Exhibit No.: 4.7
WARRANT AGREEMENT
Dated as of December 20, 2000
by and between
CRYOCON, INC.
and
▇▇▇▇ ▇▇▇▇▇
THIS WARRANT AGREEMENT (this "Agreement") is made and entered into as
of December 20, 2000 by and between CRYOCON, INC., a Colorado corporation (the
"Company"), and ▇▇▇▇ ▇▇▇▇▇ ("Holder").
WHEREAS, the Company agrees to issue Common Stock warrants as
hereinafter described (the "Warrants") to purchase shares of Common Stock (as
defined below), in such number and at such price determined in accordance with
this Agreement. Each Warrant entitles the holder thereof to purchase one Warrant
Share (as defined below).
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, and for the purpose of defining the respective
rights and obligations of the Company and Holder, the parties hereto agree as
follows:
Section 1. Certain Definitions. As used in this Agreement, the
following terms shall have the following respective meanings:
"Commission" means the Securities and Exchange Commission.
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"Common Stock" means the common stock, no par value, of the Company,
and any other capital stock of the Company into which such common stock may be
converted or reclassified or that may be issued in respect of, in exchange for,
or in substitution for, such common stock by reason of any stock splits, stock
dividends, distributions, mergers, consolidations or other like events.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any successor statute, and the rules and regulations promulgated thereunder.
"Exercise Price" means the purchase price to be paid upon the exercise
of the Warrants in accordance with the terms hereof. The initial Exercise Price
per share shall be equal to $0.10, subject to adjustment from time to time
pursuant to Section 11 hereof.
"Expiration Date" means December 31, 2005, as the same may be extended
pursuant to Section 6 hereof.
"Holder" means ▇▇▇▇ ▇▇▇▇▇ and any other person who is the owner of
Warrants as shown on the Warrant register maintained by the Company.
"Issue Date" means the date of the initial issuance of the Warrants,
which shall be the date of this Agreement.
"Rule 144" shall mean Rule 144 promulgated under the Securities Act, as
such Rule may be amended from time to time, or any similar rule (other than Rule
144A) or regulation hereafter adopted by the Commission providing for offers and
sales of securities made in compliance therewith resulting in offers and sales
by subsequent holders that are not affiliates of an issuer of such securities
being free of the registration and prospectus delivery requirements of the
Securities Act.
"Rule 144A" shall mean Rule 144A promulgated under the Securities Act,
as such Rule may be amended from time to time, or any similar rule (other than
Rule 144) or regulation hereafter adopted by the Commission.
"Securities Act" means the Securities Act of 1933 or any successor
statute and the rules and regulations promulgated thereunder.
"Warrant Shares" means the fully paid and non-assessable shares of
Common Stock issued or issuable upon the exercise of the Warrants.
Section 2. Issuance of Warrants; Warrant Certificates.
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(a) The Warrants will be issued in the form of definitive certificates,
substantially in the form of Exhibit A (the "Warrant Certificates"). Each
Warrant shall provide that it shall represent the aggregate amount of
outstanding Warrants from time to time endorsed thereon and that the aggregate
amount of outstanding Warrants represented thereby may from time to time be
reduced or increased, as appropriate.
(b) The Warrants shall be initially issued on the Issue Date in the
aggregate amount of 1,000,000 shares of Common Stock, subject to adjustment as
herein provided, and shall be issued under one Warrant Certificate.
Section 3. Execution of Warrant Certificates. Warrant Certificates
shall be signed on behalf of the Company by the Company's President or a Vice
President and by its Secretary or an Assistant Secretary under its corporate
seal. Each such signature upon the Warrant Certificates may be in the form of a
facsimile signature of the present or any future President, Vice President,
Secretary or Assistant Secretary and may be imprinted or otherwise reproduced on
the Warrant Certificates and for that purpose the Company may adopt and use the
facsimile signature of any person who shall have been President, Vice President,
Secretary or Assistant Secretary, notwithstanding the fact that at the time the
Warrant Certificates shall be countersigned and delivered or disposed of, such
person shall have ceased to hold such office. The seal of the Company may be in
the form of a facsimile thereof and may be impressed, affixed, imprinted or
otherwise reproduced on the Warrant Certificates.
In case any officer of the Company who shall have signed any of the
Warrant Certificates shall cease to be such officer before the Warrant
Certificates so signed shall have been disposed of by the Company, such Warrant
Certificates nevertheless may be countersigned and delivered or disposed of as
though such person had not ceased to be such officer of the Company; and any
Warrant Certificate may be signed on behalf of the Company by any person who, at
the actual date of the execution of such Warrant Certificate, shall be a proper
officer of the Company to sign such Warrant Certificate, although at the date of
the execution of this Warrant Agreement any such person was not such officer.
Section 4. Registration. The Company shall number and register the
Warrant Certificates in a register as they are issued by the Company.
The Company may deem and treat the person in whose name any Warrant is
registered as the absolute owner(s) thereof, for all purposes, and the Company
shall not be affected by any notice to the contrary.
Section 5. Registration of Transfers and Exchanges.
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(a) Transfer and Exchange of Warrants. When Warrants are presented to
the Company with a request to register their transfer; or to exchange such
Warrants for an equal number of Warrants of other authorized denominations, the
Company shall register the transfer or make the exchange as requested if the
Warrants presented or surrendered for registration of transfer or exchange shall
be duly endorsed or accompanied by a written instruction of transfer in form
satisfactory to the Company, duly executed by the Holder thereof or by his
attorney-in-fact, duly authorized in writing.
(b) Legends.
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Each Warrant Certificate (and all Warrants issued in exchange
therefor or substitution thereof) and each certificate representing the
Warrant Shares shall bear a legend in substantially the following form:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED
STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THE SECURITY
EVIDENCED HEREBY AND THE SECURITIES DELIVERED UPON EXERCISE THEREOF MAY
NOT BE EXERCISED, OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE
OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.
(c) Obligations With Respect to Transfers and Exchanges of Warrants.
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(i) To permit registrations of transfers and exchanges, the
Company shall execute in accordance with the provisions of Section 4
and this Section 5, Warrants as required pursuant to the provisions of
this Section 5. Notwithstanding anything to the contrary contained
herein, the Company shall refuse to register any transfer of the
Warrants not made in accordance with Regulation S promulgated under the
Securities Act, pursuant to registration under the Securities Act or
pursuant to an available exemption from the registration requirements
of the Securities Act; provided, however, that if a foreign law
prevents the Company from refusing to register securities transfers,
the Company shall implement other reasonable measures designed to
prevent transfers of the Warrants not made in accordance with
Regulation S, pursuant to registration under the Securities Act or
pursuant to an available exemption from the registration requirements
of the Securities Act.
(ii) All Warrants issued upon any registration of transfer or
exchange of Warrants shall be the valid obligations of the Company,
entitled to the same benefits under this Warrant Agreement, as the
Warrants surrendered upon such registration of transfer or exchange.
(iii) Prior to due presentment for registration of transfer of
any Warrant, the Company may deem and treat the person in whose name
any Warrant is registered as the absolute owner of such Warrant and the
Company shall not be affected by notice to the contrary.
(iv) No service charge shall be made to a Holder for any
registration of transfer or exchange.
Section 6. Terms of Warrants; Exercise of Warrants. Subject to the
terms of this Agreement, each Holder shall have the right, which may be
exercised at any time and from time to time, in whole or in part, commencing on
the date hereof and ending at 4:00 p.m., Central Standard Time, on the
Expiration Date, to receive from the Company the number of fully paid and
nonassessable Warrant Shares which the Holder may at the time be entitled to
receive on exercise of such Warrants and payment of the Exercise Price then in
effect for such Warrant Shares. Subject to the provisions of the following
paragraph of this Section 6, each Warrant not exercised prior to 4:00 p.m.,
Central Standard Time, on the Expiration Date shall become void and all rights
thereunder and all rights in respect thereof under this Agreement shall cease as
of such time. No adjustments as to dividends will be made upon exercise of the
Warrants.
The Company shall use its reasonable efforts to give notice not less
than 90, and not more than 120, days prior to the Expiration Date to the Holders
of all then outstanding Warrants to the effect that the Warrants will terminate
and become void as of 4:00 p.m., Central Standard Time, on the Expiration Date.
Notwithstanding the Company's failure to give such notice, the Expiration Date
shall not be extended and, in no event will Holders be entitled to any damages
or other remedy for the Company's failure to give such notice.
A Warrant may be exercised upon surrender to the Company of the
certificate or certificates evidencing the Warrant to be exercised with the form
of election to purchase on the reverse thereof properly completed and signed,
and upon payment to the Company of the Exercise Price as adjusted as herein
provided, for each of the Warrant Shares in respect of which such Warrants are
then exercised. Payment of the aggregate Exercise Price shall be made in cash or
by certified or official bank check, payable to the order of the Company. In the
alternative, each Holder may exercise its right to receive Warrant Shares on a
net basis, such that without the exchange of any funds, the Holder receives that
number of Warrant Shares otherwise issuable upon exercise of its Warrants less
that number of Warrant Shares determined from the application of the following
formula: exercise price divided by current market price multiplied by the total
number of warrant shares available. For purposes of the foregoing sentence,
"current market value" of the Warrant Shares shall be as determined in
accordance with Section 11(c) hereof. The Company shall notify the Holder in
writing of any such determination of current market value.
Subject to the provisions of Section 7 hereof, upon surrender of
Warrants and payment of the Exercise Price as provided above, the Company shall
promptly transfer to the Holder of such Warrant a certificate or certificates
for the appropriate number of Warrant Shares or other securities or property
(including any money) to which the Holder is entitled, registered or otherwise
placed in, or payable to the order of, such name or names as may be directed in
writing by the Holder, and shall deliver such certificate or certificates
representing the Warrant Shares and any other securities or property (including
any money) to the person or persons entitled to receive the same, together with
an amount in cash in lieu of any fraction of a share as provided in Section 13.
Any such certificate or certificates representing the Warrant Shares shall be
deemed to have been issued and any person so designated to be named therein
shall be deemed to have become a Holder of record of such Warrant Shares as of
the later of the date of the surrender of such Warrants and payment of the
Exercise Price.
The Warrants shall be exercisable commencing on the Issue Date, at the
election of the Holders thereof, either in full or from time to time in part
and, in the event that a certificate evidencing Warrants is exercised in respect
of fewer than all of the Warrant Shares issuable on such exercise at any time
prior to the date of expiration of the Warrants, a new certificate evidencing
the remaining Warrant or Warrants will be issued and delivered pursuant to the
provisions of this Section and of Section 3 hereof.
All Warrant Certificates surrendered upon exercise of Warrants shall be
canceled. Such canceled Warrant Certificates shall then be disposed of in
accordance with customary procedures.
Section 7. Payment of Taxes. The Company will pay all documentary stamp
taxes, if any, attributable to the issuance of the Warrant Certificates or the
initial issuance of Warrant Shares upon the exercise of Warrants; provided,
however, that the Company shall not be required to pay any tax or taxes which
may be payable in respect of any transfer involved in the issue of any
certificates for Warrant Shares in a name other than that of the Holder of a
Warrant Certificate surrendered upon the exercise of a Warrant.
Section 8. Mutilated or Missing Warrant Certificates. In case any of
the Warrant Certificates shall be mutilated, lost, stolen or destroyed, the
Company may in its discretion issue in exchange and substitution for and upon
cancellation of the mutilated Warrant Certificate, or in lieu of and
substitution for the Warrant Certificate lost, stolen or destroyed, a new
Warrant Certificate of like tenor and representing an equivalent number of
Warrants, but only upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction of such Warrant Certificate and, if
requested, indemnity reasonably satisfactory to them. Applicants for such
substitute Warrant Certificates shall also comply with such other reasonable
regulations and pay such other reasonable charges as the Company may prescribe.
Section 9. Reservation of Warrant Shares. The Company will at all times
reserve and keep available, free from any preemptive rights, out of the
aggregate of its authorized but unissued Common Stock or its authorized and
issued Common Stock held in its treasury, for the purpose of enabling it to
satisfy any obligation to issue Warrant Shares upon exercise of Warrants, the
maximum number of shares of Common Stock which may then be deliverable upon the
exercise of all outstanding Warrants.
The transfer agent for the Common Stock (the "Transfer Agent") and
every subsequent transfer agent for any shares of the Company's capital stock
issuable upon the exercise of any of the rights of purchase aforesaid will be
irrevocably authorized and directed at all times to reserve such number of
authorized shares as shall be required for such purpose. The Company will keep a
copy of this Agreement on file with the Transfer Agent and with every subsequent
transfer agent for any shares of the Company's capital stock issuable upon the
exercise of the rights of purchase represented by the Warrants. The Company will
supply such Transfer Agent with duly executed certificates for such purposes and
will provide or otherwise make available any cash which may be payable as
provided in Section 13. The Company will furnish such Transfer Agent a copy of
all notices of adjustments and certificates related thereto, transmitted to each
Holder of the Warrants pursuant to Section 14 hereof.
Before taking any action which would cause an adjustment pursuant to
Section 11 hereof that would reduce the Exercise Price below the then par value
(if any) of the Warrant Shares, the Company will take any corporate action which
may, in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable Warrant Shares at the
Exercise Price as so adjusted.
The Company covenants that all Warrant Shares which may be issued upon
exercise of Warrants in accordance with the terms of this Agreement (including
the payment of the Exercise Price) will, upon issue, be duly and validly issued,
fully paid, nonassessable, and free of preemptive rights and Liens.
Section 10. Intentionally omitted.
Section 11. Adjustment of Exercise Price and Number of Warrant Shares
Issuable. The number and kind of shares purchasable upon the exercise of
Warrants and the Exercise Price shall be subject to adjustment from time to time
(as set forth in the notices required by Section 14 hereof) as follows:
(a) Stock Splits, Combinations, etc. In case the Company shall
hereafter (A) pay a dividend or make a distribution on its Common Stock in
shares of its capital stock (whether shares of Common Stock or of capital stock
of any other class), (B) subdivide its outstanding shares of Common Stock, (C)
combine its outstanding shares of Common Stock into a smaller number of shares,
or (D) issue by reclassification of its shares of Common Stock any shares of
capital stock of the Company, the Exercise Price in effect and the number of
Warrant Shares issuable upon exercise of each Warrant immediately prior to such
action shall be adjusted so that the Holder of any Warrant thereafter exercised
shall be entitled to receive the number of shares of capital stock of the
Company which such Holder would have owned immediately following such action had
such Warrant been exercised immediately prior thereto. Any adjustment made
pursuant to this paragraph shall become effective immediately after the record
date in the case of a dividend and shall become effective immediately after the
effective date in the case of a subdivision, combination or reclassification.
If, as a result of an adjustment made pursuant to this paragraph, the Holder of
any Warrant thereafter exercised shall become entitled to receive shares of two
or more classes of capital stock of the Company, the Board of Directors of the
Company (whose determination shall be conclusive and evidenced by a Board
resolution) shall determine the allocation of the adjusted Exercise Price
between or among shares of such classes of capital stock.
(b) Reclassification, Combinations, Mergers, etc. In case of any
reclassification or change of outstanding shares of Common Stock issuable upon
exercise of the Warrants (other than as set forth in paragraph (a) above and
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 a subdivision or combination), or in
case of any consolidation or merger of the Company with or into another
corporation (other than a merger in which the Company is the continuing
corporation and which does not result in any reclassification or change of the
then outstanding shares of Common Stock or other capital stock issuable upon
exercise of the Warrants) or in case of any sale or conveyance to another
corporation of all or substantially all of the assets of the Company, then, as a
condition of such reclassification, change, consolidation, merger, sale or
conveyance, the Company or such a successor or purchasing corporation, as the
case may be, shall forthwith make lawful and adequate provision whereby the
Holder of each Warrant then outstanding shall have the right thereafter to
receive on exercise of such Warrant the kind and amount of shares of stock and
other securities and property receivable upon such reclassification, change,
consolidation, merger, sale or conveyance by a Holder of the number of shares of
Common Stock issuable upon exercise of such Warrant immediately prior to such
reclassification, change, consolidation, merger, sale or conveyance and enter
into a supplemental warrant agreement so providing. Such provisions shall
include provision for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 11. If the issuer of
securities deliverable upon exercise of Warrants under the supplemental warrant
agreement is an affiliate of the formed, surviving or transferee corporation,
that issuer shall join in the supplemental warrant agreement. The Company shall
not effect any such reclassification, consolidation, merger, conveyance,
transfer, dissolution, liquidation or winding up or change of control unless,
prior to the consummation thereof, the successor corporation (if other than the
Company) resulting from such reclassification, consolidation, merger,
conveyance, transfer, dissolution, liquidation or winding up or change of
control, shall assume, by written instrument executed and delivered to the
Holder, the obligation to deliver to the Holder such shares of stock, securities
or assets, which, in accordance with the foregoing provisions, such Holder shall
be entitled to purchase. The above provisions of this paragraph (b) shall
similarly apply to successive reclassifications and changes of shares of Common
Stock and to successive consolidations, mergers, sales or conveyances.
(c) Current Market Price. For the purpose of any computation of current
market price under this Agreement, the current market price per share of Common
Stock at any date shall be the daily closing price the last full trading day on
the exchange or market specified in the second succeeding sentence prior to the
Time of Determination (as defined below). The term "Time of Determination" as
used herein shall be the time and date of the earlier to occur of (A) the date
as of which the current market price is to be computed and (B) the last full
trading day on such exchange or market before the commencement of "ex-dividend"
trading in the Common Stock relating to the event giving rise to the adjustment
required by paragraph (a) or (b) above. The closing price for any day shall be
the last reported sale price regular way or, in case no such reported sale takes
place on such day, the average of the closing bid and asked prices regular way
for such day, in each case (1) on the principal national securities exchange on
which the shares of Common Stock are listed or to which such shares are admitted
to trading or (2) if the Common Stock is not listed or admitted to trading on a
national securities exchange, in the over-the-counter market as reported by
Nasdaq National or SmallCap Markets or any comparable system or (3) if the
Common Stock is not listed on Nasdaq National or SmallCap Markets or a
comparable system but a public market for the Common Stock exists, as furnished
by two members of the NASD selected from time to time in good faith by the Board
of Directors of the Company for that purpose. In the absence of all of the
foregoing, or if for any other reason the current market price per share cannot
be determined pursuant to the foregoing provisions of this paragraph (c), the
current market price per share shall be the fair market value thereof as
determined in good faith by the Board of Directors of the Company and evidenced
by a resolution of such Board, subject to the following dispute resolution right
of the Holders of the Warrants. In the event that Holders of a majority of the
Warrants dispute the determination of the Board of Directors, such Holders shall
notify the Company and the current market price shall be determined in a
reasonably prompt manner as follows:
(1) The Company and Holders of a majority of the Warrants shall each
appoint an independent, experienced appraiser who is a member of a
recognized professional association of business appraisers. The two
appraisers shall determine the value of shares of Common Stock at the
relevant date, assuming a sale between a willing buyer and a willing
seller, both of whom have full knowledge of the financial and other
affairs of the Company, and neither of whom is under any compulsion to
sell or to buy.
(2) If the higher of the two appraisals is not more than 20% more than
the lower of the appraisals, the current market price per share shall
be the average of the two appraisals. If the higher of the two
appraisals is 20% or more than the lower of the two appraisals, then a
third appraiser shall be appointed by the two appraisers, and if they
cannot agree on a third appraiser, the American Arbitration Association
shall appoint the third appraiser. The third appraiser, regardless of
who appoints him or her, shall have the same qualifications as the
first two appraisers.
(3) The current market price per share after the appointment of the
third appraiser shall be the average of the two appraisals that are
closest in value to each other.
(4) The fees and expenses of the appraisers shall be paid one-half by
the Company and one-half by the Holders.
(d) Consideration Received. If any shares of Common Stock shall be
issued, sold or distributed for a consideration other than cash, the amount of
the consideration other than cash received by the Company in respect thereof
shall be deemed to be the then current market value of such consideration (as
determined in accordance with Section 11(c) hereof).
(e) Deferral of Certain Adjustments. No adjustment to the Exercise
Price (including the related adjustment to the number of shares of Common Stock
purchasable upon the exercise of each Warrant) shall be required hereunder
unless such adjustment, together with other adjustments carried forward as
provided below, would result in an increase or decrease of at least one percent
of the Exercise Price; provided that any adjustments which by reason of this
paragraph (e) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. No adjustment need be made for a
change in the par value of the Common Stock. All calculations under this Section
11(e) shall be made to the nearest 1/1,000 of one cent or to the nearest 1/1000
of a share, as the case may be.
(f) Other Adjustments. In the event that at any time, as a result of an
adjustment made pursuant to this Section 11, the Holders shall become entitled
to receive any securities of the Company other than shares of Common Stock,
thereafter the number of such other securities so receivable upon exercise of
the Warrants and the Exercise Price applicable to such exercise shall be subject
to adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the shares of Common Stock
contained in this Section 11.
Section 12. Statement on Warrants. Irrespective of any adjustment in
the number or kind of shares issuable upon the exercise of the Warrants or the
Exercise Price, Warrants theretofore or thereafter issued may continue to
express the same number and kind of shares as are stated in the Warrants
initially issuable pursuant to this Agreement.
Section 13. Fractional Interest. The Company shall not be required to
issue fractional shares of Common Stock on the exercise of Warrants. If more
than one Warrant shall be presented for exercise in full at the same time by the
same Holder, the number of full shares of Common Stock which shall be issuable
upon such exercise shall be computed on the basis of the aggregate number of
shares of Common Stock acquirable on exercise of the Warrants so presented. If
any fraction of a share of Common Stock would, except for the provisions of this
Section 13, be issuable on the exercise of any Warrant (or specified portion
thereof), the Company shall direct the Transfer Agent to pay an amount in cash
calculated by it equal to (i) the then current market price per share multiplied
by such fraction computed to the nearest whole cent, less (ii) an amount equal
to the Exercise Price multiplied by such fraction computed to the nearest whole
cent. The Holders, by their acceptance of the Warrant Certificates, expressly
waive any and all rights to receive any fraction of a share of Common Stock or a
stock certificate representing a fraction of a share of Common Stock.
Section 14. Notices to Holders. Upon any adjustment of the Exercise
Price pursuant to Section 11, the Company shall promptly thereafter cause to be
given to each of the registered Holders by first-class mail, postage prepaid, a
certificate executed by the Chief Financial Officer of the Company setting forth
the Exercise Price after such adjustment and setting forth in reasonable detail
the method of calculation and the facts upon which such calculations are based
and setting forth the number of Warrant Shares (or portion thereof) issuable
after such adjustment in the Exercise Price, upon exercise of a Warrant and
payment of the adjusted Exercise Price, which certificate shall be conclusive
evidence, absent manifest error, of the correctness of the matters set forth
therein.
In case:
(a) the Company shall authorize the issuance to all holders of
shares of Common Stock of rights, options or warrants to subscribe for
or purchase shares of Common Stock or of any other subscription rights
or warrants; or
(b) the Company shall authorize the distribution to all
holders of shares of Common Stock of evidences of its indebtedness or
assets (other than cash dividends or cash distributions payable out of
consolidated earnings or earned surplus or dividends payable in shares
of Common Stock or distributions referred to in Section 11 hereof); or
(c) of any consolidation or merger to which the Company is a
party for which approval of any shareholders of the Company is required
and following which the shareholders of the Company before such
consolidation or merger no longer hold at least 50% of the outstanding
capital stock of the Company following the merger or consolidation, or
of the conveyance or transfer of all or substantially all of the
properties and assets of the Company, or of any reclassification or
change of Common Stock issuable upon exercise of the Warrants (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 a subdivision or
combination), or a tender offer or exchange offer for shares of Common
Stock, or other transaction that would result in a change in control;
or
(d) of the voluntary or involuntary dissolution, liquidation
or winding up of the Company; or
(e) the Company proposes to take any other action that would
require an adjustment of the Exercise Price or the number of Warrant
Shares pursuant to Section 11; then the Company shall cause to be given
to each of the registered Holders of the Warrants at such Holder's
address appearing on the Warrant register, at least 10 days prior to
the applicable record date hereinafter specified, or promptly in the
case of events for which there is no record date, by first-class mail,
postage prepaid, a written notice stating (i) the date as of which the
holders of record of shares of Common Stock to be entitled to receive
any such rights, options, warrants or distribution are to be
determined, or (ii) the initial expiration date set forth in any tender
offer or exchange offer for shares of Common Stock, or (iii) the date
on which any such reclassification, consolidation, merger, conveyance,
transfer, dissolution, liquidation or winding up or change of control
is expected to become effective or consummated, and the date as of
which it is expected that holders of record of shares of Common Stock
shall be entitled to exchange such shares for securities or other
property, if any, deliverable upon such reclassification,
consolidation, merger, conveyance, transfer, dissolution, liquidation
or winding up or change of control. The failure to give the notice
required by this Section 14 or any defect therein shall not affect the
legality or validity of any distribution, right, option, warrant,
consolidation, merger, conveyance, transfer, dissolution, liquidation
or winding up, or change of control or the vote upon any action.
Nothing contained in this Agreement or in any of the Warrant
Certificates shall be construed as conferring upon the Holders thereof
the right to vote or to consent or to receive notice as shareholders in
respect of the meetings of shareholders or the election of Directors of
the Company or any other matter, or any rights whatsoever as
shareholders of the Company.
Section 15. Intentionally omitted.
Section 16. Intentionally omitted.
Section 17. Notices to Company. Any notice or demand authorized by this
Agreement to be given or made by the Holder of any Warrants to or on the Company
shall be sufficiently given or made when and if deposited in the mail,
first-class or certified, postage prepaid, or delivered via Federal Express
overnight delivery or by facsimile (with confirmation of receipt), addressed
(until another address is filed in writing by the Company), as follows:
Cryocon, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Any notice pursuant to this Agreement to be given by the Company to the
Holder shall be sufficiently given when and if deposited in the mail,
first-class or certified, postage prepaid, or delivered via Federal Express
overnight delivery or by facsimile (with confirmation of receipt), addressed
(until another address is filed in writing with the Company) to:
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Section 18. Supplements and Amendments. The Company and Holder may from
time to time supplement or amend this Agreement without the approval of any
Holders of Warrants in order to cure any ambiguity or to correct or supplement
any provision contained herein which may be defective or inconsistent with any
other provision herein, or to make any other provisions in regard to matters or
questions arising hereunder which the Company and Holder may deem necessary or
desirable and which shall not in any way adversely affect the interests of the
Holders of Warrants. Any amendment or supplement to this Agreement that has a
material adverse effect on the interests of Holders shall require the written
consent of Holders representing a majority of the then outstanding Warrants
(excluding Warrants held by the Company or any of its Affiliates); provided,
however, that the consent of each Holder of a Warrant affected shall be required
for any amendment pursuant to which the Exercise Price would be increased or the
number of Warrant Shares purchasable upon exercise of Warrants would be
decreased (other than pursuant to adjustments provided for in Section 11
hereof). Holder shall be entitled to receive and shall be fully protected in
relying upon an officer's certificate and opinion of counsel as conclusive
evidence that any such amendment or supplement is authorized or permitted
hereunder, that it does or does not, as the case may be, require the written
consent of Holders to be effective hereunder, that it is not inconsistent
herewith, and that it will be valid and binding upon the Company in accordance
with its terms.
Section 19. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company shall bind and inure to the
benefit of its respective successors and assigns hereunder.
Section 20. Termination. This Agreement (other than any party's
obligations with respect to Warrants previously exercised and with respect to
indemnification) shall terminate at 4:00 p.m., Central Standard Time on the
Expiration Date.
Section 21. Governing Law. THIS AGREEMENT AND EACH WARRANT CERTIFICATE
ISSUED HEREUNDER SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE
STATE OF UTAH AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF SAID STATE, WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAWS
PRINCIPLES THEREOF.
Section 22. Benefits of This Agreement.
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(a) Nothing in this Agreement shall be construed to give to any person
other than the Company and the Holder of the Warrants any legal or equitable
right, remedy or claim under this Agreement; but this Agreement shall be for the
sole and exclusive benefit of the Company and the Holder of the Warrants from
time to time.
(b) Prior to the exercise of the Warrants, no Holder of a Warrants, as
such, shall be entitled to any rights of a stockholder of a Company, including,
without limitation, the right to receive dividends or subscription rights, the
right to vote, to consent, to exercise any preemptive right, to receive any
notice of or to participate in meetings of stockholders for the election of
directors of the Company or any other matter or to receive any notice of any
proceedings of the Company, except as may be specifically and expressly provided
for herein. The Holders of the Warrants are not entitled to share in the assets
of the Company in the event of the liquidation, dissolution or winding up of the
Company's affairs.
(c) All rights of action in respect of this Agreement are vested in the
Holders of the Warrants, and any Holder of any Warrant, without the consent of
the Holder of any other Warrant, may, on such Holder's own behalf and for such
Holder's own benefit, enforce, and may institute and maintain any suit, action
or proceeding against the Company suitable to enforce, or otherwise in respect
of, such Holder's rights hereunder, including the right to exercise, exchange or
surrender for purchase such Holder's Warrants in the manner provided in this
Agreement.
Section 23. Representations and Warranties of the Company. The Company
represents and warrants to the Holder as follows:
(a) Due Issuance and Authorization of Capital Stock. All of the
outstanding shares of capital stock of the Company have been validly issued, are
fully paid and nonassessable and, except as set forth in Schedule 23(b) hereto,
are free from preemptive rights.
(b) Organization. The Company (i) is a corporation duly organized,
validly existing and in good standing under the laws of the State of Colorado,
(ii) is duly qualified to do business as a foreign corporation and is in good
standing in each jurisdiction where the nature of the property owned or leased
by it or the nature of the business conducted by it makes such qualification
necessary, and (iii) has all requisite corporate power and authority to own or
lease and operate its assets and carry on its business as presently being
conducted.
(c) Consents. Neither the execution, delivery or performance of this
Agreement by the Company, nor the consummation by it of the obligations and
transactions contemplated hereby (including, without limitation, the issuance,
the reservation for issuance and the delivery of the Warrant Shares) requires
any consent of, authorization by, exemption from, filing with or notice to any
governmental authority or any other person.
(d) Authorization; Enforcement. The Company has all requisite corporate
power and has taken all necessary corporate action required for the due
authorization, execution, delivery and performance by the Company of this
Agreement and to consummate the transactions contemplated hereby (including,
without limitation, the issuance of the Warrant Shares). The execution, delivery
and performance by the Company of this Agreement and the consummation by the
Company of the transactions contemplated hereby and thereby, have been duly
authorized by all necessary corporate action on the part of the Company. This
Agreement has been duly executed and delivered by the Company and constitutes a
valid and binding obligation of the Company enforceable against it in accordance
with its terms.
(e) No Conflicts. The execution, delivery and performance, by the
Company of this Agreement and the consummation of the transactions contemplated
hereby (including, without limitation, the issuance and reservation for issuance
of the Warrant Shares) by the Company will not (i) result in a violation of the
Certificate of Incorporation or By-Laws, (ii) conflict with or result in the
material breach of the terms, conditions or provisions of or constitute a
default (or an event which with notice or lapse of time or both would become a
default) under, or give rise to any right of termination, acceleration or
cancellation under, any material agreement, lease, mortgage, license, indenture,
instrument or other contract to which the Company or any of its Subsidiaries is
a party, (iii) result in a violation of any law, rule, regulation, order,
judgment or decree (including, without limitation, U.S. federal and state
securities laws and regulations) applicable to the Company or any of its
Subsidiaries or by which any property or asset of the Company or any Subsidiary
is bound or affected, or (iv) result in the creation of any lien or encumbrance
upon any of their assets.
Section 24. Representations and Warranties of the Holder. Holder
represents and warrants to the Company as follows:
(a) Corporate Existence. The Holder is an entity duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation.
(b) Acknowledgment of Risks. The Holder has carefully reviewed and
understands the risks of, and other considerations relating to, this Agreement,
the Warrants and the Warrant Shares.
(c) Acquisition of Warrant Shares. Upon exercise of the Warrants,
Holder will acquire the Warrant Shares for its own account or for one or more
separate accounts maintained by it and without the view to the distribution
thereof within the meaning of the Securities Act or with any present intention
of distributing or selling the Warrant Shares except in compliance with the
Securities Act.
(d) No Registration. The Holder understands that (i) the Warrants and
the Warrant Shares (A) have not been registered under the Securities Act or any
state securities laws, (B) will be issued in reliance upon an exemption from the
registration and prospectus delivery requirements of the Securities Act, (C)
will be issued in reliance upon exemptions from the registration and prospectus
delivery requirements of state securities laws, (ii) there is not currently any
trading market for the Warrants or the Warrant Shares and there can be no
assurances that the Warrants and the Warrant Shares will be listed on any
exchange or quoted on any quotation system, and (iii) the Holder must therefore
bear the economic risk of such investment indefinitely unless a subsequent
disposition thereof is registered under the Securities Act and applicable state
securities laws or is exempt therefrom. The Holder further understands that such
exemption depends upon, among other things, the bona fide nature of the
investment intent of the Holder expressed herein. Pursuant to the foregoing, the
Holder acknowledges that any certificate representing any Warrant Shares
acquired by the Holder shall bear the restrictive legends set forth in Section
5(b).
(e) Investment Experience. The Holder, together with its advisors, has
knowledge, skill and experience in financial, business and investment matters
relating to an investment of this type and is capable of evaluating the merits
and risks of such investment and protecting the Holder's interest in connection
with the acquisition of the Warrants and any Warrant Shares. The Holder
understands that the acquisition of the Warrants and any Warrant Shares is a
speculative investment and involves substantial risks and that the Holder could
lose the Holder's entire investment in the Warrants and any Warrant Shares. To
the extent deemed necessary by the Holder, the Holder has retained, at its own
expense, and has relied upon appropriate professional advice regarding the
investment, tax and legal merits and consequences of purchasing and owning the
Warrants and any Warrant Shares. The Holder has the ability to bear the economic
risks of investment in the Company, including a complete loss of the investment,
and the Holder has no need for liquidity in such investment.
(f) Status as Accredited Investor. The Holder is an "Accredited
Investor" within the meaning of Rule 501 of Regulation D, promulgated by the
United States Securities and Exchange Commission pursuant to the Securities Act.
Section 25. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
Section 26. Superceding Prior Option Agreements. This agreement
supercedes a previous agreement between the parties for the same number of
shares executed in December, 2000.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
CRYOCON, INC.
By: /s/
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------
Title: President/CEO
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/s/
------------------
▇▇▇▇ ▇▇▇▇▇
Exhibit A
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FORM OF WARRANT CERTIFICATE
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY EVIDENCED HEREBY AND
THE SECURITIES DELIVERED UPON EXERCISE THEREOF MAY NOT BE EXERCISED, OFFERED,
SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM.
1,000,000 Shares of Common Stock Warrant Certificate No. 001
WARRANT CERTIFICATE
For the Purchase of Common Stock
of CRYOCON, INC.
1. Certificate. THIS IS TO CERTIFY THAT _________________, or its
registered assigns ("Holder"), is entitled to exercise this Warrant Certificate
to purchase from Cryocon, Inc., a Colorado corporation (the "Company"),
____________________ (________) shares of common stock, no par value per share,
of the Company (the "Common Stock"), all on the terms and conditions and
pursuant to the provisions hereinafter set forth. This Warrant Certificate is
executed pursuant to the terms of that certain Warrant Agreement of even date
herewith (the "Agreement") between the Company and the Holder. Any capitalized
terms not defined herein will have the meanings set forth in the Agreement.
2. Exercise Price. The exercise price to be paid upon the exercise of
the warrants in accordance with the terms of the Agreement, in the aggregate,
shall initially be $0.10 (the "Exercise Price"). Such Exercise Price and the
number of shares of Common Stock into which this Warrant Certificate is
exercisable are subject to adjustment from time to time as provided in the
Agreement.
3. Exercise. This Warrant Certificate may be exercised, in whole or in
part, at any time or from time to time on or after the date hereof; provided,
however, that this Warrant Certificate shall be void and all rights represented
hereby shall cease unless exercised in full on or before December 31, 2005 (the
"Expiration Date").
In order to exercise this Warrant Certificate, in whole or in part, the
Holder hereof shall deliver to the Company at its principal office, or at such
other office as shall be designated by the Company pursuant to the Agreement:
(a) written notice of Holder's election to exercise this Warrant
Certificate, in substantially the form of the Notice of Exercise attached hereto
as Annex A;
(b) payment of the Exercise Price in cash or by certified check or on a
"net basis" as set forth in Section 6 of the Agreement; and
Upon receipt thereof, the Company shall promptly execute or cause to be executed
and deliver to such Holder a certificate or certificates representing the
aggregate number of full shares of Common Stock issuable upon such exercise. The
stock certificate or certificates so delivered shall be registered in the name
of such Holder, or such other name as shall be designated in said notice
(subject to any restrictions on transfer set forth in the Agreement). If the
exercise is for less than all of the shares of Common Stock issuable as provided
in the Warrant Certificate, the Company will issue a new Warrant Certificate of
like tenor and date for the balance of such shares issuable hereunder to the
Holder.
4. Transfer. This Warrant Certificate and all options and rights
hereunder are transferable, as to all or any part of the number of shares of
Common Stock purchasable upon its exercise, in accordance with the Agreement.
5. Registration Rights. The Common Stock into which this Warrant
Certificate is exercisable is subject to registration rights as provided in the
Registration Rights Agreement.
6. Successors and Assigns. This Warrant Certificate and the rights
evidenced hereby shall inure to the benefit of and be binding upon the
successors and assigns of the Holder hereof and, shall be enforceable by any
such Holder.
7. Headings. Headings of the paragraphs in this Warrant Certificate are
for convenience and reference only and shall not, for any purpose, be deemed a
part of this Warrant Certificate.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed and issued.
DATED as of __________, _____.
CRYOCON, INC.
By: /s/
-----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Title: President/CEO
-----------------------------
ATTEST:
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
CORPORATE SEAL:
ANNEX A
-------
FORM OF NOTICE OF EXERCISE
[To be signed only upon exercise of the attached Warrant Certificate]
TO CRYOCON, INC.
The undersigned hereby irrevocably exercises the right to purchase
_______ shares of Common Stock which the undersigned is entitled to purchase by
the terms of the attached Warrant Certificate according to the conditions
thereof, and herewith
[check one]
-- makes payment of $____________ therefor; or
-- directs the Company to issue ______ shares of Common Stock, and to
withhold ______ shares of Common Stock in lieu of payment of the
Exercise Price, as described in Section 6 of the Warrant Agreement.
Please issue a certificate or certificates for such shares of Common
Stock in the following name or names and denominations:
If said number of shares shall not be all the shares issuable upon the
exercise of the attached Warrant Certificate, a new Warrant Certificate is to be
issued in the name of the undersigned for the balance remaining of such shares
less any fraction of a share paid in cash.
Dated: ____________________, ________
--------------------------------
Note: The above signature should
correspond exactly with
the name of the face of
the attached Warrant
Certificate or with the
name of the assignee
appearing in the
assignment form below.
Exhibit B
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CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR
REGISTRATION OF TRANSFER OF WARRANTS
Re: _______ Warrants to Purchase Common Stock (the "Warrants") of Cryocon,
Inc.
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This Certificate relates to ________ Warrants held in _____ book-entry
or _____ definitive form by _______________ (the "Transferor"). The Transferor:
-----------
[ ] has requested the Company by written order to exchange or
register the transfer of a Warrant or Warrant(s).
In connection with such request and in respect of each such Warrant,
the Transferor does hereby certify that the Transferor is familiar with the
Warrant Agreement relating to the above captioned Warrants and that the transfer
of each such Warrant does not require registration under the Securities Act of
1933 (the "Securities Act") because:
[ ] Each such Warrant is being acquired for the Transferor's own
account without transfer.
[ ] Each such Warrant is being transferred (i) to a "qualified
institutional buyer" (as defined in Rule 144A under the Securities Act), in
reliance on Rule 144A or (ii) pursuant to an exemption from registration in
accordance with Rule 904 under the Securities Act (and, in the case of clauses
(i) and (ii), based on an opinion of counsel and written certification if the
Company so requests).
[ ] Each such Warrant is being transferred (i) in accordance with Rule
144 under the Securities Act (and based on an opinion of counsel if the Company
so requests) or (ii) pursuant to an effective registration statement under the
Securities Act.
[ ] Each such Warrant is being transferred in reliance on and in
compliance with another exemption from the registration requirements of the
Securities Act (and based on an opinion of counsel if the Company so requests).
[INSERT NAME OF TRANSFEROR]
By:
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Name:
-------------------------------------
Title:
-------------------------------------
Date:
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