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Exhibit 10.23
WARRANT AGREEMENT effective as of April 9, 1998 between
Bionutrics, Inc., a Nevada corporation (the "Company"), and The Shemano Group,
Inc. (hereinafter referred to variously as "Holder").
W I T N E S S E T H:
WHEREAS, Holder and the Company are parties to a certain
investment banking agreement dated April 9, 1998 (the "Investment Agreement");
and
WHEREAS, pursuant to the terms of the Investment Agreement,
the Company has agreed to issue Holder certain warrants to purchase shares of
the Company's common stock, par value $.001 ("Common Stock") in consideration
for and as part of Holder's compensation in connection with Holder's financial
advisory services; and
NOW, THEREFORE, in consideration of the services to be
provided pursuant to the Investment Agreement and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agrees as follows:
1. Grant. Holder is hereby granted the right to purchase up to
an aggregate of 100,000 shares of Common Stock ("Warrants") at the Exercise
Price (as defined in Section 2), subject to adjustment as provided in Section 8,
during the exercise period which, for purposes of the first 50,000 shares, shall
be the period commencing on the date hereof and ending at 5:30 p.m. Eastern
Standard Time three years thereafter and, for purposes of the second 50,000
shares, shall be the period commencing 180 days from the date hereof and ending
at 5:30 p.m. Eastern Standard Time three years from the date hereof (the
"Exercise Period").
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2. Exercise Price.
The term "Exercise Price" shall mean $4 per share of Common
Stock as may be adjusted from time to time pursuant to Section 8.
3. Warrant Certificates. The warrant certificates delivered
pursuant to this Warrant Agreement shall be in the form set forth in Exhibit A
with such appropriate insertions, omissions, substitutions and other variations
as required or permitted by this Warrant Agreement (the "Warrant Certificates").
4. Exercise of Warrant.
The Warrants are exercisable at the Exercise Price and
payable to the Company at its executive offices located at 0000 Xxxx Xxxxxxxxx
Xxxx, Xxx. 000, Xxxxxxx, XX 00000, attn: Chief Financial Officer (or such other
officer as designated to Holder by the Company), by certified or official bank
check in New York Clearing House funds or wire transfer. Upon surrender of a
Warrant Certificate, submission of an executed Form of Election to Purchase in
the form set forth in Exhibit B and payment of the Exercise Price, Holder shall
be entitled to receive a certificate for the shares of Common Stock so
purchased. The purchase rights represented by each Warrant Certificate are
exercisable at the option of Holder in whole or in part, but not as to
fractional shares of the Common Stock underlying the Warrants or in increments
of less than 1,000 shares of Common Stock underlying the Warrants.
5. Issuance of Certificates. Upon the exercise of Warrants the
Company shall promptly issue to Holder a certificate for the shares of Common
Stock underlying such Warrant Certificate. If Holder purchases less than all the
shares of Common Stock purchasable under any Warrant Certificate, the Company
shall cancel said Warrant Certificate upon the surrender thereof
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and shall execute and deliver a new Warrant Certificate of like tenor for the
balance of the shares of Common Stock. Subject to the terms and conditions of
this Warrant Agreement, Holder shall be deemed the record holder of the shares
of Common Stock on the date of exercise of the Warrant, irrespective of the date
of delivery of the Common Stock certificate.
6. Restriction On Transfer of Warrants. Holder may not sell,
assign, pledge, hypothecate or otherwise transfer any rights under a Warrant,
except pursuant to the express written consent of the Company.
7.1 Registration Under the Securities Act of 1933. Neither the
Warrants nor the shares of Common Stock issuable upon exercise of the Warrants
have been registered under the Securities Act of 1933, as amended (the
"Securities Act"), or any applicable state securities or blue sky laws. Upon
exercise of the Warrants, the Company may cause a legend in substantially the
form set forth below to be placed on each certificate representing the shares of
Common Stock issued.
The securities represented by this certificate have not been
registered for public resale under the Securities Act of 1933,
as amended ("Securities Act"), and may not be offered,
transferred or sold except pursuant to (i) an effective
registration statement under the Securities Act and any
applicable state securities or blue sky laws, (ii) to the
extent applicable, Rule 144 under the Securities Act (or any
similar rule under the Securities Act relating to the
disposition of securities) together with an opinion of
counsel, if such opinion shall be reasonably satisfactory to
issuer's counsel, that such transfer is permitted or (iii) an
opinion of counsel, if such opinion shall be reasonably
satisfactory to issuer's counsel, that an exemption from
registration under the Securities Act and any applicable state
securities or blue sky laws is available.
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7.2 Registration Rights. The Company shall file a registration
statement with respect to the shares of common stock underlying the Warrants' as
soon as practicable, but in no event later than 60 days after a request by
Holder, which request may only be made after such common stock closes on the
Nasdaq Small Cap or other national exchange at or above the Exercise Price for
five consecutive trading days or 12 such days within any consecutive 15-day
trading period provided that the Company shall not be required to so file unless
it is entitled to use of form S-3 or successor or like form authorizing
incorporation by reference to the information called for by items 401-403 of
Regulation S-K of the Securities Act. Following such filing, the Company shall
use its best efforts to have the registration statement underlying the Warrants
have been sold pursuant to the registration statement or pursuant to Rule 144 or
Section 4(2) of the Securities Act or (z) date on which the Company supplies to
Holder an opinion of counsel, or the Holder receives an opinion of counsel
reasonably satisfactory to the Company, that the shares underlying the Warrants
may be sold by non-affiliates under the provisions of Rule 144 under the
Securities Act (subject to volume and manner of sale restrictions).
Adjustments to Exercise and Number of Securities.
8.1 Recapitalization and Reclassifications. In case the
Company shall at any time effect a recapitalization or reclassification of such
character that the shares of Common Stock shall be changed into or become
exchangeable for a larger or smaller number of shares, then upon the effective
date thereof the number of shares of Common Stock which Holder shall be entitled
to purchase upon exercise of the Warrant shall be increased or decreased, as the
case may be, in direct proportion to the increase or decrease in the number of
shares of Common Stock by reason of such recapitalization or reclassification,
and the Exercise Price shall be, in the case of an increase in the
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number of shares, proportionately decreased and, in the case of a decrease in
the number of shares, proportionately increased.
8.2 Sale; Merger; Consolidation. In the case of a transfer or
sale of all or substantially all the capital stock or assets of the Company or
in the case of any consolidation or merger of the Company with another entity
(other than a consolidation or merger which does not result in any
reclassification or change of the outstanding Common Stock), the transferee,
purchaser or entity formed by or surviving a consolidation or merger, as the
case may be, shall execute and deliver to Holder a supplemental warrant
agreement providing Holder shall have the right during the Exercise Period to
receive, upon exercise of a Warrant, the kind and amount of shares of stock
and/or other securities receivable upon such transfer, sale, consolidation or
merger, as the case may be, by a holder of the number of shares of Common Stock
for which such Warrant might have been exercised immediately prior to such
transfer, sale, consolidation or merger, as the case may be. Such supplemental
warrant agreement shall provide for adjustments which shall be identical to the
adjustments provided in this Section 8.
8.3 No Adjustment of Exercise Price in Certain Cases. No
adjustment of the Exercise Price shall be made if the amount of an adjustment is
less than $.02 per share of Common Stock, provided that 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 such adjustment, shall amount to at least $.02 per share of
Common Stock.
8.4 Dividends and Other Distributions. In the event the
Company declares a dividend payable in shares of Common Stock, Holder shall be
entitled to receive upon exercise of the Warrant, in addition to the number of
shares of Common Stock as to which the Warrant is
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exercised, such additional shares of Common Stock as Holder would have received
had the Warrant been exercised immediately prior to such record date for the
dividend. In the event the Company declares a dividend other than a dividend of
Common Stock, Holder shall thereafter be entitled to receive, in addition to the
shares of Common Stock receivable upon the exercise thereof, upon the exercise
of such Warrants, such non-Common Stock dividend as Holder would have received
had the Warrant been exercised immediately prior to such record date for the
dividend.
8.5 If, as a result of an adjustment made pursuant to this
Section 8, Holder shall upon exercise of the Warrants become entitled to receive
securities or assets other than Common Stock then, wherever appropriate, all
references herein to shares of Common Stock shall be deemed to refer to and
include such other securities or assets and thereafter the number of such other
securities or assets shall be subject to adjustment from time to time in a
manner and upon terms as nearly equivalent as practicable to the provisions of
this Section 8.
9. Issuance of New Warrant Certificate. Upon receipt by the
Company of evidence reasonably satisfactory to it of a loss, theft, destruction
or mutilation of a Warrant Certificate, reimbursement by Holder to the Company
of all incidental expenses and, in the case of loss, theft or destruction,
receipt of indemnity or security from Holder reasonably satisfactory to it, or,
in the case of mutilated, upon surrender and cancellation of the mutilated
Warrant Certificate by Holder, the Company will make and deliver a new Warrant
Certificate to Holder of like tenor in lieu thereof.
10. Elimination of Fractional Interests. The Company shall not
be required to issue certificates representing fractions of shares of Common
Stock upon the exercise of the
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Warrants. The Company shall have the option to make payment in cash in respect
of any fractional shares or to round any fraction up to the nearest whole number
of shares of Common Stock.
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 Warrants,
such number of shares of Common Stock as shall be issuable upon the exercise
thereof.
12. Representations and Warranties.
(a) Holder represents and warrants to the Company that the
Warrants are being acquired solely for Holder's own account, for investment, not
for the interest of any other and are not being acquired with a view to or for
resale, distribution, assignment, subdivision or fractionalization thereof, and
Holder has no present plans to enter into any contract, undertaking, agreement
or arrangement for such purpose.
(b) Holder represents and warrants to the Company that it
is a "sophisticated investor," i.e., an entity with such knowledge and
experience in financial and business matters that it is capable of evaluating
the merits and risks of a prospective investment in the Warrants.
13. Notice to Warrant Holders. Nothing contained in this
Warrant Agreement shall be construed as conferring upon Holder the right to
vote, consent or receive notice as a stockholder in respect of any meetings of
stockholders for the election of directors or any other matter, or as having any
rights whatsoever as a stockholder of the Company.
14. Notices. Any notice or demand pursuant to this Warrant
Agreement shall be in writing and shall be deemed sufficiently given or made (i)
upon personal delivery; (ii) the day
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following delivery to a reputable overnight courier, or (iii) three days
following mailing by certified or registered mail, return receipt requested,
postage prepaid, and addressed, until the other party is notified of another
address, as follows:
If to the Company:
Bionutrics, Inc.
0000 Xxxx Xxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxxxxx Xxxx, Chief Executive Officer
with a copy to:
Xxxxxxxx Siegelbaum LLP
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: J. Xxxxxx Xxxxxx, Esq.
If to Holder:
The Shemano Group, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx X. Xxxxxxx
with a copy to:
Keesal, Young & Xxxxx
Suite 0000
Xxxx Xxxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx Xxxxxxxx
15. Supplements and Amendments. Except as otherwise expressly
provided herein, the provisions of this Warrant Agreement may be amended or
waived at any time only by the written agreement of the parties hereto. Any
waiver, permit, consent or approval of kind or
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character on the part of each Company or Holder of any provisions or conditions
of this Warrant Agreement must be made in writing and shall be effective only to
the extent specifically set forth in such writing.
16. Successors. All the covenants and provisions of this
Warrant Agreement shall be binding upon and inure to the benefit of the Company,
Holder and its respective successors and permitted assigns hereunder.
17. Governing Law; Submission to Jurisdiction. (a) This
Warrant Agreement and each Warrant Certificate issued hereunder shall be deemed
to be a contract made under the laws of the State of New York and for all the
purposes shall be construed in accordance with the laws of said State without
giving effect to the rules of said State governing the conflicts of laws.
(b) Arbitration. This Warrant Agreement and all
controversies that may arise between Holder and the Company hereunder shall be
determined by arbitration. The parties understand that
(i) arbitration is final and binding on the parties;
(ii) the parties waive their right to seek remedies in
court, including the right to a jury trial;
(iv) pre-arbitration discovery is generally more limited
than and different from court proceedings;
(v) the arbitrator's award is not required to include
factual findings or legal reasoning and each party's right to appeal or to seek
modifications or rulings by the arbitrators is strictly limited; and
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(vi) the panel of arbitrators typically includes a minority
or arbitrators who were or are affiliated with the securities industry.
18. Entire Agreement; Modification. This Warrant Agreement
contains the entire understanding between the parties with respect to the
subject matter hereof and may not be modified or amended except by both parties.
19. Severability. If any provision of this Warrant Agreement
shall be held to be invalid or unenforceable, such invalidity or
unenforceability shall not affect any other provision hereof.
20. Captions. The caption headings of the Sections of this
Warrant Agreement are for convenience of reference only and are not intended,
nor should they be construed as, a part of this Warrant Agreement and shall be
given no substantive effect.
21. Benefits of this Warrant Agreement. Nothing in this
Warrant Agreement shall be construed to give to any person or entity other than
the Company and Holder any legal or equitable right, remedy or claim hereunder;
and this Warrant Agreement shall be for the sole and exclusive benefit of the
Company and Holder.
22. Counterparts. This Warrant 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.
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IN WITNESS WHEREOF, the parties hereto have caused this Warrant
Agreement to be duly executed, as of the day and year first above written.
BIONUTRICS, INC.
By: /s/Xxxxxx X. Xxxx
------------------------------------
Name: Xxxxxx X. Xxxx
Title: President
THE SHEMANO GROUP, INC.
By: /s/Xxxx X. Xxxxxxx
------------------------------------
Name: Xxxx X. Xxxxxxx
Title: President
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THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF STOCK ISSUABLE
UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), FOR PUBLIC RESALE AND MAY NOT BE OFFERED,
TRANSFERRED OR SOLD EXCEPT PURSUANT TO (I) AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES OR BLUE SKY LAWS,
(ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER THE SECURITIES ACT (OR ANY SIMILAR
RULE UNDER THE SECURITIES ACT RELATING TO THE DISPOSITION OF SECURITIES)
TOGETHER WITH AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO ISSUER'S COUNSEL
THAT SUCH TRANSFER IS PERMITTED OR (iii) AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO ISSUER'S COUNSEL THAT AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES OR BLUE SKY LAWS IS
AVAILABLE.
THE EXERCISE, TRANSFER AND EXCHANGE OF THE WARRANTS REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT TO THE WARRANT AGREEMENT BETWEEN BIONUTRICS, INC. AND
THE SHEMANO GROUP, INC.
50,000 Warrants
WARRANT CERTIFICATE
This Warrant Certificate certifies that Xxxx X. Xxxxxxx, c/o
The Shemano Group, 000 Xxxxxxxxxx Xxxxxx, #0000, Xxx Xxxxxxxxx, XX 00000, Social
Security # ###-##-####, is the registered holder of 50,000 Warrants to purchase,
at any time from the date hereof, until 5:30 p.m. Eastern Standard Time on April
9, 2001 ("Expiration Date"), up to 50,000 fully-paid and non-assessable shares
of common stock, par value $.001 per share ("Common Stock"), of Bionutrics, Inc.
(the "Company") at an exercise price of $4 per share of Common Stock ("Exercise
Price"), upon surrender of this Warrant Certificate and payment of the Exercise
Price to the Company and subject to the warrant agreement dated April 9, 1998
between the Company and The Shemano Group, Inc. (the "Warrant Agreement").
At 5:31 p.m. Eastern Standard Time on the Expiration Date all
Warrants evidenced hereby, unless exercised prior thereto, shall be void.
The Warrant Agreement is hereby incorporated by reference and
made a part of this Warrant Certificate and is hereby referred to for a
description of the rights, obligations, duties and restrictions of the Company
and holder of the Warrants.
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IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be duly executed as of this 27th day of April, 1999.
Bionutrics, Inc.
By: /s/Xxxxxx X. Xxxx
-------------------------------------
Xxxxxx X. Xxxx
President
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THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF STOCK ISSUABLE
UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), FOR PUBLIC RESALE AND MAY NOT BE OFFERED,
TRANSFERRED OR SOLD EXCEPT PURSUANT TO (I) AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES OR BLUE SKY LAWS,
(ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER THE SECURITIES ACT (OR ANY SIMILAR
RULE UNDER THE SECURITIES ACT RELATING TO THE DISPOSITION OF SECURITIES)
TOGETHER WITH AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO ISSUER'S COUNSEL
THAT SUCH TRANSFER IS PERMITTED OR (iii) AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO ISSUER'S COUNSEL THAT AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES OR BLUE SKY LAWS IS
AVAILABLE.
THE EXERCISE, TRANSFER AND EXCHANGE OF THE WARRANTS REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT TO THE WARRANT AGREEMENT BETWEEN BIONUTRICS, INC. AND
THE SHEMANO GROUP, INC.
25,000 Warrants
WARRANT CERTIFICATE
This Warrant Certificate certifies that Xxxx Xxxxxx, c/o The
Shemano Group, 000 Xxxxxxxxxx Xxxxxx, #0000, Xxx Xxxxxxxxx, XX 00000, Social
Security ####-##-#### is the registered holder of 25,000 Warrants to purchase,
at any time from the date hereof, until 5:30 p.m. Eastern Standard Time on April
9, 2001 ("Expiration Date"), up to 25,000 fully-paid and non-assessable shares
of common stock, par value $.001 per share ("Common Stock"), of Bionutrics, Inc.
(the "Company") at an exercise price of $4 per share of Common Stock ("Exercise
Price"), upon surrender of this Warrant Certificate and payment of the Exercise
Price to the Company and subject to the warrant agreement dated April 9, 1998
between the Company and The Shemano Group, Inc. (the "Warrant Agreement").
At 5:31 p.m. Eastern Standard Time on the Expiration Date all
Warrants evidenced hereby, unless exercised prior thereto, shall be void.
The Warrant Agreement is hereby incorporated by reference and
made a part of this Warrant Certificate and is hereby referred to for a
description of the rights, obligations, duties and restrictions of the Company
and holder of the Warrants.
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IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be duly executed as of this 27th day of April, 1999.
BIONUTRICS, INC.
By: /s/Xxxxxx X. Xxxx
-----------------------------------
Xxxxxx X. Xxxx
President
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THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF STOCK ISSUABLE
UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), FOR PUBLIC RESALE AND MAY NOT BE OFFERED,
TRANSFERRED OR SOLD EXCEPT PURSUANT TO (I) AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES OR BLUE SKY LAWS,
(ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER THE SECURITIES ACT (OR ANY SIMILAR
RULE UNDER THE SECURITIES ACT RELATING TO THE DISPOSITION OF SECURITIES)
TOGETHER WITH AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO ISSUER'S COUNSEL
THAT SUCH TRANSFER IS PERMITTED OR (iii) AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO ISSUER'S COUNSEL THAT AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES OR BLUE SKY LAWS IS
AVAILABLE.
THE EXERCISE, TRANSFER AND EXCHANGE OF THE WARRANTS REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT TO THE WARRANT AGREEMENT BETWEEN BIONUTRICS, INC. AND
THE SHEMANO GROUP, INC.
25,000 Warrants
WARRANT CERTIFICATE
This Warrant Certificate certifies that Xxxxxxx X. Xxxxx, c/o
The Shemano Group, 000 Xxxxxxxxxx Xxxxxx, #0000, Xxx Xxxxxxxxx, XX 00000, Social
Security ####-##-#### is the registered holder of 25,000 Warrants to purchase,
at any time from the date hereof, until 5:30 p.m. Eastern Standard Time on April
9, 2001 ("Expiration Date"), up to 25,000 fully-paid and non-assessable shares
of common stock, par value $.001 per share ("Common Stock"), of Bionutrics, Inc.
(the "Company") at an exercise price of $4 per share of Common Stock ("Exercise
Price"), upon surrender of this Warrant Certificate and payment of the Exercise
Price to the Company and subject to the warrant agreement dated April 9, 1998
between the Company and The Shemano Group, Inc. (the "Warrant Agreement").
At 5:31 p.m. Eastern Standard Time on the Expiration Date all
Warrants evidenced hereby, unless exercised prior thereto, shall be void.
The Warrant Agreement is hereby incorporated by reference and
made a part of this Warrant Certificate and is hereby referred to for a
description of the rights, obligations, duties and restrictions of the Company
and holder of the Warrants.
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IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be duly executed as of this 27th day of April, 1999.
BIONUTRICS, INC.
By: /s/Xxxxxx X. Xxxx
------------------------------
Xxxxxx X. Xxxx
President
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