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EXHIBIT 4.20
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RIBOGENE, INC.
AND
GRUNTAL & CO., L.L.C.
FORM OF
REPRESENTATIVE'S WARRANT AGREEMENT
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Dated as of , 1998
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REPRESENTATIVE'S WARRANT AGREEMENT, dated as of ____________, 1998,
between RIBOGENE, INC., a Delaware corporation (the "Company"), and GRUNTAL &
CO., L.L.C. (the "Representative").
W I T N E S S E T H:
WHEREAS, the Company proposes to issue to the Representative warrants
("Warrants") to purchase up to an aggregate of 270,000 Common Shares (as defined
in Section 14 hereof);
WHEREAS, pursuant to the underwriting agreement (the "Underwriting
Agreement"), dated as of the date hereof, between the Representative, as
representative of the several Underwriters (as such term is defined in the
Underwriting Agreement), and the Company, the Representative and the other
Underwriters have agreed to purchase 2,700,000 common shares of the Company, at
a public offering price of $_____ per share in connection with the Company's
proposed initial public offering (the "Public Offering"); and
WHEREAS, the Warrants to be issued pursuant to this Agreement will be
issued on the Closing Date (as such term is defined in the Underwriting
Agreement) by the Company to the Representative in consideration for, and as
part of the Representative's compensation in connection with, the performance of
the Representative pursuant to the Underwriting Agreement.
NOW, THEREFORE, in consideration of the premises, the payment by the
Representative to the Company of an aggregate of one hundred dollars ($100.00),
the agreements herein set forth and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
Section 1.0 Grant. The Representative is hereby granted the right to
purchase, at any time from ________, 1999 [the first anniversary of the
effective date of the registration statement] until 5:30 p.m., New York time, on
_________, 2003 [the fifth anniversary of the effective date of the registration
statement] (the "Exercise Period"), up to an aggregate of 270,000 Common Shares
(the "Warrant Shares"), subject to the terms and conditions of this Agreement,
at an initial exercise price (subject to adjustment as provided in Section 7
hereof) of $______ [165% of the initial public offering price per share] per
Common Share.
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Section 2.0 Warrant Certificates. The warrant certificates (the
"Warrant Certificates") delivered and to be delivered pursuant to this Agreement
shall be in the form set forth in Exhibit A, attached hereto and made a part
hereof, with such appropriate insertions, omissions, substitutions and other
variations as required or permitted by this Agreement.
Section 3.0 Exercise of Warrant.
Section 3.1 Method of Exercise. The Warrants initially are
exercisable at the initial exercise price per Common Share set forth in Section
5 hereof (subject to adjustment as provided in Section 7 hereof) payable by
certified or official bank check in New York Clearing House funds. Upon
surrender of a Warrant Certificate with the annexed Form of Election to Purchase
duly executed, together with payment of the applicable exercise price for the
Common Shares purchased, at the Company's principal executive offices in
California (presently located at 00000 Xxxxxxxx Xxxx, Xxxxxxx, Xxxxxxxxxx
94545), the registered holder (a "Holder") of a Warrant Certificate shall be
entitled to receive a certificate or certificates for the Common Shares so
purchased. The purchase rights represented by each Warrant Certificate are
exercisable at the option of the Holder thereof, in whole or in part (but not as
to fractional Common Shares underlying the Warrants). In the case of the
purchase of less than all the Common Shares purchasable under any Warrant
Certificate, the Company shall cancel said Warrant Certificate upon the
surrender thereof and shall execute and deliver a new Warrant Certificate of
like tenor for the balance of the Common Shares purchasable thereunder.
Section 3.2 Exercise by Surrender of Warrants. In addition to the
method of payment set forth in Section 3.1 and in lieu of any cash payment
required thereunder, the Holder(s) of the Warrants shall have the right at any
time and from time to time to exercise the Warrants in whole or in part by
surrendering the Warrant Certificates in the manner specified in Section 3.1 in
exchange for the number of Common Shares equal to (x) the number of shares as to
which the Warrants are being exercised multiplied by (y) a fraction, the
numerator of which is the Market Price (as defined in Section 14) of the Common
Shares less the Exercise Price and the denominator of which is the Market Price.
Solely for the purposes of this paragraph, the Market Price shall be calculated
either (i) on the date on which the annexed Form of Election to Purchase is
deemed to have been sent to the Company pursuant to Section 12 hereof ("Notice
Date") or (ii) as the average of the Market Prices for each of the five
consecutive trading days preceding the Notice Date, whichever of (i) or (ii) is
greater.
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Section 4.0 Issuance of Certificates. Upon the exercise of the
Warrants, the issuance of certificates for Common Shares or other securities,
properties or rights underlying such Warrants shall be made forthwith (and in
any event within three (3) business days thereafter) without charge to the
Holder thereof including, without limitation, any tax which may be payable in
respect of the issuance thereof, and such certificates shall (subject to the
provisions of Section 1 hereof) be issued in the name of, or in such names as
may be directed by, the Holder thereof; provided, however, that the Company
shall not be required to pay any tax which may be payable in respect of any
transfer involved in the issuance and delivery of any such certificates in a
name other than that of the Holder, and the Company shall not be required to
issue or deliver such certificates unless or until the person or persons
requesting the issuance thereof shall have paid to the Company the amount of
such tax or shall have established to the satisfaction of the Company that such
tax has been paid.
The Warrant Certificates and the certificates representing the
Warrant Shares (and/or other securities, property or rights issuable upon the
exercise of the Warrants) shall be executed on behalf of the Company by the
manual or facsimile signature of the then present Chairman of the Board of
Directors or the President or Vice President of the Company and the then present
Treasurer or Assistant Treasurer or the Secretary or Assistant Secretary of the
Company. Warrant Certificates shall be dated the date of execution by the
Company upon initial issuance, division, exchange, substitution or transfer.
Section 5.0 Exercise Price.
Section 5.1 Initial and Adjusted Exercise Price. Except as otherwise
provided in Section 7 hereof, the initial exercise price of each Warrant shall
be (i) $[____] [165% of the initial public offering price] per Common Share. The
adjusted exercise price shall be the exercise price which shall result from time
to time from any and all adjustments of the initial exercise price in accordance
with the provisions of Section 7 hereof.
Section 5.2 Exercise Price. The term "Exercise Price" as used herein
shall mean the initial exercise price or the adjusted exercise price, depending
upon the context.
Section 6.0 Registration Rights.
Section 6.1 Piggyback Registration. If, at any time during the period
commencing on the date hereof and expiring seven (7) years thereafter, the
Company
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proposes to register any of its securities under the Securities Act of 1933, as
amended (the "Act") (other than pursuant to Form S-4 or Form S-8 or a successor
form), either for its own account or for the account of others, it will give
written notice by delivery in person, registered or certified mail (postage
prepaid, return receipt requested), telex, telecopier or overnight air courier
guaranteeing next day delivery, at least thirty (30) days prior to the filing of
each such registration statement, to the Representative and to all other Holders
of the Warrants and/or the Warrant Shares of its intention to do so. If any of
the Holders of the Warrants and/or Warrant Shares notify the Company within
twenty (20) days after receipt of any such notice of its or their desire to
include any Registrable Securities (as defined in Section 14) in such proposed
registration statement, the Company shall afford each such Holder the
opportunity to have any such Registrable Securities registered under such
registration statement.
Notwithstanding the foregoing, if, in the case of an underwritten
offering, the managing underwriter of such offering shall advise the Company in
writing that, in its opinion, the distribution of the Registrable Securities
requested to be included in the registration concurrently with the securities
being registered would adversely affect the market price of such securities,
then the offering and sale of such Registrable Securities shall be delayed for
such period, not to exceed ninety (90) days, as such managing underwriter shall
reasonably request. In the event of a delay as provided in the preceding
sentence, the Company shall, with respect to any Registrable Securities not
included in such offering, file such supplements and post-effective amendments,
and take any such other steps as may be necessary, to permit the proposed
offering and sale of such Registrable Securities for a period of one (1) year
immediately following the end of such period of delay.
Notwithstanding the provisions of this Section 6.1, the Company shall
have the right at any time after it shall have given written notice pursuant to
this Section 6.1 (irrespective of whether a written request for inclusion of any
such Registrable Securities shall have been made) to elect not to file any such
proposed registration statement, or to withdraw the same after the filing but
prior to the effective date thereof.
Section 6.2 Demand Registration.
(a) At any time during the period commencing on the date hereof
and expiring five (5) years thereafter, the Representative or Holders of fifty
percent (50%) or more of the Registrable Securities issued or issuable upon
exercise of the Warrants issued to the Representative (collectively, the
"Initiating Holders") shall have the right (which right is in addition to the
registration rights under Section 6.1 here-
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of), exercisable by written notice to the Company, to have the Company prepare
and file with the Securities and Exchange Commission (the "Commission"), on one
occasion, a registration statement and such other documents, including a
prospectus, as may be necessary in the opinion of both counsel for the Company
and counsel for the Representative or the Initiating Holders, in order to comply
with the provisions of the Act, so as to permit a public offering and sale of
their respective Registrable Securities for twelve (12) consecutive months by
such Holders and any other Holders of Registrable Securities who notify the
Company within twenty (20) days after receiving notice from the Company of such
request.
(b) The Company covenants and agrees to give written notice of
any registration request under this Section 6.2 by any Holder or Holders to all
other registered Holders of Registrable Securities within five (5) days from the
date of the receipt of any such registration request.
(c) In addition to the registration rights under Section 6.1 and
subsection (a) of this Section 6.2, at any time during the period commencing on
the date hereof and expiring five (5) years thereafter, the Representative or
the Initiating Holders shall have the right, exercisable by written notice to
the Company, to have the Company prepare and file with the Commission, on one
occasion, a registration statement and such other documents, including a
prospectus, as may be necessary in the opinion of both counsel for the Company
and counsel for the Representative or the Initiating Holders, in order to comply
with the provisions of the Act, so as to permit a public offering and sale of
their respective Registrable Securities for twelve (12) consecutive months by
such Holders and any other Holders of Registrable Securities who notify the
Company within twenty (20) days after receiving notice from the Company of such
request; provided, however, that the provisions of Section 6.3(b) hereof shall
not apply to any such registration request, and registration and all costs
incident thereto shall be at the expense of the Holder or Holders making such
request.
(d) No right of the Holders under this Section 6.2 shall be
deemed to have been exercised if with respect to such right:
(A) the requisite notice given by Holders pursuant to this
Section 6.2 is withdrawn prior to the date of filing of a registration
statement or if a registration statement filed by the Company under the
Act pursuant to this Section 6.2 is withdrawn prior to its effective date,
in either case, by written notice to the Company from the Representative
or the Initiating Holders to be included or which are included in such
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registration statement stating that such Holders have elected not to
proceed with the offering contemplated by such registration statement
because (i) a development in the Company's affairs has occurred or has
become known to such Holders subsequent to the date of the notice by the
Holders to the Company requesting registration of the Registrable
Securities or the filing of such registration statement which, in the
judgment of such Holders or the managing underwriter of the proposed
public offering, materially and adversely affects the market price of such
Registrable Securities or the distribution of such Registrable Securities
or (ii) a registration statement filed by the Company pursuant to this
Section 6.2, in the reasonable opinion of counsel for such Holders or the
managing underwriter of the proposed public offering, contains an untrue
statement of a material fact or omits to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading in light of the circumstances under which made (other than any
such statement or omission relating to such Holders and based on
information supplied or failed to be supplied by such Holders) and the
Company has not, promptly after written notice thereof, corrected such
statement or omission in an amendment filed to such registration statement
pursuant to Section 6.3(o); or
(B) a registration statement pursuant to this Section 6.2 shall
have become effective under the Act and (i) the underwriters shall not
purchase any Registrable Securities because of a failure of a condition
contained in the underwriting agreement (other than a condition to be
performed by or within the control of the Holders) relating to the
offering covered by such registration statement or (ii) less than
eighty-five percent (85%) of the Registrable Securities included therein
shall have been sold as a result of any stop order, injunction or other
order or requirement of the Commission or other governmental agency or
court.
Section 6.3 Covenants of the Company with Respect to Registration. In
connection with any registration under Section 6.1 or 6.2 hereof, the Company
covenants and agrees as follows:
(a) The Company shall use its best efforts to file a
registration statement on appropriate form within forty-five (45) days of
receipt of any demand therefor, shall use its best efforts to have any
registration statements declared effective
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at the earliest possible time, and shall furnish each Holder desiring to sell
Registrable Securities such number of prospectuses as shall reasonably be
requested.
(b) The Company shall pay all costs (other than underwriting or
selling commissions), fees and expenses in connection with all registration
statements filed pursuant to Sections 6.1 and 6.2(a) hereof including, without
limitation, the Company's legal and accounting fees, printing expenses, blue sky
fees and expenses. The Holder(s) will pay all costs, fees and expenses in
connection with any registration statement filed pursuant to Section 6.2(c). If
the Company shall fail to comply with the provisions of Section 6.3(a), the
Company shall, in addition to any other equitable or other relief available to
the Holder(s), extend the Exercise Period by such number of days as shall equal
the delay caused by the Company's failure, and be liable for any or all damages
as the Holder(s) may be entitled to as a matter of law.
(c) The Company will take all necessary action which may be
required in qualifying or registering the Registrable Securities included in a
registration statement for offering and sale under the securities or blue sky
laws of such states as the Holder(s) shall designate and to keep such
qualifications or registrations in effect for so long as the registration
statement is in effect; provided that the Company shall not be obligated to
qualify to do business in any such jurisdiction or to file any general consent
to service of process in any jurisdiction in any action other than one arising
out of the offering or the sale of the Registrable Securities.
(d) The Company shall indemnify each Holder of Registrable
Securities to be sold pursuant to any registration statement, each director and
officer of such person and each person, if any, who controls such Holder within
the meaning of Section 15 of the Act or Section 20(a) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), against all loss, claim, damage,
expense or liability (including all expenses reasonably incurred in
investigating, preparing or defending against any claim whatsoever), joint or
several, to which any of them may become subject under the Act, the Exchange Act
or otherwise, arising from such registration statement or any final prospectus,
preliminary prospectus or summary prospectus contained therein or any amendment
or supplement thereto; provided that the Company shall not be liable in any such
case to the extent that such loss, claim, damage, expense or liability, arises
out of information furnished to the Company by any Holder through an instrument
duly executed by such Holder specifically stating that it is for use in the
preparation thereof.
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(e) The Holder(s) of the Registrable Securities to be sold
pursuant to a registration statement, and their successors and assigns, shall
severally, and not jointly, indemnify the Company, its officers and directors
and each person, if any, who controls the Company within the meaning of Section
15 of the Act or Section 20(a) of the Exchange Act, against all loss, claim,
damage, expense or liability (including all 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 such Holder(s) through an instrument duly executed
by such Holder for specific inclusion in such registration statement and any
final prospectus, preliminary prospectus or summary prospectus contained therein
or any amendment or supplement thereto. Notwithstanding the foregoing, no Holder
of Registrable Securities shall be liable, or required to indemnify the Company,
in the aggregate, for any amount in excess of the net proceeds received by such
Holder from the sale of Registrable Securities to which such loss, claim,
damage, liability or expense relates.
(f) Promptly after receipt by any indemnified person of a notice
of a claim or the beginning of any action in respect of which indemnity is to be
sought against an indemnifying person pursuant to Section 6(d) or 6(e), such
indemnified person shall notify the indemnifying person in writing of such claim
or of the commencement of such action and, subject to the provisions hereinafter
stated, in case any such action shall be brought against an indemnified person,
the indemnifying person shall be entitled to participate therein, and, to the
extent that it shall wish, to assume the defense thereof, with counsel
reasonably satisfactory to the indemnified person. After notice from the
indemnifying person to such indemnified person of the indemnifying person's
election to assume the defense thereof, the indemnifying person shall not be
liable to such indemnified person for any legal expenses subsequently incurred
by such indemnified person in connection with the defense thereof; provided,
however, that if there exists or shall exist a conflict of interest that would
make it inappropriate in the reasonable judgment of the indemnified person for
the same counsel to represent both the indemnified person and such indemnifying
person or any affiliate or associate thereof, the indemnified person shall be
entitled to retain its own counsel at the expense of such indemnifying person;
provided, further, that the indemnifying person shall not be obligated to assume
the expenses of more than one counsel (in addition to local counsel) to
represent all indemnified persons. No indemnifying party shall, without the
consent of the indemnified party, consent to entry of any judgment or enter into
any settlement of any such action which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such indemnified party
of a release from all liability in respect to such claim or litigation. No
indemnified party shall consent to
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entry of any judgment or enter into any settlement of any such action the
defense of which has been assumed by an indemnifying party without the consent
of such indemnifying party.
(g) If the indemnification provided for in Section 6(d) or 6(e)
is unavailable to or insufficient to hold harmless an indemnified party under
subsection 7(d) or 7(e) above in respect of any loss, claim, damage, expense or
liability (or actions or proceedings in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages, liabilities
or expenses (or actions in respect thereof) in such proportion as is appropriate
to reflect the relative fault of the Company on the one hand and the Holders on
the other in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or expenses (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
on the one hand or a Holder on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Holders agree that it would not be
just and equitable if contributions pursuant to this subsection (g) were
determined by pro rata allocation (even if the Holders were treated as one
entity for such purpose) or by any other method of allocation which does not
take into account the equitable considerations referred to above in this
subsection (g). The amount paid or payable by an indemnified party as a result
of the losses, claims, damages, liabilities or expenses (or actions in respect
thereof) referred to above in this subsection (g) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (g), no Holder of Registrable
Securities shall be required to contribute in the aggregate any amount in excess
of the net proceeds received by such Holder from the sale of the Registrable
Securities to which such loss, claim, damage, liability or expense relates. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Holders' obligations in this
subsection (g) to contribute are several in proportion to their sales of the
Registrable Securities to which such loss relates and not joint.
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(h) The obligations of the Company and the Holders of Warrants
under Sections 6(d), (e) and (g) shall be in addition to any liability which the
Company and the respective Holders may otherwise have.
(i) Nothing contained in this Agreement shall be construed as
requiring a Holder to exercise its Warrants prior to the initial filing of any
registration statement or the effectiveness thereof.
(j) The Company shall not permit the inclusion of any securities
other than the Registrable Securities in any registration statement filed
pursuant to Section 6.2 hereof, or file any registration statement subsequent to
the receipt of any notice pursuant to Section 6.2 hereof and until ninety (90)
days after the effectiveness of a registration statement filed pursuant to
Section 6.2 hereof; provided, however, that in the event of an underwritten
public offering, the Company shall have the right to permit the inclusion of
such other securities if the managing underwriter of such offering advises the
Company or the Holders in writing that, in its opinion, the inclusion of such
securities other than the Registrable Securities in such registration statement
will not adversely affect the distribution or the offering price of such
Registrable Securities.
(k) In connection with any registration statement filed pursuant
to Section 6.2 hereof, the Company shall furnish to each Holder participating in
any underwritten offering and to each underwriter, 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 the underwriting agreement), 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, 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.
(l) The Company shall as soon as practicable after the effective
date of the registration statement, and in any event within fifteen (15) months
thereafter, make "generally available to its security holders" (within the
meaning of Rule 158 under
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the Act) an earnings statement (which need not be audited) complying with
Section 11(a) of the Act and covering a period of at least twelve (12)
consecutive months beginning after the effective date of the registration
statement.
(m) The Company shall deliver promptly to each Holder
participating in the offering requesting the correspondence and memoranda
described below, and to the managing underwriters, 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 National
Association of Securities Dealers, Inc. ("NASD"). Such investigation shall
include access to books, records and properties and opportunities to discuss the
business of the Company with its officers and independent auditors, all to such
reasonable extent and at such reasonable times and as often as any such Holder
or underwriter shall reasonably request.
(n) The Company shall enter into an underwriting agreement with
the managing underwriters selected for such underwriting by the Representative
or the Initiating Holders, which may be any of the Underwriters. 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, covenants and indemnities 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 Registrable Securities and may, at their
option, require that any or all the representations, warranties, covenants and
indemnities 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 and their
intended methods of distribution.
(o) The Company shall promptly notify each Holder of Registrable
Securities covered by such registration statement, at any time when a prospectus
relating thereto is required to be delivered under the Act, upon the Company's
discovery that, or upon the happening of any event as a result of which, the
prospectus included in such registration statement, as then in effect, includes
an untrue statement of a material fact or omits to state any material fact
required to be stated
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therein or necessary to make the statements therein not misleading in the light
of the circumstances under which they were made, and at the request of any such
Holder promptly prepare and furnish to such Holder and each underwriter, if any,
a reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such securities, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances under which they were made.
(p) The Company shall prepare and file with the Commission such
amendments and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the Act with respect to
the disposition of all securities covered by such registration statement until
the earlier of such time as all of such securities have been disposed of in
accordance with the intended methods of disposition by the Holder or Holders
thereof set forth in such registration statement or the expiration of twelve
(12) consecutive months after such registration statement becomes effective.
(q) The Company shall furnish to each Holder of Registrable
Securities covered by such registration statement and each underwriter, if any,
of the securities being sold by such Holder such number of conformed copies of
such registration statement and of each such amendment and supplement thereto
(in each case including all exhibits), such number of copies of the prospectus
contained in such registration statement (including each preliminary prospectus
and any summary prospectus) and any other prospectus filed under Rule 424 under
the Act, in conformity with the requirements of the Act, and such other
documents, as such Holder and underwriter, if any, may reasonably request in
order to facilitate the public sale or other disposition of the Registrable
Securities owned by such Holder.
(r) The Company shall use its best efforts to cause all
Registrable Securities covered by such registration statement to be registered
with or approved by such other governmental agencies or authorities as may be
necessary to enable the seller or sellers thereof to consummate the disposition
of such Registrable Securities.
(s) The Company shall otherwise use its best efforts to comply
with all applicable rules and regulations of the Commission and will furnish to
each Holder of Registrable Securities included in any registration statement at
least five (5)
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business days prior to the filing thereof a copy of any amendment or supplement
to such registration statement or prospectus and shall not file any amendment or
supplement thereof to which any such Holder shall have reasonably objected on
the grounds that such amendment or supplement does not comply in all material
respects with the requirements of the Act or the rules or regulations
thereunder.
Section 7.0 Adjustments to Exercise Price and Number of Shares.
Section 7.1 Adjustment in Number of Shares. Upon each adjustment of
the Exercise Price pursuant to the provisions of this Section 7, the number of
Warrant Shares issuable upon the exercise of each Warrant shall be adjusted to
the nearest full amount by multiplying a number equal to the Exercise Price in
effect immediately prior to such adjustment by the number of Warrant Shares
issuable upon exercise of the Warrants immediately prior to such adjustment and
dividing the product so obtained by the adjusted Exercise Price.
Section 7.2 Issuance of Additional Common Shares. In case the Company
at any time or from time to time after the date hereof shall issue or sell
Additional Common Shares (including Additional Common Shares deemed to be issued
pursuant to Section 7.4 or 7.5) without consideration or for a consideration per
share less than the greater of the Current Market Price (as defined in Section
14) and the Exercise Price in effect immediately prior to such issue or sale,
then, and in each such case, such Exercise Price shall be reduced, concurrently
with such issue or sale, to a price (calculated to the nearest .001 of a cent)
determined by multiplying such Exercise Price by a fraction:
(a) the numerator of which shall be (i) the number of Common
Shares outstanding immediately prior to such issue or sale plus (ii) the number
of Common Shares which the aggregate consideration received by the Company for
the total number of such Additional Common Shares so issued or sold would
purchase at the greater of the Current Market Price and such Exercise Price, and
(b) the denominator of which shall be the number of Common
Shares outstanding immediately after such issue or sale, provided that, for the
purposes of this Section 7.2, (x) immediately after any Additional Common Shares
are deemed to have been issued pursuant to Section 7.4 or 7.5, such Additional
Shares shall be deemed to be outstanding, and (y) treasury shares shall not be
deemed to be outstanding.
Section 7.3 Extraordinary Dividends and Distributions. In case the
Company at any time or from time to time after the date hereof shall declare,
order, pay or make
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a dividend or other distribution (including, without limitation, any
distribution of other or additional shares or other securities or property or
Options by way of dividend or spin-off, reclassification, recapitalization or
similar corporate rearrangement) on the Common Shares, other than a dividend
payable in Additional Common Shares, then, and in each such case, the Exercise
Price in effect immediately prior to the close of business on the record date
fixed for the determination of holders of any class of securities entitled to
receive such dividend or distribution shall be reduced, effective as of the
close of business on such record date, to a price (calculated to the nearest
.001 of a cent) determined by multiplying such Exercise Price by a fraction:
(a) the numerator of which shall be the Current Market Price in
effect on such record date or, if the Common Shares trade on an ex-dividend
basis, on the date prior to the commencement of ex-dividend trading, less the
amount of such dividend or distribution (as determined in good faith by the
Board of Directors of the Company) applicable to one Common Share, and
(b) the denominator of which shall be such Current Market Price,
provided that, in the event that the amount of such dividend as so determined is
equal to or greater than ten percent (10%) of such Current Market Price or in
the event that such fraction is less than 9/10, in lieu of the foregoing
adjustment, adequate provision shall be made so that the Holder of this Warrant
shall receive a pro rata share of such dividend based upon the maximum number of
Common Shares at the time issuable to such Holder (determined without regard to
whether the Warrant is exercisable at such time).
Section 7.4 Treatment of Options and Convertible Securities. In case
the Company at any time or from time to time after the date hereof shall issue,
sell, grant or assume, or shall fix a record date for the determination of
holders of any class of securities entitled to receive, any Options or
Convertible Securities, then, and in each such case, the maximum number of
Additional Common Shares (as set forth in the instrument relating thereto,
without regard to any provisions contained therein for a subsequent adjustment
of such number) issuable upon the exercise of such Options or, in the case of
Convertible Securities and Options therefor, the conversion or exchange of such
Convertible Securities, shall be deemed to be Additional Common Shares issued as
of the time of such issue, sale, grant or assumption or, in case such a record
date shall have been fixed, as of the close of business on such record date (or,
if the Common Shares trade on an ex-dividend basis, on the date prior to the
commencement of ex-
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dividend trading), provided that such Additional Common Shares shall not be
deemed to have been issued unless the consideration per share (determined
pursuant to Section 7.6) of such shares would be less than the greater of the
Current Market Price and the Exercise Price in effect on the date of and
immediately prior to such issue, sale, grant or assumption or immediately prior
to the close of business on such record date (or, if the Common Shares trade on
an ex-dividend basis, on the date prior to the commencement of ex-dividend
trading), as the case may be, and provided, further, that in any such case in
which Additional Common Shares are deemed to be issued:
(a) no further adjustment of the Exercise Price shall be made
upon the subsequent issue or sale of Convertible Securities or Common Shares
upon the exercise of such Options or the conversion or exchange of such
Convertible Securities;
(b) if such Options or Convertible Securities by their terms
provide, with the passage of time or otherwise, for any increase in the
consideration payable to the Company, or decrease in the number of Additional
Common Shares issuable, upon the exercise, conversion or exchange thereof (by
change of rate or otherwise), the Exercise Price computed upon the original
issue, sale, grant or assumption thereof (or upon the occurrence of the record
date, or date prior to the commencement of ex-dividend trading, as the case may
be, with respect thereto), and any subsequent adjustments based thereon, shall,
upon any such increase or decrease becoming effective, be recomputed to reflect
such increase or decrease insofar as it affects such Options, or the rights of
conversion or exchange under such Convertible Securities, which are outstanding
at such time;
(c) upon the expiration (or purchase by the Company and
cancellation or retirement) of any such Options which shall not have been
exercised or the expiration of any rights of conversion or exchange under any
such Convertible Securities which (or purchase by the Company and cancellation
or retirement of any such Convertible Securities the rights of conversion or
exchange under which) shall not have been exercised, the Exercise Price computed
upon the original issue, sale, grant or assumption thereof (or upon the
occurrence of the record date, or date prior to the commencement of ex-dividend
trading, as the case may be, with respect thereto), and any subsequent
adjustments based thereon, shall, upon such expiration (or such cancellation or
retirement, as the case may be), be recomputed as if:
(i) in the case of Options for Common Shares or Convertible
Securities, the only Additional Common Shares issued or sold were the
Additional Common Shares, if any, actually issued or sold
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upon the exercise of such Options or the conversion or exchange of such
Convertible Securities and the consideration received therefor was the
consideration actually received by the Company for the issue, sale, grant
or assumption of all such Options, whether or not exercised, plus the
consideration actually received by the Company upon such exercise, or for
the issue or sale of all such Convertible Securities which were actually
converted or exchanged, plus the additional consideration, if any,
actually received by the Company upon such conversion or exchange; and
(ii) in the case of Options for Convertible Securities, only the
Convertible Securities, if any, actually issued or sold upon the exercise
of such Options were issued at the time of the issue, sale, grant or
assumption of such Options, and the consideration received by the Company
for the Additional Common Shares deemed to have then been issued was the
consideration actually received by the Company for the issue, sale, grant
or assumption of all such Options, whether or not exercised, plus the
consideration deemed to have been received by the Company (pursuant to
Section 7.6) upon the issue or sale of such Convertible Securities with
respect to which such Options were actually exercised;
(d) no readjustment pursuant to clause (b) or (c) above shall
have the effect of increasing the Exercise Price by an amount in excess of the
amount of the adjustment thereof originally made in respect of the issue, sale,
grant or assumption of such Options or Convertible Securities; and
(e) in the case of any such Options which expire by their terms
not more than thirty (30) days after the date of issue, sale, grant or
assumption thereof, no adjustment of the Exercise Price shall be made until the
expiration or exercise of all such Options, whereupon such adjustment shall be
made in the manner provided in clause (c) above.
Section 7.5 Treatment of Share Dividends, Share Splits, etc. In case
the Company at any time or from time to time after the date hereof shall declare
or pay any dividend on the Common Shares payable in Common Shares, or shall
effect a subdivision of the outstanding Common Shares into a greater number of
Common Shares (by reclassification or otherwise than by payment of a dividend in
Common Shares), then, and in each such case, Additional Common Shares shall be
deemed to
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have been issued (a) in the case of any such dividend, immediately
after the close of business on the record date for the determination
of holders of any class of securities entitled to receive such
dividend, or (b) in the case of any such clause, at the close of
business on the day immediately prior to the day upon which such
corporate action becomes effective.
Section 7.6 Computation of Consideration. For the purposes of this
Section 7:
(a) the consideration for the issue or sale of any Additional
Common Shares shall, irrespective of the accounting treatment of such
consideration,
(i) insofar as it consists of cash, be computed at the net
amount of cash received by the Company, without deducting any expenses
paid or incurred by the Company or any commissions or compensations paid
or concessions or discounts allowed to underwriters, dealers or others
performing similar services in connection with such issue or sale,
(ii) insofar as it consists of property (including
securities) other than cash, be computed at the fair value thereof at the
time of such issue or sale, as determined in good faith by the Board of
Directors of the Company, and
(iii) in case Additional Common Shares are issued or sold
together with other shares or securities or other assets of the Company
for a consideration which covers both, be the portion of such
consideration so received, computed as provided in clauses (i) and (ii)
above, allocable to such Additional Common Shares, all as determined in
good faith by the Board of Directors of the Company.
(b) Additional Common Shares deemed to have been issued pursuant
to Section 7.4, relating to Options and Convertible Securities, shall be deemed
to have been issued for a consideration per share determined by dividing:
(i) the total amount, if any, received and receivable by
the Company as consideration for the issue, sale, grant or assumption of
the Options or Convertible Securities in question, plus the minimum
aggregate amount of additional consideration (as set forth in the
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instruments relating thereto, without regard to any provision contained
therein for a subsequent adjustment of such consideration to protect
against dilution) payable to the Company upon the exercise in full of such
Options or the conversion or exchange of such Convertible Securities or,
in the case of Options for Convertible Securities, the exercise of such
Options for Convertible Securities and the conversion or exchange of such
Convertible Securities, in each case computing such consideration as
provided in the foregoing clause (a),
by
(ii) the maximum number of Common Shares (as set forth in
the instruments relating thereto, without regard to any provision
contained therein for a subsequent adjustment of such number to protect
against dilution) issuable upon the exercise of such Options or the
conversion or exchange of such Convertible Securities.
(c) Additional Common Shares deemed to have been issued pursuant
to Section 7.5, relating to share dividends, share splits, etc., shall be deemed
to have been issued for no consideration.
Section 7.7 Adjustments for Combinations, etc. In case the
outstanding Common Shares shall be combined or consolidated, by reclassification
or otherwise, into a lesser number of Common Shares, the Exercise Price in
effect immediately prior to such combination or consolidation shall,
concurrently with the effectiveness of such combination or consolidation, be
proportionately increased.
Section 7.8 Dilution in Case of Other Securities. In case any Other
Securities shall be issued or sold or shall become subject to issue or sale upon
the conversion or exchange of any shares (or Other Securities) of the Company
(or any issuer of Other Securities or any other person referred to in Section
7.9) or to subscription, purchase or other acquisition pursuant to any Options
issued or granted by the Company (or any such other issuer or person) for a
consideration such as to dilute, on a basis consistent with the standards
established in the other provisions of this Section 7, the purchase rights
granted by this Warrant, then, and in each such case, the computations,
adjustments and readjustments provided for in this Section 7 with respect to the
Exercise Price shall be made as nearly as possible in the manner so provided and
applied to determine the amount of Other Securities from time to time receivable
upon the exercise
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of the Warrants, so as to protect the Holders of the Warrants against the effect
of such dilution.
Section 7.9 Merger or Consolidation. In case the Company after the
date hereof (i) shall consolidate with or merge into any other person and shall
not be the continuing or surviving corporation of such consolidation or merger,
or (ii) shall permit any other person to consolidate with or merge into the
Company and the Company shall be the continuing or surviving person but, in
connection with such consolidation or merger, the Common Shares or Other
Securities shall be changed into or exchanged for stock or Other Securities of
any other person or cash or any other property, or (iii) shall transfer all or
substantially all of its properties or assets to any other person, or (iv) shall
effect a capital reorganization or reclassification of the Common Shares or
Other Securities (other than a capital reorganization or reclassification
resulting in the issue of Additional Common Shares for which adjustment in the
Exercise Price is provided in this Section 7), then, and in the case of each
such transaction, proper provision shall be made so that, upon the basis and the
terms and in the manner provided in this Agreement and the Warrants, the Holders
of the Warrants, upon the exercise thereof at any time after the consummation of
such transaction, shall be entitled to receive (at the aggregate Exercise Price
in effect at the time of such consummation for all Common Shares or Other
Securities issuable upon such exercise immediately prior to such consummation),
in lieu of the Common Shares or Other Securities issuable upon such exercise
prior to such consummation, the highest amount of securities, cash or other
property to which such Holder would actually have been entitled as a shareholder
upon such consummation if such Holder had exercised the rights represented by
the Warrants immediately prior thereto, subject to adjustments (subsequent to
such consummation) as nearly equivalent as possible to the adjustments provided
for in this Section 7; provided that if a purchase, tender or exchange offer
shall have been made to and accepted by the holders of more than 50% of the
outstanding Common Shares, and if a Holder of Warrants so designates in a notice
given to the Company on or before the date immediately preceding the date of the
consummation of such transaction, such Holder of such Warrants shall be entitled
to receive the highest amount of securities, cash or other property to which
such Holder would actually have been entitled as a shareholder if such Holder of
such Warrants had exercised such Warrants prior to the expiration of such
purchase, tender or exchange offer and accepted such offer, subject to
adjustments (from and after the consummation of such purchase, tender or
exchange offer) as nearly equivalent as possible to the adjustments provided for
in this Section 7.
Section 7.10 Assumption of Obligations. Notwithstanding anything
contained in the Warrants to the contrary, the Company will not effect any of
the transactions
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described in clauses (i) through (iv) of Section 7.4 unless, prior to the
consummation thereof, each person (other than the Company) which may be required
to deliver any shares, securities, cash or property upon the exercise of the
Warrants as provided herein shall assume, by written instrument delivered to,
and reasonably satisfactory to, the Holders of the Warrants, (a) the obligations
of the Company under this Agreement and the Warrants (and if the Company shall
survive the consummation of such transaction, such assumption shall be in
addition to, and shall not release the Company from, any continuing obligations
of the Company under this Agreement and the Warrants) and (b) the obligation to
deliver to such Holders such shares, securities, cash or property as, in
accordance with the provisions of this Section 7, such Holders may be entitled
to receive, and such person shall have similarly delivered to such Holders an
opinion of counsel for such person, which counsel shall be reasonably
satisfactory to such Holders, stating that this Agreement and the Warrants shall
thereafter continue in full force and effect and the terms hereof (including,
without limitation, all of the provisions of this Section 7) shall be applicable
to the shares, securities, cash or property which such person may be required to
deliver upon any exercise of the Warrants or the exercise of any rights pursuant
hereto.
Section 7.11 Notice of Adjustments. Whenever the Exercise Price or
the kind of securities or property issuable upon exercise of the Warrants, or
both, shall be adjusted pursuant to this Section 7, the Company shall make a
certificate signed by its President or a Vice President and by its Chief
Financial Officer, Secretary or Assistant Secretary, setting forth, in
reasonable detail, the event requiring the adjustment, the amount of the
adjustment, the method by which such adjustment was calculated (including a
description of the basis on which the Company made any determination hereunder),
and the Exercise Price and the kind of securities or property issuable upon
exercise of the Warrants after giving effect to such adjustment, and shall cause
copies of such certificate to be mailed (by first class mail postage prepaid) to
each Holder promptly after each adjustment.
Section 7.12 Preservation of Rights. The Company will not, by
amendment of its certificate of incorporation or through any consolidation,
merger, reorganization, transfer of assets, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of this Agreement or the Warrants or the
rights represented thereby, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the Holders of the
Warrants against dilution or other impairment.
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Section 7.13 Other Dilutive Events. In case any event shall occur as
to which the provisions of Section 7 are not strictly applicable but the failure
to make any adjustment would not fairly protect the purchase rights represented
by this Agreement and the Warrants in accordance with the essential intent and
principles of Section 7, then, in each such case, the Company shall appoint a
firm of independent certified public accountants of recognized national standing
(which may be the regular auditors of the Company), which shall give their
opinion upon the adjustment, if any, on a basis consistent with the essential
intent and principles established in Section 7, necessary to preserve, without
dilution, the purchase rights represented by this Agreement and the Warrants.
Upon receipt of such opinion, the Company will promptly mail a copy thereof to
the Holder of the Warrants and shall make the adjustments described therein.
Section 8.0 Exchange and Replacement of Warrant Certificates. Each
Warrant Certificate is exchangeable without expense, upon the surrender thereof
by the registered Holder at the principal executive office of the Company, for a
new Warrant Certificate of like tenor and date representing in the aggregate the
right to purchase the same number of Warrant Shares in such denominations as
shall be designated by the Holder thereof at the time of such surrender.
Upon receipt by the Company of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of any Warrant Certificate, and,
in case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it, and reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of the Warrants, if
mutilated, the Company will make and deliver a new Warrant Certificate of like
tenor, in lieu thereof.
Section 9.0 Elimination of Fractional Interests. The Company shall
not be required to issue certificates representing fractions of Common Shares
upon the exercise of the Warrants, nor shall it be required to issue scrip or
pay cash in lieu of 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 Common Shares or other securities, properties or
rights.
Section 10.0 Reservation and Listing of Securities. The Company shall
at all times reserve and keep available out of its authorized Common Shares,
solely for the purpose of issuance upon the exercise of the Warrants, such
number of Common Shares 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 Common
Shares and other securities issuable upon
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such exercise shall be duly and validly issued, fully paid, nonassessable and
not subject to the preemptive rights of any shareholder. As long as the Warrants
shall be outstanding, the Company shall use its best efforts to cause all Common
Shares issuable upon the exercise of the Warrants to be listed on all securities
exchanges and/or included in the automated quotation system of the Nasdaq
[National Market System] (subject to official notice of issuance) with respect
to which the Common Shares issued to the public in connection herewith may then
be so listed and/or quoted.
Section 11.0 Notices to Warrant Holders. In the event of
(a) any taking by the Company of a record of the holders of any
class of securities for the purpose of determining the holders thereof who are
entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right, or
(b) any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or any
consolidation or merger involving the Company and any other person or any
transfer of all or substantially all the assets of the Company to any other
person, or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company,
the Company will mail to each Holder of a Warrant a notice specifying (i) the
date or expected date on which any such record is to be taken for the purpose of
such dividend, distribution or right, and the amount and character of such
dividend, distribution or right, and (ii) the date or expected date on which any
such reorganization, reclassification, recapitalization, consolidation, merger,
transfer, dissolution, liquidation or winding-up is to take place and the time,
if any such time is to be fixed, as of which the holders of record of Common
Shares (or Other Securities) shall be entitled to exchange their shares of
Common Shares (or Other Securities) for the securities or other property
deliverable upon such reorganization, reclassification, recapitalization,
consolidation, merger, transfer, dissolution, liquidation or winding-up. Such
notice shall be mailed at least 45 days prior to the date therein specified.
Section 12.0 Notices. All notices, requests, consents and other
communications hereunder shall be in writing and shall be deemed to have been
duly given or made at the time delivered by hand if personally delivered; five
calendar days after mailing if
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sent by registered or certified mail; when answered back, if telexed; when
receipt is acknowledged, if telecopied: and the next business day after timely
delivery to the courier, if sent by overnight air courier guaranteeing next day
delivery (except that a notice of change of address shall not be deemed to have
been given until actually received by the addressee):
(a) If to the registered Holder of the Warrants, to the address
of such Holder as shown on the books of the Company; or
(b) If to the Company, to the address set forth in Section 3.1
hereof or to such other address as the Company may designate by notice to the
Holders.
Section 13.0 Supplements and Amendments. The Company and the
Representative may from time to time supplement or amend this Agreement without
the approval of any Holders of Warrant Certificates (other than the
Representative) in order to cure any ambiguity, to correct or supplement any
provision contained herein which may be defective or inconsistent with any
provisions herein, or to make any other provisions in regard to matters or
questions arising hereunder which the Company and the Representative may deem
necessary or desirable and which the Company and the Representative deem shall
not adversely affect the interests of the Holders of Warrant Certificates.
Section 14.0 Definitions. As used herein, unless the context
otherwise requires, the following terms have the following respective meanings:
Additional Common Shares: All Common Shares (including treasury
shares) issued or sold (or, pursuant to Section 7.4 or 7.5, deemed to be issued)
by the Company after the date hereof, whether or not subsequently reacquired or
retired by the Company.
Common Shares: (i) the class of shares designated as Common Stock in
the Certificate of Incorporation of the Company as may be amended as of the date
hereof, or (ii) any other class of shares resulting from successive changes or
reclassifications of such Common Shares. In the event that the Company shall
after the date hereof issue securities with greater or superior voting rights
than the Common Shares outstanding as of the date hereof, the Holder, at its
option, may receive upon exercise of any Warrant either Common Shares or a like
number of such securities with greater or superior voting rights.
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Convertible Securities: Any evidence of indebtedness, shares (other
than Common Shares) or other securities directly or indirectly convertible into
or exchangeable for Additional Common Shares.
Current Market Price: On any date specified herein, the average daily
Market Price during the period of the most recent twenty (20) days, ending on
such date, on which the national securities exchanges were open for trading,
except that if no Common Shares is then listed or admitted to trading on any
national securities exchange or quoted in the over-the-counter market, the
Current Market Price shall be the Market Price on such date.
Market Price: On any date specified herein, the amount per Common
Shares, equal to (a) the last sale price of such Common Shares, regular way, on
such date or, if no such sale takes place on such date, the average of the
closing bid and asked prices thereof on such date, in each case as officially
reported on the principal national securities exchange on which such Common
Shares are then listed or admitted to trading, or (b) if such Common Shares are
not then listed or admitted to trading on any national securities exchange but
are designated as a national market system security by the NASD, the last
trading price of the Common Shares on such date, or (c) if there shall have been
no trading on such date or if the Common Shares are not so designated, the
average of the closing bid and asked prices of the Common Shares on such date as
shown by the NASD automated quotation system, or (d) if such Common Shares are
not then listed or admitted to trading on any national exchange or quoted in the
over-the-counter market, the higher of (x) the book value thereof as determined
by any firm of independent public accountants of recognized standing selected by
the Board of Directors of the Company as of the last day of any month ending
within sixty (60) days preceding the date as of which the determination is to be
made or (y) the fair value thereof determined in good faith by the Board of
Directors of the Company as of a date which is within eighteen (18) days of the
date as of which the determination is to be made.
Options: Rights, options or warrants to subscribe for, purchase or
otherwise acquire either Additional Common Shares or Convertible Securities.
Other Securities: Any shares (other than Common Shares) and other
securities of the Company or any other person (corporate or otherwise) which the
Holders of the Warrants at any time shall be entitled to receive, or shall have
received, upon the exercise of the Warrants, in lieu of or in addition to Common
Shares, or which
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at any time shall be issuable or shall have been issued in exchange for or in
replacement of Common Shares or Other Securities pursuant to Section 7 or
otherwise.
Registrable Securities: (a) Any Common Shares or Other Securities
issued or issuable upon exercise of the Warrants and (b) any securities issued
or issuable with respect to any securities referred to in the foregoing clause
by way of share dividend or share split or in connection with a combination of
shares, recapitalization, merger, consolidation or other reorganization or
otherwise. As to any particular Registrable Securities, once issued such
securities shall cease to be Registrable Securities when (a) a registration
statement with respect to the sale of such securities shall have become
effective under the Act and such securities shall have been disposed of in
accordance with such registration statement, (b) they shall have been
distributed to the public pursuant to Rule 144 (or any successor provision)
under the Act, or (c) they shall have ceased to be outstanding.
Section 15.0 Successors. All the covenants and provisions of this
Agreement shall be binding upon and inure to the benefit of the Company, the
Holders and their respective successors and assigns hereunder.
Section 16.0 Termination. Except as otherwise provided herein, this
Agreement shall terminate at the close of business on _____________, 2005.
Section 17.0 Governing Law; Submission to Jurisdiction. This
Agreement and each Warrant Certificate issued hereunder shall be deemed to be a
contract made under the laws of the State of Delaware and for all purposes shall
be construed in accordance with the laws of said State without giving effect to
the rules of said State governing the conflicts of laws.
Any process or summons to be served upon any of the Company, the
Representative and the Holders (at the option of the party bringing such action,
proceeding or claim) 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 12 hereof. Such mailing shall be deemed
personal service and shall be legal and binding upon the party so served in any
action, proceeding or claim. The Company, the Representative and the Holders
agree that the prevailing party(ies) in any such action or proceeding shall be
entitled to recover from the other party(ies) all of its/their reasonable legal
costs and expenses relating to such action or proceeding and/or incurred in
connection with the preparation therefor.
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Section 18.0 Entire Agreement; Modification. This Agreement
(including the Underwriting Agreement to the extent portions thereof are
referred to herein) contains the entire understanding between the parties hereto
with respect to the subject matter hereof and may not be modified or amended
except by a writing duly signed by the party against whom enforcement of the
modification or amendment is sought.
Section 19.0 Severability. If any provision of this Agreement shall
be held to be invalid or unenforceable, such invalidity or unenforceability
shall not affect any other provision of this Agreement.
Section 20.0 Captions. The caption headings of the Sections of this
Agreement are for convenience of reference only and are not intended to be, nor
should they be construed as, part of this Agreement and shall be given no
substantive effect.
Section 21.0 Benefits of This Agreement. Nothing in this Agreement
shall be construed to give any person or corporation other than the Company and
the Representative and any other registered Holder(s) of the Warrant
Certificates or Warrant Shares any legal or equitable right, remedy or claim
under this Agreement; and this Agreement shall be for the sole and exclusive
benefit of the Company, the Representative and any other registered Holder(s) of
the Warrant Certificates or Warrant Shares.
Section 22.0 Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and such counterparts shall together constitute but
one and the same instrument.
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IN WITNESS WHEREOF, the Company and the Representative have caused
this Agreement to be signed by their respective officers thereunto duly
authorized as of the date first written above.
RIBOGENE, INC.
By:
-------------------------------------
Attest:
--------------------------------
Secretary
GRUNTAL & CO., L.L.C.
By:
-------------------------------------
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EXHIBIT A
[Form of Warrant Certificate]
THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.
EXERCISABLE ON OR BEFORE 5:30 P.M.,
NEW YORK TIME, __________, 2003
[the fifth anniversary of the effective
date of the registration statement]
No. W- _______ Warrants
WARRANT CERTIFICATE
This Warrant Certificate certifies that , or registered assigns, is
the registered holder of _________ Warrants to purchase initially at any time
from __________, 1998 [the first anniversary of the effective date of the
registration statement] until 5:30 p.m., New York time, on __________, 2003 [the
fifth anniversary of the effective date of the registration statement]
("Expiration Date"), up to ______ fully paid and nonassessable shares of common
stock, $.001 par value per share ("Common Shares") of RiboGene, Inc., a Delaware
corporation (the "Company"), at the initial exercise price, subject to
adjustment in certain events (the "Exercise Price"), of $ ________ [165% of the
initial public offering price per share] per Common Share, upon surrender of
this Warrant Certificate and payment of the Exercise Price at any office or
agency of the Company, but only subject to the conditions set forth herein and
in the Representative's Warrant Agreement, dated as of __________, 1998, between
the Company and Gruntal & Co., L.L.C. (the "Warrant Agreement"). Payment of the
Exercise Price shall be made by certified or official bank check in New York
Clearing House funds payable to the order of the Company.
No Warrant may be exercised after 5:30 p.m., New York time, on the
Expiration Date, at which time all Warrants evidenced hereby, unless exercised
prior thereto, shall thereafter be void.
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The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants issued pursuant to the Warrant Agreement, which
Warrant Agreement is hereby incorporated by reference in and made a part of this
instrument and is hereby referred to for a description of the rights, limitation
of rights, obligations, duties and immunities thereunder of the Company and the
holders (the words "holders" or "holder" meaning the registered holders or
registered holder) of the Warrants.
The Warrant Agreement provides that upon the occurrence of certain
events the Exercise Price and the type and/or number of the Company's securities
issuable thereupon may, subject to certain conditions, be adjusted. In such
event, the Company will, at the request of the holder, issue a new Warrant
Certificate evidencing the adjustment in the Exercise Price and the number
and/or type of securities issuable upon the exercise of the Warrants; provided,
however, that the failure of the Company to issue such new Warrant Certificates
shall not in any way change, alter, or otherwise impair the rights of the holder
as set forth in the Warrant Agreement.
Upon due presentment for registration of transfer of this Warrant
Certificate at an office or agency of the Company, a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like number
of Warrants shall be issued to the transferee(s) in exchange for this Warrant
Certificate, subject to the limitations provided herein and in the Warrant
Agreement, without any charge except for any tax or other governmental charge
imposed in connection with such transfer.
Upon the exercise of less than all of the Warrants evidenced by this
Certificate, the Company shall forthwith issue to the holder hereof a new
Warrant Certificate representing such number of unexercised Warrants.
The Company may deem and treat the registered holder(s) hereof as the
absolute owner(s) of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, and for all other purposes, and the Company shall not be
affected by any notice to the contrary.
All terms used in this Warrant Certificate which are defined in the
Warrant Agreement shall have the meanings assigned to them in the Warrant
Agreement.
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IN WITNESS WHEREOF, the Company has caused this Warrant Certificate
to be duly executed under its corporate seal.
Dated:
RIBOGENE, INC.
By
-------------------------------------
Name:
Title:
Attest:
-------------------------------
Name:
Secretary
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[FORM OF ELECTION TO PURCHASE
PURSUANT TO SECTION 3.1]
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase _____ Common Shares and
herewith tenders in payment for such securities a certified or official bank
check payable in New York Clearing House funds to the order of RiboGene, Inc. in
the amount of $__________, all in accordance with the terms hereof. The
undersigned requests that a certificate for such securities be registered in the
name of ____________ whose address is ______________________ and that such
Certificate be delivered to ________________ whose address is
__________________.
Dated: Signature
----------------------------------------
(Signature must conform in all respects
to name of holder as specified on the
face of the Warrant Certificate.)
----------------------------------------
(Insert Social Security or Other
Identifying Number of Holder)
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[FORM OF ELECTION TO PURCHASE
PURSUANT TO SECTION 3.2]
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase _____ of Common Shares all
in accordance with the terms of Section 3.2 of the Representative's Warrant
Agreement, dated as of __________, 1998, between RiboGene, Inc. and Gruntal &
Co., L.L.C. The undersigned requests that a certificate for such securities be
registered in the name of ______________ whose address is _____________ and that
such Certificate be delivered to ____________ whose address is
_________________.
Dated: Signature
----------------------------------------
(Signature must conform in all respects
to name of holder as specified on the
face of the Warrant Certificate.)
----------------------------------------
(Insert Social Security or Other
Identifying Number of Holder)
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[FORM OF ASSIGNMENT]
(To be executed by the registered holder if such holder desires to transfer the
Warrant Certificate)
FOR VALUE RECEIVED ______________________ hereby sells, assigns and transfers
unto
---------------------------------------------------------
(Please print name and address of transferee)
this Warrant Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ____________ Attorney, to
transfer the within Warrant Certificate on the books of the within named
Company, with full power of substitution.
Dated: Signature
------------ ----------------------------------------
(Signature must conform in all respects
to name of holder as specified on the
face of the Warrant Certificate.)
----------------------------------------
(Insert Social Security or Other
Identifying Number of Holder)
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