Exhibit 4.1
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WARRANT TO PURCHASE
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SHARES OF COMMON STOCK
OF
N-VIRO INTERNATIONAL CORPORATION (THE "COMPANY")
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS. THEY HAVE BEEN ACQUIRED SOLELY FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED,
HYPOTHECATED OR OTHERWISE DISTRIBUTED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL, SATISFACTORY IN
FORM AND SUBSTANCE TO THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED UNDER
THE SECURITIES ACT OF 1993, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS.
ISSUANCE NO. _______________ [DATE]
THIS CERTIFIES THAT, for valuable consideration received,
_________________(the "Holder"), or its successors or assigns, is entitled to
purchase ____________________________ (_________) fully paid and nonassessable
shares of common stock, with par value of $.01 per share, of the Company (the
"Stock") at a purchase price of One and 85/100 Dollars ($1.85) per share. The
number of shares of Stock to be received upon exercise of this Warrant and the
price to be paid per share of Stock may be adjusted, from time to time as
hereinafter set forth. The shares of Stock deliverable upon such exercise, as
adjusted from time to time, are hereinafter sometimes referred to as "Warrant
Shares" and the exercise price for a share of Stock in effect at any time and as
adjusted from time to time is hereinafter sometimes referred to as the "Warrant
Price". The terms and provisions of Stock as of the date hereof are set forth
in the Certificate of Incorporation of the Company.
1. ANTIDILUTION PROVISIONS.
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(a) Adjustment of Number of Shares. This Warrant, the Warrant Price
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and the number of Warrant Shares are subject to adjustment under the following
provisions:
(i) Dividends, Reclassification, etc.. In case, prior to the
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expiration of this Warrant by exercise or by its terms, the Company shall at any
time issue Stock as a stock dividend or other distribution or subdivide the
number of outstanding shares of Stock into a greater number of shares, then, in
either of such cases, the Warrant Price of the Warrant Shares purchasable
pursuant to this Warrant in effect at the time of such action shall be
proportionately reduced and the number of Warrant Shares at that time
purchasable pursuant to this Warrant shall be proportionately increased; and
conversely, in the event the Company shall contract the number of outstanding
shares of Stock by combining such shares into a smaller number of shares, then,
in such case, the Warrant Price of the Warrant Shares purchasable pursuant to
this Warrant in effect at the time of such action shall be proportionately
increased and the number of Warrant Shares at that time purchasable pursuant to
this Warrant shall be proportionately decreased. If the Company shall, at any
time during the life of this Warrant, declare a dividend payable in cash on its
Stock and shall at substantially the same time offer to the holders of its Stock
the right to purchase new Stock from the proceeds of such dividend or for an
amount substantially equal to the dividend, all shares of Stock so issued shall,
for the purpose of this Warrant be deemed to have been issued as a stock
dividend. Any dividend paid or distributed upon the Stock in shares of any
other class of securities convertible into Stock shall be treated as a dividend
paid in Stock to the extent that Stock is issuable upon the conversion thereof.
(ii) No Adjustment for Small Amounts. The Company shall not be
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required to give effect to any adjustment in the Warrant Price unless and until
the net effect of one or more adjustments, determined as provided above, shall
have required a change of the Warrant Price by at least thirteen cents ($.12),
but when the cumulative net effect of more than one adjustment so determined
shall be to change the actual Warrant Price by at least twenty cents ($.12),
such change in the Warrant Price shall thereupon be given effect.
(b) Stock Defined. Whenever reference is made in this Section 1 to the
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issue or sale of shares of Stock, the term "Stock" shall mean the Stock of the
Company of the class authorized as of the date hereof and any other class of
stock ranking on a parity with such Stock. However, shares issuable upon
exercise of this Warrant shall include only shares of the class designated as
Stock of the Company as of the date hereof.
(c) Determination of Adjusted Purchase Price. Upon the occurrence of
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each event requiring an adjustment of the Warrant Price and of the number of
Warrant Shares purchasable pursuant to this Warrant in accordance with, and as
required by, the terms of this Warrant, the Company shall forthwith employ a
firm of certified public accountants (who may be the regular accountants for the
Company) who shall compute the adjusted Warrant Price and the adjusted number of
shares purchasable at such adjusted Warrant Price by reason of such event in
accordance with the provisions hereof. The Company shall mail forthwith to the
holder of this Warrant a copy of such computation.
2. LIMITATIONS ON EXERCISE RIGHT.
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This Warrant is exercisable only from the date of issuance through and
including the expiration date of MARCH 1, 2010.
3. EXERCISE OF WARRANT.
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The terms and conditions upon which this Warrant may be exercised, and
the Stock covered hereby may be purchased, are as follows:
(a) Method of Exercise. At any time after 12:01 a.m. Toledo, Ohio
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time on the date hereof and prior to 5:00 p.m., Toledo, Ohio time on March 1,
2010, the Holder may exercise in whole or in part this Warrant. Such exercise
shall be effected by:
(i) the surrender of this Warrant, together with a duly
executed copy of the Notice of Exercise attached hereto, to the Secretary or any
Assistant Secretary of the Company at its principal offices.
(ii) the payment to the Company, by certified or cashier's
check or bank draft payable to its order, of an amount equal to the aggregate
Warrant Price for the number of Warrant Shares for which the purchase rights
hereunder are being exercised.
(b) Issuance of Shares. The Company shall cause, at its expense,
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the issuance within five (5) business days of the date of exercise hereof to the
Holder of such number of Warrant Shares as subscribed for by the Holder. All
such Warrant Shares shall be unregistered, restricted securities. In the event
that, pursuant to subparagraph 3(a), there is a partial exercise of a Warrant, a
Warrant for the unexercised portion shall be issued to the Holder.
(c) Conditions Precedent to Obligations of the Company. The
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obligation of the Company under this Warrant to sell and deliver the Warrant
Shares, is at its option, subject to (i) receiving an opinion of counsel for the
Company that the Company has complied with or is exempt from (a) all applicable
registration requirements under the Securities Act of 1933, (b) all applicable
registration requirements under the securities laws of any state, and (c) all
other requirements of law or of any regulatory body having jurisdiction over the
issuance and delivery of the Warrant Shares; and (ii) the Holder's complying
with all the terms and conditions of this Warrant.
(d) Restrictive Legend. Any stock certificates evidencing Warrant
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Shares acquired under this Warrant pursuant to an unregistered transaction shall
bear the following restrictive legend and such other restrictive legends as are
required or deemed advisable under the provisions of any applicable law:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS. THEY HAVE BEEN ACQUIRED SOLELY FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED,
HYPOTHECATED OR OTHERWISE DISTRIBUTED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL, SATISFACTORY IN
FORM AND SUBSTANCE TO THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED UNDER
THE SECURITIES ACT OF 1993, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS.
4. RESERVATION OF STOCK ISSUABLE UPON CONVERSION.
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Solely for the purpose of effecting the exercise of this Warrant the
Company shall at all times reserve and keep available out of its authorized but
unissued shares of Stock such number of shares of Stock as shall from time to
time be sufficient to effect the exercise of this Warrant.
5. TRANSFERS AND EXCHANGES.
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(a) Subject only to limitations imposed by the Securities Act of
1933, as amended, and applicable state securities laws, this Warrant and all
rights hereunder are transferable in whole, or in part, by the Holder. The
transfer shall be recorded on the books of the Company upon the surrender of
this Warrant, properly endorsed, to the Secretary or any Assistant Secretary of
the Company at its principal offices and the payment to the Company of all
transfer taxes and other governmental charges imposed on such transfer (if any)
and a new Warrant shall be issued in the name of the transferee. In the event
of a partial transfer, the Company shall issue to the Holders one or more
appropriate new Warrants.
(b) Each Holder agrees that this Warrant when endorsed in blank
shall be negotiable and that when so endorsed the Holder may be treated by the
Company and all other persons dealing with this Warrant as the absolute owner
for all purposes and as the person entitled to exercise the purchase rights
evidenced hereby; provided, however, that until such time as the transfer is
recorded on the books of the Company, the Company may treat the registered
Holder of this Warrant as the absolute owner.
(c) All Warrants issued in connection with transfers or exchanges
of this Warrant shall bear the same date as this Warrant and shall be identical
in form and provision to this Warrant except for the number of shares
purchasable thereunder.
6. NO PRIVILEGES OF STOCK OWNERSHIP.
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Prior to exercise of this Warrant, the Holder shall not be entitled to
any rights of a shareholder of the Company, including (without limitation) the
right to vote, receive dividends or other distributions, exercise preemptive
rights or be notified of shareholder meetings, and such Holder shall not be
entitled to any notice or other communication concerning the business or affairs
of the Company except as otherwise provided herein.
7. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
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The Company represents and warrants to the Holder as follows:
(a) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, and the Company
has all requisite corporate power and authority to own its properties and
conduct its business as now being conducted. The Company is duly licensed or
qualified to conduct business in each jurisdiction wherein the failure to be
licensed or qualified could have a material adverse effect on the business or
financial condition of the Company or its ability to execute, deliver or perform
its obligations under this Warrant.
(b) Upon issuance thereof and payment therefore as contemplated in
this Warrant, each Warrant Share will have been duly authorized and validly
issued and will be fully paid and nonassessable and free of preemptive rights.
(c) The Company has all requisite corporate power and authority to
execute, deliver and perform this Warrant and to consummate the transactions
contemplated hereby. The Company has taken all requisite corporate action to
authorize the execution, delivery and performance of this Warrant. This Warrant
has been duly executed and delivered by the Company. This Warrant is the legal,
valid and binding obligation of the Company, enforceable against it in
accordance with its terms.
(d) The execution, delivery and performance of this Warrant and
the consummation of the transaction contemplated hereby; (i) do not violate any
provisions of law applicable to the Company, (ii) will not conflict with, or
result in the breach or termination of any provision of, or constitute a default
under (in each case whether with or without the giving of notice or the lapse of
time or both), the Company's Certificate of Incorporation or By-Laws, or any
indenture, mortgage, lease, deed of trust, or other instrument, contract or
agreement or any order, judgment, arbitration award, or decree to which the
Company is a party or by which it or any of its assets and properties are bound
and (iii) do not and will not result in the creation of any encumbrance upon any
of the properties, assets, or business of the Company.
8. NOTICES.
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All communications hereunder shall be in writing and shall be deemed
duly given when delivered personally, when sent by facsimile transmission
(receipt confirmed) or one day after being mailed by first class mail, postage
prepaid or sent by overnight courier, properly addressed, if to the Company, to
N-Viro International Corporation, 0000 X. Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx,
Xxxx 00000, Attention: Xxxxxxx X. Xxxxxxx President and CEO, fax 000-000-0000 or
if to the Holder hereof, at the address last appearing on the records of the
Company. The Company or the Holder hereof may change such address and/or
facsimile number at any time or times by notice hereunder to the other.
9. GOVERNING LAW.
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This Warrant shall be binding upon any successors or assigns of the
Company. This Warrant shall constitute a contract under the laws of Delaware
and for all purposes shall be construed in accordance with and governed by the
laws of said state, without giving effect to the conflict of laws principles.
10. ATTORNEY'S FEES.
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In any litigation, arbitration or court proceeding between the Company
and the Holder as the holder of this Warrant relating hereto, the prevailing
party shall be entitled to reasonable attorney's fees and expenses incurred in
enforcing this Warrant.
11. AMENDMENTS.
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This Warrant may be amended and the observance of any term of this
Warrant may be waived only with the written consent of the Company and the
Holder as the holder hereof.
12. SUCCESSORS AND ASSIGNS
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The terms and provisions of this Warrant shall inure to the benefit
of, and be binding upon, the Company and the holder thereof and their respective
successors and assigns.
N-VIRO INTERNATIONAL CORPORATION
By:________________________________
Xxxxx X. XxXxxx
Secretary and Treasurer
Dated: ___________________________
NOTICE OF EXERCISE
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To: N-Viro International Corporation
1. The undersigned hereby elects to purchase ___________________ shares
(the "Shares") of common stock $.01 par value of N-Viro International
Corporation, a Delaware Corporation (the "Company"), pursuant to the terms of
the attached Warrant, and tenders herewith payment of the purchase price and any
transfer taxes payable pursuant to the terms of the Warrant, together with an
investment representation statement in form and substance satisfactory to legal
counsel to the Company.
2. The Shares to be received by the undersigned upon exercise of the
Warrant are being acquired for its own account not as a nominee or agent, and
not with a view to resale or distribution of any part thereof, and the
undersigned has no present intention of selling, granting any participation in,
or otherwise distributing the same, except in compliance with applicable federal
and state securities laws. The undersigned further represents that it does not
have any contract, undertaking, agreement or arrangement with any person to
sell, transfer or grant participation to such person or to any third person,
with respect to the Shares. The undersigned believes it has received all the
information it considers necessary or appropriate for deciding whether to
purchase the Shares.
3. The undersigned understands that the Shares are characterized as
"restricted securities" under the federal securities laws inasmuch as they are
being acquired from the Company in transactions not involving a public offering
and that under such laws and applicable regulations such securities may be
resold without registration under the Securities Act of 1933, as amended (the
"Act"), only in certain limited circumstances. In this connection, the
undersigned represents that it is familiar with Rule 144 of the Act, as
presently in effect, and understands the resale limitations imposed thereby and
by the Act.
4. The undersigned understands the certificates evidencing the Shares
may bear one or all of the following legends:
(a) "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES
UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OF SUCH ACT."
(b) Any legend required by applicable state law.
5. Please issue a certificate or certificates representing said Shares
in the name of the
undersigned.
6. Please issue a new Warrant for the unexercised portion of the
attached Warrant in the name of the undersigned.
_____________________________________________
[Name]
____________________________
_____________________________________________
[Date] [Signature]
