General Statement of Beneficial Ownership — Schedule 13D
Filing Table of Contents
Document/Exhibit Description Pages Size
1: SC 13D General Statement of Beneficial Ownership 9 36K
2: EX-1 Underwriting Agreement 5 23K
3: EX-2 Plan of Acquisition, Reorganization, Arrangement, 9 28K
Liquidation or Succession
4: EX-3 Articles of Incorporation/Organization or By-Laws 110 376K
5: EX-4 Instrument Defining the Rights of Security Holders 2 11K
6: EX-5 Opinion re: Legality 19 71K
7: EX-6 Opinion re: Discount on Capital Shares 40 101K
8: EX-7 Opinion re: Liquidation Preference 5 21K
EX-5 — Opinion re: Legality
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EXHIBIT 5
WARRANT TO PURCHASE
SHARES OF COMMON STOCK
OF
JLM INDUSTRIES, INC.
Expires _________, 2006
No.: W-__ Number of Shares: __________
Date of Issuance: __________, 2001
FOR VALUE RECEIVED, subject to the provisions hereinafter set forth,
the undersigned, JLM Industries, Inc., a Delaware corporation (together with its
successors and assigns, the "ISSUER"), hereby certifies that Phoenix Enterprises
LLC or its registered assigns is entitled to subscribe for and purchase, during
the period specified in this Warrant, up to _________ shares (subject to
adjustment as hereinafter provided) of the duly authorized, validly issued,
fully paid and nonassessable Common Stock of the Issuer, at an exercise price
per share equal to the Warrant Price then in effect, subject, however, to the
provisions and upon the terms and conditions hereinafter set forth. Capitalized
terms used in this Warrant and not otherwise defined herein shall have the
respective meanings specified in Section 7 hereof.
1. TERM. The right to subscribe for and purchase shares of Warrant Stock
represented hereby shall commence on the date of issuance of this Warrant and
shall expire at 5:00 p.m., New York City time, on ________, 2006 (such period
being the "TERM").
2. METHOD OF EXERCISE PAYMENT; ISSUANCE OF NEW WARRANT; TRANSFER AND
EXCHANGE.
(a) TIME OF EXERCISE. The purchase rights represented by this
Warrant may be exercised in whole or in part at any time and from time to time
during the Term.
(b) METHOD OF EXERCISE. The Holder hereof may exercise this Warrant,
in whole or in part, by the surrender of this Warrant (with the exercise form
attached hereto duly executed) at the principal office of the Issuer, and by the
payment to the Issuer of an amount of consideration therefor equal to the
Warrant Price in effect on the date of such exercise multiplied by the number of
shares of Warrant Stock with respect to which this Warrant is then being
exercised, payable at such Holder's election by (i) certified or official bank
check or wire transfer of immediately available funds or (ii) surrender to the
Issuer for cancellation of a portion of this Warrant representing that number of
unissued shares of Warrant Stock which is equal to the quotient obtained by
dividing (A) the product obtained by multiplying the Warrant Price by the number
of shares of Warrant Stock being purchased upon such exercise by (B) the
difference obtained by subtracting the Warrant Price from the Per Share Market
Value as of the date of such exercise, or (iii) by a combination of the
foregoing methods of payment selected by the Holder of this Warrant. In any case
where the consideration payable upon such exercise is being paid in whole or in
part pursuant to the provisions of clause (ii) of this subsection (b), such
exercise shall be accompanied by written notice from the Holder of this Warrant
specifying the manner of payment thereof and containing a calculation showing
the number of shares of Warrant Stock
with respect to which rights are being surrendered thereunder and the net number
of shares to be issued after giving effect to such surrender.
(c) ISSUANCE OF STOCK CERTIFICATES. In the event of any exercise of
the rights represented by this Warrant in accordance with and subject to the
terms and conditions hereof, (i) certificates for the shares of Warrant Stock so
purchased shall be dated the date of such exercise and delivered to the Holder
hereof within a reasonable time, not exceeding three Trading Days after such
exercise, and the Holder hereof shall be deemed for all purposes to be the
Holder of the shares of Warrant Stock so purchased as of the date of such
exercise, and (ii) unless this Warrant has expired, a new Warrant representing
the number of shares of Warrant Stock, if any, with respect to which this
Warrant shall not then have been exercised (less any amount thereof which shall
have been canceled in payment or partial payment of the Warrant Price as
hereinabove provided) shall also be issued to the Holder hereof at the Issuer's
expense within such time.
(d) TRANSFERABILITY OF WARRANT. Subject to Section 2(e), this
Warrant may be transferred by a Holder without the consent of the Company. If
transferred pursuant to this paragraph and subject to the provisions of
subsection (e) of this Section 2, this Warrant may be transferred on the books
of the Issuer by the Holder hereof, upon surrender of this Warrant at the
principal office of the Issuer, properly endorsed (by the Holder executing an
assignment in the form attached hereto). This Warrant is exchangeable at the
principal office of the Issuer for Warrants for the purchase of the same
aggregate number of shares of Warrant Stock, each new Warrant to represent the
right to purchase such number of shares of Warrant Stock as the Holder hereof
shall designate at the time of such exchange. All Warrants issued on transfers
or exchanges shall be dated the Original Issue Date and shall be identical with
this Warrant except as to the number of shares of Warrant Stock issuable
pursuant hereto.
(e) COMPLIANCE WITH SECURITIES LAWS.
(i) The Holder of this Warrant, by acceptance hereof,
acknowledges that this Warrant or the shares of Warrant Stock to be issued upon
exercise hereof are being acquired solely for the Holder's own account and not
as a nominee for any other party, and for investment, and that the Holder will
not offer, sell, pledge or otherwise dispose of this Warrant or any shares of
Warrant Stock to be issued upon exercise hereof except pursuant to an effective
registration statement, or an exemption from registration, under the Securities
Act and any applicable state securities laws.
(ii) Except as provided in paragraph (iii) below, this Warrant
and all certificates representing shares of Warrant Stock issued upon exercise
hereof shall be stamped or imprinted with a legend in substantially the
following form:
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE
HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD,
TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE
SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR JLM INDUSTRIES,
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INC. SHALL HAVE RECEIVED AN OPINION OF ITS COUNSEL THAT REGISTRATION OF SUCH
SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE
SECURITIES LAWS IS NOT REQUIRED.
(iii) The restrictions imposed by this subsection (e) upon the
transfer of this Warrant and the shares of Warrant Stock to be purchased upon
exercise hereof shall terminate (A) when such securities shall have been
effectively registered under the Securities Act, (B) upon the Issuer's receipt
of an opinion of counsel, in form and substance reasonably satisfactory to the
Issuer, addressed to the Issuer to the effect that such restrictions are no
longer required to ensure compliance with the Securities Act and state
securities laws or (C) upon the Issuer's receipt of other evidence reasonably
satisfactory to the Issuer that such registration and qualification under state
securities laws is not required. Whenever such restrictions shall cease and
terminate as to any such securities, the Holder thereof shall be entitled to
receive from the Issuer (or its transfer agent and registrar), without expense
(other than applicable transfer taxes, if any), new Warrants (or, in the case of
shares of Warrant Stock, new stock certificates) of like tenor not bearing the
applicable legend required by paragraph (ii) above relating to the Securities
Act and state securities laws.
(f) CONTINUING RIGHTS OF HOLDER. The Issuer will, at the time of or
at any time after each exercise of this Warrant, upon the request of the Holder
hereof, acknowledge in writing the extent, if any, of its continuing obligation
to afford to such Holder all rights 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 Issuer to afford such
rights to such Holder.
3. STOCK FULLY PAID; RESERVATION AND LISTING OF SHARES; COVENANTS.
(a) STOCK FULLY PAID. The Issuer represents, warrants, covenants and
agrees that all shares of Warrant Stock which may be issued upon the exercise of
this Warrant or otherwise hereunder will, upon issuance, be duly authorized,
validly issued, fully paid and non-assessable and free from all taxes, liens and
charges created by or through Issuer. The Issuer further covenants and agrees
that during the period within which this Warrant may be exercised, the Issuer
will at all times have authorized and reserved for the purpose of the issue upon
exercise of this Warrant a sufficient number of shares of Common Stock to
provide for the exercise of this Warrant.
(b) RESERVATION. If any shares of Common Stock required to be
reserved for issuance upon exercise of this Warrant or as otherwise provided
hereunder require registration or qualification with any governmental authority
under any Federal or state law before such shares may be so issued, the Issuer
shall in good faith use its best efforts as expeditiously as possible at its
expense to cause such shares to be duly registered or qualified. If the Issuer
shall list any shares of Common Stock on any securities exchange or market it
shall, at its expense, list thereon, maintain and increase when necessary such
listing of, all shares of Warrant Stock from time to time issued upon exercise
of this Warrant or as otherwise provided hereunder, and, to the extent
permissible under the applicable securities exchange rules, all unissued shares
of Warrant
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Stock which are at any time issuable hereunder, so long as any shares of Common
Stock shall be so listed. The Issuer shall also so list on each securities
exchange or market, and shall maintain such listing of, any other securities
which the Holder of this Warrant shall be entitled to receive upon the exercise
of this Warrant if at the time any securities of the same class shall be listed
on such securities exchange or market by the Issuer.
(c) COVENANTS. The Issuer shall not by any action including, without
limitation, amending the Restated Certificate of Incorporation or the By-laws of
the Issuer, or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other action, avoid or
seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good faith assist in the carrying out of all such terms
and in the taking of all such actions as may be necessary or appropriate to
protect the rights of the Holder hereof against dilution (to the extent
specifically provided herein) or impairment. Without limiting the generality of
the foregoing, the Issuer will (i) not permit the par value, if any, of its
Common Stock to exceed the then effective Warrant Price, (ii) not amend or
modify any provision of the Restated Certificate of Incorporation or By-laws of
the Issuer in any manner that would adversely affect in any way the powers,
preferences or relative participating, optional or other special rights of the
Common Stock or which would adversely affect the rights of the Holders of the
Warrants, (iii) take all such action as may be reasonably necessary in order
that the Issuer may validly and legally issue fully paid and nonassessable
shares of Common Stock, free and clear of any liens, claims, encumbrances and
restrictions (other than as provided herein) upon the exercise of this Warrant,
and (iv) use its best efforts to obtain all such authorizations, exemptions or
consents from any public regulatory body having jurisdiction thereof as may be
reasonably necessary to enable the Issuer to perform its obligations under this
Warrant.
(d) LOSS, THEFT, DESTRUCTION OF WARRANTS. Upon receipt of evidence
satisfactory to the Issuer of the ownership of and the loss, theft, destruction
or mutilation of any Warrant and, in the case of any such loss, theft or
destruction, upon receipt of indemnity or security satisfactory to the Issuer
or, in the case of any such mutilation, upon surrender and cancellation of such
Warrant, the Issuer will make and deliver, in lieu of such lost, stolen,
destroyed or mutilated Warrant, a new Warrant of like tenor and representing the
right to purchase the same number of shares of Common Stock.
(e) RIGHTS AND OBLIGATIONS UNDER THE REGISTRATION RIGHTS AGREEMENT.
The shares of Warrant Stock are entitled to the benefits and subject to the
terms of the Registration Rights Agreement, in the form attached hereto as
EXHIBIT A, between the Issuer and the Holders listed on the signature pages
thereof, in the form attached hereto as EXHIBIT A (as amended from time to time,
the "REGISTRATION RIGHTS AGREEMENT"). The Issuer shall keep or cause to be kept
a copy of the Registration Rights Agreement, and any amendments thereto, at its
chief executive office and shall furnish, without charge, copies thereof to the
Holder upon request.
4. ADJUSTMENT OF WARRANT PRICE AND WARRANT SHARE NUMBER. The number and
kind of Securities purchasable upon the exercise of this Warrant and the Warrant
Price shall be subject to adjustment from time to time upon the happening of
certain events as follows:
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(a) RECAPITALIZATION; REORGANIZATION; RECLASSIFICATION;
CONSOLIDATION; MERGER OR SALE.
(i) In case the Issuer after the Original Issue Date shall do
any of the following (each, a "TRIGGERING EVENT"): (a) consolidate with or merge
into any other Person and the Issuer shall not be the continuing or surviving
corporation of such consolidation or merger, or (b) permit any other Person to
consolidate with or merge into the Issuer and the Issuer shall be the continuing
or surviving Person but, in connection with such consolidation or merger, any
Capital Stock of the Issuer shall be changed into or exchanged for Securities of
any other Person or cash or any other property, or (c) transfer, sell or
otherwise dispose all or substantially all of its properties or assets to any
other Person, or (d) effect a capital reorganization or reclassification of its
Capital Stock, then, and in the case of each such Triggering Event, proper
provision shall be made so that, upon the basis and the terms and in the manner
provided in this Warrant, the Holder of this Warrant shall be entitled (x) upon
the exercise hereof at any time after the consummation of such Triggering Event,
to the extent this Warrant is not exercised prior to such Triggering Event, or
is redeemed in connection with such Triggering Event, to receive at the Warrant
Price in effect at the time immediately prior to the consummation of such
Triggering Event in lieu of the Common Stock issuable upon such exercise of this
Warrant prior to such Triggering Event, the Securities, cash and property to
which such Holder would have been entitled upon the consummation of such
Triggering Event if such Holder had exercised the rights represented by this
Warrant immediately prior thereto, subject to adjustments and increases
(subsequent to such corporate action) as nearly equivalent as possible to the
adjustments provided for in Section 4 hereof or (y) to sell this Warrant (or, at
such Holder's election, a portion hereof) concurrently with the Triggering Event
to the Person continuing after or surviving such Triggering Event, or to the
Issuer (if Issuer is the continuing or surviving Person) at a sales price equal
to the amount of cash, property and/or Securities to which a holder of the
number of shares of Common Stock which would otherwise have been delivered upon
the exercise of this Warrant would have been entitled upon the effective date or
closing of any such Triggering Event (the "EVENT CONSIDERATION"), less the
amount or portion of such Event Consideration having a fair value equal to the
aggregate Warrant Price applicable to this Warrant or the portion hereof so
sold.
(ii) Notwithstanding anything contained in this Warrant to the
contrary, the Issuer will not effect any Triggering Event unless, prior to the
consummation thereof, each Person (other than the Issuer) which may be required
to deliver any Securities, cash or property upon the exercise of this Warrant as
provided herein shall assume, by written instrument delivered to, and reasonably
satisfactory to, the Holder of this Warrant, (A) the obligations of the Issuer
under this Warrant (and if the Issuer shall survive the consummation of such
Triggering Event, such assumption shall be in addition to, and shall not release
the Issuer from, any continuing obligations of the Issuer under this Warrant)
and (B) the obligation to deliver to such Holder such shares of Securities, cash
or property as, in accordance with the foregoing provisions of this subsection
(a), such Holder shall be entitled to receive, and such Person shall have
similarly delivered to such Holder an opinion of counsel for such Person, which
counsel shall be reasonably satisfactory to such Holder, stating that this
Warrant shall thereafter continue in full force and effect and the terms hereof
(including, without limitation, all of the provisions of this subsection (a))
shall be applicable to the Securities, cash or property
5
which such Person may be required to deliver upon any exercise of this Warrant
or the exercise of any rights pursuant hereto.
(iii) If with respect to any Triggering Event, the Holder of
this Warrant has exercised its right as provided in clause (y) of subparagraph
(i) of this subsection (a) to sell this Warrant or a portion thereof, the Issuer
agrees that as a condition to the consummation of any such Triggering Event the
Issuer shall secure such right of Holder to sell this Warrant to the Person
continuing after or surviving such Triggering Event and the Issuer shall not
effect any such Triggering Event unless upon or prior to the consummation
thereof the amounts of cash, property and/or Securities required under such
clause (y) are delivered to the Holder of this Warrant. The obligation of the
Issuer to secure such right of the Holder to sell this Warrant shall be subject
to such Holder's reasonable cooperation with the Issuer, including, without
limitation, the giving of customary representations and warranties to the
purchaser in connection with any such sale. Prior notice of any Triggering Event
shall be given to the Holder of this Warrant in accordance with Section 11
hereof.
(b) SUBDIVISION OR COMBINATION OF SHARES. If the Issuer, at any time
while this Warrant is outstanding, shall subdivide or combine any shares of
Common Stock, (i) in case of subdivision of shares, the Warrant Price shall be
proportionately reduced (as at the effective date of such subdivision or, if the
Issuer shall take a record of Holders of its Common Stock for the purpose of so
subdividing, as at the applicable record date, whichever is earlier) to reflect
the increase in the total number of shares of Common Stock outstanding as a
result of such subdivision, or (ii) in the case of a combination of shares, the
Warrant Price shall be proportionately increased (as at the effective date of
such combination or, if the Issuer shall take a record of Holders of its Common
Stock for the purpose of so combining, as at the applicable record date,
whichever is earlier) to reflect the reduction in the total number of shares of
Common Stock outstanding as a result of such combination.
(c) CERTAIN DIVIDENDS AND DISTRIBUTIONS. If the Issuer, at any time
while this Warrant is outstanding, shall:
(i) STOCK DIVIDENDS. Pay a dividend in, or make any other
distribution to its stockholders of, shares of Common Stock, the Warrant Price
shall be adjusted, as at the date the Issuer shall take a record of the Holders
of the Issuer's Capital Stock for the purpose of receiving such dividend or
other distribution (or if no such record is taken, as at the date of such
payment or other distribution), to that price determined by multiplying the
Warrant Price in effect immediately prior to such record date (or if no such
record is taken, then immediately prior to such payment or other distribution),
by a fraction (1) the numerator of which shall be the total number of shares of
Common Stock outstanding immediately prior to such dividend or distribution, and
(2) the denominator of which shall be the total number of shares of Common Stock
outstanding immediately after such dividend or distribution (plus in the event
that the Issuer paid cash for fractional shares, the number of additional shares
which would have been outstanding had the Issuer issued fractional shares in
connection with said dividends); or
(ii) OTHER DIVIDENDS. Pay a dividend on, or make any
distribution of its assets upon or with respect to (including, but not limited
to, a distribution of its property as a
6
dividend in liquidation or partial liquidation or by way of return of capital),
the Common Stock (other than as described in clause (i) of this subsection (c)),
or in the event that the Company shall offer options or rights to subscribe for
shares of Common Stock, or issue any Common Stock Equivalents, to all of its
holders of Common Stock, then on the record date for such payment, distribution
or offer or, in the absence of a record date, on the date of such payment,
distribution or offer, the Holder shall receive what the Holder would have
received had it exercised this Warrant in full immediately prior to the record
date of such payment, distribution or offer or, in the absence of a record date,
immediately prior to the date of such payment, distribution or offer.
(d) ISSUANCE OF ADDITIONAL SHARES OF COMMON STOCK. If the Issuer, at
any time while this Warrant is outstanding, shall issue any Additional Shares of
Common Stock (otherwise than as provided in the foregoing subsections (a)
through (c) of this Section 4), at a price per share less than the Warrant Price
then in effect or without consideration, then the Warrant Price upon each such
issuance shall be adjusted to that price (rounded to the nearest cent)
determined by multiplying the Warrant Price then in effect by a fraction:
(i) the numerator of which shall be equal to the sum of (A)
the number of shares of Common Stock outstanding immediately prior to the
issuance of such Additional Shares of Common Stock plus (B) the number of shares
of Common Stock (rounded to the nearest whole share) which the aggregate
consideration for the total number of such Additional Shares of Common Stock so
issued would purchase at a price per share equal to the Warrant Price then in
effect, and
(ii) the denominator of which shall be equal to the number of
shares of Common Stock outstanding immediately after the issuance of such
Additional Shares of Common Stock.
The provisions of this subsection (d) shall not apply under any of the
circumstances for which an adjustment is provided in subsection (a), (b) or (c)
of this Section 4. No adjustment of the Warrant Price shall be made under this
subsection (d) upon the issuance of any Additional Shares of Common Stock which
are issued pursuant to any Common Stock Equivalent if upon the issuance of such
Common Stock Equivalent (x) any adjustment shall have been made pursuant to
subsection (e) of this Section 4 or (Y) no adjustment was required pursuant to
subsection (e) of this Section 4. No adjustment of the Warrant Price shall be
made under this subsection (d) in an amount less than $.01 per share, but any
such lesser adjustment shall be carried forward and shall be made at the time
and together with the next subsequent adjustment, if any, which together with
any adjustments so carried forward shall amount to $.01 per share or more,
provided that upon any adjustment of the Warrant Price as a result of any
dividend or distribution payable in Common Stock or Convertible Securities or
the reclassification, subdivision or combination of Common Stock into a greater
or smaller number of shares, the foregoing figure of $.01 per share (or such
figure as last adjusted) shall be adjusted (to the nearest one-half cent) in
proportion to the adjustment in the Warrant Price.
(e) ISSUANCE OF COMMON STOCK EQUIVALENTS. If the Issuer, at any time
while this Warrant is outstanding, shall issue any Common Stock Equivalent and
the price per share for
7
which Additional Shares of Common Stock may be issuable thereafter pursuant to
such Common Stock Equivalent shall be less than the Warrant Price then in
effect, or if, after any such issuance of Common Stock Equivalents, the price
per share for which Additional Shares of Common Stock may be issuable thereafter
is amended or adjusted, and such price as so amended shall be less than the
Warrant Price in effect at the time of such amendment, then the Warrant Price
upon each such issuance or amendment shall be adjusted as provided in the first
sentence of subsection (d) of this Section 4 on the basis that (1) the maximum
number of Additional Shares of Common Stock issuable pursuant to all such Common
Stock Equivalents shall be deemed to have been issued (whether or not such
Common Stock Equivalents are actually then exercisable, convertible or
exchangeable in whole or in part) as of the earlier of (A) the date on which the
Issuer shall enter into a firm contract for the issuance of such Common Stock
Equivalent, or (B) the date of actual issuance of such Common Stock Equivalent,
and (2) the aggregate consideration for such maximum number of Additional Shares
of Common Stock shall be deemed to be the minimum consideration received or
receivable by the Issuer for the issuance of such Additional Shares of Common
Stock pursuant to such Common Stock Equivalent. No adjustment of the Warrant
Price shall be made under this subsection (e) upon the issuance of any
Convertible Security which is issued pursuant to the exercise of any warrants or
other subscription or purchase rights therefor, if any adjustment shall
previously have been made in the Warrant Price then in effect upon the issuance
of such warrants or other rights pursuant to this subsection (e).
(f) PURCHASE OF COMMON STOCK BY THE ISSUER. If the Issuer at any
time while this Warrant is outstanding shall, directly or indirectly through a
Subsidiary or otherwise, purchase, redeem or otherwise acquire any shares of
Common Stock at a price per share greater than the Per Share Market Value then
in effect, then the Warrant Price upon each such purchase, redemption or
acquisition shall be adjusted to that price determined by multiplying such
Warrant Price by a fraction (i) the numerator of which shall be the number of
shares of Common Stock outstanding immediately prior to such purchase,
redemption or acquisition minus the number of shares of Common Stock which the
aggregate consideration for the total number of such shares of Common Stock so
purchased, redeemed or acquired would purchase at the Per Share Market Value;
and (ii) the denominator of which shall be the number of shares of Common Stock
outstanding immediately after such purchase, redemption or acquisition. For the
purposes of this subsection (f), the date as of which the Per Share Market Value
shall be computed shall be the earlier of (x) the date on which the Issuer shall
enter into a firm contract for the purchase, redemption or acquisition of such
Common Stock, or (y) the date of actual purchase, redemption or acquisition of
such Common Stock. For the purposes of this subsection (f), a purchase,
redemption or acquisition of a Common Stock Equivalent shall be deemed to be a
purchase of the underlying Common Stock, and the computation herein required
shall be made on the basis of the full exercise, conversion or exchange of such
Common Stock Equivalent on the date as of which such computation is required
hereby to be made, whether or not such Common Stock Equivalent is actually
exercisable, convertible or exchangeable on such date.
(g) OTHER PROVISIONS APPLICABLE TO ADJUSTMENTS UNDER THIS SECTION 4.
The following provisions shall be applicable to the making of adjustments in the
Warrant Price hereinbefore provided in Section 4:
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(i) COMPUTATION OF CONSIDERATION. The consideration received
by the Issuer shall be deemed to be the following: to the extent that any
Additional Shares of Common Stock or any Common Stock Equivalents shall be
issued for a cash consideration, the consideration received by the Issuer
therefor, or if such Additional Shares of Common Stock or Common Stock
Equivalents are offered by the Issuer for subscription, the subscription price,
or, if such Additional Shares of Common Stock or Common Stock Equivalents are
sold to underwriters or dealers for public offering without a subscription
offering, the public offering price, in any such case excluding any amounts paid
or receivable for accrued interest or accrued dividends and without deduction of
any compensation, discounts, commissions, or expenses paid or incurred by the
Issuer for or in connection with the underwriting thereof or otherwise in
connection with the issue thereof; to the extent that such issuance shall be for
a consideration other than cash, then, except as herein otherwise expressly
provided, the fair market value of such consideration at the, time of such
issuance as determined in good faith by the Board. The consideration for any
Additional Shares of Common Stock issuable pursuant to any Common Stock
Equivalents shall be the consideration received by the Issuer for issuing such
Common Stock Equivalents, plus the additional consideration payable to the
Issuer upon the exercise, conversion or exchange of such Common Stock
Equivalents. In case of the issuance at any time of any Additional Shares of
Common Stock or Common Stock Equivalents in payment or satisfaction of any
dividend upon any class of Capital Stock of the Issuer other than Common Stock,
the Issuer shall be deemed to have received for such Additional Shares of Common
Stock or Common Stock Equivalents a consideration equal to the amount of such
dividend so paid or satisfied. In any case in which the consideration to be
received or paid shall be other than cash, the Board shall notify the Holder of
this Warrant of its determination of the fair market value of such consideration
prior to payment or accepting receipt thereof. If, within thirty days after
receipt of said notice, the Majority Holders shall notify the Board in writing
of their objection to such determination, a determination of the fair market
value of such consideration shall be made by an Independent Appraiser selected
by the Majority Holders with the approval of the Board (which approval shall not
be unreasonably withheld), whose fees and expenses shall be paid by the Issuer.
(ii) READJUSTMENT OF WARRANT PRICE. Upon the expiration or
termination of the right to convert, exchange or exercise any Common Stock
Equivalent the issuance of which effected an adjustment in the Warrant Price, if
such Common Stock Equivalent shall not have been converted, exercised or
exchanged in its entirety, the number of shares of Common Stock deemed to be
issued and outstanding by reason of the fact that they were issuable upon
conversion, exchange or exercise of any such Common Stock Equivalent shall no
longer be computed as set forth above, and the Warrant Price shall forthwith be
readjusted and thereafter be the price which it would have been (but reflecting
any other adjustments in the Warrant Price made pursuant to the provisions of
this Section 4 after the issuance of such Common Stock Equivalent) had the
adjustment of the Warrant Price been made in accordance with the issuance or
sale of the number of Additional Shares of Common Stock actually issued upon
conversion, exchange or issuance of such Common Stock Equivalent and thereupon
only the number of Additional Shares of Common Stock actually so issued shall be
deemed to have been issued and only the consideration actually received by the
Issuer (computed as in clause (i) of this subsection (g)) shall be deemed to
have been received by the Issuer.
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(iii) OUTSTANDING COMMON STOCK. The number of shares of Common
Stock at any time outstanding shall (A) not include any shares thereof then
directly or indirectly owned or held by or for the account of the Issuer or any
of its Subsidiaries, and (B) be deemed to include all shares of Common Stock
then issuable upon conversion, exercise or exchange of any then outstanding
Common Stock Equivalents or any other evidences of indebtedness, shares of
Capital Stock or other Securities which are or may be at any time convertible
into or exchangeable for shares of Common Stock or Other Common Stock.
(h) OTHER ACTION AFFECTING COMMON STOCK. In case after the Original
Issue Date the Issuer shall take any action affecting its Common Stock, other
than an action described in any of the foregoing subsections (a) through (g) of
this Section 4, inclusive, and the failure to make any adjustment would not
fairly protect the purchase rights represented by this Warrant in accordance
with the essential intent and principle of this Section 4, then the Warrant
Price shall be adjusted in such manner and at such time as the Board may in good
faith determine to be equitable in the circumstances.
(i) ADJUSTMENT OF WARRANT SHARE NUMBER. Upon each adjustment in the
Warrant Price pursuant to any of the foregoing provisions of this Section 4, the
Warrant Share Number shall be adjusted, to the nearest one hundredth of a whole
share, to the product obtained by multiplying the Warrant Share Number
immediately prior to such adjustment in the Warrant Price by a fraction, the
numerator of which shall be the Warrant Price immediately before giving effect
to such adjustment and the denominator of which shall be the Warrant Price
immediately after giving effect to such adjustment. If the Issuer shall be in
default under any provision contained in Section 3 of this Warrant so that
shares issued at the Warrant Price adjusted in accordance with this Section 4
would not be validly issued, the adjustment of the Warrant Share Number provided
for in the foregoing sentence shall nonetheless be made and the Holder of this
Warrant shall be entitled to purchase such greater number of shares at the
lowest price at which such shares may then be validly issued under applicable
law. Such exercise shall not constitute a waiver of any claim arising against
the Issuer by reason of its default under Section 3 of this Warrant.
(j) FORM OF WARRANT AFTER ADJUSTMENTS. The form of this Warrant need
not be changed because of any adjustments in the Warrant Price or the number and
kind of Securities purchasable upon the exercise of this Warrant.
5. NOTICE OF ADJUSTMENTS. Whenever the Warrant Price or Warrant Share
Number shall be adjusted pursuant to Section 4 hereof (for purposes of this
Section 5, each an "ADJUSTMENT"), the Issuer shall cause its Chief Financial
Officer to prepare and execute a certificate setting forth, in reasonable
detail, the event requiring the adjustment, the amount of the adjustment, the
method by which such adjustment was calculated (including a description of the
basis on which the Board made any determination hereunder), the calculations
made in connection therewith and the Warrant Price and Warrant Share Number
after giving effect to such adjustment, and shall cause copies of such
certificate to be delivered to the Holder of this Warrant promptly after each
adjustment. Any dispute between the Issuer and the Holder of this Warrant with
respect to the matters set forth in such certificate may at the option of the
Holder of this Warrant be submitted to one of the national or regional
accounting firms selected by the
10
Holder, provided that the Issuer shall have ten days after receipt of notice
from such Holder of its selection of such firm to object thereto, in which case
such Holder shall select another such firm and the Issuer shall have no such
right of objection. The firm selected by the Holder of this Warrant as provided
in the preceding sentence shall be instructed to deliver a written opinion as to
such matters to the Issuer and such Holder within thirty days after submission
to it of such dispute. Such opinion shall be final and binding on the parties
hereto. The fees and expenses of such accounting firm shall be paid by the
Issuer.
6. FRACTIONAL SHARES. No fractional shares of Warrant Stock will be issued
in connection with and exercise hereof, but in lieu of such fractional shares,
the Issuer shall make a cash payment therefor equal in amount to the product of
the applicable fraction multiplied by the Per Share Market Value then in effect.
7. DEFINITIONS. For the purposes of this Warrant, the following terms have
the following meanings:
"ADDITIONAL SHARES OF COMMON STOCK" means all shares of Common Stock
issued by the Issuer after the Original Issue Date, and all shares of Other
Common, if any, issued by the Issuer after the Original Issue Date, except the
Warrant Stock, Common Stock reserved for issuance upon exercise of existing
stock options issued under any employee incentive stock option, and Common Stock
issued upon exercise of options and warrants authorized by the Board prior to
the Closing Date.
"BOARD" shall mean the Board of Directors of the Issuer.
"CAPITAL STOCK" means and includes (i) any and all shares,
interests, participations or other equivalents of or interests in (however
designated) corporate stock, including, without limitation, shares of preferred
or preference stock, (ii) all partnership interests (whether general or limited)
in any Person which is a partnership, (iii) all membership interests or limited
liability company interests in any limited liability company, and (iv) all
equity or ownership interests in any Person of any other type.
"RESTATED CERTIFICATE OF INCORPORATION" means the Restated
Certificate of Incorporation of the Issuer as in effect on the Original Issue
Date, and as hereafter from time to time amended, modified, supplemented or
restated in accordance with the terms hereof and thereof and pursuant to
applicable law.
"COMMON STOCK" means the Common Stock, $.01 par value, of the Issuer
and any other Capital Stock into which such stock may hereafter be changed.
"COMMON STOCK EQUIVALENT" means any Convertible Security or warrant,
option or other right to subscribe for or purchase any Additional Shares of
Common Stock or any Convertible Security.
"CONVERTIBLE SECURITIES" means evidences of indebtedness, shares of
Capital Stock or other Securities which are or may be at any time convertible
into or exchangeable for
11
Additional Shares of Common Stock. The term "Convertible Security" means one of
the Convertible Securities.
"GOVERNMENTAL AUTHORITY" means any governmental, regulatory or
self-regulatory entity, department, body, official, authority, commission,
board, agency or instrumentality, whether Federal, state or local, and whether
domestic or foreign.
"HOLDERS" mean the Persons who shall from time to time own any
Warrant. The term "Holder" means one of the Holders.
"INDEPENDENT APPRAISER" means a nationally recognized or major
regional investment banking firm or firm of independent certified public
accountants of recognized standing (which may not include the firm that
regularly examines the financial statements of the Issuer) that is regularly
engaged in the business of appraising the Capital Stock or assets of
corporations or other entities as going concerns, and which is not affiliated
with either the Issuer or the Holder of any Warrant.
"ISSUER" means JLM Industries, Inc., a Delaware corporation, and its
successors.
"MAJORITY HOLDERS" means at any time the Holders of Warrants
exercisable for a majority of the shares of Warrant Stock issuable under the
Warrants at the time outstanding.
"ORIGINAL ISSUE DATE" means _______________, 2001.
"OTHER COMMON STOCK" means any other Capital Stock of the Issuer of
any class which shall be authorized at any time after the date of this Warrant
(other than Common Stock) and which shall have the right to participate in the
distribution of earnings and assets of the Issuer without limitation as to
amount.
"OTC BULLETIN BOARD" means the over-the-counter electronic bulletin
board.
"PERSON" means an individual, corporation, limited liability
company, partnership, joint stock company, trust, unincorporated organization,
joint venture, Governmental Authority or other entity of whatever nature.
"PER SHARE MARKET VALUE" means on any particular date (a) the last
sales price per share of the Common Stock on such date the Nasdaq National
Market or other registered national stock exchange on which the Common Stock is
then listed or if there is no such price on such date, then the closing bid
price on such exchange or quotation system on the date nearest proceeding such
date, or (b) if the Common Stock is not listed then on The Nasdaq National
Market or any registered national stock exchange, the closing bid price for a
share of Common Stock in the over-the-counter market, as reported by the OTC
Bulletin Board or in the National Quotation Bureau Incorporated (or similar
organization or agency succeeding to its functions of reporting prices) at the
close of business on such date, or (c) if the Common Stock is not then reported
by the OTC Bulletin Board or the National Quotation Bureau Incorporated (or
similar organization or agency succeeding to its functions of reporting prices),
then the average of the "Pink Sheet" quotes for the relevant conversion period,
as determined in good faith by the
12
holder, or (d) if the Common Stock is not then publicly traded, the fair market
value of a share of Common Stock as determined by an Independent Appraiser
selected in good faith by the Majority Holders; provided, however, that the
Issuer, after receipt of the determination by such Independent Appraiser, shall
have the right to select an additional Independent Appraiser, in which case, the
fair market value shall be equal to the average of the determinations by each
such Independent Appraiser; and provided, further that all determinations of the
Per Share Market Value shall be appropriately adjusted for any stock dividends,
stock splits or other similar transactions during such period. The Issuer shall
pay all costs and expenses of each Independent Appraiser. The determination of
fair market value by an Independent Appraiser shall be based upon the fair
market value of the Issuer determined on a going concern basis as between a
willing buyer and a willing seller and taking into account all relevant factors
determinative of value, and shall be final and binding on all parties. In
determining the fair market value of any shares of Common Stock, no
consideration shall be given to any restrictions on transfer of the Common Stock
imposed by agreement or by Federal or state securities laws, or to the existence
or absence of, or any limitations on, voting rights.
"PURCHASE AGREEMENT" means the Purchase Agreement dated as of May
___, 2001, by and among the Issuer and the Investors party hereto.
"REGISTRATION RIGHTS AGREEMENT" has the meaning specified in Section
3(e) hereof.
"SECURITIES" means any debt or equity securities of the Issuer,
whether now or hereafter authorized, any instrument convertible into or
exchangeable for Securities or a Security, and any option, warrant or other
right to purchase or acquire any Security.
"SECURITIES ACT" means the Securities Act of 1933, as amended, or
any similar federal statute then in effect.
"SECURITY" means one of the Securities.
"SUBSIDIARY" means any corporation a majority of whose outstanding
Voting Stock shall at the time be owned directly or indirectly by the Issuer or
by one or more of its Subsidiaries, or by the Issuer and one or more of its
Subsidiaries.
"TRADING DAY" means (a) a day on which the Common Stock is traded on
The Nasdaq National Market as reported by Bloomberg L.P., or (b) if the Common
Stock is not listed on The Nasdaq National Market, a day on which the Common
Stock is traded on any other registered national stock exchange, or (c) if the
Common Stock is not quoted on the OTC Bulletin Board, a day on which the Common
Stock is quoted in the over-the-counter market as reported by the National
Quotation Bureau Incorporated (or any similar organization or agency succeeding
its functions of reporting prices); provided, however, that in the event that
the Common Stock is not listed or quoted as set forth in (a), (b) and (c)
hereof, then Trading Day shall mean any day except Saturday, Sunday and any day
which shall be a legal holiday or a day on which banking institutions in the
State of New York are authorized or required by law or other government action
to close.
13
"TERM" has the meaning specified in Section 1 hereof.
"VOTING STOCK", as applied to the Capital Stock of any corporation,
means Capital Stock of any class or classes (however designated) having ordinary
voting power for the election of a majority of the members of the Board of
Directors (or other governing body) of such corporation, other than Capital
Stock having such power only by reason of the happening of a contingency.
"WARRANT PRICE" means $_____ per share, provided, however, that if
the Registration Statement (as defined in the Registration Rights Agreement) is
not declared effective within one hundred twenty (180) days after the Closing
Date, the Warrant Price shall be reduced by 1.5% and by an additional 1.5% for
each thirty day period thereafter until the Registration Statement has been
declared effective, which shall be pro rated for such periods less than thirty
(30) days.
"WARRANT SHARE NUMBER" means at any time the aggregate number of
shares of Warrant Stock which may at such time be purchased upon exercise of
this Warrant, after giving effect to all prior adjustments and increases to such
number made or required to be made under the terms hereof.
"WARRANT STOCK" means Common Stock issuable upon exercise of any
Warrant or Warrants or otherwise issuable pursuant to any Warrant or Warrants.
"WARRANTS" means the Warrants issued pursuant to the Purchase
Agreement and the Commitment Letter dated April 11, 2001 between the Issuer and
Phoenix Enterprises LLC, including, without limitation, this Warrant, and any
other warrants of like tenor issued in substitution or exchange for any thereof
pursuant to the provisions of Section 2(c), 2(d) or 2(e) hereof or of any of
such other Warrants.
8. OTHER NOTICES. In case at any time:
(A) the Issuer shall make any distributions to the holders of
Common Stock; or
(B) the Issuer shall authorize the granting to all holders of
its Common Stock of rights to subscribe for or purchase any shares of Capital
Stock of any class or of any Common Stock Equivalents or Convertible Securities
or other rights; or
(C) there shall be any reclassification of the Capital Stock
of the Issuer; or
(D) there shall be any capital reorganization by the Issuer;
or
(E) there shall be any (i) consolidation or merger involving
the Issuer or (ii) sale, transfer or other disposition of all or substantially
all of the Issuer's property, assets or business (except a merger or other
reorganization in which the Issuer shall be the surviving corporation and its
shares of Capital Stock shall continue to be outstanding and
14
unchanged and except a consolidation, merger, sale, transfer or other
disposition involving a wholly-owned Subsidiary); or
(F) there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Issuer or any partial liquidation of the Issuer
or distribution to holders of Common Stock;
then, in each of such cases, the Issuer shall give written notice to the Holder
of the date on which (i) the books of the Issuer shall close or a record shall
be taken for such dividend, distribution or subscription rights or (ii) such
reorganization, reclassification, consolidation, merger, disposition,
dissolution, liquidation or winding-up, as the case may be, shall take place.
Such notice also shall specify the date as of which the holders of Common Stock
of record shall participate in such dividend, distribution or subscription
rights, or shall be entitled to exchange their certificates for Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, disposition, dissolution, liquidation
or winding-up, as the case may be. Such notice shall be given at least twenty
days prior to the action in question and not less than twenty days prior to the
record date or the date on which the Issuer's transfer books are closed in
respect thereto. The Issuer shall give to the Holder notice of all meetings and
actions by written consent of its stockholders, at the same time in the same
manner as notice of any meetings of stockholders is required to be given to
stockholders who do not waive such notice (or, if such requires no notice, then
two Trading Days written notice thereof describing the matters upon which action
is to be taken). The Holder shall have the right to send two representatives
selected by it to each meeting, who shall be permitted to attend, but not vote
at, such meeting and any adjournments thereof. This Warrant entitles the Holder
to receive copies of all financial and other information distributed or required
to be distributed to the holders of the Common Stock.
9. AMENDMENT AND WAIVER. Except as provided in Section 8.3 of the Purchase
Agreement, any term, covenant, agreement or condition in this Warrant may be
amended, or compliance therewith may be waived (either generally or in a
particular instance and either retroactively or prospectively), by a written
instrument or written instruments executed by the Issuer and the Majority
Holders; provided, however, that no such amendment or waiver shall reduce the
Warrant Share Number, increase the Warrant Price, shorten the period during
which this Warrant may be exercised or modify any provision of this Section 9
without the consent of the Holder of this Warrant.
10. GOVERNING LAW. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
PRINCIPLES OF CONFLICTS OF LAW.
11. NOTICES. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earlier of (i) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile
telephone number specified for notice prior to 5:00 p.m., New York City time, on
a Business Day, (ii) the Business Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile telephone
number specified for
15
notice later than 5:00 p.m., New York City time, on any date and earlier than
11:59 p.m., New York City time, on such date, (iii) the Business Day following
the date of mailing, if sent by nationally recognized overnight courier service
or (iv) actual receipt by the party to whom such notice is required to be given.
The addresses for such communications shall be with respect to the Holder of
this Warrant or of Warrant Stock issued pursuant hereto, addressed to such
Holder at its last known address or facsimile number appearing on the books of
the Issuer maintained for such purposes, or with respect to the Issuer,
addressed to:
JLM Industries, Inc.
8675 Hidden River Parkway
Tampa, FL 33637
Attn: Michael E. Hayes
Telephone Number: (813) 632-3300
Fax: (813) 632-3315
or to such other address or addresses or facsimile number or numbers as any such
party may most recently have designated in writing to the other parties hereto
by such notice. Copies of notices to the Issuer shall be sent to Holland &
Knight LLP, Attn: Michael L. Jamieson, Esq., Facsimile no.: (813) 229-0134.
Copies of notices to the Holder shall be sent to Baer Marks & Upham LLP, 805
Third Avenue, New York, New York 10022, Attention: Jonathan J. Russo, Esq.,
Facsimile no.: (212) 702-5941.
12. WARRANT AGENT. The Issuer shall, by written notice to each Holder of
this Warrant, appoint an agent having an office in New York, New York for the
purpose of issuing shares of Warrant Stock on the exercise of this Warrant
pursuant to subsection (b) of Section 2 hereof, exchanging this Warrant pursuant
to subsection (d) of Section 2 hereof or replacing this Warrant pursuant to
subsection (d) of Section 3 hereof, or any of the foregoing, and thereafter any
such issuance, exchange or replacement, as the case may be, shall be made at
such office by such agent.
13. REMEDIES. The Issuer stipulates that the remedies at law of the Holder
of this Warrant in the event of any default or threatened default by the Issuer
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.
14. SUCCESSORS AND ASSIGNS. This Warrant and the rights evidenced hereby
shall inure to the benefit of and be binding upon the successors and assigns of
the Issuer, the Holder hereof and (to the extent provided herein) the Holders of
Warrant Stock issued pursuant hereto, and shall be enforceable by any such
Holder or Holder of Warrant Stock.
15. MODIFICATION AND SEVERABILITY. If, in any action before any court or
agency legally empowered to enforce any provision contained herein, any
provision hereof is found to be unenforceable, then such provision shall be
deemed modified to the extent necessary to make it enforceable by such court or
agency. If any such provision is not enforceable as set forth in the preceding
sentence, the unenforceability of such provision shall not affect the other
provisions of
16
this Warrant, but this Warrant shall be construed as if such unenforceable
provision had never been contained herein.
16. HEADINGS. The headings of the Sections of this Warrant are for
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.
IN WITNESS WHEREOF, the Issuer has executed this Warrant as of the day and
year first above written.
JLM INDUSTRIES, INC.
By:
----------------------------------
Name:
Title:
17
EXERCISE FORM
JLM INDUSTRIES, INC.
The undersigned _______________, pursuant to the provisions of the within
Warrant, hereby elects to purchase _____ shares of Common Stock of
___________________ covered by the within Warrant.
Dated: Signature:
----------------------
Address:
------------------------
------------------------
ASSIGNMENT
FOR VALUE RECEIVED, _________________ hereby sells, assigns and transfers unto
__________________ the within Warrant and all rights evidenced thereby and does
irrevocably constitute and appoint _____________, attorney, to transfer the said
Warrant on the books of the within named corporation.
Dated: Signature:
----------------------
Address:
------------------------
------------------------
PARTIAL ASSIGNMENT
FOR VALUE RECEIVED, _________________ hereby sells, assigns and transfers unto
__________________ the right to purchase _________ shares of Warrant Stock
evidenced by the within Warrant together with all rights therein, and does
irrevocably constitute and appoint ___________________, attorney, to transfer
that part of the said Warrant on the books of the within named corporation.
Dated: Signature:
----------------------
Address:
------------------------
------------------------
18
FOR USE BY THE ISSUER ONLY:
This Warrant No. W-_____ cancelled (or transferred or exchanged) this _____ day
of ___________, _____, shares of Common Stock issued therefor in the name of
_______________, Warrant No. W-_____ issued for ____ shares of Common Stock in
the name of _______________.
Dates Referenced Herein
| Referenced-On Page |
|---|
| This ‘SC 13D’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| Filed on: | | 7/9/01 | | | | | | | None on these Dates |
| | 4/11/01 | | 14 |
| List all Filings |
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