EXHIBIT 10.15
Neither this Warrant nor the shares of Common Stock
issuable upon exercise of this Warrant have been
registered under the Securities Act of 1933, as
amended (the "Securities Act"), or any applicable
state securities law and this Warrant cannot be sold
or transferred, and the shares of Common Stock
issuable upon exercise of this Warrant cannot be sold
or transferred, unless and until they are so
registered or unless such registration is not then
required under the circumstances of such sale or
transfer.
Warrant to Purchase an aggregate of 50,000
No. WP - 17 Units, each Unit consisting of one share of
Dated: April 23, 1994 Common Stock and one Warrant to purchase
Amended: March 18, 2002 one share of Common Stock for $9.00
HOLLIS EDEN PHARMACEUTICALS
UNIT WARRANT
Exercisable on or before 5:00 P.M., March 18, 2005
This certifies that, for value received, Salvatore J. Zizza, the registered
holder hereof ("Holder"), is entitled, subject to the terms and conditions
hereof, to purchase from Hollis Eden Pharmaceuticals, a Delaware corporation
(the "Corporation"), at any time or from time to time during the period
specified in Section 1(a) hereof, up to 50,000 units (the "Units"), each Unit
consisting of one share of common stock, par value $.O1 per share (the "Common
Stock"), of the Corporation and one warrant (the "Underlying Warrant") to
purchase one share of Common Stock of the Corporation during the period
specified in Section 1(b) hereof. The form of Underlying Warrant is attached
hereto as Annex A. The shares of Common Stock purchasable upon exercise of this
Warrant and the Underlying Warrant are collectively referred to herein as the
"Warrant Shares." The Warrant Shares shall be purchasable at the prices (the
"Exercise Prices") per share as determined pursuant to Sections 7(a) and 7(b)
hereof, respectively. The number of Warrant Shares issuable upon exercise of
this Warrant and the Underlying Warrant are subject to adjustment as provided in
Section 7 below.
1. Term of Warrants: Exercise Periods.
(a) Subject to the terms and conditions set forth herein, this Warrant
shall be exercisable, in whole or in part (but not as to fractional shares),
during the period commencing on the date hereof and, unless extended by the
Corporation, ending at 5:00 p.m., Eastern Time, on March 18, 2005, (the
"Exercise Period"), and shall be void thereafter.
Exercise of this Warrant, in whole or in part, during the Exercise Period shall
be made in accordance with the provisions of Section 2(a) hereof.
(b) Subject to the terms and conditions set forth herein and in the
Underlying Warrant, the Underlying Warrant shall be exercisable, in whole or in
part (but not as to fractional shares), during the period commencing upon the
consummation of a Business Combination by the Corporation and, unless extended
by the Corporation, ending at 5:00 p.m., Eastern Time, on May 15, 2002 (the
"Underlying Warrant Exercise Period"), and shall be void thereafter. Exercise of
the Underlying Warrant, in whole or in part, during the Underlying Warrant
Exercise Period shall be made in accordance with the provisions of Section 2(b)
hereof. For purposes hereof, a Business Combination shall be deemed to be a
merger, exchange of capital stock, asset acquisition or other business
combination involving the Corporation, all as more fully set forth in the
Prospectus of the Corporation dated May 15, 1995.
2. Exercise of Warrants. (a) This Warrant may be exercised by the Holder,
in whole or in part, at the Primary Warrant Exercise Price (as defined in
Section 7(a) hereof), at any time during the Exercise Period in accordance with
Section 1(a) hereof, by mailing or otherwise delivering this Warrant, along with
an Exercise Notice in the form attached hereto as Annex B duly executed by the
Holder (or the Holder's duly authorized attorney or representative) and payment
of the Exercise Price for the Warrant Shares to be purchased, to the address of
the Corporation.
(b) The Underlying Warrant may be exercised by the Holder, in whole
or in part, at the Underlying Warrant Exercise Price (as defined in Section 7(b)
hereof), at any time during the Underlying Warrant Exercise Period in accordance
with Section 1(b) hereof, by mailing or otherwise delivering the Underlying
Warrant, along with an Exercise Notice in the form attached hereto as Annex B
duly executed by the Holder (or the Holder's duly authorized attorney or
representative) and payment of the Underlying Warrant Exercise Price for the
Warrant Shares to be purchased, to the address of the Corporation.
(c) Payment for the Warrant Shares to be purchased pursuant to this
Warrant and the Underlying Warrant shall be made (i) in cash or by check, (ii)
by cancellation by the Holder of indebtedness of the Corporation to the Holder
or (iii) by a combination of (i) and (ii).
(d) In the event this Warrant or the Underlying Warrant is exercised
for less than all of the Warrant Shares purchasable hereunder or thereunder, the
Corporation will, upon surrender of this Warrant or the Underlying Warrant, as
the case may be, to the Corporation, execute and deliver a new Warrant or
Underlying Warrant, as the case may be, of like tenor and exercisable for the
balance of the Warrant Shares for which this Warrant or the Underlying Warrant,
as the case may be, may then be exercised.
(e) This Warrant and the Underlying Warrant shall be deemed to have
been exercised immediately prior to the close of business on the date of its
surrender for exercise
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as provided above, and the Holder entitled to receive Warrant Shares issuable
upon exercise shall be treated for all purposes as the holder of record of such
shares as of the close of business on such date.
3. Replacement of Warrants. On receipt of evidence of the loss, theft,
destruction or mutilation of this Warrant or the Underlying Warrant, and, in the
case of loss, theft or destruction, on delivery of indemnity and/or security
reasonably satisfactory to the Corporation or, in the case of mutilation, on
surrender and cancellation of this Warrant or the Underlying Warrant, as the
case may be, the Corporation shall execute and deliver a new Warrant or
Underlying Warrant, as the case may be, of like tenor in substitution hereof or
thereof.
4. No Rights as Stockholders. Nothing contained in this Warrant or the
Underlying Warrant shall be construed so as to confer upon the Holder of this
Warrant or the Underlying Warrant any right to vote for the election of
directors or upon any other matter submitted to stockholders of the Corporation
at any meeting thereof, or to give or withhold consent to any corporate action,
or to receive notice of meetings, or to receive dividends or subscription
rights, or any other rights or privileges of a stockholder of the Corporation,
until this Warrant or the Underlying Warrant, as the case may be, shall have
been exercised as provided herein or therein.
5. Transfer of Warrants.
(a) Restriction on Transferability of Warrants. Neither this Warrant
nor the Underlying Warrant nor any rights of the Holder hereof or thereof may be
transferred or assigned, in whole or in part, except with the prior written
consent of the Corporation.
(b) Exchange of Warrants Upon Transfer. If this Warrant or the
Underlying Warrant is presented for transfer in accordance with the terms hereof
or thereof, it shall be surrendered by the Holder at the office of the
Corporation and accompanied by an assignment in form and substance reasonably
satisfactory to the Corporation, duly executed by the Holder or the Holder's
duly authorized attorney or representative. On surrender of this Warrant or the
Underlying Warrant for transfer, the Corporation shall issue a new warrant to
the Holder's transferee (if transferred in whole), or to the Holder and Holder's
transferee, as appropriate (if transferred in part), for the number of shares
then issuable upon exercise hereof or thereof.
(c) Warrant Register. The Corporation will maintain a register (the
"Warrant Register") containing the names and addresses of the Holder and the
holders of other warrants issued by the Corporation. The Holder of this Warrant
or the Underlying Warrant, as the case may be, may change its address shown on
the Warrant Register by written notice to the Corporation requesting such
change. Until this Warrant or the Underlying Warrant, as the case may be, is
transferred on the Warrant Register of the Corporation, the Corporation shall be
entitled to treat the registered holder as shown on the Warrant Register as the
owner of this Warrant or the Underlying Warrant, as the case may
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be, for all purposes, notwithstanding any notice to the contrary, and shall not
be bound to recognize any equitable or other claim to or interest in such
Warrant or Underlying Warrant, as the case may be, on the part of any other
person.
6. Reservation of Stock. The Corporation covenants that until the
expiration of this Warrant and the Underlying Warrant, the Corporation will keep
reserved 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
this Warrant and/or the Underlying Warrant, as such number may vary from time to
time. The Corporation further covenants that all shares that may be issued upon
exercise of this Warrant and the Underlying Warrant, upon payment of the
Exercise Price or Underlying Warrant Exercise Price, as the case may be, in
accordance with the terms hereof or thereof, will be duly authorized, validly
issued, and fully paid and nonassessable.
7. Exercise Prices. (a) The Exercise Price for each Warrant Share
purchasable pursuant to this Warrant (the "Primary Warrant Exercise Price")
shall be ten dollars ($10.00) per Warrant Share purchased. The Primary Warrant
Exercise Price shall be subject to adjustment from time to time as hereinafter
provided (such price, or the price as last adjusted, also being referred to
herein as the "Primary Warrant Exercise Price"). Upon each adjustment (other
than the adjustment described in Section 8(a) hereof) of the Primary Warrant
Exercise Price, the Holder shall thereafter be entitled to purchase, at the
Primary Warrant Exercise Price resulting from such adjustment, the number of
Warrant Shares obtained by multiplying the Primary Warrant Exercise Price in
effect immediately prior to such adjustment by the number of shares purchasable
upon exercise of this Warrant immediately prior to such adjustment, and dividing
the product thereof by the Primary Warrant Exercise Price resulting from such
adjustment.
(b) The Exercise Price for each Warrant Share purchasable pursuant to
the Underlying Warrant (the "Underlying Warrant Exercise Price") shall be nine
dollars ($9.00) per Warrant Share purchased. The Underlying Warrant Exercise
Price shall be subject to adjustment from time to time as hereinafter provided
(such price, or the price as last adjusted, also being referred to herein as the
"Underlying Warrant Exercise Price"). Upon each adjustment of the Underlying
Warrant Exercise Price, the Holder shall thereafter be entitled to purchase, at
the Underlying Warrant Exercise Price resulting from such adjustment, the number
of Warrant Shares obtained by multiplying the Underlying Warrant Exercise Price
in effect immediately prior to such adjustment by the number of shares
purchasable upon exercise of the Underlying Warrant immediately prior to such
adjustment, and dividing the product thereof by the Underlying Warrant Exercise
Price resulting from such adjustment.
(c) Subdivision or Combination of Stock. In case the Corporation
shall at any time subdivide its outstanding shares of Common Stock into a
greater number of shares by way of a stock split, stock dividend or similar
event, the Primary Warrant and Underlying Warrant Exercise Price in effect
immediately prior to such subdivision shall be proportionately reduced, and
conversely, in case the outstanding shares of Common Stock
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shall be combined into a smaller number of shares by way of a reverse stock
split or similar event, the Primary Warrant and Underlying Warrant Exercise
Price in effect immediately prior to such combination shall be proportionately
increased.
(d) Reorganization, Reclassification, Consolidation. Merizer or Sale.
If any capital reorganization or eclassification of the capital stock of the
Corporation, any consolidation or merger of the Corporation with another entity,
or the sale of all or substantially all of the Corporation's assets to another
entity shall be effected in such a way that holders of Common Stock shall be
entitled to receive stock, securities or assets with respect to or in exchange
for Common Stock, then, as a condition of such reorganization, reclassification,
consolidation, merger or sale, lawful and adequate provisions shall be made
whereby the Holder shall thereafter have the right to purchase and receive upon
the basis and the terms and conditions specified in this Warrant and the
Underlying Warrant and in lieu of the shares of Common Stock immediately
theretofore purchasable and receivable upon the exercise of the rights
represented hereby, 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 Common
Stock immediately theretofore purchasable and receivable upon the exercise of
the rights represented hereby and thereby had such reorganization,
reclassification, consolidation, merger or sale not taken place and in any such
case appropriate provision shall be made with respect to the rights and
interests of the Holder of this Warrant and the Underlying Warrant to the end
that the provisions hereof and thereof (including, without limitation,
provisions for adjustments of the Primary Warrant and Underlying Warrant
Exercise Prices and of the number of shares of Common Stock purchasable and
receivable upon the exercise of this Warrant and the Underlying Warrant) shall
thereafter be applicable, as nearly as may be, in relation to any shares of
stock, securities or assets thereafter deliverable upon the exercise hereof and
thereof. The Corporation will not effect any such consolidation, merger or sale
unless prior to the consummation thereof, the successor corporation (if other
than the Corporation) resulting from such consolidation or merger or the
corporation purchasing such assets shall assume by written instrument, executed
and mailed or delivered to the Holder at the last address thereof appearing on
the books of the Corporation, the obligation to deliver to such Holder such
shares of stock, securities or assets as, in accordance with the foregoing
provisions, such Holder may be entitled to purchase.
(e) No Adjustment for First Business Combination. No adjustment of
the Primary Warrant or Underlying Warrant Exercise Price shall be made as a
result of or in connection with (i) the issuance or sale of shares of Common
Stock pursuant to options, warrants, stock purchase agreements and convertible
or exchangeable securities outstanding or in effect on the date hereof or
granted upon the consummation of and in connection with the first Business
Combination, or (ii) the issuance or sale of shares of Common Stock if the
amount of said adjustment shall be less than $.10, provided, however, that in
such case, any adjustment that would otherwise be required then to be made shall
be carried forward and shall be made at the time of and together with the next
subsequent adjustment that shall amount, together with any adjustment so carried
forward, to at least $.10.
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(f) Notice of Adjustment. Upon any adjustment of the Primary Warrant
or Underlying Warrant Exercise Price and/or number of Warrant Shares, then and
in each such case the Corporation shall give written notice thereof, by first
class mail, postage prepaid, addressed to the Holder at the address thereof as
shown on the books of the Corporation. The notice shall state the Primary
Warrant or Underlying Warrant Exercise Price and/or number of Warrant Shares
resulting from such adjustment, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based.
(g) No Change of Warrant. The form of this Warrant and the Underlying
Warrant need not be changed because of any adjustment in number and kind of
Warrant Shares purchasable hereunder pursuant to this Section 7. Any Warrant or
Underlying Warrant issued after any such adjustment upon any partial exercise or
upon replacement or transfer may continue to express the same terms as are
stated in this Warrant or the Underlying Warrant as initially issued, and the
number and kind of Warrant Shares purchasable hereunder and thereunder shall be
considered to have been so changed as of the close of business on the date or
dates of adjustment.
8. Redemption.
(a) Commencing on the date that the Corporation consummates a
Business Combination (the "Initial Redemption Date"), the Corporation may on 30
days prior written notice, redeem the Underlying Warrant, provided that the last
sale of Common Stock, if the Common Stock is listed for trading on an exchange
or inter-dealer quotation system which provides last sale prices, or, the
average of the closing bid and asked quotes, if the Common Stock is listed for
trading on an inter-dealer quotation system which does not provide last sale
prices, on all 10 of the trading days ending on the day immediately prior to the
day on which the Corporation gives notice of redemption, has been $11.00 or
higher. In the event that, on the date set for redemption of the Underlying
Warrants (the "Redemption Date"), (i) this Warrant has been exercised and such
Warrant Holder is the Registered Holder of the Underlying Warrant, then the
Underlying Warrant shall be redeemed by the Corporation for $.05 per Underlying
Warrant or (ii) this Warrant has not been exercised, then the exercise price of
this Warrant shall be reduced by $.05 (the amount the Corporation would pay to
redeem the Underlying Warrant) and the Primary Warrant Exercise Price shall be
$9.95 per Warrant during the Exercise Period (subject to further adjustment as
provided in section 7 hereof). Notwithstanding anything to the contrary herein,
the last sentence of Section 7(a) hereof shall not apply to the adjustment
described in the preceding sentence (i.e., after the adjustment described in the
preceding sentence is made, this Warrant will entitle the holder hereof upon
exercise to receive the same number of Warrant Shares purchasable upon exercise
of this Warrant immediately prior to such adjustment).
(b) In case the Corporation shall exercise its right to redeem the
Underlying Warrant, it shall give or cause to be given notice (i) to the
Registered Holder of the Underlying Warrant, if this Warrant has been exercised
as of the Initial Redemption Date, or (ii) to the Registered Holder of this
Warrant, if this Warrant has not been exercised as of the Initial Redemption
Date, by mailing to such Registered Holder a notice of
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redemption, first class, postage prepaid, at such holder's last address as shall
appear on the records of the Warrant Register. Any notice mailed in the manner
provided herein shall be conclusively presumed to have been duly given whether
or not the Registered Holder receives such notice.
(c) The notice of redemption shall specify (i) the redemption price,
(ii) the date fixed for redemption, which shall in no event be less that 30 days
after the date of mailing of such notice, (iii)(A) the place where the Warrant
Certificate shall be delivered and the redemption price shall be paid (in the
event this Warrant has been exercised prior to the Redemption Date and the
Holder is the Registered Holder of the Underlying Warrant as of the Redemption
Date), or (B) that, after the Redemption Date, this Warrant shall entitle the
holder upon exercise only to Warrant Share(s) and not to any Underlying
Warrant(s) (in the event this Warrant has not been exercised prior to the
Redemption Date) and (iv) that the right to exercise the Underlying Warrant
shall terminate at 5:00 p.m. (New York time) on the business day immediately
preceding the Redemption Date. No failure to mail such notice nor any defect
therein or in the mailing thereof shall affect the validity of the proceedings
for such redemption except as to a holder (a) to whom notice was not mailed or
(b) whose notice was defective. An affidavit of the Warrant Register or the
Secretary or Assistant Secretary of the Corporation that notice of redemption
has been mailed shall, in the absence of fraud, be prima facie evidence of the
facts stated therein.
(d) Any right to exercise the Underlying Warrant shall terminate at
5:00 p.m. (New York time) on the business day immediately preceding the
Redemption Date. The redemption price payable to the Registered Holder of the
Underlying Warrant shall be mailed to such person at such person's address of
record in the Warrant Register.
9. Governing Law. This Warrant shall be governed by and construed in
accordance with the laws of the State of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this Warrant to be executed
by its duly authorized officer on the date first above written.
HOLLIS EDEN PHARMACEUTICALS
By: /s/ Richard B. Hollis
--------------------------
Richard B. Hollis
Chairman and CEO
Annex A
Neither this Warrant nor the shares of Common Stock
issuable upon exercise of this Warrant have been
registered under the Securities Act of 1933, as amended
(the "Securities Act"), or any applicable state
securities law and this Warrant cannot be sold or
transferred, and the shares of Common Stock issuable
upon exercise of this Warrant cannot be sold or
transferred, unless and until they are so registered or
unless such registration is not then required under the
circumstances of such sale or transfer.
No. WQ - Warrant to Purchase an aggregate of
Dated: ___________ ____________ shares of Common Stock
INITIAL ACQUISITION CORP.
WARRANT
Exercisable on or before 5:00 P.M., May 15, 2000
(unless extended)
This certifies that, for value received,__________ , the registered holder
hereof ("Holder"), is entitled, subject to the terms and conditions hereof, to
purchase from INITIAL ACQUISITION CORP., a Delaware corporation (the
"Corporation"), at any time or from time to time during the period specified in
Section 1 hereof, up to shares of common stock, par value $.O1 per share
(the "Common Stock"), of the Corporation. The shares of Common Stock purchasable
upon exercise of this Warrant are collectively referred to herein as the
"Warrant Shares." The Warrant Shares shall be purchasable at a price (the
"Exercise Price") per share as determined pursuant to Section 7 hereof. The
number of Warrant Shares issuable upon exercise of this Warrant is subject to
adjustment as provided in Section 7 below. As used herein, the term "Warrant"
shall include this Warrant and any warrants delivered in substitution or
exchange herefor as provided herein.
l. Term of Warrant; Exercise Period.
Subject to the terms and conditions set forth herein, this Warrant
shall be exercisable, in whole or in part (but not as to fractional shares),
during the period commencing upon the consummation of a Business Combination by
the Corporation and, unless extended by the Corporation, ending at 5:00 p.m.,
Eastern
Time, on May 15, 2000, (the "Exercise Period"), and shall be void thereafter.
Exercise of this Warrant, in whole or in part (but not as to fractional shares),
during the Exercise Period shall be made in accordance with provisions of
Section 2(a) hereof. For purposes hereof, a Business Combination shall be deemed
to be a merger, exchange of capital stock, asset acquisition or other business
combination involving the Corporation, all as more fully set forth in the
Prospectus of the Corporation dated May 15, 1995.
2. Exercise of Warrant. (a) This Warrant may be exercised by the Holder,
in whole or in part, at the Exercise Price, at any time during the Exercise
Period in accordance with Section 1 hereof, by mailing or otherwise delivering
this Warrant, along with an Exercise Notice in the form attached hereto as Annex
A duly executed by the Holder (or the Holder's duly authorized attorney or
representative) and payment of the Exercise Price for the Warrant Shares to be
purchased, to the address of the Corporation.
(b) Payment for the Warrant Shares to be purchased shall be made (i)
in cash or by check, (ii) by cancellation by the Holder of indebtedness of the
Corporation to the Holder or (iii) by a combination of (i) and (ii).
(c) In the event this Warrant is exercised for less than all of the
Warrant Shares purchasable hereunder, the Corporation will, upon surrender of
this Warrant to the Corporation, execute and deliver a new Warrant of like tenor
and exercisable for the balance of the Warrant Shares for which this Warrant may
then be exercised.
(d) This Warrant shall be deemed to have been exercised immediately
prior to the close of business on the date of its surrender for exercise as
provided above, and the Holder entitled to receive Warrant Shares issuable upon
exercise shall be treated for all purposes as the holder of record of such
shares as of the close of business on such date.
3. Replacement of Warrant. On receipt of evidence of the loss, theft,
destruction or mutilation of this Warrant and, in the case of loss, theft or
destruction, on delivery of indemnity and/or security reasonably satisfactory to
the Corporation or, in the case of mutilation, on surrender and cancellation of
this Warrant, the Corporation shall execute and deliver a new Warrant of like
tenor in substitution hereof.
4. No Rights as Stockholders. Nothing contained in this Warrant shall be
construed so as to confer upon the Holder of this Warrant, in its capacity as
such, any right to vote for the election of directors or upon any other matter
submitted to stockholders of the Corporation at any meeting thereof, or to give
or withhold consent to any corporate action, or to receive notice
of meetings, or to receive dividends or subscription rights, or any other rights
or privileges of a stockholder of the Corporation, until the Warrant shall have
been exercised as provided herein.
5. Transfer of Warrant.
(a) Restriction on Transferability of Warrant. Neither this Warrant
nor any rights of the Holder hereof may be transferred or assigned, in whole or
in part, except with the prior written consent of the Corporation.
(b) Exchange of Warrant Upon Transfer. If this Warrant is presented
for transfer in accordance with the terms hereof, it shall be surrendered by the
Holder at the office of the Corporation and accompanied by an assignment in form
and substance reasonably satisfactory to the Corporation, duly executed by the
Holder or the Holder's duly authorized attorney or representative. On surrender
of this Warrant for transfer, the Corporation shall issue a new warrant to the
Holder's transferee (if transferred in whole) , or to the Holder and Holder's
transferee, as appropriate (if transferred in part), for the number of shares
then issuable upon exercise hereof.
(c) Warrant Register. The Corporation will maintain a register (the
"Warrant Register") containing the names and addresses of the Holder and the
holders of other warrants issued by the Corporation. The Holder of this Warrant
may change its address shown on the Warrant Register by written notice to the
Corporation requesting such change. Until this Warrant is transferred on the
Warrant Register of the Corporation, the Corporation shall be entitled to treat
the registered holder as shown on the Warrant Register as the owner of this
Warrant for all purposes, notwithstanding any notice to the contrary, and shall
not be bound to recognize any equitable or other claim to or interest in such
Warrant on the part of any other person.
6. Reservation of Stock. The Corporation covenants that until the
expiration of this Warrant, the Corporation will keep reserved 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 this Warrant, as
such number may vary from time to time. The Corporation further covenants that
all shares that may be issued upon exercise of this Warrant, upon payment of the
Exercise Price in accordance with the terms hereof, will be duly authorized,
validly issued, and fully paid and nonassessable.
7. Exercise Price. The Exercise Price for each Warrant Share purchasable
pursuant to this Warrant shall be nine dollars ($9.00) per Warrant Share
purchased. The Exercise Price shall be subject to adjustment from time to time
as hereinafter provided (such price, or the price as last adjusted, also being
referred to
herein as the "Exercise Price"). Upon each adjustment of the Exercise Price, the
Holder shall thereafter be entitled to purchase, at the Exercise Price resulting
from such adjustment, the number of Warrant Shares obtained by multiplying the
Exercise Price in effect immediately prior to such adjustment by the number of
shares purchasable upon exercise of this Warrant immediately prior to such
adjustment, and dividing the product thereof by the Exercise Price resulting
from such adjustment.
(a) Subdivision or Combination of Stock. In case the Corporation
shall at any time subdivide its outstanding shares of Common Stock into a
greater number of shares by way of stock split, stock dividend or similar event,
the Exercise Price in effect immediately prior to such subdivision shall be
proportionately reduced, and conversely, in case the outstanding shares of
Common Stock shall be combined into a smaller number of shares by way of reverse
stock split or similar event, the Exercise Price in effect immediately prior to
such combination shall be proportionately increased.
(b) Reorganization, Reclassification, Consolidation, Merger or
Sale. If any capital reorganization or reclassification of the capital stock of
the Corporation, any consolidation or merger of the Corporation with another
entity, or the sale of all or substantially all of the Corporation's assets to
another entity shall be effected in such a way that holders of Common Stock
shall be entitled to receive stock, securities or assets with respect to or in
exchange for Common Stock, then, as a condition of such reorganization,
reclassification, consolidation, merger or sale, lawful and adequate provisions
shall be made whereby the Holder shall thereafter have the right to purchase and
receive upon the basis and the terms and conditions specified in this Warrant
and in lieu of the shares of Common Stock immediately theretofore purchasable
and receivable upon the exercise of the rights represented hereby, 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 Common Stock immediately theretofore
purchasable and receivable upon the exercise of the rights represented hereby
had such reorganization, reclassification, consolidation, merger or sale not
taken place and in any such case appropriate provision shall be made with
respect to the rights and interests of the Holder of this Warrant to the end
that the provisions hereof (including, without limitation, provisions for
adjustments of the Exercise Price and of the number of shares of Common Stock
purchasable and receivable upon the exercise of this Warrant) shall thereafter
be applicable, as nearly as may be, in relation to any shares of stock,
securities or assets thereafter deliverable upon the exercise hereof. The
Corporation will not effect any such consolidation, merger or sale, unless prior
to the consummation thereof, the successor corporation (if other than the
Corporation) resulting from such consolidation or merger or the
corporation purchasing such assets shall assume by written instrument, executed
and mailed or delivered to the Holder at the last address thereof appearing on
the books of the Corporation, the obligation to deliver to such holder such
shares of stock, securities or assets as, in accordance with the foregoing
provisions, such holder may be entitled to purchase.
(c) No Adjustment for First Business Combination. No adjustment
of Exercise Price shall be made as a result of or in connection with (i) the
issuance or sale of shares of Common Stock pursuant to options, warrants, stock
purchase agreements and convertible or exchangeable securities outstanding or in
effect on the date hereof or granted upon the consummation of and in connection
with the first Business Combination, or (ii) the issuance or sale of shares of
Common Stock if the amount of said adjustment shall be less than $.10, provided,
however, that in such case, any adjustment that would otherwise be required then
to be made shall be carried forward and shall be made at the time of and
together with the next subsequent adjustment that shall amount, together with
any adjustment so carried forward, to at least $.10.
(d) Notice of Adjustment. Upon any adjustment of the Exercise
Price and/or number of Warrant Shares, then and in each such case the
Corporation shall give written notice thereof, by first class mail, postage
prepaid, addressed to the Holder at the address thereof as shown on the books of
the Corporation. The notice shall state the Exercise Price and/or number of
Warrant Shares resulting from such adjustment, setting forth in reasonable
detail the method of calculation and the facts upon which such calculation is
based.
(e) No Change of Warrant. The form of this Warrant need not be
changed because of any adjustment in number and kind of Warrant Shares
purchasable hereunder pursuant to this Section 7. Any Warrant issued after any
such adjustment upon any partial exercise or upon replacement or transfer may
continue to express the same terms as are stated in this Warrant as initially
issued, and the number and kind of Warrant Shares purchasable hereunder shall be
considered to have been so changed as to the close of business on the date or
dates of adjustment.
8. Redemption.
(a) Commencing on the date that the Company consummates a
Business Combination (the "Initial Redemption Date"), the Company may, on 30
days prior written notice, redeem this Warrant at $.05 per Warrant, provided
that the last sale price of Common Stock, if the Common Stock is listed for
trading on an exchange or interdealer quotation system which provides last sale
prices, or, the average of the closing bid and asked quotes, if the Common Stock
is listed for trading on an inter-dealer quotation system which does
not provide last sale prices, on all 10 of the trading days ending on the day
immediately prior to the day on which the Company gives notice of redemption,
has been $11.00 higher.
(b) In case the Company shall exercise its right to redeem this
Warrant, it shall give or cause to be given notice to the Registered Holder of
this as of the Initial Redemption Date, by mailing to such Registered Holder a
notice of redemption, first class, postage prepaid, at such holder's last
address as shall appear on the records of the Warrant Register. Any notice
mailed in the manner provided herein shall be conclusively presumed to have been
duly given whether or not the Registered Holder receives such notice.
(c) The notice of redemption shall specify (i) the redemption
price, (ii) the date fixed for redemption, which shall in no event be less that
30 days after the date of mailing of such notice, (iii) the place where the
Warrant Certificate shall be delivered and the redemption price shall be paid
and (iv) that the right to exercise the Warrant shall terminate at 5:00 p.m.
(New York time) on the business day immediately preceding the Redemption Date.
No failure to mail such notice nor any defect therein or in the mailing thereof
shall affect the validity of the proceedings for such redemption except as to a
holder (a) to whom notice was not mailed or (b) whose notice was defective. An
affidavit of the Warrant Register or the Secretary or Assistant Secretary of the
Company that notice of redemption has been mailed shall, in the absence of
fraud, be prima facie evidence of the facts stated therein.
(d) Any right to exercise this Warrant shall terminate at 5:00
p.m. (New York time) on the business day immediately preceding the Redemption
Date. The redemption price payable to the Registered Holder shall be mailed to
such person at such person's address of record in the Warrant Register.
9. Governing Law. This Warrant shall be governed by and construed in
accordance with the laws of the State of Delaware. IN WITNESS WHEREOF, the
Corporation has caused this Warrant to be executed by its duly authorized
officer on the date first above written.
INITIAL ACQUISITION CORP.
By:______________________________________
Name: Salvatore J. Zizza
Title: President
Annex A
EXERCISE NOTICE
The undersigned hereby elects to exercise the right to purchase shares
of Common Stock of Initial Acquisition Corp., covered by this Warrant in
accordance with the terms and conditions hereof. The undersigned herewith makes
payment of the Exercise Price of such Warrant Shares in full in the following
manner:
( ) Cash in the amount of $___________ ,
( ) Check, bank draft or money order payable to the order of
"Initial Acquisition Corp." in the amount of $________________ and/or
( ) Discharge of Indebtedness in principal amount of $_________ ,
due to the Holder pursuant to ___________________________.
Dated: ______________________
________________________
Holder
By:_____________________
Name:
Title:
Social Security Number or
Taxpayer's Identification
Number
Annex B
EXERCISE NOTICE
The undersigned hereby elects to exercise the right to purchase
_______ shares of Common Stock of Initial Acquisition Corp. covered by this
Warrant in accordance with the terms and conditions hereof. The undersigned
herewith makes payment of the Exercise Price of such Warrant Shares in full in
the following manner:
( ) Cash in the amount of $______________________,
( ) Check, bank draft or money order payable to the order of "Initial
Acquisition Corp. " in the amount of $____________ , and/or
( ) Discharge of Indebtedness in principal amount of $______, due to the
Holder pursuant to __________________
Dated: _________________________
_________________________
Holder
By:______________________
Name:
Title:
__________________________
Social Security Number or
Taxpayer's Identification
Number