EXHIBIT 99.2
WARRANT AGREEMENT
This Warrant Agreement (the "Agreement"), made and entered into as of
June, 2005, by and between ADVANCED BIOPHOTONICS INC., a Delaware corporation
(the "Company"), and CORPORATE STOCK TRANSFER, INC., a Colorodo corporation, as
Warrant Agent (the "Warrant Agent").
W I T N E S S E T H T H A T:
WHEREAS, in connection with the offering of up to 7,000,000 rights
("Rights"), each Right entitling the holder thereof to purchase for $.50 one
share of the Company's Series B Convertible Preferred Stock, par value $.01 per
share (the "Series B Preferred Shares") and to be issued, without the payment of
additional consideration, Common Stock Purchase Warrants (the "Warrants") to
purchase 50% of the shares of Common Stock, par value $.001 per share, issuable
to such holder upon conversion of all the Series B Preferred Shares purchased by
such holder, exercisable at $.75 per share through June, 2010; and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing to so act, in connection with the
issuance, registration, transfer, exchange and redemption of the Warrants, the
issuance of Warrant Certificates, the exercise of the Warrants, and the rights
of the holders thereof.
NOW THEREFORE, in consideration of the premises and the mutual agreements
hereinafter set forth and for the purpose of defining the terms and provisions
of the Warrants and the certificates representing the Warrants (the "Warrant
Certificates") and the respective rights and obligations thereunder of the
Company, the Registered Holders and the Warrant Agent, the parties hereto agree
as follows.
SECTION 1. DEFINITIONS.
As used herein, the following terms shall have the following meanings,
unless the context shall otherwise require:
1.1. "Common Stock" shall mean stock of the Company of any class, whether
now or hereafter authorized, which has the right to participate in the
distribution of earnings and assets of the Company without limit as to amount or
percentage, which at the date hereof consists of 50,000,000 shares of Common
Stock, $.001 par value, authorized.
1.2. "Corporate Office" shall mean the office of the Warrant Agent (or its
successor) at which at any particular time its principal business shall be
administered, which office is located at the date hereof at 0000 Xxxxxx Xxxxx
Xxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000.
1.3. "Exercise Date" shall mean the date on which the Warrant Agent shall
have received both (a) the Warrant Certificate representing a Warrant, with the
exercise form thereon duly executed by the Registered Holder thereof or his
attorney duly authorized in writing, and (b) payment in cash, or by official
bank or certified check made payable to the Company, of an amount in lawful
money of the United States of America equal to the applicable Purchase Price.
1.4. "Initial Warrant Exercise Date" shall mean [__________], 2005.
1.5. "Purchase Price" shall mean the purchase price to be paid upon
exercise of each Warrant in accordance with the terms hereof, which price shall
be $.75 per share through [__________], 2010; subject to adjustment from time to
time pursuant to the provisions of Section 8 hereof.
1.6. "Registered Holder" shall mean the person in whose name any
certificate representing Warrants shall be registered on the books maintained by
the Warrant Agent pursuant to Section 6.
1.7. "Transfer Agent" shall mean Corporate Stock Transfer, Inc., as the
Company's transfer agent, or its authorized successor, as such.
1.8. "Warrant Expiration Date" shall mean 5:00 p.m., New York City time,
on [__________], 2010, provided that if such date shall in the State of New York
be a holiday or a day on which banks are authorized to close, then 5:00 p.m.,
New York City time, on the next following day which in the State of New York is
not a holiday or a day on which banks are authorized to close. Upon notice to
the Registered Holders, the Company shall have the right to extend the warrant
expiration date of the Warrants.
SECTION 2. WARRANTS AND ISSUANCE OF WARRANT CERTIFICATES.
2.1. A Warrant shall initially entitle the Registered Holder of the
Warrant Certificate representing such Warrant to purchase one share of Common
Stock upon the exercise thereof, in accordance with the terms hereof; subject to
modification and adjustment as provided in Section 8.
2.2. Upon execution of this Agreement, the Company shall furnish the
Warrant Agent with a sufficient quantity of blank Warrant Certificates and from
time to time will renew such supply upon the reasonable request of the Warrant
Agent. Such blank Warrant Certificates shall be properly signed by the Company
authorized by law and in accordance with the Company's by laws to sign such
Warrant Certificates. Upon written order of the Company signed by its President
and by another duly authorized officer, the Warrant Certificates shall be
manually countersigned by the Warrant Agent and shall not be valid for any
purpose unless so countersigned, issued and delivered by the Warrant Agent
pursuant to this Agreement.
2.3. From time to time, up to the Warrant Expiration Date, the Transfer
Agent shall countersign and deliver stock certificates in required whole number
denominations representing up to an aggregate of 7,000,000 shares of Common
Stock, subject to adjustment as described herein, upon the exercise of the
Warrants in accordance with this Agreement.
2.4. From time to tune, up to the applicable Warrant Expiration Date, the
Warrant Agent shall countersign and deliver Warrant Certificates in required
whole number denominations to the persons entitled thereto in connection with
any transfer or exchange permitted under this Agreement; provided that no
Warrant Certificates shall be issued except
2
(a) those initially issued hereunder;
(b) those issued on or after the Initial Warrant Exercise Date, upon
the exercise of fewer than all Warrants represented by the respective
Warrant Certificate, to evidence any unexercised Warrants held by the
exercising Registered Holder;
(c) those issued upon any transfer or exchange pursuant to Section
6;
(d) those issued in replacement of lost, stolen, destroyed or
mutilated Warrant Certificates pursuant to Section 7; and
(e) at the option of the Company, in such form as may be approved by
its Board of Directors, to reflect any adjustment or change in the
Purchase Price, or the number of shares of Common Stock purchasable upon
exercise of the Warrants.
SECTION 3. FORM AND EXECUTION OF WARRANT CERTIFICATES.
3.1. The Warrant Certificates shall be substantially in the form annexed
hereto as Exhibit A (the provisions of which are hereby incorporated herein) and
may have such letters, numbers or other marks of identification or designation
and such legends, summaries or endorsements printed, lithographed or engraved
thereon as the Company may deem appropriate and as are not inconsistent with the
provisions of this Agreement, or as may be required to comply with any law or
with any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which the Warrants may be listed, or to conform to
usage. The Warrant Certificates shall be dated the date of issuance thereof
(whether upon initial issuance, transfer, exchange or in lieu of mutilated,
lost, stolen or destroyed Warrant Certificates) and issued in registered form.
Warrants shall be numbered serially with the letters RO.
3.2. Warrant Certificates shall he properly signed on behalf of the
Company by officers of the Company authorized by law and in accordance with the
Company's by-laws to sign such Warrant Certificates. Warrant Certificates shall
be manually countersigned by the Warrant Agent and shall not be valid for any
purpose unless so countersigned. In case any officer of the Company who shall
have signed any of the Warrant Certificates shall cease to be such officer of
the Company before the date of issuance of the Warrant Certificates or before
countersignature by the Warrant Agent, such Warrant Certificate may be issued
and delivered with the same force and effect as though the person who signed
such Warrant Certificates had not ceased to be such officer of the Company.
After countersignature by the Warrant Agent, Warrant Certificates shall be
delivered by the Warrant Agent to the Registered Holder without further action
by the Company, except as otherwise provided by Section 4 hereof.
SECTION 4. EXERCISE.
4.1. Each Warrant may be exercised by the Registered Holder thereof at any
time on or after the Initial Exercise Date, but not after the Warrant Expiration
Date, upon the terms and subject to the conditions set forth herein and in the
Warrant Certificate. A Warrant shall be deemed to have been exercised
immediately prior to the close of business on the Exercise Date and the person
entitled to receive the Common Stock deliverable upon such exercise shall be
treated for all purposes as the holder upon exercise thereof as of the close of
business on the Exercise Date. As soon as practicable on or after the Exercise
Date, the Warrant Agent shall deposit the proceeds received from the exercise of
a Warrant and shall notify the Company in writing, by mail or by telecopy of the
exercise of the Warrants. Promptly following, and in any event within three (3)
days after the date of such notice from the Warrant Agent, the Warrant Agent, on
behalf of the Company, shall cause to be issued and delivered by the Transfer
Agent, to the person or persons entitled to receive the same, a certificate or
certificates for the securities deliverable upon such exercise, (plus a Warrant
Certificate for any remaining unexercised Warrants of the Registered Holder)
unless within 24 hours of the receipt of the notice, the Company shall instruct
the Warrant Agent by telecopy to refrain from causing such issuance of Warrant
Certificates pending clearance of checks received in payment of the Purchase
Price pursuant to such Warrants. Upon the exercise of any Warrant and clearance
of the funds received, the Warrant Agent shall promptly remit the payment
received for the Warrant to the Company or as the Company may direct in writing.
3
SECTION 5. RESERVATION OF SHARES; LISTING; PAYMENT OF TAXES; ETC.
5.1. The Company's Certificate of Incorporation authorizes the issuance of
50,000,000 shares of Common Stock. As of [_______], 2005, the Company had
outstanding [_________] shares of Common Stock. The Company covenants that it
will at all times reserve and keep available out of its authorized Common Stock,
solely for the purpose of issue upon exercise of Warrants, such number of shares
of Common Stock as shall be issuable upon the exercise of all outstanding
Warrants. The Company covenants that all shares of Common Stock which shall be
issuable upon exercise of the Warrants shall, at the time of delivery, be duly
and validly issued, fully paid, nonassessable and free from all taxes, liens and
charges with respect to the issue thereof (other than those which the Company
shall promptly pay or discharge).
5.2. The Company covenants that if any securities to be reserved for the
purpose of exercise of Warrants hereunder require registration with, or approval
of, any governmental authority under any Federal securities law before such
securities may be validly issued or delivered upon such exercise, then the
Company will in good faith and as expeditiously as reasonably possible, endeavor
to secure such registration or approval. The Company will use reasonable efforts
to obtain appropriate approvals or registrations under state "blue sky"
securities laws. With respect to any such securities, however, Warrants may not
be exercised by, or shares of Common Stock issued to, any Registered Holder in
any state in which such exercise would he unlawful. The Warrant Agent will not
have any duty or responsibility for determining if the registration would be
unlawful.
5.3. The Company shall pay all documentary, stamp or similar taxes and
other governmental charges that may be imposed with respect to the issuance of
Warrants, or the issuance, or delivery of any shares upon exercise of the
Warrants; provided, however, that if the shares of Common Stock are to be
delivered in a name other than the name of the Registered Holder of the Warrant
Certificate representing any Warrant being exercised, then no such delivery
shall be made unless the person requesting the same has paid to the Warrant
Agent the amount of transfer taxes or charges incident thereto, if any.
4
5.4. The Warrant Agent is hereby irrevocably authorized to requisition the
Company's Transfer Agent from time to time for certificates representing shares
of Common Stock required upon exercise of the Warrants, and the Company will
authorize the Transfer Agent to comply with all such proper requisitions. The
Company will file with the Warrant Agent a statement setting forth the name and
address of the Transfer Agent of the Company for shares of Common Stock issuable
upon exercise of the Warrants.
SECTION 6. EXCHANGE AND REGISTRATION OF TRANSFER.
6.1. Warrant Certificates may be exchanged for other Warrant Certificates
representing an equal aggregate number of Warrants of the same class or may be
transferred in whole or in part. Warrant Certificates to be exchanged shall be
surrendered to the Warrant Agent at the Corporate Office, and upon satisfaction
of the terms and provisions hereof, the Company shall execute and the Warrant
Agent shall countersign, issue and deliver in exchange therefor the Warrant
Certificate or Certificates which the Registered Holder making the exchange
shall be entitled to receive.
6.2. The Warrant Agent shall keep at the Corporate Office books in which,
subject to such reasonable regulations as it may prescribe, it shall register
Warrant Certificates and the transfer thereof in accordance with its regular
practice. Upon due presentment for registration or transfer of any Warrant
Certificate at such office, the Company shall execute and the Warrant Agent
shall issue and deliver to the transferee or transferees a new Warrant
Certificate or Certificates representing an equal aggregate number of Warrants
of the same class.
6.3. With respect to all Warrant Certificates presented for registration
or transfer, or for exchange or exercise, the Warrant Agent shall from time to
time register the transfer, exchange or exercise of any outstanding Warrant
Certificate upon records maintained by the Warrant Agent for such purpose upon
surrender of such Warrant Certificate to the Warrant Agent, accompanied by
appropriate instruments of transfer in form satisfactory to the Company and the
Warrant Agent and duly executed by the Registered Holder or a duly authorized
attorney.
6.4. A Service charge may be imposed by the Warrant Agent for registration
or transfer or for exchange of Warrant Certificates. In addition, the Company
may require payment by such holder of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith.
6.5. All Warrant Certificates surrendered for exercise or for exchange in
case of mutilated Warrant Certificates shall be promptly canceled by the Warrant
Agent and thereafter retained by the Warrant Agent until termination of this
Agreement or resignation as Warrant Agent, or, disposed of or destroyed, at the
direction of the Company, within the retention guidelines prescribed by any
Federal, State or banking regulatory authority.
6.6. Prior to due presentment for registration or transfer thereof, the
Company and the Warrant Agent may deem and treat the Registered Holder of any
Warrant Certificate as the absolute owner thereof and of each Warrant
represented thereby (notwithstanding any notations of ownership or writing
thereon made by anyone other than a duly authorized officer of the Company or
the Warrant Agent) for all purposes and shall not be affected by any notice to
the contrary.
5
SECTION 7. LOSS OR MUTILATION.
7.1. Upon receipt by the Company and the Warrant Agent of evidence
satisfactory to them of the ownership of and loss, theft, destruction or
mutilation of any Warrant Certificate and (in case of loss, theft or
destruction) of indemnity satisfactory to them, and (in the case of mutilation)
upon surrender and cancellation thereof the Company shall execute and the
Warrant Agent shall (in the absence of notice to the Company and/or Warrant
Agent that the Warrant Certificate has been acquired by a bonafide purchaser)
countersign and deliver to the Registered Holder in lieu thereof a new Warrant
Certificate of like tenor representing an equal aggregate number of Warrants of
that same class. Applicants for a substitute Warrant Certificate shall comply
with such other reasonable regulations and pay such other reasonable charges as
the Warrant Agent may prescribe.
SECTION 8. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES OF COMMON
STOCK OR WARRANTS.
8.1. The Company may elect, upon any adjustment of the Purchase Price
hereunder, to adjust the number of Warrants of each or any class outstanding, in
lieu of the adjustment in the number of shares of Common Stock purchasable upon
the exercise of each Warrant as hereinabove provided, so that each Warrant
outstanding after such adjustment shall represent the right to purchase one
share of Common Stock. Each Warrant held of record prior to such adjustment of
the number of Warrants of each or any class shall become that number of Warrants
(calculated to the nearest tenth) determined by multiplying the number one by a
fraction, the numerator of which shall be the Purchase Price in effect
immediately prior to stock adjustment and the denominator of which shall be the
Purchase Price in effect immediately after such adjustment. Upon each adjustment
of the number of Warrants pursuant to this Section 8.1, the Company shall, as
promptly as practicable, cause to be distributed to each Registered Holder of
Warrant Certificates on the date of such adjustment Warrant Certificates
evidencing, subject to Section 9 hereof, the number of additional Warrants of
each class to which such Registered Holder shall be entitled as a result of such
adjustment or, at the option of the Company, cause to be distributed to such
Registered Holder in substitution and replacement for the Warrant Certificates
held by him prior to the date of adjustment (and upon surrender thereof, if
required by the Company) new Warrant Certificates evidencing the number of
Warrants of each class to which such Registered Holder shall be entitled after
such adjustment.
8.2. In case of any reclassification, capital reorganization or other
change of outstanding shares of Common Stock, or in case of any consolidation or
merger of the Company with or into another corporation (other than a
consolidation or merger in which the Company is the continuing corporation and
which does not result in any reclassification, capital reorganization or other
change of outstanding shares of Common Stock), or in case of any sale or
conveyance to another corporation of the property of the Company as, or
substantially as, an entirety (other than a sale/leaseback, mortgage or other
financing transaction), the Company shall cause effective provision to be made
so that:
6
(a) each holder of a Warrant then outstanding shall have the right
thereafter, by exercising such Warrant, to purchase the kind and number of
shares of stock or other securities or property (including cash)
receivable upon such reclassification, capital reorganization or other
change, consolidation, merger, sale or conveyance by a holder of the
number of shares of Common Stock that might have been purchased upon
exercise of such Warrant immediately prior to such reclassification,
capital reorganization or other change, consolidation, merger, sale or
conveyance. Any such provision shall include provision for adjustments
that shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 8.2; and
(b) new management of the Company will be obligated to maintain a
current prospectus with respect to the Warrants until the Warrant
Expiration Date. The foregoing provisions shall similarly apply to
successive reclassifications, capital reorganizations and other changes of
outstanding shares of Common Stock and to successive consolidations,
mergers, sales or conveyances.
8.3. If and whenever the Company shall grant to the holders of Common
Stock, as such, rights or warrants to subscribe for or to purchase, or any
options for the purchase of, Common Stock or securities convertible into or
exchangeable for or carrying a right, warrant or option to purchase Common
Stock, the Company shall concurrently therewith grant to each of the then
Registered Holders of the Warrants all of such rights, warrants or options to
which each such holder would have been entitled if, on the date of determination
of stockholders entitled to the rights, warrants or options being granted by the
Company, such holder were the holder of record of the number of whole shares of
Common Stock then issuable upon exercise (assuming, for purposes of this Section
8.3, that exercise of Warrants is permissible during periods prior to the
Initial Warrant Exercise Date) of his Warrants. Such grant by the Company to the
holders of the Warrants shall be in lieu of any adjustment which otherwise might
be called for pursuant to this Section 8.
8.4. Irrespective of any adjustments or changes in the Purchase Price or
the number of shares of Common Stock purchasable upon exercise of the Warrants,
the Warrant Certificates theretofore and thereafter issued shall, unless the
Company shall exercise its option to issue new Warrant Certificates pursuant to
Section 2.4 hereof, continue to express the Purchase Price per share, and the
number of shares purchasable thereunder in the Warrant Certificates when the
same were originally issued.
8.5. After each adjustment of the Purchase Price pursuant to this Section
8, the Company will promptly prepare a certificate signed by the President and
by the Secretary or an Assistant Secretary, of the Company setting forth:
(a) the Purchase Price as so adjusted,
(b) the number of shares of Common Stock purchasable upon exercise
of each Warrant after such adjustment, and, if the Company shall have
elected to adjust the number of Warrants, the number of Warrants to which
the Registered Holder of each Warrant shall then be entitled, and
7
(c) a brief statement of the facts accounting for such adjustment.
The Company will promptly file such certificate with the Warrant Agent and
cause a brief summary thereof to be sent by ordinary first class mail to
each registered holder of Warrants at his last address as it shall appear
on the registry books of the Warrant Agent. No failure to mail such notice
nor any defect therein or in the mailing thereof shall affect the validity
thereof except as to the Registered Holder to whom the Company failed to
mail such notice, or except as to the Registered Holder whose notice was
defective. The affidavit of an officer of the Warrant Agent or the
Secretary or an Assistant Secretary of the Company that such notice has
been mailed shall, in the absence of fraud, be prima facie evidence of the
facts stated therein.
8.6. As used in this Section 8, the term "Common Stock" shall mean and
include the Company's Common Stock authorized on the date of the original issue
of the Warrants and shall also include any capital stock of any class of the
Company thereafter authorized which shall not be limited to a fixed sum or
percentage in respect of the rights of the holders thereof to participate in
dividends and in the distribution of assets upon the voluntary liquidation,
dissolution or winding up of the Company; provided, however, that the shares
issuable upon exercise of the Warrants shall include only shares of such class
designated in the Company's Certificate of Incorporation as Common Stock on the
date of the original issue of the Warrants or (i), in the case of any
reclassification, change, consolidation, merger, sale or conveyance of the
character referred to in Section 8.2, hereof, the stock, securities or property
provided for in such section or (ii), in the case of any reclassification or
change in the outstanding shares of Common Stock issuable upon exercise of the
Warrants as a result of a subdivision or combination or consisting of a change
in par value, or from par value to no par value, or from no par value to par
value, such shares of Common Stock as so reclassified or changed.
8.7. Any determination as to whether an adjustment in the Purchase Price
in effect hereunder is required pursuant to Section 8, or as to the amount of
any such adjustment, if required, shall be binding upon the holders of the
Warrants and the Company if made in good faith by the Board of Directors of the
Company.
8.8. The Warrant Agent assumes no responsibility for any determination
under this Section and will act only in accordance with the written directions
of the Company and its counsel.
SECTION 9. FRACTIONAL WARRANTS AND FRACTIONAL SHARES.
9.1. If the number of shares of Common Stock purchasable upon the exercise
of each Warrant is adjusted pursuant to Section 8 hereof, the Company shall
nevertheless not be required to issue fractions of shares, upon exercise of the
Warrants or otherwise, or to distribute certificates that evidence fractional
shares. With respect to any fraction of a share called for upon any exercise
hereof, the Company shall pay to the Holder an amount in cash equal to such
fraction multiplied by the current market value of such fractional share,
determined as follows:
(a) If the Common Stock is listed on a National Securities Exchange
or admitted to unlisted trading privileges on such exchange or listed for
trading on the Nasdaq Stock Market, the current value shall be the last
reported sale price of the Common Stock on such exchange on the last
business day prior to the date of exercise of this Warrant or if no such
sale is made on such day, the average closing bid and asked prices for
such day on such exchange; or
8
(b) If the Common Stock is not listed or admitted to unlisted
trading privileges, the current value shall be the mean of the last
reported bid and asked prices reported by the National Quotation Bureau,
Inc. on the last business day prior to the date of the exercise of this
Warrant; or
(c) if the Common Stock is not so listed or admitted to unlisted
trading privileges and bid and asked prices are not so reported, the
current value shall be an amount determined in such reasonable manner as
may be prescribed by the Board of Directors of the Company.
SECTION 10. WARRANT HOLDERS NOT DEEMED STOCKHOLDERS.
10.1. No Registered Holder shall, as such, be entitled to vote or to
receive dividends or be deemed the holder of Common Stock that may at any time
be issuable upon exercise of such Warrants for any purpose whatsoever, nor shall
anything contained herein be construed to confer upon the Registered Holder, as
such, any of the rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to stockholders at any
meeting thereof or to give or withhold consent to any corporate action (whether
upon any recapitalization, issue or reclassification of stock, change of par
value or change of stock to no par value, consolidation, merger or conveyance or
otherwise), or to receive notice of meetings, or to receive dividends or
subscription rights, until such Registered Holder shall have exercised such
Warrants and been issued shares of Common Stock in accordance with the
provisions hereof.
SECTION 11. RIGHTS OF ACTION.
11.1. All rights of action with respect to this Agreement are vested in
the respective Registered Holders, and any Registered Holder, without consent of
the Warrant Agent or of the holder of any other Warrant, may, in his own behalf
and for his own benefit, enforce against the Company his right to exercise his
Warrants for the purchase of shares of Common Stock in the manner provided in
the Warrant Certificate and this Agreement.
SECTION 12. AGREEMENT OF WARRANT HOLDERS.
12.1. Every Registered Holder, by his acceptance thereof, consents and
agrees with the Company, the Warrant Agent and every other holder of a Warrant
that:
(a) The Warrants arc transferable only on the registry books of the
Warrant Agent by the Registered Holder thereof in person or by his
attorney duly authorized in writing and only if the Warrant Certificates
representing such Warrants are surrendered at the office of the Warrant
Agent, duly endorsed or accompanied by a proper instrument of transfer
satisfactory to the Warrant Agent and the Company in their sole
discretion, together with payment of any applicable transfer taxes; and
9
(b) The Company and the Warrant Agent may deem and treat the person
in whose name the Warrant Certificate is registered as the holder and as
the absolute, true and lawful owner of the Warrants represented thereby
for all purposes, and neither the Company nor the Warrant Agent shall be
affected by any notice or knowledge to the contrary, except as otherwise
expressly provided in Section 6 hereof.
SECTION 13. CANCELLATION OF WARRANT CERTIFICATES.
13.1. If the Company shall purchase or acquire any Warrant or Warrants,
the Warrant Certificate or Warrant Certificates evidencing the same shall
thereupon be delivered to the Warrant Agent and canceled by it and retired.
SECTION 14. CONCERNING THE WARRANT AGENT.
14.1. The Warrant Agent shall act hereunder as agent and in a ministerial
capacity for the Company, and its duties shall be determined solely by the
provisions hereof. The Warrant Agent shall not, by issuing and delivering
Warrant Certificates or by any other act hereunder be deemed to make any
representations as to the validity, value or authorization of the Warrant
Certificates or the Warrants represented thereby or of any securities or other
property delivered upon exercise of any Warrant or whether any stock issued upon
exercise of any Warrant is fully paid and nonassessable.
14.2. The Warrant Agent shall not at any time be under any duty or
responsibility to any holder of Warrant Certificates to make or cause to be made
any adjustment of the Purchase Price provided in this Agreement, or to determine
whether any fact exists which may require any such adjustments, or with respect
to the nature or extent of any such adjustment, when made, or with respect to
the method employed in making the same. It shall not (i) be liable for any
recital or statement of facts contained herein or for any action taken, suffered
or omitted by it in reliance on any Warrant Certificate or other document or
instrument believed by it in good faith to be genuine and to have been signed or
presented by the proper party or parties, (ii) be responsible for any failure on
the part of the Company to comply with any of its covenants and obligations
contained in this Agreement or in any Warrant Certificate, or (iii) be liable
for any act or omission in connection with this Agreement except for its own
negligence or willful misconduct.
14.3. The Warrant Agent may at any time consult with counsel satisfactory
to it (who may be counsel for the Company) and shall incur no liability or
responsibility for any action taken, suffered or omitted by it in good faith in
accordance with the opinion or advice of such counsel, Any notice, statement,
instruction, request, direction, order or demand of the Company shall be
sufficiently evidenced by an instrument signed by the President, its Secretary,
or Assistant Secretary (unless other evidence in respect thereof is herein
specifically prescribed). The Warrant Agent shall not be liable for any action
taken, suffered or omitted by it in accordance with such notice, statement,
instruction, request, direction, order or demand believed by it to be genuine.
14.4. The Company agrees to pay the Warrant Agent compensation for its
services hereunder and to reimburse it for its expenses hereunder in accordance
with the fees listed on Schedule I attached hereto; it further agrees to
indemnify the Warrant Agent and save it harmless against any and all losses,
expenses and liabilities, including judgments, costs and counsel fees, for
anything done or omitted by the Warrant Agent in the execution of its duties and
powers hereunder except losses, expenses and liabilities arising as a result of
the Warrant Agent's negligence or willful misconduct.
10
14.5. The Warrant Agent may resign its duties and be discharged from all
further duties and liabilities hereunder (except liabilities arising as a result
of the Warrant Agent's own negligence or willful misconduct), after giving 60
days' prior written notice to the Company. At least 30 days prior to the date
such resignation is to become effective, the Warrant Agent shall cause a copy of
such notice of resignation to be mailed to the Registered Holder of each Warrant
Certificate at the Company's expense. Upon such resignation, or any inability of
the Warrant Agent to act as such hereunder, the Company shall appoint a new
warrant agent in writing. If the Company shall fail to make such appointment
within a period of 30 days after it has been notified in writing of such
resignation by the resigning Warrant Agent, then the Registered Holder of any
Warrant Certificate may apply to any court of competent jurisdiction for the
appointment of a new warrant agent. Any new Warrant Agent, whether appointed by
the Company or by such a court, shall be a bank or trust company having a
capital and surplus, as shown by its last published report to its stockholders,
of not less than $10,000,000 or a stock transfer company. After acceptance in
writing of such appointment by the new warrant agent is received by the Company,
such new warrant agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named herein as the Warrant Agent,
without any further assurance, conveyance, act or deed; but if for any reason it
shall be necessary or expedient to execute and deliver any further assurance,
conveyance, act or deed, the same shall be done at the expense of the Company
and shall be legally and validly executed and delivered by the resigning Warrant
Agent. Not later than the effective date of any such appointment the Company
shall file notice thereof with the resigning Warrant Agent and shall forthwith
cause a copy of such notice to be mailed to the Registered Holder of each
Warrant Certificate.
14.6. Any corporation into which the Warrant Agent or any new warrant
agent may he converted or merged or any corporation resulting from any
consolidation to which the Warrant Agent or any new warrant agent shaft be a
party or any corporation succeeding to the trust business of the Warrant Agent
shall be a successor warrant agent under this Agreement without any further act,
provided that such corporation is eligible for appointment as successor to the
Warrant Agent under the provisions of the preceding paragraph. Any such
successor warrant agent shall promptly cause notice of its succession as warrant
agent to be mailed to the Company and to the Registered Holder of each Warrant
Certificate.
14.7. The Warrant Agent, its subsidiaries and affiliates, and any of its
or their officers or directors, may buy and hold or sell Warrants or other
securities of the Company and otherwise deal with the Company in the same manner
and to the same extent and with like effects as though it were not Warrant
Agent. Nothing herein shall preclude the Warrant Agent from acting in any other
capacity for the Company or for any other legal entity.
11
SECTION 15. MODIFICATION OF AGREEMENT.
15.1. The Warrant Agent and the Company may by supplemental agreement make
any changes or corrections in this Agreement (i) that they shall deem it
appropriate to cure any ambiguity or to correct any defective or inconsistent
provision or manifest mistake or error herein contained; or (ii) that they may
deem necessary or desirable and which shall not adversely affect the interests
of the Registered Holders; provided, however, that this Agreement shall not
otherwise be modified, supplemented or altered in any respect except with the
consent in writing of the Registered Holders representing not less than
two-thirds of the Warrants, other than such changes as are specifically
prescribed by this Agreement as originally executed.
SECTION 16. NOTICES.
16.1. All notices, requests, consents and other communications hereunder
shall be in writing and shall be deemed to have been made when delivered or
mailed first class registered or certified mail, postage prepaid as follows: if
to the Registered Holder of a Warrant Certificate, at the address of such holder
as shown on the registry books maintained by the Warrant Agent; if to the
Company, at 000 Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxx Xxxx 00000, Attention:
Xxxxx X. X'Xxxxxx, or at such other address as may have been furnished to the
Warrant Agent in writing by the Company; if to the Warrant Agent, at the
Corporate Office.
SECTION 17. GOVERNING LAW.
17.1. This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware, without reference to principles of conflicts
of law.
SECTION 18. BINDING EFFECT.
18.1. This Agreement shall be binding upon and inure to the benefit of the
Company and, the Warrant Agent and their respective successors and assigns, and
the Registered Holders of the Warrant Certificates. Nothing in this Agreement is
intended or shall he construed to confer upon any other person any right, remedy
or claim, in equity or at law, or to impose upon any other person any duty,
liability or obligation.
SECTION 19. TERMINATION.
19.1. This Agreement shall terminate at the close of business on the
Expiration Date of the Warrant or such earlier date upon which all Warrants have
been exercised, except that the obligation of the Warrant Agent to account to
the Company for cash held by it and the provisions of Section 13 hereof shall
survive such termination.
SECTION 20. COUNTERPARTS.
20.1. This Agreement may be executed in several counterparts, which taken
together shall constitute a single document.
[Remainder of page intentionally left blank.]
12
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
ADVANCED BIOPHOTONICS INC.
By:
--------------------------------------
Name:
Title:
CORPORATE STOCK TRANSFER, INC.
By:
--------------------------------------
Name:
Title:
13
Schedule I
Fees
Exhibit A
Warrant Certificate
