and hold or sell Warrants or other securities of the Company
and otherwise deal with the Company in the same manner and to the
same extent and with like effect as though it were not Warrant
Agent. Nothing herein shall preclude the Warrant Agent from
acting in any other capacity for the Company or for any other
legal entity.
(i) The Warrant Agent shall retain for a period of two
years from the date of exercise any Warrant Certificate received
by it upon such exercise.
SECTION 11. Modification of Agreement.
The Warrant Agent and the Company may by supplemental
agreement make any changes or corrections in this Agreement (i)
that they shall deem appropriate to cure any ambiguity or to
correct any defective or inconsistent provision or manifest
mistake or error herein contained; or (ii) that they may deem
necessary or desirable and which shall not adversely affect the
interests of the holders of Warrant Certificates; provided,
however, that this Agreement shall not otherwise be modified,
supplemented or altered in any respect except with the consent in
writing of the Registered Holders representing not less than 66-2/3% of the
Warrants then outstanding; provided, further, that
no change in the number or nature of the securities purchasable
upon the exercise of any Warrant, or to increase the Exercise
Price therefor or to accelerate of the Warrant Expiration Date,
shall be made without the consent in writing of the Registered
Holder of the Warrant Certificate representing such Warrant,
other than such changes as are presenting specifically prescribed
by this Agreement as originally executed. In addition, this
Agreement may not be modified, amended or supplemented without
the prior written consent of National, other than to cure any
ambiguity or to correct any provision which is inconsistent with
any other provision of this Agreement or to make any such change
that is necessary or desirable and which shall not adversely
affect the interests of National and except as may be required by
law.
SECTION 12. Notices.
All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed to have been
made when delivered or mailed first-class registered or certified
mail, postage prepaid, as follows: if to the Registered Holder
of a Warrant Certificate, at the address of such holder as shown
on the registry books maintained by the Warrant Agent; if to the
Company at 000 Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx Xxxx, Xxxxxxxx
00000, Attention: X.X. Xxxxxxx, or at such other address as may
have been furnished to the Warrant Agent in writing by the
Company; and if to the Warrant Agent, at [Address]. Copies of
any notice delivered pursuant to this Agreement shall also be
delivered to National Securities Corporation, 0000 Xxxxxx Xxxxxx,
Xxxxx 0000, Xxxxxxx, Xxxxxxxxxx 00000-0000, Attention: General
Counsel, or at such other address as may have been furnished to
the Company and the Warrant Agent in writing.
SECTION 13. Governing Law.
This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without giving
effect to conflicts of laws.
SECTION 14. Binding Effect.
This Agreement shall be binding upon and inure to the
benefit of the Company, National, the Warrant Agent and their
respective successors and assigns and the holders from time to
time of Warrant Certificates or any of them. Nothing in this
Agreement is intended or shall be construed to confer upon any
other person any right, remedy or claim, in equity or at law, or
to impose upon any other person any duty, liability or
obligation.
SECTION 15. Termination.
This Agreement shall terminate at the close of business on
the Expiration Date of all of the Warrants or such earlier date
upon which all Warrants have been exercised or redeemed, except
that the Warrant Agent shall account to the Company for cash held
by it and the provisions of Section 10 hereof shall survive such
termination.
SECTION 16. Counterparts.
This Agreement may be executed in several counterparts,
which taken together shall constitute a single document.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the first date first above
written.
ATTEST: THERMOENERGY CORPORATION
By: By:
------------------- ----------------------
Name: Xxxxxx X. Xxxxxx Name: X. X. Xxxxxxx
Title: CEO/Secretary Title: President
NATIONAL SECURITIES
CORPORATION, INC.
By:
--------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Chairman
CHASEMELLON SHAREHOLDER
SERVICES
By:
--------------------------
Name:
Title:
EXHIBIT A
No. W VOID AFTER August 2002
------- ---,
WARRANTS
-------
REDEEMABLE [Series 1] [Series 2] WARRANT CERTIFICATE TO
PURCHASE ONE SHARE OF COMMON STOCK
THERMOENERGY CORPORATION
CUSIP #
---------
THIS CERTIFIES THAT, FOR VALUE RECEIVED
or its registered assigns (the "Registered Holder") is the owner
of the number of Redeemable Warrants (the "Warrants") specified
above. Each Warrant initially entitles the Registered Holder to
purchase, subject to the terms and conditions set forth in this
Certificate and the Warrant Agreement (as hereinafter defined),
one fully paid and nonassessable share of Common Stock, no par
value, of ThermoEnergy Corporation, an Arkansas corporation (the
"Company"), at any time between August ____, 1997 (the "Initial
Warrant Exercise Date"), and the Expiration Date (as hereinafter
defined) upon the presentation and surrender of this Warrant
Certificate with the Subscription Form on the reverse hereof duly
executed, at the corporate office of [ChaseMellon Shareholder
Services,] as Warrant Agent, or its successor (the "Warrant
Agent"), accompanied by payment of $_____ per share, subject to
adjustment (the "Exercise Price'), in lawful money of the United
States of America in cash or by check made payable to the Warrant
Agent for the account of the Company.
This Warrant Certificate and each Warrant represented hereby
are issued pursuant to and are subject in all respects to the
terms and conditions set forth in the Warrant Agreement (the
"Warrant Agreement"), dated August ____, 1997, by and between the
Company, National Securities Corporation ("National") and the
Warrant Agent.
In the event of certain contingencies provided for in the
Warrant Agreement, the Exercise Price and the number of shares of
Common Stock subject to purchase upon the exercise of each
Warrant represented hereby are subject to modification or
adjustment.
Each Warrant represented hereby is exercisable at the option
of the Registered Holder, but no fractional interests will be
issued. In the case of the exercise of less than all the
Warrants represented hereby, the Company shall cancel this
Warrant Certificate upon the surrender hereof and shall execute
and deliver a new Warrant Certificate or Warrant Certificates of
like tenor, which the Warrant Agent shall countersign, for the
balance of such Warrants.
The term "Expiration Date" shall mean 5:00 p.m. (New York
time) on the date which is five (5) years after the Initial
Warrant Exercise Date. If each such date shall in the State of
New York be a holiday or a day on which the banks are authorized
to close, then the Expiration Date shall mean 5:00 p.m. (New York
time) the next following day which in the State of New York is
not a holiday or a day on which banks are authorized to close.
The Company shall not be obligated to deliver any securities
pursuant to the exercise of this Warrant unless a registration
statement under the Securities Act of 1933, as amended (the
"Act'), with respect to such securities is effective or an
exemption thereunder is available. The Company has covenanted
and agreed that it will file a registration statement under the
Federal securities laws, use its best efforts to cause the same
to become effective, use its best efforts to keep such
registration statement current, if required under the Act, while
any of the Warrants are outstanding, and deliver a prospectus
which complies with Section 10(a)(3) of the Act to the Registered
Holder exercising this Warrant. This Warrant shall not be
exercisable by a Registered Holder in any state where such
exercise would be unlawful.
This Warrant Certificate is exchangeable, upon the surrender
hereof by the Registered Holder at the corporate office of the
Warrant Agent, for a new Warrant Certificate or Warrant
Certificates of like tenor representing an equal aggregate number
of Warrants, each of such new Warrant Certificates to represent
such number of Warrants as shall be designated by such Registered
Holder at the time of such surrender. Upon due presentment and
payment of any tax or other charge imposed in connection
therewith or incident thereto, for registration of transfer of
this Warrant Certificate at such office, a new Warrant
Certificate or Warrant Certificates representing an equal
aggregate number of Warrants will be issued to the transferee in
exchange therefor, subject to the limitations provided in the
Warrant Agreement.
Prior to the exercise of any Warrant represented hereby, the
Registered Holder shall not be entitled to any rights of a
stockholder of the Company, including, without limitation, the
right to vote or to receive dividends or other distributions, and
shall not be entitled to receive any notice of any proceedings of
the Company, except as provided in the Warrant Agreement.
Subject to the provisions of the Warrant Agreement, this
Warrant may be redeemed at the option of the Company, at a
redemption price of $.05 per Warrant, at any time commencing
after August , 1998, provided that the average closing bid
price for the Common Stock as reported by the Nasdaq SmallCap
Market, if the Common Stock is then traded on the Nasdaq SmallCap
Market (or the average closing sale price, if the Common Stock is
then traded on the Nasdaq National Market or a national
securities exchange), shall have equalled or exceeded $_____
per share for any twenty (20) trading days within a period of
thirty (30) consecutive trading days ending on the fifth trading
day prior to the Notice of Redemption, as defined below (subject
to adjustment in the event of any stock splits or other similar
events) and National has given its prior written consent to such
redemption. Notice of redemption (the "Notice of Redemption")
shall be given not later than the thirtieth day before the date
fixed for redemption, or as provided in the Warrant Agreement.
On and after the date fixed for redemption, the Registered Holder
shall have no rights with respect to the Warrants except to
receive the $.05 per Warrant upon surrender of this Warrant
Certificate.
Upon certain circumstances, National may be entitled to
receive an aggregate of five percent (5%) of the Exercise Price
of the Warrants represented hereby, if it is engaged as a Warrant
solicitation agent by the Company.
Prior to due presentment for registration of transfer
hereof, the Company and the Warrant Agent may deem and treat the
Registered Holder as the absolute owner hereof and of each
Warrant represented hereby (notwithstanding any notations of
ownership or writing hereon made by anyone other than a duly
authorized officer of the Company or the Warrant Agent) for all
purposes and shall not be affected by any notice to the contrary,
except as provided in the Warrant Agreement.
This Warrant Certificate shall be governed by and construed
in accordance with the laws of the State of California without
giving effect to conflicts of laws.
This Warrant Certificate is not valid unless countersigned
by the Warrant Agent.
IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be duly executed, manually or in facsimile by two
of its officers thereunto duly authorized and a facsimile of its
corporate seal to be imprinted hereon.
Dated: August , 1997
[SEAL] THERMOENERGY CORPORATION
By:
--------------------------
Name: X.X. Xxxxxxx
Title: President
By:
---------------------------
Xxxxxx Xxxxxx
COUNTERSIGNED:
CHASEMELLON SHAREHOLDER SERVICES
as Warrant Agent
By:
-----------------------------
Authorized Officer
SUBSCRIPTION FORM
To Be Executed by the Registered Holder
in Order to Exercise Warrants
The undersigned Registered Holder hereby irrevocably elects
to exercise _____ Warrants represented by this Warrant
Certificate, and to purchase the securities issuable upon the
exercise of such Warrants, and requests that certificates for
such securities shall be issued in the name of
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
-------------------------------------
-------------------------------------
-------------------------------------
(please print or type name and address)
and be delivered to
-------------------------------------
-------------------------------------
-------------------------------------
(please print or type name and address)
and if such number of Warrants shall not be all the Warrants
evidenced by this Warrant Certificate, that a new Warrant
Certificate for the balance of such Warrants be registered in the
name of, and delivered to, the Registered Holder at the address
stated below.
IMPORTANT: PLEASE COMPLETE THE FOLLOWING
1. The exercise of this Warrant was solicited by:
-------------------------------------. [ ]
2. The exercise of this Warrant was not solicited. [ ]
Dated:
----------------------------
------------------------------
------------------------------
Address
------------------------------
Social Security or Taxpayer
Identification Number
------------------------------
Signature Guaranteed
------------------------------
ASSIGNMENT
To Be Executed by the Registered Holder
in Order to Assign Warrants
FOR VALUE RECEIVED, ___________________, hereby sells,
assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER
--------------------------------
--------------------------------
--------------------------------
--------------------------------
(please print or type name and address)
______________ of the Warrants represented by this Warrant
Certificate, and hereby irrevocably constitutes and appoints
_____________ Attorney to transfer this Warrant Certificate on
the books of the Company, with full power of substitution in the
premises.
Dated:
---------------------
----------------------------
Signatured Guaranteed
----------------------------
THE SIGNATURE TO THE ASSIGNMENT OR THE SUBSCRIPTION FORM MUST
CORRESPOND TO THE NAME AS WRITTEN UPON THE FACE OF THIS WARRANT
CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR
ENLARGEMENT OR ANY CHANGE WHATSOEVER AND MUST BE GUARANTEED BY
AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS
AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN
APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO
S.E.C. RULE 17Ad-15.
