1
EXHIBIT 10.70
WARRANT AGREEMENT dated as of February 3, 1998 (this
"Agreement"), by and between AccuMed International, a Delaware corporation (the
"Company"), and Xxxxxx X. Xxxxxx, an individual residing in the State of Nevada
("Xxxxxx").
W I T N E S S E T H:
WHEREAS, the Company proposes to issue to Xxxxxx a warrant (the
"Warrant") to purchase up to 100,000 shares (the "Warrant Shares") of the
Company's Common Stock, par value $0.01 per share (the "Common Stock"); and
WHEREAS, the Warrant issued pursuant to this Agreement is being
issued by the Company to Xxxxxx in consideration for the making of a loan by
Xxxxxx to the Company in the principal amount of $1,000,000 pursuant to a
Promissory Note (the "Promissory Note")and Security Agreement of even date
herewith.
NOW, THEREFORE, in consideration of the premises, the agreements
herein set forth and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Grant. On the terms and subject to the conditions set forth
herein, and unless this Agreement is terminated prior to exercise in accordance
with Section 16 hereof, Xxxxxx or other registered holder hereof (hereinafter
"the Holder") is hereby granted the right to purchase, at any time from February
3, 1998 until 5:00 P.M., New York time, on February 3, 2003 (the "Warrant
Exercise Term"), up to 100,000 Warrant Shares at an initial exercise price
(subject to adjustment as provided in Article 7 hereof) of $1.5625 per Warrant
Share.
2. Warrant Certificate. The warrant certificate (the "Warrant
Certificate") delivered and to be delivered pursuant to this Agreement shall be
in the form set forth in Exhibit A attached hereto and made a part hereof, with
such appropriate insertions, omissions, substitutions and other variations as
required or permitted by this Agreement.
3. Exercise of Warrant.
Cash Exercise. The Warrant initially is
exercisable at a price of $1.5625 per Warrant Share, payable in cash or by check
to the order of the Company, or any combination of cash or check, subject to
adjustment as provided in Article 7 hereof. Upon surrender of the Warrant
Certificate with the annexed Form of Election to Purchase duly executed,
together with
2
payment of the Exercise Price (as hereinafter defined) for the Warrant Shares
purchased, at the Company's principal offices (currently located at 000 X.
Xxxxxxxx Xxxxxx, Xxx. 000, Xxxxxxx, Xxxxxxxx 00000, Attn: Corporate Controller).
The Holder shall be entitled to receive a certificate or certificates for the
Warrant Shares so purchased. The purchase rights represented by each Warrant
Certificate are exercisable at the option of the Holder, in whole or in part
(but not as to fractional Warrant Shares). In the case of the purchase of less
than all the Warrant Shares purchasable under any Warrant Certificate, the
Company shall cancel said Warrant Certificate upon the surrender thereof and
shall execute and deliver a new Warrant Certificate of like tenor for the
balance of the Warrant Shares purchasable thereunder.
4. Issuance of Certificates.
Upon the exercise of the Warrants for cash, the issuance of
certificates for the Warrant Shares purchased shall be made forthwith without
charge to the Holder thereof including, without limitation, any tax which may be
payable in respect of the issuance thereof, and such certificates shall (subject
to the provisions of Article 5 hereof) be issued in the name of, or in such
names as may be directed by, the Holder thereof; provided, however, that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the issuance and delivery of any such certificates in a
name other than that of the Holder and the Company shall not be required to
issue or deliver such certificates unless or until the person or persons
requesting the issuance thereof shall have paid to the Company the amount of
such tax or shall have established to the satisfaction of the Company that such
tax has been paid.
The Warrant Certificate and the certificates representing the
Warrant Shares shall be executed on behalf of the Company by the manual or
facsimile signature of the present or any future Chairman or Vice Chairman of
the Board of Directors or President or Vice President of the Company under its
corporate seal reproduced thereon, attested to by the manual or facsimile
signature of the present or any future Secretary or Assistant Secretary of the
Company. The Warrant Certificate shall be dated the date hereof and certificates
representing the Warrant Shares shall be dated the date of execution by the
Company upon initial issuance, division, exchange, substitution or transfer.
Upon exercise, in part or in whole, of the Warrants, certificates
representing the Warrant Shares shall bear a legend substantially similar to the
following:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933. THE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT
BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT
2
3
FOR THESE SHARES UNDER THE SECURITIES ACT OF 1933 OR AN OPINION OF THE COMPANY'S
COUNSEL THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT.
5. Restriction on Transfer of Warrants.
Xxxxxx, by his acceptance thereof, covenants and agrees that the
Warrant is being acquired as an investment and not with a view to the
distribution thereof, and that neither the Warrant nor, if exercised, any
Warrant Shares, may be sold, transferred, assigned, hypothecated or otherwise
disposed of except in accordance with applicable securities laws.
6. Price.
6.1. Initial and Adjusted Exercise Price. The
initial exercise price of the Warrant shall be $1.5625 per Warrant Share. The
adjusted exercise price shall be the price which shall result from time to time
from any and all adjustments of the initial exercise price in accordance with
the provisions of Article 7 hereof.
6.2. Exercise Price. The term "Exercise Price"
herein shall mean the initial exercise price or the adjusted exercise price,
depending upon the context.
7. Adjustments of Exercise Price and Number of Warrant Shares.
7.1. Subdivision and Combination. In case the
Company shall at any time subdivide or combine the outstanding shares of Common
Stock, the Exercise Price shall forthwith be proportionately decreased in the
case of subdivision or increased in the case of combination.
7.2. Adjustment in Number of Warrant Shares.
Upon each adjustment of the Exercise Price pursuant to the provisions of this
Article 7, the number of Warrant Shares issuable upon the exercise of the
Warrant shall be adjusted to the nearest full Warrant Share by multiplying a
number equal to the Exercise Price in effect immediately prior to such
adjustment by the number of Warrant Shares issuable upon exercise of the Warrant
immediately prior to such adjustment and dividing the product so obtained by the
adjusted Exercise Price.
7.3. Reclassification, Consolidation, Merger,
etc. In case of any reclassification or change of the outstanding shares of
Common Stock (other than a change in par value to no par value, or from no par
value to par value, or as a result of a subdivision or combination), or in the
case of any consolidation of the Company with, or merger of the Company into,
3
4
another corporation (other than a consolidation or merger in which the Company
is the surviving corporation and which does not result in any reclassification
or change of the outstanding shares of Common Stock, except a change as a result
of a subdivision or combination of such shares or a change in par value, as
aforesaid), or in the case of a sale or conveyance to another corporation of the
property of the Company as an entirety, the Holder shall thereafter have the
right to purchase the kind and number of shares of stock and other securities
and property receivable upon such reclassification, change, consolidation,
merger, sale or conveyance as if the Holder was the owner of the Warrant Shares
underlying the Warrant at a price equal to the product of (x) the number of
shares of Common Stock issuable upon conversion of the Warrant Shares and (y)
the Exercise Price prior to the record date for such reclassification, change,
consolidation, merger, sale or conveyance as if such Holder had exercised the
Warrant.
7.4. Redemption of Warrant; Redemption of Warrant
Shares. Notwithstanding anything to the contrary contained in the Warrant or
elsewhere, the Warrant cannot be redeemed by the Company under any
circumstances.
7.5. Dividends and Other Distributions with Respect to
Outstanding Securities. In the event that the Company shall at any time prior to
the exercise of the Warrant declare a dividend (other than a dividend consisting
solely of shares of Common Stock or a cash dividend or distribution payable out
of current or retained earnings) or otherwise distribute to its stockholders any
monies, assets, property, rights, evidences of indebtedness, securities (other
than shares of Common Stock), whether issued by the Company or by another person
or entity, or any other thing of value, the Holder of the Warrant shall
thereafter be entitled, in addition to the securities receivable upon the
exercise thereof, to receive, upon the exercise of such Warrant, the same
monies, property, assets, rights, evidences of indebtedness, securities or any
other thing of value that he would have been entitled to receive at the time of
such dividend or distribution. At the time of any such dividend or distribution,
the Company shall make appropriate reserves to ensure the timely performance of
the provisions of this Subsection 7.5.
7.6. Subscription Rights for Shares of Common Stock or
Other Securities. In the case that the Company or an affiliate of the Company
shall at any time after the date hereof and prior to the exercise of the Warrant
issue any rights to subscribe for shares of Common Stock or any other securities
of the Company or of such affiliate to all the stockholders of the Company, the
Holder of the unexercised Warrant shall be entitled, in addition to the
securities receivable upon the exercise of the Warrant, to receive its pro rata
portion of such rights at the
4
5
time such rights are distributed to the stockholders of the Company.
7.7 Possible Reduction in Exercise Price upon
Exchange of 12% Convertible Promissory Notes. If (i) prior to repayment in full
of the principal and interest evidenced by the Promissory Note, holders of the
Company's 12% Convertible Promissory Notes due 2000 (the "Notes") are offered
the right to exchange their Notes for Preferred Stock convertible into Common
Stock at a conversion price per share of Common Stock lower than the initial
Exercise Price set forth in Section 6.1 hereof, or (ii) the Company shall issue
other securities convertible into or exercisable for shares of Common Stock at a
price lower than the initial Exercise Price, then the Exercise Price shall be
reduced to equal the lowest of such prices per share.
8. Exchange and Replacement of Warrant Certificates.
The Warrant Certificate is exchangeable without expense, upon the
surrender hereof by the registered Holder at the principal executive office of
the Company, for a new Warrant Certificate of like tenor and date representing
in the aggregate the right to purchase the same number of Warrant Shares in such
denominations as shall be designated by the Holder thereof at the time of such
surrender.
Upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of the Warrant Certificate,
and, in case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it, and reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of the Warrant, if
mutilated, the Company will make and deliver a new Warrant Certificate of like
tenor, in lieu thereof.
9. Elimination of Fractional Interests.
The Company shall not be required to issue certificates
representing fractions of Warrant Shares upon the exercise of the Warrant, nor
shall it be required to issue scrip or pay cash in lieu of fractional interests,
it being the intent of the parties that all fractional interests shall be
eliminated by rounding any fraction up to the nearest whole number of Warrant
Shares.
10. Reservation and Listing of Securities.
The Company shall at all times reserve and keep available out of
its authorized shares of Common Stock, solely for the purpose of issuance upon
the exercise of the Warrant and conversion of the Warrant Shares, such number of
shares of Warrant Stock and Common Stock as shall be issuable upon such exercise
or conversion, as the case may be. The Company
5
6
covenants and agrees that, upon exercise of the Warrant and payment of the
Exercise Price therefor, all shares of Common Stock issuable upon such exercise
shall be duly and validly issued, fully paid, non-assessable and not subject to
the preemptive rights of any stockholder. As long as the Company's Warrant shall
be outstanding, the Company shall use its best efforts to cause all Warrant
Shares to be quoted by Nasdaq or listed on such national securities exchanges as
the Common Stock is listed.
11. Notices to Warrant Holder.
Nothing contained in this Agreement shall be construed as
conferring upon the Holder the right to vote or to consent or to receive notice
as a stockholder in respect of any meetings of stockholders for the election of
directors or any other matter, or as having any rights whatsoever as a
stockholder of the Company. If, however, at any time prior to the expiration of
the Warrants and their exercise, any of the following events shall occur:
(a) the Company shall take a record of the holders of its
shares of Common Stock for the purpose of entitling them to
receive a dividend or distribution payable otherwise than in
cash, or a cash dividend or distribution payable otherwise than
out of current or retained earnings, as indicated by the
accounting treatment of such dividend or distribution on the
books of the Company; or
(b) the Company shall offer to all the holders of its
Common Stock any additional shares of capital stock of the
Company or securities convertible into or exchangeable for shares
of capital stock of the Company, or any option, right or warrant
to subscribe therefor; or
(c) a dissolution, liquidation or winding up of the
Company (other than in connection with a consolidation or merger)
or a sale of all or substantially all of its property, assets and
business as an entirety shall be proposed;
then, in any one or more of said events, the Company shall give written notice
to the Holder of such event at least five (5) days prior to the date fixed as a
record date or the date of closing the transfer books for the determination of
the stockholders entitled to such dividend, distribution, convertible or
exchangeable securities or subscription rights, options or warrants, or entitled
to vote on such proposed dissolution, liquidation, winding up or sale. Such
notice shall specify such
6
7
record date or the date of closing the transfer books, as the case may be.
Failure to give such notice or any defect therein shall not affect the validity
of any action taken in connection with the declaration or payment of any such
dividend or distribution, or the issuance of any convertible or exchangeable
securities or subscription rights, options or warrants, or any proposed
dissolution, liquidation, winding up or sale.
12. Notices.
All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed to have been duly made when
delivered, or mailed by registered or certified mail, return receipt requested:
(a) If to the registered Holder of the Warrant,
to the address of such Holder as shown on the books of
the Company; or
(b) If to the Company, to the address set forth in
Section 3 of this Agreement or to such other address as the
Company may designate by notice to the Holder.
13. Supplements and Amendments.
The Company and Schiller may from time to time supplement or
amend this Agreement without the approval of any Holder of the Warrant and/or
securities underlying the Warrant in order to cure any ambiguity, to correct or
supplement any provision contained herein which may be defective or inconsistent
with any provisions herein, or to make any other provisions in regard to matters
or questions arising hereunder which the Company and Schiller may deem necessary
or desirable and which the Company and the Underwriter deem not to adversely
affect the interests of the Holder of the Warrant.
14. Successors.
All the covenants and provisions of this Agreement by or for the
benefit of the Company and the Holder inure to the benefit of their respective
successors and assigns hereunder.
15. Termination.
This Agreement shall terminate at the close of business on August
18, 2002. Notwithstanding the foregoing, this Agreement will terminate on any
earlier date when the Warrant has been exercised and all securities underlying
the Warrant have been resold to the public.
16. Governing Law.
7
8
This Agreement and the Warrant Certificate issued hereunder shall
be deemed to be a contract made under the laws of the State of Illinois and for
all purposes shall be construed in accordance with the laws of said State.
17. Benefits of this Agreement.
Nothing in this Agreement shall be construed to give to any
person or corporation other than the Company and Schiller and any other
registered Holder of the Warrant or any securities underlying the Warrant any
legal or equitable right, remedy or claim under this Agreement; and this
Agreement shall be for the sole and exclusive benefit of the Company and
Schiller and any such other Holder.
18. Counterparts.
This Agreement may be executed in any number of counterparts and
each of such counterparts shall for all purposes be deemed to be an original,
and such counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed, as of the day and year first above written.
[SEAL] ACCUMED INTERNATIONAL, INC.
By: \s\ XXXXXXX X. XXXXXX
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer
and Chief Operating Officer
Attest:
\s\ XXXX X. XXXXXXXX
---------------------
Xxxx X. Xxxxxxxx
Assistant Secretary
\s\ XXXXXX X. XXXXXX
--------------------------
Xxxxxx X. Xxxxxx
1
9
EXHIBIT A
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE SECURITIES ISSUABLE UPON
EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), AND MAY NOT BE OFFERED OR SOLD EXCEPT (i) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, (ii) TO THE EXTENT APPLICABLE,
PURSUANT TO RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE UNDER SUCH ACT RELATING
TO THE DISPOSITION OF SECURITIES), OR (iii) UPON THE DELIVERY BY THE HOLDER TO
THE COMPANY OF AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO COUNSEL FOR THE
ISSUER, STATING THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.
THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS
CERTIFICATE IS RESTRICTED IN ACCORDANCE WITH THE WARRANT
AGREEMENT REFERRED TO HEREIN.
EXERCISABLE AT ANY TIME FROM February 3, 1998 UNTIL
5:00 P.M., NEW YORK TIME, February 3, 2003
100,000 Warrants
WARRANT CERTIFICATE
This Warrant Certificate certifies that Xxxxxx X. Xxxxxx, an
individual residing in the State of Nevada ("Xxxxxx"), or registered assigns, is
the registered holder of Warrants to purchase, at any time from February 3,
1998, until 5:00 P.M. New York City time on February 3, 2003 ("Expiration
Date"), up to 100,000 fully-paid and non-assessable share(s) (the "Shares") of
Common Stock, par value $0.01 per share ("Common Stock"), of AccuMed
International, Inc., a Delaware corporation (the "Company"), at the initial
exercise price, subject to adjustment in certain events (the "Exercise Price"),
of $1.5625 per share, upon surrender of this Warrant Certificate and, if
exercised for cash, payment of the Exercise Price at an office or agency of the
Company, but subject to the conditions set forth herein and in the Warrant
Agreement dated as of February 3, 1998, by and between the Company and Xxxxxx
(the "Warrant Agreement"). Payment of the Exercise Price may be made in cash, or
by check payable to the order of the Company, or any combination of cash or
check.
No Warrant may be exercised after 5:00 P.M., New York City time,
on the Expiration Date, at which time all Warrants evidenced hereby, unless
exercised prior thereto, shall thereafter be void.
The Warrants evidenced by this Warrant Certificate are part of a
duly authorized issue of Warrants issued pursuant to the Warrant Agreement,
which Warrant Agreement is hereby incorporated by reference in and made a part
of this instrument and is hereby referred to in a description of the rights,
limitation of
2
10
rights, obligations, duties and immunities thereunder of the Company and the
holders (the words "holders" or "holder" meaning the registered holders or
registered holder) of the Warrants.
The Warrant Agreement provides that upon the occurrence of
certain events, the Exercise Price and the type and/or number of the Company's
securities issuable thereupon may, subject to certain conditions, be adjusted.
In such event, the Company will, at the request of the holder, issue a new
Warrant Certificate evidencing the adjustment in the Exercise Price and the
number and/or type of securities issuable upon the exercise of the Warrants;
provided, however, that the failure of the Company to issue such new Warrant
Certificates shall not in any way change, alter, or otherwise impair, the rights
of the holder as set forth in the Warrant Agreement.
Upon due presentment for registration of transfer of this Warrant
Certificate at an office or agency of the Company, a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like number
of Warrants shall be issued to the transferee(s) in exchange for this Warrant
Certificate, subject to the limitations provided herein and in the Warrant
Agreement, without any charge except for any tax, or other governmental charge
imposed in connection therewith.
Upon the exercise of less than all of the Warrants evidenced by
this Certificate, the Company shall forthwith issue to the holder hereof a new
Warrant Certificate representing such number of unexercised Warrants.
The Company may deem and treat the registered holder(s) hereof as
the absolute owner(s) of this Warrant Certificate (notwithstanding any notation
of ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, and of any distribution to the holder(s) hereof, and for all
other purposes, and the Company shall not be affected by any notice to the
contrary.
All terms used in this Warrant Certificate which are defined in
the Warrant Agreement shall have the meanings assigned to them in the Warrant
Agreement.
3
11
IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be duly executed under its corporate seal.
Dated: February 3, 1998 ACCUMED INTERNATIONAL, INC.
[SEAL] By: XXXXXXX X. XXXXXX
---------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer
and Chief Operating Officer
Attest:
\s\ XXXX X. XXXXXXXX
----------------------
Xxxx X. Xxxxxxxx
Assistant Secretary
4
12
[FORM OF ELECTION TO PURCHASE]
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase _________ shares of Common
Stock of AccuMed International, Inc. (or its successor) and herewith tenders in
payment for such shares cash or a check payable to the order of AccuMed
International, Inc. in the amount of $______________________ , all in accordance
with the terms hereof. The undersigned requests that a certificate for such
shares be registered in the name of __________________________________________
______________________________________________________ , whose address
is_________________________________________________ , and that such Certificate
be delivered to________________________ , whose address is _____________.
Dated: Signature:__________________________________
(Signature must conform in all
respects to name of holder as
specified on the face of the Warrant
Certificate.)
________________________________
________________________________
(Insert Social Security or Other
Identifying Number of Holder)
5
13
[FORM OF ASSIGNMENT]
(To be executed by the registered holder if such holder
desires to transfer the Warrant Certificate.)
FOR VALUE RECEIVED_______________________________________________
hereby sells, assigns and transfers unto
________________________________________________________________________________
(Please print name and address of transferee)
this Warrant Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _______________, Attorney, to
transfer the within Warrant Certificate on the books of the within-named
Company, with full power of substitution.
Dated: Signature:__________________________________
(Signature must conform in all
respects to name of holder as
specified on the face of the
Warrant Certificate)
_______________________________
_______________________________
(Insert Social Security or Other
Identifying Number of Assignee)
1
