THE SECURITIES REPRESENTED BY THIS CERTIFICATE AND ISSUABLE UPON
EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER THE PROVISIONS OF ANY
APPLICABLE STATE SECURITIES LAWS, BUT HAVE BEEN ACQUIRED BY THE
REGISTERED HOLDER HEREOF FOR PURPOSES OF INVESTMENT AND IN RELIANCE ON
STATUTORY EXEMPTIONS UNDER THE SECURITIES ACT, AND UNDER ANY APPLICABLE
STATE SECURITIES LAW. THESE SECURITIES AND THE SECURITIES ISSUED UPON
EXERCISE HEREOF MAY NOT BE SOLD, PLEDGED, TRANSFERRED OR ASSIGNED, NOR
MAY THESE WARRANTS BE EXERCISED, EXCEPT IN ACCORDANCE WITH TERMS SET
FORTH IN THIS CERTIFICATE OR IN A TRANSACTION WHICH IS EXEMPT UNDER
PROVISIONS OF THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES
LAWS OR PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT; AND IN THE
CASE OF AN EXEMPTION, ONLY IF THE COMPANY HAS RECEIVED AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH TRANSACTION DOES NOT
REQUIRE REGISTRATION OF ANY SUCH SECURITIES
No. I-1
GLOBAL TECHNOVATIONS, INC.
WARRANTS
TO PURCHASE 770,833 SHARES OF COMMON STOCK
Global Technovations, Inc., a Delaware corporation (the "Company"),
hereby certifies that for value received, Wilmington Trust Company and George
Jeff Mennen, Co-Trustees u/a dated November 25, 1970 with George S. Mennen FBO
John Henry Mennen, or its assigns (the "Holder "), is entitled subject to the
terms set forth below to purchase from the Company 770,833 fully paid and
non-assessable shares of common stock (the "Common Stock") of the Company at the
price of $_____per share (the "Purchase Price"). Subject to vesting, these
warrants shall be exercisable for 10 years commencing August__, 2000 and
expiring on August__, 2009 at 6:00 p.m. New York time. These Warrants shall vest
as follows: (i). 520,833 are fully vested and not subject to forfeiture ; and
(ii) 250,000 shall only vest if by 6:00 p.m. New York time September ____, 2001,
the Holder has not received full payment including accrued interest of a Senior
Secured Promissory Note in the principal amount of $5,000,000 issued by the
Company to the Holder as of the date hereof. The number and character of such
shares of Common Stock and the Purchase Price are subject to adjustment as
provided herein.
As used herein the following capitalized terms, unless the context
otherwise requires, have the following respective meanings:
(a) The term "Company" includes any corporation
which shall succeed to or assume the obligations of the Company
hereunder.
(b) The term "Common Stock" means the common stock, par value
$0.001 per share, of the Company, together with all stock of any class
or classes (however designated) of the Company, the holders of which
shall have the right, without limitation as to amount, either to all or
to a share of the balance of current dividends and liquidating
dividends after the payment of dividends and distributions on any
shares entitled to preference, and the holders of which shall
ordinarily, in the absence of contingencies, be entitled to vote for
the election of a majority of directors of the Company (even though the
right so to vote has been suspended by the happening of such a
contingency).
(c) The term "Purchase Price per share" shall be the then
applicable purchase price for one share of Common Stock as adjusted
pursuant to Sections 5 and 6 hereof.
(d) The term "Securities Act" means the Securities Act of
1933 as the same shall be in effect at the time.
(e) The term "Warrants" refers to these Warrants.
1. Registration. The Company shall register for public sale the Common
Stock and all other shares of Common Stock owned by the Holder or obtainable by
the Holder upon exercise of outstanding warrants, options or rights or by
conversion of convertible securities, all in accordance with a Registration
Rights Agreement in the form annexed as Exhibit A.
2. Sale or Exercise Without Registration. If, at the time of any
exercise, permitted transfer or surrender for exchange of the Warrants or of
Common Stock previously issued upon the exercise of the Warrants, such Warrants
or Common Stock shall not be registered under the Securities Act, the Company
may require, as a condition of allowing such exercise, transfer or exchange,
that the holder or transferee of such Warrants or Common Stock, as the case may
be, furnish to the Company an opinion of counsel reasonably satisfactory to the
Company to the effect that such exercise, transfer or exchange may be made
without registration under the Securities Act, provided that the disposition
thereof shall at all times be within the control of such holder or transferee,
as the case may be, and provided further that nothing contained in this Section
2 shall relieve the Company from complying with any request for registration
pursuant to Section 1 hereof. The Holder of the Warrants represents to the
Company that it is acquiring the Warrants for investment and not with a view to
the distribution thereof.
3. Exercise of Warrants; Partial Exercise.
3.1 Exercise in Full or in Part. These Warrants may be
exercised in full or in part by the Holder hereof by surrender of these
Warrants, with the form of subscription attached hereto duly executed by such
holder, to the Company at its principal office, as provided in Section 19
hereof, accompanied by payment by certified or official bank check payable to
the order of the Company, in the amount obtained by multiplying the number of
shares of Common Stock called for on the face of these Warrants (without giving
effect to any adjustment therein) by the Purchase Price.
3.2 Company to Reaffirm Obligations. The Company will, at the
time of any exercise of these Warrants, upon the request of the Holder hereof,
acknowledge in writing its continuing obligation to afford to such Holder any
rights to which such Holder shall continue to be entitled after such exercise in
accordance with the provisions of these Warrants, provided that if the Holder of
these Warrants shall fail to make any such request, such failure shall not
affect the continuing obligation of the Company to afford such Holder any such
rights.
4. Delivery of Stock Certificates, etc., on Exercise. As soon
as practicable after the exercise of these Warrants infull or in part, and in
any event within two days thereafter, the Company at its expense (including
the payment by it of any applicable issue or transfer taxes) will cause to
be issued in the name of and delivered to the Holder hereof a certificate or
certificates for the number of fully paid and non-assessable Common Stock or
Other Securities to which such Holder shall be entitled upon such exercise,
plus, in lieu of any fractional share to which such holder would otherwise
be entitled, cash equal to such fraction multiplied by the then current fair
market value of one full share (determined by the closing price on the principal
market as of the date of receipt of the Warrants with executed subscription),
together with any other stock or other securities and property (including cash,
where applicable) to which such Holder is entitled upon such exercise pursuant
to Section 5 hereof or otherwise.
5. Anti-Dilution Provisions. If and to the extent that the number of
issued shares of Common Stock of the Company shall be increased, reduced or
changed by change in par value, split up, reclassification, or distribution of a
dividend payable in Common Stock, the number of shares subject to the Warrants
and the exercise price per share shall be proportionately adjusted; provided,
however, that the anti-dilution provision described in this Section 5 does not
apply to sales of Common Stock made by the Company at a price below the Purchase
Price.
6. Reorganization, Consolidation, Merger, etc. In case the Company
shall (a) effect a reorganization, (b) consolidate with or merge with or into
any other entity, or (c) transfer all or substantially all of its properties or
assets to any other entity under any plan or arrangement contemplating the
dissolution of the Company, then, in each such case, the holder of these
Warrants, upon the exercise thereof as provided in Section 3 hereof at any time
after the consummation of such reorganization, consolidation or merger or the
effective date of such dissolution, as the case may be, shall be entitled to
receive (and the Company shall be entitled to deliver), in lieu of the Common
Stock issuable upon such exercise prior to such consummation or such effective
date, the stock and other securities and property (including cash) to which such
Holder would have been entitled upon such consummation or in connection with
such dissolution, as the case may be, if such Holder had so exercised these
Warrants immediately prior thereto, all subject to further adjustment thereafter
as provided in Section 5 hereof.
7. Further Assurances. The Company will take all such action as may be
necessary or appropriate in order that the Company may validly and legally issue
fully paid and non-assessable Common Stock upon the exercise of all Warrants
from time to time outstanding.
8. Officer's Certificate as to Adjustments. In each case of any
adjustment or readjustment in the Common Stock issuable upon the exercise of the
Warrants, the Company at its expense will promptly compute such adjustment or
readjustment in accordance with the terms of the Warrants and prepare a
certificate, executed by its chief financial or accounting officer, setting
forth such adjustment or readjustment and showing in detail the facts upon which
such adjustment or readjustment is based, and the number of Common Stock
outstanding or deemed to be outstanding. The Company will forthwith mail a copy
of each such certificate to each Holder of Warrants.
9. Notices of Record Date, etc. In the event of
(a) any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the
Company or any transfer of all or substantially all the assets of the
Company to or consolidation or merger of the Company with or into any
other person; or
(b) any voluntary or involuntary dissolution, liquidation
or winding-up of the Company;
and to which the provisions of either or both of Sections 5 and 6
hereof are applicable, then and in each such event the Company will
mail or cause to be mailed to each holder of Warrants a notice
specifying (i) the date on which any such record is to be taken for the
purpose of such dividend, distribution or right, and stating the amount
and character of such dividend, distribution or right; and (ii) the
date on which any such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution,
liquidation or winding-up is to take place, and the time, if any, as of
which the holders of record of Common Stock shall be entitled to
exchange their shares of Common Stock for securities or other property
deliverable upon such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution,
liquidation or winding-up. Such notice shall be mailed at least 15 days
prior to the date therein specified.
10. Reservation of Common Stock, etc., Issuable on Exercise of
Warrants. The Company will at all times reserve and keep available, solely for
issuance and delivery upon the exercise of the Warrants, all Common Stock from
time to time issuable upon the exercise of the Warrants.
11. Listing on Securities Exchanges; Registration. If the Company at
any time shall list any Common Stock on any national securities exchange, the
Company will, at its expense, simultaneously list on such exchange, upon
official notice of issuance upon exercise of the Warrants, and maintain such
listing of, all Common Stock from time to time issuable upon the exercise of the
Warrants. The Company shall promptly seek, and use its best efforts to obtain,
stockholder approval if required by any national securities exchange.
12. Exchange of Warrants. Subject to the provisions of Section 2
hereof, upon surrender for exchange of any Warrants, properly endorsed to the
Company, the Company at its own expense will issue and deliver to the holder
thereof new Warrants of like tenor, in the name of such holder calling in the
aggregate on the face or faces thereof for the number of shares of Common Stock
called for on the face of the Warrants so surrendered.
13. Replacement of Warrants. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of any
Warrants and, in the case of any such loss, theft or destruction, upon delivery
of an indemnity agreement reasonably satisfactory in form and amount to the
Company or, in the case of any such mutilation, upon surrender and cancellation
of such Warrants, the Company at its expense will execute and deliver, in lieu
thereof, new Warrants of like tenor.
14. Warrant Agent. The Company may, by written notice to each Holder of
the Warrants, appoint an agent for the purpose of issuing Common Stock upon the
exercise of the Warrants pursuant to Section 3 hereof, exchanging Warrants
pursuant to Section 12 hereof, and replacing Warrants pursuant to Section 13
hereof, or any of the foregoing, and thereafter any such issuance, exchange or
replacement, as the case may be, shall be made at such office by such agent.
15. Legend. Unless the shares of Common Stock have been registered
under the Securities Act, upon exercise of any of the Warrants and the issuance
of any of the Common Stock, pursuant thereto all certificates representing
Common Stock shall bear on the face thereof substantially the following legend:
The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and may not
be sold, offered for sale, assigned, transferred or otherwise disposed
of, unless registered pursuant to the provisions of that Act or unless
a written opinion of counsel to the Company concludes that such
disposition is in compliance with an available exemption from such
registration.
16. Remedies. The Company stipulates that the remedies at law of the
Holder of these Warrants in the event of any default or threatened default by
the Company in the performance of or compliance with any of the terms of these
Warrants are not and will not be adequate, and that such terms may be
specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.
17. Severability. In the event any parts of these Warrants are
found to be void, the remaining provisions of these Warrants shall neverthe-
less be binding with the same effect as though the void parts were deleted.
18. Benefit. These Warrants shall be binding upon and inure to
the benefit of the parties hereto and their legal representatives, successors
and assigns.
19. Notices and Addresses. All notices, offers, acceptance and any
other acts under these Warrants (except delivery of these Warrants and payment
of the Purchase Price) shall be in writing, and shall be sufficiently given if
delivered to the addressees in person, by Federal Express or similar receipted
delivery, by facsimile delivery or, if mailed, postage prepaid, by certified
mail, return receipt requested, as follows:
The Company: Mr. William C. Willis, Jr., President and
Chief Executive Officer
Global Technovations, Inc.
7108 Fairway Drive, Suite 200
Palm Beach Gardens, FL 33418-3757
Facsimile: (561) 691-5220
The Holder: Mr. George Jeff Mennen
TMF Investments, Inc.
25B Hanover Road
Florham Park, NJ 07932
Wilmington Trust Co. & George Jeff Mennen,
Co-Trustees U/A
Dated 11/25/70 with Geroge S. Mennen for
John Henry Mennen
Rodney Square North
1100 North Market Street
Wilmington, DE 19890-0001
or to such other address as any of them, by notice to the others may designate
from time to time. The transmission confirmation receipt from the sender's
facsimile machine shall be evidence of successful facsimile delivery. Time shall
be counted to, or from, as the case may be, the delivery in person or by
mailing.
20. Attorney's Fees. In the event that there is any controversy or
claim arising out of or relating to these Warrants, or to the interpretation,
breach or enforcement thereof, and any action or proceeding including an
arbitration proceeding is commenced to enforce the provisions of these Warrants,
the prevailing party shall be entitled to an award by the court of reasonable
attorney's fees, costs and expenses.
21. Governing Law. These Warrants and any dispute, disagreement, or
issue of construction or interpretation arising hereunder whether relating to
its execution, its validity, the obligations provided herein or performance
shall be governed or interpreted according to the internal laws of the State of
Delaware without regard to choice of law considerations.
22. Section or Paragraph Headings. Section headings herein have been
inserted for reference only and shall not be deemed to limit or otherwise
affect, in any matter, or be deemed to interpret in whole or in part any of the
terms or provisions of these Warrants.
Dated: August__, 2000 GLOBAL TECHNOVATIONS, INC.
By:
William C. Willis, Jr.
President and Chief
Executive Officer
<PAGE>
ASSIGNMENT FORM
(To be executed only upon the assignment of Warrants)
FOR VALUE RECEIVED the undersigned registered holder of the within
Warrants hereby sells, assigns and transfers unto ______________, whose address
is ____________________________ all of the rights of the undersigned under the
within Warrants, with respect to ______________ Common Stock of Global
Technovations, Inc. and, if such Common Stock do not include all the Common
Stock issuable as provided in the Warrants, that new Warrants of like tenor for
the number of Common Stock not being transferred hereunder be issued in the name
of and delivered to the undersigned, and does hereby irrevocably constitute and
appoint ______________ Attorney to register such transfer on the books of
______________ maintained for the purpose, with full power of substitution in
the premises.
Dated: ______________, ______.
(Signature must conform in all respects to name of holder as specified
on the face of the Warrants)
Signature Guaranteed
Address:
<PAGE>
FORM OF SUBSCRIPTION
(To be signed only upon exercise of Warrants)
To:___________________________
The undersigned, the holder of the within Warrants, hereby irrevocably
elects to exercise the purchase right represented by such Warrants for, and to
purchase thereunder, ______________ Common Stock of Global Technovations, Inc.,
and herewith makes payment of $______________ therefor, and requests that the
certificates for such shares be issued in the name of, and delivered to, , whose
address is . If the Common Stock being purchased hereby do not include all the
Common Stock issuable as provided in the Warrants, that new Warrants for the
number of Common Stock not being purchased hereunder be issued in the name of
and delivered to the undersigned.
Dated: ______________, ______.
(Signature must conform in all respects to name of holder as specified
on the face of the Warrants)
Signature Guaranteed
Address:
<PAGE>
EXHIBIT A
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is entered into as
of the ___ day of August, 2000 by and among Global Technovations, Inc., a
Delaware corporation (the "Company"), and Wilmington Trust Company and George
Jeff Mennen Co-Trustees U/A dated 11/25/70 with George S. Mennen FBO John Henry
Mennen (the "Investor").
WHEREAS, the Company has issued to the Investor, warrants to purchase
shares of common stock dated as of the date hereof (the "warrants"); and
WHEREAS, the Company has agreed to provide certain registration rights
to the Investor in connection with the shares of Common Stock issuable to the
Investor pursuant to exercise of the Warrants;
Therefore, the parties hereto hereby agree as follows:
1. Definitions. Unless the context otherwise requires, the
terms defined in this Section 1 shall have the meanings herein specified for
all purposes of this Agreement, applicable to both the singular and plural
forms of any of the terms herein
defined.
"Agreement" means this Registration Rights Agreement, as the same may
be amended, modified or supplemented in accordance with the terms hereof.
"Board" means the Board of Directors of the Company.
"Common Stock" means the Common Stock, $.001 par value per share, of
the Company.
"Commission" means the Securities and Exchange Commission.
"Company" has the meaning assigned to it in the introductory paragraph
of this Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Excluded Forms" has the meaning assigned to it in Section 2c of this
Agreement.
"Investor" has the meaning assigned to it in the introductory paragraph
of this Agreement.
"Other Shares" has the meaning assigned to it in Section 4f of this
Agreement.
"Person" includes any natural person, corporation, trust, association,
company, partnership, joint venture, limited liability company and other entity
and any government, governmental agency, instrumentality or political
subdivision.
"Proposed Registration" has the meaning assigned to it in Section 4 of
this Agreement.
The terms "register" "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement on other
than any of the Excluded Forms in compliance with the Securities Act, and the
declaration or ordering of the effectiveness of such registration statement.
"Securities Act" means the Securities Act of 1933, as amended.
"Warrants" mean the warrants referred to on the first WHEREAS clause
hereof.
2. Required Registration.
a. At any time, the holders of Common Stock may from time to
time request (the "Request") that the Company register under the Securities Act,
all or any portion of the shares of Common Stock held by such requesting holder
or holders for sale in the manner specified in such notice. The Company shall be
obligated to file a registration statement with respect to such Common Stock
registered pursuant to this Section 2 within 45 days of such Request.
b. Following receipt of any Request under this Section 2, the
Company shall use its best efforts to register under the Securities Act, for
public sale in accordance with the method of disposition specified in such
Request, the number of shares specified in such Request (and in all subsequent
notices received by the Company from other holders of shares within 30 days
after the giving of such notice by the Company). If the holders initiating the
Request hereunder intend to distribute the Common Stock covered by their Request
by means of an underwriting, the underwriter will be selected by a majority in
interest of the holders so requesting and shall be reasonably acceptable to the
Company.
c. The Company shall be entitled to include in any
registration statement referred to in this Section 2, shares of Common Stock to
be sold by the Company for its own account, except as and to the extent that, in
the opinion of the managing underwriter (if such method of disposition shall be
an underwritten public offering), such inclusion would adversely affect the
marketing of the shares to be sold for the Investor.
d. provided, however, that shares of Common Stock shall only
be registrable pursuant to this Agreement if and so long as they have not been
(i) sold to or through a broker or dealer or underwriter in a public
distribution or a public securities transaction, or (ii) sold in a transaction
exempt from the registration and prospectus delivery requirements of the
Securities Act under Section 41 thereof so that all transfer restrictions and
restrictive legends with respect to such shares of Common Stock are removed upon
the consummation of such sale and the seller and purchaser of such shares of
Common Stock shall have received an opinion of counsel for the Company, which
shall be in form and content reasonably satisfactory to the seller and buyer and
their respective counsel, to the effect that such shares of Common Stock in the
hands of the purchaser are freely transferable without restriction or
registration under the Securities Act in any public or private transaction.
3. Piggyback Registration.
a. Each time that the Company proposes for any reason to
register any of its Common Stock under the Securities Act in connection with the
proposed offer and sale of its Common Stock for money, either for its own
account or on behalf of any other security holder ("Proposed Registration"),
other than pursuant to a registration statement on Excluded Forms, the Company
shall promptly give written notice of such Proposed Registration to the Investor
and shall offer the Investor the right to request inclusion of the share of
Common Stock in the Proposed Registration.
b. The Investor shall have 30 days from the receipt of such
notice to deliver to the Company a written request specifying the number of
share of Common Stock such holder intends to sell in the Proposed Registration
and the holder's intended method of disposition.
c. In the event that the Proposed Registration by the Company
is, in whole or in part, an underwritten public offering, the Company shall so
advise the Investor as part of the written notice given pursuant to Section 4a,
and any request under Section 4b must specify that the shares be included in the
underwriting on the same terms and conditions as the shares of Common Stock, if
any, otherwise being sold through underwriters under such registration.
d. Upon receipt of a written request pursuant to Section 4b,
the Company shall promptly use its best efforts to cause all such shares of
Common Stock held by the Investor to be registered under the Securities Act (and
included in any related qualifications under blue sky laws or other compliance),
to the extent required to permit sale or disposition as set forth in the
Proposed Registration.
e. In the event that the offering is to be an underwritten
offering, all holders of Shares proposing to distribute their shares of Common
Stock through such underwritten offering agree to enter into an underwriting
agreement with the underwriter or underwriters selected for such underwriting by
the Company.
f. Notwithstanding the foregoing, if in its good faith
judgment, the Company or managing underwriter determines and advises in writing
that the inclusion of shares of Common Stock proposed to be included in the
underwritten public offering, together with any other issued and outstanding
shares of Common Stock proposed to be included therein by holders other than the
Investor (such other shares hereinafter collectively referred to as the "Other
Shares"), would interfere with the successful marketing of such securities, then
the number of such shares to be included in such underwritten public offering
shall be reduced first, (i) by the shares requested to be included in such
registration by the holders of Other Shares, on a pro rata basis, based upon the
number of Other Shares sought to be registered by each holder, and, second (ii)
from the number of shares of Common Stock then owned by the Investor. The
foregoing shall not apply to the sale of Common Stock by the Company or
registration rights previously granted by the Company.
4. Preparation and Filing. If and whenever the Company is under
an obligation pursuant to this Agreement to use its best efforts to effect the
registration of any Common Stock, the Company shall, as expeditiously as
practicable:
a. prepare and file with the Commission a registration
statement with respect to such securities and use its best efforts to cause such
registration statement to become and remain effective in accordance with Section
5b hereof;
b. prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective
until the earlier of (i) the sale of all Common Stock covered thereby or (ii)
the expiration of 12 months from the effective date of the registration
statement, and to comply with the provisions of the Securities Act with respect
to the sale or other disposition of all shares of Common Stock covered by such
registration statement;
c. furnish to the Investors, such number of copies of any
summary prospectus or other prospectus, including a preliminary prospectus, in
conformity with the requirements of the Securities Act, and such other documents
as such holder may reasonably request in order to facilitate the public sale or
other disposition of such shares of Common Stock;
d. use its best efforts to register or qualify the shares of
Common Stock covered by such registration statement under the securities or blue
sky laws of such jurisdictions as the Investor shall reasonably request within
days prior to the original filing of the registration statement and do any and
all other acts or things which may be necessary or advisable to enable such
holder to consummate the public sale or other disposition in such jurisdictions
of such shares of Common Stock; provided, however, that the Company shall not be
required to consent to general service of process for all purposes in any
jurisdiction where it is not then subject to process, qualify to do business as
a foreign corporation where it would not be otherwise required to qualify or
submit to liability for state or local taxes where it is not liable for such
taxes;
e. at any time when a prospectus relating thereto covered by
such registration statement is required to be delivered under the Securities Act
within the appropriate period mentioned in Section 5b hereof, notify the
Investor of the happening of any event as a result of which the prospectus
included in such registration, as then in effect, includes an untrue statement
of a material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in light of
the circumstances then existing and, at the request of such holder, as promptly
as practicable prepare, file and furnish to such holder a reasonable number of
copies of a supplement to or an amendment of such prospectus as may be necessary
so that, as thereafter delivered to the purchasers of such shares, such
prospectus shall not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing;
f. if the Company has delivered preliminary or final
prospectuses to the Investor and after having done so the prospectus is amended
to comply with the requirements of the Securities Act, the Company shall
promptly notify the Investor and, if requested, the Investor shall immediately
cease making offers of shares of Common Stock and return all prospectuses to the
Company. The Company shall promptly provide the Investor with revised
prospectuses and, following receipt of the revised prospectuses, the Investor
shall be free to resume making offers of the shares of Common Stock; and
g. furnish, at the request of the Investor on the date that
such shares of Common Stock are delivered to the underwriters for sale in
connection with a registration pursuant to this Agreement, if such securities
are being sold through underwriters, or, if such securities are not being sold
through underwriters, on the date that the registration statement with respect
to such securities becomes effective, (i) an opinion, dated as of such date, of
the counsel representing the Company for the purposes of such registration, in
form and substance as is customarily given to underwriters in an underwritten
public offering and reasonably satisfactory to the Investor, addressed to the
underwriters, if any, and to the Investor, and (ii) a letter dated as of such
date, from the independent certified public accountants of the Company, in form
and substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering and reasonably
satisfactory to the Investor, addressed to the underwriters, if any, and if
permitted by applicable accounting standards, to Investor. [Will - do you want
to give a comfort letter].
5. Expenses. The Company shall pay all expenses incurred by the Company
in complying with Sections 2, 3, 4 and 5 of this Agreement, including, without
limitation, all registration and filing fees (including all expenses incident to
filing with the NASD Regulation, Inc.), fees and expenses of complying with
securities and blue sky laws, printing expenses, and fees and disbursements of
the Company's counsel; provided, however, that all underwriting discounts,
selling commissions and counsel fees of the Investor shall be paid by the
Investor.
6. Indemnification.
a. In the event of any registration of any shares of Common
Stock under the Securities Act pursuant to this Agreement, the Company shall
indemnify and hold harmless the Investor, each of such holder's trustees and
their officers, directors and partners, each underwriter of such shares, if any,
each broker or any other person, if any, who controls any of the foregoing
Persons, within the meaning of the Securities Act, from and against any losses,
claims, damages or liabilities, joint or several, to which any of the foregoing
persons may become subject under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in any registration statement under which such
shares of Common Stock were registered under the Securities Act, any preliminary
prospectus or final prospectus contained therein, or any amendment or supplement
thereto, or any document incident to registration or qualification of any shares
of Common Stock pursuant to Section 5d hereof, or arise out of or are based upon
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 or,
with respect to any prospectus, necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, or any
violation by the Company of the Securities Act, the Exchange Act, or state
securities or blue sky laws applicable to the Company and relating to action or
inaction required of the Company in connection with such registration or
qualification under the Securities Act or such state securities or blue sky
laws. The Company shall reimburse (after receipt of appropriate documentation)
such selling holder, trustee officer, director, partner, underwriter, broker or
other Person acting on behalf of such selling holder and each such controlling
Person for any legal or any other out-of-pocket expenses reasonably incurred by
any of them in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in said registration statement,
said preliminary prospectus, said prospectus, or said amendment or supplement or
any document incident to registration or qualification of any shares of Common
Stock pursuant to Section 5d hereof in reliance upon and in conformity with
written information furnished to the Company by such selling holder or such
underwriter specifically for use in the preparation thereof or information
omitted to be furnished by such selling holder.
b. Before shares of Common Stock held by the Investor shall be
included in any registration pursuant to this Agreement, and any underwriter
acting on its behalf shall have agreed to indemnify and hold harmless (in the
same manner and to the same extent as set forth in Section 7a the Company, each
director of the Company, each officer of the Company who signs such registration
statement and any Person who controls the Company within the meaning of the
Securities Act, with respect to any untrue statement or omission from such
registration statement, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereto, if such untrue statement or
omission was made in reliance upon and in conformity with written information
furnished to the Company through an instrument duly executed by such selling
holder or such underwriter specifically for use in the preparation of such
registration statement, preliminary prospectus, final prospectus or amendment or
supplement.
c. Promptly after receipt by an indemnified party of notice of
the commencement of any action involving a claim referred to in Section 7a or b,
such indemnified party will, if a claim in respect thereof is made against an
indemnifying party, give written notice to the latter of the commencement of
such action. In case any such action is brought against an indemnified party,
the indemnifying party will be entitled to participate in and to assume the
defense thereof, jointly with any other indemnifying party similarly notified to
the extent that it may wish, with counsel reasonably satisfactory to such
indemnified party, and, after notice from the indemnifying party to such
indemnified party of its election so as to assume the defense thereof, the
indemnifying party shall be responsible for any legal or other expenses
subsequently incurred by the latter in connection with the defense thereof,
provided, however, that, if counsel for any indemnified party shall have
reasonably concluded that there may be one or more legal defenses available to
such indemnified party which are different from or additional to those available
to the indemnifying party, there is an actual or potential conflict of interest
between the indemnified and the indemnifying party, or that such claim or
litigation involves or could have an effect upon matters beyond the scope of the
indemnity agreement provided in this Section 7, the indemnifying party shall not
have the right to assume the defense of such action on behalf of such
indemnified party, and such indemnifying party shall reimburse such indemnified
party and any Person controlling such indemnified party for the fees and
expenses of counsel retained by the indemnified party which are reasonably
related to the matters covered by the indemnity agreement provided in this
Section 7; provided, however, that in no event shall any indemnification by the
Investor under this Section 7 exceed the net proceeds from the offering received
by the Investor. The indemnified party shall not make any settlement of any
claims indemnified against hereunder without the written consent of the
indemnifying party or parties, which consent shall not be unreasonably withheld.
No indemnifying party, in defense of any such claim or litigation, shall, except
with the consent of such indemnified party, consent to entry of any judgment or
enter into any settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such indemnified party a
release from all liability in respect to such claim or litigation.
d. In order to provide for just and equitable contribution to
joint liability under the Securities Act in any case in which either (i) party
exercising rights under this Agreement, makes a claim for indemnification
pursuant to this Section 7, but it is judicially determined (by the entry of a
final judgment or decree by a court of competent jurisdiction and the expiration
of time to appeal or the denial of the last right of appeal) that such
indemnification may not be enforced in such case notwithstanding the fact that
this Section 7 provides for indemnification in such case, or (ii) contribution
under the Securities Act may be required on the part of any party in
circumstances for which indemnification is provided under this Section 7; then,
in each such case, the Company and the Investor will contribute to the aggregate
losses, claims, damages or liabilities to which they may be subject as is
appropriate to reflect the relative fault of the Company and the Investor in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities, it being understood that the parties acknowledge
that the overriding equitable consideration to be given effect in connection
with this provision is the ability of one party or the other to correct the
statement or omission which resulted in such losses, claims, damages or
liabilities, and that it would not be just and equitable if contribution
pursuant hereto were to be determined by pro rata allocation or by any other
method of allocation which does not take into consideration the foregoing
equitable considerations. Notwithstanding the foregoing, no person or entity who
is guilty of fraudulent misrepresentation, within the meaning of Section 12f of
the Securities Act, shall be entitled to contribution from any person or entity
who is not guilty of such fraudulent misrepresentation.
e. Notwithstanding any of the foregoing, if, in connection
with an underwritten public offering of the shares of Common Stock, the Company,
the Investor and the underwriters enter into an underwriting or purchase
agreement relating to such offering which contains provisions covering
indemnification among the parties, then the indemnification provision of this
Section 7 shall be deemed inoperative for purposes of such offering.
7. Reporting Requirements Under the Exchange Act. The Company agrees to
keep effective its registration under the Exchange Act and to file timely such
information, documents and reports as the Commission may require or prescribe
under Section 13 of the Exchange Act. The Company forthwith upon request agrees
to furnish to the Investor (a) a written statement by the Company that it has
complied with such reporting requirements, (b) a copy of the most recent annual
or quarterly report of the Company and (c) such other reports and documents
filed by the Company with the Commission as such holder may reasonably request
in availing itself of an exemption for the sale of share of Common Stock without
registration under the Securities Act. The Company acknowledges and agrees that
the purposes of the requirements contained in this Section 8 are to enable the
Investor to comply with the current public information requirements contained in
Rule 144 under the Securities Act should such holder ever wish to dispose of any
of the securities of the Company acquired by it without registration under the
Securities Act in reliance upon Rule 144 (or any other similar exemptive
provision). In addition, the Company agrees to take such other measures and file
such other information, documents and reports, as shall be required of it
hereafter by the Commission as a condition to the availability of Rule 144 under
the Securities Act (or any similar exemptive provision hereafter in effect) and
the use of Form S-3.
8. Shareholder Information. The Company may request the Investor as to
which any registration is to be effected pursuant to this Agreement to furnish
the Company with such information with respect to it and the distribution of its
share of Common Stock as the Company may from time to time reasonably request in
writing and as shall be required by law or by the Commission in connection
therewith, and the Investor as to which any registration is to be effected
pursuant to this Agreement agrees to furnish the Company with such information.
9. "Market Stand-Off" Agreement. The Investor hereby agrees that,
except for a registration of the share of Common Stock on Form S-4, if
applicable, during the period of duration specified by the Company and an
underwriter of securities of the Company (not to exceed 180 days) following the
effective date of a registration statement of the Company filed under the
Securities Act, it shall not, to the extent requested by the Company and such
underwriter, directly or indirectly sell, offer to sell, contract to sell
(including, without limitation, any short sale), grant any option to purchase or
otherwise transfer or dispose of (other than to donees who agree to be similarly
bound) any securities of the Company held by it at any time during such period
except Common Stock included in such registration; provided, however, that the
Investor agrees to such limitation if and only if all officers and directors of
the Company do so.
In order to enforce the foregoing covenant, the Company may
impose stop-transfer instructions with respect to the share of Common Stock
owned by the Investor (and the shares or securities of every other Person
subject to the foregoing restriction) until the end of such period.
10. Forms. All references in this Agreement to particular forms of
registration statements are intended to include, and shall be deemed to include,
references to all successor forms which are intended to replace, or to apply to
similar transactions as, the forms herein referenced.
11. Termination of Rights. The rights of the Investor to register
shares of Common Stock pursuant to this Agreement, and the Company's obligations
to effect such registration, (i) shall terminate as to all of the Company's
obligations hereunder on the date on which all share of Common Stock have been
registered under applicable federal and state securities laws, and (ii) with
respect to the Company's obligations pursuant to Section 2 of this Agreement
only, shall terminate after the Company has registered shares of Common Stock
pursuant to Section 2 on two occasions.
12. Granting of Registration Rights. The Company shall not grant
any future registration rights superior to those granted hereunder without the
prior written consent of the Investor.
13. Severability. In the event any parts of this Agreement are
found to be void, the remaining provisions of this Agreement shall nevertheless
be binding with the same effect as though the void parts were deleted.
14. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. The execution of this
Agreement may be by actual or facsimile signature.
15. Benefit. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their legal representatives, successors
and assigns.
16. Notices and Addresses. All notices, offers, acceptance and any
other acts under this Agreement (except payment) shall be in writing, and shall
be sufficiently given if delivered to the addressees in person, by Federal
Express or similar receipted delivery, by facsimile delivery or, if mailed,
postage prepaid, by certified mail, return receipt requested, as follows:
The Company: Global Technovations, Inc.
William C. Willis, Jr. President
7108 Fairway Drive, Suite 200
Palm Beach Gardens, FL 33418
Facsimile (561) 691-5220
with a copy to: Michael D. Harris, Esq.
Michael Harris, P.A.
1645 Palm Beach Lakes Blvd.
Suite 550
West Palm Beach, FL 33401
Facsimile (561) 478-1817
Trustees: Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, DE 19890-0001
George Jeff Mennen
c/o TMF Investments, Inc.
25B Hanover Road
Florhen Park, NJ 07932
or to such other address as either of them, by notice to the other may designate
from time to time. Time shall be counted to, or from, as the case may be, the
date of delivery.
17. Attorney's Fees. In the event that there is any controversy or
claim arising out of or relating to this Agreement, or to the interpretation,
breach or enforcement thereof, and any action or proceeding including an
arbitration proceeding is commenced to enforce the provisions of this Agreement,
the prevailing party shall be entitled to an award by the court or arbitrator,
as appropriate, of reasonable attorney's fees, including the fees on appeal,
costs and expenses.
18. Oral Evidence. This Agreement constitutes the entire Agreement
between the parties and supersedes all prior oral and written agreements between
the parties hereto with respect to the subject matter hereof. Neither this
Agreement nor any provision hereof may be changed, waived, discharged or
terminated orally, except by a statement in writing signed by the party or
parties against which enforcement or the change, waiver discharge or termination
is sought.
19. Additional Documents. The parties hereto shall execute such
additional instruments as may be reasonably required by their counsel in order
to carry out the purpose and intent of this Agreement and to fulfill the obliga-
tions of the parties hereunder.
20. Governing Law. This Agreement and any dispute, disagreement, or
issue of construction or interpretation arising hereunder whether relating to
its execution, its validity, the obligations provided herein or performance
shall be governed or interpreted according to the internal laws of the State of
Delaware without regard to choice of law considerations.
21. Arbitration. Any controversy, dispute or claim arising out of or
relating to this Agreement, or its interpretation, application, implementation,
breach or enforcement which the parties are unable to resolve by mutual
agreement, shall be settled by submission by either party of the controversy,
claim or dispute to binding arbitration in Wilmington, Delaware (unless the
parties agree in writing to a different location), before a single arbitrator in
accordance with the rules of the American Arbitration Association then in
effect. In any such arbitration proceeding the parties agree to provide all
discovery deemed necessary by the arbitrator. The decision and award made by the
arbitrator shall be final, binding and conclusive on all parties hereto for all
purposes, and judgment may be entered thereon in any court having jurisdiction
thereof.
22. Section or Paragraph Headings. Section headings herein have been
inserted for reference only and shall not be deemed to limit or otherwise
affect, in any matter, or be deemed to interpret in whole or in part any of the
terms or provisions of this Agreement.
23. Force Majure. The parties shall each be excused from any delay in
performance or for non-performance of any of the terms and conditions of this
Agreement caused by any circumstances beyond their respective control,
including, but not limited to, any Act of God, fire, flood, or government
regulation, direction or request, or accident, labor dispute, unavoidable
breakdown, civil unrest or disruption.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed personally or by a duly authorized representative
thereof as of the day and year first above written.
THE COMPANY:
________________________ Global Technovations, Inc..
________________________ By: __________________________
Name: William C. Willis, Jr.
Title: President
INVESTOR:
________________________ Wilmington Trust Company and
George Jeff Mennen Co-Trustees U/A dated
11/23/70 with George S. Mennen
FBO John Henry Mennen
_______________________ By: ____________________________
Trustee:
Wilmington Trust Company, Trustee
By: ____________________________
By: ____________________________
George Jeff Mennen, Trustee
