SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported) -April 27, 2000.
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CAPRIUS, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-11914 22-2457487
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(State or other jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
One Parker Plaza Fort Lee, New Jersey 07024
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(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code - (201) 592-8838
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Not Applicable
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(Former Name or Former Address, if changed since last report)
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ITEM 5. OTHER EVENTS.
On April 27, 2000 Caprius, Inc. ("the Company"), completed a
private placement offering (the "Placement") in which it sold 650,000 units
("Units") and received gross proceeds of $1,950,000. The Company offered the
Units at a price of $3.00 per Unit to several "accredited investors," as such
term is defined in Regulation D under the Securities Act of 1933, as amended,
pursuant to a Stock Purchase Agreement. Each Unit consists of (i) three (3)
shares of Common Stock, $.01 par value (the "Common Stock"), of the Company,
(ii) four (4) redeemable Series A Warrants and (iii) two (2) redeemable Series B
Warrants. Each Series A Warrant gives the holder the right to purchase one share
of the Company's Common Stock at a price of $.50 and is exercisable for five
years. Each Series B Warrant gives the holder the right to purchase one share of
Common Stock at a price of $.75 and is exercisable for five years. The Company
will use the Placement proceeds to repay portions of its indebtedness and for
working capital.
The Company separately agreed to give the principal investors
in the Placement, who collectively purchased 451,000 of the Units (the
"Principal Investors"), the right to designate two members of the Board of
Directors (the "Designees"), one of whom also shall be appointed to the
Compensation Committee of the Board of Directors; provided, however, the
Designees are reasonably acceptable to the current Board of Directors. The
Designees, Mr. Shrikant Mehta and Mr. Sanjay Mody shall be added to the Board of
Directors to fill vacancies created by the resignations of Jack Nelson and
Enrique Levy pursuant to the terms of the Placement. At each meeting of
stockholders for the election of directors held at any time prior to March 27,
2003, the Company shall include the two Designees or their substitutes on the
management slate of directors, subject to certain conditions.
The Principal Investors separately agreed to vote all of their
shares of Common Stock, which they beneficially own as of the applicable record
date, for Mr. Jonathan Joels and Mr. George Aaron, both current directors of the
Company, at each meeting of stockholders or in any consent in lieu of a meeting
of stockholders with respect to the election of directors held at any time prior
to March 27, 2003. Mr. Joels and Mr. Aaron reciprocally agreed to vote all of
their shares of Common Stock, which they beneficially own as of the applicable
record date, for the Designees, at each meeting of stockholders or in any
consent in lieu of a meeting of stockholders with respect to the election of
directors held at any time prior to March 27, 2003.
In consideration of their participation in the Placement, the
Company separately agreed to give the Principal Investors preemptive rights for
a period of three years with respect to their interest in the Company, such
that, to the extent of their current interest in the Company, the Principal
Investors each have the right to participate in any sale, for cash, by the
Company of its Common Stock or shares of preferred stock or other securities
(the "Derivative Securities") that are exercisable for, convertible into or
exchangeable for shares of Common Stock in a private placement transaction
pursuant to the exemption from registration under Regulation D of the Securities
Act of 1933 financing of the Company, subject to certain exceptions.
The Company also agreed to provide the Principal Investors
with most favorable investors rights, such that if any greater rights are
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received by the holders of the next rounds of equity financing of the Company
occurring within one year after the date of purchase ("Subsequent Investments"),
subject to certain exceptions, the Company would put the Principal Investors in
the same position as the holders of any Subsequent Investments. Furthermore, in
the event that any Subsequent Investment is at a price per share of less than
the equivalent of $0.722 per share of Common Stock (i.e., less than $0.722 per
share of equity security (including exercise price, if any) exercisable for or
convertible into one share of the Company's Common Stock), then the Company
would issue to Mr. Mehta, without additional consideration, the number of shares
of Common Stock that he would have received if he had made his investment in the
Placement as a Subsequent Investment.
Additionally, in consideration for his participation in the
Placement, the Company separately agreed to grant Mr. Mehta options to purchase
500,000 shares of the Company's Common Stock, exercisable at $1.00 per share for
a period of three years.
As of April 27, 2000, the number of outstanding shares of the
Company's Common Stock was increased to 15,700,517 shares, excluding shares
underlying Derivative Securities.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
10.1 Form of Stock Purchase Agreement
10.2 Form of Series A Warrant
10.3 Form of Series B Warrant
10.4 Letter Agreement, dated March 27, 2000, between the Company and certain
purchasers.
10.5 Letter Agreement, dated March 29, 2000, between the Company and certain
purchasers.
99.1 Press Release, dated April 27, 2000
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
Caprius, Inc.
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(Registrant)
By: /s/ Jonathan Joels
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Jonathan Joels,
Vice President
April 27, 2000
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EXHIBIT INDEX
EXHIBIT
10.1 Form of Stock Purchase Agreement
10.2 Form of Series A Warrant
10.3 Form of Series B Warrant
10.4 Letter Agreement, dated March 27, 2000, between the Company and
certain purchasers.
10.5 Letter Agreement, dated March 29, 2000, between the Company and
certain purchasers.
99.1 Press Release, dated April 27, 2000
EXHIBIT 10.1
STOCK PURCHASE AGREEMENT
AGREEMENT, dated as of , by and among CAPRIUS, INC., a
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Delaware corporation (the "Company"), and each of the persons severally listed
on the Schedule of Purchasers attached hereto. The persons listed on the
Schedule of Purchasers are sometimes hereinafter collectively referred to as the
"Purchasers" and individually as a "Purchaser."
WHEREAS, the Company desires to offer and issue (the "Offering") up to
666,667 units ("Units") in a private placement at a price of $3.00 per Unit,
each Unit consisting of (i) three (3) shares of Common Stock, $.01 par value
(the "Common Stock"), of the Company, (ii) four (4) redeemable Series A Warrants
to purchase shares of Common Stock and (iii) two (2) redeemable Series B Warrant
to purchase shares of Common Stock (collectively with the Series A Warrants
referred to herein as the "Warrants" and all shares underlying such Warrants are
collectively referred to herein as the "Warrant Shares"), on the terms and
conditions hereinafter set forth and set forth in each Warrant, a form of which
is attached hereto as Exhibit A and Exhibit B, and each Purchaser desires to
acquire that number of Units set forth opposite his name on the Schedule of
Purchasers (the Units, Common Stock, Warrants and/or the Warrants Shares are
sometimes hereinafter collectively referred to as the "Securities");
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and conditions herein contained, the Company and each Purchaser,
severally and not jointly, hereby agree as follows:
SECTION 1
Sale and Purchase of the Units.
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1.1 At the Closing (as defined in Section 2.1 hereof), and subject to
the terms and conditions hereof and in reliance upon the representations,
warranties and agreements contained herein, the Company is issuing and selling
to the Purchasers and each Purchaser is purchasing from the Company the number
of Units set forth opposite his name in the column labeled "Number of Units" on
the Schedule of Purchasers at the purchase amount (the "Purchase Amount") set
forth opposite his name in the column labeled "Purchase Amount" on the Schedule
of Purchasers. The number of Warrants and shares of Common Stock underlying the
Units are also set forth on the Schedule of Purchasers.
SECTION 2
Closing, Payment and Delivery
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2.1 Closing Date and Place of Closing. The closing of the purchase
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and sale of the Units hereunder (the "Closing") in the amounts and to the
persons specified in the Schedule of Purchasers shall be held simultaneously
with the execution and delivery of this Agreement at the offices of Thelen Reid
& Priest LLP, 40 West 57th Street, New York, New York, at 10:00 a.m. Eastern
Standard Time on the date hereof, provided that at least 451,000 Units are
subscribed for. In the event only a minimum number of Units are subscribed for
at the Closing Date (the "Initial Closing Date"), the Company may continue the
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Offering for an additional forty-five (45) days and hold subsequent closings
with respect to the balance of the Units.
2.2 Payment and Delivery. At each Closing, the Purchaser therein
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shall pay to the Company by wire transfer of immediately available funds or such
other form of payment as shall be mutually agreed upon by the Company and that
Purchaser, the Purchase Amount set forth opposite his name in the column labeled
"Purchase Amount" on the Schedule of Purchasers, and the Company shall deliver
to each Purchaser a certificate or certificates representing the number of
shares of Common Stock and Warrants as set forth opposite such Purchaser's name
in the applicable columns on the Schedule of Purchasers.
SECTION 3
Representations and Warranties of the Company
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The Company hereby represents and warrants to each Purchaser as of his
Closing Date as follows:
3.1 Organization, Qualification, Certificate and By-laws. The Company
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is a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware. The Company is duly qualified or licensed to do
business as a foreign corporation in good standing in every jurisdiction where
the character of its properties, owned or leased, or the nature of its
activities make such qualification necessary.
3.2 Corporate Power. The Company has all requisite corporate power to
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enter into this Agreement, to sell the Securities and to carry out and perform
its obligations under the terms of this Agreement, and also to own properties
owned by it and to conduct business as being conducted by it.
3.3 Capitalization. The Company's authorized capital stock, as of
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December 31, 1999, consisted of 50,000,000 shares of Common Stock and 1,000,000
shares of preferred stock, $.01 par value (the "Preferred Stock"), of which
13,525,517 shares of Common Stock and 27,000 shares of Series B Preferred Stock
are issued and outstanding. The Company has reserved 10,452,317 shares of Common
Stock for issuance upon the exercise of outstanding options and warrants
(including the Warrants) and the conversion of outstanding Preferred Stock. All
of the issued and outstanding shares of Common Stock are validly issued, fully
paid and non-assessable. All of the Common Stock being issued and the Warrant
Shares issuable to the Purchasers pursuant to this Agreement upon issuance in
accordance with the terms thereof will be validly issued, fully paid and
non-assessable shares of Common Stock. Schedule 3.3 annexed hereto sets forth a
complete and correct list of all outstanding options, warrants or other rights
of any kind to acquire any additional shares of capital stock of the Company or
securities convertible into or exchangeable for, or which otherwise confer on
the holder thereof any right to acquire, any such additional shares.
3.4 No Restrictive Agreements. Upon the delivery of the Securities in
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the manner contemplated hereunder, the Purchasers will acquire the beneficial
and legal, valid and indefeasible title to such Securities, free and clear of
all pledges, liens, charges, claims or options of any kind, except for
restrictions on transfer under federal and state securities laws. Except as set
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forth in the Company's Reports, there are no agreements relating to the voting,
purchase or sale of capital stock (i) between or among the Company and any of
its stockholders and (ii) to the best of Company's knowledge, between or among
any of the Company's stockholders.
3.5 Authorization. All corporate action on the part of the Company
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necessary for the authorization, execution, delivery and performance by the
Company of this Agreement and for the authorization, issuance and delivery of
the Securities issuable upon payment therefor has been taken. This Agreement
constitutes a valid and binding agreement of the Company enforceable in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency or other similar laws affecting the enforcement of
creditors' rights generally and general principles of equity.
3.6 Financial Information. The Company's Annual Report on Form 10-KSB
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for the fiscal year ended September 30, 1999 together with the Company's
Quarterly Report on Form 10-QSB for the fiscal quarter ended December 31, 1999
(collectively, the "Company's Reports") present fairly the financial position
and results of operations of the Company at the dates and for the periods to
which they relate (subject, in the case of the unaudited financial statements,
to normal year-end adjustments). The audited financial statements and the
unaudited financial statements contained in the Company's Reports have been
prepared in accordance with generally accepted accounting principles
consistently followed throughout the periods involved (except as may be
otherwise indicated in the notes thereto and except with respect to unaudited
statements as permitted by Form 10-QSB).
3.7 Absence of Certain Changes. At all times since December 31, 1999
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there has not been any event or condition of any character which has adversely
affected, or may be expected to adversely affect, the Company's business or
prospects, including but not limited to:
(a) any material adverse change in the condition, assets, liabilities
(existing or contingent) or business of the Company from that shown on the
Company's Reports;
(b) any damage, destruction or loss of any of the properties or
assets of the Company (whether or not covered by insurance) materially adversely
affecting the business or plans of the Company;
(c) any declaration, setting aside or payment or other distribution
in respect of any of the Company's capital stock, or any direct or indirect
redemption, purchase or other acquisition of any of such stock by the Company;
(d) any actual or threatened cancellation or adverse modification of
any material agreement to which the Company is a party; or
(e) any other event or condition of any character, materially
adversely affecting the business or plans of the Company.
3.8 Taxes. The Company has filed or will file within the time
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prescribed by law (including extensions of time approved by the appropriate
taxing authority) all tax returns and reports required to be filed with the
United States Internal Revenue Service and (except to the extent that the
failure to file would not have a material adverse effect on the condition or
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operations of the Company) with all other jurisdictions where such filing is
required by law. The Company has paid, or made adequate provision for the
payment of, all taxes, interest, penalties, assessments or deficiencies shown to
be due or claimed to be due on or in respect of such tax returns and reports.
The Company's federal income tax returns have not, to the best of the Company's
knowledge and belief, been audited by the Internal Revenue Service.
3.9 Litigation. Except as otherwise disclosed in Schedule 3.9 annexed
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hereto, there is neither pending nor, to the Company's knowledge, threatened any
action, suit, proceeding or claim to which the Company is or may be named as a
party or its property is or may be subject and in which an unfavorable outcome,
ruling or finding in any such matter or for all such matters taken as a whole
might have a material adverse effect on the condition, financial or otherwise,
and operations or prospects of the Company. The Company has no knowledge of any
unasserted claim which, if asserted and granted might have a material adverse
effect on the condition, financial or otherwise, operations or prospects of the
Company.
3.10 Consents. Except for those consents and filings contemplated by
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Section 6 hereof in connection with the Registration Statement, no consent,
approval, qualification, order or authorization of, or filing with, any
governmental authority is required in connection with the Company's execution,
delivery or performance of this Agreement, or the offer, sale or issuance of the
Securities by the Company other than "Blue Sky" filings which have been made
based upon the addresses of the Purchasers as set forth on the Schedule of
Purchasers.
3.11 Compliance. The execution, delivery and performance of this
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Agreement by the Company does not conflict with or cause a breach under any of
the terms or conditions of (i) its Certificate of Incorporation or By-Laws or
(ii) any mortgage, indenture, contract, agreement, instrument, judgment, decree,
order, statute, rule or regulation to which the Company is subject and a breach
or violation of which might have a material adverse effect on the condition,
financial or otherwise, operations or prospects of the Company. To the best
knowledge of the Company, the operations of the Company have complied and are in
compliance in all material respects with all applicable federal, state and local
laws, and where appropriate, foreign laws, including, without limitation,
health, safety and environmental statutes, regulations, orders and judgments,
except to the extent any failure to so comply would not have a material adverse
effect on the condition, financial or otherwise, operations or prospects of the
Company. The Company possesses all permits, licenses and approvals of
governmental authorities which are required in the operation of its business,
except for those the failure of which to hold would not have a material adverse
effect on the Company's business and prospects. To the best knowledge of the
Company, the Company is in compliance in all material respects with the terms
and conditions of such permits, licenses and approvals.
3.12 Company Reports. The Company Reports, taken as a whole as of the
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date hereof, and the representations and warranties of the Company in this
Agreement and its Schedules hereto do not contain any untrue statement of
material fact or omit to state a material fact required to be stated therein, or
necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading.
3.13 Intellectual Property. The Company owns or has valid, adequate
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and subsisting rights to use and exploit all patents, patent licenses, trade
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secrets, copyrights, trademarks and service marks necessary for the conduct of
the business of the Company as described in the Company's Reports (collectively,
the "Intellectual Property") free and clear of any pledge, lien, charge, claim
or option. None of the processes currently used by the Company or any of the
properties or products currently sold by the Company or trademarks, trade names,
labels or other marks or copyrights used by the Company, to the best knowledge
of the Company, infringes the patent, industrial property, trademark, trade
name, label, other mark, right or copyright of any other person or entity. The
Company has not received any written notice of adverse claim with respect to any
of the Intellectual Property, and, to the Company's best knowledge, no basis
exists for any such claim.
SECTION 4
Representations and Warranties of Purchasers
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Each Purchaser represents and warrants to the Company, severally and
not jointly, and only as to himself, as follows:
4.1 Experience. He is experienced in evaluating and investing in
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companies such as the Company, and has such knowledge and experience in
evaluating the merits and risks of its investment, and has the ability to bear
the economic risks of its investment. He is an "accredited investor", as such
term is defined in Regulation D under the Securities Act. His purchase of the
Securities is consistent with his investment objectives.
4.2 Investment. He is acquiring the Securities for investment for his
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own account and not with the view to, or for resale in connection with, any
distribution thereof (subject to the provisions of Section 6 hereof). He
understands that the Securities have not been registered under the Securities
Act by reason of specified exemption from the registration provisions of the
Securities Act which depends upon, among other things, the bona fide nature of
his investment intent as expressed herein. He acknowledges that the Company may
place restrictive legends on, and stop transfer orders against, the certificates
representing the Securities being acquired by him.
4.3 Rule 144. He acknowledges that the Securities must be held
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indefinitely unless they are subsequently registered under the Securities Act or
an exemption from such registration is available. He has been advised or is
aware of the provisions of Rule 144 promulgated under the Securities Act, which
permits limited resale of shares purchased in a private placement subject to the
satisfaction of certain conditions and that such Rule may not become available
for resale of the Units.
4.4 Authority. He has full power and authority under all applicable
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laws to enter into this Agreement and to consummate the transactions herein and
has taken all action necessary to authorize his execution and performance of
this Agreement. This Agreement when executed and delivered will be duly executed
and will constitute a legal, valid and binding obligation of such Purchaser,
enforceable in accordance with its terms, except as the enforceability thereof
may be limited by bankruptcy, insolvency or other similar laws affecting the
enforcement or creditors' rights generally and general principles of equity.
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4.5 Access to Data. He is fully familiar with the Company's business,
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operations and financial history as set forth in the Company Reports, including
the history of losses, limited capital, competitive factors and the Company's
limited business history with respect to its current primary operations. He has
had an opportunity to discuss the Company's business, operations and financial
affairs with its management and has had the opportunity to review the Company's
facilities. He is aware of that the Company's Common Stock is traded on the OTC
Bulletin Board and the limited marketability thereon.
4.6 Broker. There is no broker, finder, placement agent or other
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intermediary which has been retained by or is authorized to act for the
Purchaser who may be entitled to a fee or commission for its services in
connection with this Agreement.
SECTION 5
Covenants of the Company
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5.1 Future Reports. For a period of two (2) years from the date
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hereof and so long as the Purchaser is a holder of Securities: (a) the Company
will furnish to the Purchaser (i) all annual, quarterly and periodic reports and
proxy statements filed by the Company with the Securities and Exchange
Commission (the "Commission") pursuant to the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and (ii) all registration statements filed by
the Company under the Securities Act, within five (5) days after filing such
report or registration statement with the Commission, and (b) the Company will
use its best efforts to file all reports required to be filed by it under the
Exchange Act and will take such further action as any Purchaser may reasonably
request, all to the extent required to enable such Purchaser to sell pursuant to
Rule 144 under the Securities Act.
SECTION 6
Registration Under the Securities Act
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6.1 Demand Registration. Upon demand of the majority in interest of
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the Purchasers of Units, the Company will use its best efforts to file within 60
days from the receipt of its receipt of the foregoing demands (the "Demand
Date") a registration statement under the Securities Act (the "Registration
Statement"), on Form SB-2 or such applicable form as properly designated by the
Company, registering the shares of Common Stock and the Warrant Shares
underlying their Units (together, the "Registrable Securities"), and use its
best efforts to have the Registration Statement declared effective by the
Commission as soon as possible thereafter (the "Effective Date"). Upon such
demand, the Company shall notify those Purchasers who had not joined in the
foregoing demand within 20 days of its intention to file the Registration
Statement, so that they may include their Registrable Securities in the
Registration Statement. Any Purchaser who fails to notify the Company within ten
days prior to the proposed filing date of the Registration Statement shall be
deemed not to desire to include his Registrable Shares therein. For purposes of
this Section 6, those Purchasers whose are participating in a Registration
Statement shall be "Holders." In the event the Registration Statement is not
declared effective within 150 days after the Demand Date (the "Registration
Deadline"), the then number of Warrants of the Holders shall be increased by two
percent (2%), effective as of the end of the Registration Deadline and by an
additional two percent (2%) on each 30 day period thereafter, until such time
that the number of Warrants should equal 112% of the original number of Warrants
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of the Holders. The Company agrees to keep effective the Registration Statement
for a period of nine months from the Effective Date. The obligation of the
Company under this Section 6.1 shall be limited to one Registration Statement
which is declared effective under the Securities Act.
6.2 Piggyback Registration.
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(a) If at any time prior to the Expiration Date (as defined by the
Warrants) the Company proposes to register shares of its Common Stock under the
Securities Act on a Registration Statement for the account of stockholders
(other than a registration relating to (i) a registration of a stock option,
stock purchase or compensation or incentive plan or of stock issued or issuable
pursuant to any such plan, or a dividend investment plan; (ii) a registration of
securities proposed to be issued in exchange for securities or assets of, or in
connection with a merger or consolidation with, another corporation; or (iii) a
registration of securities proposed to be issued in exchange for other
securities of the Company) in a manner which would permit registration of the
Registrable Securities for sale to the public under the Securities Act (a
"Piggyback Registration"), it will at such time give prompt written notice to
the Purchasers of its intention to do so and of the Purchasers' rights under
this Section 6.2. Such rights are referred to hereinafter as "Piggyback
Registration Rights". Upon the written request of the Purchaser to the Company
made within ten days after the giving of any such notice (which request shall
specify the number of Registrable Securities intended to be disposed of by the
Holder and the intended method of disposition thereof), the Company will include
in the Registration Statement the Registrable Securities which the Company has
been so requested to register by the Holder, provided that the Company's
obligation shall continue after exercise of the Warrants, but it need not
include any Registrable Securities in a Registration Statement filed after the
Expiration Date.
(b) If the securities covered by the Registration Statement are to be
underwritten, the Company shall not be required to include therein any of the
Registrable Securities unless the Holder accepts the terms of the underwriting
as agreed upon between the Company and the underwriters selected by it. If in
the opinion of the managing underwriter, the registration of all, or a part of,
the Registrable Securities which the Purchasers have requested to be included in
the Registration Statement would adversely affect such public offering, then,
(i) the Company shall be required to include in the underwriting only the number
of Registrable Securities, if any, which the managing underwriter believes may
be sold without causing such adverse effect, and the number of Registrable
Securities that may be included in such registration shall be allocated among
all selling stockholders, requesting to participate in such registration in
proportion (as nearly as practicable) to the amount of shares of Common Stock
owned by each selling stockholder (including each Holder), or (ii) the Company
may require the selling shareholders (including the Holders) to delay any
offering of the Registrable Securities for a period of up to ninety (90) days.
(c) The Company shall keep the Registration Statement to which this
Section 6.2 applies, and all amendments thereto, effective and current under the
Securities Act for a period ending not sooner than ninety (90) days after their
initial effective date (excluding any lock-up period) and cooperate with respect
to all necessary or advisable action to permit the completion of the public sale
or other disposition of the securities included therein.
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(d) The Purchaser acknowledges that the Company shall have no
obligation to include the Registrable Securities in a Piggyback Registration if
the Registrable Securities then can be publicly sold pursuant to Rule 144 under
the Securities Act.
(e) The Company is obligated to file only one Registration Statement
pursuant to this Section 6.2 which is declared effective under the Securities
Act.
6.3 Blue Sky Laws. In the event of a registration pursuant to the
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provisions of this Section 6, the Company shall use its best efforts to cause
the Registrable Securities so registered to be registered or qualified for sale
under the securities or blue sky laws of such jurisdictions as the Holders may
reasonably request; provided, however, that the Company shall not by reason of
this Section 6.2 be required to qualify to do business in any state in which it
is not otherwise required to qualify to do business or to file a general consent
to service of process.
6.4 Copies of Registration Statement. In the event of a registration
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pursuant to the provisions of this Section 6, the Company shall furnish to each
Holder such reasonable number of copies of the Registration Statement and of
each amendment and supplement thereto (in each case, including all exhibits),
such reasonable number of copies of each prospectus contained in such
registration statement and each supplement or amendment thereto (including each
preliminary prospectus), all of which shall conform to the requirements of the
Securities Act and the rules and regulations thereunder, and such other
documents, as any Holder may reasonably request to facilitate the disposition of
the Registrable Securities included in such registration.
6.5 Cost and Expenses. In the event of a registration pursuant to the
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provision of this Section 6, the Company shall bear the entire cost and expense
of the Registration Statement, excluding commissions and other brokerage charges
and any counsel fees of the Holders.
6.6 Furnishing of Information. Each Holder shall be required to
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furnish to the Company and to its counsel all relevant information concerning
the proposed method of sale or other distribution by such Holder of his
Registrable Securities, and such other information as the Company and its
counsel reasonably may require to prepare and file the Registration Statement in
accordance with the applicable provisions of the Securities Act and the rules
and regulations promulgated by the Commission thereunder. If requested by the
Company, such information shall be furnished in writing.
6.7 Sales Suspension. If, at any time when the Company is required to
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maintain the Registration Statement effective and current with respect to the
Registrable Securities any event or events shall occur which would cause the
prospectus contained therein, as then amended or supplemented, to be other than
in compliance with the requirements of Section 10 of the Securities Act, the
Company will promptly give notice thereof to each Holder and, upon receipt of
such notice, each Holder shall immediately cease and desist from effecting any
sales of his Registrable Securities until he shall have received notice from the
Company that such sales again may be effected together with copies of a
prospectus which has been amended or supplemented so as to conform to the
requirements of said Section 10. Upon the occurrence of any such event, the
Company promptly shall use its best efforts to prepare and file with the
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Commission a post-effective amendment to the Registration Statement, or a
post-effective amendment or supplement to the prospectus, so that the
prospectus, as so amended or supplemented, will comply with the requirements of
Section 10 of the Securities Act. The Company agrees to extend the rights
granted under this Section 6 for the period of time during which any suspension
of sales occur under this Section 6.7.
6.8 Indemnification.
---------------
(a) The Company will indemnify and hold harmless each Holder and each
person, if any, who controls such Holder, (each, an "Indemnified Holder"),
against any losses, claims, damages, expenses (including reasonable costs of
investigation), and liabilities (joint or several) (collectively, "Claims") to
which any of them may become subject under the Securities Act, the Exchange Act
or otherwise, insofar as such Claims (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based upon any
of the following statements, omissions or violations (collectively, a
"Violation"): (i) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, or any post-effective amendment
thereof, or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, (ii) any untrue statement or alleged untrue statement of a material
fact contained in any preliminary prospectus if used prior to the effective date
of the Registration Statement, or contained in the final prospectus (as amended
or supplemented if the Company files any amendment thereof or supplement thereto
with the Commission) or in any document incorporated by reference therein or the
omission or alleged omission to state therein a material fact required to be
stated therein, or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading or (iii) any
violation or alleged violation by the Company of the Securities Act, the
Exchange Act, any state securities law or any rule or regulations promulgated
under the Securities Act, the Exchange Act or any state securities law. Subject
to the restrictions set forth in Subsection (c) below with respect to the number
of legal counsel, the Company shall reimburse the Indemnified Holders promptly
as such expenses are incurred and are due and payable for any legal fees or
other reasonable expenses incurred by them in connection with investigating or
defending any such Claim. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Subsection: (A) shall
not apply to a Claim arising out of or based upon a Violation which occurs in
reliance upon and in conformity with information furnished in writing to the
Company by any Indemnified Holder expressly for use in connection with the
preparation of the Registration Statement or any such amendment thereof or
supplement thereto; (B) with respect to any preliminary prospectus, shall not
inure to the benefit of any such person from whom the person asserting any such
Claim purchased the Registrable Securities that are the subject thereof (or to
the benefit of any person controlling such person) if the untrue statement or
omission of material fact contained in the preliminary prospectus was corrected
in the prospectus, as then amended or supplemented and such corrected prospectus
was furnished by the Company for delivery to such person as required by law; and
(C) shall not apply to amounts paid in settlement of any Claim if such
settlement is effected without the prior written consent of the Company, which
consent shall not be unreasonably withheld. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of the
Indemnified Holder.
9
<PAGE>
(b) Each Holder agrees to indemnify and hold harmless, to the same
extent and in the same manner set forth in Section 6.8(a), the Company, each of
its directors, each of its officers who sign the Registration Statement, each
person, if any, who controls the Company within the meaning of the Securities
Act or the Exchange Act, the other Purchasers selling Registrable Securities
pursuant to the Registration Statement or any of their respective directors or
officers or any person who controls such Purchaser, against any Claim to which
any of them may become subject, under the Securities Act, the Exchange Act or
otherwise, insofar as such Claim arises out of or is based upon any Violation,
in each case to the extent (and only to the extent) that such Violation occurs
in reliance upon and in conformity with written information furnished to the
Company by such Purchaser expressly for use in connection with the Registration
Statement; and such Purchaser will reimburse any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such Claim; provided, however, that the indemnification contained in this
Subsection shall not apply to amounts paid in settlement of any Claim if such
settlement is effected without the prior written consent of such Purchaser,
which consent shall not be unreasonably withheld and provided, further, that
such Purchaser shall be liable under this Subsection for only that amount of a
Claim as does not exceed the net proceeds to such Purchaser as a result of the
sale of the Registrable Securities pursuant to such Registration Statement. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of such Indemnified Party.
(c) Promptly after receipt by a person seeking indemnification
hereunder (an "Indemnified Party") of notice of the commencement of any action
(including any governmental action), such Indemnified Party shall, if a Claim in
respect thereof is to be made against any indemnifying party (an "Indemnifying
Party") under this Subsection, deliver to the Indemnifying Party a written
notice of the commencement thereof and the Indemnifying Party shall have the
right to participate in, and, to the extent the Indemnifying Party so desires,
jointly with any other Indemnifying Party similarly noticed, to assume control
of the defense thereof with counsel mutually satisfactory to the Indemnifying
Parties; provided, however, that an Indemnified Party shall have the right to
retain his own counsel, with the fees and expenses to be paid by the
Indemnifying Party, if, in the reasonable opinion of counsel for the Indemnified
Party, representation of such Indemnified Party by the counsel retained by the
Indemnifying Party would be inappropriate due to actual or potential differing
interests between such Indemnified Party and any other party represented by
counsel to the Indemnifying Party in such proceeding. The Company shall pay for
only one legal counsel (in addition to any local counsel) for the Holders;
provided, however, there is no demonstrable conflict between the Holders. Absent
a demonstrable conflict, such legal counsel shall be selected by Holders,
holding a majority in interest of the Registrable Securities. The failure to
deliver written notice to the Indemnifying Party within a reasonable time of the
commencement of any such action shall not relieve such Indemnifying Party of any
liability to the Indemnified Party under this Section 6.8, except to the extent
that the Indemnifying Party is substantially prejudiced in its ability to defend
such action as a result of such failure.
SECTION 7
Miscellaneous
-------------
7.1 Governing Law; Jurisdiction. Notwithstanding the place where this
---------------------------
Agreement may be executed by any of the parties hereto, the parties expressly
10
<PAGE>
agree that all the terms and provisions hereof shall be construed in accordance
with and governed by the laws of the State of Delaware.
7.2 Survival. The representations and warranties made in Sections 3
--------
and 4 herein shall survive the Closing for a period of one year.
7.3 Successors and Assigns. This Agreement shall inure to the benefit
----------------------
of, and be binding upon, the parties hereto and their respective successors,
assigns, heirs, executors and administrators.
7.4 Entire Agreement; Amendment. This Agreement and the documents
---------------------------
delivered pursuant hereto constitute the full and entire understanding and
agreement among the parties with regard to the subjects hereof. Neither this
Agreement nor any term hereof may be amended, waived, discharged or terminated
except by a written instrument signed by the Company and the Purchasers;
provided, however, that Purchasers of at least eighty (80%) percent of the
Registrable Securities together with the Company, may by written instrument
amend the provisions of Section 6 hereof.
7.5 Notices, etc. All notices and other communications required or
------------
permitted hereunder shall be in writing and shall be mailed by first-class mail,
postage prepaid, or by express courier, or delivered either by hand or by
messenger, addressed (a) if to a Purchaser, as indicated on the Schedule of
Purchasers attached hereto, or at such other address as such Purchaser shall
have furnished to the Company in writing, or (b) if to the Company, at One
Parker Plaza, Fort Lee, New Jersey 07024, Attention: President or at such other
address as the Company shall have furnished to the Purchasers in writing.
7.6 Rights; Separability. Unless otherwise expressly provided herein,
--------------------
the rights of the Purchasers hereunder are several rights, not rights jointly
held with any of the other Purchasers. In case any provision of the Agreement
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
7.7 Information Confidential. Each Purchaser acknowledges that the
------------------------
information received by him pursuant to this Agreement may be confidential, and
non-public, and is for the Purchaser's use only. He will not use such
confidential information in violation of the Exchange Act or otherwise, or
reproduce, disclose or disseminate such information to any other person (other
than his representatives having a need to know the contents of such information,
and his attorneys and financial advisors), except in connection with the
exercise of rights under this Agreement, unless the Company has made such
information available to the public generally or such Purchaser is required to
disclose such information by a governmental body.
7.8 Expenses. The Company and the Purchasers shall bear their own
--------
expenses and legal fees incurred on their behalf with respect to this Agreement
and the transactions contemplated hereby, except as otherwise provided herein.
7.9 Titles and Gender. The titles of the Sections and Subsections of
-----------------
this Agreement are for convenience of reference only and are not to be
11
<PAGE>
considered in construing this Agreement. Whenever used herein, the singular
member includes the plural, the plural includes the singular, and the use of any
gender shall include all genders.
7.10 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered by their respective proper and duly authorized officers
as of the day and year first above written.
CAPRIUS, INC.
By:
------------------------------------
PURCHASERS:
----------------------------------------
12
<PAGE>
SCHEDULE OF PURCHASERS
NAME, ADDRESS
AND SOCIAL NUMBER NUMBER NUMBER
SECURITY NUMBER NUMBER OF SHARES OF OF A OF B PURCHASE
OF PURCHASER OF UNITS COMMON STOCK WARRANTS WARRANTS AMOUNT
------------ -------- ------------ -------- -------- --------
13
EXHIBIT 10.2
VOID AFTER 5:00 P.M., EASTERN TIME,
ON MARCH 27, 2005
THIS WARRANT AND THE SHARES OF COMMON STOCK UNDERLYING THIS WARRANT
(COLLECTIVELY, THE "SECURITIES") HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, ASSIGNED OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION UNDER SUCH ACT OR IN A
TRANSACTION THAT, IN THE OPINION OF COUNSEL TO CAPRIUS, INC., QUALIFIES AS AN
EXEMPT TRANSACTION UNDER SUCH ACT AND THE RULES AND REGULATIONS PROMULGATED
THEREUNDER.
CAPRIUS, INC.
SERIES A COMMON STOCK PURCHASE WARRANT
---------------------------------------
No. WB- Shares
-------
CAPRIUS, INC., a Delaware corporation (the "Company"), hereby certifies
that (the "Initial Holder"), is entitled, subject to
------------------------
the terms set forth below, to purchase from the Company,
-----------------------
shares (the "Shares") of fully paid and non-assessable Common Stock of the
Company, par value $.01 per share, at a purchase price of Fifty Cents ($0.50)
per Share, subject to adjustment from time to time pursuant to Section 3 hereof
(the "Exercise Price"). The term "Common Stock" means, unless the context
otherwise requires, the Company's Common Stock, par value $.01 per share, or
other securities or property at the time deliverable upon the exercise of this
Warrant.
This Warrant is part of the Series A of Common Stock Purchase Warrants
initially issued for the purchase of an aggregate of up to 666,667 units (the
"Units") as part of a private placement by the Company pursuant to the terms of
a Stock Purchase Agreement, dated as of March 27, 2000 among the Company and the
Initial Holders. Each Unit consisted of (i) three (3) shares of Common Stock,
(ii) four (4) redeemable Series A Warrants and (iii) two (2) redeemable Series B
Warrant to purchase shares of Common Stock.
1. Exercise.
--------
1.1 Timing of Exercise. This Warrant shall be exercisable in whole or in
------------------
part from time to time commencing as of March 27, 2000 and expiring at 5:00
P.M., New York time, on March 27, 2005 (the "Expiration Date"), subject to
earlier termination as provided herein, and may not be exercised thereafter.
1.2 Manner of Exercise. The purchase rights evidenced by this Warrant
------------------
shall be exercised by the Initial Holder or any person permitted by Section 6.1
herein (collectively, "the Holder"), by surrendering this Warrant, with the
Notice of Exercise in the form of Exhibit A hereto duly executed by the Holder,
to the Company at its principal office (or such other office as may be
1
<PAGE>
designated by the Company to the Holder), accompanied by payment (in cash, by
wire transfer or by certified or official bank check or checks) of the Exercise
Price.
1.3 Partial Exercise. This Warrant may be exercised for less than the full
----------------
number of shares of Common Stock at the time called for hereby, in which case
the number of shares receivable upon the exercise of this Warrant as a whole,
and the sum payable upon the exercise of this Warrant as a whole, shall be
proportionately reduced. Upon any such partial exercise, the Company at its
expense will forthwith issue to the Holder a new Warrant or Warrants of like
tenor calling for the number of shares of Common Stock as to which rights have
not been exercised, such Warrant or Warrants to be issued in the name of the
Holder.
2. Delivery of Stock Certificates Upon Exercise. As soon as practicable
--------------------------------------------
after the exercise of this Warrant, and in any event within five (5) business
days thereafter, the Company, at its expense, will cause to be issued in the
name of and delivered to the Holder a certificate or certificates for the number
of fully paid and non-assessable shares of Common Stock to which the Holder
shall be entitled upon such exercise. Any shares of Common Stock as to which
this Warrant is exercised shall be deemed issued on and as of the date of such
exercise, and the Holder shall thereupon be deemed to be the owner of record of
such shares.
3. Anti-Dilution Adjustments.
-------------------------
3.1 Change in Capitalization. In case of any stock split, stock dividend
------------------------
or similar transaction which increases or decreases the number of outstanding
shares of Common Stock, appropriate adjustment shall be made by the Chief
Financial Officer of the Company to the number of Shares, and the Exercise Price
per Share, of Common Stock which may be purchased under this Warrant.
3.2 Consolidation, Merger and Sale of Assets.
----------------------------------------
(a) In case of any consolidation of the Company with or a merger of
the Company into another corporation or in case of any sale or conveyance to
another corporation of the property of the Company as an entirety or
substantially as an entirety, upon any such consolidation, merger, sale or
conveyance and the surviving entity is a publicly traded company, the Company
agrees that a condition of such transaction will be that the Company or such
successor or purchasing corporation, as the case may be, shall assume the
obligations of the Company hereunder in writing. In the case of any such
consolidation, merger or sale or conveyance, the Holder shall have the right
until the Expiration Date upon payment of the Exercise Price in effect
immediately prior to such action, to receive the kind and amount of shares and
other securities and/or property which it would have owned or have been entitled
to receive after the happening of such consolidation, merger, sale or conveyance
had this Warrant been exercised immediately prior to such action, subject to
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 3. The provisions of this
Section 3.2(a) shall similarly apply to successive consolidations, mergers,
sales or conveyances.
(b) In case of any consolidation of the Company with or a merger of
the Company into another corporation or in case of any sale or conveyance to
2
<PAGE>
another corporation of the property of the Company as an entirety or
substantially as an entirety, upon any such consolidation, merger, sale or
conveyance and the surviving entity is a non-publicly traded company, the
Company agrees that a condition of such transaction will be that the Company
shall mail to the Holder at the earliest applicable time (and, in any event not
less than 20 days before any record date for determining the persons entitled to
receive the consideration payable in such transaction) written notice of such
record date. Such notice shall also set forth facts as shall indicate the effect
of such action (to the extent such effect may be known at the date of such
notice) on the Exercise Price of and the kind and amount of the shares of stock
and other securities and property deliverable upon exercise of this Warrant.
Upon the closing of the transaction referenced in the foregoing notice, this
Warrant to the extent then unexercised shall terminate.
3.3 Exchanges and Distributions With Respect to Common Stock. If the
--------------------------------------------------------
Company shall exchange for its Common Stock or distribute with respect to its
Common Stock other securities issued by it, the Company shall give notice
thereof to the Holder, and the Holder shall have the right thereafter (until the
expiration of this Warrant) to exercise this Warrant for the kind and amount of
shares of stock and other securities retained or received by a holder of the
number of shares of Common Stock of the Company into which this Warrant might
have been converted immediately prior to such exchange or distribution, subject
to adjustment as provided hereinabove.
3.4 Officer's Certificate. Whenever the Exercise Price per share or the
---------------------
number of shares of Common Stock subject to this Warrant is adjusted, the
Company shall promptly mail to the Holder of this Warrant a notice of
adjustment, which notice shall include a brief statement of the facts requiring
the adjustment and the manner of computing it and shall be certified by the
chief financial officer of the Company. The determination of the adjustment
shall be made by the Company in its sole discretion and shall be final and
binding upon the Holder absent manifest error.
4. Shares to Be Fully Paid; Reservation of Capital Stock Issuable Upon
-------------------------------------------------------------------
Exercise of Warrants. The Company covenants and agrees that any Shares issued
- ---------------------
hereunder will, upon issuance, be fully paid and non-assessable and free from
all taxes, liens and charges with respect to the issuance thereof. The Company
shall at all times reserve and keep available out of its authorized but unissued
capital stock, solely for the issuance and delivery upon the exercise of this
Warrant, such number of its duly authorized shares of Common Stock and other
securities as from time to time shall be issuable upon the exercise of this
Warrant.
5. Fractional Shares. The Company shall not issue fractions of shares of
-----------------
Common Stock upon exercise of this Warrant or scrip in lieu thereof. If any
fraction of a share of Common Stock would, except for the provisions of this
Section 5, be issuable upon exercise of this Warrant, then the number of shares
of Common Stock to be issued shall be rounded up or down to the nearest whole
share.
6. Transfer Restrictions.
---------------------
6.1 Transfer. A Holder, including the Initial Holder or any subsequent
--------
Holder, may transfer this Warrant only to (i) any other Holder, (ii) any entity
3
<PAGE>
controlled by, controlling or under common control of the Holder, or for which
the Holder is acting as the representative, or to one or more of its
shareholders, directors, officers, members, employees or limited or general
partners, or to entities that manage or co-manage the Holder or any of its
limited or general partners, or (iii) any member of the immediate family (which
shall be deemed to include a spouse, parent, or child) of an individual Holder
or trust for the benefit of any such individual. Prior to any such transfer, the
Holder must deliver the Assignment Form in the form of Exhibit B hereto and
provide information to the Company, in writing, regarding the proposed
transferee sufficient for the Company to determine the eligibility of such
transferee under this Section 6.
6.2 Securities Laws. The Holder of this Warrant, by accepting delivery of
---------------
the same, hereby:
(a) acknowledges that any shares of Common Stock issued pursuant to
the exercise of this Warrant may not be registered under the Securities Act of
1933, as amended (the "Securities Act"), at the time issued;
(b) agrees that, upon the exercise of this Warrant, he shall make the
customary representations and warranties as may be requested by counsel to the
Company in order for the Company to properly rely upon Section 4(2) of the
Securities Act regarding exemption from registration thereunder, and, in
connection with such exemption, that any certificates representing shares of
Common Stock issued pursuant to this Warrant would reflect an appropriate legend
regarding restrictions upon transferability; and
(c) agree to indemnify the Company, and hold it harmless from and
against, any and all losses, expenses (including attorneys' fee), costs and
damages arising form or relating to any violation of applicable state securities
or "blue sky" laws in connection with the issuance, sale, delivery or exercise
of this Warrant and the issuance, sale and delivery of shares of Common Stock
upon any exercise of this Warrant.
7. Redemption of Warrants. The Warrants are redeemable by the Company at
----------------------
any time, in whole or in part, on not less than thirty (30) days prior written
notice at a redemption price of $.01 per Warrant, provided the closing bid
quotation of the Common Stock as reported on the OTC Bulletin Board, if traded
thereon, or if not traded thereon, the closing sale price if listed on a
national securities exchange or the Nasdaq market (or other reporting system
that provides last sale prices), has been at least 600% of the then current
Exercise Price of the Warrants, for a period of 15 consecutive trading days
ending within five days prior to the date on which the Company gives notice of
redemption. Any redemption in part shall be made pro rata to all Holders. The
redemption notice shall be mailed to the Holders pursuant to Section 12 hereof.
Any such notice mailed in the manner provided herein shall be conclusively
presumed to have been duly given in accordance with this Agreement whether or
not the registered holder receives such notice. No failure to mail such notice
nor any defect therein or in the mailing thereof shall affect the validity of
the proceedings for such redemption except as to a registered holder of a
Warrant (i) to whom notice was not mailed or (ii) whose notice was defective. An
affidavit of the Secretary or Assistant Secretary of the Company that notice of
redemption has been mailed shall, in the absence of fraud, be prima facie
evidence of the facts stated therein. Holders of the Warrants will have exercise
rights until the close of business on the day immediately preceding the date
fixed for redemption. On and after the date fixed for redemption, the holder
4
<PAGE>
shall have no right with respect to the Warrant except to receive $.01 per
Warrant upon surrender of the Warrant. If any Shares have not been registered
pursuant Section 6 of the Stock Purchase Agreement, the Company agrees not to
redeem any of the Warrants under this Section 7 until 30 days after a
registration statement under the Securities Act (a "Registration Statement") has
been declared effective with respect to such Shares. The Company shall notify
the Holders of its intention to file such a Registration Statement pursuant to
Section 12, hereof.
8. Registration Under the Securities Act of 1933. Any obligation the
---------------------------------------------
Company has to file any registration statement under the Securities Act to
effect the resale of all of the shares of Common Stock receivable upon exercise
of the Warrants is set forth in Section 6 of the Stock Purchase Agreement.
9. Replacement of Warrant. Upon receipt of evidence reasonably
----------------------
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and (in the case of loss, theft or destruction) upon delivery of an
indemnity agreement, and if requested by the Board of Directors, a bond in an
amount reasonably satisfactory to it, or (in the case mutilation) upon surrender
and cancellation hereof, the Company will issue in lieu thereof a new Warrant of
like tenor.
10. Rights as a Warrant Holder. The Holder shall not, by virtue hereof, be
--------------------------
entitled to any rights of a stockholder in the Company, either at law or equity
except with respect to certificates representing shares of Common Stock issued
upon exercise of this Warrant. The rights of the Holder are limited to those
expressed in this Warrant and are not enforceable against the Company except to
the extent set forth herein. Prior to due presentment for transfer of this
Warrant, the Company may deem and treat the Holder as the absolute owner of this
Warrant for purposes of any exercise hereof and for all other purposes and such
right of the Company shall not be affected by any notice to the contrary.
11. Subdivision of Rights. This Warrant (as well as any new warrant issued
---------------------
pursuant to the provisions of this Section) is exchangeable upon the surrender
hereof by the Holder at the principal office of the Company for any number of
new warrants of like tenor and date representing in the aggregate the right to
subscribe for and purchase the number of shares of Common Stock of the Company
that may be subscribed for and purchased hereunder.
12. Sending of Notices. All notices and other communications with respect
------------------
to this Warrant shall be in writing and sent by express mail or courier service
or by personal delivery, if to the Holder, to the address set forth on the
records of the Company, and if to the Company, to One Parker Plaza, Fort Lee,
New Jersey 07024, Attn: President, or to such other address as either party
hereto may duly give to the other.
13. Headings. The headings in this Warrant are for purposes of reference
--------
only and shall not limit or otherwise affect the meaning of the terms hereof.
14. Change, Waiver, Discharge or Termination. This Warrant sets forth the
----------------------------------------
entire agreement between the Company and the Holder with respect to the matters
herein. Neither this Warrant nor any term hereof may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
5
<PAGE>
the party against which enforcement of the change, waiver, discharge or
termination is sought. The Company shall not amend any other Warrant issued as
part of this Series to make terms thereunder more favorable to the Holder
thereof without offering the same amended terms to the Holder hereof.
15. Governing Law. This Warrant shall be governed by, and construed in
--------------
accordance with, the laws of the State of Delaware.
CAPRIUS, INC.
By:
-------------------------------
Dated: , 2000
-------------------
6
<PAGE>
EXHIBIT A
---------
NOTICE OF EXERCISE
------------------
(To be executed by a Holder desiring to exercise the right to purchase Shares
pursuant to a Warrant.)
The undersigned Holder of a Warrant hereby:
(a) Irrevocably elects to exercise the Warrant to the extent of purchasing
Shares;
- -------
(b) Makes payment in full of the aggregate Exercise Price for those Shares by
wire transfer or the delivery of certified funds or a bank cashier's check in
the amount of $ ;
-----------
(c) Requests that a certificate for such Shares be issued in the name of the
undersigned, or, if the name and address of some other person is specified
below, in the name of such other person:
- ---------------------------------------------------
- ---------------------------------------------------
- ---------------------------------------------------
- ---------------------------------------------------
(Name, address and tax identification number of
person other than the undersigned in whose name
Shares are to be registered.)
(d) Requests, if the number of Shares purchased are not all the Shares
purchasable pursuant to the unexercised portion of the Warrant, that a new
Warrant of like tenor for the remaining Shares purchasable pursuant to the
Warrant be issued and delivered to the undersigned at the address stated below.
Dated:
--------------------------- ----------------------------------------
Signature
(This signature must conform in all respects to the name of the Holder as
specified on the face of the Warrant.)
- --------------------------------- ----------------------------------------
Tax Identification Number Printed Name
Address:
----------------------------------
- ------------------------------------------
Stock Warrant No.: ##
7
<PAGE>
EXHIBIT B
---------
ASSIGNMENT FORM
---------------
FOR VALUE RECEIVED, the undersigned,
, hereby sells, assigns and transfers unto:
- --------------------------------
Name:
------------------------------------------------
(Please type or print in block letters.)
Address:
---------------------------------------------
- ------------------------------------------------------
the right to purchase shares (the "Shares") of Caprius, Inc. (the
--------------
"Company") pursuant to the terms and conditions of the Warrant held by the
undersigned. The undersigned hereby authorizes and directs the Company (i) to
issue and deliver to the above-named assignee at the above address a new Warrant
pursuant to which the rights to purchase being assigned may be exercised, and
(ii) if there are rights to purchase Shares remaining pursuant to the
undersigned's Warrant after the assignment contemplated herein, to issue and
deliver to the undersigned at the address stated below a new Warrant evidencing
the right to purchase the number of Shares remaining after issuance and delivery
of the Warrant to the above-named assignee. Except for the number of Shares
purchasable, the new Warrant to be issued and delivered by the Company is to
contain the same terms and conditions as the undersigned's Warrant. This
Assignment is subject to receipt by the Company of such investment
representations by the assignee, as may be reasonably required under the
Securities Act of 1933, as amended. To complete the assignment contemplated by
this Assignment Form, the undersigned hereby irrevocably constitutes and
appoints as the undersigned's attorney-in-fact to
------------------------------
transfer the Warrant and the rights thereunder on the books of the Company with
full power of substitution for these purposes.
Dated:
--------------------------- ----------------------------------------
Signature
(This signature must conform in all respects to the name of the Holder as
specified on the face of the Warrant.)
- --------------------------------- ----------------------------------------
Social Security Number Printed Name
or Employer ID Number
Address:
--------------------------------
- -----------------------------------------
Stock Warrant No.: ##
8
EXHIBIT 10.3
VOID AFTER 5:00 P.M., EASTERN TIME,
ON MARCH 27, 2005
THIS WARRANT AND THE SHARES OF COMMON STOCK UNDERLYING THIS WARRANT
(COLLECTIVELY, THE "SECURITIES") HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, ASSIGNED OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION UNDER SUCH ACT OR IN A
TRANSACTION THAT, IN THE OPINION OF COUNSEL TO CAPRIUS, INC., QUALIFIES AS AN
EXEMPT TRANSACTION UNDER SUCH ACT AND THE RULES AND REGULATIONS PROMULGATED
THEREUNDER.
CAPRIUS, INC.
SERIES B COMMON STOCK PURCHASE WARRANT
--------------------------------------
No. WB- Shares
-------
CAPRIUS, INC., a Delaware corporation (the "Company"), hereby certifies
that (the "Initial Holder"), is entitled, subject to
------------------------
the terms set forth below, to purchase from the Company,
shares (the "Shares") of fully paid and
- ----------------------------
non-assessable Common Stock of the Company, par value $.01 per share, at a
purchase price of Seventy Five Cents ($0.75) per Share, subject to adjustment
from time to time pursuant to Section 3 hereof (the "Exercise Price"). The term
"Common Stock" means, unless the context otherwise requires, the Company's
Common Stock, par value $.01 per share, or other securities or property at the
time deliverable upon the exercise of this Warrant.
This Warrant is part of the Series B of Common Stock Purchase Warrants
initially issued for the purchase of an aggregate of up to 666,667 units (the
"Units") as part of a private placement by the Company pursuant to the terms of
a Stock Purchase Agreement, dated as of March 27, 2000 among the Company and the
Initial Holders. Each Unit consisted of (i) three (3) shares of Common Stock,
(ii) four (4) redeemable Series A Warrants and (iii) two (2) redeemable Series B
Warrant to purchase shares of Common Stock.
1. Exercise.
---------
1.1 Timing of Exercise. This Warrant shall be exercisable in whole or
------------------
in part from time to time commencing as of March 27, 2000 and expiring at 5:00
P.M., New York time, on March 27, 2005 (the "Expiration Date"), subject to
earlier termination as provided herein, and may not be exercised thereafter.
1.2 Manner of Exercise. The purchase rights evidenced by this Warrant
------------------
shall be exercised by the Initial Holder or any person permitted by Section 6.1
herein (collectively, "the Holder"), by surrendering this Warrant, with the
Notice of Exercise in the form of Exhibit A hereto duly executed by the Holder,
to the Company at its principal office (or such other office as may be
designated by the Company to the Holder), accompanied by payment (in cash, by
1
<PAGE>
wire transfer or by certified or official bank check or checks) of the Exercise
Price.
1.3 Partial Exercise. This Warrant may be exercised for less than the
----------------
full number of shares of Common Stock at the time called for hereby, in which
case the number of shares receivable upon the exercise of this Warrant as a
whole, and the sum payable upon the exercise of this Warrant as a whole, shall
be proportionately reduced. Upon any such partial exercise, the Company at its
expense will forthwith issue to the Holder a new Warrant or Warrants of like
tenor calling for the number of shares of Common Stock as to which rights have
not been exercised, such Warrant or Warrants to be issued in the name of the
Holder.
2. Delivery of Stock Certificates Upon Exercise. As soon as practicable
--------------------------------------------
after the exercise of this Warrant, and in any event within five (5) business
days thereafter, the Company, at its expense, will cause to be issued in the
name of and delivered to the Holder a certificate or certificates for the number
of fully paid and non-assessable shares of Common Stock to which the Holder
shall be entitled upon such exercise. Any shares of Common Stock as to which
this Warrant is exercised shall be deemed issued on and as of the date of such
exercise, and the Holder shall thereupon be deemed to be the owner of record of
such shares.
3. Anti-Dilution Adjustments.
-------------------------
3.1 Change in Capitalization. In case of any stock split, stock
------------------------
dividend or similar transaction which increases or decreases the number of
outstanding shares of Common Stock, appropriate adjustment shall be made by the
Chief Financial Officer of the Company to the number of Shares, and the Exercise
Price per Share, of Common Stock which may be purchased under this Warrant.
3.2 Consolidation, Merger and Sale of Assets.
----------------------------------------
(a) In case of any consolidation of the Company with or a
merger of the Company into another corporation or in case of any sale or
conveyance to another corporation of the property of the Company as an entirety
or substantially as an entirety, upon any such consolidation, merger, sale or
conveyance and the surviving entity is a publicly traded company, the Company
agrees that a condition of such transaction will be that the Company or such
successor or purchasing corporation, as the case may be, shall assume the
obligations of the Company hereunder in writing. In the case of any such
consolidation, merger or sale or conveyance, the Holder shall have the right
until the Expiration Date upon payment of the Exercise Price in effect
immediately prior to such action, to receive the kind and amount of shares and
other securities and/or property which it would have owned or have been entitled
to receive after the happening of such consolidation, merger, sale or conveyance
had this Warrant been exercised immediately prior to such action, subject to
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 3. The provisions of this Section
3.2(a) shall similarly apply to successive consolidations, mergers, sales or
conveyances.
(b) In case of any consolidation of the Company with or a
merger of the Company into another corporation or in case of any sale or
conveyance to another corporation of the property of the Company as an entirety
2
<PAGE>
or substantially as an entirety, upon any such consolidation, merger, sale or
conveyance and the surviving entity is a non-publicly traded company, the
Company agrees that a condition of such transaction will be that the Company
shall mail to the Holder at the earliest applicable time (and, in any event not
less than 20 days before any record date for determining the persons entitled to
receive the consideration payable in such transaction) written notice of such
record date. Such notice shall also set forth facts as shall indicate the effect
of such action (to the extent such effect may be known at the date of such
notice) on the Exercise Price of and the kind and amount of the shares of stock
and other securities and property deliverable upon exercise of this Warrant.
Upon the closing of the transaction referenced in the foregoing notice, this
Warrant to the extent then unexercised shall terminate.
3.3 Exchanges and Distributions With Respect to Common Stock. If the
--------------------------------------------------------
Company shall exchange for its Common Stock or distribute with respect to its
Common Stock other securities issued by it, the Company shall give notice
thereof to the Holder, and the Holder shall have the right thereafter (until the
expiration of this Warrant) to exercise this Warrant for the kind and amount of
shares of stock and other securities retained or received by a holder of the
number of shares of Common Stock of the Company into which this Warrant might
have been converted immediately prior to such exchange or distribution, subject
to adjustment as provided hereinabove.
3.4 Officer's Certificate. Whenever the Exercise Price per share or the
---------------------
number of shares of Common Stock subject to this Warrant is adjusted, the
Company shall promptly mail to the Holder of this Warrant a notice of
adjustment, which notice shall include a brief statement of the facts requiring
the adjustment and the manner of computing it and shall be certified by the
chief financial officer of the Company. The determination of the adjustment
shall be made by the Company in its sole discretion and shall be final and
binding upon the Holder absent manifest error.
4. Shares to Be Fully Paid; Reservation of Capital Stock Issuable Upon
-------------------------------------------------------------------
Exercise of Warrants. The Company covenants and agrees that any Shares issued
- --------------------
hereunder will, upon issuance, be fully paid and non-assessable and free from
all taxes, liens and charges with respect to the issuance thereof. The Company
shall at all times reserve and keep available out of its authorized but unissued
capital stock, solely for the issuance and delivery upon the exercise of this
Warrant, such number of its duly authorized shares of Common Stock and other
securities as from time to time shall be issuable upon the exercise of this
Warrant.
5. Fractional Shares. The Company shall not issue fractions of shares
-----------------
of Common Stock upon exercise of this Warrant or scrip in lieu thereof. If any
fraction of a share of Common Stock would, except for the provisions of this
Section 5, be issuable upon exercise of this Warrant, then the number of shares
of Common Stock to be issued shall be rounded up or down to the nearest whole
share.
6. Transfer Restrictions
---------------------
6.1 Transfer. A Holder, including the Initial Holder or any subsequent
--------
Holder, may transfer this Warrant only to (i) any other Holder, (ii) any entity
3
<PAGE>
controlled by, controlling or under common control of the Holder, or for which
the Holder is acting as the representative, or to one or more of its
shareholders, directors, officers, members, employees or limited or general
partners, or to entities that manage or co-manage the Holder or any of its
limited or general partners, or (iii) any member of the immediate family (which
shall be deemed to include a spouse, parent, or child) of an individual Holder
or trust for the benefit of any such individual. Prior to any such transfer, the
Holder must deliver the Assignment Form in the form of Exhibit B hereto and
provide information to the Company, in writing, regarding the proposed
transferee sufficient for the Company to determine the eligibility of such
transferee under this Section 6.
6.2 Securities Laws. The Holder of this Warrant, by accepting delivery of
---------------
the same, hereby:
(a) acknowledges that any shares of Common Stock issued
pursuant to the exercise of this Warrant may not be registered under the
Securities Act of 1933, as amended (the "Securities Act"), at the time issued;
(b) agrees that, upon the exercise of this Warrant, he shall
make the customary representations and warranties as may be requested by counsel
to the Company in order for the Company to properly rely upon Section 4(2) of
the Securities Act regarding exemption from registration thereunder, and, in
connection with such exemption, that any certificates representing shares of
Common Stock issued pursuant to this Warrant would reflect an appropriate legend
regarding restrictions upon transferability; and
(c) agree to indemnify the Company, and hold it harmless from
and against, any and all losses, expenses (including attorneys' fee), costs and
damages arising form or relating to any violation of applicable state securities
or "blue sky" laws in connection with the issuance, sale, delivery or exercise
of this Warrant and the issuance, sale and delivery of shares of Common Stock
upon any exercise of this Warrant.
7. Redemption of Warrants. The Warrants are redeemable by the Company
----------------------
at any time, in whole or in part, on not less than thirty (30) days prior
written notice at a redemption price of $.01 per Warrant, provided the closing
bid quotation of the Common Stock as reported on the OTC Bulletin Board, if
traded thereon, or if not traded thereon, the closing sale price if listed on a
national securities exchange or the Nasdaq market (or other reporting system
that provides last sale prices), has been at least 667% of the then current
Exercise Price of the Warrants, for a period of 15 consecutive trading days
ending within five days prior to the date on which the Company gives notice of
redemption. Any redemption in part shall be made pro rata to all Holders. The
redemption notice shall be mailed to the Holders pursuant to Section 12 hereof.
Any such notice mailed in the manner provided herein shall be conclusively
presumed to have been duly given in accordance with this Agreement whether or
not the registered holder receives such notice. No failure to mail such notice
nor any defect therein or in the mailing thereof shall affect the validity of
the proceedings for such redemption except as to a registered holder of a
Warrant (i) to whom notice was not mailed or (ii) whose notice was defective. An
affidavit of the Secretary or Assistant Secretary of the Company that notice of
redemption has been mailed shall, in the absence of fraud, be prima facie
evidence of the facts stated therein. Holders of the Warrants will have exercise
rights until the close of business on the day immediately preceding the date
4
<PAGE>
fixed for redemption. On and after the date fixed for redemption, the holder
shall have no right with respect to the Warrant except to receive $.01 per
Warrant upon surrender of the Warrant. If any Shares have not been registered
pursuant Section 6 of the Stock Purchase Agreement, the Company agrees not to
redeem any of the Warrants under this Section 7 until 30 days after a
registration statement under the Securities Act (a "Registration Statement") has
been declared effective with respect to such Shares. The Company shall notify
the Holders of its intention to file such a Registration Statement pursuant to
Section 12, hereof.
8. Registration Under the Securities Act of 1933. Any obligation the
---------------------------------------------
Company has to file any registration statement under the Securities Act to
effect the resale of all of the shares of Common Stock receivable upon exercise
of the Warrants is set forth in Section 6 of the Stock Purchase Agreement.
9. Replacement of Warrant. Upon receipt of evidence reasonably
----------------------
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and (in the case of loss, theft or destruction) upon delivery of an
indemnity agreement, and if requested by the Board of Directors, a bond in an
amount reasonably satisfactory to it, or (in the case mutilation) upon surrender
and cancellation hereof, the Company will issue in lieu thereof a new Warrant of
like tenor.
10. Rights as a Warrant Holder. The Holder shall not, by virtue hereof,
--------------------------
be entitled to any rights of a stockholder in the Company, either at law or
equity except with respect to certificates representing shares of Common Stock
issued upon exercise of this Warrant. The rights of the Holder are limited to
those expressed in this Warrant and are not enforceable against the Company
except to the extent set forth herein. Prior to due presentment for transfer of
this Warrant, the Company may deem and treat the Holder as the absolute owner of
this Warrant for purposes of any exercise hereof and for all other purposes and
such right of the Company shall not be affected by any notice to the contrary.
11. Subdivision of Rights. This Warrant (as well as any new warrant
---------------------
issued pursuant to the provisions of this Section) is exchangeable upon the
surrender hereof by the Holder at the principal office of the Company for any
number of new warrants of like tenor and date representing in the aggregate the
right to subscribe for and purchase the number of shares of Common Stock of the
Company that may be subscribed for and purchased hereunder.
12. Sending of Notices. All notices and other communications with
------------------
respect to this Warrant shall be in writing and sent by express mail or courier
service or by personal delivery, if to the Holder, to the address set forth on
the records of the Company, and if to the Company, to One Parker Plaza, Fort
Lee, New Jersey 07024, Attn: President, or to such other address as either party
hereto may duly give to the other.
13. Headings. The headings in this Warrant are for purposes of
--------
reference only and shall not limit or otherwise affect the meaning of the terms
hereof.
14. Change, Waiver, Discharge or Termination. This Warrant sets forth
----------------------------------------
the entire agreement between the Company and the Holder with respect to the
matters herein. Neither this Warrant nor any term hereof may be changed, waived,
5
<PAGE>
discharged or terminated orally, but only by an instrument in writing signed by
the party against which enforcement of the change, waiver, discharge or
termination is sought. The Company shall not amend any other Warrant issued as
part of this Series to make terms thereunder more favorable to the Holder
thereof without offering the same amended terms to the Holder hereof.
15. Governing Law. This Warrant shall be governed by, and construed in
-------------
accordance with, the laws of the State of Delaware.
CAPRIUS, INC.
By:
------------------------------------
Dated: , 2000
-------------------
6
<PAGE>
EXHIBIT A
---------
NOTICE OF EXERCISE
------------------
(To be executed by a Holder desiring to exercise the right to purchase Shares
pursuant to a Warrant.)
The undersigned Holder of a Warrant hereby:
(a) Irrevocably elects to exercise the Warrant to the extent of purchasing
Shares;
- -------
(b) Makes payment in full of the aggregate Exercise Price for those Shares by
wire transfer or the delivery of certified funds or a bank cashier's check in
the amount of $ ;
-----------
(c) Requests that a certificate for such Shares be issued in the name of the
undersigned, or, if the name and address of some other person is specified
below, in the name of such other person:
- --------------------------------------------
- --------------------------------------------
- --------------------------------------------
(Name, address and tax identification number of person other than the
undersigned in whose name Shares are to be registered.)
(d) Requests, if the number of Shares purchased are not all the Shares
purchasable pursuant to the unexercised portion of the Warrant, that a new
Warrant of like tenor for the remaining Shares purchasable pursuant to the
Warrant be issued and delivered to the undersigned at the address stated below.
Dated:
--------------------------- -------------------------------------------
Signature
(This signature must conform in all respects to the name of the Holder as
specified on the face of the Warrant.)
- --------------------------------- ------------------------------------------
Tax Identification Number Printed Name
Address:
-----------------------------------
- ------------------------------------------
Stock Warrant No.: ##
7
<PAGE>
EXHIBIT B
---------
ASSIGNMENT FORM
---------------
FOR VALUE RECEIVED, the undersigned,
, hereby sells, assigns and transfers unto:
- --------------------------------
Name:
------------------------------------------------
(Please type or print in block letters.)
Address:
----------------------------------------------
- ------------------------------------------------------
the right to purchase shares (the "Shares") of Caprius, Inc. (the
--------------
"Company") pursuant to the terms and conditions of the Warrant held by the
undersigned. The undersigned hereby authorizes and directs the Company (i) to
issue and deliver to the above-named assignee at the above address a new Warrant
pursuant to which the rights to purchase being assigned may be exercised, and
(ii) if there are rights to purchase Shares remaining pursuant to the
undersigned's Warrant after the assignment contemplated herein, to issue and
deliver to the undersigned at the address stated below a new Warrant evidencing
the right to purchase the number of Shares remaining after issuance and delivery
of the Warrant to the above-named assignee. Except for the number of Shares
purchasable, the new Warrant to be issued and delivered by the Company is to
contain the same terms and conditions as the undersigned's Warrant. This
Assignment is subject to receipt by the Company of such investment
representations by the assignee, as may be reasonably required under the
Securities Act of 1933, as amended. To complete the assignment contemplated by
this Assignment Form, the undersigned hereby irrevocably constitutes and
appoints as the undersigned's attorney-in-fact to
------------------------------
transfer the Warrant and the rights thereunder on the books of the Company with
full power of substitution for these purposes.
Dated:
--------------------------- ------------------------------------------
Signature
(This signature must conform in all respects to the name of the Holder as
specified on the face of the Warrant.)
- --------------------------------- ------------------------------------------
Social Security Number Printed Name
or Employer ID Number
Address:
----------------------------------
- ------------------------------------------
Stock Warrant No.: ##
8
EXHIBIT 10.4
CAPRIUS, INC
One Parker Plaza
Fort Lee, New Jersey 07024
March 27, 2000
Mr. Shrikant Mehta
Ms. Bela Mehta
Mr. Roger Parsons
Ladies and Gentlemen:
In consideration of your purchase of an aggregate of Four Hundred and
Fifty-One Thousand (451,000) Units in Caprius, Inc., a Delaware corporation (the
"Company"), in a placement (the "Placement") pursuant to a Stock Purchase
Agreement, dated as of March 27, 2000 (the "Purchase Agreement"), the Company is
granting to you, Shrikant Mehta ("S. Mehta"), Bela Mehta and Roger Parsons (the
"Holders"), the rights set forth herein. This letter (the "Letter Agreement")
sets forth our mutual agreement as to such rights.
The Units consisted of (i) three (3) shares of Common Stock, $.01 par
value (the "Common Stock"), of the Company, (ii) four (4) redeemable Series A
Warrants and (iii) two (2) redeemable Series B Warrant to purchase shares of
Common Stock (collectively with the Series A Warrants referred to herein as the
"Warrants" and all shares underlying such Warrants are collectively referred to
herein as the "Warrant Shares"). The Units, Common Stock, Warrants and/or the
Warrants Shares are sometimes hereinafter collectively referred to as the
"Securities".
1. Designation of Directors. Upon the closing of the Placement, S. Mehta as
------------------------
designee for the Holders shall have the right to designate two (2) members of
the Board of Directors (the "Designees"), one (1) of whom shall be appointed to
the Compensation Committee of the Board of Directors; provided, however, the
Designees are reasonably acceptable to the current Board of Directors. Sanjay
Mody, Samuel Valenti, III and S. Mehta are hereby deemed reasonably acceptable
to the current Board of Directors for the purposes of the preceding sentence.
The Designees shall be added to the Board of Directors either to fill vacancies
or the number of members of the Board of Directors shall be increased to
accommodate the Designees. At each meeting of stockholders for the election of
directors held at any time prior to March 27, 2003, the Company shall include
the two Designees on the management slate of directors, subject to the
following: (i) if the Holders cease to Beneficially Own (on the basis of
"beneficial ownership" as defined under Section 13(d) of the Securities Exchange
Act of 1934) in aggregate at least ten percent (10%) of the Company's
outstanding Common Stock on a fully-diluted basis, the Holders would have the
right to designate only one (1) person to be a director; and (ii) if the Holders
sell or otherwise dispose of an aggregate of fifty percent (50%) of the
1
<PAGE>
Securities Beneficially Owned by them upon the closing of the Placement, their
right to designate directors pursuant to this Letter Agreement shall terminate.
2. Voting Agreement.
----------------
2.1 With respect to the Designation of Directors under Paragraph 1 above, and in
consideration of each Holder's purchase of Units in the Placement, Jonathan
Joels ("Joels") and George Aaron ("Aaron") hereby agree to vote shares of the
Company's Common Stock Beneficially Owned by them as of the acceptable record
date for the two Designees at each meeting of stockholders or in any consent in
lieu of a meeting of stockholders with respect to the election of directors held
at any time prior to March 27, 2003, subject to earlier termination pursuant to
the provisos in Section 1 hereof.
2.2 Each Holder hereby agrees to vote all shares of Common Stock of the Company,
which he beneficially owns as of the applicable record date, for Joels and
Aaron, at each meeting of stockholders or in any consent in lieu of a meeting of
stockholders with respect to the election of directors held at any time prior to
March 27, 2003, subject to earlier termination pursuant to the provisos in
Section 1 hereof.
2.3 Nothing in this Section 2 shall restrict or limit the Holders, Aaron or
Joels from selling or otherwise transferring any Securities of the Company.
3. Preemptive Rights.
-----------------
3.1 If at any time and from time to time, for a period of three (3) years from
the date of this Agreement, the Board of Directors authorizes the Company to
sell (the "Sale"), solely for cash, shares of Common Stock (the "Shares"), or
shares of preferred stock or other securities (the "Derivative Securities") that
are exercisable for, convertible into or exchangeable for shares of Common Stock
in a private placement transaction pursuant to the exemption from registration
under Regulation D of the Securities Act of 1933, the Company shall send a
written notice to each Holder of such authorization (the "Notice of Preemptive
Rights") offering the Holders the right to participate in such Sale. For
purposes of this Section, a "Sale" shall not include (a) an issuance of Shares
directly or underlying options or other rights granted to employees, consultants
or directors under an agreement or an employee incentive plan or otherwise as
incentives or compensation, (b) an issuance of Shares either directly or
underlying Derivative Securities in whole or in part in consideration for
services, (c) the issuance as part of an acquisition transaction or (d) an
issuance to a party (other than the Holders or an affiliate of a Holder) whom
the members of the Board of Directors other than the Designees unanimously
determine would be a strategically important stockholder; provided, however,
that during the first 12 months of this Agreement the Company may only issue up
to ten percent (10%) of its equity on a fully-diluted basis to such party.
3.2 The Notice of Preemptive Rights shall specify the total aggregate number of
Shares to be issued, the price and other terms of the proposed Sale, the amount
of Shares or Derivative Securities to which each Holder is entitled to purchase
and the period during which the Holders may elect to participate in the
2
<PAGE>
purchase. The Notice of Preemptive Rights shall be sent to each Holder at least
fifteen (15) days prior to the anticipated closing date of the Sale. If a Holder
desires to participate in the Sale, that Holder shall notify the Company by
sending a notice of acceptance which must be received by the Company within the
time period specified in the applicable Notice of Preemptive Rights.
3.3 The purpose of this preemptive right is to accommodate the Holders' desire
to have the opportunity to maintain the Holders' beneficial percentage interest
(on a fully diluted basis) in the Company's Common Stock upon certain issuances
by the Company. If (i) any Holder fails to purchase at least fifty percent (50%)
of the Shares or Derivative Securities offered in the Notice of Preemptive
Rights in any Sale which closes, or (ii) any Holder sells or otherwise disposes
of fifty percent (50%) of the Securities Beneficially Owned by him upon the
closing of the Placement, that Holder's rights under this Section 3 shall
terminate with respect to any subsequent Sale.
4. Most Favorable Treatment.
------------------------
4.1 The Company shall provide the Holders with the most favorable investors
rights, if any, received by the holders of the next rounds of equity financing
of the Company occurring within one year after the date hereof (other than a
subsequent sale of stock to the Holders or some of them or the issuance or sale
of any securities listed in subsections 3.1(a) through (d)) (the "Subsequent
Investments"), including without limitation dividends and liquidation,
conversion, antidilution, registration, voting, and information rights and the
Company agrees to prepare, execute, and deliver a revised Subscription
Agreement, stock certificates, warrants, and any other documents necessary to
put the Holders in the same position as the holders of any Subsequent
Investments.
4.2 In the event that any Subsequent Investment is at a price per share of less
than the equivalent of $0.722 per share of Common Stock (i.e., less than $0.722
per share of equity security (including exercise price, if any) exercisable for
or convertible into one share of the Company's Common Stock), then the Company
shall issue to each Holder, without additional consideration, the number of
shares of Common Stock to be calculated as follows:
S = (I/P) - (I/.772)
S = Number of shares of Common Stock to be issued to the Holder
hereunder.
I = The aggregate purchase price of the Units sold to the Holder
hereunder.
P = Equivalent price per share of Common Stock of the equity
securities issued in the Subsequent Investment.
4.3 Upon demand of the majority in interest of the Holders of shares issued
under Section 4.2, the Company will use its best efforts to register such shares
in accordance with the terms set forth in Section 6 of the Purchase Agreement
(including without limitation Section 6.1 thereof), and the Holders shall comply
with the applicable provisions of Section 6 in connection therewith (including
without limitation Sections 6.6 and 6.8(b) thereof). The Company's obligation
under this Section 4.3 is limited to one Registration Statement which is
declared effective under the Securities Act, and the Holders may make a demand
under this Section 4.3 only during the period beginning one year after the date
hereof and ending one year thereafter.
4.4 If any Holder sells or otherwise disposes of fifty percent (50%) of the
Securities Beneficially Owned by him upon the closing of the Placement, that
Holder's rights under this Section 4 shall terminate.
5. Notices. Any notices under this Letter Agreement shall be in writing and
-------
shall be deemed to have been given when delivered personally, or if sent by an
overnight delivery service or by telecopier or other electronic means on the
first day of actual receipt. Notices shall be addressed as set forth at the head
of this Letter Agreement or to such other address as either party hereto may
duly give to the other.
6. Fees. The Company shall be responsible for the payment of up to
----
$5,000 of the legal fees incurred with respect to the Holders' purchase of the
Units and their other agreements with the Company, and the Holders shall
be responsible for the balance of their fees and expenses incurred hereunder.
7. Miscellaneous.
-------------
7.1 This Letter Agreement sets forth the entire agreement between the parties
hereto as to the subject matter herein, and cannot be amended, modified or
terminated except by an agreement in writing executed by the parties hereto.
Terms used but not defined herein shall have the meanings ascribed thereto in
the Stock Purchase Agreement. In the event of any inconsistency between this
Letter Agreement and the Stock Purchase Agreement, the provisions of this Letter
Agreement shall govern.
7.2 In the event any provision of this Letter Agreement is invalid, illegal or
unenforceable, the remainder of hereof shall be construed without taking into
effect such invalid, illegal or unenforceable provision.
7.3 This Letter Agreement shall be governed by the laws of the State of
Delaware.
7.4 The terms of this Letter Agreement shall be binding upon the Company and
each Holder, and their successors, assigns, heirs and successors.
Please signify your agreement to the foregoing by executing and
returning the duplicate of this letter. You may retain the original for your
files.
Very truly yours,
CAPRIUS, INC.
By:_______________________
Name:
Title:
Agreed to solely with respect to the voting provision under Section 2 of this
Agreement:
- -------------------------------
Jonathan Joels
- -------------------------------
George Aaron
This 27th day of March, 2000
- --------------------------------
Shrikant Mehta
- --------------------------------
Bela Mehta
- --------------------------------
Roger Parsons
EXHIBIT 10.5
CAPRIUS, INC
One Parker Plaza
Fort Lee, New Jersey 07024
March 29, 2000
Mr. Shrikant Mehta
1783 Blue Heron
Bloomfield, MI 48302
Mr. Mehta:
In consideration of your purchase of units (the "Units")offered by Caprius,
Inc., a Delaware corporation (the "Company"), in a placement (the "Placement")
pursuant to a Stock Purchase Agreement, dated as of March 27, 2000 (the
"Purchase Agreement"), the Company is granting to you, Shrikant Mehta (the
"Holder"), the rights set forth herein; provided, however, that any rights
granted hereunder by the Company are subject to the approval of the majority of
the Board of Directors, absent any interested party to this transaction
(including any Board member designated or nominated by the Holder). Furthermore,
the parties hereto agree to complete the Placement and be bound the terms of the
Purchase Agreement irrespective of whether the rights granted herein are
approved by the Board of Directors. This letter (the "Letter Agreement") sets
forth our mutual agreement as to the subject matter herein.
1. Option Grant. Subject to approval of the Board of Directors as described
-----------
above, the Company shall grant the Holder an option (the "Option") to purchase
500,000 shares of the Company's Common Stock (the "Option Grant"). The Option
shall have an exercise price of the greater of $1.00 or the market value of the
Common Stock, on the date of grant, as listed on the exchange which the Common
Stock is then listed. The Option shall be exercisable for no less than three
years or no greater then five years from the date of grant. For the purposes of
the registration rights the shares of Common Stock underlying the Option shall
be included as "Registrable Securities" as defined in Section 6 of the Purchase
Agreement. A form of the Option is attached hereto as Exhibit A.
2. Voting Agreement.
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2.1 With respect to the Option Grant, and in consideration of each Holder's
purchase of Units in the Placement, Jonathan Joels and George Aaron, executive
officers and directors of the Company, hereby agree to recommend such Option
Grant at the next meeting of the Board of Directors. After such meeting, the
Company shall notify the Holder as to whether the Board of Directors has
approved the Option Grant. The Company agrees to call a Board meeting with
regard to the Option Grant within 15 days from the date hereof.
1
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3. Notices. Any notices under this Letter Agreement shall be in writing and
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shall be deemed to have been given when delivered personally, or if sent by an
overnight delivery service or by telecopier or other electronic means on the
first day of actual receipt. Notices shall be addressed as set forth at the head
of this Letter Agreement or to such other address as either party hereto may
duly give to the other.
4. Miscellaneous.
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4.1 This Letter Agreement sets forth the entire agreement between the
parties hereto as to the subject matter herein, and cannot be amended, modified
or terminated except by an agreement in writing executed by the parties hereto.
4.2 In the event any provision of this Letter Agreement is invalid, illegal
or unenforceable, the remainder of hereof shall be construed without taking into
effect such invalid, illegal or unenforceable provision.
4.3 This Letter Agreement shall be governed by the laws of the State of
Delaware.
4.4 The terms of this Letter Agreement shall be binding upon the Company
and each Holder, and their successors, assigns, heirs and successors.
Please signify your agreement to the foregoing by executing and returning
the duplicate of this letter. You may retain the original for your files.
Very truly yours,
CAPRIUS, INC.
By:
------------------------------------
Name:
Title:
This 29th day of March, 2000
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Shrikant Mehta
2
EXHIBIT 99.1
CAPRIUS, INC.
One Parker Plaza
Fort Lee, NJ 07024
Phone: 201.592.8838 / Fax: 201.592.0393
FOR IMMEDIATE RELEASE
COMPANY CONTACT:
Beverly Tkaczenko 201.592.8838
CAPRIUS, INC. ANNOUNCES PRIVATE PLACEMENT OF $1.95 MILLION
FORT LEE, NJ, APRIL 27, 2000 - CAPRIUS, INC. (OTCBB: CAPR) announced today that
it has completed a private placement funding comprised of common stock and
warrants in the amount of $1,950,000.
The Company sold 650,000 "units" in the private placement, at a price of $3.00
per unit to several "accredited investors," including members of management.
Each unit consisted of (i) three shares of common stock, (ii) four redeemable
Series A Warrants to purchase shares of common stock at an exercise price of
$.50 per share and (iii) two redeemable Series B Warrants to purchase shares of
common stock at an exercise price of $.75 per share. The proceeds from this
placement will be used to reduce outstanding debt and provide funds for working
capital.
Concurrent with this transaction, Jack Nelson, former President & CEO, and
Enrique Levy, former C.O.O., have resigned from the Board of Directors, and were
repaid their outstanding notes which had been issued to them in December 1999
for severance obligations. Two designees of the purchasers in the placement, Mr.
Shrik Mehta and Mr. Sanjay Mody, are to be elected to the Caprius Board to fill
the vacancies created by their resignations. In conjunction with his
participation in the placement, and subject to Board approval, Mr. Mehta is to
be granted 500,000 options to purchase shares of common stock a price of $1.00
per share.
George Aaron, Caprius' President and CEO, stated, "We are delighted to have
concluded this transaction and welcome Mr. Shrik Mehta and Mr. Sanjay Mody to
join the Company. At the same time, the Company extends its appreciation to Jack
Nelson and Enrique Levy for their years of service, dedication and contributions
to Caprius."
The units and the common stock and warrants underlying the units were sold in
the private placement under Regulation D of the U.S. Securities Act of 1933, as
amended. These securities have not been registered under the Act and may not be
offered or sold in the United States absent registration or an applicable
exemption from the registration requirements.
SAFE HARBOR STATEMENT:
- ---------------------
The statements made in this press release that are not historical fact are
"forward-looking statements" which are based upon current expectations that
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include a number of risks and uncertainties. Additional factors that could
potentially affect the Company's financial results may be found on the Company's
filings with the Securities and Exchange Commission.
