COMMON SHARE PURCHASE WARRANT ÆTERNA ZENTARIS INC.
Exhibit 99.3
COMMON SHARE PURCHASE WARRANT
ÆTERNA ZENTARIS INC.
ÆTERNA ZENTARIS INC.
Warrant Shares:
|
Issue Date: October ___, 2009 | |
Warrant Number:
|
Initial Exercise Date: October ___, 2009 |
THIS COMMON SHARE PURCHASE WARRANT (the “Warrant”) certifies that, for value received,
___(the “Holder”) is entitled, upon the terms and subject to the
limitations on exercise and the conditions hereinafter set forth, at any time on or after October
___, 2009 (the “Initial Exercise Date”) and on or prior to the close of business on October
___, 2014 (the “Termination Date”) but not thereafter, to subscribe for and purchase from
Æterna Zentaris Inc., a Canadian corporation (the “Corporation”), up to ___common
shares (the “Warrant Shares”) of the capital of the Corporation (the “Common
Shares”). The purchase price of one Common Share under this Warrant shall be equal to the
Exercise Price, as defined in Section 2(b) hereof.
Section 1. Definitions. Capitalized terms used and not otherwise defined
herein shall have the meanings set forth in that certain Securities Purchase Agreement (the
“Purchase Agreement”), dated October 19, 2009, among the Corporation and the purchasers
signatory thereto.
Section 2. Exercise.
(a) Exercise of Warrant. Exercise of the purchase rights represented by this
Warrant may be made, in whole or in part, at any time or times on or after the Initial
Exercise Date and on or before the Termination Date by delivery to the Corporation (or such
other office or agency of the Corporation as it may designate by notice in writing to the
registered Holder at the address of the Holder appearing on the books of the Corporation) of
a duly executed facsimile copy of the Notice of Exercise Form annexed hereto; and,
within three (3) Trading Days of the date said Notice of Exercise is delivered to the
Corporation, the Corporation shall have received payment of the aggregate Exercise Price of
the shares thereby purchased by wire transfer or cashier’s check drawn on a United States
bank or, if available, pursuant to the cashless exercise procedure specified in Section 2(c)
below. Notwithstanding anything herein to the contrary, the Holder shall not be required to
physically surrender this Warrant to the Corporation until the Holder has purchased all of
the Warrant Shares available hereunder and the Warrant has been exercised in full, in which
case, the Holder shall surrender this Warrant to the Corporation for cancellation within
three (3) Trading Days of the date the final Notice of Exercise is delivered to the
Corporation. Partial exercises of this Warrant resulting in purchases of a portion of the
total number of Warrant Shares available hereunder shall have the effect of lowering the
outstanding number of Warrant Shares purchasable hereunder in an amount equal to the
applicable number of Warrant Shares purchased. The Holder and the Corporation shall maintain
records showing the number of Warrant Shares purchased and the date of such purchases. The
Corporation shall deliver any objection to any Notice of Exercise Form within three (3)
Business Days of receipt of such notice. In the event of any dispute or discrepancy, the Corporation’s
records shall be controlling and determinative and shall govern. The Holder and any
assignee, by
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acceptance of this Warrant, acknowledge and agree that, by reason of the
provisions of this paragraph, following the purchase of a portion of the Warrant Shares
hereunder, the number of Warrant Shares available for purchase hereunder at any given time
will be less than the amount stated on the face hereof.
(b) Exercise Price. The exercise price per Common Share under this Warrant
shall be US$1.25, subject to adjustment hereunder (the “Exercise Price”).
(c) Cashless Exercise. If at the time of exercise hereof both (i) there is no
effective registration statement registering, or the prospectus contained therein is not
available for the issuance of the Warrant Shares to the Holder and (ii) all of the Warrant
Shares are not then registered for resale by the Holder into the market at market prices
from time to time on an effective registration statement for use on a continuous basis (or
the prospectus contained therein is not available for use), then this Warrant may also be
exercised, in whole or in part, at such time by means of a “cashless exercise” in which the
Holder shall be entitled to receive a certificate for the number of Warrant Shares equal to
the quotient obtained by dividing [(A-B) (C)] by (A), where:
| (A) | = the VWAP on the Trading Day immediately preceding the date on which the Holder elects to exercise this Warrant by means of a “cashless exercise,” as set forth in the applicable Notice of Exercise; | ||
| (B) | = the Exercise Price of this Warrant, as adjusted hereunder; and | ||
| (C) | = the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise. |
“VWAP” means, for any date, the price determined by the first of the
following clauses that applies: (a) if the Common Shares are then listed or quoted on
the NASDAQ Global Market (“NASDAQ”), the daily volume weighted average price
of the Common Shares for such date (or the nearest preceding date) on the NASDAQ as
reported by Bloomberg L.P. (as defined below) (based on a Trading Day from 9:30 a.m.
(prevailing Eastern time) to 4:02 p.m. (prevailing Eastern time); (b) if the Common
Shares are not then listed or quoted on the NASDAQ, the daily volume weighted average
price of the Common Shares for the period of five Trading Days ending on such date
(or the nearest preceding date) on The Toronto Stock Exchange (the “TSX”) as
reported in the TSX’s Historical Data Access database (based on a Trading Day from
9:30 a.m. (prevailing Eastern time) to 4:02 p.m. (prevailing Eastern time), with the
values used in the VWAP being calculated in Canadian dollars and then converted to
United States dollars based on the Bank of Canada’s nominal noon exchange rate for
Canadian to United States dollars on such date; (c) if the Common Shares are not then
listed or quoted on either the NASDAQ or the TSX, the volume weighted average price
of the Common Shares for such date (or the nearest preceding date) on the OTC
Bulletin Board; (d) if the Common Shares are not then listed or quoted on a Trading Market or the OTC Bulletin Board and if prices
for the Common Shares are then reported in the “Pink Sheets” published by
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Pink OTC
Markets, Inc. (or a similar organization or agency succeeding to its functions of
reporting prices), the most recent bid price per share of the Common Shares so
reported; or (d) in all other cases, the fair market value of a Common Share as
determined by an independent appraiser selected in good faith by the Corporation and
reasonably acceptable to the Holders of a majority in interest of the Securities then
outstanding, the fees and expenses of which shall be paid by the Corporation.
“Bloomberg L.P.” means Bloomberg L.P. or, if Bloomberg L.P. no longer reports
the applicable pricing or other information, such other data service as may in the
future replace Bloomberg L.P. as the primary industry source of stock market data.
(d) Mechanics of Exercise.
(i) Delivery of Certificates Upon Exercise. Certificates for shares
purchased hereunder shall be transmitted by the Transfer Agent to the Holder by
crediting the account of the Holder’s prime broker with the Depository Trust
Corporation through its Deposit/Withdrawal At Custodian (“DWAC”) system if
the Corporation is then a participant in such system and either (A) there is an
effective Registration Statement permitting the issuance of the Warrant Shares to or
resale of the Warrant Shares by the Holder or (B) this Warrant is being exercised via
cashless exercise, and otherwise by physical delivery to the address specified by the
Holder in the Notice of Exercise by the date that is three (3) Trading Days after the
latest of (A) the delivery to the Corporation of the Notice of Exercise Form and
receipt of the DWAC request from the Holder’s prime broker (if applicable), (B)
surrender of this Warrant (if required) and (C) payment of the aggregate Exercise
Price as set forth above (including by cashless exercise, if permitted) (such date,
the “Warrant Share Delivery Date”). This Warrant shall be deemed to have been
exercised on the first date on which all of the foregoing have been delivered to the
Corporation. The Warrant Shares shall be deemed to have been issued, and the Holder
or any other person so designated to be named therein shall be deemed to have become
a holder of record of such shares for all purposes, as of the date the Warrant has
been properly exercised, with payment to the Corporation of the Exercise Price (or by
cashless exercise, if permitted) and all taxes required to be paid by the Holder, if
any, pursuant to Section 2(d)(vi) hereof prior to the issuance of such shares, having
been paid.
(ii) Delivery of New Warrants Upon Exercise. If this Warrant shall have
been exercised in part, the Corporation shall, at the request of a Holder and upon
surrender of this Warrant certificate, at the time of delivery of the certificate or
certificates representing Warrant Shares, deliver to the Holder a new Warrant
evidencing the rights of the Holder to purchase the balance of the unpurchased
Warrant Shares called for by this Warrant, which new Warrant shall in all other
respects be identical with this Warrant.
(iii) Rescission Rights. If the Corporation fails to cause the Transfer
Agent to transmit to the Holder a certificate(s) representing the Warrant Shares
pursuant to
Section 2(d)(i) hereof by the Warrant Share Delivery Date, then the Holder will
have the right to rescind such exercise.
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(iv) Compensation for Buy-In on Failure to Timely Deliver Certificates Upon
Exercise. In addition to any other rights available to the Holder, if the
Corporation fails to cause the Transfer Agent to transmit to the Holder a certificate
or the certificates representing the Warrant Shares pursuant to an exercise on or
before the Warrant Share Delivery Date, and if after such date the Holder is required
by its broker to purchase (in an open market transaction or otherwise) or the
Holder’s brokerage firm otherwise purchases, Common Shares to deliver in satisfaction
of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving
upon such exercise (a “Buy-In”), then the Corporation shall (A) pay in cash
to the Holder the amount, if any, by which (x) the Holder’s total purchase price
(including brokerage commissions, if any) for the Common Shares so purchased exceeds
(y) the amount obtained by multiplying (1) the number of Warrant Shares that the
Corporation was required to deliver to the Holder in connection with the exercise at
issue times (2) the price at which the sell order giving rise to such purchase
obligation was executed, and (B) at the option of the Holder, either reinstate the
portion of the Warrant and equivalent number of Warrant Shares for which such
exercise was not honored (in which case such exercise shall be deemed rescinded) or
deliver to the Holder the number of Common Shares that would have been issued had the
Corporation timely complied with its exercise and delivery obligations hereunder. For
example, if the Holder purchases Common Shares having a total purchase price of
US$11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common
Shares with an aggregate sale price giving rise to such purchase obligation of
US$10,000, under clause (A) of the immediately preceding sentence the Corporation
shall be required to pay the Holder US$1,000. Notwithstanding the foregoing, the
Corporation shall not be required to make the payments set forth herein in the case
of uncertificated Warrant Shares if the Holder fails to timely file a request with
the Depository Trust Corporation to receive such uncertificated Warrant Shares. The
Holder shall provide the Corporation written notice indicating the amounts payable to
the Holder in respect of the Buy-In and, upon request of the Corporation, evidence of
the amount of such loss. Nothing herein shall limit a Xxxxxx’s right to pursue any
other remedies available to it hereunder, at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief with respect to
the Corporation’s failure to timely deliver certificates representing Common Shares
upon exercise of the Warrant as required pursuant to the terms hereof.
(v) No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this Warrant. As
to any fraction of a share which the Holder would otherwise be entitled to purchase
upon such exercise, the Corporation shall, at its election, either pay a cash
adjustment in respect of such final fraction in an amount equal to such fraction
multiplied by the Exercise Price or round up to the next whole share.
(vi) Charges, Taxes and Expenses. Issuance of certificates for Warrant
Shares shall be made without charge to the Holder for any issue or transfer tax or
other incidental expense in respect of the issuance of such certificate, all of which
taxes and expenses shall be paid by the Corporation, and such certificates shall be
issued in the name of the Holder or in such name or names as may be directed by
the Holder; provided, however, that in the event certificates for
Warrant Shares are to be
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issued in a name other than the name of the Holder, this
Warrant when surrendered for exercise shall be accompanied by the Assignment Form
attached hereto duly executed by the Holder and the Corporation may require, as a
condition thereto, the payment of a sum sufficient to reimburse it for any transfer
tax incidental thereto.
(vii) Closing of Books. The Corporation will not close its shareholder
books or records in any manner which prevents the timely exercise of this Warrant,
pursuant to the terms hereof.
(e) Holder’s Exercise Limitations. The Corporation shall not effect any
exercise of this Warrant, and a Holder shall not have the right to exercise any portion of
this Warrant, pursuant to Section 2 hereof or otherwise, to the extent that after giving
effect to such issuance after exercise as set forth on the applicable Notice of Exercise,
the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group
together with the Holder or any of the Holder’s Affiliates), would beneficially own in
excess of the Beneficial Ownership Limitation (as defined below). For purposes of the
foregoing sentence, the number of Common Shares beneficially owned by the Holder and its
Affiliates shall include the number of Common Shares issuable upon exercise of this Warrant
with respect to which such determination is being made, but shall exclude the number of
Common Shares which would be issuable upon (i) exercise of the remaining, non-exercised
portion of this Warrant beneficially owned by the Holder or any of its Affiliates and (ii)
exercise or conversion of the unexercised or non-converted portion of any other securities
of the Corporation (including, without limitation, any other Common Shares Equivalents)
subject to a limitation on conversion or exercise analogous to the limitation contained
herein beneficially owned by the Holder or any of its Affiliates. Except as set forth in the
preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be
calculated in accordance with Section 13(d) of the Exchange Act and the rules and
regulations promulgated thereunder, it being acknowledged by the Holder that the Corporation
is not representing to the Holder that such calculation is in compliance with Section 13(d)
of the Exchange Act and the Holder is solely responsible for any schedules required to be
filed in accordance therewith. To the extent that the limitation contained in this Section
2(e) applies, the determination of whether this Warrant is exercisable (in relation to other
securities owned by the Holder together with any Affiliates) and of which portion of this
Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of
a Notice of Exercise shall be deemed to be the Holder’s determination of whether this
Warrant is exercisable (in relation to other securities owned by the Holder together with
any Affiliates) and of which portion of this Warrant is exercisable, in each case subject to
the Beneficial Ownership Limitation, and the Corporation shall have no obligation to verify
or confirm the accuracy of such determination and shall have no liability for exercises of
the Warrant that are in non-compliance with the Beneficial Ownership Limitation. In
addition, a determination as to any group status as contemplated above shall be determined
in accordance with Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder. For purposes of this Section 2(e), in determining the number of
outstanding Common Shares, a Holder may rely on the number of outstanding Common Shares as
reflected in (A) the Corporation’s most recent audited annual or unaudited interim
consolidated financial statements and/or accompanying management’s discussion and analysis
filed with or furnished to the Commission, as the
case may be, (B) a more recent public announcement by the Corporation or (C) a more
recent written notice by the Corporation or the Transfer Agent setting forth the number of
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Common Shares outstanding. Upon the written or oral request of a Holder, the Corporation
shall within two Trading Days confirm orally and in writing to the Holder the number of
Common Shares then outstanding as established by (A), (B) or (C) above, as applicable. In
any case, the number of outstanding Common Shares shall be determined after giving effect to
the conversion or exercise of securities of the Corporation, including this Warrant, by the
Holder or its Affiliates since the date as of which such number of outstanding shares of
Common Shares was reported. The “Beneficial Ownership Limitation” shall be 4.99% of
the number of Common Shares outstanding immediately after giving effect to the issuance of
Common Shares issuable upon exercise of this Warrant. The Holder, upon not less than 61
days’ prior notice to the Corporation, may increase or decrease the Beneficial Ownership
Limitation provisions of this Section 2(e), provided that the Beneficial Ownership
Limitation in no event exceeds 9.99% of the number of Common Shares outstanding immediately
after giving effect to the issuance of Common Shares upon exercise of this Warrant held by
the Holder and the provisions of this Section 2(e) shall continue to apply. Any such
increase or decrease will not be effective until the 61st day after such notice
is delivered to the Corporation and shall only be effective with respect to such Holder. The
provisions of this paragraph shall be construed and implemented in a manner otherwise than
in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any
portion hereof) which may be defective or inconsistent with the intended Beneficial
Ownership Limitation herein contained or to make changes or supplements necessary or
desirable to properly give effect to such limitation. The limitations contained in this
paragraph shall apply to a successor holder of this Warrant.
Section 3. Certain Adjustments.
(a) Stock Dividends and Splits. If the Corporation, at any time while this
Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or
distributions on its Common Shares or any other equity or equity equivalent securities
payable in Common Shares (which, for avoidance of doubt, shall not include any Common Shares
issued by the Corporation upon exercise of this Warrant), (ii) subdivides outstanding shares
of Common Shares into a larger number of shares, (iii) combines or consolidates (including
by way of reverse stock split) outstanding Common Shares into a smaller number of shares, or
(iv) issues by reclassification of the Common Shares any shares of capital stock of the
Corporation, then in each case the Exercise Price shall be multiplied by a fraction of which
the numerator shall be the number of Common Shares outstanding immediately before such event
and of which the denominator shall be the number of Common Shares outstanding immediately
after such event, and the number of shares issuable upon exercise of this Warrant shall be
proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain
unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective
immediately after the record date for the determination of shareholders entitled to receive
such dividend or distribution and shall become effective immediately after the effective
date in the case of a subdivision, combination, consolidation or re-classification.
(b) Subsequent Rights Offerings. If the Corporation, at any time while the
Warrant is outstanding, shall issue rights, options or warrants to all holders of Common
Shares (and not to the Holders) entitling them to subscribe for or purchase Common
Shares at a price per share less than the VWAP on the record date mentioned below, then, the
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Exercise Price shall be multiplied by a fraction, of which the denominator shall be the
number of Common Shares outstanding on the date of issuance of such rights, options or
warrants plus the number of additional Common Shares offered for subscription or purchase,
and of which the numerator shall be the number of Common Shares outstanding on the date of
issuance of such rights, options or warrants plus the number of shares which the aggregate
offering price of the total number of shares so offered (assuming receipt by the Corporation
in full of all consideration payable upon exercise of such rights, options or warrants)
would purchase at such VWAP. Such adjustment shall be made whenever such rights, options or
warrants are issued, and shall become effective immediately after the record date for the
determination of stockholders entitled to receive such rights, options or warrants.
(c) Pro Rata Distributions. If the Corporation, at any time while this Warrant
is outstanding, shall distribute to all holders of Common Shares (and not to the Holders)
evidences of its indebtedness or assets (including cash and special cash dividends) or
rights or warrants to subscribe for or purchase any security other than the Common Shares
(which shall be subject to this Section 3(c)), then in each such case the Exercise Price
shall be adjusted by multiplying the Exercise Price in effect immediately prior to the
record date fixed for determination of shareholders entitled to receive such distribution by
a fraction of which the denominator shall be the VWAP determined as of the record date
mentioned above, and of which the numerator shall be such VWAP on such record date less the
then per share fair market value at such record date of the portion of such assets or
evidence of indebtedness so distributed applicable to one outstanding Common Share as
determined by the Board of Directors in good faith. In either case the adjustments shall be
described in a statement provided to the Holder of the portion of assets or evidences of
indebtedness so distributed or such subscription rights applicable to one Common Share. Such
adjustment shall be made whenever any such distribution is made and shall become effective
immediately after the record date mentioned above.
(d) Fundamental Transaction. If, at any time while this Warrant is outstanding,
(i) the Company, directly or indirectly, in one or more related transactions effects any
merger or consolidation of the Company with or into another Person, (ii) the Company,
directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance
or other disposition of all or substantially all of its assets in one or a series of related
transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer
(whether by the Company or another Person) is completed pursuant to which holders of Common
Shares are permitted to sell, tender or exchange their shares for other securities, cash or
property and has been accepted by the holders of 50% or more of the outstanding Common
Shares, (iv) the Company, directly or indirectly, in one or more related transactions
effects any reclassification, reorganization or recapitalization of the Common Shares or any
compulsory share exchange pursuant to which the Common Shares are effectively converted into
or exchanged for other securities, cash or property, (v) the Company, directly or
indirectly, in one or more related transactions consummates a stock or share purchase
agreement or other business combination (including, without limitation, a reorganization,
recapitalization, spin-off or plan of arrangement) with another Person whereby such other
Person acquires more than 50% of the outstanding Common Shares (not
including any Common Shares held by the other Person or other Persons making or party
to, or associated or affiliated with the other Persons making or party to, such stock or
share
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purchase agreement or other business combination) (each a “Fundamental
Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have
the right to receive, for each Warrant Share that would have been issuable upon such
exercise immediately prior to the occurrence of such Fundamental Transaction, at the option
of the Holder (without regard to any limitation in Section 2(e) on the exercise of this
Warrant), the number of common shares of the successor or acquiring corporation or of the
Company, if it is the surviving corporation, and any additional consideration (the
“Alternate Consideration”) receivable as a result of such Fundamental Transaction by
a holder of the number of Common Shares for which this Warrant is exercisable immediately
prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on
the exercise of this Warrant). For purposes of any such exercise, the determination of the
Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration
based on the amount of Alternate Consideration issuable in respect of one Common Share in
such Fundamental Transaction, and the Company shall apportion the Exercise Price among the
Alternate Consideration in a reasonable manner reflecting the relative value of any
different components of the Alternate Consideration. If holders of Common Shares are given
any choice as to the securities, cash or property to be received in a Fundamental
Transaction, then the Holder shall be given the same choice as to the Alternate
Consideration it receives upon any exercise of this Warrant following such Fundamental
Transaction. Notwithstanding anything to the contrary, in the event of any type of
Fundamental Transaction and irrespective of the form of consideration payable thereunder,
the Company or any Successor Entity (as defined below) shall, at the Company’s option,
exercisable upon not less than 30 days’ prior written notice during which the Holder shall
have the opportunity to exercise this Warrant (provided that such notice is not given until
after the applicable Fundamental Transaction is publicly announced), or, at the Holder’s
option exercisable at any time concurrently with, or within 30 days after, the consummation
of the Fundamental Transaction, purchase this Warrant from the Holder by paying to the
Holder an amount of cash equal to the Black Scholes Value of the remaining unexercised
portion of this Warrant on the date of the consummation of such Fundamental Transaction.
“Black Scholes Value” means the value of this Warrant based on the Black and Scholes
Option Pricing Model obtained from the “OV” function on Bloomberg, L.P.
(“Bloomberg”) determined as of the day of consummation of the applicable Fundamental
Transaction for pricing purposes and reflecting (A) a risk-free interest rate corresponding
to the U.S. Treasury rate for a period equal to the time between the date of the public
announcement of the applicable Fundamental Transaction and the Termination Date, (B) an
expected volatility equal to the greater of 60% and the 100 day volatility obtained from the
HVT function on Bloomberg as of the Trading Day immediately following the public
announcement of the applicable Fundamental Transaction, (C) the underlying price per share
used in such calculation shall be the sum of the price per share being offered in cash, if
any, plus the value of any non-cash consideration, if any, being offered in such Fundamental
Transaction and (D) a remaining option time equal to the time between the date of the public
announcement of the applicable Fundamental Transaction and the Termination Date. The Company
shall cause any successor entity in a Fundamental Transaction in which the Company is not
the survivor (the “Successor Entity”) to assume in writing all of the obligations of
the Company under this Warrant and the other Transaction Documents in accordance with the
provisions of this Section 3(d) pursuant to written agreements in form
and substance reasonably satisfactory to the Holder and approved by the Holder (without
unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the
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holder of this Warrant, deliver to the Holder in exchange for this Warrant a security of the
Successor Entity evidenced by a written instrument substantially similar in form and
substance to this Warrant which is exercisable for a corresponding number of shares of
capital stock of such Successor Entity (or its parent entity) equivalent to the Common
Shares acquirable and receivable upon exercise of this Warrant (without regard to any
limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with
an exercise price which applies the exercise price hereunder to such shares of capital stock
(but taking into account the relative value of the Common Shares pursuant to such
Fundamental Transaction and the value of such shares of capital stock, such number of shares
of capital stock and such exercise price being for the purpose of protecting the economic
value of this Warrant immediately prior to the consummation of such Fundamental
Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon
the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to,
and be substituted for (so that from and after the date of such Fundamental Transaction, the
provisions of this Warrant and the other Transaction Documents referring to the “Company”
shall refer instead to the Successor Entity), and may exercise every right and power of the
Company and shall assume all of the obligations of the Company under this Warrant and the
other Transaction Documents with the same effect as if such Successor Entity had been named
as the Company herein.
(e) Calculations. All calculations under this Section 3 shall be made to the
nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this
Section 3, the number of Common Shares deemed to be issued and outstanding as of a given
date shall be the sum of the number of Common Shares issued and outstanding.
(f) Notice to Holder.
(i) Adjustment to Exercise Price. Whenever the Exercise Price is
adjusted pursuant to any provision of this Section 3, the Corporation shall promptly
mail to the Holder a notice setting forth the Exercise Price after such adjustment
and setting forth a brief statement of the facts requiring such adjustment.
(ii) Notice to Allow Exercise by Xxxxxx. If during the term in which
this Warrant may be exercised by the Holder (A) the Corporation shall declare a
dividend (or any other distribution in whatever form payable pro rata to all of the
Corporation’s shareholders) on the Common Shares, (B) the Corporation shall declare a
special non-recurring cash dividend on or a redemption of the Common Shares, (C) the
Corporation shall authorize the granting to all holders of the Common Shares rights
or warrants to subscribe for or purchase any shares of capital stock of any class or
of any rights, (D) the approval of any shareholders of the Corporation shall be
required in connection with any reclassification of the Common Shares, any
consolidation or merger to which the Corporation is a party, any sale or transfer of
all or substantially all of the assets of the Corporation, or any compulsory share
exchange whereby the Common Shares are converted into other securities, cash or
property, or (E) the Corporation shall authorize the voluntary or involuntary
dissolution, liquidation or winding-up of the affairs of the Corporation, then, in
each
case, the Corporation shall cause to be mailed to the Holder at its last address
as it shall appear upon the Warrant Register of the Corporation, at least twenty (20)
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calendar days prior to the applicable record or effective date hereinafter specified,
a notice stating (x) the date on which a record is to be taken for the purpose of
such dividend, distribution, redemption, rights or warrants, or if a record is not to
be taken, the date as of which the holders of the Common Shares of record to be
entitled to such dividend, distributions, redemption, rights or warrants are to be
determined or (y) the date on which such reclassification, consolidation, merger,
sale, transfer or share exchange is expected to become effective or close, and the
date as of which it is expected that holders of the Common Shares of record shall be
entitled to exchange their Common Shares for securities, cash or other property
deliverable upon such reclassification, consolidation, merger, sale, transfer or
share exchange; provided that the failure to mail such notice or any defect therein
or in the mailing thereof shall not affect the validity of the corporate action
required to be specified in such notice. The Holder shall remain entitled to exercise
this Warrant during the period commencing on the date of such notice to the effective
date of the event triggering such notice except as may otherwise be expressly set
forth herein.
(g) General. For greater certainty and notwithstanding any other provision
hereof, no adjustment shall be made to any term or feature of the Warrant in the event the
Corporation issues or obligates itself to issue for consideration any new shares or other
securities to any person, whether by way of public offering, private placement or otherwise,
except for any such issuance that may be made in connection with or upon consummation of a
rights offering made to all of the Corporation’s shareholders, in which event Section 3(b)
hereof shall apply. In addition, all adjustments effected hereunder shall be subject to
prior approval of the TSX.
Section 4. Transfer of Warrant.
(a) Transferability. Subject to compliance with applicable securities laws,
this Warrant and all rights hereunder are transferable, in whole or in part, upon surrender
of this Warrant at the principal office of the Corporation or its designated agent, together
with a written assignment of this Warrant substantially in the form attached hereto duly
executed by the Holder or its agent or attorney and funds sufficient to pay any transfer
taxes payable upon the making of such transfer. Upon such surrender and, if required, such
payment, the Corporation shall execute and deliver a new Warrant or Warrants in the name of
the assignee or assignees, as applicable, and in the denomination or denominations specified
in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing
the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled.
The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder
for the purchase of Warrant Shares without having a new Warrant issued.
(b) New Warrants. This Warrant may be divided or combined with other Warrants
upon presentation hereof at the aforesaid office of the Corporation, together with a written
notice specifying the names and denominations in which new Warrants are to be issued, signed
by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any
transfer which may be involved in such division or combination, the Corporation shall
execute and deliver a new Warrant or Warrants in exchange for the
Warrant or Warrants to be divided or combined in accordance with such notice. All
Warrants issued on transfers or exchanges shall include reference to the initial issuance
date
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set forth on the first page of this Warrant and shall be identical with this Warrant
except as to the number of Warrant Shares issuable pursuant thereto and the Warrant number.
(c) Warrant Register. The Corporation shall register this Warrant, upon records
to be maintained by the Corporation for that purpose (the “Warrant Register”), in
the name of the record Holder hereof from time to time. The Corporation may deem and treat
the registered Holder of this Warrant as the absolute owner hereof for the purpose of any
exercise hereof or any distribution to the Holder, and for all other purposes, absent actual
written notice to the contrary.
(d) Representation by the Holder. The Holder, by the acceptance hereof,
represents and warrants that it is acquiring this Warrant and, upon any exercise hereof,
will acquire the Warrant Shares issuable upon such exercise, for its own account and not
with a view to or for distributing or reselling such Warrant Shares or any part thereof in
violation of the Securities Act or any applicable state securities law, except pursuant to
sales registered or exempted under the Securities Act.
Section 5. Miscellaneous.
(a) No Rights as Stockholder Until Exercise. This Warrant does not entitle the
Holder to any voting rights, dividends or other rights as a shareholder of the Corporation
prior to the exercise hereof as set forth in Section 2(d)(i) hereof.
(b) Loss, Theft, Destruction or Mutilation of Warrant. The Corporation
covenants that upon receipt by the Corporation of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of this Warrant or any share certificate relating
to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security
reasonably satisfactory to it, and upon surrender and cancellation of such Warrant or share
certificate, if mutilated, the Corporation will make and deliver a new Warrant or share
certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or
share certificate. Applicants for a replacement Warrant under such circumstances shall also
comply with such other reasonable regulations and procedures and pay such other reasonable
charges as the Corporation may prescribe.
(c) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the
taking of any action or the expiration of any right required or granted herein shall not be
a Business Day, then, such action may be taken or such right may be exercised on the next
succeeding Business Day.
(d) Authorized Shares. The Corporation hereby represents and warrants to the
Holder that its articles do not provide for any limit on the number of Common Shares that
may be issued by the Corporation. The Corporation covenants that its issuance of this
Warrant shall constitute full authority to its officers who are charged with the duty of
executing share certificates to execute and issue the necessary certificates for the Warrant
Shares upon the exercise of the purchase rights under this Warrant. The Corporation will
take all such reasonable action as may be necessary to assure that such Warrant Shares may
be issued as provided herein without violation of any applicable law or regulation, or
of any requirements of the Trading Market upon which the Common Shares may be listed. The
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Corporation covenants that all Warrant Shares which may be issued upon the exercise of the
purchase rights represented by this Warrant will, upon exercise of the purchase rights
represented by this Warrant and payment for such Warrant Shares in accordance herewith, be
duly authorized, validly issued, fully paid and non-assessable and free from all taxes,
liens and charges created by the Corporation in respect of the issue thereof (other than
taxes in respect of any transfer occurring contemporaneously with such issue).
Except and to the extent as waived or consented to by the Holder, the Corporation shall
not by any action, including, without limitation, amending its articles of incorporation or
through any reorganization, transfer of assets, consolidation, merger, dissolution, issuance
or sale of securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of this Warrant, but will at all times in good faith
assist in the carrying out of all such terms and in the taking of all such actions as may be
necessary or appropriate to protect the rights of the Holder as set forth in this Warrant
against impairment. Without limiting the generality of the foregoing, the Corporation will
(i) take all such action as may be necessary or appropriate in order that the Corporation
may validly and legally issue fully paid and non-assessable Warrant Shares upon the exercise
of this Warrant and (ii) use commercially reasonable efforts to obtain all such
authorizations, exemptions or consents from any public regulatory body having jurisdiction
thereof, as may be, necessary to enable the Corporation to perform its obligations under
this Warrant.
Before taking any action which would result in an adjustment in the number of Warrant
Shares for which this Warrant is exercisable or in the Exercise Price, the Corporation shall
obtain all such authorizations or exemptions thereof, or consents thereto, as may be
necessary from any public regulatory body or bodies having jurisdiction thereof.
(e) Jurisdiction and Governing Law. All questions concerning the construction,
validity, enforcement and interpretation of this Warrant shall be determined in accordance with the
provisions of the Purchase Agreement.
(f) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the
exercise of this Warrant, if not registered, and the Holder does not utilize cashless exercise,
will have restrictions upon resale imposed by state and federal securities laws. The Holder further
acknowledges that Canadian securities laws and regulations may also impose resale restrictions on
the transferability of the Warrant and the Warrant Shares. The Holder undertakes and covenants to
comply at all times with all applicable securities laws and regulations.
(g) Non-waiver and Expenses. No course of dealing or any delay or failure to exercise
any right hereunder on the part of the Holder shall operate as a waiver of such right or otherwise
prejudice the Holder’s rights, powers or remedies.
(h) Notices. Any notice, request or other document required or permitted to be given
or delivered to the Holder by the Corporation shall be delivered in accordance with the notice
provisions of the Purchase Agreement.
(i) Limitation of Liability. No provision hereof, in the absence of any affirmative
action by Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of
the rights or privileges of Holder, shall give rise to any liability of Holder for the purchase
price of any Common Shares or as a shareholder of the Corporation, whether such liability is
asserted by the Corporation or by creditors of the Corporation.
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(j) Remedies. The Holder, in addition to being entitled to exercise all rights granted
by law, including recovery of damages, will be entitled to specific performance of its rights under
this Warrant. The Corporation agrees that monetary damages would not be adequate compensation for
any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees
to waive and not to assert the defense in any action for specific performance that a remedy at law
would be adequate.
(k) Successors and Assigns. Subject to applicable securities laws, this Warrant and
the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the
successors and permitted assigns of the Corporation and the successors and permitted assigns of the
Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time
to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.
(l) Amendment. This Warrant may be modified or amended or the provisions hereof waived
with the written consent of the Corporation and the Holder and with the approval of the TSX,
provided the Company shall at such time be an issuer listed on the TSX.
(m) Severability. Wherever possible, each provision of this Warrant shall be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of
such provisions or the remaining provisions of this Warrant.
(n) Headings. The headings used in this Warrant are for the convenience of reference
only and shall not, for any purpose, be deemed a part of this Warrant.
********************
(Signature Page Follows)
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IN WITNESS WHEREOF, the Corporation has caused this Warrant to be executed by its officer thereunto
duly authorized as of the date first above indicated.
| ÆTERNA ZENTARIS INC. |
||||
| Per: | ||||
| Name: | ||||
| Title: | ||||
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NOTICE OF EXERCISE
TO: ÆTERNA ZENTARIS INC.
| (1) | The undersigned hereby elects to purchase Warrant Shares of the Corporation pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any. | |
| (2) | Payment shall take the form of (check applicable box): |
| o | in lawful money of the United States; or | ||
| o | [if permitted] the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in Section 2(c) of the Warrant, to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in Section 2(c) of the Warrant. |
| (3) | Please issue a certificate or certificates representing said Warrant Shares in the name of the undersigned or in such other name as is specified below: |
The Warrant Shares shall be delivered to the following DWAC Account Number:
Account Number: |
||||
Account Name: |
||||
DTC Number: |
||||
[SIGNATURE OF HOLDER]
Name of Investing Entity:
Signature of Authorized Signatory of Investing Entity:
Name of Authorized Signatory:
Title of Authorized Signatory:
Date:
Name of Investing Entity:
Signature of Authorized Signatory of Investing Entity:
Name of Authorized Signatory:
Title of Authorized Signatory:
Date:
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ASSIGNMENT FORM
(To assign the foregoing warrant, execute this form and supply required information. Do not use
this form to exercise the warrant.)
FOR VALUE RECEIVED, [ ] all of or [ ] shares of the foregoing Warrant and all rights
evidenced thereby are hereby assigned to whose address is:
Dated:
, ______
Holder’s Signature: |
||||
Holder’s Address:
|
||||
Signature Guaranteed:
NOTE: The signature to this Assignment Form must correspond with the name as it appears on the face
of the Warrant, without alteration or enlargement or any change whatsoever, and must be guaranteed
by a bank or trust company. Officers of corporations and those acting in a fiduciary or other
representative capacity should file proper evidence of authority to assign the foregoing Warrant.
