WARRANT AGREEMENT dated as of December 28, 1995, by and between
AccuMed International, Inc., a Delaware corporation (the "Company"), and
Commonwealth Associates, a New York limited partnership ("Commonwealth").
W I T N E S S E T H:
WHEREAS, the Company proposes to issue to Commonwealth a warrant (the
"Warrant") to purchase up to 750,000 shares (the "Warrant Shares") of the
Company's Common Stock, par value $.01 per share (the "Common Stock"); and
WHEREAS, the Warrant issued pursuant to this Agreement is being issued by
the Company to Commonwealth and/or its designees in consideration for certain
services performed by Commonwealth in connection with the merger of AccuMed,
Inc. with and into the Company.
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, Commonwealth and/or its designees is hereby granted the right to
purchase, at any time from December 28, 1995 until 5:00 P.M., New York time, on
December 28, 2000 (the "Warrant Exercise Term"), up to 750,000 Warrant Shares at
an initial exercise price (subject to adjustment as provided in Article 8
hereof) of $1.25 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. The Warrant initially is exercisable at a price of
$1.25 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 8 hereof. Upon surrender of the Warrant Certificate with the annexed
Form of Election to Purchase duly executed, together with 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, Xxxxx
000, Xxxxxxx, Xxxxxxxx 60610) Commonwealth (or other registered holder of the
Warrant Certificate) (the "Holder") shall be entitled to receive a certificate
or certificates for the Warrant Shares so pur-
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chased. 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, the issuance of certificates for the
Warrant Shares purchased shall be made forthwith (and in any event within three
business days thereafter) 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 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 securities represented by this
certificate 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 the
Act (or any similar rule under such Act
relating to the disposition of securities),
or (iii) upon the delivery by the holder to
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the Company of an opinion of counsel,
reasonably satisfactory to counsel to the
issuer, stating that an exemption from
registration under such Act is available."
5. Restriction on Transfer of Warrants and Warrant Shares.
Commonwealth, by its 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 directly or indirectly offered, transferred, assigned,
pledged, sold or otherwise disposed of for a period of eighteen (18) months from
December 28, 1995 except with the consent of the Company.
6. Price.
6.1. Initial and Adjusted Exercise Price. The initial exercise price of the
Warrant shall be $1.25 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 8
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. Registration Rights.
7.1. Registration Under the Securities Act of 1933. The Warrant and the
Warrant Shares have not been registered for purposes of public distribution
under the Act.
7.2. Registrable Securities. As used herein the term "Registrable Security"
means the Warrant Shares and any shares of Common Stock issued upon any stock
split, dividend or stock dividend in respect of the Warrant Shares; provided,
however, that with respect to any particular Registrable Security, such security
shall cease to be a Registrable Security when, as of the date of determination,
(i) it has been effectively registered under the Act and disposed of pursuant
thereto, (ii) registration under the Act is no longer required for subsequent
public distribution of such security, or (iii) it has ceased to be outstanding.
The term "Registrable Securities" means any and/or all of the securities falling
within the foregoing definition of a "Registrable Security." In the event of any
merger, reorganization, consolidation, recapitalization or other change in
corporate structure affecting the Common Stock, such adjustment shall be made in
the definition of "Registrable Security" as is appropriate in order to prevent
any dilution or enlargement of the rights granted pursuant to this Article 7.
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7.3. Piggyback Registration. If, at any time during the seven (7) years
following the date of this Agreement, the Company proposes to prepare and file
any new registration statement or post-effective amendments thereto covering
equity or debt securities of the Company, or any such securities of the Company
held by its shareholders (in any such case, other than in connection with a
merger, acquisition or pursuant to Form S-8 or successor form) (for purposes of
this Article 7, collectively, a "Company Registration Statement"), it will give
written notice (the "Notice") of its intention to do so by registered mail, at
least thirty (30) business days prior to the filing of each such Company
Registration Statement, to all holders of the Registrable Securities. Upon the
written request of such a holder (a "Requesting Holder"), made within twenty
(20) business days after receipt of the Notice, that the Company include any of
the Requesting Holder's Registrable Securities in the proposed Company
Registration Statement, the Company shall, as to each such Requesting Holder,
use its best efforts to effect the registration under the Act of the Registrable
Securities which it has been so requested to register ("Piggyback
Registration"), at the Company's sole cost and expense and at no cost or expense
to the Requesting Holders (except as to underwriting discounts and commissions
and costs of individual Requesting Holders' counsel and professional advisors).
Notwithstanding the provisions of this Section 7.3, the Company shall have
the right at any time after it shall have given written notice pursuant to this
Section 7.3 (irrespective of whether any written request for inclusion of such
securities shall have already been made) to elect not to file any such proposed
Company Registration Statement, or to withdraw the same after the filing but
prior to the effective date thereof.
7.4 Demand Registration Right.
(a) At any time during the Warrant Exercise Term, any "Majority
Holder" (as such term is defined in Section 7.4(c) below) of the Registrable
Securities shall have the right (which right is in addition to the piggyback
registration rights) provided for under Section 7.3 hereof), exercisable by
written notice to the Company (the "Demand Registration Request"), to have the
Company prepare and file with the Securities and Exchange Commission (the
"Commission"), on one occasion, at the sole expense of the Company (other than
the pro rata portion of underwriting discounts, if any, attributable to the
Holder's Registrable Securities and the expenses of Holder's counsel and
advisors), a Registration Statement and such other documents, including a
prospectus, as may be necessary (in the opinion of both counsel for the Company
and counsel for such Majority Holder), in order to comply with the provisions of
the Act, so as to permit a public offering and sale of the Registrable
Securities until such time as (i) the sale of all Registrable Securities by the
holders thereof or (ii) receipt by the holders thereof of an opinion of
Company's counsel that the Registrable
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Securities may be immediately publicly sold without registration under the
Securities Act.
(b) The Company covenants and agrees to give written notice of any
Demand Registration Request to all holders of the Registrable Securities within
ten (10) days from the date of the Company's receipt of any such Demand
Registration Request. After receiving notice from the Company as provided in
this Section 7.4(b), holders of Registrable Securities may request the Company
to include their Registrable Securities in the Registration Statement to be
filed pursuant to Section 7.4(a) hereof by notifying the Company of their
decision to include such securities within ten (10) days of their receipt of the
Company's notice.
(c) The term "Majority Holder" as used in this Section 7.4 shall means
any holder or any combination of holders of Registrable Securities, if included
in such holders' Registrable Securities are that aggregate number of Warrant
Shares (including Warrant Shares already issued and Warrant Shares issuable
pursuant to the exercise of outstanding warrants) as would constitute a majority
of the aggregate number of Warrant Shares (including Warrant Shares already
issued and Warrant Shares issuable pursuant to the exercise of outstanding
Warrants) included in all of the Registrable Securities.
7.5 Covenants of the Company With Respect to Registration. The Company
covenants and agrees as follows:
(a) In connection with any registration under Section 7.4 hereof, the
Company shall file the Registration Statement as expeditiously as possible, but
in no event later than ten (10) business days following receipt of any demand
therefor, shall use its best efforts to have any such Registration Statements
declared effective at the earliest possible time, and shall furnish each holder
of Registrable Securities such number of prospectuses as shall reasonably be
requested.
(b) The Company shall pay all costs, fees and expenses in connection
with all Registration Statements filed pursuant to Sections 7.3 and 7.4 hereof
including, without limitation, the Company's legal and accounting fees, printing
expenses, and blue sky fees and expenses, except for any underwriting discounts
or commissions with respect to the Registrable Securities and except for fees of
counsel and other professional advisors of a holder or group of holders.
(c) The Company will take all necessary action which may be required
in qualifying or registering the Registrable Securities included in a
Registration Statement for offering and sale under the securities or blue sky
laws of such states as are requested by the holders of such securities, provided
that the Company shall not be obligated to so qualify or
5
register the Registrable Securities in any state that would require the Company
to execute or file any general consent to service of process or to qualify as a
foreign corporation to do business under the laws of any such jurisdiction.
(d) The Company shall indemnify any holder of the Registrable
Securities to be sold pursuant to any Registration Statement and any underwriter
or person deemed to be an underwriter under the Act and each person, if any, who
controls such holder or underwriter or person deemed to be an underwriter within
the meaning of Section 15 of the Act or Section 20(a) of the Securities Exchange
Act of 1934, as amended ("Exchange Act"), against all loss, claim, damage,
expense or liability (including all expenses reasonably incurred in
investigating, preparing or defending against any claim whatsoever) to which any
of them may become subject under the Act, the Exchange Act or otherwise, arising
from any untrue statement of a material fact contained in a Registration
Statement, any other registration statement filed by the Company under the Act,
any post-effective amendment to such registration statements, or any prospectus
included therein required to be filed or furnished by reason of this Article 7
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 not
misleading, except insofar as such losses, claims, damages or liabilities are
caused by any such untrue statement or alleged untrue statement or omission or
alleged omission based upon information furnished or required to be furnished in
writing to the Company by the holder of the Registrable Securities or
underwriter expressly for use therein; which indemnification shall include each
person, if any, who controls any such underwriter within the meaning of the Act
and each officer, director, employee and agent of such underwriter; provided,
however, that the Company shall not be obligated to so indemnify such holder or
any such underwriter or other person referred to above unless such holder or
underwriter or other person, as the case may be, shall at the same time
indemnify the Company to the extent required herein. Each person who may be
entitled to indemnification pursuant to the preceding sentence shall indemnify
the Company, its directors, each officer signing the registration statement and
each person, if any, who controls the Company within the meaning of the Act,
from and against any and all losses, claims, damages and liabilities caused by
any untrue statement or alleged untrue statement of a material fact contained in
a Registration Statement, any registration statement or any prospectus required
to be filed or furnished by reason of this Article 7 or caused by any omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, insofar as such losses, claims,
damages or liabilities are caused by any untrue statement or alleged untrue
statement or omission based upon information furnished in writing to the Company
by the Holder or underwriter expressly for use therein.
6
(e) Promptly after receipt of notice of the commencement of any action
in respect of which indemnity may be sought against any indemnifying party under
this Section 7.5, the indemnified party will notify the indemnifying party in
writing of the commencement thereof, and the indemnifying party will, subject to
the provisions hereinafter stated, assume the defense of such action (including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of expenses) insofar as such action relates to an alleged liability
in respect of which indemnity may be sought against the indemnifying party.
After notice from the indemnifying party of its election to assume the defense
of such claim or action, the indemnifying party shall no longer be liable to the
indemnified party under this Section 7.5 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
if, in the written opinion of counsel to the indemnified party or parties, it is
advisable for the indemnified party or parties to be represented by separate
counsel, the indemnified party or parties shall have the right to employ a
single counsel to represent the indemnified parties who may be subject to
liability arising out of any claim in respect of which indemnity may be sought
by the indemnified parties thereof against the indemnifying party, in which
event the reasonable fees and expenses of such separate counsel shall be borne
by the indemnifying party. Any party against whom indemnification may be sought
under this Section 7.5 shall not be liable to indemnify any person that might
otherwise be indemnified pursuant hereto for any settlement of any action
effected without such indemnifying party's consent, which consent shall not be
unreasonably withheld.
(f) If for any reason the indemnification provided for in the
preceding subparagraph is held by a court of competent jurisdiction to be
unavailable to an indemnified party with respect to any loss, claim, damage,
liability or expense referred to therein, then the indemnifying party, in lieu
of indemnifying such indemnified party thereunder, shall contribute to the
amount paid or payable by the indemnified party as a result of such loss, claim,
damage or liability in such proportion as is appropriate to reflect not only the
relative benefits received by the indemnified party and the indemnifying party,
but also the relative fault of the indemnified party and the indemnifying party,
as well as any other relevant equitable considerations.
(g) Nothing contained in this Agreement shall be construed as
requiring any holder to exercise the Warrant prior to the initial filing of any
registration statement or the effectiveness thereof.
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8. Adjustments of Exercise Price and Number of Warrant Shares.
8.1. Computation of Adjusted Price. Except as hereinafter provided, in
case the Company shall at any time after the date hereof issue or sell any
shares of Common Stock (other than the issuances or sales referred to in Section
8.6 hereof), including shares held in the Company's treasury and shares of
Common Stock issued upon the exercise of any options, rights or warrants to
subscribe for shares of Common Stock (other than the issuances or sales of
Common Stock pursuant to rights to subscribe for such Common Stock distributed
to all the shareholders of the Company and Holders of Warrants pursuant to
Section 8.9 hereof) and shares of Common Stock issued upon the direct or
indirect conversion or exchange of securities for shares of Common Stock, for a
consideration per share less than the Exercise Price in effect immediately prior
to the issuance or sale of such shares or the "Market Price" (as defined in
Section 8.1(iv) hereof) per share of Common Stock or without consideration, then
forthwith upon such issuance or sale, the Exercise Price shall (until another
such issuance or sale) be reduced to the price (calculated to the nearest full
cent) equal to the quotient derived by dividing (A) an amount equal to the sum
of (X) the product of (a) the total number of shares of Common Stock outstanding
immediately prior to such issuance or sale, multiplied by (b) the lower of (i)
the Exercise Price in effect immediately prior to such issuance or sale or (ii)
the "Market Price" (as defined in subsection (vi) of this Section 8.1 hereof)
per share of Common Stock on the date immediately prior to the issuance or sale
of such shares, plus, (Y) the aggregate of the amount of all consideration, if
any, received by the Company upon such issuance or sale, by (B) the total number
of shares of Common Stock outstanding immediately after such issuance or sale;
provided, however, that in no event shall the Exercise Price be adjusted
pursuant to this computation to an amount in excess of the Exercise Price in
effect immediately prior to such computation, except in the case of a
combination of outstanding shares of Common Stock, as provided by Section 8.3
hereof.
For the purposes of any computation to be made in accordance with this
Section 8.1, the following provisions shall be applicable:
(i) In case of the issuance or sale of shares of Common Stock for
a consideration part or all of which shall be cash, the amount of the cash
consideration therefor shall be deemed to be the amount of cash received by the
Company for such shares (or, if shares of Common Stock are offered by the
Company for subscription, the subscription price, or, if such securities shall
be sold to underwriters or dealers for public offering without a subscription
offering, the initial public offering price) before deducting therefrom any
compensation paid or discount allowed in the sale, underwriting or purchase
thereof
8
by underwriters or dealers or others performing similar services, or any
expenses incurred in connection therewith.
(ii) In case of the issuance or sale (otherwise than as a
dividend or other distribution on any stock of the Company) of shares of Common
Stock for a consideration part or all of which shall be other than cash, the
amount of the consideration therefor other than cash shall be deemed to be the
value of such consideration as determined in good faith by the Board of
Directors of the Company.
(iii) Shares of Common Stock issuable by way of dividend or other
distribution on any stock of the Company shall be deemed to have been issued
immediately after the opening of business on the day following the record date
for the determination of shareholders entitled to receive such dividend or other
distribution and shall be deemed to have been issued without consideration.
(iv) The reclassification of securities of the Company other than
shares of Common Stock into securities including shares of Common Stock shall be
deemed to involve the issuance of such shares of Common Stock for a
consideration other than cash immediately prior to the close of business on the
date fixed for the determination of security holders entitled to receive such
shares, and the value of the consideration allocable to such shares of Common
Stock shall be determined as provided in subsection (ii) of this Section 8.1.
(v) The number of shares of Common Stock at any one time
outstanding shall include the aggregate number of shares issued or issuable upon
the exercise of options, rights, warrants and upon the conversion or exchange of
convertible or exchangeable securities.
(vi) The term "Market Price" at any date shall be deemed to be
the last reported sale price, or, in case no such reported sale takes place on
such day, the average of the last reported sale prices for the last three
trading days, in either case as officially reported by the principal securities
exchange on which the Common Stock is listed or admitted to trading or as
reported in the NASDAQ National Market System, or the NASDAQ Small Cap Market,
or, if the Common Stock is not listed or admitted to trading on any national
securities exchange or quoted on the NASDAQ National Market System or the NASDAQ
Small Cap Market, the closing bid price as furnished by the National Association
of Securities Dealers, Inc. through NASDAQ or similar organization if NASDAQ is
no longer reporting such information, or if the Common Stock is not listed or
admitted to trading on a securities exchange or quoted on NASDAQ, as determined
in good faith by resolution of the Board of Directors of the Company, based on
the best information available to it for the two days immediately preceding such
issuance or sale and the day of such issuance or sale.
9
8.2. Options, Rights, Warrants and Convertible and Exchangeable Securities.
Except in the case of the Company issuing rights to subscribe for shares of
Common Stock distributed to all the shareholders of the Company and Holders of
Warrants pursuant to Section 8.10 hereof, if the Company shall at any time after
the date hereof issue options, rights or warrants to subscribe for shares of
Common Stock, or issue any securities convertible into or exchangeable for
shares of Common Stock, (i) for a consideration per share less than (a) the
Exercise Price in effect immediately prior to the issuance of such options,
rights or warrants, or such convertible or exchangeable securities, or (b) the
Market Price, or (ii) without consideration, the Exercise Price in effect
immediately prior to the issuance of such options, rights or warrants, or such
convertible or exchangeable securities, as the case may be, shall be reduced to
a price determined by making a computation in accordance with the provisions of
Section 8.1 hereof, provided that:
(a) The aggregate maximum number of shares of Common Stock, as the
case may be, issuable under all the outstanding options, rights or warrants
shall be deemed to be issued and outstanding at the time all the outstanding
options, rights or warrants were issued, and for a consideration equal to the
minimum purchase price per share provided for in the options, rights or warrants
at the time of issuance, plus the consideration (determined in the same manner
as consideration received on the issue or sale of shares in accordance with the
terms of the Warrants), if any, received by the Company for the options, rights
or warrants, and if no minimum price is provided in the options, rights or
warrants, then the consideration shall be equal to zero; provided, however, that
upon the expiration or other termination of the options, rights or warrants, if
any thereof shall not have been exercised, the number of shares of Common Stock
deemed to be issued and outstanding pursuant to this subsection (a) (and for the
purposes of subsection (v) of Section 8.1 hereof) shall be reduced by such
number of shares as to which options, warrants and/or rights shall have expired
or terminated unexercised, and such number of shares shall no longer be deemed
to be issued and outstanding, and the Exercise Price then in effect shall
forthwith be readjusted and thereafter be the price which it would have been had
adjustment been made on the basis of the issuance only of shares actually issued
or issuable upon the exercise of those options, rights or warrants as to which
the exercise rights shall not have expired or terminated unexercised.
(b) The aggregate maximum number of shares of Common Stock issuable
upon conversion or exchange of any convertible or exchangeable securities shall
be deemed to be issued and outstanding at the time of issuance of such
securities, and for a consideration equal to the consideration (determined in
the same manner as consideration received on the issue or sale of shares of
Common Stock in accordance with the terms of the Warrants) received by the
Company for such securities, plus the minimum consideration, if any, receivable
by
10
the Company upon the conversion or exchange thereof; provided, however, that
upon the termination of the right to convert or exchange such convertible or
exchangeable securities (whether by reason of redemption or otherwise), the
number of shares deemed to be issued and outstanding pursuant to this subsection
(b) (and for the purpose of subsection (v) of Section 8.1 hereof) shall be
reduced by such number of shares as to which the conversion or exchange rights
shall have expired or terminated unexercised, and such number of shares shall no
longer be deemed to be issued and outstanding and the Exercise Price then in
effect shall forthwith be readjusted and thereafter be the price which it would
have been had adjustment been made on the basis of the issuance only of the
shares actually issued or issuable upon the conversion or exchange of those
convertible or exchangeable securities as to which the conversion or exchange
rights shall not have expired or terminated unexercised.
(c) If any change shall occur in the price per share provided for in
any of the options, rights or warrants referred to in subsection (a) of this
Section 8.2, or in the price per share at which the securities referred to in
subsection (b) of this Section 8.2 are convertible or exchangeable, the options,
rights or warrants or conversion or exchange rights, as the case may be, shall
be deemed to have expired or terminated on the date when such price change
became effective in respect of shares not theretofore issued pursuant to the
exercise or conversion or exchange thereof, and the Company shall be deemed to
have issued upon such date new options, rights or warrants or convertible or
exchangeable securities at the new price in respect of the number of shares
issuable upon the exercise of such options, rights or warrants or the conversion
or exchange of such convertible or exchangeable securities.
8.3. 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.
8.4. Adjustment in Number of Warrant Shares. Upon each adjustment of the
Exercise Price pursuant to the provisions of this Article 8, 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.
8.5. 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
11
consolidation of the Company with, or merger of the Company into, 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 Holders 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 Holders were the owners 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 Holders had exercised the
Warrant.
8.6. No Adjustment of Exercise Price in Certain Cases. Notwithstanding
anything herein to the contrary, no adjustment of the Exercise Price shall be
made:
(a) Upon the issuance or sale of the Warrant or the Warrant Shares; or
(b) Upon (i) the issuance of options pursuant to the Company's
employee stock option plans in effect on the date hereof or the issuance or
sale by the Company of any shares of Common Stock pursuant to the exercise
of any such options, or (ii) the issuance or sale by the Company of any
shares of Common Stock pursuant to the exercise of any options or warrants
previously issued and outstanding on the date hereof; or
(c) If the amount of said adjustment shall be less than one cent
($0.01) per Share, provided, however, that in such case any adjustment that
would otherwise be required then to be made shall be carried forward and
shall be made at the time of and together with the next subsequent
adjustment which, together with any adjustment so carried forward, shall
amount to at least one cent ($0.01) per Share.
8.7. 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.
8.8. 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
12
Common Stock or a cash dividend or distribution payable out of current or
retained earnings) or otherwise distribute to its shareholders 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 8.8.
8.9. 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 shareholders 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 such rights at the time such rights
are distributed to the other shareholders of the Company.
9. 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.
10. 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.
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11. 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, such number of shares of Common Stock as shall be
issuable upon such exercise. The Company 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
shareholder. As long as the Warrant shall be outstanding, the Company shall use
its best efforts to cause all Warrant Shares to be listed on or quoted by NASDAQ
or listed on such national securities exchanges as the Company's Common Stock is
listed.
12. 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 shareholder
in respect of any meetings of shareholders for the election of directors or any
other matter, or as having any rights whatsoever as a shareholder 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 fifteen (15) days prior to the date fixed
as a record date or the date of closing the transfer books for the determination
of the shareholders entitled to such dividend, distribution, convertible
14
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 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.
13. 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.
14. Supplements and Amendments.
The Company and Commonwealth 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 Commonwealth 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.
15. 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.
16. Termination.
This Agreement shall terminate at the close of business on September 1,
2003. 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; provided, however, that the
provisions of Section 7 shall survive such termination until the close of
15
business on September 1, 2006 with respect to any outstanding Registrable
Securities.
17. Governing Law.
This Agreement and the Warrant Certificate issued hereunder shall be deemed
to be a contract made under the laws of the State of New York and for all
purposes shall be construed in accordance with the laws of said State.
18. Jurisdiction; Consent to Service of Process.
(a) The Company hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any New York State
court or Federal court of the United States of America sitting in the Borough of
Manhattan, City of New York, and any appellate court from any thereof, in any
action or proceeding arising out of or relating to this Agreement, or for
recognition or enforcement of any judgment hereon. The Company and Commonwealth,
by their acceptance of this Agreement, hereby irrevocably and unconditionally
agree that all claims in respect of any such action or proceeding may be heard
and determined in such New York State court or, to the extent permitted by law,
in such Federal court. Each such party also agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that the Holder may otherwise
have to bring any action or proceeding relating to this Agreement against the
Company or its properties in the courts of any jurisdiction.
(b) The Company hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement in any New York State or Federal
court. The Company and Commonwealth, by their acceptance of this Agreement,
hereby irrevocably waive, to the fullest extent permitted by law, the defense of
an inconvenient forum to the maintenance of such action or proceeding in any
such court.
(c) The Company and Commonwealth, by their acceptance hereof,
irrevocably consent to service of process in the manner provided for notices in
Section 13. Nothing in this Agreement will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.
19. Benefits of This Agreement.
Nothing in this Agreement shall be construed to give to any person or
corporation other than the Company and Commonwealth and any other registered
Holder of the Warrant or any securities underlying the Warrant any legal or
equitable right, remedy or
16
claim under this Agreement; and this Agreement shall be for the sole and
exclusive benefit of the Company and Commonwealth and any such other Holder.
20. 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.
17
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:__________________________________
Name: Xxxxx X. Xxxxxxxx
Title: Chief Executive Officer
Attest:
_________________________
Xxxx X. Xxxxxx
Secretary
COMMONWEALTH ASSOCIATES
By: Commonwealth Associates Management
Company, Inc., General Partner
By:________________________________
Name:
Title:
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 DECEMBER 28, 1995 UNTIL
5:00 P.M., NEW YORK TIME, DECEMBER 28, 2000
_______ Warrants
WARRANT CERTIFICATE
This Warrant Certificate certifies that _____________ __________________
("__________"), or registered assigns, is the registered holder of Warrants to
purchase, at any time from December 28, 1995 until 5:00 P.M. New York City time
on December 28, 2000 ("Expiration Date"), up to _______ fully-paid and
non-assessable share(s) (the "Shares") of Common Stock, no par value ("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 $1.25 per share, upon surrender of this Warrant
Certificate and 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 December 28, 1995, by and between the Company and
Commonwealth Associates (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 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.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed under its corporate seal.
Dated: December 28, 1995 ACCUMED INTERNATIONAL, INC.
[SEAL] By:___________________________
Name: Xxxxx X. Xxxxxxxx
Title: Chief Executive Officer
Attest:
_______________________
Xxxx X. Xxxxxx
Secretary
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 DECEMBER 28, 1995 UNTIL
5:00 P.M., NEW YORK TIME, DECEMBER 28, 2000
750,000 Warrants
WARRANT CERTIFICATE
This Warrant Certificate certifies that Commonwealth Associates, a New York
limited partnership ("Commonwealth"), or registered assigns, is the registered
holder of Warrants to purchase, at any time from December 28, 1995 until 5:00
P.M. New York City time on December 28, 2000 ("Expiration Date"), up to 750,000
fully-paid and non-assessable share(s) (the "Shares") of Common Stock, no par
value ("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 $1.25 per share, upon surrender of this
Warrant Certificate and 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 December 28, 1995, by and between the Company and
Commonwealth Associates (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 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.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed under its corporate seal.
Dated: December 28, 1995 ACCUMED INTERNATIONAL, INC.
[SEAL] By:___________________________
Name: Xxxxx X. Xxxxxxxx
Title: Chief Executive Officer
Attest:
______________________
Xxxx X. Xxxxxx
Secretary
