Exhibit 4.1
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE SHARES ISSUABLE UPON THE
SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE TRANSFERRED EXCEPT UPON
DELIVERY TO THE CORPORATION OF AN OPINION OF COUNSEL SATISFACTORY IN FORM AND
SUBSTANCE TO IT THAT SUCH TRANSFER WILL NOT VIOLATE THE SECURITIES ACT OF 1933,
AS AMENDED
THE TRANSFER OF THIS WARRANT IS RESTRICTED AS DESCRIBED HEREIN.
CytRx Corporation
Warrant for the Purchase of Shares of Common Stock,
par value $0.001 per Share
No. W-____ ______ Shares
Issuance Date: September 16, 2003
THIS CERTIFIES that, for value received, _____________, whose address is
_________________________ or its registered assigns (the "Holder"), is entitled
to subscribe for and purchase from CytRx Corporation, a Delaware corporation
(the "Company"), upon the terms and conditions set forth herein, ______ shares
of the Company's Common Stock, par value $0.001 per share ("Common Stock"), at a
price of $3.05 per share, subject to adjustment as provided herein (the
"Exercise Price"). As used herein the term "this Warrant" shall mean and include
this Warrant and any Common Stock or Warrants hereafter issued as a consequence
of the exercise or transfer of this Warrant in whole or in part.
The number of shares of Common Stock issuable upon exercise of the
Warrants (the "Warrant Shares") and the Exercise Price may be adjusted from time
to time as hereinafter set forth. The Warrant Shares are entitled to the
benefits, and subject to the obligations, set forth in the Registration Rights
Agreement among the Company, the Holder and certain other parties dated
concurrently herewith.
1. Exercise Price and Exercise Period. This Warrant may be exercised at
any time or from time to time during the period commencing on the Issuance Date
and ending at 5:00 P.M. Pacific time on September 14, 2008 (the "Exercise
Period").
2. Procedure for Exercise; Effect of Exercise.
(a) Cash Exercise. This Warrant may be exercised, in whole or in part, by
the Holder during normal business hours on any business day during the Exercise
Period by (i) the delivery to the Company of a duly executed Notice of Exercise
(in the form attached to this Agreement)
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specifying the number of Warrant Shares to be purchased, (ii) delivery of
payment to the Company of the Exercise Price for the number of Warrant Shares
specified in the Notice of Exercise by cash, wire transfer of immediately
available funds to a bank account specified by the Company, or by certified or
bank cashier's check (the "Aggregate Exercise Price"), and (iii) the surrender
to a common carrier for overnight delivery to the Company, or as soon as
practicable following the date the holder of this Warrant delivers the Notice of
Exercise to the Company, of this Warrant (or an indemnification undertaking with
respect to this Warrant in the case of its loss, theft or destruction).
(b) Cashless Exercise. This Warrant may also be exercised by the Holder
through a cashless exercise, as described in this Section 2(b). This Warrant may
be exercised, in whole or in part, by (i) the delivery to the Company of a duly
executed Notice of Exercise specifying the number of Warrant Shares to be
applied to such exercise, and (ii) the surrender to a common carrier for
overnight delivery to the Company, or as soon as practicable following the date
the holder of this Warrant delivers the Notice of Exercise to the Company, of
this Warrant (or an indemnification undertaking with respect to this Warrant in
the case of its loss, theft or destruction). The number of shares of Common
Stock to be issued upon exercise of this Warrant pursuant to this Section 2(b)
shall equal the value of this Warrant (or the portion thereof being canceled)
computed as of the date of delivery of this Warrant to the Company using the
following formula:
X = Y(A-B)
------
A
Where:
X = the number of shares of Common Stock to be issued to
Holder under this Section 2(b);
Y = the number of Warrant Shares identified in the Notice of
Exercise as being applied to the subject exercise;
A = the Current Market Price on such date; and
B = the Exercise Price on such date
For purposes of this Section 2(b), Current Market Price shall have the
definition provided in Section 6(g).
The Company acknowledges and agrees that this Warrant was issued on the
date set forth at the end of this Warrant. Consequently, the Company
acknowledges and agrees that, if the Holder conducts a cashless exercise
pursuant to this Section 2(b), the period during which the Holder held this
Warrant may, for purposes of Rule 144 promulgated under the Securities Act of
1933, as amended (the "Securities Act"), as such rule is currently in effect, be
"tacked" to the period during which the Holder holds the Warrant Shares received
upon such cashless exercise.
Notwithstanding the foregoing, the Holder may conduct a cashless
exercise pursuant to
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this Section 2(b) only after the first anniversary of the
Issuance Date, and then only in the event that a registration statement covering
the resale of the Warrant Shares is not then effective at the time that the
Holder wishes to conduct such cashless exercise.
(c) Effect of Exercise. Upon receipt by the Company of a Notice of
Exercise, together with proper payment of the Exercise Price, as provided in
this Section 2, the Company agrees that such Warrant Shares shall be deemed to
be issued to the Holder as the record holder of such Warrant Shares as of the
close of business on the date on which the Notice of Exercise has been delivered
and payment has been made for such Warrant Shares in accordance with this
Agreement and the Holder shall be deemed to be the holder of record of the
Warrant Shares, notwithstanding that the stock transfer books of the Company
shall then be closed or that certificates representing such Warrant Shares shall
not then be actually delivered to the Holder. On or before the fifth business
day following the date on which the Company has received each of the Notice of
Exercise, the Aggregate Exercise Price (or notice of a cashless exercise) and
this Warrant (or an indemnification undertaking with respect to this Warrant in
the case of its loss, theft or destruction) (the "Exercise Delivery Documents"),
the Company shall (X) issue and deliver to the address as specified in the
Notice of Exercise, a certificate, registered in the name of the holder of this
Warrant or its designee, for the number of shares of Common Stock to which the
holder of this Warrant is entitled pursuant to such exercise, or (Y) provided
that the Company's transfer agent (the "Transfer Agent") is participating in The
Depository Trust Company ("DTC") Fast Automated Securities Transfer Program,
upon the request of the Holder, credit such aggregate number of shares of Common
Stock to which the Holder of this Warrant is entitled pursuant to such exercise
to the Holder's or its designee's balance account with DTC through its Deposit
Withdrawal Agent Commission system. If this Warrant should be exercised in part
only, the Company shall, upon surrender of this Warrant for cancellation,
execute and deliver a new Warrant evidencing the right of the Holder to purchase
the balance of the Warrant Shares subject to purchase hereunder within five (5)
business days of receipt of the Warrant.
3. Registration of Warrants; Transfer of Warrants. Any Warrants issued
upon the transfer or exercise in part of this Warrant shall be numbered and
shall be registered in a Warrant Register as they are issued. The Company shall
be entitled to treat the registered holder of any Warrant on the Warrant
Register as the owner in fact thereof for all purposes 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, and shall not be liable for any registration or
transfer of Warrants which are registered or to be registered in the name of a
fiduciary or the nominee of a fiduciary unless made with the actual knowledge
that a fiduciary or nominee is committing a breach of trust in requesting such
registration or transfer, or with the knowledge of such facts that its
participation therein amounts to bad faith. This Warrant shall be transferable
only on the books of the Company upon delivery thereof duly endorsed by the
Holder or by its duly authorized attorney or representative, or accompanied by
proper evidence of succession, assignment, or authority to transfer. In all
cases of transfer by an attorney, executor, administrator, guardian, or other
legal representative, duly authenticated evidence of his or its authority shall
be produced. Upon any registration of transfer, the Company shall deliver a new
Warrant or Warrants to the person entitled thereto. This Warrant may be
exchanged, at the option of the Holder thereof, for another
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Warrant, or other Warrants of different denominations, of like tenor and
representing in the aggregate the right to purchase a like number of Warrant
Shares, upon surrender to the Company or its duly authorized agent.
4. Restrictions on Transfer. (a) The Holder, as of the date of issuance
hereof, represents to the Company that such Holder is acquiring the Warrants for
its own account for investment purposes and not with a view to the distribution
thereof or of the Warrant Shares. Notwithstanding any provisions contained in
this Warrant to the contrary, this Warrant and the related Warrant Shares shall
not be transferable except pursuant to the proviso contained in the following
sentence or upon the conditions specified in this Section 4, which conditions
are intended, among other things, to insure compliance with the provisions of
the Securities Act and applicable state law in respect of the transfer of this
Warrant or such Warrant Shares. The Holder by acceptance of this Warrant agrees
that the Holder will not transfer this Warrant or the related Warrant Shares
prior to delivery to the Company of an opinion of the Holder's counsel (as such
opinion and such counsel are described in Section 4(b) hereof) or until
registration of such Warrant Shares under the Securities Act has become
effective or after a sale of such Warrant Shares has been consummated pursuant
to Rule 144 or Rule 144A under the Securities Act; provided, however, that the
Holder may freely transfer this Warrant or such Warrant Shares (without delivery
to the Company of an opinion of Counsel) (i) to one of its nominees, affiliates
or a nominee thereof, (ii) to a pension or profit-sharing fund established and
maintained for its employees or for the employees of any affiliate, (iii) from a
nominee to any of the aforementioned persons as beneficial owner of this Warrant
or such Warrant Shares, or (iv) to a qualified institutional buyer, so long as
such transfer is effected in compliance with Rule 144A under the Securities Act.
(b) The Holder, by its acceptance hereof, agrees that prior to any
transfer of this Warrant or of the related Warrant Shares (other than as
permitted by Section 4(a) hereof or pursuant to a registration under the
Securities Act), the Holder will give written notice to the Company of its
intention to effect such transfer, together with an opinion of such counsel for
the Holder as shall be reasonably acceptable to the Company, to the effect that
the proposed transfer of this Warrant and/or such Warrant Shares may be effected
without registration under the Securities Act. Upon delivery of such notice and
opinion to the Company, the Holder shall be entitled to transfer this Warrant
and/or such Warrant Shares in accordance with the intended method of disposition
specified in the notice to the Company.
(c) Each stock certificate representing Warrant Shares issued upon
exercise or exchange of this Warrant shall bear the following legend unless the
opinion of counsel referred to in Section 4(b) states such legend is not
required:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE TRANSFERRED
EXCEPT UPON DELIVERY TO THE CORPORATION OF AN OPINION OF COUNSEL
SATISFACTORY IN FORM
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AND SUBSTANCE TO IT THAT SUCH TRANSFER WILL NOT VIOLATE THE SECURITIES ACT
OF 1933, AS AMENDED."
The Holder understands that the Company may place, and may instruct any transfer
agent or depository for the Warrant Shares to place, a stop transfer notation in
the securities records in respect of the Warrant Shares.
5. Reservation of Shares. The Company shall at all times during the
Exercise Period reserve and keep available out of its authorized and unissued
Common Stock, solely for the purpose of providing for the exercise of the rights
to purchase all Warrant Shares granted pursuant to the Warrants, such number of
shares of Common Stock as shall, from time to time, be sufficient therefor. The
Company covenants that all shares of Common Stock issuable upon exercise of this
Warrant, upon receipt by the Company of the full Exercise Price therefor, and
all shares of Common Stock issuable upon conversion of this Warrant, shall be
validly issued, fully paid, non-assessable, and free of preemptive rights.
6. Exercise Price Adjustments. The Exercise Price shall be subject to
adjustment from time to time as follows:
(a) (i) In the event that the Company shall (A) pay a dividend or
make a distribution, in shares of Common Stock, on any class of capital stock of
the Company or any subsidiary which is not directly or indirectly wholly owned
by the Company, (B) split or subdivide its outstanding Common Stock into a
greater number of shares, or (C) combine its outstanding Common Stock into a
smaller number of shares, then in each such case the Exercise Price in effect
immediately prior thereto shall be adjusted so that the Holder of a Warrant
thereafter surrendered for Exercise shall be entitled to receive the number of
shares of Common Stock that such Holder would have owned or have been entitled
to receive after the occurrence of any of the events described above had such
Warrant been exercised immediately prior to the occurrence of such event. An
adjustment made pursuant to this Section 6(a)(i) shall become effective
immediately after the close of business on the record date in the case of a
dividend or distribution (except as provided in Section 6(e) below) and shall
become effective immediately after the close of business on the effective date
in the case of such subdivision, split or combination, as the case may be. Any
shares of Common Stock issuable in payment of a dividend shall be deemed to have
been issued immediately prior to the close of business on the record date for
such dividend for purposes of calculating the number of outstanding shares of
Common Stock under clauses (ii) and (iii) below.
(ii) In the event that the Company shall commit to issue or
distribute Common Stock or issue rights, warrants, options or convertible or
exchangeable securities entitling the holder thereof to subscribe for or
purchase, convert into or exchange for Common Stock, in any such case at a price
per share less than the Current Market Price per share on the earliest of (i)
the date the Company shall enter into a firm contract for such issuance or
distribution, (ii) the record date for the determination of stockholders
entitled to receive any such rights, warrants, options or convertible or
exchangeable securities, if applicable, or (iii) the date of
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actual issuance or distribution of any such Common Stock or rights, warrants,
options or convertible or exchangeable securities (provided that the issuance of
Common Stock upon the exercise of rights, warrants, options or convertible or
exchangeable securities will not cause an adjustment in the Exercise Price if no
such adjustment would have been required at the time such right, warrant, option
or convertible or exchangeable security was issued), then the Exercise Price in
effect immediately prior to such earliest date shall be adjusted so that the
Exercise Price shall equal the price determined by multiplying the Exercise
Price in effect immediately prior to such earliest date by the fraction:
(x) whose numerator shall be the number of shares of Common Stock
outstanding on such date plus the number of shares which the
aggregate offering price of the total number of shares so offered
would purchase at such Current Market Price (such amount, with
respect to any such rights, warrants, options or convertible or
exchangeable securities, determined by multiplying the total
number of shares subject thereto by the exercise price of such
rights, warrants, options or convertible or exchangeable
securities and dividing the product so obtained by the Current
Market Price), and
(y) whose denominator shall be the number of shares of Common
Stock outstanding on such date plus the number of additional
shares of Common Stock to be issued or distributed or receivable
upon exercise of any such right, warrant, option or convertible or
exchangeable security.
Such adjustment shall be made successively whenever any such Common Stock,
rights, warrants, options or convertible or exchangeable securities are issued
or distributed. In determining whether any rights, warrants or options entitle
the holders to subscribe for or purchase shares of Common Stock at less than
such Current Market Price, and in determining the aggregate offering price of
shares of Common Stock so issued or distributed, there shall be taken into
account any consideration received by the Company for such Common Stock, rights,
warrants, options, or convertible or exchangeable securities, the value of such
consideration, if other than cash, to be determined by the Board of Directors,
whose determination shall be conclusive and described in a certificate filed
with the records of corporate proceedings of the Company. If any right, warrant,
option or convertible or exchangeable security to purchase or acquire Common
Stock, the issuance of which resulted in an adjustment in the Exercise Price
pursuant to this subsection (ii) shall expire and shall not have been exercised,
the Exercise Price shall immediately upon such expiration be recomputed to the
Exercise Price which would have been in effect had the adjustment of the
Exercise Price made upon the issuance of such right, warrant, option or
convertible or exchangeable security been made on the basis of offering for
subscription, purchase or issuance, as the case may be, only of that number of
shares of Common Stock actually purchased or issued upon the actual exercise of
such right, warrant, option or convertible or exchangeable securities.
(iii) No adjustment in the Exercise Price shall be required unless
the adjustment would require an increase or decrease of at least 1% in the
Exercise Price then in
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effect; provided, however, that any adjustments that by reason of this Section
6(a) are not required to be made shall be carried forward and taken into account
in any subsequent adjustment. All calculations under this Section 6(a) shall be
made to the nearest cent or nearest 1/100th of a share.
(iv) Notwithstanding anything to the contrary set forth in this
Section 6(a), no adjustment shall be made to the Exercise Price upon (A) the
issuance of shares of Common Stock pursuant to any compensation or incentive
plan for officers, directors, employees or consultants of the Company which plan
has been approved by the Compensation Committee of the Board of Directors (or,
if there is no such committee then serving, by the majority vote of the
Directors then serving each of which Director is not (x) an employee or officer
of the Company, (y) a 5% or greater stockholder of the Company, or (y) an
officer, employee, affiliate or associate of any such 5% or greater stockholder)
(unless the exercise price thereof is changed after the date hereof other than
solely by operation of the anti-dilution provisions thereof or by the
Compensation Committee of the Board of Directors or, if applicable, the Board of
Directors and, if required by law, the stockholders of the Company), or (B) the
issuance of Common Stock upon the conversion or exercise of the options,
warrants or rights of the Company outstanding on September 15, 2003, unless the
conversion or exercise price thereof is changed after September 15, 2003 (other
than solely by operation of the anti-dilution provisions thereof).
(v) The Company from time to time may reduce the Exercise Price by
any amount for any period of time in the discretion of the Board of Directors;
provided, however, that if the Company so reduces the Exercise Price, then it
shall similarly reduce the exercise price of all other warrants sold and issued
to other holders pursuant to that certain Securities Purchase Agreement dated as
of September 15, 2003, by and among the Company, the Holder and certain other
holders. A voluntary reduction of the Exercise Price does not change or adjust
the Exercise Price otherwise in effect for purposes of this Section 6(a).
(vi) In the event that, at any time as a result of an adjustment
made pursuant to Sections 6(a)(i) through 6(a)(iii) above, the Holder of any
Warrant thereafter surrendered for exercise shall become entitled to receive any
shares of the Company other than shares of the Common Stock, thereafter the
number of such other shares so receivable upon exercise of any such Warrant
shall be subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to the Common
Stock contained in Sections 6(a)(i) through 6(a)(v) above, and the other
provisions of this Section 6(a) with respect to the Common Stock shall apply on
like terms to any such other shares.
(b) In case of any reclassification of the Common Stock (other than in a
transaction to which Section 6(a)(i) applies), any consolidation of the Company
with, or merger of the Company into, any other entity, any merger of another
entity into the Company (other than a merger that does not result in any
reclassification, conversion, exchange or cancellation of outstanding shares of
Common Stock of the Company), any sale or transfer of all or substantially all
of the assets of the Company or any compulsory share exchange, pursuant to which
share exchange the Common Stock is converted into other securities, cash or
other
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property, then lawful provision shall be made as part of the terms of such
transaction whereby the Holder of a Warrant then outstanding shall have the
right thereafter, during the period such Warrant shall be exercisable, to
exercise such Warrant only for the kind and amount of securities, cash and other
property receivable upon the reclassification, consolidation, merger, sale,
transfer or share exchange by a holder of the number of shares of Common Stock
of the Company into which a Warrant might have been able to exercise for
immediately prior to the reclassification, consolidation, merger, sale, transfer
or share exchange assuming that such holder of Common Stock failed to exercise
rights of election, if any, as to the kind or amount of securities, cash or
other property receivable upon consummation of such transaction subject to
adjustment as provided in Section 6(a) above following the date of consummation
of such transaction. The Company shall not effect any such reclassification,
consolidation, merger, sale, transfer, share exchange or other disposition
unless prior to or simultaneously with the consummation thereof the successor
corporation (if other than the Company) resulting from such consolidation or
merger, or the corporation purchasing or otherwise acquiring such assets or
other appropriate corporation or entity shall assume, by written instrument
executed and delivered to the Holder, the obligation to deliver to the Holder
upon its exercise of the Warrant such shares of stock, securities or assets as,
in accordance with the foregoing provisions, the Holder may be entitled to
purchase and the other obligations under this Warrant. Notwithstanding the
foregoing, in the case of any sale or transfer of all or substantially all of
the assets of the Company or merger or consideration of the Company in which the
shareholders of the Company receive cash or other property for each of their
shares of Common Stock in excess of the then Exercise Price, this Warrant will
terminate if not exercised by the Holder no later than the closing of such sale,
merger or consolidation. The provisions of this Section 6(b) shall similarly
apply to successive reclassifications, consolidations, mergers, sales, transfers
or share exchanges.
(c) If:
(i) the Company shall take any action which would require an
adjustment in the Exercise Price pursuant to Section
6(a); or
(ii) the Company shall authorize the granting to the holders
of its Common Stock generally of rights, warrants or
options to subscribe for or purchase any shares of any
class or any other rights, warrants or options; or
(iii) there shall be any reclassification or change of the
Common Stock (other than a subdivision or combination of
its outstanding Common Stock or a change in par value)
or any consolidation, merger or statutory share exchange
to which the Company is a party and for which approval
of any stockholders of the Company is required, or the
sale or transfer of all or substantially all of the
assets of the Company; or
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(iv) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then, in each such case, the Company shall cause to be filed with the transfer
agent for the Warrants and shall cause to be mailed to each Holder at such
Holder's address as shown on the books of the transfer agent for the Warrants,
as promptly as possible, but at least 30 days prior to the applicable date
hereinafter specified, a notice stating (A) the date on which a record is to be
taken for the purpose of such dividend, distribution or granting of rights,
warrants or options, or, if a record is not to be taken, the date as of which
the holders of Common Stock of record to be entitled to such dividend,
distribution or rights, warrants or options are to be determined, or (B) the
date on which such reclassification, change, consolidation, merger, statutory
share exchange, sale, transfer, dissolution, liquidation or winding-up is
expected to become effective or occur, and the date as of which it is expected
that holders of Common Stock of record shall be entitled to exchange their
shares of Common Stock for securities or other property deliverable upon such
reclassification, change, consolidation, merger, statutory share exchange, sale,
transfer, dissolution, liquidation or winding up. Failure to give such notice or
any defect therein shall not affect the legality or validity of the proceedings
described in this Section 6(c).
(d) Whenever the Exercise Price is adjusted as herein provided, the
Company shall promptly file with the transfer agent for the Warrants a
certificate of an officer of the Company setting forth the Exercise Price after
the adjustment and setting forth a brief statement of the facts requiring such
adjustment and a computation thereof. The Company shall promptly cause a notice
of the adjusted Exercise Price to be mailed to each Holder.
(e) In any case in which Section 6(a) provides that an adjustment
shall become effective immediately after a record date for an event and the date
fixed for such adjustment pursuant to Section 6(a) occurs after such record date
but before the occurrence of such event, the Company may defer until the actual
occurrence of such event (i) issuing to the Holder of any Warrants exercised
after such record date and before the occurrence of such event the additional
shares of Common Stock issuable upon such conversion by reason of the adjustment
required by such event over and above the Common Stock issuable upon such
exercise before giving effect to such adjustment, and (ii) paying to such holder
any amount in cash in lieu of any fraction pursuant to Section 6(i).
(f) In case the Company shall take any action affecting the Common
Stock, other than actions described in this Section 6, which in the opinion of
the Board of Directors would materially adversely affect the exercise right of
the Holders, the Exercise Price may be adjusted, to the extent permitted by law,
in such manner, if any, and at such time, as the Board of Directors may
determine to be equitable in the circumstances; provided, however, that in no
event shall the Board of Directors be required to take any such action.
(g) For the purpose of any computation under Section 2(b) or this
Section 6, the "Current Market Price" per share of Common Stock on any day shall
mean: (i) if the principal trading market for such securities is a national or
regional securities exchange,
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the closing price on such exchange on such day; or (ii) if sales prices for
shares of Common Stock are reported by the NASDAQ National Market System or
NASDAQ Small Cap Market (or a similar system then in use), the last reported
sales price (regular way) so reported on such day; or (iii) if neither (i) nor
(ii) above are applicable, and if bid and ask prices for shares of Common Stock
are reported in the over-the-counter market by NASDAQ (or, if not so reported,
by the National Quotation Bureau), the average of the high bid and low ask
prices so reported on such day. Notwithstanding the foregoing, if there is no
reported closing price, last reported sales price, or bid and ask prices, as the
case may be, for the day in question, then the Current Market Price shall be
determined as of the latest date prior to such day for which such closing price,
last reported sales price, or bid and ask prices, as the case may be, are
available, unless such securities have not been traded on an exchange or in the
over-the-counter market for 30 or more days immediately prior to the day in
question, in which case the Current Market Price shall be determined in good
faith by, and reflected in a formal resolution of, the Board of Directors of the
Company.
(h) Upon each adjustment of the Exercise Price, this Warrant shall
thereafter evidence the right to purchase, at the adjusted Exercise Price, that
number of shares (calculated to the nearest thousandth) obtained by dividing (i)
the product obtained by multiplying the number of shares purchasable upon
exercise of this Warrant prior to adjustment of the number of shares by the
Exercise Price in effect prior to adjustment of the Exercise Price, by (ii) the
Exercise Price in effect after such adjustment of the Exercise Price.
(i) The Company shall not be required to issue fractions of shares
of Common Stock or other capital stock of the Company upon the exercise of this
Warrant. If any fraction of a share would be issuable on the exercise of this
Warrant (or specified portions thereof), the Company shall purchase such
fraction for an amount in cash equal to the same fraction of the Current Market
Price of such share of Common Stock on the date of exercise of this Warrant.
7. Beneficial Ownership. The Company shall not effect the exercise of this
Warrant, and no Person (as defined below) who is a holder of this Warrant shall
have the right to exercise this Warrant, to the extent that after giving effect
to such exercise, such Person (together with such Person's affiliates) would
beneficially own in excess of 9.99% of the shares of the Common Stock
outstanding immediately after giving effect to such exercise. For purposes of
the foregoing sentence, the aggregate number of shares of Common Stock
beneficially owned by such Person and its affiliates shall include the number of
shares of Common Stock issuable upon exercise of this Warrant with respect to
which the determination of such sentence is being made, but shall exclude shares
of Common Stock which would be issuable upon (i) exercise of the remaining,
unexercised portion of this Warrant beneficially owned by such Person and its
affiliates and (ii) exercise or conversion of the unexercised or unconverted
portion of any other securities of the Company beneficially owned by such Person
and its affiliates (including, without limitation, any debentures, convertible
notes or convertible preferred stock or warrants) subject to a limitation on
conversion or exercise analogous to the limitation contained herein. Except as
set forth in the preceding sentence, for purposes of this paragraph, beneficial
ownership shall be calculated in
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accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended. For purposes of this Warrant, in determining the number of outstanding
shares of Common Stock, a holder may rely on the number of outstanding shares of
Common Stock as reflected in (1) the Company's most recent Form 10-Q, Form 10-K
or other public filing with the Securities and Exchange Commission, as the case
may be, (2) a more recent public announcement by the Company or (3) any other
notice by the Company or its Transfer Agent setting forth the number of shares
of Common Stock outstanding. For any reason at any time, upon the written or
oral request of the holder of this Warrant, the Company shall within two
Business Days confirm orally and in writing to the holder of this Warrant the
number of shares of Common Stock then outstanding. In any case, the number of
outstanding shares of Common Stock shall be determined after giving effect to
the conversion or exercise of securities of the Company by the holder of this
Warrant and its affiliates since the date as of which such number of outstanding
shares of Common Stock was reported. In effecting the exercise of this Warrant,
the Company shall be entitled to rely on a representation by the holder of this
Warrant as to the number of shares that it beneficially owns for purposes of the
above 9.99% limitation calculation.
8. Transfer Taxes. The issuance of any shares or other securities upon the
exercise of this Warrant, and the delivery of certificates or other instruments
representing such shares or other securities, shall be made without charge to
the Holder for any tax or other charge in respect of such issuance. The Company
shall not, however, be required to pay any tax which may be payable in respect
of any transfer involved in the issue and delivery of any certificate in a name
other than that of the Holder and the Company shall not be required to issue or
deliver any such certificate unless and until the person or persons requesting
the issue thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.
9. Loss or Mutilation of Warrant. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction, or mutilation of
any Warrant (and upon surrender of any Warrant if mutilated), and upon
reimbursement of the Company's reasonable incidental expenses, the Company shall
execute and deliver to the Holder thereof a new Warrant of like date, tenor, and
denomination.
10. No Rights as a Stockholder. The Holder of any Warrant shall not have,
solely on account of such status, any rights of a stockholder of the Company,
either at law or in equity, or to any notice of meetings of stockholders or of
any other proceedings of the Company, except as provided in this Warrant.
11. Governing Law. This Warrant shall be construed in accordance with the
laws of the State of Delaware applicable to contracts made and performed within
such State, without regard to principles of conflicts of law.
Dated: September 16, 2003
CYTRX CORPORATION
By:
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Steven A. Kriegsman,
Chief Executive Officer
11
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer the
attached Warrant.)
FOR VALUE RECEIVED, hereby sells, assigns, and transfers unto
__________________ a Warrant to purchase __________ shares of Common Stock, par
value $0.001 per share, of CytRx Corporation (the "Company"), together with all
right, title, and interest therein, and does hereby irrevocably constitute and
appoint attorney to transfer such Warrant on the books of the Company, with full
power of substitution.
Dated:
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By:
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Signature
The signature on the foregoing Assignment must correspond to the name
as written upon the face of this Warrant in every particular, without alteration
or enlargement or any change whatsoever.
To: CytRx Corporation
11726 San Vicente Blvd., Suite 650
Los Angeles, California 90049
Attention: Chief Executive Officer
NOTICE OF EXERCISE
The undersigned hereby exercises his or its rights to purchase _______
Warrant Shares covered by the within Warrant and tenders payment herewith in the
amount of $_________ by [tendering cash or delivering a certified check or bank
cashier's check, payable to the order of the Company] [surrendering ______
shares of Common Stock received upon exercise of the attached Warrant, which
shares have a Current Market Price equal to such payment] in accordance with the
terms thereof, and requests that certificates for such securities be issued in
the name of, and delivered to:
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(Print Name, Address and Social Security
or Tax Identification Number)
and, if such number of Warrant Shares shall not be all the Warrant Shares
covered by the within Warrant, that a new Warrant for the balance of the Warrant
Shares covered by the within Warrant be registered in the name of, and delivered
to, the undersigned at the address stated below.
Dated:
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By:
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Print Name
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Signature
Address:
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