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Exhibit 10.10
Amended and Restated
Common Stock Purchase Warrant
Expiring August 25, 2005
New York, New York
July 28, 2000
PPN# 278858 1 1 3
No. W-5
ECO SOIL SYSTEMS, INC., a Nebraska corporation (the
"Company"), for value received, hereby certifies that ALBION ALLIANCE
MEZZANINE FUND, L.P., or registered assigns, is entitled to purchase from the
Company 353,313 duly authorized, validly issued, fully paid and nonassessable
shares of Common Stock, par value $.005 per share, of the Company (the
"Common Stock") at the purchase price per share of $.01, at any time or from
time to time on or after July 28, 2000 and prior to 3 P.M., New York City
time, on August 25, 2005, all subject to the terms, conditions and
adjustments set forth below in this Amended and Restated Warrant.
This Warrant is one of the Amended and Restated Common
Stock Purchase Warrants (the "Warrants", such term to include all Warrants
issued in substitution therefor) originally issued in connection with the
issue and sale by the Company of $15,000,000 aggregate principal amount of
its 12.00% Notes due August 25, 2003 (together with all notes issued in
substitution therefor, the "Notes"), pursuant to the Note and Warrant
Purchase Agreements (collectively, the "Purchase Agreement"), each dated as
of August 25, 1998 and amended from time to time, between the Company and the
institutional investors named therein; and amended and restated on December
21, 1999. The Warrants originally so issued evidenced rights to purchase an
aggregate of 262,500 shares of Common Stock and the Warrants as so amended
and restated evidence rights to purchase an additional 399,961 shares of
Common Stock, for an aggregate of 662,461 shares; all subject to adjustment
as provided herein. Certain capitalized terms used in this Warrant are
defined in section 14.
1. EXERCISE OF WARRANT. 1.1. MANNER OF EXERCISE. This
Warrant may be exercised by the holder hereof, in whole or in part, during
normal business hours on
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any Business Day by surrender of this Warrant, with the form of subscription
at the end hereof (or a reasonable facsimile thereof) duly executed by such
holder, to the Company at its principal office (or, if such exercise shall be
in connection with an underwritten Public Offering of shares of Common Stock
(or Other Securities) subject to this Warrant, at the location at which the
Company shall have agreed to deliver the shares of Common Stock (or Other
Securities) subject to such offering), accompanied by payment, in cash or by
certified or official bank check payable to the order of the company or by
the application of Notes in the manner provided in section 1.5 (or by any
combination of such methods), in the amount obtained by multiplying (A) the
number of shares of Common Stock (without giving effect to any adjustment
therein) designated in such form of subscription by (B) $.01 and such holder
shall thereupon be entitled to receive the number of duly authorized, validly
issued, fully paid and nonassessable shares of Common Stock (or Other
Securities) determined as provided in sections 2 through 4.
1.2. WHEN EXERCISE DEEMED EFFECTED. Each exercise of this
Warrant shall be deemed to have been effected immediately prior to the close
of business on the Business Day on which this Warrant shall have been
surrendered to the Company as provided in section 1.1, and at such time the
person or persons in whose name or names any certificate or certificates for
shares of Common Stock (or Other Securities) shall be issuable upon such
exercise as provided in section 1.3 shall be deemed to have become the holder
or holders of record thereof.
1.3. DELIVERY OF STOCK CERTIFICATES, ETC. As soon as
practicable after the exercise of this Warrant, in whole or in part, and in
any event within five Business Days thereafter (unless such exercise shall be
in connection with an underwritten Public Offering of shares of Common Stock
(or Other Securities) subject to this Warrant, in which event concurrently
with such exercise), the Company at its expense (including the payment by it
of any applicable taxes other than transfer taxes) will cause to be issued in
the name of and delivered to the holder hereof or, subject to section 8, as
such holder (upon payment by such holder of any applicable transfer taxes)
may direct,
(a) a certificate or certificates for the number of duly
authorized, validly issued, fully paid and
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nonassessable shares of Common Stock (or Other Securities) to which
such holder shall be entitled upon such exercise plus, in lieu of any
fractional share to which such holder would otherwise be entitled, cash
in an amount equal to the same fraction of the Market Price per share
of such Common Stock (or Other Securities) on the Business Day next
preceding the date of such exercise, and
(b) in case such exercise is in part only, a new Warrant or
Warrants of like tenor, calling in the aggregate on the face or faces
thereof for the number of shares of Common Stock equal (without giving
effect to any adjustment therein) to the number of such shares called
for on the face of this Warrant minus the number of such shares
designated by the holder upon such exercise as provided in section 1.1.
1.4. COMPANY TO REAFFIRM OBLIGATIONS. The Company will, at
the time of or at any time after each exercise of this Warrant, upon the
request of the holder hereof or of any shares of Common Stock (or Other
Securities) issued upon such exercise, acknowledge in writing its continuing
obligation to afford to such holder all rights (including, without
limitation, any right of registration of any shares of Common Stock (or Other
Securities) issuable upon exercise of this Warrant pursuant to the
Registration Rights Agreement) to which such holder shall continue to be
entitled after such exercise in accordance with the terms of this Warrant,
PROVIDED that if any such holder shall fail to make any such request, the
failure shall not affect the continuing obligation of the Company to afford
such rights to such holder.
1.5. PAYMENT BY APPLICATION OF THE NOTES. Upon any exercise
of this Warrant, the holder hereof may, at its option, instruct the Company,
by so specifying in the form of subscription submitted therewith as provided
in section 1.1, to apply to the payment required by section 1.1 all or any
part of the principal amount then unpaid and of the interest on such
principal amount then accrued on any one or more Notes at the time held by
such holder, in which case the Company will accept the aggregate amount of
principal and accrued interest on such principal
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specified in such form of subscription in satisfaction of a like amount of
such payment. In case less than the entire unpaid principal amount of any
Note shall be so specified, the principal amount so specified shall be
credited, as of the date of such exercise, against the installments of
principal then remaining unpaid on such Note either in the inverse order of
their maturity dates or in the direct order of their maturity dates as such
holder shall instruct in such form of subscription. Within five days after
receipt of any such notice, the Company will pay to the holder of the Notes
submitting such form of subscription, in the manner provided in such Notes
and the Purchase Agreement, all unpaid interest accrued to the date of
exercise of such Warrant on the principal amount so specified in such form of
subscription that is not applied to the payment required by section 1.1 under
this section 1.5. In the event that the entire unpaid principal amount of any
Note is applied to the payment required by section 1.1 under this section
1.5, such Note shall be promptly surrendered and canceled in accordance with
the provisions of section 15 of the Purchase Agreement.
2. ADJUSTMENT OF COMMON STOCK ISSUABLE UPON EXERCISE. 2.1.
NUMBER OF SHARES; WARRANT PRICE. The number of shares of Common Stock which
the holder of this Warrant shall be entitled to receive upon each exercise
hereof shall be determined by multiplying the number of shares of Common
Stock which would otherwise (but for the provisions of this section 2) be
issuable upon such exercise, as designated by the holder hereof pursuant to
section 1.1, by a fraction of which (I) the numerator is $.01 and (II) the
denominator is the Warrant Price in effect on the date of such exercise. The
"Warrant Price" shall initially be $.01 per share, shall be adjusted and
readjusted from time to time as provided in this section 2 and, as so
adjusted or readjusted, shall remain in effect until a further adjustment or
readjustment thereof is required by this section 2.
2.2. ADJUSTMENT OF WARRANT PRICE. 2.2.1. ISSUANCE OF
ADDITIONAL SHARES OF COMMON STOCK. In case the Company, at any time or from
time to time after August 25, 1998 (the "Initial Date"), shall issue or sell
Additional Shares of Common Stock (including Additional Shares of Common
Stock deemed to be issued pursuant to section 2.3 or 2.4) without
consideration or for a consideration per share less than the Base Price in
effect, in each case, on the date of and immediately prior to such issue or
sale, then, and in each such case, subject to section 2.8, such Warrant Price
shall be reduced, concurrently with such issue or
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sale, to a price (calculated to the nearest .001 of a cent) determined by
multiplying such Warrant Price by a fraction,
(a) the numerator of which shall be (I) the number of shares
of Common Stock outstanding immediately prior to such issue or sale
plus (II) the number of shares of Common Stock which the aggregate
consideration received by the Company for the total number of such
Additional Shares of Common Stock so issued or sold would purchase at
the Base Price, and
(b) the denominator of which shall be the number of shares of
Common Stock outstanding immediately after such issue or sale,
PROVIDED that, for the purposes of this section 2.2.1, (X) immediately after
any Additional Shares of Common Stock are deemed to have been issued pursuant
to section 2.3 or 2.4, such Additional Shares shall be deemed to be
outstanding, and (Y) treasury shares shall not be deemed to be outstanding.
2.2.2. EXTRAORDINARY DIVIDENDS AND DISTRIBUTIONS. In case
the Company at any time or from time to time after the Initial Date shall
declare, order, pay or make a dividend or other distribution (including,
without limitation, any distribution of other or additional stock or other
securities or property or Options by way of dividend or spin-off,
reclassification, recapitalization or similar corporate rearrangement) on any
Common Stock, other than (A) a dividend payable in Additional Shares of
Common Stock or in Options for Common Stock or (B) a regular, periodic
dividend payable in cash and declared out of the earned surplus of the
Company as at the date hereof as increased by any credits (other than credits
resulting from a revaluation of property) and decreased by any debits made
thereto after such date, then, and in each such case, subject to section 2.8,
the Warrant Price in effect immediately prior to the close of business on the
record date fixed for the determination of holders of any class of securities
entitled to receive such dividend or distribution shall be reduced, effective
as of the close of business on such record date, to a price (calculated to
the nearest .001 of a cent) determined by multiplying such Warrant Price by a
fraction,
(i) the numerator of which shall be the Current Market Price
in effect on such record date or, if the
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Common Stock trades on an ex-dividend basis, on the date prior to
the commencement of ex-dividend trading, less the value of such
dividend or distribution (as determined in good faith by the Board of
Directors of the Company) applicable to one share of Common Stock, and
(ii) the denominator of which shall be such Current Market
Price.
2.3. TREATMENT OF OPTIONS AND CONVERTIBLE SECURITIES. In
case the Company at any time or from time to time after the Initial Date
shall issue, sell, grant or assume, or shall fix a record date for the
determination of holders of any class of securities entitled to receive, any
Options or Convertible Securities, then, and in each such case, the maximum
number of Additional Shares of Common Stock (as set forth in the instrument
relating thereto, without regard to, any provisions contained therein for a
subsequent adjustment of such number) issuable upon the exercise of such
Options or, in the case of Convertible Securities and Options therefor, the
conversion or exchange of such Convertible Securities, shall be deemed to be
issued for purposes of section 2.2.1 as of the time of such issue, sale,
grant or assumption or, in case such a record date shall have been fixed, as
of the close of business on such record date (or, if the Common Stock trades
on an ex-dividend basis, on the date prior to the commencement of ex-dividend
trading), PROVIDED that such Additional Shares of Common Stock shall not be
deemed to have been issued unless the consideration per share (determined
pursuant to section 2.5) of such shares would be less than the Base Price in
effect, in each case, on the date of and immediately prior to such issue,
sale, grant or assumption or immediately prior to the close of business on
such record date (or, if the Common Stock trades on an ex-dividend basis, on
the date prior to the commencement of ex-dividend trading), as the case may
be, and PROVIDED, FURTHER, that in any such case in which Additional Shares
of Common Stock are deemed to be issued,
(a) no further adjustment of the Warrant Price shall be made
upon the subsequent issue or sale of Additional Shares of Common Stock
or Convertible Securities upon the exercise of such Options or the
conversion or exchange of such Convertible Securities;
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(b) if such Options or Convertible Securities by their terms
provide, with the passage of time or otherwise, for any increase in the
consideration payable to the Company, or decrease in the number of
Additional Shares of Common Stock issuable, upon the exercise,
conversion or exchange thereof (by change of rate or otherwise), the
Warrant Price computed upon the original issue, sale, grant or
assumption thereof (or upon the occurrence of the record date, or date
prior to the commencement of ex-dividend trading, as the case may be,
with respect thereto), and any subsequent adjustments based thereon,
shall, upon any such increase or decrease becoming effective, be
recomputed to reflect such increase or decrease insofar as it affects
such Options, or the rights of conversion or exchange under such
Convertible Securities, which are outstanding at such time;
(c) upon the expiration of any such Options or of the rights
of conversion or exchange under any such Convertible Securities which
shall not have been exercised (or upon purchase by the Company and
cancellation or retirement of any such Options which shall not have
been exercised or of any such Convertible Securities the rights of
conversion or exchange under which shall not have been exercised), the
Warrant Price computed upon the original issue, sale, grant or
assumption thereof (or upon the occurrence of the record date, or date
prior to the commencement of ex-dividend trading, as the case may be,
with respect thereto), and any subsequent adjustments based thereon,
shall, upon such expiration (or such cancellation or retirement, as the
case may be), be recomputed as if:
(i) in the case of Options for Common Stock or of
Convertible Securities, the only Additional Shares of Common
Stock issued or sold were the Additional Shares of Common
Stock, if any, actually issued or sold upon the exercise of
such Options or the conversion or exchange of such Convertible
Securities and the consideration received therefor was (X) an
amount equal to (A) the consideration actually received by the
Company for the issue, sale, grant or assumption of all such
Options, whether or not exercised, plus (B) the consideration
actually received by the Company
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upon such exercise, minus (C) the consideration paid by the
Company for any purchase of such Options which were not
exercised, or (Y) an amount equal to (A) the consideration
actually received by the Company for the issue, sale, grant
or assumption of all such Convertible Securities which were
actually converted or exchanged, plus (B) the additional
consideration, if any, actually received by the Company upon
such conversion or exchange, minus (C) the consideration paid
by the Company for any purchase of such Convertible Securities
the rights of conversion or exchange under which were not
exercised, and
(ii) in the case of Options for Convertible
Securities, only the Convertible Securities, if any, actually
issued or sold upon the exercise of such Options were issued
at the time of the issue, sale, grant or assumption of such
Options, and the consideration received by the Company for the
Additional Shares of Common Stock deemed to have then been
issued was an amount equal to (X) the consideration actually
received by the Company for the issue, sale, grant or
assumption of all such Options, whether or not exercised, plus
(Y) the consideration deemed to have been received by the
Company (pursuant to section 2.5) upon the issue or sale of
the Convertible Securities with respect to which such Options
were actually exercised, minus (Z) the consideration paid by
the Company for any purchase of such Options which were not
exercised;
(d) no readjustment pursuant to subdivision (b) or (c) above
shall have the effect of increasing the Warrant Price by an amount in
excess of the amount of the adjustment thereof originally made in
respect of the issue, sale, grant or assumption of such Options or
Convertible Securities; and
(e) in the case of any such Options which expire by their
terms not more than 30 days after the date of issue, sale, grant or
assumption thereof, no adjustment of the Warrant Price shall be made
until the expiration or exercise of all such Options, whereupon such
adjustment shall be made in the manner provided in subdivision (c)
above.
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In case at any time after the Initial Date the Company
shall be required to increase the number of Additional Shares of Common Stock
subject to any Option or into which any Convertible Securities (other than
the Warrants) are convertible or exchangeable pursuant to the operation of
anti-dilution provisions applicable thereto, such Additional Shares shall be
deemed to be issued for purposes of section 2.1 as of the time of such
increase.
2.4. TREATMENT OF STOCK DIVIDENDS, STOCK SPLITS, ETC. In
case the Company at any time or from time to time after the Initial Date
shall declare or pay any dividend or other distribution on any class of stock
of the Company payable in Common Stock, or shall effect a subdivision of the
outstanding shares of Common Stock into a greater number of shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in
Common Stock) , then, and in each such case, Additional Shares of Common
Stock shall be deemed to have been issued (A) in the case of any such
dividend, immediately after the close of business on the record date for the
determination of holders of any class of securities entitled to receive such
dividend, or (B) in the case of any such subdivision, at the close of
business on the day immediately prior to the day upon which such corporate
action becomes effective.
2.5. COMPUTATION OF CONSIDERATION. For the purposes of this
section 2:
(a) The consideration for the issue or sale of any Additional
Shares of Common Stock or for the issue, sale, grant or assumption of
any Options or Convertible Securities, irrespective of the accounting
treatment of such consideration, shall
(i) insofar as it consists of cash, be computed at
the amount of cash received by the Company, after deducting
any expenses paid or incurred by the Company or any
commissions or compensation paid or concessions or discounts
allowed to underwriters, dealers or others performing similar
services and any accrued interest or dividends in connection
with such issue or sale,
(ii) insofar as it consists of consideration
(including securities) other than cash, be
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computed at the Fair Value thereof at the time of such issue
or sale, after deducting any expenses paid or incurred by the
Company for any commissions or compensation paid or
concessions or discounts allowed to underwriters, dealers or
others performing similar services and any accrued interest or
dividends in connection with such issue or sale, and
(iii) in case Additional Shares of Common Stock are
issued or sold or Convertible Securities are issued, sold,
granted or assumed together with other stock or securities or
other assets of the Company for a consideration which covers
both, be the proportion of such consideration so received,
computed as provided in subdivisions (i) and (ii) above,
allocable to such Additional Shares of Common Stock or
Convertible Securities, as the case may be, all as determined
in good faith by the Board of Directors of the Company.
(b) All Options issued, sold, granted or assumed together with
other stock or securities or other assets of the Company for a
consideration which covers both, all Additional Shares of Common Stock,
Options or Convertible Securities issued in payment of any dividend or
other distribution on any class of stock of the Company and all
Additional Shares of Common Stock issued to effect a subdivision of the
outstanding shares of Common Stock into a greater number of shares of
Common Stock (by reclassification or otherwise than by payment of a
dividend in Common Stock) shall be deemed to have been issued without
consideration.
(c) Additional Shares of Common Stock deemed to have been
issued for consideration pursuant to section 2.3, relating to Options
and Convertible Securities, shall be deemed to have been issued for a
consideration per share determined by dividing
(i) the total amount, if any, received and receivable
by the Company as consideration for the issue, sale, grant or
assumption of the Options or Convertible Securities in
question, plus the minimum aggregate amount of additional
consideration (as set forth in the instruments relating
thereto, without regard to any provision
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contained therein for a subsequent adjustment of such
consideration) payable to the Company upon the exercise in
full of such Options or the conversion or exchange of such
Convertible Securities or, in the case of Options for
Convertible Securities, the exercise of such Options for
Convertible Securities and the conversion or exchange of
such Convertible Securities, in each case computing such
consideration as provided in the foregoing subdivision (a),
by
(ii) the maximum number of shares of Common Stock (as
set forth in the instruments relating thereto, without regard
to any provision contained therein for a subsequent adjustment
of such number) issuable upon the exercise of such Options or
the conversion or exchange of such Convertible Securities.
(d) Additional Shares of Common Stock issued or deemed to have
been issued pursuant to the operation of anti-dilution provisions
applicable to Convertible Securities (other than the Warrants), Options
or other securities of the Company (either as a result of the
adjustments provided for by the Warrants or otherwise) shall be deemed
to have been issued without consideration.
2.6. ADJUSTMENTS FOR COMBINATIONS, ETC. In case the
outstanding shares of Common Stock shall be combined or consolidated, by
reclassification or otherwise, into a lesser number of shares of Common
Stock, the Warrant Price in effect immediately prior to such combination or
consolidation shall, concurrently with the effectiveness of such combination
or consolidation, be proportionately increased.
2.7. DILUTION IN CASE OF OTHER SECURITIES. In case any
Other Securities shall be issued or sold or shall become subject to issue or
sale upon the conversion or exchange of any stock (or Other Securities) of
the Company (or any issuer of Other Securities or any other Person referred
to in section 3) or to subscription, purchase or other acquisition pursuant
to any Options issued or granted
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by the Company (or any such other issuer or Person) for a consideration such
as to dilute, on a basis consistent with the standards established in the
other provisions of this section 2, the purchase rights granted by this
Warrant, then, and in each such case, the computations, adjustments and
readjustments provided for in this section 2 with respect to the Warrant
Price shall be made as nearly as possible in the manner so provided and
applied to determine the amount of Other Securities from time to time
receivable upon the exercise of the Warrants, so as to protect the holders of
the Warrants against the effect of such dilution.
2.8. MINIMUM ADJUSTMENT OF WARRANT PRICE. If the amount of any
adjustment of the Warrant Price required pursuant to this section 2 would be
less than one one-hundredth (.01) of a cent, such amount shall be carried
forward and adjustment with respect thereto made at the time of and together
with any subsequent adjustment which, together with such amount and any other
amount or amounts so carried forward, shall aggregate at least one one-hundredth
(.01) of a cent.
3. CONSOLIDATION, MERGER, SALE OF ASSETS, REORGANIZATION,
ETC.. In case the Company, after the Initial Date, (A) shall consolidate with
or merge into any other Person and shall not be the continuing or surviving
corporation of such consolidation or merger, or (B) shall permit any other
Person to consolidate with or merge into the Company and the Company shall be
the continuing or surviving Person but, in connection with such consolidation
or merger, Common Stock or Other Securities shall be changed into or
exchanged for cash, stock or other securities of any other Person or any
other property, or (C) shall transfer all or substantially all of its
properties and assets to any other Person, or (D) shall effect a capital
reorganization or reclassification of Common Stock or Other Securities (other
than a capital reorganization or reclassification resulting in the issue of
Additional Shares of Common Stock for which adjustment in the Warrant Price
is provided in section 2.2.1 or 2.2.2), then, and in the case of each such
transaction, the Company shall give written notice thereof to each holder of
any Warrant not less than 30 days prior to the consummation thereof and
proper provision shall be made so that, upon the basis and the terms and in
the manner provided in this section 3, the holder of this Warrant, upon the
consummation of such transaction, shall be entitled to receive, at the
aggregate Warrant Price in effect at the
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time of such consummation for all Common Stock (or Other Securities) issuable
upon such exercise immediately prior to such consummation, in lieu of the
Common Stock (or Other Securities) issuable upon such exercise prior to such
consummation, the highest amount of cash, securities or other property to
which such holder would actually have been entitled as a shareholder upon
such consummation if such holder had exercised this Warrant immediately prior
thereto, subject to adjustments (subsequent to such consummation) as nearly
equivalent as possible to the adjustments provided for in section 2 and this
section 3, PROVIDED that if a purchase, tender or exchange offer shall have
been made to and accepted by the holders of Common Stock under circumstances
in which, upon completion of such purchase, tender or exchange offer, the
maker thereof, together with members of any group (within the meaning of Rule
13d-5(b)(1) under the Exchange Act) of which such maker is a part, and
together with any affiliate or associate of such maker (within the meaning of
Rule 12b-2 under the Exchange Act) and any members of any such group of which
any such affiliate or associate is a part, own beneficially (within the
meaning of Rule 13d-3 under the Exchange Act) more than 50% of the
outstanding shares of Common Stock, and if the holder of this Warrant so
designates in such notice given to the Company, the holder of this Warrant
shall be entitled to receive the highest amount of cash, securities or other
property to which such holder would actually have been entitled as a
shareholder if the holder of this Warrant had exercised this Warrant prior to
the expiration of such purchase, tender or exchange offer, accepted such
offer and all of the Common Stock held by such holder had been purchased
pursuant to such purchase, tender or exchange offer, subject to adjustments
(from and after the consummation of such purchase, tender or exchange offer)
as nearly equivalent as possible to the adjustments provided for in section 2
and this section 3.
4. OTHER DILUTIVE EVENTS. In case any event shall occur as
to which the provisions of section 2 or section 3 are not strictly applicable
but the failure to make any adjustment would not fairly protect the purchase
rights represented by this Warrant in accordance with the essential intent
and principles of such sections, then, in each such case, the Company shall
appoint a firm of independent public accountants of recognized national
standing (which may be the regular auditors of the Company), which shall give
their opinion upon the adjustment, if any,
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on a basis consistent with the essential intent and principles established in
sections 2 and 3, necessary to preserve, without dilution, the purchase
rights represented by this Warrant. Upon receipt of such opinion the Company
will promptly mail a copy thereof to the holder of this Warrant and shall
make the adjustments described therein.
5. NO DILUTION OR IMPAIRMENT. The Company will not, by
amendment of its certificate of incorporation or through any consolidation,
merger, reorganization, transfer of assets, 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 action as may be necessary or appropriate in order to
protect the rights of the holder of this Warrant against dilution or other
impairment. Without limiting the generality of the foregoing, the Company (A)
will not permit the par value of any shares of stock receivable upon the
exercise of this Warrant to exceed the amount payable therefor upon such
exercise, (B) will 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 stock upon the exercise of all of the Warrants from
time to time outstanding, (C) will not take any action which results in any
adjustment of the Warrant Price if the total number of shares of Common Stock
(or Other Securities) issuable after the action upon the exercise of all of
the Warrants would exceed the total number of shares of Common Stock (or
other Securities) then authorized by the Company's certificate of
incorporation and available for the purpose of issue upon such exercise and,
(D) will not issue any capital stock of any class which has the right to more
than one vote per share or which is preferred as to dividends or as to the
distribution of assets upon voluntary or involuntary dissolution, liquidation
or winding-up, unless such stock is sold for a cash consideration at least
equal to the amount of its preference upon voluntary or involuntary
dissolution, liquidation or winding-up and the rights of the holders thereof
shall be limited to a fixed percentage (not exceeding 15%) of such cash
consideration in respect of participation in dividends.
6. ACCOUNTANTS' REPORT AS TO ADJUSTMENTS. In each case of
any adjustment or readjustment in the shares of Common Stock (or Other
Securities) issuable upon the
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exercise of the Warrants, the Company at its expense will promptly compute
such adjustment or readjustment in accordance with the terms of the Warrants
and cause independent public accountants of recognized national standing
selected by the Company (which may be the regular auditors of the Company) to
verify such computation and prepare a report setting forth such adjustment or
readjustment and showing in reasonable detail the method of calculation
thereof and the facts upon which such adjustment or readjustment is based,
including without limitation a statement of (A) the consideration received or
to be received by the Company for any Additional Shares of Common Stock
issued or sold or deemed to have been issued, (B) the number of shares of
Common Stock outstanding or deemed to be outstanding, and (C) the Warrant
Price in effect immediately prior to such issue or sale and as adjusted and
readjusted (if required by section 2) on account thereof. The Company will
forthwith mail a copy of each such report to each holder of a Warrant and
will, upon the written request at any time of any holder of a Warrant,
furnish to such holder a like report setting forth the Warrant Price at the
time in effect and showing in reasonable detail how it was calculated. The
Company will also keep copies of all such reports at its principal office and
will cause the same to be available for inspection at such office during
normal business hours by any holder of a Warrant or any prospective purchaser
of a Warrant designated by the holder thereof.
7. NOTICES OF CORPORATE ACTION. In the event of
(a) any taking by the Company of a record of the holders of
any class of securities for the purpose of determining the holders
thereof who are entitled to receive any dividend (other than a regular
periodic dividend payable in cash out of earned surplus) or other
distribution, or any right to subscribe for, purchase or otherwise
acquire any shares of stock of any class or any other securities or
property, or to receive any other right, or
(b) any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the
Company or any consolidation or merger involving the Company and any
other Person or any transfer of all or substantially all the assets of
the Company to any other Person, or
15
<PAGE>
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company,
the Company will mail to each holder of a Warrant a notice specifying (I) the
date or expected date on which any such record is to be taken for the purpose
of such dividend, distribution or right, and the amount and character of such
dividend, distribution or right, and (II) the date or expected date on which
any such reorganization, reclassification, recapitalization, consolidation,
merger, transfer, 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 record
of Common Stock (or Other Securities) shall be entitled to exchange their
shares of Common Stock (or Other Securities) for the securities or other
property deliverable upon such reorganization, reclassification,
recapitalization, consolidation, merger, transfer, dissolution, liquidation
or winding-up. Such notice shall be mailed at least 20 days prior to the date
therein specified, in the case of any date referred to in the foregoing
subdivision (i), and at least 90 days prior to the date therein specified, in
the case of the date referred to in the foregoing subdivision (ii).
8. RESTRICTIONS ON TRANSFER. 8.1. RESTRICTIVE LEGENDS.
Except as otherwise permitted by this section 8, each Warrant originally
issued pursuant to the Purchase Agreement and each Warrant issued upon direct
or indirect transfer or in substitution for any Warrant pursuant to section
13 shall be stamped or otherwise imprinted with a legend in substantially the
following form:
"This Warrant and any shares acquired upon the exercise of
this Warrant have not been registered under the Securities Act of 1933
and may not be transferred in the absence of such registration or an
exemption therefrom under such Act."
Except as otherwise permitted by this section 8, each certificate for Common
Stock (or Other Securities) issued upon the exercise of any Warrant and each
certificate issued upon the direct or indirect transfer of any such Common
Stock (or Other Securities) shall be stamped or otherwise imprinted with a
legend in substantially the following form:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933
16
<PAGE>
and may not be transferred in the absence of such registration or
an exemption therefrom under such Act. Such shares are also subject
to certain restrictions on transferability imposed by Common Stock
Purchase Warrants expiring August 25, 2005, a copy of which is on file
at the offices of the Company."
8.2. NOTICE OF PROPOSED TRANSFER; OPINIONS OF COUNSEL.
Prior to any transfer of any Restricted Securities which are not registered
under an effective registration statement under the Securities Act (other
than a transfer pursuant to Rule 144 or any comparable rule under such Act),
the holder thereof will give written notice to the Company of such holder's
intention to effect such transfer and to comply in all other respects with
this section 8.2. Each such notice (A) shall describe the manner and
circumstances of the proposed transfer in sufficient detail to enable counsel
to render the opinions referred to below, and (B) shall designate counsel for
the holder giving such notice (who may be in-house counsel for such holder).
The holder giving such notice will submit a copy thereof to the counsel
designated in such notice. The following provisions shall then apply:
(i) If in the opinion of counsel for the holder the proposed
transfer may be effected without registration, such holder shall
thereupon be entitled to transfer such Restricted Securities in
accordance with the terms of the notice delivered by such holder to the
Company. Each Warrant or certificate, if any, issued upon or in
connection with such transfer shall bear the appropriate restrictive
legend set forth in section 8.1 unless, in the opinion of such counsel,
such legend is no longer required to insure compliance with the
Securities Act.
(ii) If the opinion of such counsel for the holder is not to
the effect that the proposed transfer may legally be effected without
registration of such Restricted Securities under the Securities Act,
such holder shall not be entitled to transfer such Restricted
Securities (other than in a transfer pursuant to Rule 144 or any
comparable rule under the Securities Act) until the conditions
specified in subdivision (i) above shall be satisfied or until
registration of such Restricted Securities under the Securities Act has
become effective.
17
<PAGE>
Notwithstanding the foregoing provisions of this section 8.2, the holder of
any Restricted Securities shall be permitted to transfer any such Restricted
Securities pursuant to Rule 144A under the Securities Act, PROVIDED that each
transferee agrees in writing to be bound by all the restrictions on transfer
of such Restricted Securities contained in this section 8.2. The Company will
pay the reasonable fees and disbursements of counsel (other than in-house
counsel) for any holder of Restricted Securities and of counsel for the
Company in connection with all opinions rendered by them pursuant to this
section 8.2 and pursuant to section 8.3.
8.3. TERMINATION OF RESTRICTIONS. The restrictions imposed
by this section 8 upon the transferability of Restricted Securities shall
cease and terminate as to any particular Restricted Securities (A) when such
securities shall have been effectively registered under the Securities Act
and disposed of in accordance with the registration statement covering such
Restricted Securities, (B) when, in the opinions of both counsel for the
holder thereof and counsel for the Company, such restrictions are no longer
required in order to insure compliance with the Securities Act, or (C) when
such securities have been beneficially owned, by a person who has not been an
affiliate of the Company for at least three months, for a period of at least
two years, all as determined under Rule 144 under the Securities Act.
Whenever such restrictions shall terminate as to any Restricted Securities,
as soon as practicable thereafter and in any event within five days, the
holder thereof shall be entitled to receive from the Company, without expense
(other than transfer taxes, if any), new securities of like tenor not bearing
the applicable legend set forth in section 8.1 hereof.
9. REGISTRATION UNDER SECURITIES ACT, ETC. The shares
issuable upon exercise of this Warrant shall be entitled to the registration
rights set forth in the Registration Rights Agreement.
10. AVAILABILITY OF INFORMATION. The Company will cooperate
with each holder of any Restricted Securities in supplying such information
as may be necessary for such holder to complete and file any information
reporting forms presently or hereafter required by the Commission as a
condition to the availability of an exemption from the
18
<PAGE>
Securities Act for the sale of any Restricted Securities. The Company will
furnish to each holder of any Warrants, promptly upon their becoming
available, copies of all financial statements, reports, notices and proxy
statements sent or made available generally by the Company to its
stockholders, and copies of all regular and periodic reports and all
registration statements and prospectuses filed by the Company with any
securities exchange or with the Commission.
11. RESERVATION OF STOCK, ETC. The Company will at all
times reserve and keep available, solely for issuance and delivery upon
exercise of the Warrants, the number of shares of Common Stock (or Other
Securities) from time to time issuable upon exercise of all Warrants at the
time outstanding. All shares of Common Stock (or Other Securities) shall be
duly authorized and, when issued upon such exercise, shall be validly issued
and, in the case of shares, fully paid and nonassessable with no liability on
the part of the holders thereof.
12. LISTING ON SECURITIES EXCHANGE. The Company will list
on each national securities exchange on which any Common Stock may at any
time be listed, subject to official notice of issuance upon exercise of the
Warrants, and will maintain such listing of, all shares of Common Stock from
time to time issuable upon exercise of the Warrants. The Company will also so
list on each national securities exchange, and will maintain such listing of,
any other securities if at the time any securities of the same class shall be
listed on such national securities exchange by the Company.
13. OWNERSHIP, TRANSFER AND SUBSTITUTION OF WARRANTS. 13.1.
OWNERSHIP OF WARRANTS. The Company may treat the person in whose name any
Warrant is registered on the register kept at the principal office of the
Company as the owner and holder thereof for all purposes, notwithstanding any
notice to the contrary, except that, if and when any Warrant is properly
assigned in blank, the Company may (but shall not be obligated to) treat the
bearer thereof as the owner of such Warrant for all purposes, notwithstanding
any notice to the contrary. Subject to section 8, a Warrant, if properly
assigned, may be exercised by a new holder without first having a new Warrant
issued.
19
<PAGE>
13.2. TRANSFER AND EXCHANGE OF WARRANTS. Upon the surrender
of any Warrant, properly endorsed, for registration of transfer or for
exchange at the principal office of the Company, the Company at its expense
will (subject to compliance with section 8, if applicable) execute and
deliver to or upon the order of the holder thereof a new Warrant or Warrants
of like tenor, in the name of such holder or as such holder (upon payment by
such holder of any applicable transfer taxes) may direct, calling in the
aggregate on the face or faces thereof for the number of shares of Common
Stock called for on the face or faces of the Warrant or Warrants so
surrendered.
13.3. REPLACEMENT OF WARRANTS. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of any Warrant and, in the case of any such loss, theft or
destruction of any Warrant held by a Person other than any institutional
investor, upon delivery of indemnity reasonably satisfactory to the Company
in form and amount or, in the case of any such mutilation, upon surrender of
such Warrant for cancellation at the principal office of the Company, the
Company at its expense will execute and deliver, in lieu thereof, a new
Warrant of like tenor.
14. DEFINITIONS. As used herein, unless the context
otherwise requires, the following terms have the following respective
meanings:
ACQUIRING PERSON: the continuing or surviving corporation
of a consolidation or merger with the Company (if other than the Company),
the transferee of substantially all of the properties and assets of the
Company, the corporation consolidating with or merging into the Company in a
consolidation or merger in connection with which the Common Stock is changed
into or exchanged for stock or other securities of any other Person or cash
or any other property, or, in the case of a capital reorganization or
reclassification, the Company.
ACQUISITION PRICE: as applied to the Common Stock, with
respect to any transaction to which section 3 applies, (A) the price per
share equal to the greater of the following, determined in each case as of
the date immediately preceding the date of consummation of such transaction:
(I) the Market Price of the Common Stock and (II) the highest amount of cash
plus the Fair Value of the
20
<PAGE>
highest amount of securities or other property which the holder of this
Warrant would have been entitled as a shareholder to receive upon such
consummation if such holder had exercised this Warrant immediately prior
thereto, or (B) if a purchase, tender or an exchange offer is made by the
Acquiring Person (or by any of its affiliates) to the holders of the Common
Stock and such offer is accepted by the holders of more than 50% of the
outstanding shares of Common Stock, the greater of (I) the price determined
in accordance with the foregoing, subdivision (a) and (II) the price per
share equal to the greater of the following, determined in each case as of
the date immediately preceding the acceptance of such offer by the holders of
more than 50% of the outstanding shares of Common Stock: (X) the Market Price
of the Common Stock and (Y) the highest amount of cash plus the Fair Value of
the highest amount of securities or other property which the holder of this
Warrant would be entitled as a shareholder to receive pursuant to such offer
if such holder had exercised this Warrant immediately prior to the expiration
of such offer and accepted the same.
ADDITIONAL SHARES OF COMMON STOCK: all shares (including
treasury shares) of Common Stock issued or sold (or, pursuant to section 2.3
or 2.4, deemed to be issued) by the Company after the Initial Date hereof,
whether or not subsequently reacquired or retired by the Company, other than
(A) shares of Common Stock issued upon the exercise of Warrants and (B) the
Options listed on Schedule A hereto.
BASE PRICE: as of any date of determination, the lesser of
(A) $4.00 and (B) the Current Market Price as of such date.
BUSINESS DAY: any day other than a Saturday or a Sunday or
a day on which commercial banking institutions in the City of New York are
authorized by law to be closed, PROVIDED that, in determining the period
within which certificates or Warrants are to be issued and delivered pursuant
to section 1.3 at a time when shares of Common Stock (or Other Securities)
are listed or admitted to trading on any national securities exchange or in
the over-the-counter market and in determining the Market Price of any
securities listed or admitted to trading on any national securities exchange
or in the over-the-counter market, "Business Day" shall mean any day when the
principal exchange in which securities are then listed or admitted to trading
is open for trading or, if such securities are
21
<PAGE>
traded in the over-the-counter market in the United States, such market is
open for trading, and PROVIDED, FURTHER, that any reference to "days" (unless
Business Days are specified) shall mean calendar days.
COMMISSION: the Securities and Exchange Commission or any
other Federal agency at the time administering the Securities Act or the
Exchange Act, whichever is the relevant statute for the particular purpose.
COMMON STOCK: the Company's Common Stock, par value $.005
per share, as constituted on the date hereof, any stock into which such
Common Stock shall have been changed or any stock resulting from any
reclassification of such Common Stock, and all other stock of any class or
classes (however designated) of the Company the holders of which have the
right, without limitation as to amount, either to all or to a share of the
balance of current dividends and liquidating dividends after the payment of
dividends and distributions on any shares entitled to preference.
COMPANY: Eco Soil Systems, Inc., a Nebraska corporation.
CONVERTIBLE SECURITIES: any evidences of indebtedness,
shares of stock (other than Common Stock) or other securities directly or
indirectly convertible into or exchangeable for Additional Shares of Common
Stock.
CURRENT MARKET PRICE: on any date specified herein, (A)
with respect to Common Stock, (I) the lesser of (X) the average daily Market
Price during the period of the most recent 20 consecutive Business Days
ending on such date and (Y) the Market Price on the Business Day immediately
preceding such date, or (II) if shares of Common Stock are not then listed or
admitted to trading on any national securities exchange and if the closing
bid and asked prices thereof are not then quoted or published in the
over-the-counter market, the Market Price on such date; and (B) with respect
to any other securities, the Market Price on such date.
EXCHANGE ACT: the Securities Exchange Act of 1934, 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. Reference to a
particular
22
<PAGE>
section of the Securities Exchange Act of 1934 shall include a reference to
the comparable section, if any, of any such similar Federal statute.
FAIR VALUE: with respect to any securities or other
property, the Fair Value thereof as of a date which is within 15 days of the
date as of which the determination is to be made (A) determined by an
agreement between the Company and the Requisite Holders of Warrants or (B) if
the Company and the Requisite Holders of Warrants fail to agree, determined
jointly by an independent investment banking firm retained by the Company and
by an independent investment banking firm retained by the Requisite Holders
of Warrants, either of which firms may be an independent investment banking
firm regularly retained by the Company or any such holder or (C) if the
Company or such holders shall fail so to retain an independent investment
banking firm within five Business Days of the retention of such firm by such
holders or the Company, as the case may be, determined solely by the firm so
retained or (D) if the firms so retained by the Company and by such holders
shall be unable to reach a joint determination within 15 Business Days of the
retention of the last firm so retained, determined by another independent
investment banking firm which is not a regular investment banking firm of the
Company or any such holder chosen by the first two such firms.
INITIAL DATE: the meaning specified in section 2.2.
MARKET PRICE: on any date specified herein, (A) with
respect to Common Stock, the amount per share equal to (I) the last sale
price of shares of such security, regular way, on such date or, if no such
sale takes place on such date, the average of the closing bid and asked
prices thereof on such date, in each case as officially reported on the
principal national securities exchange on which the same are then listed or
admitted to trading, or (II) if no shares of such security are then listed or
admitted to trading on any national securities exchange but such security is
designated as a national market system security by the NASD, the last trading
price of such security on such date, or if such security is not so
designated, the average of the reported closing bid and asked prices thereof
on such date as shown by the NASD automated quotation system or, if no shares
thereof are then quoted in such system, as published by the National
Quotation Bureau, Incorporated or any
23
<PAGE>
successor organization, and in either case as reported by any member firm of
the New York Stock Exchange selected by the Company, or (III) if no shares of
such security are then listed or admitted to trading on any national exchange
or designated as a national market system security and if no closing bid and
asked prices thereof are then so quoted or published in the over-the-counter
market, the higher of (X) the book value thereof as determined by agreement
between the Company and the Requisite Holders of Warrants, or if the Company
and the Requisite Holders of Warrants fail to agree, by any firm of
independent public accountants of recognized standing selected by the Board
of Directors of the Company, as of the last day of any month ending within 60
days preceding the date as of which the determination is to be made or (Y)
the fair value thereof determined in good faith by the Board of Directors of
the issuer thereof as of a date which is within 15 days of the date as of
which the determination is to be made; and (B) with respect to any other
securities, the fair value thereof determined in good faith by the Board of
Directors of the Company as of a date which is within 15 days of the date as
of which the determination is to be made.
NASD: the National Association of Securities Dealers.
NOTES: the meaning specified in the opening paragraphs of this
Warrant.
OPTIONS: rights, options or warrants to subscribe for,
purchase or otherwise acquire either Additional Shares of Common Stock or
Convertible Securities.
OTHER SECURITIES: any stock (other than Common Stock) and
other securities of the Company or any other Person (corporate or otherwise)
which the holders of the Warrants at any time shall be entitled to receive, or
shall have received, upon the exercise of the Warrants, in lieu of or in
addition to Common Stock, or which at any time shall be issuable or shall have
been issued in exchange for or in replacement of Common Stock or Other
Securities pursuant to section 3 or otherwise.
PARENT: as to any Acquiring Person, any corporation which
(A) controls the Acquiring Person directly or indirectly through one or more
intermediaries, (B) is required to include the Acquiring Person in its
consolidated
24
<PAGE>
financial statements under generally accepted accounting principles and (C)
is not itself included in the consolidated financial statements of any other
Person (other than its consolidated subsidiaries).
PERSON: an individual, a partnership, an association, a
joint venture, a corporation, a limited liability company, a business, a
trust, an unincorporated organization or a government or any department,
agency or subdivision thereof.
PUBLIC OFFERING: any offering of Common Stock to the public
pursuant to an effective registration statement under the Securities Act.
PURCHASE AGREEMENT: the meaning specified in the opening
paragraphs of this Warrant.
REGISTRATION RIGHTS AGREEMENT: that certain Registration
Rights Agreement, dated December 21, 1999, among the Company, Albion Alliance
Mezzanine Fund, L.P. and Paribas Capital Funding LLC.
REQUISITE HOLDERS OF WARRANTS: the holders of at least 60%
of all the Warrants at the time outstanding determined on the basis of the
number of shares of Common Stock or Other Securities deliverable upon
exercise thereof.
RESTRICTED SECURITIES: (A) any Warrants bearing the applicable
legend set forth in section 8.1, (B) any shares of Common Stock (or Other
Securities) which have been issued upon the exercise of Warrants and which are
evidenced by a certificate or certificates bearing the applicable legend set
forth in such section, and (C) unless the context otherwise requires, any shares
of Common Stock (or Other Securities) which are at the time issuable upon the
exercise of Warrants and which, when so issued, will be evidenced by a
certificate or certificates bearing the applicable legend set forth in such
section.
SECURITIES ACT: the Securities Act of 1933, 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. Reference to a particular
section of the Securities Act of 1933 shall include a reference to the
comparable section, if any, of any such similar Federal statute.
25
<PAGE>
SUBSIDIARY: any corporation, association or other business
entity at least 50% (by number of votes) of the Voting Common Stock of which
is at the time owned by the Company or by one or more Subsidiaries or by the
Company and one or more Subsidiaries.
TRANSFER: unless the context otherwise requires, any sale,
assignment, pledge or other disposition of any security, or of any interest
therein, which could constitute a "sale" as that term is defined in section
2(3) of the Securities Act.
VOTING COMMON STOCK: with respect to any corporation,
association or other business entity, stock of any class or classes (or
equivalent interest) , if the holders of the stock of such class or classes
(or equivalent interests) are ordinarily, in the absence of contingencies,
entitled to vote for the election of a majority of the directors (or persons
performing similar functions) of such corporation, association or business
entity, even if the right so to vote has been suspended by the happening of
such a contingency.
WARRANT PRICE: the meaning specified in section 2.1.
WARRANTS: the meaning specified in the opening paragraphs
of this Warrant.
15. REMEDIES. The Company stipulates that the remedies at
law of the holder of this Warrant in the event of any default or threatened
default by the Company in the performance of or compliance with any of the
terms of this Warrant are not and will not be adequate and that, to the
fullest extent permitted by law, such terms may be specifically enforced by a
decree for the specific performance of any agreement contained herein or by
an injunction against a violation of any of the terms hereof or otherwise.
16. NO RIGHTS OR LIABILITIES AS STOCKHOLDER. Nothing
contained in this Warrant shall be construed as conferring upon the holder
hereof any rights as a stockholder of the Company or as imposing any
liabilities on such holder to purchase any securities or as a stockholder of
the Company, whether such liabilities are asserted by the Company or by
creditors or stockholders of the Company or otherwise.
26
<PAGE>
17. NOTICES. All notices and other communications under
this Agreement shall be in writing and shall be delivered by hand, facsimile
transmission or courier service, or mailed by registered or certified mail,
return receipt requested, addressed (A) if to any holder of any Warrant or
any holder of any Common Stock (or Other Securities), at the registered
address of such holder as set forth in the register kept at the principal
office of the Company, or (B) if to the Company, to the attention of its
Chief Financial Officer, at its principal office, PROVIDED that the exercise
of any Warrant shall be effected in the manner provided in section 1.
18. MISCELLANEOUS. This Warrant and any term hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of such change, waiver,
discharge or termination is sought. The agreements of the Company contained
in this Warrant, other than those applicable solely to the Warrants and the
holders thereof, shall inure to the benefit of and be enforceable by any
holder or holders at the time of any Common Stock (or Other Securities)
issued upon the exercise of Warrants, whether so expressed or not. This
Warrant shall be construed and enforced in accordance with and governed by
the laws of the State of New York. The section headings in this Warrant are
for purposes of convenience only and shall not constitute a part hereof.
[SIGNATURE APPEARS ON THE FOLLOWING PAGE]
27
<PAGE>
19. EXPIRATION. The right to exercise this Warrant shall
expire at 3 P.M., New York City time, on August 25, 2005.
ECO SOIL SYSTEMS, INC.
By: /s/ Dennis Sentz
--------------------
Title: CFO
28
<PAGE>
FORM OF SUBSCRIPTION
(To be executed only upon exercise of Warrant)
To _________________
The undersigned registered holder of the within Warrant
hereby irrevocably exercises such Warrant for, and purchases thereunder,
_____________1 shares of Common Stock of ECO SOIL SYSTEMS, INC., a Nebraska
corporation, and herewith makes payment of $________ therefor
[by application pursuant to section 1.5 of such Warrant of $________ aggregate
principal amount of Notes (as defined in such Warrant) plus $________ accrued
interest thereon], 2 and requests that the certificates for such shares be
issued in the name of, and delivered to ________ whose address is ________.
[The undersigned hereby instructs you to credit the principal amount of each
Note so applied against the installments of principal remaining unpaid on such
Note in the ________ order of their maturity dates.]
Dated: ______________
---------------------
(Signature must conform in all
respects to name of holder as
specified on the face of this
Warrant)
[insert address]
--------
1 Insert here the number of shares called for on the face of this Warrant (or,
in the case of a partial exercise, the portion thereof as to which this Warrant
is being exercised), in either case without making any adjustment for additional
Common Stock or any other stock or other securities or property or cash which,
pursuant to the adjustment provisions of this Warrant, may be delivered upon
exercise. In the case of a partial exercise, a new warrant or Warrants will be
issued and delivered, representing the unexercised portion of this Warrant, to
the holder surrendering the same.
2 Delete inapplicable language in brackets.
29
<PAGE>
FORM OF ASSIGNMENT
(To be executed only upon transfer of Warrant)
For value received, the undersigned registered holder of
the within Warrant hereby sells, assigns and transfers unto ________ the
right represented by such Warrant to purchase ________ shares of Common Stock
of ECO SOIL SYSTEMS, INC., a Nebraska corporation, to which such Warrant
relates, and appoints ________ Attorney to make such transfer on the books of
________ maintained for such purpose, with full power of substitution in the
premises.
Dated:
----------------------------
-------------------------
(Signature must conform in all
respects to name of holder as
specified on the face of this
Warrant)
[insert address]
Signed in the presence of:
-------------------------
30
<PAGE>
================================================================================
ECO SOIL SYSTEMS, INC.
------------------------------
AMENDED AND RESTATED
COMMON STOCK PURCHASE WARRANT
------------------------------
Expiring August 25, 2005
================================================================================
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
1. Exercise of Warrant...............................................................................1
1.1. Manner of Exercise.......................................................................1
1.2. When Exercise Deemed Effected............................................................2
1.3. Delivery of Stock Certificates, etc......................................................2
1.4. Company to Reaffirm Obligations..........................................................3
1.5. Payment by Application of the Notes......................................................3
2. Adjustment of Common Stock Issuable Upon Exercise.................................................4
2.1. Number of Shares; Warrant Price..........................................................4
2.2. Adjustment of Warrant Price..............................................................4
2.2.1. Issuance of Additional Shares of Common Stock......................................4
2.2.2. Extraordinary Dividends and Distributions..........................................5
2.3. Treatment of Options and Convertible Securities..........................................6
2.4. Treatment of Stock Dividends, Stock Splits, etc..........................................9
2.5. Computation of Consideration.............................................................9
2.6. Adjustments for Combinations, etc.......................................................11
2.7. Dilution in Case of Other Securities....................................................11
2.8. Minimum Adjustment of Warrant Price.....................................................12
3. Consolidation, Merger, Sale of Assets, Reorganization, etc.......................................12
4. Other Dilutive Events............................................................................13
5. No Dilution or Impairment........................................................................14
6. Accountants' Report as to Adjustments............................................................14
7. Notices of Corporate Action......................................................................15
8. Restrictions on Transfer.........................................................................16
8.1. Restrictive Legends.....................................................................16
8.2. Notice of Proposed Transfer; Opinions of Counsel........................................17
8.3. Termination of Restrictions.............................................................18
9. Registration under Securities Act, etc............................................................18
10. Availability of Information......................................................................18
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
11. Reservation of Stock, etc........................................................................19
12. Listing on Securities Exchange...................................................................19
13. Ownership, Transfer and Substitution of Warrants.................................................19
13.1. Ownership of Warrants...................................................................19
13.2. Transfer and Exchange of Warrants.......................................................20
13.3. Replacement of Warrants.................................................................20
14. Definitions......................................................................................20
15. Remedies.........................................................................................26
16. No Rights or Liabilities as Stockholder..........................................................26
17. Notices..........................................................................................27
18. Miscellaneous....................................................................................27
19. Expiration.......................................................................................28
</TABLE>
Form of Subscription
Form of Notice
Schedule of Outstanding Options
ii
