EXHIBIT C
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE
HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE. THIS WARRANT MAY NOT BE
EXERCISED BY OR ON BEHALF OF ANY U.S. PERSON (AS DEFINED IN REGULATION S OF THE
SECURITIES AND EXCHANGE COMMISSION PROMULGATED UNDER THE ACT), AND THIS WARRANT
AND THE UNDERLYING SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED,
HYPOTHECATED, OR OTHERWISE TRANSFERRED IN THE ABSENCE OF REGISTRATION UNDER
SAID ACT AND ALL OTHER APPLICABLE SECURITIES LAWS, UNLESS AN EXEMPTION FROM THE
REGISTRATION PROVISIONS OF SAID ACT AND ALL OTHER APPLICABLE SECURITIES LAWS IS
AVAILABLE.
WARRANT
WARRANT TO PURCHASE SHARES OF COMMON STOCK
OF ▇▇▇-TYME, INC.
Date of Issuance: As of October 25, 1996
THIS CERTIFIES that, for value received, Ulster Investments Limited,
or registered assigns (the "Holder") is entitled to purchase, subject to the
provisions of this Warrant, from ▇▇▇-TYME, INC., a Delaware corporation (the
"Company"), at the price hereinafter set forth in Section 7, the number of
shares hereinafter set forth in Section 8, of the Company's $.0001 par value
common stock (all of the Company's shares of Common Stock being hereafter
referred to as "Common Stock"). This Warrant is hereinafter referred to as the
"Warrant" and the shares of Common Stock issued or then issuable pursuant to
the terms hereof are hereinafter sometimes referred to as "Warrant Shares".
Section 1. Exercise of Warrant. This Warrant may be exercised in whole
or in part at any time and from time to time on or after its date of issuance
but prior to the Expiration Date defined in Section 11 by presentation of the
Purchase Form annexed hereto duly executed and accompanied by payment of the
Exercise Price set forth in Section 7 hereof and/or election of the "net
issuance" method of exercise set forth on said Purchase Form, for the number of
shares specified in such form. Upon receipt by the Company of the said Purchase
Form executed as aforesaid, at the office of the Company, accompanied by
payment of the Exercise Price (which can be paid in whole or in part (a)
through application of any outstanding obligation of the Company to Holder, (b)
by delivery to the Company of certificate(s) representing shares of the
Company's common stock together with executed stock powers wherein the shares
represented by such certificates will be valued based upon the average of the
closing bid and ask prices for the stock over the five trading days immediately
preceding such delivery) and/or (c) through designation of the "net issuance"
method of exercise set forth on said Purchase Form, the Company shall issue and
deliver to the Holder within a reasonable period of time not to exceed 10 days
a certificate or certificates of the shares of Common Stock then being issued
upon such exercise. Based upon representations, warranties and covenants of the
Company contained in the Loan and Warrant Purchase Agreement of even date
herewith by and between the Company and the Holder, such certificates shall not
bear any restricted legends. If this Warrant shall be exercised with respect to
only a part of the shares of Common Stock covered hereby, the Holder shall be
entitled to receive a similar warrant of like tenor and date covering the
number of shares in respect of which this Warrant shall not have been
exercised.
Section 2. Reservation of Shares. The Company hereby covenants that at
all times during the term of this Warrant there shall be reserved for issuance
such number of shares of its Common Stock as shall be required to be issued
upon exercise of this Warrant.
Section 3. Shares to be Fully Paid and Nonassessable. All shares of
Common Stock issued upon the exercise of this Warrant shall be validly issued,
fully paid and nonassessable.
Section 4. Assignment of Warrant. This Warrant is not transferable
except pursuant to an effective registration statement under the Securities Act
of 1933, as amended, and other applicable securities laws, or unless an
exemption from the registration provisions of such Act and other applicable
securities laws is applicable. All subsequent offers and sales of this Warrant
will be made: (a) outside the United States in compliance with Rule 903 or Rule
904 of Regulation S, (b) pursuant to registration of the Warrant under the Act,
or (c) pursuant to an exemption from such registration. In the event of such
transfer or assignment, the Holder shall surrender this Warrant to the Company
with the Assignment Form in the form annexed hereto duly executed and with
funds sufficient to pay any transfer taxes, and the Company shall cancel this
Warrant and, without charge, shall execute and deliver a new Warrant of like
tenor in the name of the assignee which enables the assignee to succeed to all
rights and interest of its assignor at the time of assignment of this Warrant.
Section 5. Loss of Warrant. Upon receipt by the Company of evidence
satisfactory to it of the loss, theft or destruction of this Warrant, and of
indemnification satisfactory to it, or upon surrender and cancellation of this
Warrant, if mutilated, the Company will execute and deliver a new Warrant of
like tenor and date.
Section 6. Rights of the Holder. No provision of this Warrant shall be
construed as conferring upon the Holder hereof the right to vote, consent,
receive dividends or receive notice other than as herein expressly provided. No
provision hereof, in the absence of affirmative action by the Holder hereof to
purchase Warrant Shares, and no enumeration herein of the rights or privileges
of the Holder hereof shall give rise to any liability of such Holder for the
purchase price of any Warrant Shares or as a stockholder of the Company,
whether such liability is asserted by the Company or by creditors of the
Company.
This Warrant and the shares issuable hereunder shall not be sold,
offered for sale, pledged, hypothecated, or otherwise transferred in the
absence of registration under the Act and other applicable securities laws or
an exemption from the registration provisions of such Act and other applicable
securities laws is available.
Section 7. Exercise Price.
7(a). Initial Exercise Price. The purchase price for each share of
Common Stock purchased under this Warrant (the "Exercise Price") shall
initially be $0.10.
7(b). Adjustment of Exercise Price. The Exercise Price, determined
pursuant to Subsection 7(a) hereof, shall, in addition to any adjustments
pursuant to Section 10 hereof, be adjusted from time to time pursuant to this
Subsection 7(b).
7(b)(1). Adjustment of Exercise Price upon Issuance of Common Stock.
If and whenever after the date hereof the Company shall issue or sell, or is,
in accordance with the provisions of this Subsection 7(b), deemed to have
issued or sold, any shares of its Common Stock for a consideration per share
less than the Exercise Price in effect immediately prior to the time of such
issue or sale, then, forthwith upon such issue or sale, the Exercise Price
shall be reduced to the price per share of Common Stock at which such shares
are deemed to have been issued or sold.
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7(b)(2). Issuance of Rights or Options. In case at any time the
Company shall in any manner grant (whether directly or by assumption in a
merger or otherwise) any rights to subscribe for or to purchase, or any options
for the purchase of, Common Stock or any stock or securities convertible into
or exchangeable for Common Stock (such rights or options being herein called
"Options" and such convertible or exchangeable stock or securities being herein
called "Convertible Securities"), whether or not such Options or the right to
convert or exchange any such Convertible Securities are immediately
exercisable, and the price per share for which Common Stock is issuable upon
the exercise of such Options or upon conversion or exchange of such Convertible
Securities (determined as provided in the following sentence) shall be less
than the Exercise Price in effect immediately prior to the time of the granting
of such Options, then the total maximum number of shares of Common Stock
issuable upon the exercise of all such Options or upon conversion or exchange
of the total maximum amount of such Convertible Securities issuable upon the
exercise of such Options shall, for purposes of this Subsection 7(b), be deemed
to have been issued for such price per share as of the date of granting of such
Options and thereafter shall be deemed to be outstanding. The price per share
for which Common Stock is issuable, as referred to in the preceding sentence,
shall be determined by dividing (a) the sum of (l) the total amount, if any,
received or receivable by the Company as consideration for the granting of such
Options, plus (2) the minimum aggregate amount of additional consideration
payable to the Company upon the exercise of all such Options, plus (3) in the
case of all such Options that relate to Convertible Securities, the minimum
aggregate amount of additional consideration, if any, payable upon the issue or
sale of all such Convertible Securities (to the extent not counted in clause
(2)) and upon the conversion or exchange of all such Convertible Securities
into Common Stock, by (b) the total maximum number of shares of Common Stock
issuable upon the exercise of such Options or upon the conversion or exchange
of all such Convertible Securities issuable upon the exercise of such Options;
the consideration received or receivable by the Company shall in each case be
determined in accordance with Paragraph (5) of Subsection 7(b) hereof. Except
as otherwise provided in Paragraph (4) of Subsection 7(b) hereof, no adjustment
of the Exercise Price shall be made upon the actual issue of such Common Stock
or of such Convertible Securities upon exercise of such Options or upon the
actual issue of such Common Stock upon conversion or exchange of such
Convertible Securities.
7(b)(3). Issuance of Convertible Securities. In case the Company shall
in any manner issue (whether directly or by assumption in a merger or
otherwise) or sell any Convertible Securities, whether or not the rights to
exchange or convert thereunder are immediately exercisable, and the price per
share for which Common Stock is issuable upon such conversion or exchange
(determined as provided in the following sentence) shall be less than the
Exercise Price in effect immediately prior to the time of such issue or sale,
then the total maximum number of shares of Common Stock convertible or issuable
upon conversion or exchange of all such Convertible Securities shall, for
purposes of this Subsection 7(b), be deemed to have been issued for such price
per share as of the date of the issue of such Convertible Securities and
thereafter shall be deemed to be outstanding, provided that (a) except as
otherwise provided in Paragraph (4) of Subsection 7(b) below, no adjustment of
the Exercise Price shall be made upon the actual issue of such Common Stock
upon conversion or exchange of such Convertible Securities, and (b) if any such
issue or sale of such Convertible Securities is made upon exercise of any
Options for which adjustments of the Exercise Price have been or are to be made
pursuant to other provisions of this Subsection 7(b), no further adjustment of
the Exercise Price shall be made by reason of such issue or sale. The price per
share for which Common Stock is
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issuable, as referred to in the preceding sentence, shall be determined by
dividing (x) the sum of (1) the total amount received or receivable by the
Company as consideration for the issue or sale of such Convertible Securities,
plus (2) the minimum aggregate amount of additional consideration, if any,
payable upon the conversion or exchange of such Convertible Securities into
Common Stock; by (y) the total maximum number of shares of Common Stock
issuable upon the conversion or exchange of such Convertible Securities; the
consideration received or receivable by the Company shall in each case be
determined in accordance with Paragraph (5) of Subsection 7(b).
7(b)(4). Change in Option Price or Conversion Rate. Upon the happening
of any of the following events, namely, if (a) the purchase price provided for
in any Option which is referred to in Paragraph (2) of Subsection 7(b) and is
still outstanding, (b) the additional consideration, if any, payable upon the
conversion or exchange of any Convertible Securities which are referred to in
Paragraphs (2) or (3) of Subsection 7(b) and are still outstanding, or (c) the
rate at which any such Convertible Securities are convertible into or
exchangeable for Common Stock shall change at any time (other than under or by
reason of provisions designed to protect against dilution), the Exercise Price
in effect at the time of such event shall forthwith be readjusted to the
Exercise Price which would have been in effect at such time had such Options or
Convertible Securities provided for such changed purchase price, additional
consideration or conversion rate, as the case may be, at the time initially
granted, issued or sold. On the expiration of any Option referred to in
Paragraph (2) of Subsection 7(b) prior to the exercise thereof or the
termination of any right to convert or exchange any Convertible Securities
referred to in Paragraphs (2) or (3) of Subsection 7(b) prior to the exercise
of such rights, the Exercise Price then in effect hereunder shall forthwith be
increased to the Exercise Price which would have been in effect at the time of
such expiration or termination had such Option or Convertible Securities, to
the extent outstanding immediately prior to such expiration or termination,
never been issued, and the Common Stock issuable thereunder shall no longer be
deemed to be outstanding for the purposes of any calculation under Paragraphs
(2) or (3) of Subsection 7(b). If the purchase price provided for in any Option
referred to in Paragraph (2) of Subsection 7(b) or the consideration, if any,
payable upon the conversion or exchange of any Convertible Securities referred
to in Paragraphs (2) or (3) of Subsection 7(b) and still outstanding shall
decrease, or the number of shares of Common Stock issuable upon conversion or
exchange of any such Convertible Securities shall increase, at any time under
or by reason of provisions with respect thereto designed to protect against
dilution, then in case of the delivery of Common Stock, the Exercise Price then
in effect hereunder shall forthwith be adjusted to the Exercise Price which
would have obtained had Paragraphs (2) and (3) of Subsection 7(b) and the
provisions of this Paragraph (4) of Subsection 7(b) never been given effect in
relation to such Option or Convertible Securities and had the Exercise Price
been adjusted pursuant to Subsection 7(b) at the time of delivery of such
shares of Common Stock based on the consideration received (or deemed received
under Paragraph (5) of Subsection 7(b)) for such Common Stock, determined as of
the date of such delivery, provided that such adjustment of the Exercise Price
shall be made only if as a result thereof the Exercise Price then in effect
hereunder is thereby reduced.
7(b)(5). Consideration for Securities. In case any shares of Common
Stock, Options or Convertible Securities shall be issued or sold for cash, the
consideration received therefor shall be deemed to be the amount received by
the Company thereof, without deduction therefrom of any expenses incurred or
any underwriting commissions or concessions paid or allowed by the Company in
connection therewith. In case any shares of Common Stock, Options or
Convertible Securities shall be issued or sold for a consideration other than
cash, the amount of the consideration other than cash received by the Company
shall be
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deemed to be the fair value of such consideration as determined in good faith
by the Board of Directors of the Company, without deduction of any expenses
incurred or any underwriting commissions or concessions paid or allowed by the
Company in connection therewith. In case any Options shall be issued in
connection with the issue and sale of other securities of the Corporation,
together comprising one integral transaction in which no specific consideration
is allocated to such Options by the parties thereto, such Options shall be
deemed to have been issued for such consideration as determined in good faith
by the Board of Directors of the Corporation.
7(b)(6). Record Date. In case the Company shall declare a record date
of the holders of its Common Stock for the purpose of entitling them (a) to
receive a dividend or other distribution payable in Common Stock, Options or
Convertible Securities, or (b) to subscribe for or purchase Common Stock,
Options, or Convertible Securities, then such record date shall be deemed to be
the date of the issue or sale of the shares of Common Stock deemed to have been
issued or sold upon the declaration of such dividend or the making of such
other distribution or the date of the granting of such right of subscription or
purchase, as the case may be.
7(b)(7). Treasury Shares. The number of shares of Common Stock
outstanding at any given time shall not include shares owned or held by or for
the account of the Company, and the disposition of any such shares shall be
considered an issue or sale of Common Stock for the purposes of this Subsection
7(b).
7(b)(8). Subdivision or Combination of Stock. In case the Company
shall at any time subdivide (by any stock split, stock dividend, or otherwise)
its outstanding shares of Common Stock into a greater number of shares, the
Exercise Price in effect immediately prior to such subdivision shall be
proportionately reduced, and conversely, in case the outstanding shares of
Common Stock of the Company shall be combined into a smaller number of shares,
the Exercise Price in effect immediately prior to such combination shall be
proportionately increased.
7(b)(9). Certain Issues of Common Stock Excepted. Anything herein to
the contrary notwithstanding, the Company shall not be required to make any
adjustment of the Exercise Price in the case of up to a total of Ten Thousand
(10,000) shares (appropriately adjusted for any stock splits, stock dividends
or stock combinations) issued or issuable to employees pursuant to the exercise
of stock options granted either by the Board of Directors of the Company or
pursuant to stock option plans approved by the Board of Directors of the
Company.
7(b)(10). Duty to Make Fair Adjustments In Certain Cases. If any event
occurs as to which the other provisions of this Subsection 7(b) or the
provisions of Section 10 hereof are not strictly applicable or if strictly
applicable would not fairly protect the purchase rights of the Warrants in
accordance with the essential intent and principles of such provisions, then
the Board of Directors shall make an adjustment in the application of such
provisions, in accordance with such essential intent and principles, so as to
protect such purchase rights as aforesaid.
Section 8. Number of Warrant Shares.
Initial Number of Warrant Shares. This Warrant shall upon its issuance
be exercisable in accordance with the terms hereof for 100,000 shares of Common
Stock (the "Initial Number") subject to adjustment pursuant to Section 10
hereof.
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The number of shares of Common Stock actually issued will be subject to further
adjustment in the event and to the extent the Holder designates the "net
issuance" method of exercise set forth on the Purchase Form.
Section 9. Notices to Warrant Holder. So long as this Warrant shall be
outstanding, the Company shall cause to be delivered to the Holder at least 15
days prior written notice of the time, place and agenda of any meeting of its
stockholders or the Board of Directors at which it is proposed to authorize the
issuance of any shares of Common Stock or any securities, options, warrants or
rights of conversion the exercise of which would entitle the holder thereof to
receive shares of Common Stock. In addition, (i) if the Company shall pay any
dividend or make any distribution upon the shares of its Common Stock, or (ii)
if the Company shall offer to the holders of Common Stock for subscription or
purchase by them any shares of stock of any classes or any other rights, or
(iii) if any capital reorganization of the Company, reclassification of the
Common Stock of the Company, consolidation or merger of the Company with or
into another corporation, or voluntary or involuntary dissolution, liquidation
or winding up of the Company shall be effected, then, in any such case, the
Company shall cause to be delivered to the Holder, at least 30 days prior to
the date specified in (a) or (b) below, as the case may be, a notice containing
a brief description of the proposed action and stating the date on which (a) a
record is to be taken or the stock transfer books of the Company are to be
closed for the purpose of determining the stockholders entitled to receive such
dividend, distribution or rights, or (b) a record is to be taken or the stock
transfer books of the Company are to be closed for the purpose of determining
the stockholders entitled to exchange their shares of Common Stock for
securities or other property deliverable upon such reclassification,
reorganization, consolidation, merger, dissolution, liquidation or winding up.
Section 10. Reclassification, Reorganization or Merger. In case of any
reclassification, capital reorganization or other change of outstanding shares
of Common Stock of the Company (other than a change in par value, or from par
value to no par value, or from no par value to par value, or as a result of an
issuance of Common Stock except by way of dividend or other distribution or
except by way of a subdivision, split or combination), or in case of any
consolidation or merger of the Company with or into another corporation (other
than a merger with a subsidiary in which merger the Company is the continuing
corporation or which does not result in any reclassification, capital
reorganization or other change of outstanding shares of Common Stock of the
class issuable upon exercise of this Warrant), the Company shall cause
effective provision to be made so that the Holder shall have the right
thereafter, by exercising this Warrant, to purchase the kind and amount of
shares of stock and other securities and property receivable upon such
reclassification, capital reorganization or other change, consolidation or
merger, by a holder of the number of shares of Common Stock which might have
been purchased upon exercise of this Warrant immediately prior to such
reclassification, change, consolidation or merger. Any such provision shall
include provision for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Warrant. The foregoing
provisions of this Section 10 shall similarly apply to successive
reclassifications, capital reorganizations and changes of shares of Common
Stock and to successive consolidations and mergers. In the event that in any
such capital reorganization or reclassification, consolidation or merger,
additional shares of Common Stock shall be issued in exchange, conversion,
substitution or payment, in whole or in part, for or of a security of the
Company other than Common Stock, any amount of the consideration received
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upon the issue thereof being determined by the Board of Directors of the
Company in good faith shall be final and binding on the Holder.
Section 11. Expiration Date. The Warrant shall terminate on the
Expiration Date and may not be exercised on or after such date. The Expiration
Date shall be October __, 2001.
Section 12. Applicable Law. The parties hereto acknowledge that the
principal place of business of the Holder is Antigua, West Indies and this
Warrant shall be deemed to have been delivered, is to be performed within and
shall be deemed to be a contract made under, construed and interpreted in
accordance with and governed by the internal laws of the Antigua, West Indies
(without reference to (i) its judicially or statutorily pronounced rules
regarding conflict of law or choice of law; (ii) where any instrument is
executed or delivered; (iii) where performance required by any instrument is
made or required to be made; (iv) where any breach of any provision of any
instrument occurs or any cause of action otherwise accrues; (v) where any
action or other proceeding is instituted or pending; (vi) the nationality,
citizenship, domicile, principal place of business, or jurisdiction,
organization or domestication of any party; (vii) whether the laws of the forum
jurisdiction would otherwise apply the laws of a jurisdiction other than
Antigua, West Indies; or (viii) any combination of the foregoing.
Section 13. Registration. The Holder and the Company hereby agree that
the Registration Rights Agreement, dated as of October __, 1996, between the
Company and the Holder ("Registration Rights Agreement") shall apply to Warrant
Shares acquired by the Holder upon exercise of this Warrant from time to time.
▇▇▇-TYME, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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ASSIGNMENT FORM
Dated:
-----------------
For value received, ____________________________________ hereby sells,
assigns and transfers a Warrant dated ____________ unto:
Name ___________________________________________________________
(Please typewrite or print in block letters)
Address_________________________________________________________
and appoints ___________________________________________________
________________________________________________________________
Attorney to transfer the said Warrant on the books of the within named Company
with full power of substitution in the premises.
The undersigned hereby certifies, as a condition to ▇▇▇-Tyme, Inc.
honoring the assignment of the Warrant, that: (a) it is not a U.S. person
(within the meaning of Securities and Exchange Commission Regulation S) and all
offers and sales of the Warrant were made outside the United States in
compliance with Rule 903 or Rule 904 of Regulation S to persons who were not
U.S. persons; or (b) a written opinion of counsel satisfactory to the within
named Company will be delivered to the within named Company to the effect that
the Warrant and the securities delivered upon exercise thereof have been
registered under the Securities Act of 1933, as amended, or are exempt from
registration thereunder.
Signature_________________________
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PURCHASE FORM
Dated:____________
The undersigned hereby irrevocably elects to exercise his or
its right to purchase __________ shares of the _____ par value Common Stock of
▇▇▇- Tyme, Inc. (the "Company"), such right being pursuant to a Warrant dated
October__, 1996, and as issued to the undersigned by the Company, and hereby:
(i) [ ] remits herewith the sum of $__________ in payment for same in
accordance with the Exercise Price specified in Section 7 of said
Warrant, or
(ii) [ ] directs that the amount of $_________ owed to the undersigned by
Company be applied as payment for same in accordance with the Exercise
Price specified in Section 7 of said Warrant, or
(iii) [ ] delivers certificate(s) representing shares of the Company's
Common Stock together with executed stock powers wherein shares with a
value of $__________________ are being surrendered to the Company in
payment for same in accordance with the Exercise Price specified in
Section 7 of said Warrant (such value being calculated as provided in
Section 1 of said Warrant), or
(iv) [ ] directs that the purchase be without cash payment and on a "net
issuance" basis whereby the shares of Common Stock actually issued to
the undersigned will be that number of shares of Common Stock equal to
the number of shares for which the Warrant is being exercised less the
number of shares having a value (calculated as provided in Section 1
of the Warrant) equal to the aggregate exercise price of that number
of shares for which the Warrant is being exercised. For example, if
the Warrant is being exercised with respect to 15,000 shares and the
value of the Company's common stock is $0.30 per share at the time of
exercise, the number of shares issued to the Holder will be 10,000
[15,000-5,000 which is derived by multiplying 15,000 (the number of
shares being exercised) by $0.10 (the exercise price) and dividing the
result by $0.30 (the value per share)], or
(v) [ ] elects the following combination of (i) through (iv), inclusive,
to the extent of $_______________ in payment for same in accordance
with the Exercise Price specified in Section 7 of said Warrant or
through "net issuance" as provided in (iv) above:
The undersigned hereby certifies, as a condition to the Company
honoring the exercise of the Warrant, that: (a) it is not a U.S. person (within
the meaning of Securities and Exchange Commission Regulation S) and the Warrant
is not being exercised on behalf of a U.S. person; or (b) a written opinion of
counsel will be delivered to the Company to the effect that the Warrant and the
securities delivered upon exercise thereof have been registered under the
Securities Act of 1933, as amended, or are exempt from registration thereunder.
-------------------------------------------------------.
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name
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(Please typewrite or print in block letters)
Address
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Signature:
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Shares Heretofore Purchased
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( ) .
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