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THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES LAW, AND MAY NOT BE SOLD,
TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF OR EXERCISED UNLESS
(i) A REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATE
SECURITIES LAWS SHALL HAVE BECOME EFFECTIVE WITH REGARD THERETO, OR (ii) AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE STATE
SECURITIES LAWS IS AVAILABLE IN CONNECTION WITH SUCH OFFER, SALE OR TRANSFER.
AN INVESTMENT IN THESE SECURITIES INVOLVES A HIGH DEGREE OF RISK.
HOLDERS MUST RELY ON THEIR OWN ANALYSIS OF THE INVESTMENT AND ASSESSMENT OF THE
RISKS INVOLVED. SEE THE RISK FACTORS SET FORTH UNDER THAT CERTAIN REGULATION D
COMMON STOCK EQUITY LINE SUBSCRIPTION AGREEMENT BY AND BETWEEN THE COMPANY AND
HOLDER REFERENCED THEREIN AS EXHIBIT J.
Warrant to Purchase
_______ shares
WARRANT TO PURCHASE COMMON STOCK
OF
TECHNICLONE CORPORATION
THIS CERTIFIES that ________________ or any subsequent
holder hereof ("Holder"), has the right to purchase from TECHNICLONE
CORPORATION, a Delaware corporation (the "Company"), up to _______________ fully
paid and nonassessable shares of the Company's common stock, $.001 par value per
share ("Common Stock"), subject to adjustment as provided herein, at a price
equal to the Exercise Price as defined in Section 3 below, at any time beginning
on the Date of Issuance (defined below) and ending at 5:00 p.m., New York, New
York
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time, on December 31, 2004 (the "Exercise Period").
Holder agrees with the Company that this Warrant to
Purchase Common Stock of Techniclone Corporation (this "Warrant") is issued and
all rights hereunder shall be held subject to all of the conditions, limitations
and provisions set forth herein.
32. Date of Issuance.
This Warrant shall be deemed to be issued on June 16th,
1998 ("Date of Issuance").
33. Exercise.
(a) Manner of Exercise. During the Exercise Period, this Warrant
may be exercised as to all or any lesser number of full shares of Common Stock
covered hereby (the "Warrant Shares") upon surrender of this Warrant, with the
Exercise Form attached hereto as Exhibit A (the "Exercise Form") duly completed
and executed, together with the full Exercise Price (as defined below) for each
share of Common Stock as to which this Warrant is exercised, at the office of
the Company, 00000 Xxxxxxxx Xxxxxx, Xxxxxx, XX 00000, Attention: Xxxxxxxxx
Xxxxxxx-Xxxxx, Chief Financial Officer, Telephone No. (000) 000-0000, Telecopy
No. (000) 000-0000, or at such other office or agency as the Company may
designate in writing, by overnight mail, with an advance copy of the Exercise
Form sent to the Company and its Transfer Agent by facsimile (such surrender and
payment of the Exercise Price hereinafter called the "Exercise of this
Warrant").
(b) Date of Exercise. The "Date of Exercise" of the Warrant shall
be defined as the date that the advance copy of the completed and executed
Exercise Form is sent by facsimile to the Company, provided that the original
Warrant and Exercise Form are received by the Company as soon as practicable
thereafter. Alternatively, the Date of Exercise shall be defined as the date the
original Exercise Form is received by the Company, if Holder has not sent
advance notice by facsimile.
(c) Cancellation of Warrant. This Warrant shall be canceled upon
the Exercise of this Warrant, and, as soon as practical after the Date of
Exercise, Holder shall be entitled to receive Common Stock for the number of
shares purchased upon such Exercise of this Warrant, and if this Warrant is not
exercised in full, Holder shall be entitled to receive a new Warrant (containing
terms identical to this Warrant) representing any unexercised portion of this
Warrant in addition to such Common Stock.
(d) Holder of Record. Each person in whose name any Warrant for
shares of Common Stock is issued shall, for all purposes, be deemed to be the
Holder of record of such shares on the Date of Exercise of this Warrant,
irrespective of the date of delivery of the Common Stock purchased upon the
Exercise of this Warrant. Nothing in this Warrant shall be construed as
conferring upon Holder any rights as a stockholder of the Company.
(e) Limitation on Exercise. Notwithstanding anything to the
contrary contained herein, this Warrant may not be exercised by the Warrant
Holder to the extent that, after giving
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effect to Warrant Shares to be issued pursuant to an Exercise Form, the total
number of shares of Common Stock deemed beneficially owned by such Holder (other
than by virtue of ownership of this Warrant, or ownership of other securities
that have limitations on the Holder's rights to convert or exercise similar to
the limitations set forth herein), together with all shares of Common Stock
deemed beneficially owned by the Holder's "affiliates" (as defined in Rule 144
of the Securities Act) that would be aggregated for purposes of determining
whether a group under Section 13(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") exists, would exceed 9.9%; provided that (w) each
Warrant Holder shall have the right at any time and from time to time to reduce
such percentage from 9.9% immediately upon notice to the Company or in the event
of a Change in Control Transaction, as defined below, (x) each Warrant Holder
shall have the right at any time and from time to time to increase such
percentage from 9.9% or otherwise waive in whole or in part the restrictions of
this Section 2(e) upon 61 days' prior notice to the Company or immediately in
the event of a Change in Control Transaction, (y) each Warrant Holder can make
subsequent adjustments pursuant to (w) or (x) any number of times from time to
time (which adjustment shall be effective immediately if it results in a
decrease in the percentage or shall be effective upon 61 days' prior written
notice or immediately in the event of a Change in Control Transaction if it
results in an increase in percentage) and (z) each Warrant Holder may eliminate
or reinstate this limitation at any time and from time to time (which
elimination will be effective upon 61 days' prior notice and which reinstatement
will be effective immediately). Without limiting the foregoing, in the event of
a Change in Control Transaction, any holder may reinstate immediately (in whole
or in part) the requirement that any increase in the percentage be subject to 61
days' prior written notice, notwithstanding such Change in Control Transaction,
without imposing such requirement on, or otherwise changing such Holder's rights
with respect to, any other Change in Control Transaction. For this purpose, any
material modification of the terms of a Change in Control Transaction will be
deemed to create a new Change in Control Transaction. A "Change in Control
Transaction" will be deemed to have occurred upon the earlier of the
announcement or consummation of a transaction or series of transactions
involving (x) any consolidation or merger of the Company with or into any other
corporation or other entity or person (whether or not the Company is the
surviving corporation), or any other corporate reorganization or transaction or
series of related transactions in which in excess of 50% of the Company's voting
power is transferred through a merger, consolidation, tender offer or similar
transaction, or (y) in excess of 50% of the Corporation's Board of Directors
consists of directors not nominated by the prior Board of Directors of the
Company, or (z) any person (as defined in Section 13(d) of the Exchange Act),
together with its affiliates and associates (as such terms are defined in Rule
405 under the Act), beneficially owns or is deemed to beneficially own (as
described in Rule 13d-3 under the Exchange Act without regard to the 60-day
exercise period) in excess of 50% of the Company's voting power. The delivery of
an Exercise Form by the Warrant Holder shall be deemed a representation by such
Holder that it is in compliance with this paragraph. Notwithstanding anything in
this subsection (e), the exercise of this Warrant may only be deferred until
December 31, 2004.
34. Payment of Warrant Exercise Price.
The Exercise Price shall equal $1.375 per share ("Exercise
Price"). Payment of the Exercise Price may be made, by
cashless exercise only,: by surrender of this Warrant at the principal office of
the Company together with notice of cashless
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exercise, in which event the Company shall issue Holder a number of shares of
Common Stock computed using the following formula:
X = Y (A-B)/A
where: X = the number of shares of Common Stock to be issued to
Holder.
Y = the number of shares of Common Stock for which this
Warrant is being exercised.
A = the Market Price of one (1) share of Common
Stock (for purposes of this Section 3(ii), the "Market Price"
shall be defined as the average closing bid price of the Common
Stock for the five (5) trading days prior to the Date of Exercise
of this Warrant (the "Average Closing Price"), as reported by the
National Association of Securities Dealers Automated Quotation
System ("Nasdaq") Small Cap Market, or if the Common Stock is not
traded on the Nasdaq Small Cap Market, the Average Closing Price
in any other over-the-counter market; provided, however, that if
the Common Stock is listed on a stock exchange, the Market Price
shall be the Average Closing Price on such exchange for the five
(5) trading days prior to the date of exercise of the Warrants.
If the Common Stock is/was not traded during the five (5) trading
days prior to the Date of Exercise, then the closing price for
the last publicly traded day shall be deemed to be the closing
price for any and all (if applicable) days during such five (5)
trading day period.
B = the Exercise Price.
For purposes of Rule 144 and sub-section (d)(3)(ii) thereof, it
is intended, understood and acknowledged that the Common Stock issuable upon
exercise of this Warrant in a cashless exercise transaction shall be deemed to
have been acquired at the time this Warrant was issued. Moreover, it is
intended, understood and acknowledged that the holding period for the Common
Stock issuable upon exercise of this Warrant in a cashless exercise transaction
shall be deemed to have commenced on the date this Warrant was issued.
35. Transfer and Registration.
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(a) Transfer Rights. Subject to the provisions of Section 8 of
this Warrant, this Warrant may be transferred on the books of the Company, in
whole or in part, in person or by attorney, upon surrender of this Warrant
properly completed and endorsed. This Warrant shall be canceled upon such
surrender and, as soon as practicable thereafter, the person to whom such
transfer is made shall be entitled to receive a new Warrant or Warrants as to
the portion of this Warrant transferred, and Holder shall be entitled to receive
a new Warrant as to the portion hereof retained.
(b) Registrable Securities. The Common Stock issuable upon the
exercise of this Warrant constitutes "Registrable Securities" under that certain
Registration Rights Agreement dated on or about June 16th, 1998 between the
Company and certain investors and, accordingly, has the benefit of the
registration rights pursuant to that agreement.
36. Anti-Dilution Adjustments.
(a) Stock Dividend. If the Company shall at any time declare a
dividend payable in shares of Common Stock, then Holder, upon Exercise of this
Warrant after the record date for the determination of holders of Common Stock
entitled to receive such dividend, shall be entitled to receive upon Exercise of
this Warrant, in addition to the number of shares of Common Stock as to which
this Warrant is exercised, such additional shares of Common Stock as such Holder
would have received had this Warrant been exercised immediately prior to such
record date and the Exercise Price will be proportionately adjusted.
(b) Recapitalization or Reclassification. If the Company shall at
any time effect a recapitalization, reclassification or other similar
transaction of such character that the shares of Common Stock shall be changed
into or become exchangeable for a larger or smaller number of shares, then upon
the effective date thereof, the number of shares of Common Stock which Holder
shall be entitled to purchase upon Exercise of this Warrant shall be increased
or decreased, as the case may be, in direct proportion to the increase or
decrease in the number of shares of Common Stock by reason of such
recapitalization, reclassification or similar transaction, and the Exercise
Price shall be, in the case of an increase in the number of shares,
proportionally decreased and, in the case of decrease in the number of shares,
proportionally increased. The Company shall give Holder the same notice it
provides to holders of Common Stock of any transaction described in this Section
5(b).
(c) Distributions. If the Company shall at any time distribute
for no consideration to holders of Common Stock cash, evidences of indebtedness
or other securities or assets (other than cash dividends or distributions
payable out of earned surplus or net profits for the current or preceding years)
then, in any such case, Holder shall be entitled to receive, upon Exercise of
this Warrant, with respect to each share of Common Stock issuable upon such
exercise, the amount of cash or evidences of indebtedness or other securities or
assets which Holder would have been entitled to receive with respect to each
such share of Common Stock as a result of the happening of such event had this
Warrant been exercised immediately prior to the record date or other date fixing
shareholders to be affected by such event (the "Determination Date") or, in lieu
thereof, if the Board of Directors of the Company should so determine at the
time of such distribution, a reduced Exercise Price determined by multiplying
the Exercise Price on the Determination Date by a fraction, the numerator of
which is the result of such Exercise Price
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reduced by the value of such distribution applicable to one share of Common
Stock (such value to be determined by the Board of Directors of the Company in
its discretion) and the denominator of which is such Exercise Price.
(d) Notice of Consolidation or Merger. In the event of a merger,
consolidation, exchange of shares, recapitalization, reorganization, or other
similar event, as a result of which shares of Common Stock shall be changed into
the same or a different number of shares of the same or another class or classes
of stock or securities or other assets of the Company or another entity or there
is a sale of all or substantially all the Company's assets (a "Corporate
Change"), then this Warrant shall be exerciseable into such class and type of
securities or other assets as Holder would have received had Holder exercised
this Warrant immediately prior to such Corporate Change; provided, however, that
Company may not affect any Corporate Change unless it first shall have given
thirty (30) days notice to Holder hereof of any Corporate Change.
(e) Exercise Price Adjusted. As used in this Warrant, the term
"Exercise Price" shall mean the purchase price per share specified in Section 3
of this Warrant, until the occurrence of an event stated in subsection (a), (b)
or (c) of this Section 5, and thereafter shall mean said price as adjusted from
time to time in accordance with the provisions of said subsection. No such
adjustment under this Section 5 shall be made unless such adjustment would
change the Exercise Price at the time by $.01 or more; provided, however, that
all adjustments not so made shall be deferred and made when the aggregate
thereof would change the Exercise Price at the time by $.01 or more. No
adjustment made pursuant to any provision of this Section 5 shall have the net
effect of increasing the Exercise Price. The number of shares of Common Stock
subject hereto shall increase proportionately with each decrease in the Exercise
Price.
(f) Adjustments: Additional Shares, Securities or Assets. In the
event that at any time, as a result of an adjustment made pursuant to this
Section 5, Holder shall, upon Exercise of this Warrant, become entitled to
receive shares and/or other securities or assets (other than Common Stock) then,
wherever appropriate, all references herein to shares of Common Stock shall be
deemed to refer to and include such shares and/or other securities or assets;
and thereafter the number of such shares and/or other securities or assets shall
be subject to adjustment from time to time in a manner and upon terms as nearly
equivalent as practicable to the provisions of this Section 5.
37. Fractional Interests.
No fractional shares or scrip representing
fractional shares shall be issuable upon the Exercise of this Warrant, but on
Exercise of this Warrant, Holder may purchase only a whole number of shares of
Common Stock. If, on Exercise of this Warrant, Holder would be entitled to a
fractional share of Common Stock or a right to acquire a fractional share of
Common Stock, such fractional share shall be disregarded and the number of
shares of Common Stock issuable upon exercise shall be the next higher number of
shares.
38. Reservation of Shares.
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The Company shall at all times reserve for issuance
such number of authorized and unissued shares of Common Stock (or other
securities substituted therefor as herein above provided) as shall be sufficient
for the Exercise of this Warrant and payment of the Exercise Price. The Company
covenants and agrees that upon the Exercise of this Warrant, all shares of
Common Stock issuable upon such exercise shall be duly and validly issued, fully
paid, nonassessable and not subject to preemptive rights, rights of first
refusal or similar rights of any person or entity.
39. Restrictions on Transfer.
(a) Registration or Exemption Required. This Warrant has been
issued in a transaction exempt from the registration requirements of the Act by
virtue of Regulation D and exempt from state registration under applicable state
laws. The Warrant and the Common Stock issuable upon the Exercise of this
Warrant may not be pledged, transferred, sold or assigned except pursuant to an
effective registration statement or an exemption to the registration
requirements of the Act and applicable state laws.
(b) Assignment. If Holder can provide the Company with reasonably
satisfactory evidence that the conditions of (a) above regarding registration or
exemption have been satisfied, Holder may sell, transfer, assign, pledge or
otherwise dispose of this Warrant, in whole or in part. Holder shall deliver a
written notice to Company, substantially in the form of the Assignment attached
hereto as Exhibit B, indicating the person or persons to whom the Warrant shall
be assigned and the respective number of warrants to be assigned to each
assignee. The Company shall effect the assignment within ten (10) days, and
shall deliver to the assignee(s) designated by Holder a Warrant or Warrants of
like tenor and terms for the appropriate number of shares.
40. Benefits of this Warrant.
Nothing in this Warrant shall be construed to
confer upon any person other than the Company and Holder any legal or equitable
right, remedy or claim under this Warrant and this Warrant shall be for the sole
and exclusive benefit of the Company and Holder.
41. Applicable Law.
This Warrant is issued under and shall for all
purposes be governed by and construed in accordance with the laws of the state
of Delaware, without giving effect to conflict of law provisions thereof.
42. Loss of Warrant.
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Upon receipt by the Company of evidence of the
loss, theft, destruction or mutilation of this Warrant, and (in the case of
loss, theft or destruction) of indemnity or security reasonably satisfactory to
the Company, and upon surrender and cancellation of this Warrant, if mutilated,
the Company shall execute and deliver a new Warrant of like tenor and date.
43. Notice or Demands.
Notices or demands pursuant to this Warrant to be given or made
by Holder to or on the Company shall be sufficiently given or made if sent by
certified or registered mail, return receipt requested, postage prepaid, and
addressed, until another address is designated in writing by the Company, to
Attention: Xxxxxxxxx Xxxxxxx-Xxxxx, Chief Financial Officer, 00000 Xxxxxxxx
Xxxxxx, Xxxxxx, XX 00000, Telephone No. (000) 000-0000, Telecopy No. (714)
838-4094. Notices or demands pursuant to this Warrant to be given or made by the
Company to or on Holder shall be sufficiently given or made if sent by certified
or registered mail, return receipt requested, postage prepaid, and addressed, to
the address of Holder set forth in the Company's records, until another address
is designated in writing by Holder.
[Intentionally Left Blank]
IN WITNESS WHEREOF, the undersigned has executed this
Warrant as of the ______ day of June, 1998.
TECHNICLONE CORPORATION
By: ________________________________
Xxxxxxxxx Xxxxxxx-Xxxxx, CFO
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EXHIBIT A
EXERCISE FORM FOR WARRANT
TO: TECHNICLONE CORPORATION
The undersigned hereby irrevocably exercises the right to
purchase ____________ of the shares of Common Stock (the "Common Stock") of
TECHNICLONE CORPORATION, a Delaware corporation (the "Company"), evidenced by
the attached warrant (the "Warrant"), and herewith makes payment of the exercise
price with respect to such shares in full, all in accordance with the conditions
and provisions of said Warrant.
1. The undersigned agrees not to offer, sell, transfer or
otherwise dispose of any of the Common Stock obtained on exercise of the
Warrant, except in accordance with the provisions of Section 8(a) of the
Warrant.
2. The undersigned requests that stock certificates for such
shares be issued free of any restrictive legend, if appropriate, and a warrant
representing any unexercised portion hereof be issued, pursuant to the Warrant
in the name of the undersigned and delivered to the undersigned at the address
set forth below:
Dated:
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Signature
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Print Name
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Address
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NOTICE
The signature to the foregoing Exercise Form must correspond to
the name as written upon the face of the attached Warrant in every particular,
without alteration or enlargement or any change whatsoever.
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EXHIBIT B
ASSIGNMENT
(To be executed by the registered holder desiring to transfer the Warrant)
FOR VALUE RECEIVED, the undersigned holder of the attached
warrant (the "Warrant") hereby sells, assigns and transfers unto the person or
persons below named the right to purchase _______ shares of the Common Stock of
TECHNICLONE CORPORATION, evidenced by the attached Warrant and does hereby
irrevocably constitute and appoint _______________________ attorney to transfer
the said Warrant on the books of the Company, with full power of substitution in
the premises.
Dated:
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Signature
Fill in for new registration of Warrant:
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Name
-----------------------------------
Address
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Please print name and address of assignee
(including zip code number)
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NOTICE
The signature to the foregoing Assignment must correspond to the
name as written upon the face of the attached Warrant in every particular,
without alteration or enlargement or any change whatsoever.
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