Exhibit 4.4
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THIS WARRANT AND THE SHARES OF COMMON STOCK UNDERLYING THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR UNDER APPLICABLE STATE
SECURITIES LAWS. THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THIS WARRANT UNDER THE ACT AND
APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO TOUCHSTONE APPLIED SCIENCE ASSOCIATES,
INC. THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD
PURSUANT TO THE PROVISIONS OF RULE 144 OF THE ACT.
THIS WARRANT IS SUBJECT TO THE PROVISIONS OF A SECURITIES
PURCHASE AGREEMENT, DATED AS OF SEPTEMBER 4, 1998, AND MAY NOT BE
TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT AS THEREIN
PROVIDED.
[FORM OF]
WARRANT TO ACQUIRE SHARES OF
COMMON STOCK OF
TOUCHSTONE APPLIED SCIENCE ASSOCIATES, INC.
Warrant No. __ ____________, 1998
THIS CERTIFIES THAT ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ STRATEGIC PARTNERS FUND,
L.P. (the "Holder"), for value received, or its registered
assigns, is entitled to purchase, on the terms and subject to the
conditions hereinafter set forth, from TOUCHSTONE APPLIED SCIENCE
ASSOCIATES, INC., a Delaware corporation (the "Company"), at any
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time after the Effective Date (as defined below in Section 2.3)
of this Warrant and on or before the Termination Date (as defined
below in Section 2.7) of this Warrant (the "Exercise Period"),
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that number of shares (the "Warrant Shares") of common stock, par
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value $.0001 per share, of the Company (the "Common Stock"), as
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set forth in Section 2.1 hereof. The Company issued this Warrant
with three other Warrants (each, along with this Warrant, a
"Warrant" and, collectively, the "Warrants") and a debenture (the
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"Debenture"), to the Holder pursuant to a Securities Purchase
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Agreement, dated as of September 4, 1998, by and between the
Company and the Holder (the "Securities Purchase Agreement").
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Capitalized words not defined herein shall have the meanings set
forth in the Securities Purchase Agreement.
SECTION 1
Exercise Price
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The exercise price at which this Warrant may be exercised
shall be $0.35 per share of Common Stock (the "Exercise Price"),
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subject to any adjustment pursuant to Section 3.3.
SECTION 2
Exercise of Warrant, Etc.
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2.1 Number of Shares for Which Warrant is Exercisable.
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This Warrant shall be exercisable to purchase [________] shares
of Common Stock, which represents [______] percent (__%) of the
Company's issued and outstanding capital stock on a fully diluted
basis at the date of issuance, subject to any adjustment pursuant
to Section 3.3.
2.2 Procedure for Exercise of Warrant. The Warrant may be
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exercised in whole or in part during the Exercise Period by
surrendering this Warrant, with the purchase form provided for
herein duly executed by the Holder or by the Holder's duly
authorized attorney-in-fact, at the principal office of the
Company or at such other office or agency in the United States as
the Company may designate by notice in writing to the Holder
accompanied by payment in full, in cash, bank cashier's check or
certified check payable to the order of the Company, in an amount
equal to the product of (i) the Exercise Price multiplied by (ii)
the number of Warrant Shares being purchased. In addition to
payments of the Exercise Price by cash or said checks, payment of
the Exercise Price with respect to the Warrant(s) being exercised
may be made, at the option of the Holder, by the reduction in the
principal amount of the Debenture issued to the Holder pursuant
to the Securities Purchase Agreement (or forgiveness of any
accrued and unpaid interest thereon, even during a period in
which an Event of Default (as defined in the Securities Purchase
Agreement) has occurred and is continuing under such Debenture,
in an amount equal to the Exercise Price with respect to the
number of Warrant Shares being purchased; and in such a case,
this Warrant shall be accompanied by said Debenture (with the
purchase form duly executed) which shall be substituted and
replaced by a new Debenture identical in form and content to the
original Debenture except that principal amount shall be
appropriately reduced to reflect the reduction in the principal
amount applicable to the payment of the Exercise Price with
respect to the Warrant being exercised. If fewer than all of the
Warrant Shares are being exercised, the Company shall, upon
exercise prior to the end of the Expiration Period, execute and
deliver to the Holder a new certificate (dated the date hereof)
evidencing the balance of the Warrant Shares that remain
exercisable.
2.3 Effective Date; Conversion.
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(a) The "Effective Date" of this Warrant shall be the
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earlier of:
(i) [the date hereof / the eighteen (18)
month anniversary date of the Closing Date]; or
(ii) upon the occurrence or existence of an Event
of Default (as defined in the Securities Purchase
Agreement).
(b) Beginning on the Effective Date, this Warrant
shall immediately become exercisable for that number of
shares of Common Stock issuable upon exercise of this
Warrant (subject to adjustment under Section 3.3) and this
Warrant shall remain exercisable for such number of shares
(subject to adjustment under Section 3.3) until the
Termination Date.
(c) If prior to the Effective Date, the Company
satisfies all obligations under the Securities Purchase
Agreement and the Debenture (including without limitation
paying in full all principal and interest thereunder), this
Warrant shall terminate and be null and void AB INITIO.
Satisfaction of all obligations under the Debenture and
Securities Purchase Agreement by the Company on or after the
Effective Date shall not affect this Warrant, which shall
remain in full force and effect until the Termination Date
2.4 Transfer Restriction Legend. Each certificate for
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Warrant Shares initially issued upon exercise of this Warrant,
unless at the time of exercise such Warrant Shares are registered
under the Act, shall bear the following legend (and any
additional legend required by any securities exchange upon which
such Warrant Shares may, at the time of such exercise, be listed)
on the face thereof:
"These securities have not been registered under the
Securities Act of 1933, as amended, or under any state
securities laws and may be offered, sold or transferred
only if registered pursuant to the provisions of such
laws, or if in the opinion of counsel satisfactory to
the Company, an exemption from such registration is
available."
2.5 Acknowledgment of Continuing Obligation. The Company
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will, if the Holder exercises this Warrant in part, upon request
of the Holder, acknowledge in writing the Company's continuing
obligation to the Holder in respect of any rights to which the
Holder shall continue to be entitled after such exercise in
accordance with this Warrant, provided, that the failure of the
Holder to make any such request shall not affect the continuing
obligation of the Company to the Holder in respect of such
rights.
2.6 Termination of Warrant. Unless the parties otherwise
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agree in writing to extend or modify the Exercise Period, this
Warrant, or the unexercised portion of this Warrant, shall
terminate and be null and void on the date five years from the
Effective Date (the "Termination Date").
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SECTION 3
Ownership of this Warrant
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3.1 Deemed Holder. The Company may deem and treat the
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person in whose name this Warrant is registered as the Holder and
owner hereof (notwithstanding any notations of ownership or
writing hereon made by anyone other than the Company) for all
purposes and shall not be affected by any notice to the contrary,
until presentation of this Warrant for registration of transfer
as provided in this Section 3.
3.2 Exchange, Transfer and Replacement. This Warrant is
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non-detachable from the Debenture and may not be transferred,
assigned, sold, pledged or otherwise hypothecated ("Transferred")
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except with the Debenture, and if so Transferred, then only as
permitted under the terms and conditions of the Debenture and the
Securities Purchase Agreement. This Warrant and all rights
hereunder are transferable in whole or in part upon the books of
the Company by the Holder in person or by duly authorized
attorney, and a new Warrant shall be made and delivered by the
Company, of the same tenor as this Warrant but registered in the
name of the transferee, upon surrender of this Warrant duly
endorsed at said office or agency of the Company. Upon receipt
by the Company of evidence reasonably satisfactory to it of the
loss, theft, destruction or mutilation of this Warrant, and, in
case of loss, theft or destruction, or indemnity or security
reasonably satisfactory to it, and upon surrender and
cancellation of this Warrant, if mutilated, the Company will make
and deliver a new Warrant of like tenor, in lieu of this Warrant,
provided, however, that if the Holder of this Warrant is the
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original Holder, an affidavit of lost Warrant shall be sufficient
for all purposes of this Section 3.2. This Warrant shall be
promptly canceled by the Company upon the surrender hereof in
connection with any exchange, transfer or replacement. The
Company shall pay all reasonable expenses, taxes (other than
stock transfer taxes and income taxes) and other charges payable
by it in connection with the preparation, execution and delivery
of Warrant Shares pursuant to this Section 3.2.
3.3 Antidilution.
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(a) If at any time while all or any portion of this
Warrant remains outstanding all or any portion of this
Warrant shall be exercised subsequent to (i) any sales of
shares of Common Stock of the Company at a price per share
less than the Exercise Price per share then applicable to
this Warrant, or (ii) any issuance of any security
convertible into shares of Common Stock of the Company with
a conversion price per share less than the Exercise Price
per share then applicable to this Warrant, or (iii) any
issuance of any option, warrant or other right to purchase
shares of Common Stock of the Company at any exercise price
per share less than the Exercise Price per share then
applicable to this Warrant (except, in each case, pursuant
to an employee or director stock option plan or similar
compensation plan approved by the Board of Directors); then
in any and every such event the Exercise Price per share for
this Warrant shall be reduced and shall be equal to such
lower sales, conversion or exercise price per share.
(b) If all or any portion of this Warrant shall be
exercised subsequent to any stock dividend, split-up,
recapitalization, merger, consolidation, combination or
exchange of shares, reorganization or liquidation of the
Company occurring after the date hereof, as a result of
which such shares of any class shall be issued in respect of
outstanding shares of Common Stock of the Company (or shall
be issuable in respect of securities convertible into shares
of Common Stock) or upon exercise of rights (other than this
Warrant) to purchase shares of Common Stock or shares of
such Common Stock shall be changed into the same or a
different number of shares of the same or another class or
classes, the Holder exercising this Warrant shall receive
the aggregate number and class of shares which such Holder
would have received if this Warrant had been exercised
immediately before such stock dividend, split-up,
recapitalization, merger, consolidation, combination or
exchange of shares, reorganization or liquidation.
SECTION 4
Special Agreements of the Company
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The Company covenants and agrees that:
4.1 The Company will reserve and set apart and have at all
times, free from preemptive rights, a number of shares of
authorized but unissued Common Stock deliverable upon the
exercise of this Warrant or of any other rights or privileges
provided for herein sufficient to enable the Company at any time
to fulfill all its obligations hereunder.
4.2 This Warrant shall be binding upon any corporation or
entity succeeding to the Company by merger, consolidation or
acquisition of all or substantially all of the Company's assets.
SECTION 5
Notices
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Any notice or other document required or permitted to be
given or delivered to the Holder or the Company shall be
delivered, or sent by certified or registered mail, to the Holder
or the Company at the address as set forth in the Securities
Purchase Agreement.
SECTION 6
Governing Law
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This Warrant shall be governed by, and construed and
enforced in accordance with, the internal laws of the State of
New York, without giving effect to its conflicts of laws
provisions.
SECTION 7
Assignment
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Notwithstanding any provision of this Warrant which may be
construed to the contrary, this Warrant and any rights hereunder
shall not be assignable by the Holder except in accordance with
the provisions governing assignments hereof set forth in the
Securities Purchase Agreement and any attempt by the Holder to
assign this Warrant or any rights hereunder other than in
accordance therewith shall be void and of no force and effect.
This Warrant is non-detachable from the Debenture and may not be
transferred except with the Debenture.
[Balance of Page Left Blank Intentionally -- Signature Page
Follows]
IN WITNESS WHEREOF, the Company has caused this Warrant to
be signed by its duly authorized officer under its corporate
seal, attested by its duly authorized officer, and to be dated as
of the date first hereinabove set forth.
TOUCHSTONE APPLIED SCIENCE ASSOCIATES, INC.
By: _____________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President and Chief Executive Officer
ATTEST:
______________________________ [SEAL]
Name:
Title: Secretary
ASSIGNMENT
TO BE EXECUTED BY THE REGISTERED HOLDER IF IT DESIRES AND IS
PERMITTED TO TRANSFER THE WARRANT OF
TOUCHSTONE APPLIED SCIENCE ASSOCIATES, INC.
FOR VALUE RECEIVED ___________________________________
hereby sells, assigns and transfers unto
__________________________ the right to purchase [______%] of the
number of shares of Common Stock covered by the within Warrant,
and does hereby irrevocably constitute and appoint
__________________________________________________ Attorney to
transfer the said Warrant on the books of the Company (as defined
in said Warrant) with full power of substitution.
The undersigned represents and warrants to the Company that
this assignment has been effected in compliance with all
applicable provisions of said Warrant and any applicable
provisions of the Securities Purchase Agreement referred to in
such Warrant.
Signature: __________________________(SEAL)
Address: ________________________________
Dated: ___________________199__
In the presence of
______________________________ By: ___________________________________
NOTICE
The signature to the foregoing Assignment must correspond to
the name as written upon the face of the within Warrant in every
particular, without alteration or enlargement or any change
whatsoever.
WARRANT CERTIFICATE
TO BE EXECUTED BY THE REGISTERED HOLDER
IF IT DESIRES TO EXERCISE THE WARRANT OF
TOUCHSTONE APPLIED SCIENCE ASSOCIATES, INC.
The undersigned hereby exercises the right to purchase
shares of Common Stock obtainable by exercise of [_____%] of the
within Warrant, according to the conditions thereof and makes
payment of the Exercise Price for such shares in full by the
enclosed payment and/or by reduction in the principal amount of
the Debenture (as defined in the Warrant) as more specifically
set forth below:
Signature: __________________________(SEAL)
Address: ________________________________