SETTLEMENT AND RELEASE AGREEMENT
This Settlement and Release Agreement ("This Agreement") is
made and entered into this 5th day of March, 1998, by and among LANXIDE
CORPORATION, a Delaware corporation ("Lanxide"), LANXIDE PERFORMANCE
MATERIALS, INC., a Delaware Corporation ("Lanxide Performance"), XXXX X.
XXXXXXX, an individual residing in Delaware, COMMODORE ENVIRONMENTAL
SERVICES, INC., a Delaware corporation ("COES"), COMMODORE APPLIED
TECHNOLOGIES, INC., a Delaware corporation ("Commodore Applied") and other
individuals and companies for whose benefit and on whose behalf this
Agreement is made, as more fully set forth hereinafter.
RECITALS:
WHEREAS, Lanxide's subsidiary, Lanxide Performance, is a party
to and borrower under (i) a Line of Credit Agreement with Commodore
Applied, as Lender, dated August 30, 1996 in the amount of $1.5 Million
(the "$1.5 Million Credit Agreement"), (ii) a Line of Credit Promissory
Note dated August 30, 1996 in the amount of $1.5 Million (the "$1.5 Million
Note"), and (iii) a Security Agreement dated August 30, 1996 in the amount
of $1.5 Million (the "$1.5 Million Security Agreement"); Lanxide is a
guarantor of the aforementioned $1.5 Million Credit Agreement and $1.5
Million Note (the "$1.5 Million Guaranty"); the $1.5 Million Credit
Agreement, Note, Security Agreement and Guaranty Agreement are hereinafter
collectively referred to as the "Lanxide Performance $1.5 Million Loan
Documents");
WHEREAS, Lanxide Performance is a party to and borrower under a
certain Line of Credit Agreement with COES, as Lender, dated November 13,
1996 in the amount of $3 Million (the "$3 Million Credit Agreement"), a
Line of Credit Promissory Note dated November 13, 1996 (the "$3 Million
Note"), a corresponding Security Agreement dated November 13, 1996 (the $3
Million Security Agreement"); Lanxide guaranteed the aforementioned $3
Million Credit Agreement, the $3 Million Note and $3 Million Security
Agreement (the "$3 Million Guaranty"); the aforementioned $3 Million Credit
Agreement, the $3 Million Note, the $3 Million Security Agreement and the
$3 Million Guaranty are hereinafter collectively referred to as the
"Lanxide Performance $3 Million Loan Documents");
WHEREAS, Lanxide and COES are parties to a Securities Purchase
Agreement dated the third day of July, 1997 (the "Securities Purchase
Agreement") pursuant to which, inter alia, Lanxide granted to COES a
warrant entitling COES or the holder to purchase up to 250,000 shares of
Lanxide Series F Preferred Stock at an exercise price of $100 per warrant
(the "Original Warrant");
WHEREAS, certain individual stockholders of Lanxide (the
"Subject Lanxide Stockholders") entered into a "Voting Agreement" with
Bentley X. Xxxx ("Xxxx"), Xxxx X. Xxxxxxxxx ("Xxxxxxxxx"), Xxxxx Xxxxxxxx
("Xxxxxxxx"), Xxxxxxx Xxxxx ("Xxxxx") and Xxxxxxx Xxxxxxx ("Xxxxxxx")
(collectively the "Proxy Holders") pursuant to which the Subject Lanxide
Stockholders granted a proxy to the Proxy Holders to vote their shares in
Lanxide;
WHEREAS, the parties hereto and the parties for and on whose
behalf this Agreement is made desire to settle certain disputes which have
arisen relating to the Lanxide Performance $1.5 Million Loan Documents, the
Lanxide Performance $3 Million Loan Documents, the Securities Purchase
Agreement, the Voting Agreement and other miscellaneous agreements, and
those same parties desire to release each other from claims arising out of
the foregoing agreements;
NOW, THEREFORE, in consideration of the foregoing Recitals and
other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, and intending to be legally bound, it is hereby
agreed as follows:
1. Voting Trust Agreement. The parties hereto acknowledge
and agree that the Voting Agreement was terminated on
February 5, 1998 and that from and after that date, was
no longer and is no longer of any force or effect
whatsoever.
2. Amendment to Securities Purchase Agreement.
Lanxide and COES hereby agree to amend the Securities
Purchase Agreement and agree that they shall,
contemporaneously herewith, execute and deliver an
AMENDMENT TO SECURITIES PURCHASE AGREEMENT in the form of
Exhibit A annexed hereto and made a part hereof.
3. The $3 Million Loan. COES hereby agrees that any and all
obligations and liabilities of Lanxide Performance and/or
Lanxide arising under or related to the Lanxide
Performance $3 Million Loan Documents, including, but not
limited to, the liability of Lanxide Performance to make
any payment pursuant to, or to repay any amount of money
which it borrowed (including any interest thereon) in
respect to the Lanxide Performance $3 Million Loan
Documents, and any duty of Lanxide to guarantee that
repayment (including any interest thereon) or make that
repayment (including any interest thereon), are hereby
terminated. Contemporaneously with the execution and
delivery of this Agreement and as consideration for this
Agreement (including the releases herein contained) and
the License Agreement (as such term is defined in
paragraph 5 hereof), COES will return to Lanxide
Performance and Lanxide the original $3 Million Note and
$3 Million Guaranty marked cancelled.
4. The $1.5 Million Loan. COES hereby agrees that any and
all obligations and liabilities of Lanxide Performance
and/or Lanxide arising under or related to the Lanxide
Performance $1.5 Million Loan Documents, including, but
not limited to, the liability of Lanxide Performance to
make any payment pursuant to or to repay any amount of
money which it borrowed (including any interest thereon)
in respect to the Lanxide Performance $1.5 Million Loan
Documents, and any duty of Lanxide to guarantee that
repayment (including any interest thereon) or make that
repayment (including any interest thereon), are hereby
terminated. Contemporaneously with the execution and
delivery of this Agreement and as consideration for this
Agreement (including the releases herein contained) and
the License Agreement, Commodore Applied will return to
Lanxide Performance and Lanxide the original $1.5 Million
Note and $1.5 Million Guaranty marked cancelled.
5. The CerasetTM Business, Trademark and License. Lanxide
shall cause its subsidiary, Lanxide Technology Company,
L.P., contemporaneously herewith, to execute and deliver
to Commodore Polymer Technologies, Inc., a Delaware
corporation and an affiliate of Commodore Applied and
COES ("Polymer"), a license agreement (the "License") to
use Lanxide Technology Company, L.P.'s CerasetTM
technology and trademark, which license agreement shall
be in the form of Exhibit "B" annexed hereto and made a
part hereof (the "License Agreement"). Lanxide hereby
agrees to transfer to Polymer all aspects of Lanxide's
Ceraset business that relate to the License, including
but not limited to customer lists, prospective contracts,
and names and addresses of former employees (whom Polymer
is authorized to attempt to hire). Lanxide further agrees
to assign any agreements that it has that relate
exclusively to the rights being granted in the license to
Polymer. In the event of any conflict between the
provisions of this paragraph 5 and the License Agreement,
the provisions of the License Agreement shall control.
6. Release.
A. Lanxide, for itself and all of its subsidiaries, including,
without limitation, Lanxide Performance, and Xxxx X. Xxxxxxx (collectively
the "Lanxide Releasors") for and on behalf of themselves and their
respective heirs, administrators, executors, predecessors, successors and
assigns hereby unconditionally and forever fully release, remise, quit
claim, settle and discharge any and all claims, demands, liabilities,
actions, choses-in-action, causes-in-action, whether known or unknown,
legal or equitable, absolute, contingent or vested, which any or all of the
Lanxide Releasors may have had, have or may hereafter acquire against (i)
COES and any of its subsidiaries or affiliates, including without
limitation, Commodore Applied, and their respective past or present Board
members and corporate officers (the "Commodore Group"), (ii) the Lanxide
stockholders identified on Schedule A to the Voting Agreement, to wit,
Bentley X. Xxxx, Xxxxx Xxxxx, Xxxxxx Xxxx, Xxxxxxx Xxxxxxxxx, Xxxx X.
Xxxxxxxxx, Xxxx X. Xxxxxxx and Xxx Xxxx Xxxxxxxxx (the "Subject Lanxide
Shareholders"), (iii) the Proxy Holders identified in the Voting Agreement,
to wit, Bentley X. Xxxx, Xxxx X. Xxxxxxxxx, Xxxxx Xxxxxxxx, Xxxxxxx Xxxxx
and Xxxxxxx Xxxxxxx (the "Lanxide Proxy Holders"), and (iv) those former
members of the Lanxide Board of Directors, to wit, Xxxxxxx X. Xxxxxxxx,
Esquire and Xxxxxxx X. Xxxxxx (the "Former Lanxide Directors"), and all of
their respective heirs, administrators, executors, predecessors,
successors, assigns, privies, and attorneys-at-law or other legal or
financial advisors, which relate to, or arise from, actions taken or
agreements made prior to the date hereof. Without in any way intending to
limit the generality of the foregoing, the Lanxide Releasors hereby
releases COES, Commodore Applied, the Subject Lanxide Shareholders and the
Proxy Holders, and Former Lanxide Directors, and their respective heirs,
administrators, executors, predecessors, successors and assigns from any
and all claims the Lanxide Releasors may have had or have as of the date
hereof arising out of the Voting Agreement, including any vote of Lanxide
shares undertaken by or omitted by the Proxy Holders and for any breaches
by COES under the Securities Purchase Agreement.
X. XXXX and Commodore Applied, for and on behalf of themselves
and all of their subsidiaries (collectively, the "Commodore Releasors") and
their respective predecessors, successors and assigns, hereby
unconditionally and forever fully release, remise, quit claim, settle and
discharge any and all claims, demands, liabilities, actions,
choses-in-action, causes-in-action, whether known or unknown, legal or
equitable, absolute, contingent or vested, which any or all of the
Commodore Releasors may have had, have or may hereafter acquire against the
Lanxide Releasors and all of their respective past or present board
members, and corporate officers, heirs, administrators, executors,
predecessors, successors, assigns, privies, and attorneys-at-law or other
legal or financial advisors, which relate to, or arise from, actions taken
or agreements made prior to the date hereof. Without intending to limit the
generality of the foregoing, each of the Commodore Releasors hereby
releases the Lanxide Releasors and all of their respective past or present
board members, and corporate officers, heirs, administrators, executors,
predecessors, successors, assigns, privies, and attorneys-at-law or other
legal or financial advisors, from and against any and all liabilities and
obligations arising under or related to the Lanxide Performance $1.5
Million Loan Documents, the Lanxide Performance $3 Million Loan Documents
and the Securities Purchase Agreement.
C. Nothing in this section is intended to release any party
hereto from any breach or default under this Agreement, the Amendment to
Securities Purchase Agreement or the License Agreement from and after the
date hereof.
7. Representations and Warranties.
Each party hereto represents and warrants to each other party as
follows:
7.1 Corporate Organization, Standing. It is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware.
7.2 Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by it and, subject to the due
authorization, execution and delivery by the other parties hereto,
constitutes a legal, valid and binding obligation of it, enforceable in
accordance with its terms, except that (i) the enforceability hereof may be
subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights and
(ii) the remedy of specific performance and injunctive and other terms of
equitable relief may be subject to equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought. The
execution and delivery of this Agreement, the consummation of the
transactions contemplated hereto and the fulfillment and compliance with
the terms and conditions hereof do not and will not after the giving or
notice, or the lapse of time, or otherwise: (a) violate any provisions of
any judicial or administrative order, award, judgment or decree applicable
to it, or (b) conflict with any of the provisions of the Articles or
Certificate of Incorporation or By-Laws of it, or (c) conflict with, result
in a breach of or constitute a default under any agreement or instrument to
which it is a party or by which it is bound, except for any of the
foregoing that, individually or in the aggregate, would not have a material
adverse effect on the financial condition, operations or businesses of such
party and its subsidiaries, taken as a whole.
7.3 Disclosure. No representation, warranty or covenant in this
Agreement nor any Schedule, statement, list or certificate furnished or to
be furnished to Sellers pursuant thereto, or in connection with the
transactions contemplated hereby, contains any untrue statement of a
material fact, or omits to state a material fact required to be stated
therein or necessary to make the statements contained therein not
misleading.
8.1 Notices. All notices, requests, demands and other
communications under or in respect of this Agreement or any transactions
hereunder shall be in writing (which may include telegraphic or telecopied
communication) and shall be personally delivered, sent by overnight
courier, mailed (registered or certified mail, return receipt requested),
telegraphed or telecopied by facsimile transmission to the applicable party
at its address or telecopier number indicated below.
If to COES:
Commodore Environmental Services, Inc.
000 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Atten: Xxxxxxx X. Xxxxxxxx, Esquire
Senior Vice President and General Counsel
Chief Financial and Administrative Officer
Telecopier No.: (000) 000-0000
If to Commodore Applied:
Commodore Applied Technologies, Inc.
000 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Atten: Xxxxxxx X. Xxxxxxxx, Esquire
Senior Vice President and General Counsel
Chief Financial and Administrative Officer
Telecopier No.: (000) 000-0000
If to the Lanxide Companies:
Lanxide Corporation
0000 Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000-0000
Atten:Xx. Xxxx X. Xxxxxxx, President
Telecopier No.: (000) 000-0000
8.2 Entire Agreement. This Agreement (including the Exhibits
and Schedules) contains the entire agreement among the parties with respect
to the subject matter contained herein and supersedes all prior
arrangements or understandings, written or oral, with respect thereto.
8.3 Amendments. Any term or condition of this Agreement may be
amended or modified in whole or in part at any time, to the extent
authorized by applicable law, by an agreement in writing, authorized and
executed in the same manner as this Agreement by the parties hereto. No
delay on the part of any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any waiver on the
part of any party of any right, power of privilege hereunder, nor shall any
single or partial exercise of any right, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege hereunder. The rights and remedies herein
provided are cumulative and are not exclusive of any rights or remedies
which any party may otherwise have at law or in equity. The rights and
remedies of any party arising out of or otherwise in respect of any
inaccuracy in or breach of any representation, warranty, covenant or
agreement contained in this Agreement shall in no way be limited by the
fact that the act, omission, occurrence or breach may also be the subject
matter of any other representation, warranty, covenant or agreement
contained in this Agreement (or in any other agreement between the parties)
as to which there is no inaccuracy or breach.
8.4 Severability. If any provision of This Agreement is held
invalid or unenforceable, either in its entirety or by virtue of its scope
or application to given circumstances, such provision shall thereupon be
deemed modified only to the extent necessary to render same valid, or not
applicable to given circumstances, or excised from this Agreement, as the
situation may require, and this Agreement shall be construed and enforced
as if such provision had been included herein as so modified in scope or
application, or had not been included herein, as the case may be.
8.5 Execution and Delivery. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
Delivery of a counterpart shall be deemed effective upon receipt by the
other party of telefaxed signature page to this Agreement, provided that
such party shall nonetheless transmit its original executed signature page
to the other party.
8.6 Exhibits. The Exhibits and other documents attached to or
delivered herewith are hereby incorporated and made a part of this
Agreement as if set forth in full herein.
8.7 Drafting. No presumption shall operate in favor of or
against any party in the construction or interpretation of this Agreement
as a consequence of a party's responsibility for drafting this Agreement.
8.8 Recitals. The recital clauses of this Agreement are
incorporated herein to the body as though set forth at length.
8.9 Attorney and Professional Fees. Each party will pay his/her
own attorney or professional fees in connection with this Agreement or
settlement discussions leading to this Agreement.
8.10 Captions. The captions of Sections hereof are for
convenience only and shall not control or affect the meaning or
construction of any of the provisions of this Agreement.
8.11 Controlling Law. The parties hereto agree that this
Agreement shall be governed and construed by the internal, substantive laws
of the State of New York (without regard to that state's choice of law
rules or doctrines) and, if applicable, the substantive law (statutory,
administrative or common law) of the United States (without regard to its
choice of law, rules or doctrines) Sellers hereby consent to personal
jurisdiction in the State of New York for the purposes of any matter of or
related to this Agreement or any other agreement between the parties hereto
executed and delivered on or about the date hereof, including for purposes
of any amendments hereto or thereto. The parties hereto further agree that
venue for any dispute arising under this Agreement or for any other
agreement between the parties hereto which are executed on or about the
date hereof shall be proper in the United States District Court for the
Southern District of New York. The parties also expressly waive trial by
jury and the right to request a transfer of venue.
8.12 Binding Effect. This Agreement shall be binding and inure
to the benefit of the named parties hereto, all of their wholly or
partially-owned subsidiaries, the parties on whose behalf and for whose
benefit it is made and their respective heirs, administrators, executors,
successors and assigns.
8.13 Confirmation of Effectiveness of Earlier Granted Licenses.
Nothing contained herein shall affect in any manner any license granted by
Lanxide or any of its affiliates to Commodore Applied or any of its
affiliates as consideration in whole or in part for and in connection with
the loans made pursuant to the Lanxide Performance $1.5 Million Loan
Documents and the Lanxide Performance $3 Million Loan Documents, including
without limitation that certain License Agreement dated as of August 29,
1996 by and among Lanxide Technology Company L.P., Commodore Applied and
Lanxide, a copy of which is attached hereto as Exhibit D.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, and intending to be legally bound, the parties
have hereto executed this Agreement on the day and date first above
written.
Attest: LANXIDE CORPORATION
/s/ R. Xxxxxxx Xxxx By: /s/ Xxxx X. Xxxxxxx
_____________________ ___________________________
Xxxx X. Xxxxxxx, its President
LANXIDE PERFORMANCE MATERIALS, INC.
/s/ R. Xxxxxxx Xxxx By: /s/ Xxxx X. Xxxxxxx
____________________ ____________________________
Xxxx X. Xxxxxxx, its President
COMMODORE ENVIRONMENTAL SERVICES, INC.
/s/ Xxxxxxx X. Xxxxxxxx By: /s/ Xxxx X. Xxxxxxxxx
________________________ __________________________________
Xxxx X. Xxxxxxxxx, its President
COMMODORE APPLIED TECHNOLOGIES, INC.
/s/ Xxxxxxx X. Xxxxxxxx By: /s/ Xxxx X. Xxxxxxxxx
________________________ __________________________________
Xxxx X. Xxxxxxxxx, its CEO
/s/ R. Xxxxxxx Xxxx By: /s/ Xxxx X. Xxxxxxx
----------------------- -------------------------------------
Xxxx X. Xxxxxxx
[SIGNATURE PAGE TO SETTLEMENT AND RELEASE AGREEMENT]
EXHIBIT LIST
Exhibit
Amendment to Securities Purchase Agreement A
License Agreement B
List of Third Party CerasetTM Licenses C
August 29, 1996 License Agreement D
EXHIBIT A
AMENDMENT TO SECURITIES PURCHASE AGREEMENT
This Amended Securities Purchase Agreement (this "Agreement")
is entered into this 5th day of March, 1998, by and between LANXIDE
CORPORATION, a Delaware corporation ("Lanxide") and COMMODORE ENVIRONMENTAL
SERVICES, INC., a Delaware corporation, ("COES").
RECITALS:
WHEREAS, Lanxide's subsidiary, Lanxide Performance, is a party
to and borrower under (i) a Line of Credit Agreement with Commodore Applied
Technologies, Inc., Lender, dated August 30, 1996 in the amount of $1.5
Million (the "$1.5 Million Credit Agreement"), (ii) a Line of Credit
Promissory Note dated August 30, 1996 in the amount of $1.5 Million (the
"$1.5 Million Note"), and (iii) a Security Agreement dated August 30, 1996
in the amount of $1.5 Million (the "$1.5 Million Security Agreement");
Lanxide is a guarantor of the aforementioned $1.5 Million Credit Agreement
and $1.5 Million Note; the $1.5 Million Credit Agreement, Note, Security
Agreement and Guaranty Agreement are hereinafter collectively referred to
as the "Lanxide Performance $1.5 Million Loan Documents");
WHEREAS, Lanxide Performance is a party to and borrower under a
certain Line of Credit Agreement with COES dated November 13, 1996 in the
amount of $3 Million (the "$3 Million Credit Agreement"), a Line of Credit
Promissory Note dated November 13, 1996 (the "$3 Million Note"), a
corresponding Security Agreement dated November 13, 1996 (the $3 Million
Security Agreement"); Lanxide guaranteed the aforementioned $3 Million
Credit Agreement, the $3 Million Note and $3 Million Security Agreement
(the "Lanxide $3 Million Guaranty"); the aforementioned $3 Million Credit
Agreement, the $3 Million Note, the $3 Million Security Agreement and the
$3 Million Lanxide Guaranty are hereinafter collectively referred to as the
"Lanxide Performance $3 Million Loan Documents");
WHEREAS, Lanxide and COES are parties to a Securities Purchase
Agreement dated the third day of July, 1997 (the "Securities Purchase
Agreement") pursuant to which, inter alia, Lanxide granted to COES a
warrant entitling COES or the holder to purchase up to 250,000 shares of
Lanxide Series F Preferred Stock (the "Series F Preferred Stock") at an
exercise price of $100 per warrant (the "Original Warrant"); and
WHEREAS, certain individual stockholders of Lanxide entered
into a "Voting Agreement" with Bentley X. Xxxx ("Xxxx"), Xxxx X. Xxxxxxxxx
("Xxxxxxxxx"), Xxxxx Xxxxxxxx ("Xxxxxxxx"), Xxxxxxx Xxxxx ("Xxxxx") and
Xxxxxxx Xxxxxxx ("Xxxxxxx") (collectively the "Proxy Holders") pursuant to
which said Lanxide stockholders granted a proxy to the Proxy Holders to
vote their shares in Lanxide.
NOW, THEREFORE, in consideration of the foregoing Recitals and
other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, and intending to be legally bound, it is hereby
agreed as follows:
1. Definitions. "Common Stock Warrant" shall
mean the three (3) year warrant issued to COES on the
execution and delivery date hereof entitling the
holder to purchase up to 270,000 shares of Lanxide
common stock, at an exercise price of $7.41 per
warrant share, in substantially the form of Exhibit
"A" annexed hereto.
2. Cancellation of Share Purchase Right. The
parties hereto acknowledge and agree that COES's
right to purchase any additional shares of Series G
Preferred Stock of Lanxide (the "Series G Preferred
Stock"), as provided in Section 2.2(c) and (d) of the
Securities Purchase Agreement is hereby cancelled.
3. Cancellation of Warrant. The parties hereto
hereby agree that the Warrant which Lanxide issued to
COES for the right to purchase any shares of
preferred stock, as set forth in Section 2.3 of the
Securities Purchase Agreement, is hereby cancelled.
4. Board Action for Series F Preferred Stock;
Consent to Employee Stock Option Plan; Consent to
Landlord Warrant Modifications. Lanxide hereby
covenants and agrees not to issue any shares of
Series F Preferred Stock and shall take all necessary
action as soon as practicable to cancel all Series F
Preferred Stock, and COES hereby consents to such
cancellation.
COES hereby consents to the adoption by Lanxide of a stock
option plan anticipated to be approved by Lanxide on or before March 31,
1998 (i) pursuant to which certain employees of Lanxide will be given five
year options to acquire shares of Common Stock for an exercise price
anticipated to be $1.00 per share and (ii) under which the aggregate number
of shares to be reserved for issuance is not to exceed twenty-five percent
(25%) of the issued and outstanding shares of Common Stock as of the date
hereof on a fully diluted basis, including shares of Common Stock issuable
under the Common Stock Warrant.
COES hereby consents to Lanxide's modifications to an
outstanding Warrant to acquire shares of Common Stock registered in the
name of W.P. Xxxxx & Co., Inc., or an affiliate thereof, which entity is
Lanxide's landlord for its principal place of business, provided that such
modifications do not (i) reduce the exercise price under such modified
Warrant below $1.00 per share of Common Stock issuable upon exercise of
such Warrant or (ii) increase the maximum number of shares of Common Stock
issuable upon a exercise of such modified Warrant to a number that is
greater than 31,000 shares.
5. Post-Closing Financing and Consummation.
The parties hereto hereby acknowledge and agree that
COES's duty to seek or obtain post-closing financing
and/or to consummate any of the transactions
contemplated in the Securities Purchase Agreement
not already consummated prior to the execution date
hereof are hereby cancelled.
6. Exchange of Shares of Series G Preferred
Stock; Board Action for Series G Preferred Stock;
Common Stock Warrant. Lanxide, in consideration for
(a) the terms and conditions of this Agreement, (b)
other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged,
shall (i) upon surrender to Lanxide of the share
certificates representing COES' ownership of all
shares of Series G Preferred Stock, issue share
certificate(s), in such denominations and registered
in such names as COES may reasonably request,
representing ownership of a like number of shares of
Lanxide's Preferred Stock, Series H, having terms
and conditions set forth on Exhibit B hereto (the
"Series H Preferred Stock"), (ii) following COES'
surrender of the certificates representing its
ownership of Series G Preferred Stock, cause its
Board to cancel all Series G Preferred Stock, and
COES hereby consents to such cancellation; and (iii)
issue to COES (in such denominations as may
reasonably be requested by COES) the Common Stock
Warrant.
7. Registration Rights. The following
provisions replace the provisions set forth in
Section 11 of the Securities Purchase Agreement:
7.1 Piggyback Rights. If at any time following the date hereof,
Lanxide shall file a registration statement (other than a registration
statement on Form X-0, Xxxx X-0, or any successor form) with the SEC while
any Registrable Securities (as hereinafter defined) are outstanding,
Lanxide shall give all the then holders of any Registrable Securities or
securities which are convertible into or exercisable for Registrable
Securities, including for this purpose, holders of the Registrable
Securities (the "Eligible Holders") at least 30 days prior written notice
of the filing of such registration statement. If requested by any Eligible
Holder in writing within 15 days after receipt of any such notice, Lanxide
shall, at Lanxide's sole expense (other than the fees and disbursements of
counsel for the Eligible Holders and the underwriting discounts or
commissions, if any, payable in respect of the Registrable Securities sold
by any Eligible Holder), register or qualify all or, at each Eligible
Holder's option, any portion of the Registrable Securities of any Eligible
Holders who shall have made such request, concurrently with the
registration of such other securities, all to the extent requisite to
permit the public offering and sale of the Registrable Securities through
the facilities of all appropriate securities exchanges and the
over-the-counter market, and will use its best efforts through its
officers, directors, auditors, and counsel to cause such registration
statement to become effective as promptly as practicable. Notwithstanding
the foregoing, if the managing underwriter of any such offering shall
advise Lanxide in writing that, in its opinion, the distribution of all or
a portion of the Registrable Securities requested to be included in the
registration concurrently with the securities being registered by Lanxide
would adversely affect the distribution of such securities by Lanxide for
its own account, then the underwriters shall have the right to exclude any
or all of the securities that the Eligible Holders or other prospective
seller requested to be included in such public offering; provided, however,
that such exclusion shall be made pro rata among the Eligible Holders and
the other stockholders of Lanxide that have registration rights or have
otherwise requested to participate on a piggyback basis in such public
offering in proportion to the respective number of shares of securities
which were requested to be included in such public offering. As used
herein, "Registrable Securities" shall mean the shares of Lanxide Common
Stock issuable upon full or partial exercise of the Warrant, which have not
been previously sold pursuant to a registration statement or Rule 144
promulgated under the 0000 Xxx.
7.2 If at any time following COES's completion of its purchase
and payment for any of the 270,000 Shares of Common Stock, Lanxide shall
receive a written request, from Eligible Holders who in the aggregate own
(or upon exercise of all Warrants then outstanding or issuable would own)
at least 50% of the Registrable Securities then included (or upon such
exercises would be included) in the Registrable Securities (the "Majority
Holders"), to register the sale of all or part of such Registrable
Securities, Lanxide shall, as soon as reasonably practicable, but in any
event within 180 days of Lanxide's receipt of a written request from the
Eligible Holders, prepare and file with the SEC a registration statement
sufficient to permit the public offering and sale of the Registrable
Securities through the facilities of all appropriate securities exchanges
and the over-the-counter market, and will use its best efforts through its
officers, directors, auditors and counsel to cause such registration
statement to become effective within such 180 day time period; provided,
however, that the Eligible Holders shall bear all expenses, fees (including
Lanxide's reasonable attorney's fees) and disbursements incurred in
connection with such registration. Lanxide shall not be obligated to effect
any registration of its securities pursuant to this Section 7.2 within six
months after the effective date of a previous registration statement
prepared and filed in accordance with Sections 7.1 or 7.2. Within seven (7)
business days after receiving any request contemplated by this Section 7.2,
Lanxide shall give written notice to all the other Eligible Holders,
advising each of them that Lanxide is proceeding with such registration and
offering to include therein all or any portion of any such other Eligible
Holder's Registrable Securities, provided that Lanxide receives a written
request to do so from such Eligible Holder within fifteen (15) days after
receipt by him or it of Lanxide's notice. Provided, however, that the
Eligible Holders may not make such a request or demand provided for in this
Section 7.2 before January 1, 2000.
7.3 Blue Sky Matters. In the event of a registration pursuant
to the provisions of this Section 7, Lanxide shall use its best efforts to
cause the Registrable Securities so registered to be registered or
qualified for sale under the securities or blue sky laws of such
jurisdictions as the Eligible Holder or such holders may reasonably
request; provided, however, that Lanxide shall not be required to qualify
to do business in any state by reason of this Section 7.3 in which it is
not otherwise required to qualify to do business.
7.4 Period During Which Registration Statement to Remain
Effective. Lanxide shall keep effective any registration or qualification
contemplated by this Section 7 and shall from time to time amend or
supplement each applicable registration statement, preliminary prospectus,
final prospectus, application, document, and communication for such period
of time as shall be required to permit the Eligible Holders to complete the
offer and sale of the Registrable Securities covered thereby. Lanxide shall
in no event be required to keep any such registration or qualification in
effect for a period in excess of nine months from the date on which the
Eligible Holders are first free to sell such Registrable Securities;
provided, however, that, if Lanxide is required to keep any such
registration or qualification in effect with respect to securities other
than the Registrable Securities beyond such period, Lanxide shall keep such
registration or qualification in effect as it relates to the Registrable
Securities for so long as such registration or qualification remains or is
required to remain in effect in respect of such other securities.
7.5 Copies of Documents. In the event of a registration
pursuant to the provisions of this Section 7, Lanxide shall furnish to each
Eligible Holder such number of copies of the registration statement and of
each amendment and supplement thereto (in each case, including all
exhibits), such reasonable number of copies of each prospectus contained in
such registration statement and each supplement or amendment thereto
(including each preliminary prospectus), all of which shall conform to the
requirements of the 1933 Act and the rules and regulations thereunder, and
such other documents, as any Eligible Holder may reasonably request to
facilitate the disposition of the Registrable Securities included in such
registration.
7.6 Opinion of Counsel to Lanxide. In the event of a
registration pursuant to the provisions of this Section 7, Lanxide shall
furnish each Eligible Holder of any Registrable Securities so registered
with an opinion of its counsel (reasonably acceptable to the Eligible
Holders) to the general effect that (i) the registration statement has
become effective under the 1933 Act and no order suspending the
effectiveness of the registration statement, preventing or suspending the
use of the registration statement, any preliminary prospectus, any final
prospectus, or any amendment or supplement thereto has been issued nor has
the SEC or any securities or blue sky authority of any jurisdiction
instituted or threatened to institute any proceedings with respect to such
an order, (ii) the registration statement and each prospectus forming a
part thereof (including each preliminary prospectus), and any amendment or
supplement thereto, complies as to form with the 1933 Act and the rules and
regulations thereunder, and (iii) such counsel has no knowledge of any
material misstatement or omission in such registration statement or any
prospectus, as amended or supplemented.
7.7 Terms of Underwriting Agreement. In the event of a
registration pursuant to the provision of this Xxxxxxx 0, Xxxxxxx shall
enter into a cross-indemnity agreement and a contribution agreement, each
in customary form, with each underwriter, if any, and, if requested, enter
into an underwriting agreement containing conventional representations,
warranties, allocation of expenses, and customary closing conditions,
including, but not limited to, opinions of counsel and accountants' cold
comfort letters, with any underwriter who acquires any Registrable
Securities.
7.8 Undertakings of Eligible Holders. In the event of a
registration pursuant to the provisions of this Section 7:
(a) each Eligible Holder shall furnish to Lanxide in
writing such appropriate information (relating to such Eligible
Holder and the intention of such Eligible Holder as to proposed
methods of sale or other disposition of their Shares) and the
identity of and compensation to be paid to any proposed
underwriters to be employed in connection therewith as Lanxide,
any underwriter, or the SEC or any other regulatory authority
may request;
(b) the Eligible Holders shall enter into the usual and
customary form of underwriting agreement agreed to by Lanxide
and any underwriter with respect to any such offering, if
required, and such underwriting agreement shall contain the
customary rights of indemnity between Lanxide, the
underwriters, and such Eligible Holders;
(c) each Eligible Holder shall agree that he shall
execute, deliver and/or file with or supply Lanxide, any
underwriters, the SEC and/or any state or other regulatory
authority such information, documents, representations,
undertakings and/or agreements necessary to carry out the
provisions of the registration covenants contained in this
Section 7 and/or to effect the registration or qualification of
his or its Registrable Securities under the 1933 Act and/or any
of the laws and regulations of any state or governmental
instrumentality;
(d) Lanxide's obligation to include any Registrable
Securities in a registration statement shall be subject to the
written agreement of each holder thereof to offer such
securities in the same manner and on the same terms and
conditions as the other securities of the same class are being
offered pursuant to the registration statement, if such shares
are being underwritten;
(e) in the event that all the Registrable Securities have
not been sold on or prior to the expiration of the period
specified in Section 7.4 above, Lanxide may de-register by
post-effective amendment any Registrable Securities covered by
the registration statement, but not sold on or prior to such
date. Lanxide agrees that it will notify each holder of
Registrable Securities of the filing and effective date of such
post-effective amendment; and
(f) each Eligible Holder agrees that upon notification by
Lanxide that the prospectus in respect to any public offering
covered by the provisions hereof is in need of revision, such
Eligible Holder shall immediately upon receipt of such
notification (i) cease to offer or sell any securities of
Lanxide which must be accompanied by such prospectus, (ii)
return all such prospectuses in such Eligible Holder's hands to
Lanxide, and (iii) not offer or sell any securities of Lanxide
until such Holder has been provided with a current prospectus
and Lanxide has given such Eligible Holder notification
permitting such Eligible Holder to resume offers and sales.
7.9 Covenant Regarding Current Information. Lanxide agrees that
until all the Registrable Securities have been sold under a registration
statement or pursuant to Rule 144 under the 1933 Act, it shall use its best
efforts to keep current in filing all reports, statements and other
materials required to be filed with the SEC to permit holders of the
Registrable Securities to sell such securities under Rule 144.
7.10 Negative Covenant Regarding Future Registration Rights.
Except for (i) rights granted to holders of the Warrants, and (ii) rights
granted by Lanxide to other security holders of Lanxide prior to the date
hereof, Lanxide will not, without the written consent of the Majority
Holders, grant to any persons the right to request Lanxide to register any
securities of Lanxide, provided that Lanxide may grant such registration
rights to other persons so long as such rights are subordinate or pari
passu to the rights of the Eligible Holders.
7.11 Definitions. Wherever the term "Warrant" is used in this
Article it means and refers to the Common Stock Warrant defined in Section
1 hereof.
8. Series H Preferred Stock. Lanxide covenants
and agrees that, within seven (7) business days
following the execution and delivery of this
Agreement, it will take all necessary action to fix
the rights, preferences and limitations of the
Series H Preferred Stock in the manner set forth on
Exhibit B hereto. Lanxide shall deliver to COES a
fully executed Certificate of Stock Designation for
the Series H Preferred Stock promptly following the
filing of such certificate.
9. Partys' Representations and Warranties. Each of the
parties hereby represents and warrants to the other party
hereto as follows:
9.1 Corporate Organization, Standing. It is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware.
9.2 Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by it and, subject to the due
authorization, execution and delivery by such other party, constitutes a
legal, valid and binding obligation of it, enforceable in accordance with
its terms, except that (i) the enforceability hereof may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights and (ii) the
remedy of specific performance and injunctive and other terms of equitable
relief may be subject to equitable defenses and to the discretion of the
court before which any proceeding therefor may be brought. The execution
and delivery of this Agreement, the consummation of the transactions
contemplated hereto and the fulfillment and compliance with the terms and
conditions hereof do not and will not after the giving or notice, or the
lapse of time, or otherwise: (a) violate any provisions of any judicial or
administrative order, award, judgment or decree applicable to it, or (b)
conflict with any of the provisions of the Certificate of Incorporation or
By-Laws of it, or (c) conflict with, result in a breach of or constitute a
default under any agreement or instrument to which it is a party or by
which it is bound, except for any of the foregoing that, individually or in
the aggregate, would not have a material adverse effect on the financial
condition, operations or businesses of such party and its subsidiaries,
taken as a whole.
10. Indemnification. The indemnification
provision set forth in Sections 12.1 through 12.3 of
the Securities Purchase Agreement are incorporated
herein by reference as though set forth at length
and apply with equal force with respect to the
Common Stock Warrant and stock purchases as a result
of any exercise thereof.
11. Miscellaneous.
11.1 Notices. All notices, requests, demands and other
communications under or in respect of this Agreement or any transactions
hereunder shall be in writing (which may include telegraphic or telecopied
communication) and shall be personally delivered, sent by overnight
courier, mailed (registered or certified mail, return receipt
requested), telegraphed or telecopied by facsimile transmission to the
applicable party at its address or telecopier number indicated below.
If to COES:
Commodore Environmental Services, Inc.
000 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Atten: Xxxxxxx X. Xxxxxxxx, Esquire
Senior Vice President and General Counsel
Chief Financial and Administrative Officer
Telecopier No.: (000) 000-0000
Commodore Applied Technologies, Inc.
000 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Atten: Xxxxxxx X. Xxxxxxxx, Esquire
Senior Vice President and General Counsel
Chief Financial and Administrative Officer
Telecopier No.: (000) 000-0000
If to the Lanxide Companies:
Lanxide Corporation
0000 Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000-0000
Atten: Xx. Xxxx X. Xxxxxxx, President
Telecopier No.: (000) 000-0000
11.2 Entire Agreement. This Agreement (including the Exhibits
and Schedules) contains the entire agreement among the parties with respect
to the purchase of the Purchased Shares and related transactions and
supersedes all prior arrangements or understandings, written or oral, with
respect thereto.
11.3 Amendments. Any term or condition of this Agreement may be
amended or modified in whole or in part at any time, to the extent
authorized by applicable law, by an agreement in writing, authorized and
executed in the same manner as this Agreement by the parties hereto. No
delay on the part of any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any waiver on the
part of any party of any right, power of privilege hereunder, nor shall any
single or partial exercise of any right, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege hereunder. The rights and remedies herein
provided are cumulative and are not exclusive of any rights or remedies
which any party may otherwise have at law or in equity. The rights and
remedies of any party arising out of or otherwise in respect of any
inaccuracy in or breach of any representation, warranty, covenant or
agreement contained in this Agreement shall in no way be limited by the
fact that the act, omission, occurrence or breach is based may also be the
subject matter of any other representation, warranty, covenant or agreement
contained in this Agreement (or in any other agreement between the parties)
as to which there is no inaccuracy or breach.
11.4 Severability. If any provision of This Agreement is held
invalid or unenforceable, either in its entirety or by virtue of its scope
or application to given circumstances, such provision shall thereupon be
deemed modified only to the extent necessary to render same valid, or not
applicable to given circumstances, or excised from this Agreement, as the
situation may require, and this Agreement shall be construed and enforced
as if such provision had been included herein as so modified in scope or
application, or had not been included herein, as the case may be.
11.5 Execution and Delivery. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
Delivery of a counterpart shall be deemed effective upon receipt by the
other party of telefaxed signature page to this Agreement, provided that
such party shall nonetheless transmit its original executed signature page
to the other party.
11.6 Exhibits and Schedules. The Exhibits and Schedules and
other documents attached to or delivered herewith are hereby incorporated
and made a part of this Agreement as if set forth in full herein.
11.7 Drafting. No presumption shall operate in favor of or
against any party in the construction or interpretation of this Agreement
as a consequence of a party's responsibility for drafting this Agreement.
11.8 Recitals. The recital clauses of this Agreement are
incorporated herein to the body as though set forth at length.
11.9 Attorney and Professional Fees. Each party will pay
his/her own attorney or professional fees in connection with this Agreement
or settlement discussions leading to this Agreement.
11.10 Captions. The captions of Sections hereof are for
convenience only and shall not control or affect the meaning or
construction of any of the provisions of this Agreement.
11.11 Controlling Law. The parties hereto agree that this
Agreement shall be governed and construed by the internal, substantive laws
of the State of New York (without regard to that state's choice of law
rules or doctrines) and, if applicable, the substantive law (statutory,
administrative or common law) of the United States (without regard to its
choice of law, rules or doctrines) Sellers hereby consent to personal
jurisdiction in the State of New York for the purposes of any matter of or
related to this Agreement or any other agreement between the parties hereto
executed and delivered on or about the date hereof, including for purposes
of any amendments hereto or thereto. The parties hereto further agree that
venue for any dispute arising under this Agreement or for any other
agreement between the parties hereto which are executed on or about the
date hereof shall be proper in the United States District Court for the
Southern District of New York. The parties also expressly waive trial by
jury and the right to request a transfer of venue.
11.12 Binding Effect. This Agreement shall be binding and inure
to the benefit of the named parties hereto, all of their wholly or
partially-owned subsidiaries, the parties on whose behalf and for whose
benefit it is made and their respective heirs, administrators, executors,
successors and assigns.
11.13 Survival. The Securities Purchase Agreement, as amended
by the Amendment, shall survive and remain valid, binding and enforceable
according to its terms.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, and intending to be legally bound, the parties
have hereto executed this Agreement on the day and date first above
written.
Attest: LANXIDE CORPORATION
________________________ By:__________________________________
Xxxx X. Xxxxxxx, its President
COMMODORE ENVIRONMENTAL SERVICES, INC.
________________________ By:__________________________________
Xxxx X. Xxxxxxxxx, its President
SIGNATURE PAGE TO AMENDMENT TO SECURITIES PURCHASE AGREEMENT
EXHIBIT "A"
NEITHER THE WARRANTS REPRESENTED BY THIS CERTIFICATE NOR THE
SHARES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED. NEITHER THE WARRANTS NOR
SUCH SHARES MAY BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT, OR AN EXEMP
TION FROM REGISTRATION UNDER SUCH ACT.
LANXIDE CORPORATION
WARRANT FOR THE PURCHASE OF SHARES OF COMMON STOCK
No. ___
270,000 Shares
THIS CERTIFIES that, for value received, Commodore Environmental
Services, Inc. (the "Holder"), is entitled to subscribe for and purchase
from Lanxide Corporation, a Delaware corporation (the "Company"), upon the
terms and conditions set forth herein, at any time and from time to time
after December 31, 1998 and before 5:00 P.M. (New York City time) on March
1, 2001, New York time (the "Exercise Period"), Two Hundred and Seventy
Thousand (270,000) shares of common stock, par value .01 per share, of the
Company (the "Common Stock"), at an exercise price of $7.41 per share (the
"Exercise Price"). This Warrant is issued in connection with the sale to
the Holder of 20,000 shares of the Company's non-voting, non-convertible
Series G Preferred Stock, $.01 par value per share, of the Company (the
"Series G Preferred Stock") pursuant to a Securities Purchase Agreement,
dated July 3, 1997 (the "Securities Purchase Agreement"), as amended by an
Amendment to Securities Purchase Agreement dated March 5, 1998 (the
"Amendment"), by and between the Holder and the Company, the sale of which
has already occurred. In accordance with the Amendment, the Company and the
Holder have exchanged all of the shares of Series G Preferred Stock
purchased by the Holder pursuant to the Securities Purchase Agreement for a
like number of shares of the Company's Preferred Stock, Series H (the
"Series H Preferred Stock"). This Warrant is issued in substitution of the
Warrant issued on July 3, 1997 which July 3, 1997 Warrant has been
cancelled. As used herein the term "this Warrant" shall mean and include
this Warrant and any Warrant or Warrants hereafter issued as a consequence
of the exercise or transfer of this Warrant in whole or in part.
The number of shares of Common Stock issuable upon exercise of the
Warrants (the "Warrant Shares") and the Exercise Price may be adjusted from
time to time as hereinafter set forth.
1. This Warrant may be exercised during the Exercise
Period, as to the whole or any lesser number of the respective
whole Warrant Shares, by the surrender of this Warrant (with
the election at the end hereof duly executed) to the Company at
its office as set forth in the form of election attached
hereto, or at such other place as is designated in writing by
the Company, together with a certified or bank cashier's check
payable to the order of the Company in an amount equal to the
Exercise Price multi plied by the number of respective Warrant
Shares for which this Warrant is being exercised.
Notwithstanding the foregoing, or any other provision of this
Warrant to the contrary, to the extent that the Holder shall
have acquired shares of Series H Preferred Stock of the
Company, this Warrant may be exercised by the Holder during the
Exercise Period and the Exercise Price for one or more Warrant
Shares may be paid by the Holder's surrender for cancellation
of one or more shares of Series H Preferred Stock. Upon such
Holder's delivery of such share(s) of Series H Preferred Stock,
duly endorsed in blank for transfer, the Company shall
simultaneously deliver to the Holder of this Warrant that
number of Warrant Shares equal to the quotient obtained by
dividing (a) the product of (i) the number of shares of Series
H Preferred Stock so surrendered for cancellation and (ii)
$100.00 by (b) $7.41. Upon issuance of such Warrant Shares, the
Corporation shall cancel the shares of Series H Preferred Stock
so surrendered by the Holder. In the event and to the extent
that all shares of Series H Preferred Stock acquired by the
Holder pursuant to the Amendment shall have been so surrendered
for cancellation and Warrant Shares issued therefor, the
Exercise Price for all remaining Warrant Shares issuable
pursuant to this Warrant shall be paid in accordance with the
first sentence of this Section 1.
2. Upon each exercise of the Holder's rights to
purchase Warrant Shares and payment of the Exercise Price, the
Holder shall be deemed to be the holder of record of the
Warrant Shares issuable upon such exercise, notwithstanding
that the transfer books of the Company shall then be closed or
certificates representing such Warrant Shares shall not then
have been actually delivered to the Holder. As soon as
practicable after each such exercise of this Warrant and
payment by the Holder, the Company shall issue and cause to be
delivered a certificate or certificates for the Warrant Shares
issuable upon such exercise, registered in the name of the
Holder or its designee. If the Warrant should be exercised in
part only, the Company shall, upon surrender of this Warrant
for cancellation, execute and deliver a new Warrant evidencing
the right of the Holder to purchase the balance of the Warrant
Shares (or portions thereof) subject to purchase hereunder.
3. Any Warrants issued upon the transfer or exercise
in part of this Warrant shall be numbered and shall be
registered in a Warrant Register as they are issued. The
Company shall be entitled to treat the registered holder of any
Warrant on the Warrant Register as the Owner in fact thereof
for all purposes and shall not be bound to recognize any
equitable or other claim to or interest in such Warrant on the
part of any other person, and shall not be liable for any
registration or transfer of Warrants which are registered or to
be registered in the name of a fiduciary or the nominee of a
fiduciary unless made with the actual knowledge that a
fiduciary or nominee is committing a breach of trust in
requesting such registration or transfer, or with the knowledge
of such facts that its participation therein amounts to bad
faith. This Warrant shall be transferable only on the books of
the Company upon delivery thereof duly endorsed by the Holder
or by his duly authorized attorney or representative, or
accompanied by proper evidence of succession, assignment, or
authority to transfer. In all cases of transfer by an attorney,
executor, administrator, guardian, or other legal
representative, duly authenticated evidence of his or its
authority shall be produced. Upon any registration of transfer,
the Company shall deliver a new Warrant or Warrants to the
person entitled thereto. This Warrant may be exchanged, at the
option of the Holder thereof, for another Warrant, or other
Warrants of different denominations, of like tenor and
representing in the aggregate the right to purchase a like
number of Warrant Shares (or portions thereof), upon surrender
to the Company or its duly authorized agent. Notwithstanding
the foregoing, the Company shall have no obligation to cause
Warrants to be transferred on its books to any person if, in
the opinion of counsel to the Company, such transfer does not
comply with the provisions of the Securities Act of 1933, as
amended (the "Act"), and the rules and regulations
promulgated thereunder.
4. The Company shall at all times reserve and keep
available out of its authorized and unissued Common Stock,
solely for the purpose of providing for the exercise of the
rights to purchase all Warrant Shares granted pursuant to the
Warrants, such number of shares of Common Stock as shall, from
time to time, be sufficient therefor. The Company covenants
that all shares of Common Stock issuable upon exercise of this
Warrant, upon receipt by the Company of the full Exercise Price
therefor, shall be validly issued, fully paid, nonassessable,
and free of preemptive rights.
5. (a) In case the Company shall at any time after
the date the Warrants were first issued (i) declare a dividend
on the outstanding Common Stock payable in shares of its
capital stock, (ii) subdivide the outstanding Common Stock,
(iii) combine the outstanding Common Stock into a smaller
number of shares, or (iv) issue any shares of its capital stock
by reclassification of the Common Stock (including any such
reclassification in connection with a consolidation or merger
in which the Company is the continuing corporation), then, in
each case, the Exercise Price, and the number of Warrant Shares
issuable upon exercise of this Warrant, in effect at the time
of the record date for such dividend or of the effective date
of such subdivision, combination, or reclassification, shall be
proportionately adjusted so that the Holder after such time
shall be entitled to receive the aggregate number and kind of
shares which, if such Warrant had been exercised immediately
prior to such time, he or it would have owned upon such
exercise and been entitled to receive by virtue of such
dividend, subdivision, combination, or reclassification. Such
adjustment shall be made successively whenever any event listed
above shall occur.
(b) In case the Company shall issue or fix a record
date for the issuance to all holders of Common Stock of
rights, options, or warrants to subscribe for or purchase
Common Stock (or securities convertible into or
exchangeable for Common Stock) at a price per share (or
having a conversion or exchange price per share, if a
security convertible into or exchangeable for Common
Stock) less than the Exercise Price per share of Common
Stock on such record date, then, in each case, the
Exercise Price shall be adjusted by multiplying the
Exercise Price in effect immediately prior to such record
date by a fraction, the numerator of which shall be the
number of shares of Common Stock outstanding on such
record date plus the number of shares of Common Stock
which the aggregate offering price of the total number of
shares of Common Stock so to be offered (or the aggregate
initial conversion or exchange price of the convertible or
exchangeable securities so to be offered) would purchase
at such current Exercise Price and the denominator of
which shall be the number of shares of Common Stock
outstanding on such record date plus the number of
additional shares of Common Stock to be offered for
subscription or purchase (or into which the convertible or
exchangeable securities so to be offered are initially
convertible or exchangeable). Such adjustment shall become
effective at the close of business on such record date;
provided, however, that, to the extent the shares of
Common Stock (or securities convertible into or
exchangeable for shares of Common Stock) are not
delivered, the Exercise Price shall be readjusted after
the expiration of such rights, options, or warrants (but
only with respect to Warrants exercised after such
expiration), to the Exercise Price which would then be in
effect had the adjustments made upon the issuance of such
rights, options, or warrants been made upon the basis of
delivery of only the number of shares of Common Stock (or
securities convertible into or exchangeable for shares of
Common Stock) actually issued. In case any subscription
price may be paid in a consideration part or all of which
shall be in a form other than cash, the value of such
consideration shall be as determined in good faith by the
board of directors of the Company, whose determination
shall be conclusive absent manifest error. Shares of
Common Stock owned by or held for the account of the
Company or any majority-owned subsidiary shall not be
deemed outstanding for the purpose of any such
computation.
(c) In case the Company shall distribute to all
holders of Common Stock (including any such distribution made
to the stockholders of the Company in connection with a
consolidation or merger in which the Company is the continuing
corporation) evidences of its indebtedness or assets (other
than cash dividends or distributions and dividends payable in
shares of Common Stock), or rights, options, or warrants to
subscribe for or purchase Common Stock, or securities
convertible into or exchangeable for shares of Common Stock
(excluding those with respect to the issuance of which an
adjustment of the Exercise Price is provided pursuant to
Section 5(b) hereof), then, in each case, the Exercise Price
shall be adjusted by multiplying the Exercise Price in effect
immediately prior to the record date for the determination of
stockholders entitled to receive such distribution by a
fraction, the numerator of which shall be the Exercise Price
per share of Common Stock on such record date, less the fair
market value (as determined in good faith by the board of
directors of the Company, whose determination shall be
conclusive absent manifest error) of the portion of the
evidences of indebtedness or assets so to be distributed, or of
such rights, options, or warrants or convertible or
exchangeable securities, applicable to one share, and the
denominator of which shall be such current Exercise Price per
share of Common Stock. Such adjustment shall be made whenever
any such distribution is made, and shall become effective on
the record date for the determination of shareholders entitled
to receive such distribution.
(d) In case the Company shall issue shares of Common
Stock or rights, options, or warrants to subscribe for or
purchase Common Stock, or securities convertible into or
exchangeable for Common Stock (excluding only shares, rights,
options, warrants, or convertible or exchangeable securities
issued or issuable (i) in any of the transactions with respect
to which an adjustment of the Exercise Price is provided
pursuant to Sections 5(a), 5(b) or 5(c) above, (ii) upon
exercise, in whole or in part, of the Warrants or (iii) to
management or employees of the Company of authorized shares of
Common Stock), at a price per share (determined, in the case of
such rights, options, warrants, or convertible or exchangeable
securities, by dividing (x) the total amount received or
receivable by the Company in consideration of the sale and
issuance of such rights, options, warrants, or convertible or
exchangeable securities, plus the minimum aggregate
consideration payable to the Company upon exercise, conversion,
or exchange thereof, by (y) the maximum number of shares
covered by such rights, options, warrants, or convertible or
exchangeable securities) lower than the Exercise Price per
share of Common Stock in effect immediately prior to such
issuance, then the Exercise Price shall be reduced on the date
of such issuance to a price (calculated to the nearest cent)
determined by multiplying the Exercise Price in effect
immediately prior to such issuance by a fraction, (i) the
numerator of which shall be an amount equal to the sum of (A)
the number of shares of Common Stock outstanding immediately
prior to such issuance plus (B) the quotient obtained by
dividing the consider ation received by the Company upon such
issuance by such current Exercise Price, and (ii) the
denominator of which shall be the total number of shares of
Common Stock outstanding immediately after such issuance. For
the purposes of such adjustments, the maximum number of shares
which the holders of any such rights, options, warrants, or
convertible or exchangeable securities shall be entitled to
initially subscribe for or purchase or convert or exchange such
securities into shall be deemed to be issued and outstanding as
of the date of such issuance, and the consideration received by
the Company therefor shall be deemed to be the consideration
received by the Company for such rights, options, warrants, or
convertible or exchangeable securities, plus the minimum
aggregate consideration or premiums stated in such rights,
options, warrants, or convertible or exchangeable securities to
be paid for the shares covered thereby. No further adjustment
of the Exercise Price shall be made as a result of the actual
issuance of shares of Common Stock on exercise of such rights,
options, or warrants or on conversion or exchange of such
convertible or exchangeable securities. On the expiration or
the termination of such rights, options, or warrants, or the
termination of such right to convert or exchange, the Exercise
Price shall be readjusted (but only with respect to Warrants
exercised after such expiration or termination) to such
Exercise Price as would have obtained had the adjustments made
upon the issuance of such rights, options, warrants, or
convertible or exchangeable securities been made upon the basis
of the delivery of only the number of shares of Common Stock
actually delivered upon the exercise of such rights, options,
or warrants or upon the conversion or exchange of any such
securities; and on any change of the number of shares of Common
Stock deliverable upon the exercise of any such rights,
options, or warrants or conversion or exchange of such
convertible or exchangeable securities or any change in the
consideration to be received by the Company upon such exercise,
conversion, or exchange, including, but not limited to, a
change resulting from the antidilution provisions thereof, the
Exercise Price, as then in effect, shall forthwith be
readjusted (but only with respect to Warrants exercised after
such change) to such Exercise Price as would have been obtained
had an adjustment been made upon the issuance of such rights,
options, or warrants not exercised prior to such change, or
securities not converted or exchanged prior to such change, on
the basis of such change. In case the Company shall issue
shares of Common Stock or any such rights, options, warrants,
or convertible or exchangeable securities for a consideration
consisting, in whole or in part, of property other than cash or
its equivalent, then the "price per share" and the
"consideration received by the Company" for purposes of the
first sentence of this Section 5(d) shall be as determined in
good faith by the board of directors of the Company, whose
determination shall be conclusive absent manifest error. Shares
of Common Stock owned by or held for the account of the Company
or any majority-owned subsidiary shall not be deemed
outstanding for the purpose of any such computation.
(e) No adjustment in the Exercise Price shall be
required if such adjustment is less than $0.10; provided,
however, that any adjustments which by reason of this
Section 5 are not required to be made shall be carried
forward and taken into account in any subsequent
adjustment. All calculations under this Section 5 shall be
made to the nearest cent or to the nearest one-thousandth
of a share, as the case may be.
(f) In any case in which this Section 5 shall
require that an adjustment in the Exercise Price be made
effective as of a record date for a specified event, the
Company may elect to defer, until the occurrence of such
event, issuing to the Holder, if the Holder exercised this
Warrant after such record date, the shares of Common
Stock, if any, issuable upon such exercise over and above
the shares of Common Stock, if any, issuable upon such
exercise on the basis of the Exercise Price in effect
prior to such adjustment; provided, however, that the
Company shall deliver to the Holder a due xxxx or other
appropriate instrument evidencing the Holder's right to
receive such additional shares upon the occurrence of the
event requiring such adjustment.
(g) Upon each adjustment of the Exercise Price as a
result of the calculations made in Sections 5(b), 5(c) or
5(d) hereof, this Warrant shall thereafter evidence the
right to purchase, at the adjusted Exercise Price, that
number of shares (calculated to the nearest thousandth)
obtained by dividing (A) the product obtained by
multiplying the number of shares purchasable upon exercise
of this Warrant prior to adjustment of the number of
shares by the Exercise Price in effect prior to adjustment
of the Exercise Price by (B) the Exercise Price in effect
after such adjustment of the Exercise Price.
(h) Whenever there shall be an adjustment as
provided in this Section 5, the Company shall promptly
cause written notice thereof to be sent by registered
mail, postage prepaid, to the Holder, at its address as it
shall appear in the Warrant Register, which notice shall
be accompanied by an officer's certificate setting forth
the number of Warrant Shares purchasable upon the exercise
of this Warrant and the Exercise Price after such
adjustment and setting forth a brief statement of the
facts requiring such adjustment and the computation
thereof, which officer's certificate shall be conclusive
evidence of the correctness of any such adjustment absent
manifest error.
(i) The foregoing provisions of this Section 5
notwithstanding, no adjustments shall be made under this
Section 5 in respect of any shares of Common Stock issued
or issuable pursuant to a stock option plan anticipated to
be approved by Lanxide on or before March 31, 1998 (i)
pursuant to which certain employees of Lanxide will be
given five year options to acquire shares of Common Stock
for an exercise price anticipated to be $1.00 per share
and (ii) under which the aggregate number of shares to be
reserved for issuance is not to exceed twenty-five percent
(25%)of the issued and outstanding shares of Common Stock
as of the date hereof on a fully diluted basis, including
the Warrant Shares.
6. (a) In case of any consolidation with or merger of
the Company with or into another corporation (other than a
merger or consolidation in which the Company is the surviving
or continuing corporation), or in case of any sale, lease, or
conveyance to another corporation of the property and assets of
any nature of the Company as an entirety or substantially as an
entirety, such successor, leasing, or purchasing corporation,
as the case may be, shall (i) execute with the Holder an
agreement providing that the Holder shall have the right
thereafter to receive upon exercise of this Warrant solely the
kind and amount of shares of stock and other securities,
property, cash, or any combination thereof receivable upon such
consolidation, merger, sale, lease, or conveyance by a holder
of the number of shares of Common Stock for which this Warrant
might have been exercised immediately prior to such
consolidation, merger, sale, lease, or conveyance and (ii) make
effective provision in its certificate of incorporation or
otherwise, if necessary, to effect such agreement. Such
agreement shall provide for adjustments which shall be as
nearly equivalent as practicable to the adjustments in Section
5.
(b) In case of any reclassification or change of the
shares of Common Stock issuable upon exercise of this
Warrant (other than a change in par value or from no par
value to a specified par value, or as a result of a
subdivision or combination, but including any change in
the shares into two or more classes or series of shares),
or in case of any consolidation or merger of another
corporation into the Company in which the Company is the
surviving or continuing corporation and in which there is
a reclassification or change (including a change to the
right to receive cash or other property) of the shares of
Common Stock (other than a change in par value, or from no
par value to a specified par value, or as a result of a
subdivision or combination, but including any change in
the shares into two or more classes or series of shares),
the Holder shall have the right thereafter to receive upon
exercise of this Warrant solely the kind and amount of
shares of stock and other securities, property, cash, or
any combination thereof receivable upon such
reclassification, change, consolidation, or merger by a
holder of the number of shares of Common Stock for which
this Warrant might have been exercised immediately prior
to such reclassification, change, consolidation, or
merger. Thereafter, appropriate provision shall be made
for adjustments which shall be as nearly equivalent as
practicable to the adjustments in Section 5.
(c) The above provisions of this Section 6 shall
similarly apply to successive reclassifications and
changes of shares of Common Stock and to successive
consolidations, mergers, sales,
leases, or conveyances.
7. In case at any time the Company shall propose
(a) to pay any dividend or make any distribution on
shares of Common Stock in shares of Common Stock or make
any other distribution (other than regularly scheduled
cash dividends which are not in a greater amount per share
than the most recent such cash dividend) to all holders of
Common Stock; or
(b) to issue any rights, warrants, or other
securities to all holders of Common Stock entitling them
to purchase any additional shares of Common Stock or any
other rights, warrants, or other securities; or
(c) to effect any reclassification or change of
outstanding shares of Common Stock, or any consolidation,
merger, sale, lease, or conveyance of property, described
in Section 6; or
(d) to effect any liquidation, dissolution, or
winding-up of the Company; or
(e) to take any other action which would cause an
adjustment to the Exercise Price;
then, and in any one or more of such cases, the Company shall give
written notice thereof, by registered mail, postage prepaid, to the
Holder at the Holder's address as it shall appear in the Warrant
Register, mailed at least 10 days prior to (i) the date as of which
the holders of record of shares of Common Stock to be entitled to
receive any such dividend, distribution, rights, warrants, or other
securities are to be determined, (ii) the date on which any such
reclassification, change of outstanding shares of Common Stock,
consolidation, merger, sale, lease, conveyance of property,
liquidation, dissolution, or winding-up is expected to become
effective, and the date as of which it is expected that holders of
record of shares of Common Stock shall be entitled to exchange their
shares for securities or other property, if any, deliverable upon such
reclassification, change of outstanding shares, consolidation, merger,
sale, lease, conveyance of property, liquidation, dissolution, or
winding-up, or (iii) the date of such action which would require an
adjustment to the Exercise Price.
8. The issuance of any shares or other securities
upon the exercise of this Warrant, and the delivery of
certificates or other instruments representing such shares or
other securities, shall be made without charge to the Holder
for any tax or other charge in respect of such issuance. The
Company shall not, however, be required to pay any tax which
may be payable in respect of any transfer involved in the issue
and delivery of any certificate in a name other than that of
the Holder and the Company shall not be required to issue or
deliver any such certificate unless and until the person or
persons requesting the issue thereof shall have paid to the
Company the amount of such tax or shall have established to
the satisfaction of the Company that such tax has been paid.
9. Certificates evidencing the Warrant Shares issued upon
exercise of the Warrants shall bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH
SHARES MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATE MENT UNDER SUCH ACT, OR AN
EXEMPTION FROM REGISTRATION UNDER SUCH ACT."
10. Upon receipt of evidence satisfactory to the
Company of the loss, theft, destruction, or mutilation of any
Warrant (and upon surrender of any Warrant if mutilated) and a
certificate executed by the Holder and provided by the Company
pursuant to which the Holder agrees to indemnify the Company
for any claims, losses or liability the Company may suffer on
account of the issuance of a new certificate, and upon
reimbursement of the Company's reasonable incidental expenses,
the Company shall execute and deliver to the Holder thereof a
new Warrant of like date, tenor and denomination.
11. The Holder of any Warrant shall not have, solely
on account of such status, any rights of a stockholder of the
Company, either at law or in equity, or to any notice of
meetings of stockholders or of any other proceedings of the
Company, except as provided in this Warrant.
12. Any notice or other communication required or
permitted to be given hereunder shall be in writing and shall
be mailed by certified mail, return receipt requested or sent
by Federal Express, Express Mail, or similar overnight delivery
or courier service or delivered (in person or by telecopy,
telex, or similar telecommunications equipment) against receipt
to the party to whom it is to be given, if sent to the Company,
at: 000 Xxxx 00xx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000,
Attention: The Chairman or the Chief Executive Officer; or if
sent to the Holder, at the Holder's address as it shall appear
on the Warrant Register; or to such other address as the party
shall have furnished in writing in accordance with the
provisions of this Section 14. Any notice or other
communication given by certified mail shall be deemed given at
the time of certification thereof, except for a notice changing
a party's address which will be deemed given at the time of
receipt thereof. Any notice given by other means permitted by
this Section 14 shall be deemed given at the time of receipt
thereof.
13. This Warrant shall be binding upon the Company and its
successors and assigns and shall inure to the benefit of
the Holder and its successors and assigns.
14. This Warrant shall be construed in accordance with the
laws of the State of New York applicable to contracts made
and performed within such State, without regard to
principles of conflicts of law.
15. The Company irrevocably consents to the
jurisdiction of the courts of the State of New York and of any
federal court located in such State in connection with any
action or proceeding arising out of or relating to this
Warrant, any document or instrument delivered pursuant to, in
connection with or simultaneously with this Warrant, or a
breach of this Warrant or any such document or instrument. In
any such action or proceeding, the Company waives personal
service of any summons, complaint or other process.
IN WITNESS WHEREOF, the undersigned has duly executed and delivered
this Warrant on the date and year first set forth below.
Dated: _____________, 1998
LANXIDE CORPORATION
__________________________ By:_____________________
Name: Xxxx X. Xxxxxxx
Title: President
[SEAL]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to
transfer the attached Warrant.)
FOR VALUE RECEIVED, _________________________ hereby sells,
assigns, and transfers unto ___________________ a Warrant to purchase
shares of Common Stock, par value .01 per share, of Lanxide
Corporation (the "Company"), together with all right, title, and
interest therein, and does hereby irrevocably constitute and appoint
____________________ attorney to transfer such Warrant on the books of
the Company, with full power of substitution.
Dated:_________________________
Signature
-------------------------------------
NOTICE
The signature on the foregoing Assignment must correspond to the
name as written upon the face of this Warrant in every particular,
without alteration or enlargement or any change whatsoever.
To: Lanxide Corporation
0000 Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000-0000
Attn: Xxxx X. Xxxxxxx, President
ELECTION TO EXERCISE
The undersigned hereby exercises its rights to purchase Warrant
Shares covered by the within warrant and tenders payment herewith in
the amount of $___________________, or by delivery of __________
shares of Lanxide Corporation's Series H Preferred Stock, all in
accordance with the terms thereof, and requests that certificates for
such securities be issued in the name of, and delivered to:
--------------------------------------------------------------------
--------------------------------------------------------------------
--------------------------------------------------------------------
(Print Name, Address and Social Security
or Tax Identification Number)
and, if such number of Warrant Shares shall not be all the Warrant
Shares covered by the within Warrant, that a new Warrant for the
balance of the Warrant Shares covered by the within Warrant be
registered in the name of, and delivered to, the undersigned at the
address stated below.
Dated:______________________________________
Name_______________________________________
(Print)
Address:_____________________________________
-------------------------------
(Signature)
EXHIBIT "B"
CERTIFICATE OF STOCK DESIGNATION
OF
LANXIDE CORPORATION
PERTAINING TO ITS PREFERRED STOCK, SERIES H
It is hereby certified that:
1. The name of the corporation (hereinafter called the
"Corporation") is LANXIDE CORPORATION.
2. The certificate of incorporation of the Corporation authorizes the
issuance of 15,000,000 shares of preferred stock of the Corporation having
a par value of $.01 per share (the "Preferred Stock"), and expressly vests
in the Board of Directors of the Corporation the authority provided therein
to fix by resolution or resolutions the designation, number, preferences
and relative, participating, optional and other special rights and the
qualifications, limitations, restrictions and other distinguishing
characteristics of each series of Preferred Stock to be issued.
3. The Board of Directors of the Corporation, pursuant to the
authority expressly vested in it as aforesaid, has adopted the following
resolutions creating a Series H issue of the Preferred Stock of the
Corporation as follows:
RESOLVED: That there shall be created a series of the Preferred
Stock of the Corporation, to be designated as "Series H" of
such Preferred Stock and to consist of 20,000 shares of such
Preferred Stock (each a "Share" and collectively the "Shares"),
which will have relative rights, preferences and limitations as
follows:
Series H Preferred Stock
Section 1. Dividends. The Series H Preferred Stock will not entitle
the holders thereof to receive any dividends in respect of such Series H
Preferred Stock; provided, however, that this Section 1 shall not prohibit
or impair payments to the holders of the Series H Preferred Stock upon
liquidation, dissolution or winding up of the Corporation in accordance
with Section 2 below.
Section 2. Liquidation. Upon any liquidation, dissolution or winding
up of the Corporation, each holder of Series H Preferred Stock will be
entitled to be paid, out of the net assets of the Corporation available for
distribution to stockholders of the Corporation, and before any
distribution or payment is made upon any Junior Securities, an amount in
cash equal to the aggregate Liquidation Value of all Shares held by such
holder, and the holders of Series H Preferred Stock will not be entitled to
any further payment. If upon any such liquidation, dissolution or winding
up of the Corporation, the Corporation's assets to be distributed among the
holders of the Series H Preferred Stock and the holders of all outstanding
shares of any other series or class of preferred stock that are not Junior
Securities and which rank on a parity as to liquidation with the Series H
Preferred Stock are insufficient to permit payment to such holders of the
aggregate amounts which they are entitled to be paid, then the entire
assets to be distributed will be distributed ratably among such holders
based upon the aggregate Liquidation Value of the Series H Preferred Stock
and such other preferred stock held by each such holder. The Corporation
will mail written notice of such liquidation, dissolution or winding up,
not less than thirty (30) days prior to the payment date stated therein, to
each record holder of Series H Preferred Stock. Neither the consolidation
or merger of the Corporation into or with any other entity or entities, nor
the sale or transfer by the Corporation of all or any part of its assets,
nor the reduction of the capital stock of the Corporation, will be deemed
to be a liquidation, dissolution or winding up of the Corporation within
the meaning of this Section 2.
Section 3. Priority of Series H Preferred Stock. The Series H
Preferred Stock shall rank junior to the Corporation's issued and
outstanding Series A Preferred Stock, and shall rank senior to the
Corporation's Series E Preferred Stock. So long as any of the Series H
Preferred Stock remains outstanding, neither the Corporation nor any
Subsidiary will:
3.1 authorize or issue any class of preferred stock or other
equity securities which shall rank senior to the Series H Preferred Stock;
3.2 redeem, purchase or otherwise acquire directly or
indirectly any securities ranking on a parity with the Series H Preferred
Stock, unless the Corporation shall first offer to the holder(s) of the
Series H Preferred Stock, pursuant to written notice given not more than
sixty (60) and not less than (30) days' prior to the date fixed for such
redemption, purchase or acquisition, an opportunity to participate with the
holders of such other parity securities in such redemption, purchase or
acquisition on a ratable basis with such holders of such other parity
securities, based upon the aggregate Liquidation Value of the Series H
Preferred Stock and such other parity securities held by each such holder;
or
3.3 redeem, purchase or otherwise acquire directly or
indirectly any Junior Securities (other than shares of Series E Preferred
Stock pursuant to the terms of its certificate of designations), or
directly or indirectly pay or declare any dividend or make any distribution
upon any Junior Securities, other than dividends payable solely in Junior
Securities.
Section 4. Redemptions.
4.1 Mandatory Redemption. The Series H Preferred Stock shall
not be subject to mandatory redemption by the holder; provided, however,
that to the extent that (i) any holder of Series H Preferred Stock is also
the registered owner of a Warrant of the Corporation, (ii) such holder has
determined to exercise such Warrant for shares of Common Stock of the
Corporation and (iii) such holder has elected to pay all or any portion of
the exercise price for such shares of Common Stock by the tender of one or
more shares of Series H Preferred Stock in accordance with the terms of
such Warrant, then the Corporation shall redeem and cancel such number of
Shares of Series H Preferred Stock as so tendered.
4.2 Optional Redemption. The Series H Preferred Stock may not
be redeemed at the option of the Corporation prior to December 31, 1998. At
any time, or from time to time, from and after December 31, 1998, the
Series H Preferred Stock may be redeemed at the Liquidation Value per
Share, at the sole option of the Corporation. Any optional redemption by
the Corporation hereunder will be made upon not less than thirty (30) days'
prior written notice and not more than sixty (60) days' prior written
notice to the holders of the outstanding Series H Preferred Stock. The
holders of the Series H Preferred Stock shall have the right, exercisable
in their sole discretion at any time prior to the date fixed for
redemption, to utilize all or any portion of such Series H Preferred Stock
to exercise the Warrant and pay the exercise price therefore in such shares
of Series H Preferred Stock in accordance with Section 4.1 above and the
terms of such Warrant. Subject to the foregoing, on the date fixed for
redemption, the Corporation shall pay to the holders thereof the applicable
redemption price for all other shares of Series H Preferred Stock called
for redemption (such payment to be made, at the Corporation's option, by
wire transfer of immediately available funds or by certified or bank
cashier's check). Each date fixed for any such optional redemption is
herein referred to as an "Optional Redemption Date."
4.3 Redemption Procedure. For each Share of Series H Preferred
Stock which is to be redeemed, the Corporation will be obligated on the
subject Optional Redemption Date to pay to the holder thereof (upon
surrender by such holder at the Corporation's principal office of the
certificate representing such Share) an amount in immediately available
funds equal to applicable redemption price therefor at the Liquidation
Value per Share.
4.4 Reissuance of Certificates. In case fewer than the total
number of Shares represented by any stock certificate are redeemed or
converted, a new certificate representing the number of unredeemed and
unconverted Shares will be issued to the holder thereof without cost to
such holder within five (5) business days after surrender of the
certificate representing the redeemed Shares.
4.5 Redeemed or Otherwise Acquired Shares. Any Shares which are
redeemed or otherwise acquired by the Corporation will be canceled and, so
long as any Series H Preferred Stock remains outstanding, such Shares may
thereafter be reissued as such Series H Preferred Stock or as a part of a
new series of Preferred Stock of the Corporation to be created by
resolution or resolutions of the Board of Directors of the Corporation.
Section 5. Conversion. Except as otherwise provided in any Warrant to
acquire Shares of Common Stock pursuant to Section 4.1 above, the Series H
Preferred Stock shall not be convertible into Common Stock or any other
securities of the Corporation.
Section 6. Voting Rights and Consent.
6.1 General. Except for any matters for which separate class
voting is provided in Section 6.2 below, the Shares of Series H Preferred
Stock shall not be entitled to vote on any matter requiring the affirmative
vote or ratification by stockholders of the Corporation.
6.2 Separate Class Voting. The holders of the outstanding
Shares shall be entitled, voting as a separate class, to vote with respect
only to any change in the preferences, rights or limitations of the Series
H Preferred Stock (with the affirmative vote of the holders of a majority
of the Shares then outstanding being required for the adoption or approval
of any such matter).
Section 7. Costs. The Corporation shall pay all documentary, stamp,
transfer or other transactional taxes attributable to the issuance or
delivery of shares of Common Stock upon exercise of the Warrant and
exchange of any shares of the Series H Preferred Stock; provided, however,
that the Corporation shall not be required to pay any federal or state
income taxes or other taxes which may be payable in respect of any transfer
involved in the issuance or delivery of any certificate for such shares in
a name other than that of the holder of the shares of the Series H
Preferred Stock in respect of which such shares are being issued.
Section 8. Consolidation, Merger, Sale, Lease or Conveyance. In case
of any consolidation with or merger of the Corporation with or into another
corporation or other Person who is not an Affiliate of the Corporation, or
in case of any sale, lease or conveyance to another corporation or other
Person who is not an Affiliate of the Corporation of the assets of the
Corporation as an entirety or substantially as an entirety (a "Sale of
Control"), each outstanding Share of the Series H Preferred Stock shall, on
or within five (5) business days after the date of such Sale of Control, be
redeemed by the successor-in-interest to the Corporation for cash at the
Liquidation Value per Share, unless the holder(s) of Shares of Series H
Preferred Stock shall have previously elected to exercise all or any
portion of the Warrant by exchanging all Shares of Series H Preferred Stock
held by such holder for Warrant Shares. Nothing contained in this Section 8
shall be deemed to permit any transaction in violation of any of the
Corporation's covenants contained in the Securities Purchase Agreement.
Section 9. Registration of Transfer. The Corporation will keep at its
principal office a register for the registration of Series H Preferred
Stock. Upon the surrender of any certificate representing Series H
Preferred Stock at such place, the Corporation will, at the written request
of the record holder of such certificate, execute and deliver (at the
Corporation's expense) a new certificate or certificates in exchange
therefor representing in the aggregate the number of Shares represented by
the surrendered certificate. Each such new certificate will be registered
in such name and will represent such number of Shares as is requested by
the holder of the surrendered certificate and will be substantially
identical in form to the surrendered certificate.
Section 10. Replacement. Upon receipt of evidence reasonably
satisfactory to the Corporation of the ownership and the loss, theft,
destruction or mutilation of any certificate evidencing Shares and in the
case of any such loss, theft or destruction, upon receipt of indemnity
reasonably satisfactory to the Corporation (provided that if the holder is
a financial institution, an entity whose securities are traded or listed on
any national securities exchange or recognized automated quotation system,
or any Subsidiary of the foregoing, then the holder's own agreement will be
satisfactory), or, in the case of any such mutilation upon surrender of
such certificate, the Corporation will (at its expense) execute and deliver
in lieu of such certificate a new certificate of like kind representing the
number of Shares represented by such lost, stolen, destroyed or mutilated
certificate and dated the date of such lost, stolen, destroyed or mutilated
certificate.
Section 11. Definitions. For purposes hereof, the following
terms have the meanings set forth below:
11.1 "Affiliate" means any Person directly or indirectly controlling,
controlled by, or under common control with the Person in question or any
Affiliate of such Person.
11.2 "Common Stock" means the Corporation's Common Stock.
11.3 "Junior Securities" means any equity securities of the
Corporation, other than (a) the shares of Series A Preferred Stock of the
Corporation outstanding as of the date of this Certificate of Designation
or (b) any series or class of capital stock of the Corporation as to which,
by the written consent or affirmative vote of the holders of a majority of
the Series H Preferred Stock outstanding at the time of such consent or
vote, is accorded parity with or seniority to the Series H Preferred Stock.
11.4 "Liquidation Value" of any Share as of any particular date will
be equal to One Hundred ($100) Dollars per Share.
11.5 "Person" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a joint
venture, an unincorporated organization or any other business entity, a
trust or a governmental entity or any department, agency or political
subdivision thereof.
11.6 "Securities Purchase Agreement" means that certain Securities
Purchase Agreement dated July 3, 1997 by and between the Corporation and
Commodore Environmental Services, Inc., as same may be amended, modified,
supplemented and/or restated from time to time, including without
limitation that certain Amendment to Securities Purchase Agreement dated
March 5, 1998, pursuant to which the Shares and Warrants were issued by
the Corporation.
11.7 "Shares" means the shares of Series H Preferred Stock of the
Corporation outstanding at any time and from time to time.
11.8 "Subsidiary" means, with respect to any Person, any corporation,
partnership, limited liability company, association or other business
entity of which (a) if a corporation, a majority of the total voting power
of shares of stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a
combination thereof, or (b) if a partnership, limited liability company,
association or other business entity, a majority of the partnership or
other similar ownership interests thereof are at the time owned or
controlled, directly or indirectly, by any Person or one or more
Subsidiaries of that Person or a combination thereof. For purposes hereof,
a Person or Persons will be deemed to have a majority ownership interest in
a partnership, limited liability company, association or other business
entity if such Person or Persons are allocated a majority of partnership,
limited liability company, association or other business entity gains or
losses or control the managing director or member or general partner of
such partnership, limited liability company, association of other business
entity.
11.9 "Warrant" means the warrant, exercisable after December 31, 1998
and before 5:00 p.m. (New York City time) on March 1, 2001 to purchase an
aggregate of 270,000 shares of Common Stock which has been issued pursuant
to the Securities Purchase Agreement.
11.10 "Warrant Shares" means all or any portion of the 270,000 shares
of Common Stock of the Corporation issuable upon exercise of the Warrant.
Section 12. Amendment and Waiver. No amendment, modification or
waiver will be binding or effective with respect to any provision of
Sections 1 through 14 hereof without the prior written consent or
affirmative vote of the holders of a majority of the Series H Preferred
Stock outstanding at the time such action is taken.
Section 13. Notices. Except as otherwise expressly provided
hereunder, all notices referred to herein will be in writing and will be
delivered by registered or certified mail, return receipt requested and
postage prepaid, or by reputable overnight courier service, charges
prepaid, and will be deemed to have been given when so mailed or sent (a)
to the Corporation, at its principal executive offices, and (b) to any
stockholder, at such holder's address as it appears in the stock records of
the Corporation (unless otherwise indicated by notice given by any such
holder).
RESOLVED: That the statements contained in the foregoing
resolution creating and designating the said "Series H" issue
of the Preferred Stock of the Corporation and fixing the
number, powers, preferences and relative, optional,
participating and other special rights and the qualifications,
limitations, restrictions and other distinguishing
characteristics thereof shall, upon the effective date of said
Series, be deemed to be included in and be a part of the
certificate of incorporation of the Corporation pursuant to the
provisions of Sections 104 and 151 of the Delaware General
Corporation Law.
Signed and attested to on ___________________,1998.
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Xxxx X. Xxxxxxx, President
Attest:
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Xxxxx X. Xxxxxx, Secretary
