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EXHIBIT 10.44
Warrant No. D-1 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: Thomas E. Schulze
124 Hewes Street
North Barrington, Illinois 60010
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 6,000 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 Eight and 50/100 Dollars ($8.50) per share (the
"Exercise Price"). The Exercise Price of this Warrant is subject to adjustment
pursuant to Section 8 hereof.
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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 December 31, 1999 (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
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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
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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
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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.
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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,
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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
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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
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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
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