EXHIBIT 10.37
Warrant No.: BAT-01
THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY OTHER
SECURITIES LAWS, HAVE BEEN TAKEN FOR INVESTMENT, AND MAY NOT BE SOLD OR
TRANSFERRED OR OFFERED FOR SALE OR TRANSFER UNLESS A REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND OTHER APPLICABLE SECURITIES LAWS WITH RESPECT TO
SUCH SECURITIES IS THEN IN EFFECT, OR IN THE OPINION OF COUNSEL TO THE ISSUER OF
THESE SECURITIES), SUCH REGISTRATION UNDER THE SECURITIES ACT AND OTHER
APPLICABLE SECURITIES LAWS IS NOT REQUIRED.
Date: December 21, 2000
GLOBAL TECHNOVATIONS, INC.
WARRANT FOR THE PURCHASE OF 280,000 SHARES OF
COMMON STOCK
Warrant Price: $3.00 per share, subject to adjustment as provided below.
THIS IS TO CERTIFY that, for value received, Boston Advanced Technologies, a
Delaware corporation and its successors and assigns (collectively, the
"Holder"), is entitled to purchase, subject to the terms and conditions
hereinafter set forth, 280,000 shares of the common stock ("Common Stock"), of
Global Technovations, Inc., a Delaware corporation (the "Company"), and to
receive certificates for the Common Stock so purchased.
Exercise Period. This Warrant may be exercised during the period beginning on
the earlier of (i) the effective date of a registration statement covering the
shares of Common Stock or (ii) one year from the date of this Warrant and ending
at 6:00 p.m. New York time on December 20, 2005 (the "Exercise Period"). This
Warrant will terminate automatically and immediately upon the expiration of the
Exercise Period.
Exercise of Warrant. This Warrant may be exercised, in whole or in part, at any
time and from time to time during the Exercise Period. Such exercise shall be
accomplished by tender to the Company of the purchase price set forth above as
the warrant price (the "Warrant Price"), in cash by wire transfer or by
certified check or bank cashier's check, payable to the order of the Company,
together with presentation and surrender to the Company of this Warrant with an
executed subscription in substantially the form attached hereto as Exhibit A
(the "Subscription"). Upon receipt of the foregoing, the Company will deliver to
the Holder, as promptly as possible, a certificate or certificates representing
the shares of Common Stock so purchased, registered in the name of the Holder or
its transferee (as permitted under Section 3 below). With respect to any
exercise of this Warrant, the Holder will for all purposes be deemed to have
become the holder of record of the number of shares of Common Stock purchased
hereunder on the date this Warrant, a properly executed Subscription and payment
of the Warrant Price is received by the Company (the "Exercise Date"),
irrespective of the date of delivery of the certificate evidencing such shares,
except that, if the date of such receipt is a date on which the stock transfer
books of the Company are closed, such person will be deemed to have become the
holder of such shares at the close of business on the next succeeding date on
which the stock transfer books are open. Fractional shares of Common Stock will
not be issued upon the exercise of this Warrant. In lieu of any fractional
shares that would have been issued but for the immediately preceding sentence,
the Holder will be entitled to receive cash equal to the current market price of
such fraction of a share of Common Stock on the trading day immediately
preceding the Exercise Date. In the event this Warrant is exercised in part, the
Company shall issue a new Warrant to the Holder covering the aggregate number of
shares of Common Stock as to which this Warrant remains exercisable for.
Transferability and Exchange.
This Warrant, and the Common Stock issuable upon the exercise hereof, may not be
sold, transferred, pledged or hypothecated unless the Company shall have been
provided with an opinion of the Company's counsel that such transfer is not in
violation of the Securities Act, and any applicable state securities laws.
Subject to the satisfaction of the aforesaid condition, this Warrant and the
underlying shares of Common Stock shall be transferable from time to time by the
Holder upon written notice to the Company. If this Warrant is transferred, in
whole or in part, the Company shall, upon surrender of this Warrant to the
Company, deliver to each transferee a Warrant evidencing the rights of such
transferee to purchase the number of shares of Common Stock that such transferee
is entitled to purchase pursuant to such transfer. The Company may place a
legend similar to the legend at the top of this Warrant on any replacement
Warrant and on each certificate representing shares issuable upon exercise of
this Warrant or any replacement Warrants. Only a registered Holder may enforce
the provisions of this Warrant against the Company. A transferee of the original
registered Holder becomes a registered Holder only upon delivery to the Company
of the original Warrant and an original Assignment, substantially in the form
set forth in Exhibit B attached hereto.
This Warrant is exchangeable upon its surrender by the Holder to the Company for
new Warrants of like tenor and date representing in the aggregate the right to
purchase the number of shares purchasable hereunder, each of such new Warrants
to represent the right to purchase such number of shares as may be designated by
the Holder at the time of such surrender.
Adjustments to Warrant Price and Number of Shares Subject to Warrant. The
Warrant Price and the number of shares of Common Stock purchasable upon the
exercise of this Warrant are subject to adjustment from time to time upon the
occurrence of any of the events specified in this Section 4. For the purpose of
this Section 4, "Common Stock" means shares now or hereafter authorized of any
class of common stock of the Company and any other stock of the Company, however
designated, that has the right to participate in any distribution of the assets
or earnings of the Company without limit as to per share amount (excluding, and
subject to any prior rights of, any class or series of preferred stock).
In case the Company shall (i) pay a dividend or make a distribution in shares of
Common Stock or other securities, (ii) subdivide its outstanding shares of
Common Stock into a greater number of shares, (iii) combine its outstanding
shares of Common Stock into a smaller number of shares, or (iv) issue by
reclassification of its shares of Common Stock other securities of the Company,
then the Warrant Price in effect at the time of the record date for such
dividend or on the effective date of such subdivision, combination or
reclassification, and/or the number and kind of securities issuable on such
date, shall be proportionately adjusted so that the Holder of any Warrant
thereafter exercised shall be entitled to receive the aggregate number and kind
of shares of Common Stock (or such other securities other than Common Stock) of
the Company, at the same aggregate Warrant Price, that, if such Warrant had been
exercised immediately prior to such date, the Holder would have owned upon such
exercise and been entitled to receive by virtue of such dividend, distribution,
subdivision, combination or reclassification. Such adjustment shall be made
successively whenever any event listed above shall occur.
In case the Company shall fix a record date for the making of a distribution to
all holders of Common Stock (including any such distribution made in connection
with a consolidation or merger in which the Company is the surviving
corporation) of cash, evidences of indebtedness or assets, or subscription
rights or warrants, the Warrant Price to be in effect after such record date
shall be determined by multiplying the Warrant Price in effect immediately prior
to such record date by a fraction, the numerator of which shall be the current
market price per share of Common Stock on such record date, less the amount of
cash so to be distributed (or the fair market value (as determined in good faith
by, and reflected in a formal resolution of, the Board of Directors of the
Company) of the portion of the assets or evidences of indebtedness so to be
distributed, or of such subscription rights or warrants, applicable to one share
of Common Stock, and the denominator of which shall be such current market price
per share of Common Stock. Such adjustment shall be made successively whenever
such a record date is fixed; and in the event that such distribution is not so
made, the Warrant Price shall again be adjusted to be the Warrant Price which
would then be in effect if such record date had not been fixed.
For purposes of this Warrant "current market price" shall mean the price of the
Company's Common Stock determined as of the last business day for which the
prices or quotes below are available: (i) the closing price of the Company's
Common Stock appearing on a national securities exchange if the principal market
for such Common Stock is such an exchange or if not listed or if such exchange
is not the principal market, appearing on the Nasdaq Stock Market ("Nasdaq");
(ii) if the principal market for the Company's Common Stock is not an exchange
or Nasdaq, then the average bid and asked price for its Common Stock as listed
on the National Association of Securities Dealers, Inc.'s OTC Bulletin Board
("OTC-BB"); or (iii) if the principal market for Company's Common Stock is not
an exchange, Nasdaq or the OTC-BB, then the average bid and asked price for the
Company's Common Stock as reported in the National Quotation Bureau's "pink
sheets"; or (iv) if the Common Stock is not so listed as provided in Section
4(c)(i), (ii) or (iii) above, and bid and asked prices are not so reported, the
"current market price" shall be an amount determined in such reasonable manner
as may be prescribed by the Board of Directors of the Company.
Notwithstanding any provision herein to the contrary, no adjustment in the
Warrant Price shall be required unless such adjustment would require an increase
or decrease of at least 1% in the Warrant Price; provided, however, that any
adjustments which by reason of this subsection (d) are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
All calculations under this Section 4 shall be made to the nearest cent or the
nearest one-hundredth of a share, as the case may be.
In the event that at any time, as a result of an adjustment made pursuant to
subsection (a) above, the Holder of any Warrant thereafter exercised shall
become entitled to receive any shares of capital stock of the Company other than
shares of Common Stock, thereafter the number of such other shares so receivable
upon exercise of any Warrant shall be subject to adjustment from time to time in
a manner and on terms as nearly equivalent as practicable to the provisions with
respect to the shares of Common Stock contained in this Section 4, and the other
provisions of this Warrant shall apply on like terms to any such other shares.
If the Company merges or consolidates into or with another corporation or
entity, or if another corporation or entity merges into or with the Company
(excluding such a merger in which the Company is the surviving or continuing
corporation and which does not result in any reclassification, conversion,
exchange, or cancellation of the outstanding shares of Common Stock), or if all
or substantially all of the assets or business of the Company are sold or
transferred to another corporation, entity, or person, then, as a condition to
such consolidation, merger, or sale (a "Transaction"), lawful and adequate
provision shall be made whereby the Holder shall have the right from and after
the Transaction to receive, upon exercise of this Warrant and upon the terms and
conditions specified herein and in lieu of the shares of the Common Stock that
would have been issuable if this Warrant had been exercised immediately before
the Transaction, such shares of stock, securities, or assets as the Holder would
have owned immediately after the Transaction if the Holder had exercised this
Warrant immediately before the effective date of the Transaction.
In case any event shall occur as to which the other provisions of this Section 4
are not strictly applicable but the failure to make any adjustment would not
fairly protect the purchase rights represented by this Warrant in accordance
with the essential intent and principles hereof, then, in each such case, the
Company shall effect such adjustment, on a basis consistent with the essential
intent and principles established in this Section 4, as may be necessary to
preserve, without dilution, the purchase rights represented by this Warrant.
Registration Rights. The Holder (including any transferee pursuant to Section
3)shall be entitled to the benefits of and the Company agrees to execute and
deliver to the Holder a Registration Rights Agreement, a form of which is set
forth in Exhibit C attached hereto.
Reservation of Shares. The Company agrees at all times to reserve and hold
available out of its authorized but unissued shares of Common Stock the number
of shares of Common Stock issuable upon the full exercise of this Warrant. The
Company further covenants and agrees that all shares of Common Stock that may be
delivered upon the exercise of this Warrant will, upon delivery, be fully paid
and nonassessable and free from all taxes, liens and charges with respect to the
purchase thereof hereunder.
Notices to Holder. Upon any adjustment of the Warrant Price (or number of shares
of Common Stock purchasable upon the exercise of this Warrant) pursuant to
Section 4, the Company shall promptly thereafter cause to be given to the Holder
written notice of such adjustment. Such notice shall include the Warrant Price
(and/or the number of shares of Common Stock purchasable upon the exercise of
this Warrant) after such adjustment, and shall set forth in reasonable detail
the Company's method of calculation and the facts upon which such calculations
were based. Where appropriate, such notice shall be given in advance and
included as a part of any notice required to be given under the other provisions
of this Section 7.
In the event of (a) any fixing by the Company of a record date with respect to
the holders of any class of securities of the Company for the purpose of
determining which of such holders are entitled to dividends or other
distributions, or any rights to subscribe for, purchase or otherwise acquire any
shares of capital stock of any class or any other securities or property, or to
receive any other right, (b) any capital reorganization of the Company, or
reclassification or recapitalization of the capital stock of the Company or any
transfer of all or substantially all of the assets or business of the Company
to, or consolidation or merger of the Company with or into, any other entity or
person, or (c) any voluntary or involuntary dissolution or winding up of the
Company, then and in each such event the Company will give the Holder a written
notice specifying, as the case may be (i) the record date for the purpose of
such dividend, distribution, or right, and stating the amount and character of
such dividend, distribution, or right; or (ii) the date on which any such
reorganization, reclassification, recapitalization, transfer, consolidation,
merger, conveyance, dissolution, liquidation, or winding up is to take place and
the time, if any is to be fixed, as of which the holders of record of Common
Stock (or such capital stock or securities receivable upon the exercise of this
Warrant) shall be entitled to exchange their shares of Common Stock (or such
other stock securities) for securities or other property deliverable upon such
event. Any such notice shall be given at least 10 days prior to the earliest
date therein specified.
No Rights as a Stockholder. This Warrant does not entitle the Holder to any
voting rights or other rights as a stockholder of the Company, nor to any other
rights whatsoever except the rights herein set forth.
Additional Covenants of the Company. For so long as the Common Stock is listed
for trading on any national securities exchange or the Nasdaq Stock Market, the
Company shall, upon issuance of any shares for which this Warrant is
exercisable, at its expense, promptly obtain and maintain the listing of such
shares.
The Company shall comply with the reporting requirements of Sections 13 and
15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") for so long as
and to the extent that such requirements apply to the Company.
The Company shall not, by amendment of its Articles or Certificate of
Incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities, or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of this
Warrant. Without limiting the generality of the foregoing, the Company (a) will
at all times reserve and keep available, solely for issuance and delivery upon
exercise of this Warrant, shares of Common Stock issuable from time to time upon
exercise of this Warrant, (b) will not increase the par value of any shares of
capital stock receivable upon exercise of this Warrant above the amount payable
therefor upon such exercise, and (c) will take all such actions as may be
necessary or appropriate in order that the Company may validly and legally issue
fully paid and nonassessable stock.
Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the Company, the Holder and their respective successors and permitted
assigns.
Notices. The Company agrees to maintain a ledger of the ownership of this
Warrant (the "Ledger"). Any notice hereunder shall be given by Federal Express,
other overnight delivery service or registered or certified mail, if to the
Company at its principal executive office and, if to the Holder to its address
shown in the Ledger of the Company; provided, however, that either the Company
or the Holder may at any time on three days written notice to the other
designate or substitute another address where notice is to be given. Notice
shall be deemed given and received after such notice has been delivered to the
Federal Express or other overnight delivery service, or certified or registered
letter, properly addressed with postage prepaid, is deposited in the U.S. mail.
Severability. Every provision of this Warrant is intended to be severable. If
any term or provision hereof is illegal or invalid for any reason whatsoever,
such illegality or invalidity shall not affect the remainder of this Warrant.
Governing Law. This Warrant shall be governed by and construed in accordance
with the laws of the State of Florida without giving effect to the principles of
choice of laws thereof.
Attorneys' Fees. In any action or proceeding brought to enforce any provision of
this Warrant, the prevailing party shall be entitled to recover reasonable
attorneys' fees in addition to its costs and expenses and any other available
remedy.
Entire Agreement. This Warrant (including the Exhibits attached hereto)
constitutes the entire understanding between the Company and the Holder with
respect to the subject matter hereof, and supersedes all prior negotiations,
discussions, agreements and understandings relating to such subject matter.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
duly authorized officer as of the date first set forth above.
Global Technovations, Inc.
By: _________________________________________________
David Natan, Vice President
<PAGE>
A-2
Exhibit A
SUBSCRIPTION FORM
(To be Executed by the Holder to Exercise the Rights To Purchase Common Stock
Evidenced by the Within Warrant)
The undersigned hereby irrevocably subscribes for _______ shares of the
Common Stock (the "Stock") of Global Technovations, Inc. (the "Company")
pursuant to and in accordance with the terms and conditions of the attached
Warrant (the "Warrant"), and hereby makes payment of $_______ therefor by
tendering cash, wire transferring or delivering a certified check or bank
cashier's check, payable to the order of the Company. The undersigned requests
that a certificate for the Stock be issued in the name of the undersigned and be
delivered to the undersigned at the address stated below. If the Stock is not
all of the shares purchasable pursuant to the Warrant, the undersigned requests
that a new Warrant of like tenor for the balance of the remaining shares
purchasable thereunder be delivered to the undersigned at the address stated
below.
In connection with the issuance of the Stock, I hereby represent to the
Company that I am acquiring the Stock for my own account for investment and not
with a view to, or for resale in connection with, a distribution of the shares
within the meaning of the Securities Act of 1933, as amended (the "Securities
Act").
I understand that because the Stock has not been registered under the
Securities Act, I must hold such Stock indefinitely unless the Stock is
subsequently registered and qualified under the Securities Act or is exempt from
such registration and qualification. I shall make no transfer or disposition of
the Stock unless (a) such transfer or disposition can be made without
registration under the Securities Act by reason of a specific exemption from
such registration and such qualification, or (b) a registration statement has
been filed pursuant to the Securities Act and has been declared effective with
respect to such disposition. I agree that each certificate representing the
Stock delivered to me shall bear substantially the same as set forth on the
front page of the Warrant.
I agree to execute an accredited investor questionnaire prior to
exercising this warrant. I further agree that my right to exercise this warrant
is subject to compliance with the Securities Act and all applicable state
securities laws.
I agree that each certificate representing the Stock delivered to me
shall bear substantially the same legend as set forth on the front page of the
Warrant.
I further agree that the Company may place stop orders on the
certificates evidencing the Stock with the transfer agent, if any, to the same
effect as the above legend. The legend and stop transfer notice referred to
above shall be removed only upon my furnishing to the Company of an opinion of
counsel (reasonably satisfactory to the Company) to the effect that such legend
may be removed.
Date:____________________________________________
Signed:__________________________________________
Address:_________________________________________
<PAGE>
B-1
Exhibit B
ASSIGNMENT
(To be Executed by the Holder to Effect Transfer of the Attached Warrant)
For Value Received __________________________ hereby sells, assigns and
transfers to _________________________ the Warrant attached hereto and the
rights represented thereby to purchase _________ shares of Common Stock in
accordance with the terms and conditions hereof, and does hereby irrevocably
constitute and appoint _________________________ as attorney to transfer such
Warrant on the books of the Company with full power of substitution.
Dated:________________________ Signed: _____________________________
Please print or typewrite Please insert Social Security
name and address of or other Tax Identification
assignee: Number of Assignee:
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<PAGE>
Exhibit C
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") entered into as of this
21st day of December, 2000 by and between Global Technovations, Inc. (the
"Company"), a Delaware corporation, and all persons who execute this Agreement
and shows names and addresses are reflected on Schedule 1 to this Agreement, as
it may be amended from time to time, (the "Holders").
_________Definitions
Affiliate: With reference to any designated Person, any Person that has
a relationship with such designated Person whereby either of such Persons
directly or indirectly controls or is controlled by or is under common control
with the other. For this purpose "control" means the power, direct or indirect,
of one Person to direct or cause direction of the management and policies of
another, whether by contract, through voting securities or otherwise.
Commission: The Securities and Exchange Commission or any other
governmental body at the time administering the Securities Act.
Common Stock: The Company's authorized common stock, as constituted on
the date hereof, any stock into which such Common Stock may thereafter be
changed and any stock of the Company of any other class, which is not preferred
as to dividends or assets over any other class of stock of the Company and which
is not subject to redemption, issued to the holders of shares of such Common
Stock upon any re-classification thereof.
Company Securities: Any equity securities proposed to be sold by
the Company in the registration statement referred to.
Person: A corporation, an association, a partnership, a limited
liability company, a joint venture, a trust, an organization, a business, an
entity, an individual, a government or political subdivision thereof or a
governmental body.
Registrable Securities: Common Stock and any securities of the Company
issued with respect to the Common Stock by way of stock dividend or stock split
or in connection with a combination, recapitalization, share exchange,
consolidation or other reorganization of the Company. As to any Registrable
Securities, once issued such securities shall cease to be Registrable Securities
when (i) a registration statement with respect to the sale of such securities
shall have become effective under the Securities Act and such securities shall
have been disposed of in accordance with such registration statement, (ii) they
shall have been distributed to the public pursuant to Rule 144 (or any successor
provision) under the Securities Act, (iii) they shall have been otherwise
transferred, new certificates for them not bearing a legend restricting further
transfer shall have been delivered by the Company and subsequent disposition of
them shall not require registration or qualification of them under the
Securities Act or any similar state law then in force, or (iv) they shall have
ceased to be outstanding.
Selling Expenses: All underwriting discounts, selling commissions and
stock transfer taxes applicable to the securities registered by the Holders and
all fees and disbursements of counsel for the Holders.
Capitalized terms used in this Agreement but not otherwise defined herein shall
have the meanings ascribed to such terms in the Warrants issued to the Holders
by the Company as of the same date.
Registration Rights.
(a) If the Company at any time proposes to register any of its equity securities
under the Securities Act on any form other than Form S-4 or Form S-8 (or any
similar or successor form then in effect), whether or not for sale for its own
account, and if the registration form proposed to be used may be used for the
registration of Registrable Securities, the Company will in each such case give
prompt written notice (and in any event at least 10 business days' prior written
notice prior to the filing of such registration statement) to the Holders, at
the addresses specified on Schedule 2(a) hereto, of the Company's intention to
do so, such notice to specify the securities to be registered, the proposed
numbers and amounts thereof and the date not less than 20 days thereafter by
which the Company must receive the Holders' written indication of whether the
Holders wish to include their Registrable Securities in such registration
statement and advising the Holders of their rights under this Section 2. Upon
the written request of any Holder made on or before the date specified in such
notice (which request shall specify the number of Registrable Securities
intended to be disposed of by such Holder), the Company will, subject to the
limitations of Section 3.2(a) and to the extent permitted under Section 7, use
its best efforts to cause all such Registrable Securities, which the Holders
have so requested the registration thereof, to be registered under the
Securities Act (with the securities that the Company at the time proposes to
register), to the extent requisite to permit the sale or other disposition (in
accordance with the intended methods thereof as aforesaid) by the Holders of the
Registrable Securities to be so registered.
(b) Notwithstanding anything to the contrary in this Section 2, the Company
shall have the right to discontinue any registration under this Section 2 at any
time prior to the effective date of such registration if the registration of
other securities giving rise to such registration under this Section 2 is
discontinued.
Registration Procedures.
3.1 Obligations of the Company.
If and whenever the Company is required by the provisions hereof to
effect or cause the registration of any Registrable Securities under the
Securities Act as provided herein, the Company will, as expeditiously as
possible:
(c) prepare and file with the Commission (in the case of a registration pursuant
to Section 2, such filing to be made as soon thereafter as possible but in any
event within 60 days after the request by any Holder to register Registrable
Securities) a registration statement with respect to such Registrable Securities
and use all commercially reasonable efforts to cause such registration statement
to become and remain effective (provided that, before filing a registration
statement or prospectus or any amendments or supplements thereto, the Company
will furnish to one counsel, as selected by the Holders of a majority of the
Registrable Securities, (the "Counsel") copies of all such documents proposed to
be filed);
(d) 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 as provided in Section
3.2(a) and to comply with the provisions of the Securities Act with respect to
the sale or other disposition of all securities covered by such registration
statement during such period in accordance with the intended methods of
disposition by the seller or sellers thereof set forth in such registration
statement;
(e) furnish to Counsel for the Holders and each underwriter of the securities
being sold by the Holder such number of copies of such registration statement
and of each such amendment and supplement thereto (in each case including all
exhibits), such number of copies of the prospectus included in such registration
statement (including each preliminary prospectus), in conformity with the
requirements of the Securities Act, and such other documents, as such Counsel
may reasonably request, in substantially the form in which they are proposed to
be filed with the Commission, in order to facilitate the public sale or other
disposition of the Registrable Securities owned by the Holder;
(f) use all commercially reasonable efforts to register or qualify such
Registrable Securities covered by such registration statement under such other
securities or blue sky laws of New York and New Jersey and do any and all other
acts and things which may be necessary or advisable to enable the Holders and
any underwriter to consummate the disposition in such jurisdiction;
(g) use all commercially reasonable efforts to cause such Registrable Securities
covered by such registration statement to be registered with or approved by such
other governmental agencies or authorities as may be reasonably necessary to
enable the Holders to consummate the disposition of their Registrable
Securities;
(h) notify the Holders at any time when a prospectus relating to their
Registrable Securities is required to be delivered under the Securities Act, of
the Company's becoming aware that the prospectus included in the related
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading in light of the
circumstances then existing, and promptly prepare and furnish to the Holders and
each underwriter a reasonable number of copies of a prospectus supplemented or
amended so that, as thereafter delivered to the purchasers of such Registrable
Securities, 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 the light of the circumstances
then existing;
(i) otherwise use all commercially reasonable efforts to comply with all
applicable rules and regulations of the Commission;
(j) to the extent applicable if the principal trading market for the Company's
common stock is one of the following exchanges or markets, use all commercially
reasonable efforts (i) to cause all such Registrable Securities covered by such
registration statement to be listed on a national securities exchange (if such
Registrable Securities are not already so listed) and on each additional
national securities exchange on which similar securities issued by the Company
are then listed, if the listing of such Registrable Securities is then permitted
under the rules of such exchange, or (ii) to secure designation of all such
Registrable Securities covered by such registration statement as a Nasdaq
"national market system security" or "small cap system security" within the
meaning of Rule 11Aa2-1 of the Commission or, failing that, to secure Nasdaq
authorization for such Registrable Securities;
(k) enter into such agreements (including an underwriting agreement in customary
form) and take such other actions as the Holders shall reasonably request in
order to expedite or facilitate the disposition of its Registrable Securities;
(l) make available for inspection by the Holders and by any underwriter
participating in any disposition to be effected pursuant to such registration
statement and by any attorney, accountant or other agent retained by the Holders
or any such underwriter, all pertinent financial and other records, pertinent
corporate documents and properties of the Company, and cause all of the
Company's officers, directors, employees and the independent public accountants
who have audited its financial statements to supply all information reasonably
requested by each participating Holder, underwriter, attorney, accountant or
agent in connection with such registration statement;
(m) in the case of an underwritten offering, enable the Registrable Securities
to be in such denominations and registered in such names as the underwriters may
request at least two business days prior to the sale of the Registrable
Securities; and
(n) notify the Holders of any stop order threatened or issued by the Commission
and take all actions reasonably necessary to prevent the entry of such stop
order or to remove it if entered.
Section 3.2 Other Procedures.
(a) The Company shall be required to maintain the effectiveness of a
registration statement until the earlier of (i) the sale of all Common Stock
owned by the Holders or (ii) a total of three months. In the event that the
registration statement is required to be amended or supplemented and the Company
gives the Holders notice of such requirement, the Holders shall cease all sales.
The Company shall have no liability to the Holders for delays in the Holders
being able to sell the Registerable Securities (i) as long as the Company uses
its best efforts to file post-effective amendments or supplements, (ii) where
the required financial statements are unavailable or (iii) where the Company
would be required to disclose information that it has no duty to disclose under
the Securities Act, the Exchange Act, or the rules and regulations of the
Commission.
(b) The Holders shall be deemed to have agreed by acquisition of such
Registrable Securities that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 3.1(f) above, the
Holders will forthwith discontinue its disposition of Registrable Securities
pursuant to the registration statement covering such Registrable Securities
until the Holders' receipt of the copies of the supplemented or amended
prospectus contemplated by said Section 3.1(f) and, if so directed by the
Company, will deliver to the Company (at the Company's expense) all copies,
other than permanent file copies, then in the Holders' possession of the
prospectus covering such Registrable Securities current at the time of receipt
of such notice. In the event the Company shall give any such notice, the period
mentioned in Section 3.2(a) above shall be extended by the number of days during
the period from and including the date of the giving of such notice to and
including the date when the Holders shall have received the copies of the
supplemented or amended prospectus contemplated by Section 3.1 (f) above.
(c) Each Holders shall furnish to the Company in writing such
information and documents regarding it and the distribution of its securities as
may reasonably be required to be disclosed in the registration statement in
question by the rules and regulations under the Securities Act or under any
other applicable securities or blue sky laws of the jurisdictions referred to in
Section 3.1(d) above. The Holders shall also promptly execute any representation
letter concerning compliance with Regulation M under the Exchange Act (or any
successor rule or regulation).
(d) If any such registration or comparable statement refers any Holder
by name or otherwise as the holder of any securities of the Company, but such
reference to the Holder by name or otherwise is not required by the Securities
Act or any similar federal statute then in force, then each Holder shall have
the right to require the deletion of the reference to the Holder.
Registration Expenses.
In connection with any registration of Registrable Securities pursuant
to Section 2, the Company will, whether or not any such registration shall
become effective, from time to time, pay all expenses (other than Selling
Expenses) incident to its performance of or compliance herewith (the "Company
Registration Expenses"), including, without limitation, all registration, and
filing fees, fees and expenses of compliance with securities or blue sky laws,
word processing, duplicating expenses, messenger and delivery expenses, fees and
disbursements of counsel for the Company and all independent public accountants
and other Persons retained by the Company.
Indemnification.
The Company will indemnify, to the extent permitted by law, the Holders and
each Person, if any, who controls the Holders within the meaning of Section 15
of the Securities Act (collectively, "Holder Indemnified Parties"), from and
against all losses, claims, damages, liabilities and expenses, joint or several,
to which any such Holder Indemnified Party may become subject under the
Securities Act, the Exchange Act and all rules and regulations under each such
Act, at common law or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in any
registration statement as contemplated hereby or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary, final or summary prospectus, together with the documents
incorporated by reference therein (as amended or supplemented if the Company
shall have filed with the Commission any amendment thereof or supplement
thereto), or any 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 the light of the circumstances under which they were made, not
misleading, or (iii) any violation by the Company of any federal, state or
common law rule or regulation applicable to the Company and relating to action
of or inaction by the Company in connection with any such registration;
provided, however, that the Company shall not be liable to any such Holder
Indemnified Party insofar as the Company is entitled to indemnification under
Section 7(c) for such losses, claims, damages, liabilities, expenses, actions or
proceedings.
(b) If the offering pursuant to any registration statement provided for
hereunder is made through underwriters, no action or failure to act on the part
of such underwriters (whether or not any such underwriter is an Affiliate of any
Holder Indemnified Party) shall affect the Company's obligations to indemnify
the Holder Indemnified Parties pursuant to Section 5(a). If the offering
pursuant to any registration statement provided for hereunder is made through
underwriters, the Company agrees to enter into an underwriting agreement in
customary form with such underwriters and to indemnify such underwriters, their
officers and directors, if any, and each Person, if any, who controls such
underwriters within the meaning of Section 15 of the Securities Act to the same
extent as hereinbefore provided with respect to the indemnification of the
Holder Indemnified Parties; provided, however, that the Company shall not be
required to indemnify any such underwriter, or any officer or director of such
underwriter or any Person who controls such underwriter within the meaning of
Section 15 of the Securities Act, to the extent that the loss, claim, damage,
liability, expense, action or proceeding for which indemnification is claimed
results from such underwriter's failure to send or give a copy of the amended or
supplemented final prospectus, at or prior to the written confirmation of the
sale of Registrable Securities, or to a Person asserting the existence of an
untrue statement or alleged untrue statement or omission or alleged omission if
such statement or omission was corrected in such amended or supplemented final
prospectus prior to such written confirmation and the underwriter was given
notice of the availability of such amended or supplemented final prospectus.
(c) In connection with any registration statement in which any Holder
is participating, each Holder will furnish to the Company in writing such
information as shall be reasonably requested by the Company for use in any such
registration statement or prospectus and will indemnify, to the extent permitted
by law, the Company, its officers and directors and each Person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act,
against any losses, claims, damages, liabilities, expenses, actions or
proceedings resulting from (i) any untrue statement or alleged untrue statement
of a material fact or any omission or alleged omission of a material fact
required to be stated in the registration statement or prospectus or preliminary
prospectus or any amendment thereof or supplement thereto, or necessary to make
the statements therein not misleading, but only to the extent that such untrue
statement or omission is made in reliance on or in conformity with any
information so furnished in writing by such Holder expressly for use therein; or
(ii) any failure by such Holder to register or qualify the Registerable
Securities under the securities laws of any state or other jurisdiction.
(d) A party that seeks indemnification under this Section 5 must
promptly give the other party notice of any legal action. However, a delay in
notice does not relieve an indemnifying party of any liability to an indemnified
party, except to the extent the indemnifying party shows that the delay
prejudiced the defense of the action.
(e) The indemnifying party may participate in the defense at any time
or it may assume the defense by giving notice to the other party. After assuming
the defense, the indemnifying party:
(i) must select an attorney that is reasonably satisfactory to the other
party;
(ii) is not liable to the other party for any later attorney's fees or for
any other later expenses that the other party incurs;
(iii) must not compromise or settle the action without the other party's
consent (but the other party must not unreasonably withhold its consent); and
(iv) is not liable for any compromise or settlement made without its
consent.
(f) If the indemnifying party fails to assume the defense within 10
days after receiving notice of the action, the indemnifying party is bound by
any determination made in the action or by any compromise or settlement made by
the other party.
(g) If for any reason the foregoing indemnity is unavailable, then the
indemnifying party shall contribute to the amount paid or payable by the
indemnified party as a result of such losses, claims, damages, liabilities or
expenses (i) in such proportion as is appropriate to reflect the relative
benefits received by the indemnifying party on the one hand and the indemnified
party on the other, or (ii) if the allocation provided by Section 5(g) (i) above
is not permitted by applicable law or provides a lesser sum to the indemnified
party than the amount hereinafter calculated, in such proportion as is
appropriate to reflect not only the relative benefits received by the
indemnifying party on the one hand and the indemnified party on the other but
also the relative fault of the indemnifying party and the indemnified party as
well as any other relevant equitable considerations. Notwithstanding the
foregoing, the Holders shall not be required to contribute any amount in excess
of the proceeds to the Holders of all Registrable Securities sold by them
pursuant to any such registration statement. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. The obligation of any underwriters to contribute
pursuant to this Section 5 shall be several in proportion to their respective
underwriting commitments and not joint.
(h) An indemnifying party shall make payments of all amounts required
to be made pursuant to the foregoing provisions of this Section 5 to or for the
account of the indemnified party from time to time promptly upon receipt of
bills or invoices relating thereto or when otherwise due and payable.
Certain Limitations on Registration Rights.
In the case of a registration under Section 2, if the Company
determines to enter into an underwriting agreement in connection therewith, all
Registrable Securities to be included in such registration shall be subject to
such underwriting agreement and no Person may participate in such registration
unless such Person agrees to sell such Person's securities on the basis provided
in such underwriting agreement and completes and/or executes all questionnaires,
indemnities, and other reasonable documents which must be executed under the
terms of such underwriting agreement.
Allocation of Securities Included in Registration Statement
In the case of a registration pursuant to Section 2 for the Company's
account, if the Company's managing underwriter shall advise the Company and the
Holders and other holders of Registrable Securities in writing that the
inclusion in any registration pursuant hereto of some or all of (a) the
Registrable Securities sought to be registered by the Holders and other holders,
and (b) the Company Securities sought to be registered creates a substantial
risk that the proceeds or price per unit that will be derived from such
registration will be reduced or that the number of securities to be registered
is too large a number to be reasonably sold, (i) first, the number of Company
Securities sought to be registered shall be included in such registration, and
(ii) next, the number of Registrable Securities and other securities of holders
including the Holders exercising "piggyback rights" shall be included in such
registration to the extent permitted by the Company's managing underwriter with
the number of Registrable Securities and such other securities being registered
being on a pro-rata basis based on the number of securities the participating
holders including the Holders desire to have registered; provided, however,
that, if any participating Holder would be required pursuant to the provisions
of this Section 7 to reduce the number of Registrable Securities that it may
include in such registration, the Holder may withdraw all or any portion of its
Registrable Securities from such registration.
Limitations on Sale or Distribution of Securities.
If a registration hereunder shall be in connection with an underwritten
public offering, the Holders shall be deemed to have agreed by acquisition of
its Registrable Securities not to effect any public sale or distribution,
including any sale pursuant to Rule 144 under the Securities Act, of any
Registrable Securities and to use its best efforts not to effect any such public
sale or distribution of any other equity security of the Company (including any
short sale) or of any security convertible into or exchangeable or exercisable
for any equity security of the Company (other than as part of such underwritten
public offering) within 10 days before or 90 days after the effective date of
such registration statement. In such event, the Holders agree, if requested, to
sign a customary market stand-off letter with the Company's managing
underwriter, and to comply with applicable rules and regulations of the
Commission.
Rule 144.
The Company covenants that it will file the reports required to be
filed under the Securities Act and the Exchange Act and the rules and
regulations adopted by the Commission thereunder (or, in the event that the
Company is not required to file such reports, it will make publicly available
information as set forth in Rule 144(c)(2) promulgated under the Securities
Act), and it will take such further action as the Holders may reasonably
request, or to the extent required from time to time to enable the Holders to
sell its Registrable Securities without registration under the Securities Act
within the limitation of the exemption provided by (a) Rule 144 under the
Securities Act, as such Rule may be amended from time to time, or (b) any
similar rule or regulation hereafter adopted by the Commission (collectively,
"Rule 144"). Upon request of any Holder, the Company will deliver to the Holder
a written statement as to whether it has complied with such requirements.
Transfer of Registration Rights.
If and to the extent that any Holder sells or otherwise disposes of
Registrable Securities in any transaction that does not require registration
under the Securities Act (other than a transaction exempt under Rule 144), the
rights of the Holder hereunder with respect to such Registrable Securities will
be assignable to the transferee of such Registrable Securities; provided,
however, that such transferee agrees in writing to be bound by all the terms and
conditions of this Agreement.
11. Miscellaneous.
(a) Gender. Any reference to "it" or "its" shall also be
deemed to refer to "him" or "her" as applicable.
(b) 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.
(c) 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.
(d) Benefit. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their legal representatives, successors
and assigns.
(e) 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: William C. Willis, Jr., President
Global Technovations, Inc.
7108 Fairway Drive, Suite 200
Palm Beach Gardens, FL 33418-3757
Facsimile: (561) 775-2668
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
the Holders: As disclosed on Schedule 1
or to such other address as any of them, by notice to the other 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.
(f) 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 parties shall be entitled to an award by the court or arbitrator,
as appropriate, of reasonable attorney's fees, costs and expenses.
(g) 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.
(h) 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.
(i) 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 Palm Beach County, Florida (unless
the parties agree in writing to a different location), before three arbitrators
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 arbitrators. The decision and award made by
the arbitrators 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.
(j) 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.
IN WITNESS WHEREOF, the parties hereto have executed, or caused to be
executed by their duly authorized representatives, this Agreement as of the date
first above written.
GLOBAL TECHNOVATIONS, INC.
___________________________________ By: _______________________________
William C. Willis, Jr.,
President
HOLDERS
___________________________________ By: _____________________________
-----------------------------------
___________________________________ By: _____________________________
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___________________________________ By: _____________________________
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___________________________________ By: _____________________________
<PAGE>
Schedule 1 to Registration Rights Agreement between
Global Technovations, Inc. and the Holders described below
dated as of December 21, 2000
Names Addresses
