1
EXHIBIT 4.6
THIS WARRANT AND THE SHARES ISSUABLE UPON THE EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE SHARES
ISSUABLE UPON THE EXERCISE OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE,
ASSIGNED, TRANSFERRED, OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION
UNDER SUCH ACT OR AN OPINION OF COUNSEL THAT REGISTRATION IS NOT REQUIRED UNDER
SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT. ANY SUCH SALE,
OFFER, ASSIGNMENT, TRANSFER OR DISPOSAL MUST ALSO COMPLY WITH APPLICABLE STATE
SECURITIES LAWS.
Right to Purchase 100,000 Shares of
Class A Common Stock, no par value
CLASS H
STOCK PURCHASE WARRANT
THIS CLASS H STOCK PURCHASE WARRANT (THIS "WARRANT") CERTIFIES
THAT, for value received, XXXXXXX ARNOUSE (the "Holder"), is entitled to
purchase from LIDAK PHARMACEUTICALS, a California corporation (the "Company"),
at any time or from time to time during the period specified in Paragraph 2
hereof, 100,000 (one hundred thousand) fully paid and nonassessable shares of
the Company's Class A Common Stock, no par value (the "Common Stock"), at an
exercise price of $2.40 per share (the "Exercise Price"). The term "Warrant
Shares," as used herein, refers to the shares of Common Stock purchasable
hereunder.
This Warrant is subject to the following terms, provisions,
and conditions:
1. MANNER OF EXERCISE; ISSUANCE OF CERTIFICATES; PAYMENT FOR
SHARES. Subject to the provisions hereof, this Warrant may be exercised by the
Holder, in whole or in part, by the surrender of this Warrant, together with a
completed exercise agreement in the form attached hereto (the "Exercise
Agreement"), to the Company during normal business hours on any business day at
the Company's principal executive offices (or such other office or agency of the
Company as it may designate by notice to the Holder), and upon payment to the
Company, in cash, by certified or official bank check or by wire transfer for
the account of the Company, of the Exercise Price for the Warrant Shares
specified in the Exercise Agreement. The Warrant Shares so purchased shall be
deemed to be issued to the Holder or the Holder's designee, as the record owner
of such shares, as of the close of business on the date on which this Warrant
shall have been surrendered, the completed Exercise Agreement shall have been
delivered, and payment shall have been made for such shares as set forth above.
Certificates for the Warrant Shares so purchased, representing the aggregate
number of shares specified in the Exercise Agreement, shall be delivered to the
Holder within a reasonable time, not exceeding three (3) business days, after
this Warrant shall have been so exercised. The certificates so delivered shall
be in such denominations as may be requested by
2
the Holder and shall be registered in the name of the Holder or such other name
as shall be designated by the Holder. If this Warrant shall have been exercised
only in part, then, unless this Warrant has expired, the Company shall, at its
expense, at the time of delivery of such certificates, deliver to the Holder a
new Warrant representing the number of shares with respect to which this Warrant
shall not then have been exercised.
2. PERIOD OF EXERCISE. This Warrant is exercisable at any time
or from time to time on or after the earlier of (1) the first date after the
date hereof on which the trading price of the Common Stock is $6.00 or more or
(2) the date that is 200 days after the date of issuance of this Warrant, and in
either case before 5:00 p.m., New York City time, on the fifth (5th) anniversary
of the date of issuance (the "Exercise Period").
3. CERTAIN AGREEMENTS OF THE COMPANY. The Company hereby
covenants and agrees as follows:
(a) SHARES TO BE FULLY PAID. All Warrant Shares will,
upon issuance in accordance with the terms of this Warrant, be validly issued,
fully paid, and nonassessable and free from all taxes, liens, and charges with
respect to the issue thereof.
(b) RESERVATION OF SHARES. During the Exercise
Period, the Company shall at all times have authorized, and reserved for the
purpose of issuance upon exercise of this Warrant, a sufficient number of shares
of Common Stock to provide for the exercise of this Warrant.
(c) CERTAIN ACTIONS PROHIBITED. The Company will not,
by amendment of its charter or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities, or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed by it hereunder, but will at all times in
good faith assist in the carrying out of all the provisions of this Warrant and
in the taking of all such action as may reasonably be requested by the Holder in
order to protect the exercise privilege of the Holder against dilution or other
impairment, consistent with the tenor and purpose of this Warrant. Without
limiting the generality of the foregoing, the Company (i) will not increase the
par value of any shares of Common Stock receivable upon the exercise of this
Warrant above the Exercise Price then in effect, and (ii) will take all such
actions as may be necessary or appropriate in order that the Company may validly
and legally issue fully paid and nonassessable shares of Common Stock upon the
exercise of this Warrant.
(d) SUCCESSORS AND ASSIGNS. This Warrant will be
binding upon any entity succeeding to the Company by merger, consolidation, or
acquisition of all or substantially all the Company's assets.
4. ANTIDILUTION PROVISIONS. During the Exercise Period, the
Exercise Price and the number of Warrant Shares shall be subject to adjustment
from time to time as provided in this Paragraph 4. In the event that any
adjustment of the Exercise Price as required herein results in a fraction of a
cent, such Exercise Price shall be rounded up to the nearest cent.
2
3
(a) SUBDIVISION OR COMBINATION OF COMMON STOCK. If
the Company at any time subdivides (by any stock split, stock dividend,
recapitalization, reorganization, reclassification or otherwise) the shares of
Common Stock acquirable hereunder into a greater number of shares, then, after
the date of record for effecting such subdivision, the Exercise Price in effect
immediately prior to such subdivision will be proportionately reduced. If the
Company at any time combines (by reverse stock split, recapitalization,
reorganization, reclassification or otherwise) the shares of Common Stock
acquirable hereunder into a smaller number of shares, then, after the date of
record for effecting such combination, the Exercise Price in effect immediately
prior to such combination will be proportionately increased.
(b) ADJUSTMENT IN NUMBER OF SHARES. Upon each
adjustment of the Exercise Price pursuant to the provisions of this Paragraph 4,
the number of shares of Common Stock issuable upon exercise of this Warrant
shall be adjusted by multiplying a number equal to the Exercise Price in effect
immediately prior to such adjustment by the number of shares of Common Stock
issuable upon exercise of this Warrant immediately prior to such adjustment and
dividing the product so obtained by the adjusted Exercise Price.
(c) CONSOLIDATION, MERGER OR SALE. In case of any
consolidation of the Company with, or merger of the Company into any other
corporation, or in case of any sale or conveyance of all or substantially all of
the assets of the Company other than in connection with a plan of complete
liquidation of the Company, then as a condition of such consolidation, merger or
sale or conveyance, adequate provision will be made whereby the Holder will have
the right to acquire and receive upon exercise of this Warrant in lieu of the
shares of Common Stock immediately theretofore acquirable upon the exercise of
this Warrant, such shares of stock, securities or assets as may be issued or
payable with respect to or in exchange for the number of shares of Common Stock
immediately theretofore acquirable and receivable upon exercise of this Warrant
had such consolidation, merger or sale or conveyance not taken place.
(d) DISTRIBUTION OF ASSETS. In case the Company shall
declare or make any distribution of its assets (including cash) to holders of
Common Stock as a partial liquidating dividend, by way of return of capital or
otherwise, then, after the date of record for determining stockholders entitled
to such distribution, but prior to the date of distribution, the Holder shall be
entitled upon exercise of this Warrant for the purchase of any or all of the
shares of Common Stock subject hereto, to receive the amount of such assets
which would have been payable to the Holder had the Holder been the holder of
such shares of Common Stock on the record date for the determination of
stockholders entitled to such distribution.
(e) NOTICE OF ADJUSTMENT. Upon the occurrence of any
event which requires any adjustment of the Exercise Price in accordance with the
terms of this Paragraph 4, then, and in each such case, the Company shall give
notice thereof to the Holder, which notice shall state the Exercise Price
resulting from such adjustment and the increase or decrease in the number of
Warrant Shares purchasable at such price upon exercise, setting forth in
reasonable detail the method
3
4
of calculation and the facts upon which such calculation is based. Such
calculation shall be certified by the chief financial officer of the Company.
(f) NO FRACTIONAL SHARES. No fractional shares of
Common Stock are to be issued upon the exercise of this Warrant, but the Company
shall pay a cash adjustment in respect of any fractional share which would
otherwise be issuable in an amount equal to the same fraction of the Market
Price (as defined below) of a share of Common Stock on the date of such
exercise.
(g) CERTAIN DEFINITIONS.
(i) "MARKET PRICE," as of any date, (i) means the
average of the last reported sale prices for the shares of Common Stock as
reported by the National Association of Securities Dealers Automated Quotation
National Market ("NASDAQ-NMS") for the ten (10) trading days immediately
preceding such date, or (ii) if the NASDAQ-NMS is not the principal trading
market for the shares of Common Stock, the average of the last reported sale
prices on the principal trading market for the Common Stock during the same
period, or (iii) if market value cannot be calculated as of such date on any of
the foregoing bases, the Market Price shall be the fair market value as
reasonably determined in good faith by (a) the Board of Directors of the
Corporation or, at the option of a majority-in-interest of the holders of the
outstanding Warrants by (b) an independent investment bank of nationally
recognized standing in the valuation of businesses similar to the business of
the corporation. The manner of determining the Market Price of the Common Stock
set forth in the foregoing definition shall apply with respect to any other
security in respect of which a determination as to market value must be made
hereunder.
(ii) "COMMON STOCK," for purposes of this
Paragraph 4, includes the Class A Common Stock, no par value per share, and any
additional class of stock of the Company having no preference as to dividends or
distributions on liquidation, provided that the shares purchasable pursuant to
this Warrant shall include only shares of the Class A Common Stock, no par value
per share, in respect of which this Warrant is exercisable, or shares resulting
from any subdivision or combination of such Common Stock, or in the case of any
reorganization, reclassification, consolidation, merger, or sale of the
character referred to in Paragraph 4(c) hereof, the stock or other securities or
property provided for in such Paragraph.
5. ISSUE TAX. The issuance of certificates for Warrant Shares
upon the exercise of this Warrant shall be made without charge to the Holder or
such shares for any issuance tax or other costs in respect thereof, provided
that the Company shall not be required to pay any tax which may be payable in
respect of any transfer involved in the issuance and delivery of any certificate
in a name other than the Holder.
6. NO RIGHTS OR LIABILITIES AS A SHAREHOLDER. This Warrant
shall not entitle the Holder to any voting rights or other rights as a
shareholder of the Company. No provision of this Warrant, in the absence of
affirmative action by the Holder to purchase Warrant Shares, and no mere
enumeration herein of the rights or privileges of the Holder, shall give rise to
any liability of the
4
5
Holder for the Exercise Price or as a shareholder of the Company, whether such
liability is asserted by the Company or by creditors of the Company.
7. TRANSFER AND REPLACEMENT OF WARRANT.
(a) RESTRICTION ON TRANSFER. This Warrant and the
related rights granted to the Holder shall not be transferable, in whole or in
part, except to legatees and heirs.
(b) REPLACEMENT OF WARRANT. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction, or
mutilation of this Warrant and, in the case of any such loss, theft, or
destruction, upon delivery of an indemnity agreement reasonably satisfactory in
form and amount to the Company, or, in the case of any such mutilation, upon
surrender and cancellation of this Warrant, the Company, at its expense, will
execute and deliver, in lieu thereof, a new Warrant of like tenor.
(c) CANCELLATION; PAYMENT OF EXPENSES. Upon the
surrender of this Warrant in connection with any replacement as provided in this
Paragraph 7, this Warrant shall be promptly canceled by the Company. The Company
shall pay all taxes (other than securities transfer taxes) and all other
expenses (other than legal expenses, if any, incurred by the Holder) and charges
payable in connection with the preparation, execution, and delivery of Warrants
pursuant to this Paragraph 7.
(d) REGISTER. The Company shall maintain, at its
principal executive offices (or such other office or agency of the Company as it
may designate by notice to the Holder), a register for this Warrant, in which
the Company shall record the name and address of the Holder.
(e) EXERCISE WITHOUT REGISTRATION. If, at the time of
the surrender of this Warrant in connection with any exercise of this Warrant,
this Warrant or the Warrant Shares issuable hereunder shall not be registered
under the 1933 Act and under applicable state securities or blue sky laws, the
Company may require, as a condition of allowing such exercise (i) that the
Holder of this Warrant furnish to the Company a written opinion of counsel,
which opinion and counsel are reasonably acceptable to the Company, to the
effect that such exercise may be made without registration under the 1933 Act
and under applicable state securities or blue sky laws and (ii) that the Holder
execute and deliver to the Company an investment letter in form and substance
reasonably acceptable to the Company. The Holder of this Warrant, by taking and
holding the same, represents to the Company that the Holder is acquiring this
Warrant for investment and not with a view to the distribution thereof.
8. NOTICES. All notices, requests, and other communications
required or permitted to be given or delivered hereunder to the Holder shall be
in writing, and shall be personally delivered, or shall be sent by certified or
registered mail or by recognized overnight mail courier, postage prepaid and
addressed, to the Holder at the address shown for the Holder on the books of the
Company, or at such other address as shall have been furnished to the Company by
notice from the Holder. All notices, requests, and other communications required
or permitted to
5
6
be given or delivered hereunder to the Company shall be in writing, and shall be
personally delivered, or shall be sent by certified or registered mail or by
recognized overnight mail courier, postage prepaid and addressed, to the office
of the Company at 00000 X. Xxxxxx Xxxxx Xxxx, Xx Xxxxx, Xxxxxxxxxx 00000,
Attention: Chief Financial Officer or at such other address as shall have been
furnished to the Holder by notice from the Company. Any such notice, request, or
other communication may be sent by facsimile, but shall in such case be
subsequently confirmed by a writing personally delivered or sent by certified or
registered mail or by recognized overnight mail courier as provided above. All
notices, requests, and other communications shall be deemed to have been given
either at the time of the receipt thereof by the person entitled to receive such
notice at the address of such person for purposes of this Paragraph 8, or, if
mailed by registered or certified mail or with a recognized overnight mail
courier upon deposit with the United States Post Office or such overnight mail
courier, if postage is prepaid and the mailing is properly addressed, as the
case may be.
9. GOVERNING LAW. THIS WARRANT SHALL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
CALIFORNIA WITHOUT REGARD TO THE BODY OF LAW CONTROLLING CONFLICTS OF LAW.
10. MISCELLANEOUS.
(a) AMENDMENTS. This Warrant and any provision hereof may
only be amended by an instrument in writing signed by the Company and the
Holder.
(b) DESCRIPTIVE HEADINGS. The descriptive headings of the
several paragraphs of this Warrant are inserted for purposes of reference only,
and shall not affect the meaning or construction of any of the provisions
hereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
6
7
IN WITNESS WHEREOF, the Company has caused this
Warrant to be signed by its duly authorized officer.
LIDAK PHARMACEUTICALS
Dated: February 26, 1997 By: /s/ Xxxxx X. Xxxx
___________________________________
Name: Xxxxx X. Xxxx, M.D.
Title: President and Chief Executive
Officer
7
8
FORM OF EXERCISE AGREEMENT
Dated:_________, ____.
TO: LIDAK PHARMACEUTICALS
The undersigned, pursuant to the provisions set forth in the
within Warrant, hereby agrees to purchase shares of Common Stock covered
by such Warrant, and makes payment herewith in full therefor at the price per
share provided by such Warrant in cash or by certified or official bank check in
the amount of $2.40. Please issue a certificate or certificates for such shares
of Common Stock in the name of and pay any cash for any fractional share to:
Name:____________________
Signature:_______________
Address:_________________
_________________________
_________________________
Note: The above signature should correspond exactly
with the name on the face of the within Warrant.
If said number of shares of Common Stock shall not be all the shares purchasable
under the within Warrant, then a new Warrant is to be issued in the name of said
undersigned covering the balance of the shares purchasable thereunder less any
fraction of a share paid in cash.
8
