UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 1)*
BIO-PLEXUS, INC.
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(Name of Issuer)
COMMON STOCK (NO PAR VALUE)
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(Title of Class of Securities)
09057C 106
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(CUSIP Number)
KENNETH MAIMAN, ESQ. ROBERT C. SCHWENKEL, ESQ.
APPALOOSA MANAGEMENT L.P. FRIED, FRANK, HARRIS, SHRIVER & JACOBSON
26 MAIN STREET, FIRST FLOOR ONE NEW YORK PLAZA
CHATHAM, NJ 07928 NEW YORK, NY 10004
(973) 701-7000 (212) 859-8000
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(Name, Address and Telephone Number of Persons Authorized to
Receive Notices and Communications)
DECEMBER 30, 1999
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check
the following box [ ].
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of
that section of the Act but shall be subject to all other provisions of the
Act (however, see the Notes).
<PAGE>
SCHEDULE 13D
CUSIP No. 09057C 106
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
APPALOOSA MANAGEMENT L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
NUMBER OF 7 SOLE VOTING POWER
SHARES 2,700,000
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY EACH 0
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH 2,700,000
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,700,000
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
16.5%
14 TYPE OF REPORTING PERSON*
PN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
CUSIP No. 09057C 106
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
DAVID A. TEPPER
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
UNITED STATES
NUMBER OF 7 SOLE VOTING POWER
SHARES 2,700,000
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY EACH 0
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH 2,700,000
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,700,000
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
16.5%
14 TYPE OF REPORTING PERSON*
IN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
This Amendment No. 1 to the statement on Schedule 13D filed on
behalf of Appaloosa Management L.P. (the "Manager") and David A. Tepper
("Mr. Tepper" and, together with the Manager, collectively, the "Reporting
Persons") on November 1, 1999 (the "Schedule 13D") relates to shares of the
common stock, no par value (the "Common Stock"), of Bio-Plexus, Inc., a
Connecticut corporation (the "Company"). Capitalized terms used but not
otherwise defined herein shall have the meaning ascribed to such terms in
the Schedule 13D. The Schedule 13D is hereby amended and supplemented as
follows:
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER
CONSIDERATION.
-----------------------------------
The Additional $3 Warrants (as defined in Item 4 hereof)
representing the right to purchase, in the aggregate, 200,000 shares of
Common Stock were purchased with the funds of the Purchasers for an
aggregate purchase price of $50,000 in cash.
ITEM 4. PURPOSE OF TRANSACTION.
----------------------
On December 30, 1999, the Reporting Persons and the Company
entered into an amendment to the Bridge Note (the "Amended Bridge Note"),
which provides, among other things, for an extension of the Rollover
Closing from December 31, 1999 to February 28, 2000. In addition, on
December 30, 1999, Appaloosa and the Company entered into a Letter
Agreement (the "Letter Agreement") pursuant to which (i) the Company has
agreed to sell to the Purchasers warrants to purchase, in the aggregate,
200,000 shares of Common Stock with an exercise price of $3.00 per share
(the "Additional $3 Warrants") and (ii) the Purchasers have agreed to make
an additional loan of $1,650,000 (the "New Loan") to the Company in the
form of a 15% Secured Note (the "New Note"). In addition, pursuant to the
Letter Agreement and as more fully described in Item 6 hereof, the Company
has agreed, under certain circumstances, to cancel the existing $3 Warrants
issued to Appaloosa, Palomino and Tersk on October 21, 1999 and issue to
each of them new warrants identical in amount and substantially identical
in form to the $3 Warrants (such warrants, the "New Warrants"). In the
event that the New Warrants are not issued pursuant to the Letter
Agreement, the Purchasers will continue to hold the $3 Warrants. The
Additional $3 Warrants and the New Warrants, if issued, will be issued to
the Purchasers (and/or certain affiliates of the Purchasers) on the earlier
of (A) February 28, 2000 and (B) the date of the Rollover Closing. The
Amended Bridge Note, the Letter Agreement, the form of Additional $3
Warrants, the New Note, and the form of New Warrants are attached hereto as
Exhibits 1 through 5 respectively and are incorporated in and made a part
of this Schedule 13D in their entirety by this reference.
ITEM 5. INTERESTS IN SECURITIES OF THE ISSUER.
-------------------------------------
As more fully described in Items 4 and 6 hereof, on December 30,
1999, Appaloosa, Palomino and Tersk each agreed to acquire from the Company
the Additional $3 Warrants representing the right to purchase 87,700,
97,900 and 14,400 shares of Common Stock, respectively (or 200,000 shares
of Common Stock in the aggregate). In addition, on December 30, 1999,
Appaloosa, Palomino and Tersk each agreed to exchange, under certain
circumstances, the $3 Warrants held by each such Purchaser for an equal
amount of New Warrants.
Accordingly, as of the date hereof, assuming the Reporting
Persons beneficially own the Additional $3 Warrants, Appaloosa, Palomino
and Tersk each hold warrants to acquire 1,183,950, 1,321,650 and 194,400
shares of Common Stock, respectively (or 2,700,000 shares in the
aggregate).
(a) As of December 30, 1999, the Reporting Persons may be deemed
to be the beneficial owners of an aggregate of 2,700,000 shares of Common
Stock, which constitute approximately 16.5% of the issued and outstanding
Common Stock.
(b) As of December 30, 1999, each of the Manager and Mr. Tepper
may be deemed to have the sole voting and dispositive power with respect to
2,700,000 shares of Common Stock (assuming the exercise of all warrants
described above).
(c) Except as described in this Schedule 13D, the Reporting
Persons have not effected any transactions in the Common Stock during the
sixty days preceding the date of this Schedule 13D.
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS
WITH RESPECT TO SECURITIES OF THE ISSUER.
--------------------------------------------------------
The responses set forth in Items 4 and 5 of this Schedule 13D are
incorporated herein by this reference in their entirety.
On January 5, 2000, the New Loan was made and the New Note was
issued. The New Note matures on the earlier of February 28, 2000 or the
consummation of the Rollover Transactions. Other than as set forth above,
the New Note contains terms substantially identical to the Bridge Note, as
amended, which is attached as Exhibit 2 to the Schedule 13D filed on
November 1, 1999 and is incorporated by reference herein in its entirety.
Pursuant to the Letter Agreement, the Purchasers will acquire
from the Company the Additional $3 Warrants. The Additional $3 Warrants
contain customary provisions, including anti-dilution protection. In
addition, the Additional $3 Warrants contain provisions (i) granting
preemptive rights to the Purchasers in connection with future issuances of
debt and equity securities by the Company and (ii) permitting the
Purchasers to exercise such warrants by (A) paying the exercise price in
cash or (B) paying the exercise price through the tendering of a portion of
the Convertible Notes or the Additional $3 Warrants (in the amounts
prescribed in the Additional $3 Warrants).
Pursuant to the Letter Agreement, the Purchasers have agreed,
under certain circumstances, to exchange the $3 Warrants for the New
Warrants. The New Warrants, if issued, will contain customary provisions,
including anti-dilution protection. In addition, the New Warrants will
contain provisions granting preemptive rights to the Purchasers in
connection with future issuances of debt and equity securities by the
Company. The New Warrants will have an exercise price of either (i) $4.00
per share in the event that the Rollover Transactions are consummated or
(ii) $5.00 per share. Other than as set forth above, the New Warrants will
contain terms substantially identical to the $3 Warrants, the form of which
is attached as Exhibit 3 to the Schedule 13D filed on November 1, 1999 and
is incorporated by reference herein in its entirety.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
--------------------------------
Exhibit 1 -- Amended Bridge Note
Exhibit 2 -- Letter Agreement
Exhibit 3 -- Form of Additional $3 Warrant
Exhibit 4 -- New Note
Exhibit 5 -- Form of New Warrant
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
Dated: January 5, 2000
Appaloosa Management L.P.
By: Appaloosa Partners Inc.,
Its General Partner
By: /s/ David A. Tepper
----------------------------
David A. Tepper
President
/s/ David A. Tepper
--------------------------
David A. Tepper
<PAGE>
EXHIBIT INDEX
Exhibit 1 -- Amended Bridge Note
Exhibit 2 -- Letter Agreement
Exhibit 3 -- Form of Additional $3 Warrant
Exhibit 4 -- New Note
Exhibit 5 -- Form of New Warrant
EXHIBIT 1
FIRST AMENDMENT TO THE 7.5 % SECURED NOTE
FIRST AMENDMENT, dated as of December 30, 1999 (this "First
Amendment"), to the 7.5% Secured Note (the "Note") issued by Bio-Plexus,
Inc. (the "Company") to Appaloosa Investment Limited Partnership I (the
"Holder") on October 21, 1999.
W I T N E S S E T H:
-------------------
WHEREAS, the Company has issued the Note to the Holder;
WHEREAS, the Company wishes to induce the Holder to make
additional loans to the Company pursuant to the 15% Secured Note (as
defined herein), and in furtherance thereof the Company and the Holder have
agreed to amend the Note, subject to the terms and conditions set forth
herein;
NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein, the Company and the Holder hereby agree as
follows:
1. Defined Terms. Unless otherwise defined herein, capitalized
terms which are defined in the Note are used herein as therein defined.
2. Amendment to Note.
(a) Subsection 1.4 of the Note is amended by deleting the first
sentence thereof in its entirety and substituting in lieu therefor the
following:
The unpaid principal balance of this Note outstanding at any
time shall accrue interest at a rate per annum equal to (i)
from October 21, 1999 to the date preceding the date hereof,
7.5% and (ii) from the date hereof, 12%, in each case
including during the pendency of any bankruptcy or similar
proceeding, whether or not a claim for post-petition
interest is allowed as a claim in any such bankruptcy or
proceeding.
(b) Subsection 1.5 of the Note is amended by deleting the
percentage at the end of the first sentence thereof and substituting in
lieu therefor the following:
15% (including during the pendency of any bankruptcy or
similar proceeding, whether or not a claim for post-petition
interest is allowed as a claim in any such bankruptcy or
proceeding)
(c) Subsection 3.2 of the Note is amended by adding the letter
"(a)" before the first sentence thereof and adding the following new
subsection (b):
(b) The Board of Directors has taken all necessary action so
that no "fair price," "moratorium," "control share
acquisition," "interested holder" or other similar
anti-takeover statute or regulation (including, without
limitation, Sections 33-840 through 33-845 of the
Connecticut Business Corporation Act) or any applicable
anti-takeover provision in the Company's Certificate of
Incorporation or By-Laws is applicable to the transactions
contemplated by the Transaction Documents. To the knowledge
of the Company, no other state takeover statute is
applicable to the transactions contemplated by the
Transaction Documents.
(d) Subsection 4.4 of the Note is amended by (i) deleting the
date at the end of the first clause of the first sentence thereof and
substituting in lieu therefor "February 28, 2000" and (ii) deleting the
period at the end of the first sentence thereof and substituting in lieu
therefor the following:
; provided, however, that the Company shall adjourn the
Company Meeting from time to time until all of the
conditions set forth in Section 6.2 are satisfied or waived
(other than those conditions that by their nature are to be
satisfied on the Rollover Date), such that the Company
Meeting shall take place on the same day as the Rollover
Date in accordance with Section 6.1.
(e) A new subsection 4.13 is added to the end of subsection 4.12:
4.13 Security. The Secured Obligations have been, and will
continue to be, secured by the Collateral, subject to the
terms and conditions of the Collateral Documentation.
(f) Subsection 5.1(d) of the Note is amended by deleting all
references therein to "December 31, 1999" and substituting in lieu therefor
"February 28, 2000".
(g) Subsection 6.1 of the Note is amended by deleting the first
sentence thereof in its entirety and substituting in lieu therefor the
following:
On the same day that the stockholders' approval referred to
in Section 4.4 has been obtained (the "Rollover Date"),
subject to Section 6.2, the Company and the Purchasers shall
enter into (i) the Convertible Note Purchase Agreement
attached as an exhibit to the Proxy Statement (the
"Convertible Note Purchase Agreement"), (ii) warrants to
purchase 1,500,000 shares of Common Stock at an exercise
price of $7 attached as an exhibit to the Proxy Statement
(the "Rollover Warrant"), (iii) the Registration Rights
Agreement attached as an exhibit to the Proxy Statement (the
"Rollover Registration Rights Agreement") and (iv) the
Convertible Note Security Agreement attached as an exhibit
to the Proxy Statement (the "Convertible Note Security
Agreement"); provided, however, that if a Governmental
Entity shall determine that any of the transactions
contemplated by the Rollover Transactions violate any
applicable rules or regulations of such Governmental Entity,
the Holder shall, at the Holder's sole discretion, either
(i) abandon the Rollover Transactions or (ii) modify the
structure of the Rollover Transactions in a manner to comply
with such rule or regulation.
(h) Subsection 6.2(b) of the Note is amended by:
(I) adding the following phrase after the word "continuing"
in clause (ii) thereof:
"under this Note and no Default (as defined in the 15%
Secured Note) shall have occurred and be continuing
under the 15% Secured Note";
(II) clause (iii) thereof shall be amended by adding the
following after the word "full":
"and the principal amount of the 15% Secured Note, plus
all accrued and unpaid interest on the 15% Secured
Note, shall have been repaid in full"; and
(III)deleting clause (iv) thereof in its entirety and
renumbering the original clause (v) to clause (iv) and
clause (vi) to clause (v).
(i) Subsection 6.4 of the Note is amended by deleting the
reference to "December 31, 1999" and substituting in lieu therefor
"February 28, 2000"
(j) Subsection 7.1 of the Note is amended by (i) adding the
following definitions in proper alphabetical order:
"15% Secured Note" means the 15% Secured Note in the initial
aggregate principal amount of $1,650,000 to be issued by the
Company to the Holder after the date hereof in accordance
with the terms of the side letter, dated the date hereof,
between the Company and the Holder, as such 15% Secured Note
may be amended from time to time.
"Note" shall mean this Note as amended hereby and from time
to time in accordance with its terms.
and (ii) the definitions of "$3 Warrants," "$5 Warrants," "Maturity Date,"
"Registration Rights Agreement," "Rollover Transactions," "Transaction
Documents" and "Warrants" are deleted in their entirety and substituting in
lieu therefor the following definitions:
"$3 Warrants" shall have the meaning ascribed thereto in
Section 2(e).
"$5 Warrants" shall have the meaning ascribed thereto in
Section 2(e).
"Maturity Date" shall mean the earlier of February 28, 2000
and the Rollover Date.
"Registration Rights Agreement" shall have the meaning
ascribed thereto in Section 6.4.
"Rollover Transactions" shall mean the transactions
contemplated by Section 6.1 of this Note.
"Transaction Documents" shall mean this Note, the 15%
Secured Note, the side letter, dated the date hereof,
between the Company and the Holder, the Security Agreement,
the Registration Rights Agreement, the warrants to be issued
to Affiliates of the Holder pursuant to section (c) of the
aforesaid side letter and the Warrants.
"Warrants" shall have the meaning ascribed thereto in
Section 2(e).
(k) Subsection 8.4 of the Note is amended by deleting it in its
entirety and substituting in lieu therefor the following:
8.4. Entire Agreement. The Transaction Documents (including
the Schedules and Exhibits thereto) contain the entire
understanding of the parties with respect to the
transactions contemplated hereby and thereby.
3. Representations and Warranties. The Company hereby confirms,
reaffirms and restates the representations and warranties set forth in
Section 3 of the Note. The Company represents and warrants that as of the
date hereof and, after giving effect to this First Amendment and the
transactions contemplated hereby, no Default or Event of Default has
occurred and is continuing.
4. Effectiveness. The First Amendment shall become effective as of the
date upon which the Holder receives the counterpart of this First Amendment
duly executed by the Company and a duly executed copy of the side letter,
dated the date hereof, between the Company and the Holder.
5. Continuing Effect of the Transaction Documents. This First
Amendment shall not constitute an amendment of any other provisions of the
Note or any other Transaction Documents not expressly referred to herein
and shall not be construed as a waiver or consent to any further or future
action on the part of the Company that would require a waiver or consent of
the Holder. Except as expressly amended hereby, the provisions of the Note
and the other Transaction Documents are and shall remain in full force and
effect.
6. Counterparts. This First Amendment may be executed by the parties
hereto in any number of separate counterparts, each of which shall be
deemed to be an original, and all of which taken together shall be deemed
to constitute one and the same instrument.
7. GOVERNING LAW. THIS FIRST AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this First
Amendment to be duly executed and delivered by their respective proper and
duly authorized officers as of the day and year first above written.
BIO-PLEXUS, INC.
By: /s/ Carl Sahi
--------------------------------
Name: Carl Sahi
Title:
APPALOOSA INVESTMENT LIMITED
PARTNERSHIP I
By: Appaloosa Management L.P., its
General Partner
By: Appaloosa Partners Inc., its General
Partner
By: /s/ James E. Bolin
--------------------------------
Name: James E. Bolin
Title: Vice President
EXHIBIT 2
Bio-Plexus, Inc.
129 Reservoir Road
Vernon, CT 06066
December 30, 1999
Appaloosa Investment Limited
Partnership I
26 Main Street, 1st Floor
Chatham, New Jersey 07928
Attention: Mr. James Bolin
Dear Mr. Bolin:
Reference is made to the 7.5% Secured Note, dated October 21,
1999, issued by Bio-Plexus, Inc. (the "Company") to Appaloosa Investment
Limited Partnership I ("Appaloosa") (as such 7.5% Secured Note may be
amended from time to time, the "7.5% Note"). The purpose of this letter is
to set forth the understanding of the Company and Appaloosa with respect to
the matters set forth herein:
(a) on the date hereof, the Company and Appaloosa will enter into
an amendment to the 7.5% Note in the form attached hereto as Exhibit A;
(b) no later than January 6, 2000, if no Default (as defined in
the 7.5% Note) shall have occurred and be continuing under the 7.5% Note,
Appaloosa will make additional loans to the Company and, in exchange
therefor, the Company shall execute and deliver a 15% Secured Note (the
"15% Note") in the form attached hereto as Exhibit B (subject to the
satisfaction or waiver of the conditions to such loans specified therein);
(c) in connection with the 15% Note, on the Maturity Date (as
defined in the 7.5% Note), regardless of whether the Rollover Transactions
(as defined in the 7.5% Note) are consummated, the Company will sell to one
or more affiliates of Appaloosa, and one or more affiliates of Appaloosa
will purchase from the Company, as part of an investment unit with the 15%
Note, warrants to purchase in the aggregate 200,000 shares of common stock,
no par value, of the Company (the "Common Stock"), with an exercise price
of $3.00 per share in the form attached hereto as Exhibit C (the
"Additional Warrants");
(d) on the Maturity Date:
(i) if either (X) all the conditions to the Purchasers' (as
defined in the 7.5% Note) obligations to consummate the
Rollover Transactions, as specified in the 7.5% Note, have
not been satisfied or waived and the Rollover Transactions
are not consummated, or (Y) if all the conditions to the
Company's and the Purchasers' obligations to consummate the
Rollover Transactions, as specified in the 7.5% Note, have
been satisfied or waived but the Company fails to consummate
the Rollover Transactions, the $3 Warrants (as defined in
the 7.5% Note) will remain in full force and effect and the
terms and conditions thereof will remain unchanged;
(ii) if the Rollover Transactions are consummated, the $3
Warrants will be cancelled and be of no further force and
effect and, simultaneously therewith, the Company will issue
to one or more affiliates of Appaloosa replacement warrants
to purchase 1,000,000 shares of Common Stock with an
exercise price of $4 per share; and
(iii) if all the conditions to the Company's and the
Purchasers' obligations to consummate the Rollover
Transactions, as specified in the 7.5% Note, have been
satisfied or waived but the Purchasers fail to consummate
the Rollover Transactions, the $3 Warrants will be cancelled
and be of no further force and effect and, simultaneously
therewith, the Company will issue to one or more affiliates
of Appaloosa replacement warrants to purchase 1,000,000
shares of Common Stock with an exercise price of $5 per
share.
The warrants to be issued by the Company pursuant to (ii) or (iii) above
(as the case may be, the "Replacement Warrants"; the "Replacement
Warrants", together with the Additional Warrants, the "Warrants") will be
in the form attached hereto as Exhibit D.
The Company represents that (i) the execution and delivery of
this letter by the Company and the performance by it of the transactions
contemplated hereby (including, without limitation, the issuance of the
Warrants and issuance of shares of Common Stock upon exercise of the
Warrants) and compliance by the Company with all the provisions of the
Warrants (as applicable) have been duly authorized by all requisite
corporate proceedings on the part of the Company and (ii) the shares of
Common Stock issuable upon exercise of the Warrants have been validly
reserved for issuance, and upon issuance, will be validly issued and
outstanding, fully paid and nonassessable.
The Company cannot assign its rights and obligations under this
letter without the written consent of Appaloosa.
If any term, provision, covenant or restriction of this letter or
any exhibit hereto is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this letter and such exhibits shall remain in
full force and effect and shall in no way be affected, impaired or
invalidated. It is hereby stipulated and declared to be the intention of
the parties that they would have executed the remaining terms, provisions,
covenants and restrictions without including any of such which may be
hereafter declared invalid, void or unenforceable.
Appaloosa, on the one hand, and the Company, on the other,
acknowledge and agree that irreparable damage would occur in the event that
any of the provisions of this letter were not performed in accordance with
their specific terms or were otherwise breached. It is accordingly agreed
that Appaloosa shall be entitled to an injunction to prevent breaches of
the provisions of this letter and to enforce specifically the terms and
provisions hereof in any court of the United States or any state thereof
having jurisdiction, this being in addition to any other remedy to which
they may be entitled at Law (as defined in the 7.5% Note) or equity.
Neither the Company nor Appaloosa shall make any public
statements, including, without limitation, any press releases, with respect
to this letter and the transactions contemplated hereby without the prior
written consent of the other party (which consent shall not be unreasonably
withheld) except as may be required by Law. If a public statement is
required to be made by Law, the parties shall consult with each other in
advance as to the contents and timing thereof.
THIS LETTER SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF
NEW YORK EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT
WOULD REQUIRE THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH
STATE.
If any Litigation (as defined in the 7.5% Note) shall be brought
by Appaloosa in order to enforce any right or remedy under this letter, the
Company hereby consents and will submit to the jurisdiction of any state or
federal court of competent jurisdiction sitting within the area comprising
the Southern District of New York on the date of this letter. The Company
hereby irrevocably waives any objection, including, but not limited to, any
objection to the laying of venue or based on the grounds of forum non
conveniens, which it may now or hereafter have to the bringing of any such
Litigation in such jurisdiction.
THE COMPANY HEREBY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY ACTION, PROCEEDING OR LITIGATION DIRECTLY OR
INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH, THIS LETTER.
<PAGE>
Please confirm that the foregoing is in accordance with your
understanding by signing and returning to me this letter, whereupon this
letter shall be deemed accepted and binding.
Very truly yours,
BIO-PLEXUS, INC.
By: /s/ Carl Sahi
---------------------------
Name: Carl Sahi
Title:
ACCEPTED AND AGREED
THIS 30TH DAY OF DECEMBER, 1999
APPALOOSA INVESTMENT LIMITED
PARTNERSHIP I
By: Appaloosa Management L.P., its
General Partner
By: Appaloosa Partners Inc., its
General Partner
By: /s/ James E. Bolin
-------------------------------
Name: James E. Bolin
Title: Vice President
EXHIBIT 3
WARRANT
To Purchase Shares of Common Stock of
BIO-PLEXUS, INC.
At a Purchase Price of
$3.00 per Share
(Subject to Adjustment as Provided herein)
No. of Shares of Common Stock: _________
<PAGE>
TABLE OF CONTENTS
-----------------
Section Page
- ------- ----
1. DEFINITIONS 1
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2. EXERCISE OF WARRANT 4
- ---------------------------------------------------------------------------
2.1. MANNER OF EXERCISE. 4
2.2. PAYMENT OF TAXES. 5
2.3. FRACTIONAL SHARES. 5
3. TRANSFER, DIVISION AND COMBINATION 6
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3.1. TRANSFER. 6
3.2. DIVISION AND COMBINATION. 6
3.3. EXPENSES. 6
3.4. MAINTENANCE OF BOOKS. 6
4. ADJUSTMENTS 6
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4.1. STOCK DIVIDENDS, SUBDIVISIONS AND COMBINATIONS. 6
4.2. CERTAIN OTHER DISTRIBUTIONS. 7
4.3. ISSUANCE OF ADDITIONAL SHARES OF COMMON STOCK. 8
4.4. ISSUANCE OF WARRANTS OR OTHER RIGHTS. 8
4.5. ISSUANCE OF CONVERTIBLE SECURITIES. 9
4.6. SUPERSEDING ADJUSTMENT. 10
4.7. OTHER PROVISIONS APPLICABLE TO ADJUSTMENTS UNDER THIS SECTION. 10
4.8. REORGANIZATION, RECLASSIFICATION, MERGER, CONSOLIDATION
OR DISPOSITION OF ASSETS. 12
4.9. OTHER ACTION AFFECTING COMMON STOCK. 13
4.10.CERTAIN LIMITATIONS. 13
5. NOTICES TO WARRANT HOLDERS 13
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5.1. NOTICE OF ADJUSTMENTS. 13
5.2. NOTICE OF CORPORATE ACTION. 13
6. RIGHTS OF HOLDERS 14
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6.1 NO IMPAIRMENT. 14
7. RESERVATION AND AUTHORIZATION OF COMMON STOCK; REGISTRATION
WITH OR APPROVAL OF ANY GOVERNMENTAL AUTHORITY 15
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8. TAKING OF RECORD; STOCK AND WARRANT TRANSFER BOOKS 15
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9. RESTRICTIONS ON TRANSFERABILITY 15
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9.1. RESTRICTIVE LEGEND. 15
9.2. NOTICE OF PROPOSED TRANSFERS; REQUESTS FOR REGISTRATION. 16
9.3. TERMINATION OF RESTRICTIONS. 16
10. PREEMPTIVE RIGHTS 16
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11. SUPPLYING INFORMATION 17
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12. LOSS OR MUTILATION 17
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13. LIMITATION OF LIABILITY 18
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14. MISCELLANEOUS 18
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14.1. NONWAIVER AND EXPENSES. 18
14.2. NOTICE GENERALLY. 18
14.3. REMEDIES. 19
14.4. SUCCESSORS AND ASSIGNS. 19
14.5. AMENDMENT. 19
14.6. SEVERABILITY. 19
14.7. HEADINGS. 19
14.8. GOVERNING LAW. 19
<PAGE>
THIS WARRANT AND THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR AN APPLICABLE EXEMPTION TO THE REGISTRATION REQUIREMENTS
OF SUCH ACT OR SUCH LAWS
No. of Shares of Common Stock:
----------
WARRANT
To Purchase Shares of Common Stock of
BIO-PLEXUS, INC.
THIS IS TO CERTIFY THAT _______________, or its registered
assigns (the "Holder"), is entitled, at any time prior to the Expiration
Date (as hereinafter defined), to purchase from BIO-PLEXUS, INC., a
Connecticut corporation (the "Company"), _________ (subject to adjustment
as provided herein) shares of Common Stock (as hereinafter defined), in
whole or in part, at a purchase price of $3.00 per share (subject to
adjustment as provided herein), all on the terms and conditions and
pursuant to the provisions hereinafter set forth.
1. DEFINITIONS
As used in this Warrant, the following terms have the respective
meanings set forth below:
"Additional Shares of Common Stock" shall mean all shares of
Common Stock issued by the Company after the Issue Date, other than (i)
Warrant Stock, (ii) shares of Common Stock issuable upon the conversion of
the Convertible Notes to be issued under the Convertible Note Purchase
Agreement and (iii) shares of Common Stock issuable upon exercise of the $7
Warrants to be issued pursuant to the Convertible Note Purchase Agreement.
"Average Market Price" shall mean, in respect of any share of
Common Stock on any date herein specified, the daily volume weighted
average sale price per share of Common Stock for such date. The closing
price for each day shall be the last quoted sale price or, if not so
quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of
Securities Dealers, Inc., Automated Quotation System or such other system
then in use, or, if on any such date the Common Stock or such other
securities are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker
making a market in the Common Stock selected by the Board of Directors of
the Company. If the Common Stock is listed or admitted to trading on a
national securities exchange, the closing price shall be the last sale
price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the Common Stock is not listed or admitted to trading on
the New York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the
principal national securities exchange on which the Common Stock is listed
or admitted to trading.
"Business Day" shall mean any day that is not a Saturday or
Sunday or a day on which banks are required or permitted to be closed in
the State of New York.
"Capital Stock" means, in the case of the Company, any and all
shares (however designated) of the capital stock of the Company now or
hereafter outstanding.
"Commission" shall mean the Securities and Exchange Commission or
any other federal agency then administering the Securities Act and other
federal securities laws.
"Common Stock" shall mean (except where the context otherwise
indicates) the Common Stock, no par value, of the Company as constituted on
the Issue Date, and any capital stock into which such Common Stock may
thereafter be changed, and shall also include (i) capital stock of the
Company of any other class (regardless of how denominated) issued to the
holders of shares of Common Stock upon any reclassification thereof and
(ii) shares of common stock of any successor or acquiring corporation (as
defined in Section 4.8) received by or distributed to the holders of Common
Stock of the Company in the circumstances contemplated by Section 4.8.
"Convertible Note Purchase Agreement" shall mean the convertible
note purchase agreement to be entered into by and among the Company, the
purchasers listed on Exhibit A thereto and Appaloosa Management L.P., as
collateral agent.
"Convertible Notes" shall mean the notes to be issued pursuant to
the Convertible Note Purchase Agreement.
"Convertible Securities" shall mean evidences of indebtedness,
shares of stock or other securities which are convertible into or
exchangeable or exercisable, with or without payment of additional
consideration in cash or property, for Additional Shares of Common Stock,
either immediately or upon the occurrence of a specified date or a
specified event.
"Current Market Price" shall mean, in respect of any share of
Common Stock on any date herein specified, the average of the Average
Market Price for the twenty Business Days ending five days prior to such
date.
"Current Warrant Price" shall mean, in respect of a share of
Common Stock at any date herein specified, the price at which a share of
Common Stock may be purchased pursuant to this Warrant on such date. The
Current Warrant Price as of the date of the issuance of this Warrant is
$3.00.
"Expiration Date" shall mean a date which is nine years from the
issuance of this Warrant.
"Holder" shall mean the Person in whose name this Warrant is
registered on the books of the Company maintained for such purpose.
"Holders" shall mean, collectively, each Holder of a Warrant, in the event
of any division of this Warrant.
"Issue Date" shall mean __________, 2000.
"Majority Holders" shall mean the holders of Warrants exercisable
for in excess of 50% of the aggregate number of shares of Warrant Stock
then purchasable upon exercise of all Warrants.
"Other Property" shall have the meaning set forth in Section 4.8.
"Outstanding" shall mean, when used with reference to Common
Stock, at any date as of which the number of shares thereof is to be
determined, all issued shares of Common Stock, except shares then owned or
held by or for the account of the Company or any subsidiary thereof, and
shall include all shares issuable in respect of outstanding scrip or any
certificates representing fractional interests in shares of Common Stock.
For the purposes of Sections 4.3, 4.4, 4.5, 4.6 and 4.7, Common Stock
Outstanding shall include all shares of Common Stock issuable in respect of
options or warrants to purchase, or securities convertible into, shares of
Common Stock, the exercise or conversion price of which is less than the
Current Market Price as of any date on which the number of shares of Common
Stock Outstanding is to be determined.
"Permitted Issuances" shall mean issuances of shares of Common
Stock and upon exercise of the warrants and options and other convertible
securities, in each case listed on Schedule 1.
"Person" shall mean any individual, firm, corporation,
partnership or other entity, and shall include any successor by merger or
otherwise of such entity.
"Restricted Common Stock" shall mean shares of Common Stock which
are, or which upon their issuance on the exercise of this Warrant would be,
evidenced by a certificate bearing the restrictive legend set forth in
Section 9.1(a).
"Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute, and the rules and regulations of
the Commission thereunder, all as the same shall be in effect at the time.
"Security" or "Securities" shall mean any equity or debt security
of the Company (including, without limitation, subscriptions, options,
warrants, rights, stock-based or stock-related awards or convertible or
exchangeable securities to which the Company is a party or by which the
Company may be bound of any character relating to, or obligating the
Company to issue, grant, award, transfer or sell any issued or unissued
shares of the Company's Capital Stock or other securities of the Company).
"Trading Day" means a Business Day or, if the Common Stock is
listed or admitted to trading in any national securities exchange, a day on
which such exchange is open for the transaction of business.
"Transfer" shall mean any disposition of any Warrant or Warrant
Stock or of any interest in either thereof, which would constitute a sale
thereof within the meaning of the Securities Act.
"Transfer Notice" shall have the meaning set forth in Section
9.2.
"Warrants" shall mean this Warrant and all warrants issued upon
transfer, division or combination of, or in substitution for, any thereof.
All Warrants shall at all times be identical as to terms and conditions and
date, except as to the number of shares of Common Stock for which they may
be exercised.
"Warrant Stock" shall mean the shares of Common Stock purchased
by the holders of the Warrants upon the exercise thereof.
2. EXERCISE OF WARRANT
2.1. MANNER OF EXERCISE. At any time or from time to time from and
after the Issue Date and until 5:00 P.M., New York time, on the Expiration
Date, Holder may exercise this Warrant, on any Business Day, for all or any
part of the number of shares of Common Stock purchasable hereunder.
In order to exercise this Warrant, in whole or in part, Holder
shall deliver to the Company at its principal office at 129 Reservoir Road,
Vernon, CT 06066 (i) a written notice of Holder's election to exercise this
Warrant, which notice shall specify the number of shares of Common Stock to
be purchased, (ii) payment of the aggregate Current Warrant Price for such
shares and (iii) this Warrant. Such notice shall be substantially in the
form appearing at the end of this Warrant as Exhibit A, duly executed by
Holder. Thirty days after receipt of the items specified in the second
preceding sentence, the Company shall execute or cause to be executed and
deliver or cause to be delivered to Holder a certificate or certificates
representing the aggregate number of full shares of Common Stock issuable
upon such exercise, together with cash in lieu of any fraction of a share,
as hereinafter provided. The stock certificate or certificates so delivered
shall be in such denomination or denominations as Holder shall request in
the notice and shall be registered in the name of Holder or, subject to
Section 9, such other name as shall be designated in the notice. This
Warrant shall be deemed to have been exercised and such certificate or
certificates shall be deemed to have been issued, and Holder or any other
Person so designated shall be deemed to have become a holder of record of
such shares for all purposes, as of the date which is thirty days after the
date of the notice, together with the Current Warrant Price and this
Warrant, are received by the Company as described above. If this Warrant
shall have been exercised in part, the Company shall, at the time of
delivery of the certificate or certificates representing Warrant Stock,
deliver to Holder a new Warrant evidencing the right of Holder to purchase
the unpurchased shares of Common Stock called for by this Warrant, which
new Warrant shall in all other respects be identical with this Warrant, or,
at the request of Holder, appropriate notation may be made on this Warrant
and the same returned to Holder.
Payment of the Current Warrant Price shall be made at the option
of Holder by (i) certified or official bank check, (ii) wire transfer of
immediately available funds, (iii) tendering Convertible Notes having an
Accreted Value (as defined in the Convertible Note Purchase Agreement)
equal to the Current Warrant Price (the Company hereby agreeing to reissue
any Convertible Notes of a Holder into one or more Convertible Notes in
denominations requested by such Holder) or (iv) the surrender of this
Warrant to the Company, with a duly executed exercise notice marked to
reflect "Net Issue Exercise," and, in either case, specifying the number of
shares of Common Stock to be purchased, during normal business hours on any
Business Day. Upon a Net Issue Exercise, Holder shall be entitled to
receive shares of Common Stock equal to the value of this Warrant (or the
portion thereof being exercised by Net Issue Exercise) by surrender of this
Warrant to the Company together with notice of such election, in which
event the Company shall issue to Holder a number of shares of the Company's
Common Stock computed as of the date of surrender of this Warrant to the
Company using the following formula:
X = Yx(A-B)
-------
A
Where X = the number of shares of Common Stock to be issued to the
Holder
Y = the number of shares of Warrant Stock being exercised under this
Warrant;
A = the Current Market Price of one share of the Company's Common
Stock (at the date of such calculation);
B = the Current Warrant Price (as adjusted to the date of such
calculation).
2.2. PAYMENT OF TAXES. All shares of Common Stock issuable upon the
exercise of this Warrant shall be validly issued, fully paid and
nonassessable. The Company shall pay all expenses in connection with, and
all taxes (other than income taxes or capital gain tax of the Holder) and
other governmental charges that may be imposed with respect to, the issue
or delivery thereof.
2.3. FRACTIONAL SHARES. The Company shall not be required to issue a
fractional share of Common Stock upon exercise of this Warrant. As to any
fraction of a share which Holder would otherwise be entitled to purchase
upon such exercise, the Company shall pay a cash adjustment in respect of
such fraction in an amount equal to the same fraction of the Current Market
Price per share of Common Stock on the date of exercise.
3. TRANSFER, DIVISION AND COMBINATION
3.1. TRANSFER. Subject to compliance with Section 9, transfer of this
Warrant and all rights hereunder, in whole or in part, shall be registered
on the books of the Company to be maintained for such purpose, upon
surrender of this Warrant at the principal office of the Company referred
to in Section 2.1, together with a written assignment of this Warrant
substantially in the form of Exhibit B hereto duly executed by Holder and
funds sufficient to pay any transfer taxes payable upon the making of such
transfer. Upon such surrender and, if required, such payment, the Company
shall, subject to Section 9, execute and deliver a new Warrant or Warrants
in the name of the assignee or assignees and in the denomination specified
in such instrument of assignment, and shall issue to the assignor a new
Warrant evidencing the portion of this Warrant not so assigned, and this
Warrant shall promptly be canceled. A Warrant, if properly assigned in
compliance with Section 9, may be exercised by a new Holder for the
purchase of shares of Common Stock without having a new Warrant issued.
3.2. DIVISION AND COMBINATION. Subject to Section 9, this Warrant may
be divided into multiple Warrants or combined with other Warrants upon
presentation hereof at the aforesaid office or agency of the Company,
together with a written notice specifying the names and denominations in
which new Warrants are to be issued, signed by Holder. Subject to
compliance with Section 3.1 and with Section 9, as to any transfer which
may be involved in such division or combination, the Company shall execute
and deliver a new Warrant or Warrants in exchange for the Warrant or
Warrants to be divided or combined in accordance with such notice.
3.3. EXPENSES. The Company shall prepare, issue and deliver at its own
expense (other than transfer taxes) the new Warrant or Warrants under this
Section 3.
3.4. MAINTENANCE OF BOOKS. The Company agrees to maintain, at its
aforesaid office, books for the registration and the registration of
transfer of the Warrants.
4. ADJUSTMENTS
The number of shares of Common Stock for which this Warrant is
exercisable and/or the price at which such shares may be purchased upon
exercise of this Warrant, shall be subject to adjustment from time to time
as set forth in this Section 4. The Company shall give each Holder notice
of any event described below which requires an adjustment pursuant to this
Section 4 at the time of such event.
4.1. STOCK DIVIDENDS, SUBDIVISIONS AND COMBINATIONS. If at any time
the Company shall:
(a) take a record of the holders of its Common Stock for the
purpose of entitling them to receive a dividend payable in, or other
distribution of, Additional Shares of Common Stock,
(b) subdivide its outstanding shares of Common Stock into a
larger number of shares of Common Stock, or
(c) combine its outstanding shares of Common Stock into a smaller
number of shares of Common Stock,
then (i) the number of shares of Common Stock for which this Warrant is
exercisable immediately after the occurrence of any such event shall be
adjusted to equal the number of shares of Common Stock which a record
holder of the same number of shares of Common Stock for which this Warrant
is exercisable immediately prior to the occurrence of such event would own
or be entitled to receive after the happening of such event, and (ii) the
Current Warrant Price per share shall be adjusted to equal (A) the Current
Warrant Price multiplied by the number of shares of Common Stock for which
this Warrant is exercisable immediately prior to the adjustment divided by
(B) the number of shares for which this Warrant is exercisable immediately
after such adjustment.
4.2. CERTAIN OTHER DISTRIBUTIONS. If at any time the Company shall
take a record of the holders of its Common Stock for the purpose of
entitling them to receive any dividend or other distribution of:
(a) cash,
(b) any evidences of its indebtedness, any shares of stock or any
other securities or property of any nature whatsoever (other than
cash, Convertible Securities or Additional Shares of Common Stock), or
(c) any warrants or other rights to subscribe for or purchase any
evidences of its indebtedness, any shares of its stock or any other
securities or property of any nature whatsoever (other than cash,
Convertible Securities or Additional Shares of Common Stock),
then (i) the number of shares of Common Stock for which this Warrant is
exercisable shall be adjusted to equal the product of the number of shares
of Common Stock for which this Warrant is exercisable immediately prior to
such adjustment and a fraction (A) the numerator of which shall be the
Current Market Price per share of Common Stock at the date of taking such
record and (B) the denominator of which shall be such Current Market Price
per share of Common Stock minus the amount allocable to one share of Common
Stock of any such cash so distributable and of the fair value (as
determined in good faith by the Board of Directors of the Company) of any
and all such evidences of indebtedness, shares of stock, other securities
or property or warrants or other subscription or purchase rights so
distributable, and (ii) the Current Warrant Price shall be adjusted to
equal (A) the Current Warrant Price multiplied by the number of shares of
Common Stock for which this Warrant is exercisable immediately prior to the
adjustment divided by (B) the number of shares for which this Warrant is
exercisable immediately after such adjustment. A reclassification of the
Common Stock (other than a change in par value, or from par value to no par
value or from no par value to par value) into shares of Common Stock and
shares of any other class of stock shall be deemed a distribution by the
Company to the holders of its Common Stock of such shares of such other
class of stock within the meaning of this Section 4.2 and, if the
outstanding shares of Common Stock shall be changed into a larger or
smaller number of shares of Common Stock as a part of such
reclassification, such change shall be deemed a subdivision or combination,
as the case may be, of the outstanding shares of Common Stock within the
meaning of Section 4.1.
4.3. ISSUANCE OF ADDITIONAL SHARES OF COMMON STOCK. (a) If at any time
the Company shall (except as hereinafter provided) issue or sell any
Additional Shares of Common Stock, other than Permitted Issuances, in
exchange for consideration in an amount per Additional Share of Common
Stock less than the Current Warrant Price at the time the Additional Shares
of Common Stock are issued, then (i) the Current Warrant Price as to the
number of shares for which this Warrant is exercisable prior to such
adjustment shall be reduced to a price determined by multiplying (A) the
Current Warrant Price by (B) a fraction, the numerator of which shall be
the sum of (x) the number of shares of Common Stock Outstanding immediately
prior to such issue or sale multiplied by the then applicable Current
Warrant Price (the "Adjustment Price") and (y) the aggregate consideration
receivable by the Company for the total number of shares of Common Stock so
issued, and the denominator of which shall be the sum of (a) the total
number of shares of Common Stock Outstanding on such date and (b) the
number of Additional Shares issued, multiplied by the Adjustment Price; and
(ii) the number of shares of Common Stock for which this Warrant is
exercisable shall be adjusted to equal the product obtained by multiplying
the Current Warrant Price in effect immediately prior to such issue or sale
by the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to such issue or sale and dividing the
product thereof by the Current Warrant Price resulting from the adjustment
made pursuant to clause (i) above. For purposes of this Section 4.3 and for
the purposes of making adjustments of the number of shares of Common Stock
for which this Warrant is exercisable and the Current Warrant Price as
provided in this Section 4, the aggregate consideration receivable by the
Company in connection with the issuance of shares of Common Stock or of
rights, warrants or other securities convertible into shares of Common
Stock shall be deemed to be equal to the sum of the aggregate offering
price (before deduction of underwriting discounts or commissions and
expenses payable to third parties) of all such Common Stock, rights,
warrants and convertible securities plus the aggregate amount (as
determined on the date of issuance), if any, payable upon exercise or
conversion of any such rights, warrants and convertible securities into
shares of Common Stock. If, subsequent to the date of issuance of such
rights, warrants or Convertible Securities, the exercise or conversion
price thereof is reduced, such aggregate amount shall be recalculated and
the Current Warrant Price and number of shares of Common Stock for which
the Warrant is exercisable adjusted retroactively to give effect to such
reduction. If Common Stock is sold as a unit with other securities, the
aggregate consideration received for such Common Stock shall be deemed to
be net of the Fair Market Value of such other securities.
4.4. ISSUANCE OF WARRANTS OR OTHER RIGHTS. If at any time the Company
shall take a record of the holders of its Common Stock for the purpose of
entitling them to receive a distribution of, or shall in any manner
(whether directly or by assumption in a merger in which the Company is the
surviving corporation) issue or sell, any warrants or other rights to
subscribe for or purchase any Additional Shares of Common Stock or any
Convertible Securities (other than Permitted Issuances), whether or not the
rights to exchange or convert thereunder are immediately exercisable, and
the price per share for which Common Stock is issuable upon the exercise of
such warrants or other rights or upon conversion or exchange of such
Convertible Securities shall be less than the Current Warrant Price in
effect immediately prior to the time of such issue or sale, then the number
of shares for which this Warrant is exercisable and the Current Warrant
Price shall be adjusted as provided in Section 4.3 on the basis that the
maximum number of Additional Shares of Common Stock issuable pursuant to
all such warrants or other rights or necessary to effect the conversion or
exchange of all such Convertible Securities shall be deemed to have been
issued and outstanding and the Company shall have received all of the
consideration payable therefor, if any, as of the date of the actual
issuance of the number such warrants or other rights. No further
adjustments of the Current Warrant Price shall be made upon the actual
issue of such Common Stock or of such Convertible Securities upon exercise
of such warrants or other rights or upon the actual issue of such Common
Stock upon such conversion or exchange of such Convertible Securities.
Notwithstanding the foregoing, no adjustment shall be required under this
Section 4.4 solely by reason of the issuance or distribution of stock
purchase rights pursuant to a shareholder rights plan or any other rights
plan of the Company, provided that the adjustments required by this Section
4.4 shall be made if any "flip-in" or "flip-over" event shall occur under
such stockholder rights plan.
4.5. ISSUANCE OF CONVERTIBLE SECURITIES. If at any time the Company
shall take a record of the holders of its Common Stock for the purpose of
entitling them to receive a distribution of, or shall in any manner
(whether directly or by assumption in a merger in which the Company is the
surviving corporation) issue or sell, any Convertible Securities (other
than Permitted Issuances), whether or not the rights to exchange or convert
thereunder are immediately exercisable, and the price per share for which
Common Stock is issuable upon such conversion or exchange shall be less
than the Current Warrant Price in effect immediately prior to the time of
such issue or sale, then the number of shares for which this Warrant is
exercisable and the Current Warrant Price shall be adjusted as provided in
Section 4.3 on the basis that the maximum number of Additional shares of
Common Stock necessary to effect the conversion or exchange of all such
Convertible Securities shall be deemed to have been issued and outstanding
and the Company shall have received all of the consideration payable
therefor, if any, as of the date of actual issuance of such Convertible
Securities. No adjustment of the number of shares for which this Warrant is
exercisable and the Current Warrant Price shall be made under this Section
4.5 upon the issuance of any Convertible Securities which are issued
pursuant to the exercise of any warrants or other subscription or purchase
rights therefor, if any such adjustment shall previously have been made
upon the issuance of such warrants or other rights pursuant to Section 4.4.
No further adjustments of the number of shares for which this Warrant is
exercisable and the Current Warrant Price shall be made upon the actual
issue of such Common Stock upon conversion or exchange of such Convertible
Securities and, if any issue or sale of such Convertible Securities is made
upon exercise of any warrant or other right to subscribe for or to purchase
any such Convertible Securities for which adjustments of the number of
shares for which this Warrant is exercisable and the Current Warrant Price
have been or are to be made pursuant to other provisions of this Section 4,
no further adjustments of the number of shares for which this Warrant is
exercisable and the Current Warrant Price shall be made by reason of such
issue or sale.
4.6. SUPERSEDING ADJUSTMENT. If, at any time after any adjustment of
the number of shares for which this Warrant is exercisable and the Current
Warrant Price shall have been made pursuant to Section 4.4 or Section 4.5
as the result of any issuance of warrants, rights or Convertible
Securities, such warrants or rights, or the right of conversion or exchange
in such other Convertible Securities, shall expire, and all of such
warrants or rights, or the right of conversion or exchange with respect to
all or a portion of such other Convertible Securities, as the case may be,
shall not have been exercised and no outstanding Warrant shall have been
exercised (in whole or in part), then for each outstanding Warrant such
previous adjustment shall be rescinded and annulled and the Additional
Shares of Common Stock which were deemed to have been issued by virtue of
the computation made in connection with the adjustment so rescinded and
annulled shall no longer be deemed to have been issued by virtue of such
computation.
4.7. OTHER PROVISIONS APPLICABLE TO ADJUSTMENTS UNDER THIS SECTION.
The following provisions shall be applicable to the making of adjustments
of the number of shares of Common Stock for which this Warrant is
exercisable and the Current Warrant Price provided for in this Section 4:
(a) Computation of Consideration. To the extent that any
Additional Shares of Common Stock or any Convertible Securities or any
warrants or other rights to subscribe for or purchase any Additional Shares
of Common Stock or any Convertible Securities shall be issued for cash
consideration, the consideration received by the Company therefor shall be
the amount of the cash received by the Company therefor, or, if such
Additional Shares of Common Stock or Convertible Securities are offered by
the Company for subscription, the subscription price, or, if such
Additional Shares of Common Stock or Convertible Securities are sold to
underwriters or dealers for public offering without a subscription
offering, the public offering price (in any such case subtracting any
amounts paid or receivable for accrued interest or accrued dividends). To
the extent that such issuance shall be for a consideration other than cash,
then, except as herein otherwise expressly provided, the amount of such
consideration shall be deemed to be the fair value of such consideration at
the time of such issuance as determined in good faith by the Board of
Directors of the Company. In case any Additional Shares of Common Stock or
any Convertible Securities or any warrants or other rights to subscribe for
or purchase such Additional Shares of Common Stock or Convertible
Securities shall be issued in connection with any merger in which the
Company issues any securities, the amount of consideration therefor shall
be deemed to be the fair value, as determined in good faith by the Board of
Directors of the Company, of such portion of the assets and business of the
nonsurviving corporation as such Board in good faith shall determine to be
attributable to such Additional Shares of Common Stock, Convertible
Securities, warrants or other rights, as the case may be. The consideration
for any Additional Shares of Common Stock issuable pursuant to any warrants
or other rights to subscribe for or purchase the same shall be the
consideration received by the Company for issuing such warrants or other
rights plus the additional consideration payable to the Company upon
exercise of such warrants or other rights. The consideration for any
Additional Shares of Common Stock issuable pursuant to the terms of any
Convertible Securities shall be the consideration received by the Company
for issuing warrants or other rights to subscribe for or purchase such
Convertible Securities, plus the consideration paid or payable to the
Company in respect of the subscription for or purchase of such Convertible
Securities, plus the additional consideration, if any, payable to the
Company upon the exercise of the right of conversion or exchange in such
Convertible Securities. In case of the issuance at any time of any
Additional Shares of Common Stock or Convertible Securities in payment or
satisfaction of any dividends upon any class of stock other than Common
Stock, the Company shall be deemed to have received for such Additional
Shares of Common Stock or Convertible Securities a consideration equal to
the amount of such dividend so paid or satisfied.
(b) When Adjustments to Be Made. The adjustments required by this
Section 4 shall be made whenever and as often as any specified event
requiring an adjustment shall occur, except that any adjustment of the
number of shares of Common Stock for which this Warrant is exercisable that
would otherwise be required may be postponed (except in the case of a
subdivision or combination of shares of the Common Stock, as provided for
in Section 4.1) up to, but not beyond the date of exercise if such
adjustment either by itself or with other adjustments not previously made
results in an increase or decrease of less than 1% of the shares of Common
Stock for which this Warrant is exercisable immediately prior to the making
of such adjustment. Any adjustment representing a change of less than such
minimum amount (except as aforesaid) which is postponed shall be carried
forward and made as soon as such adjustment, together with other
adjustments required by this Section 4 and not previously made, would
result in a minimum adjustment or on the date of exercise. For the purpose
of any adjustment, any specified event shall be deemed to have occurred at
the close of business on the date of its occurrence.
(c) Fractional Interests. In computing adjustments under this
Section 4, fractional interests in Common Stock shall be taken into account
to the nearest 1/100th of a share.
(d) When Adjustment Not Required. If the Company shall take a
record of the holders of its Common Stock for the purpose of entitling them
to receive a dividend or distribution or subscription or purchase rights
and shall, thereafter and before the distribution to stockholders thereof,
legally abandon its plan to pay or deliver such dividend, distribution,
subscription or purchase rights, then thereafter no adjustment shall be
required by reason of the taking of such record and any such adjustment
previously made in respect thereof shall be rescinded and annulled.
(e) Escrow of Warrant Stock. If Holder exercises this Warrant
after any property becomes distributable pursuant to this Section 4 by
reason of the taking of any record of the holders of Common Stock, but
prior to the occurrence of the event for which such record is taken, any
additional shares of Common Stock issuable upon exercise by reason of such
adjustment shall be deemed the last shares of Common Stock for which this
Warrant is exercised (notwithstanding any other provision to the contrary
herein) and such shares or other property shall be held in escrow for
Holder by the Company to be issued to Holder when and to the extent that
the event actually takes place, upon payment of the then Current Warrant
Price. Notwithstanding any other provision to the contrary herein, if the
event for which such record was taken fails to occur or is rescinded, then
such escrowed shares shall be canceled by the Company and escrowed property
returned.
(f) Challenge to Good Faith Determination. Whenever the Board of
Directors of the Company shall be required to make a determination in good
faith of the fair value of any item under this Section 4, such
determination may be challenged in good faith by the Majority Holders, and
any dispute shall be resolved by an investment banking firm of recognized
national standing selected by the Majority Holders and acceptable to the
Company.
4.8. REORGANIZATION, RECLASSIFICATION, MERGER, CONSOLIDATION OR
DISPOSITION OF ASSETS. In case the Company shall reorganize its capital,
reclassify its capital stock, consolidate or merge with or into another
corporation (where the Company is not the surviving corporation or where
there is a change in or distribution with respect to the Common Stock of
the Company), or sell, transfer or otherwise dispose of all or
substantially all its property, assets or business to another corporation
and, pursuant to the terms of such reorganization, reclassification,
merger, consolidation or disposition of assets, shares of common stock of
the successor or acquiring corporation, or any cash, shares of stock or
other securities or property of any nature whatsoever (including warrants
or other subscription or purchase rights) in addition to or in lieu of
common stock of the successor or acquiring corporation ("Other Property"),
are to be received by or distributed to the holders of Common Stock of the
Company, then Holder shall have the right thereafter to receive, upon
exercise of this Warrant and payment of the Current Warrant Price, the
number of shares of common stock of the successor or acquiring corporation
or of the Company, if it is the surviving corporation, and Other Property
receivable upon or as a result of such reorganization, reclassification,
merger, consolidation or disposition of assets by a holder of the number of
shares of Common Stock for which this Warrant is exercisable immediately
prior to such event. In case of any such reorganization, reclassification,
merger, consolidation or disposition of assets, the successor or acquiring
corporation (if other than the Company) shall expressly assume the due and
punctual observance and performance of each and every covenant and
condition of this Warrant to be performed and observed by the Company and
all the obligations and liabilities hereunder, subject to such
modifications as may be deemed appropriate (as determined by resolution of
the Board of Directors of the Company) in order to provide for adjustments
of shares of the Common Stock for which this Warrant is exercisable which
shall be as nearly equivalent as practicable to the adjustments provided
for in this Section 4. For purposes of this Section 4.8, "common stock of
the successor or acquiring corporation" shall include stock of such
corporation of any class which is not preferred as to dividends or assets
over any other class of stock of such corporation and which is not subject
to redemption and shall also include any evidences of indebtedness, shares
of stock or other securities which are convertible into or exchangeable for
any such stock, either immediately or upon the arrival of a specified date
or the happening of a specified event and any warrants or other rights to
subscribe for or purchase any such stock. The foregoing provisions of this
Section 4.8 shall similarly apply to successive reorganizations,
reclassifications, mergers, consolidations or disposition of assets.
4.9. OTHER ACTION AFFECTING COMMON STOCK. In case at any time or from
time to time the Company shall take any action in respect of its Common
Stock, other than any action described in this Section 4, then, unless such
action will not have a materially adverse effect upon the rights of the
Holders, the number of shares of Common Stock or other stock for which this
Warrant is exercisable and/or the purchase price thereof shall be adjusted
in such manner as may be equitable in the circumstances.
4.10. CERTAIN LIMITATIONS. Notwithstanding anything herein to the
contrary, the Company agrees not to enter into any transaction which, by
reason of any adjustment hereunder, would cause the Current Warrant Price
to be less than the par value per share of Common Stock.
5. NOTICES TO WARRANT HOLDERS
5.1. NOTICE OF ADJUSTMENTS. Whenever the number of shares of Common
Stock for which this Warrant is exercisable, or whenever the price at which
a share of such Common Stock may be purchased upon exercise of the
Warrants, shall be adjusted pursuant to Section 4, the Company shall
forthwith prepare a certificate to be executed by the chief financial
officer of the Company setting forth, in reasonable detail, the event
requiring the adjustment and the method by which such adjustment was
calculated (including a description of the basis on which the Board of
Directors of the Company determined the fair value of any evidences of
indebtedness, shares of stock, other securities or property or warrants or
other subscription or purchase rights referred to in Section 4.2 or
4.7(a)), specifying the number of shares of Common Stock for which this
Warrant is exercisable and (if such adjustment was made pursuant to Section
4.8 or 4.9) describing the number and kind of any other shares of stock or
Other Property for which this Warrant is exercisable, and any change in the
purchase price or prices thereof, after giving effect to such adjustment or
change. The Company shall promptly cause a signed copy of such certificate
to be delivered to each Holder in accordance with Section 14.2. The Company
shall keep at its principal office copies of all such certificates and
cause the same to be available for inspection at said office during normal
business hours by any Holder or any prospective purchaser of a Warrant
designated by a Holder thereof.
5.2. NOTICE OF CORPORATE ACTION. If at any time
(a) the Company shall take a record of the holders of its Common
Stock for the purpose of entitling them to receive a dividend (other
than a cash dividend payable out of earnings or earned surplus legally
available for the payment of dividends under the laws of the
jurisdiction of incorporation of the Company) or other distribution,
or any right to subscribe for or purchase any evidences of its
indebtedness, any shares of stock of any class or any other securities
or property, or to receive any other right, or
(b) there shall be any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the
Company or any consolidation or merger of the Company with, or any
sale, transfer or other disposition of all or substantially all the
property, assets or business of the Company to, another corporation,
or
(c) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then, in any one or more of such cases, the Company shall give to Holder
(i) at least 20 days' prior written notice of the date on which a record
date shall be selected for such dividend, distribution or right or for
determining rights to vote in respect of any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up, and (ii) in the case of any such
reorganization, reclassification, merger, consolidation, sale, transfer,
disposition, dissolution, liquidation or winding up, at least 20 days'
prior written notice of the date when the same shall take place. Such
notice in accordance with the foregoing clause also shall specify (i) the
date on which any such record is to be taken for the purpose of such
dividend, distribution or right, the date on which the holders of Common
Stock shall be entitled to any such dividend, distribution or right, and
the amount and character thereof, and (ii) the date on which any such
reorganization, reclassification, merger, consolidation, sale, transfer,
disposition, dissolution, liquidation or winding up is to take place and
the time, if any such time is to be fixed, as of which the holders of
Common Stock shall be entitled to exchange their shares of Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up. Each such written notice shall be
sufficiently given if addressed to Holder at the last address of Holder
appearing on the books of the Company and delivered in accordance with
Section 13.2.
6. RIGHTS OF HOLDERS
6.1 NO IMPAIRMENT. The Company shall not by any action, including,
without limitation, amending its Certificate of Incorporation, by-laws or
comparable governing instruments 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, but will at all times in
good faith assist in the carrying out of all such terms and in the taking
of all such actions as may be necessary or appropriate to protect the
rights of Holder against impairment. Without limiting the generality of the
foregoing, the Company will (a) not increase the par value of any shares of
Common Stock receivable upon the exercise of this Warrant above the amount
payable therefor upon such exercise immediately prior to such increase in
par value, (b) take all such action as may be necessary or appropriate in
order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock upon the exercise of this Warrant, and
(c) use its best efforts to obtain all such authorizations, exemptions or
consents from any public regulatory body having jurisdiction thereof as may
be necessary to enable the Company to perform its obligations under this
Warrant.
Upon the request of Holder, the Company will at any time during
the period this Warrant is outstanding acknowledge in writing, in form
reasonably satisfactory to Holder, the continuing validity of this Warrant
and the obligations of the Company hereunder.
7. RESERVATION AND AUTHORIZATION OF COMMON STOCK;
REGISTRATION WITH OR APPROVAL OF ANY GOVERNMENTAL AUTHORITY
From and after the Issue Date, the Company shall at all times
reserve and keep available for issue upon the exercise of Warrants such
number of its authorized but unissued shares of Common Stock as will be
sufficient to permit the exercise in full of all outstanding Warrants. All
shares of Common Stock which shall be so issuable, when issued upon
exercise of any Warrant and payment therefor in accordance with the terms
of such Warrant, shall be duly and validly issued and fully paid and
nonassessable.
8. TAKING OF RECORD; STOCK AND WARRANT TRANSFER BOOKS
In the case of all dividends or other distributions by the
Company to the holders of its Common Stock with respect to which any
provision of Section 4 refers to the taking of a record of such holders,
the Company will in each such case take such a record and will take such
record as of the close of business on a Business Day. The Company will not
at any time, except upon dissolution, liquidation or winding up of the
Company, close its stock transfer books or Warrant transfer books so as to
result in preventing or delaying the exercise or transfer of any Warrant.
9. RESTRICTIONS ON TRANSFERABILITY
The Warrants and the Warrant Stock shall not be transferred,
hypothecated or assigned before satisfaction of the conditions specified in
this Section 9, which conditions are intended to ensure compliance with the
provisions of the Securities Act with respect to the Transfer of any
Warrant or any Warrant Stock. Holder, by acceptance of this Warrant, agrees
to be bound by the provisions of this Section 9.
9.1. RESTRICTIVE LEGEND. Except as otherwise provided in this Section
9, each Warrant and each certificate for Warrant Stock initially issued
upon the exercise of a Warrant, and each certificate for Warrant Stock
issued to any subsequent transferee of any such certificate, shall be
stamped or otherwise imprinted with a legend in substantially the following
form:
"[THIS WARRANT AND THE SECURITIES REPRESENTED HEREBY] [THE
SECURITIES REPRESENTED BY THIS CERTIFICATE] HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OTHERWISE
DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR
AN APPLICABLE EXEMPTION TO THE REGISTRATION REQUIREMENTS OF SUCH
ACT OR SUCH LAWS."
9.2. NOTICE OF PROPOSED TRANSFERS; REQUESTS FOR REGISTRATION. Prior to
any Transfer or attempted Transfer of any Warrants or any shares of
Restricted Common Stock, the holder of such Warrants or Restricted Common
Stock shall give ten days' prior written notice (a "Transfer Notice") to
the Company of such holder's intention to effect such Transfer, describing
the manner and circumstances of the proposed Transfer, and obtain from
counsel to such holder who shall be reasonably satisfactory to the Company,
an opinion that the proposed Transfer of such Warrants or such Restricted
Common Stock may be effected without registration under the Securities Act.
After receipt of the Transfer Notice and opinion, the Company shall, within
five days thereof, notify the holder of such Warrants or such Restricted
Common Stock as to whether such opinion is reasonably satisfactory and, if
so, such holder shall thereupon be entitled to Transfer such Warrants or
such Restricted Common Stock, in accordance with the terms of the Transfer
Notice. Each certificate, if any, evidencing such shares of Restricted
Common Stock issued upon such Transfer and each Warrant issued upon such
Transfer shall bear the restrictive legend set forth in Section 9.1, unless
in the opinion of such counsel such legend is not required in order to
ensure compliance with the Securities Act. The holder of the Warrants or
the Restricted Common Stock, as the case may be, giving the Transfer Notice
shall not be entitled to Transfer such Warrants or such Restricted Common
Stock until receipt of notice from the Company under this Section 9.2 that
such opinion is reasonably satisfactory.
9.3. TERMINATION OF RESTRICTIONS. Notwithstanding the foregoing
provisions of this Section 9, the restrictions imposed by this Section upon
the transferability of the Warrants, the Warrant Stock and the Restricted
Common Stock and the legend requirements of Section 9.1 shall terminate as
to any particular Warrant or share of Warrant Stock or Restricted Common
Stock (i) when and so long as such security shall have been effectively
registered under the Securities Act and disposed of pursuant thereto or
(ii) when the Company shall have received an opinion of counsel reasonably
satisfactory to it that such shares may be transferred without registration
thereof under the Securities Act.
10. PREEMPTIVE RIGHTS
(a) The Company shall not issue, sell or exchange, or agree to
issue, sell or exchange (collectively, "Issue," and any issuance, sale or
exchange resulting therefrom, an "Issuance") any Securities unless the
Company shall have first given written notice (the "Section 10 Notice") to
each holder of Warrants or Warrant Stock (for purposes of this Section,
each a "Section 10 Offeree") that shall (i) state the Company's intention
to Issue Securities, the amount to be issued, sold or exchanged, the terms
of such Securities, the purchase price therefor and a summary of the other
material terms of the proposed issuance, sale or exchange and (ii) offer (a
"Section 10 Offer") to Issue to each Section 10 Offeree and their
affiliates such Section 10 Offeree's Proportionate Percentage (as defined
below) of such Securities (with respect to each Section 10 Offeree, the
"Offered Securities") upon the terms and subject to the conditions set
forth in the Section 10 Notice, which Section 10 Offer by its terms shall
remain open and irrevocable for a period of 15-days from the date it is
delivered by the Company to such holder, as the case may be (and, to the
extent the Section 10 Offer is accepted during such 15-day period, until
the closing of the Issuance contemplated by the Section 10 Offer).
"Proportionate Percentage" for the purposes of this Section shall mean the
quotient obtained by dividing: (A) the Warrant Stock held by such Section
10 Offeree (assuming for purposes of this Section 10 that all issued and
outstanding Warrants have been exercised) on the date of the Section 10
Offer, by (B) the Warrant Stock issued and outstanding on the date of the
Section 10 Offer.
(b) Notice of a Section 10 Offeree's intention to accept a
Section 10 Offer, in whole or in part, shall be evidenced by a writing
signed by such party and delivered to the Company prior to the end of the
15-day period of such Section 10 Offer (each, a "Notice of Acceptance"),
setting forth the portion of the Offered Securities that the Section 10
Offeree elects to purchase, which election shall be binding.
(c) In the event that a Notice of Acceptance is not given by a
Section 10 Offeree in respect of all the Offered Securities, the Company
shall have 60 days following the 15-day period referred to in clause (b)
above to Issue all or any part of such remaining Offered Securities not
covered by the Notice of Acceptance to any other Person(s), but only at a
price not less than the price, and on terms no more favorable to the person
than the terms, stated in the Section 10 Offer Notice. If the Company does
not consummate the Issuance of all or part of the remaining Offered
Securities to such other Person(s) within such period, the right provided
hereunder shall be deemed to be revived and such securities shall not be
offered unless first re-offered to each Section 10 Offeree in accordance
with this Section 10. Upon the closing of the Issuance to such other
Person(s) (the "Other Buyers") of all or part of the remaining Offered
Securities, each Section 10 Offeree shall purchase from the Company, and
the Company shall Issue to each such Section 10 Offeree, the Offered
Securities covered by the Notice of Acceptance delivered to the Company by
the Section 10 Offeree, on the terms specified in the Section 10 Offer. The
purchase by a Section 10 Offeree of any Offered Securities is subject in
all cases to the execution and delivery by the Company and the Section 10
Offeree of a purchase agreement relating to such Offered Securities in form
and substance similar in all material respects to the extent applicable to
that executed and delivered between the Company and the Other Buyers.
11. SUPPLYING INFORMATION
The Company shall cooperate with each Holder of a Warrant and
each holder of Restricted Common Stock in supplying such information as may
be reasonably necessary for such holder to complete and file any reports or
forms presently or hereafter required by the Commission as a condition to
the availability of an exemption from the Securities Act for the sale of
any Warrant or Restricted Common Stock.
12. LOSS OR MUTILATION
Upon receipt by the Company from any Holder of evidence
reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of this Warrant and indemnity reasonably
satisfactory to it (it being understood that, in the case of the initial
holder, the written agreement of Appaloosa Management L.P. shall be
sufficient indemnity), and in case of mutilation upon surrender and
cancellation hereof, the Company will execute and deliver in lieu hereof a
new Warrant of like tenor to such Holder; provided, in the case of
mutilation, no indemnity shall be required if this Warrant in identifiable
form is surrendered to the Company for cancellation.
13. LIMITATION OF LIABILITY
No provision hereof, in the absence of affirmative action by
Holder to purchase shares of Common Stock, and no enumeration herein of the
rights or privileges of Holder hereof, shall give rise to any liability of
such Holder for the purchase price of any Common Stock or as a stockholder
of the Company, whether such liability is asserted by the Company or by
creditors of the Company.
14. MISCELLANEOUS
14.1. NONWAIVER AND EXPENSES. No course of dealing or any delay or
failure to exercise any right hereunder on the part of Holder shall operate
as a waiver of such right or otherwise prejudice Holder's rights, powers or
remedies. If the Company fails to make, when due, any payments provided for
hereunder, or fails to comply with any other provision of this Warrant, the
Company shall pay to Holder such amounts as shall be sufficient to cover
any costs and expenses including, but not limited to, reasonable attorneys'
fees, including those of appellate proceedings, incurred by Holder in
collecting any amounts due pursuant hereto or in otherwise enforcing any of
its rights, powers or remedies hereunder.
14.2. NOTICE GENERALLY. Any notice, demand, request, consent,
approval, declaration, delivery or other communication hereunder to be made
pursuant to the provisions of this Warrant shall be sufficiently given or
made if in writing and either delivered in person with receipt acknowledged
or sent by registered or certified mail, return receipt requested, postage
prepaid, or by telecopy and confirmed by telecopy answerback, addressed as
follows:
(a) If to any Holder or holder of Warrant Stock, at its last
known address appearing on the books of the Company maintained for
such purpose.
(b) If to the Company at
Bio-Plexus, Inc.
129 Reservoir Road
Vernon, CT 06066
Attention: Mr. Carl Sahi
Fax: (860) 870-6118
or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in
writing by the party entitled to receive such notice. Every notice, demand,
request, consent, approval, declaration, delivery or other communication
hereunder shall be deemed to have been duly given or served on the date on
which personally delivered, with receipt acknowledged, telecopied and
confirmed by telecopy answerback, or three Business Days after the same
shall have been deposited in the United States mail. Failure or delay in
delivering copies of any notice, demand, request, approval, declaration,
delivery or other communication to the person designated above to receive a
copy shall in no way adversely affect the effectiveness of such notice,
demand, request, approval, declaration, delivery or other communication.
14.3. REMEDIES. Each holder of Warrant and Warrant Stock, in addition
to being entitled to exercise all rights granted by law, including recovery
of damages, will be entitled to specific performance of its rights under of
this Warrant. The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of
the provisions of this Warrant and hereby agrees to waive the defense in
any action for specific performance that a remedy at law would be adequate.
14.4. SUCCESSORS AND ASSIGNS. Subject to the provisions of Sections
3.1 and 9, this Warrant and the rights evidenced hereby shall inure to the
benefit of and be binding upon the successors of the Company and the
successors and assigns of Holder. The provisions of this Warrant are
intended to be for the benefit of all Holders from time to time of this
Warrant and, with respect to Section 9 hereof, holders of Warrant Stock,
and shall be enforceable by any such Holder or holder of Warrant Stock.
14.5. AMENDMENT. This Warrant and all other Warrants may be modified
or amended or the provisions hereof waived with the written consent of the
Company and the Majority Holders, provided that no such Warrant may be
modified or amended to reduce the number of shares of Common Stock for
which such Warrant is exercisable or to increase the price at which such
shares may be purchased upon exercise of such Warrant (before giving effect
to any adjustment as provided therein) without the prior written consent of
the Holder thereof, provided however, that the foregoing shall not limit
the operation of Section 4.6.
14.6. SEVERABILITY. Wherever possible, each provision of this Warrant
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be prohibited by
or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Warrant.
14.7. HEADINGS. The headings used in this Warrant are for the
convenience of reference only and shall not, for any purpose, be deemed a
part of this Warrant.
14.8. GOVERNING LAW. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT
TO THE PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY AND UNCONDITIONALLY CONSENTS TO SUBMIT TO THE EXCLUSIVE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND OF THE UNITED
STATES OF AMERICA, IN EACH CASE LOCATED IN THE COUNTY OF NEW YORK, FOR ANY
ACTION, PROCEEDING OR INVESTIGATION IN ANY COURT OR BEFORE ANY GOVERNMENTAL
AUTHORITY ("LITIGATION") ARISING OUT OF OR RELATING TO THIS WARRANT AND THE
TRANSACTIONS CONTEMPLATED HEREBY (AND AGREES NOT TO COMMENCE ANY LITIGATION
RELATING THERETO EXCEPT IN SUCH COURTS), AND FURTHER AGREES THAT SERVICE OF
ANY PROCESS, SUMMONS, NOTICE OR DOCUMENT BY U.S. REGISTERED MAIL TO ITS
RESPECTIVE ADDRESS SET FORTH IN THIS WARRANT SHALL BE EFFECTIVE SERVICE OF
PROCESS FOR ANY LITIGATION BROUGHT AGAINST IT IN ANY SUCH COURT. EACH OF
THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY
OBJECTION TO THE LAYING OF VENUE OF ANY LITIGATION ARISING OUT OF THIS
WARRANT OR THE TRANSACTIONS CONTEMPLATED HEREBY IN THE COURTS OF THE STATE
OF NEW YORK OR THE UNITED STATES OF AMERICA, IN EACH CASE LOCATED IN THE
COUNTY OF NEW YORK, AND HEREBY FURTHER IRREVOCABLY AND UNCONDITIONALLY
WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH
LITIGATION BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM. EACH OF THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHTS TO TRIAL BY
JURY IN CONNECTION WITH ANY LITIGATION ARISING OUT OF OR RELATING TO THIS
WARRANT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant to be
duly
executed by an officer thereunto duly authorized.
Dated:
-----------------
BIO-PLEXUS, INC.
By:
---------------------------
Name:
Title:
<PAGE>
EXHIBIT A
SUBSCRIPTION FORM
[To be executed only upon exercise of Warrant]
Net Issue Exercise _____No ______Yes
The undersigned registered owner of this Warrant irrevocably
exercises this Warrant for the purchase of _____ shares of Common Stock of
Bio-Plexus, Inc. and herewith makes payment therefor, all at the price and
on the terms and conditions specified in this Warrant and requests that
certificates for the shares of Common Stock hereby purchased (and any
securities or other property issuable upon such exercise) be issued in the
name of and delivered to _____________ whose address is ________________
and, if such shares of Common Stock shall not include all of the shares of
Common Stock issuable as provided in this Warrant, that a new Warrant of
like tenor and date for the balance of the shares of Common Stock issuable
hereunder be delivered to the undersigned.
-----------------------------------
(Name of Registered Owner)
-----------------------------------
(Signature of Registered Owner)
-----------------------------------
(Street Address)
-----------------------------------
(City) (State) (Zip Code)
NOTICE: The signature on this subscription must correspond with the name
as written upon the face of the within Warrant in every
particular, without alteration or enlargement or any change
whatsoever.
<PAGE>
EXHIBIT B
ASSIGNMENT FORM
FOR VALUE RECEIVED the undersigned registered owner of this
Warrant hereby sells, assigns and transfers unto the Assignee named below
all of the rights of the undersigned under this Warrant, with respect to
the number of shares of Common Stock set forth below:
Name and Address of Assignee No. of Shares of Common Stock
- ---------------------------- -----------------------------
and does hereby irrevocably constitute and appoint ________________
attorney-in-fact to register such transfer on the books of BIO-PLEXUS, INC.
maintained for the purpose, with full power of substitution in the
premises.
Dated: Print Name:
------------------ ----------------------------
Signature:
-----------------------------
Witness:
-------------------------------
NOTICE: The signature on this assignment must correspond with the name as
written upon the face of the within Warrant in every particular,
without alteration or enlargement or any change whatsoever.
EXHIBIT 4
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OR THE
SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS OR AN APPLICABLE EXEMPTION TO THE
REGISTRATION REQUIREMENTS OF SUCH ACT OR SUCH LAWS.
BIO-PLEXUS, INC.
15% SECURED NOTE
No. R-1 Dated as of January 5, 2000
$1,650,000
FOR VALUE RECEIVED, the undersigned, BIO-PLEXUS, INC. (herein called the
"Company"), a corporation organized and existing under the laws of the
State of Connecticut, hereby unconditionally promises to pay to the order
of Appaloosa Investment Limited Partnership I, or its registered assigns
(the "Holder"), the principal sum of ONE MILLION SIX HUNDRED FIFTY THOUSAND
DOLLARS ($1,650,000) in immediately available lawful money of the United
States of America, together with interest on the unpaid balance hereof, in
accordance with the terms and conditions set forth below.
1. Payment.
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1.1. Principal. The entire unpaid principal balance of this Note
shall be paid in full by the Company on the Due Date.
1.2. Home Office Payment. The Company will pay to each Holder or
any transferee thereof all sums becoming due on this Note at the
account/address to be specified by such Holder or transferee for such
purpose by notice to the Company, by wire transfer of immediately available
funds, or at such other address or by such other method as such Holder or
transferee shall have designated by notice to the Company.
1.3. Prepayment. After all amounts owed under the 7.5% Secured
Note issued by the Company to the Holder on October 21, 1999 (as amended
from time to time, the "7.5% Note") have been repaid in full, subject to
Section 8.8, (i) upon at least ten days prior notice to the Holder, this
Note may be prepaid, without premium or penalty, in whole or in part by the
Company at any time and from time to time and (ii) concurrently with the
receipt of any proceeds received by the Company in respect of any sale of
Debentures pursuant to section 1.4 of the Subscription Agreement, the
Company shall make a mandatory prepayment of the Note in an amount equal to
100% of such proceeds; provided, that, upon any prepayment under (i) or
(ii) above, all accrued and unpaid interest shall be paid on the principal
of the Note being repaid.
1.4. Interest. The unpaid principal balance of this Note
outstanding at any time shall accrue interest, at a rate per annum equal to
15% (including during the pendency of any bankruptcy or similar proceeding,
whether or not a claim for post-petition interest is allowed as a claim in
any such bankruptcy or proceeding). Interest shall begin to accrue from the
date hereof and shall be computed on the basis of a year of 360 days and
actual days elapsed and shall be payable in one lump sum on the Due Date.
1.5. Default Interest. If the Company shall fail to pay any
principal amount of, or interest on, or other amount payable under, this
Note when due and payable (whether at the Due Date, the Acceleration Date
or otherwise), such principal amount, interest or other amount shall
thereafter bear interest, until paid in full (after as well as before
judgment) to the extent lawful, at a rate per annum equal to 15% (including
during the pendency of any bankruptcy or similar proceeding, whether or not
a claim for post-petition interest is allowed as a claim in any such
bankruptcy or proceeding). The Company shall pay such default interest in
cash on demand from time to time.
1.6. Limitation on Interest. No provision of this Note shall
require the payment or permit the collection of interest in excess of the
maximum rate which is permitted by Law. If any such excess interest is
provided for herein, or shall be adjudicated to be so provided for, then
the Company shall not be obligated to pay such interest in excess of the
maximum rate permitted by Law, and the right to demand payment of any such
excess interest is hereby waived, any other provisions in this Note to the
contrary notwithstanding.
1.7. Allocation. The parties hereto agree that the fair market
value of this Note is $1,600,000 and the fair market value of the warrants
to be issued to one or more Affiliates of the Holder on the Maturity Date
pursuant to the section (c) of the side letter, dated December 30, 1999,
between the Company and the Holder is $50,000. Each party agrees to file
all tax returns consistent with such allocation and to take no position
inconsistent with such allocation, unless required by Law.
2. Deliveries by the Company. Simultaneously with the execution of
this Note, the Company is delivering to the Holder the following:
(a) an opinion of the Company's counsel, dated as of the date
hereof, addressed to such Holder in the form of Exhibit 2(a) hereto;
(b) a good standing certificate for the Company, dated no earlier
than seven days prior to the date hereof, from the State of Connecticut;
(c) a copy of the resolutions of the Board of Directors
authorizing the execution of each of the Transaction Documents and the
performance of the transactions contemplated by the Transaction Documents
which shall be certified as true, correct and effective as of the date
hereof by an officer of the Company; and
(d) the Holder's costs and expenses (including the reasonable
fees and expenses of its counsel, Fried, Frank, Harris, Shriver & Jacobson,
in an aggregate amount not to exceed $100,000 which amounts shall be
deducted from the proceeds of this Note and shall be wired transferred by
the Holder, on behalf of the Company, to one or more accounts designated by
such party on or prior to the date hereof) incurred in connection with the
transactions contemplated hereby.
3. Representations and Warranties of the Company. The Company
represents and warrants to the Holder as follows:
3.1. Organization; Subsidiaries. (a) The Company is a corporation
duly organized and existing in good standing under the laws of the State of
Connecticut and has the corporate power to own its property and to carry on
its business as now being conducted. The Company is duly qualified as a
foreign corporation to do business and is in good standing in every
jurisdiction in which the nature of the business conducted or property
owned by it makes such qualification necessary and where the failure to so
qualify could, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
(b) The Company does not have any Subsidiaries. Except as set
forth on Schedule 3.1(b), the Company does not own, directly or indirectly,
or have the right or obligation to acquire, any interest in any business
association or other Person.
3.2. Due Authorization. (a) The Company has all right, power and
authority to enter into, deliver and perform the Transaction Documents to
which it is a party and to consummate the transactions contemplated
thereby. The execution and delivery of each Transaction Document by the
Company and the performance by it of the transactions contemplated thereby
(including, without limitation, the issuance and sale of this Note) and
compliance by the Company with all the provisions of each Transaction
Document (as applicable) has been duly authorized by all requisite
corporate proceedings on the part of the Company. Each of the Transaction
Documents has been duly executed and delivered on behalf of the Company,
and each such Transaction Document constitutes the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance
with its respective terms, except to the extent that such enforceability
(i) may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to creditors' rights generally or (ii) is
subject to general principles of equity.
(b) The Board of Directors has taken all necessary action so that
no "fair price," "moratorium," "control share acquisition," "interested
holder" or other similar anti-takeover statute or regulation (including,
without limitation, Sections 33-840 through 33-845 of the Connecticut
Business Corporation Act) or any applicable anti-takeover provision in the
Company's Certificate of Incorporation or By-Laws is applicable to the
transactions contemplated by the Transaction Documents. To the knowledge of
the Company, no other state takeover statute is applicable to the
transactions contemplated by the Transaction Documents.
3.3. Capitalization. The authorized capital stock of the Company
consists of (i) 25,000,000 shares of Common Stock, of which, as of the date
hereof, 14,004,239 shares were issued and outstanding, 579,650 shares were
reserved for issuance upon the exercise of outstanding stock options
pursuant to the Company's option plans, 3,957,588 shares were reserved for
issuance upon the exercise of the outstanding warrants, and 2,111,880
shares were reserved for issuance upon the conversion of certain 6%
Convertible Debentures due 2004 and (ii) 3,000,000 shares of Preferred
Stock, no par value (the "Preferred Stock"), of which, as of the date
hereof, no shares were issued and outstanding. All of the outstanding
shares of Common Stock are validly issued and are fully paid and
nonassessable. No class of Capital Stock of the Company is entitled to
preemptive rights. Except as set forth on Schedule 3.3, there are no
outstanding options, warrants, preemptive rights, subscription rights,
calls or commitments of any character whatsoever relating to, or securities
or rights convertible into, shares of any class of Capital Stock of the
Company, or Contracts, by which the Company is or may become bound to issue
additional shares of its Capital Stock or options, warrants or other rights
to purchase or acquire any shares of its Capital Stock. Except as set forth
on Schedule 3.3, no warrants, bonds, debentures, notes or other
Indebtedness or other security having the right to vote (or convertible
into or exercisable for securities having the right to vote) on any matters
on which stockholders may vote were issued or outstanding. Except as set
forth on Schedule 3.3 or as contemplated by the Transaction Documents, the
Company is not a party to, and, to the Company's best knowledge, there are,
and immediately after the Closing, there will be, no agreement, restriction
or encumbrance (such as a preemptive or similar right of first refusal,
right of first offer, proxy, voting agreement, voting trust, registration
rights agreement, shareholders' agreement, etc., whether or not the Company
is a party thereto) with respect to the purchase, sale or voting of any
shares of Capital Stock of the Company (whether outstanding or issuable
upon conversion, exchange or exercise of outstanding securities) or other
securities of the Company pursuant to any provision of Law, the Certificate
of Incorporation or By-Laws, any agreement or otherwise. Except as set
forth on Schedule 3.3, no person has the right to nominate or elect one or
more directors of the Company. Immediately following the transactions
contemplated hereby, the Company's capitalization will be as set forth on
Schedule 3.3. The Company has not declared or paid any dividend or made any
other distribution of cash, stock or other property to its stockholders
since January 1, 1996.
3.4. SEC Reports Correspondence. The Company has filed all proxy
statements, reports and other documents required to be filed by it under
the Exchange Act from and after January 1, 1995 (collectively, the "SEC
Reports"). Each SEC Report was in compliance in all material respects with
the requirements of its respective report form and did not on the date of
filing contain any 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, in the light of the circumstances under which they were
made, not misleading, and as of the date hereof there is no fact or facts
not disclosed in the SEC Reports which relate specifically to the Company
and which could, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.
3.5. Financial Statements. The financial statements (including
any related schedules and/or notes) included in the SEC Reports have been
prepared in accordance with GAAP consistently followed (except as indicated
in the notes thereto) throughout the periods involved and fairly present
the consolidated financial condition, results of operations, cash flows and
changes in stockholders' equity of the Company as of the respective dates
thereof and for the respective periods then ended (in each case subject, as
to interim statements, to changes resulting from year-end adjustments, none
of which were material in amount or effect). Except as set forth on
Schedule 3.5, the Company is not subject to any Liabilities, except (i)
Liabilities in the respective amounts reflected or reserved against in the
Company's balance sheet as of December 31, 1998 included in the SEC Reports
or (ii) Liabilities incurred in the ordinary course of business since
December 31, 1998 which could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
3.6. No Material Adverse Change. Since December 31, 1998, no
event has occurred or failed to occur which could, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
3.7. Intellectual Property Rights. Schedule 3.7 sets forth a
complete and correct list of all Intellectual Property of the Company (the
"Company Intellectual Property"). Except as set forth on Schedule 3.7, the
Company owns and possesses all right, title and interest in, or possesses
adequate licenses to (without the making of any payment to others or the
obligation to grant rights to others in exchange) all the Company
Intellectual Property, free and clear of any Liens, licenses or other
restrictions. The Company has the right to require the applicant of any
Company Intellectual Property which is an application, including but not
limited to patent applications, trademark applications, service mark
applications, copyright applications, or mask work applications, to
transfer ownership to the Company of the application and of the
registration once it issues. All registered patents, trademarks, service
marks and copyrights listed on Schedule 3.7 are valid and subsisting and in
full force and effect. The Company Intellectual Property is all the
Intellectual Property that is necessary for the ownership, maintenance and
operation of the Company's properties and assets and the Company has the
right to use all of the Company Intellectual Property in all jurisdictions
in which the Company conducts or proposes to conduct its business, and the
consummation of the transactions contemplated hereby will not alter or
impair any such rights. The Company has never agreed to indemnify any
person for or against any interference, infringement, misappropriation or
other conflict with respect to any Company Intellectual Property. Except as
set forth in Schedule 3.7, no third party has interfered with, infringed
upon, misappropriated or otherwise come into conflict with any Company
Intellectual Property. The Company has taken all reasonably necessary and
desirable action to maintain and protect each item of Company Intellectual
Property. The validity, ownership, enforceability, use or legality of the
Company Intellectual Property is not being questioned or opposed in any
Litigation or Order to which the Company or any Person who has granted a
license of Intellectual Property to the Company, is a party or subject,
nor, to the knowledge of the Company, is any such Litigation or Order
threatened. The conduct of the Company as currently conducted and as
currently proposed to be conducted does not and will not infringe,
interfere with, misappropriate or otherwise come into conflict with any
Intellectual Property of any other Person, and the Company has not received
any charge, complaint, claim, demand or notice alleging any such
infringement, interference, misappropriation or conflict (including any
claim that the Company must license or refrain from using any Intellectual
Property of any other Person). Except as set forth on Schedule 3.7, the
Company has not granted any licenses of Intellectual Property to any
Person.
3.8. Existing Indebtedness; Future Liens. (a) Schedule 3.8 sets
forth a complete and correct list of all outstanding Indebtedness of the
Company as of the date hereof. Except as set forth on Schedule 3.8, the
Company has not defaulted and no waiver of default is currently in effect,
in the payment of any principal or interest on any such Indebtedness and no
event or condition exists with respect to any such Indebtedness that would
permit (or that with notice or the lapse of time, or both, would permit)
one or more Persons to cause such Indebtedness to become due and payable
before its stated maturity or before its regularly scheduled dates of
payment. The Company has not received any notice from any Person declaring
or threatening to declare any Indebtedness owed by the Company to such
Person due and payable prior to the stated maturity of such Indebtedness or
before its regularly scheduled dates of payment.
(b) The Company has not agreed or consented to cause or
permit in the future (upon the happening of a contingency or otherwise) any
of its property, whether now owned or hereafter acquired, to be subject to
any Lien (other than Permitted Liens).
3.9. Litigation. (a) Except as set forth on Schedule 3.9, there
is no Litigation pending or, to the knowledge of the Company, threatened
against the Company or any of its properties or assets by or before any
court, arbitrator or other Governmental Entity.
(b) The Company is not in default under or in breach of any Order
of any court, arbitrator or other Governmental Entity, and the Company is
not subject to or a party to any Order of any court, arbitrator or other
Governmental Entity arising out of any claim, demand, notice, action, suit
or proceeding under any Law.
3.10. Compliance with Laws. The Company is in compliance with all
applicable Laws including, without limitation, all rules, regulations and
other Laws of the Food and Drug Administration relating to the design,
development, manufacturing, sales and distribution of safety medical
products and accessories, except where the failure to comply could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. No Order has been issued nor any Law enacted which
prevents, nor does any Law prohibit the consummation of the transactions
contemplated by any of the Transaction Documents.
3.11. Offering of the Securities. In connection with the offering
of this Note, neither the Company nor any Person acting on its behalf has
offered the Note, or any similar securities of the Company for sale to,
solicited any offers to buy the Note, or any similar securities of the
Company from or otherwise approached or negotiated with respect to the
Company with any Person other than the Purchasers and other "accredited
investors" (as defined in Rule 501(a) under the Securities Act). Neither
the Company nor any Person acting on its behalf has taken or, except as
contemplated hereby will take any action (including, without limitation,
any offering of any securities of the Company under circumstances which
would require the integration of such offering with the offering of the
Note under the Securities Act) which could reasonably be expected to
subject the offering, issuance or sale of the Note and the Warrants to the
registration requirements of Section 5 of the Securities Act or violate the
provisions of any securities, "blue sky", or similar law of any applicable
jurisdiction.
3.12. Solvency. The Company is not, and after giving effect to
the issuance of this Note and the application of the proceeds therefrom
will not be, insolvent within the meaning of Title 11 of the United States
Code or any comparable state law provision.
3.13. Security Documents. Except as set forth in Schedule 3.13,
upon proper filing of the Financing Statements (or assignments thereof) in
the offices of the Secretary of State of Connecticut with respect to the
Company (or assignments thereof) and in the locations identified in the
Security Agreement, the Liens granted under the Transaction Documents shall
constitute a fully perfected first priority security interest in all right,
title and interest of the Company in and to the personal property therein
prior to any other security interests against such property or interests
therein.
3.14. Disclosure. Neither any Transaction Document nor any
Schedule hereto and thereto, nor any certificate furnished to any Holder by
or on behalf of the Company in connection with the transactions
contemplated hereby and thereby, contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make
the statements contained herein and therein not misleading. The financial
forecasts furnished by the Company to the Holder has been prepared in good
faith based upon reasonable assumptions. There is no fact or information
relating to the Company that could reasonably be expected to be material to
the Company that has not been disclosed to the Holder.
4. Covenants of the Company. The Company covenants that for so long as
this Note is outstanding or any amounts are due and unpaid hereunder:
4.1. Limitation on Indebtedness. The Company shall not, and shall
not permit any of its Subsidiaries to, create, incur, assume or directly or
indirectly guarantee or in any other manner become directly or indirectly
liable for the payment of any Indebtedness (excluding Permitted
Indebtedness and Indebtedness which is a Guaranty of an Indebtedness of the
Company or any of its Subsidiaries that is otherwise Permitted
Indebtedness).
4.2. Limitation on Encumbrances. The Company shall not, and shall
not permit any of its Subsidiaries to, directly or indirectly, create,
incur, assume or otherwise suffer to exist or cause or otherwise suffer to
become effective any Lien in or on any right, title or interest to any
property (real or personal) that constitutes all or any portion of the
Collateral (a "Restricted Encumbrance," which term excludes the Lien
created in favor of the Holder) unless such Restricted Encumbrance is a
Permitted Lien.
4.3. Limitation on Dividends; Stock Issuances. The Company shall
not offer or issue any shares of Preferred Stock or Common Stock for any
purpose whatsoever, except pursuant to Schedule 4.3. The Company shall not
declare any dividends on any shares of its Capital Stock, or make any
payment on account of, or set apart assets for a sinking or other analogous
fund for, the purchase, redemption, retirement, exchange or other
acquisition of any shares of its Capital Stock, whether now or hereafter
outstanding, or make any other distribution in respect thereof, either
directly or indirectly, whether in cash, securities, property or in
obligations of the Company or any of its Subsidiaries.
4.4. Stockholders' Meetings. As promptly as practicable hereafter
but in no event no later than February 28, 2000, the Company shall take all
action necessary, in accordance with applicable Law and its Certificate of
Incorporation and By-laws, to convene a special meeting of its stockholders
(the "Company Meeting") for the purpose of considering and voting upon the
approval of the Rollover Transactions, including, without limitation, the
issuance and sale of the Convertible Notes, the Shares and the Rollover
Warrants, and any other transactions contemplated in furtherance thereof
under applicable Law; provided, however, that the Company shall adjourn the
Company Meeting from time to time until all of the conditions set forth in
Section 6.2 are satisfied or waived (other than those conditions that by
their nature are to be satisfied on the Rollover Date), such that the
Company Meeting shall take place on the same day as the Rollover Date in
accordance with Section 6.1. The Company will use its best efforts to
obtain such stockholders' approval, including, without limitation, taking
all lawful actions to solicit such approval. The Board of Directors will
recommend that its stockholders vote in favor of and approve the Rollover
Transactions, including, without limitation, the issuance and sale of the
Convertible Notes, the Shares and the Rollover Warrants, and any other
transactions contemplated in furtherance thereof under applicable Law.
4.5. Proxy Statement. The Proxy Statement shall comply as to form
in all material respects with the applicable provisions of the Exchange Act
and the rules and regulations thereunder. The Company shall use its best
efforts, and the Holder will cooperate with the Company, to have the Proxy
Statement cleared by the SEC as promptly as practicable. The Company shall,
as promptly as practicable, provide copies of any written comments received
from the SEC with respect to the Proxy Statement to the Holder and advise
the Holder of any oral comments with respect to the Proxy Statement
received from the SEC. The Holder agrees that none of the information
supplied or to be supplied by it for inclusion or incorporation by
reference in the Proxy Statement and each amendment or supplement thereto,
at the time of mailing thereof and at the time of the Company Meeting, will
contain 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, in light of the circumstances under which they were made, not
misleading. The Company agrees that none of the information supplied or to
be supplied by the Company for inclusion or incorporation by reference in
the Proxy Statement and each amendment or supplement thereto, at the time
of mailing thereof and at the time of the Company Meeting, will contain 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,
in light of the circumstances under which they were made, not misleading.
The Company will provide the Holder with a reasonable opportunity to review
and comment on the Proxy Statement and any amendment or supplement thereto
prior to filing such with the SEC, and will provide the Holder with a copy
of all such filings made with the SEC. No amendment or supplement to the
information supplied by the Holder for inclusion in the Proxy Statement
shall be made without the approval of such Holder, which approval shall not
be unreasonably withheld or delayed.
4.6. Operations in Accordance with the Business Plan. The
business and operations of the Company and its Subsidiaries shall be
conducted in accordance with a business plan of the Company approved by the
Holder.
4.7. Proceeds. The proceeds of the sale of this Note shall be
used for the purposes set forth on Schedule 4.7. No part of the proceeds
from the sale of this Note hereunder shall be used, directly or indirectly,
for the purpose of "purchasing" or "carrying" any "margin stock" within the
respective meanings of Regulation U of the Board of Governors of the
Federal Reserve System or for any purpose which violates or would be
inconsistent with the provisions of Regulations T, U or X of said Board.
4.8. Additional Offerings of Securities. The Company shall not
seek financing from any third party consisting of an issuance of Equity
Securities without the written consent of the Holder (which may be withheld
at the Holder's absolute discretion).
4.9. Existence. Neither the Company nor any of its Subsidiaries
shall enter into any transaction for the acquisition of, or merger or
consolidation or amalgamation with, any other Person (including any
Subsidiary or Affiliate of the Company or any of its Subsidiaries), or
enter into any transaction or series of transactions that could result in a
Change of Control, or sell, transfer or otherwise dispose of ("Transfer")
all or substantially all of its assets in one transaction or series of
transactions to any Person, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or make any material change in the
present method of conducting business or engage in any type of business
other than of same general type now conducted by it. The Company shall not,
and shall not permit any of its Subsidiaries to, Transfer any property or
assets, unless the property or asset that is the subject of such Transfer
constitutes (i) inventory held for sale, (ii) marketable securities
available for sale, or (iii) real estate, equipment, fixtures, supplies or
materials no longer required in the operation of the business of the
Company or such Subsidiary or that is obsolete, and, in the case of any
Transfer described in clause (i) or (iii), such Transfer is in the ordinary
course of business consistent with past practice.
4.10. Access. Subject to a written confidentiality agreement, the
Company shall, and shall cause the Company's officers, directors, employees
and agents to, afford to the Holder and each of its Affiliates, officers,
directors, employees, counsel, investment bankers, accountants, advisors,
agents and other representatives (collectively, "Representatives"),
reasonable access during normal business hours to its officers, employees,
accountants, agents, properties, offices and other facilities, and to the
books and records of the Company (including, without limitation, all
interim financial statements, tax returns and work papers of its
accountants), legal documents of the Company, and shall furnish the Holder
and its Representatives all financial, operating, technical and other data
and information which any of them may from time to time reasonably request.
4.11. 6% Convertible Debentures due 2004. The Company shall not
exercise its Put Option without the written consent of the Holder.
4.12. Security. The Secured Obligations will be secured by the
Collateral, subject to the terms and conditions of the Collateral
Documentation.
5. Events of Default and Remedies.
------------------------------
5.1. Events of Default and Remedies. "Event of Default," wherever
used herein, means any one of the following events (whatever the reason for
such Event of Default and whether it shall be voluntary or involuntary or
be effected by operation of law or pursuant to any Order of any court or
any Order, rule or regulation of any Governmental Entity) (or if the giving
of notice or lapse of time or both is required, then, prior to such notice
or lapse of time, a "Default"):
(a) default in the payment of any interest upon this Note
when it becomes due and payable; or
(b) default in the payment of any principal of this Note
when it becomes due and payable; or
(c) default in the performance of any agreement or covenant
in, or provision of, this Note or the other documents executed and
delivered in connection with this Note (including any other
Transaction Document) and to which the Company or any of its
Subsidiaries is a party (other than a covenant or a default in whose
performance is elsewhere in this Section specifically dealt with)
which is not cured within thirty (30) days, or any representation or
warranty made in any document executed and delivered in connection
with this Note (including any other Transaction Document) was false in
any material respect on the date as of which made or deemed made; or
(d) the Company Meeting shall not have been held on or prior
to February 28, 2000 or the approval of the Company's stockholders
described in Section 4.4 shall not have been obtained at the Company
Meeting on or prior to February 28, 2000; or
(e) the Company or any of its Subsidiaries shall: (A)
default in any payment of principal of or interest on any Indebtedness
(other than this Note and any intercompany debt) or in the payment of
any Guarantee, beyond the period of grace, if any, provided in the
instrument or agreement under which such Indebtedness or Guarantee was
created; or (B) default in the observance or performance of any other
agreement or condition relating to any such Indebtedness or Guarantee
or contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event shall occur or condition exist,
the effect of which default or other event or condition is to cause,
or to permit the holder or holders of such Indebtedness or beneficiary
or beneficiaries of such Guarantee (or a trustee or agent on behalf of
such holder or holders or beneficiary or beneficiaries) to cause, with
the giving of notice if required, such Indebtedness to become due
prior to its stated maturity, any applicable grace period having
expired, or such Guarantee to become payable, any applicable grace
period having expired, provided that the aggregate principal amount of
all such Indebtedness and Guarantee which would then become due or
payable as described in this Section 5.1(e) would equal or exceed
$100,000; or
(f) a final judgment or judgments for the payment of money
are entered by a court or courts of competent jurisdiction against the
Company or any of its Subsidiaries and such remains undischarged for a
period (during which execution shall not effectively be stayed) of 60
days, provided that the aggregate of all such judgments that are not
covered by insurance under which the Company or a Subsidiary is a
beneficiary exceeds $100,000, or the Holder shall determine that any
regulatory body having jurisdiction over the Company or any of its
Subsidiaries including, without limitation, the SEC, shall have taken
or proposed to take any action that the Holder believes could,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect or that adversely affects the Holder's
security interest in the Collateral; or
(g) the Company or any of its Subsidiaries (i) is generally
not paying, or admits in writing its inability to pay, its debts as
they become due, (ii) files, or consents by answer or otherwise to the
filing against it of, a petition for relief or reorganization or
arrangement or any other petition in bankruptcy, for liquidation or to
take advantage of any bankruptcy, insolvency, reorganization,
moratorium or other similar law of any jurisdiction, (iii) makes an
assignment for the benefit of its creditors, (iv) consents to the
appointment of a custodian, receiver, trustee or other officer with
similar powers with respect to it or with respect to any substantial
part of its property, (v) is adjudicated as insolvent or to be
liquidated, or (vi) takes corporate action for the purpose of any of
the foregoing; or
(h) a court or other Governmental Entity of competent
jurisdiction enters an Order appointing, without consent by the
Company or any of its Subsidiaries, a custodian, receiver, trustee or
other officer with similar powers with respect to it or with respect
to any substantial part of its property, or constituting an order for
relief or approving a petition for relief or reorganization or any
other petition in bankruptcy or for liquidation or to take advantage
of any bankruptcy or insolvency law of any jurisdiction, or ordering
the dissolution, winding-up or liquidation of the Company or any of
its Subsidiaries, or any such petition shall be filed against the
Company or any of its Subsidiaries and such petition shall not be
dismissed within 60 days; or
(i) a court or other Governmental Entity of competent
jurisdiction enters a final judgment holding this Note or any of the
documents delivered in connection with this Note (including any other
Transaction Document) to be invalid or unenforceable and such judgment
remains unstayed and in effect for a period of 20 consecutive days; or
the Company or any of its Subsidiaries shall assert, in any pleading
filed in such a court, that this Note or any of the documents
delivered in connection with this Note (including any other
Transaction Document) are invalid or unenforceable; or
(j) any material provision of any Transaction Document shall
for any reason cease to be valid, binding and enforceable in
accordance with its terms (or the Company or any of its Subsidiaries
shall challenge the enforceability of any Transaction Document or
shall assert in writing, or engage in any action or inaction based on
any such assertion, that any provision of any of the Transaction
Documents has ceased to be or otherwise is not valid, binding and
enforceable in accordance with its terms), or any first priority
security interest created under any Transaction Document shall cease
to be a valid and perfected security interest, or Lien in any of the
Collateral purported to be covered thereby; or
(k) the Company or any of its Subsidiaries shall default in
the payment of any amounts due pursuant to the terms of any document
executed and delivered by the Company or such Subsidiary in connection
with this Note (other than payments elsewhere in this Section
specifically dealt with).
5.2. Acceleration of Maturity. If any Event of Default (other
than an Event of Default specified in clause (g), (h), (i) or (j) of
Section 5.1) shall have occurred and be continuing, the Holder may, by
notice to the Company, declare the entire unpaid principal amount of this
Note, plus all accrued and unpaid interest thereon (together with the
Holder's costs and expenses pursuant to Section 8.8) , to be immediately
due and payable, and upon such declaration all of such amount shall be
immediately due and payable (the "Declared Acceleration Date"), in each and
every case without presentment, demand, protest or further notice, all of
which are hereby waived, anything in this Note to the contrary
notwithstanding; provided that if an Event of Default under clause (g),
(h), (i) or (j) of Section 5.1 shall have occurred, the entire unpaid
principal amount of this Note (to the full extent permitted by applicable
Law), plus all accrued and unpaid interest thereon (together with the
Holder's costs and expenses pursuant to Section 8.8), shall immediately
become due and payable (the "Automatic Acceleration Date"), without any
declaration and without presentment, demand, protest or further notice, all
of which are hereby waived, anything in this Note to the contrary
notwithstanding.
5.3. Other Remedies. If any Event of Default shall have occurred
and be continuing, from and including the date of such Event of Default to
but not including the date such Event of Default is cured or waived, each
Holder may enforce its rights by suit in equity, by action at law, or by
any other appropriate proceedings, whether for the specific performance (to
the extent permitted by Law) of any covenant or agreement contained in this
Note or in aid of the exercise of any power granted in this Note, and each
Holder may enforce the payment of any Note held by such Holder and any of
its other legal or equitable rights.
5.4. Conduct; No Waiver; Collection Expenses. No course of
dealing on the part of the Holder, nor any delay or failure on the part of
the Holder to exercise any of its rights, shall operate as a waiver of such
right or otherwise prejudice the Holder's rights, powers and remedies. If
the Company fails to pay, when due, any payment in respect of this Note,
the Company will pay such Holder, to the extent permitted by Law, on
demand, all costs and expenses incurred by such Holder in the collection of
any amount due in respect of this Note hereunder, including reasonable
legal fees incurred by such Holder in enforcing its rights hereunder.
5.5. Annulment of Acceleration. If a declaration is made in
accordance with Section 5.2, then and in every such case, the Holder may,
by an instrument delivered to the Company, annul such declaration and the
consequences thereof.
5.6. Remedies Cumulative. No right or remedy conferred upon or
reserved to the Holder under this Note is intended to be exclusive of any
other right or remedy, and every right and remedy shall be cumulative and
in addition to every other right and remedy given hereunder or now and
hereafter existing under applicable Law. Every right and remedy given by
this Note or by applicable Law to the Holder may be exercised from time to
time and as often as may be deemed expedient by such Holder.
6. Rollover
--------
6.1. Rollover. On the same day that the stockholders' approval
referred to in Section 4.4 has been obtained (the "Rollover Date"), subject
to Section 6.2, the Company and the Purchasers shall enter into (i) the
Convertible Note Purchase Agreement attached hereto as Exhibit 6.1(i) (the
"Convertible Note Purchase Agreement"), (ii) warrants to purchase 1,500,000
shares of Common Stock at an exercise price of $7 attached hereto as
Exhibit 6.1(ii) (the "Rollover Warrant"), (iii) the Registration Rights
Agreement attached hereto as Exhibit 6.1(iii) (the "Rollover Registration
Rights Agreement") and (iv) the Convertible Note Security Agreement
attached hereto as Exhibit 6.1(iv) (the "Convertible Note Security
Agreement"); provided, however, that if a Governmental Entity shall
determine that any of the transactions contemplated by the Rollover
Transactions violate any applicable rules or regulations of such
Governmental Entity, the Holder shall, at the Holder's sole discretion,
either (i) abandon the Rollover Transactions or (ii) modify the structure
of the Rollover Transactions in a manner to comply with such rule or
regulation.
6.2. Conditions to Rollover. (a) The obligation of each party to
consummate the Rollover Transactions shall be subject to there having been
no enactment, issuance, promulgation, enforcement or entering into of any
Law by a Governmental Entity that effects or has the effect of making any
of the Rollover Transactions illegal or otherwise restraining or
prohibiting such transactions.
(b) The obligation of the Purchasers to consummate the
Rollover Transactions shall be subject to the following conditions:
(i) no change (or any condition, event or development
involving a prospective change) shall have occurred or be
threatened that could, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect;
(ii) no Default shall have occurred and be continuing
under this Note and no Default (as defined in the 7.5% Secured
Note) shall have occurred and be continuing under the 7.5%
Secured Note;
(iii) concurrently with the consummation of the
Rollover Transactions, the principal amount of this Note (plus
all accrued and unpaid interest on this Note) and the 7.5%
Secured Note (plus all accrued and unpaid interest on the 7.5%
Secured Note) shall have been repaid in full;
(iv) the Company shall have delivered to the Purchasers
any document, instrument or certificate required to be delivered
by the Company pursuant to the Rollover Transaction Documents;
and
(v) each Purchaser shall have received such other
instruments and documents reasonably requested by such Purchaser.
(c) The obligation of the Company to consummate the Rollover
Transactions shall be subject to the delivery by each Purchaser to the
Company of any document, instrument or certificate required to be delivered
by such Purchaser pursuant to the Rollover Transaction Documents.
6.3. Failure to Consummate the Rollover Transactions.
Notwithstanding anything herein to the contrary, if the Company shall fail
to consummate the Rollover Transactions described in Section 6.1 for any
reason whatsoever, then the Company's sole liability to the Holder will be
the: (i) payment of the Holder's costs and, in each case, expenses pursuant
to Section 8.8; (ii) payment of principal and interest under this Note and
the 7.5% Note (and, in each case, default interest, if applicable); and
(iii) execution of the Registration Rights Agreement by the Company
pursuant to Section 6.4.
6.4. Registration Rights Agreement. In the event the approval of
the Company's stockholders described in Section 4.4 shall not have been
obtained at the Company Meeting on or prior to February 28, 2000, or in the
event that the Rollover Transactions shall not have occurred on or prior to
the Rollover Date, the Company shall immediately execute the Registration
Rights Agreement attached hereto as Exhibit 6.4 (the "Registration Rights
Agreement") and deliver such executed Registration Rights Agreement by fax
to the Holder.
7. Interpretation.
--------------
7.1. Definitions.
-----------
"7.5% Note" shall have the meaning ascribed thereto in Section
1.3.
"Acceleration Date" shall mean the Declared Acceleration Date or
the Automatic Acceleration Date, as the case may be.
"Action" shall have the meaning ascribed thereto in Section
8.1(b)(i).
"Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Exchange Act. "Affiliate" shall also include partners of a
Person. Notwithstanding the foregoing, "Affiliate" shall not include the
limited partners of the Holder or any limited partners of a limited partner
of the Holder.
"Automatic Acceleration Date" shall have the meaning ascribed
thereto in Section 5.2.
"Board of Directors" shall mean the Board of Directors of the
Company.
"Business Day" shall mean any day other than a Saturday, Sunday,
or a day on which banking institutions in the State of New York are
authorized or obligated by Law or executive order to close.
"Capital Stock" means, in the case of the Company, any and all
shares (however designated) of the capital stock of the Company now or
hereafter outstanding.
"Capitalized Lease" shall mean, with respect to any Person, any
lease or any other agreement for the use of property which, in accordance
with generally accepted accounting principles, should be capitalized on the
lessee's or user's balance sheet.
"Capitalized Lease Obligation" of any Person shall mean and
include, as of any date as of which the amount thereof is to be determined,
the amount of the liability capitalized or disclosed (or which should be
disclosed) in a balance sheet of such Person in respect of a Capitalized
Lease of such Person.
"Change of Control" shall mean
(a) the acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act) of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 30% or more of the
combined voting power of the then outstanding Voting Securities
of the Company, but excluding, for this purpose, any such
acquisition by (i) the Company or any Subsidiary), (ii) any
Benefit Plan (or related trust) of the Company or any Subsidiary
or (iii) the Holder or any of its Affiliates or in connection
with the Rollover Transactions; or
(b) the Incumbent Board shall cease for any reason to
constitute at least 50% of the members of the Board.
"Collateral" means all real and personal property and interests
in real and personal property including, without limitation, Intellectual
Property, rights under leases and royalty rights and agreements, now owned
or hereafter acquired by the Company or its Subsidiaries in or upon which a
Lien is granted or made under the Collateral Documentation.
"Collateral Documentation" means the Security Agreement, the
Financing Statements, and all other deeds of trust, assignments,
endorsements, pledged stock, collateral assignments and other instruments,
documents, agreements or conveyances at any time creating or evidencing
Liens or assigning Liens to the Holder, to secure the obligations of the
Company or any of its Subsidiaries under this Note and the Registration
Rights Agreement.
"Common Stock" shall mean the Common Stock, no par value, of the
Company.
"Company" shall have the meaning ascribed thereto in the
Preamble.
"Company Meeting" shall have the meaning ascribed thereto in
Section 4.4.
"Contracts" shall mean all agreements, contracts, leases,
purchase orders, arrangements, commitments and licenses to which the
Company or any of its Subsidiaries is a party or by which the Company or
any of its Subsidiaries is bound.
"Convertible Note Purchase Agreement" shall have the meaning
ascribed thereto in Section 6.1.
"Convertible Note Security Agreement" shall have the meaning
ascribed thereto in Section 6.1.
"Debentures" shall have the meaning ascribed thereto in the
Subscription Agreement.
"Declared Acceleration Date" shall have the meaning ascribed
thereto in Section 5.2.
"Default" shall have the meaning ascribed thereto in Section 5.1.
"Due Date" shall mean the earlier of the Maturity Date and the
Acceleration Date, as applicable.
"Environmental Laws" means any and all Laws, permits,
concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or
the release of any materials into the environment, including but not
limited to those related to hazardous substances or wastes, air emissions
and discharges to waste or public systems.
"Equity Interests" means any capital stock, partnership interest,
joint venture interest or other equity interest or warrants, options or
other rights to acquire any capital stock, partnership interest, joint
venture interest or other equity interest.
"Equity Securities" shall mean with respect to any Person, shares
of capital stock or other equity interest of such Person, and any rights,
options or warrants to purchase stock or other securities exchangeable for
or convertible into capital stock of or other equity interest in the
Company.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"Event of Default" shall have the meaning ascribed thereto in
Section 5.1.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any successor federal statute, and the rules and regulations of
the SEC thereunder, all as the same shall be in effect at the time.
Reference to a particular section of the Securities Exchange Act of 1934,
as amended, shall include reference to the comparable section, if any, of
any such successor federal statute.
"Financing Statements" means Form UCC-1 financing statements
filed in all jurisdictions necessary or desirable in order to perfect the
Holder's security interest in the Collateral and shall include any Form
UCC-1 financing statements assigned to the Holder and filings to be made in
the U.S. Patent and Trademark Office and the U.S. Copyright Office.
"GAAP" shall mean U.S. generally accepted accounting principles.
"Governmental Entity" shall mean any supernational, national,
foreign, federal, state or local judicial, legislative, executive,
administrative or regulatory or self-regulatory body or authority.
"Guaranty" or "Guarantee" by any Person shall mean all
obligations (other than endorsements in the ordinary course of business of
negotiable instruments for deposit or collection) of any Person
guaranteeing, or in effect guaranteeing, any Indebtedness, dividend or
other obligation of any other Person (the "primary obligor") in any manner,
whether directly or indirectly, including, without limitation, all
obligations incurred through an agreement, contingent or otherwise, by such
Person: (i) to purchase such Indebtedness or obligation or any property or
assets constituting security therefor, (ii) to advance or supply funds (x)
for the purchase or payment of such Indebtedness or obligation, (y) to
maintain working capital or other balance sheet condition or otherwise to
advance or make available funds for the purchase or payment of such
Indebtedness or obligation, (iii) to lease property or to purchase
securities or other property or services primarily for the purpose of
assuring the owner of such Indebtedness or obligation of the ability of the
primary obligor to make payment of such Indebtedness or obligation, or (iv)
otherwise to assure the owner of the Indebtedness or obligation of the
primary obligor against loss in respect thereof. For the purposes of any
computations made under this Note, a Guarantee in respect of any
Indebtedness for borrowed money shall be deemed to be Indebtedness equal to
the outstanding amount of the Indebtedness for borrowed money which has
been guaranteed, and a Guarantee in respect of any other Liability or any
dividend shall be deemed to be Indebtedness equal to the maximum aggregate
amount of such Liability or dividend.
"Holder" shall have the meaning ascribed thereto in the Preamble.
"Incumbent Board" shall mean the individuals who, immediately
after the Closing, constitute the Board of Directors; provided, however,
that any individual becoming a director subsequent to the Closing whose
election, or nomination for election by the Company's stockholders, was
approved by a vote of at least a majority of the directors then comprising
the Incumbent Board shall be deemed to be a member of the Incumbent Board
"Indebtedness" shall mean, with respect to any Person, (i) all
obligations of such Person for borrowed money, or with respect to deposits
or advances of any kind, (ii) all obligations of such Person evidenced by
bonds, debentures, notes or similar instruments, (iii) all obligations of
such Person under conditional sale or other title retention agreements
relating to property purchased by such Person, (iv) all obligations of such
Person issued or assumed as the deferred purchase price of property or
services (other than accounts payable to suppliers and similar accrued
liabilities incurred in the ordinary course of business and paid in a
manner consistent with industry practice), (v) all Indebtedness of others
secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any lien or security
interest on property owned or acquired by such Person whether or not the
obligations secured thereby have been assumed, (vi) all Capitalized Lease
Obligations of such Person, (vii) all Guarantees of such Person, (viii) all
obligations (including but not limited to reimbursement obligations)
relating to the issuance of letters of credit for the account of such
Person, (ix) all obligations arising out of foreign exchange contracts, and
(x) all obligations arising out of interest rate and currency swap
agreements, cap, floor and collar agreements, interest rate insurance,
currency spot and forward contracts and other agreements or arrangements
designed to provide protection against fluctuations in interest or currency
exchange rates.
"Indemnified Person" shall have the meaning ascribed thereto in
Section 8.1(b).
"Intellectual Property" means (a) Patents, (b) all trademarks,
service marks, trade dress, logos, trade names, domain names and corporate
names, together with all translations, adaptations, derivations and
combinations thereof and including all goodwill associated therewith, and
all applications, registrations and renewals in connection therewith, (c)
all copyrightable works, all copyrights and all applications, registrations
and renewals in connection therewith, (d) all mask works and all
applications, registrations and renewals in connection therewith, (e) all
trade secrets and confidential business information (including ideas,
research and development, know-how, formulas, compositions, manufacturing
and production processes and techniques, technical data, designs, drawings,
specifications, customer and supplier lists, pricing and cost information
and business and marketing plans and proposals), (f) all computer software
(including data and related documentation), (g) all other proprietary
rights, (h) all copies and tangible embodiments of the foregoing (in
whatever form or medium) and (i) all licenses, sublicenses, permissions or
agreements in connection with the foregoing.
"Law" shall include any foreign, federal, state, or local law,
statute, rule, regulation, Order or other restriction of any court or other
Governmental Entity.
"Liability" shall mean any debt, liability or obligation, whether
known or unknown, asserted or unasserted, accrued, absolute, contingent or
otherwise, whether due or to become due.
"Lien" means, with respect to any Person, any mortgage, lien,
pledge, charge, security interest or other encumbrance, or any interest or
title of any vendor, lessor, lender or other secured party to or of such
Person under any conditional sale or other title retention agreement or
Capital Lease, upon or with respect to any property or asset of such Person
(including in the case of stock, stockholder agreements, voting trust
agreements and all similar arrangements).
"Litigation" shall mean any claim, demand, notice, action, suit,
proceeding, arbitration, investigation, civil, criminal or administrative
action, audit, inquiry or hearing by or before any Governmental Entity or
private arbitration tribunal.
"Material Adverse Effect" shall mean a material adverse effect on
(a) the properties, business, prospects, operations, earnings, assets,
Liabilities or the condition (financial or otherwise) of the Company and
its Subsidiaries taken as a whole, whether or not in the ordinary course of
business, (b) the ability of the Company or any of its Subsidiaries to
perform its obligations under any of the Transaction Documents to which it
is a party, (c) the validity or enforceability of any of the Transaction
Documents, (d) the rights, remedies, powers and privileges of the Holder
under any of the Transaction Documents or (e) the timely payment or
performance of the Secured Obligations.
"Maturity Date" shall mean the earlier of February 28, 2000 and
the Rollover Date.
"Order" shall mean any judgment, order, injunction, ruling,
decree, stipulation or award of any Governmental Entity or private
arbitration tribunal.
"Patents" shall mean, collectively, (a) all inventions (whether
patentable or unpatentable and whether or not reduced to practice) and all
improvements thereon, (b) all patents, patent applications and patent
disclosures, (c) all reissues, divisions, continuations, revisions
reexaminations, renewals, extensions and continuations-in-part thereof) and
(d) all rights, now existing or hereafter coming into existence, (i) to all
income, royalties, damages, and other payments (including in respect of all
past, present and future infringements) now or hereafter due or payable
under or with respect to any of the foregoing, (ii) to sue for all past,
present and future infringements with respect to any of the foregoing and
(iii) otherwise accruing under or pertaining to any of the foregoing
throughout the world, including all inventions and improvements described
or discussed in all such patents and patent applications.
"Permitted Indebtedness" means, without duplication, any of the
following Indebtedness of the Company or any of its Subsidiaries, as the
case may be: (i) Indebtedness and obligations under this Note; (ii) any
Indebtedness and obligations outstanding on the date hereof, as set forth
on Schedule 4.1; or (iii) Indebtedness incurred in the ordinary course of
business and consistent with past practice not to exceed $10,000
individually or in the aggregate.
"Permitted Liens" means: (i) Liens existing on the date hereof
and set forth on Schedule 4.2, all of which are subordinate to the Lien of
the Collateral Documentation except as set forth in Schedule 4.2; (ii)
Liens (other than any Lien imposed under ERISA or any Environmental Laws)
for taxes, assessments or charges of any Governmental Entity for claims not
yet due or which are being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted, and with respect
to which adequate reserves or other appropriate provisions are being
maintained in accordance with the provisions of GAAP and enforcement
thereof is stayed; (iii) Liens of landlords, carriers, warehousemen,
mechanics, materialmen and other Liens (other than any Lien imposed under
ERISA) not voluntarily granted for amounts not yet due or which are being
contested in good faith by appropriate proceedings promptly instituted and
diligently conducted, and with respect to which adequate reserves or other
appropriate provisions are being maintained in accordance with the
provisions of GAAP, and enforcement thereof is stayed; (iv) Liens (other
than any Lien imposed under ERISA), incurred or deposited made in the
ordinary course of business, including without limitation, surety bonds and
appeal bonds, in connection with workers' compensation, unemployment
insurance and other types of social security benefits or to secure the
performance of tenders, bids, leases, contracts (other than for the
repayment of indebtedness), statutory obligations and other similar
obligations or arising as a result of progress payments under government
contracts; (v) easements (including without limitation reciprocal easement
agreements and utility agreements), rights-of-way, covenants, consents,
reservations, encroachments, variations and other similar restrictions,
charges or encumbrances (whether or not recorded) and other Liens incurred
in the ordinary course of business, which do not secure indebtedness or the
deferred purchase price of any asset and which do not interfere materially
with the ordinary conduct of the business of the Company or any Subsidiary
of the Company and which do not materially detract from the value of the
property to which they attach or materially impair the use thereof to the
Company or any Subsidiary of the Company; and (vi) building restrictions,
zoning laws and other statutes, laws, rules, regulations, ordinances and
restrictions, and any amendments thereto, now or at any time hereafter
adopted by any Governmental Entity having jurisdiction.
"Person" shall mean any individual, firm, corporation, limited
liability company, partnership, company or other entity, and shall include
any successor (by merger or otherwise) of such entity.
"Preferred Stock" shall have the meaning ascribed thereto in
Section 3.3.
"Proxy Statement" shall mean the proxy statement in a definitive
form relating to the Company Meeting.
"Put Option" shall have the meaning ascribed thereto in the
Subscription Agreement.
"Purchaser" shall mean the purchasers listed on Exhibit A to the
Convertible Note Purchase Agreement.
"Registration Rights Agreement" shall have the meaning ascribed
thereto in Section 6.4.
"Representatives" shall have the meaning ascribed thereto in
Section 4.10.
"Restricted Encumbrance" shall have the meaning ascribed thereto
in Section 4.2.
"Rollover Date" shall have the meaning ascribed thereto in
Section 6.1.
"Rollover Registration Rights Agreement" shall have the meaning
ascribed thereto in Section 6.1.
"Rollover Transactions" shall mean the transactions contemplated
by Section 6.1 of this Note.
"Rollover Transaction Documents" shall mean the Convertible Note
Purchase Agreement, the Rollover Warrant, the Rollover Registration Rights
Agreement, the Convertible Note Security Agreement and any documents and
instruments required to be executed or delivered pursuant to any of the
foregoing agreements.
"Rollover Warrant" shall have the meaning ascribed thereto in
Section 6.1.
"SEC" shall mean the United States Securities and Exchange
Commission.
"SEC Reports" shall have the meaning ascribed thereto in Section
3.4.
"Secured Obligations" shall mean any and all obligations of the
Company or any of its Subsidiaries at any time and from time to time for
the performance of its agreements, covenants and undertakings under or in
respect of the Transaction Documents to which it is a party.
"Securities Act" shall mean the Securities Act of 1933, as
amended, or any successor federal statute, and the rules and regulations of
the SEC thereunder, all as the same shall be in effect at the time.
Reference to a particular section of the Securities Act shall include
reference to the comparable section, if any, of such successor federal
statute.
"Security Agreement" shall mean the agreement, dated as of
October 21, 1999, between Appaloosa Investment Limited Partnership I, L.P.
and the Company, providing for a security interest in the Collateral.
"Subscription Agreement" shall mean the Subscription Agreement,
dated as of April 21, 1999, by and among the Company and certain
subscribers thereto.
"Subsidiary" means, with respect to any Person, (i) a corporation
a majority of whose capital stock with voting power, under ordinary
circumstances, to elect directors is at the time, directly or indirectly,
owned by such Person, by one or more Subsidiaries of such Person or by such
Person and one or more Subsidiaries thereof, (ii) any other Person (other
than a corporation), including without limitation a joint venture, in which
such Person, one or more Subsidiaries thereof or such Person and one or
more Subsidiaries thereof, directly or indirectly, at the date of
determination thereof, has at least majority ownership interest entitled to
vote in the election of directors, managers or trustees thereof (or other
Persons performing similar functions), (iii) the management of which is
otherwise controlled, directly or indirectly, by such Person or (iv) any
other Person required to be consolidated with such Person in accordance
with generally accepted accounting principles. For purposes of this
definition (and for the determination of whether or not a Subsidiary is a
wholly-owned Subsidiary of a Person), any directors' qualifying shares or
investment by foreign nationals mandated by applicable law shall be
disregarded in determining the ownership of a Subsidiary.
"Tax" and "Taxes" shall mean any federal, state, local or foreign
income, gross receipts, property, sales, use, value added, license, excise,
franchise, capital, net worth, estimated, withholding, employment, payroll,
premium, withholding, alternative or added minimum, ad valorem, inventory,
asset, gains, transfer or excise tax, or any other tax, levy, custom, duty,
impost, governmental fee or other like assessment or charge of any kind
whatsoever, together with any interest, penalty or additions to tax,
imposed by any Governmental Entity and, including, without limitation, any
Taxes of another Person owing under a contract, as transferee or successor,
under Treas. Reg. ss. 1.1502-6 or analogous state, local or foreign law, or
otherwise.
"Tax Return" shall mean any return, report or similar statement
required to be filed with respect to any Tax (including any attached
schedules), including, without limitation, any information return, claim
for refund, amended return or declaration of estimated Tax.
"Transaction Documents" shall mean this Note, the 7.5% Note, the
side letter, dated December 30, 1999, between the Company and the Holder,
the Security Agreement, the Registration Rights Agreement, the warrants to
be issued to Affiliates of the Holder pursuant to section (c) of the
aforesaid side letter and the Warrants (as defined in the 7.5% Note).
"Transfer" shall have the meaning ascribed thereto in 4.9.
"Voting Securities" shall mean at any time shares of any class of
Capital Stock of the Company (or other corporation) which are then entitled
to vote generally in the election of directors of the Company (or such
other corporation).
7.2. Accounting Principles. The character or amount of any asset,
liability, capital account or reserve and of any item of income or expense
required to be determined pursuant to this Note, and any consolidation or
other accounting computation required to be made pursuant to this Note, and
the construction of any definition in this Note containing a financial
term, shall be determined or made, as the case may be, in accordance with
GAAP, to the extent applicable, unless such principles are inconsistent
with the express requirements of this Note.
8. Miscellaneous.
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8.1. Payment; Indemnity; Taxes. (a) If the date on which any
payment under this Note is required to be made occurs on a day other than a
Business Day, such payment shall be due and payable on the next succeeding
Business Day.
(b) (i) The Company and its Subsidiaries shall jointly and
severally indemnify and hold harmless the Holder and its Representatives
(each, an "Indemnified Person") from and against any and all suits,
actions, proceedings, claims (collectively, "Actions"), damages, losses,
Liabilities and out-of-pocket expenses (including reasonable attorneys'
fees and disbursements and other costs of investigation or defense,
including those incurred upon any appeal) which may be instituted or
asserted against or incurred by any such Indemnified Person as the result
of credit having been extended, suspended or terminated under this Note and
the other Transaction Documents and the administration of such credit, and
in connection with or arising out of the transactions contemplated
hereunder and thereunder and any actions or failures to act in connection
therewith.
(ii) Upon receipt by any Indemnified Person of any
Action against such Indemnified Person with respect to which indemnity may
be sought under this Note or any other Transaction Document, such
Indemnified Person shall promptly notify the Company in writing, provided
that failure so to notify the Company shall not relieve the Company from
any liability which the Company may have on account of this indemnity or
otherwise, except to the extent the Company shall have been materially
prejudiced by such failure. The Company shall, at its option, assume the
defense of any Action including the employment of counsel reasonably
satisfactory to the Indemnified Person. Any Indemnified Person shall have
the right to employ separate counsel in any such action and participate in
the defense thereof but the fees and expenses of such counsel shall be at
the expense of such Indemnified Person, unless: (i) the Company has failed
promptly to assume the defense and employ counsel or (ii) the named parties
to such Action (including any impleaded parties) include such Indemnified
Person and the Company, and such Indemnified Person and the Company shall
have been advised by counsel that there may be one or more legal defenses
available to it which are different from or in addition to those available
to the Company or there is or may be a conflict between the Company and any
Indemnified Person (in which case the Company may not assume the defense).
In the event that any Indemnified Person shall become entitled to separate
counsel under this Note or any other Transaction Document, the Company
shall not in such event be responsible hereunder for the fees and expenses
of more than one firm of separate counsel in connection with any Action in
the same jurisdiction, in addition to any local counsel. In addition, the
Company will not, without prior written consent of the Indemnified Person,
settle, compromise or consent to the entry of any judgment in or otherwise
seek to terminate any pending or threatened Action in which indemnification
may be sought hereunder (whether or not any Indemnified Person is a party
thereto) unless such settlement, compromise, consent or termination
includes an unconditional release of such Indemnified Person from all
liabilities and expenses arising out of such Action.
(c) The Company shall bear all sales, documentary, transfer,
stamp or other similar taxes and all filing fees and expenses incurred in
connection with the transactions contemplated by this Note and shall
indemnify and hold harmless each Indemnified Purchaser from and against any
such taxes.
8.2. Severability. If any term, provision, covenant or
restriction of this Note or any exhibit hereto is held by a court of
competent jurisdiction to be invalid, void or unenforceable, the remainder
of the terms, provisions, covenants and restrictions of this Note and such
exhibits shall remain in full force and effect and shall in no way be
affected, impaired or invalidated. It is hereby stipulated and declared to
be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such
which may be hereafter declared invalid, void or unenforceable.
8.3. Specific Enforcement. The Holder, on the one hand, and the
Company, on the other, acknowledge and agree that irreparable damage would
occur in the event that any of the provisions of this Note were not
performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the Holder shall be entitled to an
injunction to prevent breaches of the provisions of this Note and to
enforce specifically the terms and provisions hereof in any court of the
United States or any state thereof having jurisdiction, this being in
addition to any other remedy to which they may be entitled at Law or
equity.
8.4. Entire Agreement. The Transaction Documents (including the
Schedules and Exhibits hereto and thereto) contain the entire understanding
of the parties with respect to the transactions contemplated hereby and
thereby.
8.5. Notices and other Communications. All notices, consents,
requests, instructions, approvals, financial statements, proxy statements,
reports and other communications provided for herein shall be deemed given,
if in writing and delivered personally, by telecopy or sent by registered
mail, postage prepaid, if to:
The Company, to:
129 Reservoir Road
Vernon, CT 06066
Attention: Carl Sahi
Fax: (860) 870-6118
With a copy to:
Pepe & Hazard LLP
Goodwin Square
Hartford, CT 06103
Attention: Walter W. Simmers, Esq.
Fax: (860) 522-2796
The Holder, to:
c/o Appaloosa Management, L.P.
26 Main Street, 1st Floor
Chatham, New Jersey 07928
Attention: Mr. James Bolin
Fax: (973) 701-7055
With a copy to:
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, NY 10004
Attention: Robert C. Schwenkel, Esq.
Fax: (212) 859-4000
or to such other address as any party may, from time to time, designate in
a written notice given in a like manner.
8.6. Successors and Assigns. All covenants and agreements
contained herein shall bind and inure to the benefit of the Holder and its
respective successors and assigns. The Company many not assign this Note
without the written consent of the Holder.
8.7. Amendments. No amendment or waiver of any provision of this
Note, nor consent to any departure by the Company therefrom, shall in any
event be effective unless the same shall be in writing and signed by the
Holder and then such amendment, waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.
8.8. Expenses. The Company agrees to promptly (but in no event
later than 2 business days) pay the Holder all costs and expenses
(including the fees and expenses of its counsel) incurred by it in
connection with the transactions contemplated hereby (to the extent not
already paid by the Company on the date hereof) and the Rollover
Transactions (regardless of whether the Rollover Transactions are
consummated) upon the earlier to occur of (i) the prepayment of the entire
outstanding principal amount of the Note in accordance with Section 1.3 and
(ii) the Due Date. In addition, the Company agrees to pay to the Holder all
reasonable costs and expenses incurred by the Holder relating to any future
amendment or supplement to any of the Transaction Documents (or any
proposal by the Company for such amendment or supplement) whether or not
consummated or any waiver or consent with respect thereto (or any proposal
for such waiver or consent) whether or not consummated, and all costs and
expenses of such Holder relating to the enforcement of any of the
Transaction Documents
8.9 Survival. All covenants, agreements, representations and
warranties contained herein in connection with the transactions
contemplated hereby shall survive the date hereof and the delivery of the
Transaction Documents, regardless of any investigation made by or on behalf
of any party; provided, that, all covenants, agreements, representations
and warranties contained herein shall terminate when this Note and any
amounts due hereunder have been indefeasibly repaid in full; provided,
however, that notwithstanding anything to the contrary contained herein,
Sections 6.3, 8.1(b), 8.2, 8.3, 8.4, 8.5 and 8.8 shall survive forever.
8.10. Public Announcements. Neither the Company nor the Holder
shall make any public statements, including, without limitation, any press
releases, with respect to this Note or the other Transaction Documents and
the transactions contemplated hereby or thereby without the prior written
consent of the other party (which consent shall not be unreasonably
withheld) except as may be required by Law. If a public statement is
required to be made by Law, the parties shall consult with each other in
advance as to the contents and timing thereof.
8.11. GOVERNING LAW. THIS NOTE AND THE OTHER TRANSACTION
DOCUMENTS SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE
RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF NEW
YORK EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD
REQUIRE THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH
STATE.
8.12. Submission to Jurisdiction. If any Litigation shall be
brought by the Holder in order to enforce any right or remedy under this
Note or any of the other Transaction Documents, the Company hereby consents
and will submit, and will cause each of its Subsidiaries to submit, to the
jurisdiction of any state or federal court of competent jurisdiction
sitting within the area comprising the Southern District of New York on the
date of this Note. The Company hereby irrevocably waives any objection,
including, but not limited to, any objection to the laying of venue or
based on the grounds of forum non conveniens, which it may now or hereafter
have to the bringing of any such Litigation in such jurisdiction.
8.13. Service of Process. Nothing herein shall affect the right
of the Holder to serve process in any other manner permitted by Law or to
commence legal proceedings or otherwise proceed against the Company in any
other jurisdiction.
8.14. WAIVER OF JURY TRIAL. THE COMPANY HEREBY WAIVES ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, PROCEEDING OR
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION
WITH, THIS NOTE OR ANY OF THE OTHER TRANSACTION DOCUMENTS
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Note to be duly
executed as of the date first above written.
BIO-PLEXUS, INC.
By: /s/ Carl Sahi
-----------------------------
Name: Carl Sahi
Title:
EXHIBIT 5
WARRANT
To Purchase Shares of Common Stock of
BIO-PLEXUS, INC.
At a Purchase Price of
$____ per Share
(Subject to Adjustment as Provided herein)
No. of Shares of Common Stock: _________
<PAGE>
TABLE OF CONTENTS
Section Page
- ------- ----
1. DEFINITIONS 1
- --------------------------------------------------------------------------
2. EXERCISE OF WARRANT 4
- --------------------------------------------------------------------------
2.1. MANNER OF EXERCISE. 4
2.2. PAYMENT OF TAXES. 5
2.3. FRACTIONAL SHARES. 5
3. TRANSFER, DIVISION AND COMBINATION 6
- --------------------------------------------------------------------------
3.1. TRANSFER. 6
3.2. DIVISION AND COMBINATION. 6
3.3. EXPENSES. 6
3.4. MAINTENANCE OF BOOKS. 6
4. ADJUSTMENTS 6
- --------------------------------------------------------------------------
4.1. STOCK DIVIDENDS, SUBDIVISIONS AND COMBINATIONS. 6
4.2. CERTAIN OTHER DISTRIBUTIONS. 7
4.3. ISSUANCE OF ADDITIONAL SHARES OF COMMON STOCK. 8
4.4. ISSUANCE OF WARRANTS OR OTHER RIGHTS. 8
4.5. ISSUANCE OF CONVERTIBLE SECURITIES. 9
4.6. SUPERSEDING ADJUSTMENT. 10
4.7. OTHER PROVISIONS APPLICABLE TO ADJUSTMENTS UNDER THIS SECTION. 10
4.8. REORGANIZATION, RECLASSIFICATION, MERGER, CONSOLIDATION OR
DISPOSITION OF ASSETS. 12
4.9. OTHER ACTION AFFECTING COMMON STOCK. 13
4.10.CERTAIN LIMITATIONS. 13
5. NOTICES TO WARRANT HOLDERS 13
- --------------------------------------------------------------------------
5.1. NOTICE OF ADJUSTMENTS. 13
5.2. NOTICE OF CORPORATE ACTION. 13
6. RIGHTS OF HOLDERS 14
- --------------------------------------------------------------------------
6.1 NO IMPAIRMENT. 14
7. RESERVATION AND AUTHORIZATION OF COMMON STOCK; REGISTRATION
WITH OR APPROVAL OF ANY GOVERNMENTAL AUTHORITY 15
- --------------------------------------------------------------------------
8. TAKING OF RECORD; STOCK AND WARRANT TRANSFER BOOKS 15
- --------------------------------------------------------------------------
9. RESTRICTIONS ON TRANSFERABILITY 15
- --------------------------------------------------------------------------
9.1. RESTRICTIVE LEGEND. 15
9.2. NOTICE OF PROPOSED TRANSFERS; REQUESTS FOR REGISTRATION. 16
9.3. TERMINATION OF RESTRICTIONS. 16
10. PREEMPTIVE RIGHTS 16
- --------------------------------------------------------------------------
11. SUPPLYING INFORMATION 17
- --------------------------------------------------------------------------
12. LOSS OR MUTILATION 17
- --------------------------------------------------------------------------
13. LIMITATION OF LIABILITY 18
- --------------------------------------------------------------------------
14. MISCELLANEOUS 18
- --------------------------------------------------------------------------
14.1. NONWAIVER AND EXPENSES. 18
14.2. NOTICE GENERALLY. 18
14.3. REMEDIES. 19
14.4. SUCCESSORS AND ASSIGNS. 19
14.5. AMENDMENT. 19
14.6. SEVERABILITY. 19
14.7. HEADINGS. 19
14.8. GOVERNING LAW. 19
<PAGE>
THIS WARRANT AND THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR AN APPLICABLE EXEMPTION TO THE REGISTRATION REQUIREMENTS
OF SUCH ACT OR SUCH LAWS
No. of Shares of Common Stock:
---------
WARRANT
To Purchase Shares of Common Stock of
BIO-PLEXUS, INC.
THIS IS TO CERTIFY THAT _______________, or its registered
assigns (the "Holder"), is entitled, at any time prior to the Expiration
Date (as hereinafter defined), to purchase from BIO-PLEXUS, INC., a
Connecticut corporation (the "Company"), _________ (subject to adjustment
as provided herein) shares of Common Stock (as hereinafter defined), in
whole or in part, at a purchase price of $ ____ per share (subject to
adjustment as provided herein), all on the terms and conditions and
pursuant to the provisions hereinafter set forth.
1. DEFINITIONS
As used in this Warrant, the following terms have the respective
meanings set forth below:
"Additional Shares of Common Stock" shall mean all shares of
Common Stock issued by the Company after the Issue Date, other than (i)
Warrant Stock, (ii) shares of Common Stock issuable upon the conversion of
the Convertible Notes to be issued under the Convertible Note Purchase
Agreement and (iii) shares of Common Stock issuable upon exercise of the $7
Warrants to be issued pursuant to the Convertible Note Purchase Agreement.
"Average Market Price" shall mean, in respect of any share of
Common Stock on any date herein specified, the daily volume weighted
average sale price per share of Common Stock for such date. The closing
price for each day shall be the last quoted sale price or, if not so
quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of
Securities Dealers, Inc., Automated Quotation System or such other system
then in use, or, if on any such date the Common Stock or such other
securities are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker
making a market in the Common Stock selected by the Board of Directors of
the Company. If the Common Stock is listed or admitted to trading on a
national securities exchange, the closing price shall be the last sale
price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the Common Stock is not listed or admitted to trading on
the New York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the
principal national securities exchange on which the Common Stock is listed
or admitted to trading.
"Business Day" shall mean any day that is not a Saturday or
Sunday or a day on which banks are required or permitted to be closed in
the State of New York.
"Capital Stock" means, in the case of the Company, any and all
shares (however designated) of the capital stock of the Company now or
hereafter outstanding.
"Commission" shall mean the Securities and Exchange Commission or
any other federal agency then administering the Securities Act and other
federal securities laws.
"Common Stock" shall mean (except where the context otherwise
indicates) the Common Stock, no par value, of the Company as constituted on
the Issue Date, and any capital stock into which such Common Stock may
thereafter be changed, and shall also include (i) capital stock of the
Company of any other class (regardless of how denominated) issued to the
holders of shares of Common Stock upon any reclassification thereof and
(ii) shares of common stock of any successor or acquiring corporation (as
defined in Section 4.8) received by or distributed to the holders of Common
Stock of the Company in the circumstances contemplated by Section 4.8.
"Convertible Note Purchase Agreement" shall mean the convertible
note purchase agreement to be entered into by and among the Company, the
purchasers listed on Exhibit A thereto and Appaloosa Management L.P., as
collateral agent.
"Convertible Notes" shall mean the notes to be issued pursuant to
the Convertible Note Purchase Agreement.
"Convertible Securities" shall mean evidences of indebtedness,
shares of stock or other securities which are convertible into or
exchangeable or exercisable, with or without payment of additional
consideration in cash or property, for Additional Shares of Common Stock,
either immediately or upon the occurrence of a specified date or a
specified event.
"Current Market Price" shall mean, in respect of any share of
Common Stock on any date herein specified, the average of the Average
Market Price for the twenty Business Days ending five days prior to such
date.
"Current Warrant Price" shall mean, in respect of a share of
Common Stock at any date herein specified, the price at which a share of
Common Stock may be purchased pursuant to this Warrant on such date. The
Current Warrant Price as of the date of the issuance of this Warrant is $
______.
"Expiration Date" shall mean a date which is nine years from the
issuance of this Warrant.
"Holder" shall mean the Person in whose name this Warrant is
registered on the books of the Company maintained for such purpose.
"Holders" shall mean, collectively, each Holder of a Warrant, in the event
of any division of this Warrant.
"Issue Date" shall mean __________, 2000.
"Majority Holders" shall mean the holders of Warrants exercisable
for in excess of 50% of the aggregate number of shares of Warrant Stock
then purchasable upon exercise of all Warrants.
"Other Property" shall have the meaning set forth in Section 4.8.
"Outstanding" shall mean, when used with reference to Common
Stock, at any date as of which the number of shares thereof is to be
determined, all issued shares of Common Stock, except shares then owned or
held by or for the account of the Company or any subsidiary thereof, and
shall include all shares issuable in respect of outstanding scrip or any
certificates representing fractional interests in shares of Common Stock.
For the purposes of Sections 4.3, 4.4, 4.5, 4.6 and 4.7, Common Stock
Outstanding shall include all shares of Common Stock issuable in respect of
options or warrants to purchase, or securities convertible into, shares of
Common Stock, the exercise or conversion price of which is less than the
Current Market Price as of any date on which the number of shares of Common
Stock Outstanding is to be determined.
"Permitted Issuances" shall mean issuances of shares of Common
Stock and upon exercise of the warrants and options and other convertible
securities, in each case listed on Schedule 1.
"Person" shall mean any individual, firm, corporation,
partnership or other entity, and shall include any successor by merger or
otherwise of such entity.
"Restricted Common Stock" shall mean shares of Common Stock which
are, or which upon their issuance on the exercise of this Warrant would be,
evidenced by a certificate bearing the restrictive legend set forth in
Section 9.1(a).
"Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute, and the rules and regulations of
the Commission thereunder, all as the same shall be in effect at the time.
"Security" or "Securities" shall mean any equity or debt security
of the Company (including, without limitation, subscriptions, options,
warrants, rights, stock-based or stock-related awards or convertible or
exchangeable securities to which the Company is a party or by which the
Company may be bound of any character relating to, or obligating the
Company to issue, grant, award, transfer or sell any issued or unissued
shares of the Company's Capital Stock or other securities of the Company).
"Trading Day" means a Business Day or, if the Common Stock is
listed or admitted to trading in any national securities exchange, a day on
which such exchange is open for the transaction of business.
"Transfer" shall mean any disposition of any Warrant or Warrant
Stock or of any interest in either thereof, which would constitute a sale
thereof within the meaning of the Securities Act.
"Transfer Notice" shall have the meaning set forth in Section
9.2.
"Warrants" shall mean this Warrant and all warrants issued upon
transfer, division or combination of, or in substitution for, any thereof.
All Warrants shall at all times be identical as to terms and conditions and
date, except as to the number of shares of Common Stock for which they may
be exercised.
"Warrant Stock" shall mean the shares of Common Stock purchased
by the holders of the Warrants upon the exercise thereof.
2. EXERCISE OF WARRANT
2.1. MANNER OF EXERCISE. At any time or from time to time from and
after the Issue Date and until 5:00 P.M., New York time, on the Expiration
Date, Holder may exercise this Warrant, on any Business Day, for all or any
part of the number of shares of Common Stock purchasable hereunder.
In order to exercise this Warrant, in whole or in part, Holder
shall deliver to the Company at its principal office at 129 Reservoir Road,
Vernon, CT 06066 (i) a written notice of Holder's election to exercise this
Warrant, which notice shall specify the number of shares of Common Stock to
be purchased, (ii) payment of the aggregate Current Warrant Price for such
shares and (iii) this Warrant. Such notice shall be substantially in the
form appearing at the end of this Warrant as Exhibit A, duly executed by
Holder. Thirty days after receipt of the items specified in the second
preceding sentence, the Company shall execute or cause to be executed and
deliver or cause to be delivered to Holder a certificate or certificates
representing the aggregate number of full shares of Common Stock issuable
upon such exercise, together with cash in lieu of any fraction of a share,
as hereinafter provided. The stock certificate or certificates so delivered
shall be in such denomination or denominations as Holder shall request in
the notice and shall be registered in the name of Holder or, subject to
Section 9, such other name as shall be designated in the notice. This
Warrant shall be deemed to have been exercised and such certificate or
certificates shall be deemed to have been issued, and Holder or any other
Person so designated shall be deemed to have become a holder of record of
such shares for all purposes, as of the date which is thirty days after the
date of the notice, together with the Current Warrant Price and this
Warrant, are received by the Company as described above. If this Warrant
shall have been exercised in part, the Company shall, at the time of
delivery of the certificate or certificates representing Warrant Stock,
deliver to Holder a new Warrant evidencing the right of Holder to purchase
the unpurchased shares of Common Stock called for by this Warrant, which
new Warrant shall in all other respects be identical with this Warrant, or,
at the request of Holder, appropriate notation may be made on this Warrant
and the same returned to Holder.
Payment of the Current Warrant Price shall be made at the option
of Holder by (i) certified or official bank check, (ii) wire transfer of
immediately available funds, (iii) tendering Convertible Notes having an
Accreted Value (as defined in the Convertible Note Purchase Agreement)
equal to the Current Warrant Price (the Company hereby agreeing to reissue
any Convertible Notes of a Holder into one or more Convertible Notes in
denominations requested by such Holder) or (iv) the surrender of this
Warrant to the Company, with a duly executed exercise notice marked to
reflect "Net Issue Exercise," and, in either case, specifying the number of
shares of Common Stock to be purchased, during normal business hours on any
Business Day. Upon a Net Issue Exercise, Holder shall be entitled to
receive shares of Common Stock equal to the value of this Warrant (or the
portion thereof being exercised by Net Issue Exercise) by surrender of this
Warrant to the Company together with notice of such election, in which
event the Company shall issue to Holder a number of shares of the Company's
Common Stock computed as of the date of surrender of this Warrant to the
Company using the following formula:
X = Y x(A-B)
--------
A
Where X = the number of shares of Common Stock to be issued to the
Holder
Y = the number of shares of Warrant Stock being exercised under
this Warrant;
A = the Current Market Price of one share of the Company's Common
Stock (at the date
of such calculation);
B = the Current Warrant Price (as adjusted to the date of such
calculation).
2.2. PAYMENT OF TAXES. All shares of Common Stock issuable upon the
exercise of this Warrant shall be validly issued, fully paid and
nonassessable. The Company shall pay all expenses in connection with, and
all taxes (other than income taxes or capital gain tax of the Holder) and
other governmental charges that may be imposed with respect to, the issue
or delivery thereof.
2.3. FRACTIONAL SHARES. The Company shall not be required to issue a
fractional share of Common Stock upon exercise of this Warrant. As to any
fraction of a share which Holder would otherwise be entitled to purchase
upon such exercise, the Company shall pay a cash adjustment in respect of
such fraction in an amount equal to the same fraction of the Current Market
Price per share of Common Stock on the date of exercise.
3. TRANSFER, DIVISION AND COMBINATION
3.1. TRANSFER. Subject to compliance with Section 9, transfer of this
Warrant and all rights hereunder, in whole or in part, shall be registered
on the books of the Company to be maintained for such purpose, upon
surrender of this Warrant at the principal office of the Company referred
to in Section 2.1, together with a written assignment of this Warrant
substantially in the form of Exhibit B hereto duly executed by Holder and
funds sufficient to pay any transfer taxes payable upon the making of such
transfer. Upon such surrender and, if required, such payment, the Company
shall, subject to Section 9, execute and deliver a new Warrant or Warrants
in the name of the assignee or assignees and in the denomination specified
in such instrument of assignment, and shall issue to the assignor a new
Warrant evidencing the portion of this Warrant not so assigned, and this
Warrant shall promptly be canceled. A Warrant, if properly assigned in
compliance with Section 9, may be exercised by a new Holder for the
purchase of shares of Common Stock without having a new Warrant issued.
3.2. DIVISION AND COMBINATION. Subject to Section 9, this Warrant may
be divided into multiple Warrants or combined with other Warrants upon
presentation hereof at the aforesaid office or agency of the Company,
together with a written notice specifying the names and denominations in
which new Warrants are to be issued, signed by Holder. Subject to
compliance with Section 3.1 and with Section 9, as to any transfer which
may be involved in such division or combination, the Company shall execute
and deliver a new Warrant or Warrants in exchange for the Warrant or
Warrants to be divided or combined in accordance with such notice.
3.3. EXPENSES. The Company shall prepare, issue and deliver at its own
expense (other than transfer taxes) the new Warrant or Warrants under this
Section 3.
3.4. MAINTENANCE OF BOOKS. The Company agrees to maintain, at its
aforesaid office, books for the registration and the registration of
transfer of the Warrants.
4. ADJUSTMENTS
The number of shares of Common Stock for which this Warrant is
exercisable and/or the price at which such shares may be purchased upon
exercise of this Warrant, shall be subject to adjustment from time to time
as set forth in this Section 4. The Company shall give each Holder notice
of any event described below which requires an adjustment pursuant to this
Section 4 at the time of such event.
4.1. STOCK DIVIDENDS, SUBDIVISIONS AND COMBINATIONS. If at any time
the Company shall:
(a) take a record of the holders of its Common Stock for the
purpose of entitling them to receive a dividend payable in, or other
distribution of, Additional Shares of Common Stock,
(b) subdivide its outstanding shares of Common Stock into a
larger number of shares of Common Stock, or
(c) combine its outstanding shares of Common Stock into a smaller
number of shares of Common Stock,
then (i) the number of shares of Common Stock for which this Warrant is
exercisable immediately after the occurrence of any such event shall be
adjusted to equal the number of shares of Common Stock which a record
holder of the same number of shares of Common Stock for which this Warrant
is exercisable immediately prior to the occurrence of such event would own
or be entitled to receive after the happening of such event, and (ii) the
Current Warrant Price per share shall be adjusted to equal (A) the Current
Warrant Price multiplied by the number of shares of Common Stock for which
this Warrant is exercisable immediately prior to the adjustment divided by
(B) the number of shares for which this Warrant is exercisable immediately
after such adjustment.
4.2. CERTAIN OTHER DISTRIBUTIONS. If at any time the Company shall
take a record of the holders of its Common Stock for the purpose of
entitling them to receive any dividend or other distribution of:
(a) cash,
(b) any evidences of its indebtedness, any shares of stock or any
other securities or property of any nature whatsoever (other than
cash, Convertible Securities or Additional Shares of Common Stock), or
(c) any warrants or other rights to subscribe for or purchase any
evidences of its indebtedness, any shares of its stock or any other
securities or property of any nature whatsoever (other than cash,
Convertible Securities or Additional Shares of Common Stock),
then (i) the number of shares of Common Stock for which this Warrant is
exercisable shall be adjusted to equal the product of the number of shares
of Common Stock for which this Warrant is exercisable immediately prior to
such adjustment and a fraction (A) the numerator of which shall be the
Current Market Price per share of Common Stock at the date of taking such
record and (B) the denominator of which shall be such Current Market Price
per share of Common Stock minus the amount allocable to one share of Common
Stock of any such cash so distributable and of the fair value (as
determined in good faith by the Board of Directors of the Company) of any
and all such evidences of indebtedness, shares of stock, other securities
or property or warrants or other subscription or purchase rights so
distributable, and (ii) the Current Warrant Price shall be adjusted to
equal (A) the Current Warrant Price multiplied by the number of shares of
Common Stock for which this Warrant is exercisable immediately prior to the
adjustment divided by (B) the number of shares for which this Warrant is
exercisable immediately after such adjustment. A reclassification of the
Common Stock (other than a change in par value, or from par value to no par
value or from no par value to par value) into shares of Common Stock and
shares of any other class of stock shall be deemed a distribution by the
Company to the holders of its Common Stock of such shares of such other
class of stock within the meaning of this Section 4.2 and, if the
outstanding shares of Common Stock shall be changed into a larger or
smaller number of shares of Common Stock as a part of such
reclassification, such change shall be deemed a subdivision or combination,
as the case may be, of the outstanding shares of Common Stock within the
meaning of Section 4.1.
4.3. ISSUANCE OF ADDITIONAL SHARES OF COMMON STOCK. (a) If at any time
the Company shall (except as hereinafter provided) issue or sell any
Additional Shares of Common Stock, other than Permitted Issuances, in
exchange for consideration in an amount per Additional Share of Common
Stock less than the Current Warrant Price at the time the Additional Shares
of Common Stock are issued, then (i) the Current Warrant Price as to the
number of shares for which this Warrant is exercisable prior to such
adjustment shall be reduced to a price determined by multiplying (A) the
Current Warrant Price by (B) a fraction, the numerator of which shall be
the sum of (x) the number of shares of Common Stock Outstanding immediately
prior to such issue or sale multiplied by the then applicable Current
Warrant Price (the "Adjustment Price") and (y) the aggregate consideration
receivable by the Company for the total number of shares of Common Stock so
issued, and the denominator of which shall be the sum of (a) the total
number of shares of Common Stock Outstanding on such date and (b) the
number of Additional Shares issued, multiplied by the Adjustment Price; and
(ii) the number of shares of Common Stock for which this Warrant is
exercisable shall be adjusted to equal the product obtained by multiplying
the Current Warrant Price in effect immediately prior to such issue or sale
by the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to such issue or sale and dividing the
product thereof by the Current Warrant Price resulting from the adjustment
made pursuant to clause (i) above. For purposes of this Section 4.3 and for
the purposes of making adjustments of the number of shares of Common Stock
for which this Warrant is exercisable and the Current Warrant Price as
provided in this Section 4, the aggregate consideration receivable by the
Company in connection with the issuance of shares of Common Stock or of
rights, warrants or other securities convertible into shares of Common
Stock shall be deemed to be equal to the sum of the aggregate offering
price (before deduction of underwriting discounts or commissions and
expenses payable to third parties) of all such Common Stock, rights,
warrants and convertible securities plus the aggregate amount (as
determined on the date of issuance), if any, payable upon exercise or
conversion of any such rights, warrants and convertible securities into
shares of Common Stock. If, subsequent to the date of issuance of such
rights, warrants or Convertible Securities, the exercise or conversion
price thereof is reduced, such aggregate amount shall be recalculated and
the Current Warrant Price and number of shares of Common Stock for which
the Warrant is exercisable adjusted retroactively to give effect to such
reduction. If Common Stock is sold as a unit with other securities, the
aggregate consideration received for such Common Stock shall be deemed to
be net of the Fair Market Value of such other securities.
4.4. ISSUANCE OF WARRANTS OR OTHER RIGHTS. If at any time the Company
shall take a record of the holders of its Common Stock for the purpose of
entitling them to receive a distribution of, or shall in any manner
(whether directly or by assumption in a merger in which the Company is the
surviving corporation) issue or sell, any warrants or other rights to
subscribe for or purchase any Additional Shares of Common Stock or any
Convertible Securities (other than Permitted Issuances), whether or not the
rights to exchange or convert thereunder are immediately exercisable, and
the price per share for which Common Stock is issuable upon the exercise of
such warrants or other rights or upon conversion or exchange of such
Convertible Securities shall be less than the Current Warrant Price in
effect immediately prior to the time of such issue or sale, then the number
of shares for which this Warrant is exercisable and the Current Warrant
Price shall be adjusted as provided in Section 4.3 on the basis that the
maximum number of Additional Shares of Common Stock issuable pursuant to
all such warrants or other rights or necessary to effect the conversion or
exchange of all such Convertible Securities shall be deemed to have been
issued and outstanding and the Company shall have received all of the
consideration payable therefor, if any, as of the date of the actual
issuance of the number such warrants or other rights. No further
adjustments of the Current Warrant Price shall be made upon the actual
issue of such Common Stock or of such Convertible Securities upon exercise
of such warrants or other rights or upon the actual issue of such Common
Stock upon such conversion or exchange of such Convertible Securities.
Notwithstanding the foregoing, no adjustment shall be required under this
Section 4.4 solely by reason of the issuance or distribution of stock
purchase rights pursuant to a shareholder rights plan or any other rights
plan of the Company, provided that the adjustments required by this Section
4.4 shall be made if any "flip-in" or "flip-over" event shall occur under
such stockholder rights plan.
4.5. ISSUANCE OF CONVERTIBLE SECURITIES. If at any time the Company
shall take a record of the holders of its Common Stock for the purpose of
entitling them to receive a distribution of, or shall in any manner
(whether directly or by assumption in a merger in which the Company is the
surviving corporation) issue or sell, any Convertible Securities (other
than Permitted Issuances), whether or not the rights to exchange or convert
thereunder are immediately exercisable, and the price per share for which
Common Stock is issuable upon such conversion or exchange shall be less
than the Current Warrant Price in effect immediately prior to the time of
such issue or sale, then the number of shares for which this Warrant is
exercisable and the Current Warrant Price shall be adjusted as provided in
Section 4.3 on the basis that the maximum number of Additional shares of
Common Stock necessary to effect the conversion or exchange of all such
Convertible Securities shall be deemed to have been issued and outstanding
and the Company shall have received all of the consideration payable
therefor, if any, as of the date of actual issuance of such Convertible
Securities. No adjustment of the number of shares for which this Warrant is
exercisable and the Current Warrant Price shall be made under this Section
4.5 upon the issuance of any Convertible Securities which are issued
pursuant to the exercise of any warrants or other subscription or purchase
rights therefor, if any such adjustment shall previously have been made
upon the issuance of such warrants or other rights pursuant to Section 4.4.
No further adjustments of the number of shares for which this Warrant is
exercisable and the Current Warrant Price shall be made upon the actual
issue of such Common Stock upon conversion or exchange of such Convertible
Securities and, if any issue or sale of such Convertible Securities is made
upon exercise of any warrant or other right to subscribe for or to purchase
any such Convertible Securities for which adjustments of the number of
shares for which this Warrant is exercisable and the Current Warrant Price
have been or are to be made pursuant to other provisions of this Section 4,
no further adjustments of the number of shares for which this Warrant is
exercisable and the Current Warrant Price shall be made by reason of such
issue or sale.
4.6. SUPERSEDING ADJUSTMENT. If, at any time after any adjustment of
the number of shares for which this Warrant is exercisable and the Current
Warrant Price shall have been made pursuant to Section 4.4 or Section 4.5
as the result of any issuance of warrants, rights or Convertible
Securities, such warrants or rights, or the right of conversion or exchange
in such other Convertible Securities, shall expire, and all of such
warrants or rights, or the right of conversion or exchange with respect to
all or a portion of such other Convertible Securities, as the case may be,
shall not have been exercised and no outstanding Warrant shall have been
exercised (in whole or in part), then for each outstanding Warrant such
previous adjustment shall be rescinded and annulled and the Additional
Shares of Common Stock which were deemed to have been issued by virtue of
the computation made in connection with the adjustment so rescinded and
annulled shall no longer be deemed to have been issued by virtue of such
computation.
4.7. OTHER PROVISIONS APPLICABLE TO ADJUSTMENTS UNDER THIS SECTION.
The following provisions shall be applicable to the making of adjustments
of the number of shares of Common Stock for which this Warrant is
exercisable and the Current Warrant Price provided for in this Section 4:
(a) Computation of Consideration. To the extent that any
Additional Shares of Common Stock or any Convertible Securities or any
warrants or other rights to subscribe for or purchase any Additional Shares
of Common Stock or any Convertible Securities shall be issued for cash
consideration, the consideration received by the Company therefor shall be
the amount of the cash received by the Company therefor, or, if such
Additional Shares of Common Stock or Convertible Securities are offered by
the Company for subscription, the subscription price, or, if such
Additional Shares of Common Stock or Convertible Securities are sold to
underwriters or dealers for public offering without a subscription
offering, the public offering price (in any such case subtracting any
amounts paid or receivable for accrued interest or accrued dividends). To
the extent that such issuance shall be for a consideration other than cash,
then, except as herein otherwise expressly provided, the amount of such
consideration shall be deemed to be the fair value of such consideration at
the time of such issuance as determined in good faith by the Board of
Directors of the Company. In case any Additional Shares of Common Stock or
any Convertible Securities or any warrants or other rights to subscribe for
or purchase such Additional Shares of Common Stock or Convertible
Securities shall be issued in connection with any merger in which the
Company issues any securities, the amount of consideration therefor shall
be deemed to be the fair value, as determined in good faith by the Board of
Directors of the Company, of such portion of the assets and business of the
nonsurviving corporation as such Board in good faith shall determine to be
attributable to such Additional Shares of Common Stock, Convertible
Securities, warrants or other rights, as the case may be. The consideration
for any Additional Shares of Common Stock issuable pursuant to any warrants
or other rights to subscribe for or purchase the same shall be the
consideration received by the Company for issuing such warrants or other
rights plus the additional consideration payable to the Company upon
exercise of such warrants or other rights. The consideration for any
Additional Shares of Common Stock issuable pursuant to the terms of any
Convertible Securities shall be the consideration received by the Company
for issuing warrants or other rights to subscribe for or purchase such
Convertible Securities, plus the consideration paid or payable to the
Company in respect of the subscription for or purchase of such Convertible
Securities, plus the additional consideration, if any, payable to the
Company upon the exercise of the right of conversion or exchange in such
Convertible Securities. In case of the issuance at any time of any
Additional Shares of Common Stock or Convertible Securities in payment or
satisfaction of any dividends upon any class of stock other than Common
Stock, the Company shall be deemed to have received for such Additional
Shares of Common Stock or Convertible Securities a consideration equal to
the amount of such dividend so paid or satisfied.
(b) When Adjustments to Be Made. The adjustments required by this
Section 4 shall be made whenever and as often as any specified event
requiring an adjustment shall occur, except that any adjustment of the
number of shares of Common Stock for which this Warrant is exercisable that
would otherwise be required may be postponed (except in the case of a
subdivision or combination of shares of the Common Stock, as provided for
in Section 4.1) up to, but not beyond the date of exercise if such
adjustment either by itself or with other adjustments not previously made
results in an increase or decrease of less than 1% of the shares of Common
Stock for which this Warrant is exercisable immediately prior to the making
of such adjustment. Any adjustment representing a change of less than such
minimum amount (except as aforesaid) which is postponed shall be carried
forward and made as soon as such adjustment, together with other
adjustments required by this Section 4 and not previously made, would
result in a minimum adjustment or on the date of exercise. For the purpose
of any adjustment, any specified event shall be deemed to have occurred at
the close of business on the date of its occurrence.
(c) Fractional Interests. In computing adjustments under this
Section 4, fractional interests in Common Stock shall be taken into account
to the nearest 1/100th of a share.
(d) When Adjustment Not Required. If the Company shall take a
record of the holders of its Common Stock for the purpose of entitling them
to receive a dividend or distribution or subscription or purchase rights
and shall, thereafter and before the distribution to stockholders thereof,
legally abandon its plan to pay or deliver such dividend, distribution,
subscription or purchase rights, then thereafter no adjustment shall be
required by reason of the taking of such record and any such adjustment
previously made in respect thereof shall be rescinded and annulled.
(e) Escrow of Warrant Stock. If Holder exercises this Warrant
after any property becomes distributable pursuant to this Section 4 by
reason of the taking of any record of the holders of Common Stock, but
prior to the occurrence of the event for which such record is taken, any
additional shares of Common Stock issuable upon exercise by reason of such
adjustment shall be deemed the last shares of Common Stock for which this
Warrant is exercised (notwithstanding any other provision to the contrary
herein) and such shares or other property shall be held in escrow for
Holder by the Company to be issued to Holder when and to the extent that
the event actually takes place, upon payment of the then Current Warrant
Price. Notwithstanding any other provision to the contrary herein, if the
event for which such record was taken fails to occur or is rescinded, then
such escrowed shares shall be canceled by the Company and escrowed property
returned.
(f) Challenge to Good Faith Determination. Whenever the Board of
Directors of the Company shall be required to make a determination in good
faith of the fair value of any item under this Section 4, such
determination may be challenged in good faith by the Majority Holders, and
any dispute shall be resolved by an investment banking firm of recognized
national standing selected by the Majority Holders and acceptable to the
Company.
4.8. REORGANIZATION, RECLASSIFICATION, MERGER, CONSOLIDATION OR
DISPOSITION OF ASSETS. In case the Company shall reorganize its capital,
reclassify its capital stock, consolidate or merge with or into another
corporation (where the Company is not the surviving corporation or where
there is a change in or distribution with respect to the Common Stock of
the Company), or sell, transfer or otherwise dispose of all or
substantially all its property, assets or business to another corporation
and, pursuant to the terms of such reorganization, reclassification,
merger, consolidation or disposition of assets, shares of common stock of
the successor or acquiring corporation, or any cash, shares of stock or
other securities or property of any nature whatsoever (including warrants
or other subscription or purchase rights) in addition to or in lieu of
common stock of the successor or acquiring corporation ("Other Property"),
are to be received by or distributed to the holders of Common Stock of the
Company, then Holder shall have the right thereafter to receive, upon
exercise of this Warrant and payment of the Current Warrant Price, the
number of shares of common stock of the successor or acquiring corporation
or of the Company, if it is the surviving corporation, and Other Property
receivable upon or as a result of such reorganization, reclassification,
merger, consolidation or disposition of assets by a holder of the number of
shares of Common Stock for which this Warrant is exercisable immediately
prior to such event. In case of any such reorganization, reclassification,
merger, consolidation or disposition of assets, the successor or acquiring
corporation (if other than the Company) shall expressly assume the due and
punctual observance and performance of each and every covenant and
condition of this Warrant to be performed and observed by the Company and
all the obligations and liabilities hereunder, subject to such
modifications as may be deemed appropriate (as determined by resolution of
the Board of Directors of the Company) in order to provide for adjustments
of shares of the Common Stock for which this Warrant is exercisable which
shall be as nearly equivalent as practicable to the adjustments provided
for in this Section 4. For purposes of this Section 4.8, "common stock of
the successor or acquiring corporation" shall include stock of such
corporation of any class which is not preferred as to dividends or assets
over any other class of stock of such corporation and which is not subject
to redemption and shall also include any evidences of indebtedness, shares
of stock or other securities which are convertible into or exchangeable for
any such stock, either immediately or upon the arrival of a specified date
or the happening of a specified event and any warrants or other rights to
subscribe for or purchase any such stock. The foregoing provisions of this
Section 4.8 shall similarly apply to successive reorganizations,
reclassifications, mergers, consolidations or disposition of assets.
4.9. OTHER ACTION AFFECTING COMMON STOCK. In case at any time or from
time to time the Company shall take any action in respect of its Common
Stock, other than any action described in this Section 4, then, unless such
action will not have a materially adverse effect upon the rights of the
Holders, the number of shares of Common Stock or other stock for which this
Warrant is exercisable and/or the purchase price thereof shall be adjusted
in such manner as may be equitable in the circumstances.
4.10. CERTAIN LIMITATIONS. Notwithstanding anything herein to the
contrary, the Company agrees not to enter into any transaction which, by
reason of any adjustment hereunder, would cause the Current Warrant Price
to be less than the par value per share of Common Stock.
5. NOTICES TO WARRANT HOLDERS
5.1. NOTICE OF ADJUSTMENTS. Whenever the number of shares of Common
Stock for which this Warrant is exercisable, or whenever the price at which
a share of such Common Stock may be purchased upon exercise of the
Warrants, shall be adjusted pursuant to Section 4, the Company shall
forthwith prepare a certificate to be executed by the chief financial
officer of the Company setting forth, in reasonable detail, the event
requiring the adjustment and the method by which such adjustment was
calculated (including a description of the basis on which the Board of
Directors of the Company determined the fair value of any evidences of
indebtedness, shares of stock, other securities or property or warrants or
other subscription or purchase rights referred to in Section 4.2 or
4.7(a)), specifying the number of shares of Common Stock for which this
Warrant is exercisable and (if such adjustment was made pursuant to Section
4.8 or 4.9) describing the number and kind of any other shares of stock or
Other Property for which this Warrant is exercisable, and any change in the
purchase price or prices thereof, after giving effect to such adjustment or
change. The Company shall promptly cause a signed copy of such certificate
to be delivered to each Holder in accordance with Section 14.2. The Company
shall keep at its principal office copies of all such certificates and
cause the same to be available for inspection at said office during normal
business hours by any Holder or any prospective purchaser of a Warrant
designated by a Holder thereof.
5.2. NOTICE OF CORPORATE ACTION. If at any time
(a) the Company shall take a record of the holders of its Common
Stock for the purpose of entitling them to receive a dividend (other
than a cash dividend payable out of earnings or earned surplus legally
available for the payment of dividends under the laws of the
jurisdiction of incorporation of the Company) or other distribution,
or any right to subscribe for or purchase any evidences of its
indebtedness, any shares of stock of any class or any other securities
or property, or to receive any other right, or
(b) there shall be any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the
Company or any consolidation or merger of the Company with, or any
sale, transfer or other disposition of all or substantially all the
property, assets or business of the Company to, another corporation,
or
(c) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then, in any one or more of such cases, the Company shall give to Holder
(i) at least 20 days' prior written notice of the date on which a record
date shall be selected for such dividend, distribution or right or for
determining rights to vote in respect of any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up, and (ii) in the case of any such
reorganization, reclassification, merger, consolidation, sale, transfer,
disposition, dissolution, liquidation or winding up, at least 20 days'
prior written notice of the date when the same shall take place. Such
notice in accordance with the foregoing clause also shall specify (i) the
date on which any such record is to be taken for the purpose of such
dividend, distribution or right, the date on which the holders of Common
Stock shall be entitled to any such dividend, distribution or right, and
the amount and character thereof, and (ii) the date on which any such
reorganization, reclassification, merger, consolidation, sale, transfer,
disposition, dissolution, liquidation or winding up is to take place and
the time, if any such time is to be fixed, as of which the holders of
Common Stock shall be entitled to exchange their shares of Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up. Each such written notice shall be
sufficiently given if addressed to Holder at the last address of Holder
appearing on the books of the Company and delivered in accordance with
Section 13.2.
6. RIGHTS OF HOLDERS
6.1 NO IMPAIRMENT. The Company shall not by any action, including,
without limitation, amending its Certificate of Incorporation, by-laws or
comparable governing instruments 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, but will at all times in
good faith assist in the carrying out of all such terms and in the taking
of all such actions as may be necessary or appropriate to protect the
rights of Holder against impairment. Without limiting the generality of the
foregoing, the Company will (a) not increase the par value of any shares of
Common Stock receivable upon the exercise of this Warrant above the amount
payable therefor upon such exercise immediately prior to such increase in
par value, (b) take all such action as may be necessary or appropriate in
order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock upon the exercise of this Warrant, and
(c) use its best efforts to obtain all such authorizations, exemptions or
consents from any public regulatory body having jurisdiction thereof as may
be necessary to enable the Company to perform its obligations under this
Warrant.
Upon the request of Holder, the Company will at any time during
the period this Warrant is outstanding acknowledge in writing, in form
reasonably satisfactory to Holder, the continuing validity of this Warrant
and the obligations of the Company hereunder.
7. RESERVATION AND AUTHORIZATION OF COMMON STOCK; REGISTRATION WITH OR
APPROVAL OF ANY GOVERNMENTAL AUTHORITY
From and after the Issue Date, the Company shall at all times
reserve and keep available for issue upon the exercise of Warrants such
number of its authorized but unissued shares of Common Stock as will be
sufficient to permit the exercise in full of all outstanding Warrants. All
shares of Common Stock which shall be so issuable, when issued upon
exercise of any Warrant and payment therefor in accordance with the terms
of such Warrant, shall be duly and validly issued and fully paid and
nonassessable.
8. TAKING OF RECORD; STOCK AND WARRANT TRANSFER BOOKS
In the case of all dividends or other distributions by the
Company to the holders of its Common Stock with respect to which any
provision of Section 4 refers to the taking of a record of such holders,
the Company will in each such case take such a record and will take such
record as of the close of business on a Business Day. The Company will not
at any time, except upon dissolution, liquidation or winding up of the
Company, close its stock transfer books or Warrant transfer books so as to
result in preventing or delaying the exercise or transfer of any Warrant.
9. RESTRICTIONS ON TRANSFERABILITY
The Warrants and the Warrant Stock shall not be transferred,
hypothecated or assigned before satisfaction of the conditions specified in
this Section 9, which conditions are intended to ensure compliance with the
provisions of the Securities Act with respect to the Transfer of any
Warrant or any Warrant Stock. Holder, by acceptance of this Warrant, agrees
to be bound by the provisions of this Section 9.
9.1. RESTRICTIVE LEGEND. Except as otherwise provided in this Section
9, each Warrant and each certificate for Warrant Stock initially issued
upon the exercise of a Warrant, and each certificate for Warrant Stock
issued to any subsequent transferee of any such certificate, shall be
stamped or otherwise imprinted with a legend in substantially the following
form:
"[THIS WARRANT AND THE SECURITIES REPRESENTED
HEREBY] [THE SECURITIES REPRESENTED BY THIS
CERTIFICATE] HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
LAWS OF ANY STATE AND MAY NOT BE SOLD OR OTHERWISE
DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE
STATE SECURITIES LAWS OR AN APPLICABLE EXEMPTION TO THE
REGISTRATION REQUIREMENTS OF SUCH ACT OR SUCH LAWS."
9.2. NOTICE OF PROPOSED TRANSFERS; REQUESTS FOR REGISTRATION. Prior to
any Transfer or attempted Transfer of any Warrants or any shares of
Restricted Common Stock, the holder of such Warrants or Restricted Common
Stock shall give ten days' prior written notice (a "Transfer Notice") to
the Company of such holder's intention to effect such Transfer, describing
the manner and circumstances of the proposed Transfer, and obtain from
counsel to such holder who shall be reasonably satisfactory to the Company,
an opinion that the proposed Transfer of such Warrants or such Restricted
Common Stock may be effected without registration under the Securities Act.
After receipt of the Transfer Notice and opinion, the Company shall, within
five days thereof, notify the holder of such Warrants or such Restricted
Common Stock as to whether such opinion is reasonably satisfactory and, if
so, such holder shall thereupon be entitled to Transfer such Warrants or
such Restricted Common Stock, in accordance with the terms of the Transfer
Notice. Each certificate, if any, evidencing such shares of Restricted
Common Stock issued upon such Transfer and each Warrant issued upon such
Transfer shall bear the restrictive legend set forth in Section 9.1, unless
in the opinion of such counsel such legend is not required in order to
ensure compliance with the Securities Act. The holder of the Warrants or
the Restricted Common Stock, as the case may be, giving the Transfer Notice
shall not be entitled to Transfer such Warrants or such Restricted Common
Stock until receipt of notice from the Company under this Section 9.2 that
such opinion is reasonably satisfactory.
9.3. TERMINATION OF RESTRICTIONS. Notwithstanding the foregoing
provisions of this Section 9, the restrictions imposed by this Section upon
the transferability of the Warrants, the Warrant Stock and the Restricted
Common Stock and the legend requirements of Section 9.1 shall terminate as
to any particular Warrant or share of Warrant Stock or Restricted Common
Stock (i) when and so long as such security shall have been effectively
registered under the Securities Act and disposed of pursuant thereto or
(ii) when the Company shall have received an opinion of counsel reasonably
satisfactory to it that such shares may be transferred without registration
thereof under the Securities Act.
10. PREEMPTIVE RIGHTS
(a) The Company shall not issue, sell or exchange, or agree to
issue, sell or exchange (collectively, "Issue," and any issuance, sale or
exchange resulting therefrom, an "Issuance") any Securities unless the
Company shall have first given written notice (the "Section 10 Notice") to
each holder of Warrants or Warrant Stock (for purposes of this Section,
each a "Section 10 Offeree") that shall (i) state the Company's intention
to Issue Securities, the amount to be issued, sold or exchanged, the terms
of such Securities, the purchase price therefor and a summary of the other
material terms of the proposed issuance, sale or exchange and (ii) offer (a
"Section 10 Offer") to Issue to each Section 10 Offeree and their
affiliates such Section 10 Offeree's Proportionate Percentage (as defined
below) of such Securities (with respect to each Section 10 Offeree, the
"Offered Securities") upon the terms and subject to the conditions set
forth in the Section 10 Notice, which Section 10 Offer by its terms shall
remain open and irrevocable for a period of 15-days from the date it is
delivered by the Company to such holder, as the case may be (and, to the
extent the Section 10 Offer is accepted during such 15-day period, until
the closing of the Issuance contemplated by the Section 10 Offer).
"Proportionate Percentage" for the purposes of this Section shall mean the
quotient obtained by dividing: (A) the Warrant Stock held by such Section
10 Offeree (assuming for purposes of this Section 10 that all issued and
outstanding Warrants have been exercised) on the date of the Section 10
Offer, by (B) the Warrant Stock issued and outstanding on the date of the
Section 10 Offer.
(b) Notice of a Section 10 Offeree's intention to accept a
Section 10 Offer, in whole or in part, shall be evidenced by a writing
signed by such party and delivered to the Company prior to the end of the
15-day period of such Section 10 Offer (each, a "Notice of Acceptance"),
setting forth the portion of the Offered Securities that the Section 10
Offeree elects to purchase, which election shall be binding.
(c) In the event that a Notice of Acceptance is not given by a
Section 10 Offeree in respect of all the Offered Securities, the Company
shall have 60 days following the 15-day period referred to in clause (b)
above to Issue all or any part of such remaining Offered Securities not
covered by the Notice of Acceptance to any other Person(s), but only at a
price not less than the price, and on terms no more favorable to the person
than the terms, stated in the Section 10 Offer Notice. If the Company does
not consummate the Issuance of all or part of the remaining Offered
Securities to such other Person(s) within such period, the right provided
hereunder shall be deemed to be revived and such securities shall not be
offered unless first re-offered to each Section 10 Offeree in accordance
with this Section 10. Upon the closing of the Issuance to such other
Person(s) (the "Other Buyers") of all or part of the remaining Offered
Securities, each Section 10 Offeree shall purchase from the Company, and
the Company shall Issue to each such Section 10 Offeree, the Offered
Securities covered by the Notice of Acceptance delivered to the Company by
the Section 10 Offeree, on the terms specified in the Section 10 Offer. The
purchase by a Section 10 Offeree of any Offered Securities is subject in
all cases to the execution and delivery by the Company and the Section 10
Offeree of a purchase agreement relating to such Offered Securities in form
and substance similar in all material respects to the extent applicable to
that executed and delivered between the Company and the Other Buyers.
11. SUPPLYING INFORMATION
The Company shall cooperate with each Holder of a Warrant and
each holder of Restricted Common Stock in supplying such information as may
be reasonably necessary for such holder to complete and file any reports or
forms presently or hereafter required by the Commission as a condition to
the availability of an exemption from the Securities Act for the sale of
any Warrant or Restricted Common Stock.
12. LOSS OR MUTILATION
Upon receipt by the Company from any Holder of evidence
reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of this Warrant and indemnity reasonably
satisfactory to it (it being understood that, in the case of the initial
holder, the written agreement of Appaloosa Management L.P. shall be
sufficient indemnity), and in case of mutilation upon surrender and
cancellation hereof, the Company will execute and deliver in lieu hereof a
new Warrant of like tenor to such Holder; provided, in the case of
mutilation, no indemnity shall be required if this Warrant in identifiable
form is surrendered to the Company for cancellation.
13. LIMITATION OF LIABILITY
No provision hereof, in the absence of affirmative action by
Holder to purchase shares of Common Stock, and no enumeration herein of the
rights or privileges of Holder hereof, shall give rise to any liability of
such Holder for the purchase price of any Common Stock or as a stockholder
of the Company, whether such liability is asserted by the Company or by
creditors of the Company.
14. MISCELLANEOUS
14.1. NONWAIVER AND EXPENSES. No course of dealing or any delay or
failure to exercise any right hereunder on the part of Holder shall operate
as a waiver of such right or otherwise prejudice Holder's rights, powers or
remedies. If the Company fails to make, when due, any payments provided for
hereunder, or fails to comply with any other provision of this Warrant, the
Company shall pay to Holder such amounts as shall be sufficient to cover
any costs and expenses including, but not limited to, reasonable attorneys'
fees, including those of appellate proceedings, incurred by Holder in
collecting any amounts due pursuant hereto or in otherwise enforcing any of
its rights, powers or remedies hereunder.
14.2. NOTICE GENERALLY. Any notice, demand, request, consent,
approval, declaration, delivery or other communication hereunder to be made
pursuant to the provisions of this Warrant shall be sufficiently given or
made if in writing and either delivered in person with receipt acknowledged
or sent by registered or certified mail, return receipt requested, postage
prepaid, or by telecopy and confirmed by telecopy answerback, addressed as
follows:
(a) If to any Holder or holder of Warrant Stock, at its last
known address appearing on the books of the Company maintained for
such purpose.
(b) If to the Company at
Bio-Plexus, Inc.
129 Reservoir Road
Vernon, CT 06066
Attention: Mr. Carl Sahi
Fax: (860) 870-6118
or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in
writing by the party entitled to receive such notice. Every notice, demand,
request, consent, approval, declaration, delivery or other communication
hereunder shall be deemed to have been duly given or served on the date on
which personally delivered, with receipt acknowledged, telecopied and
confirmed by telecopy answerback, or three Business Days after the same
shall have been deposited in the United States mail. Failure or delay in
delivering copies of any notice, demand, request, approval, declaration,
delivery or other communication to the person designated above to receive a
copy shall in no way adversely affect the effectiveness of such notice,
demand, request, approval, declaration, delivery or other communication.
14.3. REMEDIES. Each holder of Warrant and Warrant Stock, in addition
to being entitled to exercise all rights granted by law, including recovery
of damages, will be entitled to specific performance of its rights under of
this Warrant. The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of
the provisions of this Warrant and hereby agrees to waive the defense in
any action for specific performance that a remedy at law would be adequate.
14.4. SUCCESSORS AND ASSIGNS. Subject to the provisions of Sections
3.1 and 9, this Warrant and the rights evidenced hereby shall inure to the
benefit of and be binding upon the successors of the Company and the
successors and assigns of Holder. The provisions of this Warrant are
intended to be for the benefit of all Holders from time to time of this
Warrant and, with respect to Section 9 hereof, holders of Warrant Stock,
and shall be enforceable by any such Holder or holder of Warrant Stock.
14.5. AMENDMENT. This Warrant and all other Warrants may be modified
or amended or the provisions hereof waived with the written consent of the
Company and the Majority Holders, provided that no such Warrant may be
modified or amended to reduce the number of shares of Common Stock for
which such Warrant is exercisable or to increase the price at which such
shares may be purchased upon exercise of such Warrant (before giving effect
to any adjustment as provided therein) without the prior written consent of
the Holder thereof, provided however, that the foregoing shall not limit
the operation of Section 4.6.
14.6. SEVERABILITY. Wherever possible, each provision of this Warrant
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be prohibited by
or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Warrant.
14.7. HEADINGS. The headings used in this Warrant are for the
convenience of reference only and shall not, for any purpose, be deemed a
part of this Warrant.
14.8. GOVERNING LAW. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT
TO THE PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY AND UNCONDITIONALLY CONSENTS TO SUBMIT TO THE EXCLUSIVE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND OF THE UNITED
STATES OF AMERICA, IN EACH CASE LOCATED IN THE COUNTY OF NEW YORK, FOR ANY
ACTION, PROCEEDING OR INVESTIGATION IN ANY COURT OR BEFORE ANY GOVERNMENTAL
AUTHORITY ("LITIGATION") ARISING OUT OF OR RELATING TO THIS WARRANT AND THE
TRANSACTIONS CONTEMPLATED HEREBY (AND AGREES NOT TO COMMENCE ANY LITIGATION
RELATING THERETO EXCEPT IN SUCH COURTS), AND FURTHER AGREES THAT SERVICE OF
ANY PROCESS, SUMMONS, NOTICE OR DOCUMENT BY U.S. REGISTERED MAIL TO ITS
RESPECTIVE ADDRESS SET FORTH IN THIS WARRANT SHALL BE EFFECTIVE SERVICE OF
PROCESS FOR ANY LITIGATION BROUGHT AGAINST IT IN ANY SUCH COURT. EACH OF
THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY
OBJECTION TO THE LAYING OF VENUE OF ANY LITIGATION ARISING OUT OF THIS
WARRANT OR THE TRANSACTIONS CONTEMPLATED HEREBY IN THE COURTS OF THE STATE
OF NEW YORK OR THE UNITED STATES OF AMERICA, IN EACH CASE LOCATED IN THE
COUNTY OF NEW YORK, AND HEREBY FURTHER IRREVOCABLY AND UNCONDITIONALLY
WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH
LITIGATION BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM. EACH OF THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHTS TO TRIAL BY
JURY IN CONNECTION WITH ANY LITIGATION ARISING OUT OF OR RELATING TO THIS
WARRANT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant to be
duly executed by an officer thereunto duly authorized.
Dated:
--------------------
BIO-PLEXUS, INC.
By:
----------------------------
Name:
Title:
<PAGE>
EXHIBIT A
SUBSCRIPTION FORM
[To be executed only upon exercise of Warrant]
Net Issue Exercise _____No ______Yes
The undersigned registered owner of this Warrant irrevocably
exercises this Warrant for the purchase of _____ shares of Common Stock of
Bio-Plexus, Inc. and herewith makes payment therefor, all at the price and
on the terms and conditions specified in this Warrant and requests that
certificates for the shares of Common Stock hereby purchased (and any
securities or other property issuable upon such exercise) be issued in the
name of and delivered to _____________ whose address is ________________
and, if such shares of Common Stock shall not include all of the shares of
Common Stock issuable as provided in this Warrant, that a new Warrant of
like tenor and date for the balance of the shares of Common Stock issuable
hereunder be delivered to the undersigned.
-----------------------------------
(Name of Registered Owner)
-----------------------------------
(Signature of Registered Owner)
-----------------------------------
(Street Address)
-----------------------------------
(City) (State) (Zip Code)
NOTICE: The signature on this subscription must correspond with the name
as written upon the face of the within Warrant in every
particular, without alteration or enlargement or any change
whatsoever.
<PAGE>
EXHIBIT B
ASSIGNMENT FORM
FOR VALUE RECEIVED the undersigned registered owner of this
Warrant hereby sells, assigns and transfers unto the Assignee named below
all of the rights of the undersigned under this Warrant, with respect to
the number of shares of Common Stock set forth below:
Name and Address of Assignee No. of Shares of Common Stock
- ---------------------------- -----------------------------
and does hereby irrevocably constitute and appoint ________________
attorney-in-fact to register such transfer on the books of BIO-PLEXUS, INC.
maintained for the purpose, with full power of substitution in the
premises.
Dated: Print Name:
------------------ ----------------------------
Signature:
-----------------------------
Witness:
-------------------------------
NOTICE: The signature on this assignment must correspond with the name as
written upon the face of the within Warrant in every particular,
without alteration or enlargement or any change whatsoever.
