EXHIBIT 10.35
WASTE RECOVERY, INC.
DODGE COMMON STOCK AND WARRANT PURCHASE AGREEMENT
December 24, 1996
AGREEMENT
THIS DODGE COMMON STOCK AND WARRANT PURCHASE AGREEMENT ("Agreement") is
made as of the 24th day of December, 1996, by and among Waste Recovery, Inc., a
Texas corporation (the "Company"), and Xxxxxxx X. Xxxxx ("Investor").
WHEREAS, the Company wishes to sell to Investor, and Investor wishes to
purchase from the Company, an aggregate of 300,000 shares of common stock, no
par value ("Common Stock"), of the Company and on behalf of Investor's nominees
as set forth on SCHEDULE A ("Warrantholders"), a total of 300,000 warrants, each
exercisable to purchase one share of Common Stock at a price of $2.0625 per
share during the four-year period commencing on the date hereof (the
"Warrants"), on the terms and in the manner set forth in this Agreement.
IT IS AGREED:
1. PURCHASE AND SALE OF COMMON STOCK AND WARRANTS.
1.1. Subject to the terms and conditions of this Agreement, Investor
hereby purchases from the Company, and the Company hereby sells to Investor, an
aggregate of 300,000 shares ("Shares") of Common Stock and to the Warrantholders
as set forth on SCHEDULE A, an aggregate of 300,000 Warrants (the Shares and
Warrants, collectively "Investor Securities") at a purchase price of $1.45 per
Share and $.05 per Warrant or an aggregate of $450,000.
1.2. Concurrently with the execution of this Agreement, the
Company is delivering to Investor and to the Warrantholder certificates
representing the Investor Securities set forth opposite Investor's or each
Warrantholder's name on SCHEDULE A attached hereto and Investor is delivering
to the Company a certified or official bank check or a wire transfer in the
amount set forth on SCHEDULE A representing payment of the purchase price,
the receipt and adequacy of both of which are hereby acknowledged by the
parties.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to Investor that:
2.1. ORGANIZATION, GOOD STANDING AND QUALIFICATION. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Texas and has all requisite corporate power and authority to
carry on its business as now conducted and as proposed to be conducted. The
Company is duly qualified to transact business, and is in good standing in each
jurisdiction in which the failure so to qualify would have a material adverse
effect on its business or properties (a "Material Adverse Effect"). A true and
correct copy of the Company's Articles of Incorporation ("Certificate") and
By-laws are attached hereto as EXHIBIT A.
2.2. CORPORATE POWER; CONDUCT OF BUSINESS. The Company has all
requisite legal and corporate power to (i) execute and deliver this Agreement,
(ii) issue the Shares and the Warrants and the Common Stock issuable upon
conversion of the Warrants, and (iii) carry out and perform its obligations
under the terms of this Agreement. The Company has all necessary
authorizations, approvals, orders, licenses, certificates and permits of all
governmental and/or regulatory officials and bodies to own or lease its
properties and conduct its business, and the Company is and has been doing
business in compliance with all such authorizations, approval, orders, licenses,
certificates and permits and all federal, state and local laws, rules and
regulations, except where the failure to do so would not have a Material Adverse
Effect.
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2.3. AUTHORIZATION. This Agreement has been duly authorized,
executed and delivered by the Company and constitutes the legal, valid and
binding obligation of the Company, enforceable in accordance with its terms.
2.4. CAPITALIZATION. Prior to the issuance of the Shares and the
Warrants pursuant to this Agreement and the shares of Common Stock of the
Company and the Warrants to be issued pursuant to that Common Stock and Warrant
Purchase Agreement of even date herewith, there are no more than 18,000,000
shares of Common Stock of the Company outstanding on a fully diluted basis,
after giving effect to the exercise and/or conversion of all outstanding
options, warrants and convertible securities.
2.5. VALID ISSUANCE OF SHARES AND WARRANTS.
(a) The issuance, sale and delivery of the Shares and
Warrants being purchased by Investor and the Warrantholders hereunder, and
the reservation for issuance of the Common Stock issuable upon exercise of
the Warrants, have been duly authorized by all required corporate action on
the part of the Company, and the Shares and Warrants are duly and validly
issued, the Shares are fully paid and non-assessable and, based in part upon
the representations and warranties of Investor and the Warrantholders in this
Agreement, the Shares and Warrants will be issued in compliance with all
applicable federal and state securities laws. The Common Stock issuable upon
exercise of the Warrants has been duly and validly reserved for issuance and,
upon issuance in accordance with the terms of the Warrants and payment of the
exercise price set forth in the Warrants, shall be duly and validly issued,
fully paid, and non-assessable. The Shares (and the Common Stock issuable
upon exercise of the Warrants) will be free and clear from any liens or
encumbrances other than those created by, or imposed upon, the holders
thereof through no action of the Company; PROVIDED, HOWEVER, that Shares (and
the Common Stock issuable upon exercise of the Warrants) shall be subject to
restrictions on transfer under state and/or federal securities laws as set
forth herein.
(b) The outstanding shares of Common Stock are all duly and
validly authorized and issued, fully paid, and non-assessable, and were issued
in compliance with all applicable federal and state securities laws and have not
been issued in violation of any preemptive rights.
2.6. 10b-5 REPRESENTATION. SCHEDULE 2.6 lists all of the reports
filed by the Company pursuant to the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), or the rules and regulations thereunder ("Regulations")
since January 1, 1996. The Company has filed all reports required to be filed
by it pursuant to the Exchange Act and the Regulations. Each of such reports,
when filed, complied in all material respects with the requirements of the
applicable provisions of the Exchange Act and the Regulations and did not
contain an untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances in which they were made, not misleading.
Since the date of the most recent report on Form 10-Q filed by the Company under
the Exchange Act and the Regulations, there has been no material adverse change
in the business, financial condition or assets of the Company.
2.7. CONSENTS. No consent, approval, order, license, certificate or
permit from, or authorization of, or registration, qualification, designation,
declaration or filing with, any federal, state, local, foreign or provincial
governmental authority or any court or other tribunal is required on the part of
the Company in connection with the consummation of the transactions contemplated
by this Agreement. No consent of any party to any contract, agreement,
instrument, lease, license, arrangement or understanding to which the Company is
a party is required for the execution, delivery or performance of this Agreement
and the transactions contemplated hereby.
2.8. COMPLIANCE WITH OTHER INSTRUMENTS. The Company is not in
violation or default of
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any provisions of its Certificate or By-laws. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby will not result in any such violation or be in conflict
with or constitute, with or without the passage of time and giving of notice,
either a default under any such provision, instrument, judgment, order, writ,
decree, or contract or constitute an event which results in the creation of
any lien, charge, or encumbrance upon any assets of the Company. The Company
does not have any knowledge of any termination or material breach or
anticipated termination or material breach by the other parties to any
material contract or commitment to which it is a party or to which any of its
assets is subject.
3. REPRESENTATIONS AND WARRANTIES OF INVESTOR. Investor hereby
represents and warrants to the Company that:
3.1. AUTHORIZATION. This Agreement constitutes his valid and legally
binding obligations, enforceable in accordance with its terms. Investor
represents that he has full power and authority to enter into this Agreement.
3.2. PURCHASE FOR OWN ACCOUNT. The Shares and Warrants to be
received by Investor and the Warrantholder pursuant to the terms hereof and
the Common Stock issuable upon exercise of the Warrants (collectively, the
"Securities") will be acquired for investment for such Investor's or
Warrantholder's own account, not as a nominee or agent, and not with a view
to the resale or distribution of any part thereof, and neither Investor nor
the Warrantholder has any present intention of selling, granting any
participation in, or otherwise distributing the same. By executing this
Agreement, Investor further represents warrants that he does not have any
contract, undertaking, agreement, or arrangement with any person to sell,
transfer, or grant participations to such person or to any third person, with
respect to any of the Securities.
3.3. RESTRICTED SECURITIES. Investor understands that the Shares and
the Warrants that are being purchased hereunder are characterized as "restricted
securities" under the federal securities laws inasmuch as they are being
acquired from the Company in a transaction not involving a public offering and
that under such laws and applicable regulations such securities may be resold
without registration under the Securities Act of 1933, as amended (the "Act"),
only in certain limited circumstances. In this regard, Investor represents that
he is familiar with Securities and Exchange Commission Rule 144 ("Rule 144"), as
presently in effect, and understands the resale limitations imposed thereby and
by the Act. Without in any way limiting the representations set forth above,
Investor agrees not to make any disposition of all or any portion of the Shares
or Warrants (or the Common Stock issuable upon exercise of the Warrants) unless
there is then in effect a registration statement under the Act covering such
proposed disposition and such disposition is made in accordance with such
registration statement; Investor shall have notified the Company of the proposed
disposition and shall have furnished the Company with a statement of the
circumstances surrounding the proposed disposition, and, if reasonably requested
by the Company, Investor shall have furnished the Company with an opinion of
counsel, reasonably satisfactory to the Company, that such disposition will not
require registration of such shares under the Act. It is agreed that the
Company will request opinions of counsel for transactions made pursuant to Rule
144 only if such request is reasonable.
3.4. ACCREDITED INVESTOR STATUS. Investor represents and warrants
that he is an "accredited investor" within the meaning of Rule 501(a) of
Regulation D, promulgated under the Act.
3.5. LEGENDS. It is understood that the certificates evidencing the
Shares and the Warrants (and the Common Stock issuable upon exercise of the
Warrants) shall bear the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE
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HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"), OR APPLICABLE
STATE SECURITIES LAWS AND MAY NOT BE SOLD, PLEDGED
OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT WITH RESPECT THERETO UNDER
THE ACT OR PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF SAID ACT AND
COMPLIANCE WITHIN ANY APPLICABLE STATE SECURITIES
LAW, OR UNLESS THE COMPANY RECEIVES AN OPINION OF
COUNSEL, SATISFACTORY TO THE COMPANY AND ITS
COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.
After the Registration Statement referenced in Section 4.4(a)
hereinbelow is declared effective by the Securities and Exchange Commission (the
"Commission"), or after any registration statement in which Investor Securities
or Additional Shares (as hereinafter defined) are included pursuant to the
registration rights set forth in Section 4.4(b) is declared effective by the
Commission, Investor may deliver to the Company the certificates representing
the Investor Securities and/or Additional Shares so registered, and the Company
will, within three (3) days after receipt by the Company of the foregoing, cause
its transfer agent to issue new certificates representing and in exchange for
the aforementioned certificates, which new certificates shall be legended as
follows:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. THE SECURITIES MAY BE SOLD PURSUANT TO THE
REGISTRATION STATEMENT PROVIDED THAT (i) THE REGISTRATION
STATEMENT IS CURRENT AND EFFECTIVE, (ii) THE HOLDER COMPLIES
WITH THE PROSPECTUS DELIVERY REQUIREMENTS UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND (iii) THE SALE IS IN
COMPLIANCE WITH THE PLAN OF DISTRIBUTION SET FORTH IN THE
PROSPECTUS.
The legend shall be removed by the Company from any
certificate at such time as the holder of the shares represented by the
certificate delivers an opinion of counsel reasonably satisfactory to the
Company to the effect that such legend is not required in order to establish
compliance with any provisions of the Act, or at such time as the holder of
such shares satisfies the requirements of Rule 144(k) under the Act, provided
that Rule 144(k) as then in effect does not differ substantially from Rule
144(k) as in effect as of the date of this Agreement, and provided further
that the Company has received from the holder a written representation that
(i) such holder is not an affiliate of the Company and has not been an
affiliate during the preceding three (3) months, (ii) such holder has
beneficially owned the shares represented by the certificate for a period of
at least three (3) years, or such other period of time then set forth under
Rule 144(k), and (iii) such holder otherwise satisfies the requirements of
Rule 144(k) as then in effect with respect to such shares.
By acceptance of the Warrants, each Warrantholder does hereby
acknowledge and agree that she takes such Warrants pursuant to the terms and
subject to the conditions set forth in this Article 3.
4. COVENANTS OF THE COMPANY. The Company covenants and agrees as
follows:
4.1. USE OF PROCEEDS. The Company will apply the proceeds received
from the sale of
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the Common Stock for working capital and general corporate purposes. No
proceeds of the Shares and Warrants sold to Investor or the proceeds of any
exercise of the Warrants will be used to pay any debt for borrowed funds from
any director or officer, or any debts or obligations owed to any officer,
director or shareholder of the Company or any of their respective affiliates.
4.2. FINANCIAL STATEMENTS AND OTHER INFORMATION. The Company shall
deliver to Investor copies of all reports filed by the Company under the
Exchange Act and the Regulations at the time such reports are filed with the
Commission.
4.3. ANTI-DILUTION RIGHTS. Until the date which is three (3) months
after the date on which the Registration Statement is declared effective, in the
event that the Company issues (i) any shares of Common Stock at a price per
share less than $1.25, (ii) any options to purchase or rights to subscribe for
Common Stock exercisable at a price (including the purchase price of such option
or rights) per share of Common Stock exercisable at a price (including the
purchase price of such option or rights) per share of Common Stock of less than
$1.25, or (iii) securities convertible into or exchangeable for Common Stock or
options to purchase or rights to subscribe for such convertible or exchangeable
securities, at a price per convertible or exchangeable security (including the
purchase price of the rights to subscribe for such convertible or exchangeable
security) of less than $1.25, the Company will issue to the holders of the
Shares ("Holders") that amount of additional shares of Common Stock ("Additional
Shares") as will cause the effective per share purchase price of the Common
Stock held by the Holders to be equal to the per share or per security purchase
or exercise price of the Common Stock or securities convertible into or
exercisable or exchangeable for common Stock so issued. Notwithstanding the
foregoing, the Company will not be required to issue Additional Shares to the
Holders as a result of the issuance of options (and the shares of Common Stock
underlying such options) to purchase shares of Common Stock to officers,
directors or employees of the Company if the exercise price of such options is
or was not less than the market price of the Common Stock on the date the
options are granted.
4.4. REGISTRATION RIGHTS.
(a) On or before May 15, 1997, the Company shall file a
registration statement under the Act (the "Registration Statement") with the
Commission registering for resale the Shares, the Additional Shares, if any,
that have been issued to the Holders, and the Warrants and the shares of Common
Stock issuable upon exercise of the Warrants (collectively, the "Registrable
Securities"). The Company will use its best efforts to have such registration
statement declared effective promptly thereafter.
(b) In addition to the registration rights granted in
subsection (a) above, (i) the Holders and each Warrantholder shall have the
right to include the Registrable Securities as part of any other registration
of securities filed by the Company (other than in connection with a
transaction contemplated by Rule 145(a) promulgated under the Act or pursuant
to Form S-8 or any equivalent form), and (ii) upon the request, on one
occasion, of the holders of more than fifty (50%) of any Additional Shares
which may have been issued pursuant to Section 4.3 hereof and which have not
been registered pursuant to Section 4.4(a) hereof ("Additional Registrable
Securities"), the Company shall file a registration statement under the Act
with the Commission registering for resale such Additional Registrable
Securities.
(c) The Company shall bear all fees and expenses attendant to
registering the Registrable Securities and any Additional Registrable
Securities, but the Holders shall pay any and all underwriting commissions in
connection with the sale of the Registrable Securities and any Additional
Registrable Securities. The Company agrees to use its best efforts to cause the
filing required herein to become effective promptly and to qualify or register
the Registrable Securities and any Additional Registrable Securities in such
States as are reasonably requested by the Holders and the Warrantholders;
PROVIDED, HOWEVER, that in no event shall the Company be required to register
the Registrable Securities or
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Additional Registrable Securities in a State in which such registration would
cause (i) the Company to be obligated to register or license to do business
in such State, or (ii) the principal shareholders of the Company to be
obligated to escrow their shares of capital stock of the Company. The
Company shall cause any registration statement filed pursuant to the rights
granted under this Section 4.4 to remain effective until the earliest of (i)
the date by which all of the Registrable Securities and Additional
Registrable Securities, if any, have been sold pursuant to the registration
statement, or (ii) the date by which all of the Registrable Securities or
Additional Registrable Securities, if any, are eligible for resale without
restriction pursuant to Rule 144(k) promulgated under the Act.
(d) Notwithstanding Section 4.4(b)(i) hereof, if the offering
with respect to which a registration statement is filed is managed by an
independent underwriter, then (i) if in the reasonable judgment of the managing
underwriter, which shall be evidenced by a writing delivered to each Holder and
each Warrantholder, the sale of the Registrable Securities or the Additional
Registrable Securities in connection with the proposed offering would have a
material adverse effect on the offering, the Holders and the Warrantholder shall
not sell their Registrable Securities or Additional Registrable Securities under
such registration statement until ninety (90) days after the effective date of
such registration statement without the consent of the managing underwriter, and
(ii) if securities are to be registered for the benefit of any other selling
security holder ("Selling Holder"), each Holder and Warrantholder shall be
entitled to sell immediately under such registration statement a percentage of
the total number of Registrable Securities and Additional Registrable Securities
of a particular class of securities owned by him or her equal to the highest
percentage of that class to be sold under such registration statement (vis-a-vis
the total number of securities of that class owned) by any such Selling Holder,
with the Holder or such Warrantholder being entitled to sell the balance of its
Registrable Securities and/or Additional Registrable Securities, if any, under
such registration statement commencing ninety (90) days after the effective date
of the registration statement.
(e) The Company shall indemnify the holder(s) of the
Registrable Securities or Additional Registrable Securities to be sold
pursuant to any registration statement hereunder and each person, if any, who
controls such holders within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act, against all loss, claim, damage, expense or
liability (including all reasonable attorneys' fees and other expenses
reasonably incurred in investigating, preparing or defending against any
claim whatsoever) to which any of them may become subject under the Act, the
Exchange Act or otherwise, arising from such registration statement other
than arising from information set forth therein furnished by or on behalf of
such holders or their successors or assigns in writing for specific inclusion
in such registration statement. The holder(s) of the Registrable Securities
or Additional Registrable Securities to be sold pursuant to such registration
statement, and their successors and assigns, shall severally, and not
jointly, indemnify the Company against all loss, claims, damage, expense or
liability (including all reasonable attorneys' fees and other expenses
reasonably incurred in investing, preparing or defending against any claim
whatsoever) to which they may become subject under the Act, the Exchange Act
or otherwise, arising from information furnished by or on behalf of such
holders, or their successors or assigns, in writing, for specific inclusion
in such registration statement.
(f) Nothing contained in this Agreement shall be construed as
requiring the Warrantholders to exercise their Warrants prior to or after the
initial filing of any registration statement or the effectiveness thereof.
(g) Each of the Holders and the Warrantholders participating in
any of the foregoing offerings shall furnish to the Company a complete, accurate
and executed questionnaire provided by the Company requesting information
customarily sought of selling securityholders.
5. INDEMNIFICATION. The Company shall indemnify and hold harmless
Investor and its
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successors and assigns, from and against any losses, damages, expenses or
liabilities, including, without limitation, reasonable attorneys' fees, which
may be sustained suffered or incurred by Investor, his successors and
assigns, arising from or in connection with the breach of any of the
Company's covenants, representations, warranties, agreements, obligations or
undertakings hereunder. Investor shall indemnify and hold harmless the
Company from and against any losses, damages, expenses or liabilities,
including, without limitation, reasonable attorneys' fees, which may be
sustained, suffered or incurred by the Company arising from or in connection
with the breach of any of Investor's covenants, representations, warranties,
agreements, obligations or undertakings hereunder. These indemnities shall
survive the execution of this Agreement.
6. MISCELLANEOUS.
6.1. SURVIVAL OF WARRANTIES. The warranties, representations and
covenants of the Company and Investor contained in or made pursuant to this
Agreement shall survive the execution and delivery of this Agreement and shall
in no way be affected by any investigation of the subject matter thereof made by
or on behalf of Investor or the Company.
6.2. SUCCESSORS AND ASSIGNS. Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the parties hereto or
their respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
6.3. GOVERNING LAW. This Agreement shall be governed by and
construed under the laws of the State of Texas, disregarding any principles
of conflicts of laws.
6.4. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
6.5. TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
6.6. FINDER'S FEE. Each party represents that it neither is nor will
be obligated for any finder's fee or commission in connection with this
transaction. The Company agrees to indemnify and hold harmless Investor from
any liability for any commission or compensation in the nature of a finder's fee
(and the costs and expenses of defending against such liability or asserted
liability) for which the Company or any of its officers, employees, or
representatives is responsible.
6.7. ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS. This Agreement
constitutes the full and entire understanding and agreement between the parties
with regard to the subjects hereof. Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively), only
with the written consent of the Company and Investor. Any amendment or waiver
effected in accordance with this Section 6.7 shall be binding upon each holder
of any securities purchased under this Agreement at the time outstanding
(including securities into which such securities are convertible), each future
holder of all such securities, and the Company.
6.8. SEVERABILITY. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, such provision shall be excluded
from this Agreement and the balance of the Agreement shall be interpreted as if
such provision were so excluded and shall be enforceable in accordance with its
terms.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
WASTE RECOVERY, INC.
By: /s/ XXXXXX X. XXXXXXXX
-------------------------------------
Xxxxxx X. Xxxxxxxx
President and Chief Executive Officer
Address: 000 X. Xxxxx Xxxxxxxxxx
Xxxxxx, Xxxxx 00000
INVESTOR
By: /s/ XXXXXXX X. XXXXX
-------------------------------------
Xxxxxxx X. Xxxxx
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SCHEDULE A
Number of
Amount of Shares of Number of
Investor Investment Common Stock Warrants
-------- ---------- ------------ ----------
Xxxxxxx X. Xxxxx $435,000 300,000 -
Warrantholder
-------------
Xxxxx X. Xxxxx $ 5,000 100,000
Xxxxxxxxx X. Xxxxx $ 5,000 100,000
Xxx X. Xxxxx $ 5,000 100,000
SCHEDULE A - Page 1
SCHEDULE 2.6
EXCHANGE ACT REPORTS
1. Form 10-K Annual Report filed with respect to the Company's fiscal year
ended December 31, 1995.
2. Form 10-Q Quarterly Reports filed with respect to the Company's fiscal
quarters ended March 31, 1996, June 30, 1996 and September 30, 1996.
3. Form 8-K Current Report filed with respect to the Company's December 1996
acquisitions of U.S. Tire Recycling Partners, L.P. and the general
partnership interest of Riverside Caloric Company in Waste Recovery-
Illinois, an Illinois general partnership.
SCHEDULE 2.6 - Page 1
NEITHER THIS WARRANT NOR THE COMMON STOCK WHICH MAY BE ACQUIRED UPON THE
EXERCISE HEREOF HAS BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
SOLD, PLEDGED, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT WITH RESPECT THERETO UNDER THE ACT AND COMPLIANCE WITH
ANY APPLICABLE STATE SECURITIES LAW, OR UNLESS THE COMPANY RECEIVES AN
OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS
NOT REQUIRED.
VOID AFTER 5:00 P.M. EASTERN TIME, DECEMBER 24, 2000.
For the Purchase of
100,000 Shares of
Common Stock
No. ____________
WARRANT FOR THE PURCHASE OF
SHARES OF COMMON STOCK
OF
WASTE RECOVERY, INC.
(A Texas Corporation)
Waste Recovery, Inc., a Texas corporation (the "Company"), hereby
certifies that for value received, ___________________________________, or
her registered assigns (the "Registered Holder"), residing at
_______________________________, is entitled, subject to the terms set forth
below, to purchase from the Company, pursuant to this Warrant ("Warrant"), at
any time or from time to time until December 24, 2000 ("Expiration Date"),
one hundred thousand (100,000) shares of Common Stock, no par value, of the
Company ("Common Stock"), at a purchase price equal to $2.0625 per share of
Common Stock. The number of shares of Common Stock purchasable upon exercise
of this Warrant, and the purchase price per share, each as adjusted from time
to time pursuant to the provisions of this Warrant, are hereinafter referred
to as the "Warrant Shares" and the "Purchase Price," respectively.
1. EXERCISE.
(a) This Warrant may be exercised by the Registered Holder, in
whole or in part, by the surrender of this Warrant (with the Notice of
Exercise Form attached hereto as Exhibit I duly executed by such Registered
Holder) at the principal office of the Company, or at such other office or
agency as the Company may designate, accompanied by payment in full, in
lawful money of the United States, of an amount equal to the then applicable
Purchase Price multiplied by the number of Warrant Shares then being
purchased upon such exercise.
(b) Each exercise of this Warrant shall be deemed to have been
effected immediately prior to the close of business on the day on which this
Warrant shall have been surrendered to the Company as provided in subsection
1(a) above. At such time, the person or persons in whose name or names any
certificates for Warrant Shares shall be issuable upon such exercise as
provided in subsection 1(c) below shall be deemed to have become the holder
or holders of record of the Warrant Shares represented by such certificates.
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(c) As soon as practicable after the exercise of the purchase
right represented by this Warrant, the Company at its expense will use its
best efforts to cause to be issued in the name of the Registered Holder and
delivered to you:
(i) A certificate or certificates for the number of full
shares of Warrant Shares to which such Registered Holder shall be entitled
upon such exercise plus, in lieu of any fractional share to which such
Registered Holder would otherwise be entitled, a Warrant Share representing
the remainder of the fractional share to the next whole Warrant Share, and
(ii) In case such exercise is in part only, a new warrant or
warrants (dated the date hereof) of like tenor, stating on the face or faces
thereof the number of shares currently stated on the face of this Warrant
minus the number of such shares purchased by the Registered Holder upon such
exercise as provided in subsection 1(a) above.
2. ADJUSTMENTS.
(a) SPLIT, SUBDIVISION OR COMBINATION OF SHARES. If the
outstanding shares of the Company's Common Stock at any time while this
Warrant remains outstanding and unexpired shall be subdivided or split into a
greater number of shares, or a dividend in Common Stock shall be paid in
respect of Common Stock, or a similar change in the Company's capitalization
occurs which affects the outstanding Common Stock, as a class, then the
Purchase Price in effect immediately prior to such subdivision or at the
record date of such dividend shall, simultaneously with the effectiveness of
such subdivision or split or immediately after the record date of such
dividend (as the case may be), be proportionately decreased. If the
outstanding shares of Common Stock shall be combined or reverse-split into a
smaller number of shares, the Purchase Price in effect immediately prior to
such combination or reverse split shall, simultaneously with the
effectiveness of such combination or reverse split, be proportionately
increased. When any adjustment is required to be made in the Purchase Price,
the number of shares of Warrant Shares purchasable upon the exercise of this
Warrant shall be changed to the number determined by dividing (i) an amount
equal to the number of shares issuable upon the exercise of this Warrant
immediately prior to such adjustment, multiplied by the Purchase Price in
effect immediately prior to such adjustment, by (ii) the Purchase Price in
effect immediately after such adjustment.
(b) RECLASSIFICATION, REORGANIZATION, CONSOLIDATION OR MERGER. In
the case of any reclassification of the Common Stock or any reorganization,
consolidation or merger of the Company with or into another corporation
(other than a merger or reorganization with respect to which the Company is
the continuing corporation and which does not result in any reclassification
of the Common Stock), or a transfer of all or substantially all of the assets
of the Company, or the payment of a liquidating distribution then, as part of
any such reorganization, reclassification, consolidation, merger, sale or
liquidating distribution, the Company shall arrange for the other party to
the transaction to agree to, and lawful provision shall be made, so that the
Registered Holder of this Warrant shall have the right thereafter to receive
upon the exercise hereof (to the extent, if any, still exercisable), the kind
and amount of shares of stock or other securities or property which such
Registered Holder would have been entitled to receive if, immediately prior
to any such reorganization, reclassification, consolidation, merger, sale or
liquidating distribution, as the case may be, such Registered Holder had held
the number of shares of Common Stock that were then purchasable upon the
exercise of this Warrant. In any such case, appropriate adjustment (as
reasonably determined by the Board of Directors of the Company) shall be made
in the application of the provisions set forth herein with respect to the
rights and interests thereafter of the Registered Holder of this Warrant such
that the provisions set forth in this Section 2 (including provisions with
respect to the Purchase Price) shall thereafter be applicable as nearly as is
reasonably practicable, in relation to any shares of stock or other
securities or property thereafter deliverable upon the exercise of this
Warrant.
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3. LIMITATION ON SALES. Each holder of this Warrant acknowledges that
this Warrant and the Warrant Shares have not been registered under the
Securities Act of 1933, as now in force or hereafter amended, or any
successor legislation (the "Act"), and agrees not to sell, pledge,
distribute, offer for sale, transfer or otherwise dispose of this Warrant or
any Warrant Shares issued upon its exercise in the absence of (a) an
effective registration statement under the Act as to this Warrant or such
Warrant Shares and registration or qualification of this Warrant or such
Warrant Shares under any applicable Blue Sky or state securities law then in
effect or (b) an opinion of counsel, satisfactory to the Company, that such
registration and qualification are not required. Without limiting the
generality of the foregoing, unless the offering and sale of the Warrant
Shares to be issued upon the particular exercise of the Warrant shall have
been effectively registered under the Act, the Company shall be under no
obligation to issue the shares covered by such exercise unless and until the
Registered Holder shall have executed an investment letter in form and
substance satisfactory to the Company, including a warranty at the time of
such exercise that it is acquiring such shares for its on account, and will
not transfer the Warrant Shares unless pursuant to an effective and current
registration statement under the Act or an exemption from the registration
requirements of the Act and any other applicable restrictions, in which event
the Registered Holder shall be bound by the provisions of a legend or legends
to such effect which shall be endorsed upon the certificate(s) representing
the Warrant Shares issued pursuant to such exercise. The Warrant Shares
issued upon exercise thereof shall be imprinted with legends in substantially
the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("ACT")
OR APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD, PLEDGED
OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT WITH RESPECT THERETO UNDER THE ACT OR PURSUANT TO AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SAID ACT AND
COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAW, OR UNLESS
THE COMPANY RECEIVES AN OPINION OF COUNSEL, SATISFACTORY TO THE
COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED."
After the Registration Statement referenced in Section 4
hereinbelow is declared effective by the Securities and Exchange Commission
(the "Commission"), or after any registration statement in which Warrant
Shares are included pursuant to the registration rights set forth in Section
4.4(b) of the Dodge Common Stock and Warrant Purchase Agreement between the
Company and Investor as described therein ("Common Stock and Warrant Purchase
Agreement") is declared effective by the Commission, the Registered Holder
may deliver to the Company the certificates representing the Warrant Shares
so registered, and the Company will, within three days after receipt by the
Company of the foregoing, issue new certificates representing and in exchange
for the aforementioned certificates, which new certificates shall be legended
as follows:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE
SECURITIES MAY BE SOLD PURSUANT TO THE REGISTRATION STATEMENT
PROVIDED THAT (i) THE REGISTRATION STATEMENT IS CURRENT AND
EFFECTIVE, (ii) THE HOLDER COMPLIES WITH THE PROSPECTUS DELIVERY
REQUIREMENTS UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
(iii) THE SALE IS IN COMPLIANCE WITH THE PLAN OF DISTRIBUTION SET
FORTH IN THE PROSPECTUS."
4. REGISTRATION RIGHTS OF WARRANT HOLDER. The Company has agreed to
register the Warrants
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and Warrant Shares issuable hereunder on a Registration Statement under the
Act (the "Registration Statement") with the Commission in accordance with
Section 4 of the Common Stock and Warrant Purchase Agreement. These
registration rights shall inure to the benefit of any transferee of the
Warrants and the Warrant Shares.
5. NOTICES OF RECORD DATE. In case:
(a) The Company shall take a record of the holders of its Common
Stock (or other stock or securities at the time deliverable upon the exercise
of this Warrant) for the purpose of entitling or enabling them to receive any
dividend or other distribution (other than a dividend or distribution payable
solely in capital stock of the Company or out of funds legally available
therefor), or to receive any right to subscribe for or purchase any shares of
any class or any other securities, or to receive any other right, or
(b) Of any capital reorganization of the Company, any
reclassification of the capital stock of the Company, any consolidation or
merger of the Company with or into another corporation (other than a
consolidation or merger in which the Company is the surviving entity), or any
transfer of all or substantially all of the assets of the Company, or
(c) Of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company, then, and in each such case, the Company will mail
or cause to be mailed to the Registered Holder of this Warrant a notice
specifying, as the case may be, (i) the date on which a record is to be taken
for the purpose of such dividend, distribution or right, and stating the
amount and character of such dividend, distribution or right, or (ii) the
effective date on which such reorganization, reclassification, consolidation,
merger, transfer, dissolution, liquidation or winding-up is to take place,
and the time, if any is to be fixed, as of which the holders of record of
Common Stock (or such other stock or securities at the time deliverable upon
the exercise of this Warrant) shall be entitled to exchange their shares of
Common Stock (or such other stock or securities) for securities or other
property deliverable upon such reorganization, reclassification,
consolidation, merger, transfer, dissolution, liquidation or winding-up.
Such notice shall be mailed at least ten (10) days prior to the record date
or effective date for the event specified in such notice, provided that the
failure to mail such notice shall not affect the legality or validity of any
such action.
6. RESERVATION AND MAINTENANCE OF LISTING OF STOCK. The Company will
at all times reserve and keep available, solely for issuance and delivery
upon the exercise of this Warrant, such shares of Warrant Shares and other
stock, securities and property as from time to time shall be issuable upon
the exercise of this Warrant and shall use its best efforts to list and
maintain the quotation of the Warrant Shares on the same system or exchange
as the Company's outstanding Common Stock.
7. REPLACEMENT OF WARRANTS. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and (in the case of loss, theft or destruction) upon delivery of
an indemnity agreement (with surety if reasonably required) in an amount
reasonably satisfactory to the Company, or (in the case of mutilation) upon
surrender and cancellation of this Warrant, the Company will issue, in lieu
thereof, a new Warrant of like tenor.
8. TRANSFERS, ETC.
(a) The Company will maintain or cause to be maintained a register
containing the names and addresses of the Registered Holders of this Warrant.
Any Registered Holder may change its, his or her address as shown on the
warrant register by written notice to the Company requesting such change.
(b) Until any transfer of this Warrant is made in the warrant
register, the Company may treat the Registered Holder of this Warrant as the
absolute owner hereof for all purposes; provided,
4
however, that if an when this Warrant is properly assigned in blank, the
Company may (but shall not be obligated to) treat the bearer hereof as the
absolute owner hereof for all purposes, notwithstanding any notice to the
contrary.
9. NO RIGHTS AS SHAREHOLDER. Until the exercise of this Warrant, the
Registered Holder of this Warrant shall not have or exercise any rights by
virtue hereof as a shareholder of the Company.
10. CHANGE OR WAIVER. Any term of this Warrant may be changed or
waived only by an instrument in writing signed by the party against which
enforcement of the change or waiver is sought.
11. HEADINGS. The headings in this Warrant are for purposes of
reference only and shall not limit or otherwise affect the meaning of any
provision of this Warrant.
12. GOVERNING LAW. This Warrant shall be governed by and construed in
accordance with the laws of the State of Texas as such laws are applied to
contracts made and to be fully performed entirely within that state between
residents of that state.
13. MAILING OF NOTICES, ETC. All notices and other communications
under this Warrant (except payment) shall be in writing and shall be
sufficiently given if delivered to the addressees in person, by Federal
Express or similar receipt delivery, by facsimile delivery or, if mailed,
postage prepaid, by certified mail, return receipt requested, as follows:
Registered Holder: To her address on page 1 of this Warrant.
with a copy to: Xxxxxxx X. Xxxxx
c/o 000 Xxxxx Xxxxx Xxxxxxxxxx
Xxxxxx, Xxxxx 00000
Fax: (000) 000-0000
The Company: Waste Recovery, Inc.
000 X. Xxxxx Xxxxxxxxxx
Xxxxxx, Xxxxx 00000
Fax: (000) 000-0000
with a copy to: Xxxxx Xxxxxxx Rain Xxxxxxx
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000-0000
Attn: Xxxx Xxxxxxx, Esq.
Fax: (000) 000-0000
or to such other address as any of them, by notice to the others may
designate from time to time. Time shall be counted to, or from, as the case
may be, the delivery in person or by mailing.
WASTE RECOVERY, INC.
By:
---------------------------------
Xxxxxx X. Xxxxxxxx
President and Chief Executive Officer
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EXHIBIT I
NOTICE OF EXERCISE
TO: Waste Recovery, Inc.
000 X. Xxxxx Xxxxxxxxxx
Xxxxxx, Xxxxx 00000
1. The undersigned hereby elects to purchase ______________ shares of
the Common Stock of Waste Recovery, Inc., pursuant to terms of the attached
Warrant, and tenders herewith payment of the purchase price of such shares in
full, together with all applicable transfer taxes, if any.
2. Please issue a certificate or certificates representing said shares
of the Common Stock in the name of the undersigned or in such other name as
is specified below.
3. The undersigned represents that it will sell the shares of Common
Stock pursuant to an effective Registration Statement under the Securities
Act of 1933, as amended, or an exemption from registration thereunder.
--------------------------------
(Name)
--------------------------------
(Address)
--------------------------------
--------------------------------
--------------------------------
(Taxpayer Identification Number)
-----------------------------------
[PRINT NAME OF REGISTERED HOLDER]
By:
--------------------------------
Title:
-----------------------------
Date:
------------------------------
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