[FORM OF FINANCIAL ADVISORY SERVICES AGREEMENT WARRANT]
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
ANY STATE SECURITIES LAW. SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH SALE OR TRANSFER IS EXEMPT FROM THE
REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT.
PALATIN TECHNOLOGIES, INC.
WARRANT FOR THE PURCHASE OF SHARES OF
COMMON STOCK
NO. [ ] [ ] SHARES
FOR VALUE RECEIVED, PALATIN TECHNOLOGIES, INC., a Delaware corporation (the
"COMPANY"), hereby certifies that[ ], or his permitted assigns, is entitled to
purchase from the Company, at any time or from time to time commencing on
SEPTEMBER 1, 1996, and prior to 5:00 P.M., New York City time, on SEPTEMBER 1,
2001 (the "TERMINATION DATE"), [ ] fully paid and non-assessable shares of the
Common Stock, $.01 par value per share, of the Company (the "Common Stock") at
an exercise price equal to $[ ]. (Hereinafter, (i) said Common Stock, together
with any other equity securities which may be issued by the Company with respect
thereto or in substitution therefor, is referred to as the "COMMON STOCK", (ii)
the shares of the Common Stock purchasable hereunder or under any other Warrant
(as hereinafter defined) are referred to as the "WARRANT SHARES", (iii) the
aggregate purchase price payable for the Warrant Shares hereunder is referred to
as the "AGGREGATE WARRANT PRICE", (iv) the price payable for each of the Warrant
Shares hereunder is referred to as the "PER SHARE WARRANT PRICE", (v) this
Warrant, all similar Warrants issued on the date hereof and all warrants
hereafter issued in exchange or substitution for this Warrant or such similar
Warrants are referred to as the "WARRANTS" and (vi) 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
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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.
1. EXERCISE OF WARRANT.
(a) This Warrant may be exercised by the Holder, in whole at any time or in
part from time to time, commencing on September 1, 1996 and prior to the
Termination Date:
(i) by the surrender of this Warrant (with the subscription form at
the end hereof duly executed) at the address set forth in Subsection 10(a)
hereof, together with proper payment of the Aggregate Warrant Price, or the
proportionate part thereof if this Warrant is exer cised in part, with
payment for Warrant Shares made by certified or official bank check payable
to the order of the Company; or
(ii) by the surrender of this Warrant (with the cashless exercise form
at the end hereof duly executed) (a "CASHLESS EXERCISE") at the address set
forth in Subsection 10(a) hereof. Such presentation and surrender 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
multiplied by a fraction, the numerator of which shall be the difference
between the then current Market Price per share (as hereinafter defined) of
Common Stock and the Per Share Warrant Price, and the denominator of which
shall be the then current Market Price per share of Common Stock. The then
current market price per share of the Common Stock at any date (the "MARKET
PRICE") shall be deemed to be the last sale price of the Common Stock on
the business day prior to the date of the Cashless Exercise or, in case no
such reported sales take place on such day, the average of the last
reported bid and asked prices of the Common Stock on such day, in either
case on the principal national securities exchange on which the Common
Stock is admitted to trading or listed, or if not listed or admitted to
trading on any such exchange, the representative closing bid price of the
Common Stock as reported by the NASDAQ Bulletin Board ("NASDAQ"), or other
similar organization if NASDAQ is no longer reporting such information, or
if not so available, the
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fair market price of the Common Stock as determined in good faith by the
Board of Directors.
(b) If this Warrant is exercised in part, this Warrant must be exercised
for a number of whole shares of the 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 the Common Stock to which the Holder shall be
entitled and, if this Warrant is exercised in whole, in lieu of any fractional
share of the 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, if any, or the proportionate part
thereof if this Warrant is exercised in part, pursuant to the provisions of this
Warrant.
2. 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, except for the restrictions on sale or transfer set forth in the
Securities Act of 1933, as amended (the "Act"), and restrictions created by or
on behalf of the Holder, and free and clear of all preemptive rights and rights
of first refusal and (b) when the Company prepares and files a registration
statement covering the shares of Common Stock issued or issuable upon exercise
of this Warrant with the Securities and Exchange Commission (the "SEC") which
registration statement is declared effective by the SEC under the Act and the
Company lists its Common Stock on any national securities exchange or other
quotation system, it will use its reasonable best efforts to cause the shares of
Common Stock subject to this Warrant to be listed on such exchange or quotation
system.
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3. PROTECTION AGAINST DILUTION.
(a) If, at any time or from time to time after the date of issuance of this
Warrant, the Company shall issue or distribute to the holders of shares of
Common Stock evidence of its indebtedness, any other securities of the Company
or any cash, property or other assets (excluding a subdivision, combination or
reclassification, or dividend or distribution payable in shares of Common Stock,
referred to in Subsection 3(b), and also excluding cash dividends or cash
distributions paid out of net profits legally available therefor in the full
amount thereof, which together with the value of other dividends and
distributions made substantially concurrently therewith or pursuant to a plan
which includes payment thereof, is equivalent to not more than 5% of the
Company's net worth) (any such non-excluded event being herein called a "SPECIAL
DIVIDEND"), the Per Share Warrant Price shall be adjusted by multiplying the Per
Share Warrant Price then in effect by a fraction, the numerator of which shall
be the then current Market Price of the Common Stock less the fair market value
(as determined in good faith by the Company's Board of Directors) of the
evidence of indebtedness, cash, securities or property, or other assets issued
or distributed in such Special Dividend applicable to one share of Common Stock
and the denominator of which shall be the then current Market Price of the
Common Stock. An adjustment made pursuant to this Subsection 3(a) shall become
effective immediately after the record date of any such Special Dividend.
(b) 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, (iii)
combine its outstanding shares of Common Stock into a smaller number of shares
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 to be equal
to a fraction, the numerator of which shall be the Aggregate Warrant Price and
the denominator of which shall be the number of shares of Common Stock or other
capital stock of the Company which the Holder would have owned immediately
following such action had such Warrant been exercised immediately prior thereto.
An adjustment made pursuant to this Subsection 3(b) shall become effective
immediately after the record date in the case of a dividend or distribution and
shall become effective immediately after the effective date in the case of a
subdivision, combination or reclassification.
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(c) Except as provided in subsections 3(a) and 3(d), in case the Company
shall hereafter issue or sell any Common Stock, any securities convertible into
Common Stock or any rights, options or warrants to purchase Common Stock or
securities convertible into Common Stock, other than an offering of securities
for which Paramount Capital, Inc. serves as placement agent initiated within 180
days following September 1, 1996 (the "Private Placement"), in each case for a
price per share or entitling the holders thereof to purchase Common Stock at a
price per share (determined by dividing (i) the total amount, if any, received
or receivable by the Company in consideration of the issuance or sale of such
securities plus the total consideration, if any, payable to the Company upon
exercise or conversion thereof (the "TOTAL CONSIDERATION") by (ii) the number of
additional shares of Common Stock issued, sold or issuable upon exercise or
conversion of such securities) less than the then current Market Price of the
Common Stock or the current Per Share Warrant Price in effect on the date of
such issuance or sale, the Per Share Warrant Price shall be adjusted by
multiplying the Per Share Warrant Price then in effect by a fraction, the
numerator of which shall be (x) the sum of (A) the number of shares of Common
Stock outstanding on the record date of such issuance or sale plus (B) the Total
Consideration divided by either the current Market Price of the Common Stock or
the current Per Share Warrant Price, whichever is greater, and the denominator
of which shall be (y) the number of shares of Common Stock outstanding on the
record date of such issuance or sale plus the maximum number of additional
shares of Common Stock issued, sold or issuable upon exercise or conversion of
such securities.
(d) Except as otherwise provided herein, no adjustment in the Per Share
Warrant Price shall be required in the case of the issuance by the Company of
(i) Common Stock pursuant to the exercise or conversion of any Warrant or any
other options, warrants or any convertible securities currently outstanding or
outstanding as a result of securities hereafter issued; provided, that the
exercise price or conversion price at which such securities are exercised or
converted, as the case may be, is equal to the exercise price or conversion
price in effect as of the date of this Warrant or as of the date of issuance
with respect to securities hereafter issued (except for standard anti-dilution
adjustments) and (ii) shares of Common Stock issued or sold pursuant to stock
purchase or stock option plans or other similar arrangements that are approved
by the Company's Board of Directors.
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(e) 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 an 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), 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 cor respondingly 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(e) shall similarly apply to successive
reorganizations, reclassifica tions, 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 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.
(f) In case any event shall occur as to which the other provisions of this
Section 3 are not strictly applicable but as to which the failure to make any
adjustment would not fairly protect the purchase rights represented by this
Warrant in accordance with the essential intent and principles hereof then, in
each such case, the Holders of Warrants representing the right to purchase a
majority of the Warrant Shares subject to all outstanding Warrants may appoint a
firm of independent
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public accountants of recognized national standing reasonably acceptable to the
Company, which shall give their opinion as to the adjustment, if any, on a basis
consistent with the essential intent and principles established herein,
necessary to preserve the purchase rights represented by the Warrants. Upon
receipt of such opinion, the Company will promptly mail a copy thereof to the
Holder of this Warrant and shall make the adjustments described therein. The
fees and expenses of such independent public accountants shall be borne by the
Company.
(g) No adjustment in the Per Share Warrant Price shall be required unless
such adjustment would require an increase or decrease of at least $0.05 per
share of Common Stock; provided, however, that any adjustments which by reason
of this Subsection 3(g) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 3 shall be made to the nearest cent or to the nearest 1/100th of a
share, as the case may be. Anything in this Section 3 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Per Share Warrant Price, in addition to those required by this Section 3, as it
in its discretion shall deem to be advisable in order that any stock dividend,
subdivision of shares or distribution of rights to purchase stock or securities
convertible or exchangeable for stock hereafter made by the Company to its
stockholders shall not be taxable.
(h) Whenever the Per Share Warrant Price is adjusted as provided in this
Section 3 and upon any modifi cation of the rights of a Holder of Warrants in
accordance with this Section 3, the Chief Financial Officer of the Company shall
promptly prepare a certificate setting forth the Per Share Warrant Price and the
number of Warrant Shares after such adjustment or the effect of such
modification and a brief statement of the facts requiring such adjustment or
modification and the manner of computing the same and cause copies of such
certificate to be mailed to the Holders of the Warrants.
(i) If the Board of Directors of the Company shall declare any dividend or
other distribution with respect to the Common Stock, the Company shall mail
notice thereof to the Holders of the Warrants not less than fifteen (15) days
prior to the record date fixed for determining stockholders entitled to
participate in such dividend or other distribution.
(j) If, as a result of an adjustment made pursuant
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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.
4. REDEMPTION. At any time after September 1, 1996, this Warrant shall be
redeemable at the Company's option upon forty five (45) days notice to the
Holder, for $.05 per Warrant Share, if the closing price of the Common Stock of
the Company shall exceed three hundred percent (300%) (as reported on the Nasdaq
Small Cap Market) of the Exercise Price of this Warrant for twenty (20)
consecutive trading days ending ten (10) days prior to the date of notice of
redemption.
5. FULLY PAID STOCK; TAXES. The Company agrees that the shares of the
Common Stock represented by each and every certificate of Warrant Shares
delivered on the exercise of this Warrant 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 Common Stock
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 or similar taxes which may be
payable in respect of the issue of any Warrant Share or any certificate thereof.
6. REGISTRATION UNDER SECURITIES ACT OF 1933.
(a) The shares of Common Stock underlying the Warrants (the "Conversion
Shares") shall be included in the registration statement filed in connection
with the Private Placement or, if no such registration statement is filed or
becomes effective, in the next registration statement (the "Registration
Statement") filed by the Company in which these shares can legally be included
(i.e. excluding registrations on Form X-0, X-0 or any other limited purpose
form).
(b) Until all Warrant Shares have been sold under a Registration Statement
or pursuant to Rule 144, the Company
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shall use its reasonable best efforts to file with the Securities and Exchange
Commission all current reports and the information as may be necessary to enable
the Holder to effect sales of its shares in reliance upon Rule 144 promulgated
under the Act.
7. LIMITED TRANSFERABILITY. This Warrant may not be sold, transferred,
assigned or hypothecated by the Holder except in compliance with the provisions
of the Act and the applicable state securities "blue sky" laws. The Company may
treat the registered Holder of this Warrant as he or it appears on the Company's
books at any time as the Holder for all purposes. The Company shall permit any
Holder of a Warrant or his duly authorized attorney, upon written request during
ordinary business hours, to inspect and copy or make extracts from its books
showing the registered holders of Warrants. All warrants issued upon the
transfer or assignment of this Warrant will be dated the same date as this
Warrant, and all rights of the holder thereof shall be identical to those of the
Holder.
8. 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.
9. 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.
10. MODIFICATION. This Agreement may not be modified, amended or waived in
any manner except by an instrument in writing signed by the Holder. The waiver
by either party of compliance with any provision of this Agreement by the other
party shall not operate or be construed as a waiver of such party of a provision
of this Agreement.
11. COMMUNICATION. No notice or other communi cation under this Warrant
shall be effective unless, but any notice or other communication shall be
effective and shall be deemed to have been given if, the same is in writing and
is
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mailed by first-class mail, postage prepaid, addressed to:
(a) the Company at 000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, X.X., 00000,
Attention: President or other address as the Company has designated in writing
to the Holder; or
(b) the Holder at x/x Xxxxxxxxx Xxxxxxx, Xxx., 000 Xxxxxxx Xxxxxx, 00xx
Xxxxx, Xxx Xxxx, XX, 00000, Attn: Xxxxxxx XxXxxxxxx or other such address as the
Holder has designated in writing to the Company.
12. HEADINGS. The headings of this Warrant have been inserted as a matter
of convenience and shall not affect the construction hereof.
13. APPLICABLE LAW. This Warrant shall be governed by and construed in
accordance with the law of the State of New York without giving effect to the
principles of conflicts of law thereof.
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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 1ST day of SEPTEMBER, 1996.
PALATIN TECHNOLOGIES, INC.
By: _______________________________
Name: Xxxxxx X. Xxxxxx
Title: President
ATTEST:
-------------------------------
Secretary
[Corporate Seal]
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SUBSCRIPTION
The undersigned, ___________________, pursuant to the provisions
of the foregoing Warrant, hereby agrees to subscribe for and purchase
____________________ shares of the Common Stock, par value $.01 per share, of
Palatin Technologies, Inc. covered by said Warrant, and makes payment therefor
in full at the price per share provided by said Warrant.
Dated:_______________ Signature:____________________
Address:______________________
CASHLESS EXERCISE
The undersigned ___________________, pursuant to the provisions
of the foregoing Warrant, hereby elects to exchange its Warrant for
___________________ shares of Common Stock, par value $.01 per share, of Palatin
Technologies, Inc. pursuant to the Cashless Exercise provisions of the Warrant.
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
Palatin Technologies, Inc.
Dated:_______________ Signature:____________________
Address:______________________
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PARTIAL ASSIGNMENT
FOR VALUE RECEIVED _______________ hereby assigns and transfers
unto ____________________ the right to purchase _______ shares of the Common
Stock, par value $.01 per share, of Palatin Technologies, 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 Palatin Technologies, Inc.
Dated:_______________ Signature:____________________
Address:______________________
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