1
EXHIBIT 10.47
Warrant No. D-4 Right to Purchase Common Shares
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE.
THIS WARRANT HAS BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO
DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD, ASSIGNED, MADE SUBJECT TO A
SECURITY INTEREST, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND
APPLICABLE STATE LAWS OR PURSUANT TO AN EXEMPTION THEREFROM IF THE CORPORATION
RECEIVES AN OPINION OF COUNSEL (WHICH COUNSEL AND OPINION (IN FORM, SCOPE, AND
SUBSTANCE) SHALL BE REASONABLY ACCEPTABLE TO THE CORPORATION) THAT SUCH
REGISTRATION IS NOT REQUIRED AS TO SUCH SALE OR OFFER.
KTI, INC.
A NEW JERSEY CORPORATION
WARRANT TO PURCHASE COMMON STOCK
Registered Owner: The Baldwin & Clarke Companies
Coldstream Park
116B South River Road
Bedford, New Hampshire 03110
For Value Received, KTI, Inc., a New Jersey corporation (the
"Corporation") grants the following rights to the registered owner of this
Warrant (the "Holder") and the Holder hereby acknowledges and agrees that:
1. Issue.
Upon tender of this Warrant to the Corporation, the
Corporation shall issue to the registered owner hereof the number of shares
specified in paragraph 2 hereof of fully paid and nonassessable shares of common
stock of the Corporation, no par value (the "Common Stock"), that the registered
owner is otherwise entitled to purchase.
2. Number of Shares.
Subject to the provisions of paragraph 8, the number
of shares of Common Stock that the registered owner of this Warrant is entitled
to receive upon exercise of this Warrant is 15,000 shares of Common Stock. The
Corporation shall, at all times, authorize and reserve for issuance such number
of shares of Common Stock as shall be issuable upon the exercise of this
Warrant. The Corporation covenants and agrees that all shares of Common Stock
that may be issued upon the exercise of this Warrant shall, upon payment and
issuance therefore, be duly and validly issued, fully paid and nonassessable,
and free from all taxes, liens and charges with respect to the purchase and the
issuance of such shares.
3. Exercise Price.
The price at which the shares of Common Stock may
purchased upon exercise of this Warrant is Six and no/100 Dollars ($6.00) per
share (the "Exercise Price"). The Exercise Price of this Warrant is subject to
adjustment pursuant to Section 8 hereof.
Page 1
2
4. Exercise.
This Warrant shall be exercisable on and after
January 1, 1997 and shall become void unless it is exercised and payment of the
Exercise Price is received by the Corporation prior to April 30, 2001 (the
"Expiration Date"); provided that in case of dissolution of the Corporation, but
subject to the provisions of paragraph 8(b), this Warrant shall become void on
the date of such dissolution.
5. Tender.
The exercise of this Warrant must be accomplished by
actual delivery of the Exercise Price in cash, certified check, or official bank
draft in lawful money of the United States of America, and by actual delivery of
a duly executed exercise form, a copy of which is attached to this Warrant as
"Exhibit A", properly executed by the registered owner of the Warrant, and by
surrender of this Warrant. The payment and exercise form must be delivered,
personally or by mail, to the offices of the Corporation at 7000 Boulevard East,
Guttenberg, New Jersey 07093 or such other address or addresses as the
Corporation shall notify the Holder including the address of a stock transfer
agent, authorized by the Company. Documents sent by mail shall be deemed to be
delivered when they are received by the Corporation. If this Warrant should be
exercised in part only, the Corporation shall, upon surrender of this Warrant
for cancellation, execute and deliver a new Warrant evidencing the rights of the
Holder thereof to purchase the balance of the shares of Common Stock purchasable
hereunder. Upon receipt by the Corporation of an exercise form properly
executed, payment of the Exercise Price, and this Warrant at its office, or by
the authorized stock transfer agent of the Corporation at its office, in proper
form for exercise, the Holder shall be deemed to be the holder of record of the
shares of Common Stock issuable upon such exercise, notwithstanding that the
stock transfer books of the Corporation shall then be closed or that
certificates representing such shares of Common Stock shall not then be
physically delivered to the Holder.
6. Recognition of the Registered Owner.
Prior to due presentment for registration of transfer
of this Warrant, the Corporation may deem and treat the registered Holder or
Holders of this Warrant as its absolute owner or owners for all purposes, as the
person or persons exclusively entitled to receive notices concerning this
Warrant, and as the person or persons otherwise entitled to exercise rights
under this Warrant.
7. Restricted Securities.
The Holder, by acquiring this Warrant, hereby
covenants and agrees that:
(a) the Holder will not offer for sale or sell this
Warrant or the shares of Common Stock issuable upon the exercise of
this Warrant unless pursuant to:
i. an effective registration statement under
the Securities Act ("Registration
Statement") filed by the Company covering
such offer and sale; or
ii. an exemption from registration under the
Securities Act; provided that prior to any
such proposed transfer, the Holder shall
give five (5) days' written notice to the
Company of the Holder's intentions to affect
such transfer, which notice shall be
accompanied by such evidence (including the
provision of an opinion of counsel (which
counsel and opinion (in form scope, and
substance) shall be reasonably acceptable to
the Corporation) that such registration is
not required as to such sale or offer as may
be
Page 2
3
reasonably satisfactory to the Company that
the proposed transfer may be effected
without registration under the Securities
Act.
(b) The certificates representing the shares of
Common Stock issued upon exercise hereof, unless the same are
registered under the Securities Act prior to exercise of this Warrant,
shall be stamped or otherwise imprinted with a legend in substantially
the following form:
"The shares of common stock represented by this certificate
have not been registered under the Securities Act of 1933, as
amended (the "Securities Act"), or the securities laws of any
state. The shares of common stock have been acquired for
investment and not with a view to distribution or resale, and
may not be sold, assigned, made subject to a security
interest, pledged, hypothecated, or otherwise transferred
except pursuant to an effective registration statement under
the Securities Act and applicable state laws or pursuant to an
exemption therefrom if the Company receives an opinion of
counsel (which counsel and opinion (in form, scope and
substance, shall be reasonably acceptable to the Corporation)
that such registration is not required as to such sale or
offer."
(c) Any offer or sale of this Warrant or the shares
of Common Stock issued upon exercise hereof shall be made in accordance
with the federal and state securities laws of applicable jurisdictions
(including the prospectus delivery requirements of the Securities Act),
and any other applicable law.
8. Adjustment of Exercise Price and Shares.
After each adjustment of the Exercise Price pursuant
to this Section 8, the number of shares of Common Stock purchasable on the
exercise of this Warrant shall be the number derived by dividing such adjusted
pertinent Exercise Price into the original Exercise Price. The Exercise Price
shall be subject to adjustment as follows:
(a) In the event, prior to the termination of this
Warrant by exercise thereof or by its terms, the Corporation shall
issue any shares of its Common Stock as a share dividend or shall
declare a stock split or otherwise subdivide the number of outstanding
shares of Common Stock into a greater number of shares, then, in either
of such events (referred to hereinafter as an "Adjustment Event"), the
Exercise Price per share of Common Stock that may be purchased pursuant
to this Warrant in effect at the time of such action shall be reduced
proportionately and the number of shares of Common Stock that may be
purchased pursuant to this Warrant shall be increased proportionately
to the nearest full amount so as to ensure that the Holder hereof is in
the same economic position as such Holder was in prior to such share
dividend or subdivision. Conversely, in the event the Corporation shall
reduce the number of shares of its outstanding Common Stock by
declaring a reverse stock split or otherwise combining such shares into
a smaller number of shares, then, in such event, the Exercise Price per
share that may be purchased pursuant to this Warrant in effect at the
time of such action shall be increased proportionately and the number
of shares of Common Stock at that time purchasable pursuant to this
Warrant shall be decreased proportionately to the nearest full amount
so as to ensure that the Holder hereof is in the same economic position
as such Holder was in prior to such share combination. Any dividend
paid or distributed on the Common Stock in shares of any other class of
capital stock of the Corporation or securities convertible into shares
of Common Stock shall be treated as a dividend paid in Common Stock to
the extent that shares of Common Stock are issuable on the conversion
thereof. An adjustment in the Exercise Price or the number of shares of
Common
Page 3
4
Stock to be received upon exercise of this Warrant made pursuant to
this Section 8(a) shall become effective immediately after the
effective date of such Adjustment Event retroactive to the record date,
if any, for such Adjustment Event.
(b) In the event the Corporation, at any time while
this Warrant shall remain unexpired and unexercised, shall (i) effect a
reorganization, (ii) consolidate with or merge into any person, (iii)
transfer or sell all or substantially all of its property, or (iv)
dissolve, liquidate or wind up its affairs (a "Reorganization Event"),
the Corporation will take prompt action to ensure that proportionate,
equitable, lawful and adequate provision shall be made as part of the
terms of any such Reorganization Event such that the Holder of this
Warrant may thereafter receive, on exercise thereof, in lieu of each
share of Common Stock which such Holder would have been entitled to
receive, the same kind and amount of any share, securities, or assets
as may be issuable, distributable or payable pursuant to such
Reorganization Event with respect to each share of Common Stock which
the Holder would have been entitled to receive if such Holder had
exercised this Warrant immediately prior to such Reorganization Event.
Upon any Reorganization Event referred to in this paragraph 8(b), this
Warrant shall continue in full force and effect and the terms hereof
shall be applicable to all securities and other property receivable on
the exercise of this Warrant after the consummation of such
Reorganization Event; and shall be binding upon the issuer of any such
securities or other property, including, in the case of any such
transfer, the person acquiring all or substantially all of the
properties or assets of the Corporation, whether or not such person
shall have expressly assumed the terms of this Warrant.
(c) Notwithstanding the provisions of this Section 8,
no adjustment of the Exercise Price or the shares of Common Stock to be
received upon exercise of the Warrant shall be made unless Exercise
Price is the aggregate of such adjustments to the Exercise Price equals
or exceeds $0.005.
(d) In the event, prior to the expiration of this
Warrant by exercise thereof or by its terms, the Corporation shall
determine to take a record of the holders of its Common Stock for the
purpose of determining shareholders entitled to receive any share
dividend or other right which will cause any change or adjustment in
the number, amount, price or nature of the shares of Common Stock or
other securities or assets deliverable on exercise of this Warrant
pursuant to the foregoing provisions, the Corporation shall give to the
registered Holder of this Warrant at such Holder's address as may
appear on the books of the Corporation at least fifteen (15) days'
prior written notice to the effect that it intends to take such a
record. Such notice shall specify the date as of which such record is
to be taken, and the number, amount, price and nature of the Common
Stock or other shares, securities or assets which will be deliverable
on exercise of this Warrant after the action for which such record will
be taken has been completed. Without limiting the obligation of the
Corporation to provide notice to the registered Holder of this Warrant
of any corporate action hereunder, the failure of the Corporation to
give notice shall not invalidate such corporate action of the
Corporation.
(e) No adjustment of the Exercise Price pursuant to
this Section 8 or Section 9 shall be made as a result of or in
connection with (i) the issuance of Common Stock pursuant to options,
warrants and share purchase agreements outstanding or in effect on the
date hereof, (ii) the establishment of additional stock option or other
benefit plans of the Corporation, the modification, renewal or
extension of any stock option or other benefit plan now in effect or
hereafter created, or the issuance of Common Stock on exercise of any
options pursuant to such stock option or other benefit plans, or (iii)
the issuance of Common Stock in connection with an acquisition or
merger of any type (the antidilution provision of this Section 8 will
not apply in the event a merger or acquisition is undertaken by the
Corporation as long as the Corporation is the survivor thereof), and
(iv) in connection with compensation arrangements for present or former
Page 4
5
officers, direct employees or agents of the Corporation or any indirect
or direct subsidiary of the Corporation, and the like.
9. Other Adjustments to Purchase Price and Number of
Securities.
(a) Computation of Adjusted Purchase Price. Except as
hereinafter provided, in case the Corporation shall at any time after
the date of this Warrant issue or sell any shares of Common Stock
(other than an issuance or sale referred to in paragraph 8(e)) for a
consideration per share less than the then current fair market value of
a share of the Common Stock ("fair market value" of the Common Stock to
mean the average closing price of the Common Stock on the immediately
preceding ten (10) days on which such shares of Common Stock may be
traded in the NASDAQ National Market or other securities exchange) then
immediately upon such issuance or sale, the Exercise Price shall (until
another such issuance or sale) be reduced to the price (calculated to
the nearest full cent) equal to the Exercise Price in effect prior to
such issuance or sale multiplied by the quotient derived by dividing
(A) an amount equal to the sum of (X) the then current fair market
value per share of Common Stock immediately prior to such issuance or
sale multiplied by the total number of shares of Common Stock
outstanding immediately prior to such issuance or sale, plus (Y) the
aggregate of the amount of all consideration, if any, to be received by
the Corporation upon such issuance or sale, by (B) the then current
fair market value per share of Common Stock immediately prior to such
issuance or sale multiplied by the total number of shares of Common
Stock outstanding immediately after such issuance or sale; provided
that:
i. In case of the issuance or sale of shares of
Common Stock for a consideration part or all
of which shall be cash, the amount of the
cash consideration therefor shall be deemed
to be the amount of cash received by the
Corporation for such shares (or, if shares
of Common Stock are offered by the
Corporation for subscription, the
subscription price, or, if either of such
securities shall be sold to underwriters or
dealers for public offering without a
subscription offering, the initial public
offering price for such shares) before
deducting therefrom any compensation paid or
discount allowed in the sale, underwriting
or purchase thereof by underwriters or
dealers or others performing similar
services, or any expenses incurred in
connection therewith.
ii. In case of the issuance or sale (otherwise
than as a dividend or other distribution on
any capital stock of the Corporation) of
shares of Common Stock for a consideration
part or all of which shall be other than
cash, the amount of the consideration
therefor other than cash shall be deemed to
be the value of such consideration as
determined in good faith by the Board of
Directors of the Corporation.
iii. The reclassification of securities of the
Corporation other than shares of Common
Stock into securities including shares of
Common Stock shall be deemed to involve the
issuance of such shares of Common Stock for
a consideration other than cash immediately
prior to the close of business on the date
fixed for the determination of security
holders entitled to receive such shares, and
the value of the consideration allocable to
such shares of Common Stock shall be
determined in good faith by the Board of
Directors of the Corporation.
Page 5
6
iv. The number of shares of Common Stock at any
one time outstanding shall include the
aggregate number of shares issued or
issuable (subject to readjustment upon the
actual issuance thereof) upon the exercise
of options, rights, and warrants and upon
the conversion or exchange of convertible or
exchangeable securities.
(b) Options, Rights, Warrants and Convertible and
Exchangeable Securities. Except as hereinafter provided, in case the
Corporation shall at any time after the date hereof issue or sell
options, rights or warrants to subscribe for shares of Common Stock, or
issue any securities convertible into or exchangeable for shares of
Common Stock (other than the issuances or sales referred to in
paragraph 9(c)), for a consideration per share less than the then
current fair market value of the share of the Common Stock immediately
prior to the issuance of such options, rights or Warrants, or such
convertible or exchangeable securities, or without consideration, the
Exercise Price shall (until another such issuance or sale) be reduced
to the price (calculated to the nearest full cent) equal to the
Exercise Price in effect prior to such issuance or sale multiplied by
the quotient derived by dividing (A) an amount equal to the sum of (X)
the then current fair market value per share of Common Stock
immediately prior to such issuance or sale multiplied by the total
number of shares of Common Stock outstanding immediately prior to such
issuance or sale, plus (Y) the aggregate of the amount of all
consideration, if any, to be received by the Corporation upon the
exercise of such convertible or exchangeable securities, by (B) the
then current fair market value per share of Common Stock immediately
prior to such issuance or sale multiplied by the total number of shares
of Common Stock that would be outstanding immediately after the
exercise of such convertible or exchangeable securities provided that:
i. The aggregate maximum number of shares of
Common Stock, as the case may be, issuable
under such options, rights or warrants shall
be deemed to be issued and outstanding at
the time such options, rights or warrants
were issued, and for a consideration equal
to the minimum purchase price per share
provided for in such options, rights or
warrants at the time of issuance, plus the
consideration (determined in the same manner
as consideration received on the issue or
sale of shares in accordance with the terms
of this Warrant), if any, received by the
Corporation for such options, rights or
warrants.
ii. The aggregate maximum number of shares of
Common Stock issuable upon conversion or
exchange of any convertible or exchangeable
securities shall be deemed to be issued and
outstanding at the time of issuance of such
securities, and for a consideration equal to
the consideration (determined in the same
manner as consideration received on the
issue or sale of shares of Common Stock in
accordance with the terms of this Warrant)
received by the Corporation for such
securities, plus the minimum consideration,
if any, receivable by the Corporation upon
the conversion or exchange thereof.
iii. If any change shall occur in the price per
share provided for in any of the options,
rights, or warrants or convertible or
exchangeable securities referred to in this
subsection (b) of this paragraph 9, such
options, rights or warrants or conversion or
exchange rights, as the case may be, shall
be deemed to have expired or terminated on
the date when such price change became
effective in respect of shares not
theretofore issued and the Corporation shall
be deemed to have issued upon such date new
options,
Page 6
7
rights or warrants or convertible or
exchangeable securities at the new price per
share in respect of the number of shares
issuable upon the exercise of such options,
rights or warrants or the conversion or
exchange of such convertible or exchangeable
securities.
(c) Exclusions. The provisions of subsection 9(b)
above shall not apply to any options issued pursuant to stock option
plans of the Corporation in effect on the date hereof, to renewals of
any existing options, rights or warrants or to any options, rights or
warrants issued to employees of the Corporation or any of its
subsidiaries on the date hereof. Moreover, the provisions of subsection
9(b) shall terminate at such time as there is in effect a registration
statement filed with the Securities and Exchange Commission with
respect to the shares of Common Stock underlying the Warrant.
(d) Adjustment in Number of Securities. Upon each
adjustment of the Exercise Price pursuant to the provisions of this
paragraph 9, the number of shares of Common Stock issuable upon the
exercise of this Warrant shall be adjusted to the nearest full amount
by multiplying a number equal to the Exercise Price in effect
immediately prior to such adjustment by the number of shares of Common
Stock issuable upon exercise of this Warrant immediately prior to such
adjustment and dividing the product so obtained by the adjusted
Exercise Price.
10. Fractional Shares.
No fractional shares or script representing
fractional shares of Common Stock shall be issued upon the exercise of
this Warrant. No adjustment to the shares of Common Stock that may be
purchased upon the exercise of this Warrant will result in any
fractional shares to be issued to the Holders hereof.
11. Rights of the Holder.
The Holder shall not, by virtue hereof, be entitled
to any rights of a shareholder in the Corporation, either at law or equity, and
the rights of the Holder are limited to those expressed in this Warrant and are
not enforceable against the Corporation except to the extent set forth herein.
12. Notices of Record Date, Etc. In case:
(a) the Corporation shall take a record of the
holders of its Common Stock (or other securities at the time receivable
upon the exercise of the Warrant) for the purpose of entitling them to
receive any dividend (other than a cash dividend payable 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 to receive any other right; or
(b) of any capital reorganization of the Corporation
(other than a stock split or reverse stock split), any reclassification
of the capital stock of the Corporation, any consolidation or merger of
the Corporation with or into another corporation (other than a merger
for purposes of change of domicile) or any conveyance of all or
substantially all of the assets of the Corporation to another
corporation; or
(c) of any voluntary or involuntary dissolution,
liquidation or winding-up of the Corporation;
then, in each such case, the corporation
shall mail or cause to be mailed to the Holder at the time outstanding
a notice specifying, as the case may be, (i) the date on which
Page 7
8
a record is to be taken for the purpose of such
dividend, distribution or right, and stating the
amount and character of such dividend, distribution
or right, or (ii) the date on which such
reorganization, reclassification, consolidation,
merger, conveyance, dissolution, liquidation or
winding-up is to take place, and the time, if any, to
be fixed as to which the holders of record of Common
Stock (or such other securities at the time
receivable upon the exercise of the Warrant) shall be
entitled to exchange their shares of Common Stock (or
such other securities) for securities or other
property deliverable upon such reorganization,
reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding-up. Such notice
shall be mailed at least twenty (20) days prior to
the date therein specified and this Warrant may be
exercised prior to said date during the term of the
Warrant no later than five (5) days prior to said
date.
13. No Impairment. The Corporation will not, by amendment of
its Certificate of Incorporation or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, avoid or seek to avoid the observance or performance of
any of the terms of this Warrant, 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. Without limiting the generality of the foregoing, the Corporation (a)
will not increase the par value of any shares of Common Stock receivable on the
exercise of the Warrant above the amount payable therefor on such exercise, and
(b) will take all such action as may be necessary or appropriate in order that
the Corporation may validly and legally issue fully paid and nonassessable
shares of Common Stock on the exercise of this Warrant from time to time
outstanding.
14. Replacement of Warrant. On receipt of evidence reasonably
satisfactory to the Corporation of the loss, theft, destruction or mutilation of
this Warrant and, in the case of any such loss, theft or destruction of this
Warrant, on delivery of any indemnity agreement or security reasonably
satisfactory in form and amount to the Corporation or, in the case of any such
mutilation, on surrender and cancellation of such Warrant, the Corporation at
its expense will execute and deliver, in lieu thereof, a new Warrant of like
tenor.
IN WITNESS WHEREOF, the Corporation has signed this Warrant by
its duly authorized officer this second day of January, 1997.
KTI, INC.
By:________________________________________________
Name: Nicholas Menonna, Jr.
Title: Chairman of the Board of Directors and
Chief Executive Officer
Page 8
9
EXHIBIT A
EXERCISE FORM
To Be Executed Upon Exercise of Warrant
The undersigned record holder of the within Warrant hereby
irrevocably elects to exercise the rights to purchase ______ shares of Common
Stock of KTI, Inc. by exercise of the within Warrant, according to the terms and
conditions therein and payment of the Exercise Price in full.
The undersigned requests that certificates for such shares of
Common Stock shall be issued in the name set forth below.
Dated: , 199__
______________________________
Signature
______________________________
Print Name of Signatory
Address:_______________________________
________________________________
Social Security No.
or other identifying number:____________________
If said number of shares of Common Stock and Warrants shall
not be all the shares under the within Warrant, the undersigned requests that a
new Warrant for the unexercised portion shall be registered in the name of:
______________________________
(Please print)
Address:_______________________________
________________________________
Social Security No.
or other identifying number:____________________
Signature:_____________________________
_____________________________
Print Name of Signatory
Page 9