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EXHIBIT 4
STOCK WARRANT AGREEMENT
Agreement made as of the 1st day of June, 1999, by and between
American Biogenetic Sciences, Inc., a Delaware Corporation (hereinafter called
the "Company") and Redington, Inc. (hereinafter called "Redington").
WITNESSETH:
WHEREAS, the Company has engaged Redington to act as an Investor
Relations Consultant to the Company pursuant to an agreement for the term
between January 20, 1999 and January 19, 2000 (the "Consultant Agreement"); and
WHEREAS, Redington has earned this Warrant (the "Warrant") under the
Consultant Agreement, but on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants contained herein, it is hereby agreed:
1. GRANT OF WARRANT. The Company hereby grants to Redington the right
and option to purchase from the Company, upon and subject to the terms and
conditions hereinafter set forth, all or any part of an aggregate of up to
300,000 shares of the Company's Class A Common Stock, $0.001 par value per share
(hereinafter called the "Common Stock" and the shares thereof so purchased or
purchasable, as the case may be, being hereinafter called the "Shares") at an
exercise price of $1.00 per share, notwithstanding the foregoing, this Warrant
may be exercised as to 50,000 share amounts only if the Closing "Ask" price (the
"Closing Ask") of the Company's Common Stock during the period ending June 30,
2000, remains at each such Closing Ask set forth below for a period of ten
consecutive trading days.
COLUMN 1 COLUMN 2
-------- --------
Then the maximum number of
Shares exercisable under this
Closing Ask Warrant at each Vested Price
$1.00 50,000(Vested on Execution)
$1.50 50,000
$2.00 50,000
$2.50 50,000
$3.00 50,000
$3.50 50,000
2. TERM OF WARRANT. The term of this Warrant is for five years and
shall have commenced effective January 20, 1999, and shall expire at 5:00 p.m.,
New York time, on January 19, 2004 ("Expiration Date").
3. METHOD OF WARRANT EXERCISE. Subject to the terms and conditions of
this Agreement, the
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Warrant conferred hereby may be exercised by Redington at any time during its
term, to the extent exercisable at that time, by giving written notice to the
Company at 0000 Xxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx 00000, Attention: Xxxxx X.
Xxxxxxx, Vice President Finance. Such notice shall state the election to
exercise this Warrant and the number of shares in respect of which it is being
exercised, shall be signed on behalf of Redington by a duly authorized signature
thereof and shall be accompanied by (a) payment of the exercise price therefor
by cash or certified check, payable to the order of the Company, (b) any
required federal income tax or other required withholding amount, which shall be
paid in cash or by certified check and (c) such other documents (including a
confirmation of the representation and agreement referred to in Section 4 as of
the time of exercise of this Warrant) as the Company may reasonably require.
This Warrant may not be exercised in an amount less than 5,000
Shares, nor may it be exercised as to a fraction of a Share.
This Warrant shall be considered exercised on the date such notice,
together with all required payments and other documents, is deemed given under
Section 8(d). The Company shall deliver or cause to be delivered to Redington a
certificate or certificates representing the Shares for which this Warrant is
presently exercised, registered in the name of Redington, as soon as practicable
after this warrant shall have been properly exercised. Shares to be issued on
the exercise of this Warrant at the election of the Company, may be either
authorized but unissued Common Stock or Common Stock previously issued and
reacquired by the Company. Redington shall not be, nor have any of the rights or
privileges of, a stockholder of the Company in respect of any of the Shares
issuable upon the exercise of the warrant hereby granted unless and until
certificates representing such Shares shall have been issued and delivered.
4. INVESTMENT COVENANT. Redington represents and warrants that the
Shares issued upon such exercise are being acquired for investment by Redington
and for its own account and without a view to the resale or distribution thereof
within the meaning of the Securities Act of 1933, as amended (the "Act").
Redington agrees that it will not sell, transfer, pledge, hypothecate or
otherwise dispose of any of such Shares except pursuant to (i) an effective
Registration Statement under the Act covering such disposition, or (ii) an
opinion of counsel to the Company, in response to a request therefor, to the
effect that such registration is not required as a condition of such
disposition. Redington acknowledges that such Shares are not presently
registered under the Act and that, except for the Registration Rights being
afforded the Company is under no obligation to so register or qualify this
Warrant or any of the Shares underlying this Warrant under, or do any act which
may be requisite to Redington securing an exemption from the registration or
qualification requirements of, the Act or any state security law in connection
with the exercise of this warrant or any disposition of the Shares. Accordingly,
any Shares acquired hereunder must be held indefinitely unless they are
registered under the Act or the disposition thereof is exempt from the
registration requirements of the Act; any sale of the Shares or any part thereof
made in reliance on Rule 144 of the Securities and Exchange Commission under the
Act can be made only after compliance with any requisite holding period and in
amounts in accordance with the terms and conditions of that Rule. Redington
agrees that the certificates representing the Shares to be received by Redington
upon exercise of this option my have "stop transfer instructions" placed against
the transfer thereof based upon the foregoing, and may bear the following (or a
similar) legend:
"The Shares represented by this certificate have not been registered
under the Securities Act of 1933 and may not be sold, transferred,
pledged, hypothecated or otherwise disposed of in the absence of (i)
an effective registration statement for such shares under said Act or
(ii) an opinion of Company counsel that such registration is not
required."
If the Company's Board of Directors shall determine, in its
discretion, that the listing or qualification
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of the Shares subject to this Warrant on any securities exchange or under any
applicable law, or the consent or approval of any governmental regulatory body,
is necessary or desirable as a condition to, or in connection with, the exercise
of this Warrant or the issue of shares hereunder, the Company shall use its best
efforts to obtain such listing, qualification, consent or approval, but this
Warrant may not be exercised in whole or in part unless and until such listing,
qualification, consent or approval shall have been effected or obtained free of
any conditions that are not reasonably acceptable to the Company's Board of
Directors.
5. REGISTRATION RIGHTS.
(a) If requested to do so, but only on one occasion, by Redington of
an aggregate of a majority of the shares of Common Stock (i) theretofore issued
upon the exercise of this Warrant (or a portion hereof) and (ii) represented by
the portion of this Warrant which has not theretofore been exercised, the
Company shall (subject to all of the provisions of this Section) use its best
efforts to promptly file with the Securities and Exchange Commission, a
registration statement under the Act on Form S-3 or the comparable short
registration form (but the Company shall not be obligated to file a registration
statement under this clause (a) of Section 5 on any other form) covering the
shares of Common Stock of the Company issued prior to the time of the filing of
such registration statement (and those shares which Redington agrees to purchase
by exercising this Warrant (or applicable portion) no later than
contemporaneously with the effectiveness of such registration statement) which
are so specifically designated in such written request as being proposed to be
sold by Redington and requested to be included in such registration statement.
Those whose Shares of Common Stock are to be included in any registration
statement filed under this clause (a) of this Section 5 are hereinafter referred
to as the "Selling Stockholders".
(b) The Company shall not be obligated to register this Warrant or
any portion hereof.
(c) The Company shall use its best efforts to keep any registration
statement filed pursuant to this Section 5 effective for a period of nine months
following its initial effective date or such earlier date as all of the Selling
Stockholder's shares of Common Stock covered by such registration statement have
been sold.
(d) Notwithstanding anything to the contrary set forth herein, the
Company shall not be required to include in any such registration statement any
Shares of Common Stock owned by any proposed Selling Stockholder if (i) in the
opinion of the Company's counsel, the shares proposed to be included in the
registration statement may properly be disposed of under Rule 144 under the Act
or otherwise without registration under the Act, (ii) the offering to which the
registration statement relates is an underwritten offering which would include
Shares to be offered by the Company and/or other of the Company's security
holders and the underwriter or representative of the underwriters objects to the
inclusion of such Shares in such registration statement or (iii) to the extent
the Company is otherwise contractually prohibited from, or restrictive in,
including such Shares in such registration statement.
(e) In the event of an underwritten offering of any equity securities
of the Company (and whether or not any Shares of Common Stock issued or issuable
upon the exercise of this Warrant are included in such offering), this Warrant
may not be exercised during such period (up to 180 days following the
consummation of such offering) that the Company in the related underwriting or
purchase agreement agrees not to issue any Shares of its Common Stock; PROVIDED,
HOWEVER, that in such event, the Expiration Date of this Warrant shall be
extended by the number of days during which this Warrant may not be exercised.
(f) In connection with any such registration statement which includes
Shares of Common Stock issued upon exercise of this Warrant, the Company agrees
to take all reasonable steps to comply with such
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state securities laws as may be reasonably requested by Selling Stockholders
(except that the Company shall in no event be required to qualify as a foreign
corporation or give a general consent to the service of process nor subject
itself to taxation in such jurisdiction) and to furnish to Selling Stockholders
such number of prospectuses or other documents incident to such offering as the
Selling Stockholders may from time to time reasonably request.
(g) The Company's obligations under this Section 5 shall be
conditioned upon the Selling Stockholder (i) furnishing to the Company all such
information and material as may be reasonably requested by the Company or its
counsel for inclusion in any such registration statement, (ii) doing all such
things and executing all such additional instruments as may be reasonably
necessary or desirable in the opinion of the Company or its counsel in
connection with such registration statement or public offering and (iii)
complying in all respects with the Act and all applicable rules and regulations
thereunder and with the securities laws of the states in which any such public
offering is made.
(h) All costs and expenses in connection with any registration
statement filed pursuant to this Section 5 with respect to a Selling
Stockholder's Shares including, without limitation, Federal and State
registration and filing fees, printing expenses and the fees and disbursements
of the Company's counsel and of the Company's independent accountants, shall be
borne by the Company, except that such Selling Stockholder shall be responsible
for all (i) underwriting discounts and commissions and all stock transfer taxes
applicable to the Selling Stockholder's Shares and (ii) fees and expenses of any
counsel or accountants representing such Selling Stockholder.
(i) In connection with any registration statement which pursuant to
this Section 5 includes Shares of Common Stock of Selling Stockholders, the
Company will indemnify each Selling Stockholder, its partners, officers and
directors and each person, if any, who controls the Selling Stockholder within
the meaning of Section 15 of the Act and hold all such indemnified persons
harmless against and in respect of any losses, claims, damages or liabilities,
joint or several, to which the indemnified persons may become subject under the
Act or otherwise insofar as such losses, claims, damages or liabilities (or
actions with respect thereto) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in such
registration statement (or any amendment thereto or supplement to any Prospectus
contained therein) or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements made therein not misleading, except to the
extent that any such untrue statement or omission or alleged untrue statement or
omission is based upon information furnished to the Company by any of the
Selling Stockholders or any of their representatives for use in such
registration statement; and the Company agrees to reimburse the Selling
Stockholders and such other persons entitled to indemnification under this
paragraph for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action.
In connection with any registration statement which pursuant to this
Section 5 includes Shares of Common Stock of Selling Stockholders, each Selling
Stockholder will indemnify the Company and each other Selling Stockholder and
each other person who participates in the offering and each of their respective
partners, officers, directors and persons, if any, who control such indemnified
persons within the meaning of Section 15 of the Act and hold all such
indemnified persons harmless against and in respect of any losses, claims,
damages or liabilities, joint or several, to which such indemnified persons may
become subject under the Act or otherwise insofar as such losses, claims,
damages or liabilities (or actions with respect thereto) arise out of or are
based upon any untrue statement or alleged untrue statement of any material fact
contained in such registration statement (or any amendment thereto or supplement
to any Prospectus contained therein) or arise out of or are based upon the
omission or alleged omission to state therein a material fact required
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to be stated therein or necessary to make the statements made therein not
misleading, but only to the extent that any such untrue statement or omission or
alleged untrue statement or omission is based upon information furnished to the
Company by such Selling Stockholder or any of its or his representatives, and
such Selling Stockholder agrees to reimburse the Company, such other Selling
Stockholders and such other persons entitled to indemnification under this
paragraph for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action.
Promptly after receipt by a party entitled to indemnity pursuant
hereto (an "indemnified party") of notice of a claim or the commencement of any
action, such indemnified party will, if a claim with respect thereto is to be
made against another pursuant to this Section 5 (an "indemnifying party"),
notify the indemnifying party of the claim or commencement of such action, but
failure to so notify an indemnifying party shall not relieve the indemnifying
party from any liability which it may have on account of this indemnity
agreement except to the extent such indemnifying party is materially, adversely
and permanently prejudiced thereby. The indemnifying party will be entitled to
participate in and, to the extent that it may wish, jointly with any other
indemnifying party, assume the defense thereof, with counsel reasonably
satisfactory to the indemnified parties, and from and after notice to such
indemnified parties of the indemnifying party's election so to assume the
defense thereof, the indemnifying party shall thenceforth not be liable to such
indemnified party for any legal and related expense subsequently incurred by
such indemnified party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, that nothing herein shall
be deemed to preclude any indemnified party from participating in any such
defense at its own cost and expense.
No indemnifying or indemnified party will consent to the entry of a
judgment or enter into a settlement of any claims which might give rise to
liability of an indemnified party (or another indemnifying party) without the
prior written consent of such other parties, which consent shall not be
unreasonably withheld.
If it is determined that, as a matter of public policy, the
indemnification provided for in this clause (i) is unavailable to an indemnified
party as contemplated, then, to the extent not determined to be prohibited by
public policy, the indemnifying party shall contribute to the amount paid or
payable by the indemnified party as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect not only the relative
benefits received by the indemnified party and the indemnifying party, but also
the relative fault of the indemnified party and the indemnifying party, as well
as any other relevant equitable considerations.
Notwithstanding anything to the contrary contained in this clause
(i), if pursuant to an underwritten public offering of a Selling Stockholder's
shares of Common Stock, the Company and any underwriters enter into an
underwriting or purchase agreement relating to such offering which contains
provisions relating to indemnification, such provisions (in lieu of the
foregoing provisions) shall be deemed to govern indemnification among the
Company, the Selling Stockholders and such underwriters.
6. EFFECT OF CHANGE OF OUTSTANDING SHARES.
(a) In the event that, prior to the full exercise of this Warrant,
the outstanding shares of Common Stock of the Company are changed by reason of a
stock dividend, stock split-up, combination, recapitalization or the like, an
appropriate adjustment shall be made by the Board of Directors of the Company
(whose determination shall be final and binding on the parties) in the aggregate
number and kind of shares and Warrant exercise price per share of Common Stock
then remaining subject to this warrant (but without regard to fractions).
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(b) In the event of: (i) the liquidation of dissolution of the
Company or (ii) a merger or consolidation in which the Company is not the
surviving corporation, this Warrant shall terminate unless other provision is,
in the sole discretion of the Board of Directors of the Company, made therefor
in the transaction.
7. LIMITED TRANSFERABILITY.
(a) This Warrant is not transferable or assignable by Redington to
any third party (the "Holder") except it may be transferred in compliance with
Subsection (b) and with respect to not less than 50,000 Shares, this Warrant may
be transferred and assigned: (i) to Redington, Inc., any successor firm or
corporation of Redington, Inc., (ii) to any of the officers or employees of
Redington, Inc. or of any such successor firm or (iii) in the case of an
individual pursuant to such individual's last will and testament only upon the
books of the Company which it shall cause to be maintained for the purpose. The
Company may treat the registered Holder of this Warrant as he or it appears on
the Company's books at any time as the Holder for all purposes. The Company
shall permit any Holder of a warrant or his or its duly authorized attorney,
upon written request during ordinary business hours, to inspect and copy or make
extracts from its books showing the registered Holder of Warrants. All Warrants
will be dated the same date as this Warrant.
(b) By acceptance hereof, the Holder represents and warrants that
this Warrant is being acquired, and all Shares to be purchased upon the exercise
of this Warrant will be acquired, by the Holder solely for the account of such
Holder and not with a view to the fractionalization and distribution thereof and
will not be sold or transferred except in accordance with the applicable
provisions of the Act and the rules and regulations of the Securities and
Exchange Commission promulgated thereunder, and the Holder agrees that neither
this Warrant nor any of the Shares may be sold or transferred except under cover
of a Registration Statement under the Act which is effective and current with
respect to such Shares or pursuant to an opinion, in form and substance
reasonably acceptable to the Company, that registration under the Act is not
required in connection with such sale or transfer. Any Shares issued upon
exercise of this Warrant shall bear the legend contained in Section 4.
8. MISCELLANEOUS.
(a) This Agreement is made under and shall be governed by the laws of
the Sate of New York in all respects, including matters of construction,
validity and performance, except insofar as the laws of the State of Delaware
specifically and mandatorily apply.
(b) If any provision of this Agreement is held to be illegal, invalid
or unenforceable under applicable law, such provisions shall be fully severable,
with this Agreement to be construed and enforced as if such illegal, invalid or
unenforceable provision had never constituted a part of this Agreement; and the
remaining provisions of this Agreement shall remain in full force and effect and
shall not be affected by the illegal, invalid or unenforceable provision or by
its severance from this Agreement. Furthermore, in lieu of such illegal inlaid
or unenforceable provision there shall be added automatically as a part of this
Agreement a provision as similar in terms to such illegal, inlaid or
unenforceable provision as may be possible and be legal, valid and enforceable.
(c) This Agreement and the Consultant Agreement constitute the entire
agreement between the parities with respect to the subject matter hereof. This
Agreement may not be modified or amended, nor may any term or provision hereof
be waived or discharged, except in writing, signed by the party against whom
such modification, amendment, waiver or discharge is sought to be enforced. A
waiver in one
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instance shall not be effective unless it is in writing and shall not be deemed
a continuing waiver.
(d) All notices or other communications required, desired or
permitted to be given under this Agreement shall be in writing and shall be (i)
if sent to the Company, addressed to the Company at 0000 Xxxxx Xxxxxx, Xxxxxxxx,
Xxx Xxxx 00000 and (ii) if sent to Redington, addressed to Redington, Inc., at
49 Xxxxxxxxxxxxx, Xxxxxxxx, XX 00000 or (iii) in either case to any different
address as a party may notify the other. Any such notice or other communication
shall be deemed "given" when delivered personally, one business day after sent
by Federal Express (or similar overnight delivery service) or Express Mail, or
five days after sent by registered or certified mail, postage prepaid.
(e) The captions of the various sections are inserted only for
reference and for convenience of the parties, and in no way define, limit or
describe the scope of this Agreement, nor the intent of any of the provisions
hereof.
IN WITNESS WHEREOF, the parities have executed this Agreement the day
and year first written above.
AMERICAN BIOGENETIC SCIENCES, INC.
By:______________________________
Xxxx X. North
President
REDINGTON, INC.
By:______________________________
Xxxxxx Xxxxxxxxx
President
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ASSIGNMENT
FOR VALUE RECEIVED, _______________ hereby sells, assigns and
transfers onto __________________ the foregoing Warrant and all rights evidenced
thereby, and does irrevocably constitute and appoint __________________,
attorney, to transfer said Warrant on the books of AMERICAN BIOGENETIC SCIENCES,
INC.
Dated:__________________ Signature: __________________
Address: __________________
PARTIAL ASSIGNMENT
FOR VALUE RECEIVED, __________________ hereby assigns and transfers
unto __________________ the right to purchase __________________ shares of the
Common Stock of American Biogenetic Sciences, Inc. by the foregoing Warrant, and
a proportionate part of said Warrant and the rights evidenced hereby, and does
irrevocably constitute and appoint __________________, attorney, to transfer
that part of said Warrant on the books of American Biogenetic Sciences, Inc.
Dated:__________________ Signature:__________________
Address:__________________
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SUBSCRIPTION FORM
[To be signed only if Holder desires to
exercise all or a portion of the Warrant]
To: AMERICAN BIOGENETIC SCIENCES, INC.
The undersigned, the registered Holder of the within Warrant, hereby
irrevocably elects to exercise the purchase rights represented by the Warrant to
purchase thereunder with respect to:
___________ shares of Class A Common Stock covered by the within
Warrant and herewith makes payment of $____________ therefor, and requests that
the certificates for such shares be issued in the name of __________________
whose address is __________________ and whose social security or employer
identification number is __________________ and if such shares shall not be all
of the shares purchasable under the Warrant, that a new Warrant of like tenor
for the balance of the number of shares purchasable thereunder be delivered to
the undersigned.
Dated:
____________________________________________
(Signature must conform in all respects to name
of the registered Holder as specified on the
face of the Warrant.)
