NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE
STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT
TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED. ANY SUCH TRANSFER MAY ALSO BE
SUBJECT TO APPLICABLE STATE SECURITIES LAWS.
SPARTA PHARMACEUTICALS, INC.
Warrant for the Purchase of Shares of
---------------------------------------
Common Stock, $.001 Par Value per Share
---------------------------------------
No. PCI-1 500,000 Shares
FOR VALUE RECEIVED, SPARTA PHARMACEUTICALS, INC., a Delaware
corporation (the "Company"), hereby certifies that PARAMOUNT CAPITAL
INVESTMENTS, LLC, ("Paramount"), or its permitted assigns, is entitled to
purchase from the Company, at the times set forth in Section 1 below, and prior
to 5:00 P.M., New York City time, on December 4, 2002, Five Hundred Thousand
(500,000) fully paid and nonassessable shares of the Common Stock, $.001 par
value per share, of the Company, subject to the conditions set forth in Section
1 below and subject to adjustment as provided in Section 3 below, for an
aggregate purchase price of Two Hundred Eighteen Thousand Seven Hundred and
Fifty Dollars ($218,750) ($.4375 per share). As used hereinafter, (a) the term
"Common Stock" means the Company's Common Stock, $.001 par value, (b) the term
"Other Securities" refers to any stock (other than Common Stock) and other
securities of the Company or any other entity (corporate or otherwise) (i) 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
Common Stock, or (ii) which at any time shall be issuable or shall have been
issued in exchange for or in replacement of Common Stock or Other Securities, in
each case pursuant to Section 3 hereof; (c) the shares of the Common Stock and
Other Securities purchasable hereunder or under any other Warrant (as
hereinafter defined) are referred to as the "Warrant Shares"; (d) the aggregate
purchase price payable for the Warrant Shares hereunder is referred to as the
"Aggregate Warrant Price"; (e) the price payable for each of the Warrant Shares
hereunder is referred to as the "Per Share Warrant Price," (f) this Warrant and
all warrants hereafter issued in exchange or substitution for this Warrant are
referred to as the "Warrants" and (g) the holder of this Warrant is referred to
as the "Holder" and the holder of this Warrant and all other Warrants or Warrant
Shares issued upon the exercise of any Warrant are referred to as the "Holders."
The Aggregate Warrant Price is not subject to adjustment. The Per Share Warrant
Price is subject to adjustment as hereinafter provided; in the event of any such
adjustment, the number of Warrant Shares shall be adjusted by dividing the
Aggregate Warrant Price by the Per Share Warrant Price in effect immediately
after such adjustment.
I. Exercise of Warrant.
--------------------
This Warrant may be exercised, in whole at any time or in part from
time to time by the Holder as more fully detailed below:
A. This Warrant may be exercised immediately for 200,000 shares
of Common Stock, in whole at any time or in part from time to
time by the Holder, and prior to 5:00 P.M., New York City
time, on December 4, 2002.
B. This Warrant may be exercised for an additional 200,000
shares of Common Stock, in whole at any time or in part from
time to time by the Holder, upon receipt of written notice or
public announcement from the Company that the Phase II
clinical trials testing efficacy and tolerance of
Pyrazinoylguanidine ("PZG") have been successfully completed
and that the Company or an affiliated third party intends to
initiate Phase III clinical trials, and prior to 5:00 P.M.,
New York City time, on December 4, 2002.
C. This Warrant may be exercised for an additional 100,000
shares of Common Stock, in whole at any time or in part from
time to time by the Holder, upon receipt of written notice or
public announcement from the Company that the Company or an
affiliated third party has filed a New Drug Application for
PZG, and prior to 5:00 P.M., New York City time, on December
4, 2002.
D. The Warrant may be exercised upon its surrender (with the
subscription form at the end hereof duly executed) at the
Company's address set forth in Section 15 hereof, together
with proper payment of the Aggregate Warrant Price, or the
proportionate part thereof if this Warrant is exercised in
part, with payment for Warrant Shares made by certified or
official bank check payable to the order of the Company; or
by the surrender of this Warrant (with the Cashless Exercise
form at the end hereof duly executed) (a "Cashless
Exercise"). Such presentation and surrender pursuant to a
Cashless Exercise shall be deemed a waiver of the Holder's
obligation to pay the Aggregate Warrant Price, or the
proportionate part thereof if this Warrant is exercised in
part. In the event of a Cashless Exercise, the Holder shall
exchange its Warrant for that number of Warrant Shares
subject to such Cashless Exercise (the "Exercised Number of
Warrant Shares") less that number of Warrant Shares which,
when multiplied by the then-current market price per Warrant
Share, equals the Per Share Warrant Price multiplied by the
Exercised Number of Warrant Shares. For purposes of any
computation under this Section 1 and Section 3(b), the
then-current market price per Warrant Share at any date (the
2
"Market Price") shall be deemed to be the last sale price of
the Warrant Shares on the business day prior to the date of
the Cashless Exercise (or the business day prior to the date
of termination of the Warrants in the case of Section 3(b))
or, in case no such reported sales take place on such day,
the average of the last reported bid and asked prices of the
Warrant Shares on such day, in either case on the principal
national securities exchange on which the Warrant Shares are
admitted to trading or listed, or if not listed or admitted
to trading on any such exchange, the last sale price of the
Warrant Shares on the business day prior to the date of the
Cashless Exercise as reported by the NASDAQ Stock Market
("NASDAQ"), or other similar organization if NASDAQ is no
longer reporting such information, or if not so available,
the fair market price of the Warrant Shares as determined by
good faith by the Board of Directors. Notwithstanding
anything contained herein, the Holder hereof shall pay to the
Company upon exercise, in cash, an amount equal to the
aggregate amount of the par value of all Warrant Shares
purchased upon the exercise of this Warrant pursuant to a
Cashless Exercise.
E. If this Warrant is exercised in part, this Warrant must be
exercised for a number of whole shares of Common Stock, and
the Holder is entitled to receive a new Warrant covering the
Warrant Shares which have not been exercised and setting
forth the proportionate part of the Aggregate Warrant Price
applicable to such Warrant Shares. Upon surrender of this
Warrant, the Company will (i) issue a certificate or
certificates in the name of the Holder for the largest number
of whole shares of Common Stock to which the Holder shall be
entitled and, if this Warrant is exercised in whole, in lieu
of any fractional share of Common Stock to which the Holder
shall be entitled, pay to the Holder cash in an amount equal
to the fair value of such fractional share (determined in
such reasonable manner as the Board of Directors of the
Company shall determine), and (ii) deliver the other
securities and properties receivable upon the exercise of
this Warrant, or the proportionate part thereof if this
Warrant is exercised in part, pursuant to the provisions of
this Warrant.
II. Reservation of Warrant Shares; Listing. The Company agrees that, prior to
the expiration of this Warrant, the Company will at all times (a) have
authorized and in reserve, and will keep available, solely for issuance or
delivery upon the exercise of this Warrant, the shares of the Common Stock and
other securities and properties as from time to time shall be receivable upon
the exercise of this Warrant, free and clear of all restrictions on sale or
transfer and free and clear of all preemptive rights and rights of first
refusal; and (b) if the Company hereafter lists its Common Stock on any national
securities exchange, keep the shares of Common Stock receivable upon the
exercise of this Warrant authorized for listing on such exchange upon notice of
issuance.
3
III. Adjustments of Per Share Warrant Price.
---------------------------------------
A. In case the Company shall hereafter (i) pay a dividend or
make a distribution on its capital stock in shares of Common
Stock, (ii) subdivide its outstanding shares of Common Stock
into a greater number of shares (by a stock split or
otherwise), (iii) combine its outstanding shares of Common
Stock into a smaller number of shares (by a reverse stock
split or otherwise) or (iv) issue by reclassification of its
Common Stock any shares of capital stock of the Company, the
Per Share Warrant Price shall be adjusted so that the holder
upon the exercise hereof shall be entitled to receive the
number of shares of Common Stock or other capital stock of
the Company which it would have owned immediately following
such action had such Warrant been exercised immediately prior
thereto. An adjustment made pursuant to this Subsection 3(a)
shall become effective on the record date in the case of a
dividend or distribution and shall become effective on the
effective date in the case of a subdivision, combination or
reclassification.
B. In case of any capital reorganization or reclassification, or
any consolidation or merger to which the Company is a party
other than a merger or consolidation in which the Company is
the continuing corporation, or in case of any sale or
conveyance to another entity of the property of the Company
as an entirety or substantially as a entirety, or in the case
of any statutory exchange of securities with another
corporation (including any exchange effected in connection
with a merger of a third corporation into the Company)(which
consolidation, merger, sale, conveyance and statutory
exchange is referred to below as a "Sale"), the Holder of
this Warrant shall have the right thereafter to receive on
the exercise of this Warrant the kind and amount of
securities, cash or other property which the Holder would
have owned or have been entitled to receive immediately after
such reorganization, reclassification, consolidation, merger,
statutory exchange, sale or conveyance had this Warrant been
exercised immediately prior to the effective date of such
reorganization, reclassification, consolidation, merger,
statutory exchange, sale or conveyance and in any such case,
if necessary, appropriate adjustment shall be made in the
application of the provisions set forth in this Section 3
with respect to the rights and interests thereafter of the
Holder of this Warrant to the end that the provisions set
forth in this Section 3 shall thereafter correspondingly be
made applicable, as nearly as may reasonably be, in relation
to any shares of stock or other securities or property
thereafter deliverable on the exercise of this Warrant. The
above provisions of this Subsection 3(b) shall similarly
apply to successive reorganizations, reclassifications,
consolidations, mergers, statutory exchanges, sales or
conveyances. The issuer of any shares of stock or other
securities or property thereafter deliverable on the exercise
of this Warrant shall be responsible for all of the
agreements and obligations of the Company hereunder. Notice
of any such reorganization, reclassification, consolidation,
merger, statutory exchange, sale or conveyance and of said
4
provisions so proposed to be made, shall be mailed to the
Holders of the Warrants not less than 30 days prior to such
event. A sale of all or substantially all of the assets of
the Company for a consideration consisting primarily of
securities shall be deemed a consolidation or merger for the
foregoing purposes. In the event of an anticipated Sale, the
Company or the entity assuming the obligations of the Company
hereunder may (i) upon written notice to the Holders of all
outstanding Warrants, provide that all Warrants must be
exercised, to the extent then exercisable, within a specified
number of days of the date of such notice, at the end of
which period the Warrants shall terminate (but if and only if
such Sale shall be consummated); or (ii) terminate all
Warrants in exchange for a cash payment equal to the excess
of the Market Price of the Warrant Shares subject to such
Warrants, to the extent then exercisable, over the Per Share
Warrant Price thereof (but if and only if such Sale shall be
consummated).
C. If the Board of Directors of the Company shall declare any
dividend or other distribution with respect to the Common
Stock other than a cash distribution out of earned surplus,
the Company shall mail notice thereof to the Holders of the
Warrants not less than 15 days prior to the record date fixed
for determining stockholders entitled to participate in such
dividend or other distribution.
D. If, as a result of an adjustment made pursuant to this
Section 3, the Holder of any Warrant thereafter surrendered
for exercise shall become entitled to receive shares of two
or more classes of capital stock or shares of Common Stock
and other capital stock of the Company, the Board of
Directors (whose determination shall be conclusive and shall
be described in a written notice to the Holder of any Warrant
promptly after such adjustment) shall determine the
allocation of the adjusted Per Share Warrant Price between or
among shares or such classes of capital stock or shares of
Common Stock and other capital stock.
E. In case any Other Securities shall have been issued, or shall
then be subject to issue upon the conversion or exchange of
any stock (or Other Securities) of the Company (or any other
issuer of Other Securities or any other entity referred to in
Section 3(b) hereof) or to subscription, purchase or other
acquisition pursuant to any rights or options granted by the
Company (or such other issuer or entity), the holder hereof
shall be entitled to receive upon exercise hereof such amount
of Other Securities (in lieu of or in addition to Common
Stock) as is determined in accordance with the terms hereof,
treating all references to Common Stock herein as references
to Other Securities to the extent applicable, and the
computations, adjustments and readjustments provided for in
this Section 3 with respect to the number of shares of Common
Stock issuable upon exercise of this Warrant shall be made as
nearly as possible in the manner so provided and applied to
determine the amount of Other Securities from time to time
receivable on the exercise of the Warrant, so as to provide
the holder of the Warrant with the benefits intended by this
Section 3 and the other provisions of this Warrant.
5
IV. Certificate as to Adjustments. In each case of any adjustment or
readjustment in the Warrant Shares issuable on the exercise of the Warrants, the
Company at its expense will promptly cause its Treasurer or Chief Financial
Officer to compute such adjustment or readjustment in accordance with the terms
of the Warrants and prepare a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or
readjustment is based, including, among other things, (a) the number of Warrant
Shares outstanding or deemed to be outstanding, and (b) the Aggregate Purchase
Price and the number of Warrant Shares to be received upon exercise of this
Warrant, in effect immediately prior to such issue or sale and as adjusted and
readjusted as provided in this Warrant. The Company will forthwith mail a copy
of each such certificate to each Holder, and will, on the written request at any
time of any Holder, furnish to such Holder a like certificate setting forth the
Per Share Warrant Purchase Price at the time in effect and showing how it was
calculated.
V. Fully Paid Stock; Taxes. The Company agrees that the Warrant Shares delivered
on the exercise of this Warrant shall, at the time of such delivery, be validly
issued and outstanding, fully paid and nonassessable, and not subject to
preemptive rights or rights of first refusal, and the Company will take all such
actions as may be necessary to assure that the par value or stated value, if
any, per share of the Warrant Shares is at all times equal to or less than the
then Per Share Warrant Price. The Company further covenants and agrees that it
will pay, when due and payable, any and all Federal and state stamp, original
issue, transfer or similar taxes which may be payable in respect of the issue of
any Warrant Share or any certificate thereof.
VI. Transferred Warrants. The Company may treat the registered holder hereof as
the Holder for all purposes. All warrants issued upon the transfer or assignment
of this Warrant will be dated the same date as this Warrant, and all rights and
obligations of the Holder thereof shall be identical to those of the Holder
hereof.
VII. Loss, etc., of Warrant. Upon receipt of evidence satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant, and of
indemnity reasonably satisfactory to the Company, if lost, stolen or destroyed,
and upon surrender and cancellation of this Warrant, if mutilated, the Company
shall execute and deliver to the Holder a new Warrant of like date, tenor and
denomination.
VIII. Dissolution. Except as otherwise provided herein, in the event of any
dissolution of the Company following the transfer of all or substantially all of
its properties or assets, the Company, prior to such dissolution, shall at its
expense deliver or cause to be delivered the stock and other securities and
property (including cash, where applicable) receivable by the holders of the
Warrants after the effective date of such dissolution pursuant to this Section 8
to a bank or trust company, as trustee for the Holder or Holders of the
Warrants.
IX. No Dilution or Impairment. The Company will not,
by amendment of its Charter or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be
6
necessary or appropriate in order to protect the rights of the holder of this
Warrant hereunder. Without limiting the generality of the foregoing, the Company
(i) will not increase the par value of any shares of stock receivable on the
exercise of this Warrant above the amount payable therefor on such exercise,
(ii) will take all such action as may be necessary or appropriate in order that
the Company may validly and legally issue fully paid and non-assessable shares
of stock on the exercise of this Warrant from time to time outstanding, and
(iii) will not transfer all or substantially all of its properties and assets to
any other entity (corporate or otherwise), or consolidate with or merge into any
other entity or permit any such entity to consolidate with or merge into the
Company (if the Company is not the surviving entity), unless such other entity
shall expressly assume in writing and will be bound by all the terms of this
Warrant.
X. Trustee for Warrant Holders. In the event that a bank or trust company shall
have been appointed as trustee for the Holders of the Warrants pursuant to
Section 8, such bank or trust company shall have all the powers and duties of a
warrant agent appointed pursuant to Section 11 and shall accept, in its own name
for the account of the Company or such successor person as may be entitled
thereto, all amounts otherwise payable to the Company or such successor, as the
case may be, on exercise of this Warrant pursuant to Section 1.
XI. Warrant Agent. The Company may, by written notice to each Holder, appoint an
agent for the purpose of issuing Common Stock on the exercise of the Warrants
pursuant to Section 1 or any of the foregoing, and thereafter any such issuance,
exchange or replacement, as the case may be, shall be made at such office by
such agent.
XII. Warrant Holder Not Shareholder. Except as otherwise provided herein, this
Warrant does not confer upon the Holder any right to vote or to consent to or
receive notice as a stockholder of the Company, as such, in respect of any
matters whatsoever, or any other rights or liabilities as a stockholder, prior
to the exercise hereof.
XIII. Covenants of Warrant Holder. By acceptance of this Warrant, the Holder is
hereby deemed to covenant and agree with the Company that it is acquiring this
Warrant as an investment and not with a view to distribution hereof. This
Warrant may not be sold, transferred, assigned or hypothecated by the Holder
except in compliance with the provisions of the Securities Act of 1933, as
amended (the "Securities Act") (or any successor legislation), and the state
securities laws, and is so transferable only upon the books of the Company which
it shall cause to be maintained for such purpose. Each registered Holder of this
Warrant acknowledges that this Warrant has not been registered under the
Securities Act and agrees not to sell, pledge, distribute, offer for sale,
transfer or otherwise dispose of this Warrant or any Warrant Shares issued upon
its exercise in the absence of (i) an effective registration statement as to
this Warrant or such Warrant Shares under the Securities Act, or (ii) an opinion
of counsel reasonably acceptable to the Company to the effect that such
registration is not, under the circumstances, required; provided, however, that
7
no such opinion under this Section 13 or similar provisions elsewhere herein
shall be required in the event that Paramount transfers this Warrant or portions
thereof to current or former employees of Paramount provided, however, that such
transferees agree to be bound by all of the existing terms and conditions of the
Warrant and make such written representations in that regard as may be required
by Company counsel. In addition, in order for any transferee of this Warrant or
any Warrant Shares to receive any of the benefits of this Warrant or the Warrant
Shares, as the case may be, the Company must have received notice of such
transfer, at the address set forth in Section 15 below, in the form of
assignment or partial assignment attached hereto. Any transferee other than
pursuant to an effective registration statement under the Securities Act or
pursuant to Rule 144 promulgated under the Securities Act must also covenant and
agree that it is acquiring this Warrant or such Warrant Shares as an investment
and not with a view to distribution hereof or thereof, except in accordance with
the Securities Act and applicable state securities law.
XIV. Negotiability, etc. Until this Warrant is transferred on the books of the
Company, the Company may treat the registered holder hereof as the absolute
owner hereof for all purposes, notwithstanding any notice to the contrary.
XV. Communication. All notices, requests, consents and demands shall be made in
writing and shall be mailed postage prepaid, or delivered by hand, to the
Company or to the Holder thereof at their respective addresses set forth below
or to such other address as may be furnished in writing to the other party
hereto:
If to the Holder: Paramount Capital Investments, LLC
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxxx, M.D.,
Chairman
If to the Company: Sparta Pharmaceuticals, Inc.
000 Xxxx Xxxx
Xxxxxxx, XX 00000-2307
Attention: Xxxxx X. Xxxx, Ph.D., President
All notices, requests, consents and other communications hereunder shall be
deemed to have been given either (i) if by hand, at the time of the delivery
thereof to the receiving party at the address of such party set forth above,
(ii) if made by telex, telecopy or facsimile transmission, at the time that
receipt thereof has been acknowledged by electronic confirmation or otherwise,
(iii) if sent by overnight courier, on the next business day following the day
such notice is delivered to the courier service, or (iv) if sent by registered
or certified mail, on the 5th business day following the day such mailing is
made.
XVI. Headings. The headings of this Warrant have been inserted as a matter of
convenience and shall not affect the construction hereof.
XVII. Applicable Law. This Warrant shall be governed by and construed in
accordance with the law of the State of Delaware without giving effect to the
principles of conflicts of law thereof.
8
XVIII. Pronouns. All pronouns and any variations thereof used herein shall be
deemed to refer to the masculine, feminine, neuter, singular or plural as the
person or persons referred to may require.
XIX. Amendment. The Company and the Holder may by supplemental agreement make
any changes or corrections in this Warrant to cure any ambiguity or to correct
any defective or inconsistent provision herein contained or that they deem
necessary or desirable and which shall not adversely affect the interests of the
then Holder(s) of the Warrant; provided, however, that this Warrant shall not be
otherwise modified, supplemented or altered in any respect except with the
consent in writing of the Holder(s) of Warrants representing not less than 50%
of the Warrants then outstanding other than such changes specifically prescribed
by this Warrant as originally executed or made in compliance with applicable
law.
XX. Expiration. The right to exercise this Warrant shall expire on 5:00 P.M.,
Eastern Standard Time, on December 4, 2002.
IN WITNESS WHEREOF, the Company has caused this Warrant to be
signed by its President and its corporate seal to be hereunto affixed and
attested by its Secretary this 4th day of December, 1997.
SPARTA PHARMACEUTICALS, INC.
By:________________________
President
ATTEST:
____________________
Secretary
[Corporate Seal]
9
SUBSCRIPTION
------------
The undersigned, ___________________, pursuant to the
provisions of the foregoing Warrant, hereby agrees to subscribe for and purchase
____________________ shares (the "Warrant Shares") of the common stock, par
value $.001 per share, of Sparta Pharmaceuticals, Inc. covered by said Warrant,
and makes payment therefor in full at the price per share provided by said
Warrant.
A. The undersigned represents that the address of the
undersigned furnished below is (i) the undersigned's
principal residence if he or she is an individual or
(ii) the undersigned's principal business address if
it is a corporation, partnership or other entity.
B. The undersigned (i) was not formed for the purpose
of investing in the Company, (ii) is acquiring the
Warrant Shares for its own account for investment
and not with a view to or for resale in connection
with any distribution or resale of the Warrant
Shares except in accordance with the Securities Act
of 1933, as amended (or any successor statute) (the
"Securities Act") and applicable state securities
laws, and (iii) has not offered or sold any portion
of the Warrant Shares and has no present intention
of dividing the Warrant Shares with others or of
selling, distributing or otherwise disposing of any
portion of the Warrant Shares either currently or
after the passage of a fixed or determinable period
of time or upon the occurrence or non-occurrence of
any predetermined event or circumstance, except in
accordance with the Securities Act and applicable
state securities laws.
C. The undersigned understands that (i) the sale of the
Warrant Shares has not been registered under the
Securities Act or any state securities law in
reliance upon an exemption therefrom for non-public
or limited offerings, (ii) the Warrant Shares must
be held indefinitely unless the sale or other
transfer thereof is subsequently registered under
the Securities Act or an exemption from such
registration is available at the time, and (iii) the
Company has no obligation to register the Warrant
Shares.
D. The undersigned understands and agrees that the
following restrictions and limitations are
applicable to its purchase and any resales, pledges,
hypothecations or other transfers of the Warrant
Shares:
1. The following legend (or a legend in
substantially similar form) will be placed on any
certificate(s) or other document(s) evidencing
the Warrant Shares, and the undersigned for
itself must comply with the terms and conditions
set forth in such legend prior to any resales,
pledges, hypothecations or other transfers of the
Warrant Shares:
"The securities represented by this certificate have
not been registered pursuant to the Securities Act of
1933, as amended ("Act"), or any state securities
laws, and may not be sold, pledged, hypothecated or
otherwise transferred unless (A) the stockholder
wishing to transfer such securities provides an
opinion of counsel in form and substance satisfactory
to Sparta Pharmaceuticals, Inc. (the "Company")
stating that the proposed transfer of the Company's
securities is exempt from the registration provisions
of all applicable federal and state laws; or (B) said
securities are registered pursuant to the Act and all
applicable state securities laws.
2. Stop transfer instructions have been or will be
placed on any certificates or other documents
evidencing the Warrant Shares so as to restrict the
resale, pledge, hypothecation or other transfer
thereof in accordance with the provisions hereof.
E. The undersigned's representations and warranties made herein
shall survive the execution and delivery hereof and of the
Warrant Shares.
Dated:_______________ Signature:__________________________________
Address:___________________________________
CASHLESS EXERCISE
-----------------
The undersigned ___________________, pursuant to the
provisions of the foregoing Warrant, hereby elects to exchange its Warrant for
___________________ shares (the "Warrant Shares") of common stock, par value
$.001 per share, of Sparta Pharmaceuticals, Inc. pursuant to the Cashless
Exercise provisions of the Warrant.
A. The undersigned represents that the address of the
undersigned furnished below is (i) the undersigned's
principal residence if he or she is an individual or
(ii) the undersigned's principal business address if
it is a corporation, partnership or other entity.
B. The undersigned (i) was not formed for the purpose
of investing in the Company, (ii) is acquiring the
Warrant Shares for its own account for investment
and not with a view to or for resale in connection
with any distribution or resale of the Warrant
Shares except in accordance with the Securities Act
of 1933, as amended (or any successor statute) (the
"Securities Act") and applicable state securities
laws, and (iii) has not offered or sold any portion
of the Warrant Shares and has no present intention
of dividing the Warrant Shares with others or of
selling, distributing or otherwise disposing of any
portion of the Warrant Shares either currently or
after the passage of a fixed or determinable period
of time or upon the occurrence or non-occurrence of
any predetermined event or circumstance, except in
accordance with the Securities Act and applicable
state securities laws.
C. The undersigned understands that (i) the sale of the
Warrant Shares has not been registered under the
Securities Act or any state securities law in
reliance upon an exemption therefrom for non-public
or limited offerings, (ii) the Warrant Shares must
be held indefinitely unless the sale or other
transfer thereof is subsequently registered under
the Securities Act or an exemption from such
registration is available at the time, and (iii) the
Company has no obligation to register the Warrant
Shares.
D. The undersigned understands and agrees that the
following restrictions and limitations are
applicable to its purchase and any resales, pledges,
hypothecations or other transfers of the Warrant
Shares:
1. The following legend (or a legend in
substantially similar form) will be placed on
any certificate(s) or other document(s)
evidencing the Warrant Shares, and the
undersigned for itself must comply with the
terms and conditions set forth in such legend
prior to any resales, pledges, hypothecations
or other transfers of the Warrant Shares:
"The securities represented by this certificate have
not been registered pursuant to the Securities Act of
1933, as amended ("Act"), or any state securities
laws, and may not be sold, pledged, hypothecated or
otherwise transferred unless (A) the stockholder
wishing to transfer such securities provides an
opinion of counsel in form and substance satisfactory
to Sparta Pharmaceuticals, Inc. (the "Company")
stating that the proposed transfer of the Company's
securities is exempt from the registration provisions
of all applicable federal and state laws; or (B) said
securities are registered pursuant to the Act and all
applicable state securities laws.
2. Stop transfer instructions have been or will be
placed on any certificates or other documents
evidencing the Warrant Shares so as to restrict the
resale, pledge, hypothecation or other transfer
thereof in accordance with the provisions hereof.
E. The undersigned's representations and warranties made herein
shall survive the execution and delivery hereof and of the
Warrant Shares.
Dated:_______________ Signature:_________________________________
Address:___________________________________
ASSIGNMENT
----------
FOR VALUE RECEIVED _______________ hereby sells, assigns and
transfers unto ____________________ the foregoing Warrant and all rights
evidenced thereby, and does irrevocably constitute and appoint
_____________________, attorney, to transfer said Warrant on the books of Sparta
Pharmaceuticals, Inc.
Dated:_______________ Signature:_________________________________
Address:___________________________________
PARTIAL ASSIGNMENT
------------------
FOR VALUE RECEIVED _______________ hereby assigns and
transfers unto ____________________ the right to purchase _______ shares of the
common stock, par value $.001 per share, of Sparta Pharmaceuticals, Inc. covered
by the foregoing Warrant, and a proportionate part of said Warrant and the
rights evidenced thereby, and does irrevocably constitute and appoint
____________________, attorney, to transfer that part of said Warrant on the
books of Sparta Pharmaceuticals, Inc.
Dated:_______________ Signature:_________________________________
Address:___________________________________
