WARRANT AND
REGISTRATION RIGHTS AGREEMENT - Page 1
WARRANT AND REGISTRATION RIGHTS AGREEMENT
_____________, 1998
TEJAS SECURITIES GROUP, INC.
REDSTONE SECURITIES, INC.
SEABOARD SECURITIES, INC.
As Representatives of the Several Underwriters
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Gentlemen:
BioShield Technologies, Inc., a Georgia corporation (the "Company"),
hereby agrees to sell to you, the several underwriters, and you hereby agree to
purchase from the Company at a purchase price of $100.00, unit purchase warrants
(the "Underwriter Warrants") covering 75,000 of the Company's units (the
"Units"), each Unit consisting of two shares of the Company's Common Stock (the
"Shares") and one Redeemable Common Stock Purchase Warrant (the "Warrants")
issued in accordance with the terms of a warrant agreement (the "Warrant
Agreement") dated as of _____, 1998, between the Company and American Stock
Transfer & Trust Company, as warrant agent (the "Warrant Agent"). The
Underwriter Warrants will be exercisable by you as to all or any lesser number
of Units covered thereby, at the Purchase Price per Unit as defined below, at
any time and from time to time on and after the first anniversary of the date
hereof and ending at 5:00 pm. on the fifth anniversary of the date hereof.
2.ab Definitions.
As used herein the following terms, unless the context otherwise
requires, shall have for all purposes hereof the following meanings:
The term "Common Stock" refers to all stock of any class or classes
(however designated) of the Company, now or hereafter authorized, the holders of
which shall have the right without limitation as to amount, either to all or to
a part of the balance of current dividends and liquidating dividends after the
payment of dividends and distributions on any shares entitled to preference, and
the holders of which shall ordinarily, in the absence of contingency, be
entitled to vote for the election of a majority of the directors of the Company
(even though the right so to vote has been suspended by the occurrence of such a
contingency).
The term "Underlying Common Stock" refers to the shares of Common Stock
(or Other Securities) issuable under this Warrant Agreement pursuant to the
exercise, in whole or in part, of the Warrants or the Underwriter Warrants.
The term "Other Securities" refers to any stock (other than Units) and
other securities of the Company or any other person (corporate or otherwise)
which the holders of the Underwriter Warrants at any time shall be entitled to
receive, or shall have received, upon the exercise of the Underwriter Warrants,
in lieu of or in addition to Common Stock and Warrants, or which at any time
shall be issuable or shall have been issued in exchange for or in replacement of
Units or Other Securities pursuant to Section 7 below or otherwise.
The term "Registration Statement" refers, collectively, to the
Registration Statements relating to the Prospectus in the form first filed with
the Securities and Exchange Commission (the "Commission") pursuant to the Rules
and Regulations of the Commission under the Securities Act of 1933, as amended
(the "Act").
The term "Purchase Price" refers to the purchase price of the Units
subject to this Agreement. The Purchase Price shall equal 120% of the offering
price per Unit as set forth in the Registration Statement. The Purchase Price is
subject to adjustment as provided in Section 7 below.
The term "Warrant Stock" refers to shares of Common Stock issued upon
the exercise of the Warrants or the Underwriter's Underwriter Warrants.
The purchase and sale of the Underwriter Warrants shall take place, and the
purchase price therefore shall be paid by delivery of your check, simultaneously
with the purchase of and payment for any Units of the Company as provided in
that certain Underwriting Agreement relating to the public offering covered by
the Registration Statement.
4.ab Representations and Warranties.
The Company represents and warrants to you as follows:
(b)ab Corporate Action. The Company has all requisite corporate power
and authority, and has taken all necessary corporate action, to execute and
deliver this Agreement, to issue and deliver the Underwriter Warrants and
certificates evidencing same, and to authorize and reserve for issuance, and
upon payment from time to time of the Purchase Price to issue and deliver, the
Units, including the Common Stock and the Warrants and shares of Common Stock
underlying the Warrants.
(d)ab No Violation. Neither the execution nor delivery of this
Agreement, the consummation of the actions herein contemplated nor compliance
with the terms and provisions hereof will conflict with, or result in a breach
of, or constitute a default or an event permitting acceleration under, any of
the terms, provisions or conditions of the Amended and Restated Articles of
Incorporation or Bylaws of the Company or any indenture, mortgage, deed of
trust, note, bank loan, credit agreement, franchise, license, lease, permit,
judgment, decree, order, statute, rule or regulation or any other agreement,
understanding or instrument to which the Company is a party or by which it is
bound.
6.ab Compliance with the Act.
(b)ab Transferability of Underwriter Warrants. You agree that the
Underwriter Warrants may not be transferred, sold, assigned or hypothecated
prior to the first anniversary date hereof, except to (i) persons who are
officers of you; (ii) a successor to you in a merger or consolidation; (iii) a
purchaser of all or substantially all of your assets; (iv) your shareholders in
the event you are liquidated or dissolved; (v) persons who are partners or
officers of participating broker-dealers.
(d)ab Registration of Underlying Common Stock. The Underlying Common
Stock issuable upon the exercise of the Underwriter Warrants has not been
registered under the Act. You agree not to make any sale or other disposition of
the Underlying Common Stock except pursuant to a new registration statement
which has become effective under the Act, setting forth the terms of such
offering, the underwriting discount and the commissions and any other pertinent
data with respect thereto, unless you have provided the Company with an opinion
of counsel reasonably acceptable to the Company that such registration is not
required.
(f)ab Inclusion in Registration of Other Securities. If at any time
after the first anniversary of the effective date hereof but prior to the fifth
anniversary of the effective date hereof, the Company shall propose the
registration on an appropriate form under the Act of any shares of Common Stock
or Other Securities (other than pursuant to Forms S-8 or S-4, or any successor
form in connection with employee benefit plans, mergers and acquisitions), the
Company shall at least 30 days prior to the filing of such registration
statement give you written notice, or telegraphic or telephonic notice followed
as soon as practicable by written confirmation thereof, of such proposed
registration and, upon written notice, or telegraphic or telephonic notice
followed as soon as practicable by written confirmation thereof, given to the
Company within five business days after the giving of such notice by the
Company, shall include or cause to be included in any such registration
statement all or such portion of the Underwriter Warrants, the Underlying Common
Stock and the Warrant Stock as you may request, provided, however, that the
Company may at any time withdraw or cease proceeding with any such registration
if it shall at the same time withdraw or cease proceeding with the registration
of such Common Stock or such Other Securities originally proposed to be
registered.
Notwithstanding any provision of this Agreement to the
contrary, if any holder of any of the Underwriter Warrants exercises his
Underwriter Warrants but shall not have included all the Underlying Common Stock
in a registration statement containing a Registration Statement which complies
with Section 10(a)(3) of the Act, which has been effective for at least 30
calendar days following the exercise of the Underwriter Warrants, the
registration rights set forth in this Subsection 3(c) shall be extended until
such time as (i)the registration statement containing such a Registration
Statement has been effective for at least 30 calendar days or (ii) in the
opinion of counsel satisfactory to you and the Company, registration is not
required under the Act or under applicable state laws for resale of the
Underlying Common Stock in the manner proposed.
(i)ab Company's Obligations in Registration. In the event you timely
elect to participate in an offering by including your Underwriter Warrants, the
Underlying Common Stock or the Warrant Stock in a registration statement
pursuant to Subsection 3(c) above, the Company shall:
(ii)ab Notify you as to the filing thereof and of all amendments or
supplements thereto filed prior to the effective date thereof;
(iv)ab Comply with all applicable rules and regulations of the Commission;
(vi)ab Notify you immediately, and confirm the notice in
writing, (1) when the registration statement becomes effective, (2) of
the issuance by the Commission of any stop order or of the initiation,
or the threatening, of any proceedings for that purpose, (3) of the
receipt by the Company of any notification with respect to the
suspension of qualification of the Underlying Common Stock for sale in
any jurisdiction or of the initiation, or the threatening, of any
proceedings for that purpose and (4) of the receipt of any comments, or
requests for additional information, from the Commission or any state
regulatory authority. If the Commission or any state regulatory
authority shall enter such a stop order or order suspending
qualification at any time, the Company will make every reasonable
effort to obtain the lifting of such order as promptly as is reasonably
practicable;
(viii)ab During the time when a Registration Statement is
required to be delivered under the Act during the period required for
the distribution of the Underlying Common Stock, comply so far as it is
able with all requirements imposed upon it by the Act, as hereafter
amended, and by the rules and regulations promulgated thereunder, as
from time to time in force, so far as necessary to permit the
continuance of sales of or dealings in the Underlying Common Stock. If
at any time when a Registration Statement relating to the Underlying
Common Stock is required to be delivered under the Act any event shall
have occurred as a result of which, in the opinion of counsel for the
Company or your counsel, the Registration Statement relating to the
Underlying Common Stock as then amended or supplemented includes an
untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, or if it is necessary at any time to amend such
Registration Statement to comply with the Act, the Company will
promptly prepare and file with the Commission an appropriate amendment
or supplement (in form reasonably satisfactory to you);
(x)ab Endeavor in good faith, in cooperation with you, at or
prior to the time the registration statement becomes effective, to
qualify the Underlying Common Stock for offering and sale under the
securities laws relating to the offering or sale of the Underlying
Common Stock of such jurisdictions as you may reasonably designate and
to continue the qualifications in effect so long as required for
purposes of the sale of the Underlying Common Stock; provided that no
such qualification shall be required in any jurisdiction where, as a
result thereof, the Company would be subject to service of general
process, or to taxation as a foreign corporation doing business in such
jurisdiction. In each jurisdiction where such qualification shall be
effected, the Company will, unless you agree that such action is not at
the time necessary or advisable, file and make such statements or
reports at such times as are or may reasonably be required by the laws
of such jurisdiction. For the purposes of this paragraph, "good faith"
is defined as the same standard of care and degree of effort as the
Company will use to qualify its securities other than the Underlying
Common Stock;
(xii)ab Make generally available to its security holders as
soon as practicable, but not later than the first day of the eighteenth
full calendar month following the effective date of the registration
statement, an earnings statement (which need not be certified by
independent public or independent certified public accountants unless
required by the Act or the rules and regulations promulgated
thereunder, but which shall satisfy the provisions of Section 11(a) of
the Act) covering a period of at least twelve months beginning after
the effective date of the registration statement;
(xiv)ab After the effective date of such registration
statement, prepare, and promptly notify you of the proposed filing of,
and promptly file with the Commission, each and every amendment or
supplement thereto or to any Registration Statement forming a part
thereof as may be necessary to make any statements therein not
misleading in any material respect; provided that no such amendment or
supplement shall be filed if you shall object thereto in writing
promptly after being furnished a copy thereof;
(xvi)ab Furnish to you, as soon as available, copies of any
such registration statement and each preliminary or final Registration
Statement, or supplement or amendment prepared pursuant thereto, all in
such quantities as you may from time to time reasonably request;
(xviii)ab Make such representations and warranties to any
underwriter of the Underlying Common Stock, and use your best efforts
to cause Company counsel to render such opinions to such underwriter,
as such underwriter may reasonably request; and
(xx)ab Pay all costs and expenses incident to the performance
of the Company's obligations under Subsection 3(c) above and under this
Subsection 3(d), including without limitation the fees and
disbursements of Company auditors, engineers and legal counsel, of
legal counsel for you and of legal counsel responsible for qualifying
the Underlying Common Stock under blue sky laws, all filing fees and
printing expenses, all expenses in connection with the transfer and
delivery of the Underlying Common Stock, and all expenses in connection
with the qualification of the Underlying Common Stock under blue sky
laws provided, however, that the Company shall not be responsible for
compensation and reimbursement of expenses to underwriters or selling
agents for the included Underlying Common Stock.
(k)ab Agreements by Warrant Holder. In connection with the filing of a
registration statement pursuant to Subsection 3(c) above, if you participate in
the offering of the Underlying Common Stock by including shares owned by you,
you agree:
(ii)ab To furnish the Company all material information
requested by the Company concerning yourself and your holdings of
securities of the Company and the proposed method of sale or other
disposition of the Underlying Common Stock and such other information
and undertakings as shall be reasonably required in connection with the
preparation and filing of any such registration statement covering all
or a part of the Underlying Common Stock and in order to ensure full
compliance with the Act; and
(iv)ab To cooperate in good faith with the Company and its
underwriters, if any, in connection with such registration, including
placing the shares of Underlying Common Stock to be included in such
registration statement in escrow or custody to facilitate the sale and
distribution thereof.
(m)ab Indemnification. The Company shall indemnify and hold harmless
you and any underwriter (as defined in the Act) for you, and each person, if
any, who respectively controls you or such underwriter within the meaning of
Section 15 of the Act or Section 20(a) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), against any loss, liability, claim, damage and
expense whatsoever (including but not limited to any and all expense whatsoever
reasonably incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim whatsoever), joint or several,
to which any of you or such underwriter or such controlling person becomes
subject, under the Act or otherwise, insofar as such loss, liability, claim,
damage and expense (or actions in respect thereof arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact contained
in (i) a registration statement covering the Underlying Common Stock, in the
Registration Statement contained therein, or in an amendment or supplement
thereto, or (ii) any application or other document or communication (in this
Subsection collectively called "application") executed by or on behalf of the
Company or based upon written information furnished by or on behalf of the
Company filed in any jurisdiction in order to qualify the Underlying Common
Stock under the securities laws thereof or filed with the Commission, or arise
out of or based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading provided, however, that the Company shall not be
obligated to indemnify in any such case to the extent that any such loss, claim,
damage, expense or liability arises out of or is based upon any untrue statement
or alleged untrue statement or omission or alleged omission made in reliance
upon, and in conformity with, written information respectively furnished by you
or such underwriter or such controlling person for use in the registration
statement, or any amendment or supplement thereto, or any application, as the
case may be.
If any action is brought against a person in respect of which
indemnity may be sought against the Company pursuant to the foregoing paragraph,
such person shall promptly notify the Company in writing of the institution of
such action and the Company shall assume the defense of the action, including
the employment of counsel (satisfactory to the indemnified person in its
reasonable judgment) and payment of expenses. The indemnified person shall have
the right to employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such indemnified person or
unless the employment of such counsel shall have been authorized in writing by
the Company in connection with the defense of the action or the Company shall
not have employed counsel to have charge of the defense of the action or the
indemnified person shall have reasonably concluded that there may be defenses
available to it or them which are different from or additional to those
available to the Company (in which case the Company shall not have the right to
direct the defense of the action on behalf of the indemnified person), in any of
which events these fees and expenses shall be borne by the Company. Anything in
this paragraph to the contrary notwithstanding, the Company shall not be liable
for any settlement of any claim or action effected without its written consent.
The Company's indemnity agreements contained in this Subsection shall remain in
full force and effect regardless of any investigation made by or on behalf of
any indemnified person, and shall survive any termination of this Agreement. The
Company agrees promptly to notify you of the commencement of any litigation or
proceedings against the Company or any of its officers or directors in
connection with the registration statement pursuant to Subsection 3(c) above.
If you choose to include all or a part of the Underlying
Common Stock in a public offering pursuant to Subsection 3(c), then you agree to
indemnify and hold harmless the Company and each of its directors and officers
who have signed any such registration statement, and any underwriter for the
Company (as defined in the Act), and each person, if any, who controls the
Company or such underwriter within the meaning of the Act, to the same extent as
the indemnity by the Company in this Subsection 3(f) but only with respect to
statements or omissions, if any, made in such registration statement, or any
amendment or supplement thereto, or in any application in reliance upon, and in
conformity with, written information furnished by you to the Company for use in
the registration statement, or any amendment or supplement thereto, or any
application, as the case may be. In case any action shall be brought in respect
of which indemnity may be sought against you, you shall have the rights and
duties given to the Company, and the persons so indemnified shall have the
rights and duties given to you by the provisions of the first paragraph of this
Subsection.
The Company further agrees that, if the indemnity provisions
of the foregoing paragraphs are held to be unenforceable, any holder of a
Warrant or controlling person of such a holder may recover contribution from the
Company in an amount which, when added to contributions such holder or
controlling person has theretofore received or concurrently receives from
officers and directors of the Company or controlling persons of the Company,
will reimburse such holder or controlling person for all losses, claims, damages
or liabilities and legal or other expenses; provided, however, that if the full
amount of the contribution specified in this Subsection 3(f) is not permitted by
law, then such holder or controlling person shall be entitled to contribution
from the Company and its officers, directors and controlling persons to the full
extent permitted by law.
8.ab Exercise of Underwriter Warrants; Partial Exercise.
(b)ab Exercise in Full. Each Warrant may be exercised in full by the
holder thereof by surrender of the Warrant Certificate, with the form of
subscription at the end thereof duly executed by such holder, to the Company at
its principal office, accompanied by payment, in cash or by certified or bank
cashiers check payable to the order of the Company, in the respective amount
obtained by multiplying the number of shares of the Underlying Common Stock
represented by the Warrant Certificate (after giving effect to any adjustment
therein as provided in Section 7 below) by the Purchase Price per share.
(d)ab Partial Exercise. Each Warrant may be exercised in part by
surrender of the Warrant Certificate in the manner and at the place provided in
Subsection 4(a) above, accompanied by payment, in cash or by certified or bank
cashiers check payable to the order of the Company, in the respective amount
obtained by multiplying the number of shares of the Underlying Common Stock
designated by the holder in the form of subscription attached to the Warrant
Certificate by the Purchase Price per share (after giving effect to any
adjustment therein as provided in Section 7 below). Upon any such partial
exercise, the Company at its expense will forthwith issue and deliver to or upon
the order of the purchasing holder, a new Warrant Certificate or Certificates of
like tenor, in the name of the holder thereof or as such holder (upon payment by
such holder of any applicable transfer taxes) may request calling in the
aggregate for the purchase of the number of shares of the Underlying Common
Stock equal to the number of such shares called for on the face of the Warrant
Certificate (after giving effect to any adjustment therein as provided in
Section 7 below) minus the number of such shares (after giving effect to such
adjustment) designated by the holder in the aforementioned form of subscription.
(g)ab Company to Reaffirm Obligations. The Company will, at the time of
any exercise of any Warrant, upon the request of the holder thereof, acknowledge
in writing its continuing obligation to afford to such holder any rights
(including without limitation any right to registration of the shares of the
Underlying Common Stock issued upon such exercise) to which such holder shall
continue to be entitled after such exercise in accordance with the provisions of
this Agreement provided, however, that if the holder of a Warrant shall fail to
make any such request, such failure shall not affect the continuing obligation
of the Company to afford to such holder any such rights.
10.ab Redemption of Warrants.
All terms applicable to the redemption of the Warrants underlying
Underwriter Warrants shall be identical to the redemption provisions of the
Warrants set forth in Section 12 of the Warrant Agreement.
12.ab Delivery of Certificates, etc, on Exercise.
As soon as practicable after the exercise of any Warrant in full or in
part, and in any event within twenty days thereafter, the Company at its expense
(including the payment by it of any applicable issue taxes) will cause to be
issued in the name of and delivered to the purchasing holder thereof, a
certificate or certificates for the number of Units, Warrants and fully paid and
nonassessable shares of the Underlying Common Stock to which such holder shall
be entitled upon such exercise, plus in lieu of any fractional share to which
such holder would otherwise be entitled, cash in an amount determined pursuant
to Section 8(g), together with any other stock or other securities and property
(including cash, where applicable) to which such holder is entitled upon such
exercise pursuant to Section 7 below or otherwise. 14.ab Anti-dilution
Provisions.
The Underwriter Warrants are subject to the following terms and
conditions during the term thereof:
(b)ab Stock Distributions and Splits. In case (i) the outstanding
shares of the Common Stock (or Other Securities) shall be subdivided into a
greater number of shares or (ii) a dividend in Common Stock (or Other
Securities) shall be paid in respect of Common Stock (or Other Securities), the
Purchase Price per share in effect immediately prior to such subdivision or at
the record date of such dividend or distribution shall simultaneously with the
effectiveness of such subdivision or immediately after the record date of such
dividend or distribution be proportionately reduced; and if outstanding shares
of Common Stock (or Other Securities) shall be combined into a smaller number of
shares thereof, the Purchase Price per share in effect immediately prior to such
combination shall simultaneously with the effectiveness of such combination be
proportionately increased. Any dividend paid or distributed on the Common Stock
(or Other Securities) in stock or any other securities convertible into shares
of Common Stock (or Other Securities) shall be treated as a dividend paid in
Common Stock (or Other Securities) to the extent that shares of Common Stock (or
Other Securities) are issuable upon the conversion thereof.
(d)ab Adjustments. Whenever the Purchase Price per share is adjusted as
provided in Subsection 6(a) above, the number of shares of the Underlying Common
Stock purchasable upon exercise of the Underwriter Warrants immediately prior to
such Purchase Price adjustment shall be adjusted, effective simultaneously with
such Purchase Price adjustment, to equal the product obtained (calculated to the
nearest full share) by multiplying such number of shares of the Underlying
Common Stock by a fraction, the numerator of which is the Purchase Price per
share in effect immediately prior to such Purchase Price adjustment and the
denominator of which is the Purchase Price per share in effect upon such
Purchase Price adjustment, which adjusted number of shares of the Underlying
Common stock shall thereupon be the number of shares of the Underlying Common
Stock purchasable upon exercise of the Underwriter Warrants until further
adjusted as provided herein.
(f)ab Reorganizations. In case the Company shall be recapitalized by
reclassifying its outstanding Common Stock (or Other Securities) into a stock
with a different par value or by changing its outstanding Common Stock (or Other
Securities) with par value to stock without par value, then, as a condition of
such reorganization, lawful and adequate provision shall be made whereby each
holder of a Warrant shall thereafter have the right to purchase, upon the terms
and conditions specified herein, in lieu of the shares of Common Stock (or Other
Securities) theretofore purchasable upon the exercise of the Underwriter
Warrants, the kind and amount of shares of stock and other securities receivable
upon such recapitalization by a holder of the number of shares of Common Stock
(or Other Securities) which the holder of an Underwriter Warrant might have
purchased immediately prior to such recapitalization. If any consolidation or
merger of the Company with another corporation, or the sale of all or
substantially all of its assets to another corporation, shall be effected in
such a way that holders of Common Stock shall be entitled to receive stock,
securities or assets with respect to or in exchange for Common Stock, then, as a
condition of such consolidation, merger or sale, lawful and adequate provisions
shall be made whereby the holder hereof shall thereafter have the right to
purchase and receive upon the basis and upon the terms and conditions specified
in this Warrant Agreement and in lieu of the shares of the Common Stock of the
Company immediately theretofore purchasable and receivable upon the exercise of
the rights represented hereby, such shares of stock, securities or assets as may
be issued or payable with respect to or in exchange for a number of outstanding
shares of such Common Stock equal to the number of shares of such stock
immediately theretofore purchasable and receivable upon the exercise of the
rights represented hereby had such consolidation, merger or sale not taken
place, and in any such case, appropriate provision shall be made with respect to
the rights and interests of the holders of Underwriter Warrants to the end that
the provisions hereof (including without limitation provisions for adjustments
of the Purchase Price and of the number of shares purchasable and receivable
upon the exercise of the Underwriter Warrants) shall thereafter be applicable,
as nearly as may be, in relation to any shares of stock, securities or assets
thereafter deliverable upon the exercise hereof (including an immediate
adjustment, by reason of such consolidation or merger, of the Purchase Price to
the value for the Common Stock reflected by the terms of such consolidation or
merger if the value so reflected is less than the Purchase Price in effect
immediately prior to such consolidation or merger). In the event of a merger or
consolidation of the Company with or into another corporation as a result of
which a number of shares of common stock of the surviving corporation greater or
lesser than the number of shares of Common Stock of the Company outstanding
immediately prior to such merger or consolidation are issuable to holders of
Common Stock of the Company, then the Purchase Price in effect immediately prior
to such merger or consolidation shall be adjusted in the same manner as though
there were a subdivision or combination of the outstanding shares of Common
Stock of the Company. The Company will not effect any such consolidation, merger
or sale, unless prior to the consummation thereof the successor corporation (if
other than the Company) resulting from such consolidation or merger or the
corporation purchasing such assets shall assume by written instrument executed
and mailed or delivered to the registered holder hereof at the last address of
such holder appearing on the books of the Company, the obligation to deliver to
such holder such shares of stock, securities or assets as, in accordance with
the foregoing provisions, such holder may be entitled to purchase. If a
purchase, tender or exchange offer is made to and accepted by the holders of
more than of the outstanding shares of Common Stock of the Company, the Company
shall not effect any consolidation, merger or sale with the Person having made
such offer or with any Affiliate of such Person, unless prior to the
consummation of such consolidation, merger or sale the holders of Underwriter
Warrants shall have been given a reasonable opportunity to then elect to receive
upon the exercise of Underwriter Warrants either the stock, securities or assets
then issuable with respect to the Common Stock of the Company or the stock,
securities or assets, or the equivalent issued to previous holders of the Common
Stock in accordance with such offer. The term "Person" as used in this
subparagraph shall mean and include an individual, a partnership, a corporation,
a trust, a joint venture, an unincorporated organization and a government or any
department or agency thereof. For the purposes of this subparagraph, an
"Affiliate" of any Person shall mean any Person directly or indirectly
controlling, controlled by or under direct or indirect common control with, such
other Person. A Person shall be deemed to control a corporation if such Person
possesses, directly or indirectly, the power to direct or cause the direction of
the management and policies of such corporation, whether through the ownership
of voting securities, by contract or otherwise.
(h)ab Effect of Dissolution or Liquidation. In case the Company shall
dissolve or liquidate all or substantially all of its assets, all rights under
this Agreement shall terminate as of the date upon which a certificate of
dissolution or liquidation shall be filed with the Secretary of the State of
Georgia (or, if the Company theretofore shall have been merged or consolidated
with a corporation incorporated under the laws of another state, the date upon
which action of equivalent effect shall have been taken); provided, however,
that (i) no dissolution or liquidation shall affect the rights under Subsection
7(c) of any holder of a Warrant and (ii) if the Company's Board of Directors
shall propose to dissolve or liquidate the Company, each holder of a Warrant
shall be given written notice of such proposal at the earlier of (A) the time
when the Company's shareholders are first given notice of the proposal or (B)
the time when notice to the Company's shareholders is first required.
(j)ab Notice of Change of Purchase Price. Whenever the Purchase Price
per share or the kind or amount of securities purchasable under the Underwriter
Warrants shall be adjusted pursuant to any of the provisions of this Agreement,
the Company shall forthwith thereafter cause to be sent to each holder of a
Warrant, a certificate setting forth the adjustments in the Purchase Price per
share and/or in such number of shares, and also setting forth in detail the
facts requiring, such adjustments, including without limitation a statement of
the consideration received or deemed to have been received by the Company for
any additional shares of stock issued by it requiring such adjustment. In
addition, the Company at its expense shall within 90 days following the end of
each of its fiscal years during the term of this Agreement, and promptly upon
the reasonable request of any holder of a Warrant in connection with the
exercise from time to time of all or any portion of any Warrant, cause
independent certified public accountants of recognized standing selected by the
Company to compute any such adjustment in accordance with the terms of the
Underwriter Warrants and prepare a certificate setting forth such adjustment and
showing in detail the facts upon which such adjustment is based.
(l)ab Notice of a Record Date. In the event of (i) any taking by the
Company of a record of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive any dividend (other
than a cash dividend payable out of earned surplus of the Company) or other
distribution, or any right to subscribe for, purchase or otherwise acquire any
shares of stock of any class or any other securities or property, or to receive
any other right, (ii) any capital reorganization of the Company, or any
reclassification or recapitalization of the capital stock of the Company, or any
transfer of all or substantially all of the assets of the Company to, or
consolidation or merger of the Company with or into, any other person or (iii)
any voluntary or involuntary dissolution or liquidation of the Company, then and
in each such event the Company will mail or cause to be mailed to each holder of
a Warrant a notice specifying not only the date on which any such 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, but also the date
on which any such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or winding-up is to take place,
and the time, if any, as of which the holders of record of Common Stock (or
Other Securities) shall be entitled to exchange their shares of Common Stock (or
Other Securities) for securities or other property deliverable upon such
reorganization, reclassification, recapitalization, transfer, consolidation,
merger, dissolution, liquidation or winding-up. Such notice shall be mailed at
least 20 days prior to the proposed record date therein specified.
16.ab Further Covenants of the Company.
(b)ab Reservation of Stock. The Company shall at all times reserve and
keep available, solely for issuance and delivery upon the exercise of the
Underwriter Warrants, all shares of the Underlying Common Stock from time to
time issuable upon the exercise of the Warrants and the Underwriter Warrants and
shall take all necessary actions to ensure that the par value per share, if any,
of the Underlying Common Stock is, at all times equal to or less than the then
effective Purchase Price per share.
(d)ab Title to Units. All Units and shares of the Underlying Common
Stock delivered upon the exercise of the Underwriter Warrants shall be validly
issued, fully paid and nonassessable; each holder of an Underwriter Warrant
shall receive good and marketable title to the Units and Underlying Common
Stock, free and clear of all voting and other trust arrangements, liens,
encumbrances, equities and claims whatsoever; and the Company shall have paid
all taxes, if any, in respect of the issuance thereof.
(f)ab Listing on Securities Exchanges; Registration. If the Company at
any time shall list any Units, Common Stock or Warrants on any national
securities exchange, the Company will, at its expense, use its best reasonable
efforts to simultaneously list on such exchange, upon official notice of
issuance upon the exercise of the Underwriter Warrants, and maintain such
listing of, all Units, Warrants and shares of the Underlying Common Stock from
time to time issuable upon the exercise of the Underwriter Warrants; and the
Company will so list on any national securities exchange, will so register and
will maintain such listing of, any Other Securities if and at the time that any
securities of like class or similar type shall be listed on such national
securities exchange by the Company.
(h)ab Exchange of Underwriter Warrants. Subject to Subsection 3(a)
hereof, upon surrender for exchange of any Warrant Certificate to the Company,
the Company at its expense will promptly issue and deliver to or upon the order
of the holder thereof a new Warrant Certificate or certificates of like tenor,
in the name of such holder or as such holder (upon payment by such holder of any
applicable transfer taxes) may direct, calling in the aggregate for the purchase
of the number of shares of the Underlying Common Stock called for on the face or
faces of the Warrant Certificate or Certificates so surrendered.
(j)ab Replacement of Underwriter Warrants. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of any Warrant Certificate and, in the case of any such loss, theft
or destruction, upon delivery of an indemnity agreement reasonably satisfactory
in form and amount to the Company or, in the case of any such mutilation, upon
surrender and cancellation of such Warrant Certificate, the Company, at the
expense of the Warrant holder will execute and deliver, in lieu thereof, a new
Warrant Certificate of like tenor.
(l)ab Reporting by the Company. The Company agrees that, if it files a
Registration Statement during the term of the Underwriter Warrants, it will use
its best reasonable efforts to keep current in the filing of all forms and other
materials which it may be required to file with the appropriate regulatory
authority pursuant to the Exchange Act, and all other forms and reports required
to be filed with any regulatory authority having jurisdiction over the Company.
(n)ab Fractional Shares. No fractional shares of Underlying Common
Stock are to be issued upon the exercise of any Warrant, but the Company shall
pay a cash adjustment in respect of any fraction of a share which would
otherwise be issuable in an amount equal to the same fraction of the highest
market price per share of Underlying Common Stock on the day of exercise, as
determined by the Company.
18.ab Other Holders.
The Underwriter Warrants are issued upon the following terms, to all of
which each holder or owner thereof by the taking thereof consents and agrees as
follows: (a) any person who shall become a transferee, within the limitations on
transfer imposed by Subsection 3(a) hereof, of a Warrant properly endorsed shall
take such Warrant subject to the provisions of Subsection 3(a) hereof and
thereupon shall be authorized to represent himself as absolute owner thereof
and, subject to the restrictions contained in this Agreement, shall be empowered
to transfer absolute title by endorsement and delivery thereof to a permitted
bona fide purchaser for value; (b) each prior taker or owner waives and
renounces all of his equities or rights in such Warrant in favor of each such
permitted bona fide purchaser, and each such permitted bona fide purchaser shall
acquire absolute title thereto and to all rights presented thereby; (c) until
such time as the respective Warrant is transferred on the books of the Company,
the Company may treat the registered holder thereof as the absolute owner
thereof for all purposes, notwithstanding any notice to the contrary and (d) all
references to the word "you" in this Warrant Agreement shall be deemed to apply
with equal effect to any person to whom a Warrant Certificate or Certificates
have been transferred in accordance with the terms hereof, and where
appropriate, to any person holding Units, Warrants or shares of the Underlying
Common Stock.
20.ab Miscellaneous.
All notices, certificates and other communications from or at the
request of the Company to the holder of any Warrant shall be mailed by first
class, registered or certified mail, postage prepaid, to such address as may
have been furnished to the Company in writing by such holder, or, until an
address is so furnished, to the address of the last holder of such Warrant who
has so furnished an address to the Company, except as otherwise provided herein.
This Agreement and any of the terms hereof may be changed, waived, discharged or
terminated only by an instrument in writing signed by the party against which
enforcement of such change, waiver, discharge or termination is sought. This
Agreement shall be construed and enforced in accordance with and governed by the
laws of the State of Georgia. The headings in this Agreement are for reference
only and shall not limit or otherwise affect any of the terms hereof. This
Agreement, together with the forms of instruments annexed hereto as Schedule I,
constitutes the full and complete agreement of the parties hereto with respect
to the subject matter hereof.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed on this _____ day of _________, 1998, by its proper corporate officers
thereunto duly authorized.
WARRANT AND
REGISTRATION RIGHTS AGREEMENT - Page 1
BIOSHIELD TECHNOLOGIES, INC.
By:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Co-Chairman of the Board, President and
Chief Executive Officer
WARRANT AND
REGISTRATION RIGHTS AGREEMENT - Page 1
The above Warrant and Registration Rights Agreement is confirmed this
___ day of _____, 1998.
TEJAS SECURITIES GROUP, INC.
Representative of the Several Underwriters Listed on
Schedule A to the Underwriting Agreement
By:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III
REDSTONE SECURITIES, INC.
Representative of the Several Underwriters Listed on
Schedule A to the Underwriting Agreement
By:
Name:
SEABOARD SECURITIES, INC.
Representative of the Several Underwriters Listed on
Schedule A to the Underwriting Agreement
By:
Name:
G:\TEJASC~1\DEALS\SB2\BIOSHI~1\AMENDM~1\1T#6T02!.WPD0871998
349:18662-5
SCHEDULE A
BIOSHIELD TECHNOLOGIES, INC.
Unit Purchase Warrant
Certificate Evidencing Right to Purchase
__________ Units
This is to certify that ___________________ ("_______") or assigns, is
entitled to purchase at any time or from time to time after 9 A.M., Central
Standard time, on __________, 1999 and until 9 A.M., Central Standard time, on
__________, 2003 up to the above referenced number of Units consisting of two
shares of the Company's Common Stock (the "Shares") and one Redeemable Common
Stock Purchase Warrant (the "Warrants"), of BioShield Technologies, Inc., a
Georgia corporation (the "Company"), for the consideration specified in Section
1 of the Warrant and Registration Rights Agreement dated __________, 1998
between the Company and Tejas Securities Group, Inc., Redstone Securities, Inc.
and Seaboard Securities, Inc. (collectively, the "Representatives"), as
representatives of the several underwriters listed in Schedule A to that certain
Underwriting Agreement dated _________, 1998 by and among the Company, the
Representatives and certain Selling Shareholders of the Company (the "Warrant
Agreement"), pursuant to which this Warrant is issued. All rights of the holder
of this Warrant Certificate are subject to the terms and provisions of the
Warrant Agreement, copies of which are available for inspection at the office of
the Company.
The Units issuable upon the exercise of this Warrant have not been
registered under the Securities Act of 1933, as amended (the "Act"), and no
distribution of the Shares or Warrants issuable upon exercise of this Warrant
may be made until the effectiveness of a registration statement under the Act
covering such Units. Transfer of this Warrant Certificate is restricted as
provided in Subsection 3(a) of the Warrant Agreement.
This Warrant has been issued to the registered owner in reliance upon
written representations necessary to ensure that this Warrant was issued in
accordance with an appropriate exemption from registration under any applicable
state and federal securities laws, rules and regulations. This Warrant may not
be sold, transferred, or assigned unless, in the opinion of the Company and its
legal counsel, such sale, transfer or assignment will not be in violation of the
Act, applicable rules and regulations of the Securities and Exchange Commission,
and any applicable state securities laws.
Subject to the provisions of the Act and of the Warrant Agreement, this
Warrant Certificate and all rights hereunder are transferable, in whole or in
part, at the offices of the Company, by the holder hereof in person or by duly
authorized attorney, upon surrender of this Warrant Certificate, together with
the Assignment hereof duly endorsed. Until transfer of this Warrant Certificate
on the books of the Company, the Company may treat the registered holder hereof
as the owner hereof for all purposes.
Any Units, Warrants or Common Stock which is acquired pursuant to the
exercise of this Warrant shall be acquired in accordance with the Warrant
Agreement and certificates representing all securities so acquired shall bear a
restrictive legend reading substantially as follows:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
OR UNDER ANY APPLICABLE STATE LAW. THEY MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR PLEDGED WITHOUT (1) REGISTRATION UNDER THE SECURITIES ACT OF
1933 AND ANY APPLICABLE STATE LAW, OR (2) AN OPINION OF COUNSEL
(SATISFACTORY TO THE COMPANY) THAT REGISTRATION IS NOT REQUIRED.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
executed on this ____ day of _________, 1998, by its proper corporate officer's
thereunto duly authorized.
BIOSHIELD TECHNOLOGIES, INC.
By:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Co-Chairman of the Board, President and
Chief Executive Officer
Attest:
Name:
SUBSCRIPTION
(To be signed only upon exercise of Warrant)
To: BioShield Technologies, Inc.
The undersigned, the holder of the enclosed Warrant Certificate, hereby
irrevocably elects to exercise the purchase right represented by such Warrant
Certificate for, and to purchase thereunder, _________________ Units (as defined
in the Warrant and Registration Rights Agreement to which the form of this
Subscription was attached) and herewith makes payment of $______________
therefor by cash, certified check or official bank check, and requests that the
certificate or certificates for such shares be issued in the name of and
delivered to the undersigned.
Date:
Taxpayer ID No.:
(Signature must conform in all respects to name of holder
as specified on the face of the Warrant Certificate)
(Address)
Insert the number of shares called for on the face of the Warrant
Certificate (or, in the case of a partial exercise, the portion thereof as to
which the Warrant is being exercised), in either case without making any
adjustment for additional Units or other securities or property or cash which,
pursuant to the adjustment provisions of the Warrant, may be deliverable upon
exercise.
ASSIGNMENT
(To be signed only upon transfer of Warrant)
For value received, the undersigned hereby sells, assigns and transfers
unto _______________________________ the right represented by the enclosed
Warrant Certificate to purchase ________ Units with full power of substitution
in the premises.
The undersigned represents and warrants that the transfer, in whole in
or in part, of such right to purchase represented by the enclosed Warrant
Certificate is permitted by the terms of the Warrant and Registration Rights
Agreement pursuant to which the enclosed Warrant has been issued, and the
transferee hereof, by his acceptance of this Assignment, represents and warrants
that he is familiar with the terms of such Warrant and Registration Rights
Agreement and agrees to be bound by the terms thereof with the same force and
effect as if a signatory thereto.
Date:
Taxpayer ID No.:
Warrant Certificate No.:
(Signature must conform in all respects to name of holder as
specified on the face of the Warrant Certificate)
(Address)
Signed in the presence of: