Exhibit 10.35
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUED UPON ITS
EXERCISE ARE SUBJECT TO THE RESTRICTIONS ON
TRANSFER SET FORTH IN SECTION 4 OF THIS WARRANT
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Warrant No. 3 Number of Shares: 120,000
(subject to adjustment)
Date of Issuance: May 12, 1998
IGI, INC.
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Common Stock Purchase Warrant
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(Void after May 12, 2003)
IGI, Inc., a Delaware corporation (the "Company"), for value received,
hereby certifies that Mellon Bank, N.A., a national banking association, or its
registered assigns (the "Registered Holder"), is entitled, subject to the terms
set forth below, to purchase from the Company, at any time or from time to time
on or after September 1, 1998 and on or before May 12, 2003 at not later than
5:00 p.m. 120,000 shares of Common Stock, $.01 par value per share (the "Common
Stock"), of the Company, at a Exercise Price of $3.50 per share unless, by 5:00
p.m., Buena, New Jersey time, on or before August 31, 1998, either (a) all
Obligations (as defined in the Extension Agreement dated April 29, 1998 (the
"Extension Agreement") by and among the Registered Holder, Fleet Bank, N.A.,
Mellon Bank, N.A., the Company and certain of its subsidiaries) of the Borrowers
(as defined in the Extension Agreement) to the Lenders (as defined in the
Extension Agreement) shall have been paid in full, in which case this Warrant
and the Registered Holder's rights hereunder shall expire, or (b) the Borrowers
have delivered a commitment letter reasonably satisfactory to the Lenders,
subject only to documentation and no further contingencies of any kind, from a
financial institution acceptable to the Lenders, contemplating a full
refinancing of the then existing Obligations and a closing of such financing
within thirty (30) days of such commitment letter, in which case this Warrant's
exercise start date shall be extended to commence September 30, 1998; provided,
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however, if all Obligations to the Lenders have been paid in full on or before
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such extended start date, this Warrant and the Registered Holder's rights
hereunder shall expire upon such payment. The shares issuable upon exercise of
this Warrant, and the exercise price per share, each as adjusted from time to
time pursuant to the provisions of this Warrant, are hereinafter referred to as
the "Warrant Shares" and the "Exercise Price," respectively.
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1. Certain Definitions. As used in this Warrant, the following terms
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shall have the following respective meanings:
"Commission" means the Securities and Exchange Commission, or any
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other Federal agency at the time administering the Securities Act.
"Registration Statement" means a registration statement filed by the
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Company with the Commission for a public offering and sale of Common Stock
(other than a registration statement on Form S-8 or Form S-4, or their
successors, or any other form for a similar limited purpose, or any registration
statement covering only securities proposed to be issued in exchange for
securities or assets of another corporation).
"Registrable Shares" means (i) the Warrant Shares, and (ii) any other
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shares of Common Stock issued in respect of such shares (because of stock
splits, stock dividends, reclassifications, recapitalizations, or similar
events); provided, however, that shares of Common Stock which are Registrable
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Shares shall cease to be Registrable Shares (i) upon any sale pursuant to a
Registration Statement or Rule 144 under the Securities Act or (ii) upon any
sale in any manner to a person or entity which, by virtue of Section 13 of this
Warrant, is not entitled to the rights provided by this Warrant.
"Securities Act" means the Security Act of 1933, as amended, or any
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similar Federal statute, and the rules and regulations of the Commission issued
under such Act, as they each may, from time to time, be in effect.
2. Exercise.
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(a) This Warrant may be exercised by the Registered Holder, in whole
or in part, by surrendering this Warrant, with the purchase form appended hereto
as Exhibit I duly executed by such Registered Holder or by such Registered
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Holder's duly authorized attorney, at the principal office of the Company, or at
such other office or agency as the Company may designate, accompanied by payment
in full, in lawful money of the United States, of the Exercise Price payable in
respect of the number of Warrant Shares issued upon such exercise.
(b) The Registered Holder may, at its option, elect to pay some or
all of the Exercise Price payable upon an exercise of this Warrant by cancelling
a portion of this Warrant exercisable for such number of Warrant Shares as is
determined by dividing (i) the total Exercise Price payable in respect of the
number of Warrant Shares being issued upon such exercise by (ii) the excess of
the Fair Market Value per share of Common Stock as of the effective date of
exercise, as determined pursuant to subsection 2(c) below (the "Exercise Date")
over the Exercise Price per share. If the Registered Holder wishes to exercise
this Warrant pursuant to this method of
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payment with respect to the maximum number of Warrant Shares issuable pursuant
to this method, then the number of Warrant Shares so issuable shall be equal to
the total number of Warrant Shares, minus the product obtained by multiplying
(x) the total number of Warrant Shares by (y) a fraction, the numerator of which
shall be the Exercise Price per share and the denominator of which shall be the
Fair Market Value per share of Common Stock as of the Exercise Date. The Fair
Market Value per share of Common Stock shall be determined as follows:
(i) If the Common Stock is listed on a national securities
exchange, the Nasdaq Stock Market or another nationally recognized exchange or
trading system as of the Exercise Date, the Fair Market Value per share of
Common Stock shall be deemed to be the average of the last reported sale price
per share of Common Stock thereon for the ten consecutive trading days ending on
the day immediately prior to the Exercise Date.
(ii) If the Common Stock is not listed on a national securities
exchange, the Nasdaq Stock Market or another nationally recognized exchange or
trading system as of the Exercise Date, the Fair Market Value per share of
Common Stock shall be deemed to be the amount most recently determined in good
faith by the Board of Directors to represent the fair market value per share of
the Common Stock (including without limitation a determination for purposes of
granting Common Stock options or issuing Common Stock under an employee benefit
plan of the Company); and, upon request of the Registered Holder, the Board of
Directors (or a representative thereof) shall promptly notify the Registered
Holder of the Fair Market Value per share of Common Stock. Notwithstanding the
foregoing, if the Board of Directors has not made such a determination within a
forty-five day period prior to the Exercise Date, then (A) the Fair Market Value
per share of Common Stock shall be the amount next determined in good faith by
the Board of Directors to represent the fair market value per share of the
Common Stock (including without limitation a determination for purposes of
granting Common Stock options or issuing Common Stock under an employee benefit
plan of the Company), (B) the Board of Directors shall make such a determination
within 15 days of a request by the Registered Holder that it do so, and (C) the
exercise of this Warrant pursuant to this subsection 2(b) shall be delayed until
such determination is made.
(c) Each exercise of this Warrant shall be deemed to have been
effected immediately prior to the close of business on the day on which this
Warrant shall have been surrendered to the Company as provided in subsection
2(a) above. At such time, the person or persons in whose name or names any
certificates for Warrant Shares shall be issuable upon such exercise as provided
in subsection 2(d) below shall be deemed to have become the holder or holders of
record of the Warrant Shares represented by such certificates.
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(d) As soon as practicable after the exercise of this Warrant in full
or in part, and in any event within 10 days thereafter, the Company, at its
expense, will cause to be issued in the name of, and delivered to, the
Registered Holder, or as such Registered Holder (upon payment by such Holder of
any applicable transfer taxes) may direct:
(i) a certificate or certificates for the number of full
Warrant Shares to which such Registered Holder shall be entitled upon such
exercise plus, in lieu of any fractional share to which such Registered Holder
would otherwise be entitled, cash in an amount determined pursuant to Section 4
hereof; and
(ii) in case such exercise is in part only, a new warrant or
warrants (dated the date hereof) of like tenor, calling in the aggregate on the
face or faces thereof for the number of Warrant Shares equal (without giving
effect to any adjustment therein) to the number of such shares called for on the
face of this Warrant minus the sum of (a) the number of such shares purchased by
the Registered Holder upon such exercise plus (b) the number of Warrant Shares
(if any) covered by the portion of this Warrant cancelled in payment of the
Exercise Price payable upon such exercise pursuant to subsection 2(b) above.
3. Adjustments.
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(a) General. The Exercise Price shall be subject to adjustment from
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time to time pursuant to the terms of this Section 3.
(b) Diluting Issuances.
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(i) Special Definitions. For purposes of this subsection 3(b),
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the following definitions shall apply:
(A) "Option" shall mean rights, options or warrants to
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subscribe for, purchase or otherwise acquire Common Stock or Convertible
Securities, excluding options described in clause (II) of subsection 3(b)(i)(D)
below.
(B) "Original Issue Date" shall mean the date on which
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this Warrant was first issued.
(C) "Convertible Securities" shall mean any evidences of
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indebtedness, shares or other securities directly or indirectly convertible into
or exchangeable for Common Stock.
(D) "Additional Shares of Common Stock" shall mean all
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shares of Common Stock issued (or, pursuant to subsection 3(b)(iii) below,
deemed to
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be issued) by the Company after the Original Issue Date, other than
shares of Common Stock issued or issuable:
(I) by reason of a dividend, stock split, split-up or
other distribution on shares of Common Stock that
are excluded from the definition of Additional
Shares of Common Stock by this clause (I); or
(II) to employees or directors of, or consultants to, the
Company pursuant to a plan adopted by the Board of
Directors of the Company.
(ii) No Adjustment of Exercise Price. No adjustments to the
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Exercise Price shall be made unless the consideration per share (determined
pursuant to subsection 3(b)(v)) for an Additional Share of Common Stock issued
or deemed to be issued by the Company is less than the Exercise Price in effect
on the date of, and immediately prior to, the issue of such Additional Shares.
(iii) Issue of Securities Deemed Issue of Additional Shares of
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Common Stock. If the Company at any time or from time to time after the Original
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Issue Date shall issue any Options or Convertible Securities or shall fix a
record date for the determination of holders of any class of securities entitled
to receive any such Options or Convertible Securities, then the maximum number
of shares of Common Stock (as set forth in the instrument relating thereto
without regard to any provision contained therein for a subsequent adjustment of
such number) issuable upon the exercise of such Options or, in the case of
Convertible Securities and Options therefor, the conversion or exchange of such
Convertible Securities, shall be deemed to be Additional Shares of Common Stock
issued as of the time of such issue or, in case such a record date shall have
been fixed, as of the close of business on such record date, provided that
Additional Shares of Common Stock shall not be deemed to have been issued unless
the consideration per share (determined pursuant to subsection 3(b)(v) hereof)
of such Additional Shares of Common Stock would be less than the Exercise Price
in effect on the date of and immediately prior to such issue, or such record
date, as the case may be, and provided further that in any such case in which
Additional Shares of Common Stock are deemed to be issued:
(A) No further adjustment in the Exercise Price shall be
made upon the subsequent issue of Convertible Securities or shares of Common
Stock upon the exercise of such Options or conversion or exchange of such
Convertible Securities;
(B) If such Options or Convertible Securities by their
terms provide, with the passage of time or otherwise, for any increase in the
consideration payable to the Company, upon the exercise, conversion or exchange
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thereof, the Exercise Price computed upon the original issue thereof (or upon
the occurrence of a record date with respect thereto), and any subsequent
adjustments based thereon, shall, upon any such increase becoming effective, be
recomputed to reflect such increase insofar as it affects such Options or the
rights of conversion or exchange under such Convertible Securities;
(C) Upon the expiration or termination of any
unexercised Option, the Exercise Price shall not be readjusted, but the
Additional Shares of Common Stock deemed issued as the result of the original
issue of such Option shall not be deemed issued for the purposes of any
subsequent adjustment of the Exercise Price;
(D) In the event of any change in the number of shares
of Common Stock issuable upon the exercise, conversion or exchange of any Option
or Convertible Security, including, but not limited to, a change resulting from
the anti-dilution provisions thereof, the Exercise Price then in effect shall
forthwith be readjusted to such Exercise Price as would have obtained had the
adjustment which was made upon the issuance of such Option or Convertible
Security not exercised or converted prior to such change been made upon the
basis of such change; and
(E) No readjustment pursuant to Clause (B) or (D) above
shall have the effect of increasing the Exercise Price to an amount which
exceeds the lower of (i) the Exercise Price on the original adjustment date, or
(ii) the Exercise Price that would have resulted from any issuances of
Additional Shares of Common Stock between the original adjustment date and such
readjustment date.
(iv) Adjustment of Exercise Price Upon Issuance of Additional
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Shares of Common Stock. In the event the Company shall at any time after the
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Original Issue Date issue Additional Shares of Common Stock (including
Additional Shares of Common Stock deemed to be issued pursuant to subsection
3(b)(iii), but excluding shares issued as a dividend or distribution or upon a
stock split or combination as provided in subsection 3(c)), without
consideration or for a consideration per share less than the Exercise Price in
effect on the date of and immediately prior to such issue, then and in such
event, such Exercise Price shall be reduced, concurrently with such issue, to a
price (calculated to the nearest cent) determined by multiplying such Exercise
Price by a fraction, (A) the numerator of which shall be (1) the number of
shares of Common Stock outstanding immediately prior to such issue plus (2) the
number of shares of Common Stock which the aggregate consideration received or
to be received by the Company for the total number of Additional Shares of
Common Stock so issued would purchase at such Exercise Price; and (B) the
denominator of which shall be the number of shares of Common Stock outstanding
immediately prior to such issue plus the number of such Additional Shares of
Common Stock so issued; provided that, (i) for the purpose of this
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subsection 3(b)(iv), all shares of Common Stock issuable upon exercise or
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conversion of Options or Convertible Securities outstanding immediately prior to
such issue shall be deemed to be outstanding (other than shares excluded from
the definition of "Additional Shares of Common Stock" by virtue of clause (II)
of subsection 3(b)(i)(D)), and (ii) the number of shares of Common Stock deemed
issuable upon conversion of such outstanding Options and Convertible Securities
shall not give effect to any adjustments to the conversion price or conversion
rate of such Options or Convertible Securities resulting from the issuance of
Additional Shares of Common Stock that is the subject of this calculation.
Notwithstanding the foregoing, the applicable Exercise Price shall not
be so reduced at such time if the amount of such reduction would be an amount
less than $.05, but any such amount shall be carried forward and reduction with
respect thereto made at the time of and together with any subsequent reduction
which, together with such amount and any other amount or amounts so carried
forward, shall aggregate $.05 or more.
(v) Determination of Consideration. For purposes of this
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subsection 3(b), the consideration received by the Company for the issue of any
Additional Shares of Common Stock shall be computed as follows:
(A) Cash and Property: Such consideration shall:
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(I) insofar as it consists of cash, be computed at
the aggregate of cash received by the Company, excluding amounts paid or payable
for accrued interest or accrued dividends;
(II) insofar as it consists of property other than
cash, be computed at the fair market value thereof at the time of such issue, as
determined in good faith by the Board of Directors; and
(III) in the event Additional Shares of Common Stock
are issued together with other shares or securities or other assets of the
Company for consideration which covers both, be the proportion of such
consideration so received, computed as provided in clauses (I) and (II) above,
as determined in good faith by the Board of Directors.
(B) Options and Convertible Securities. The consideration
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per share received by the Company for Additional Shares of Common Stock deemed
to have been issued pursuant to subsection 3(b)(iii), relating to Options and
Convertible Securities, shall be determined by dividing
(x) the total amount, if any, received or receivable
by the Company as consideration for the issue of such Options or Convertible
Securities, plus the minimum aggregate amount of additional
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consideration (as set forth in the instruments relating thereto, without regard
to any provision contained therein for a subsequent adjustment of such
consideration) payable to the Company upon the exercise of such Options or the
conversion or exchange of such Convertible Securities, or in the case of Options
for Convertible Securities, the exercise of such Options for Convertible
Securities and the conversion or exchange of such Convertible Securities, by
(y) the maximum number of shares of Common Stock (as
set forth in the instruments relating thereto, without regard to any provision
contained therein for a subsequent adjustment of such number) issuable upon the
exercise of such Options or the conversion or exchange of such Convertible
Securities.
(c) Recapitalizations. If outstanding shares of Common Stock shall be
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subdivided into a greater number of shares or a dividend in Common Stock shall
be paid in respect of Common Stock, the Exercise Price in effect immediately
prior to such subdivision or at the record date of such dividend shall
simultaneously with the effectiveness of such subdivision or immediately after
the record date of such dividend be proportionately reduced. If outstanding
shares of Common Stock shall be combined into a smaller number of shares, the
Exercise Price in effect immediately prior to such combination shall,
simultaneously with the effectiveness of such combination, be proportionately
increased.
(d) Mergers, etc. If there shall occur any capital reorganization or
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reclassification of the Common Stock (other than a change in par value or a
subdivision or combination as provided for in subsection 3(c) above), or any
consolidation or merger of the Company with or into another corporation, or a
transfer of all or substantially all of the assets of the Company, then, as part
of any such reorganization, reclassification, consolidation, merger or sale, as
the case may be, lawful provision shall be made so that the Registered Holder of
this Warrant shall have the right thereafter to receive upon the exercise hereof
the kind and amount of shares of stock or other securities or property which
such Registered Holder would have been entitled to receive if, immediately prior
to any such reorganization, reclassification, consolidation, merger or sale, as
the case may be, such Registered Holder had held the number of shares of Common
Stock which were then issuable upon the exercise of this Warrant. In any such
case, appropriate adjustment (as reasonably determined in good faith by the
Board of Directors of the Company) shall be made in the application of the
provisions set forth herein with respect to the rights and interests thereafter
of the Registered Holder of this Warrant, such that the provisions set forth in
this Section 3 (including provisions with respect to adjustment of the Exercise
Price) shall thereafter be applicable, as nearly as is reasonably practicable,
in relation to any shares of stock or other securities or property thereafter
deliverable upon the exercise of this Warrant.
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(e) Adjustment in Number of Warrant Shares. When any adjustment is
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required to be made in the Exercise Price, the number of Warrant Shares issuable
upon the exercise of this Warrant shall be changed to the number determined by
dividing (i) an amount equal to the number of shares issuable upon the exercise
of this Warrant immediately prior to such adjustment, multiplied by the Exercise
Price in effect immediately prior to such adjustment, by (ii) the Exercise Price
in effect immediately after such adjustment.
(f) Certificate of Adjustment. When any adjustment is required to be
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made pursuant to this Section 3, the Company shall promptly mail to the
Registered Holder a certificate setting forth the Exercise Price after such
adjustment and setting forth a brief statement of the facts requiring such
adjustment. Such certificate shall also set forth the kind and amount of stock
or other securities or property into which this Warrant shall be exercisable
following such adjustment .
4. Fractional Shares. The Company shall not be required upon the exercise
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of this Warrant to issue any fractional shares, but shall make an adjustment
therefor in cash on the basis of the Fair Market Value per share of Common
Stock, as determined pursuant to subsection 2(b) above.
5. Requirements for Transfer.
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(a) This Warrant and the Warrant Shares shall not be sold or
transferred unless either (i) they first shall have been registered under the
Securities Act of 1933, as amended (the "Securities Act"), or (ii) the Company
first shall have been furnished with an opinion of legal counsel, reasonably
satisfactory to the Company, to the effect that such sale or transfer is exempt
from the registration requirements of the Act.
(b) Notwithstanding the foregoing, no registration or opinion of
counsel shall be required for (i) a transfer by a Registered Holder which is a
partnership to a partner of such partnership or a retired partner of such
partnership who retires after the date hereof, or to the estate of any such
partner or retired partner, if the transferee agrees in writing to be subject to
the terms of this Section 5, (ii) a transfer made in accordance with Rule 144
under the Act, or (iii) a transfer by a Registered Holder which is a corporation
to an affiliate, as defined under Rule 144 of the Securities Act, if the
transferee agrees in writing to be subject to the terms of this Section.
(c) Each certificate representing Warrant Shares shall bear a legend
substantially in the following form:
"The securities represented by this certificate have not been
registered under the Securities
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Act of 1933, as amended, and may not be offered, sold or
otherwise transferred, pledged or hypothecated unless and until
such securities are registered under such Act or an opinion of
counsel satisfactory to the Company is obtained to the effect
that such registration is not required."
The foregoing legend shall be removed from the certificates representing any
Warrant Shares, at the request of the holder thereof, at such time as they
become eligible for resale pursuant to Rule 144(k) under the Act.
6. No Impairment. The Company will not, by amendment of its charter or
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through reorganization, consolidation, merger, dissolution, sale of assets 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 impairment.
7. Liquidating Dividends. If the Company pays a dividend or makes a
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distribution on the Common Stock payable otherwise than in cash out of earnings
or earned surplus (determined in accordance with generally accepted accounting
principles) except for a stock dividend payable in shares of Common Stock (a
"Liquidating Dividend"), then the Company will pay or distribute to the
Registered Holder of this Warrant, upon the exercise hereof, in addition to the
Warrant Shares issued upon such exercise, the Liquidating Dividend which would
have been paid to such Registered Holder if he had been the owner of record of
such Warrant Shares immediately prior to the date on which a record is taken for
such Liquidating Dividend or, if no record is taken, the date as of which the
record holders of Common Stock entitled to such dividends or distribution are to
be determined.
8. Optional Redemption.
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(a) At any time, the Company may, at its option, redeem all, but not
less than all, of the Warrant Shares for which the Registered Holder has not
exercised its right to be issued (the "Available Warrant Shares"), by paying
$3.33 per Available Warrant Share (subject to appropriate adjustment for stock
splits, stock dividends, combinations or other similar recapitalizations
affecting such shares) in cash for each Available Warrant Share then redeemed
(hereinafter referred to as the "Redemption Price"); provided, however, that the
Registered Holder may immediately exercise its Warrant or Warrants until such
time on or 15 days prior to the Redemption Date (as defined below).
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(b) At least 15 days prior to the date fixed for any redemption of
Available Warrant Shares (hereinafter referred to as the "Redemption Date"),
written notice shall be mailed, by first class or registered mail, postage
prepaid, to the Registered Holder, notifying such holder of the election of the
Company to redeem such Available Warrant Shares, specifying the Redemption Date
and calling upon the Registered Holder to surrender to the Company, in the
manner and at the place designated, its Warrant or Warrants, representing the
Available Warrant Shares to be redeemed (such notice is hereinafter referred to
as the "Redemption Notice"). On or prior to the Redemption Date (subject to the
Registered Holder's right to exercise such Warrants prior to the Redemption
Date), the Registered Holder shall surrender its Warrant or Warrants
representing Available Warrant Shares to the Company, in the manner and at the
place designated in the Redemption Notice, and thereupon the Redemption Price of
such shares shall be payable to the order of the Registered Holder and each
surrendered Warrant shall be cancelled. From and after the Redemption Date,
unless there shall have been a default in payment of the Redemption Price (or
the Registered Holder has exercised the Warrants prior to such Redemption Date),
all rights of the Registered Holder designated for redemption in the Redemption
Notice as the Registered Holder (except the right to receive the Redemption
Price without interest upon surrender of the Warrant) shall cease with respect
to the Warrant or Warrants representing the Available Warrant Shares, and such
Warrant or Warrants shall not thereafter be transferred on the books of the
Company or be deemed to be outstanding for any purpose whatsoever.
9. Notices of Record Date, etc. In case:
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(a) the Company shall take a record of the holders of its Common
Stock (or other stock or securities at the time deliverable upon the exercise of
this Warrant) for the purpose of entitling or enabling them to receive any
dividend or other distribution, or to receive any right to subscribe for or
purchase any shares of stock of any class or any other securities, or to receive
any other right; or
(b) of any capital reorganization of the Company, any
reclassification of the capital stock of the Company, any consolidation or
merger of the Company with or into another corporation (other than a
consolidation or merger in which the Company is the surviving entity), or any
transfer of all or substantially all of the assets of the Company; or
(c) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company, then, and in each such case, the Company will mail or
cause to be mailed to the Registered Holder of this Warrant a notice specifying,
as the case may be, (i) the date on which a 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, or (ii) the effective date on
which such reorganization, reclassification, consolidation, merger, transfer,
dissolution, liquidation or winding-up
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is to take place, and the time, if any is to be fixed, as of which the holders
of record of Common Stock (or such other stock or securities at the time
deliverable upon the exercise of this Warrant) shall be entitled to exchange
their shares of Common Stock (or such other stock or securities) for securities
or other property deliverable upon such reorganization, reclassification,
consolidation, merger, transfer, dissolution, liquidation or winding-up. Such
notice shall be mailed at least ten (10) days prior to the record date or
effective date for the event specified in such notice.
10. Reservation of Stock. The Company will at all times reserve and keep
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available, solely for issuance and delivery upon the exercise of this Warrant,
such number of Warrant Shares and other stock, securities and property, as from
time to time shall be issuable upon the exercise of this Warrant.
11. Exchange of Warrants. Upon the surrender by the Registered Holder of
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any Warrant or Warrants, properly endorsed, to the Company at the principal
office of the Company, the Company will, subject to the provisions of Section 5
hereof, issue and deliver to or upon the order of such Registered Holder, at the
Company's expense, a new Warrant or Warrants of like tenor, in the name of such
Registered Holder or as such Registered Holder (upon payment by such Registered
Holder of any applicable transfer taxes) may direct, calling in the aggregate on
the face or faces thereof for the number of shares of Common Stock called for on
the face or faces of the Warrant or Warrants so surrendered.
12. Replacement of Warrants. Upon receipt of evidence reasonably
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satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and (in the case of loss, theft or destruction) upon delivery of an
indemnity agreement (with surety if reasonably required) in an amount reasonably
satisfactory to the Company, or (in the case of mutilation) upon surrender and
cancellation of this Warrant, the Company will issue, in lieu thereof, a new
Warrant of like tenor.
13. Transfers, etc.
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(a) The Company will maintain a register containing the name and
address of the Registered Holder of this Warrant. Any Registered Holder may
change its or his address as shown on the warrant register by written notice to
the Company requesting such change.
(b) Subject to the provisions of Section 5 hereof, this Warrant and
all rights hereunder are transferable, in whole or in part, upon surrender of
this Warrant with a properly executed assignment (in the form of Exhibit II
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hereto) at the principal office of the Company.
(c) Until any transfer of this Warrant is made in the warrant
register, the Company may treat the Registered Holder of this Warrant as the
absolute owner
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hereof for all purposes; provided, however, that if and when this Warrant is
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properly assigned in blank, the Company may (but shall not be obligated to)
treat the bearer hereof as the absolute owner hereof for all purposes,
notwithstanding any notice to the contrary.
14. Mailing of Notices, etc. All notices and other communications from the
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Company to the Registered Holder of this Warrant shall be mailed by first-class
certified or registered mail, postage prepaid, to the address furnished to the
Company in writing by the last Registered Holder of this Warrant who shall have
furnished an address to the Company in writing. All notices and other
communications from the Registered Holder of this Warrant or in connection
herewith to the Company shall be mailed by first-class certified or registered
mail, postage prepaid, to the Company at its principal office set forth below.
If the Company should at any time change the location of its principal office to
a place other than as set forth below, it shall give prompt written notice to
the Registered Holder of this Warrant and thereafter all references in this
Warrant to the location of its principal office at the particular time shall be
as so specified in such notice.
15. No Rights as Stockholder. Until the exercise of this Warrant, the
------------------------
Registered Holder of this Warrant shall not have or exercise any rights by
virtue hereof as a stockholder of the Company.
16. Change or Waiver. Any term of this Warrant may be changed or waived
----------------
only by an instrument in writing signed by the party against which enforcement
of the change or waiver is sought.
17. Headings. The headings in this Warrant are for purposes of reference
--------
only and shall not limit or otherwise affect the meaning of any provision of
this Warrant.
18. Governing Law. This Warrant will be governed by and construed in
-------------
accordance with the laws of Delaware.
19. Registration Rights.
-------------------
(a) The Registered Holder shall have the registration rights with
respect to the Warrant Shares as specified in Section 9 of the Extension
Agreement dated April 29, 1998 by and among the Registered Holder, Fleet Bank,
N.A., Mellon Bank, N.A., the Company and certain of its subsidiaries.
(b) Furthermore, the Registered Holder shall be entitled to "piggy-
back" registration rights for so long as the Registered Holder shall own Warrant
Shares. Whenever the Company proposes to file a Registration Statement (other
than pursuant to subsection 19(a) at any time and from time to time, it will,
prior to such
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filing, give written notice to the Registered Holder of its intention to do so
and, upon the written request of the Registered Holder given within 20 days
after the Company provides such notice (which request shall state the intended
method of disposition of such Registrable Shares), the Company shall use its
best efforts to cause all Registrable Shares which the Company has been
requested by such Registered Holder to register to be registered under the
Securities Act to the extent necessary to permit their sale or other disposition
in accordance with the intended methods of distribution specified in the request
of the Registered Holder; provided that the Company shall have the right to
postpone or withdraw any registration effected pursuant to subsection 19(b)
without obligation to the Registered Holder or any persons or entities to whom
the rights under this Warrant are transferred by the Registered Holder, its
successors or assigns pursuant to Section 13 hereof.
(c) In connection with any registration under subsection 19(b)
involving an underwriting, the Company shall not be required to include any
Registrable Shares in such registration unless the holders thereof accept the
terms of the underwriting as agreed upon between the Company and the
underwriters selected by it (provided that such terms must be consistent with
this Warrant). If in the opinion of the managing underwriter it is appropriate
because of marketing factors to limit the number of Registrable Shares to be
included in the offering, then the Company shall be required to include in the
registration only that number of Registrable Shares, if any, which the managing
underwriter believes should be included therein. If the number of Registrable
Shares to be included in the offering in accordance with the foregoing is less
than the total number of shares which the holders of Registrable Shares have
requested to be included, then the holders of Registrable Shares who have
requested registration and other holders of securities entitled to include them
in such registration shall participate in the registration pro rata based upon
their total ownership of shares of Common Stock (giving effect to the conversion
into Common Stock of all securities convertible thereinto). If any holder would
thus be entitled to include more securities than such holder requested to be
registered, the excess shall be allocated among other requesting holders pro
rata in the manner described in the preceding sentence.
20. Registration Procedures. If and whenever the Company is required by
-----------------------
the provisions of this Warrant to use its best efforts to effect the
registration of any of the Registrable Shares under the Securities Act, the
Company shall:
(a) furnish to the Registered Holder such number of copies as the
Registered Holder shall reasonably request of the prospectus, including a
preliminary prospectus and any amendments or supplements thereto, in conformity
with the requirements of the Securities Act;
(b) use its best efforts to register or qualify the Registrable
Shares covered by the Registration Statement under the securities laws of such
states as the
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Registered Holder shall reasonably request; provided, however, that the Company
-------- -------
shall not be required in connection with this subsection 20(b) to qualify as a
foreign corporation or execute a general consent to service of process in any
jurisdiction;
(c) promptly notify the Registered Holder, if the Company has
delivered preliminary or final prospectuses to the Registered Holder and after
having done so, the prospectus is amended to comply with the requirements of the
Securities Act and, if requested by the Company, the Registered Holder shall
immediately cease making offers or sales of Registrable Shares under the
Registration Statement and return all prospectuses to the Company. The Company
shall promptly provide the Registered Holder with revised prospectuses and,
following receipt of the revised prospectuses, the Registered Holder shall be
free to resume making offers and sales of the Registrable Shares; and
(d) pay the expenses incurred by it in complying with its obligations
under this Warrant in connection with registration rights, including all
registration and filing fees, exchange listing fees, expenses for the
preparation of the Registration statement, prospectus and any amendments and
supplements thereto, printing and photocopy expenses, fees and expenses of
counsel for the Company, and fees and expenses of accountants for the Company,
but excluding: (i) selling commissions or underwriting discounts incurred by the
Registered Holder in connection with sales of Registrable Shares under the
Registration Statement and (ii) the fees and expenses of any counsel retained by
the Registered Holder.
21. Requirements of Registered Holder. The Company shall not be required
---------------------------------
to effect the registration of any of the Registrable Shares under the Securities
Act pursuant to this Warrant unless:
(a) the Registered Holder owning such shares furnishes to the Company
in writing such information regarding such Registered Holder and the proposed
sale of Registrable Shares by such Registered Holder as the Company may
reasonably request in writing in connection with the filing of a Registration
Statement or as shall be required in connection therewith by the Commission or
any state securities law authorities; and
(b) Such Registered Holder shall have provided to the Company its
written agreement that in the event of any registration of any of the
Registrable Shares under the Securities Act pursuant to this Warrant, each
Registered Holder will indemnify the Company and its officers and directors and
each person, if any, who controls any thereof (within the meaning of the
Securities Act) against any and all claims, losses, damages and liabilities (or
actions in respect thereof) arising out of or based on any untrue statement (or
alleged untrue statement) of any material fact contained in any prospectus or
other document incident to any registration, qualification or compliance (or in
any related Registration Statement, notification or
-15-
the like) or any omission (or alleged omission) to state therein any material
fact required to be stated therein or necessary to make the statement therein
not misleading, and such Registered Holder will reimburse the Company and each
other person indemnified pursuant to this Section 21 for any legal and any other
expenses reasonably incurred in connection with investigating or defending any
such claim, loss, damage, liability or action; provided, however, that this
-------- -------
Section 21 shall apply only if (and only to the extent that) such statement or
omission was made in reliance upon written information furnished to the Company
in an instrument duly executed by such Registered Holder and stated to be
specifically for use in such prospectus or other document (or related
Registration Statement, notification or the like) or any amendment or supplement
thereto; and, provided further that each Registered Holder's liability hereunder
-------- -------
with respect to any particular registration shall be limited to an amount equal
to the net proceeds received by such Registered Holder from the Registrable
Securities sold by such Registered Holder in such registration.
22. Indemnification by Company. In the event of any registration of any of
--------------------------
the Registrable Shares under the Securities Act pursuant to this Warrant, the
Company will indemnify each Registered Holder and each person who controls the
Registered Holder (within the meaning of the Securities Act) against any and all
claims, losses, damages and liabilities (or actions in respect thereof) arising
out of or based on any untrue statement (or alleged untrue statement) of any
material fact contained in any prospectus or other document incident to any
registration, qualification or compliance (or in any related Registration
Statement, notification or the like) or any omission (or alleged omission) to
state therein any material fact required to be stated therein or necessary to
make the statements therein not misleading, or any violation by the Company of
any rule or regulation promulgated under the Securities Act applicable to the
Company and relating to any action or inaction required of the Company in
connection with any such registration, qualification or compliance, and the
Company will reimburse each such Registered Holder and controlling person for
any legal and any other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability or action;
provided, however, that the Company will not be liable in any such case to the
-------- -------
extent that any such claim, loss, damage or liability arises out of or is based
on any untrue statement or omission based upon written information furnished to
the Company in an instrument duly executed by such Registered Holder or
controlling person and specifically for use in such prospectus or other
document.
IGI, INC.
/s/ Xxxxxx X. Xxxxx
________________________________
By: XXXXXX X. XXXXX
Title: CHAIRMAN
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EXHIBIT I
---------
PURCHASE FORM
-------------
To:_________________ Dated:____________
The undersigned, pursuant to the provisions set forth in the attached
Warrant (No. ___), hereby irrevocably elects to purchase _____ shares of the
Common Stock covered by such Warrant. The undersigned herewith makes payment of
$____________, representing the full Exercise Price for such shares at the price
per share provided for in such Warrant. Such payment takes the form of (check
applicable box or boxes):
[_] $______ in lawful money of the United States; and/or
[_] The cancellation of such portion of the attached Warrant as is exercisable
for a total of _____ Warrant Shares (using a Fair Market Value of $_____
per share for purposes of this calculation).
Signature:_____________________
Address:______________________
______________________
EXHIBIT II
----------
ASSIGNMENT FORM
---------------
FOR VALUE RECEIVED, ________________________________________ hereby sells,
assigns and transfers all of the rights of the undersigned under the attached
Warrant (No. ____) with respect to the number of shares of Common Stock covered
thereby set forth below, unto:
Name of Assignee Address No. of Shares
---------------- ------- -------------
Dated:_____________________ Signature:________________________________
Dated:_____________________ Witness:__________________________________
