Exhibit 10.4
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS, WHICH, IN THE OPINION OF COUNSEL FOR THE HOLDER, WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO COUNSEL FOR THE COMPANY, IS AVAILABLE.
WARRANT TO PURCHASE COMMON STOCK OF
HYDRON TECHNOLOGIES, INC.
Warrant Certificate No. 2008A-2 | Date: January 23, 2008 (“Effective Date”) |
For value received, HYDRON TECHNOLOGIES, INC., a New York corporation (the “Company”), hereby grants to RICHARD BANAKUS (the “Holder”), the right to purchase, TWO HUNDRED THOUSAND (200,000) shares of common stock of the Company, par value $.01 per share (the “Stock”), at the Warrant Exercise Price per share (as defined below), subject to adjustment and the other terms and conditions as set forth below, at any time or from time to time after the date hereof and prior to 5:00 P.M. (Eastern Time) on January 23, 2013 (the “Warrant Expiration Date”).
This warrant and all warrants hereafter issued in exchange or substitution for this warrant are hereinafter referred to as the “Warrants.” THIS WARRANT, TO THE EXTENT NOT EXERCISED IN THE MANNER SET FORTH HEREIN, SHALL TERMINATE AND BECOME NULL AND VOID AT 5:00 P.M. (EASTERN TIME) ON THE WARRANT EXPIRATION DATE.
| This Warrant is subject to the following terms and conditions: |
| 1. | Exercise; Issuance of Certificates; Payment for Shares. |
| (a) | Exercise. This Warrant may be exercised, at the option of the Holder, in whole or in part at any time prior to 5:00 P.M. (Eastern Time) on the Warrant Expiration Date, by surrender to the Company of this Warrant Certificate properly endorsed together with the Form of Subscription attached hereto as Exhibit A, duly filled in, executed and accompanied by payment of an amount equal to the Warrant Exercise Price multiplied by the number of shares of Stock for which the Warrant is being exercised. Payment shall be either in cash, wire transfer to the Company’s bank account, certified bank check or official bank or cashier’s check payable to the order of the Company. |
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| (b) | Certificates. The Company agrees that the shares of Stock purchased on the exercise of each Warrant shall be deemed to be issued as of the close of business on the date on which this Warrant Certificate shall have been surrendered and payment made for such shares of Stock. Issuance of the shares of Stock shall be subject to compliance with all provisions of the Securities Act of 1933, as amended (the “Securities Act”), the Securities Exchange Act of 1934 (the “Exchange Act”), and any relevant state securities law. Certificates for the largest whole number of shares of Stock so purchased shall be delivered to the Holder by the Company within ten business days after this Warrant has been exercised. No fractional shares of Stock shall be issued upon exercise of this Warrant. Each stock certificate so delivered shall be registered in the name of the Holder or such other name as shall be designated by the Holder, subject to the provisions of Sections 4 and 7 hereof. If prior to the Warrant Expiration Date, this Warrant is exercised in part, one or more new Warrants substantially in the form of, and on the terms contained in, this Warrant Certificate will be issued for the covering the remaining number shares of Stock the Holder hereof is entitled to purchase. |
| (c) | The exercise price shall be $0.125 per share. |
2. Shares to be Fully Paid; Reservation of Shares. The Company covenants and agrees that all shares of Stock that may be issued upon the exercise of this Warrant will, upon issuance, be duly authorized, validly issued, fully paid and nonassessable. The Company further covenants and agrees that during the period within which this Warrant may be exercised, the Company will at all times have authorized and reserved, and will keep available solely for issuance upon exercise of this Warrant, a sufficient number of shares of Stock or other securities and property as from time to time shall be receivable upon the exercise of this Warrant. The Company shall provide that any successor corporation shall reserve a sufficient number of shares or authorized but unissued stock or other securities or set aside sufficient other property, as the case may be, as provided for in this Section 2.
| 3. | Adjustment of Warrant Exercise Price and Number of Shares; Events Requiring Notice; Changes in Stock. |
| (a) | Method of Adjustment. The Warrant Exercise Price and the number of shares of Stock purchasable hereunder shall be subject to adjustment from time to time upon the occurrence of the events described in Section 3(b). Upon each adjustment of the Warrant Exercise Price, the Holder shall thereafter be entitled to purchase, at the Warrant Exercise Price resulting from such adjustment, the number of shares of Stock obtained by multiplying the Warrant Exercise Price in effect immediately prior to such adjustment by the number of shares of Stock purchasable hereunder immediately prior to such adjustment, and dividing the product thereof by the Warrant Exercise Price resulting from such adjustment. |
| (b) | Subdivision or Combination of Stock and Stock Dividend. In case the Company shall at any time subdivide its outstanding shares of Stock into a greater number |
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of shares of Stock or declare a dividend upon its Stock payable solely in shares of Stock, the Warrant Exercise Price in effect immediately prior to such subdivision or dividend shall be proportionately reduced, and conversely, in case the outstanding shares of Stock of the Company shall be combined into a smaller number of shares of Stock, the Warrant Exercise Price in effect immediately prior to such combination shall be proportionately increased.
| (c) | Adjustments for Dividends in Securities other than Common Stock. While this Warrant, or any portion hereof, remains outstanding and unexpired, if the Holders of the Stock shall have received, or, on or after the record date fixed for the determination of eligible stockholders, shall have become entitled to receive, without payment therefore, shares of capital stock of a subsidiary of the Company by way of dividend or otherwise, then in such case, this Warrant shall represent the right to acquire, in addition to the number of shares receivable upon exercise of this Warrant, and without payment of any additional consideration therefor, the amount of capital stock of such subsidiary that the Holder would have received if the Holder had exercised this Warrant prior to any such capital stock distribution, provided, however, no adjustment to the Warrant Exercise Price shall occur as a result of any such dividend of capital stock of a subsidiary of the Company. |
| (d) | Notice of Adjustment. Upon any adjustment of the Warrant Exercise Price and any increase or decrease in the number of shares of Stock purchasable upon the exercise of this Warrant, the Company promptly shall give written notice thereof to the Holder, which shall state the Warrant Exercise Price resulting from such adjustment and increase or decrease, if any, in the number of shares of Stock purchasable hereunder at such price setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based. |
| (e) | Other Notices. If at any time: |
| (i) | the Company shall declare a dividend upon its Stock payable in shares of capital stock of one of its subsidiaries; |
| (ii) | there shall be any consolidation or merger of the Company with another corporation, or sale of all or substantially all of the Company’s assets to another corporation; or |
| (iii) | there shall be a voluntary or involuntary dissolution, liquidation or winding-up of the Company; |
then, in any one or more of said cases, the Company shall give the Holder (x) at least thirty (30) days’ prior written notice of the date on which the books of the Company shall close or a record date shall have occurred for such dividend or distribution or for determining rights to vote in respect of any such consolidation, merger, sale, dissolution, liquidation or winding-up, and (y) in the case of any such consolidation, merger, sale, dissolution, liquidation or winding-up, at least twelve (12) calendar days’ written notice of the date when the same shall take place. Any notice given in accordance with clause (x) above shall also specify, in
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the case of a dividend or distribution, the date on which the holders of Stock shall be entitled to receive the dividend or distribution. Any notice given in accordance with clause (y) above shall also specify the date on which the holders of the Stock shall be entitled to exchange their Stock for securities or other property deliverable upon such consolidation, merger, sale, dissolution, liquidation or winding-up, as the case may be. Notwithstanding anything contained herein to the contrary, if the Holder does not exercise this Warrant prior to a record date or the occurrence of an event described above, as applicable, except as provided in Section 3(b), the Holder shall not be entitled to receive the benefits accruing to existing holders of the Stock in such event.
4. Tax on Issuance. The issuance of certificates for shares of Stock upon the exercise of this Warrant shall be made without charge to the Holder for any issuance tax in respect thereof, provided, however, that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any certificate in a name other than that of the Holder.
5. No Voting or Dividend Rights. This Warrant does not confer upon the Holder the right to vote or to consent or to receive notice as a stockholder of the Company, in respect of meetings of stockholders for the election of directors of the Company or any other matters or any rights whatsoever as a stockholder of the Company prior to the exercise hereof. No cash dividends shall be payable or accrue with respect to this Warrant or the shares of Stock purchasable hereunder until, and only to the extent that, this Warrant shall have been exercised.
| 6. | Restrictions on Transferability; Compliance with Securities Act. |
| (a) | The Holder may transfer or assign this Warrant, except that the Company shall not be obligated to effect any transfer of this Warrant unless a registration statement is in effect with respect thereto under applicable state and Federal securities laws or the Company has received an opinion from counsel to the Holder, which opinion and counsel are reasonably satisfactory to the Company that such registration is not required and this Warrant is surrendered to the Company at its principal office together with the Assignment Form annexed hereto as Exhibit B, duly completed and executed, and sufficient funds to pay any transfer tax. |
| (b) | The Company and any agent of the Company may treat the person in whose name this Warrant Certificate is registered on the Warrant Register maintained by the Company as the sole owner and holder hereof for all purposes. This Warrant Certificate, if properly assigned, may be exercised by a new holder without first having a new Warrant Certificate issued. |
| (c) | A legend setting forth or referring to the above restrictions shall be placed on this Warrant, any replacement hereof or any certificate representing the Stock, and a stop transfer restriction or order shall be placed on the books of the Company and with any transfer agent until such securities may be legally sold or otherwise transferred. |
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7. Registration Rights. In the event that the Company shall grant “piggy back” registration rights to any other party to cause its shares of Stock or any security exercisable or exchangeable for, or convertible into shares of Stock to be included in a registration filed by the Company to register shares of Stock for sale by the Company or any selling shareholder, the Company agrees to grant the Holder similar rights.
8. Modification and Waiver. This Warrant and any provision hereof may only be changed, waived, discharged or terminated by an instrument in writing signed by the Holder and the Company.
9. Notices. Any notice, request or other document required or permitted to be given or delivered by the Holder or the Company hereunder shall be sent by registered or certified mail, overnight express or facsimile (with a confirming copy sent by one of the other methods) to the parties at the addresses provided below or at any other address hereafter designated in writing by a party hereto to the other party.
Holder:
Richard Banakus
82 Verissimo Drive
Novato, CA 94947
The Company:
Hydron Technologies, Inc.
4400 34TH Street North
Suite F
St. Petersburg, FL 33724
Attention: Chief Operating Officer
Any notice, request or other document shall be deemed to have been given upon receipt by the other party. Each party shall notify the other of any change in address within a reasonable time following such change.
10. Descriptive Headings and Governing Law. The descriptive headings of the several sections and paragraphs of this Warrant are inserted for convenience only and do not constitute a part of this Warrant. This Warrant shall be construed and enforced in accordance with, and the rights of the parties shall be governed by the laws of the State of Florida, without regard to conflicts of law principles.
11. Lost Warrant Certificates or Stock Certificates. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant
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Certificate or any stock certificate deliverable upon the exercise hereof and, in the case of any such loss, theft or destruction, upon receipt of an indemnity and, if requested, bond reasonably satisfactory to the Company, or in the case of any such mutilation, upon surrender and cancellation of this Warrant or such stock certificate, the Company, at its expense, shall make and deliver a new Warrant or stock certificate of like tenor, in lieu of the lost, stolen, destroyed or mutilated Warrant or stock certificate.
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IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be executed as of the date first above written.
HYDRON TECHNOLOGIES, INC.
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Exhibit A
FORM OF SUBSCRIPTION
(To be signed only upon exercise of a Warrant)
TO: HYDRON TECHNOLOGIES, INC.
The undersigned, the holder of Warrant Certificate No. 2008A-2 relating to purchase of TWO HUNDRED THOUSAND shares of Common Stock of the Company, par value $.01 per share, or such lesser amount representing the unexercised portion thereof, hereby elects to exercise the Warrant to purchase _______ shares of Common Stock for $0.125 per share, totaling an aggregate purchase price of $______________, and requests that certificates for these shares be issued in the name of, and delivered to, _____________________________ whose address is _______________________________.
Dated: __________________
____________________________________
Signature
____________________________________
Name (name must conform to name of Holder
as specified on the face of the Warrant)
____________________________________
____________________________________
Address
A-1
FORM OF ASSIGNMENT
(To be signed only on transfer of Warrant
in accordance with the provisions of Section 6
of the Warrant Certificate)
For value received, the undersigned hereby sells, assigns and transfers unto __________________________ the right represented by the Warrant to purchase ____________ shares of Common Stock of Hydron Technologies, Inc., par value $.01 per share to which the Warrant relates and directs Hydron Technologies, Inc. to transfer such rights on its books and records.
Dated: _______________
____________________________
Signature
____________________________
Name (name must conform to name of Holder
as specified on the face of the Warrant)
____________________________
____________________________
Address
A-2
