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THESE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). SUCH SECURITIES MAY NOT BE
TRANSFERRED UNLESS A REGISTRATION STATEMENT UNDER THE ACT IS IN EFFECT AS TO
SUCH TRANSFER OR, IN THE OPINION OF COUNSEL FOR THE ISSUER, AN EXEMPTION FROM
REGISTRATION IS THEN AVAILABLE.
WARRANT
VOID AFTER 5:00 P.M., New York Time, on ________, 1999
WARRANT TO PURCHASE COMMON STOCK
OF
ADVANCED POLYMER SYSTEMS, INC.
Date of Issuance: ___________ Certificate No. W-______
For value received, Advanced Polymer Systems, Inc., a Delaware
corporation (the "COMPANY"), hereby grants to MeesPierson Clearing Services
B.V., a Netherlands corporation ("MEESPIERSON"), or its registered assigns (the
"REGISTERED HOLDER") the right to purchase from the Company _______ shares of
Warrant Stock at a price per share of $_______ (as adjusted from time to time
hereunder, the "EXERCISE PRICE"). This Warrant is one of several warrants
(collectively, the "WARRANTS") issued pursuant to the terms of the Investment
Agreement, dated as of __________, by and between the Company and MeesPierson
(the "INVESTMENT AGREEMENT"). Certain capitalized terms used herein are defined
in Section 6 hereof. The amount and kind of securities purchasable pursuant to
the rights granted hereunder and the purchase price for such securities are
subject to adjustment pursuant to the provisions contained in this Warrant.
This Warrant is subject to the following provisions:
1. Exercise of Warrant.
a. Exercise Period. The Registered Holder may exercise, in whole or
in part (but not as to a fractional share of Warrant Stock), the purchase rights
represented by this Warrant at any time and from time to time after the Date of
Issuance to and including _______, 1999 (the "EXERCISE PERIOD").
b. Exercise Procedure.
(1) This Warrant shall be deemed to have been exercised when the
Company has received all of the following items (the "EXERCISE TIME"):
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(a) a completed Exercise Agreement, in the form set forth in Exhibit
I hereto, executed by the Person exercising all or part of the purchase rights
represented by this Warrant (the "PURCHASER");
(b) this Warrant;
(c) if this Warrant is not registered in the name of the Purchaser,
an Assignment or Assignments in the form set forth in Exhibit II hereto
evidencing the assignment of this Warrant to the Purchaser, in which case the
Registered Holder shall have complied with the provisions set forth in Section 8
hereof; and
(d) either (x) a check payable to the Company in an amount equal to
the product of the Exercise Price multiplied by the number of shares of Warrant
Stock being purchased upon such exercise (the "AGGREGATE EXERCISE PRICE") or (y)
the surrender to the Company of securities of the Company having a Market Price
equal to the Aggregate Exercise Price of the Warrant Stock being purchased upon
such exercise. Alternatively, the Registered Holder may elect to have the
Company deliver to such holder (without payment by the Registered Holder of any
Exercise Price or of any other cash or other consideration) that number of
shares of Warrant Stock equal to the quotient obtained by dividing (A) the value
of this Warrant at the Exercise Time (determined by subtracting the Aggregate
Exercise Price in effect immediately prior to the exercise of the Warrant from
the aggregate Market Price of the Warrant Stock issuable upon exercise of this
Warrant immediately prior to the exercise of the Warrant) by (B) the Market
Price of one share of Warrant Stock immediately prior to the exercise of the
Warrant.
(2) Certificates for shares of Warrant Stock purchased upon exercise of
this Warrant shall be delivered by the Company to the Purchaser within three (3)
business days after the date of the Exercise Time. Unless this Warrant has
expired or all of the purchase rights represented hereby have been exercised,
the Company shall prepare a new Warrant, substantially identical hereto,
representing the rights formerly represented by this Warrant which have not
expired or been exercised and shall, within such three business day period,
deliver such new Warrant to the Person designated for delivery in the Exercise
Agreement.
(3) The Warrant Stock issuable upon the exercise of this Warrant shall
be deemed to have been issued to the Purchaser at the Exercise Time, and the
Purchaser shall be deemed for all purposes to have become the record holder of
such Warrant Stock at the Exercise Time.
(4) The issuance of certificates for shares of Warrant Stock upon
exercise of this Warrant shall be made without charge to the Registered Holder
or the Purchaser for any issuance or stamp tax in respect thereof or other cost
incurred by the Company in connection with such exercise and the related
issuance of shares of Warrant Stock.
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(5) The Company shall not close its books against the transfer of this
Warrant or of any share of Warrant Stock issued or issuable upon the exercise of
this Warrant in any manner which interferes with the timely exercise of this
Warrant. The Company shall from time to time take all such action as may be
necessary to assure that the par value per share of the unissued Warrant Stock
acquirable upon exercise of this Warrant is at all times equal to or less than
the Exercise Price then in effect.
(6) The Company shall assist and cooperate with any Registered Holder
or Purchaser required to make any governmental filings or obtain any
governmental approvals prior to or in connection with any exercise of this
Warrant (including, without limitation, making any filings required to be made
by the Company).
(7) Notwithstanding any other provision hereof, if an exercise of any
portion of this Warrant is to be made in connection with a public offering, the
exercise of any portion of this Warrant may, at the election of the holder
hereof, be conditioned upon the consummation of the public offering in which
case such exercise shall not be deemed to be effective until the consummation of
the public offering and such exercise may be limited to the number of Warrant
Shares included in such public offering.
(8) The Company shall at all times reserve and keep available out of
its authorized but unissued shares of Common Stock solely for the purpose of
issuance upon the exercise of the Warrants, such number of shares of Warrant
Stock issuable upon the exercise of all outstanding Warrants. All shares of
Warrant Stock which are so issuable shall, when issued, be duly and validly
issued, fully paid and nonassessable and free from all taxes, liens and charges.
The Company shall take all such actions as may be necessary to assure that all
such shares of Warrant Stock may be so issued without violation of any
applicable law or governmental regulation or any requirements of any domestic
securities exchange upon which shares of Warrant Stock may be listed.
c. Exercise Agreement. Upon any exercise of this Warrant, the Exercise
Agreement shall be substantially in the form set forth in Exhibit I hereto,
except that if the shares of Warrant Stock are not to be issued in the name of
the Person in whose name this Warrant is registered, the Exercise Agreement
shall also state the name of the Person to whom the certificates for the shares
of Warrant Stock are to be issued, and if the number of shares of Warrant Stock
to be issued does not include all the shares of Warrant Stock purchasable
hereunder, it shall also state the name of the Person to whom a new Warrant for
the unexercised portion of the rights hereunder is to be delivered. Such
Exercise Agreement shall be dated the actual date of execution thereof.
d. Fractional Shares. If a fractional share of Warrant Stock would, but
for the provisions of Section 1.a., be issuable upon exercise of the rights
represented by this Warrant, the Company shall, within three (3) business days
after the date of the Exercise Time, deliver to the Purchaser a check payable to
the Purchaser in lieu of such fractional share in an amount equal
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to the difference between the Market Price of such fractional share as of the
date of the Exercise Time and the Exercise Price of such fractional share.
2. Adjustment of Exercise Price and Number of Shares. In order to
prevent dilution of the rights granted under this Warrant, the Exercise Price
shall be subject to adjustment from time to time as provided in this Section 2,
and the number of shares of Warrant Stock obtainable upon exercise of this
Warrant shall be subject to adjustment from time to time as provided in this
Section 2; provided, however, there will be no adjustment of the Exercise Price
(or the number of shares obtainable upon exercise of this Warrant) as a result
of issuances or deemed issuances of Common Stock (i) for incentive or
compensatory purposes to directors, officers, employees or consultants of the
Company which are from time to time approved by the Company's Board of
Directors, including, without limitation, grants of stock option and issuance of
Common Stock upon the exercise thereof, (ii) in any transaction or related
series of transactions that in the aggregate do not exceed 2% of the Company's
Common Stock Deemed Outstanding (as defined below) as of the date of such
issuance or (iii) pursuant to options and warrants outstanding as of the date of
issuance of this Warrant.
a. Adjustment of Exercise Price and Number of Shares upon Issuance
of Common Stock. If and whenever on or after the Date of Issuance of this
Warrant, the Company issues or sells, or in accordance with Section 2.b. is
deemed to have issued or sold, any shares of Common Stock for a consideration
per share less than the Exercise Price in effect immediately prior to such time,
then immediately upon such issue or sale the Exercise Price shall be reduced to
the Exercise Price determined by dividing (1) the sum of (x) the product derived
by multiplying the Exercise Price in effect immediately prior to such issue or
sale times the number of shares of Common Stock Deemed Outstanding immediately
prior to such issue or sale, plus (y) the consideration, if any, received by the
Company upon such issue or sale, by (2) the number of shares of Common Stock
Deemed Outstanding immediately after such issue or sale.
Upon each such adjustment of the Exercise Price hereunder, the
number of shares of Warrant Stock acquirable upon exercise of this Warrant shall
be adjusted to the number of shares determined by multiplying the Exercise Price
in effect immediately prior to such adjustment by the number of shares of
Warrant Stock acquirable upon exercise of this Warrant immediately prior to such
adjustment and dividing the product thereof by the Exercise Price resulting from
such adjustment.
b. Effect on Exercise Price of Certain Events. For purposes of
determining the adjusted Exercise Price under Section 2.a., the following shall
be applicable:
(1) Issuance of Rights or Options. If the Company in any manner
grants any rights or options to subscribe for or to purchase Common Stock or any
stock or other securities convertible into or exchangeable for Common Stock
(such rights or options being herein called "OPTIONS" and such convertible or
exchangeable stock or securities being herein called "CONVERTIBLE SECURITIES")
and the price per share for which Common Stock is issuable upon the
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exercise of such Options or upon conversion or exchange of such Convertible
Securities is less than the Exercise Price in effect immediately prior to the
time of the granting of such Options, then the total maximum number of shares of
Common Stock issuable upon the exercise of such Options or upon conversion or
exchange of the total maximum amount of such Convertible Securities issuable
upon the exercise of such Options shall be deemed to be outstanding and to have
been issued and sold by the Company for such price per share. For purposes of
this paragraph, the "price per share for which Common Stock is issuable upon
exercise of such Options or upon conversion or exchange of such Convertible
Securities" is determined by dividing (A) the total amount, if any, received or
receivable by the Company as consideration for the granting of such Options,
plus the minimum aggregate amount of additional consideration payable to the
Company upon the exercise of all such Options, plus in the case of such Options
which relate to Convertible Securities, the minimum aggregate amount of
additional consideration, if any, payable to the Company upon the issuance or
sale of such Convertible Securities and the conversion or exchange thereof, by
(B) the total maximum number of shares of Common Stock issuable upon exercise of
such Options or upon the conversion or exchange of all such Convertible
Securities issuable upon the exercise of such Options. No adjustment of the
Exercise Price shall be made upon the actual issuance of such Common Stock or of
such Convertible Securities upon the exercise of such Options or upon the actual
issuance of such Common Stock upon conversion or exchange of such Convertible
Securities.
(2) Issuance of Convertible Securities. If the Company in any
manner issues or sells any Convertible Securities and the price per share for
which Common Stock is issuable upon such conversion or exchange is less than the
Exercise Price in effect immediately prior to the time of such issue or sale,
then the maximum number of shares of Common Stock issuable upon conversion or
exchange of such Convertible Securities shall be deemed to be outstanding and to
have been issued and sold by the Company for such price per share. For the
purposes of this paragraph, the "price per share for which Common Stock is
issuable upon such conversion or exchange" is determined by dividing (A) the
total amount received or receivable by the Company as consideration for the
issue or sale of such Convertible Securities, plus the minimum aggregate amount
of additional consideration, if any, payable to the Company upon the conversion
or exchange thereof, by (B) the total maximum number of shares of Common Stock
issuable upon the conversion or exchange of all such Convertible Securities. No
adjustment of the Exercise Price shall be made upon the actual issue of such
Common Stock upon conversion or exchange of such Convertible Securities, and if
any such issue or sale of such Convertible Securities is made upon exercise of
any Options for which adjustments of the Exercise Price had been or are to be
made pursuant to other provisions of this Section 2.b., no further adjustment of
the Exercise Price shall be made by reason of such issue or sale.
(3) Change in Option Price or Conversion Rate. If the purchase
price provided for in any Options, the additional consideration, if any, payable
upon the issue, conversion or exchange of any Convertible Securities, or the
rate at which any Convertible Securities are convertible into or exchangeable
for Common Stock change at any time, the Exercise Price in effect at the time of
such change shall be readjusted to the Exercise Price which
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would have been in effect at such time had such Options or Convertible
Securities still outstanding provided for such changed purchase price,
additional consideration or changed conversion rate, as the case may be, at the
time initially granted, issued or sold and the number of shares of Warrant Stock
shall be correspondingly readjusted; provided that if such adjustment would
result in an increase of the Exercise Price then in effect, no adjustment shall
be made in the Exercise Price.
(4) Treatment of Expired Options and Unexercised Convertible
Securities. Upon the expiration of any Option or the termination of any right to
convert or exchange any Convertible Securities without the exercise of such
Option or right, the Exercise Price then in effect and the number of shares of
Warrant Stock acquirable hereunder shall be adjusted to the Exercise Price and
the number of shares which would have been in effect at the time of such
expiration or termination had such Option or Convertible Securities, to the
extent outstanding immediately prior to such expiration or termination, never
been issued; provided that if such expiration or termination would result in an
increase in the Exercise Price then in effect, such increase shall not be
effective until 10 days after written notice thereof has been given to all
holders of the Warrants.
(5) Calculation of Consideration Received. If any Common Stock,
Options or Convertible Securities are issued or sold or deemed to have been
issued or sold for cash, the consideration received therefor shall be deemed to
be the net amount received by the Company therefor. In case any Common Stock,
Options or Convertible Securities are issued or sold for a consideration other
than cash, the amount of the consideration other than cash received by the
Company shall be the fair value of such consideration, except where such
consideration consists of securities, in which case the amount of consideration
received by the Company shall be the Market Price thereof as of the date of
receipt. In case any Common Stock, Options or Convertible Securities are issued
to the owners of the non-surviving entity in connection with any merger in which
the Company is the surviving entity the amount of consideration therefor shall
be deemed to be the fair value of such portion of the net assets and business of
the non-surviving entity as is attributable to such Common Stock, Options or
Convertible Securities, as the case may be. The fair value of any consideration
other than cash or securities shall be determined jointly by the Company and the
Registered Holders of Warrants representing a majority of the shares of Warrant
Stock obtainable upon exercise of such Warrants. If such parties are unable to
reach agreement within a reasonable period of time, such fair value shall be
determined by an appraiser jointly selected by the Company and the Registered
Holders of Warrants representing a majority of the shares of Warrant Stock
obtainable upon exercise of such Warrants. The determination of such appraiser
shall be final and binding on the Company and the Registered Holders of the
Warrants, and the fees and expenses of such appraiser shall be paid by the
Company.
(6) Integrated Transactions. In case any Option is issued in
connection with the issue or sale of other securities of the Company, together
comprising one integrated transaction in which no specific consideration is
allocated to such Options by the parties thereto, the Options shall be deemed to
have been issued without consideration.
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(7) Treasury Shares. The number of shares of Common Stock
outstanding at any given time does not include shares owned or held by or for
the account of the Company or any subsidiary and the disposition of any shares
so owned or held shall be considered an issue or sale of Common Stock.
(8) Record Date. If the Company takes a record of the holders of
Common Stock for the purpose of entitling them (A) to receive a dividend or
other distribution payable in Common Stock, Options or in Convertible Securities
or (B) to subscribe for or purchase Common Stock, Options or Convertible
Securities, then such record date shall be deemed to be the date of the issue or
sale of the shares of Common Stock deemed to have been issued or sold upon the
declaration of such dividend or the making of such other distribution or the
date of the granting of such right of subscription or purchase, as the case may
be.
c. Subdivision or Combination of Common Stock. If the Company at any
time subdivides (by any stock split, stock dividend, recapitalization or
otherwise) one or more classes of its outstanding shares of Common Stock into a
greater number of shares, the Exercise Price in effect immediately prior to such
subdivision shall be proportionately reduced and the number of shares of Warrant
Stock obtainable upon exercise of this Warrant shall be proportionately
increased. If the Company at any time combines (by reverse stock split or
otherwise) one or more classes of its outstanding shares of Common Stock into a
smaller number of shares, the Exercise Price in effect immediately prior to such
combination shall be proportionately increased and the number of shares of
Warrant Stock obtainable upon exercise of this Warrant shall be proportionately
decreased.
d. Reorganization, Reclassification, Consolidation, Merger or Sale.
Any recapitalization, reorganization, reclassification, consolidation, merger,
sale of all or substantially all of the Company's assets to another Person or
other transaction which is effected in such a way that holders of Common Stock
are entitled to receive (either directly or upon subsequent liquidation) stock,
securities or assets with respect to or in exchange for Common Stock is referred
to herein as "ORGANIC CHANGE." Prior to the consummation of any Organic Change,
the Company shall make appropriate provision (in form and substance reasonably
satisfactory to the Registered Holders of the Warrants representing a majority
of the Warrant Stock obtainable upon exercise of all Warrants then outstanding)
to insure that each of the Registered Holders of the Warrants shall thereafter
have the right to acquire and receive in lieu of or in addition to (as the case
may be) the shares of Warrant Stock immediately theretofore acquirable and
receivable upon the exercise of such holder's Warrants, such shares of stock,
securities or assets as may be issued or payable with respect to or in exchange
for the number of shares of Warrant Stock immediately therefore acquirable and
receivable upon exercise of such holder's Warrants had such Organic Change not
taken place. In any such case, the Company shall make appropriate provision (in
form and substance satisfactory to the Registered Holders of the Warrants
representing a majority of the Warrant Stock obtainable upon exercise of all
Warrants then outstanding) with respect to such holders' rights and interests to
insure that the provisions of this Section 2 and Sections 3 and 4 hereof shall
thereafter be applicable to the Warrants (including, in the case of any such
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consolidation, merger or sale in which the successor entity or purchasing entity
is other than the Company, an immediate adjustment of the Exercise Price to the
value for the Common Stock reflected by the terms of such consolidation, merger
or sale, and a corresponding immediate adjustment in the number of shares of
Warrant Stock acquirable and receivable upon exercise of the Warrants, if the
value so reflected is less than the Exercise Price in effect immediately prior
to such consolidation, merger or sale). The Company shall not effect any such
consolidation, merger or sale, unless prior to the consummation thereof, the
successor entity (if other than the Company) resulting from consolidation or
merger or the entity purchasing such assets assumes by written instrument (in
form and substance satisfactory to the Registered Holders of Warrants
representing a majority of the Warrant Stock obtainable upon exercise of all of
the Warrants then outstanding), the obligation to deliver to each such holder
such shares of stock, securities or assets as, in accordance with the foregoing
provisions, such holder may be entitled to acquire.
e. Certain Events. If any event occurs of the type contemplated by
the provisions of this Section 2 but not expressly provided for by such
provisions (including, without limitation, the granting of stock appreciation
rights, phantom stock rights or other rights with equity features), then the
Company's board of directors shall make an appropriate adjustment in the
Exercise Price and the number of shares of Warrant Stock obtainable upon
exercise of this Warrant so as to protect the rights of the holders of the
Warrants; provided that no such adjustment shall increase the Exercise Price or
decrease the number of shares of Warrant Stock obtainable as otherwise
determined pursuant to this Section 2.
f. Notices.
(1) Immediately upon any adjustment of the Exercise Price, the
Company shall give written notice thereof to the Registered Holder, setting
forth in reasonable detail and certifying the calculation of such adjustment.
(2) The Company shall give written notice to the Registered
Holder at least 20 days prior to the date on which the Company closes its books
or takes a record (A) with respect to any dividend or distribution upon the
Common Stock, (B) with respect to any pro rata subscription offer to holders of
Common Stock or (C) for determining rights to vote with respect to any Organic
Change, dissolution or liquidation.
(3) The Company shall also give written notice to the Registered
Holders at least 20 days prior to the date on which any Organic Change,
dissolution or liquidation shall take place.
3. Liquidating Dividends. If the Company declares or pays a dividend
upon the Common Stock payable otherwise than in cash out of earnings or earned
surplus (determined in accordance with generally accepted accounting principles,
consistently applied) except for a stock dividend payable in shares of Common
Stock (a "LIQUIDATING DIVIDEND"), then the Company shall pay to the Registered
Holder of this Warrant at the time of payment thereof the Liquidating
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Dividend which would have been paid to such Registered Holder on the Warrant
Stock had this Warrant been fully exercised immediately prior to the date on
which a record is taken for such Liquidating Dividend, or, if no record is
taken, the date as of which the record holders of Common Stock entitled to such
dividends are to be determined.
4. Purchase Rights. If at any time the Company grants, issues or sells
any Options, Convertible Securities or rights to purchase stock, warrants,
securities or other property pro rata to the record holders of any class of
Common Stock (the "PURCHASE RIGHTS"), then the Registered holder of this Warrant
shall be entitled to acquire, upon the terms applicable to such Purchase Rights,
the aggregate Purchase Rights which such holder could have acquired if such
holder had held the number of shares of Warrant Stock acquirable upon complete
exercise of this Warrant immediately before the date on which a record is taken
for the grant, issuance or sale of such Purchase Rights, or, if no such record
is taken, the date as of which the record holders of Common Stock are to be
determined for the grant, issue or sale of such Purchase Rights.
5. Registration Rights. The Warrant Stock and each holder of this
Warrant shall enjoy the benefits of and be subject to the registration rights
provided in the Registration Agreement dated _________, 1996 by and between the
Company and MeesPierson ("REGISTRATION RIGHTS AGREEMENT").
6. Definitions. The following terms have meanings set forth below:
"COMMON STOCK" means the Company's common stock, par value $0.01 per
share.
"COMMON STOCK DEEMED OUTSTANDING" means, at any given time, the
number of shares of Common Stock actually outstanding at such time, plus the
number of shares of Common Stock deemed to be outstanding pursuant to Sections
2.b(1) and 2.b(2) hereof regardless of whether the Options or Convertible
Securities are actually exercisable at such time, but excluding any shares of
Common Stock issuable upon exercise of the Warrants].
"MARKET PRICE" means the closing bid price for the Common Stock as
of the end of normal day trading hours of the business day on which the Exercise
Time occurs on the Nasdaq national market quotation system ("NASDAQ NATIONAL
MARKET") as confirmed by Bloomberg Financial Market News or if the Exercise Time
does not occur on a day on which the Common Stock is traded, as of the close of
the most recent day on which the Nasdaq National Market was open for business.
"PERSON" means an individual, a partnership, a joint venture, a
corporation, a limited liability company, a trust, an unincorporated
organization and a government or any department or agency thereof.
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"WARRANT STOCK" means the Company's Common Stock issuable upon
exercise of the Warrants; provided that if there is a change such that the
securities issuable upon exercise of the Warrants are issued by an entity other
than the Company or there is a change in the class of securities so issuable,
then the term "Warrant Stock" shall mean one share of the security issuable upon
exercise of the Warrants if such security is issuable in shares, or shall mean
the smallest unit in which such security is issuable if such security is not
issuable in shares.
7. No Voting Rights; Limitations of Liability. This Warrant shall not
entitle the holder hereof to any voting rights or other rights as a stockholder
of the Company. No provision hereof, in the absence of affirmative action by the
Registered Holder to purchase Warrant Stock, and no enumeration herein of the
rights or privileges of the Registered Holder shall give rise to any liability
of such holder for the Exercise Price of Warrant Stock acquirable by exercise
hereof or as a stockholder of the Company.
8. Warrant Transferable. Subject to the transfer conditions referred to
in the legend endorsed hereon, this Warrant and all rights hereunder are
transferable, in whole or in part, without charge to the Registered Holder, upon
surrender of this Warrant with a properly executed Assignment (in the form of
Exhibit II hereto) at the principal office of the Company.
9. Warrant Exchangeable for Different Denominations. This Warrant is
exchangeable, upon the surrender hereof by the Registered Holder at the
principal office of the Company, for new Warrants of like tenor representing in
the aggregate the purchase rights hereunder, and each of such new Warrants shall
represent such portion of such rights as is designated by the Registered Holder
at the time of such surrender. The date the Company initially issues this
Warrant shall be deemed to be the "DATE OF ISSUANCE" hereof regardless of the
number of times new certificates representing the unexpired and unexercised
rights formerly represented by this Warrant shall be issued. All Warrants
representing portions of the rights hereunder are referred to herein as the
"WARRANTS."
10. Replacement. Upon receipt of evidence reasonably satisfactory to the
Company of the ownership and the loss, theft, destruction or mutilation of any
certificate evidencing this Warrant, and in the case of any such loss, theft or
destruction, upon receipt of indemnity reasonably satisfactory to the Company,
or, in the case of any such mutilation upon surrender of such certificate, the
Company shall (at its expense) execute and deliver in lieu of such certificate a
new certificate of like kind representing the same rights represented by such
lost, stolen, destroyed or mutilated certificate and dated the date of such
lost, stolen, destroyed or mutilated certificate.
11. Transfer in Compliance with the Securities Act of 1933;
Indemnification.
a. This Warrant may not be assigned or transferred, except as
provided herein, and in accordance with and subject to the provisions of the
Securities Act of 1933, as amended, and the Rules and Regulations promulgated
thereunder (said Act and such Rules and Regulations
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being hereinafter collectively referred to as the "ACT"). Any purported transfer
or assignment made other than in accordance with this Section 11 shall be null
and void and of no force and effect.
b. This Warrant or the Warrant Stock may not be sold or otherwise
disposed of except in accordance with Section 4(d) of the Investment Agreement.
c. Each certificate for Warrant Stock or for any other security
issued or issuable upon exercise of this Warrant shall contain a legend on the
face, in form and substance satisfactory to counsel for Company, setting forth
the restrictions on transfer contained in Section 11.a., unless, in the opinion
of counsel reasonably satisfactory to Company, such legend is not required.
d. Each holder of the Warrant, the Warrant Stock and any other
security issued or issuable upon exercise of this Warrant shall indemnify and
hold harmless the Company, its directors and officers, and each other Person, if
any, who controls the Company against any losses, claims, damages or
liabilities, joint or several, to which the Company or any such director,
officer or any such Person may become subject under the Act, any applicable
state securities law or any other statute or at common law, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) directly
arise out of or are based upon the disposition by such holder of the Warrant,
Warrant Stock or other such securities in violation of the above representation.
12. Notices. Except as otherwise expressly provided herein, all notices
referred to in this Warrant shall be in writing and shall be delivered
personally, sent by express courier service (charges prepaid) or sent by
registered or certified mail, return receipt requested, postage prepaid and
shall be deemed to have been given when so delivered, sent or deposited in the
U. S. Mail (i) to the Company, at its principal executive offices and (ii) to
the Registered Holder of this Warrant, at such holder's address as it appears in
the records of the Company (unless otherwise indicated by any such holder).
13. Amendment and Waiver. Except as otherwise provided herein, the
provisions of the Warrants may be amended and the Company may take any action
herein prohibited, or omit to perform any act herein required to be performed by
it, only if the Company has obtained the written consent of the Registered
Holders of Warrants representing a majority of the shares of Warrant Stock
obtainable upon exercise of the Warrants; provided that no such action may
change the Exercise Price of the Warrants or the number of shares or class of
stock obtainable upon exercise of each Warrant without the written consent of
the Registered Holders of Warrants representing at least 50% of the shares of
Warrant Stock obtainable upon exercise of the Warrants.
14. Descriptive Headings; Governing Law. The descriptive headings of the
several Sections of this Warrant are inserted for convenience only and do not
constitute a part of this Warrant. The construction, validity and interpretation
of this Warrant shall be governed by the internal law, and not the conflicts
law, of the State of New York.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed
and attested by its duly authorized officers under its corporate seal and to be
dated the Date of Issuance hereof.
ADVANCED POLYMER SYSTEMS, INC.
By____________________________
Its___________________________
[Corporate Seal]
Attest:
________________________
Secretary
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EXHIBIT I
EXERCISE AGREEMENT
To: Dated:
The undersigned, pursuant to the provisions set forth in the attached
Warrant (Certificate No. W- ), hereby agrees to subscribe for the purchase of
shares of the Warrant Stock covered by such Warrant having an Aggregate
Exercise Price of ($ ) and makes payment herewith in full therefor as
follows [select appropriate option]:
[by check in the amount of the Aggregate Exercise Price ($ ).]
[by surrender of (amount and description of securities surrendered) of the
Company having a Market Price equal to the Aggregate Exercise Price
($ )].
[by cashless exercise in which event the number of shares of Warrant Stock
deliverable upon exercise of such Warrant shall be determined by dividing (A)
the value of such Warrant at the Exercise Time (determined by subtracting the
Aggregate Exercise Price in effect immediately prior to the exercise of such
Warrant from the aggregate Market Price of the Warrant Stock issuable upon
exercise of such Warrant immediately prior to the Exercise of such Warrant by,
(B) the Market Price of one share of Warrant Stock immediately prior to the
exercise of such Warrant.]
Certificates for the shares of Warrant Stock subscribed for shall be issued to
the parties listed below:
Name of Issuee Address No. of Shares
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New Warrants for the rights not exercised hereunder shall be issued to the
parties listed below:
Name of Issuee Address No. of Shares
-------------- ------- -------------
Signature
---------------------
Address
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EXHIBIT II
ASSIGNMENT
FOR VALUE RECEIVED, hereby sells,
assigns and transfers all of the rights of the undersigned under the attached
Warrant (Certificate No. W- ) with respect to the number of shares of the
Warrant Stock covered thereby set forth below, unto:
Names of Assignee Address No. of Shares
- ----------------- ------- -------------
Dated: Signature
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Witness
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