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AQUAGENIX, INC
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WARRANT AGREEMENT
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DATED AS OF OCTOBER 15, 1996
100,000 WARRANTS TO PURCHASE COMMON STOCK
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TABLE OF CONTENTS
(NOT PART OF AGREEMENT)
Page
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1. FORM, EXECUTION AND TRANSFER OF WARRANT CERTIFICATES.............. 1
1.1 Form of Warrant Certificates................................ 1
1.2 Execution of Warrant Certificates; Registration Books....... 1
1.3 Transfer, Split Up, Combination and Exchange of Warrant
Certificates; Lost or Stolen Warrant Certificates........... 2
1.4 Subsequent Issuance of Warrant Certificates................. 3
1.5 Special Agreements of Warrant Certificate Holders........... 3
2. EXERCISE OF WARRANTS; PAYMENT OF PURCHASE PRICE................... 3
2.1 Exercise of Warrants........................................ 3
2.2 Issuance of Common Stock.................................... 4
2.3 Unexercised Warrants........................................ 4
2.4 Cancellation and Destruction of Warrant Certificates........ 4
2.5 Shares not Registered....................................... 4
3. SPECIAL AGREEMENTS OF THE COMPANY................................. 5
3.1 Reservation of Common Stock................................. 5
3.2 Common Stock To Be Duly Authorized and Issued, Fully Paid and
Nonassessable............................................... 5
3.3 Transfer Taxes.............................................. 5
3.4 Common Stock Record Date.................................... 6
3.5 Rights in Respect of Common Stock........................... 6
3.6 Right to Receive Consideration Upon Dividend or Distribution. 6
3.7 Private Placement Number; CUSIP Number...................... 8
3.8 Right of Action............................................. 8
3.9 Survival.................................................... 8
4. ADJUSTMENTS....................................................... 9
4.1 Mechanical Adjustments...................................... 9
4.2 Fractional Shares........................................... 13
4.3 Additional Agreements of the Company........................ 13
5. FINANCIAL AND OTHER INFORMATION................................... 13
6. REGISTRATION RIGHTS............................................... 13
6.1 Incidental Registration..................................... 13
6.3 Preparation; Reasonable Investigation....................... 18
6.4 Registration Expenses....................................... 18
6.5 Rights of Requesting Holders................................ 19
6.6 Indemnification; Contribution............................... 19
6.7 Holdback Agreements; Registration Rights to Others.......... 21
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6.9 Availability of Information................................. 22
7. INTERPRETATION OF THIS AGREEMENT.................................. 22
7.2 Descriptive Headings........................................ 28
7.3 Governing Law............................................... 28
8. MISCELLANEOUS..................................................... 28
8.1 Expenses.................................................... 28
8.2 Amendment and Waiver........................................ 29
8.3 No Rights or Liabilities as Stockholder..................... 30
8.4 Directly or Indirectly...................................... 30
8.5 Survival of Representations and Warranties; Entire Agreement.30
8.6 Successors and Assigns...................................... 30
8.7 Notices..................................................... 30
8.8 Severability................................................ 31
8.9 Counterparts................................................ 31
8.10 Jurisdiction; Jury Trial.................................... 31
8.11. Expiration.................................................. 32
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WARRANT AGREEMENT
WARRANT AGREEMENT ("Agreement"), dated as of October 15, 1996, between
AQUAGENIX, INC. (together with its successors and assigns, the "Company"), a
Delaware corporation, ▇▇▇▇▇▇/▇▇▇▇▇▇▇ INCORPORATED, a California corporation
("DRI") and AQUAGENIX WARRANT HOLDINGS II, a general partnership (hereinafter
referred to as the "Warrant Holder").
RECITALS:
WHEREAS, DRI has provided financial consulting services to the Company
pursuant to a letter agreement dated October 1, 1996 between DRI and the Company
and the Warrants ("Warrants") issued pursuant to this Warrant Agreement are
being issued by the Company as consideration for such services; and
WHEREAS, DRI has assigned its right, title and interest in and to the
Warrants to the Warrant Holder; and
WHEREAS, the Company proposes to issue, effective October 15, 1996, to the
Warrant Holder, assignee of DRI, a warrant (the "Warrant" or "Warrants") to
purchase One Hundred Thousand (100,000) shares ("the Shares") of Common Stock of
the Company, par value $.01 per share (the "Common Stock").
AGREEMENT:
NOW, THEREFORE, in consideration of the premises and the mutual agreements
set forth herein, the parties to this Agreement hereby agree as follows:
1. FORM, EXECUTION AND TRANSFER OF WARRANT CERTIFICATES.
1.1 FORM OF WARRANT CERTIFICATES.
The warrant certificates ("Warrant Certificates") evidencing the Warrants
and the forms of assignment and of election to purchase shares are substantially
in the form of Attachment A to this Agreement.
1.2 EXECUTION OF WARRANT CERTIFICATES; REGISTRATION BOOKS.
(A) EXECUTION OF WARRANT CERTIFICATES. The Warrant Certificates
shall be executed on behalf of the Company by an officer of the Company
authorized by the Board of Directors. In case the officer of the Company who
shall have signed any Warrant Certificate shall cease to be such an officer of
the Company before issuance and delivery by the Company of such Warrant
Certificate, such Warrant Certificate nevertheless may be issued and delivered
with the same force and effect s though the individual who signed such Warrant
Certificate had not ceased to be such an officer of the Company, and any Warrant
Certificate may be signed on behalf of the Company by any individual who, at the
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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 Agreement any such individual was not such an officer.
(B) REGISTRATION BOOKS. The Company will keep or cause to be kept at
its office maintained at the address of the Company set forth in Section 8.7, or
at such other office of the Company int he United States of America of which the
Company shall have given notice to each holder of Warrant Certificates, books
for registration and transfer of the Warrant Certificates issued hereunder. Such
books shall show the names and addresses of the respective holders of the
Warrant Certificates, the registration number and the number of Warrants
evidenced on its face by each of the Warrant Certificates and the date of each
of the Warrant Certificates.
1.3 TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF WARRANT CERTIFICATES;
LOST OR STOLEN WARRANT CERTIFICATES.
(A) TRANSFER, SPLIT UP, ETC. Any Warrant Certificate, with or
without other Warrant Certificates, may be transferred, split up, combined or
exchanged for another Warrant Certificate or Warrant Certificates, entitling the
registered holder or transferee thereof to purchase a like number of shares of
Common Stock as the Warrant Certificate or Warrant Certificates surrendered then
entitled such registered holder to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Warrant Certificate shall make such
request in writing delivered to the Company, and shall surrender the Warrant
Certificate or Warrant Certificates to be transferred, split up, combined or
exchanged at the office of the Company referred to in Section 1.2(b), whereupon
the Company shall deliver promptly to the Person entitled thereto a Warrant
Certificate or Warrant Certificates, as the case may be, as so requested.
(B) LOSS, THEFT, ETC. Upon receipt by the Company of evidence
reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of any Warrant Certificate (which evidence shall be,
in the case of an institutional investor, notice from such institutional
investor of such ownership (or of ownership by such institutional investor's
nominee) and such loss, theft, destruction or mutilation), and:
(i) in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to the Company; provided, however, that if
the holder of such Warrant Certificate is an institutional investor
or a nominee of an institutional investor, such holder's own
unsecured agreement of indemnity shall be deemed to be satisfactory;
or
(ii) in the case of mutilation, upon surrender and cancellation
thereof;
the Company at its own expense will execute and deliver, in lieu thereof, a new
Warrant Certificate, dated the date of such lost, stolen, destroyed or mutilated
Warrant Certificate and of like tenor.
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1.4 SUBSEQUENT ISSUANCE OF WARRANT CERTIFICATES.
Subsequent to the original issuance, no Warrant Certificates shall be
issued, except:
(A) Warrant Certificates issued upon any transfer, combination,
split up or exchange of Warrants pursuant to Section 1.3(a);
(B) Warrant Certificates issued in replacement of mutilated,
destroyed, lost or stolen Warrant Certificates pursuant to Section 1.3(b); and
(C) Warrant Certificates issued pursuant to Section 2.3 upon the
partial exercise of any Warrant Certificate to evidence the unexercised portion
of such Warrant Certificate.
1.5 SPECIAL AGREEMENTS OF WARRANT CERTIFICATE HOLDERS.
Every holder of a Warrant Certificate by accepting the same consents and
agrees with the Company and with every other holder of a Warrant Certificate
that:
(A) the Warrant Certificates are transferable only on the registry
books of the Company if surrendered at the office of the Company referred to in
Section 1.3(b), duly endorsed or accompanied by an instrument of transfer (in
the form attached hereto); and
(B) the Company may deem and treat the Person in whose name each
Warrant Certificate is registered as the absolute owner thereof and of the
Warrants evidenced thereby (notwithstanding any notations of ownership or
writing on the Warrant Certificates made by anyone other than the Company) for
all purposes whatsoever, and the Company shall not be affected by any notice to
the contrary.
2. EXERCISE OF WARRANTS; PAYMENT OF PURCHASE PRICE.
2.1 EXERCISE OF WARRANTS.
At any time and from time to time on or prior to the Expiration Date, the
holder of any Warrant Certificate may exercise the Warrants evidenced thereby,
in whole or in part, by surrender of such Warrant Certificate, with an election
to purchase (a form of which is attached to each Warrant Certificate) attached
thereto duly executed, to the Company at its principal office, together with
payment of the Purchase Price for each share of Common Stock with respect to
which the Warrants are then being exercised. Such Purchase Price shall be
payable:
(A) in cash or by certified or official bank check payable to the
order of the Company or by wire transfer of immediately available funds to the
account of the Company; or
(B) at any time before the Expiration Date, the holder may, at its
option, exchange the Warrant, in whole or in part ("Warrant Exchange"), into the
number of shares of Common Stock determined in accordance with this Section
2.1(b), by surrendering the Warrant at the principal office of the Company,
accompanied by a notice stating such holder's intent to effect such exchange,
the number of shares of Common Stock to be exchanged and the date on which the
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holder requests that such Warrant Exchange occur (the "Notice of Exchange"). The
Warrant Exchange shall take place on the date specified in the Notice of
Exchange or, if later, the date the Notice of Exchange is received by the
Company (the "Exchange Date"). Certificates for the shares of Common Stock
issuable upon such Warrant Exchange and, if applicable, a new warrant of like
tenor evidencing the balance of the shares of Common Stock remaining subject to
this Warrant shall be issued as of the Exchange Date and delivered to the holder
within three (3) days following the Exchange Date. In connection with any
Warrant Exchange, the Warrant shall represent the right to subscribe for and
acquire without any cash outlay the number of shares of Common Stock (rounded to
the next highest integer) equal to (A) the number of shares of Common Stock
specified by the holder in its Notice of Exchange (the "Total Share Number")
less (B) the number of shares of Common Stock equal to the quotient obtained by
dividing (i) the product of the Total Share Number and the existing Exercise
Price by (ii) the Market Price of a share of Common Stock.
2.2 ISSUANCE OF COMMON STOCK.
Upon timely receipt of a Warrant Certificate, with the form of election to
purchase duly executed, accompanied by payment of the Purchase Price for each of
the shares to be purchased in the manner provided in Section 2.1 and an amount
equal to any applicable transfer tax (if not payable by the Company as provided
in Section 3.3), the Company shall thereupon promptly cause certificates
representing the number of whole shares of Common Stock then being purchased to
be delivered to or upon the order of the registered holder of such Warrant
Certificate, registered in such name or names as may be designated by such
holder, and, promptly after such receipt deliver the cash, if any, to be paid in
lieu of fractional shares pursuant to Section 4 to or upon the order of the
registered holder of such Warrant Certificate.
2.3 UNEXERCISED WARRANTS.
In case the registered holder of any Warrant Certificate shall exercise
less than all the Warrants evidenced thereby, a new Warrant Certificate
evidencing Warrants equal in number to the number of Warrants remaining
unexercised shall be issued by the Company to the registered holder of such
Warrant Certificate or to its duly authorized assigns.
2.4 CANCELLATION AND DESTRUCTION OF WARRANT CERTIFICATES.
All Warrant Certificates surrendered to the Company for the purpose of
exercise, exchange, substitution or transfer shall be cancelled by it, and no
Warrant Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Agreement. The Company shall cancel
and retire any other Warrant Certificates purchased or acquired by the Company
otherwise than upon the exercise thereof.
2.5 SHARES NOT REGISTERED.
The Purchaser acknowledges that the shares of Common Stock issuable upon
exercise of the Warrants have not been registered under the Securities Act and
may not be transferred, sold or otherwise disposed of unless subsequently
registered under the Securities Act or an exemption from such registration is
available.
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3. SPECIAL AGREEMENTS OF THE COMPANY.
3.1 RESERVATION OF COMMON STOCK.
The Company covenants and agrees that it will at all times cause to be
reserved and kept available out of its authorized and unissued shares of Common
Stock such number of shares of Common Stock as will be sufficient to permit the
exercise in full of all Warrants issued hereunder and all other rights, warrants
or options exercisable into, and the conversion of all Securities convertible
into, Common Stock.
3.2 COMMON STOCK TO BE DULY AUTHORIZED AND ISSUED, FULLY PAID AND
NONASSESSABLE.
The Company covenants and agrees that it will take all such action as may
be necessary to ensure that all shares of Common Stock delivered upon the
exercise of any Warrants, at the time of delivery of the certificates
representing such shares, shall be duly and validly authorized and issued and
fully paid and nonassessable, free of any preemptive rights and free of any Lien
created by, or arising out of actions of, the Company, any Subsidiary or any
Affiliate.
3.3 TRANSFER TAXES.
The Company covenants and agrees that it will pay when due and payable any
and all federal and state transfer taxes and charges that may be payable in
respect of the initial issuance or delivery of:
(A) each Warrant Certificate;
(B) each Warrant Certificate issued in exchange for any other
Warrant Certificate pursuant to Section 1.4(a) or Section 2.3; and
(C) each share of Common Stock issued upon the exercise of any
Warrant.
The Company shall not, however, be required to-
(i) pay any transfer tax that may be payable in respect of the
transfer or delivery of Warrant Certificates or the issuance or
delivery of certificates for shares of Common Stock in a name other
than that of the registered holder of the Warrant Certificate
evidencing any Warrant surrendered for exercise (any such tax being
payable by the holder of such Warrant Certificate at the time of
surrender); or
(ii) issue or deliver any such certificates referred to in the
foregoing clause (i) for shares of Common Stock upon the exercise of
any Warrant until any such tax referred to in the foregoing clause
(i) shall have been paid.
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3.4 COMMON STOCK RECORD DATE.
Except in the event the Warrants are exercised pursuant to Section 2.1(b),
each Person in whose name any certificate for shares of Common Stock is issued
upon the exercise of Warrants shall for all purposes be deemed to have become
the holder of record of the Common Stock represented thereby on, and such
certificate shall be dated, the date upon which the Warrant Certificate
evidencing such Warrants was duly surrendered with an election to purchase
attached thereto duly executed and payment of the aggregate Purchase Price (and
any applicable transfer taxes, if payable by such Person) was made. In the event
the Warrants are exercised pursuant to Section 2.1(b), the holder thereof shall
for all purposes be deemed to have become the holder of record of the Common
Stock represented thereby on the date the Warrants were issued.
3.5 RIGHTS IN RESPECT OF COMMON STOCK.
Prior to the exercise of the Warrants evidenced thereby, the holder of a
Warrant Certificate shall not be entitled to any rights of a stockholder in the
Company with respect to shares for which the Warrants shall be exercisable,
including, without limitation, the right to vote in respect of any matter upon
which the holders of Common Stock may vote or the right to receive dividends or
other distributions (but the holders of the Warrants shall have the rights set
forth in Section 3.6 in respect of the declaration or payment of any dividend or
distribution), and shall not be entitled to receive any notice of any
proceedings of the Company.
3.6 RIGHT TO RECEIVE CONSIDERATION UPON DIVIDEND OR DISTRIBUTION.
(A) RIGHT TO PAYMENT IN RESPECT OF CASH DIVIDENDS. In the event that
the Company shall pay any dividend in cash in respect of its Common Stock, the
Company shall, on the same date such dividend is paid, pay to each Person who
was a registered holder of Warrants on the record date for the payment of such
dividend on the Common Stock, an amount equal to the product of:
(i) the aggregate number of shares of Common Stock into which
all Warrants then held by such holder are exercisable on the date of
payment; times
(ii) the amount per share of Common Stock of such dividend.
(B) RIGHTS IN RESPECT OF OTHER DISTRIBUTIONS. In the event that the
Company shall distribute to holders of shares of Common Stock (including,
without limitation, any such distribution made in connection with a
consolidation or merger in which the Company is the continuing corporation), any
Property (other than cash, shares of Common Stock or Rights) including, without
limitation, shares of stock other than Common Stock or evidences of
indebtedness, then, in each case, the Company shall, on the same date such
distribution is made, deliver to each Person who was a registered holder of
Warrants on the record date for the payment of such distribution on the Common
Stock, at the election of such holder, either:
(i) that amount of such Property which a holder of such number
of shares of Common Stock as the holder of a Warrant would have had
the right to acquire upon the exercise of such Warrant immediately
prior to such consolidation, merger, sale or conveyance; or
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(ii) the value, in cash, of the Property which such holder
would be entitled to receive pursuant to the foregoing clause (i),
as established by the Valuation Agent.
(C) NOTICE OF DECLARATION OF DIVIDEND OR DISTRIBUTION. In the event
that the Company shall declare any dividend or make any distribution of any
Property upon its Common Stock, the Company shall give written notice of such
declaration to each holder of Warrants within five (5) days after the
declaration of such dividend (but in no event later than thirty (30) days prior
to the making of such distribution), which notice shall state:
(i) that the Company has declared a dividend or distribution
in respect of its Common Stock;
(ii) the amount of cash or other consideration per share of
such dividend or distribution and, in the case of a distribution
other than in cash, a description of the Property to be so
distributed if the holder were to elect the option set forth in
Section 3.6(b)(i) and the amount of cash to be paid to such holder
should the holder elect the option set forth in Section 3.6(b)(ii);
(iii) the record date for the determination of the registered
holders of Common Stock for the purpose of payment of such dividend
or distribution;
(iv) a description of the right described in Section 3.6(a)
or Section 3.6(b), as the case may be;
(v) the number of shares of Common Stock into which each
Warrant is then exercisable; and
(vi) in the case of a distribution pursuant to Section 3.6(b):
(A) a statement describing the election of the holder
to be made pursuant thereto;
(B) a statement describing the manner in which the
holder may make the election provided for in
Section 3.6(b);
(C) a statement that if a holder fails to make an
election pursuant to Section 3.6(b), the holder
shall be deemed to have made the election set
forth in Section 3.6(b)(ii); and
(D) a copy of a report of the Valuation Agent relating
to the value of the Property to be so distributed,
reflecting the calculations of the respective
amounts set forth in Section 3.6(c)(ii).
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In the event of a distribution pursuant to Section 3.6(b), any holder may make
the election set forth therein by notifying the Company in writing of whether it
is making the election pursuant to Section 3.6(b)(i) or the election pursuant to
Section 3.6(b)(ii) not later than five (5) days prior to the date fixed for
making such distribution. In the event that any holder fails to make an election
pursuant to Section 3.6(b), the holder shall be deemed to have made the election
set forth in Section 3.6(b)(ii).
(D) DIVIDENDS PAID PARTLY IN CASH. For purposes of this Section 3.6,
any dividend declared or paid partly in cash and partly in Common Stock, other
Securities or other Property shall be deemed to be:
(i) a dividend of cash subject to the provisions of Section
3.6(a) in the amount payable in cash;
(ii) a dividend of Property subject to the provisions of
Section 3.6(b) to the extent payable in Property;
(iii) a dividend of Common Stock subject to the provisions of
Section 4.1(a) to the extent payable in Common Stock; and
(iv) an issuance, for no consideration, of Rights subject to
the provisions of Section 4.1(c) to the extent payable in Rights.
3.7 PRIVATE PLACEMENT NUMBER; CUSIP NUMBER.
The Company covenants and agrees to maintain a private placement number in
respect of the Warrants and a CUSIP number (so long as the Common Stock is then
listed on a national securities exchange or admitted to trading on any national
securities market (including, without limitation, the NASDAQ National Market
System)) or a private placement number (in the event that the Common Stock is
not then so listed) in respect of the Common Stock, in each case, from the CUSIP
Service Bureau of Standard & Poor's, a division of ▇▇▇▇▇▇-▇▇▇▇, Inc.
3.8 RIGHT OF ACTION.
All rights of action in respect of the Warrants are vested in the
respective registered holders of the Warrant Certificates, and any registered
holder of any Warrant Certificate, without the consent of the holder of any
other Warrant Certificate, may, in its own behalf and for its own benefit,
enforce, and may institute and maintain any suit, action or proceeding against
the Company to enforce, or otherwise act in respect of, its right to exercise
the Warrants evidenced by such Warrant Certificate in the manner provided in
such Warrant Certificate and in this Agreement.
3.9 SURVIVAL.
The agreements of the Company contained in this Section 3 (other than
those set forth in Sections 3.1, 3.6 and 3.7) shall survive the exercise of and
the expiration of the Warrants.
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4. ADJUSTMENTS
4.1 MECHANICAL ADJUSTMENTS.
The number of shares of Common Stock purchasable upon the exercise of each
Warrant, and the Purchase Price, shall be subject to adjustment as follows:
(A) STOCK DIVIDENDS, SUBDIVISIONS AND COMBINATIONS. In the event
that the Company shall, on or after the date hereof:
(i) pay a dividend in shares of Additional Common Stock or
make a distribution in shares of Additional Common Stock;
(ii) reclassify by subdivision its outstanding shares of
Common Stock into a greater number of shares; or
(iii) reclassify by combination its outstanding shares of
Common Stock into a smaller number of shares;
then, and in each such case, the Purchase Price in effect at the time of the
record date for such dividend or of the effective date of such subdivision or
combination shall be adjusted to that price determined by multiplying the
Purchase Price in effect immediately prior to such event by the quotient of:
(A) the total number of outstanding shares of Common
Stock immediately prior to such event; divided by
(B) the total number of outstanding shares of Common
Stock immediately after such event.
An adjustment made pursuant to this Section 4.1 (a) shall become effective on
the effective date of such event.
(B) DISTRIBUTIONS OF PROPERTY. In the event that the Company shall
make any dividend or distribution in cash or other Property (other than Common
Stock ) in respect of its Common Stock, no adjustment to the Purchase Price or
the number of shares issuable upon exercise of a Warrant shall be made, but the
holders of the Warrants instead shall have the rights set forth in Section 3.6
with respect to such dividend or distribution.
(C) ISSUANCES OF COMMON STOCK AND OTHER SECURITIES. In the event
that the Company shall issue or sell shares of Additional Common Stock or Rights
(other than Excluded Securities) at a Consideration Per Share lower than the
Reference Price in effect on the date of such issuance or sale or if the Company
should amend any provisions of any Rights such as to reduce the consideration
per share applicable thereto, then the Purchase Price in effect immediately
after such event shall be adjusted by multiplying the Purchase Price in effect
immediately prior to such event by the quotient of:
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(i) the sum of:
(A) the number of shares of Common Stock outstanding
immediately prior to such event; plus
(B) the quotient of (I) the Aggregate Consideration
Receivable, divided by (Il) the Reference Price,
in each case immediately prior to such event;
divided by
(ii) the sum of:
(A) the number of shares of Common Stock outstanding
immediately prior to such event; plus
(B) the number of shares of Additional Common Stock so
issued or sold (or then issuable pursuant to such
Rights).
In the event that the Company shall issue and sell shares of Common Stock or
Rights for a consideration consisting, in whole or in part, of Property other
than cash or its equivalent, then in determining the "Aggregate Consideration
Receivable," the Board of Directors shall determine, in good faith and on a
reasonable basis, the fair value of such Property, and such determination, If so
made, shall be binding upon all holders of Warrants.
(D) CONSOLIDATION; MERGER; SALE; RECLASSIFICATION. In the event
that there is:
(i) any consolidation of the Company with, or merger of the
Company with or into, another corporation (other than a merger in
which the Company is the surviving corporation and that does not
result in any reclassification of shares of Common Stock outstanding
immediately prior to such merger);
(ii) any sale or conveyance to another corporation of the
Property of the Company substantially as an entirety; or
(iii) any reclassification of the Common Stock that results in
the issuance of other Securities of the Company;
then, in each such case, lawful provision shall be made as a part of the terms
of such transaction so that the holders of Warrants shall thereafter have the
right to purchase the number and kind of shares of stock, other Securities,
cash, Property and rights receivable upon such consolidation, merger, sale,
conveyance or reclassification by a holder of such number of shares of Common
Stock as the holder of a Warrant would have had the right to acquire upon the
exercise of such Warrant immediately prior to such consolidation, merger, sale
or conveyance, at the Purchase Price then in effect.
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(E) DE MINIMIS CHANGES IN PURCHASE PRICE. No adjustment in the
Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least one percent (1 %) in the Purchase Price;
provided that any adjustments that, at the time of the calculation thereof, are
less than one percent (1%) of the Purchase Price at such time and by reason of
this Section 4.1 (e) are not required to be made at such time shall be carried
forward and added to any subsequent adjustment or adjustments for purposes of
determining whether such subsequent adjustment or adjustments, as so
supplemented, exceed the one percent (1 %) amount set forth in this Section
4.1(e) and, if any such subsequent adjustment, as so supplemented or otherwise,
should exceed such one percent (1 %) amount, all adjustments deferred prior
thereto and not previously made shall then be made. In any case all such
adjustments being carried forward pursuant to this Section 4.1 (e) shall be
given effect upon the exercise of any Warrants by any holder thereof for
purposes of determining the Purchase Price thereof. All calculations shall be
made to the nearest ten-thousandth of a dollar ($0.0001 ).
(F) ADJUSTMENT OF NUMBER OF SHARES LSSUABLE PURSUANT TO WARRANTS.
Upon each adjustment of the Purchase Price as a result of the calculations made
in this Section 4.1, each Warrant outstanding immediately prior to the making of
such adjustment shall thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of shares of Common Stock (calculated to the nearest
one-hundredth (.01)) obtained by multiplying the number of shares of Common
Stock covered by such Warrant immediately prior to such adjustment by the
quotient of:
(i) the Purchase Price in effect immediately prior to such
adjustment,
(ii) the Purchase Price in effect immediately after such
adjustment.
All Warrants originally issued by the Company hereunder shall, subsequent to any
adjustment made to the Purchase Price hereunder, evidence the right to purchase,
at the adjusted Purchase Price, the number of shares of Common Stock determined
to be purchasable from time to time hereunder upon exercise of such Warrants,
all subject to further adjustment as provided herein. Each such adjustment shall
be valid and binding upon the Company and the holders of Warrants irrespective
of whether the Warrant Certificates theretofore and thereafter issued express
the Purchase Price per share of Common Stock and the number of shares of Common
Stock that were expressed upon the initial Warrant Certificates issued
hereunder.
(G) MISCELLANEOUS.
(i) Adjustments shall be made pursuant to this Section 4.1
successively whenever any of the events referred to in Section
4.1(a) through Section 4.1 (d), inclusive, and Section 4.1(1), shall
occur.
(ii) If any Warrant shall be exercised subsequent to the
record date for any of the events referred to in this Section 4.1,
but prior to the effective date thereof, appropriate adjustments
shall be made immediately after such effective date so that the
holder of such Warrant on such record date shall have received, in
the aggregate, the kind and number of shares of Common Stock or
other Securities or Property that it would have owned or been
entitled to receive on such effective date had such Warrant been
exercised prior to such record date.
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(iii) Shares of Common Stock owned by or held for the account
of the Company or any Subsidiary shall not, for purposes of the
adjustments set forth in this Section 4.1, be deemed outstanding.
(H) OTHER SECURITIES. In the event that at any time, as a result of
an adjustment made pursuant to this Section 4.1, each holder of Warrants shall
become entitled to purchase any Securities of the Company other than shares of
Common Stock, the number or amount of such other Securities so purchasable and
the Purchase Price of such Securities shall be subject to adjustment from time
to time in a manner and on terms as nearly equivalent as practicable to the
provisions contained in Section 4.1 (a) through Section 4.1 (d), inclusive, and
all other relevant provisions of this Section 4.1 that are applicable to shares
of Common Stock shall be applicable to such other Securities.
(I) NOTICE OF ADJUSTMENT. Whenever the number of shares of Common
Stock issuable upon the exercise of Warrants is adjusted or the Purchase Price
in respect thereof is adjusted, as herein provided, the Company shall promptly
give to each holder of Warrants notice of such adjustment or adjustments and
shall promptly deliver to each holder of Warrants a certificate of the Company's
chief financial officer setting forth:
(i) the number of shares of Common Stock issuable upon the
exercise of each Warrant and the Purchase Price of such shares after
such adjustment;
(ii) a brief statement of the facts requiring such adjustment;
and
(iii) the computation by which such adjustment was made.
So long as any Warrant is outstanding, within ninety (90) days of the end of
each fiscal year of the Company, the Company shall deliver to each holder of
Warrants a certificate of the Company setting forth:
(A) the number of shares of Common Stock issuable upon
the exercise of each Warrant and the Purchase Price of such
shares as of the end of such fiscal year;
(B) a brief statement of the facts requiring each
adjustment required to be made in such fiscal year; and
(C) the computation by which each such adjustment was
made.
(J) NOTICE OF CERTAIN EVENTS. Whenever the Company shall publicly
announce the authorization of any Notice Event, the Company shall, not less than
twenty (20) days after the record date with respect to such event (or, if no
record date for the same shall be fixed, not less than twenty (20) days after
the occurrence of such Notice Event), give to each holder of Warrants written
notice of such event setting forth any change in the number of shares of Common
12
Stock the Company estimates will be issuable upon the exercise of such holder's
Warrants, the estimated Purchase Price of such shares after any adjustment
required to be made hereunder and a brief statement of the facts requiring such
adjustment and the computation by which the Company expects such adjustment will
be made. Notwithstanding the foregoing, no failure of the Company to give any
such notice shall affect the validity of the action taken unless such failure
was in bad faith.
4.2 FRACTIONAL SHARES.
The Company shall not be required to issue fractional shares of Common
Stock upon the exercise of any Warrant. Upon the exercise of any Warrant, there
shall be paid to the holder thereof, in lieu of any fractional share of Common
Stock resulting therefrom, an amount of cash equal to the product of:
(A) the fractional amount of such share; times
(B) the Market Price, as determined on the trading day immediately
prior to the date of exercise of such Warrant.
4.3 ADDITIONAL AGREEMENTS OF THE COMPANY.
The Company covenants and agrees that it shall not, by amendment to its
certificate of incorporation, as in effect on the date hereof, or through any
reorganization, transfer of assets, consolidation, merger, dissolution,
liquidation, issuance or sale of Securities or any other voluntary action, avoid
or seek to avoid the observance or performance of any of the terms to be
observed or performed hereunder by the Company, but shall at all times in good
faith assist in the carrying out of all the provisions of this Section 4 and in
the taking of all such actions as may be necessary or appropriate in order to
protect the rights of the holders of the Warrant Certificates against dilution
or other impairment.
5. FINANCIAL AND OTHER INFORMATION.
The Company shall, at all times, and whether or not the Company shall be
required to do so by law, deliver to each holder of Registrable Securities:
(A) copies of all quarterly, annual and current reports and other
information, documents and reports (or copies of such portions of the foregoing
as the SEC may from time to time by rules or regulations prescribe) which the
Company may be required to file with the SEC pursuant to Section 13 or Section
15(d) of the Exchange Act or the rules and regulations of the SEC thereunder;
or, if the Company is not required to file information, documents or reports
pursuant to either Section 13 or Section 1 5(d) of the Exchange Act, then it
will deliver to each holder of Registrable Securities such annual, quarterly and
current reports and such of the information, documents and reports which a
Person subject to Section 13 of the Exchange Act and the rules and regulations
of the SEC thereunder would be required to file with the SEC in respect of a
security listed and registered on a national securities exchange; and
13
(B) all other information actually delivered to the holders of the
Common Stock generally.
6. REGISTRATION RIGHTS.
6.1 INCIDENTAL REGISTRATION.
(A) FILING OF REGISTRATION STATEMENT. If the Company at any time
proposes to register any of its Common Stock (an "Incidental Registration")
under the Securities Act (other than pursuant to a registration statement on
Form S-4 or Form S-8 or any successor forms thereto) for sale to the public in a
public offering, it will each such time give prompt written notice to all
holders of Registrable Securities of its intention to do so, which notice shall
be given to all such holders at least thirty (30) Business Days prior to the
date that a registration statement relating to such registration is proposed to
be filed with the SEC. Upon the written request of any such holder to include
its shares under such registration statement (which request shall be made within
fifteen (15) Business Days after the receipt of any such notice and shall
specify the Registrable Securities intended to be disposed of by such holder),
the Company will use its best efforts to effect the registration of all
Registrable Securities that the Company has been so requested to register by
such holder; provided, however, that if at any time after giving written notice
of its intention to register any Securities and prior to the effective date of
the registration statement filed in connection with such registration, the
Company shall determine for any reason not to proceed with the Incidental
Registration, the Company may, at its election, give written notice of such
determination to each holder of Registrable Securities and, thereupon, shall be
relieved of its obligation to register any Registrable Securities of such
Persons in connection with such registration.
(B) SELECTION OF UNDERWRITERS. Each notice of the Company's
intention to register such Securities given to the holders of Registrable
Securities pursuant to Section 6.1(a) shall designate the proposed underwriters
of such offering (which shall be one or more underwriting firms of recognized
standing) and shall contain the Company's agreement to use its best efforts, if
requested to do so, to arrange for such underwriters to include in such
underwriting the Registrable Securities that the Company has been so requested
to sell pursuant to this Section 6.1, it being understood that the holders of
Registrable Securities shall have no right to select different underwriters for
the disposition of their Registrable Securities.
(C) PRIORITY ON INCIDENTAL REGISTRATIONS. If the managing
underwriter shall advise the Company in writing (with a copy to each holder of
Registrable Securities requesting sale) that, in such underwriter's opinion, the
number of shares of Securities requested to be included in such Incidental
Registration exceeds the number that can be sold in such offering within a price
range acceptable to the Company (such writing to state the basis of such opinion
and the approximate number of shares of Securities that may be included in such
offering without such effect), the Company will include in such Incidental
Registration, to the extent of the number of shares of Securities that the
Company is so advised can be sold in such offering:
(i) in the case of any registration initiated by the Company
for the purpose of selling Securities for its own account:
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(A) first, Securities that the Company proposes to
issue and sell for its own account; and
(B) second, Registrable Securities requested to be
sold by the holders thereof pursuant to this
Section 6.1 and all Securities proposed to be
registered by any other selling stockholders, pro
rata among such holders on the basis of the number
of shares requested to be so registered by such
holders; and
(ii) in the case of a registration initiated by any other
stockholder pursuant to demand or required registration rights in
favor of such other stockholder:
(A) FIRST, all Securities proposed to be registered by
any other stockholders exercising demand or
required registration rights with respect to such
registration pursuant to registration rights
agreements in existence on the date of this
agreement;
(B) SECOND, to the extent allowed by Section 7.5(g) of
the Underwriter Warrant Agreement, Registrable
Securities requested to be sold by the holders
thereof pursuant to this Section 6.1 and all other
Securities proposed to be registered by any other
stockholders, pro rata among such holders on the
basis of the number of shares requested to be so
registered by such holders; and
(C) THIRD, Securities that the Company proposes to
issue and sell for its own account.
6.2 REGISTRATION PROCEDURES.
The Company will use its best efforts to effect the Required Registration
and each Incidental Registration of any Registrable Securities under the
Securities Act as provided in Sections 6.1, and to cooperate with the sale of
such Registrable Securities in accordance with the intended method of
disposition thereof as quickly as practicable, and the Company will as
expeditiously as possible:
(A) subject, in the case of an Incidental Registration, to the
proviso to Section 6.1(a), prepare and file with the SEC the registration
statement and use its best efforts to cause the Registration to become
effective; provided, however, that before filing any registration statement or
prospectus or any amendments or supplements thereto, the Company will furnish to
the holders of the Registrable Securities covered by such registration
statement, their counsel, and the underwriters, if any, and their counsel,
copies of all such documents proposed to be filed at least fifteen (15) days
prior thereto, which documents will be subject to the reasonable review, within
such period, of such holders, their counsel and the underwriters;
15
(B) subject, in the case of an Incidental Registration, to the
proviso to Section 6.1(a), prepare and file with the SEC such amendments and
post-effective amendments to any registration statement and any prospectus used
in connection therewith as may be necessary to keep such registration statement
effective and to comply with the provisions of the Securities Act with respect
to the disposition of all Registrable Securities covered by such registration
statement until such time as all of such Securities have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof set forth in such registration statement and cause the prospectus to be
supplemented by any required prospectus supplement, and as so supplemented to be
filed pursuant to Rule 424 under the Securities Act;
(C) furnish to each holder of Registrable Securities included in
such Registration and the underwriter or underwriters, if any, without charge,
at least one signed copy of the registration statement and any post-effective
amendment thereto, upon request, and such number of conformed copies thereof and
such number of copies of the prospectus (including each preliminary prospectus
and each prospectus filed under Rule 424 under the Securities Act), any
amendments or supplements thereto and any documents incorporated by reference
therein, as such holder or underwriter may reasonably request in order to
facilitate the disposition of the Registrable Securities being sold by such
holder (it being understood that the Company consents to the use of the
prospectus and any amendment or supplement thereto by each holder of Registrable
Securities covered by such registration statement and the underwriter or
underwriters, if any, in connection with the offering and sale of the
Registrable Securities covered by the prospectus or any amendment or supplement
thereto);
(D) notify each holder of the Registrable Securities of any stop
order or other order suspending the effectiveness of any registration statement,
issued or threatened by the SEC in connection therewith, and take all reasonable
actions required to prevent the entry of such stop order or to remove it or
obtain withdrawal of it at the earliest possible moment if entered;
(E) if requested by the managing underwriter or underwriters or any
holder of Registrable Securities in connection with any sale pursuant to a
registration statement, promptly incorporate in a prospectus supplement or
post-effective amendment such information relating to such underwriting as the
managing underwriter or underwriters or such holder reasonably requests to be
included therein; and make all required filings of such prospectus supplement or
post-effective amendment as soon as practicable after being notified of the
matters incorporated in such prospectus supplement or post-effective amendment;
(F) on or prior to the date on which a Registration is declared
effective, use its best efforts to register or qualify, and cooperate with the
holders of Registrable Securities included in such Registration, the underwriter
or underwriters, if any, and their counsel, in connection with the registration
or qualification of the Registrable Securities covered by such Registration for
offer and sale under the securities or "blue sky" laws of each state and other
jurisdiction of the United States as any such holder or underwriter reasonably
requests in writing; use its best efforts to keep each such registration or
qualification effective, including through new filings, or amendments or
renewals, during the period such registration statement is required to be kept
effective; and do any and all other acts or things necessary or advisable to
enable the disposition in all such jurisdictions reasonably requested of the
Registrable Securities covered by such Registration; provided, however, that the
Company will not be required to qualify generally to do business in any
16
jurisdiction where it is not then so qualified or to take any action which would
subject it to general service of process in any such jurisdiction where it is
not then so subject;
(G) in connection with any sale pursuant to a Registration,
cooperate with the holders of Registrable Securities and the managing
underwriter or underwriters, if any, to facilitate the timely preparation and
delivery of certificates (not bearing any restrictive legends) representing
Securities to be sold under such Registration, and enable such Securities to be
in such denominations and registered in such names as the managing underwriter
or underwriters, if any, or such holders may reasonably request;
(H) use its best efforts to cause the Registrable Securities to be
registered with or approved by such other governmental agencies or authorities
within the United States and having jurisdiction over the Company or any
Subsidiary as may reasonably be necessary to enable the seller or sellers
thereof or the underwriter or underwriters, if any, to consummate the
disposition of such Securities;
(I) make available for inspection by any holder of Registrable
Securities included in any Registration, any underwriter participating in any
disposition pursuant to any Registration, and any attorney, accountant or other
agent retained by any such seller or underwriter, all financial and other
records, pertinent corporate documents and properties of the Company, as shall
be reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's officers, directors and employees to
supply all information reasonably requested by any such Person in connection
with such Registration;
(J) use its best efforts to obtain:
(i) at the time of effectiveness of each Registration, a
"comfort letter" from the Company's independent certified public
accountants covering such matters of the type customarily covered by
"cold comfort letters" as the Requisite Holders and the underwriters
reasonably request; and
(ii) at the time of any underwritten sale pursuant to the
registration statement, a "bring-down comfort letter," dated as of
the date of such sale, from the Company's independent certified
public accountants covering such matters of the type customarily
covered by comfort letters as the Requisite Holders and the
underwriters reasonably request;
(K) obtain, at the time of effectiveness of each Incidental
Registration and at the time of any sale pursuant to each Registration, an
opinion or opinions, reasonably acceptable to the Requisite Holders in form and
scope, from counsel for the Company in customary form;
(L) so long as such Registration remains effective, notify each
seller of Registrable Securities covered by such Registration, upon discovery
that, or upon the happening of any event as a result of which, the prospectus
included in such Registration, as then in effect, includes an untrue statement
of a material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and promptly
prepare, file with the SEC and furnish to such seller or holder a reasonable
17
number of copies of a supplement to or an amendment of such prospectus as may be
necessary so that, as thereafter delivered to the purchasers or prospective
purchasers of such Securities, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances under which they are made;
(M) otherwise comply with all applicable rules and regulations of
the SEC, and make generally available to its security holders (as contemplated
by Section 11 (a) under the Securities Act) an earnings statement satisfying the
provisions of Rule 158 under the Securities Act no later than ninety (90) days
after the end of the twelve (12) month period beginning with the first month of
the Company's first fiscal quarter commencing after the effective date of the
registration statement, which statement shall cover said twelve (12) month
period;
(N) provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities covered by each Registration from and
after a date not later than the effective date of such Registration;
(O) use its best efforts to cause all Registrable Securities covered
by each Registration to be listed subject to notice of issuance, prior to the
date of first sale of such Registrable Securities pursuant to such Registration,
on each securities exchange on which the Common Stock (or other Securities
issuable upon exercise of the Warrants) issued by the Company are then listed,
and admitted to trading on NASDAQ, if the Common Stock or any such other
Securities are then admitted to trading on NASDAQ; and
(P) enter into such agreements (including underwriting agreements in
customary form) and take such other actions as the Requisite Holders shall
reasonably request in order to expedite or facilitate the disposition of such
Registrable Securities.
The obligation of the Company to include Registrable Securities in any such
Registration is expressly subject to the condition that such holder furnish the
Company with such information in respect of such holder of its Registrable
Securities that will be included in such Registration as the Company may
reasonably request in writing and as is required by applicable laws or
regulations.
6.3 PREPARATION; REASONABLE INVESTIGATION.
In connection with the preparation and filing of each registration
statement registering Registrable Securities under the Securities Act, the
Company will give the holders of such Registrable Securities so registered,
their underwriters, if any, and their respective counsel and accountants the
opportunity to participate in the preparation of such registration statement
(other than reports and proxy statements incorporated therein by reference and
lawfully and properly filed with the SEC) and each prospectus included therein
or filed with the SEC, and each amendment thereof or supplement thereto, and
will give each of them such access to its books and records and such
opportunities to discuss the business of the Company with its officers and the
independent public accountants who have certified its financial statements as
shall be necessary, in the opinion of such holders' or such underwriters' to
conduct a reasonable investigation within the meaning of the Section 11 (b)(3)
of the Securities Act.
18
6.4 REGISTRATION EXPENSES.
The Company will pay all Registration Expenses in connection with each
registration of Registrable Securities, including, without limitation, any such
registration not effected by the Company.
6.5 RIGHTS OF REQUESTING HOLDERS.
Each holder of Registrable Securities which makes a written request
therefor within thirty (30) days after the notice to such holders provided for
in Section 6.1, shall have the right to receive the copies of the information,
notices and other documents described in Section 6.2(c), Section 6.2(l) and
Section 6.2(m) in connection with any proposed Registration by the Company under
the Securities Act.
6.6 INDEMNIFICATION; CONTRIBUTION.
(A) INDEMNIFICATION BY THE COMPANY. The Company shall indemnify, to
the fullest extent permitted by law, each holder of Registrable Securities, its
officers, directors and agents, if any, and each Person, if any, who controls
such holder within the meaning of section 15 of the Securities Act, against all
losses, claims, damages, liabilities (or proceedings in respect thereof) and
expenses (under the Securities Act or common law or otherwise), joint or
several, resulting from any violation by the Company of the provisions of the
Securities Act or any untrue statement or alleged untrue statement of a material
fact contained in any registration statement filed pursuant to this Agreement or
prospectus (and as amended or supplemented if amended or supplemented) or any
preliminary prospectus included therein or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein (in the case of any prospectus, in
light of the circumstances under which they were made) not misleading, except to
the extent that such losses, claims, damages, liabilities (or proceedings in
respect thereof) or expenses are caused by any untrue statement or alleged
untrue statement contained in or by any omission or alleged omission from
information concerning any holder furnished in writing to the Company by such
holder expressly for use therein. If the offering pursuant to any registration
statement provided for under this Section 6 is made through underwriters, no
action or failure to act on the part of such underwriters (whether or not such
underwriter is an Affiliate of any holder of Registrable Securities) shall
affect the obligations of the Company to indemnify any holder of Registrable
Securities or any other Person pursuant to the preceding sentence. If the
offering pursuant to any registration statement provided for under this Section
6 is made through underwriters, the Company agrees, to the extent required by
such underwriters, to enter into an underwriting agreement in customary form
with such underwriters and to indemnify such underwriters, their officers,
directors and agents, if any, and each Person, if any, who controls such
underwriters within the meaning of section 15 of the Securities Act to the same
extent as hereinbefore provided with respect to the indemnification of the
holders of Registrable Securities; provided that the Company shall not be
required to indemnify any such underwriter, or any officer or director of such
underwriter or any Person who controls such underwriter within the meaning of
section 15 of the Securities Act, to the extent that the loss, claim, damage
liability (or proceedings in respect thereof) or expense for which
indemnification is claimed results from such underwriter's failure to send or
give a copy of an amended or supplemented final prospectus to the Person
asserting an untrue statement or alleged untrue statement or omission or alleged
19
omission at or prior to the written confirmation of the sale of Registrable
Securities to such Person if such statement or omission was corrected in such
amended or supplemented final prospectus prior to such written confirmation and
the underwriter was provided with such amended or supplemented final prospectus.
(B) INDEMNIFICATION BY THE HOLDERS. In connection with any
registration statement in which a holder of Registrable Securities is
participating, each such holder, severally and not jointly, shall indemnify, to
the fullest extent permitted by law, the Company, each underwriter and their
respective officers, directors and agents, if any, and each Person, if any, who
controls the Company or such underwriter within the meaning of section 15 of the
Securities Act, against any losses, claims, damages, liabilities (or proceedings
in respect thereof) and expenses resulting from any untrue statement or alleged
untrue statement of a material fact or any omission or alleged omission of a
material fact required to be stated in the registration statement or prospectus
or preliminary prospectus or any amendment thereof or supplement thereto or
necessary to make the statements therein (in the case of any prospectus, in
light of the circumstances under which they were made) not misleading, but only
to the extent that such untrue statement is contained in or such omission is
from information so concerning a holder furnished in writing by such holder
expressly for use therein; provided, however, that such holder's obligations
hereunder shall be limited to an amount equal to the net proceeds to such holder
of the Registrable Securities sold pursuant to such registration statement; and
provided, further, that no holder of Registrable Securities shall be required to
indemnify any such underwriter, or any officer or director of such underwriter
or any Person who controls such underwriter within the meaning of section 15 of
the Securities Act, to the extent that the loss, claim, damage, liability (or
proceedings in respect thereof) or expense for which indemnification is claimed
results from such underwriter's failure to send or give a copy of an amended or
supplemented final prospectus to the Person asserting an untrue statement or
alleged untrue statement or omission or alleged omission at or prior to the
written confirmation of the sale of Registrable Securities to such Person if
such statement or omission was corrected in such amended or supplemented final
prospectus prior to such written confirmation and the underwriter was provided
with such amended or supplemented final prospectus.
(C) CONTROL OF DEFENSE. Any Person entitled to indemnification under
the provisions of this Section 6.6 shall give prompt notice to the indemnifying
party of any claim with respect to which it seeks indemnification and unless in
such indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist in respect of such claim, permit
such indemnifying party to assume the defense of such claim, with counsel
reasonably satisfactory to the indemnified party; and if such defense is so
assumed, such indemnifying party shall not enter into any settlement without the
consent of the indemnified party if such settlement attributes liability to the
indemnified party and such indemnifying party shall not be subject to any
liability for any settlement made without its consent (which shall not be
unreasonably withheld); and any underwriting agreement entered into with respect
to any registration statement provided for under this Section 6 shall so
provide. In the event an indemnifying party shall not be entitled, or elects
not, to assume the defense of a claim, such indemnifying party shall not be
obligated to pay the fees and expenses of more than one counsel or firm of
counsel for all parties indemnified by such indemnifying party in respect of
such claim, unless in the reasonable judgment of any such indemnified party a
conflict of interest may exist between such indemnified party and any other of
such indemnified parties in respect to such claim.
20
(D) CONTRIBUTION. If for any reason the foregoing indemnity is
unavailable, then the indemnifying party shall contribute to the amount paid or
payable by the indemnified party as a result of such losses, claims, damages,
liabilities or expenses, in such proportion as is appropriate to reflect not
only the relative benefits received by the indemnifying party on the one hand
and the indemnified party on the other but also the relative fault of the
indemnifying party and the indemnified party as well as any other relevant
equitable considerations. Notwithstanding the foregoing, no holder of
Registrable Securities shall be required to contribute any amount in excess of
the amount such holder would have been required to pay to an indemnified party
if the indemnity under Section 6.6(b) was available. No Person guilty of
fraudulent misrepresentation (within the meaning of section 11 (f) of the
Securities Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation. The obligation of any Person to
contribute pursuant to this Section 6.6 shall be several and not joint.
(E) TIMING OF PAYMENTS. An indemnifying party shall make payments of
all amounts required to be made pursuant to the foregoing provisions of this
Section 6.6 to or for the account of the indemnified party from time to time
promptly upon receipt of bills or invoices relating thereto or when otherwise
due or payable.
(F) SURVIVAL. The indemnity and contribution agreements contained in
this Section 6.6 shall remain in full force and effect regardless of any
investigation made by or on behalf of a participating holder of Registrable
Securities, its officers, directors, agents or any Person, if any, who controls
such holder as aforesaid, and shall survive the transfer of such Securities by
such holder.
6.7 HOLDBACK AGREEMENTS; REGISTRATION RIGHTS TO OTHERS.
(A) In connection with each underwritten sale of Registrable
Securities, the Company agrees, and each holder of Registrable Securities by
acquisition of such Registrable Securities agrees, to enter into customary
holdback agreements for a period not exceeding two hundred (200) days concerning
sale or distribution of Registrable Securities and other equity Securities of
the Company, except, in the case of any holder of Registrable Securities, to the
extent that such holder is prohibited by applicable law or exercise of fiduciary
duties from agreeing to withhold Registrable Securities from sale or is acting
in its capacity as a fiduciary or investment adviser. In the event that any such
holder is so prohibited from making any such agreement, then, in the case of any
Incidental Registration only, the Company, at the discretion of the underwriter
of such offering, may refuse to include such holder in such Incidental
Registration. Without limiting the scope of the term "fiduciary," a holder shall
be deemed to be acting as a fiduciary or an investment adviser if its actions or
the Registrable Securities proposed to be sold are subject to the Employee
Retirement Income Security Act of 1974, as amended, or the Investment Company
Act of 1940, as amended, or if such Registrable Securities are held in a
separate account under applicable insurance law or regulation.
(B) If the Company shall at any time after the date hereof grant to
any holder of any Securities of the Company rights with respect to the
registration of such Securities under the Securities Act, such rights shall not
be in conflict with or adversely affect any of the rights provided in this
Section 6 to the holders of Registrable Securities.
21
6.8 OTHER REGISTRATION OF COMMON STOCK.
If any shares of Common Stock required to be reserved for purposes of
exercise of Warrants or conversion of any class of Common Stock into any other
class of Common Stock require registration with or approval of any governmental
authority under any federal or state law (other than the Securities Act) before
such shares may be issued upon conversion, the Company will, at its expense and
as expeditiously as possible, use its reasonable best efforts to cause such
shares to be duly registered or approved, as the case may be.
6.9 AVAILABILITY OF INFORMATION.
The Company will use its best efforts to comply with the reporting
requirements of Sections 13 and 15(d) of the Exchange Act and will use its best
efforts to comply with all other public information reporting requirements of
the SEC as from time to time in effect, and cooperate with the holders of
Registrable Securities, so as to permit disposition of the Registrable
Securities pursuant to an exemption from the Securities Act for the sale of any
Registrable Securities (including, without limitation, the current public
information requirements of Rule 144(c) and Rule 144A under the Securities Act).
The Company will also cooperate with each holder of any Registrable Securities
in supplying such information as may be necessary for such holder to complete
and file any information reporting forms presently or hereafter required by the
SEC as a condition to the availability of an exemption from the Securities Act
for the sale of any Registrable Securities.
7. INTERPRETATION OF THIS AGREEMENT.
7.1 CERTAIN DEFINED TERMS.
For the purpose of this Agreement, the following terms shall have the
meanings specified with respect thereto below:
ADDITIONAL COMMON STOCK - Common Stock of the Company, including treasury
shares, issued after the date hereof, except (a) Common Stock issued upon the
exercise of any one or more Warrants, and (b) Excluded Securities.
AFFILIATE - means, at any time, a Person (other than a Subsidiary or the
Purchaser):
(A) that directly or indirectly through one or more intermediaries
controls, or is controlled by, or is under common control with, the Company;
(B) that beneficially owns or holds five percent (5%) or more of
any class of the Voting Stock of the Company; or
(C) five percent (5%) or more of the Voting Stock (or in the case
of a Person that is not a corporation, five percent (5%) or more of the equity
interest) of which is beneficially owned or held by the Company or a Subsidiary;
at such time.
22
As used in this definition,
CONTROL - means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
AGGREGATE CONSIDERATION RECEIVABLE - means, in the case of a sale of
shares of Additional Common Stock, the aggregate amount paid to the Company in
connection therewith, and, in the case of an issuance or sale of Rights, or any
amendment thereto, the sum of:
(a) the aggregate amount paid to the Company for such Rights; plus
(b) the aggregate consideration or premiums stated in such Rights
to be payable for the shares of Additional Common Stock covered thereby;
in each case without deduction for any fees, expenses or underwriters discounts
or commissions.
AGREEMENT, THIS - and references thereto shall mean this Agreement as it
may from time to time be amended or supplemented.
BOARD OF DIRECTORS - means the board of directors of the Company or any
committee thereof that, in the instance, shall have the lawful power to exercise
the power and authority of such board of directors.
BUSINESS DAY - means a day other than a Saturday, a Sunday or a day on
which banks in the State of Florida are required or permitted by law (other than
a general banking moratorium or holiday for a period exceeding four (4)
consecutive days) to be closed.
CLOSING PRICE - means, per share of Common Stock, on any date specified
herein:
(a) the last sale price, regular way, on such date or, if no such
sale takes place on such date, the average of the closing bid and asked
prices on such date, in each case as officially reported on the principal
national securities exchange on which the Common Stock is then listed or
admitted to trading; and
(b) if the Common Stock is not then listed or admitted to trading on
any national securities exchange, but is designated as a national market
system security by the National Association of Securities Dealers, Inc.,
the last trading price of the Common Stock on such date, or if there shall
have been no trading on such date or if the Common Stock is not so
designated, the average of the reported closing bid and asked prices on
such date as shown by the NASDAQ.
COMMON STOCK - the common stock, par value $.01 per share, of the Company
and any other equity securities of the Company which are not limited to a fixed
sum or a fixed percentage of par value in respect of participation in dividends
and distributions in liquidation.
COMPANY - shall have the meaning specified in the introductory paragraph
hereof.
23
CONSIDERATION PER SHARE - means, with respect to shares of Common Stock or
Rights, the quotient of:
(a) the Aggregate Consideration Receivable in respect of such
shares of Common Stock or such Rights; divided by
(b) the total number of such shares of Common Stock or, in the case
of Rights, the total number of shares of Common Stock covered by such
Rights.
EFFECTIVE DATE - means October 15, 1996.
EXCHANGE ACT - means the Securities Exchange Act of 1934, as amended.
EXCLUDED SECURITIES - means and includes:
(a) shares of Common Stock or Rights issued (i) upon the exercise or
conversion of a Right (an "Underlying Right") if at the time of the
issuance of the Underlying Right either no adjustment pursuant to Section
4.1 was necessary or any necessary adjustment pursuant to Section 4.1 was
made, or (ii) in a transaction described in Section 4.1(a), Section 4.1(c)
or Section 4.1(d) in respect of which any necessary adjustment pursuant to
Section 4.1 was made;
(b) shares of Common Stock issuable upon exercise of the Warrants;
(c) up to 2,233,288 shares of Common Stock issuable upon the
exercise of presently outstanding rights and warrants which are listed on
Part 2.20 of the Disclosure Letter referred to in the Note Purchase
Agreement by and between the Company and Equitable Life Assurance Society
of the United States dated December 15, 1995;
(d) up to 500,000 shares of Common Stock issuable upon the exercise
of options granted after the Effective Date pursuant to the Company Stock
Option Plan, provided that the exercise price of each such option shall be
not less than the Market Price as of the date such option is granted; and
(e) up to 50,000 shares of Common Stock issuable upon the exercise
of options granted after the Effective Date pursuant to the Company's
Directors Stock Option Plan, provided that the exercise price of each such
option shall not be less than the Market Price as of the date such option
is granted.
EXPIRATION DATE - means 5:00 p.m. (Eastern Standard Time) on October 15,
2001.
FAIR VALUE - means, with respect to any share of Common Stock, the
quotient of:
(a) the sum of
(i) the fair salable value of the Company, as a going concern,
giving effect to all Property thereof and subject to all liabilities
24
thereof, that would be realized in an arm's length sale between an
informed and willing buyer and an informed and willing seller, under
no compulsion to buy or sell, respectively, as of a date that is
within fifteen (15) days of the date as of which the determination
is to be made, determined by the Valuation Agent, such determination
to be made without regard to any absence of a liquid or ready market
for such Common Stock; plus
(ii) the aggregate exercise or conversion price of all Rights
in existence and remaining unexercised on such date;
divided by
(b) the total number of shares of Common Stock outstanding at such
time on a fully diluted basis.
INCIDENTAL REGISTRATION - Section 6.1.
INITIAL PURCHASE PRICE - means $4.875 per share.
LIEN - means any mortgage, pledge, security interest, encumbrance, lien
(statutory or otherwise) or charge of any kind (including any agreement to give
any of the foregoing (but excluding negative pledge clauses in agreements
related to the borrowing of money), any conditional sale or other title
retention agreement, any lease in the nature thereof, and the filing of or
agreement to give any financing statement under the Uniform Commercial Code of
any jurisdiction (but excluding informational filings made in respect of leases)
or any other type of preferential arrangement for the purpose, or having the
effect, of protecting a creditor against loss or securing the payment or
performance of an obligation. The term "Lien" includes encumbrances with respect
to stock, including, without limitation, stockholder agreements, voting trust
agreements, buy-back agreements and all similar arrangements.
MARKET PRICE - means, per share of Common Stock, as of any date of
determination, the arithmetic mean of the daily Closing Prices for the twenty
(20) consecutive trading days before such date of determination; provided that
if the Common Stock is not then listed or admitted to trading on any national
securities exchange or quoted in the over-the-counter market, then "Market
Price" means the greater of:
(a) the book value of one share of Common Stock, as determined in
accordance with generally accepted accounting principles by the Valuation
Agent, as of the date of determination; and
(b) the Fair Value of one share of Common Stock, as of the date of
determination .
NASDAQ - means the National Association of Securities Dealers Automated
Quotation
NOTICE EVENT - means any of the following:
25
(a) any event that would require an adjustment in the Purchase
Price pursuant to Section 4.1; or
(b) any distribution of Property in respect of Common Stock.
PERSON - means an individual, partnership, corporation, limited liability
company, joint venture, trust, unincorporated organization, or a government or
agency or political subdivision thereof.
PROPERTY - means any interest in any kind of property or asset, whether
real, personal or mixed, and whether tangible or intangible.
PURCHASE PRICE - means the Initial Purchase Price.
REFERENCE PRICE - means, per share of Common Stock, as of any date of
determination, the Market Price as of such date; provided, however, that with
respect to each of the first three Significant Equity Infusions to occur after
the date hereof and prior to May 1, 1997, the Reference Price shall be 85% of
the Market Price on the date of such transaction.
REGISTRABLE SECURITIES - means, at any time:
(a) any shares of Common Stock that have been issued upon the
exercise of any Warrant; and
(b) any shares of Common Stock that are issuable upon the exercise
of the Warrants.
For purposes of Section 6 and the definition of "Requisite Holders" herein,
holders of Warrants at any time shall be deemed to be holders of Registrable
Securities described in clause (b) of this definition that are at such time
issuable upon exercise in full of such Warrants, whether or not such holders are
then entitled so to exercise such Warrants pursuant to the terms thereof.
As to any particular Registrable Securities once issued, such Securities shall
cease to be Registrable Securities:
(i) when a registration statement with respect to the sale of
such Securities shall have become effective under the Securities Act
and such Securities shall have been disposed of in accordance with
such registration statement;
(ii) when they shall have been distributed to the public
pursuant to Rule 144 (or any successor provision) under the
Securities Act;
(iii) when they shall have been otherwise transferred and
subsequent disposition of them shall not require registration or
qualification under the Securities Act or any similar state law then
in force; or
26
(iv) when they shall have ceased to be outstanding or (with
respect to Registrable Securities described in clause (b) of this
definition) issuable upon exercise of the Warrants.
REGISTRATION - means the Incidental Registration.
REGISTRATION EXPENSES - means all expenses incident to the Company's
performance of or compliance with Section 6.1 through Section 6.5, inclusive,
including, without limitation, all registration and filing fees (except to the
extent required by the National Association of Securities Dealers to be paid by
the holders of Registrable Securities), fees and expenses of compliance with
securities or blue sky laws (including reasonable fees and disbursements of
counsel in connection with blue sky qualifications of the Registrable
Securities), expenses of printing certificates for the Registrable Securities in
a form eligible for deposit with Depositary Trust Company, messenger and
delivery expenses, internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), and fees and disbursements of counsel for the Company and
its independent certified public accountants (including the expenses of any
management review, cold comfort letters or any special audits required by or
incident to such performance and compliance), securities acts liability
insurance (if the Company elects to obtain such insurance), the reasonable fees
and expenses of any special experts retained by the Company in connection with
such registration, fees and expenses of other Persons retained by the Company
and fees and expenses of counsel for holders of Registrable Securities, selected
by the Requisite Holders; but not including any underwriting fees, discounts or
commissions attributable to the sale of Registrable Securities or fees and
expenses of more than one counsel representing the holders of Registrable
Securities or any other selling expenses, discounts or commissions incurred in
connection with the sale of Registrable Securities.
REQUIRED WARRANTHOLDERS - means, at any time, the holders of at least
fifty-one percent (51%) of all Warrants outstanding (excluding any Warrants
directly or indirectly held by the Company, any Subsidiary or any Affiliate) at
such time.
REQUISITE HOLDERS - means, with respect to any registration or proposed
registration of Registrable Securities pursuant to Section 6, any holder or
holders (other than the Company or any Affiliate or Subsidiary) holding at least
seventy-five percent (75%) of the shares of Registrable Securities (excluding
any shares of Registrable Securities directly or indirectly held by the Company
or any Affiliate or Subsidiary) to be so registered.
RIGHT - means and includes:
(a) any warrant (including, without limitation, any Warrant) or any
option (including, without limitation, employee stock options) to acquire
Common Stock;
(b) any right issued to holders of the Common Stock, or any class
thereof, permitting the holders thereof to subscribe to shares of Common
Stock (pursuant to a rights offering or otherwise);
(c) any right to acquire Common Stock pursuant to the provisions of
any Security convertible or exchangeable into Common Stock; and
27
(d) any similar right permitting the holder thereof to subscribe for
or purchase shares of Common Stock.
SEC - means, at any time, the Securities and Exchange Commission or any
other federal agency at such time administering the Securities Act.
SECURITIES ACT - means the Securities Act of 1933, as amended.
SECURITY - shall have the meaning specified in section 2(1) of the
Securities Act.
SIGNIFICANT EQUITY INFUSION - means, a transaction in which the Company
issues Common Stock or preferred stock and in which the gross proceeds to the
Company are at least Two Million Dollars ($2,000,000).
SUBSIDIARY - means, as to any Person, any corporation in which such Person
or one or more Subsidiaries of such Person or such Person and one or more
Subsidiaries of such Person owns sufficient voting securities to enable it or
them (as a group) ordinarily, in the absence of contingencies, to elect a
majority of the directors (or Persons performing similar functions) of such
corporation; the term "Subsidiary," as used herein without reference to any
Person, shall mean a Subsidiary of the Company.
TRANSFEREE - means any registered transferee of all or any part of any
Warrant Certificate issued to the Purchaser under this Agreement.
UNDERWRITER WARRANT AGREEMENT - that certain Warrant Agreement, dated as
of September 12, 1994, between the Company and Whale Securities Co., L.P.
VALUATION AGENT - means a firm of independent certified public
accountants, an investment banking firm or appraisal firm (which firm shall own
no Securities of, and shall not be an Affiliate, Subsidiary or a related Person
of, the Company) of recognized national standing retained by the Company and
reasonably acceptable to the Required Warrantholders.
VOTING STOCK - means, with respect to any corporation, any shares of stock
of such corporation whose holders are entitled under ordinary circumstances to
vote for the election of directors of such corporation (irrespective of whether
at the time any stock of any other class or classes shall have or might have
voting power by reason of the happening of any contingency).
WARRANT - shall have the meaning specified in the Recitals hereof.
WARRANT CERTIFICATE - shall have the meaning specified in Section 1.1
hereof.
7.2 DESCRIPTIVE HEADINGS.
The descriptive headings of the several Sections of this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.
7.3 GOVERNING LAW.
28
THIS AGREEMENT AND THE WARRANT CERTIFICATES SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY,
THE INTERNAL LAWS OF THE STATE OF FLORIDA.
8. MISCELLANEOUS.
8.1 EXPENSES.
The Company agrees to pay, and save the Warrant Holder and any other
holders of Warrant Certificates harmless against liability for the payment of,
all out-of-pocket expenses arising in connection with the transactions herein
contemplated, including, without limitation:
(a) the cost, if any, of complying with Section 3.8;
(b) any subsequent proposed modification of, or proposed consent
requested or initiated by or on behalf of the Company under, this
Agreement, the Warrant Certificate or the Warrants, whether or not such
proposed modification shall be effected or proposed consent granted
(including, without limitation, all document production and duplication
charges and the fees and expenses of one special counsel engaged by the
holders of Warrant Certificates in connection therewith); and
(c) the enforcement of (or determination of whether or how to
enforce) any rights under this Agreement, the Warrant Certificates or the
Warrants or in responding to any subpoena or other legal process or
informal investigative demand issued in connection with this Agreement or
the transactions contemplated hereby or by reason of the Warrant Holder or
any Transferee's having acquired any Warrant Certificate, including,
without limitation, the fees and disbursements of one special counsel
engaged by the holders of Warrant Certificates and incurred by such
holders and the costs and expenses incurred in any bankruptcy case
involving the Company or any Subsidiary.
The obligations of the Company under this Section 8.1 shall survive the transfer
of any Warrant Certificate or portion thereof or interest therein by the Warrant
Holder or any Transferee and the exercise or expiration of any Warrant.
8.2 AMENDMENT AND WAIVER.
This Agreement may be amended, and the observance of any term of this
Agreement may be waived, with and only with the written consent of the Company
and:
(a) in the case of Sections 1 through 5, inclusive, Section 7.2,
Section 7.3, Section 8 (other than this Section 8.2), and of any term
defined in Section 7.1 used in any of such Sections, the written consent
of the Required Warrantholders;
(b) in the case of Section 6 and of any term defined in Section 7.1
used in Section 6, the written consent of the Requisite Holders; and
29
(c) in the case of this Section 8.2, the written consent of all
holders of Warrants then outstanding;
provided, however, that:
(i) no such amendment or waiver of any of the provisions of
this Agreement pertaining to the Purchase Price or the number or
kind of shares of Common Stock that may be purchased upon exercise
of each Warrant; and
(ii) no change in the definition of "Expiration Date";
shall be effective as to the holder of any Warrant unless consented to in
writing by such holder.
8.3 NO RIGHTS OR LIABILITIES AS STOCKHOLDER.
Nothing contained in this Agreement shall be construed as conferring upon
the holder of any Warrant any rights as a stockholder of the Company or as
imposing any obligation on such holder to purchase any Securities or as imposing
any liabilities on such holder as a stockholder of the Company, whether such
obligation or liabilities are asserted by the Company or by creditors of the
Company. Although a holder of the Warrants shall not be considered a stockholder
of the Company for any purposes, the holders of the Warrants shall have those
rights provided by agreement in Section 3.6 of this Agreement.
8.4 DIRECTLY OR INDIRECTLY.
Where any provision in this Agreement refers to any action to be taken by
any Person, or that such Person is prohibited from taking, such provision shall
be applicable whether such action is taken directly or indirectly by such
Person, including actions taken by or on behalf of any partnership in which such
Person is a general partner.
8.5 SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein shall survive the
execution and delivery of this Agreement and the Warrant Certificates, the
transfer by the Warrant Holder of any Warrant Certificate or portion thereof or
interest therein and the exercise or expiration of any Warrant, and may be
relied upon by the Warrant Holder or Transferee, regardless of any investigation
made at any time by or on behalf of the Warrant Holder or Transferee. Subject to
the preceding sentence this Agreement and the Warrant Certificates embody the
entire agreement and understanding between the Warrant Holder and the Company,
and supersede all prior agreements and understandings, relating to the subject
matter hereof.
8.6 SUCCESSORS AND ASSIGNS.
All covenants and other agreements in this Agreement contained by or on
behalf of any of the parties hereto shall bind and inure to the benefit of the
respective successors and assigns of the parties hereto (including, without
limitation, any Transferee) whether so expressed or not.
30
8.7 NOTICES.
All written communications provided for hereunder sent to the parties
hereto shall be sufficiently given or made if sent by United States mail
(registered or certified mail), postage prepaid, or sent by nationwide overnight
delivery service (with charges prepaid) and are addressed to the following
addresses:
(a) if to the Warrant Holder, addressed to it at:
Aquagenix Warrant Holdings II, a General Partnership
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
or at such other address as the Warrant Holder shall have specified to the
Company in writing;
(b) if to any other holder of any Warrant Certificate, addressed to
such other holder at such address as such other holder shall have
specified to the Company in writing or, if any such other holder shall not
have so specified an address to the Company, then addressed to such other
holder in care of the last holder of such Warrant Certificate that shall
have so specified an address to the Company; and
(c) if to the Company, addressed to it at:
Aquagenix, Inc.
▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
TEL: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address as the Company shall have specified to the holder of
each Warrant Certificate in writing.
Any communication so addressed and deposited in the United States mail, postage
prepaid, by registered or certified mail (in each case, with return receipt
requested) shall be deemed to be received on the third (3rd) succeeding Business
Day after the day of such deposit (not including the date of such deposit). Any
notice so addressed and otherwise delivered shall be deemed to be received when
actually received at the address of the addressee.
8.8 SEVERABILITY.
Any provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
31
8.9 COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of
which shall be an original but all of which together shall constitute one
instrument.
8.10 JURISDICTION; JURY TRIAL.
EACH OF THE PARTIES HERETO IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE
JURISDICTION OF ANY UNITED STATES FEDERAL OR FLORIDA STATE COURT SITTING IN
BROWARD COUNTY, FLORIDA ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR ANY OF THE OTHER DOCUMENTS AND INSTRUMENTS CONTEMPLATED HEREBY
AND EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN
RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH
COURT. NONE OF THE PARTIES HERETO SHALL SEEK A JURY TRIAL IN ANY LAWSUIT,
PROCEEDING, COUNTERCLAIM OR OTHER LITIGATION PROCEDURE BASED UPON OR ARISING OUT
OF OR OTHERWISE RELATED TO THIS AGREEMENT OR ANY OF THE WARRANTS AND EACH OF THE
PARTIES HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND
ALL RIGHT TO ANY SUCH JURY TRIAL AND ANY RIGHT EACH MAY HAVE TO ASSERT THE
DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY SUCH
PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 8.10.
8.11. EXPIRATION.
All Warrants that have not been exercised in accordance with the
provisions of this Agreement shall expire and all rights of holders of such
Warrants shall terminate and cease on the Expiration Date.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be duly executed and delivered by one of its duly authorized officers or
representatives.
AQUAGENIX, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇
-----------------------------------
▇▇▇▇▇ ▇▇▇▇, Chief Financial Officer
▇▇▇▇▇▇/▇▇▇▇▇▇▇ INCORPORATED, a
California corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Managing Director
AQUAGENIX WARRANT HOLDINGS II, a
General Partnership
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Manager
32
ATTACHMENT A
[FORM OF WARRANT CERTIFICATE]
WARRANT CERTIFICATE
AQUAGENIX, INC.
No. WR-___ [______] Warrants
Date:________ PPN: 03838R 2# 8
This Warrant Certificate certifies that ___________, or registered
assigns, is the registered holder of ___________ (____) Warrants. Each Warrant
entitles the owner thereof to purchase at any time on or prior to 5:00 p.m.,
Eastern Time, on __________, 2001 (the "Expiration Date"), one (1) fully paid
and nonassessable share of Common Stock of AQUAGENIX, INC. (together with its
successors and assigns, the "Company"), a Delaware corporation, at a Purchase
Price of [ ($ )] per share, upon presentation and surrender of this Warrant
Certificate with a form of election to purchase duly executed and delivered to
the Company and payment of the Purchase Price in the manner set forth in the
Warrant Agreement (defined below). The number of shares of Common Stock that may
be purchased upon exercise of each Warrant and the Purchase Price are the number
and the Purchase Price as of the date hereof, and are subject to adjustment as
referred to below.
The Warrants are issued pursuant to that certain Warrant Agreement (as it
may from time to time be amended, the "Warrant Agreement"), dated as of
_____________, 1996, between the Company, ▇▇▇▇▇▇/▇▇▇▇▇▇▇ Incorporated and
Aquagenix Warrant Holdings II, and are subject to all of the terms, provisions
and conditions thereof, which Warrant Agreement is hereby incorporated herein by
reference and made a part hereof and to which Warrant Agreement reference is
hereby made for a full description of the rights, obligations, duties and
immunities of the Company and the holders of the Warrant Certificates.
Capitalized terms used, but not defined, herein have the respective meanings
ascribed to them in the Warrant Agreement.
This Warrant Certificate shall be exercisable, at the election of the
holder, either as an entirety or in part from time to time. If this Warrant
Certificate shall be exercised in part, the holder shall be entitled to receive,
upon surrender hereof, another Warrant Certificate or Warrant Certificates for
the number of Warrants not exercised. This Warrant Certificate, with or without
other Warrant Certificates, upon surrender in the manner set forth in the
Warrant Agreement, may be exchanged for another Warrant Certificate or Warrant
Certificates of like tenor evidencing Warrants entitling the holder to purchase
a like aggregate number of shares of Common Stock as the Warrants evidenced by
the Warrant Certificate or Warrant Certificates surrendered shall have entitled
such holder to purchase.
Except as expressly set forth in the Warrant Agreement, no holder of this
Warrant Certificate shall be deemed for any purpose the holder of shares of
Common Stock or of any other Securities of the Company that may at any time be
issued upon the exercise hereof, nor shall anything contained in the Warrant
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a holder of a share of Common Stock in the Company or any right
to vote upon any matter submitted to holders of shares of Common Stock at any
meeting thereof, or to give or withhold consent to any corporate action (whether
Attachment A-1
upon any recapitalization, issuance of stock, reclassification of Securities,
change of par value, consolidation, merger, conveyance, or otherwise) or, except
as provided in the Warrant Agreement, to receive notice of meetings, or to
receive dividends or distributions (except that the holder of this Warrant
Certificate has certain rights to receive consideration in respect of the
payment thereof, as further provided in the Warrant Agreement) or subscription
rights, or otherwise, until the Warrant or Warrants evidenced by this Warrant
Certificate shall have been exercised as provided in the Warrant Agreement.
THIS WARRANT CERTIFICATE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, AND THE RIGHTS OF THE COMPANY AND THE HOLDER HEREOF SHALL BE GOVERNED BY,
THE INTERNAL LAWS OF THE STATE OF FLORIDA.
WITNESS the signature of a proper officer of the Company as of the date
first above written.
AQUAGENIX, INC.
By:_____________________________
Name:
Title:
Attachment A-2
[FORM OF ASSIGNMENT]
(TO BE EXECUTED BY THE REGISTERED HOLDER IF
SUCH HOLDER DESIRES TO TRANSFER THE WARRANT
FOR VALUE RECEIVED,______________________________hereby sells, assigns and
transfers unto
__________________________________________________________________ (Please print
name and address of transferee.)
the accompanying Warrant Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and appoint:
________________________________________________________________________________
attorney, to transfer the accompanying Warrant Certificate on the books of the
Company, with full power of substitution.
Dated: ____________________, _________.
AQUAGENIX WARRANT HOLDINGS II, A
GENERAL PARTNERSHIP
By:_________________________________
Name:
Title:
NOTICE
The signature to the foregoing Assignment must correspond to the name as
written upon the face of the accompanying Warrant Certificate or any prior
assignment thereof in every particular, without alteration or enlargement or any
change whatsoever.
Attachment A-3
[FORM OF ELECTION TO PURCHASE]
(TO BE EXECUTED BY THE REGISTERED HOLDER IF
SUCH HOLDER DESIRES TO EXERCISE THE WARRANT CERTIFICATE)
To AQUAGENLX, INC.:
The undersigned hereby irrevocably elects to exercise____________ Warrants
represented by the accompanying Warrant Certificate to purchase the shares of
Common Stock issuable upon the exercise of such Warrants and requests that
certificates for such shares be issued in the name of:
___________________________________________________________________(Please print
name and address.)
_________________________________________________________
(Please insert social security or other identifying number.)
Payment for the share of Common Stock is made therewith pursuant to the
provisions of Section 2.1(a) of the Agreement in the amount of $__________, or
Section 2.1(b) of the Agreement in the amount of ____________ Warrants.
If such number of Warrants shall not be all the Warrants evidenced by the
accompanying Warrant Certificate, a new Warrant Certificate for the balance
remaining of such Warrants shall be registered in the name of and delivered to:
___________________________________________________________________(Please print
name and address.)
_________________________________________________________
(Please insert social security or other identifying number.)
Dated:_______________________,___________.
AQUAGENIX WARRANT HOLDINGS II, A
GENERAL PARTNERSHIP
By:___________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Manager
NOTICE
The signature to the foregoing Election to Purchase must correspond to the
name as written upon the face of the accompanying Warrant Certificate or any
prior assignment thereof in every particular, without alteration or enlargement
or any change whatsoever.
Attachment A-4