Exhibit 4.5
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY OTHER APPLICABLE STATE SECURITIES LAW.
THE TRANSFER OF THIS WARRANT IS SUBJECT TO RESTRICTIONS
ON EXERCISE AND TRANSFER SET FORTH IN SECTION 5 OF THIS
WARRANT, AND NO TRANSFER OF THIS WARRANT SHALL BE
VALID OR EFFECTIVE UNLESS AND EXCEPT IN COMPLIANCE WITH
THE TERMS AND CONDITIONS OF SAID SECTION 5.
No. of Shares: ___________ Warrant No. __________
WARRANT
To Purchase Common Stock of
IMAGE TECHNOLOGY LABORATORIES, INC.
THIS WARRANT CERTIFIES THAT, for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the registered holder
hereof, _____________whose address is ______________, or his registered assigns,
is entitled to purchase from IMAGE TECHNOLOGY LABORATORIES, INC., a corporation
organized and existing under the laws of the State of Delaware, _________ shares
of Stock (as hereinafter defined) at the Basic Purchase Price (as hereinafter
defined) in lawful money of the United States of America at any time on or
before ____, __, _______(one (1) year from date of issuance). The number of
shares of the Stock purchasable hereunder and the Basic Purchase Price therefor
are subject to adjustment as provided in Section 6.
SECTION 1. DEFINITIONS. For all purposes of this Warrant, the following
terms shall have the meanings indicated:
"Basic Purchase Price" shall mean $0.40, which is the price per share
of the Stock at which price the registered holder hereof may exercise this
Warrant prior to any adjustments being made as provided in Section 6.
"Business Day" shall mean any day except a Saturday, Sunday or a legal
holiday in New York, New York on which banks are open for business on a regular
basis.
"Commission" shall mean the Securities and Exchange Commission and any
other similar or successor agency of the federal government then administering
the Securities Act or the Exchange Act.
"Company" shall mean Image Technology Laboratories, Inc., a Delaware
corporation, together with any corporation which shall succeed to or assume the
obligations of Image Technology Laboratories, Inc. under this Warrant.
"Convertible Securities" shall have the meaning set forth in Section
6(B)(ii).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and any similar or successor federal statute, and the rules and
regulations of the Commission thereunder, all as the same shall be in effect at
the time.
"Market Price" shall mean the last reported sale price, or, in case no
such reported sale takes place on such day, the average of the last reported
sale prices for the last five (5) trading days, in either case as officially
reported by the principal securities exchange on which the Common Stock is
listed or admitted to trading, or, if the Common Stock is not listed or admitted
to trading on any national securities exchange, the average closing bid price as
furnished by the NASD through NASDAQ or similar organization if NASDAQ is no
longer reporting such information, or if the Common stock is not quoted on
NASDAQ, as determined in good faith by resolution of the Board of Directors of
the Company, based on the best information available to it.
"Private Placement Memorandum" shall mean the Company's Confidential
Private Placement Memorandum dated January 10, 2000, as the same shall be
amended or supplemented from time to time.
"Purchase Price" shall mean, as of any date, the Basic Purchase Price,
as the same has been adjusted from time to time pursuant to the provisions of
Section 6.
"Securities Act" shall mean the Securities Act of 1933, as amended, and
any similar or successor federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"Stock" shall mean and include the Company's authorized common stock,
par value $.01 per share, and shall also include shares of any class or classes
of the capital stock of the Company resulting from any reclassification or
reclassifications of such common stock, which reclassified shares shall not be
(i) limited to a fixed sum or a percentage of par value in respect of the rights
of the holders thereof to receive dividends and to participate in the
distribution of assets upon the voluntary or involuntary liquidation,
dissolution or winding-up of the Company, or (ii) subject at any time to
redemption by the Company, provided, however, that except as provided in Section
6.G, the Stock receivable upon exercise of any Warrant shall include only shares
of the capital stock of the Company designated as Common Stock on the date
hereof, or shares of any class or classes of the capital stock of the Company
resulting from any reclassification or reclassifications of such Common Stock
which are not limited to any such fixed sum or percentage of par value and which
are not subject to any such redemption.
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"Transfer", as used in Section 5, shall include any disposition of any
Warrants or Warrant Shares (as defined hereinafter), or of any interest in
either, which would constitute a sale within the meaning of the Securities Act.
"Warrantholders" shall mean, as of any date, the then registered
holders of the Warrants and the then registered holders of the Warrant Shares
(as defined hereinafter).
"Warrants" shall mean all Warrants of the Company (including this
Warrant) comprising the Units (as defined in the Private Placement Memorandum),
whether issued or issuable, which are identical as to terms and conditions,
except as to the names and addresses of their Warrantholders and the number of
shares of the Stock for which they may be exercised, including all amendments
thereto, and together with all Warrants issued in exchange, transfer or
replacement of any thereof.
"Warrant Shares" shall mean all shares of the Stock purchased or
purchasable by the registered holders of the Warrants upon the exercise thereof
pursuant to Section 4 thereof.
SECTION 2. OWNERSHIP OF THIS WARRANT. The Company may deem and treat
the person in whose name this Warrant is registered as the holder and owner of
this Warrant, notwithstanding any notations of ownership or writing hereon made
by anyone other than the Company, for all purposes and shall not be affected by
any notice to the contrary, until presentation of this Warrant for registration
or transfer, as provided in Section 3. The Company -shall maintain, at its
office in Kingston, New York (or at such other office or agency of the Company
in Kingston, New York or elsewhere as the Company shall designate from time to
time by notice to the registered holder of this Warrant), a register for the
Warrants, in which the Company shall record the name and address of the person
in whose name each Warrant has been issued, as well as the name and address of
each transferee and each prior owner of such Warrant. Within five days after any
Warrantholder shall by notice request the same, the Company will deliver to such
Warrantholder a certificate, signed by one of its officers, listing the names
and addresses of every other Warrantholder, as such information appears in said
register and in the stock transfer books of the Company at the close of business
on the day before such certificate is signed.
SECTION 3. EXCHANGE, TRANSFER AND REPLACEMENT. This Warrant is
exchangeable upon surrender by the registered holder to the Company at its
office or agency provided for in Section 2, for new Warrants, representing in
the aggregate the right to purchase the number of shares of the Stock
purchasable hereunder, each of such new Warrants to represent the right to
purchase such number of shares of the Stock as shall be designated by said
registered holder at the time of such surrender. This Warrant and all rights
hereunder are transferable, in whole or in part, only upon the register provided
for in Section 2, by the registered holder hereof in person or by his duly
authorized attorney, and a new Warrant shall be made and delivered by the
Company, as registered in the name of the transferee, upon surrender of this
Warrant with the
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Assignment Form attached hereto duly completed, at the office or agency
maintained by the Company in accordance with Section 2 above. Upon receipt by
the Company at its office or agency provided for in Section 2 of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of
this Warrant, and, in the case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to it, and upon surrender of this Warrant, if
mutilated, the Company will make and deliver a new Warrant in replacement of
this Warrant. This Warrant shall be promptly canceled by the Company upon
surrender in connection with any exchange, transfer or replacement. The Company
shall pay all taxes (other than securities transfer taxes) and all other
expenses and charges payable in connection with the preparation, execution and
delivery of Warrants pursuant to this Section 3.
SECTION 4. EXERCISE OF THIS WARRANT.
A. Procedure for Exercise. (i) In order to exercise this Warrant in
whole or in part, the registered Warrantholder shall complete the attached
Subscription Form and deliver this Warrant to the Company, together with cash in
an amount equal to the aggregate Purchase Price of the shares of the Stock then
being purchased, at its office or agency provided for in Section 2. The exercise
of this Warrant shall be deemed to have been effected, and the Purchase Price
and the number of shares of the Stock issuable in connection with such exercise
shall be determined, as of the close of business on the business day prior to
the date on which the last to be delivered of such completed Subscription Form
and all other items required to be delivered in connection with such exercise by
the registered Warrantholder hereof pursuant to Section 5.B shall have been
delivered at such office or agency. Upon receipt of such Subscription Form and
other items, the Company shall, as promptly as practicable and in any event
within five days thereafter, execute or cause to be executed and deliver to said
Warrantholder a certificate or certificates representing the aggregate number of
shares of the Stock specified in such Form. Each Stock certificate so delivered
shall be in such denomination as may be requested by the registered
Warrantholder and shall be registered in the name of said Warrantholder or such
other name as shall be designated by said Warrantholder, and, to the extent
permitted by law, the person in whose name any such Stock certificate shall be
issuable upon such exercise shall be deemed to have become the holder of record
of the shares represented thereby as of the time when the exercise of this
Warrant with respect to such shares shall be deemed to have been effected. If
this Warrant shall have been exercised only in part, the Company shall, at its
expense at the time of delivery of said Stock certificate or certificates,
deliver to such holder a new Warrant of like tenor evidencing the rights of such
holder to purchase the remaining shares of the Stock covered by this Warrant.
The Company shall pay all taxes, other expenses and charges payable in
connection with the preparation, execution and delivery of Stock certificates
pursuant to this Section 4, except that, in case such Stock certificates shall
be registered in a name or names other than the name of the registered holder of
this Warrant, funds sufficient to pay all stock transfer taxes which shall be
payable upon the execution and delivery of such Stock certificate or
certificates shall be paid by the registered holder of this Warrant to the
Company at the time of delivery of such Stock certificates to the Company as
mentioned above.
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(i) In addition to the method of payment set forth in Section 4.A and
in lieu of any cash payment required thereunder, the Holder(s) of this Warrant
shall have the right at any time and from time to time to exercise this Warrant
in full or in part by surrendering the Warrant in the manner specified in
Section 4.A in exchange for the number of shares of Common Stock equal to the
product of (x) the number of shares to which the Warrant is being exercised
multiplied by (y) a fraction, the numerator of which is the Market Price of the
Common Stock less the Purchase Price and the denominator of which is such Market
Price.
B. Transfer Restriction Legend. Each certificate representing Warrant
Shares initially issued upon exercise of this Warrant, unless at the time of
exercise such Warrant Shares are registered under the Securities Act, shall bear
a legend in substantially the following form (and any additional legend required
by any securities exchange on which the Warrant Shares may at the time be
listed) on the face thereof:
The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, or any applicable state
securities laws. The transfer of said securities is subject to the
restrictions set forth in Section 5 hereof and no transfer of said
securities shall be valid or effective unless and except in compliance
with the terms and conditions of said Section 5.
Any certificate issued at any time upon transfer of, or in exchange for or
replacement of, any certificate bearing such legend (except a new certificate
issued upon completion of a public distribution of the securities represented by
such certificate pursuant to a registration under the Securities Act) shall also
bear such legend unless, in the opinion of counsel for the Company, addressed
and delivered to the Company and such holder, the securities represented by such
certificate no longer need to be subject to the restrictions contained in
Section 5. The provisions of Section 5 shall be binding upon all subsequent
holders of certificates bearing the above legend, and shall also be applicable
to all subsequent holders of this Warrant.
C. Acknowledgment of Continuing Obligation. Upon request of the
registered holder hereof at the time of the exercise of this Warrant but at the
expense of the Company, the Company will, in whole or in part, acknowledge in
writing its continuing obligation to said holder in respect of any rights to
which said holder shall continue to be entitled after such exercise in
accordance with this Warrant, provided that the failure of said holder to make
any such request shall not affect the continuing obligation of the Company to
said holder in respect of such rights.
D. Character of Warrant Shares. All shares of the Stock issuable upon
the exercise of this Warrant shall, when issued, have been duly authorized and
validly issued and shall be fully paid and non-assessable.
SECTION 5. RESTRICTIONS ON EXERCISE AND TRANSFER.
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A. Restrictions in General. Notwithstanding any provisions contained in
this Warrant to the contrary, this Warrant shall not be exercisable or
transferable and the related Warrant Shares shall not be transferable except
upon the conditions specified in this Section 5, which conditions are intended,
among other things, to insure compliance with the provisions of the Securities
Act in respect of the exercise or transfer of this Warrant or transfer of such
Warrant Shares. The registered holder of this Warrant agrees that it will not
transfer this Warrant, exercise this Warrant or transfer any related Warrant
Shares unless (i) the registration under the Securities Act and any applicable
state securities laws of the Warrants (if Warrants are being transferred) or the
Warrant Shares (if Warrants are being exercised or Warrant Shares are being
transferred) has become effective, or (ii) such transfer or exercise shall be
exempt from the registration requirements of the Securities Act and any
applicable state securities laws and, if required by the Company at the
Company's expense, counsel to the Company shall deliver to the Company the
opinion of counsel referred to in Section 5.B below.
B. Statement of Intention to Exercise. The registered holder of this
Warrant, by his acceptance hereof, agrees that prior to any exercise of this
Warrant where the exercising Warrantholder requests the Company to issue Stock
certificates in a name other than such Warrantholder, or prior to any transfer
of this Warrant or the related Warrant Shares, said Warrantholder will deliver
to the Company a statement setting forth either said holder's intention with
respect to the retention or disposition of any Warrant Shares issuable upon such
exercise, or the intention of said holder's prospective transferee with respect
to its retention or disposition of this Warrant or of said Warrant Shares
(whichever is involved in such transfer), in either such case. If required by
the Company, counsel to such Warrantholder shall deliver, at the expense of such
Warrantholder, an opinion of counsel as to the necessity or non-necessity for
registration under the Securities Act in connection with such exercise or
transfer. If the proposed exercise or transfer of this Warrant or the proposed
transfer of such Warrant Shares may be effected without registration under the
Securities Act or any applicable state securities laws of this Warrant or such
Warrant Shares, as the case may be, then the registered holder of this Warrant
shall be entitled to exercise or transfer this Warrant or to transfer such
Warrant Shares in accordance with the intended method of disposition specified
in the statement delivered by said holder to the Company. If the proposed
exercise or transfer of this Warrant or the proposed transfer of such Warrant
Shares may not be effected without registration under the Securities Act or any
applicable state securities laws of this Warrant or such Warrant Shares, as the
case may be, the registered holder of this Warrant shall not be entitled to
exercise or transfer this Warrant or to transfer such Warrant Shares, as the
case may be.
C. Applicabilily of Rule 144. The Company shall file on or before the
date due all reports required (if any) under Section 13 or 15(d), as the case
may be, of the Exchange Act and shall use its best efforts to comply with all
other requirements so as to enable holders of Warrant Shares to transfer such
shares pursuant to the provisions of Rule 144 under the Securities Act.
SECTION 6. ANTI-DILUTION PROVISIONS. The Purchase Price shall be subject to
adjustment from time to time as provided in this Section 6. Upon each adjustment
of the
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Purchase Price, except pursuant to Section 6.F, the registered holder of this
Warrant shall thereafter be entitled to purchase, at the Purchase Price
resulting from such adjustment, the number of shares of the Stock (calculated to
the nearest whole share) obtained by multiplying the Purchase Price in effect
immediately prior to such adjustment by the number of shares of the Stock
purchasable pursuant hereto immediately prior to such adjustment and dividing
the product thereof by the Purchase Price resulting from such adjustment.
A. Constructive Issuances of Stock. For purposes of this Section 6, the
number of shares of Stock deemed "outstanding" shall include the total maximum
number of shares of Stock issuable upon (i) the exercise of any outstanding
rights or options to subscribe for or purchase shares of Stock or securities
convertible into or exchangeable for shares of Stock and upon the conversion or
exchange of such securities, whether or not such rights, options or securities
are immediately exercisable, convertible or exchangeable and (ii) the conversion
or exchange of any outstanding security convertible into or exchangeable for
shares of Stock, whether or not such securities are immediately convertible or
exchangeable ("Convertible Securities").
B. Stock Dividends. In case at any time the Company shall declare a
dividend or any other distribution upon any capital stock of the Company which
is payable in shares of Stock, then the new Purchase Price in effect immediately
after the declaration of such dividend or distribution shall be the quotient
obtained by dividing (1) the product of (x) the number of shares of Stock
outstanding and deemed (in accordance with Section 6.B) to be outstanding
immediately prior to such declaration, multiplied by (y) the then effective
Purchase Price, by (2) the total number of shares of Stock outstanding and
deemed (in accordance with Section 6.B) to be outstanding immediately after such
declaration. All shares of Stock and all Convertible Securities issuable in
payment of any dividend or other distribution upon the capital stock of the
Company shall be deemed after such declaration to have been issued or sold
without consideration.
C. Extraordinary Dividends and Distributions. In case at any time the
Company shall declare a dividend or any other distribution upon the shares of
Stock payable otherwise than out of current net earnings or earned surplus and
otherwise than in shares of Stock or securities convertible into or exchangeable
for shares of Stock, then the new Purchase Price in effect immediately after
such declaration shall be the Purchase Price in effect immediately prior to such
declaration reduced by an amount equal, in the case of a dividend or
distribution in cash, to the amount of such dividend or distribution payable per
share of Stock or, in the case of any other dividend or distribution, to the
fair value of such dividend or distribution per share of Stock at the time such
dividend or distribution was declared, as determined by the Board of Directors
of the Company. For the purposes of the foregoing, a dividend or distribution
other than in cash shall be considered payable out of current net earnings or
earned surplus only to the extent that such current net earnings or earned
surplus are charged an amount equal to the fair value of such dividend or
distribution at the time of the declaration of such dividend or distribution, as
determined by the Board of Directors of the Company. Such reductions shall take
effect as of the
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date set for the purposes of such dividend or distribution, or, if a record date
is not set, the date as of which the holders of record of shares of Stock
entitled to such dividend or distribution are to be determined.
D. Stock Splits and Reverse Splits. In case at any time the Company
shall subdivide its outstanding shares of Stock into a greater number of shares,
the Purchase Price in effect immediately prior to such subdivision shall be
proportionately reduced to the new Purchase Price and the number of Warrant
Shares purchasable pursuant to this Warrant immediately prior to such
subdivision shall be proportionately increased, and conversely, in case at any
time the Company shall combine the outstanding shares of Stock into a smaller
number of shares, the Purchase Price in effect immediately prior to such
combination shall be proportionately increased to the new Purchase Price and the
number of Warrant Shares purchasable upon the exercise of this Warrant
immediately prior to such combination shall be proportionately reduced.
E. Reorganizations and Asset Sales. If any capital reorganization or
reclassification of the capital stock of the Company, or consolidation or merger
of the Company with another corporation, or the sale of all or substantially all
of its assets to another corporation, shall be effected in such a way that
holders of shares of Stock shall be entitled to receive stock, securities or
assets with respect to or in exchange for shares of Stock, then, prior to and as
a condition of such reorganization, reclassification, consolidation, merger or
sale, lawful and adequate provision shall be made whereby each registered holder
of Warrants shall thereafter have the right to receive, upon the basis and upon
the terms and conditions specified herein and in lieu of the shares of Stock
immediately theretofore receivable upon the exercise of such Warrants, such
shares of Stock, securities or assets as may be issued or payable with respect
to or in exchange for a number of outstanding shares of Stock equal to the
number of shares of Stock immediately theretofore so receivable had such
reorganization, reclassification, consolidation, merger or sale not taken place,
and in any such case appropriate provisions shall be made with respect to the
rights and interests of such holder to the end that the provisions hereof
(including, without limitation, provisions for adjustment of the Purchase Price
and of the number of shares issuable upon exercise and for the registration of
the Registrable Securities to the extent and as provided in Section 5, shall
thereafter be applicable, as nearly as may be, in relation to any shares of
Stock, securities or assets thereafter deliverable upon the exercise of such
Warrants. The Company shall not effect any such consolidation, merger or sale
unless prior to or simultaneously with the consummation thereof the survivor or
successor corporation (if other than the Company) resulting from such
consolidation or merger or the corporation purchasing such assets shall assume
by written instrument, executed and delivered to each registered holder of the
Warrants, the obligation to deliver to such holder such shares of Stock,
securities or assets as, in accordance with the foregoing provisions, such
holder may be entitled to receive, and containing the express assumption of such
successor corporation of the due and punctual performance and observance of
every provision of this Warrant to be performed and observed by the Company and
of all liabilities and obligations of the Company hereunder.
F. Sale or Issuance of Stock or Securities Convertible into Stock. In
case the
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Company shall, at any time, issue or sell any shares of Stock or securities
convertible into Stock other than pursuant to stock options granted to officers,
directors or employees of the Company pursuant to a stock incentive plan
approved by the Board of Directors of the Company (a "Diluting Issuance"), the
Company shall, immediately after such Diluting Issuance, grant and issue to the
holder of this Warrant such number of additional stock purchase warrants so that
after such Diluting Issuance, the holder of this Warrant would be entitled to
purchase the same percentage of Stock (on a fully diluted basis in accordance
with Section 6.B) after such Diluting Issuance as such holder was entitled to
purchase immediately prior to such Diluting Issuance.
G. Accountants' Opinion. Upon each adjustment of the Purchase Price,
and in the event of any change in the rights of the holder of this Warrant by
reason of other events herein set forth, then and in each such case, the Company
will promptly obtain an opinion of a firm of independent certified public
accountants selected by the Company's Board of Directors, stating the adjusted
Purchase Price and the new number of shares so issuable, or specifying the other
shares of Stock, securities or assets and the amount thereof receivable as a
result of such change in rights, and setting forth in reasonable detail the
method of calculation and the facts upon which such calculation is based. The
Company will promptly mail a copy of such accountants' opinion to the registered
holder of this Warrant. The opinion of such firm of independent public
accountants shall be conclusive evidence of the correctness of the computation
with respect to any such adjustment of the Purchase Price and any such change in
the number of such shares so issuable.
SECTION 7. OPTIONAL REDUCTION OF THE PURCHASE PRICE. The Company shall
have the right, at any time or from time to time, at its election, to reduce,
pro rata, the Purchase Price then in effect with respect to all the Warrants
then outstanding for such period or periods of time as a majority of the
disinterested members of the Board of Directors of the Company may determine. In
each such case, the Company shall deliver to all Warrantholders a certificate of
an officer of the Company stating the election of the Company to reduce the
Purchase Price in accordance with this Section 7 and specifying (i) the Purchase
Price so reduced, (ii) the period in which such reduced Purchase Price shall be
in effect, which period shall commence not less than 30 days after such
certificate is delivered to the Warrantholders; and (iii) that such election is
irrevocable during such period. Failure to receive such certificate, or any
defect therein, shall not affect the validity of the reduction of the Purchase
Price during such period.
SECTION 8. SPECIAL AGREEMENTS OF THE COMPANY. The Company covenants and
agrees that:
A. Will Reserve Shares. The Company will authorize, reserve and have
available for issuance at all times, free from preemptive rights, that number of
shares of Stock which is deliverable upon the exercise of the Warrants, and the
Company will have at all times any other rights or privileges provided for
therein sufficient to enable it at any time to fulfill all its obligations
hereunder.
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B. Will Avoid Certain Actions. The Company will not, by amendment of
its certificate of incorporation or through any reorganization, transfer of
assets, consolidation, merger, issue or sale of securities or otherwise, avoid
or take any action which would have the effect of avoiding the observance or
performance of any of the terms to be observed or performed hereunder by the
Company, but will at all times in good faith assist in carrying out all of the
provisions of this Warrant and in taking all such action as may be necessary or
appropriate in order to protect the rights of the registered holders of this
Warrant against dilution or other impairment and, in particular, will not permit
the par value, if any, of any share of Stock to be greater than the then
effective Purchase Price.
C. Will Not Issue Certain Stock. Except as disclosed in the Private
Placement Memorandum, the Company will not issue any capital stock of any class
which has rights to be preferred as to dividends or as to the distribution of
assets upon voluntary or involuntary liquidation, dissolution or winding-up,
unless such rights shall be limited to a fixed sum or percentage of par value in
respect of participation in dividends and in the distribution of such assets.
D. Will Secure Governmental Approvals. The Company will obtain the
approval of any governmental authority necessary or advisable under any federal
law (other than the Securities Act) or under any state law before the Warrant
Shares may be issued upon exercise of this Warrant.
E. Will Apply for Quotation on OTC Bulletin Board. The Company (through
a sponsoring market maker) shall, at its expense, as soon as practicable after
meeting the eligibility requirements obtain and maintain approval for quotation
of its securities on the OTC Bulletin Board.
F. Will List on Securities Exchange. The Company shall, at its expense
as soon as practicable after it qualifies to do so, obtain and maintain the
approval for listing on any national securities exchange (as defined in the
Exchange Act) or the quotation on the National Association of Securities Dealers
Automated Quotation System ("NASDAQ") upon official notice of issuance of all
shares of the Stock receivable upon the exercise of the Warrants at the time
outstanding and maintain the listing or quotation of such shares after their
issuance, and the Company will so list on such national securities exchange or
NASDAQ, as the case may be, will register under the Exchange Act (and any
similar state statute then in effect) and will maintain such listing of any
other securities that at any time are issuable upon exercise of the Warrants.
G. Will Enter into Separate Warrant Agreement . The Company shall, if
requested by the Warrantholders so disposing of such Warrants, execute and
deliver to a bank or trust company selected by the Company and reasonably
satisfactory to such Warrantholders, as Warrant Agent (herein called the
"Warrant Agent"), a separate warrant agreement in form and substance reasonably
satisfactory to such Warrantholders, providing for the issuance of warrants upon
countersignature by the Warrant Agent and for the registration, transfer,
exchange and
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exercise of warrants, and containing the substance of the terms and provisions
of the respective Warrants. Thereafter any Warrant may be exchanged for a
warrant or warrants issued under said separate warrant agreement evidencing the
same rights as the Warrants surrendered for exchange, and thereafter any
reference in Section 5 hereof to "this Warrant", "Warrants", "Warrant" or any
similar term shall be deemed to include the warrants so issued under such
separate warrant agreement. The Company shall pay all costs and expenses in
connection with the execution, delivery and performance of such separate warrant
agreement, including without limitation the fees and expenses of the Warrant
Agent.
H. Will Bind Successors. This Warrant will be binding upon any
corporation succeeding to the Company by merger, consolidation or acquisition of
all or substantially all of the Company's assets.
I. Will Give Notices Of Certain Events. The Company will review its
stock ledgers, stock transfer books and other corporate records periodically
(and not less than once in each calendar quarter) in order to determine whether
any Warrantholder is or shall have become, directly or indirectly, the owner of
record of more than such percentage of any class of its equity securities (as
defined in the Exchange Act) as shall cause such Warrantholder to be required to
make any filings or declarations to the Company, the Commission or any national
securities exchange pursuant to the provisions of the Exchange Act, and the
Company will give prompt notice to such Warrantholder whenever it shall have
determined, upon the basis of the information disclosed by any such review, that
such Warrantholder is or has become such a holder, which notice shall also
specify the information upon which the Company bases such determination,
provided, that the Company will give such notice only once in each fiscal year
to any Warrantholder whose percentage of ownership of record of the Company's
equity securities has not changed since the date of the giving of the
immediately preceding notice.
SECTION 9. NOTIFICATIONS BY THE COMPANY. In case at any time:
(1) the Company shall declare upon shares of Stock any dividend or
other distribution (other than cash dividends which are not in a greater amount
per share than the most recent cash dividend, if any) to the holders of shares
of Stock;
(2) the Company shall make an offer for subscription pro rata to the
holders of shares of Stock of any additional shares of Stock of any class or
other rights;
(3) the Board of Directors of the Company shall authorize (whether
definitively or subject to any conditions) any capital reorganization, or
reclassification of the capital stock of the Company, or consolidation or merger
of the Company with, or sale of all or substantially all of its assets to,
another person;
(4) the Board of Directors of the Company shall authorize (whether
definitively or subject to any conditions) a voluntary dissolution, liquidation
or winding up of the Company; or
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(5) the Company shall become subject to involuntary dissolution,
liquidation or winding-up;
then, in any one or more of such cases, the Company shall give notice to the
registered holder of this Warrant of the date on which (a) the books of the
Company shall close or a record date shall be set for such dividend,
distribution or subscription rights, or (b) such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up shall take place or be voted upon by the shareholders of the Company,
as the case may be. Such notice shall also specify the date as of which the
holders of record of shares of Stock shall participate in such dividend,
distribution or subscription rights, or shall be entitled to exchange their
shares of Stock or securities for other property deliverable upon such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding-up, as the case may be. Such notice shall be given not
less than 30 and not more than 90 days prior to the action in question and not
less than 30 and not more than 90 days prior to the record date or the date on
which the Company's transfer books are closed in respect thereto, and such
notice shall state that the action in question or the record date is subject to
the effectiveness of a registration statement under the Securities Act, or to a
favorable vote of shareholders, if either is required.
SECTION 10. NOTICES. All notices, requests and other communications
required or permitted to be given or delivered to Warrantholders shall be in
writing, and shall be delivered, or shall be sent by certified or registered
mail, postage prepaid and addressed, to each Warrantholder at the address shown
on such Warrantholder's Warrant or Warrant Shares, or at such other address as
shall have been furnished to the Company by notice from such Warrantholder. All
notices, requests and other communications required or permitted to be given or
delivered to the Company shall be in writing, and shall be delivered, or shall
be sent by certified or registered mail, postage prepaid and addressed, to the
office of the Company, at 000 Xxxxxxx Xxxxx, Xxxxxxxx, Xxx Xxxx 00000 Attention:
President, or at such other address as shall have been furnished to the
Warrantholders by notice from the Company.
SECTION 11. NO RIGHTS OR LIABILITIES AS STOCKHOLDER. This Warrant shall
not entitle any holder hereof to any of the rights of a stockholder of the
Company. No provision of this Warrant, in the absence of affirmative action by
the holder of this Warrant to purchase shares of the Stock, and no mere
enumeration in this Warrant of the rights or privileges of the holder of this
Warrant, shall give rise to any liability of such holder for the Purchase Price
or as a stockholder of the Company, whether such liability is asserted by the
Company or by creditors of the Company.
SECTION 12. GOVERNING LAW; CONSENT TO JURISDICTION. This Warrant shall
be governed by, and construed in accordance with, the laws of the State of New
York. If any action or proceeding shall be brought by any holder of this Warrant
in order to enforce any right or obligation in respect of this Warrant, the
Company hereby consents and will submit to the jurisdiction of any state or
federal court of competent jurisdiction sitting within the area comprising the
Southern District of New York on the date of this Warrant.
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SECTION 13. MISCELLANEOUS. The provisions of this Warrant may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the party (or any predecessor in interest thereof) against which
enforcement of the same is sought. The headings in this Warrant are for purposes
of reference only and shall not affect the meaning or construction of any of the
provisions of this Warrant.
SECTION 14. CALL RIGHTS. Upon sixty (60) days prior written notice (the
"Call Notice") to the registered holder of this Warrant, the Company shall have
the right to call and require such holder to sell to the Company this Warrant at
the termination of such sixty (60) day period, provided that, subsequent to the
issuance of this Warrant, the closing sale price of the Stock on any national
securities exchange or automatic quotation system on which the Stock is then
listed or quoted, has equaled or exceeded $2.50 (as such price shall be adjusted
for events of the type described in Section 6 hereof) for ten (10) consecutive
trading days. Any such notice shall comply with Section 10 herein and shall
specify the date for purchase of this Warrant. The purchase price for this
Warrant shall be equal to the product of (x) $.05 and (y) the number of shares
of Stock for which this Warrant is then exercisable, which purchase price shall
be paid within two (2) Business Days of the receipt by the Company of this
Warrant. Notwithstanding anything else contained in this Section 14, the
registered holder of this Warrant shall be entitled to exercise this Warrant and
sell the underlying Warrant Shares during such sixty (60) day period in
accordance with the terms of this Warrant.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed
and delivered in New York, New York by a duly authorized officer under its
corporate seal, attested by a duly authorized officer, and to be dated as of
this ____ day of __________, 2000.
IMAGE TECHNOLOGY LABORATORIES, INC.
By:______________________________________
Name: Xx. Xxxxx Xxxx
Title: President and Chief
Executive Officer
[Corporate Seal]
Attest:
----------------------
________________, Secretary
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ASSIGNMENT FORM
To Be Executed by the Registered Holder
Desiring to Transfer the Within Warrant of
IMAGE TECHNOLOGY LABORATORIES, INC.
FOR VALUE RECEIVED, the undersigned registered holder hereby sells,
assigns and transfers unto _______________________ the right to purchase ____
shares of the Stock covered by the within Warrant, and does hereby irrevocably
constitute and appoint __________ as the undersigned's attorney-in-fact to
transfer the said Warrant on the books of the Company (as defined in said
Warrant), with full power of substitution.
Name of Registered Holder: _____________________
Signature:______________________________________
Title: _______________________________________
Address:________________________________________
Dated: _____________
In the presence of
------------------------
NOTICE:
The signature to the foregoing Assignment Form must correspond to the
name as written upon the face of the within Warrant in every particular, without
alteration or enlargement or any change whatsoever.
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SUBSCRIPTION FORM
To Be Executed by the Registered Holder
Desiring to Exercise the Within Warrant of
IMAGE TECHNOLOGY LABORATORIES, INC.
The undersigned registered holder hereby exercises the right to
purchase ______ shares of the Stock covered by the within Warrant, according to
the conditions thereof, and herewith makes payment in full of the Purchase Price
of such shares, $ ______________
Name of Registered Holder: _____________________
Signature:______________________________________
Title: _______________________________________
Address:________________________________________
Dated: _____________
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