EXHIBIT 4.3(D)
ANNEX III
TO
NOTE PURCHASE
AGREEMENT
NEITHER THIS WARRANT NOR ISSUANCE OF THE SECURITIES ISSUABLE UPON THE EXERCISE
HEREOF TO THE HOLDER HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
QUALIFIED OR REGISTERED UNDER STATE SECURITIES OR BLUE SKY LAWS. NEITHER THIS
WARRANT NOR SUCH SECURITIES MAY BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED
OR OTHERWISE TRANSFERRED OR DISPOSED OF EXCEPT IN COMPLIANCE WITH THE SECURITIES
ACT OF 1933, APPLICABLE STATE SECURITIES OR BLUE SKY LAWS AND THE APPLICABLE
RULES AND REGULATIONS THEREUNDER.
THIS WARRANT MAY NOT BE TRANSFERRED, DIVIDED, COMBINED OR EXCHANGED, EXCEPT AS
DESCRIBED IN SECTION 5 HEREIN.
CEPHALON, INC.
WARRANT FOR THE PURCHASE OF SHARES OF COMMON STOCK
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Name of Registered Holder: _________________________
No. ____ ___________ Shares of Common Stock
For good and valuable consideration the receipt of which is hereby
acknowledged, Cephalon, Inc., a Delaware corporation (the "Company"), hereby
grants the rights herein specified and certifies that ____________________ (the
"Initial Holder") (or any registered assignee of the Initial Holder) (each of
the Initial Holder and any such registered assignee being hereinafter referred
to as the "Holder"), is entitled, subject to the conditions and upon the terms
of this Warrant, to purchase from the Company, at any time or from time to time
during the Exercise Period (as defined in Section 1 hereof), the number of
shares of Common Stock (as defined in Section 1 hereof) set forth above at the
Exercise Price (as defined in Section 1 hereof). The number of shares of Common
Stock to be received upon the exercise of this Warrant and the Exercise Price
are subject to adjustment from time to time as hereinafter set forth.
Section 1. Certain Definitions. Terms defined in the preceding paragraph
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and elsewhere in this Warrant have the respective meanings provided for therein.
The following additional terms, as used herein, have the following respective
meanings:
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"Acceleration Date" means the earlier of the date on which a Reorganization
Event occurs or the date on which the Company shall agree to effect a
Reorganization Event, provided, that if approval of the stockholders of the
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Company is required in connection with such Reorganization Event, the
Acceleration Date means the date of such approval.
"Act" means the Securities Act of 1933, as amended.
"Applicable Portion" means the portion of this Warrant which entitles the
Holder to purchase a number of shares of Common Stock (or other securities
deliverable hereunder) equal to the product of (i) the aggregate number of
Warrant Shares subject to this Warrant immediately prior to such redemption
times (ii) the quotient of (a) the amount of Net Revenues for the period from
the Issuance Date to the third anniversary of the Issuance Date minus an amount
equal to fifty percent (50%) of the Target Revenues for such period, divided by
(b) an amount equal to fifty percent (50%) of the Target Revenues for the period
from the Issuance Date to the third anniversary of the Issuance Date; provided,
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however, that in no event shall such quotient be greater than one or less than
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zero.
"Average Market Price" means the arithmetic average of the Closing Price
during any period of twenty (20) consecutive Trading Days during the ninety-day
period which commences on the date which is 1,000 days after the Issuance Date
and ends on and includes the date which is 1,089 days after the Issuance Date.
"Class A Warrants" means the Class A Common Stock Purchase Warrants issued
by the Company in connection with the issuance of the Notes.
"Class B Warrants" means this Warrant and the Other Warrants of like tenor
issued by the Company in connection with the issuance of the Notes.
"Closing Price" means on any date the last reported sale price (regular
way), or if there are no sales of Common Stock on such date, the closing bid
price, per share of the Common Stock on the principal national securities
exchange on which the Common Stock is listed or admitted to trading or, if not
listed or traded on any such exchange, on the Nasdaq National Market, or if not
listed or traded on any such exchange or system, the average of the bid and
asked price per share on the Nasdaq Stock Market in each such case, as reported
by such exchange or market or, if such quotations are not available, the fair
market value as reasonably determined by the Board of Directors of the Company
or any committee of such Board.
"Common Stock" means the Company's Common Stock, $.01 par value, and the
related Preferred Share Purchase Rights as authorized on the date hereof, and
any other securities into which or for which the Common Stock or such Preferred
Share Purchase Rights may be converted or exchanged pursuant to a plan of
recapitalization, reorganization, merger, sale of assets or otherwise or any
similar rights distributed by the Company to the holders of the Common Stock.
"Early Redemption Option" means the right of the Company to redeem the
Notes Pursuant to Section 1.2 thereof.
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"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exercise Period" means the period beginning on March 1, 2002 (or such
earlier date determined in accordance with Section 8(b)(ii)) and ending on March
1, 2004.
"Exercise Price" means $10.08 subject to change or adjustment pursuant to
Section 8 hereof.
"Issuance Date" means March 1, 1999.
"Nasdaq" means the Nasdaq Stock Market.
"Nasdaq National Market" means the Nasdaq National Market of Nasdaq.
"Net Revenues" has the meaning provided in the Notes.
"Notes" means the 11% Revenue Sharing Senior Secured Notes of the Company.
"Other Securities" means any stock (other than Common Stock) and other
securities of the Company or any other person (corporate or otherwise) 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 the
Warrant Shares, or which at any time shall be issuable or shall have been issued
in exchange for or in replacement of the Warrant Shares or Other Securities
pursuant to Section 8.
"Other Warrants" means the other Class B Warrants for the Purchase of
Shares of Common Stock issued by the Company in connection with the issuance of
the Notes.
"Permitted Transfer" means (a) any transfer, assignment or succession by
operation of law or pursuant to any court order issued by a court of competent
jurisdiction, (b) any transfer to an immediate family member, (c) any transfer
through probate or through intestate succession, (d) in the case of a transfer
by a corporation, partnership, or trust, any transfer to any person that,
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, the transferor, (e) any
distribution by a retirement plan to any participant in the plan (f) any
transfer or assignment by the Initial Holder to its employee, or (g) any
transfer or assignment to a person who is an "accredited investor," as defined
in Regulation D under the Securities Act.
"Redemption Date" has the meaning provided in Section 9(b).
"Redemption Price" has the meaning provided in Section 9(a).
"Redemption Target Price" means an amount equal to two hundred percent
(200%) of the
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Exercise Price as in effect during the period of twenty (20) consecutive Trading
Days during which the Average Market Price is determined.
"Reorganization Event" means the occurrence of any one or more of the
following events:
(i) any consolidation, merger or similar transaction of the Company or
any Subsidiary with or into another entity (other than a merger or consolidation
or similar transaction of a Subsidiary into the Company or a wholly-owned
Subsidiary) where the stockholders of the Company immediately prior to such
transaction do not collectively own at least 51% of the outstanding voting
securities of the surviving corporation of such consolidation or merger
immediately following such transaction; or the sale of all or substantially all
of the assets of the Company and the Subsidiaries in a sale transaction or a
series of related transactions; or
(ii) the occurrence of any transaction or event in connection with which
all or substantially all the Common Stock shall be exchanged for, converted
into, acquired for or constitute the right to receive consideration (whether by
means of an exchange offer, liquidation, tender offer, consolidation, merger,
share exchange, combination, reclassification, recapitalization, or otherwise)
which is not all or substantially all common stock which is (or will, upon
consummation of or immediately following such transaction or event, be) listed
on a national securities exchange or approved for quotation on Nasdaq or any
similar United States system of automated dissemination of transaction reporting
of securities prices; or
(iii) the acquisition by a person or entity or group of persons or entities
acting in concert as a partnership, limited partnership, syndicate or group, as
a result of a tender or exchange offer, open market purchases, privately
negotiated purchases or otherwise, of beneficial ownership of securities of the
Company representing 50% or more of the combined voting power of the outstanding
voting securities of the Company ordinarily (and apart from rights accruing in
special circumstances) having the right to vote in the election of directors.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Exchange Act of 1934, as amended.
"Subsidiary" means any corporation or other entity of which a majority of
the capital stock or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by the Company.
"Target Revenues" has the meaning provided in the Notes.
"Trading Day" means a day on which either the national securities exchange
or the Nasdaq National Market which then constitutes the principal securities
market for the Common Stock (or other securities deliverable hereunder) is open
for general trading of securities.
"Warrant" means this Warrant and any Warrant or Warrants which may be
issued pursuant
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to Section 4 or 5 hereof in substitution or exchange for or upon transfer of
this Warrant, any Warrant which may be issued pursuant to Section 2 hereof upon
partial exercise of this Warrant and any Warrant which may be issued pursuant to
Section 6 hereof upon the loss, theft, destruction or mutilation of this
Warrant.
"Warrant Register" means the register maintained at the principal office of
the Company, or at the office of its agent, in which the name of the Holder of
this Warrant shall be registered.
"Warrant Shares" means the shares of Common Stock, as adjusted from time to
time in accordance with Section 8 hereof, deliverable upon exercise of this
Warrant.
Section 2. Exercise of Warrant. This Warrant may be exercised, in whole
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or in part, at any time or from time to time during the Exercise Period, by
presentation and surrender hereof to the Company at its principal office at the
address set forth on the signature page hereof (or at such other address of the
Company or any agent appointed by the Company to act hereunder as the Company or
such agent may hereafter designate in writing to the Holder), with the purchase
form attached hereto as ANNEX I (the "Purchase Form") duly executed and
accompanied by cash or a certified or official bank check drawn to the order of
"CEPHALON, INC." (or its successor in interest, if any) in the amount of the
Exercise Price, multiplied by the number of Warrant Shares specified in such
Purchase Form. If this Warrant should be exercised in part only, the Company or
its agent shall, upon surrender of this Warrant, execute and deliver a Warrant
evidencing the right of the Holder thereof to purchase the balance of the
Warrant Shares purchasable hereunder. Upon receipt by the Company during the
Exercise Period of this Warrant and such Purchase Form in proper form for
exercise, together with proper payment of the Exercise Price at its principal
office, or by its agent at its office, the Holder shall be deemed to be the
holder of record of the number of Warrant Shares specified in such Purchase
Form; provided, however, that if the date of such receipt by the Company or its
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agent is a date on which the stock transfer books of the Company are closed,
such person shall be deemed to have become the record holder of such Warrant
Shares on the next business day on which the stock transfer books of the Company
are open. The Company shall pay any and all documentary, stamp or similar issue
or transfer taxes payable in respect of the issue or delivery of such Warrant
Shares. Any Warrant issued upon partial exercise of this Warrant pursuant to
this Section 2 shall be dated the date of this Warrant.
Section 3. Reservation of Shares. The Company agrees that at all times it
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will keep reserved solely for issuance and delivery pursuant to this Warrant the
number of shares of its Common Stock (or other securities) that are or would be
issuable from time to time upon exercise of this Warrant. All such shares shall
be duly authorized and, when issued upon such exercise, shall be validly issued,
fully paid and nonassessable, free and clear of all liens, security interests,
charges and other encumbrances or restrictions on sale and free of all
preemptive rights. Before taking any action that would cause an adjustment
pursuant to Section 8 hereof reducing the Exercise Price below the then par
value (if any) of the Warrant Shares issuable upon exercise of this Warrant, the
Company will take any corporate action that may, in the opinion of its counsel,
be necessary in order that the Company may validly and legally issue fully paid
and nonassessable Warrant Shares at the Exercise Price as so adjusted.
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Section 4. Transfer in Compliance with Applicable Securities Laws.
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(a) Neither this Warrant nor any of the Warrant Shares, nor any
interest in either, may be sold, assigned, pledged, hypothecated, encumbered or
in any other manner transferred or disposed of, in whole or in part, except in
accordance with Section 5 hereof and in compliance with applicable United States
federal and state securities laws and the terms and conditions hereof. Except
as provided in subsection (b) of this Section 4, each Warrant shall bear the
following legend:
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR QUALIFIED OR
REGISTERED UNDER STATE SECURITIES OR BLUE SKY LAWS. NEITHER THIS WARRANT
NOR SUCH SECURITIES MAY BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR
OTHERWISE TRANSFERRED OR DISPOSED OF EXCEPT IN COMPLIANCE WITH THE
SECURITIES ACT OF 1933, APPLICABLE STATE SECURITIES OR BLUE SKY LAWS AND
THE APPLICABLE RULES AND REGULATIONS THEREUNDER.
(b) If (i) the Warrant Shares have been registered under the
Act and registered or qualified under applicable state securities or Blue Sky
laws or (ii) the Holder has received an opinion of counsel reasonably
satisfactory to the Company that the Warrant Shares may be freely transferred
without registration under the Act or registration or qualification under
applicable state securities or Blue Sky laws, the Holder may require the Company
to issue, in substitution for a Warrant with the foregoing legend, a Warrant
with the following legend:
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
QUALIFIED OR REGISTERED UNDER STATE SECURITIES OR BLUE SKY LAWS. THIS
WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR
OTHERWISE TRANSFERRED OR DISPOSED OF EXCEPT IN COMPLIANCE WITH THE
SECURITIES ACT OF 1933, APPLICABLE STATE SECURITIES OR BLUE SKY LAWS AND
THE APPLICABLE RULES AND REGULATIONS THEREUNDER.
(c) The Holder may require the Company to issue a Warrant
without either of the foregoing legends in substitution for a Warrant bearing
one of such legends if either (i) this Warrant and the Warrant Shares issuable
upon the exercise hereof have been registered under the Act and registered or
qualified under applicable state securities laws or (ii) the Holder has received
an opinion of counsel reasonably satisfactory to the Company that this Warrant
and the Warrant Shares may be freely transferred without registration under the
Act or registration or qualification under applicable state securities laws. The
provisions of this Section 4 shall be binding on all subsequent holders of this
Warrant.
Section 5. Exchange, Transfer or Assignment of Warrant.
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(a) This Warrant may be, at the option of the Holder, upon
presentation and surrender hereof to the Company at its principal office or to
the Company's agent at its office, (i) exchanged for other Warrants of different
denominations, registered in the name of the Holder, entitling the Holder to
purchase in the aggregate the same number of Warrant Shares at the Exercise
Price or, (ii) if delivered together with a written notice signed by the Holder
specifying the denominations in which new Warrants are to be issued, divided or
combined with other Warrants registered in the name of the Holder that carry the
same rights.
(b) If the Holder has received an opinion of counsel
satisfactory to the Company that this Warrant may be sold or transferred without
registration under the Act, as contemplated by Section 4 hereof, (x) this
Warrant may be transferred and assigned, subject to subparagraph (y) of this
Section 5(b), at the option of the Holder, upon surrender of this Warrant to the
Company at its principal office or to the Company's agent at its office, with
the warrant assignment form attached hereto as ANNEX II (the "Warrant Assignment
Form") duly executed and accompanied by funds sufficient to pay any transfer
tax, except that (y) no transfer or assignment of this Warrant may be made
unless (i) such transfer or assignment is a Permitted Transfer or (ii) the
Company consents in writing to such transfer or assignment, which consent may be
withheld in its absolute discretion. The Company shall execute and deliver a new
Warrant or Warrants in the name of the assignee or assignees named in such
Warrant Assignment Form.
(c) Any transfer or exchange of this Warrant shall be without
charge to the Holder and any Warrant or Warrants issued pursuant to this Section
5 shall be dated the date hereof.
(d) The Holder shall not be entitled to transfer a portion of
this Warrant with respect to the purchase of a number of Warrant Shares that is
less than 10,000 without the prior written consent of the Company.
(e) In order to give effect to Section 9, if this Warrant shall
be exercised in part, then (1) any Warrant issued to the Holder to evidence the
unexercised portion of this Warrant shall bear a notation of the original number
of Warrant Shares subject to this Warrant and (2) in connection with any split-
up of this Warrant into two or more instruments, each such instrument shall bear
a notation of a portion of the original number of Warrant Shares subject to this
Warrant, determined by pro rata allocation thereto of the aggregate original
such amount based on the portion of the unexercised amount of this Warrant
(determined immediately prior to such split-up) evidenced by such instrument.
Section 6. Lost, Mutilated or Missing Warrant. Upon receipt by the
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Company or its agent of evidence satisfactory to it of the loss, theft or
destruction of this Warrant, and of satisfactory indemnification, and upon
surrender and cancellation of this Warrant if mutilated, the Company or its
agent shall execute and deliver a Warrant of like tenor and date in exchange for
this Warrant.
Section 7. Rights of the Holder. The Holder shall not, by virtue hereof,
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be entitled to any rights of a shareholder in the Company, either at law or in
equity, and the rights of the Holder
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are limited to those expressed in this Warrant.
Section 8. Anti-dilution. (a) If the Company shall fix or have fixed a
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record date at any time after the date hereof and before the expiration of the
Exercise Period for:
(i) The declaration of a dividend or distribution on the
Common Stock (or other securities deliverable hereunder) payable in shares
of capital stock (whether shares of Common Stock or of capital stock of any
other class), (A) the subdivision of shares of the Common Stock into a
greater number of shares, (B) the combination of the Common Stock into a
smaller number of shares or (C) the issuance of any shares of its capital
stock by reclassification of the Common Stock in connection with a
consolidation or merger with a subsidiary of the Company in which the
Company is the continuing corporation, then, in any such event, upon
exercise of this Warrant the Holder shall be entitled to receive the
aggregate number and kind of shares which, if the Warrant had been
exercised immediately prior to such record date, the Holder would have been
entitled to receive by virtue of such dividend, distribution, subdivision,
combination or reclassification, and the Exercise Price shall be
appropriately adjusted. Such adjustment shall be made successively whenever
any event listed above shall occur.
(ii) Issuance at Less than Current Market Price. The issuance
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of rights, options or warrants to all holders of Common Stock (or other
securities deliverable hereunder) entitling them to subscribe for or
purchase Common Stock (or other securities deliverable hereunder) at a
price per share or having a conversion or exercise price per share
(including the amount paid, if any, for such rights, options or warrants)
less than the Closing Price on such record date (excluding rights or
warrants that are not immediately exercisable and for which provision is
made for the Holder to receive comparable rights or warrants upon
exercise), then the number of Warrant Shares to be received hereunder after
such record date shall be determined by multiplying the number of shares
receivable hereunder immediately prior to such record date by a fraction,
the denominator of which shall be the number of shares of Common Stock (or
other securities deliverable hereunder) outstanding on such record date
plus the number of shares of Common Stock (or other securities deliverable
hereunder) that the aggregate offering price of the total number of shares
so offered for subscription or purchase would purchase at such Closing
Price, and the numerator of which shall be the number of shares of Common
Stock (or other securities deliverable hereunder) outstanding on such
record date plus the number of additional shares of Common Stock (or other
securities deliverable hereunder) offered for subscription or purchase, and
the Exercise Price shall be appropriately adjusted so that the aggregate
purchase price of the Warrant Shares to be received hereunder after such
record date is equal to the aggregate purchase price of the Warrant Shares
receivable hereunder immediately prior to such record date. Shares of
Common Stock owned by or held for the account of the Company or any
subsidiary of the Company on such record date shall not be deemed
outstanding for the purpose of any such computation. Such adjustment shall
become effective immediately after such record date. Such adjustment shall
be made successively whenever any such event shall occur. If such rights,
options or warrants are not so issued, the number of Warrant Shares
receivable hereunder shall again be adjusted to be the number that would
have been in effect had such record date not been fixed. On
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the expiration of such rights, options or warrants the number of Warrant
Shares receivable hereunder shall be readjusted to be the number that would
have obtained had the adjustment made upon the issuance of such rights,
options or warrants been made upon the basis of the issuance of only the
number of shares of Common Stock (or other securities deliverable
hereunder) actually issued upon the exercise of such rights, options or
warrants, provided, however, that if the Holder of this Warrant shall have
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exercised this Warrant prior to any such readjustment, the number of
Warrant Shares that have been delivered or the number of Warrant Shares to
be delivered shall not be subject to any readjustment. In any case in which
this subsection (ii) shall require that an adjustment in the number of
shares receivable hereunder or the Exercise Price be made effective as of a
record date for a specified event, the Company may elect to defer until the
occurrence of such event issuing to the Holder of any Warrant exercised
after such record date the number of Warrant Shares, if any, issuable upon
such exercise over and above the number of Warrant Shares, if any, issuable
upon such exercise on the basis of the Exercise Price in effect prior to
such adjustment; provided, however, that the Company shall deliver to such
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Holder a due xxxx or other appropriate instrument evidencing such Holder's
right to receive such additional Warrant Shares upon the occurrence of the
event requiring such adjustments.
(iii) Distribution of Subscription Rights, Warrants,
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Evidences of Indebtedness or Assets. The making of a distribution to all
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holders of Common Stock (or other securities deliverable hereunder)
(including any such distribution to be made in connection with a
consolidation or merger in which the Company is to be the continuing
corporation) of (A) any shares of capital stock of the Company (other than
Common Stock), (B) subscription rights or warrants (excluding those for
which adjustment is provided in subsection 8(a)(ii) above and excluding
those that are not immediately exercisable and for which provision is made
for the Holder to receive comparable subscription rights or warrants upon
exercise) or (C) evidences of its indebtedness or assets (excluding (x)
dividends paid in or distributions of the Company's capital stock for which
the number of Warrant Shares receivable hereunder shall have been adjusted
pursuant to paragraph 8(a)(i) and (y) cash dividends or distributions
payable out of earnings or surplus not in excess of 10% of the average
Closing Price for the thirty trading days prior to the fifth day before the
date of declaration multiplied by the number of outstanding shares of
Common Stock) (any of the foregoing being hereinafter in this paragraph
(iii) called the "Securities"), then in each such case (unless the Company
elects to reserve shares or other units of such Securities for distribution
to each Holder upon exercise of this Warrant so that, in addition to the
shares of Common Stock (or other securities deliverable hereunder) to which
each Holder is entitled, each Holder will receive upon such exercise the
amount and kind of such Securities which such Holder would have received if
the Holder had, immediately prior to the record date for the distribution
of the Securities, exercised the Warrant) the number of Warrant Shares
receivable hereunder after such record date shall be determined by
multiplying the number of Warrant Shares receivable hereunder immediately
prior to such record date by a fraction, the denominator of which shall be
the Closing Price on the Trading Day immediately prior to the first Trading
Day on which the Common Stock (or other securities deliverable hereunder)
trades without the right to receive such Securities, less the fair market
value (as determined in the reasonable judgment of the Board of
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Directors of the Company and described in a statement mailed to the Holder)
of the portion of the assets or evidences of indebtedness so to be
distributed to a holder of one share of the Common Stock or of such
subscription rights or warrants applicable to one share of the Common
Stock, and the numerator of which shall be the Closing Price of the Common
Stock on such Trading Day; and the Exercise Price shall be appropriately
adjusted so that the aggregate purchase price of the Warrant Shares to be
received hereunder after such record date is equal to the aggregate
purchase price of the Warrant Shares receivable hereunder immediately prior
to such record date. Such adjustment shall become effective immediately
after such record date and shall be made successively whenever such a
record date is fixed. If such distribution is not so made, the number of
Warrant Shares receivable hereunder shall be readjusted to be the number
that was in effect immediately prior to such record date. In the event that
the Holder exercises this Warrant after an adjustment is made under this
paragraph (iii) and prior to a readjustment under this paragraph (iii), the
number of Warrant Shares that have been delivered or the number of Warrant
Shares to be delivered shall not be subject to any readjustment. In any
case in which this paragraph (iii) shall require that an adjustment in the
number of Warrant Shares receivable hereunder or the Exercise Price be made
effective as of a record date for a specified event, the Company may elect
to defer until the occurrence of such event issuing to the Holder of any
Warrant exercised after such record date the number of Warrant Shares, if
any, issuable upon such exercise over and above the number of Warrant
Shares, if any, issuable upon such exercise on the basis of the Exercise
Price in effect prior to such adjustment; provided, however, that the
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Company shall deliver to such Holder a due xxxx or other appropriate
instrument evidencing such Holder's right to receive such additional
Warrant Shares upon the occurrence of the event requiring such adjustments.
(b) Reorganization Event.
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(i) In case of any Reorganization Event the Company shall,
as a condition precedent to the consummation of the transaction constituting, or
announced as, such Reorganization Event, cause effective provisions to be made
so that the Holder shall have the right immediately thereafter, by exercising
this Warrant, to receive the aggregate amount and kind of shares of stock and
other securities and property that were receivable upon such Reorganization
Event by a holder of the number of shares of Common Stock that would have been
received immediately prior to such Reorganization Event upon exercise of this
Warrant. Any such provision shall include provision for adjustments in respect
of such shares of stock and other securities and property that shall be as
nearly equivalent as may be practicable to the adjustments provided for in
Section 8(a). The foregoing provisions of this Section 8(b) shall similarly
apply to successive Reorganization Events.
(ii) If a Reorganization Event occurs or the Company agrees
to effect a Reorganization Event, then the Exercise Period shall commence on the
applicable Acceleration Date. The Company shall, at least twenty (20) days
before the Acceleration Date relating to any Reorganization Event (or if such
Reorganization Event was beyond the control of the Company, and the Company did
not have knowledge twenty (20) days before such Acceleration Date, as soon as
practicable thereafter), cause to be mailed to the Holder a notice describing in
reasonable detail such Reorganization Event and informing the Holder of the date
that
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the Exercise Period will (or did) commence and that the Holder may exercise this
Warrant at any time during the Exercise Period.
(c) Fractional Shares. No fractional shares of Common Stock (or
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other securities deliverable hereunder) or scrip shall be issued to any Holder
in connection with the exercise of this Warrant. Instead of any fractional share
of Common Stock (or other securities deliverable hereunder) that would otherwise
be issuable to such Holder, the Company shall pay to such Holder a cash
adjustment in respect of such fractional interest in an amount equal to such
fractional interest multiplied by the Closing Price per share of Common Stock
(or other securities deliverable hereunder) on the date of such exercise.
(d) Carryover. Notwithstanding any other provision of this
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Section 8, no adjustment shall be made to the number of shares of Common Stock
(or other securities deliverable hereunder) to be delivered to each Holder (or
to the Exercise Price) if such adjustment would represent less than one percent
of the number of shares to be so delivered, but any such adjustment shall be
carried forward and shall be made at the time and together with the next
subsequent adjustment which, together with any adjustments so carried forward,
shall amount to one percent or more of the number of shares to be so delivered.
(e) Notices of Certain Events. If at any time after the date
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hereof and before the expiration of the Exercise Period:
(i) the Company authorizes the issuance to all holders of
its Common Stock of (A) rights or warrants to subscribe for or purchase shares
of its Common Stock or (B) any other subscription rights or warrants;
(ii) the Company authorizes the distribution to all holders
of its Common Stock of evidences of its indebtedness or assets (other than cash
dividends or distributions excluded from the operation of paragraph 8(a)(iii));
(iii) there shall be any capital reorganization of the
Company or reclassification of the Common Stock (other than a change in par
value of the Common Stock or an increase in the authorized capital stock of the
Company not involving the issuance of any shares thereof) or any consolidation
or merger to which the Company is a party (other than a consolidation or merger
with a subsidiary in which the Company is the continuing corporation and that
does not result in any reclassification or change in the Common Stock
outstanding) or a conveyance or transfer of all or substantially all of the
properties and assets of the Company:
(iv) there shall be any voluntary or involuntary
dissolution, liquidation or winding-up of the Company; or
(v) there shall be any other event that would result in an
adjustment pursuant to this Section 8 in the Exercise Price or the number of
Warrant Shares that may be purchased upon the exercise hereof;
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the Company will cause to be mailed to the Holder, at least twenty (20) days (or
ten (10) days in any case specified in the clauses (i) or (ii) above) before the
applicable record or effective date hereinafter specified, or as soon as
practicable after the occurrence of an event specified in clause (v) if such
event was beyond the control of the Company and the Company did not have
knowledge of such event at least ten (10) days before such date, a notice
stating (A) the date as of which the holders of Common Stock of record entitled
to receive any such rights, warrants or distributions is to be determined, or
(B) the date on which any such reorganization, reclassification, consolidation,
merger, conveyance, transfer, dissolution, liquidation or winding-up is expected
to become effective, and the date as of which it is expected that holders of
Common Stock of record will be entitled to exchange their shares of Common Stock
for securities or other property, if any, deliverable upon such reorganization,
reclassification, consolidation, merger, conveyance, transfer, dissolution,
liquidation or winding-up.
(f) Failure to Give Notice. The failure to give the notice
----------------------
required by Section 8(e) hereof or any defect therein shall not affect the
legality or validity of any distribution right, warrant, consolidation, merger,
conveyance, transfer, dissolution, liquidation or winding-up or the vote upon
any such action.
Section 9. Redemption of Warrant. (a) On the date which is 45 days after
---------------------
the third anniversary of the Issuance Date, the Company shall have the right,
but not the obligation, on not less than forty-five (45) and not more than sixty
(60) days prior notice, to redeem the Applicable Portion, if any, of this
Warrant, at a redemption price of $0.01 per share of Common Stock (or unit of
other securities deliverable hereunder) issuable upon exercise of the portion of
this Warrant so redeemed (the "Redemption Price"). If this Warrant is called
for redemption, the Company shall simultaneously call for redemption a portion
of the Other Warrants in accordance with their terms that are similar to this
Section 9.
(b) If the Company wishes to exercise its right so to redeem
the Applicable Portion of this Warrant, the Company shall give a notice of
redemption to the Holder not later than the 45th day prior to the date fixed for
redemption (the "Redemption Date").
(c) The notice of redemption shall specify (i) the portion of
this Warrant to be redeemed, (ii) the aggregate Redemption Price for the
Applicable Portion of this Warrant to be redeemed, (iii) the date fixed for
redemption, (iv) the place where this Warrant shall be delivered and the
Redemption Price paid, and (v) that the right to exercise the Applicable Portion
of this Warrant that is being redeemed shall terminate at 5:00 p.m., New York
City time, on the Trading Day immediately preceding the Redemption Date unless
otherwise agreed by the Company.
(d) If the Company shall have exercised its right to redeem
the Applicable Portion of this Warrant, any right to exercise such Applicable
Portion of this Warrant shall terminate at 5:00 p.m., New York City time, on the
Trading Day immediately preceding the Redemption Date unless otherwise agreed by
the Company. On and after the Redemption Date, unless otherwise agreed by the
Company, the Holder shall have no further rights with respect to the Applicable
Portion being redeemed except to receive, upon surrender of this Warrant, the
Redemption Price.
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(e) From and after the Redemption Date, the Company shall,
at the place specified in the notice of redemption, upon presentation and
surrender to the Company by or on behalf of the Holder, deliver or cause to be
delivered to or upon the written order of the Holder a sum in cash equal to the
aggregate Redemption Price of the Applicable Portion of this Warrant being so
redeemed. From and after the Redemption Date and upon the deposit or setting
aside by the Company of a sum sufficient to redeem the Applicable Portion of
this Warrant, the Applicable Portion of this Warrant shall expire and become
void and all rights hereunder, except the right to receive payment of the
Redemption Price, shall cease.
Section 10. Officers' Certificate. Whenever the number of Warrant
---------------------
Shares that may be purchased on exercise of this Warrant or the Exercise Price
is adjusted as required by the provisions of Section 8 hereof, the Company will
forthwith file in the custody of its Secretary or an Assistant Secretary at its
principal office and at the office of its agent an officers' certificate showing
the adjusted number of Warrant Shares that may be purchased at the Exercise
Price on exercise of this Warrant and the adjusted Exercise Price determined as
herein provided, setting forth in reasonable detail the facts requiring such
adjustment and the manner of computing such adjustment. Each such officers'
certificate shall be signed by the President, Chief Financial Officer or
Treasurer of the Company and by the Secretary or an Assistant Secretary of the
Company. Each such officers' certificate shall be made available at all
reasonable times for inspection by the Holder. The Company shall, forthwith
after each such adjustment, cause such certificate to be mailed to the Holder.
Section 11. Availability of Information. In addition to the
---------------------------
requirements of Section 5(h), the Company shall comply with all applicable
public information reporting requirements of the SEC and applicable state
securities laws to which it may from time to time be subject. The Company will
also cooperate with each Holder of any Warrants and each holder of any Warrant
Shares in supplying such information concerning the Company as may be necessary
for such Holder or holder to complete and file any information reporting forms
currently or hereafter required by the SEC as a condition to the availability of
an exemption from the Act for the sales of any Warrants or Warrant Shares.
Section 12. Warrant Register. The Company will register this Warrant in
----------------
the Warrant Register in the name of the record holder to whom it has been
distributed or assigned in accordance with the terms hereof. The Company may
deem and treat the registered Holder of this Warrant as the absolute owner
hereof (notwithstanding any notation of ownership or other writing hereon made
by anyone) for the purpose of any exercise hereof or any distribution to the
Holder and for all other purposes, and the Company shall not be affected by any
notice to the contrary.
Section 13. Successors. All of the provisions of this Warrant by or for
----------
the benefit of the Company or the Holder shall bind and inure to the benefit of
their respective successors and assigns.
Section 14. Headings. The headings of sections of this Warrant have
--------
been inserted for convenience of reference only, are not to be considered a part
hereof and shall in no way modify or restrict any of the terms or provisions
hereof.
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Section 15. Amendments. This Warrant may be amended by the affirmative
----------
vote of Holders holding Warrants to purchase not less than two-thirds of the
Warrant Shares purchasable pursuant to all of the then outstanding Warrants;
provided, that, except as expressly provided herein, this Warrant may not be
--------
amended, without the consent of the Holder, to change (i) any price at which
this Warrant may be exercised, (ii) the period during which this Warrant may be
exercised, (iii) the number or type of securities to be issued upon the exercise
hereof or (iv) the provisions of this Section 15.
Section 16. Notices. Unless otherwise provided in this Warrant, any
-------
notice or other communication required or permitted to be made or given to any
party hereto pursuant to this Warrant shall be in writing and shall be deemed
made or given if delivered by hand, on the date of such delivery to such party,
or, if mailed, on the fifth day after the date of mailing, if sent to such party
by certified or registered mail, postage prepaid, addressed to it (in the case
of a Holder) at its address in the Warrant Register or (in the case of the
Company) at its address set forth below, or to such other address as is
designated by written notice, similarly given to each party hereto.
Section 17. Governing Law. This Warrant shall be deemed to be a
-------------
contract made under the laws of the State of New York and for all purposes shall
be construed in accordance with the laws of said State as applied to the
contracts made and to be performed in New York between New York residents.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Company has duly caused this Warrant to be
signed and attested by its duly authorized officer and to be dated as of
__________, 1999.
CEPHALON, INC.
By:
Name:
Title:
Address:
000 Xxxxxxxxxx Xxxxxxx
Xxxx Xxxxxxx, Xxxxxxxxxxxx 00000
Attention: Senior Vice President and
Chief Financial Officer
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ANNEX I
TO WARRANT
PURCHASE FORM
-------------
TO CEPHALON, INC.:
The undersigned, ________________________, hereby irrevocably elects
to exercise the within Warrant to purchase ___________________________ shares of
Common Stock of Cephalon, Inc., a Delaware corporation, and hereby makes payment
of $_____________________ in payment of the exercise price thereof.
Dated: _________________
_____________________________
[SIGNED]
_____________________________
[STREET ADDRESS]
_____________________________
[CITY AND STATE]
I-16
ANNEX II
TO WARRANT
WARRANT ASSIGNMENT FORM
-----------------------
TO CEPHALON, INC.:
FOR VALUE RECEIVED, the undersigned, ________________________________,
("Assignor"), hereby sells, assigns and transfers unto
Name: __________________________________________ ("Assignee")
(Please type or print in block letters.)
Address: ______________________________________
Social Security or Taxpayer I.D. No.: ___________________________
Assignor's right to purchase up to _________________ shares of Common Stock of
Cephalon, Inc., a Delaware corporation, represented by this Warrant and does
hereby irrevocably constitute and appoint the Company and any of its officers,
secretary or assistant secretaries, as its officers, secretary or assistant
secretaries, as attorneys-in-fact to transfer the same on the books of the
Company, with full power of substitution in the premises.
Date: __________________
Print Name:
II-17
