EXHIBIT A
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THIS SECURITY WAS SOLD IN A PRIVATE PLACEMENT, WITHOUT
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AND MAY BE OFFERED
OR SOLD ONLY IF REGISTERED UNDER THE SECURITIES ACT OF 1933 OR IF
AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
Right to Purchase 750,000 Shares of
Class A Common Stock of Xxxxxxx Pharmaceuticals, Inc.
XXXXXXX PHARMACEUTICALS, INC.
Class A Common Stock Purchase Warrant
XXXXXXX PHARMACEUTICALS, INC., a New Jersey corporation (the
"Company"), hereby certifies that, for value received, BERLEX
LABORATORIES, INC., or its assigns, is entitled, subject to the
terms set forth below, to purchase from the Company at any time
or times during the period commencing on (a) May 1, 1999 (in the
event that this Warrant is issued to Seller on or before December
31, 1998) or (b) the six (6) month anniversary of the date that
this Warrant is issued to Seller (in the event that this Warrant
is issued to Seller after December 31, 1998) (the "Vesting Date")
and ending on the two (2) year anniversary of such Vesting Date
at 5:00 P.M. eastern standard time (the "Initial Exercise
Period"), 750,000 fully paid and nonassessable shares of Class A
Common Stock (as defined below) at an exercise price per share of
$1.25 (such exercise price per share as adjusted from time to
time as herein provided is referred to herein as the "Exercise
Price"); provided that the Initial Exercise Period shall be
extended for up to three consecutive twelve (12) month periods
(each an "Extended Exercise Period") if the exercise of this
Warrant in full by the holder hereof would cause the holder
hereof to own in excess of 19.98% of the issued and outstanding
Class A Common Stock as of the last day of the Initial Exercise
Period or any Extended Exercise Period, as applicable. Any
reference herein to the holder of this Warrant shall mean the
holder of holders from time to time of this Warrant.
As used herein the following terms, unless the context
otherwise requires, have the following respective meanings:
1. The term "Company" means Xxxxxxx
Pharmaceuticals, Inc. and any corporation which shall
succeed or assume the obligations of the Company hereunder.
2. The term "Class A Common Stock" means (i) the
Company's Class A Common Stock, no par value, (ii) any other
securities into which or for which any of the Company's
Class A Common Stock, no par value, may be converted or
exchanged, pursuant to a plan of recapitalization,
reorganization, consolidation, merger, sale of assets or
other similar corporate rearrangement or (iii) any other
capital stock of any class of the Company (other than the
Company's Class B Common Stock, no par value) hereafter
authorized which is not limited to a fixed sum or percentage
or par or stated value in respect to the rights of the
holders thereof to participate in dividends or in the
distribution of assets upon any liquidation, dissolution or
winding up of the Company; provided that if there is a
change such that the securities issuable upon exercise of
this Warrant are issued by an entity other than the Company
or there is a change in the class of securities so issuable,
then the term "Class A Common Stock" shall mean one share of
the security issuable upon exercise of this Warrant if such
security is issuable in shares or shall mean the smallest
unit in which such security is issuable if such security is
not issuable in shares.
3. The term "Company Securities" any voting
security of the Company (other than Class A Common Stock),
or any other securities of the Company (including, without
limitation, any preferred or debt securities, options,
warrants or other similar rights) convertible into or
exercisable or exchangeable for shares of Class A Common
Stock or any other voting security of the Company which the
holder of this Warrant at any time shall be entitled to
receive, or shall have received, on the exercise of this
Warrant, in lieu of or in addition to Class A Common Stock,
or which at any time shall be issuable or shall have been
issued in exchange for or in replacement of Class A Common
Stock or Company Securities pursuant to Section 5 or
otherwise.
4. The term "Fair Market Value" means (i) if the
Class A Common Stock is listed on a national securities
exchange or admitted to unlisted trading privileges on such
exchange or listed for trading on the NASDAQ system, the
arithmetic average of the reported last sale prices of the
Class A Common Stock on such exchange or system for the
twenty (20) consecutive trading days immediately preceding
the date for which the determination is being made; (ii) if
the Class A Common Stock is not so listed or admitted to
unlisted trading privileges, the arithmetic average of the
means of the last reported bid and asked prices reports by
the National Quotation Bureau, Inc. for the twenty (20)
consecutive trading days immediately preceding the date for
which the determination is being made; or (iii) if the Class
A Common Stock is not so listed or admitted to unlisted
trading privileges and bid and asked prices are not so
reported, an amount, not less than book value thereof, as at
the end of the most recent fiscal year of the Company ending
prior to the date for which the determination is being made,
determined in such reasonable manner as may be prescribed by
the Board of Directors of the Company.
5. The term "Person" means any individual,
partnership, corporation, limited liability company,
business trust, joint stock company, trust, unincorporated
association, joint venture, governmental authority or other
entity, of whatever nature.
1. Exercise of Warrant.
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1.1 Full Exercise. This Warrant may be exercised in full
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by the holder hereof by surrender of this Warrant, with the form
of subscription at the end hereof duly executed by such holder,
to the Company at its principal office or the office of its stock
transfer agent, accompanied by payment in immediately available
funds or by certified or official bank check payable to the order
of the Company, in the amount obtained by multiplying the number
of shares of Class A Common Stock for which this Warrant is then
exercisable by the Exercise Price then in effect.
1.2 Partial Exercise. This Warrant may be exercised in
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part by surrender of this Warrant in the manner and at the place
provided in Section 1.1 except that the amount payable by the
holder on such partial exercise shall be the amount obtained by
multiplying (a) the number of shares of Class A Common Stock
designated by the holder hereof in the subscription at the end
hereof by (b) the Exercise Price then in effect. Each partial
exercise of this Warrant shall be for at least 100,000 shares of
Class A Common Stock (or such lesser number of shares of Class A
Common Stock for which this Warrant may still be exercised). On
any such partial exercise the Company at its expense will
forthwith issue and deliver to or upon the order of the holder
hereof a new Warrant or Warrants of like tenor, in the name of
the holder hereof or as such holder may request, calling in the
aggregate on the face or faces thereof for the number of shares
of Class A Common Stock for which such Warrant or Warrants may
still be exercised.
1.3 Company Acknowledgment. The Company will, at the time
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of the exercise of this Warrant, upon the request of the holder
hereof, acknowledge in writing its continuing obligation to
afford to such holder any rights to which such holder shall
continue to be entitled after such exercise in accordance with
the provisions of this Warrant. If the holder shall fail to make
any such request, such failure shall not affect the continuing
obligation of the Company to afford to such holder any such
rights.
1.4 Trustee for Warrant Holder. In the event that a bank
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or trust company shall have been appointed as trustee for the
holder of this Warrant pursuant to Section 4.2, such bank or
trust company shall accept, in its own name for the account of
the Company or such successor Person as may be entitled thereto,
all amounts otherwise payable to the Company or such successor,
as the case may be, on exercise of this Warrant pursuant to this
Section 1.
2. Delivery of Stock Certificates on Exercise. As soon as
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practicable after the exercise of this Warrant in full or in
part, and in any event within ten (10) days thereafter, the
Company at its expense (including the payment by it of any
applicable issue taxes) will cause to be issued in the name of
and delivered to the holder hereof, or as such holder (upon
payment by such holder of any applicable transfer taxes) may
direct, a certificate or certificates for the number of fully
paid and nonassessable shares of Class A Common Stock (or Company
Securities) to which such holder shall be entitled on such
exercise, plus, in lieu of any fractional share to which such
holder would otherwise be entitled, cash equal to such fraction
multiplied by the then current Fair Market Value of one full
share, together with any other stock or other securities and
property (including cash, where applicable) to which such holder
is entitled upon such exercise pursuant to Section 1 or
otherwise.
3. Adjustment for Dividends in Other Stock, Property. In case
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at any time or from time to time, the holders of Class A Common
Stock (or Company Securities) shall have received, or (on or
after the record date fixed for the determination of shareholders
eligible to receive) shall have become entitled to receive,
without payment therefor, (a) other or additional stock or other
securities or property (other than cash) by way of dividend, or
(b) other or additional stock or other securities or property
(including cash) by way of spin-off, split-up, reclassification,
recapitalization, combination of shares or similar corporate
rearrangement, or (c) other or additional stock or other
securities or property (including cash) by way of spin-off,
split-up, recapitalization, combination of shares or similar
corporate rearrangement, (other than additional shares of Class A
Common Stock (or Company Securities) issued as a stock dividend
or in a stock-split (adjustments in respect of which are provided
for in Section 5)), then and in each such case the holder of this
Warrant, on the exercise hereof as provided in Section 1, shall
be entitled to receive the amount of stock and other securities
and property (including cash in the cases referred to in
subdivisions (b) and (c) of this Section 3) which such holder
would hold on the date of such exercise if on the date
immediately prior to such event it had been the holder of record
of the number of shares of Class A Common Stock to which it would
be entitled on such date under the terms of this Warrant and had
thereafter, during the period from the date hereof to and
including the date of such exercise, retained such shares and all
such other or additional stock and other securities and property
(including cash in the cases referred to in subdivisions (b) and
(c) of this Section 3) receivable by it as aforesaid during such
period, giving effect to all adjustments called for during such
period by Sections 4 and 5.
4. Adjustment for Reorganization, Consolidation or Merger.
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4.1 General. In case at any time or from time to time, the
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Company shall (a) effect a recapitalization, reclassification or
reorganization or other change of outstanding shares of Class A
Common Stock of the Company, (b) consolidate with or merge with
or into any other Person, or (c) at any time prior to the Initial
Exercise Period, transfer or otherwise convey all or
substantially all of its properties or assets to any other Person
or under any plan or arrangement contemplating the dissolution of
the Company, then, in each such case, except as otherwise
provided in Section 4.3 hereof, the holder of this Warrant, on
the exercise hereof as provided in Section 1 at any time prior to
the termination of this Warrant shall receive, in lieu of the
Class A Common Stock (or Company Securities) issuable on such
exercise prior to such consummation or such effective date, the
stock and other securities and property (including cash) to which
such holder would have been entitled upon such consummation or in
connection with such dissolution, as the case may be, if such
holder had so exercised this Warrant, immediately prior thereto,
all subject to further adjustment thereafter as provided in
Sections 3 and 5.
4.2 Dissolution. Except as otherwise provided in Section
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4.3 hereof, in the event of any dissolution of the Company
following the transfer of all or substantially all of its
properties or assets at any time prior to the Initial Exercise
Period, the Company, prior to such dissolution, shall at its
expense deliver or cause to be delivered the stock and other
securities and property (including cash, where applicable)
receivable by the holder of this Warrant after the effective date
of such dissolution pursuant to this Section 4 to a bank or trust
company, as trustee for the holder of this Warrant.
4.3 Continuation of Terms. Except as otherwise hereinafter
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provided, upon any recapitalization, reclassification,
reorganization, consolidation, merger or transfer (and any
dissolution following any transfer or other conveyance) referred
to in this Section 4, this Warrant shall continue in full force
and effect and the terms hereof shall be applicable to the shares
of stock and other securities and property receivable on the
exercise of this Warrant after the consummation of such
recapitalization, reclassification, reorganization, consolidation
or merger or the effective date of dissolution following any such
transfer or other conveyance, as the case may be, and shall be
binding upon the issuer of any such stock or other securities,
including, in the case of any such transfer or other conveyance,
the Person acquiring all or substantially all of the properties
or assets of the Company, whether or not such Person shall have
expressly assumed the terms of this Warrant as provided herein.
5. Adjustment for Extraordinary Events. In the event that the
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Company shall (a) issue additional shares of Class A Common Stock
as a dividend or other distribution on outstanding Class A Common
Stock, (b) subdivide its outstanding shares of Class A Common
Stock, or (c) combine its outstanding shares of Class A Common
Stock into a smaller number of shares of Class A Common Stock
(each an "Extraordinary Event"), then, in each such Extraordinary
Event, the Exercise Price shall, simultaneously with the
happening of such event, be adjusted by multiplying the then
Exercise Price by a fraction, the numerator of which shall be the
number of shares of Class A Common Stock outstanding immediately
prior to such event and the denominator of which shall be the
number of shares of Class A Common Stock outstanding immediately
after such event, and the product so obtained shall thereafter be
the Exercise Price then in effect. The Exercise Price, as so
adjusted, shall be readjusted in the same manner upon the
happening of any successive Extraordinary Event(s). The holder
of this Warrant shall thereafter, on the exercise hereof as
provided in Section 1, be entitled to receive that number of
shares of Class A Common Stock determined by multiplying the
number of shares of Class A Common Stock which would otherwise
(but for the provisions of this Section 5) be issuable on such
exercise by a fraction of which (i) the numerator is the Exercise
Price which would otherwise (but for the provisions of this
Section 5) be in effect, and (ii) the denominator is the Exercise
Price in effect on the date of such exercise.
6. No Dilution or Impairment; etc. The Company shall not, by
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amendment of its charter, by-laws or other governing instrument
or through any recapitalization, 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 of this
Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such
action as may be necessary or appropriate in order to protect the
rights of the holder of this Warrant against dilution or other
impairment prohibited by this Warrant. Without limiting the
generality of the foregoing, the Company (a) shall not increase
the par value of any shares of stock receivable on the exercise
of this Warrant above the amount payable therefor on such
exercise, (b) shall take all such action as may be necessary or
appropriate in order that the Company may validly and legally
issue fully paid and nonassessable shares of stock on the
exercise of all Warrants from time to time outstanding, (c) not
close its books against the transfer of this Warrant or of any
share of Class A Common Stock issued or issuable upon the
exercise of this Warrant in any manner which interferes with the
timely exercise of this Warrant, and (d) shall assist and
cooperate with the holder hereof or any permitted assignee
thereof required to make any governmental filings or obtain any
governmental approvals prior to or in connection with any
exercise of this Warrant. Notwithstanding any other provision
hereof, if an exercise of any portion of this Warrant is to be
made in connection with a public offering or sale of the Company,
the exercise of any portion of this Warrant may, at the election
of the holder hereof, be conditioned upon the consummation of the
public offering or sale of the Company in which case such
exercise shall not be deemed to be effective until the
consummation of such transaction.
7. Certificate as to Adjustments. In each case of any
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adjustment or readjustment in the shares of Class A Common Stock
(or Company Securities) issuable on the exercise of this Warrant,
the Company, at its expense, will promptly cause its Treasurer or
Chief Financial Officer to compute such adjustment or
readjustment in accordance with the terms of this Warrant and
prepare a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such
adjustment or readjustment is based, including, among other
things, (a) the consideration received or receivable by the
Company for any additional shares of Class A Common Stock (or
Company Securities) issued or sold or deemed to have been issued
or sold, (b) the number of shares of Class A Common Stock (or
Company Securities) outstanding or deemed to be outstanding, and
(c) the Exercise Price and the number of shares of Class A Common
Stock to be received upon exercise of this Warrant, in effect
immediately prior to such issue or sale and as adjusted and
readjusted as provided in this Warrant. The Company will
forthwith mail a copy of each such certificate to the holder of
this Warrant, and will, on the written request at any time of
such holder, furnish to such holder a like certificate setting
forth the Exercise Price at the time in effect and showing how it
was calculated.
8. Notices of Record Date, etc. In the event of:
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(a) any taking by the Company of a record of the
holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive
any dividend or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of
stock of any class or any other securities or property, or
to receive any other right, or
(b) any recapitalization or reorganization of the
Company, any recapitalization or reorganization of the
capital stock of the Company or any transfer of all or
substantially all the assets of the Company to or
consolidation or merger of the Company with or into any
other Person, or any voluntary or involuntary dissolution,
liquidation or winding-up of the Company,
then and in each such event the Company will mail or cause to be
mailed to the holder of this Warrant a notice specifying (i) the
date on which any such record is to be taken for the purpose of
such dividend, distribution or right, and stating the amount and
character of such dividend, distribution or right, (ii) the date
on which any such recapitalization, reorganization, transfer,
conveyance, consolidation, merger, dissolution, liquidation or
winding-up is to take place, and the date the time, if any, is to
be fixed, as of which the holders of record of Class A Common
Stock (or Company Securities) shall be entitled to exchange their
shares of Class A Common Stock (or Company Securities) for
securities or other property deliverable on such
recapitalization, reorganization, transfer, conveyance,
consolidation, merger, dissolution, liquidation or winding up,
and (iii) the amount and character of any stock or other
securities, or rights or options with respect thereto, proposed
to be issued or granted, the date of such proposed issue or grant
and the Persons or class of Persons to whom such proposed issue
or grant is to be offered or made. Such notice shall be mailed
at least twenty (20) days prior to the date specified in such
notice on which any such action is to be taken.
9. Reservation of Stock Issuable on Exercise of Warrant. The
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Company will at all times reserve and keep available, solely for
issuance and delivery on the exercise of this Warrant, all shares
of Class A Common Stock (or Company Securities) from time to time
issuable on the exercise of this Warrant.
10. Exchange of Warrant. On surrender for exchange of this
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Warrant, properly endorsed, to the Company, the Company, at its
expense, will issue and deliver to or on the order of the holder
thereof a new Warrant or Warrants of like tenor, in the name of
such holder or as such holder (on payment by such holder of any
applicable transfer taxes) may direct, calling in the aggregate
on the face or faces thereof for the number of shares of Class A
Common Stock called for on the face or faces of the Warrant or
Warrants so surrendered.
11. Replacement of Warrant. On receipt of evidence reasonably
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satisfactory to the Company of the loss, theft, destruction or
mutilation of any Warrant and, in the case of any such loss,
theft or destruction of any Warrant, on delivery of an indemnity
agreement or security reasonably satisfactory in form and amount
to the Company or, in the case of any such mutilation, on
surrender and cancellation of such Warrant, the Company, at its
expense, will execute and deliver, in lieu thereof, a new Warrant
of like tenor.
12. Remedies. The Company stipulates that the remedies at law
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of the holder of this Warrant in the event of any default or
threatened default by the Company in the performance of or
compliance with any of the terms of this Warrant are not and will
not be adequate, and that such terms may be specifically enforced
by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any
of the terms hereof or otherwise.
13. Notices. All notices and other communications from the
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Company to the holder of this Warrant shall be mailed by first
class registered or certified mail, postage prepaid, at such
address as may have been furnished to the Company in writing by
such holder or, until any such holder furnishes to the Company an
address, then to, and at the address of, the last holder of this
Warrant who has so furnished an address to the Company.
14. Governing Law. This Warrant shall be governed by, and
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construed in accordance with, the laws of the State of New Jersey
without regard to the principles of conflicts of law.
15. Binding Effect. This Warrant shall be binding upon the
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Company and its successors and assigns, and shall inure to the
benefit of the holder or holders hereof and their respective
successors and assigns.
16. Registration of Warrant Shares. The rights of the holder
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hereof with respect to the registration of the Class A Common
Stock subject hereto under the Securities Act of 1933, as
amended, are set forth in Section 5 of Amendment No. 6 to Asset
Purchase Agreement dated as of September 19, 1997, between the
Company and Berlex Laboratories, Inc., and such Section 5 is
hereby incorporated by reference as if set forth herein in full.
17. Miscellaneous. Except as provided in Section 4.3 hereof,
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this Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed
by the party against which enforcement of such change, waiver,
discharge or termination is sought. The headings in this Warrant
are for purposes of reference only, and shall not limit or
otherwise affect any of the terms hereof. The invalidity or
unenforceability of any provision hereof shall in no way affect
the validity or enforceability of any other provision.
18. Expiration. The right to exercise this Warrant shall expire
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on 5:00 P.M., eastern standard Time, on the last day of (a) the
Initial Exercise Period, if no Extended Exercise Period is
applicable, or (b) the latest applicable Extended Exercise
Period, if one or more Extended Exercise Periods are applicable.
IN WITNESS WHEREOF, the Company has caused this Warrant to
be duly executed and delivered as of .
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ATTEST: XXXXXXX PHARMACEUTICALS, INC.
By:
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Name: Name:
Title: Secretary Title:
FORM OF SUBSCRIPTION
(To be signed only on exercise of Warrant)
TO: XXXXXXX PHARMACEUTICALS, INC.
The undersigned, the holder of the within Warrant, hereby
irrevocably elects to exercise this Warrant for, and to purchase
thereunder shares of Class A Common Stock of Xxxxxxx
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Pharmaceuticals, Inc. and herewith makes payment of $
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therefor, and requests that the certificates for such shares be
issued in the name of, and delivered to
, whose address is
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.
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Dated:
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(Signature must conform to name of
holder as specified on the face of
this Warrant)
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(Address)
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FORM OF ASSIGNMENT
(To be signed only on transfer of Warrant)
For value received, the undersigned hereby sells, assigns,
and transfers unto with an address at
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the right represented by
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the within Warrant to purchase shares of Class A
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Common Stock of Xxxxxxx Pharmaceuticals, Inc. to which the within
Warrant relates, and appoints attorney to
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transfer such right on the books of Xxxxxxx Pharmaceuticals, Inc.
with full power of substitution in the premises.
Dated:
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(Signature must conform to name of
holder as specified on the face of
this Warrant)
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(Address)
Signed in the presence of:
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