EXHIBIT 4.9
STOCK PURCHASE WARRANT
This Warrant is issued this 18th day of June, 1997, by DYNAGEN, INC., a
Delaware corporation (the "Company"), to ODYSSEY INVESTMENT PARTNERS, L.P., a
Pennsylvania limited partnership (ODYSSEY INVESTMENT PARTNERS, L.P. and any
subsequent assignee or transferee hereof are hereinafter referred to
collectively as "Holder" or "Holders").
AGREEMENT:
1. ISSUANCE OF WARRANT; TERM. For and in consideration of ODYSSEY
INVESTMENT PARTNERS, L.P. making a loan to the Company in an amount of One
Million and no/100ths Dollars ($1,000,000.00) pursuant to the terms of a secured
promissory note of even date herewith (the "Note") and related loan agreement of
even date herewith (the "Loan Agreement"), the payment of $150, and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company hereby grants to Holder the right to purchase 133,300
shares of the Company's common stock (the "Common Stock"). The shares of Common
Stock issuable upon exercise of this Warrant are hereinafter referred to as the
"Shares." This Warrant shall be exercisable at any time and from time to time
two (2) years from the date hereof until July 31, 2002. In exercising its rights
and obligations hereunder, the Company agrees to treat the Holder no less
favorably than it treats Sirrom Capital Corporation ("Sirrom") pursuant to the
Stock Purchase Warrant issued by the Company to Sirrom on the date hereof.
2. EXERCISE PRICE. The exercise price (the "Exercise Price") per
share for this Warrant shall be One Cent ($.01).
3. EXERCISE.
(a) This Warrant may be exercised by the Holder hereof (but
only on the conditions hereinafter set forth) as to all or any
increment or increments of One Thousand (1,000) Shares (or the balance
of the Shares if less than such number), upon delivery of written
notice of intent to exercise to the Company at the following address:
00 Xxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000 or such other address as
the Company shall designate in a written notice to the Holder hereof,
together with this Warrant and payment to the Company of the aggregate
Exercise Price of the Shares so purchased. The Exercise Price shall be
payable, at the option of the Holder, (i) by certified or bank check,
or (ii) by the surrender of the Note or portion thereof having an
outstanding principal balance equal to the aggregate Exercise Price. In
addition to and without limiting the rights of the Holder under the
terms of this Warrant, the Holder shall have the right (the "Conversion
Right") to convert this Warrant or any portion thereof into shares of
Common Stock as provided in this Section at any time or from time to
time prior to its expiration. In lieu of exercising this Warrant for
cash, the Holder may elect to surrender a portion of this Warrant for
conversion and to receive
shares of Common Stock equal to the value of this Warrant (or the
portion being cancelled, surrendered and converted) by surrender of
this Warrant to the Company together with notice of such election. Upon
such event, the Company shall issue to the Holder a number of shares of
the Company's Common Stock computed by using the following formula:
X = Y (A - B)
A
Where: X = the number of shares of Common Stock to be issued to the
Holder;
Y = the number of shares of Common Stock to otherwise be
purchased under this Warrant;
A = the Fair Market Value of one share of the Common Stock;
and
B = the Exercise Price of the Warrant (as adjusted to the date
of the calculation).
Upon exercise of the Conversion Right with respect to a
particular number of Shares, the Company shall deliver to the Holder, without
payment by the Holder of any exercise price or any cash or other consideration,
that number of Shares equal to the number computed using the above formula. No
fractional shares shall be issuable upon exercise of the Conversion Right, and
the number of shares to be issued in accordance with the foregoing formula is
other than a whole number, the Company shall round down to the nearest whole
number the total number of shares to be issued. For purposes of this Section
3(a), the term "Fair Market Value" shall mean the average last sale price per
share of Common Stock during the five (5) trading days immediately preceding the
effective date of conversion. If the Common Stock is not publicly traded at such
time, Fair Market Value shall be determined as follows:
(i) The Company and the Holder shall each appoint an
independent, experienced appraiser who is a member of a
recognized professional association of business appraisers.
The two appraisers shall determine the value of the shares of
Common Stock which would be issued upon the exercise of the
Warrant, taking into consideration that such shares would
constitute a minority interest, and would lack liquidity, and
further assuming that the sale would be between a willing
buyer and a willing seller, both of whom have full knowledge
of the financial and other affairs of the Company, and neither
of whom is under any compulsion to sell or to buy.
(ii) If the highest of the two appraisals is not more
than 10% more than the lowest of the appraisals, the Fair
Market Value shall be the average of the two appraisals. If
the highest of the two appraisals is 10% or more than the
lowest of the two appraisals, then a third appraiser shall be
appointed by
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the two appraisers, and if they cannot agree on a third
appraiser, the American Arbitration Association shall appoint
the third appraiser. The third appraiser, regardless of who
appoints him or her, shall have the same qualifications as the
first two appraisers.
(iii) The Fair Market Value after the appointment of
the third appraiser shall be the mean of the three appraisals.
(iv) The fees and expenses of the appraisers shall be
paid by the Company.
(b) Upon exercise of this Warrant as aforesaid, the Company
shall as promptly as practicable, and in any event within fifteen (15)
days thereafter, execute and deliver to the Holder of this Warrant a
certificate or certificates for the total number of whole Shares for
which this Warrant is being exercised in such names and denominations
as are requested by such Holder. If this Warrant shall be exercised
with respect to less than all of the Shares, the Holder shall be
entitled to receive a new Warrant covering the number of Shares in
respect of which this Warrant shall not have been exercised, which new
Warrant shall in all other respects be identical to this Warrant. The
Company covenants and agrees that it will pay when due any and all
state and federal issue taxes which may be payable in respect of the
issuance of this Warrant or the issuance of any Shares upon exercise of
this Warrant.
4. COVENANTS AND CONDITIONS. The above provisions are subject to
the following:
(a) Neither this Warrant nor the Shares have been registered
under the Securities Act of 1933, as amended ("Securities Act") or any
state securities laws ("Blue Sky Laws"). This Warrant has been acquired
for investment purposes and not with a view to distribution or resale
and may not be pledged, hypothecated, sold, made subject to a security
interest, or otherwise transferred without (i) an effective
registration statement for such Warrant under the Securities Act and
such applicable Blue Sky Laws, or (ii) an opinion of counsel, which
opinion and counsel shall be reasonably satisfactory to the Company and
its counsel, that registration is not required under the Securities Act
or under any applicable Blue Sky Laws (the Company hereby acknowledges
that Bass, Xxxxx & Xxxx is acceptable counsel). Transfer of the shares
issued upon the exercise of this Warrant shall be restricted in the
same manner and to the same extent as the Warrant and the certificates
representing such Shares shall bear substantially the following legend:
THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR ANY APPLICABLE STATE SECURITIES LAW
AND MAY NOT BE TRANSFERRED UNTIL (I) A REGISTRATION STATEMENT
UNDER THE ACT OR
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SUCH APPLICABLE STATE SECURITIES LAWS SHALL HAVE BECOME
EFFECTIVE WITH REGARD THERETO, OR (II) IN THE OPINION OF
COUNSEL ACCEPTABLE TO THE COMPANY, REGISTRATION UNDER SUCH
SECURITIES ACTS OR SUCH APPLICABLE STATE SECURITIES LAWS IS
NOT REQUIRED IN CONNECTION WITH SUCH PROPOSED TRANSFER.
The Holder hereof and the Company agree to execute such other documents and
instruments as counsel for the Company reasonably deems necessary to effect the
compliance of the issuance of this Warrant and any shares of Common Stock issued
upon exercise hereof with applicable federal and state securities laws.
(b) The Company covenants and agrees that all Shares which may
be issued upon exercise of this Warrant will, upon issuance and payment
therefor, be legally and validly issued and outstanding, fully paid and
nonassessable, free from all taxes, liens, charges and preemptive
rights, if any, with respect thereto or to the issuance thereof. The
Company shall at all times reserve and keep available for issuance upon
the exercise of this Warrant such number of authorized but unissued
shares of Common Stock as will be sufficient to permit the exercise in
full of this Warrant.
(c) The Company covenants and agrees that it shall not sell
any shares of the Company's capital stock at a price below the fair
market value (as reasonably determined by the Company's board of
directors) of such shares, without the prior written consent of the
Holder hereof. In the event that the Company sells shares of the
Company's capital stock in violation of this Section 4(c), the number
of shares of Common Stock issuable upon exercise of this Warrant shall
be equal to the product obtained by multiplying the number of shares
then issuable pursuant to this Warrant prior to such sale by a
fraction, the numerator of which shall be the product of (x) the total
number of shares of Common Stock outstanding on a fully diluted basis
immediately after such issuance or sale, multiplied by (y) the fair
market value immediately prior to such issuance or sale and the
denominator of which shall be the sum of (i) the number of shares of
Common Stock outstanding on a fully diluted basis immediately prior to
such issuance or sale multiplied by the fair market value immediately
prior to such issuance or sale, plus (ii) the aggregate amount of the
consideration received by the Company upon such issuance or sale (as
illustrated on Schedule I hereto).
5. TRANSFER OF WARRANT. Subject to the provisions of Section 4
hereof, this Warrant may be transferred, in whole or in part, to any person or
business entity, by presentation of the Warrant to the Company with written
instructions for such transfer. Upon such presentation for transfer, the Company
shall promptly execute and deliver a new Warrant or Warrants in the form hereof
in the name of the assignee or assignees and in the denominations specified in
such instructions. The Company shall pay all expenses incurred by it in
connection with the preparation, issuance and delivery of Warrants under this
Section.
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6. WARRANT HOLDER NOT SHAREHOLDER; RIGHTS OFFERING. Except as
otherwise provided herein, this Warrant does not confer upon the Holder, as
such, any right whatsoever as a shareholder of the Company. Notwithstanding the
foregoing, if the Company should offer to all of the Company's shareholders the
right to purchase any securities of the Company, then all shares of Common Stock
that are subject to this Warrant shall be deemed to be outstanding and owned by
the Holder and the Holder shall be entitled to participate in such rights
offering.
7. [INTENTIONALLY OMITTED]
8. ADJUSTMENT UPON CHANGES IN STOCK.
(a) If all or any portion of this Warrant shall be exercised
subsequent to any stock split, stock dividend, recapitalization,
combination of shares of the Company, or other similar event, occurring
after the date hereof, then the Holder exercising this Warrant shall
receive, for the aggregate price paid upon such exercise, the aggregate
number and class of shares which such Holder would have received if
this Warrant had been exercised immediately prior to such stock split,
stock dividend, recapitalization, combination of shares, or other
similar event. If any adjustment under this Section 8(a) would create a
fractional share of Common Stock or a right to acquire a fractional
share of Common Stock, such fractional share shall be disregarded and
the number of shares subject to this Warrant shall be the next higher
number of shares, rounding all fractions upward. Whenever there shall
be an adjustment pursuant to this Section 8(a), the Company shall
forthwith notify the Holder or Holders of this Warrant of such
adjustment, setting forth in reasonable detail the event requiring the
adjustment and the method by which such adjustment was calculated.
(b) If all or any portion of this Warrant shall be exercised
subsequent to any merger, consolidation, exchange of shares,
separation, reorganization or liquidation of the Company, or other
similar event, occurring after the date hereof, as a result of which
shares of Common Stock shall be changed into the same or a different
number of shares of the same or another class or classes of securities
of the Company or another entity, then the Holder exercising this
Warrant shall receive, for the aggregate price paid upon such exercise,
the aggregate number and class of shares which such Holder would have
received if this Warrant had been exercised immediately prior to such
merger, consolidation, exchange of shares, separation, reorganization
or liquidation, or other similar event. If any adjustment under this
Section 8(b) would create a fractional share of Common Stock or a right
to acquire a fractional share of Common Stock, such fractional share
shall be disregarded and the number of shares subject to this Warrant
shall be the next higher number of shares, rounding all fractions
upward. Whenever there shall be an adjustment pursuant to this Section
8(b), the Company shall forthwith notify the Holder or Holders of this
Warrant of such adjustment, setting forth in reasonable detail the
event requiring the adjustment and the method by which such adjustment
was calculated.
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9. PUT AND SUBSTITUTION AGREEMENT.
(a) The Company hereby irrevocably grants and issues to Holder
the right and option to sell to the Company (the "Put") this Warrant
for a period of 30 days immediately following five years from the date
hereof, at a purchase price (the "Purchase Price") equal to the lower
of (i) an amount based upon seven times the Company's consolidated
EBITDA for the twelve-month period ending May 31, 2002, or (ii)
$500,000 or Holder may substitute this Warrant for that certain Stock
Purchase Warrant of even date herewith issued by Superior
Pharmaceutical Company, an Ohio corporation and wholly owned subsidiary
of the Company (the "Subsidiary Warrant") ("Right of Substitution").
For purposes of this Warrant "EBITDA" means net income, plus interest
expense, plus income taxes, plus depreciation expense, plus
amortization expense, all determined in accordance with GAAP. If Sirrom
Capital Corporation executes its right of substitution with respect to
its Stock Purchase Warrant of even date herewith on or prior to five
(5) years from the date hereof, then the Company shall notify Holder,
and Holder may exercise the Right of Substitution on the same terms as
Sirrom Capital Corporation.
(b) The Company shall pay to the Holder, in cash or certified
or cashier's check, the Purchase Price in exchange for the delivery to
the Company of this Warrant within forty-five (45) days of the receipt
of written notice, addressed as set forth in Section 3 hereto, from the
Holder of its intention to exercise the Put and stating the Purchase
Price in accordance with this Section 9.
(c) Neither the Put nor the Right of Substitution may be
exercised by Holder if the fair market value of all of the Shares
originally issuable pursuant to this Warrant is equal to or greater
than $3.75 per Share on the date five years from the date hereof.
(d) The fair market value of each share of Common Stock of the
Company issuable pursuant to this Warrant shall be the average last
sale price per share of Common Stock regular way on the principal
national securities exchange on which the Company's common stock is
listed and traded during the five (5) trading days immediately
preceding the date five years from the date hereof or if the Common
Stock is not so publicly traded at such time shall be determined as
follows:
(i) The Company and the Holder shall each appoint an
independent, experienced appraiser who is a member of a
recognized professional association of business appraisers.
The two appraisers shall determine the value of the shares of
Common Stock which would be issued upon the exercise of the
Warrant, taking into consideration that such shares would
constitute a minority interest, and would lack liquidity, and
further assuming that the sale would be between a willing
buyer and a willing seller, both of whom have full knowledge
of the financial and other affairs of the Company, and neither
of whom is under any compulsion to sell or to buy.
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(ii) If the highest of the two appraisals is not more
than 10% more than the lowest of the appraisals, the fair
market value shall be the average of the two appraisals. If
the highest of the two appraisals is 10% or more than the
lowest of the two appraisals, then a third appraiser shall be
appointed by the two appraisers, and if they cannot agree on a
third appraiser, the American Arbitration Association shall
appoint the third appraiser. The third appraiser, regardless
of who appoints him or her, shall have the same qualifications
as the first two appraisers.
(iii) The fair market value after the appointment of
the third appraiser shall be the mean of the three appraisals.
(iv) The fees and expenses of the appraisers shall be
paid by the Company.
10. REGISTRATION.
(a) The Company and the holders of the Shares agree that if at
any time after the date hereof the Company shall propose to file a
registration statement with respect to the underwritten issuance and
sale by the Company any of its Common Stock on a form suitable for a
secondary offering, it will give notice in writing to such effect to
the registered holder(s) of the Shares at least thirty (30) days prior
to such filing, and, at the written request of any such registered
holder, made within five (5) business days after the receipt of such
notice, will include therein at the Company's cost and expense
(including the fees and expenses of counsel to such holder(s), but
excluding underwriting discounts, commissions and filing fees
attributable to the Shares included therein) such of the Shares as such
holder(s) shall request; provided, however, that if the offering being
registered by the Company is underwritten and if the representative of
the underwriters certifies in writing that the inclusion therein of the
Shares would materially and adversely affect the sale of the securities
to be sold by the Company thereunder, then the Company shall be
required to include in the offering only that number of securities,
including the Shares, which the underwriters determine in their sole
discretion will not jeopardize the success of the offering (the
securities so included to be apportioned pro rata among all selling
shareholders according to the total amount of securities entitled to be
included therein owned by each selling shareholder, but in no event
shall the total number of Shares included in the offering be less than
the number of securities included in the offering by any other single
selling shareholder).
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(b) Whenever the Company undertakes to effect the registration
of any of the Shares, the Company shall, as expeditiously as reasonably
possible:
(i) Prepare and file with the Securities and Exchange
Commission (the "Commission") a registration statement
covering such Shares and use its best efforts to cause such
registration statement to be declared effective by the
Commission as expeditiously as possible and to keep such
registration effective until the earlier of (A) the date when
all Shares covered by the registration statement have been
sold or (B) two hundred seventy (270) days from the effective
date of the registration statement; provided, that before
filing a registration statement or prospectus or any amendment
or supplements thereto, the Company will furnish to each
Holder of Shares covered by such registration statement and
the underwriters, if any, copies of all such documents
proposed to be filed (excluding exhibits, unless any such
person shall specifically request exhibits), which documents
will be subject to the review of such Holders and
underwriters, and the Company will not file such registration
statement or any amendment thereto or any prospectus or any
supplement thereto (including any documents incorporated by
reference therein) with the Commission if (A) the
underwriters, if any, shall reasonably object to such filing
or (B) if information in such registration statement or
prospectus concerning a particular selling Holder has changed
and such Holder or the underwriters, if any, shall reasonably
object.
(ii) Prepare and file with the Commission such
amendments and post-effective amendments to such registration
statement as may be necessary to keep such registration
statement effective during the period referred to in Section
10(b)(i) and to comply with the provisions of the Securities
Act with respect to the disposition of all securities covered
by such registration statement, and cause the prospectus to be
supplemented by any required prospectus supplement, and as so
supplemented to be filed with the Commission pursuant to Rule
424 under the Securities Act.
(iii) Furnish to the selling Holder(s) such numbers
of copies of such registration statement, each amendment
thereto, the prospectus included in such registration
statement (including each preliminary prospectus), each
supplement thereto and such other documents as they may
reasonably request in order to facilitate the disposition of
the Shares owned by them.
(iv) Use its best efforts to register and qualify
under such other securities laws of such jurisdictions as
shall be reasonably requested by any selling Holder and do any
and all other acts and things which may be reasonably
necessary or advisable to enable such selling Holder to
consummate the disposition of the Shares owned by such Holder,
in such jurisdictions; provided, however, that the Company
shall not be required in connection
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therewith or as a condition thereto to qualify to transact
business or to file a general consent to service of process in
any such states or jurisdictions.
(v) Promptly notify each selling Holder of the
happening of any event as a result of which the prospectus
included in such registration statement contains an untrue
statement of a material fact or omits any fact necessary to
make the statements therein not misleading and, at the request
of any such Holder, the Company will prepare a supplement or
amendment to such prospectus so that, as thereafter delivered
to the purchasers of such Shares, such prospectus will not
contain an untrue statement of a material fact or omit to
state any fact necessary to make the statements therein not
misleading and the Holder(s) shall suspend trading at the
request of the Company if upon advice of counsel to the
Company, such suspension is advisable.
(vi) Provide a transfer agent and registrar for all
such Shares not later than the effective date of such
registration statement.
(vii) Enter into such customary agreements (including
underwriting agreements in customary form for a primary
offering) and take all such other actions as the underwriters,
if any, reasonably request in order to expedite or facilitate
the disposition of such Shares (including, without limitation,
effecting a stock split or a combination of shares).
(viii) Make available for inspection by any selling
Holder or any underwriter participating in any disposition
pursuant to such registration statement and any attorney,
accountant or other agent retained by any such selling Holder
or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause
the officers, directors, employees and independent accountants
of the Company to supply all information reasonably requested
by any such seller, underwriter, attorney, accountant or agent
in connection with such registration statement.
(ix) Promptly notify the selling Holder(s) and the
underwriters, if any, of the following events and (if
requested by any such person) confirm such notification in
writing: (A) the filing of the prospectus or any prospectus
supplement and the registration statement and any amendment or
post-effective amendment thereto and, with respect to the
registration statement or any post-effective amendment
thereto, the declaration of the effectiveness of such
documents, (B) any requests by the Commission for amendments
or supplements to the registration statement or the prospectus
or for additional information, (C) the issuance or threat of
issuance by the Commission of any stop order suspending the
effectiveness of the registration statement or the initiation
of any proceedings for that purpose, and (D) the receipt by
the Company of any notification with respect to the suspension
of the qualification of the Shares for sale in any
jurisdiction or the initiation or threat of initiation
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of any proceeding for such purposes and the Holder(s) shall
suspend trading at the request of the Company if upon advice
of counsel to the Company, such suspension is advisable.
(x) Make every reasonable effort to prevent the entry
of any order suspending the effectiveness of the registration
statement and obtain at the earliest possible moment the
withdrawal of any such order, if entered.
(xi) Cooperate with the selling Holder(s) and the
underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing the Shares to be sold
and not bearing any restrictive legends, and enable such
Shares to be in such lots and registered in such names as the
underwriters may request at least two (2) business days prior
to any delivery of the Shares to the underwriters.
(xii) Provide a CUSIP number for all the Shares not
later than the effective date of the registration statement.
(xiii) [Intentionally Omitted]
(xiv) Otherwise use its best efforts to comply with
all applicable rules and regulations of the Commission, and
make generally available to its security holders earnings
statements satisfying the provisions of Section 11(a) of the
Securities Act, no later than forty-five (45) days after the
end of any twelve-month period (or ninety (90) days, if such
period is a fiscal year) (A) commencing at the end of any
fiscal quarter in which the Shares are sold to underwriters in
a firm or best efforts underwritten offering, or (B) if not
sold to underwriters in such an offering, beginning with the
first month of the first fiscal quarter of the Company
commencing after the effective date of the registration
statement, which statements shall cover such twelve-month
periods.
(c) The Company's obligations under Section 11(a) above with
respect to each holder of Shares are expressly conditioned upon such
holder's furnishing to the Company in writing such information
concerning such holder and the terms of such holder's proposed offering
as the Company shall reasonably request for inclusion in the
registration statement. If any registration statement including any of
the Shares is filed, then the Company shall indemnify each holder
thereof (and each underwriter for such holder and each person, if any,
who controls such underwriter within the meaning of the Securities Act)
from any loss, claim, damage or liability arising out of, based upon or
in any way relating to any untrue statement of a material fact
contained in such registration statement or any omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except for any such
statement or omission based on information furnished in writing by such
holder of the Shares expressly for use in connection with such
registration statement; and such holder shall indemnify the Company
(and each of its officers and directors
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who has signed such registration statement, each director, each person,
if any, who controls the Company within the meaning of the Securities
Act, each underwriter for the Company and each person, if any, who
controls such underwriter within the meaning of the Securities Act) and
each other such holder against any loss, claim, damage or liability
arising from any such statement or omission which was made in reliance
upon information furnished in writing to the Company by such holder of
the Shares expressly for use in connection with such registration
statement.
(d) For purposes of this Section 10, all of the Shares shall
be deemed to be issued and outstanding.
(e) The rights contained in this Section 10 shall expire as to
any holder of Shares that is able to sell Shares pursuant to Rule 144
under the Securities Act.
11. CERTAIN NOTICES. In case at any time the Company shall propose
to:
(a) declare any cash dividend upon its Common Stock;
(b) declare any dividend upon its Common Stock payable in
stock or make any special dividend or other distribution to the holders
of its Common Stock;
(c) offer for subscription to the holders of any of its
Common Stock any additional shares of stock in any class or other
rights;
(d) reorganize, or reclassify the capital stock of the
Company, or consolidate, merge or otherwise combine with, or sell all
or substantially all of its assets to, another corporation; or
(e) voluntarily or involuntarily dissolve, liquidate or
wind up the affairs of the Company;
then, in any one or more of said cases, the Company shall give to the
Holder of the Warrant, by certified or registered mail, (i) at least
twenty (20) days' prior written notice of the date on which the books
of the Company shall close or a record shall be taken for such
dividend, distribution or subscription rights or for determining rights
to vote in respect of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding up,
and (ii) in the case of such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding up, at
least twenty (20) days' prior written notice of the date when the same
shall take place. Any notice required by clause (i) shall also specify,
in the case of any such dividend, distribution or subscription rights,
the date on which the holders of Common Stock shall be entitled
thereto, and any notice required by clause (ii) shall specify the date
on which the holders of Common Stock shall be entitled to exchange
their Common Stock for securities or other property deliverable upon
such reorganization,
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reclassification, consolidation, merger, sale, dissolution, liquidation
or winding up, as the case may be.
12. GOVERNING LAW. This warrant shall be governed by the laws of
the State of Tennessee applicable to agreements made entirely within
the State.
13. SEVERABILITY. If any provision(s) of this Warrant or the
application thereof to any person or circumstances shall be invalid or
unenforceable to any extent, the remainder of this Warrant and the
application of such provisions to other persons or circumstances shall
not be affected thereby and shall be enforced to the greatest extent
permitted by law.
14. COUNTERPARTS. This Warrant may be executed in any number of
counterparts and be different parties to this Warrant in separate
counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the
same Warrant.
15. JURISDICTION AND VENUE. The Company hereby consents to the
jurisdiction of the courts of the State of Tennessee and the United
States District Court for the Middle District of Tennessee, as well as
to the jurisdiction of all courts from which an appeal may be taken
from such courts, for the purpose of any suit, action or other
proceeding arising out of any of its obligations arising under this
Agreement or with respect to the transactions contemplated hereby, and
expressly waives any and all objections it may have as to venue in any
such courts.
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IN WITNESS WHEREOF, the parties hereto have set their hands as of the
date first above written.
DYNAGEN, INC., a Delaware corporation
By: /s/ Xxxxxxxxx X. Xxxxxxx
----------------------------------
Title: Executive Vice President
-------------------------------
ODYSSEY INVESTMENT PARTNERS, L.P., a
Pennsylvania limited partnership
By: ODYSSEY ASSOCIATES, L.P., its General
Partner
By: ODYSSEY ASSOCIATES, INC., its General
Partner
By: /s/ ILLEGIBLE
----------------------------------
Title: President
-------------------------------
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SCHEDULE I
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Illustration of Anti-Dilution Provision
---------------------------------------
Assumptions:
Outstanding Common Stock: 100,000 Shares
(fully diluted)
Fair Market Value per share: $10
New Issuance: 20,000 Shares
New Issue Price (all in) $8
Debt Warrant: 10,000 Shares
FMV of Warrant Shares: $100,000 ($10 x 10,000 shares)
Formula:
10,000 x (120,000 x $10)
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(100,000 x $10) + (20,000 x $8)
10,000 x 1,200,000
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1,160,000
10,000 x 1.0345
Adjusted No. of Warrant Shares: 10,344.83
Percentage of Outstanding: 10,344.83 = 0.0862
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120,000
FMV of Adj. Warrant Shares: .0862 x 1,160,000 = $100,000
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