WARRANT AGREEMENT
AGREEMENT, dated as of this ___ day of February, 1996, by and between
BENTLEY PHARMACEUTICALS, INC., a Florida corporation (the "Company"), and
AMERICAN STOCK TRANSFER & TRUST COMPANY ("the Warrant Agent").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, in connection with (i) a public offering of up to 6,900 units
("the Units"), each Unit consisting of one $1,000 principal amount 12%
Convertible Senior Subordinated Debenture and 1,000 Class A Redeemable Warrants
(the "Class A Warrants"), each Class A Warrant exercisable for the purchase of
one share of common stock, par value $.02 per share (the "Common Stock"), of the
Company, and one Class B Redeemable Warrant (the "Class B Warrants"), each two
Class B Warrants exercisable for the purchase of one share of Common Stock,
pursuant to an Underwriting Agreement dated ___, 1996 (the "Underwriting
Agreement"), between the Company and Xxxxxxx and Company Securities, Inc.
("Xxxxxxx"), and (ii) the issuance to Xxxxxxx or its designees of Underwriter
Warrants to purchase an aggregate of 600 Units, the Company will issue up to
7,500,000 Class A Warrants and 7,500,000 Class B Warrants (the Class A Warrants
and the Class B Warrants, sometimes collectively, the "Warrants").
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing to so act, in connection with the
issuance, registration, transfer, exchange and redemption of the Warrants, the
issuance of certificates representing the Warrants, the exercise of the Warrants
and the rights of the holders thereof;
NOW THEREFORE, in consideration of the premises and the mutual agreements
hereinafter set forth and for the purpose of defining the terms and provisions
of the Warrants and the certificates representing the Warrants and the
respective rights and obligations thereunder of the Company, the holders of
certificates representing the Warrants and the Warrant Agent, the parties hereto
agree as follows:
SECTION 1. DEFINITIONS.
As used herein, the following terms shall have the following meanings,
unless the context shall otherwise require:
1.01 "Common Stock" shall mean stock of the Company of any class, whether
now or hereafter authorized, which has the right to participate in the
distribution of earnings and assets of the Company without limit as to amount or
percentage, which at the date of the closing of the Underwriting Agreement
consisted of 3,330,472 outstanding shares of Common Stock, $.02 par value.
1.02 "Corporate Office" shall mean the office of the Warrant Agent (or its
successor) at which at any particular time its principal business shall be
administered, which office is located at the date hereof at 00 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx, 00000.
1.03 "Exercise Date" shall mean, as to any Warrant, the date on which the
Warrant Agent shall have received both (i) the Warrant Certificate representing
such Warrant, with the exercise form thereon duly executed by the Registered
Holder thereof or his attorney duly authorized in writing, and (ii) payment in
cash, or by official bank or certified check made payable to the Company, of an
amount in lawful money of the United States of America equal to the applicable
Purchase Price.
1.04 "Initial Exercise Date" shall mean six months from the date hereof (or
such earlier date with the prior written consent of Xxxxxxx), when the
Debentures and the Warrants may be detached and separately transferable, or the
date of issuance of the Class B Warrants, as applicable.
1.05 "Purchase Price" shall mean the purchase price to be paid upon
exercise of each Warrant in accordance with the terms hereof, which price shall
be $3.00 as to each Class A Warrant and $5.00 as to each two Class B Warrants,
subject to adjustment from time to time pursuant to the provisions of Section 9
hereof and subject to the Company's right to reduce the Purchase Price to all
Warrantholders.
1.06 "Redemption Price" shall mean the price at which the Company may, at
its option, redeem the Warrants, in accordance with the terms hereof, which
price shall be $0.05 per Class A or Class B Warrant, subject to adjustment from
time to time pursuant to the provisions of Section 9 hereof.
1.07 "Registered Holder" shall mean the person in whose name any
certificate representing Warrants shall be registered on the books maintained by
the Warrant Agent pursuant to Section 6 hereof.
1.08 "Trading Day" shall mean each Monday, Tuesday, Wednesday, Thursday and
Friday other than any day on which securities are not traded on the exchange or
the Nasdaq system which is the principal market for the Common Stock, as
determined by the Board of Directors of the Company.
1.09 "Transfer Agent" shall mean Chemical Mellon Shareholder Services of
New York as the transfer agent for the Company's Common Stock, or its authorized
successor, as such.
1.10 "Warrant Expiration Date" shall mean 5:00 P.M. (New York time) on
February ___, 1999, with respect to the Class A Warrants, or February___, 2001,
with respect to the Class B Warrants, or in either case the Redemption Date as
defined in Section 8 hereof, whichever is earlier; provided, however, that if
such date shall in the State of New York be a holiday or a day on which banks
are authorized to close, then 5:00 P.M. (New York time) on the next following
day which in the State of New York is not a holiday or a day on which banks are
authorized to close. Notwithstanding the foregoing, as to the Warrants subject
to the Underwriter Warrants, the Expiration Date of the Class A Warrants shall
be the later of (i) ___________ 1999 or (ii) one year after the date of exercise
of the portion of the Underwriter Warrants pursuant to which such Class A
Warrants are issued and the Expiration Date of the Class B Warrants shall
instead be the later of (a) __________ 2001 or (b) two years after the date of
exercise of the portion of the Underwriter Warrants pursuant to which the Class
A Warrants are issued which may be exercised for Class B Warrants.
1.11 "Warrant Shares" shall mean the shares of Common Stock or other
securities pursuant to Section 9 hereof issuable upon exercise of the Warrants.
SECTION 2. WARRANTS AND ISSUANCE OF WARRANT CERTIFICATES.
2.01 Each Class A Warrant shall initially entitle the Registered Holder of
such Class A Warrant Certificate representing such Warrant, after the Initial
Exercise Date, to purchase one share of Common Stock and one Class B Warrant
upon the exercise thereof, in accordance with the terms hereof, subject to
modification and adjustment as provided in Section 9 hereof.
2.02 Each two (2) Class B Warrants shall entitle the Registered Holder of
such Class B Warrant Certificates representing such Warrants to purchase one
share of Common Stock upon the exercise of two Class B Warrants in accordance
with the terms hereof, subject to modification and adjustment as
- 2 -
provided in Section 9 hereof. Registered Holders will only be permitted to
exercise Class B Warrants in multiples of two.
2.03 The Class A Warrants included in the offering of Units will be
detachable from the Debentures constituting part of such Units and separately
transferable therefrom after August __, 1996 or sooner with the consent of
Xxxxxxx (the "Separation Date"). The Class B Warrants will be detachable and
freely transferable immediately from the shares of Common Stock issued upon
exercise of the Class A Warrants.
2.04 On the Separation Date, and upon written order of the Company signed
by its Chairman of the Board, President or a Vice President and by its Secretary
or an Assistant Secretary, the Warrant Certificates, representing the number of
Warrants issuable upon detachment and separation of the Units, shall be
countersigned, issued and delivered by the Warrant Agent.
2.05 From time to time, up to the respective Warrant Expiration Dates, the
Transfer Agent shall countersign and deliver stock certificates in required
whole number denominations representing up to an aggregate of 11,250,000 shares
of Common Stock, subject to adjustment as described herein, upon the exercise of
Warrants in accordance with this Agreement.
2.06 From time to time, up to the applicable Warrant Expiration Dates, the
Warrant Agent shall countersign and deliver Warrant Certificates in required
whole number denominations to the persons entitled thereto in connection with
any transfer or exchange permitted under this Agreement; provided, however, that
no Warrant Certificates shall be issued except (i) those initially issued
hereunder, (ii) those issued on or after the Initial Exercise Date, upon the
exercise of fewer than all Warrants represented by any Warrant Certificate, to
evidence any unexercised Warrants held by the exercising Registered Holder;
(iii) those issued upon any transfer or exchange pursuant to Section 6 hereof;
(iv) those issued in replacement of lost, stolen, destroyed or mutilated Warrant
Certificates pursuant to Section 7 hereof; (v) at the option of the Company, in
such form as may be approved by its Board of Directors, to reflect any
adjustment or change in the Purchase Price, the number of shares of Common Stock
purchasable upon exercise of the Warrants or the Redemption Price therefor made
pursuant to Section 9 hereof; and (vi) those Class B Warrants issued upon
exercise of Class A Warrants.
2.07 Pursuant to the terms of the Underwriter Warrants, Xxxxxxx may
purchase up to 600 additional Units, including up to 600,000 Class A Warrants
and 600,000 Class B Warrants, and with Warrant Expiration Dates as specifically
set forth in Section 1.10 hereof.
SECTION 3. FORM AND EXECUTION OF WARRANT CERTIFICATES.
3.01 The Warrant Certificates shall be substantially in the form annexed
hereto as Exhibit A as to the Class A Warrants and Exhibit B as to the Class B
Warrants (the provisions of which are hereby incorporated herein) and may have
such letters, numbers or other marks of identification or designation and such
legends, summaries or endorsements printed, lithographed or engraved thereon as
the Company may deem appropriate and as are not inconsistent with the provisions
of this Agreement, or as may be required to comply with any law or with any rule
or regulation made pursuant thereto or with any rule or regulation of any stock
exchange or national securities system on which the Warrants may be listed, or
to conform to usage. The Warrant Certificates shall be dated the date of
issuance thereof (whether upon initial issuance, transfer, exchange or in lieu
of mutilated, lost, stolen, or destroyed Warrant Certificates) and issued in
registered form. Warrant Certificates shall be numbered serially with the
letters AW on each Class A Warrant of all denominations and BW on each Class B
Warrant of all denominations.
- 3 -
3.02 Warrant Certificates shall be executed on behalf of the Company by its
Chairman of the Board, President or any Vice President and by its Secretary or
an Assistant Secretary, by manual signatures or by facsimile signatures printed
thereon, and shall have imprinted thereon a facsimile of the Company's seal.
Warrant Certificates shall be manually countersigned by the Warrant Agent and
shall not be valid for any purpose unless so countersigned. In case any officer
of the Company who shall have signed any of the Warrant Certificates shall cease
to be such officer of the Company or to hold the particular office referenced in
the Warrant Certificate before the date of issuance of the Warrant Certificates
or before countersignature by the Warrant Agent and issue and delivery thereof,
such Warrant Certificates may nevertheless be countersigned by the Warrant
Agent, issued and delivered with the same force and effect as though the person
who signed such Warrant Certificates had not ceased to be such officer of the
Company. After countersignature by the Warrant Agent, Warrant Certificates shall
be delivered by the Warrant Agent to the Registered Holder without further
action by the Company, except as otherwise provided by Section 4 hereof.
SECTION 4. EXERCISE. Each Warrant may be exercised by the Registered Holder
thereof at any time on or after the applicable Initial Exercise Date, but not
after the applicable Warrant Expiration Date, upon the terms and subject to the
conditions set forth herein and in the applicable Warrant Certificate. A Warrant
shall be deemed to have been exercised immediately prior to the close of
business on the applicable Exercise Date and the person entitled to receive the
securities deliverable upon such exercise shall be treated for all purposes as
the holder upon exercise thereof as of the close of business on the applicable
Exercise Date. As soon as practicable on or after the applicable Exercise Date,
the Warrant Agent shall deposit the proceeds received from the exercise of a
Warrant and shall notify the Company in writing of such exercise. Promptly
following, and in any event within five days after the date of such notice from
the Warrant Agent, the Warrant Agent, on behalf of the Company, shall cause to
be issued and delivered by the Transfer Agent, to the person or persons entitled
to receive the same, a certificate or certificates for the securities
deliverable upon such exercise, (plus a certificate for any remaining
unexercised Warrants of the Registered Holder) unless prior to the date of
issuance of such certificates the Company shall instruct the Warrant Agent to
refrain from causing such issuance of certificates pending clearance of checks
received in payment of the Purchase Price pursuant to such Warrants.
Notwithstanding the foregoing, in the case of payment made in the form of a
check drawn on an account of such investment banks and brokerage houses as the
Company shall approve in writing to the Warrant Agent, certificates shall
immediately be issued without prior notice to the Company or any delay. Upon the
exercise of any Warrant and clearance of the funds received, the Warrant Agent
shall promptly remit the payment received for the Warrant to the Company or as
the Company may direct in writing.
SECTION 5. RESERVATION OF SHARES: LISTING; PAYMENT OF TAXES; ETC.
5.01 The Company covenants that it will at all times reserve and keep
available out of its authorized Common Stock, solely for the purpose of issue
upon exercise of Warrants, such number of shares of Common Stock as shall then
be issuable upon the exercise of all outstanding Warrants. The Company covenants
that all shares of Common Stock which shall be issuable upon exercise of the
Warrants shall, at the time of delivery, be duly and validly issued, fully paid,
nonassessable and free from all taxes, liens and charges with respect to the
issue thereof, (other than those which the Company shall promptly pay or
discharge) and that upon issuance such shares shall be listed on each national
securities exchange or included in each automated quotation system, if any, on
which the other shares of outstanding Common Stock of the Company are then
listed or included.
5.02 The Company covenants that if any securities to be reserved for the
purpose of exercise of Warrants hereunder require registration with, or approval
of, any governmental authority under
- 4 -
any federal securities law before such securities may be validly issued or
delivered upon such exercise, then the Company will in good faith and as
expeditiously as reasonably possible, endeavor to secure such registration or
approval. The Company will use reasonable efforts to obtain appropriate
approvals or registrations under state "blue sky" securities laws. With respect
to any such securities; however, Warrants may not be exercised by, or shares of
Common Stock issued to, any Registered Holder in any state in which such
exercise would be unlawful.
5.03 The Company shall pay all documentary, stamp or similar taxes and
other governmental charges that may be imposed with respect to the issuance of
Warrants, or the issuance, or delivery of any shares of Common Stock or Class B
Warrants upon exercise of the Class A Warrants or delivery of any shares of
Common Stock upon exercise of the Class B Warrants; provided, however, that if
the shares of Common Stock or Class B Warrants, as the case may be, are to be
delivered in a name other than the name of the Registered Holder of the Warrant
Certificate representing any Warrant being exercised, then no such delivery
shall be made unless the person requesting the same has paid to the Warrant
Agent the amount of transfer taxes or charges incident thereto, if any.
5.04 The Warrant Agent is hereby irrevocably authorized to requisition the
Company's Transfer Agent from time to time for certificates representing shares
of Common Stock required upon exercise of the Warrants, and the Company will
authorize the Transfer Agent to comply with all such proper requisitions. The
Company will file with the Warrant Agent a statement setting forth the name and
address of the Transfer Agent for shares of Common Stock issuable upon exercise
of the Warrants.
SECTION 6. EXCHANGE AND REGISTRATION OF TRANSFER.
6.01 At any time on or after the Initial Exercise Date, Warrant
Certificates may be exchanged for other Warrant Certificates representing an
equal aggregate number of Warrants of the same class or may be transferred in
whole or in part. Warrant Certificates to be exchanged shall be surrendered to
the Warrant Agent at its Corporate Office, and, upon satisfaction of the terms
and provisions hereof, the Company shall execute and the Warrant Agent shall
countersign, issue and deliver in exchange therefor the Warrant Certificate or
Certificates which the Registered Holder making the exchange shall be entitled
to receive.
6.02 The Warrant Agent shall keep at its office books in which, subject to
such reasonable regulations as it may prescribe, it shall register Warrant
Certificates and the transfer thereof in accordance with its regular practice.
Upon due presentment for registration of transfer of any Warrant Certificate at
such office, the Company shall execute and the Warrant Agent shall issue and
deliver to the transferee or transferees a new Warrant Certificate or
Certificates representing an equal aggregate number of Warrants, as the case may
be.
6.03 With respect to all Warrant Certificates presented for registration or
transfer, or for exchange or exercise, the subscription form on the reverse
thereof shall be duly endorsed, or be accompanied by a written instrument or
instruments of transfer and subscription, in form satisfactory to the Company
and the Warrant Agent, duly executed by the Registered Holder or his
attorney-in-fact duly authorized in writing.
6.04 A service charge may be imposed by the Warrant Agent for any exchange
or registration of transfer of Warrant Certificates. In addition, the Company
may require payment by such holder of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith.
- 5 -
6.05 All Warrant Certificates surrendered for exercise or for exchange in
case of mutilated Warrant Certificates shall be promptly cancelled by the
Warrant Agent and thereafter retained by the Warrant Agent until termination of
this Agreement or resignation as Warrant Agent or pursuant to applicable rule or
regulation or with the prior written consent of Xxxxxxx disposed of or
destroyed, at the direction of the Company.
6.06 Prior to due presentment for registration of transfer thereof, the
Company and the Warrant Agent may deem and treat the Registered Holder of any
Warrant Certificate as the absolute owner thereof and of each Warrant
represented thereby (notwithstanding any notations of ownership or writing
thereon made by anyone other than a duly authorized officer of the Company or
the Warrant Agent) for all purposes and shall not be affected by any notice to
the contrary.
SECTION 7. LOSS OR MUTILATION.
Upon receipt by the Company and the Warrant Agent of evidence satisfactory
to them of the ownership of and loss, theft, destruction or mutilation of any
Warrant Certificate and (in case of loss, theft or destruction) of indemnity
satisfactory to them, and (in the case of mutilation) upon surrender and
cancellation thereof, the Company shall execute and the Warrant Agent shall (in
the absence of notice to the Company and/or the Warrant Agent that the Warrant
Certificate has been acquired by a bona fide purchaser) countersign and deliver
to the Registered Holder in lieu thereof a new Warrant Certificate of like tenor
representing an equal aggregate number of Warrants. Applicants for a substitute
Warrant Certificate shall comply with such other reasonable regulations and pay
such other reasonable charges as the Warrant Agent may prescribe.
SECTION 8. REDEMPTION.
8.01 Subject to the provisions of Section 2.07 hereof, on or after the
Initial Exercise Date, (i) the Class A Warrants may be redeemed at the
Redemption Price per Class A Warrant, if the closing price (as hereinafter
defined) of the Common Stock for each of the twenty (20) consecutive Trading
Days equals or exceeds 150% of the then Purchase Price and (ii) the Class B
Warrants may be redeemed at the Redemption Price per Class B Warrant if the
closing price of the Common Stock for each of the twenty (20) consecutive
Trading Days equals or exceeds 130% of the then Purchase Price. For the purpose
of this Section 8, the closing price for each Trading Day shall be the last
reported sale price regular way or, in case no such reported sale takes place on
such Trading Day, the closing bid price regular way in either case on the
principal national securities exchange on which the Common Stock is listed or
admitted to trading or, if the Common Stock is not listed or admitted to trading
on any national securities exchange, the highest reported bid price as furnished
by the National Association of Securities Dealers, Inc. through NASDAQ (the
"Nasdaq System") or similar organization if NASDAQ is no longer reporting such
information, or by the National Daily Quotation Bureau or similar organization
if the Common Stock is not then quoted on an inter-dealer quotation system. All
Warrants of a class must be redeemed if any of that class are redeemed.
8.02 In case the Company shall desire to exercise its right to redeem Class
A or Class B Warrants, not later than ten (10) days following the end of any
twenty (20) consecutive Trading Day period in Section 8.01 above, it shall
irrevocably request the Warrant Agent to mail a notice of redemption to each of
the Registered Holders of the class of Warrants to be redeemed, first class,
postage prepaid, not less than thirty (30) days before the date fixed for
redemption, at their last address as shall appear in the records of the Warrant
Agent. Any notice mailed in the manner provided herein shall be conclusively
presumed to have been duly given whether or not the Registered Holder receives
such notice. The Company shall also give notice of election to redeem by issuing
a release to that effect in the Dow Xxxxx News Service.
- 6 -
8.03 The notice of redemption referred to in Section 8.02 above shall
specify (i) the redemption price, (ii) the date fixed for redemption, (iii) the
place where the Warrant Certificates shall be delivered and the redemption price
paid, and (iv) that the right to exercise the Warrant shall terminate at 5:00 PM
(New York time) on the business day immediately preceding the date fixed for
redemption. The date fixed for the redemption of the Warrants shall be the
Redemption Date. No failure to mail such notice nor any defect therein or in the
mailing thereof shall affect the validity of the proceedings for such redemption
except as to a holder (a) to whom notice was not mailed or (b) whose notice was
defective. An affidavit of the Warrant Agent or of the Secretary or an Assistant
Secretary of the Company that notice of redemption has been mailed shall, in the
absence of fraud, be prima facie evidence of the facts stated therein.
8.04 Any right to exercise the class of Warrants to be redeemed shall
terminate at 5:00 P.M. (New York time) on the business day immediately preceding
the Redemption Date. On and after the Redemption Date, the Registered Holders
shall have no further rights except to receive, upon surrender of their
Warrants, the Redemption Price.
8.05 From and after the Redemption Date, the Company shall, at the place
specified in the notice of redemption, upon presentation and surrender to the
Company by or on behalf of the Registered Holder of one or more of the class of
Warrants to be redeemed, deliver or cause to be delivered to or upon the written
order of such Registered Holder a sum in cash equal to the Redemption Price of
each such Warrant. From and after the Redemption Date and upon the deposit or
setting aside by the Company of a sum sufficient to redeem all the Warrants
called for redemption, such Warrants shall expire and become void and all rights
hereunder and under the Warrant Certificates, except the right to receive
payment of the Redemption Price, shall cease.
SECTION 9. ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES OF COMMON STOCK.
9.01 (a) The Purchase Price, the number of Warrant Shares purchasable upon
exercise of each class of Warrants and the number of each class of Warrants
outstanding are subject to adjustment from time to time upon the occurrence of
the events enumerated in this Section 9. In the event the Company shall, at any
time or from time to time after the date hereof, issue any shares of Common
Stock as a stock dividend to the holders of Common Stock, or subdivide or
combine the outstanding shares of Common Stock into a greater or lesser number
of shares (any such issuance, subdivision or combination being herein called a
"Change of Shares"), then, and thereafter upon each further Change of Shares the
Purchase Price in effect immediately prior to such Change of Shares shall be
changed to a price (including any applicable fraction of a cent) determined by
multiplying the Purchase Price in effect immediately prior thereto by a
fraction, the numerator of which shall be the number of shares of Common Stock
outstanding immediately prior to the issuance of such additional shares and the
denominator of which shall be the number of shares of Common Stock outstanding
immediately after the issuance of such additional shares. Such adjustment shall
be made successively whenever such an issuance is made.
(b) Upon each adjustment of the Purchase Price pursuant to this Section 9,
the total number of shares of Common Stock purchasable upon the exercise of each
class of Warrant shall (subject to the provisions contained in Section 9.02
hereof) be such number of shares calculated to the nearest tenth purchasable at
the Purchase Price in effect immediately prior to such adjustment multiplied by
a fraction, the numerator of which shall be the Purchase Price in effect
immediately prior to such adjustment and the denominator of which shall be the
Purchase Price in effect immediately after such adjustment.
9.02 The Company may elect, upon any adjustment of the Purchase Price
hereunder, to adjust the number of each class of Warrants outstanding, in lieu
of the adjustment in the number of Shares
- 7 -
purchasable upon the exercise of each Warrant as hereinabove provided, so that
each Class A or Class B Warrant outstanding after such adjustment shall
represent the right to purchase one share of Common Stock in the case of the
Class A Warrants and one-half (1/2) share of Common Stock in the case of the
Class B Warrants. Each Class A and Class B Warrant held of record prior to such
adjustment of the number of Class A and Class B Warrants shall become that
number of Warrants (calculated to the nearest tenth) determined by multiplying
the number by a fraction, the numerator of which shall be the Purchase Price in
effect immediately prior to such adjustment and the denominator of which shall
be the Purchase Price in effect immediately after such adjustment. Upon each
adjustment of the number of Warrants pursuant to this Section 9, the Company
shall, as promptly as practicable, cause to be distributed to each Registered
Holder of Warrant Certificates on the date of such adjustment of Warrant
Certificates evidencing, subject to Section 10 hereof, the number of additional
Warrants to which such Holder shall be entitled as a result of such adjustment
or, at the option of the Company, cause to be distributed to such Holder in
substitution and replacement for the Warrant Certificates held by him prior to
the date of adjustment (and upon surrender thereof, if required by the Company)
new Warrant Certificates evidencing the number of Class A and Class B Warrants
to which such Holder shall be entitled after such adjustment.
9.03 In case of any reclassification, capital reorganization or other
change of outstanding shares of Common Stock, or in case of any consolidation or
merger of the Company with or into another corporation (other than a
consolidation or merger in which the Company is the continuing corporation and
which does not result in any reclassification, capital reorganization or other
change of outstanding shares of Common Stock), or in case of any sale or
conveyance to another corporation of the property of the Company as, or
substantially as, an entirety (other than a sale/leaseback, mortgage or other
financing transaction), the Company shall cause effective provision to be made
so that each Registered Holder shall have the right thereafter, by exercising
such class of Warrant, to purchase the kind and number of shares of stock or
other securities or property (including cash) receivable upon such
reclassification, capital reorganization or other change, consolidation, merger,
sale or conveyance by a holder of the number of shares of Common Stock that
might have been purchased upon exercise of such class of Warrant immediately
prior to such reclassification, capital reorganization or other change,
consolidation, merger, sale or conveyance. Any such provision shall include
provision for adjustments that shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 9. The Company shall
not effect any such consolidation, merger or sale unless prior to or
simultaneously with the consummation thereof the successor (if other than the
Company) resulting from such consolidation or merger or the corporation
purchasing assets or other appropriate corporation or entity shall assume, by
written instrument executed and delivered to the Warrant Agent, the obligation
to deliver to each Registered Holder such shares of stock, securities or assets
as, in accordance with the foregoing provisions, such Holders may be entitled to
purchase and the other obligations under this Agreement. The foregoing
provisions shall similarly apply to successive reclassifications, capital
reorganizations and other changes of outstanding shares of Common Stock and to
successive consolidations, mergers, sales or conveyances.
9.04 (a) If at any time after the date hereof the Company shall issue any
shares of Common Stock (other than shares issued as a dividend or distribution
as provided in Section 9.01(a) hereof) for a consideration per share less than
the Current Market Price per share, then, forthwith upon such issue, the
Purchase Price in effect immediately prior to such issuance (the "Existing
Purchase Price") shall be reduced by dividing the number of shares of Common
Stock so issued by the total number of shares outstanding after such issuance,
multiplying the quotient by the difference between the Existing Purchase Price
and the price of the shares so issued and subtracting the result from the
Existing Purchase Price. In the case of an issue of additional shares of Common
Stock for cash, the consideration received by the Company therefor shall be
deemed to be the net cash proceeds received for such shares, excluding cash
received on account of accrued interest or accrued dividends and after deducting
therefrom any and all commissions and
- 8 -
expenses paid or incurred by the Company for any underwriting of, or otherwise
in connection with, the issue of such shares. The term "issue" shall be deemed
to include the sale or other disposition of shares of Common Stock held in the
Company's treasury. The number of shares of Common Stock outstanding at any
given time shall not include shares in the Company's treasury or shares owned by
any majority-owned subsidiary of the Company.
(b) If at any time after the date hereof the Company shall issue rights,
options or warrants entitling the holders thereof to subscribe for or purchase
Common Stock (or securities convertible into or exchangeable for Common Stock)
at a price per share (or having a conversion price per share, in the case of a
security convertible into or exchangeable for Common Stock) less than the lower
of the Purchase Price or Current Market Price per share of Common Stock on the
record date for the determination of stockholders entitled to receive such
rights or the granting date if such holders are not stockholders, then in each
such case the Purchase Price shall be adjusted by multiplying the Purchase Price
in effect immediately prior to such record or granting date by a fraction, of
which the numerator shall be the number of shares of Common Stock which the
aggregate offering price of the total number of shares of Common Stock so to be
offered (or the aggregate initial conversion price of the convertible securities
so to be offered) would purchase at such Current Market Price, and of which the
denominator shall be the number of shares of Common Stock outstanding on such
record or granting date plus the number of additional shares of Common Stock to
be offered for subscription or purchase (or into which the convertible or
exchangeable securities so to be offered are initially convertible or
exchangeable). Such adjustment shall become effective at the close of business
on such record date; provided, however, that, to the extent the shares of Common
Stock (or securities convertible into or exchangeable for shares of Common
Stock) are not delivered, the Purchase Price shall be readjusted after the
expiration of such rights, options, or warrants (but only as to those Warrants
which are not exercised after such expiration), to the Purchase Price which
would then be in effect had the adjustments made upon the issuance of such
rights or warrants been made upon the basis of delivery of only the number of
shares of Common Stock (or securities convertible into or exchangeable for
shares of Common Stock) actually issued. In case any subscription price may be
paid in a consideration part of all of which shall be in a form other than cash,
the value of such consideration shall be as determined in good faith by the
Company's Board of Directors, whose determination shall be conclusive. Shares of
Common Stock owned by or held for the account of the Company or any
majority-owned subsidiary shall not be deemed outstanding for the purpose of any
such computation.
(c) For the purpose of any computation under this Section 9.04, the
"Current Market Price" per share of Common Stock on any date shall be deemed to
be the average of the daily closing price for the 30 consecutive trading days
commencing 45 trading days before such date. The closing price for each day
shall be the last reported sales price regular way or, in case no such reported
sale takes place on such day, the closing bid price regular way, in either case
on the principal national securities exchange on which the Common Stock is
listed or admitted to trading or, if the Common Stock is not listed or admitted
to trading on any national securities exchange, the highest reported bid price
as furnished by the Nasdaq System or similar organization if Nasdaq is no longer
reporting such information, or by the National Daily Quotation Bureau or similar
organization if the Common Stock is not quoted on an inter-dealer quotation
system. If on any such date the Common Stock is not quoted by any such
organization, the fair value of the Common Stock on such date, as determined by
the Company's Board of Directors, shall be used.
9.05 Irrespective of any adjustments or changes in the Purchase Price or
the number of Warrant Shares, the Warrant Certificates theretofore and
thereafter issued shall, unless the Company shall exercise its option to issue
new Warrant Certificates pursuant to Section 2.04 hereof, continue to express
the Purchase Price per share, the number of Warrant Shares and the Redemption
Price therefor as the Purchase
- 9 -
Price per share and the number of Warrant Shares and the Redemption Price
therefore were expressed in the Warrant Certificates when the same were
originally issued.
9.06 After each adjustment of the Exercise Price pursuant to this Section
9, the Company will promptly prepare a certificate signed by the Chairman of the
Board or President, and by the Treasurer or an Assistant Treasurer or the
Secretary or an Assistant Secretary, of the Company setting forth: (i) the
Purchase Price as adjusted, (ii) the number of shares of Common Stock
purchasable upon exercise of each class of Warrant after such adjustment, and,
if the Company shall have elected to adjust the number of Warrants, the number
of Warrants to which the Registered Holder of each class of Warrant shall then
be entitled, and any adjustment in Redemption Price resulting therefrom, and
(iii) a brief statement of the facts as shall be necessary to show the reason
for and manner of computing such adjustment. The Company will promptly file such
certificate with the Warrant Agent and cause a brief summary hereof to be sent
by ordinary first class mail to each Registered Holder of Warrants at his last
address as it shall appear on the registry books of the Warrant Agent. No
failure to mail such notice nor any defect therein or in the mailing thereof
shall affect the validity thereof except as to a Registered Holder (a) to whom
notice was not mailed or (b) whose notice was defective. The affidavit of an
officer of the Warrant Agent or the Secretary or an Assistant Secretary of the
Company that such notice has been mailed shall, in the absence of fraud, be
prima facie evidence of the facts stated therein.
9.07 For purposes of this Section 9, the following shall also be
applicable:
(a) The number of shares of Common Stock outstanding at any given time
shall not include shares of Common Stock owned or held by or for the account of
the Company, and the distribution of any such treasury shares shall not be
considered a Change of Shares for purposes of said Sections.
(b) No adjustment of the Purchase Price shall be made unless such
adjustment would require an increase or decrease of at least $.05 in such Price;
provided, however, that any adjustments which by reason of this clause (b) are
not required to be made shall be carried forward and shall be made at the time
of and together with the next subsequent adjustment which, together with any
adjustment(s) so carried forward, shall require an increase or decrease of at
least $.05 in the Purchase Price then in effect hereunder.
9.08 No adjustment to the Purchase Price of the Warrants or to the number
of shares of Common Stock purchasable upon exercise of each Warrant will be
made, however, (i) upon the exercise of any of the options presently outstanding
under the Company's Incentive Stock Option Plan, the Non-Qualified Stock Option
Plan and the 1991 Stock Option Plan (together, the "Plans"); (ii) upon the
issuance or exercise of any other securities which may hereafter be granted or
exercised under the Plans or under any other employee benefit plan of the
Company; (iii) upon the sale or exercise of the Warrants, including without
limitation the sale or exercise of any Warrants comprising the Underwriter
Warrant; or (iv) upon the issuance or sale of Common Stock (or securities
convertible into or exchangeable for Common Stock) upon the exercise of any
currently outstanding rights or warrants to subscribe for or purchase, or any
option for the purchase of, Common Stock or Convertible Securities.
9.09 As used in this Section 9, the term "Common Stock" means and includes
the Common Stock authorized on the date hereof and shall also include any
capital stock of any class of the Company thereafter authorized which shall not
be limited to a fixed sum or percentage in respect of the rights of the holders
thereof to participate in dividends and in the distribution of assets upon the
voluntary liquidation, dissolution or winding up of the Company; provided,
however, that the Warrant Shares shall include only shares of such class
designated in the Company's Certificate of Incorporation as Common Stock on the
date hereof or (i), in the case of any reclassification change, consolidation,
merger, sale or conveyance of the
- 10 -
character referred to in Section 9.03 hereof the stock, securities or property
provided for in such Section or (ii), in the case of any reclassification or
change in the outstanding shares of Common Stock issuable upon exercise of the
Warrants as a result of a subdivision or combination or consisting of a change
in par value, or from par value to no par value, or from no par value, such
shares of Common Stock as so reclassified or changed.
9.10 Any determination as to whether an adjustment in the Purchase Price in
effect hereunder is required pursuant to Section 9, or as to the amount of any
such adjustment, if required, shall be binding and conclusive upon the Holders
of the Warrants and the Company if made in good faith by the Board of Directors
of the Company (or the Board of Directors of any corporation which is a
successor as provided for in Section 9.03 hereof). The Board of Directors shall
have the power to resolve any ambiguity or correct any error in this Section 9.
9.11 If and whenever the Company shall grant to the holders of Common
Stock, as such, rights or warrants to subscribe for or to purchase, or any
options for the purchase of, Common Stock or securities convertible into or
exchangeable for or carrying a right, warrant or option to purchase Common
Stock, the Company shall concurrently therewith grant to each Registered Holder
as of the record date for such transaction of the Warrants then outstanding, the
rights, warrants or options to which each Registered Holder would have been
entitled if, on the record date used to determine the stockholders entitled to
the rights, warrants or options being granted by the Company, the Registered
Holder were the holder of record of the number of whole shares of Common Stock
then issuable upon exercise of his Warrants. Such grant by the Company to the
holders of the Warrants shall be in lieu of any adjustment which otherwise might
be called for pursuant to this Section 9.
9.12 The Company may, at its option, and subject to the rules of the
principal securities exchange or the Nasdaq System on which the Common Stock may
then be listed or included for trading at any time until the Expiration Date,
reduce the then current Purchase Price for either or both classes of Warrants to
any amount deemed appropriate by the Board of Directors of the Company for any
period of at least twenty (20) consecutive Trading Days (as evidenced in a
resolution adopted by such Board of Directors). The Company shall mail, or cause
to be mailed, a notice of the reduction in the Exercise Price as provided in
this Section to each of the Registered Holders of the applicable class of
Warrants first class, postage prepaid, not later than the twentieth day before
the commencement of such reduced Purchase Price, at their last address as it
shall appear on the records maintained pursuant to Section 6.02 hereof. Any
notice mailed in the manner provided herein shall be conclusively presumed to
have been duly given whether or not the Registered Holder receives such notice.
The Company shall also give notice of the reduction in the Exercise Price within
the time provided above, by issuing a release to that effect to the Dow Xxxxx
News Service. A reduction in the Exercise Price pursuant to this Section 9.12
does not cause any other adjustment pursuant to this Section 9.
SECTION 10. FRACTIONAL WARRANT AND FRACTIONAL SHARES. If the number of shares of
Common Stock purchasable upon the exercise of each Warrant is adjusted pursuant
to Section 9 hereof, the Company nevertheless shall not be required to issue
fractions of shares, upon exercise of the Warrants or otherwise, or to
distribute certificates that evidence fractional shares. With respect to any
fraction of a share called for upon any exercise hereof, the Company shall round
up to the next highest share so that if any fraction exists, the Company shall
issue one full share for such fractional amount.
SECTION 11. WARRANT HOLDERS NOT DEEMED STOCKHOLDERS. No Registered Holder of
Warrants shall, as such, be entitled to vote or to receive dividends or be
deemed the holder of Common Stock that may at any time be issuable upon exercise
of such Warrants for any purpose whatsoever, nor shall anything contained herein
be construed to confer upon such Holder, as such, any of the rights of a
stockholder of the Company
- 11 -
or any right to vote for the election of directors or upon any matter submitted
to stockholders at any meeting thereof, or to give or withhold consent to any
corporate action (whether upon any recapitalization, issue or reclassification
of stock, change of par value or change of stock to no par value, consolidation,
merger or conveyance or otherwise), or to receive notice of meetings, or to
receive dividends or subscription rights, until such Holder shall have exercised
such Warrants and been issued shares of Common Stock in accordance with the
provisions hereof.
SECTION 12. RIGHTS OF ACTION. All rights of action with respect to this
Agreement are vested in the respective Registered Holders of the Warrants. Any
Registered Holder of a Warrant, without consent of the Warrant Agent or of the
Holder of any other Warrant, may, in his own behalf and for his own benefit,
enforce against the Company his right to exercise his Warrants for the purchase
of Warrant Shares in the manner provided in the Warrant Certificate and this
Agreement.
SECTION 13. AGREEMENT OF HOLDERS. Every Registered Holder of a Class A Warrant
or Class B Warrant, by his acceptance thereof, consents and agrees with the
Company, the Warrant Agent and every other Holder of a Warrant that:
(a) the Warrants are transferable only on the registry books of the Warrant
Agent by the Registered Holder thereof in person or by his attorney duly
authorized in writing and only if the Warrant Certificates representing such
Warrants are surrendered at the office of the Warrant Agent, duly endorsed or
accompanied by a proper instrument of transfer satisfactory to the Warrant Agent
and the Company in their sole discretion, together with payment of any
applicable transfer taxes; and
(b) the Company and the Warrant Agent may deem and treat the person in
whose name the Warrant Certificate is registered as the Registered Holder and as
the absolute, true and lawful owner of the Warrants represented thereby for all
purposes, and neither the Company nor the Warrant Agent shall be affected by any
notice or knowledge to the contrary, except as otherwise expressly provided in
Section 7 hereof.
SECTION 14. CANCELLATION OF WARRANT CERTIFICATES. If the Company shall purchase
or acquire any Warrant or Warrants, the Warrant Certificate or Warrant
Certificates evidencing the same shall thereupon be delivered to the Warrant
Agent and canceled by it and retired. The Warrant Agent shall also cancel the
Warrant Certificates following exercise of any or all of the Warrants
represented thereby or delivered to it for transfer, split-up, combination or
exchange.
SECTION 15. CONCERNING THE WARRANT AGENT.
15.01 The Warrant Agent acts hereunder as agent and in a ministerial
capacity for the Company, and its duties shall be determined solely by the
provisions hereof. The Warrant Agent shall not, by issuing and delivering
Warrant Certificates or by any other act hereunder be deemed to make any
representations as to the validity, value or authorization of the Warrant
Certificates or the Warrants represented thereby or of any securities or other
property delivered upon exercise of any Warrant or whether any stock issued upon
exercise of any Warrant is fully paid and nonassessable.
15.02 The Warrant Agent shall not at any time be under any duty or
responsibility to any holder of Warrant Certificates to make or cause to be made
any adjustment of the Purchase Price or the Redemption Price provided in this
Agreement, or to determine whether any fact exists which may require any such
adjustments, or with respect to the nature or extent of any such adjustment,
when made, or with respect to the method employed in making the same. It shall
not be (i) liable for any recital or statement of facts
- 12 -
contained herein or for any action taken, suffered or omitted by it in reliance
on any Warrant Certificate or other document or instrument believed by it in
good faith to be genuine and to have been signed or presented by the proper
party or parties, (ii) responsible for any failure on the part of the Company to
comply with any of its covenants and obligations contained in this Agreement or
in any Warrant Certificate, or (iii) liable for any act or omission in
connection with this Agreement except for its own negligence or willful
misconduct.
15.03 The Warrant Agent may at any time consult with counsel satisfactory
to it (who may be counsel for the Company) and shall incur no liability or
responsibility for any action taken, suffered or omitted by it in good faith in
accordance with the opinion or advice of such counsel.
15.04 Any notice, statement, instruction, request, direction, order or
demand of the Company shall be sufficiently evidenced by an instrument signed by
the Chairman of the Board, President, any Vice President, its Secretary, or
Assistant Secretary (unless other evidence in respect thereof is herein
specifically prescribed). The warrant agent shall not be liable for any action
taken, suffered or omitted by it in accordance with such notice, statement,
instruction, request, direction, order or demand believed by it to be genuine.
15.05 The Company agrees to pay the Warrant Agent reasonable compensation
for its services hereunder and to reimburse it for its reasonable expenses
hereunder. It further agrees to indemnify the Warrant Agent and save it harmless
against any and all losses, expenses and liabilities, including judgments, costs
and counsel fees, for anything done or omitted by the Warrant Agent in the
execution of its duties and powers hereunder except losses, expenses and
liabilities arising as a result of the Warrant Agent's negligence or willful
misconduct.
15.06 The Warrant Agent may resign its duties and be discharged from all
further duties and liabilities hereunder (except liabilities arising as a result
of the Warrant Agent's own negligence or willful misconduct), after giving
thirty (30) days prior written notice to the Company. At least fifteen (15) days
prior to the date such resignation is to become effective, the Warrant Agent
shall cause a copy of such notice of resignation to be mailed to each Registered
Holder at the Company's expense. Upon such resignation, or any inability of the
Warrant Agent to act as such hereunder, the Company shall appoint a new warrant
agent in writing. If the Company shall fail to make such appointment within a
period of fifteen (15) days after it has been notified in writing of such
resignation by the resigning Warrant Agent, then any Registered Holder may apply
to any court of competent jurisdiction for the appointment of a new warrant
agent. Any new warrant agent, whether appointed by the Company or by such a
court, shall be a bank or trust company having a capital and surplus, as shown
by its last published report to its stockholders, of not less than $10,000,000,
or a stock transfer company. After acceptance in writing of such appointment by
the new warrant agent is received by the Company, such new warrant agent shall
be vested with the same powers, rights, duties and responsibilities as if it had
been originally named herein as the Warrant Agent, without any further
assurance, conveyance, act or deed; but if for any reason it shall be necessary
or expedient to execute and deliver any further assurance, conveyance, act or
deed, the same shall be done at the expense of the Company and shall be legally
and validly executed and delivered by the resigning Warrant Agent. Not later
than the effective date of any such appointment the Company shall file notice
thereof with the resigning Warrant Agent and shall forthwith cause a copy of
such notice to be mailed to each Registered Holder.
15.07 Any corporation into which the Warrant Agent or any new warrant agent
may be converted or merged or any corporation resulting from any consolidation
to which the Warrant Agent or any new warrant agent shall be a party or any
corporation succeeding to the trust business of the Warrant Agent shall be a
successor warrant agent under this Agreement without any further act, provided
that such corporation is eligible for appointment as successor to the Warrant
Agent under the provisions of Section 15.06
- 13 -
hereof. Any such successor warrant agent shall promptly cause notice of its
succession as Warrant Agent to be mailed to the Company and to each Registered
Holder.
15.08 The Warrant Agent, its subsidiaries and affiliates, any of its or
their officers or directors, may buy and hold or sell Warrants or other
securities of the Company and otherwise deal with the Company in the same manner
and to the same extent and with like effect as though it were not the Warrant
Agent. Nothing herein shall preclude the Warrant Agent from acting in any other
capacity for the Company or for any other legal entity.
SECTION 16. MODIFICATION OF AGREEMENT. The Warrant Agent and the Company may by
supplemental agreement make any changes or corrections in this Agreement that
they (i) shall deem appropriate to cure any ambiguity or to correct any
defective or inconsistent provision or manifest mistake or error herein
contained, or (ii) may deem necessary or desirable and which shall not adversely
affect the interests of the Registered Holders of any class of Warrant
Certificates; provided, however, that this Agreement shall not otherwise be
modified, supplemented or altered in any respect except with the consent in
writing of the Registered Holders of Warrant Certificates representing not less
than 50% of that class of Warrants then outstanding; and provided, further, that
no change in the number or nature of the securities purchasable upon the
exercise of any class of Warrant, or the Purchase Price therefor, the
acceleration of the Warrant Expiration Date, or the Redemption Price shall be
made without the consent in writing of the Registered Holder of the Warrant
Certificate representing such class of Warrants, other than such changes as are
specifically prescribed by this Agreement as originally executed.
SECTION 17. NOTICES. All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed to have been made when
delivered or mailed first class registered or certified mail, postage prepaid if
to (i) a Registered Holder, at the address of such Holder as shown in the
registry books maintained by the Warrant Agent; (ii) the Company, at Xxx Xxxxx
Xxxxxx, Xxxxx 000, 0000 Xxxx Xxxxxxx Xxxxxxxxx, Xxxxx, Xxxxxxx 00000-0000,
attention: President, or at such other address as may have been furnished to the
Warrant Agent in writing by the Company; and (iii) the Warrant Agent, at its
Corporate Office.
SECTION 18. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without reference to
principles of conflict of laws.
SECTION 19. BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of the Company, the Warrant Agent and their respective successors
and assigns, and the holders from time to time of Warrant Certificates. Nothing
in this Agreement is intended or shall be construed to confer upon any other
person any right, remedy or claim, in equity or at law, or to impose upon any
other person any duty, liability or obligation.
SECTION 20. TERMINATION. This Agreement shall terminate at the close of business
on the Expiration Date of all the Warrants or such earlier date upon which all
Warrants have been exercised, except that the Warrant Agent shall account to the
Company for cash held by it and the provisions of Section 15 hereof shall
survive such termination.
SECTION 21. COUNTERPARTS. This Agreement may be executed in several
counterparts, which taken together shall constitute a single document.
SECTION 22. CAPTIONS. The captions and sections in the Agreement are for
reference only and should have no substantive effect.
- 14 -
SECTION 23. AUTHORITY. Each party represents to the others that it has due and
proper authority to perform all duties and obligations set forth in and
contemplated by the Agreement, and that it has taken and will take all acts
required so that upon execution of the Agreement it shall be binding on such
party in accordance with its terms.
SECTION 24. ENTIRE AGREEMENT. The Agreement embodies the entire agreement
between the parties hereto and supersedes all other agreements between the
parties in connection with the matters dealt with herein.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
BENTLEY PHARMACEUTICALS, INC.
By: /s/ Xxxxx X. Xxxxxx
--------------------------
Xxxxx X. Xxxxxx, President
AMERICAN STOCK TRANSFER & TRUST COMPANY
By:
--------------------------
Authorized Officer
- 15 -
EXHIBIT A
[FORM OF FACE OF CLASS A WARRANT CERTIFICATE]
No. AW _____ Warrants
VOID AFTER FEBRUARY 13, 1999
CLASS A REDEEMABLE WARRANT
CERTIFICATE FOR PURCHASE OF COMMON STOCK
BENTLEY PHARMACEUTICALS, INC.
This certified that FOR VALUE RECEIVED ____________________________________
_________________________________________________________________ or registered
assigns (the "Registered Holder") is the owner of __________________ ( ) Class A
Redeemable Warrants (the "Class A Warrants"). Each Class A Warrant initially
entitles the Registered Holder to purchase, subject to the terms and conditions
set forth in this Certificate and the Warrant Agreement (as hereinafter
defined), one fully paid and nonassessable share of Common Stock, par value
$0.02 per share, of Bentley Pharmaceuticals, Inc., a Florida corporation (the
"Company") and one Class B Redeemable Warrant ("Class B Warrant") at any time on
or after August 14, 1996 (or at such earlier time with the consent of Xxxxxxx
and Company Securities, Inc.), and prior to the Expiration Date (as hereinafter
defined), upon the presentation and surrender of this Warrant Certificate with
the Subscription Form on the reverse hereof duly executed, at the corporate
office of American Stock Transfer & Trust Company as Warrant agent, or its
successor (the "Warrant Agent"), accompanied by payment of $3.00 (the "Purchase
Price") in lawful money of the United States of America in cash or by official
bank or certified check made payable to the Company.
This Warrant Certificate and each Class A Warrant represented hereby are
issued pursuant to and are subject in all respects to the terms and conditions
set forth in the Warrant Agreement (the "Warrant Agreement"), dated as of
February 14, 1996 by and between the Company and the Warrant Agent.
In the event of certain contingencies provided for in the Warrant
Agreement, the Purchase Price or the number of shares of Common Stock subject to
purchase upon the exercise of each Class A Warrant represented hereby are
subject to modification or adjustment.
Each Class A Warrant represented hereby is exercisable at the option of the
Registered Holder, but no fractional shares of Common stock will be issued. In
the case of the exercise of less than all the Class A Warrants represented
hereby, the Company shall cancel this Warrant Certificate upon the surrender
hereof and shall execute and deliver a new Warrant Certificate or Warrant
Certificates of like tenor, which the Warrant Agent shall countersign, for the
balance of such Class A Warrants.
The term "Expiration Date" shall mean 5:00 PM (New York time) on February
13, 1999, or such earlier date as the Class A Warrants shall be redeemed. If
such date shall in the State of New York be a holiday or a day on which the
banks are authorized to close, then the Expiration Date shall mean 5:00 PM (New
York time) the next following day which in the State of New York is not a
holiday or a day on which banks are authorized to close.
The Company shall not be obligated to deliver any securities pursuant to
the exercise of this Class A Warrant unless a registration statement under the
Securities Act of 1933, as amended, with respect to such securities is
effective. The Company has covenanted and agreed that it will file a
registration statement and will use its best efforts to cause the same to become
effective and to keep such registration statement
current while any of the Class A Warrants are outstanding. The Class A Warrants
shall not be exercisable by a Registered Holder in any state where such exercise
would be unlawful.
This Warrant Certificate is exchangeable, upon the surrender hereof by the
Registered Holder at the corporate office of the Warrant Agent, for a new
Warrant Certificate or Warrant Certificates of like tenor representing an equal
aggregate number of Class A Warrants, each of such new Warrant Certificates to
represent such number of Class A Warrants as shall be designated with any
applicable transfer fee, tax or other governmental charge imposed in connection
therewith, by such Registered Holder at the time of such surrender. Upon due
presentment for registration of transfer of this Warrant Certificate at such
office, a new Warrant Certificate or Warrant Certificates representing an equal
aggregate number of Class A Warrants will be issued to the transferee in
exchange therefor, subject to the limitations provided in the Warrant Agreement.
Prior to the exercise of any Class A Warrant represented hereby, the
Registered Holder shall not be entitled to any rights of a stockholder of the
Company, including, without limitation, the right to vote or to receive
dividends or other distributions, and shall not be entitled to receive any
notice of any proceedings of the Company, except as provided in the Warrant
Agreement.
This Class A Warrant may be redeemed at the option of the Company, at a
redemption price of $0.05 per Warrant, at any time on or after August 14, 1996
(or at such earlier time with the consent of Xxxxxxx and Company Securities,
Inc.), provided the closing price (as defined in the Warrant Agreement) for the
shares issuable upon exercise of such Warrant for each of the twenty (20)
consecutive Trading Days shall equal or exceed 150% of the Purchase Price then
in effect. Notice of redemption shall be given not less than the thirtieth day
before the day fixed for redemption, all as provided in the Warrant Agreement.
On and after the date fixed for redemption, the Registered Holder shall have no
rights with respect to this Class A Warrant except to receive the $0.05 per
Warrant upon surrender of this Certificate.
Prior to due presentment for registration of transfer hereof, the Company
and the Warrant Agent may deem and treat the Registered Holder as the absolute
owner hereof and of each Class A Warrant represented hereby (notwithstanding any
notations of ownership or writing hereon made by anyone other than a duly
authorized officer of the Company or the Warrant Agent) for all purposes and
shall not be affected by any notice to the contrary.
This Warrant Certificate shall be governed by and construed in accordance
with the laws of the State of New York.
This Warrant Certificate is not valid unless countersigned by the Warrant
Agent.
-2-
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed, manually or in facsimile, by two of its officers hereto duly
authorized and a facsimile of its corporate seal to be imprinted thereon.
BENTLEY PHARMACEUTICALS, INC.
By: _________________________
[seal]
Attest: ___________________________
Secretary
Countersigned:
AMERICAN STOCK TRANSFER & TRUST COMPANY
By: _______________________________
Authorized officer
-3-
[FORM OF REVERSE OF CLASS A WARRANT CERTIFICATE]
SUBSCRIPTION FORM
To Be Executed by the Registered Holder
in Order to Exercise Class A Warrants
The undersigned Registered Holder hereby irrevocably elects to exercise
______________ Class A Warrants represented by this Warrant Certificate, and to
purchase the securities issuable upon the exercise of such Warrants, and
requests that certificates for such securities shall be issued in the name of
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER
______________________________________
______________________________________
______________________________________
[please print or type name and address]
and be delivered to
______________________________________
______________________________________
______________________________________
[please print or type name and address]
and if such number of Class A Warrants shall not be all the Class A Warrants
evidenced by this Warrant Certificate, that a new Warrant Certificate for the
balance of such Warrants be registered in the name of, and delivered to, the
Registered Holder at the address stated below.
Dated: ________________________ X______________________________________
______________________________________
______________________________________
Address
______________________________________
Taxpayer Identification Number
______________________________________
Signature Guaranteed
______________________________________
-4-
ASSIGNMENT
To Be Executed by the Registered Holder in Order to Assign Class A Warrants
FOR VALUE RECEIVED, _________________________________________________
hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER
______________________________________
______________________________________
______________________________________
[please print or type name and address]
_______________________________________ of the Class A Warrants represented by
this Warrant Certificate, and hereby irrevocably constitutes and appoints
Attorney to transfer this Warrant Certificate on the books of the Company, with
full power of substitution in the premises.
Dated: ________________________ X______________________________________
Signature Guaranteed
______________________________________
THE SIGNATURE TO THE ASSIGNMENT OR THE SUBSCRIPTION FORM MUST
CORRESPOND TO THE NAME AS WRITTEN UPON THE FACE OF THIS CLASS A
WARRANT CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR
ENLARGEMENT OR ANY CHANGE WHATSOEVER, AND MUST BE GUARANTEED BY A
COMMERCIAL BANK OR TRUST COMPANY OR AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS
WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM)
PURSUANT TO THE SECURITIES AND EXCHANGE COMMISSION RULE 17Ad-15.
-5-
Exhibit B
[FORM OF FACE OF WARRANT CERTIFICATE]
No. BW ______ Warrants
VOID AFTER FEBRUARY 13, 2001
REDEEMABLE COMMON STOCK PURCHASE WARRANT
CERTIFICATE FOR PURCHASE OF COMMON STOCK
BENTLEY PHARMACEUTICALS, INC.
This certifies that FOR VALUE RECEIVED _____________________________
________________________________________________________________________________
or registered assigns (the "Registered Holder") is the owner of _______ (_____)
Class B Redeemable Common Stock Purchase Warrants (the "Class B Warrants"). Two
Class B Warrants entitle the Registered Holder to purchase, subject to the terms
and conditions set forth in this Certificate and the Warrant Agreement (as
hereinafter defined), one fully paid and nonassessable share of Common Stock,
par value $0.02 per share, of Bentley Pharmaceuticals, Inc., a Florida
corporation (the "Company"), at any time on or after August 13, 1996 (or at such
earlier time with the consent of Xxxxxxx and Company Securities, Inc.) and prior
to the Expiration Date (as hereinafter defined), upon the presentation and
surrender of this Warrant Certificate with the Subscription Form on the reverse
hereof duly executed, at the corporate office of American Stock Transfer & Trust
Company as Warrant Agent, or its successor (the "Warrant Agent"), accompanied by
payment of $5.00 (the "Purchase Price") in lawful money of the United States of
America in cash or by official bank or certified check made payable to the
Company.
This Warrant Certificate and each Class B Warrant represented hereby are
issued pursuant to and are subject in all respects to the terms and conditions
set forth in the Warrant Agreement (the "Warrant Agreement"), dated as of
February 14, 1996 by and between the Company and the Warrant Agent.
In the event of certain contingencies provided for in the Warrant
Agreement, the Purchase Price or the number of shares of Common Stock subject to
purchase upon the exercise of each Class B Warrant represented hereby are
subject to modification or adjustment.
Each Class B Warrant represented hereby is exercisable at the option of the
Registered Holder, but no fractional shares of Common Stock will be issued. In
the case of the exercise of less than all the Class B Warrants represented
hereby, the Company shall cancel this Warrant Certificate upon the surrender
hereof and shall execute and deliver a new Warrant Certificate or Warrant
Certificates of like tenor, which the Warrant Agent shall countersign, for the
balance of such Class B Warrants.
The term "Expiration Date" shall mean 5:00 PM (New York time) on February
13, 2001, or such earlier date as the Class B Warrants shall be redeemed. If
such date shall in the State of New York be a holiday or a day on which the
banks are authorized to close, then the Expiration Date shall mean 5:00 PM (New
York time) the next following day which in the State of New York is not a
holiday or a day on which banks are authorized to close.
The Company shall not be obligated to deliver any securities pursuant to
the exercise of this Class B Warrant unless a registration, statement under, the
Securities Act of 1933, as amended, with respect to such securities is
effective. The Company has covenanted and agreed that it will file a
registration statement and will use its best efforts to cause the same to become
effective and to keep such registration statement
current while any of the Class B Warrants are outstanding. The Class B Warrants
shall not be exercisable by a Registered Holder in any state where such exercise
would be unlawful.
This Warrant Certificate is exchangeable, upon the surrender hereof by the
Registered Holder at the corporate office of the Warrant Agent, for a new
Warrant Certificate or Warrant Certificates of like tenor representing an equal
aggregate number of Class B Warrants, each of such new Warrant Certificates to
represent such number of Class B Warrants as shall be designated by such
Registered Holder at the time of such surrender. Upon due presentment with any
applicable transfer fee, tax or other governmental charge imposed in connection
therewith, for registration of transfer of this Warrant Certificate at such
office, a new Warrant Certificate or Warrant Certificates representing an equal
aggregate number of Class B Warrants will be issued to the transferee in
exchange therefor, subject to the limitations provided in the Warrant Agreement.
Prior to the exercise of any Class B Warrant represented hereby, the
Registered Holder shall not be entitled to any rights of a stockholder of the
Company, including, without limitation, the right to vote or to receive
dividends or other distributions, and shall not be entitled to receive any
notice of any proceedings of the Company, except as provided in the Warrant
Agreement.
This Class B Warrant may be redeemed at the option of the Company, at a
redemption price of $0.05 per Warrant, at any time on or after August 13, 1996
(or at such earlier time with the consent of Xxxxxxx and Company Securities,
Inc.), provided the closing price (as defined in the Warrant Agreement) for the
shares issuable upon exercise of such Warrant for the immediately preceding
twenty (20) consecutive trading days immediately preceding the record date for
redemption shall equal or exceed 130% of the Purchase Price then in effect.
Notice of redemption shall be given not less than the thirtieth day before the
date fixed for redemption, all as provided in the Warrant Agreement. On and
after the date fixed for redemption, the Registered Holder shall have no rights
with respect to this Class B Warrant except to receive the $0.05 per Warrant
upon surrender of this Certificate.
Prior to due presentment for registration of transfer hereof, the Company
and the Warrant Agent may deem and treat the Registered Holder as the absolute
owner hereof and of each Class B Warrant represented hereby (notwithstanding any
notations of ownership or writing hereon made by anyone other than a duly
authorized officer of the Company or the Warrant Agent) for all purposes and
shall not be affected by any notice to the contrary.
This Warrant Certificate shall be governed by and construed in accordance
with the laws of the State of New York.
This Warrant Certificate is not valid unless countersigned by the Warrant
Agent.
-2-
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed, manually or in facsimile, by two of its officers hereunto duly
authorized and a facsimile of its corporate seal to be imprinted thereon.
BENTLEY PHARMACEUTICALS, INC.
By: _________________________
[SEAL]
____________________________
Secretary
COUNTERSIGNED:
____________________________
AMERICAN STOCK TRANSFER AND TRUST COMPANY
By: ________________________
-3-
[FORM OF REVERSE OF CLASS B WARRANT CERTIFICATE]
SUBSCRIPTION FORM
To Be Executed by the Registered Holder
in Order to Exercise Class B Warrants
The undersigned Registered Holder hereby irrevocably elects to exercise
__________ Class B Warrants represented by this Warrant Certificate, and to
purchase the securities issuable upon the exercise of such Warrants, and
requests that certificates for such securities shall be issued in the name of
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER
______________________________________
______________________________________
______________________________________
[please print or type name and address]
and be delivered to
______________________________________
______________________________________
______________________________________
[please print or type name and address]
and if such number of Class B Warrants shall not be all the Class B Warrants
evidenced by this Warrant Certificate, that a new Warrant Certificate for the
balance of such Warrants be registered in the name of, and delivered to, the
Registered Holder at the address stated below.
Dated:____________________________ X ________________________________
________________________________
________________________________
Address
________________________________
Taxpayer Identification Number
________________________________
Signature Guaranteed
________________________________
ASSIGNMENT
To Be Executed by the Registered Holder in Order to Assign Class B Warrants
FOR VALUE RECEIVED, _________________________________________________
hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER
______________________________________
______________________________________
______________________________________
[please print or type name and address]
_______________________________________ of the Class B Warrants represented by
this Warrant Certificate, and hereby irrevocably constitutes and appoints
_____________________________________________ Attorney to transfer this Warrant
Certificate on the books of the Company, with full power of substitution in the
premises.
Dated: ____________________________ X __________________________________
Signature Guaranteed
__________________________________
THE SIGNATURE TO THE ASSIGNMENT OR THE SUBSCRIPTION FORM MUST
CORRESPOND TO THE NAME AS WRITTEN UPON THE FACE OF THIS CLASS B
WARRANT CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR
ENLARGEMENT OR ANY CHANGE WHATSOEVER, AND MUST BE GUARANTEED BY A
COMMERCIAL BANK OR TRUST COMPANY OR AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS
WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM)
PURSUANT TO THE SECURITIES AND EXCHANGE COMMISSION RULE 17Ad-15.
-2-
