Exhibit 4.10
ISONICS CORPORATION
AND
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
Amended and Restated
WARRANT AGREEMENT
Dated as of July 26, 2001 but effective as of
August , 2001
Amending and Restating that certain Amended and Restated Warrant Agreement
dated December 12, 2000, which amended and restated the Warrant
Agreement dated as of June 1, 2000, as amended as of August 9, 2000
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CLASS B and CLASS C
Amended and Restated
WARRANT AGREEMENT
THIS WARRANT AGREEMENT (this "Agreement"), dated as of June 30, 2001
but effective as of August , 2001, by and among ISONICS CORPORATION, a
California corporation (the "Company"), and CONTINENTAL STOCK TRANSFER & TRUST
COMPANY, as Warrant Agent (the "Warrant Agent"), and each of their successors
and assigns, AMENDS AND RESTATES IN ITS ENTIRETY that certain warrant agreement
between the parties dated as of June 1, 2000, as amended as of August 9, 2000
and December 12, 2000.
W I T N E S S E T H:
WHEREAS, in connection with (i) the Company's underwritten initial
public offering pursuant to a registration statement on Form SB-2, an
unaffiliated party as underwriter sold on behalf of the Company 810,000 Units
consisting of 810,000 shares of Common Stock (as defined in Section 1), and
810,000 Class A redeemable common stock purchase warrants (the "Class A
Warrants"), each warrant entitling the holder thereof to purchase one additional
share of Common Stock; and (ii) the sale to the underwriter of warrants (the
"Underwriter's Warrants") to purchase up to 80,000 shares of Common Stock and/or
80,000 Warrants, the Company issued 890,000 Warrants (subject to adjustment as
provided herein and in the Underwriter's Warrant Agreement); and
WHEREAS, the Company offered the holders of the Class A Warrants an
incentive to exchange the Class A Warrants for Class B Warrants (as defined
elsewhere herein) pursuant to a registration statement on Form S-4 (the
"Exchange Offer") pursuant to which persons holding 632,160 Class A Warrants
acquired Class B Warrants; and
WHEREAS, on December 13, 2000, the Company issued Class B Warrants to
acquire an additional 675,000 shares of Common Stock and an additional 675,000
Class C Warrants and, as a pricing adjustment effective July , 2001, issued an
additional 675,000 Class B Warrants exercisable to acquire a total of 675,000
shares of common stock and 675,000 Class C Warrants (the "Private Placement");
WHEREAS, as a result of the Exchange Offer and the Private Placement,
and the subsequent exercise of 202,500 Class B Warrants, there are the following
outstanding as of the date hereof:
1,779,660 Class B Warrants (being the total issued (1,982,160) less the
202,500 which have been exercised); and
202,500 Class C Warrants, with an additional 1,779,660 Class C Warrants
issuable upon exercise of outstanding Class B Warrants.
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WHEREAS, the Company has determined it is appropriate and in its best
interests and in the best interests of its shareholders and the persons who may
become holders of Class B Warrants and Class C Warrants to amend certain
provisions of the Class B Warrants and the Class C Warrants to, among other
things stated herein, reduce the exercise price of the Warrants, provide for the
redemption of the Class B Warrants, and amend the redemption provisions of the
Class C Warrants;
WHEREAS, persons who hold at least 66-2/3% of the outstanding Warrants
have approved this amended and restated Warrant Agreement in accordance with
Section 11 hereof; and
WHEREAS, the Company desires to provide for the issuance of
certificates representing the Class B Warrants and Class C Warrants
(collectively referred to as the "Class B/C Warrants" or (when the context
requires the "Warrants"); and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing to so act, in connection with the
issuance, registration, transfer, exchange and redemption of the Class B/C
Warrants, the issuance of certificates representing the Class B/C Warrants, the
exercise of the Class B/C Warrants and the rights of the holders thereof.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth and for the purpose of defining the terms and
provisions of the Class B/C Warrants and the certificates representing the Class
B/C Warrants and the respective rights and obligations thereunder of the
Company, the holders of certificates representing the Class B/C Warrants, and
the Warrant Agent, the parties hereto agree to amend and restate the agreement
between them as follows and, since there are no Registered Holders (as that term
is defined herein) and since the amendment does not adversely affect the
interests of the holders of the Warrant Certificates, without requiring the
consent of any other person pursuant to Section 11 hereof and the predecessor to
this Agreement:
1. DEFINITIONS. As used herein (and in addition to the definitions set
forth above in the Recitals), the following terms shall have the
following meanings, unless the context shall otherwise require:
(a) "Act" shall mean the Securities Act of 1933, as amended.
(b) ______ "Common Stock" shall have the meaning assigned to it in
Section 8(h) hereof.
(c) "Class A Warrants" shall mean the outstanding Class A
Redeemable Common Stock Purchase Warrants of the Corporation
which are subject to an agreement between the Corporation, the
Warrant Agent, and
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the underwriter dated September 22, 1997.
(d) "Class B Warrants" shall mean the Warrants being offered in
exchange for the outstanding Class A Warrants and the
additional Class B Warrants sold in December 2000 as a part of
a Unit consisting of one share of Common Stock and two Class B
Warrants.
(e) "Class C Warrants" shall mean the Warrants issuable upon
exercise of the Class B Warrants.
(f) "Commission" shall mean the Securities and Exchange
Commission.
(g) "Corporate Office" shall mean the office of the Warrant Agent
(or its successor) at which at any particular time its
business shall be administered, which office is located on the
date hereof c/o Continental Stock Transfer & Trust Company, 0
Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000.
(h) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
(i) "Exercise Date" shall mean, subject to the provisions of
Section 5(b) hereof, as to any Warrant, the date on which the
Warrant Agent shall have received both (i) the Warrant
Certificate representing such Warrant, with the exercise form
thereon duly executed by the Registered Holder hereof or his
attorney duly authorized in writing; and (ii) payment in cash
or by official bank or certified check made payable to the
Warrant Agent for the account of the Company, in the amount in
lawful money of the United States of America equal to the
applicable Purchase Price (as hereinafter defined) in good
funds.
(j) "Exercise Price" shall mean, subject to modification and
adjustment as provided in Section 8, $1.50 per share for the
Class B Warrants and $2.50 per share for the Class C Warrants,
and further subject to the Company's right, in its sole
discretion, to decrease the Exercise Price on not less than
thirty (30) days prior written notice to the Registered
Holders.
(k) "Initial Warrant Exercise Date" shall mean the date of
issuance with respect to the Class B Warrants and the Class C
Warrants.
(l) "Initial Warrant Redemption Date" shall mean the date of
issuance with respect to the Class C Warrants and May 1, 2001
with respect to the Class B Warrants.
(m) "Market Price" shall mean
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(i) if the Common Stock is listed, or admitted to unlisted trading
privileges on a national securities exchange, or is traded on
the Nasdaq National Market or Nasdaq, the last reported
closing sale price on the five trading days prior to the date
of the event to which such Market Price relates, or, if no
such reported closing sale takes place on such date, then the
average of the last reported closing sales prices for the last
five trading days before such date, in each case as officially
reported by the principal securities exchange on which the
Common Stock is listed or admitted to unlisted trading
privileges or by the Nasdaq National Market or Nasdaq, or
(ii) if the Common Stock is not listed or admitted to unlisted
trading privileges, on any national securities exchange, or
traded on the Nasdaq National Market or Nasdaq, but is
traded in the over-the-counter market, then the average of
the closing sale prices (or if closing sale prices are not
reported, the average of the last reported bid and asked
prices) of the Common Stock reported by the National
Quotation Bureau, Inc. or similar bureau if the National
Quotation Bureau, Inc. is no longer reporting such
information on the date of the event to which such Market
Price relates, and if no such prices are reported on such
date, then the average of the last so reported bid and
asked prices on the last five trading days on which such
prices are reported immediately preceding such date; or
(iii) if the Common Stock is neither listed, nor admitted to
unlisted trading privileges on a national securities exchange,
nor traded on the Nasdaq National Market or Nasdaq, nor traded
in the over-the-counter market, then the fair market value of
the Common Stock, not less than the book value thereof, as of
the date of the event to which such Market Price relates, as
determined in good faith (using customary valuation methods)
by the Board of Directors of the Company, which determination
shall be evidenced by a resolution of the Board of Directors
and based on the best information available to it.
(n) "NASD" shall mean the National Association of Securities
Dealers, Inc.
(o) "Nasdaq" shall mean the Nasdaq SmallCap Market or, if not
quoted on the Nasdaq SmallCap Market then the OTC Bulletin
Board or, if not quoted on the OTC Bulletin Board in the "pink
sheets" as published by National Quotation Bureau.
(p) "Redemption Date" shall mean the date (which may not occur
before the Initial Warrant Redemption Date) fixed for the
redemption of the Class B Warrants or the Class C Warrants in
accordance with the terms hereof.
(q) "Redemption Price" shall mean the price at which the Company
may, at its option, redeem the Warrants, in accordance with
the terms hereof, which price shall be $0.10 per Warrant,
subject to adjustment from time to time pursuant to the
provisions of Section 9 hereof.
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(r) "Registered Holder" shall mean each person in whose name a
Warrant Certificate representing any of the Warrants shall be
registered on the books maintained by the Warrant Agent
pursuant to Section 6.
(s) "Underwriter's Warrant Agreement" shall mean the agreement
dated as of September 22, 1997 between the Company and Xxxxxx
Xxxxxx Securities, Inc. relating to and governing the terms
and provisions of the Underwriter's Warrants.
(t) "Transfer Agent" shall mean Continental Stock Transfer & Trust
Company, or its authorized successor.
(u) "Underwriting Agreement" shall mean the underwriting agreement
dated as of September 22, 1997 between the Company and the
underwriter relating to the Offering.
(v) "Warrant Certificate" shall mean a certificate representing
one or more of the Warrants substantially in the form annexed
as Exhibit A (with respect to the Class B Warrants") or
Exhibit B (with respect to the Class C Warrants").
(w) "Warrant Expiration Date" shall mean, unless the Warrants are
redeemed as provided in Section 9 hereof prior to such date,
5:00 p.m. (New York time): (i) with respect to the Class B
Warrants, on December 31, 2005, and (ii) with respect to the
Class C Warrants, on December 31, 2005, or if earlier, the
Redemption Date as defined herein, whichever date is earlier;
provided that if such date shall in the State of New York be a
holiday or a day on which banks located in the State of New
York are authorized to close, then 5:00 p.m. (New York time)
on the next following day which, in the State of New York, is
neither a holiday nor a day on which such banks are authorized
to close. Upon prior written notice to the Registered Holders,
the Company (in its sole discretion) shall have the right to
extend the Warrant Expiration Date.
(x) "Warrants" mean, collectively, the Class B Warrants and the
Class C Warrants.
2. WARRANTS AND ISSUANCE OF WARRANT CERTIFICATES.
(a) Each Class B Warrant shall initially entitle the Registered
Holder of the Warrant Certificate representing such Warrant to
purchase at the Exercise Price therefor from the Initial
Warrant Exercise Date until the Warrant Expiration Date one
share of Common Stock and one Class C Warrant upon the
exercise thereof in accordance with the terms hereof (subject
to modification and adjustment as provided in Section 8).
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(b) Each Class C Warrant shall initially entitle the Registered
Holder of the Warrant Certificate representing such Warrant to
purchase at the Exercise Price therefor from the Initial
Warrant Exercise Date until the Warrant Expiration Date one
share of Common Stock upon the exercise thereof in accordance
with the terms hereof (subject to modification and adjustment
as provided in Section 8).
(c) Upon execution of this Agreement, Warrant Certificates
representing the number of Class B Warrants exchanged pursuant
to the exchange offer (subject to modification and adjustment
as provided in Section 8) shall be executed by the Company and
delivered to the Warrant Agent.
(d) Upon exercise of the Underwriter's Warrants as provided
therein, Warrant Certificates representing all or a portion of
80,000 Warrants to purchase up to an aggregate of 80,000
shares of Common Stock (subject to modification and adjustment
as provided in Section 8 hereof and in the Underwriter's
Warrant Agreement), shall be countersigned, issued and
delivered by the Warrant Agent upon written order of the
Company signed by its Chairman of the Board, Chief Executive
Officer, President or a Vice President and by its Chief
Financial Officer, Treasurer or an Assistant Treasurer or its
Secretary or an Assistant Secretary.
(e) From time to time, up to the Warrant Expiration Date, the
Warrant Agent shall countersign and deliver Warrant
Certificates in required denominations of one or whole number
multiples thereof to the person entitled thereto in connection
with any transfer or exchange permitted under this Agreement.
Except as provided herein, no Warrant Certificates shall be
issued except: (i) Warrant Certificates initially issued
hereunder and those issued on or after the Initial Warrant
Exercise Date, upon the exercise of fewer than all Warrants
held by the exercising Registered Holder, (ii) Warrant
Certificates issued upon any transfer or exchange of Warrants,
(iii) Warrant Certificates issued in replacement of lost,
stolen, destroyed or mutilated Warrant Certificates pursuant
to Section 7, (iv) Warrant Certificates issued pursuant to the
Underwriter's Warrant Agreement; and (v) at the option of the
Company, Warrant Certificates may be issued in such form as
may be approved by its Board of Directors, to reflect any
adjustment or change in the Exercise Price, the number of
shares of Common Stock purchasable upon exercise of the
Warrants or the Redemption Price therefor made pursuant to
Section 8 hereof.
3. FORM AND EXECUTION OF WARRANT CERTIFICATES.
(a) The Warrant Certificates shall be substantially in the form
annexed hereto as Exhibits A and B (the provisions of which
are hereby incorporated herein) and may have such letters,
numbers or other marks of identification or designation and
such legends, summaries or
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endorsements printed, lithographed or engraved thereon as the
Company may deem appropriate and as are not inconsistent with
the provisions of this Agreement, or as may be required to
comply with any law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock
exchange on which the Warrants may be listed, or to conform to
usage. The Warrant Certificates shall be dated the date of
issuance thereof (whether upon initial issuance, transfer,
exchange or in lieu of mutilated, lost, stolen or destroyed
Warrant Certificates) and issued in registered form. Warrants
shall be numbered serially with the letters "WB" on the Class
B Warrants and with the letters "WC" on the Class C Warrants.
(b) Warrant Certificates shall be executed on behalf of the
Company by its Chairman of the Board, Chief Executive Officer,
President or any Vice President and by its Chief Financial
Officer, Treasurer or an Assistant Treasurer or its Secretary
or an Assistant Secretary, by manual signatures or by
facsimile signatures printed thereon, and shall have imprinted
thereon a facsimile of the Company's seal. Warrant
Certificates shall be manually countersigned by the Warrant
Agent and shall not be valid for any purpose unless so
countersigned. In case any officer of the Company who shall
have signed any of the Warrant Certificates shall cease to be
such officer of the Company after the date of signature but
before the date of issuance of the Warrant Certificates or
before countersignature by the Warrant Agent and issuance and
delivery thereof, such Warrant Certificates, nevertheless, may
be countersigned by the Warrant Agent, issued and delivered
with the same force and effect as though the person who signed
such Warrant Certificates had not ceased to be such officer of
the Company. After countersignature by the Warrant Agent,
Warrant Certificates shall be delivered by the Warrant Agent
to the Registered Holder promptly and without further action
by the Company.
4. EXERCISE.
(a) Warrants in denominations of one or whole number multiples
thereof may be exercised by the Registered Holder thereof
commencing at any time on or after the Initial Warrant
Exercise Date, but not after the Warrant Expiration Date, upon
the terms and subject to the conditions set forth herein and
in the applicable Warrant Certificate. Warrants may be
exercised by their holders as follows: The exercise of
Warrants shall be accomplished upon surrender of the Warrant
Certificate evidencing such Warrants, with the Subscription
Form on the reverse side thereof duly filled in and executed,
to the Warrant Agent at its business office, together with
payment to the Warrant Agent of the Exercise Price (as of the
date of such surrender) of the Warrants then being exercised
and an amount equal to any applicable transfer tax and, if
requested by the Company, any other taxes or governmental
charges which the Company may be required by law to collect in
respect of such exercise.
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(b) Payment of the Exercise Price and other amounts may be made by
wire transfer of good funds, or by certified or bank cashier's
check, payable in lawful money of the United States of America
to the order of the Company and deliver such payment to the
Warrant Agent who shall in turn deliver the payment to the
Company. No adjustment shall be made for any cash dividends,
whether paid or declared, on any securities issuable upon
exercise of a Warrant. A Warrant shall be deemed to have been
exercised immediately prior to the close of business on the
Exercise Date and upon exercise thereof, the person entitled
to receive the securities deliverable upon such exercise shall
be treated for all purposes as the holder of the securities
issuable thereby as of the close of business on the Exercise
Date. If Warrants in denominations other than whole number
multiples thereof shall be exercised at one time by the same
Registered Holder, the number of full shares of Common Stock
which shall be issuable upon exercise thereof shall be
computed on the basis of the aggregate number of full shares
of Common Stock issuable upon such exercise. As soon as
practicable on or after the Exercise Date and in any event
within five business days after such date, if one or more
Warrants have been exercised in the manner described in this
subsection (a), the Warrant Agent on behalf of the Company
shall cause to be issued to the person or persons entitled to
receive the same a Common Stock certificate or certificates
for the shares of Common Stock deliverable upon such exercise,
and the Warrant Agent shall deliver the same to the person or
persons entitled thereto. Upon the exercise of any one or more
Warrants, the Warrant Agent shall promptly notify the Company
in writing of such fact and of the number of securities
delivered upon such exercise and, subject to subsection (b)
below, shall cause payment in cash or by check made payable to
the order of the Company, equal to the Exercise Price of such
Warrants, to be deposited promptly in the Company's bank
account or paid directly to the Company, as specified by the
Company.
(c) The Company shall not be required to issue fractional shares
on the exercise of Warrants. Warrants may be exercised only in
such multiples as are required to permit the issuance by the
Company of one or more whole shares. If one or more Warrants
shall be presented for exercise in full at the same time by
the same Registered Holder, the number of whole shares which
shall be issuable upon such exercise thereof shall be computed
on the basis of the aggregate number of shares purchasable on
exercise of the Warrants presented. If any fraction of a share
would, except for the provisions provided herein, be issuable
on the exercise of any Warrant (or specified portion thereof),
the Company shall pay an amount in cash equal to such fraction
multiplied by the then current Market Price of a share of
Common Stock.
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(d) If at the time of exercise of any of the Warrants, the Company
does not have in place an effective registration statement or
is otherwise, in the good faith determination of the Board of
Directors of the Company, precluded by applicable laws from
issuing the shares of Common Stock issuable upon such
exercise, the Company may (but is not required to), in lieu of
issuance of those shares, elect to redeem the Warrants duly
surrendered for exercise for a price per Warrant equal to the
difference between the Market Price of a share of Common Stock
on the date of such submission and the Exercise Price, and in
the event of such redemption, the Company will pay to the
Registered Holder the above-described Redemption Price in cash
within ten (10) business days after receipt of notice from the
Warrant Agent that such Warrants have been submitted for
exercise.
(e) This Warrant shall not be exercisable by a Registered Holder
in any state where such exercise would be unlawful.
5. RESERVATION OF SHARES; LISTING; PAYMENT OF TAXES; ETC.
(a) The Company covenants that it will at all times reserve and
keep available out of its authorized Common Stock, solely for
the purpose of issue upon exercise of Warrants, such number of
shares of Common Stock as shall then be issuable upon the
exercise of all outstanding Warrants. The Company covenants
that all shares of Common Stock which shall be issuable upon
exercise of the Warrants shall, at the time of delivery
thereof, be validly issued, fully paid and nonassessable and
free from all preemptive or similar rights, taxes, liens and
charges with respect to the issue thereof, and that upon
issuance such shares shall be listed on each securities
exchange, if any, on which the other shares of outstanding
Common Stock of the Company are then listed.
(b) The Company covenants that if any securities to be reserved
for the purpose of exercise of Warrants hereunder require
registration with, or approval of, any governmental authority
under any federal securities law before such securities may be
validly issued or delivered upon such exercise, then the
Company will file a registration statement under the federal
securities laws or a post-effective amendment covering such
securities, use its best efforts to cause the same to become
effective and to keep such registration statement current on
or after the Initial Warrant Exercise Date and while any of
the Warrants are outstanding and deliver a prospectus which
complies with Section 10(a)(3) of the Act to the Registered
Holder exercising the Warrant (except, if in the opinion of
counsel to the Company, such registration is not required
under the federal securities laws or if the Company receives a
letter from the staff of the Commission stating that it would
not take any enforcement action if such
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registration is not effected; PROVIDED, HOWEVER, that if at
the time of exercise of any Warrants the Company does not have
in place an effective registration statement or is otherwise,
in the good faith determination of the Board of Directors of
the Company, precluded by applicable laws from issuing the
underlying shares of Common Stock, the Company may, in lieu of
issuance of the shares of Common Stock, elect to the Warrants
duly surrendered for exercise for a price per Warrant equal to
the difference between the Market Price of the securities for
which such Warrant is exercisable on the date of such
submission and the Exercise Price of such Warrants, and in the
event of such redemption, the Company will pay to the holder
of such Warrants the above-described redemption price in cash
within ten (10) business days after receipt of notice from the
Warrant Agent that such Warrants have been submitted for
exercise. The Company will use its best efforts to obtain
appropriate approvals or registrations under state "blue sky"
securities laws with respect to any such securities. However,
Warrants may not be exercised by, or shares of Common Stock
issued to, any Registered Holder in any state in which such
exercise or issuance would be unlawful.
(c) The Company shall pay all documentary, stamp or similar taxes
and other governmental charges that may be imposed with
respect to the issuance of Warrants, or the issuance or
delivery of any shares of Common Stock upon exercise of the
Warrants; provided, however, that if shares of Common Stock
are to be delivered in a name other than the name of the
Registered Holder of the Warrant Certificate representing any
Warrant being exercised, then no such delivery shall be made
unless the person requesting the same has paid to the Warrant
Agent the amount of transfer taxes or charges incident
thereto, if any; PROVIDED, HOWEVER, that the Company shall not
be required (i) to pay any tax which may be payable in respect
of any transfer involved in the transfer and delivery of
Warrant Certificates; or (ii) to issue or deliver any
certificate for shares of Common Stock or other securities
upon the exercise of any Warrant Certificate until any such
tax shall have been paid, all such tax being payable by the
holder of such Warrant Certificate at the time of surrender.
(d) The Warrant Agent is hereby irrevocably authorized as the
Transfer Agent to requisition from time to time certificates
representing shares of Common Stock or other securities
required to be issued upon exercise of the Warrants, and the
Company will comply with all such requisitions.
6. EXCHANGE AND REGISTRATION OF TRANSFER.
(a) Warrant Certificates may be exchanged for other Warrant
Certificates representing an equal aggregate number of
Warrants of the same class or may be transferred in whole or
in part. Warrant Certificates to be exchanged shall be
surrendered to the Warrant Agent at its Corporate
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Office, and, promptly following satisfaction of the terms and
provisions hereof, the Company shall execute and the Warrant
Agent shall countersign, issue and deliver in exchange
therefor the Warrant Certificate or Certificates which the
Registered Holder making the exchange shall be entitled to
receive.
(b) The Warrant Agent shall keep, at its office, books in which,
subject to such reasonable regulations as it may prescribe, it
shall register Warrant Certificates and the transfer thereof
in accordance with customary practice. Upon due presentment
for registration of transfer of any Warrant Certificate at
such office, the Company shall execute and the Warrant Agent
shall issue and deliver to the transferee or transferees a new
Warrant Certificate or Certificates representing an equal
aggregate number of Warrants of the same class.
(c) With respect to all Warrant Certificates presented for
registration of transfer, or for exchange or exercise, the
Subscription Form on the reverse thereof shall be duly
endorsed or be accompanied by a written instrument or
instruments of transfer and subscription, in form satisfactory
to the Company and the Warrant Agent, duly executed by the
Registered Holder thereof or his attorney-in-fact duly
authorized in writing.
(d) A service charge may be imposed on the Registered Holder by
the Warrant Agent for any exchange or registration of transfer
of Warrant Certificates. In addition, the Company may require
payment by such holder of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection
therewith.
(e) All Warrant Certificates surrendered for exercise or for
exchange in case of mutilated Warrant Certificates shall be
promptly canceled by the Warrant Agent and thereafter retained
by the Warrant Agent until termination of this Agreement.
(f) Prior to due presentment for registration of transfer thereof,
the Company and the Warrant Agent may deem and treat the
Registered Holder of any Warrant Certificate as the absolute
owner thereof and of each Warrant represented thereby
(notwithstanding any notations of ownership or writing thereon
made by anyone other than a duly authorized officer of the
Company or the Warrant Agent) for all purposes and shall not
be affected by any notice to the contrary.
7. LOSS OR MUTILATION. Upon receipt by the Company and the Warrant Agent
of evidence satisfactory to them of the ownership of and the loss,
theft, destruction or mutilation of any Warrant Certificate and (in the
case of loss, theft or destruction) of indemnity satisfactory to them,
and (in case of mutilation) upon surrender and cancellation thereof,
the Company shall execute and the Warrant Agent shall (in
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the absence of notice to the Company and/or the Warrant Agent that a
new Warrant Certificate has been acquired by a bona fide purchaser)
countersign and deliver to the Registered Holder in lieu thereof a new
Warrant Certificate of like tenor representing an equal aggregate
number of Warrants. Applicants for substitute Warrant Certificates
shall also comply with such other reasonable regulations and pay such
other reasonable charges and provide a bond (if necessary) as the
Warrant Agent may prescribe.
8. ADJUSTMENTS OF NUMBER AND KIND OF SHARES PURCHASABLE AND EXERCISE
PRICE. The number and kind of securities or other property purchasable
upon exercise of a Warrant shall be subject to adjustment from time to
time upon the occurrence, after the date hereof, of any of the
following events:
(a) DIVIDENDS, STOCK SPLITS, REVERSE SPLITS, ETC. In case the
Company shall (i) pay a dividend in, or make a distribution
of, shares of Common Stock or of capital stock convertible
into Common Stock on its outstanding Common Stock, (ii)
subdivide its outstanding shares of Common Stock into a
greater number of such shares, or (iii) combine its
outstanding shares of Common Stock into a smaller number of
such shares, the total number of shares of Common Stock
purchasable upon the exercise of each Warrant outstanding
immediately prior thereto shall be adjusted so that the
Registered Holder of any Warrant Certificate thereafter
surrendered for exercise shall be entitled to receive, at the
same aggregate Exercise Price, the number of shares of Common
Stock which such holder would have owned or have been entitled
to receive immediately following the happening of any of the
events described above had such Warrant been exercised in full
immediately prior to the occurrence of such event. Any
adjustment made pursuant to this subsection shall, in the case
of a stock dividend or distribution, become effective as of
the record date therefor and, in the case of a subdivision or
combination, be made as of the effective date thereof. If, as
a result of an adjustment made pursuant to this subsection,
the Registered Holder of any Warrant Certificate thereafter
surrendered for exercise shall become entitled to receive
shares of two or more classes of capital stock of the Company,
the Board of Directors of the Company (whose determination
shall be conclusive and shall be evidenced by a Board
resolution filed with the Warrant Agent) shall determine the
allocation of the Exercise Price among shares of such classes
of capital stock.
(b) NO CHANGE IN AGGREGATE EXERCISE PRICE. In the event of any
adjustment of the total number of shares of Common Stock
purchasable upon the exercise of Warrants pursuant to
subsection (a) above, the aggregate Exercise Price of each
such Warrant shall remain unchanged, but the number of shares
of capital stock obtainable on exercise of each such Warrant
shall be adjusted as provided in subsection (a) above.
13
(c) REORGANIZATION OR RECLASSIFICATION. In the event of a capital
reorganization or a reclassification of the Common Stock
(except as provided in subsection (a) above or subsection (e)
below), each Registered Holder of a Warrant, upon exercise of
such Warrant, shall be entitled to receive at the same
aggregate Exercise Price, in substitution for the Common Stock
to which such Registered Holder would have become entitled
upon exercise immediately prior to such reorganization or
reclassification, the shares or other securities or property
of the Company (or cash) that he would have been entitled to
receive upon such reorganization or reclassification if such
Warrant had been exercised immediately prior thereto; and in
any such case, appropriate provision (as determined by the
Board of Directors of the Company, whose determination shall
be conclusive and shall be evidenced by a certified Board
resolution filed with the Warrant Agent) shall be made for the
application of this Section 8 with respect to the rights and
interests thereafter of the Registered Holders of all then
outstanding Warrants (including but not limited to the
allocation of the Exercise Price among shares of classes of
capital stock), to the end that this Section 8 (including the
adjustments of the number of shares of Common Stock or other
securities purchasable and the Exercise Price thereof) shall
thereafter be reflected, as nearly as reasonably practicable,
in all subsequent exercises of the Warrants for any shares or
securities or other property (or cash) thereafter deliverable
upon the exercise of the Warrants.
(d) CERTIFICATE OF ADJUSTMENT. Whenever the number of shares of
Common Stock or other securities purchasable upon exercise of
a Warrant is adjusted as provided in this Section 8, the
Company will promptly file with the Warrant Agent a
certificate signed by a Chairman or Vice-Chairman of the Board
or the President or a Vice President of the Company and by the
Chief Financial Officer, Treasurer or an Assistant Treasurer
or the Secretary or an Assistant Secretary of the Company
setting forth the number and kind of securities or other
property purchasable upon exercise of a Warrant, as so
adjusted, stating that such adjustments in the number or kind
of shares or other securities or property conform to the
requirements of this Section 8, and setting forth a brief
statement of the facts accounting for such adjustments.
Promptly after receipt of such certificate, the Company, or
the Warrant Agent at the Company's request, will deliver, by
first-class mail, postage pre-paid, a brief summary thereof
(to be supplied by the Company) to all Registered Holders of
the outstanding Warrant Certificates; provided, however, that
failure to file or to give any notice required under this
subsection, or any defect therein, shall not affect the
legality or validity of any such adjustments under this
Section 8; and provided, further, that, where appropriate,
such notice may be given in advance and included as part of
the notice required to be given pursuant to Section 12 hereof.
14
(e) MERGER OR CONSOLIDATION. In case of any consolidation of the
Company with, or merger of the Company into another
corporation (other than a consolidation or merger which does
not result in any reclassification or change of the
outstanding Common Stock) or in case of any sale or conveyance
to another corporation of the property of the Company as an
entirety or substantially as an entirety in a transaction
involving as an element thereof the distribution of the
consideration received by the Company therefrom, the
corporation formed by such consolidation or merger or the
corporation which shall have acquired such assets, as the case
may be, shall execute and deliver to the Warrant Agent a
supplemental warrant agreement provided that the Registered
Holder of each Warrant then outstanding shall have the right
thereafter (until the expiration of such Warrant) to receive,
upon exercise of such Warrant, solely the kind and amount of
shares of stock and other securities and property (or cash)
receivable upon such consolidation, merger, sale or transfer
by a holder of the number of shares of Common Stock of the
Company for which such Warrant could have been exercised
immediately prior to such consolidation, merger, sale or
transfer. Such supplemental warrant agreement shall provide
for adjustments, which shall be as nearly equivalent as may be
practicable to the adjustments provided in this Section 8. The
above provision of this Subsection 8(e) shall similarly apply
to successive consolidations, mergers, sales or transfers.
(f) EFFECT OF ADJUSTMENTS ON WARRANT CERTIFICATES. Irrespective of
any adjustments in the number or kind of shares issuable upon
exercise of Warrants, Warrant Certificates theretofore or
thereafter issued may continue to express the same price and
number and kind of shares as are stated in the Warrant
Certificates initially issuable pursuant to this Warrant
Agreement.
(g) ASSISTANCE OF ACCOUNTING FIRM IN MAKING COMPUTATIONS. The
Company may retain a firm of independent public accountants of
recognized standing, which may be the accountants regularly
retained by the Company, selected by the Board of Directors of
the Company or the Executive Committee of said Board, and not
disapproved by the Warrant Agent, to make any computation
required under this Section 8, and a certificate signed by
such firm shall, in the absence of fraud or gross negligence,
be conclusive evidence of the correctness of any computation
made under this Section.
(h) "COMMON STOCK". The term "Common Stock" shall mean (i) the
class of stock designated as Common Stock in the Certificate
of Incorporation of the Company, as amended, at the date of
this Agreement; or (ii) any other class of stock resulting
from successive changes or reclassifications of such Common
Stock consisting solely of changes in par value, or from par
value to no par value, or from no par value to par value. In
the event that
15
at any time as a result of an adjustment made pursuant to
this Section 8, the Registered Holder of any Warrant
thereafter surrendered for exercise shall become entitled to
receive any shares of capital stock of the Company other than
shares of Common Stock, thereafter the number of such other
shares obtainable upon exercise of any Warrant shall be
subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions
with respect to the Common Stock contained in this Section 8,
and all other provisions of this Agreement, with respect to
the Common Stock, shall apply on like terms to any such other
shares.
9. REDEMPTION.
(a) Commencing on the Initial Warrant Redemption Date, the Company
may, on thirty (30) days' prior written notice, redeem all,
but not less than all, of the Warrants at ten cents ($0.10)
per Warrant:
i. provided that at the time the notice of redemption is
sent to the holders as required by Paragraph 9(b) and
during the measurement period described in Paragraph
9(a)(ii), below, there is a current registration
statement that is effective under the Securities Act
which permits the exercise of the Warrants being
redeemed, and
ii. provided further that before any such call for
redemption of Warrants can take place, the last
reported closing sale price for the Common Stock as
officially reported by Nasdaq, if the Common Stock is
then traded on Nasdaq (or the last reported closing
sale price on the Nasdaq National Market or a
national securities exchange, if the Common Stock is
then traded on the Nasdaq National Market or on a
national securities exchange, in each case as
officially reported by the Nasdaq National Market or
such national securities exchange, or, if the Common
Stock is not then traded on Nasdaq, the Nasdaq
National Market or a national securities exchange,
but is then traded in the over-the-counter market,
then the average of the last reported bid and asked
prices of the Common Stock reported by the National
Quotation Bureau, Inc. or similar bureau if the
National Quotation Bureau, Inc. is no longer
reporting such information) shall have equaled or
exceeded $3.75 per share (subject to adjustment in
the event of any stock splits or other similar events
as provided in Section 8 hereof) for at least twenty
(20) out of the thirty (30) consecutive trading days
ending not more than the third day prior to the date
on which the notice contemplated by (b) and (c) below
is given.
(b) In case the Company shall exercise its right to redeem all of
the Warrants,
16
it shall give or cause to be given notice to the Registered
Holders of the Warrants by mailing to such Registered Holders
a notice of redemption, first-class mail, postage pre-paid, at
their last address as shall appear on the records of the
Warrant Agent. Any notice mailed in the manner provided herein
shall be conclusively presumed to have been duly given whether
or not the Registered Holder receives such notice.
(c) The notice of redemption shall specify (i) the Redemption
Price, (ii) the Redemption Date, which shall in no event be
less than thirty (30) days after the date of mailing of such
notice, (iii) the place where the Warrant Certificate shall be
delivered and the Redemption Price shall be paid, (iv) that
the right to exercise the Warrant shall terminate at 5:00 p.m.
(New York time) on the business day immediately preceding the
date fixed for redemption, and (v) shall include a copy of the
current effective prospectus relating to the exercise of the
Warrants. No failure to mail such notice nor any defect
therein or in the mailing thereof shall affect the validity of
the proceedings for such redemption except as to a holder (a)
to whom notice was not mailed; or (b) whose notice was
defective. An affidavit of the Warrant Agent or the Secretary
or Assistant Secretary of the Company that notice of
redemption has been mailed shall, in the absence of fraud, be
prima facie evidence of the facts stated therein.
(d) Any right to exercise a Warrant shall terminate at 5:00 p.m.
(New York time) on the business day immediately preceding the
Redemption Date. The Redemption Price payable to the
Registered Holders shall be mailed to such persons at their
addresses of record.
(e) On and after the Redemption Date, the Registered Holders shall
have no rights with respect to the Warrants except to receive
$0.10 per Warrant upon surrender of their Warrant
Certificates.
10. CONCERNING THE WARRANT AGENT.
(a) The Warrant Agent acts hereunder as agent and in a ministerial
capacity for the Company, and its duties shall be determined
solely by the provisions hereof. The Warrant Agent shall not,
by issuing and delivering Warrant Certificates or by any other
act hereunder, be deemed to make any representations as to the
validity or value or authorization of the Warrant Certificates
(except its countersignature thereof) or the Warrants
represented thereby or of any securities or other property
delivered upon exercise of any Warrant or whether any stock
issued upon exercise of any Warrant is fully paid and
nonassessable.
(b) The Warrant Agent shall not at any time be under any duty or
responsibility to any holder of Warrant Certificates to make
or cause to be made any adjustment of the Exercise Price or
the Redemption Price
17
provided in this Agreement, or to determine whether any fact
exists which may require any such adjustments, or with respect
to the nature or extent of any such adjustments, when made, or
with respect to the method employed in making the same (except
with respect to the exercise of Warrant Certificates after
actual notice of any adjustment of the Exercise Price). The
Warrant Agent shall not (i) be liable for any recital or
statement of fact contained herein or for any action taken,
suffered or omitted by it in reliance on any Warrant
Certificate or other document or instrument believed by it in
good faith to be genuine and to have been signed or presented
by the proper party or parties (except its countersignature on
the Warrant Certificates and such statements or recitals as
describe the Warrant Agent or action taken or to be taken by
it); (ii) be responsible for any failure on the part of the
Company to comply with any of its covenants and obligations
contained in this Agreement or in any Warrant Certificate; or
(iii) be liable for any act or omission in connection with
this Agreement except for its own gross negligence, bad faith
or willful misconduct.
(c) The Warrant Agent may at any time consult with counsel
satisfactory to it (who may be counsel for the Company) and
shall incur no liability or responsibility for any action
taken, suffered or omitted by it in good faith in accordance
with the opinion or advice of such counsel.
(d) Any notice, statement, instruction, request, direction, order
or demand of the Company shall be sufficiently evidenced by an
instrument signed by the Chairman of the Board of Directors,
Chief Executive Officer, Chief Financial Officer, President or
any Vice President (unless other evidence in respect thereof
is herein specifically prescribed). The Warrant Agent shall
not be liable for any action taken, suffered or omitted by it
in accordance with such notice, statement, instruction,
request, direction, order or demand reasonably believed by it
to be genuine.
(e) The Company agrees to pay the Warrant Agent reasonable
compensation for its services hereunder and to reimburse it
for its reasonable expenses hereunder; the Company further
agrees to indemnify the Warrant Agent and save it harmless
from and against any and all losses, expenses and liabilities,
including judgments, costs and counsel fees, for anything done
or omitted by the Warrant Agent in the execution of its duties
and powers hereunder except losses, expenses and liabilities
arising as a result of the Warrant Agent's gross negligence,
bad faith or willful conduct.
(f) The Warrant Agent may resign its duties and be discharged from
all further duties and liabilities hereunder (except
liabilities resulting as a result of the Warrant Agent's own
gross negligence or willful misconduct), after giving thirty
(30) days' prior written notice to the Company. At least
fifteen (15) days prior to the date such resignation is to
become effective,
18
the Warrant Agent shall cause a copy of such notice of
resignation to be mailed to the Registered Holder of each
Warrant Certificate at the Company's expense. Upon such
resignation, or any inability of the Warrant Agent to act as
such hereunder, the Company shall appoint in writing a new
warrant agent. If the Company shall fail to make such
appointment within a period of fifteen (15) days after it has
been notified in writing of such resignation by the resigning
Warrant Agent, then the Registered Holder of any Warrant
Certificate may apply to any court of competent jurisdiction
for the appointment of a new warrant agent. Any new warrant
agent, whether appointed by the Company or by such a court,
shall be a bank or trust company having a capital and surplus,
as shown by its last published report to its stockholders
deemed by the Company to be adequate, or a stock transfer
company. After acceptance in writing of such appointment by
the new warrant agent is received by the Company, such new
warrant agent shall be vested with the same powers, rights,
duties and responsibilities as if it had been originally named
herein as the Warrant Agent, without any further assurance,
conveyance, act or deed; but if for any reason it shall be
necessary or expedient to execute and deliver any further
assurance, conveyance, act or deed, the same shall be done at
the expense of the Company and shall be legally and validly
executed and delivered by the resigning Warrant Agent. Not
later than the effective date of any such appointment the
Company shall file notice thereof with the resigning Warrant
Agent and shall forthwith cause a copy of such notice to be
mailed to the Registered Holder of each Warrant Certificate.
(g) Any corporation into which the Warrant Agent or any new
warrant agent may be converted or merged, any corporation
resulting from any consolidation to which the Warrant Agent or
any new warrant agent shall be a party, or any corporation
succeeding to the corporate trust business of the Warrant
Agent or any new warrant agent shall be a successor warrant
agent under this Agreement without any further act, provided
that such corporation is eligible for appointment as successor
to the Warrant Agent under the provisions of the preceding
paragraph. Any such successor warrant agent shall promptly
cause notice of its succession as warrant agent to be mailed
to the Company and to the Registered Holders of each Warrant
Certificate.
(h) The Warrant Agent, its subsidiaries and affiliates, and any of
its or their officers or directors, may buy and hold or sell
Warrants or other securities of the Company and otherwise deal
with the Company in the same manner and to the same extent and
with like effect as though it were not Warrant Agent. Nothing
herein shall preclude the Warrant Agent from acting in any
other capacity for the Company or for any other legal entity.
(i) The Warrant Agent shall retain for a period of two (2) years
from the date of exercise, any Warrant Certificate received by
it upon such exercise.
19
(j) The Warrant Agent shall account promptly to the Company with
respect to Warrants exercised and concurrently pay to the
Company all moneys received by the Warrant Agent for the
purchase of securities or other property through the exercise
of such Warrants.
11. MODIFICATION OF AGREEMENT. The Warrant Agent and the Company may by
supplemental agreement make any changes or corrections in this
Agreement (i) that they shall deem appropriate to cure any ambiguity
or to correct any defective or inconsistent provision or manifest
mistake or error herein contained; or (ii) that they may deem
necessary or desirable and which shall not adversely affect the
interests of the holders of Warrant Certificates;
(a) provided, however, that this Agreement shall not otherwise be
modified, supplemented or altered in any respect except with
the consent in writing of the Registered Holders representing
not less than 66-2/3% of the Warrants then outstanding; and
(b) provided, further, that no change in the number or nature of
the securities purchasable upon the exercise of any Warrant,
or to increase the Exercise Price therefor or to accelerate
the Warrant Expiration Date shall be made without the consent
in writing of the Registered Holder of the Warrant Certificate
representing such Warrant, other than such changes as are
presenting specifically prescribed by this Agreement as
originally executed.
12. NOTICES. All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed to have been made
when delivered or mailed first-class registered or certified mail,
postage prepaid, as follows: if to the Registered Holder of a Warrant
Certificate, at the last address of such holder as shown on the
registry books maintained by the Warrant Agent; if to the Company at
0000 XxXxxxxx Xxxxxx, Xxxxxx, Xxxxxxxx 00000, Attention: CEO, or at
such other address as may have been furnished to the Warrant Agent in
writing by the Company; and if to the Warrant Agent, to the attention
of the Compliance Department at 0 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, XX
00000, or at such other address as any such party may have been
furnished to the Company and the Warrant Agent in writing.
13. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California without reference
to conflicts of laws or choice of law principles.
14. BINDING EFFECT. This Agreement shall be binding upon and inure to the
benefit of the Company, the Warrant Agent and their respective
successors and assigns and the Registered Holders from time to time of
Warrant Certificates or any of them. Nothing in this Agreement is
intended or shall be construed to confer upon any
20
other person any right, remedy or claim, in equity or at law, or to
impose upon any other person any duty, liability or obligation.
15. TERMINATION.
(a) This Agreement shall terminate at the close of business on the
Expiration Date of all of the Warrants or such earlier date
upon which all Warrants have been exercised or redeemed,
except that the Warrant Agent shall account to the Company for
all Warrants outstanding and all cash held by it and the
provisions of Section 10 hereof shall survive such
termination.
(b) The Company, at it sole discretion, may terminate this
Agreement upon thirty (30) days prior written notice to the
Warrant Agent. Termination of this Agreement will be without
prejudice to the rights and obligations accrued pursuant to
this Agreement or any other agreement between the Parties
through the date of termination. The provisions of this
Agreement survive its termination as set forth herein.
16. COUNTERPARTS. This Agreement may be executed in several
counterparts each of which shall be an original, but all of which taken
together shall constitute a single instrument.
17. HOLDERS OF WARRANTS NOT DEEMED SHAREHOLDERS. No holder of a Warrant, as
such, shall be entitled to vote, receive dividends or be deemed the
holder of Common Stock or any other securities of the Company which may
at any time be issuable on the exercise of the Warrants represented
thereby for any purpose whatever, nor shall anything contained herein
or in any Warrant Certificate be construed to confer upon any holder of
a Warrant, as such, any of the rights of a shareholder of the Company
or any right to vote for the election of directors or upon any matter
submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action (whether upon any
recapitalization, issuance of stock, reclassification of stock, change
of par value or change of stock to no par value, consolidation, merger,
conveyance or otherwise), or to receive notice of meetings or other
actions affecting shareholders, or to receive dividend or subscription
rights, or otherwise, until such Warrant shall have been exercised in
accordance with the provisions hereof, including the receipt by the
Company of the Exercise Price and any other amounts payable upon such
exercise to the Warrant Agent.
18. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement or in the Warrant
Certificates shall be construed to give to any person or corporation
other than the Company, the Warrant Agent, and their respective
successors and assigns hereunder and the Registered Holders of the
Warrant Certificates any legal or equitable right, remedy or claim
under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Warrant Agent, their respective
successors and assigns hereunder and the Registered Holders of the
21
Warrant Certificates.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the first date first above written.
ATTEST: ISONICS CORPORATION
By: By:
-------------------------- ----------------------------
Xxxxxxx X. Xxxxxx, Secretary Xxxxx X. Xxxxxxxxx, President
ATTEST: CONTINENTAL STOCK TRANSFER &
TRUST COMPANY, as Warrant Agent
By: By:
-------------------------- ---------------------------
Name: Name:
------------------------ -------------------------
Title: Title:
----------------------- ------------------------
22
Exhibit A
No. WB______ VOID AFTER December 31, 2005
WARRANTS
CLASS B REDEEMABLE WARRANT CERTIFICATE TO PURCHASE ONE SHARE
OF COMMON STOCK AND ONE CLASS C REDEEMABLE WARRANT
ISONICS CORPORATION
CUSIP # _________________
THIS CERTIFIES THAT, FOR VALUE RECEIVED ___________________________ or its
registered assigns (the "Registered Holder") is the owner of the number of Class
B Warrants (the "Warrants") specified above. Each Warrant initially entitles the
Registered Holder to purchase, subject to the terms and conditions set forth in
this Certificate and the Warrant Agreement (as hereinafter defined):
one fully paid and nonassessable share of Common Stock of Isonics
Corporation, a California corporation (the "Company"), and
one Class C Redeemable Common Stock Purchase Warrant,
at any time commencing on the date hereof, and the earlier to occur of the
Expiration Date (as hereinafter defined) and the Redemption Date (as hereinafter
defined) upon the presentation and surrender of this Warrant Certificate with
the Subscription Form on the reverse hereof duly executed, at the corporate
office of Continental Stock Transfer & Trust Company, as Warrant Agent, or its
successor (the "Warrant Agent"), accompanied by payment of $1.50 per share,
subject to adjustment (the "Exercise Price"), in lawful money of the United
States of America in cash or by check made payable to the Warrant Agent for the
account of the Company.
This Warrant Certificate and each Warrant represented hereby are issued
pursuant to and are subject in all respects to the terms and conditions set
forth in the Amended and Restated Warrant Agreement (the "Warrant Agreement"),
dated June 30, 2001, amending and restating that warrant agreement dated as of
December 12, 2000, which amended and restated that warrant agreement as of June
1, 2000 (as amended), by and between the Company and the Warrant Agent.
In the event of certain contingencies provided for in the Warrant
Agreement, the Exercise Price and the number of shares of Common Stock subject
to purchase upon the exercise of each Warrant represented hereby are subject to
modification or adjustment.
Each Warrant represented hereby is exercisable at the option of the
Registered Holder, but no fractional interests will be issued. In the case of
the exercise of less than
23
all the Warrants represented hereby, the Company shall cancel this Warrant
Certificate upon the surrender hereof and shall execute and deliver a new
Warrant Certificate or Warrant Certificates of like tenor, which the Warrant
Agent shall countersign, for the balance of such Warrants.
The term "Expiration Date" shall mean 5:00 p.m. (New York time) on
December 31, 2005. If each such date shall in the State of New York be a holiday
or a day on which banks located in the State of New York are authorized to
close, then the Expiration Date shall mean 5:00 p.m. (New York time) the next
following day which in the State of New York is neither a holiday nor a day on
which such banks are authorized to close.
The Company shall not be obligated to deliver any securities pursuant
to the exercise of this Warrant unless a registration statement under the
Securities Act of 1933, as amended (the "Act"), with respect to such securities
is effective or an exemption thereunder is available. The Company has covenanted
and agreed that it will file a registration statement under the Federal
securities laws, use its best efforts to cause the same to become effective, use
its best efforts to keep such registration statement current, if required under
the Act, following the date hereof and while any of the Warrants are
outstanding, and deliver a prospectus which complies with Section 10(a)(3) of
the Act to the Registered Holder exercising this Warrant; PROVIDED HOWEVER, that
if at the time of exercise of any of the Warrants, the Company does not have in
place an effective registration statement or is otherwise, in the good faith
determination of the Board of Directors of the Company, precluded by applicable
laws from issuing the shares of Common Stock issuable upon such exercise, the
Company may, in lieu of issuance of those shares, elect to redeem the Warrants
duly surrendered for exercise for a price per Warrant equal to the difference
between the Market Price (as defined below) of a share of Common Stock on the
date of such submission and the Exercise Price, and in the event of such
redemption, the Company will pay to the Registered Holder the above-described
Redemption Price in cash within ten (10) business days after receipt of notice
from the Warrant Agent that such Warrants have been submitted for exercise. This
Warrant shall not be exercisable by a Registered Holder in any state where such
exercise would be unlawful.
The term "Market Price" shall mean: (i) if the Common Stock is listed,
or admitted to unlisted trading privileges on a national securities exchange, or
is traded on the Nasdaq National Market or Nasdaq, the last reported closing
sale price on the five trading days prior to the date of the event to which such
Market Price relates, or, if no such reported closing sale takes place on such
date, then the average of the last reported closing sales prices for the last
five trading days before such date, in each case as officially reported by the
principal securities exchange on which the Common Stock is listed or admitted to
unlisted trading privileges or by the Nasdaq National Market or Nasdaq, or (ii)
if the Common Stock is not listed or admitted to unlisted trading privileges, on
any national securities exchange, or traded on the Nasdaq National Market or
Nasdaq, but is traded in the over-the-counter market, then the average of the
closing sale prices (or if closing sale prices are not reported, the average of
the last reported bid and asked prices) of the Common Stock reported by the
National Quotation Bureau, Inc.
24
or similar bureau if the National Quotation Bureau, Inc. is no longer reporting
such information on the date of the event to which such Market Price relates,
and if no such prices are reported on such date, then the average of the last so
reported bid and asked prices on the last five trading days on which such prices
are reported immediately preceding such date; or (iii) if the Common Stock is
neither listed, nor admitted to unlisted trading privileges on a national
securities exchange, nor traded on the Nasdaq National Market or Nasdaq, nor
traded in the over-the-counter market, then the fair market value of the Common
Stock, not less than the book value thereof, as of the date of the event to
which such Market Price relates, as determined in good faith (using customary
valuation methods) by the Board of Directors of the Company, which determination
shall be evidenced by a resolution of the Board of Directors and based on the
best information available to it.
This Warrant Certificate is exchangeable, upon the surrender hereof by
the Registered Holder at the corporate office of the Warrant Agent, for a new
Warrant Certificate or Warrant Certificates of like tenor representing an equal
aggregate number of Warrants, each of such new Warrant Certificates to represent
such number of Warrants as shall be designated by such Registered Holder at the
time of such surrender. Upon due presentment and payment of any tax or other
charge imposed in connection therewith or incident thereto, for registration of
transfer of this Warrant Certificate at such office, a new Warrant Certificate
or Warrant Certificates representing an equal aggregate number of Warrants will
be issued to the transferee in exchange therefor, subject to the limitations
provided in the Warrant Agreement.
Prior to the exercise of any Warrant represented hereby, the Registered
Holder shall not be entitled to any rights of a shareholder of the Company,
including, without limitation, the right to vote or to receive dividends or
other distributions, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided in the Warrant Agreement.
Subject to the provisions of the Warrant Agreement, this Warrant may be
redeemed at the option of the Company, at a redemption price of $0.10 per
Warrant, at any time during the term of this Warrant, provided that the last
reported closing sale price for the Common Stock as officially reported by the
Nasdaq SmallCap Market, if the Common Stock is then traded on the Nasdaq
SmallCap Market (or the last reported closing sale price on the Nasdaq National
Market or a national securities exchange, if the Common Stock is then traded on
the Nasdaq National Market or a national securities exchange, in each case as
officially reported by the Nasdaq National Market or such national securities
exchange, or, if the Common Stock is not then traded on the Nasdaq SmallCap
Market, the Nasdaq National Market or a national securities exchange, but is
then traded in the over-the-counter market, then the average of the last
reported bid and asked prices of the Common Stock reported by the National
Quotation Bureau, Inc. or similar bureau if the National Quotation Bureau, Inc.
is no longer reporting such information), shall have equaled or exceeded $3.75
per share for at least twenty (20) of the thirty (30) consecutive trading days
ending not later than the third day prior to the date on which the Notice of
Redemption, as defined below, is given (subject to
25
adjustment in the event of any stock splits or other similar events). Notice of
redemption (the "Notice of Redemption") shall be given not later than the
thirtieth (30th) day before the date fixed for redemption, or as provided in the
Warrant Agreement. On and after the date fixed for redemption, the Registered
Holder shall have no rights with respect to the Warrants except to receive the
$0.10 per Warrant upon surrender of this Warrant Certificate.
Prior to due presentment for registration of transfer hereof, the
Company and the Warrant Agent may deem and treat the Registered Holder as the
absolute owner hereof and of each Warrant represented hereby (notwithstanding
any notations of ownership or writing hereon made by anyone other than a duly
authorized officer of the Company or the Warrant Agent) for all purposes and the
Company's right so to treat the Registered Holder shall not be affected by any
notice to the contrary, except as provided in the Warrant Agreement.
This Warrant Certificate shall be governed by and construed in
accordance with the laws of the State of California without reference to
conflict of laws or choice of law principles.
This Warrant Certificate is not valid unless countersigned by the
Warrant Agent.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed, manually or in facsimile, by two of its officers thereunto
duly authorized and a facsimile of its corporate seal to be imprinted hereon.
Dated:
[SEAL] ISONICS CORPORATION
By: By:
------------------------------ -------------------------------
Xxxxxxx X. Xxxxxx, Secretary Xxxxx X. Xxxxxxxxx, President
COUNTERSIGNED:
CONTINENTAL STOCK TRANSFER AND TRUST COMPANY
as Warrant Agent
By:
------------------------------
Authorized Officer
26
SUBSCRIPTION FORM
TO BE EXECUTED BY THE REGISTERED HOLDER IN ORDER TO EXERCISE WARRANTS
The undersigned Registered Holder hereby irrevocably elects to exercise ________
Warrants represented by this Warrant Certificate, and to purchase the securities
issuable upon the exercise of such Warrants, and requests that certificates for
such securities shall be issued in the name of (PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER):
---------------------------------------
---------------------------------------
---------------------------------------
(please print or type name and address)
and be delivered to
---------------------------------------
---------------------------------------
---------------------------------------
(please print or type name and address)
and if such number of Warrants shall not be all the Warrants evidenced by this
Warrant Certificate, that a new Warrant Certificate for the balance of such
Warrants be registered in the name of, and delivered to, the Registered Holder
at the address stated below.
Dated:
------------------------- ----------------------------------------
(PLEASE SIGN NAME AS IT APPEARS ON THE
FRONT OF THE CERTIFICATE)
ASSIGNMENT
TO BE EXECUTED BY THE REGISTERED HOLDER IN ORDER TO ASSIGN WARRANTS
FOR VALUE RECEIVED, __________________ hereby sells, assigns and transfers unto
(PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER)
---------------------------------------
---------------------------------------
---------------------------------------
---------------------------------------
(please print or type name and address)
________________________________________________________________ of the Warrants
represented by this Warrant Certificate, and hereby irrevocably constitutes and
appoints ____________________________________Attorney to transfer this Warrant
Certificate on the books of the Company, with full power of substitution in the
premises.
27
Dated:
------------------------- ----------------------------------------
(PLEASE SIGN NAME AS IT APPEARS ON THE
FRONT OF THE CERTIFICATE)
---------------------------------------
Signature Guaranteed
THE SIGNATURE TO THE ASSIGNMENT OR THE SUBSCRIPTION FORM MUST CORRESPOND TO THE
NAME AS WRITTEN UPON THE FACE OF THIS WARRANT CERTIFICATE IN EVERY PARTICULAR,
WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER. THE SIGNATURE(S)
MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS,
SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED
SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15.
28
Exhibit B
No. WC______ VOID AFTER December 31, 2005
WARRANTS
CLASS C REDEEMABLE WARRANT CERTIFICATE TO PURCHASE ONE SHARE OF COMMON STOCK
ISONICS CORPORATION
CUSIP # _________________
THIS CERTIFIES THAT, FOR VALUE RECEIVED ___________________________ or its
registered assigns (the "Registered Holder") is the owner of the number of Class
C Redeemable Warrants (the "Warrants") specified above. Each Warrant initially
entitles the Registered Holder to purchase, subject to the terms and conditions
set forth in this Certificate and the Warrant Agreement (as hereinafter
defined):
one fully paid and nonassessable share of Common Stock of Isonics
Corporation, a California corporation (the "Company"),
at any time commencing on the date hereof, and the earlier to occur of the
Expiration Date (as hereinafter defined) and the Redemption Date (as hereinafter
defined) upon the presentation and surrender of this Warrant Certificate with
the Subscription Form on the reverse hereof duly executed, at the corporate
office of Continental Stock Transfer & Trust Company, as Warrant Agent, or its
successor (the "Warrant Agent"), accompanied by payment of $2.50 per share,
subject to adjustment (the "Exercise Price"), in lawful money of the United
States of America in cash or by check made payable to the Warrant Agent for the
account of the Company.
This Warrant Certificate and each Warrant represented hereby are issued
pursuant to and are subject in all respects to the terms and conditions set
forth in the Warrant Agreement (the "Warrant Agreement"), dated June 30, 2001,
amending and restating that warrant agreement dated December 12, 2000, which
amended and restated that warrant agreement dated June 1, 2000, as amended, by
and between the Company and the Warrant Agent.
In the event of certain contingencies provided for in the Warrant
Agreement, the Exercise Price and the number of shares of Common Stock subject
to purchase upon the exercise of each Warrant represented hereby are subject to
modification or adjustment.
Each Warrant represented hereby is exercisable at the option of the
Registered Holder, but no fractional interests will be issued. In the case of
the exercise of less than all the Warrants represented hereby, the Company shall
cancel this Warrant Certificate upon the surrender hereof and shall execute and
deliver a new Warrant Certificate or
29
Warrant Certificates of like tenor, which the Warrant Agent shall countersign,
for the balance of such Warrants.
The term "Expiration Date" shall mean 5:00 p.m. (New York time) on (i)
December 31, 2005; or (ii) the date fixed for redemption hereof, whichever date
is earlier. If each such date shall in the State of New York be a holiday or a
day on which banks located in the State of New York are authorized to close,
then the Expiration Date shall mean 5:00 p.m. (New York time) the next following
day which in the State of New York is neither a holiday nor a day on which such
banks are authorized to close.
The Company shall not be obligated to deliver any securities pursuant
to the exercise of this Warrant unless a registration statement under the
Securities Act of 1933, as amended (the "Act"), with respect to such securities
is effective or an exemption thereunder is available. The Company has covenanted
and agreed that it will file a registration statement under the Federal
securities laws, use its best efforts to cause the same to become effective, use
its best efforts to keep such registration statement current, if required under
the Act, following the date hereof and while any of the Warrants are
outstanding, and deliver a prospectus which complies with Section 10(a)(3) of
the Act to the Registered Holder exercising this Warrant; PROVIDED HOWEVER, that
if at the time of exercise of any of the Warrants, the Company does not have in
place an effective registration statement or is otherwise, in the good faith
determination of the Board of Directors of the Company, precluded by applicable
laws from issuing the shares of Common Stock issuable upon such exercise, the
Company may, in lieu of issuance of those shares, elect to redeem the Warrants
duly surrendered for exercise for a price per Warrant equal to the difference
between the Market Price (as defined below) of a share of Common Stock on the
date of such submission and the Exercise Price, and in the event of such
redemption, the Company will pay to the Registered Holder the above-described
redemption price in cash within ten (10) business days after receipt of notice
from the Warrant Agent that such Warrants have been submitted for exercise. This
Warrant shall not be exercisable by a Registered Holder in any state where such
exercise would be unlawful.
The term "Market Price" shall mean: (i) if the Common Stock is listed,
or admitted to unlisted trading privileges on a national securities exchange, or
is traded on the Nasdaq National Market or Nasdaq, the last reported closing
sale price on the five trading days prior to the date of the event to which such
Market Price relates, or, if no such reported closing sale takes place on such
date, then the average of the last reported closing sales prices for the last
five trading days before such date, in each case as officially reported by the
principal securities exchange on which the Common Stock is listed or admitted to
unlisted trading privileges or by the Nasdaq National Market or Nasdaq, or (ii)
if the Common Stock is not listed or admitted to unlisted trading privileges, on
any national securities exchange, or traded on the Nasdaq National Market or
Nasdaq, but is traded in the over-the-counter market, then the average of the
closing sale prices (or if closing sale prices are not reported, the average of
the last reported bid and asked prices) of the Common Stock reported by the
National Quotation Bureau, Inc. or similar bureau if the National Quotation
Bureau, Inc. is no longer reporting such
30
information on the date of the event to which such Market Price relates, and if
no such prices are reported on such date, then the average of the last so
reported bid and asked prices on the last five trading days on which such prices
are reported immediately preceding such date; or (iii) if the Common Stock is
neither listed, nor admitted to unlisted trading privileges on a national
securities exchange, nor traded on the Nasdaq National Market or Nasdaq, nor
traded in the over-the-counter market, then the fair market value of the Common
Stock, not less than the book value thereof, as of the date of the event to
which such Market Price relates, as determined in good faith (using customary
valuation methods) by the Board of Directors of the Company, which determination
shall be evidenced by a resolution of the Board of Directors and based on the
best information available to it.
This Warrant Certificate is exchangeable, upon the surrender hereof by
the Registered Holder at the corporate office of the Warrant Agent, for a new
Warrant Certificate or Warrant Certificates of like tenor representing an equal
aggregate number of Warrants, each of such new Warrant Certificates to represent
such number of Warrants as shall be designated by such Registered Holder at the
time of such surrender. Upon due presentment and payment of any tax or other
charge imposed in connection therewith or incident thereto, for registration of
transfer of this Warrant Certificate at such office, a new Warrant Certificate
or Warrant Certificates representing an equal aggregate number of Warrants will
be issued to the transferee in exchange therefor, subject to the limitations
provided in the Warrant Agreement.
Prior to the exercise of any Warrant represented hereby, the Registered
Holder shall not be entitled to any rights of a shareholder of the Company,
including, without limitation, the right to vote or to receive dividends or
other distributions, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided in the Warrant Agreement.
Subject to the provisions of the Warrant Agreement, this Warrant may be
redeemed at the option of the Company, at a redemption price of $0.10 per
Warrant, at any time during the term of this Warrant, provided that the last
reported closing sale price for the Common Stock as officially reported by the
Nasdaq SmallCap Market, if the Common Stock is then traded on the Nasdaq
SmallCap Market (or the last reported closing sale price on the Nasdaq National
Market or a national securities exchange, if the Common Stock is then traded on
the Nasdaq National Market or a national securities exchange, in each case as
officially reported by the Nasdaq National Market or such national securities
exchange, or, if the Common Stock is not then traded on the Nasdaq SmallCap
Market, the Nasdaq National Market or a national securities exchange, but is
then traded in the over-the-counter market, then the average of the last
reported bid and asked prices of the Common Stock reported by the National
Quotation Bureau, Inc. or similar bureau if the National Quotation Bureau, Inc.
is no longer reporting such information), shall have equaled or exceeded $3.75
per share for at least twenty (20) of the thirty (30) consecutive trading days
ending not later than the third day prior to the date on which the Notice of
Redemption, as defined below, is given (subject to adjustment in the event of
any stock splits or other similar events). Notice of redemption
31
(the "Notice of Redemption") shall be given not later than the thirtieth (30th)
day before the date fixed for redemption, or as provided in the Warrant
Agreement. On and after the date fixed for redemption, the Registered Holder
shall have no rights with respect to the Warrants except to receive the $0.10
per Warrant upon surrender of this Warrant Certificate.
Prior to due presentment for registration of transfer hereof, the
Company and the Warrant Agent may deem and treat the Registered Holder as the
absolute owner hereof and of each Warrant represented hereby (notwithstanding
any notations of ownership or writing hereon made by anyone other than a duly
authorized officer of the Company or the Warrant Agent) for all purposes and the
Company's right so to treat the Registered Holder shall not be affected by any
notice to the contrary, except as provided in the Warrant Agreement.
This Warrant Certificate shall be governed by and construed in
accordance with the laws of the State of California without reference to
conflict of laws or choice of law principles.
This Warrant Certificate is not valid unless countersigned by the
Warrant Agent.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed, manually or in facsimile, by two of its officers thereunto
duly authorized and a facsimile of its corporate seal to be imprinted hereon.
Dated:
[SEAL] ISONICS CORPORATION
By: By:
--------------------------- -------------------------------
Xxxxxxx X. Xxxxxx, Secretary Xxxxx X. Xxxxxxxxx, President
COUNTERSIGNED:
CONTINENTAL STOCK TRANSFER AND TRUST COMPANY
as Warrant Agent
By:
---------------------------
Authorized Officer
32
SUBSCRIPTION FORM
TO BE EXECUTED BY THE REGISTERED HOLDER IN ORDER TO EXERCISE WARRANTS
The undersigned Registered Holder hereby irrevocably elects to exercise ________
Warrants represented by this Warrant Certificate, and to purchase the securities
issuable upon the exercise of such Warrants, and requests that certificates for
such securities shall be issued in the name of (PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER):
---------------------------------------
---------------------------------------
---------------------------------------
(please print or type name and address)
and be delivered to
---------------------------------------
---------------------------------------
---------------------------------------
(please print or type name and address)
and if such number of Warrants shall not be all the Warrants evidenced by this
Warrant Certificate, that a new Warrant Certificate for the balance of such
Warrants be registered in the name of, and delivered to, the Registered Holder
at the address stated below.
Dated:
-------------------- -------------------------------------------
(PLEASE SIGN NAME AS IT APPEARS ON THE
FRONT OF THE CERTIFICATE)
ASSIGNMENT
TO BE EXECUTED BY THE REGISTERED HOLDER IN ORDER TO ASSIGN WARRANTS
FOR VALUE RECEIVED, __________________ hereby sells, assigns and transfers unto
(PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER)
---------------------------------------
---------------------------------------
---------------------------------------
---------------------------------------
(please print or type name and address)
________________________________________________________________ of the Warrants
represented by this Warrant Certificate, and hereby irrevocably constitutes and
appoints ____________________________________Attorney to transfer this Warrant
Certificate on the books of the Company, with full power of substitution in the
premises.
33
Dated:
-------------------- -------------------------------------------
(PLEASE SIGN NAME AS IT APPEARS ON THE
FRONT OF THE CERTIFICATE)
---------------------------------------
Signature Guaranteed
THE SIGNATURE TO THE ASSIGNMENT OR THE SUBSCRIPTION FORM MUST CORRESPOND TO THE
NAME AS WRITTEN UPON THE FACE OF THIS WARRANT CERTIFICATE IN EVERY PARTICULAR,
WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER. THE SIGNATURE(S)
MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS,
SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED
SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15.
34
