EXHIBIT 4.4
THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER REGULATION D PROMULGATED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT") OR OTHERWISE. THIS WARRANT SHALL NOT
CONSTITUTE AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY THE SECURITIES
IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL. THE
SECURITIES ARE "RESTRICTED" AND MAY NOT BE RESOLD OR TRANSFERRED EXCEPT AS
PERMITTED UNDER THE ACT PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.
COMMON STOCK PURCHASE WARRANT
No. [__]
To Purchase Shares of $.03 Par Value Common Stock of
PHARMOS CORPORATION
THIS CERTIFIES that, for value received, [________________] (the
"Investor") is entitled, upon the terms and subject to the conditions
hereinafter set forth, at any time on or after the date hereof and on or prior
to 5:00 p.m. New York City Time on September 1, 2005 (the "Termination Date"),
but not thereafter, to subscribe for and purchase from PHARMOS CORPORATION, a
Nevada corporation (the "Company"), [________] shares of Common Stock of the
Company (the "Warrant Shares"). The "Exercise Price" is $6.08. The Exercise
Price and the number of shares for which the Warrant is exercisable shall be
subject to adjustment as provided herein. This Warrant is being issued in
connection with the [___________] Agreement dated September 1, 2000 (the
"Agreement") entered into between the Company and the Investor.
1. Title of Warrant. Prior to the expiration hereof and subject to compliance
with applicable laws, this Warrant and all rights hereunder are
transferable, in whole or in respect of the right to purchase any part of
the Warrant Shares, at the office or agency of the Company by the holder
hereof in person or by duly authorized attorney, upon surrender of this
Warrant together with (a) the Assignment Form annexed hereto properly
endorsed, and (b) any other documentation reasonably necessary to satisfy
the Company that such transfer is in compliance with all applicable
securities laws.
2. Authorization of Shares. The Company covenants that all shares of Common
Stock which may be issued upon the exercise of rights represented by this
Warrant will, upon exercise of the rights represented by this Warrant and
payment of the Exercise Price as set forth herein will be duly authorized,
validly issued, fully paid and nonassessable and free
from all taxes, liens and charges in respect of the issue thereof (other
than taxes in respect of any transfer occurring contemporaneously with such
issue or otherwise specified herein).
3. Exercise of Warrant.
(a) Exercise of the purchase rights represented by this Warrant may be made at
any time or times, in whole or in part before the close of business on the
Termination Date, or such earlier date on which this Warrant may terminate
as provided in paragraph 11 below, by the surrender on any business day of
this Warrant and the Notice of Exercise annexed hereto duly completed and
executed, at the principal office of the Company (or such other office or
agency of the Company as it may designate by notice in writing to the
registered holder hereof at the address of such holder appearing on the
books of the Company), together with delivery to the Company by such holder
of all certifications or documentation reasonably necessary to establish,
to the satisfaction of the Company, that any such exercise has been
undertaken in compliance with all applicable federal and state securities
laws, and upon payment of the full Exercise Price of the shares thereby
purchased; whereupon the holder of this Warrant shall be entitled to
receive a certificate for the number of shares of Common Stock so
purchased. Certificates for shares purchased hereunder shall be delivered
to the holder hereof within three (3) Trading Days after the date on which
this Warrant shall have been exercised as aforesaid. Payment of the
Exercise Price of the shares shall be by certified check or cashier's check
or by wire transfer (of same day funds) to an account designated by the
Company in an amount equal to the Exercise Price multiplied by the number
of shares being purchased.
(b) Alternatively, and only in the event the Warrant Shares are not covered by
an effective registration statement, the Warrant holder may exercise this
Warrant, in whole or in part in a "cashless" or "net-issue" exercise by
delivering to the offices of the Company or any transfer agent for the
Common Stock this Warrant, together with a Notice of Exercise specifying
the number of Warrant Shares to be delivered to such Warrant holder
("Deliverable Shares") and the number of Warrant Shares with respect to
which this Warrant is being surrendered in payment of the aggregate
Exercise Price for the Deliverable Shares ("Surrendered Shares").
The number of Deliverable Shares shall be calculated as follows:
# of Deliverable Shares = # of Surrendered Shares x Fair Market Value of Common Stock less Exercise Price
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Fair Market Value of Common Stock
"Fair Market Value" shall have the meaning specified in Section 12(c)
In the event that the Warrant is not exercised in full, the number of
Warrant Shares shall be reduced by the number of such Warrant Shares for
which this Warrant is exercised and/or surrendered, and the Company, at its
expense, shall within three (3) Trading Days issue and deliver to or upon
the order of the Warrant holder a new Warrant of like tenor
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in the name of Warrant holder or as Warrant holder (upon payment by Warrant
holder of any applicable transfer taxes) may request, reflecting such
adjusted Warrant Shares.
All exercises will be deemed to occur as of the date of the Notice of
Exercise, and certificates for shares of Common Stock purchased hereunder
shall be delivered to the holder hereof within three (3) Trading Days after
the date on which this Warrant shall have been exercised as aforesaid. The
Warrant holder may withdraw its Notice of Exercise under Section 3(a) or
3(b) at any time thereafter if the Company fails to timely deliver the
applicable certificates to the Warrant holder as provided in this
Agreement.
(c) In lieu of delivering physical certificates representing the Common Stock
issuable upon exercise, provided the Company's transfer agent is
participating in the Depository Trust Company ("DTC") Fast Automated
Securities Transfer ("FAST") program, upon request of the Warrant Holder,
the Company shall use its best efforts to cause its transfer agent to
electronically transmit the Common Stock issuable upon exercise to the
Warrant Holder by crediting the account of Warrant Holder's prime broker
with DTC through its Deposit Withdrawal Agent Commission ("DWAC") system.
The time periods for delivery described in the immediately preceding
paragraph shall apply to the electronic transmittals described herein.
The term "Trading Day" means (x) if the Common Stock is listed on the New
York Stock Exchange or the American Stock Exchange, a day on which there is
trading on such stock exchange, or (y) if the Common Stock is not listed on
either of such stock exchanges but sale prices of the Common Stock are
reported on an automated quotation system, a day on which trading is
reported on the principal automated quotation system on which sales of the
Common Stock are reported, or (z) if the foregoing provisions are
inapplicable, a day on which quotations are reported by National Quotation
Bureau Incorporated.
4. No Fractional Shares or Scrip. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant.
5. Charges, Taxes and Expenses. Issuance of certificates for shares of Common
Stock upon the exercise of this Warrant shall be made without charge to the
holder hereof for any issue or transfer tax or other incidental expense in
respect of the issuance of such certificate, all of which taxes and
expenses shall be paid by the Company, and such certificates shall be
issued in the name of the holder of this Warrant or in such name or names
as may be directed by the holder of this Warrant; provided, however, that
in the event certificates for shares of Common Stock are to be issued in a
name other than the name of the holder of this Warrant, this Warrant when
surrendered for exercise shall be accompanied by the Assignment Form
attached hereto duly executed by the holder hereof; and provided further,
that the Company shall not be required to pay any tax or taxes which may be
payable in respect of any transfer involved in the issuance of any Warrant
certificates or any certificates for the Warrant Shares other than the
issuance of a Warrant Certificate to the Investor in connection with the
Investor's surrender of a
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Warrant Certificate upon the exercise of less than all of the Warrants
evidenced thereby, and the Company shall not be required to issue or
deliver such certificates unless or until the person or persons requesting
the issuance thereof shall have paid to the Company the amount of such tax
or shall have established to the satisfaction of the Company that such tax
has been paid.
6. Closing of Books. The Company will at no time close its shareholder books
or records in any manner which interferes with the timely exercise of this
Warrant.
7. No Rights as Shareholder until Exercise. Subject to Section 12 of this
Warrant and the provisions of any other written agreement between the
Company and the Investor, the Investor shall not be entitled to vote or
receive dividends or be deemed the holder of Warrant Shares or any other
securities of the Company that may at any time be issuable on the exercise
hereof for any purpose, nor shall anything contained herein be construed to
confer upon the Investor, as such, any of the rights of a stockholder of
the Company or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action (whether upon any
recapitalization, issuance of stock, reclassification of stock, change of
par value, or change of stock to no par value, consolidation, merger,
conveyance or otherwise) or to receive notice of meetings, or to receive
dividends or subscription rights or otherwise until the Warrant shall have
been exercised as provided herein. However, at the time of the exercise of
this Warrant pursuant to Section 3 hereof, the Warrant Shares so purchased
hereunder shall be deemed to be issued to such holder as the record owner
of such shares as of the close of business on the date on which this
Warrant shall have been exercised.
8. Assignment and Transfer of Warrant. This Warrant may be assigned in whole
or in part by the surrender of this Warrant and the Assignment Form annexed
hereto duly executed at the office of the Company (or such other office or
agency of the Company as it may designate by notice in writing to the
registered holder hereof at the address of such holder appearing on the
books of the Company); provided, however, that this Warrant may not be
resold or otherwise transferred except (i) in a transaction registered
under the Securities Act of 1933, as amended (the "Act"), or (ii) in a
transaction pursuant to an exemption, if available, from registration under
the Act and whereby, if requested by the Company, an opinion of counsel
reasonably satisfactory to the Company is obtained by the holder of this
Warrant to the effect that the transaction is so exempt.
9. Loss, Theft, Destruction or Mutilation of Warrant. Upon receipt by the
Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of any Warrant or stock certificate representing
the Warrant Shares, and in case of loss, theft or destruction, of indemnity
reasonably satisfactory to it, and upon reimbursement to the Company of all
reasonable expenses incidental thereto. Upon surrender and cancellation of
such Warrant or stock certificate, if mutilated, the Company will make and
deliver a new Warrant or stock certificate of like tenor and dated as of
such cancellation, in lieu of this Warrant or stock certificate.
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10. Saturdays, Sundays, Holidays, etc. If the last or appointed day for the
taking of any action or the expiration of any right required or granted
herein shall be a Saturday, Sunday or a legal holiday, then such action may
be taken or such right may be exercised on the next succeeding day not a
legal holiday.
11. Effect of Certain Events. If at any time while this Warrant or any portion
thereof is outstanding and unexpired there shall be (i) a sale or
conveyance of all or substantially all of the Company's assets or (ii) a
transaction (by merger or otherwise) in which more than 50% of the voting
power of the Company is disposed of (collectively, a "Sale or Merger
Transaction"), in which the consideration to be received by the Company or
its shareholders consists solely of cash, and in case the Company shall at
any time effect a Sale or Merger Transaction in which the consideration to
be received by the Company or its shareholders consists in part of
consideration other than cash, the holder of this Warrant shall have the
right thereafter to purchase, by exercise of this Warrant and payment of
the aggregate Exercise Price in effect immediately prior to such action,
the kind and amount of shares and other securities and property which it
would have owned or have been entitled to receive after the happening of
such transaction had this Warrant been exercised immediately prior thereto,
subject to further adjustment as provided in Section 12. Notwithstanding
the above, a Sale or Merger Transaction shall not be deemed to occur in the
event the Company is the acquiring entity in connection with an acquisition
by the Company.
12. Adjustments of Exercise Price and Number of Warrant Shares.
The number of and kind of securities purchasable upon exercise of this
Warrant and the Exercise Price shall be subject to adjustment from time to
time as follows:
(a) Subdivisions, Combinations and other Issuances. If the Company shall at any
time after the date hereof but prior to the expiration of this Warrant
subdivide its outstanding securities as to which purchase rights under this
Warrant exist, by split-up, spin-off, or otherwise, or combine its
outstanding securities as to which purchase rights under this Warrant
exist, the number of Warrant Shares as to which this Warrant is exercisable
as of the date of such subdivision, split-up, spin-off or combination shall
forthwith be proportionately increased in the case of a subdivision, or
proportionately decreased in the case of a combination. Appropriate
proportional adjustments (decrease in the case of subdivision, increase in
the case of combination) shall also be made to the Exercise Price payable
per share, so that the aggregate Exercise Price payable for the total
number of Warrant Shares purchasable under this Warrant as of such date
shall remain the same as it would have been before such subdivision or
combination.
(b) Stock Dividend. If at any time after the date hereof the Company declares a
dividend or other distribution on Common Stock payable in Common Stock or
other securities or rights convertible into Common Stock ("Common Stock
Equivalents") without payment of any consideration by holders of Common
Stock for the additional shares of Common Stock or the Common Stock
Equivalents (including the additional shares of
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Common Stock issuable upon exercise or conversion thereof), then the number
of shares of Common Stock for which this Warrant may be exercised shall be
increased as of the record date (or the date of such dividend distribution
if no record date is set) for determining which holders of Common Stock
shall be entitled to receive such dividends, in proportion to the increase
in the number of outstanding shares (and shares of Common Stock issuable
upon conversion of all such securities convertible into Common Stock) of
Common Stock as a result of such dividend, and the Exercise Price shall be
proportionately reduced so that the aggregate Exercise Price for all the
Warrant Shares issuable hereunder immediately after the record date (or on
the date of such distribution, if applicable), for such dividend shall
equal the aggregate Exercise Price so payable immediately before such
record date (or on the date of such distribution, if applicable).
(c) Other Distributions. If at any time after the date hereof the Company
distributes to holders of its Common Stock, other than as part of its
dissolution, liquidation or the winding up of its affairs, any shares of
its capital stock, any evidence of indebtedness or any of its assets (other
than Common Stock), then the number of Warrant Shares for which this
Warrant is exercisable shall be increased to equal: (i) the number of
Warrant Shares for which this Warrant is exercisable immediately prior to
such event, (ii) multiplied by a fraction, (A) the numerator of which shall
be the Fair Market Value (as defined below) per share of Common Stock on
the record date for the dividend or distribution, and (B) the denominator
of which shall be the Fair Market Value price per share of Common Stock on
the record date for the dividend or distribution minus the amount allocable
to one share of Common Stock of the value (as jointly determined in good
faith by the Board of Directors of the Company and the Warrant holder) of
any and all such evidences of indebtedness, shares of capital stock, other
securities or property, so distributed. For purposes of this Warrant, "Fair
Market Value" shall equal the 10 Trading Day average closing trading price
of the Common Stock on the Principal Market for the 10 Trading Days
preceding the date of determination or, if the Common Stock is not listed
or admitted to trading on any Principal Market, the average of the closing
bid and asked prices on the over-the-counter market as furnished by any New
York Stock Exchange member firm reasonably selected from time to time by
the Company for that purpose and reasonably acceptable to the Holder, or,
if the Common Stock is not listed or admitted to trading on the Principal
Market or traded over-the-counter and the average price cannot be
determined as contemplated above, the Fair Market Value of the Common Stock
shall be as reasonably determined in good faith by the Company's Board of
Directors with the concurrence of the Holder. The Exercise Price shall be
reduced to equal: (i) the Exercise Price in effect immediately before the
occurrence of any event (ii) multiplied by a fraction, (A) the numerator of
which is the number of Warrant Shares for which this Warrant is exercisable
immediately before the adjustment, and (B) the denominator of which is the
number of Warrant Shares for which this Warrant is exercisable immediately
after the adjustment.
(d) Merger, etc. If at any time after the date hereof there shall be a merger
or consolidation of the Company with or into or a transfer of all or
substantially all of the assets of the Company to another entity, then the
Warrant Holder shall be entitled to receive upon or
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after such transfer, merger or consolidation becoming effective, and upon
payment of the Exercise Price then in effect, the number of shares or other
securities or property of the Company or of the successor corporation
resulting from such merger or consolidation, which would have been received
by Warrant Holder for the shares of stock subject to this Warrant had this
Warrant been exercised just prior to such transfer, merger or consolidation
becoming effective or to the applicable record date thereof, as the case
may be. The Company will not merge or consolidate with or into any other
corporation, or sell or otherwise transfer its property, assets and
business substantially as an entirety to another corporation, unless the
corporation resulting from such merger or consolidation (if not the
Company), or such transferee corporation, as the case may be, shall
expressly assume in writing the due and punctual performance and observance
of each and every covenant and condition of this Warrant to be performed
and observed by the Company.
(e) Reclassification, etc. If at any time after the date hereof there shall be
a reorganization or reclassification of the securities as to which purchase
rights under this Warrant exist into the same or a different number of
securities of any other class or classes, then the Warrant Holder shall
thereafter be entitled to receive upon exercise of this Warrant, during the
period specified herein and upon payment of the Exercise Price then in
effect, the number of shares or other securities or property resulting from
such reorganization or reclassification, which would have been received by
the Warrant Holder for the shares of stock subject to this Warrant had this
Warrant at such time been exercised.
(f) Exercise Price Adjustment. In the event that the Company issues or sells
any Common Stock or securities which are convertible into or exchangeable
for its Common Stock or any convertible securities, or any warrants or
other rights to subscribe for or to purchase or any options for the
purchase of its Common Stock or any such convertible securities (other than
shares or options issued or which may be issued pursuant to (i) the
Company's current or future employee, director or bona fide consultant
option plans or shares issued upon exercise of options, warrants or rights
outstanding on the date of the Agreement and listed in the Company's most
recent periodic report filed under the Exchange Act (ii) strategic
corporate alliances not undertaken principally for financing purposes,
(iii) arrangements with the Investor, or (iv) acquisitions of other
entities by the Company) at an effective Exercise Price per share which is
less than the Exercise Price then in effect, then the Exercise Price in
effect immediately prior to such issue or sale shall be reduced effective
concurrently with such issue or sale to an amount determined by multiplying
the Exercise Price then in effect by a fraction, (x) the numerator of which
shall be the sum of (1) the number of shares of Common Stock outstanding
immediately prior to such issue or sale, plus (2) the number of shares of
Common Stock which the aggregate consideration received by the Company for
such additional shares would purchase at such Exercise Price then in
effect; and (y) the denominator of which shall be the number of shares of
Common Stock of the Company outstanding immediately after such issue or
sale.
For the purposes of the foregoing adjustment, in the case of the issuance
of any convertible securities, warrants, options or other rights to
subscribe for or to purchase or exchange for, shares of Common Stock
("Convertible Securities"), the maximum
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number of shares of Common Stock issuable upon exercise, exchange or
conversion of such Convertible Securities shall be deemed to be
outstanding, provided that no further adjustment shall be made upon the
actual issuance of Common Stock upon exercise, exchange or conversion of
such Convertible Securities.
The number of shares which may be purchased hereunder shall be increased
proportionately to any reduction in Exercise Price pursuant to this
paragraph 12(f), so that after such adjustments the aggregate Exercise
Price payable hereunder for the increased number of shares shall be the
same as the aggregate Exercise Price in effect just prior to such
adjustments.
13. Voluntary Adjustment by the Company. The Company may at its option, at any
time during the term of this Warrant, reduce but not increase the then
current Exercise Price to any amount and for any period of time deemed
appropriate by the Board of Directors of the Company.
14. Notice of Adjustment. Whenever the number of Warrant Shares or number or
kind of securities or other property purchasable upon the exercise of this
Warrant or the Exercise Price is adjusted, the Company shall promptly mail
to the holder of this Warrant a notice setting forth the number of Warrant
Shares (and other securities or property) purchasable upon the exercise of
this Warrant and the Exercise Price of such Warrant Shares after such
adjustment and setting forth a brief statement of the facts requiring such
adjustment.
15. Authorized Shares. The Company covenants that during the period the Warrant
is outstanding and exercisable, it will reserve from its authorized and
unissued Common Stock a sufficient number of shares to provide for the
issuance of the Warrant Shares upon the exercise of any purchase rights
under this Warrant. The Company further covenants that its issuance of this
Warrant shall constitute full authority to its officers who are charged
with the duty of executing stock certificates to execute and issue the
necessary certificates for the Warrant Shares upon the exercise of the
purchase rights under this Warrant. The Company will take all such
reasonable action as may be necessary to assure that such Warrant Shares
may be issued as provided herein without violation of any applicable law or
regulation, or of any requirements of the American Stock Exchange or any
domestic securities exchange upon which the Common Stock may be listed.
16. 9.9% Limitation.
(a) Notwithstanding anything to the contrary contained herein, the number of
shares of Common Stock that may be acquired by the Investor upon exercise
pursuant to the terms hereof shall not exceed a number that, when added to
the total number of shares of Common Stock deemed beneficially owned by
such holder (other than by virtue of the ownership of securities or rights
to acquire securities (including the Warrant) that have limitations on the
Investor's right to convert, exercise or purchase similar to the limitation
set forth herein), together with all shares of Common Stock deemed
beneficially owned (other than by virtue of the ownership of securities or
rights to acquire securities
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(including the Warrant) that have limitations on the right to convert,
exercise or purchase similar to the limitation set forth herein) by the
holder's "affiliates" (as defined Rule 144 of the Act) ("Aggregation
Parties") that would be aggregated for purposes of determining whether a
group under Section 13(d) of the Securities Exchange Act of 1934, as
amended, exists, would exceed 9.99% of the total issued and outstanding
shares of the Company's Common Stock (the "Restricted Ownership
Percentage"). Each Holder shall have the right (w) at any time and from
time to time to reduce its Restricted Ownership Percentage immediately upon
notice to the Company and (x) at any time and from time to time, to
increase its Restricted Ownership Percentage immediately in the event of
the announcement as pending or planned of an event of:
(i) any consolidation or merger of the Company with or into any other
corporation or other entity or person (whether or not the Company is
the surviving corporation), or any other corporate reorganization or
transaction or series of related transactions in which in excess of
50% of the Company's voting power is transferred through a merger,
consolidation, tender offer or similar transaction,
(ii) any person (as defined in Section 13(d) of the Exchange Act), together
with its affiliates and associates (as such terms are defined in Rule
405 under the 1933 Act), beneficially owns or is deemed to
beneficially own (as described in Rule 13d-3 under the Exchange Act
without regard to the 60-day exercise period) in excess of 50% of the
Company's voting power,
(iii)there is a replacement of more than one-half of the members of the
Company's Board of Directors which is not approved by those
individuals who are members of the Company's Board of Directors on the
date thereof, in one or a series of related transactions, or
(iv) a sale or transfer of all or substantially all of the assets of the
Company, determined on a consolidated basis.
(b) The Investor covenants at all times on each day (each such day being
referred to as a "Covenant Day") as follows: During the balance of such
Covenant Day and the succeeding sixty-one (61) days (the balance of such
Covenant Day and the succeeding 61 days being referred to as the "Covenant
Period") such Investor will not acquire shares of Common Stock pursuant to
any right (including the exercise of the Warrant) existing at the
commencement of the Covenant Period to the extent the number of shares so
acquired by such holder and its Aggregation Parties (ignoring all
dispositions) would exceed:
(x) the Restricted Ownership Percentage of the total number of shares of
Common Stock outstanding at the commencement of the Covenant Period,
minus
(y) the number of shares of Common Stock owned by such holder and its
Aggregation Parties at the commencement of the Covenant Period.
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A new and independent covenant will be deemed to be given by the
holder as of each moment of each Covenant Day. No covenant will terminate,
diminish or modify any other covenant. The holder agrees to comply with
each such covenant. This Section 16 controls in the case of any conflict
with any other provision of the Transaction Documents.
The Company's obligation to issue shares of Common Stock which would
exceed such limits referred to in this Section 16 shall be suspended to the
extent necessary until such time, if any, as shares of Common Stock may be
issued in compliance with such restrictions.
17. Compliance with Securities Laws.
(a) The holder hereof acknowledges that the Warrant Shares acquired upon the
exercise of this Warrant, if not registered (or if no exemption from
registration exists), will have restrictions upon resale imposed by state
and federal securities laws. Each certificate representing the Warrant
Shares issued to the Holder upon exercise (if not registered or if no
exemption from registration exists) will bear the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED WITH
THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY
STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT
BE OFFERED, TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS, BASED ON AN OPINION LETTER OF COUNSEL
SATISFACTORY TO THE COMPANY OR A NO-ACTION LETTER FROM THE SECURITIES AND
EXCHANGE COMMISSION.
(b) Without limiting the Investor's right to transfer, assign or otherwise
convey the Warrant or Warrant Shares in compliance with all applicable
securities laws, the Investor of this Warrant, by acceptance hereof,
acknowledges that this Warrant and the Warrant Shares to be issued upon
exercise hereof are being acquired solely for the Investor's own account
and not as a nominee for any other party, and that the Investor will not
offer, sell or otherwise dispose of this Warrant or any Warrant Shares to
be issued upon exercise hereof except under circumstances that will not
result in a violation of applicable federal and state securities laws. Upon
exercise of this Warrant, the Investor shall, if requested by the Company,
confirm in writing, in a form satisfactory to the Company, that the Warrant
Shares of Common Stock so purchased are being acquired solely for the
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Investor's own account and not as a nominee for any other party, for
investment, and not with a view toward distribution or resale.
(c) Neither this Warrant nor any Share of Common Stock issued upon exercise of
this Warrant may be offered for sale or sold, or otherwise transferred or
sold in any transaction which would constitute a sale thereof within the
meaning of the Act, unless (i) such security has been registered for sale
under the Act and registered or qualified under applicable state securities
laws relating to the offer an sale of securities, or (ii) exemptions from
the registration requirements of the Act and the registration or
qualification requirements of all such state securities laws are available
and the Company shall have received an opinion of counsel that the proposed
sale or other disposition of such securities may be effected without
registration under the Act, such counsel and such opinion to be
satisfactory to the Company.
(d) Investor recognizes that investing in the Warrant and the Warrant Shares
involves a high degree of risk, and Investor is in a financial position to
hold the Warrant and the Warrant Shares indefinitely and is able to bear
the economic risk and withstand a complete loss of its investment in the
Warrant and the Warrant Shares. The Investor is a sophisticated investor
and is capable of evaluating the merits and risks of investing in the
Company. The Investor has had an opportunity to discuss the Company's
business, management and financial affairs with the Company's management,
has been given full and complete access to information concerning the
Company, and has utilized such access to its satisfaction for the purpose
of obtaining information or verifying information and have had the
opportunity to inspect the Company's operation. Investor has had the
opportunity to ask questions of, and receive answers from, the management
of the Company (and any person acting on its behalf) concerning the Warrant
and the Warrant Shares and the agreements and transactions contemplated
hereby, and to obtain any additional information as Investor may have
requested in making its investment decision. The initial Investor in this
Warrant is an "accredited investor", as defined by Regulation D promulgated
under the Act.
18. Miscellaneous.
(a) Issue Date; Choice Of Law; Venue; Jurisdiction. THE PROVISIONS OF THIS
WARRANT SHALL BE CONSTRUED AND SHALL BE GIVEN EFFECT IN ALL RESPECTS AS IF
IT HAD BEEN ISSUED AND DELIVERED BY THE COMPANY ON THE DATE HEREOF. THIS
WARRANT SHALL BE BINDING UPON ANY SUCCESSORS OR ASSIGNS OF THE COMPANY.
THIS WARRANT WILL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED
BY THE LAWS OF THE STATE OF NEW YORK, EXCEPT FOR MATTERS ARISING UNDER THE
ACT, WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE
PARTIES CONSENTS TO THE EXCLUSIVE JURISDICTION OF THE U.S. DISTRICT COURT
SITTING IN THE STATE OF CITY OF NEW YORK IN THE STATE OF NEW YORK IN
CONNECTION WITH ANY DISPUTE ARISING UNDER THIS WARRANT AND HEREBY WAIVES,
TO THE MAXIMUM
11
EXTENT PERMITTED BY LAW, ANY OBJECTION, INCLUDING ANY OBJECTION BASED ON
FORUM NON CONVENIENS, TO THE BRINGING OF ANY SUCH PROCEEDING IN SUCH
JURISDICTION. EACH PARTY HEREBY AGREES THAT IF THE OTHER PARTY TO THIS
WARRANT OBTAINS A JUDGMENT AGAINST IT IN SUCH A PROCEEDING, THE PARTY WHICH
OBTAINED SUCH JUDGMENT MAY ENFORCE SAME BY SUMMARY JUDGMENT IN THE COURTS
OF ANY COUNTRY HAVING JURISDICTION OVER THE PARTY AGAINST WHOM SUCH
JUDGMENT WAS OBTAINED, AND EACH PARTY HEREBY WAIVES ANY DEFENSES AVAILABLE
TO IT UNDER LOCAL LAW AND AGREES TO THE ENFORCEMENT OF SUCH A JUDGMENT.
EACH PARTY TO THIS WARRANT IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS
IN ANY SUCH PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO SUCH PARTY AT ITS ADDRESS IN ACCORDANCE
WITH SECTION 18(C). NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY PARTY TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. EACH PARTY WAIVES ITS
RIGHT TO A TRIAL BY JURY.
(b) Modification and Waiver. This Warrant and any provisions hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought. Any
amendment effected in accordance with this paragraph shall be binding upon
the Investor, each future holder of this Warrant and the Company. No
waivers of, or exceptions to, any term, condition or provision of this
Warrant, in any one or more instances, shall be deemed to be, or construed
as, a further or continuing waiver of any such term, condition or
provision.
(c) Notices. Any notice, request or other document required or permitted to be
given or delivered to the Investor or future holders hereof or the Company
shall be personally delivered or shall be sent by certified or registered
mail, postage prepaid, to the Investor or each such holder at its address
as shown on the books of the Company or to the Company at the address set
forth in the Agreement. All notices under this Warrant shall be deemed to
have been given when received.
A party may from time to time change the address to which notices to it are
to be delivered or mailed hereunder by notice in accordance with the
provisions of this Section 18(c).
(d) Severability. Whenever possible, each provision of this Warrant shall be
interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Warrant is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not
affect the validity, legality or enforceability of any other provision of
this Warrant in such jurisdiction or affect the validity, legality or
enforceability of any provision in any other jurisdiction, but this Warrant
shall be reformed, construed and enforced in such
12
jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.
(e) No Impairment. The Company 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 Warrant Holder against impairment. Without limiting the
generality of the foregoing, the Company (a) will not increase the par
value of any Warrant Shares above the amount payable therefor on such
exercise, and (b) will take all such action as may be reasonably necessary
or appropriate in order that the Company may validly and legally issue
fully paid and nonassessable Warrant Shares on the exercise of this
Warrant.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by
its officers thereunto duly authorized.
Dated: September 1, 2000
PHARMOS CORPORATION
By:
--------------------------------
Name:
Title:
Agreed and Accepted
this 1st day of September, 2000
[____________________}
By:
-------------------------------
Name:
Title:
14
NOTICE OF EXERCISE
To: PHARMOS CORPORATION
(1) The undersigned hereby elects:
(A) to purchase ________ shares of Common Stock of Pharmos Corporation
pursuant to the terms of the attached Warrant, and tenders herewith payment of
the Exercise Price in full, together with all applicable transfer taxes, if any.
(B) in a "cashless" or "net-issue exercise" for, and to purchase
thereunder, ______ shares of Common Stock, and herewith makes payment therefor
with _______ Surrendered Shares.
(2) Please issue a certificate or certificates representing said shares of
Common Stock in the name of the undersigned or in such other name as is
specified below:
-------------------------------
(Name)
-------------------------------
(Address)
-------------------------------
(3) Please issue a new Warrant for the unexercised portion of the attached
Warrant in the name of the undersigned or in such other name as is specified
below:
Other Name: ___________________
------------------------------------------
(Name)
- --------------------------- ------------------------------------------
(Date) (Signature)
------------------------------------------
(Address)
ASSIGNMENT FORM
(To assign the foregoing warrant, execute
this form and supply required information.
Do not use this form to exercise the warrant.)
FOR VALUE RECEIVED, the foregoing Warrant of Pharmos Corporation and all
rights evidenced thereby are hereby assigned to
_______________________________________________ whose address is
____________________________________________________________________________.
____________________________________________________________________________.
Dated: ______________,
Holder's Signature: ______________________________
Holder's Address: ______________________________
______________________________
Signature Guaranteed: ___________________________________________
NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in an fiduciary or other representative
capacity should file proper evidence of authority to assign the foregoing
Warrant.