THE REGISTERED HOLDER OF THIS WARRANT, BY ITS ACCEPTANCE
HEREOF, AGREES THAT IT WILL NOT SELL, TRANSFER OR ASSIGN
THIS WARRANT EXCEPT AS HEREIN PROVIDED.
VOID AFTER 5:00 P.M. EASTERN TIME, __________ , 2002
FORM OF WARRANT
For the Purchase of
__________ Shares of Common Stock
of
AMERICAN BIOGENETIC SCIENCES, INC.
1. Warrant.
THIS CERTIFIES THAT, in consideration of _______ and other good and
valuable consideration, duly paid by or on behalf of __________ ("Holder"), as
registered owner of this Warrant, to American Biogenetic Sciences, Inc.
("Company"), Holder is entitled, at any time or from time to time at or after
the dates set forth in the vesting schedule set forth below (each a
"Commencement Date"), and at or before 5:00 p.m., Eastern Time __________, 2002
("Expiration Date"), but not thereafter, to subscribe for, purchase and receive,
in whole or in part, up to _____________________________________________________
shares of Class A Common Stock of the Company ("Common Stock"). If the
Expiration Date is a day on which banking institutions are authorized by law to
close, then this Warrant may be exercised on the next succeeding day which is
not such a day in accordance with the terms herein. During the period ending on
the Expiration Date, the Company agrees not to take any action that would
terminate the Warrant. This Warrant is initially exercisable at a price per
share of Common Stock as follows: _______ with respect to ________ shares of
Common Stock, _______ with respect to _______ shares of Common Stock, and of
______ with respect to ______ shares of Common Stock; provided, however, that
upon the occurrence of any of the events specified in Section 6 hereof, the
rights granted by this Warrant, including the applicable exercise price and the
number of shares of Common Stock to be received upon such exercise, shall be
adjusted as therein specified. The term "Exercise Price" shall mean the initial
applicable exercise price or the adjusted applicable exercise price, depending
on the context, of a share of Common Stock. The term "Securities" shall mean the
shares of Common Stock issuable upon exercise of this Warrant.
This Warrant shall be exercisable in three installments as follows: (i)
this Warrant insofar as it represents the right to purchase _______ shares at
____ per share shall be exercisable as of the date hereof; (ii) this Warrant
insofar as it represents the right to purchase _______ shares at ______ per
share shall become exercisable, subject to the further provisions of this
paragraph, on the seventh month anniversary of the date hereof; and (iii) this
Warrant insofar as it represents the right to purchase _______ shares at _______
per share shall become exercisable, subject to the further provisions of this
paragraph, on the thirteenth month anniversary of the date hereof. Once an
installment shall become exercisable, it shall be deemed vested and fully earned
and may not
be terminated prior to the Expiration Date. This Warrant is one of a series of
similar Warrants representing the right to purchase in the aggregate ________
shares of Common Stock and has been issued in connection with a Financial
Advisory Agreement, dated as of August 13, 1998, between the Company and M.H.
Meyerson & Co., Inc. ("MHM"). That agreement provides that either the Company or
MHM may terminate the engagement by the Company of MHM thereunder upon 30 days'
prior written notice. If that agreement is terminated by either party, then,
effective upon such termination, all installments under this Warrant that have
not yet become exercisable as of the effective date of such termination, shall
expire and shall become null and void. Such termination, however, shall have no
effect on that portion of the Warrant that has become exercisable and vested
prior to the termination of such agreement.
2. Exercise.
2.1 Exercise Form. In order to exercise this Warrant, the exercise form
attached hereto must be duly executed and completed and delivered to the
Company, together with this Warrant and payment of the Exercise Price for the
Securities being purchased. If the subscription rights represented hereby shall
not be exercised at or before 5:00 p.m., Eastern time, on the Expiration Date,
this Warrant shall become and be void without further force or effect, and all
rights represented hereby shall cease and expire.
2.2 Legend. Each certificate for Securities purchased under this
Warrant shall bear a legend as follows, unless such Securities have been
registered under the Securities Act of 1933, as amended ("Act"):
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended ("Act") or
applicable state law. The securities may not be offered for sale, sold
or otherwise transferred except pursuant to an effective registration
statement under the Act, or pursuant to an exemption from registration
under the Act and applicable state law."
2.3 Conversion Right.
2.3.1 Determination of Amount. In lieu of the payment of the
Exercise Price in cash, the Holder shall have the right (but not the obligation)
to convert any portion of this Warrant that has become exercisable, in whole or
in part, into Common Stock ("Conversion Right"), as follows: upon exercise of
the Conversion Right, the Company shall deliver to the Holder (without payment
by the Holder of any of the Exercise Price) that number of shares of Common
Stock equal to the quotient obtained by dividing (x) the "Value" (as defined
below) of the portion of the Warrant being converted at the time the Conversion
Right is exercised by (y) the Market Price. The "Value" of the portion of the
Warrant being converted shall equal the remainder derived from subtracting (a)
the Exercise Price multiplied by the number of shares of Common Stock underlying
the portion of the Warrant being converted from (b) the Market Price of the
Common Stock multiplied by the number of shares of Common Stock underlying the
portion of the Warrant being converted. As used herein, the term "Market Price"
at any date shall be deemed to be the last reported sale price of the Common
Stock on such date, or, in case no such reported sale takes place on such day,
the average of the last reported sale prices for the immediately preceding three
trading days, in either case as officially reported by the principal securities
exchange on which the Common Stock is listed or admitted to trading, or, if the
Common Stock is not listed or admitted to trading on any national securities
exchange or if any such exchange on which the Common Stock is listed is not its
principal trading market, the
last reported sale price as furnished by the National Association of Securities
Dealers, Inc. ("NASD") through the Nasdaq National Market or SmallCap Market,
or, if applicable, the OTC Bulletin Board, or if the Common Stock is not listed
or admitted to trading on any of the foregoing markets, or similar organization,
as determined in good faith by resolution of the Board of Directors of the
Company, based on the best information available to it.
2.3.2 Exercise of Conversion Right. The Conversion Right may
be exercised by the Holder on any business day on or after the Commencement Date
with respect to that portion of the Warrant to be converted and not later than
the Expiration Date by delivering the Warrant with a duly executed exercise form
attached hereto with the conversion section completed to the Company, exercising
the Conversion Right and specifying the total number of shares of Common Stock
the Holder will purchase pursuant to such conversion.
3. Transfer.
3.1 General Restrictions. The registered Holder of this Warrant, by its
acceptance hereof, agrees that it will not sell, transfer or assign or
hypothecate this Warrant to anyone except upon compliance with, or pursuant to
exemptions from, applicable securities laws. In order to make any permitted
assignment, the Holder must deliver to the Company the assignment form attached
hereto duly executed and completed, together with this Warrant and payment of
all transfer taxes, if any, payable in connection therewith. The Company shall
immediately transfer this Warrant on the books of the Company and shall execute
and deliver a new Warrant or Warrants of like tenor to the appropriate
assignee(s) expressly evidencing the right to purchase the aggregate number of
shares of Common Stock purchasable hereunder or such portion of such number as
shall be contemplated by any such assignment.
3.2 Restrictions Imposed by the Securities Act. This Warrant and the
Securities underlying this Warrant shall not be transferred unless and until (i)
the Company has received the opinion of counsel for the Holder that such
securities may be sold pursuant to an exemption from registration under the Act,
and applicable state law, the availability of which is established to the
reasonable satisfaction of the Company, or (ii) a registration statement
relating to such Securities has been filed by the Company and declared effective
by the Securities and Exchange Commission and compliance with applicable state
law.
4. New Warrants to be Issued.
4.1 Partial Exercise or Transfer. Subject to the restrictions in
Section 3 hereof, this Warrant may be exercised or assigned in whole or in part.
In the event of the exercise or assignment hereof in part only, upon surrender
of this Warrant for cancellation, together with the duly executed exercise or
assignment form and funds (or conversion equivalent) sufficient to pay any
Exercise Price and/or transfer tax, the Company shall cause to be delivered to
the Holder without charge a new Warrant of like tenor to this Warrant in the
name of the Holder evidencing the right of the Holder to purchase the aggregate
number of shares of Common Stock and Warrants purchasable hereunder as to which
this Warrant has not been exercised or assigned.
4.2 Lost Certificate. Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant
and of reasonably satisfactory indemnification, the Company shall execute and
deliver a new Warrant of like tenor and date. Any such new Warrant executed and
delivered as a result of such loss, theft, mutilation or destruction shall
constitute a substitute contractual obligation on the part of the Company.
3
5. Registration Rights.
5.1 Demand Registration.
5.1.1 Grant of Right. The Company, upon written demand
("Initial Demand Notice") of the Holder(s) of at least 51% of the Warrants
comprising this series of similar warrants and/or the 400,000 underlying shares
of Common Stock ("Majority Holders"), agrees to register on one occasion, all or
any portion of the Warrants requested by the Majority Holders in the Initial
Demand Notice and all of the Common Stock underlying the Warrants (collectively
the "Registrable Securities"). On such occasion, the Company will file a
Registration Statement covering the Registrable Securities within thirty days
after receipt of the Initial Demand Notice and use its best efforts to have such
registration statement declared effective promptly thereafter. If the Company
fails to comply with the provisions of this Section 5.1.1, the Company shall, in
addition to any other equitable or other relief available to the Holder(s), be
liable for any and all incidental, special and consequential damages sustained
by the Holder(s). The demand for registration may be made at any time during a
period of six years commencing on the date hereof. The Company covenants and
agrees to give written notice of its receipt of any Initial Demand Notice by any
Holder(s) to all other registered Holders of the Warrants and/or the Registrable
Securities within ten days from the date of the receipt of any such Initial
Demand Notice.
5.1.2 Terms. The Company shall bear all fees and expenses
attendant to registering the Registrable Securities, including all filing fees
payable to the National Association of Securities Dealers, Inc. but the Holders
shall pay any and all underwriting commissions and the expenses of any legal
counsel selected by the Holders to represent them in connection with the sale of
the Registrable Securities. The Company agrees to use its best efforts to cause
the filing required herein to become effective promptly and to qualify or
register the Registrable Securities in such states as are reasonably requested
by the Holder(s); provided, however, that in no event shall the Company be
required to register the Registrable Securities in a state in which such
registration would cause (i) the Company to be obligated to register or license
to do business in such state, or (ii) the principal stockholders of the Company
to be obligated to escrow their shares of capital stock of the Company. The
Company shall cause any registration statement filed pursuant to the demand
rights granted under Section 5.1.1 to remain effective until all of the
Registrable Securities covered by such registration statement have been sold or
are eligible for resale without restriction pursuant to Rule 144(k).
5.2 "Piggy-Back" Registration.
5.2.1 Grant of Right. The Holder of this Warrant shall have
the right for a period of six years commencing on January 1, 1999 to include the
Registrable Securities as part of any registration of securities filed by the
Company (other than in connection with a transaction contemplated by Rule 145(a)
promulgated under the Act or pursuant to Form S-8 or any equivalent form);
provided, however, that if, in the written opinion of the Company's managing
underwriter or underwriters, if any, for such offering (the "Underwriter"), the
inclusion of the Registrable Securities, when added to the securities being
registered by the Company or the selling stockholder(s), will exceed the maximum
amount of the Company's securities which can be marketed (i) at a price
reasonably related to their then current market value, or (ii) without
materially and adversely affecting the entire offering, the Company shall
nevertheless register all or any portion of the Registrable Securities required
to be so registered but such Registrable
4
Securities shall not be sold by the Holders until 90 days after the registration
statement for such offering has become effective; and provided further that, if
any securities are registered for sale on behalf of other stockholders in such
offering and such stockholders have not agreed to defer such sale until the
expiration of such 90 day period, the number of securities to be sold by all
stockholders in such public offering during such 90 day period shall be
apportioned pro rata among all such selling stockholders, including all holders
of the Registrable Securities, according to the total amount of securities of
the Company proposed to be sold by said selling stockholders, including all
holders of the Registrable Securities.
5.2.2 Terms. The Company shall bear all fees and expenses
attendant to registering the Registrable Securities, including any filing fees
payable to the National Association of Securities Dealers, Inc., but the Holders
shall pay any and all underwriting commissions and the expenses of any legal
counsel selected by the Holders to represent them in connection with the sale of
the Registrable Securities. In the event of such a proposed regis tration, the
Company shall furnish the then Holders of outstanding Registrable Securities
with not less than thirty days written notice prior to the proposed date of
filing of such registration statement. Such notice to the Holders shall continue
to be given for each registration statement filed by the Company until such time
as all of the Registrable Securities have been sold by the Holder. The holders
of the Registrable Securities shall exercise the "piggy-back" rights provided
for herein by giving written notice, within twenty days of the receipt of the
Company's notice of its intention to file a registration statement. The Company
shall cause any registration statement filed pursuant to the above "piggyback"
rights to remain effective until all Registrable Securities thereunder have been
sold, or are freely saleable, without restriction, under an exemption from the
registration requirements. Nothing contained in this Warrant shall be construed
as requiring any Holder to exercise this Warrant or any part thereof prior to
the initial filing of any registration statement or the effectiveness thereof.
5.3 General Terms
5.3.1 Indemnification.
(a) The Company shall indemnify the Holder(s) of the
Registrable Securities to be sold pursuant to any registration statement
hereunder and any underwriter or person deemed to be an underwriter under the
Act and each person, if any, who controls such Holders or underwriters or
persons deemed to be underwriters within the meaning of Section 15 of the Act or
Section 20(a) of the Securities Exchange Act of 1934, as amended ("Exchange
Act"), against all loss, claim, damage, expense or liability (including all
reasonable attorneys' fees and other expenses reasonably incurred in
investigating, preparing or defending against any claim whatsoever) to which any
of them may become subject under the Act, the Exchange Act or otherwise, arising
from such registration statement. The Holder(s) of the Registrable Securities to
be sold pursuant to such registration statement, and their successors and
assigns, shall severally, and not jointly, indemnify the Company, against all
loss, claim, damage, expense or liability (including all reasonable attorneys'
fees and other expenses reasonably incurred in investigating, preparing or
defending against any claim whatsoever) to which they may become subject under
the Act, the Exchange Act or otherwise, arising from information furnished by or
on behalf of such Holders, in writing, for specific inclusion in such
registration statement.
(b) If any action is brought against a party hereto,
("Indemnified Party") in respect of which indemnity may be sought against the
other party ("Indemnifying Party"), such Indemnified Party shall promptly notify
Indemnifying Party in writing of the institution of such
5
action and Indemnifying Party shall assume the defense of such action, including
the employment and fees of counsel reasonably satisfactory to the Indemnified
Party. Such Indemnified Party shall have the right to employ its or their own
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of such Indemnified Party unless (i) the employment of such counsel
shall have been authorized in writing by Indemnifying Party in connection with
the defense of such action, or (ii) Indemnifying Party shall not have employed
counsel to defend such action, or (iii) such Indemnified Party shall have been
advised by counsel that there may be one or more legal defenses available to it
which may result in a conflict between the Indemnified Party and Indemnifying
Party (in which case Indemnifying Party shall not have the right to direct the
defense of such action on behalf of the Indemnified Party), in any of which
events, the reasonable fees and expenses of not more than one additional firm of
attorneys designated in writing by the Indemnified Party shall be borne by
Indemnifying Party. Notwithstanding anything to the contrary contained herein,
if Indemnified Party shall assume the defense of such action as provided above,
Indemnifying Party shall not be liable for any settlement of any such action
effected without its written consent.
(c) If the indemnification or reimbursement provided
for hereunder is finally judicially determined by a court of competent
jurisdiction to be unavailable to an Indemnified Party (other than as a
consequence of a final judicial determination of willful misconduct, bad faith
or gross negligence of such Indemnified Party), then Indemnifying Party agrees,
in lieu of indemnifying such Indemnified Party, to contribute to the amount paid
or payable by such Indemnified Party (i) in such proportion as is appropriate to
reflect the relative benefits received, or sought to be received, by
Indemnifying Party on the one hand and by such Indemnified Party on the other or
(ii) if (but only if) the allocation provided in clause (i) of this sentence is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in such clause (i) but also the
relative fault of Indemnifying Party and of such Indemnified Party; provided,
however, that in no event shall the aggregate amount contributed by a Holder
exceed the profit, if any, earned by such Holder as a result of the exercise by
him of the Warrants and the sale by him of the underlying shares of Common
Stock.
(d) The rights accorded to Indemnified Parties
hereunder shall be in addition to any rights that any Indemnified Party may have
at common law, by separate agreement or otherwise.
5.3.2 Exercise of Warrants. Nothing contained in this Warrant
shall be construed as requiring the Holder(s) to exercise their Warrants prior
to or after the initial filing of any registration statement or the
effectiveness thereof.
5.3.3 Documents Delivered to Holders. The Company shall
furnish to each Holder participating in any of the foregoing offerings and to
each Underwriter of any such offering, if any, a signed counterpart, addressed
to such Holder or Underwriter, of (i) an opinion of counsel to the Company,
dated the effective date of such registration statement (and, if such
registration includes an underwritten public offering, an opinion dated the date
of the closing under any underwriting agreement related thereto), and (ii) a
"cold comfort" letter dated the effective date of such registration statement
(and, if such registration includes an underwritten public offering, a letter
dated the date of the closing under the underwriting agreement) signed by the
independent public accountants who have issued a report on the Company's
financial statements included in such registration statement, in each case
covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) and,
6
in the case of such accountants' letter, with respect to events subsequent to
the date of such financial statements, as are customarily covered in opinions of
issuer's counsel and in accountants' letters delivered to underwriters in
underwritten public offerings of securities. The Company shall also deliver
promptly to each Holder participating in the offering requesting the
correspondence and memoranda described below and to the managing underwriter
copies of all correspondence between the Commission and the Company, its counsel
or auditors and all memoranda relating to discussions with the Commission or its
staff with respect to the registration statement and permit each Holder and
underwriter to do such investigation, upon reasonable advance notice, with
respect to information contained in or omitted from the registration statement
as it deems reasonably necessary to comply with applicable securities laws or
rules of the NASD. Such investigation shall include access to books, records and
properties and opportunities to discuss the business of the Company with its
officers and inde pendent auditors, all to such reasonable extent and at such
reasonable times and as often as any such Holder shall reasonably request.
5.3.4 Underwriting Agreement. The Company shall enter into an
underwriting agreement with the managing underwriter(s) selected by any Holders
whose Registrable Securities are being registered pursuant to Section 5.1. Such
agreement shall be reasonably satisfactory in form and substance to the Company,
each Holder and such managing underwriters, and shall contain such
representations, warranties and covenants by the Company and such other terms as
are customarily contained in agreements of that type used by the managing
underwriter. The Holders shall be parties to any underwriting agreement relating
to an underwritten sale of their Securities and may, at their option, require
that any or all the representations, warranties and covenants of the Company to
or for the benefit of such underwriters shall also be made to and for the
benefit of such Holders. Such Holders shall not be required to make any
representations or warranties to or agreements with the Company or the
underwriters except as they may relate to such Holders, their shares and their
intended methods of distribution.
5.3.5 Documents to be Delivered by Holder(s); Cooperation.
Each of the Holder(s) participating in any of the foregoing offerings shall
furnish to the Company a completed and executed questionnaire provided by the
Company requesting information customarily sought of selling securityholders and
shall otherwise cooperate with the Company's reasonable requests.
6. Adjustments.
6.1 Adjustments to Exercise Price and Number of Securities. The
Exercise Price and the number of shares of Common Stock issuable upon exercise
of the Warrant shall be subject to adjustment from time to time as hereinafter
set forth:
6.1.1 Stock Dividends, Split-Ups. If after the date hereof,
and subject to the provisions of Section 7.2 below, the number of outstanding
shares of Common Stock is increased by a stock dividend payable in shares of
Common Stock or by a split-up of shares of Common Stock or other similar event,
then, on the effective date of such stock dividend or split-up, the number of
shares of Common Stock issuable on exercise of this Warrant shall be increased
in proportion to such increase in outstanding shares.
6.1.2 Aggregation of Shares. If after the date hereof, and
subject to the provisions of Section 7.2, the number of outstanding shares of
Common Stock is decreased by
7
a consolidation, combination or reclassification of shares of Common Stock or
other similar event, then, upon the effective date of such consolidation,
combination or reclassification, the number of shares of Common Stock issuable
on exercise of this Warrant shall be decreased in proportion to such decrease in
outstanding shares.
7. Adjustments
7.1 Adjustments to Exercise Price and Number of Securities. The
Exercise Price and the number of shares of Common Stock underlying this Warrant
shall be subject to adjustment from time to time as hereinafter set forth:
7.1.1 Stock Dividends - Split-Ups. If, after the date hereof, and
subject to the provisions of Section 7.2 below, the number of outstanding shares
of Common Stock is increased by a stock dividend on the Common Stock payable in
shares of Common Stock or by a split-up of shares of Common Stock or other
similar event, then, on the effective date thereof, the number of shares of
Common Stock issuable on exercise of this Warrant shall be increased in
proportion to such increase in outstanding shares.
7.1.2 Aggregation of Shares. If after the date hereof, and subject to
the provisions of Section 6.3, the number of outstanding shares of Common Stock
is decreased by a consolidation, combination or reclassification of shares of
Common Stock or other similar event, then, upon the effective date thereof, the
number of shares of Common Stock issuable on exercise of this Warrant shall be
decreased in proportion to such decrease in outstanding shares.
7.1.3 Adjustments in Exercise Price. Whenever the number of shares of
Common Stock purchasable upon the exercise of this Warrant is adjusted, as
provided in this Section 7.1, the Exercise Price shall be adjusted (to the
nearest cent) by multiplying such Exercise Price immediately prior to such
adjustment by a fraction (x) the numerator of which shall be the number of
shares of Common Stock purchasable upon the exercise of this Warrant immediately
prior to such adjustment, and (y) the denominator of which shall be the number
of shares of Common Stock so purchasable immediately thereafter.
7.1.4 Replacement of Securities upon Reorganization, etc. In case of
any reclassification or reorganization of the outstanding shares of Common Stock
other than a change covered by Section 7.1.1 or Section 7.1.2 hereof or which
solely affects the par value of such shares of Common Stock, or in the case of
any merger or consolidation of the Company with or into another corporation
(other than a consolidation or merger in which the Company is the continuing
corporation and which does not result in any reclassification or reorganization
of the outstanding shares of Common Stock), or in the case of any sale or
conveyance to another corporation or entity of the property of the Company as an
entirety or substantially as an entirety in connection with which the Company is
dissolved, the Holder of this Warrant shall have the right thereafter (until the
expiration of the right of exercise of this Warrant) to receive upon the
exercise hereof, for the same aggregate Exercise Price payable hereunder
immediately prior to such event, the kind and amount of shares of stock or other
securities or property (including cash) receivable upon such reclassification,
reorganization, merger or consolidation, or upon a dissolution following any
such sale or other transfer, by a Holder of the number of shares of Common Stock
of the Company obtainable upon exercise of this Warrant immediately prior to
such event; and if any reclassification also results in a change in shares of
Common Stock covered by Sections 7.1.1 or 7.1.2, then such adjustment shall be
made pursuant to Sections
8
7.1.1, 7.1.2, 7.1.3 and this Section 7.1.4. The provisions of this Section 7.1.4
shall similarly apply to successive reclassifications, reorganizations, mergers
or consolidations, sales or other transfers.
7.1.5 Changes in Form of Warrant. This form of Warrant need not be
changed because of any change pursuant to this Section, and Warrants issued
after such change may state the same Exercise Price and the same number of
shares of Common Stock and Warrants as are stated in the Warrants initially
issued pursuant to this Agreement. The acceptance by any Holder of the issuance
of new Warrants reflecting a required or permissive change shall not be deemed
to waive any rights to a prior adjustment or the computation thereof.
7.2 Elimination of Fractional Interests. The Company shall not be
required to issue certificates representing fractions of shares of Common Stock
upon the exercise of this Warrant, nor shall it be required to issue scrip or
pay cash in lieu of any fractional interests, it being the intent of the parties
that all fractional interests shall be eliminated by rounding any fraction up to
the nearest whole number of shares of Common Stock or other securities,
properties or rights.
8. Reservation and Listing. The Company shall at all times reserve and keep
available out of its authorized shares of Common Stock, solely for the purpose
of issuance upon exercise of this Warrant, such number of shares of Common Stock
or other securities, properties or rights as shall be issuable upon the exercise
thereof. The Company covenants and agrees that, upon exercise of the Warrants
and payment of the Exercise Price therefor, all shares of Common Stock and other
securities issuable upon such exercise shall be duly and validly issued, fully
paid and non-assessable and not subject to preemptive rights of any stockholder.
As long as the Warrants shall be outstanding, the Company shall use its best
efforts to cause all shares of Common Stock issuable upon exercise of the
Warrants to be listed (subject to official notice of issuance) on all securities
exchanges (or, if applicable on Nasdaq) on which the Common Stock is then listed
and/or quoted.
9. Certain Notice Requirements.
9.1 Holder's Right to Receive Notice. Nothing herein shall be construed
as conferring upon the Holders the right to vote or consent or to receive notice
as a stockholder for the election of directors or any other matter, or as having
any rights whatsoever as a stockholder of the Company. If, however, at any time
prior to the expiration of the Warrants and their exercise, any of the events
described in Section 9.2 shall occur, then, in one or more of said events, the
Company shall give written notice of such event at least fifteen days prior to
the date fixed as a record date or the date of closing the transfer books for
the determination of the stockholders entitled to such dividend, distribution,
conversion or exchange of securities or subscription rights, or entitled to vote
on such proposed dissolution, liquidation, winding up or sale. Such notice shall
specify such record date or the date of the closing of the transfer books, as
the case may be.
9.2 Events Requiring Notice. The Company shall be required to give the
notice described in this Section 9 upon one or more of the following events: (i)
if the Company shall take a record of the holders of its shares of Common Stock
for the purpose of entitling them to receive a dividend or distribution, or (ii)
the Company shall offer to all the holders of its Common Stock any additional
shares of capital stock of the Company or securities convertible into or
exchangeable for shares of capital stock of the Company, or any option, right or
warrant to subscribe therefor, or (iii) a merger or reorganization in which the
Company is not the surviving
9
party, or (iv) a dissolution, liquidation or winding up of the Company (other
than in connection with a consolidation or merger) or a sale of all or
substantially all of its property, assets and business shall be proposed.
9.3 Notice of Change in Exercise Price. The Company shall, promptly
after an event requiring a change in the Exercise Price pursuant to Section 6
hereof, send notice to the Holders of such event and change ("Price Notice").
The Price Notice shall describe the event causing the change and the method of
calculating same and shall be certified as being true and accurate by the
Company's President and Chief Financial Officer.
9.4 Transmittal of Notices. All notices, requests, consents and other
communications under this Warrant shall be in writing and shall be deemed to
have been duly made on the date of delivery if delivered personally or sent by
overnight courier, with acknowledgment of receipt by the party to which notice
is given, or on the fifth day after mailing if mailed to the party to whom
notice is to be given, by registered or certified mail, return receipt
requested, postage prepaid and properly addressed as follows: (i) if to the
registered Holder of this Warrant, to the address of such Holder as shown on the
books of the Company, or (ii) if to the Company, to its principal executive
office.
10. Miscellaneous.
10.1 Headings. The headings contained herein are for the sole purpose
of convenience of reference, and shall not in any way limit or affect the
meaning or interpretation of any of the terms or provisions of this Warrant.
10.2 Entire Agreement. This Warrant (together with the other agreements
and documents being delivered pursuant to or in connection with this Warrant)
constitutes the entire agreement of the parties hereto with respect to the
subject matter hereof, and supersedes all prior agreements and understandings of
the parties, oral and written, with respect to the subject matter hereof.
10.3 Binding Effect. This Warrant shall inure solely to the benefit of
and shall be binding upon, the Holder and the Company and their respective
successors, legal representatives and assigns, and no other person shall have or
be construed to have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Warrant or any provisions herein contained.
10.4 Governing Law; Submission to Jurisdiction. This Warrant shall be
governed by and construed and enforced in accordance with the law of the State
of New York, without giving effect to conflict of laws. The Company hereby
agrees that any action, proceeding or claim against it arising out of, or
relating in any way to this Warrant shall be brought and enforced in the courts
of the State of New York or of the United States of America for the Southern
District of New York, and irrevocably submits to such jurisdiction, which
jurisdiction shall be exclusive. The Company hereby waives any objection to such
exclusive jurisdiction and that such courts represent an inconvenient forum. Any
process or summons to be served upon the Company may be served by transmitting a
copy thereof by registered or certified mail, return receipt requested, postage
prepaid, addressed to it at the address set forth in Section 8 hereof. Such
mailing shall be deemed personal service and shall be legal and binding upon the
Company in any action, proceeding or claim. The Company agrees that the
prevailing party(ies) in any such action shall be entitled to recover from the
other party(ies) all of its reasonable attorneys' fees
10
and expenses relating to such action or proceeding and/or incurred in connection
with the preparation therefor.
10.5 Waiver, Etc. The failure of the Company or the Holder to at any
time enforce any of the provisions of this Warrant shall not be deemed or
construed to be a waiver of any such provision, nor to in any way affect the
validity of this Warrant or any provision hereof or the right of the Company or
any Holder to thereafter enforce each and every provision of this Warrant. No
waiver of any breach, non-compliance or non-fulfillment of any of the provisions
of this Warrant shall be effective unless set forth in a written instrument
executed by the party or parties against whom or which enforcement of such
waiver is sought; and no waiver of any such breach, non-compliance or
non-fulfillment shall be construed or deemed to be a waiver of any other or
subsequent breach, non-compliance or non-fulfillment.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer as of the 13th day of August, 1998.
AMERICAN BIOGENETIC, SCIENCES, INC.
By:
Print Name:
Print Title:
11
Form to be used to exercise Warrant:
American Biogenetic Sciences, Inc.
1275 Akron Street
Copaigue, New York 11726
Date: _____________________, 19___
The undersigned hereby elects irrevocably to exercise the
within Warrant and to purchase ________ shares of Common Stock of
_________________________ and hereby makes payment of $____________ (at the rate
of $_________ per share of Common Stock) in payment of the Exercise Price
pursuant thereto. Please issue the Common Stock as to which this Warrant is
exercised in accordance with the instructions given below.
--------------------------------------
Signature
- - ---------------------------
Signature Guaranteed
NOTICE: The signature to this form must correspond with the
name as written upon the face of the within Warrant in every particular without
alteration or enlargement or any change whatsoever, and must be guaranteed by a
bank, other than a savings bank, or by a trust company or by a firm having
membership on a registered national securities exchange.
INSTRUCTIONS FOR REGISTRATION OF SECURITIES
Name ________________________________________________________
(Print in Block Letters)
Address ________________________________________________________
Form to be used to assign Warrant:
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ASSIGNMENT
(To be executed by the registered Holder to effect a transfer
of the within Warrant):
FOR VALUE RECEIVED, ________________________________ does
hereby sell, assign and transfer unto _________________________________ the
right to purchase _____________________ shares of Common Stock of
_________________________________ ("Company") evidenced by the within Warrant
and does hereby authorize the Company to transfer such right on the books of the
Company.
Dated:____________________, 19___
--------------------------------------
Signature
NOTICE: The signature to this form must correspond with the
name as written upon the face of the within Warrant in every particular without
alteration or enlargement or any change whatsoever.
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Schedule 1
Number of
Name Warrants
- - ---- --------
Jeffrey Berg 2,000
Ronald I. Heller 112,200
Martan & Co. 149,600
David Nagelberg 112,200
Michael Silvestri 20,000
Eugene Whitehouse 4,000
TOTAL 400,000