NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK WHICH MAY BE PURCHASED
HEREUNDER (COLLECTIVELY, THE "SECURITIES") HAS BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AS AMENDED (THE "SECURITIES ACT, OR APPLICABLE STATE
SECURITIES LAWS, AND THE SECURITIES MAY NOT BE SOLD, TRANSFERRED, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF UNTIL EITHER (1) THE HOLDER THEREOF
SHALL HAVE RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
COMPANY THAT REGISTRATION OF THE SECURITIES UNDER THE SECURITIES ACT AND
APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED OR (2) A REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS WITH
RESPECT TO THE SECURITIES SHALL HAVE BECOME EFFECTIVE.
NOVEMBER 6, 1997
COMMON STOCK PURCHASE WARRANT
To subscribe for and purchase shares
of Common Stock, par value $.0001 per share, of
INKINE PHARMACEUTICAL COMPANY, INC.
THIS CERTIFIES that, for value received, XXXXXX XXXXXXXXX, an
individual residing at ____________________________________(the "Holder")
subject to the terms and conditions hereof, shall be entitled to purchase from
INKINE PHARMACEUTICAL COMPANY, INC., a New York corporation (the "Company"),
at any time or times prior to 5:00 P.M. (New York City Time) on the expiration
date of this Warrant set forth in Section 8 below (the "Expiration Date"), One
Hundred Twenty Five Thousand (125,000) shares of Common Stock (as defined
below) of the Company (individually, a "Warrant Share" and collectively, the
"Warrant Shares"), at an aggregate exercise price of $.61 per share, (the
"Exercise Price"), or an aggregate purchase price of Seventy Six Thousand Two
Hundred Fifty Dollars ($76,250.00). For purposes of this Warrant, the term
"Common Stock' shall mean the class of capital stock of the Company designated
as its Common Stock, par value $.0001 per share, as constituted on the date
hereof.
Section 1. Exercise of Warrants. This Warrant shall be exercisable,
at the election of the Holder, either in full or from time to time in part
and, in the event that this Warrant is exercised in respect of fewer than all
of the Warrant Shares issuable on such exercise at any time prior to the
Expiration Date, a new certificate evidencing the remaining Warrant or
Warrants will be issued, and the Company is hereby irrevocably authorized to
countersign and to deliver the required new Warrant pursuant to the provisions
of this Warrant. This Warrant, when surrendered upon its exercise, shall be
canceled by the Company and shall then be disposed of in a manner satisfactory
to the Company. The certificate(s) representing the Warrant Shares shall bear
a restrictive legend substantially in the form set forth in Exhibit B attached
hereto.
(a) Exercise for Cash
This Warrant may be exercised in whole or in part
into the number of Warrant Shares determined in accordance with this Section 1
by delivering it to the Company at its principal executive office with the
form of election attached hereto as Exhibit A duly completed and signed, and
by paying to the Company the Exercise Price or such pro rata portion of the
Exercise Price for the number of Warrant Shares in respect of which this
Warrant is then exercised. Payment of the Exercise Price shall be made in cash
or Holder's check payable to the order of the Company.
Upon surrender of this Warrant and payment of the
Exercise Price, the Company shall issue and cause to be delivered within a
reasonable time, not to exceed fifteen calendar days, to or upon the written
order of the Holder and in such name or names as the Holder may designate, a
certificate or certificates for the number of full Warrant Shares issuable
upon exercise. Such certificate or certificates shall be deemed to have been
issued, and any person so designated to be named therein shall be deemed to
have become a holder of record of such Warrant Shares, as of the date of the
surrender of this Warrant.
(b) Cashless Exercise
This Warrant may be exchanged, in whole or in part
(a "Warrant Exchange"), into the number of Warrant Shares determined in
accordance with this Section 1 by presentation and surrender of this Warrant
to the Company at its principal office, or at the office of its stock transfer
agent, if any, accompanied by a notice (a "Notice of Exchange") stating that
this Warrant is being exchanged and the number of shares of Common Stock to be
exchanged. In connection with any Warrant Exchange, this Warrant shall
represent the right to subscribe for and acquire the number of shares of
Common Stock (rounded to the nearest whole number) equal to (i) the number of
shares specified by the Holder in its Notice of Exchange (the "Total Number")
less the number of shares equal to the quotient obtained by dividing (A) the
product of the Total Number and the then applicable Exercise Price by (B) the
then fair market value (determined as set forth below) per share of Common
Stock. For purposes of this Section 1(b), the "fair market value" per share of
Common Stock as of any date shall be the average of the closing bid prices of
the Common Stock, as reported on the NASDAQ Small-Cap Market, during the five
(5) trading days immediately preceding such date. If this Warrant should be
exchanged in part only, the Company shall, upon surrender of this Warrant for
cancellation, execute and deliver a new Warrant evidencing the rights of the
Holder thereof to purchase the balance of the shares purchasable hereunder.
Upon receipt by the Company of this Warrant, together with a duly executed
Notice of Exchange, at its office, or by the stock transfer agent of the
Company at its office, the Holder shall be deemed to be the holder of record
of the shares of Common Stock issuable upon such exchange, notwithstanding
that the stock transfer books of the Company shall then be closed or that
certificates representing such shares of Common Stock shall not then be
actually delivered to the Holder. The Company shall pay any and all
documentary stamp or similar issue or transfer taxes payable in respect of the
issue or delivery of shares of Common Stock on exchange of this Warrant.
Section 2. Payment of Taxes. The Company shall pay all documentary
stamp taxes attributable to the initial issuance of Warrant Shares upon the
exercise of this Warrant. The Company, however, shall not be required to pay
any tax or taxes which may be payable in respect of any transfer involved in
the issue of any certificates for Warrant Shares in a name other than that of
the Holder.
Section 3. Mutilated, Missing or Lost Warrant. In the event that this
Warrant shall be mutilated, lost, stolen or destroyed, the Company shall issue
and countersign, in exchange and substitution for and upon cancellation of the
mutilated Warrant, or in lieu of and substitution for its loss, theft or
destruction, a new Warrant of like tenor and representing an equivalent number
of Warrants, but only upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft or destruction of this Warrant.
Section 4. Reservation of Warrant Shares. The Company will at all
times reserve and keep available, free from preemptive rights, out of the
aggregate of is authorized but unissued Common Stock or its authorized and
issued Common Stock held in its treasury, for the purpose of enabling it to
satisfy any obligation to issue Warrant Shares upon exercise of this Warrant,
the maximum number of shares of Common Stock which may then be deliverable
upon the exercise of this Warrant.
The Company covenants that all Warrant Shares which may be issued
upon exercise of Warrants will, upon issue and payment therefor, be fully
paid, nonassessable, free of preemptive rights and free from all taxes, liens,
charges and security interests with respect to the issue thereof.
Section 5. Fractional Shares. No fractional Warrant Shares, or scrip
for any such fractional Warrant Shares, shall be issued upon the exercise of
this Warrant. If any fraction of a share of Common Stock would, except for the
provisions of this Section 5, be issuable on the exercise of any Warrant, the
Company will (i) if the fraction of a share otherwise issuable is equal to or
less than one-half, round-down and issue to the Holder only the whole number
of shares of Common Stock to which the Holder is entitled or (ii) if the
fraction of a share otherwise issuable is greater than one-half, round-up and
issue to the Holder one additional share of Common Stock in addition to the
largest whole number of shares of Common Stock to which the Holder is
otherwise entitled.
Section 6. Adjustment of Number of Warrant Shares. The number of
Warrant Shares issuable upon exercise of the Warrant is subject to adjustment
from time to time upon the occurrence of the events enumerated in this Section
6.
(a) Change in Common Stock.
In case the Company shall (i) pay a dividend in
Common Stock or make a distribution in Common Stock, (ii) subdivide its
outstanding Common Stock, (iii) combine its outstanding Common Stock into a
smaller number of shares of Common Stock or (iv) issue, by reclassification of
its Common Stock, other securities of the Company (including any such
reclassification in connection with a consolidation or merger in which the
Company is the surviving corporation), the number of shares of Common Stock
purchasable upon exercise of the Warrant immediately prior thereto shall be
adjusted so that the Holder of the Warrant shall be entitled to receive the
kind and number of shares of Common Stock or other securities of the Company
which it would have owned or have been entitled to receive after the happening
of any of the events described above, had such Warrant been exercised
immediately prior to the happening of such event or any record date with
respect thereto. An adjustment made pursuant to this subparagraph (a) shall
become effective immediately after the effective date of such event
retroactive to the record date, if any, for such event. Such adjustment shall
be made successively whenever any event listed above shall occur.
(b) Rights Issue.
In case the Company shall issue rights, options or
warrants to all holders of its outstanding Common Stock, entitling them to
subscribe for or purchase Common Stock at a price per share which is lower at
the record date mentioned below than the then current market price per share
of Common Stock (as defined in subparagraph (d) below), the number of shares
of Common Stock thereafter purchasable upon the exercise of the Warrant shall
be determined by multiplying the number of shares of Common Stock theretofore
purchasable upon exercise of the Warrant by a fraction, of which the numerator
shall be the number of shares of Common Stock outstanding on the date of
issuance of such rights, options or warrants plus the number of additional
shares of Common Stock offered for subscription or purchase, and of which the
denominator shall be the number of shares of Common Stock outstanding on the
date of issuance of such right, options or warrants plus the number of shares
of Common Stock which could be purchased at the current market price per share
of Common Stock at such record date with: (i) the aggregate purchase price of
the total number of shares of Common Stock so offered for subscription or
purchase, plus (ii) any consideration received by the Company for such rights,
options or warrants. Such adjustment shall be made whenever such rights,
options or warrants are issued, and shall become effective immediately after
the record date for the determination of stockholders entitled to receive such
rights, options or warrants.
(c) Other Distributions.
In case the Company shall distribute to all holders
of its Common Stock (including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing corporation)
evidences of its indebtedness or assets (excluding cash dividends or
distributions payable out of consolidated earnings or earned surplus and
dividends or distributions referred to in subparagraph (a) above or in the
paragraph immediately following this paragraph) or rights, options or
warrants, or convertible or exchangeable securities containing the right to
subscribe for or purchase debt securities, assets or other securities of the
Company (excluding those referred to in subparagraph (b) above), then in each
case the number of shares of Common Stock thereafter purchasable upon the
exercise of the Warrant shall be determined by multiplying the number of
shares of Common Stock theretofore purchasable upon the exercise of the
Warrant by a fraction, of which the numerator shall be the then current market
price per share of Common Stock (as defined in subparagraph (d) below) on the
date of such distribution, and of which the denominator shall be the then
current market price per share of Common Stock, less the then fair market
value of the portion of the assets or evidences of indebtedness so distributed
or of such subscription rights, options or warrants, or of such convertible or
exchangeable securities applicable to one share of Common Stock. Such
adjustment shall be made whenever any such distribution is made, and shall
become effective on the date of distribution retroactive to the record date
for the determination of stockholders entitled to receive such distribution.
In the event of a distribution by the Company to
all holders of its shares of Common Stock of a subsidiary or securities
convertible into or exercisable for such stock, then in lieu of an adjustment
in the number of shares of Common Stock purchasable upon the exercise of the
Warrant, the Holder of the Warrant, upon the exercise thereof at any time
after such distribution shall be entitled to receive from the Company the
stock or other securities to which the Holder would have been entitled if the
Holder had exercised the Warrant immediately prior thereto, all subject to
further adjustment as provided in this Section 6; provided, however, that no
adjustment in respect of cash dividends or interest on such stock or other
securities shall be made during the term of the Warrant or upon the exercise
of a Warrant.
(d) Market Price.
As used in this Section 6, the term "market price"
shall mean, for any date, (i) the last sale price for the Common Stock on the
principal securities exchange on which the Common Stock is listed or admitted
to trading, or (ii) if not so listed or admitted to trading on any securities
exchange, the last sale price, or in the absence of a last sale price, the
closing bid price, for the Common Stock on the NASDAQ National Market, or
(iii) if the Common Stock shall not be listed on such Market, the the last
sale price, or in the absence of a last sale price, the closing bid price, for
the Common Stock on the NASDAQ SmallCap Market, or (iv) f the Common Stock
shall not be listed on either such Market, the closing bid price in the
over-the-counter market, in each such case, unless otherwise provided herein,
averaged over a period of 20 consecutive trading days ending on the trading
day prior to the date as of which the market price is being determined. If at
any time the Common Stock is not listed on any such exchange or such Market or
quoted in the over-the-counter market, the market price of the Common Stock
shall be deemed to be the fair market value thereof, as determined in good
faith by an independent brokerage firm, Standard & Poor's Corporation or
Xxxxx'x Investors Service, as of a date which is within fifteen calendar days
preceding the date as of which the determination is to be made.
(e) No Adjustments; Deferral of Adjustments.
No adjustment in the number of shares of Common
Stock purchasable upon the exercise of the Warrant need be made under
subparagraphs (b) and (c) if the Company issues or distributes to the Holder
of the Warrant the rights, options, warrants, or convertible or exchangeable
securities, or evidences of indebtedness or assets referred to in those
subparagraphs which the Holder of the Warrant would have been entitled to
receive had the Warrant been exercised immediately prior to the happening of
such event or the record date with respect thereto. No adjustment need be made
for a change in the par value of the shares of Common Stock.
No adjustment in the number of shares of Common
Stock purchasable hereunder shall be required unless such adjustment would
require an increase or decrease of at least one percent in the number of
shares of Common Stock purchasable upon the exercise of the Warrant; provided,
however, that any adjustments which by reason of this subparagraph (e) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations shall be made to the nearest
one-thousandth of a share.
(f) Notice Upon Adjustment.
Whenever there is an adjustment in the number or
kind of securities issuable upon exercise of the Warrant as provided in this
Section 6, the Company shall (a) issue a certificate signed by the Chairman of
the Board, President or a Vice President of the Company and by the Treasurer
or an Assistant Treasurer or the Secretary or an Assistant Secretary of the
Company, showing in detail the facts requiring such adjustment and the number
and kind of securities issuable upon exercise of each Warrant after such
adjustment; and (b) cause a notice stating that such adjustment has been
effected and stating the number and kind of securities issuable upon exercise
of each Warrant to be sent by First Class Mail postage prepaid, to the Holder
of the Warrant Certificate at the address set forth in Section 10 hereof.
(g) Notice Upon Certain Events.
If, at any time prior to the Expiration Date, (i)
the Company shall declare any dividend on the Common Stock payable in cash or
shares of Common Stock or capital stock of the Company; or (ii) the Company
shall authorize the issuance to all holders of shares of Common Stock of
rights, options or warrants to subscribe for or purchase shares of Common
Stock or of any other subscription rights or warrants; or (iii) the Company
shall authorize the distribution to all holders of shares of Common Stock
evidences of its indebtedness or assets; or (iv) the Board of Directors of the
Company shall have approved any consolidation or merger to which the Company
is a party and for which approval of any shareholders of the Company is
required, or any sale, transfer or lease of all or substantially all of the
assets of the Company or any reclassification or change of Common Stock
issuable upon exercise of the Warrants (other than a change in par value, or
as a result of a subdivision or combination), or a tender offer or exchange
offer for shares of Common Stock; or (v) the voluntary or involuntary
dissolution, liquidation or winding up of the Company; or (vi) the Company
proposes to take any action which would require an adjustment in the number or
kind of securities issuable upon exercise of the Warrant pursuant to this
Section 6; then the Company shall cause to be given to the Holder, at least
twenty calendar days prior to the applicable record date specified, or
promptly in the case of events for which there is no record date, a written
notice stating (A) the date as of which the holders of record of shares of
Common Stock to be entitled to receive any such dividends, rights, options,
warrants or distribution are to be determined, or (B) the initial expiration
date set forth in any tender offer or exchange offer for shares of Common
Stock, or (C) the date on which any such consolidation, merger, sale,
transfer, lease, reclassification, change, dissolution, liquidation or winding
up is expected to become effective or consummated, and the date as of which it
is expected that holders of record of shares of Common Stock shall be entitled
to exchange such shares for securities or other property, if any, deliverable
upon such consolidation, merger, sale, transfer, lease, reclassification,
change, dissolution, liquidation or winding up.
(h) Merger, Consolidation, etc.
If any capital reorganization or reclassification
of the capital stock of the Company, or consolidation or merger of the Company
with or into another corporation, or the sale of all or substantially all of
its assets to another corporation shall be effected, then, as a condition of
such reorganization, reclassification, consolidation, merger or sale, lawful
and adequate provision shall be made whereby the Holder of the Warrant shall
thereafter have the right to purchase and receive on exercise of such Warrant
upon the basis and upon the terms and conditions specified in this Agreement
and in lieu of the shares of the Common Stock of the Company immediately
theretofore purchasable and receivable upon the exercise of the Warrant, such
shares of stock, securities or assets as may be issued or payable with respect
to or in exchange for a number of outstanding shares of such Common Stock
equal to the number of shares such Common Stock immediately, theretofore
purchasable and receivable upon the exercise of the Warrant had such
reorganization, reclassification, consolidation, merger or sale not taken
place and in any such case appropriate provision shall be made with respect to
the rights and interests of the Holder of the Warrant to the end that the
provisions of this Agreement (including, without limitation, provision for
adjustment of the number of shares issuable upon the exercise of the Warrant)
shall thereafter be applicable as nearly as may be in relation to any shares
of stock, securities, or assets thereafter deliverable upon exercise of
Warrant. The Company shall not effect any such consolidation, merger or sale,
unless, prior to or simultaneously with the consummation thereof, the
successor corporation (if other than the Company) resulting from such
consolidation or merger or the corporation purchasing such assets shall
assume, by written instrument acceptable to the Holder, the obligation to
deliver to the Holder of the Warrant such shares of stock, securities or asset
as, in accordance with the foregoing provisions, the Holder would be entitled
to purchase.
Section 7. Holder; No Rights as Shareholder; Reports to Shareholders.
The Holder shall be deemed the owner of this Warrant for all
purposes. The Holder shall not be entitled by virtue of ownership of this
Warrant to any rights whatsoever as a shareholder of the Company either at law
or in equity, including, without limitation, the right to vote and to receive
dividends and other distributions. While this Warrant remains outstanding, the
Company shall send to the Holder copies of all reports, correspondence and
other documents which the Company sends to its shareholders.
Section 8. Expiration Date.
This Warrant, in all events, shall expire and be wholly void
after 5 P.M. (eastern time) on November 5, 2002.
Section 9. Notices.
All notices, consents or other communications required or
permitted to be given under this Agreement shall be in writing and shall be
deemed to have been duly given (a) when delivered personally, or (b) one
business day after being sent by a reputable overnight delivery service,
postage or delivery charges prepaid (provided that confirmation of delivery is
obtained from such service), to the Company at its principal executive office,
and to Holder at the last address reflected in the Company's records for
Holder.
Notices may also be given by prepaid telegram or facsimile and shall
be effective on the date transmitted if confirmed within 24 hours thereafter
by a signed original sent in the manner provided above. Any party may change
its address for notice and the address to which copies must be sent by giving
notice of the new addresses to the other parties in accordance with this
Section 10, except that any such change of address notice shall not be
effective unless and until received.
Section 11. Transfer.
This Warrant may not be sold, transferred, pledged,
hypothecated or otherwise disposed of without the express prior written
consent of the Company at any time (which consent shall not be unreasonably
withheld) by the Holder except to an entity which is an "Affiliate" of the
Holder, as that term is defined in Rule 405 promulgated under the Securities
Act, provided that, in the opinion of counsel reasonably satisfactory to the
Company, any such transfer would not result in a violation of the provisions
of the Securities Act and applicable state securities laws. Any transfer of
this Warrant shall be effective upon delivery of this Warrant and the Form of
Transfer of Warrant attached hereto as Exhibit C duly completed and executed
and, if required by the Company, the opinion referred to in the preceding
sentence, to the principal office of the Company and, thereafter the Company
shall issue a new Warrant registered in the name of the transferee. If the
Warrant is being transferred in part, the Company shall issue new Warrants, in
each case evidencing the right to purchase the appropriate number of Warrant
Shares, registered in the names of the Holder and the transferee, as
applicable. Upon any transfer of all or any part of this Warrant to any
transferee, such transferee shall be deemed the "Holder" of such Warrant as
such term is used herein and shall be deemed the owner thereof for all
purposes. Each Holder of this Warrant and any Warrant Shares issued upon
exercise of this Warrant, by taking or holding the same, consents to and
agrees to be bound by the provisions of this Section 11.
Section 12. Severability.
In the event that one or more of the provisions of this
Warrant shall for any reason be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not
affect any other provision of this Warrant, but this Warrant shall be
construed as if such invalid, illegal or unenforceable provision had never
been contained herein.
Section 13. Governing Law.
This Warrant shall be governed by and construed in
accordance with the laws of the State of New York applicable to agreements
made and to be entirely performed within such State.
IN WITNESS WHEREOF, INKINE PHARMACEUTICAL COMPANY, INC. has caused
this Warrant to be signed by its duly authorized officers and dated as of
November __, 1997.
INKINE PHARMACEUTICAL COMPANY, INC.
By: /s/ Xxxxx Xxxxxxxx
--------------------------------
Xxxxx Xxxxxxxx, President
Attest:
----------------------------
By:
------------------------------
[Corporate Seal]
EXHIBIT A
Form of Exercise
(to be executed by the Holder)
The Holder hereby exercises its rights to subscribe for and purchase
____ shares of Class A common stock, par value $.00001 ("Common Stock"), of
INKINE PHARMACEUTICAL COMPANY, INC. evidenced by the attached Warrant and
herewith makes payment of the Purchase Price of $____________ therefor in
full. Please issue a certificate in the name of the Holder for the Common
Stock in accordance with the instructions given below and issue a replacement
Warrant in the name of the Holder for the unexercised balance, if any, of the
right to purchase Warrant Shares evidenced by the attached Warrant which were
not exercised hereby.
Dated:
--------------------------------- ------------------------------------
Signature of Holder
Instructions for registration of shares
Social Security or Employer Identification
Number of Holder:
-----------------------
Address of Holder:
------------------------------------
Xxxxxx
------------------------------------
Xxxx, Xxxxx and Zip Code
EXHIBIT B
Form of Restrictive Legend
To Be Imprinted on Warrant Shares
THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED,
PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNTIL EITHER (1) THE HOLDER
THEREOF SHALL HAVE RECEIVED AN OPINION OF COUNSEL REASONABLE SATISFACTORY TO
THE COMPANY THAT REGISTRATION OF SUCH SHARES UNDER THE SECURITIES ACT AND
APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED OR (2) A REGISTRATI0N
STATEMENT UNDER THE SECURITIES ACT AND SUCH APPLICABLE STATE SECURITIES LAWS
WITH RESPECT TO SUCH SHARES SHALL HAVE BECOME EFFECTIVE.
EXHIBIT C
Form of Transfer of Warrant
To Permitted Transferee
For value received, the Holder hereby sells, assigns and transfers
unto _____________ its right to purchase ____________ shares of Class A Common
Stock, par value $.00001 per share, of INKINE PHARMACEUTICAL COMPANY, INC.
evidenced by the attached Warrant. All capitalized terms used and not defined
herein shall have the meanings ascribed to them in the Warrant.
Dated:
--------------------------------- ------------------------------------
Signature of Holder
In the presence of
--------------------------------------
Social Security or Other
Identifying Number of
Transferee:______________________________
Address of Transferee:
--------------------------------------
Xxxxxx
--------------------------------------
Xxxx, Xxxxx and Zip Code
