THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS AND MAY NOT BE TRANSFERRED, SOLD OR OFFERED FOR SALE EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS WARRANT AND THE
SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT UNDER SAID ACT AND ANY
APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
VOID AFTER 5:00 P.M., NEW YORK TIME, ON DECEMBER 29, 2007, OR IF NOT A BUSINESS
DAY, AS DEFINED HEREIN, AT 5:00 P.M., NEW YORK TIME, ON THE NEXT FOLLOWING
BUSINESS DAY.
WARRANT TO PURCHASE
_________ DEPOSITARY SHARES
WARRANT TO PURCHASE DEPOSITARY SHARES
OF
ASCENT PEDIATRICS, INC.
__________________________
This certifies that, for value received, FS Ascent Investments LLC, a
Delaware limited liability company, or registered assigns ("Warrantholder"), is
entitled to purchase from Ascent Pediatrics, Inc., a Delaware corporation (the
"Company"), subject to the terms set forth below, at any time prior to the
Expiration Date, after which time this Warrant shall become void,
_______________ Warrant Shares at the Warrant Price. The Warrant Price and the
number of Warrant Shares purchasable hereunder are subject to adjustment from
time to time as provided herein.
This Warrant is one of a series of warrants (the "Warrants") evidencing the
right to purchase Depositary Shares of the Company issued pursuant to a certain
Fifth Amendment (the "Fifth Amendment") dated as of December 29, 2000, to the
Series G Securities Purchase Agreement, dated as of May 13, 1998, by and between
the Company and the persons named therein, as amended (such Securities Purchase
Agreement, as amended on September 30, 1998, February 16, 1999, July 1, 1999,
October 15, 1999 and by the Fifth Amendment being referred to herein as the
"Purchase Agreement"), copies of which Purchase Agreement are on file at the
principal office of the Company, and the holder of this Warrant shall be
entitled to all of the benefits of and be bound by all of the applicable
obligations of the Purchase Agreement, as provided therein.
ARTICLE I
DEFINED TERMS
-------------
Section 1.1. Definition of Terms. As used in this Warrant, the following
-------------------
capitalized terms shall have the following respective meanings:
(a) "Business Day" shall mean a day other than a Saturday, Sunday or other
day on which banks in the State of New York or the Commonwealth of Massachusetts
are authorized by law to remain closed.
(b) "Convertible Notes" shall mean the 7.5% Convertible Subordinated Notes
due July 1, 2004 issued pursuant to the Third Amendment, the 7.5% Convertible
Subordinated Notes due July 1, 2004 issued pursuant to the Fourth Amendment and
the 8.0% Convertible Subordinated Notes issued on July 23, 1999 pursuant to the
Purchase Agreement.
(c) "Common Stock" shall mean the Common Stock, $.00004 par value per share,
of the Company.
(d) "Closing Price" shall mean, with respect to any day, the last reported
sales price of the Depositary Shares, regular way, or in case no sale takes
place on such day, the average of the reported closing bid and asked prices of
the Depositary Shares, regular way, in either case as reported on the principal
national securities exchange on which the Depositary Shares is listed or
admitted to trading or, if the Depositary Shares are not listed or admitted to
trading on any national securities exchange, but is traded in the
over-the-counter market, the closing sale price of the Depositary Shares or in
case no sale is publicly reported, the average of the representative closing bid
and asked quotations for the Depositary Shares on the Nasdaq National Market,
or, if bid and asked prices for such day shall not have been reported on The
Nasdaq Stock Market, the average of the bid and asked prices for the Depositary
Shares as furnished by any New York Stock Exchange, Inc. member firm regularly
making a market in the Depositary Shares and selected for such purpose by the
Board of Directors of the Company.
(e) "Depositary Shares" means the depositary shares of the Company issued
pursuant to the Depositary Agreement dated as of February 16, 1999 by and among
the Company, Alpharma USPD Inc. and State Street Bank and Trust Company, as
amended (the "Depositary Agreement"), each Depositary Share representing one
share of Common Stock of the Company subject to a call option and represented by
a depositary receipt.
(f) "Expiration Date" shall mean the earlier of (a) December 29, 2007, or if
such day is not a Business Day, the next succeeding day which is a Business Day.
(g) "Fair Market Value" with respect to the date of any exercise by the
Warrantholder of all or a portion of this Warrant, shall mean the average daily
Closing Price of the Depositary Shares, as applicable, for thirty (30)
consecutive trading days commencing forty-five (45) days before the date of such
exercise by the Warrantholder of all or a portion of this Warrant, provided,
however, that where no public market exists for the Depositary Shares at the
time of the exercise of all or a portion of this Warrant, the fair market value
per share shall be determined by the Company's Board of Directors in good faith.
(h) "Fifth Amendment" shall mean the Fifth Amendment, dated as of December
29, 2000, to the Purchase Agreement.
(i) "Fourth Amendment" shall mean the Fourth Amendment, dated as of October
15, 1999, to the Purchase Agreement.
(j) "Person" shall mean any individual, corporation, association, company,
business trust, partnership, limited liability company, joint venture,
joint-stock company, trust, unincorporated organization, association or any
other entity or government or any agency or political subdivision thereof.
(k) "Purchase Agreement" shall mean that certain Securities Purchase
Agreement, dated as of May 13, 1998, among the Company and the Persons named
therein, as amended.
(l) "Related Person" of any Person means any other Person directly or
indirectly owning (A) twenty percent (20%) or more of the outstanding common
stock of such Person (or, in the case of a Person that is not a corporation,
twenty percent (20%) or more of the equity interest in such Person) or (B)
twenty percent (20%) or more of the combined voting power of the voting capital
stock of such Person.
(m) "Securities Act" shall mean the Securities Act of 1933, as amended.
(n) "Third Amendment" shall mean the Third Amendment, dated as of July 1,
1999, to the Purchase Agreement.
(o) "Warrant Price" shall mean five cents ($.05) per Warrant Share, as such
price may be adjusted from time to time pursuant to Article III hereof.
(p) "Warrant Shares" shall mean the Depositary Shares purchasable upon
exercise of this Warrant.
ARTICLE II
DURATION AND EXERCISE OF WARRANT
--------------------------------
Section 2.1. Exercise of Warrant. The Warrantholder may exercise this
---------------------
Warrant, in whole or in part, by presentation and surrender of this Warrant at
the address of the Company set forth in Section 4.6 hereof or at such other
address as the Company may designate by notice in writing to the Warrantholder
with the Subscription Form annexed hereto duly executed, accompanied by payment
of the Warrant Price for each Warrant Share purchased. Upon receipt thereof,
the Company shall cause to be issued certificates for the Warrant Shares so
purchased in such denominations as are requested for delivery to the
Warrantholder. Such certificates shall be delivered as promptly as practicable
to the Warrantholder. Upon any partial exercise of this Warrant, the Company
shall execute and deliver a new Warrant of like tenor and date for the balance
of the Warrant Shares purchasable hereunder. Upon exercise, the Warrantholder
shall be deemed to be the holder of record of Depositary Shares issuable upon
such exercise, notwithstanding that the stock transfer books of the Company
shall then be closed or that certificates representing such Depositary Shares
shall not then be actually delivered to the Warrantholder. If at the time this
Warrant is exercised, a registration statement is not in effect to register
under the Securities Act the Warrant Shares issuable upon exercise of this
Warrant, the Company may require the Warrantholder to make such representations,
and may place such legends on certificates representing the Warrant Shares, as
may be reasonably required to permit the Warrant Shares to be issued without
such registration. The Company shall pay any and all stock transfer and similar
taxes which may be payable in respect of the issue of the Warrant or in respect
of the issue of any of the Warrant Shares, except the Company shall not pay such
transfer taxes if the Warrant Shares are issued to a Person other than the
Warrantholder.
Section 2.2. Reservation of Shares. The Company hereby agrees that at all
-----------------------
times there shall be reserved for issuance and delivery upon exercise of this
Warrant such number of Depositary Shares or other shares of capital stock of the
Company as may be from time to time issuable 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, other than
those restrictions imposed by the Securities Act of 1933, and free and clear of
all preemptive and similar rights.
Section 2.3. Fractional Shares. The Company shall not be required to issue any
-----------------
fraction of a Depositary Share in connection with the exercise of this Warrant,
and in any case where the Warrantholder would, except for the provisions of this
Section 2.3, be entitled under the terms of this Warrant to receive a fraction
of a share upon the exercise of this Warrant, the Company shall, upon the
exercise of this Warrant and receipt of the Warrant Price (as adjusted to cover
the balance of the share), issue the largest number of whole shares purchasable
upon exercise of this Warrant, but in no event shall the Company issue more than
such number of Depositary Shares as are issuable pursuant to the exercise of
this Warrant. The Company shall not be required to make any cash or other
adjustment in respect of such fraction of a share to which the Warrantholder
would otherwise be entitled.
Section 2.4. Payment for Warrant Shares.
-----------------------------
(a) Payment of the aggregate Warrant Price for Warrant Shares to be
purchased upon exercise of all or a portion of this Warrant shall be made in
full by delivery to the Company, at its address set forth in Section 4.6 hereof
or at such other address as the Company may designate by notice in writing to
the Warrantholder, of a certified or bank cashier's check or by wire transfer to
an account in the United States designated by the Company.
(b) Notwithstanding any provisions herein to the contrary, if the Fair
Market Value of one Depositary Share is greater than the Warrant Price (at the
date of calculation as set forth below), in lieu of exercising this Warrant for
cash, the Warrantholder may elect to receive shares equal to the value (as
determined below) of this Warrant (or the portion thereof, which portion shall
be canceled) by surrender of this Warrant at the principal office of the Company
together with the properly endorsed Subscription Form annexed hereto and notice
of such election in which event the Company shall issue to the Warrantholder a
number of Depositary Shares computed using the following formula:
X = Y(A-B)
------
A
Where X = the number of Depositary Shares to be issued to the
Warrantholder
Y = the number of Depositary Shares purchasable under the Warrant or, if
only a portion of the Warrant is being exercised, the portion of the Warrant
being canceled (at the date of such calculation)
A = the Fair Market Value of one Depositary Share (at the date of such
calculation)
B = Warrant Price (as adjusted to the date of such calculation)
ARTICLE III
ADJUSTMENT OF WARRANT PRICE OR WARRANT SHARES
---------------------------------------------
Section 3.1. Adjustment of Warrant Price.
------------------------------
(a) Except as hereinafter provided, in case the Company shall at any time
after the date hereof issue or sell any obligations or Depositary Shares, for a
consideration per share less than the Warrant Price in effect immediately prior
to the issuance or sale of such shares, or without consideration, then, and
thereafter successively upon each issuance or sale, the Warrant Price in effect
immediately prior to each such issuance or sale shall forthwith be reduced to a
price determined by dividing (i) an amount equal to (X) the total number of
Depositary Shares outstanding immediately prior to such issuance or sale
multiplied by the Warrant Price in effect immediately prior to such issuance or
sale, plus (Y) the consideration, if any, received by the Company upon such
issuance or sale, by (ii) the total number of Depositary Shares outstanding
immediately after such issuance or sale.
For the purposes of any computation to be made in accordance with the provisions
of this paragraph (a), the following shall be applicable:
(i) In case of the issuance or sale of Depositary Shares for a consideration
part or all of which shall be cash, the amount of the cash consideration
therefor shall be deemed to be the amount of cash received by the Company for
such shares (or, if such Depositary Shares are offered by the Company for
subscription, the subscription price, or, if Depositary Shares shall be sold to
underwriters or dealers for public offering without a subscription offering, the
public offering price) before deducting therefrom any commissions or other
expenses paid or incurred by the Company for any underwriting of, or otherwise
in connection with the issuance of such shares;
(ii) In case of the issuance or sale of Depositary Shares for a
consideration part or all of which shall be other than cash (otherwise than as a
dividend or other distribution on any Depositary Shares of the Company or on
conversion, exercise or exchange of other securities of the Company or upon
acquisition of the assets or securities of another company or upon merger or
consolidation with another entity), the amount of consideration therefor other
than cash shall be the value of such consideration as of the date of the
issuance or sale of the Depositary Shares, irrespective of accounting treatment,
but as determined by the Board of Directors of the Company in good faith. The
reclassification of securities other than Depositary Shares into Depositary
Shares shall be deemed to involve the issuance for a consideration other than
cash of such Depositary Shares immediately prior to the close of business on the
date fixed for the determination of security holders entitled to receive such
Depositary Shares;
(iii) In case of the issuance of Depositary Shares upon conversion or
exchange of any obligations or of any securities of the Company that shall be
convertible into or exchangeable for Depositary Shares or upon the exercise of
rights or options to subscribe for or to purchase Depositary Shares (other than
upon exercise of this Warrant), the amount of consideration received by the
Company for such Depositary Shares shall be deemed to be the sum of (A) the
amount of the consideration received by the Company upon the original issuance
of such obligations, shares, rights or options, as the case may be, plus (B) the
consideration, if any, other than such obligations, shares, rights or options,
received by the Company upon such conversion, exchange, or exercise except in
adjustment of interest and dividends. The amount of the consideration received
by the Company upon the original issuance of the obligations, shares, rights or
options so converted, exchanged or exercised and the amount of the
consideration, if any, other than such obligations, shares, rights or options,
received by the Company upon such conversion, exchange or exercise shall be
determined in the same manner provided in subparagraphs (i) and (ii) above with
respect to the consideration received by the Company in case of the issuance of
Depositary Shares; if such obligations, shares, rights or options shall have
been issued as a dividend upon any securities of the Company, the amount of the
consideration received by the Company upon the original issuance thereof shall
be deemed to be zero. In case of the issuance of Warrant Shares upon exercise
of this Warrant, the Company shall be deemed to have received the Warrant Price
then in effect as the consideration for each Depositary Share so issued;
(iv) Depositary Shares issuable by way of dividend or other distribution on
any securities of the Company shall be deemed to have been issued and to be
outstanding at the close of business on the record date fixed for the
determination of security holders entitled to receive such dividend or other
distribution and shall be deemed to have been issued without consideration.
Depositary Shares issued otherwise than as a dividend, shall be deemed to have
been issued and to be outstanding at the close of business on the date of issue;
(v) The number of Depositary Shares at any time outstanding shall not
include any shares then owned or held by or for the account of the Company, but
shall include the aggregate number of shares deliverable in respect of options,
rights and exercisable, convertible and exchangeable securities at all times
while such options, rights or securities remain outstanding and unexercised,
unconverted or unexchanged, as the case may be; and
(vi) No adjustment shall be made to the Warrant Price in effect upon
conversion or exchange of (i) securities convertible or exercisable or
exchangeable for Depositary Shares or for other securities that are subsequently
exercisable for Depositary Shares that are outstanding as of the date of the
Fifth Amendment, or (ii) any obligations or any securities of the Company that
shall be convertible into or exercisable or exchangeable for Depositary Shares
or upon the exercise of rights or options to subscribe for or to purchase
Depositary Shares for which an adjustment in the Warrant Price has previously
been made in accordance with paragraph (b) of this Section 3.1.
(vii) In the event that any payment is made to the holders of warrants
issued pursuant to the Securities Purchase Agreement dated as of January 31,
1997 among the Company, Triumph Connecticut Limited Partnership and the other
purchasers named therein pursuant to Section 8.3(b) (or successor provision) of
such Securities Purchase Agreement which does not result in a modification
pursuant to Section 3.4, the Company shall be deemed to have issued without
consideration as of the date of the event giving rise to such payment a number
of Depositary Shares equal to the amount of such payment divided by the Closing
Price on the date of such event.
(b) In case the Company shall at any time after the date hereof issue
options or rights to subscribe for Depositary Shares, or issue any obligations
or securities convertible into or exchangeable for Depositary Shares, otherwise
than as contemplated by Section 3.1(a)(vi) or pursuant to Section 3.3 hereof,
for a consideration per share less than the Warrant Price in effect immediately
prior to the issuance of such options or rights or convertible or exchangeable
securities, or without consideration, the Warrant Price in effect immediately
prior to the issuance of such options or rights or securities shall be reduced
to a price determined by making a computation in accordance with the provisions
of paragraph (a) of this Section 3.1, provided that:
(i) the aggregate maximum number of Depositary Shares deliverable under such
options or rights shall be considered to have been delivered at the time such
options or rights were issued, and for a consideration equal to the minimum
purchase price per Depositary Share provided for in such options or rights, plus
the consideration (determined in the same manner as consideration received on
the issue or sale of Depositary Shares), if any, received by the Company for
such options or rights;
(ii) the aggregate maximum number of Depositary Shares deliverable upon
conversion of or exchange for any such obligations or securities shall be
considered to have been delivered at the time of issuance of such securities,
and for a consideration equal to the consideration (determined in the same
manner as consideration received on the issue or sale of Depositary Shares)
received by the Company for such securities, plus the consideration, if any, to
be received by the Company upon the exchange or conversion thereof; and
(iii) on the expiration of such options or rights, or an increase in the
minimum exercise price thereof, or a decrease in the maximum number of
Depositary Shares deliverable upon exercise or conversion of such options,
rights or convertible or exchangeable securities pursuant to the terms thereof
(and not as a result of exercise or conversion), or the termination of such
right to convert or exchange, the Warrant Price in effect shall forthwith be
readjusted to such Warrant Price as would have obtained (A) in the case of the
expiration or termination of options or rights or the termination of the right
to convert or exchange convertible or exchangeable securities, had no
adjustments been made upon the issuance of such options, rights or convertible
or exchangeable securities, or (B) in the case of an increase in the minimum
exercise price thereof, or a decrease in the maximum number of shares
deliverable thereunder, had the adjustments made upon the issuance of such
options, rights or convertible or exchangeable securities been made upon the
basis of the delivery of only the number of Depositary Shares (A) actually
deliverable upon the exercise of such options or rights or upon conversion or
exchange of such securities, or (B) deliverable by reason of such increase in
price or decrease in number of shares.
(c) No adjustment to the Warrant Price shall be made in connection with the
issuance of:
(i) the Convertible Notes,the Warrants issued pursuant to the Third
Amendment, the Warrants issued pursuant to the Fourth Amendment, the Warrants
issued pursuant to the Fifth Amendment, the Warrants issued pursuant to the
Purchase Agreement and the New Warrants, as such term is defined in the Purchase
Agreement (together, the "Convertible Securities"), and the securities issued or
issuable upon conversion or exercise of the Convertible Securities, or other
currently outstanding securities that are convertible, exercisable or
exchangeable for Depositary Shares; and
(ii) Depositary Shares or rights, options or warrants to acquire Depositary
Shares issued to directors, employees or consultants of the Company pursuant to
a stock option plan or agreement (and, in the case of rights, options, or
warrants, the Depositary Shares issued or issuable upon exercise thereof) and
approved by the Board of Directors;
(d) In case the Company shall at any time after the date hereof subdivide or
combine the outstanding Depositary Shares, the Warrant Price in effect shall
forthwith be proportionately decreased in the case of the subdivision or
proportionately increased in the case of combination to the nearest one cent.
Any such adjustment shall become effective at the close of business on the date
that such subdivision or combination shall become effective.
(e) No adjustment to the Warrant Price shall be made in connection with the
conversion of all outstanding Depositary Shares into shares of Common Stock on
the Option Expiration Date (as defined in the Depositary Agreement) pursuant to
the terms of the Depositary Agreement.
Section 3.2 Adjustment of Warrant Shares. In the event of an adjustment of the
----------------------------
Warrant Price, the number of Depositary Shares (or reclassified or recapitalized
stock) issuable upon exercise of this Warrant after such adjustment shall be
equal to the number determined by multiplying the number of Depositary Shares
issuable upon exercise of this Warrant immediately prior to such adjustment by a
fraction, of which the numerator is the Warrant Price in effect immediately
prior to such adjustments, and the denominator is the Warrant Price in effect
immediately after such adjustment.
Section 3.3. Dividends and Distributions. In the event that the Company shall
---------------------------
at any time after the date hereof pay any dividend (other than in Depositary
Shares) on, or make any distribution of its assets upon or with respect to, the
Depositary Shares, or in the event that the Company shall offer options or
rights to subscribe for Depositary Shares, or issue any securities convertible
into or exchangeable for Depositary Shares, to all of its holders of Depositary
Shares, then on the record date for such payment, distribution or offer or, in
the absence of a record date, on the date of such payment, distribution or
offer, the Warrantholder shall receive what the Warrantholder would have
received had it exercised this Warrant in full immediately prior to the record
date of such payment, distribution or offer or, in the absence of a record date,
immediately prior to the date of such payment, distribution or offer.
Section 3.4. Mergers, Consolidations, Reclassifications. In the case of any
--------------------------------------------
reorganization or reclassification of the outstanding Depositary Shares (other
than a change in par value, or from par value to no par value, or from no par
value to par value, or as a result of a subdivision or combination) or in the
case of any consolidation of the Company into, or merger of the Company with
another corporation in which it is not the surviving entity (or it is the
surviving entity, but its Depositary Shares become shares of another
corporation), or in the case of any sale, lease or conveyance of all, or
substantially all, of the property, assets, business and goodwill of the Company
as an entirety, the Warrantholder shall thereafter have the right upon exercise
of this Warrant to receive the kind and amount of shares of stock and other
securities, cash and property receivable upon such reorganization,
reclassification, consolidation, merger or disposition by a holder of the number
of Depositary Shares which the Warrantholder would have received had it
exercised this Warrant immediately prior to such reorganization,
reclassification, consolidation, merger or disposition, at a price equal to the
aggregate Warrant Price then in effect for exercising this Warrant in full (the
kind, amount and price of such stock and other securities to be subject to
adjustment as herein provided); provided, however, that the kind and amount of
such shares of stock and other securities, cash and other property shall be
determined as if any payment made to the holders of warrants issued pursuant to
the Securities Purchase Agreement dated as of January 31, 1997 among the
Company, Triumph Connecticut Limited Partnership and the other purchasers named
therein upon such reorganization, reclassification, consolidation, merger or
disposition in excess of the amount such holders would otherwise have been
entitled to receive under the terms of such warrants without regard to Section
8.3(b) (or successor provision) of such Securities Purchase Agreement had not
been made. The foregoing provisions of this Section 3.4 shall similarly apply
to successive reorganizations, reclassifications, consolidations, mergers and
dispositions.
Section 3.5. Notice of Adjustment. Whenever the Warrant Price or the number of
--------------------
Warrant Shares shall be adjusted pursuant to the provisions of Article III, the
Company shall prepare and deliver forthwith to the Warrantholder a certificate
signed by the President of the Company and by its Chief Financial Officer,
setting forth the adjusted number of Warrant Shares purchasable upon the
exercise of this Warrant and the Warrant Price calculated to the nearest cent
and setting forth in reasonable detail the method of calculation and the facts
requiring such adjustment and upon which such calculation is based.
Section 3.6. Notice of Certain Corporate Action. In case at any time:
--------------------------------------
(A) the Company shall declare any dividend (or any other distributions) on
Depositary Shares; or
(B) the Company shall authorize the granting to all holders of its
Depositary Shares of rights to subscribe for or purchase any shares of stock of
any class or of any other rights; or
(C) there shall be any reclassification of the Depositary Shares or capital
stock of the Company; or
(D) there shall be any capital reorganization by the Company; or
(E) there shall be any (i) consolidation or merger involving the Company,
other than the merger contemplated by the Merger Agreement, or (ii) sale,
transfer or other disposition of all or substantially all of the Company's
property, assets or business (except a merger or other reorganization in which
the Company shall be the surviving corporation and its shares of capital stock
shall continue to be outstanding and unchanged and except a consolidation,
merger, sale, transfer or other disposition involving a wholly-owned
subsidiary); or
(F) there shall be a voluntary or involuntary dissolution, liquidation or
winding-up of the Company or any partial liquidation of the Company or
distribution to holders of Depositary Shares;
then, in each of such cases, the Company shall give written notice to the
Warrantholder of the date on which (i) the books of the Company shall close or a
record date shall be fixed for such dividend, distribution or subscription
rights or (ii) such reorganization, reclassification, consolidation, merger,
disposition, dissolution, liquidation or winding-up, as the case may be, shall
take place. Such notice also shall specify the date as of which the holders of
Depositary Shares of record shall participate in such dividend, distribution or
subscription rights, or shall be entitled to exchange their depositary receipts
for Depositary Shares for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, disposition,
dissolution, liquidation or winding-up, as the case may be. Such notice shall
be given at least twenty (20) days prior to the action in question and not less
than twenty (20) days prior to the record date or the date on which the
Company's transfer books are closed in respect thereto.
Section 3.7. Adjustment for Expiration of Call Option. From and after the
----------------------------------------
Option Expiration Date, this Warrant shall be exercisable into a number of
shares of Common Stock of the Company equal to the number of shares of Common
Stock that the Warrantholder would have received upon the exchange of the
Depositary Shares that the Warrantholder would have received had it exercised
this Warrant in full immediately prior to the Option Expiration Date. From and
after the Option Expiration Date, all references herein to Depositary Shares
shall be deemed to include the Common Stock of the Company.
Section 3.8. Form of Warrant after Adjustments. The form of this Warrant need
---------------------------------
not be changed because of any adjustments in the Warrant Price or the number or
kind of the Warrant Shares.
ARTICLE IV
MISCELLANEOUS
-------------
Section 4.1. Successors and Assigns; Transfers.
------------------------------------
(a) The terms of this Warrant shall be binding upon, inure to the benefit of
and be enforceable by and against any successors or assigns of the Company and
of the Warrantholder; provided, however, that the Company may not assign its
-------- -------
rights or obligations hereunder.
(b) Subject to the provisions of paragraph (f) below and Section 17.3 of the
Purchase Agreement, this Warrant and all rights hereunder are transferable by
the Warrantholder, in whole or in party, upon surrender of this Warrant with a
properly executed Assignment Form attached hereto at the principal office of the
Company.
(c) Any transferee to whom rights hereunder are transferred shall, as a
condition to such transfer, deliver to the Company a written instrument by which
such transferee agrees to be bound by the obligations imposed upon the
Warrantholder under this Warrant to the same extent as if such transferee was
the Warrantholder.
(d) The Company will maintain a register containing the names and addresses
of the Warrantholders of the Warrants. Any Warrantholder may change its or his
address as shown on the warrant register by written notice to the Company
requesting such change.
(e) Until any transfer of this Warrant is made in the warrant register, the
Company may treat the Warrantholder as the absolute owner hereof for all
purposes; provided, however, that if and when this Warrant is properly assigned
in blank, the Company may (but shall not be obligated to) treat the bearer
hereof as the absolute owner hereof for all purposes, notwithstanding any notice
to the contrary.
(f) This Warrant and the Warrant Shares shall not be sold or transferred
unless either (i) they first shall have been registered under the Securities Act
or (ii) the Company first shall have been furnished with an opinion of legal
counsel, reasonably satisfactory to the Company, to the effect that such sale or
transfer is exempt from the registration requirements of the Securities Act.
(g) Each certificate representing Warrant Shares shall bear a legend
substantially in the following form:
"The securities represented by this certificate have not been registered under
the Securities Act of 1933, as amended, and may not be offered, sold or
otherwise transferred, pledged or hypothecated unless and until such securities
are registered under such Act or an opinion of counsel reasonably satisfactory
to the Company is obtained to the effect that such registration is not
required."
The foregoing legend shall be removed from the certificates representing
any Warrant Shares, at the request of the holder thereof, at such time as they
become eligible for resale pursuant to Rule 144(k) under the Securities Act.
Section 4.2. Rights as Stockholder. Except as provided herein, the
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Warrantholder, as such, shall not be entitled to vote or be deemed to be a
stockholder of the Company for any purpose, nor shall anything contained in this
Warrant be construed to confer upon the Warrantholder, as such, any rights of a
stockholder of the Company or any right to vote, give or withhold consent to any
corporate action or receive notice of meetings.
Section 4.3. Acceptance by Warrantholder. Receipt of this Warrant by the
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Warrantholder shall constitute acceptance of an agreement to the foregoing terms
and conditions.
Section 4.4. Governing Law. This Warrant and the rights of the parties
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hereunder shall be governed in all respects by the laws of the State of New
York, without giving effect to the provisions thereof relating to conflicts of
law.
Section 4.5. Severability. In case any provision of this Warrant shall be
------------
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 4.6. Notices. Any notices or certificates by the Company to the
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Warrantholder and by the Warrantholder to the Company shall be deemed delivered
if in writing and delivered in person or by registered mail (return receipt
requested) to the Warrantholder, at its address in the registry of
Warrantholders maintained by the Company, and if to the Company, at 000
Xxxxxxxxxxx Xxxxxx, Xxxxx X000, Xxxxxxxxxx, XX 00000, Attention: Principal
Financial Officer. The Company may change its address by written notice to the
Warrantholder.
Section 4.7. Amendment. This Warrant may be amended or modified (or any
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provision hereof waived) only if Warrantholders holding at least eighty percent
(80%) of the Warrant Shares (assuming exercise of all the Warrants) shall
approve such amendment, modification or waiver in writing; provided, however,
that no amendment that adversely affects the rights of any Warrantholder in a
manner different from the rights of the other Warrantholders shall be effective
against such Warrantholder unless approved in writing by such Warrantholder.
After an amendment, modification or waiver of a provision the Warrants becomes
effective, the Company shall mail to the Warrantholders a notice briefly
describing the amendment, modification or waiver.
IN WITNESS WHEREOF, this Warrant has been duly executed by the Company under its
corporate seal as of the 29th day of December, 2000.
ASCENT PEDIATRICS, INC.
By:_________________________________
Name: Xxxxxx Xxxxxxxx
Title: Chief Executive Officer
SUBSCRIPTION AGREEMENT
(To be signed only upon exercise of Warrant)
To ASCENT PEDIATRICS, INC.:
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise the purchase right represented by such Warrant for, and to
purchase thereunder, Insert here the number of shares called for on the
face of the Warrant (or, in the case of a partial exercise, the portion thereof
as to which the Warrant is being exercised), in either case without making any
adjustment for additional Depositary Shares or any other stock or other
securities or property or cash which, pursuant to the adjustment provisions of
the Warrant, may be deliverable upon exercise. Depositary Shares of ASCENT
PEDIATRICS, INC. and herewith (a) makes payment of $ therefor or (b)
delivers Warrants for the purchase of _____ Depositary Shares. The undersigned
requests that the certificates for such shares be issued in the name of, and
delivered to, , whose address is
.
Dated: ____________, 20__ __________________________________________
(Signature must conform in all respects to name of
holder as specified on the face of the Warrant)
__________________________________________
(Address)
ASSIGNMENT
(To be signed only upon transfer of Warrant)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers all
of the rights of the undersigned under the within Warrant, with respect to the
number of Depositary Shares of ASCENT PEDIATRICS, INC. covered thereby set forth
hereinbelow unto:
Name of Assignee Address No. of Depositary Shares
------------------ ------- ---------------------------
Dated: __________, 20____________________________________________
(Signature must conform in all respects to name of holder as specified on the
face of the Warrant)
__________________________________________ (Address)
Signed in the presence of:
________________________________
