THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. IT MAY NOT BE
SOLD OR OFFERED FOR SALE EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SAID ACT AND ANY APPLICABLE STATE
SECURITIES LAW OR AN APPLICABLE EXEMPTION FROM SUCH REGISTRATION
REQUIREMENTS.
________________________
April 24, 1997
ALTEON INC.
________________________
Common Stock Purchase Warrant
Alteon Inc., a Delaware corporation (the "Company"),
hereby certifies that for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, [Name
of Investor], having an address [Address] ("Purchaser") or any
other Warrant Holder is entitled, on the terms and conditions set
forth below, to purchase from the Company at any time beginning
on the date hereof and ending eighty-four (84) months after the
date hereof, [Number of Shares - Aggregate] ([Number of Shares]
shares for each share of Preferred Stock subscribed for) fully
paid and nonassessable shares of Common Stock, $.01 par value, of
the Company (the "Common Stock"), at a purchase price per share
of $4.025 (the "Purchase Price"), as the same may be adjusted
pursuant to Section 5 herein.
1. Definitions.
(a) the term "Warrant Holder" shall mean
the Purchaser or any assignee of all or any portion of this
Warrant.
(b) the term "Warrant Shares" shall mean
the Shares of Common Stock or other securities issuable upon
exercise of this Warrant.
(c) the term "Registration Rights
Agreement" shall mean the Registration Rights Agreement, dated on
or about the date hereof, between the Company and the Purchaser.
(d) the term "Agreement" shall mean the
Preferred Stock Investment Agreement, dated April 24, 1997,
between the Company and the Purchaser.
(e) the term "Preferred Stock" shall mean
the 6% Cumulative Convertible Preferred Stock of the Company.
2. Exercise of Warrant.
This Warrant may be exercised by the Warrant Holder, in
whole or in part, at any time and from time to time by either of
the following methods:
(a) The Warrant Holder may surrender this
Warrant, together with the form of subscription at the end hereof
duly executed by Warrant Holder ("Subscription Notice"), at the
offices of the Company or any transfer agent for the Common Stock;
or
(b) The Warrant Holder may also exercise
this Warrant, in whole or in part, in a "cashless" or "net-issue"
exercise by delivering to the offices of the Company or any
transfer agent for the Common Stock this Warrant, together with a
Subscription Notice specifying the number of Warrant Shares to be
delivered to such Warrant Holder ("Deliverable Shares") and the
number of Warrant Shares with respect to which this Warrant is
being surrendered in payment of the aggregate Purchase Price for
the Deliverable Shares ("Surrendered Shares"); provided that the
Purchase Price multiplied by the number of Deliverable Shares shall
not exceed the value of the Surrendered Shares; and provided
further that the sum of the number of Deliverable Shares and the
number of Surrendered Shares so specified shall not exceed the
aggregate Warrant Shares represented by this Warrant. For the
purposes of this provision, each Warrant Share as to which this
Warrant is surrendered will be attributed a value equal to the fair
market value (as defined below) of the Warrant Share minus the
Purchase Price of the Warrant Share.
In the event that the Warrant is not exercised in full,
the number of Warrant Shares shall be reduced by the number of
such Warrant Shares for which this Warrant is exercised, and the
Company, at its expense, shall forthwith issue and deliver or
upon the order of Warrant Holder a new Warrant of like tenor in
the name of Warrant Holder or as Warrant Holder (upon payment by
Warrant Holder of any applicable transfer taxes) may request,
reflecting such adjusted Warrant Shares.
3. Delivery of Stock Certificates.
(a) Subject to the terms and conditions of
this Warrant, as soon as practicable after the exercise of this
Warrant in full or in part, and in any event within three (3)
"trading days" (as defined below) thereafter, the Company shall
transmit the certificates (together with any other stock or other
securities or property to which Warrant Holder is entitled upon
exercise) by messenger or overnight delivery service to reach the
address designated by such holder within three (3) trading days
after the receipt of the Subscription Notice ("T+3"). In the
alternative to physical delivery of certificates for shares, if
delivery of the Warrant Shares pursuant to any exercise hereunder
may be effectuated by electronic book-entry through Depository
Trust Company ("DTC") then delivery of Warrant Shares pursuant to
such exercise shall, if requested by such holder, be closed and
settled on T+3 by book-entry transfer through DTC, and the
Warrant Shares in connection with such exercise shall be deemed
delivered by such book-entry transfer.
-2-
Term "trading day" means a day on which there is trading on the
New York Stock Exchange or such other market or exchange on which
the Common Stock is then traded.
(b) This Warrant may not be exercised as to
fractional shares of Common Stock. In the event that the
exercise of this Warrant, in full or in part, would result in the
issuance of any fractional share of Common Stock, then in such
event the Warrant Holder shall be entitled to cash equal to the
fair market value of such fractional share. For purposes of this
Warrant, "fair market value" shall equal the closing trading
price of the Common Stock, on the Nasdaq Stock Market, the
American Stock Exchange or the New York Stock Exchange, whichever
is the principal trading exchange or market for the Common Stock
(the "Principal Market") on the date of determination or, if the
Common Stock is not listed or admitted to trading on any national
securities exchange or quoted in the Nasdaq Stock Market, the
average of the closing bid and asked prices on the over-the-counter
market as furnished by any New York Stock Exchange member
firm reasonably selected from time to time by the Company for
that purpose and reasonably acceptable to the Warrant Holder, or,
if the Common Stock is not listed or admitted to trading on any
national securities exchange or quoted on the Nasdaq Stock Market
or traded over-the-counter and the average price cannot be
determined a contemplated above, the fair market value of the
Common Stock shall be as reasonably determined in good faith by
the Company's Board of Directors with the concurrence of the
Warrant Holder.
4. (A) Representations and Covenants of the
Company.
(a) The Company shall comply with its
obligations under the Registration Rights Agreement with respect
to the Warrant Shares, including, without limitation, the
Company's obligation to have filed and declared effective a
registration statement registering the Warrant Shares under the
Securities Act of 1933, as amended (the "Act").
(b) The Company shall take all necessary action
and proceedings as may be required and permitted by applicable
law, rule and regulation, including, without limitation, the
notification of the Principal Market, for the legal and valid
issuance of this Warrant and the Warrant Shares to the Warrant
Holder under this Warrant.
(c) From the date hereof through the last date
on which this Warrant is exercisable, the Company shall take all
steps reasonably necessary and within its control to insure that
the Common Stock remains listed on the Principal Market and shall
not amend its Certificate of Incorporation or Bylaws so as to
adversely affect any rights of the Warrant Holder under this
Warrant.
(d) The Company shall at all times reserve and
keep available, solely for issuance and delivery as Warrant
Shares hereunder, such shares of Common Stock as shall from time
to time be issuable.
(e) The Warrant Shares, when issued in
accordance with the terms hereof, will be duly authorized and,
when paid for or issued in accordance with the terms hereof,
shall be validly issued, fully paid and non-assessable. The
Company has authorized and reserved for issuance to Warrant
-3-
Holder the requisite number of shares of Common Stock to be
issued pursuant to this Warrant.
(f) With a view to making available to
Warrant Holder the benefits of Rule 144 promulgated under the Act
and any other rule or regulation of the Securities and Exchange
Commission ("SEC") that may at any time permit Warrant Holder to
sell securities of the Company to the public without
registration, the Company agrees to use its reasonable best
efforts to:
i) make and keep public
information available, as those terms are understood and defined
in Rule 144, at all times;
ii) file with the SEC in a timely
manner all reports and other documents required of the Company
under the Act and the Securities Exchange Act of 1934, as amended
(the "Exchange Act"); and
(iii) furnish to any Warrant Holder
forthwith upon request a written statement by the Company that it
has complied with the reporting requirements of Rule 144 and of
the Act and the Exchange Act, a copy of the most recent annual or
quarterly report of the Company, and such other reports and
documents so filed by the Company as may be reasonably requested
to permit any such Warrant Holder to take advantage of any rule
or regulation of the SEC permitting the selling of any such
securities without registration.
(B) Representations and Covenants of the
Purchaser.
The Purchaser shall not resell Warrant
Shares, unless such resale is pursuant to an effective
registration statement under the Act or pursuant to an applicable
exemption from such registration requirements.
5. Adjustment of Purchase Price and Number of Shares.
The number of and kind of securities purchasable upon exercise of
this Warrant and the Purchase Price shall be subject to
adjustment from time to time as follows:
(a) Subdivisions, Combinations and
other Issuances. If the Company shall at any time after the
date hereof but prior to the expiration of this Warrant subdivide
its outstanding securities as to which purchase rights under this
Warrant exist, by split-up, spin-off, or otherwise, or combine its
outstanding securities as to which purchase rights under this
Warrant exist, the number of Warrant Shares as to which this
Warrant is exercisable as of the date of such subdivision,
split-up, spin-off or combination shall forthwith be
proportionately increased in the case of a subdivision, or
proportionately decreased in the case of a combination. Appropriate
adjustments shall also be made to the purchase price payable per
share, but the aggregate purchase price payable for the total
number of Warrant Shares purchasable under this Warrant as of such
date shall remain the same.
(b) Stock Dividend. If at any time after the
date hereof the Company declares a dividend or other distribution
on Common Stock payable in Common Stock or other securities or
-4-
rights convertible into Common Stock ("Common Stock Equivalents")
without payment of any consideration by holders of Common Stork
for the additional shares of Common Stock or the Common Stock
Equivalents (including the additional shares of Common Stock
issuable upon exercise or conversion thereof), then the number of
shares of Common Stock for which this Warrant may be exercised
shall be increased as of the record date (or the date of such
dividend distribution if no record date is set) for determining
which holders of Common Stock shall be entitled to receive such
dividends, in proportion to the increase in the number of
outstanding shares (and shares of Common Stock issuable upon
conversion of all such securities convertible into Common Stock)
of Common Stock as a result of such dividend, and the Purchase
Price shall be adjusted so that the aggregate amount payable for
the purchase of all the Warrant Shares issuable hereunder
immediately after the record date (or on the date of such
distribution, if applicable), for such dividend shall equal the
aggregate amount so payable immediately before such record date
(or on the date of such distribution, if applicable).
(c) Other Distributions. If at any time after
the date hereof the Company distributes to holders of its Common
Stock, other than as part of its dissolution, liquidation or the
winding up of its affairs, any shares of its capital stock, any
evidence of indebtedness or any of its assets (other than cash,
Common Stock or securities convertible into Common Stock), then
the number of Warrant Shares for which this Warrant is
exercisable shall be adjusted to equal: (i) the number of Warrant
Shares for which this Warrant is exercisable immediately prior to
such event, (ii) multiplied by a fraction, (A) the numerator of
which shall be the fair market value per share of Common Stock on
the record date for the dividend or distribution, and (B) the
denominator of which shall be the fair market value price per
share of Common Stock on the record date for the dividend or
distribution minus the amount allocable to one share of Common
stock of the value (as jointly determined in good faith by the
Board of Directors of the Company and the Warrant Holder) of any
and all such evidences of indebtedness, shares of capital stock,
other securities or property, so distributed. The Purchase price
shall be adjusted to equal: (i) the Purchase Price in effect
immediately before the occurrence of any event (ii) multiplied by
a fraction, (A) the numerator of which is the number of Warrant
Shares for which this Warrant is exercisable immediately before
the adjustment, and (B) the denominator of which is the number of
Warrant Shares for which this Warrant is exercisable immediately
after the adjustment.
(d) Merger, etc. If at any time after the date
hereof there shall be a merger or consolidation of the Company
with or into or a transfer of all or substantially all of the
assets of the Company to another entity, then the Warrant Holder
shall be entitled-to receive upon such transfer, merger or
consolidation becoming effective, and upon payment of the
aggregate Purchase Price then in effect, the number of shares or
other securities or property of the Company or of the successor
corporation resulting from such merger or consolidation, which
would have been received by Warrant Holder for the shares of
stock subject to this Warrant had this Warrant been exercised
just prior to such transfer, merger or consolidation becoming
effective or to the applicable record date thereof, as the case
may be. The Company will not merge or consolidate with or into
any other corporation, or sell or otherwise transfer its
property, assets and business substantially as an entirety to
another corporation, unless the corporation resulting from such
merger or consolidation (if not the Company), or such transferee
corporation, as the case may be, shall expressly assume, by
-5-
supplemental agreement reasonably satisfactory in form and
substance to the Warrant Holder, the due and punctual performance
and observance of each and every covenant and condition of this
Warrant to be performed and observed by the Company.
(e) Reclassification, etc. If at any time
after the date hereof there shall be a reorganization or
reclassification of the securities as to which purchase rights
under this Warrant exist into the same or a different number of
securities of any other class or classes, then the Warrant Holder
shall thereafter be entitled to receive upon exercise of this
Warrant, during the period specified herein and upon payment of
the Purchase Price then in effect, the number of shares or other
securities or property resulting from such reorganization or
reclassification, which would have been received by the Warrant
Holder for the shares of stock subject to this Warrant had this
Warrant at such time been exercised.
6. No Impairment. The Company will not, by amendment
of its Certificate of Incorporation 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 necessary or appropriate in
order to protect the rights of the Warrant Holder against
impairment. Without limiting the generality of the foregoing,
the Company (a) will not increase the par value of any Warrant
Shares above the amount payable therefor on such exercise, and
(b) will take all such action as may be reasonably necessary or
appropriate in order that the Company may validly and legally
issue fully paid and nonassessable Warrant Shares on the exercise
of this Warrant.
7. Notice of Adjustments- Notices. Whenever the Purchase
Price or number of Shares purchasable hereunder shall be adjusted
pursuant to Section 5 hereof, the Company shall execute and
deliver to the Warrant Holder a certificate setting forth, in
reasonable detail, the event requiring the adjustment, the amount
of the adjustment, the method by which such adjustment was
calculated and the Purchase Price and number of shares
purchasable hereunder after giving effect to such adjustment, and
shall cause a copy of such certificate to be mailed (by first
class mail, postage prepaid) to the Warrant Holder.
8. Rights As Stockholder. Prior to exercise of this
Warrant, the Warrant Holder shall not be entitled to any rights
as a stockholder of the Company with respect to the Warrant
Shares, including (without limitation) the right to vote such
shares, receive dividends or other distributions thereon or be
notified of stockholder meetings. However, in the event of any
taking by the Company of a record of the holders of any class of
securities for the purpose of determining the holders thereof who
are entitled to receive any dividend (other than a cash dividend)
or other distribution, any right to subscribe for, purchase or
otherwise acquire any shares of stock of any class or any other
securities or property, or to receive any other right, the
Company shall mail to each Warrant Holder, at least 10 days prior
to the date specified therein, a notice specifying the date on
which any such record is to be taken for the purpose of such
dividend, distribution or right, and the amount and character of
such dividend, distribution or right.
9. Limitation on Exercise. Notwithstanding anything to
the contrary contained herein, this Warrant may not be exercised
by the Warrant Holder to the extent that, after giving effect to
-6-
Warrant Shares to be issued pursuant to a Subscription Notice,
the total number of shares of Common Stock deemed beneficially
owned by such holder (other than by virtue of ownership of this
Warrant, or ownership of other securities that have limitations
on the holder's rights to convert or exercise similar to the
limitations set forth herein), together with all shares of Common
Stock deemed beneficially owned by the holder's "affiliates" (as
defined in Rule 144 of the Act) that would be aggregated for
purposes of determining whether a group under Section 13(d) of
the Securities Exchange Act of 1934 exists, would exceed 4.9% of
the total issued and outstanding shares of the Common Stock,
provided that the Warrant Holder shall have the right to waive
this restriction, in whole or in part, immediately in the case of
a pending "Change in Control Transaction" described in clause (x)
or (z) of Paragraph 4(i) of the Designations for the Preferred
Stock and in any other case upon 61 days prior notice to the
Company. The delivery of a Subscription Notice by the Warrant
Holder shall be deemed a representation by such holder that it is
in compliance with this paragraph.
A subsequent Warrant Holder shall not be bound by this
provision unless it expressly agrees to be so bound. The term
"deemed beneficially owned" as used in this Warrant shall exclude
shares that might otherwise be deemed beneficially owned by
reason of the exercise of this Warrant.
10. Replacement Of Warrant. On receipt of evidence
reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of the Warrant and, in the case of any
such loss, theft or destruction of the Warrant, on delivery of an
indemnity agreement or security reasonably satisfactory in form
and amount to the Company or, in the case of any such mutilation,
on surrender and cancellation of such Warrant, the Company at its
expense will execute and deliver, in lieu thereof a new Warrant
of like tenor.
11. Specific Enforcement; Consent to Jurisdiction;
Choice of Law
(a) The Company and the Warrant Holder
acknowledge and agree that irreparable damage would occur in the
event that any of the provisions of this Warrant were not
performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties
shall he entitled to an injunction or injunctions to prevent or
cure breaches of the provisions of this Warrant and to enforce
specifically the terms and provisions hereof, this being in
addition to any other remedy to which either of them may be
entitled by law or equity.
(b) Each of the Company and the Warrant
Holder (i) hereby irrevocably submits to the exclusive
jurisdiction of the state and federal court located in New York
County, New York for the purposes of any suit, action or
proceeding arising out of or relating to this Warrant and (ii)
hereby waives, and agrees not to assert in any such suit, action
or proceeding, any claim that it is not personally subject to the
jurisdiction of such court, that the suit, action or proceeding
is brought in an inconvenient forum or that the venue of the
suit, action or proceeding is improper. Each of the Company and
the Warrant Holder consents to process being served in any such
suit, action or proceeding by mailing a copy thereof to such
party at the address in effect for notices to it under this
Warrant and agrees that such service shall constitute good and
-7-
sufficient service of process and notice thereof. Nothing in
this paragraph shall affect or limit any right to serve process
in any other manner permitted by law.
(c) This Warrant shall be governed by and
construed and enforced in accordance with the internal laws of
the State of New York without regard to such state's principles
of conflict of laws.
12. Entire Agreement; Amendments. This Warrant, the
Exhibits hereto and the provisions contained in the Agreement or
the Registration Rights Agreement and incorporated into this
Warrant and the Warrant Shares contain the entire understanding
of the parties with respect to the matters covered hereby and
thereby and, except as specifically set forth herein and therein,
neither the Company nor the Warrant Holder makes any
representation, warranty, covenant or undertaking with respect to
such matters. No provision of this Agreement may be waived or
amended other than by a written instrument signed by the party
against whom enforcement of any such amendment or waiver is
sought.
13. Notices. Any notice or other communication
required or permitted to be given hereunder shall be in writing
and shall be effective (a) upon hand delivery or delivery by
telex (with correct answer back received), telecopy or facsimile
at the address or number designated below (if delivered on a
business day during normal business hours where such notice is to
be received), or the first business day following such delivery
(if delivered other than on a business day during normal business
hours where such notice is to be received) or (b) on the second
business day following the date of mailing by express courier
service, fully prepaid, addressed to such address, or upon actual
receipt of such mailing, whichever shall first occur. The
addresses for such communications shall be:
to the Company:
Alteon Inc.
000 Xxxxxxxx Xxxxx
Xxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxx X. Xxxxxx
Fax: (000) 000-0000
with copies to:
Xxxxx, Stratton, Wise, Xxxxx & Xxxxxxx
000 Xxxxxxx Xxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
to The Warrant Holder:
[Name of Investor]
[Address]
Attn:[Name of Person]
Fax: [Number]
-8-
Either party hereto may from time to time change its address for
notices under this Section 13 by giving at least 10 days prior
written notice of such changed address to the other party hereto.
14. Miscellaneous. This Warrant and any term hereof
may be changed, waived, discharged or terminated only by an
instrument in writing signed by the party against which
enforcement of such change, waiver, discharge or termination is
sought. This Warrant shall be construed and enforced in
accordance with and governed by laws of the State of New York.
The headings in this Warrant are for purposes of reference only,
and shall not limit or otherwise affect any of the terms hereof.
The invalidity or unenforceability of any provision hereof shall
in no way affect the validity or enforceability of any other
provision.
15. Assignment. This Warrant may be transferred or
assigned, in whole or in part, at any time and from time to time
by the then Warrant Holder by submitting this Warrant to the
Company together with a duly executed Assignment in substantially
the form and substance of the Form of Assignment which
accompanies this Warrant and, upon the Company's receipt hereof,
and in any event, within three (3) business days thereafter, the
Company shall issue a Warrant to the Warrant Holder to evidence
that portion of this Warrant, if any as shall not have been so
transferred or assigned.
[The remainder of this page has intentionally been left blank.]
-9-
Dated: April 24, 1997 ALTEON INC.
By:
_______________
Name:
Title:
[CORPORATE SEAL]
Attest:
By:
_____________________
Its
By: _________________________
Name:
Title:
-10-
(SUBSCRIPTION NOTICE)
FORM OF WARRANT EXERCISE
(To be signed only on exercise of Warrant)
TO _________________________________
The undersigned, the holder of the within Warrant, hereby
irrevocably elects to exercise this Warrant
_____ (A) for, and to purchase thereunder, ______ shares of
Common Stock of Alteon Inc., a Delaware corporation (the
"Company"), and herewith makes payment of $_______ therefor; or
_____ (B) in a "cashless" or "net-issue exercise" for, and
to purchase thereunder , ______ shares of Common Stock, and
herewith makes payment therefor with ______ Surrendered Warrant
Shares.
The undersigned requests that the certificates for such
shares be issued in the name of, and delivered to ___________,
whose address is _____________________.
Dated:
__________________________________
(Signature must conform to name
of holder as specified on the
face of the Warrant)
__________________________________
(Address)
Tax Identification Number:
__________________________________
-11-
________________________
FORM OF ASSIGNMENT
(To be signed only on transfer of Warrant)
For value received, the undersigned hereby sells, assigns, and
transfers unto ______________ the right represented by the
within Warrant to purchase _____ shares of Common stock of Alteon
Inc., a Delaware corporation, to which the within Warrant
relates, and appoints __________ Attorney to transfer such right
on the books of Alteon Inc., a Delaware corporation, with full
power of substitution of premises.
Dated:
____________________________________
(Signature must conform to name
of holder as specified on the face
of the Warrant)
_____________________________________
(Address)
Signed in the presence of:
_______________________
-12-
