THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
ANY APPLICABLE STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT
OR AN EXEMPTION THEREFROM. ANY SUCH TRANSFER MAY ALSO BE SUBJECT TO APPLICABLE
STATE SECURITIES LAWS.
GENTA INCORPORATED
New Class B Bridge Warrant for the Purchase of Shares of
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Common Stock
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No. CB-1 350,000 Shares
FOR VALUE RECEIVED, GENTA INCORPORATED., a Delaware
corporation (the "COMPANY"), hereby certifies that THE ARIES DOMESTIC FUND, LP
or its registered assigns (the "Holder") is entitled to purchase from the
Company, subject to the provisions of this Warrant (the "Warrant"), at any time
on or after the date hereof (the "INITIAL EXERCISE DATE"), and prior to 5:00
P.M., New York City time, on January 27, 2002 (the "TERMINATION DATE"), 350,000
fully paid and non-assessable shares of the Common Stock, $.001 par value, of
the Company ("Common Stock"), at an exercise price of $1.50 per share of Common
Stock for an aggregate exercise price of FIVE HUNDRED TWENTY-FIVE THOUSAND
DOLLARS ($525,000.00) (the aggregate purchase price payable for the Warrant
Shares hereunder is hereinafter sometimes referred to as the "AGGREGATE EXERCISE
PRICE"). The number of shares of Common Stock to be received upon exercise of
this Warrant and the price to be paid for each share of Common Stock are subject
to possible adjustment from time to time as hereinafter set forth. The shares of
Common Stock or other securities or property deliverable upon such exercise as
adjusted from time to time is hereinafter sometimes referred to as the "WARRANT
SHARES." The exercise price of a share of Common Stock in effect at any time and
as adjusted from time to time is hereinafter sometimes referred to as the "PER
SHARE EXERCISE PRICE." The Per Share Exercise Price is subject to adjustment as
hereinafter provided; in the event of any such adjustment, the number of Warrant
Shares shall also be adjusted, by dividing the Aggregate Exercise Price by the
Per Share Exercise Price in effect immediately after such adjustment. The
Aggregate Exercise Price is not subject to adjustment.
1. EXERCISE OF WARRANT.
(a) This Warrant may be exercised in whole or in part, at any
time by its holder commencing on the Initial Exercise Date and prior to the
Termination Date, by presentation and surrender of this Warrant, together with
the duly executed subscription form attached at the end hereof, at the address
set forth in subsection 8(a) hereof, together with payment, by certified or
official bank check or wire transfer payable to the order of the Company, of the
Aggregate Exercise Price or the proportionate part thereof if exercised in part.
(b) If this Warrant is exercised in part only, the Company
shall, upon presentation of this Warrant upon such exercise, execute and deliver
(along with the certificate for the Warrant Shares purchased) a new Warrant
evidencing the rights of the Holder hereof to purchase the balance of the
Warrant Shares purchasable hereunder upon the same terms and conditions as
herein set forth. Upon proper exercise of this Warrant, the Company promptly
shall deliver certificates for the Warrant Shares to the Holder duly legended as
authorized by the subscription form. No fractional shares or scrip representing
fractional shares shall be issued upon exercise of this Warrant; provided that
the Company shall pay to the holders of the Warrant cash in lieu of such
fractional shares.
2. RESERVATION OF WARRANT SHARES; FULLY PAID SHARES; TAXES.
The Company hereby represents that it has, and until expiration of this Warrant
agrees that it shall, reserve for issuance or delivery upon exercise of this
Warrant, such number of shares of the Common Stock as shall be required for
issuance and/or delivery upon exercise of this Warrant in full, and agrees that
all Warrant Shares so issued and/or delivered will be validly issued, fully paid
and non-assessable, and further agrees to pay all taxes and charges that may be
imposed upon such issuance and/or delivery.
3. PROTECTION AGAINST DILUTION.
(a) In the event the Company shall, at any time or from time
to time after the date of issuance of this Warrant, issue or distribute to all
of the holders of its shares of Common Stock evidence of its indebtedness, any
other securities of the Company or any cash, property or other assets (any such
event being herein called a "SPECIAL DIVIDEND"), the Per Share Exercise Price
shall be adjusted by multiplying the Per Share Exercise Price then in effect by
a fraction, the numerator of which shall be the then Current Market Price (as
defined in paragraph 3(k) below) of the Common Stock, less the Current Market
Price of the Special Dividend issued or distributed in respect of one share of
Common Stock, and the denominator of which shall be the Current Market Price of
the Common Stock. Such adjustment shall be made successively whenever such a
record date is fixed. Such adjustment shall be made whenever any such
distribution is made and shall become effective immediately after the record
date for the determination of shareholders entitled to receive such
distribution.
(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
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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 Exercise Price shall be adjusted to be equal to a
fraction, the numerator of which shall be the Aggregate Exercise Price and the
denominator of which shall be the number of shares of Common Stock or other
capital stock of the Company issuable upon exercise of this Warrant assuming
this Warrant had been exercised immediately prior to such action. 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.
(c)(i) Except as provided in subsections 3(a) and 3(b)(i), in
the event 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, 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 consideration, if any, payable to the Company upon
exercise or conversion thereof (collectively, the "TOTAL CONSIDERATION") by (ii)
the number of additional shares of Common Stock issued, sold or issuable upon
exercise or conversion of such securities) which is less than the then Current
Market Price of the Common Stock (as defined below) but not below the current
Per Share Exercise Price (which event is governed by subsection 3(c)(ii)), the
Per Share Exercise Price shall be adjusted as of the date of such issuance or
sale by multiplying the Per Share Exercise 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 the Current Market Price of the Common Stock,
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.
(c)(ii) Except as provided in subsection 3(a) and 3(b)(i), in
the event 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, in each case
for a price per share or entitling the holders thereof to purchase Common Stock
at a price per share (the "ISSUE PRICE"), (determined by dividing (i) the Total
Consideration by (ii) the number of additional shares of Common Stock issuable
upon exercise or conversion of such securities) which is less than the then
current Per Share Exercise Price in effect on the record date of such issuance,
the Per Share Exercise Price shall be adjusted to equal the Issue Price.
(d) In the event 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
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(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 correspondingly be made applicable, as nearly as may reasonably be,
in relation to any shares of stock or other securities or property thereafter
deliverable on the exercise of this Warrant. The above provisions of this
subsection 3(e) shall similarly apply to successive reorganizations,
reclassifications, consolidations, mergers, statutory exchanges, sales or
conveyances. The issuer of any shares of stock or other securities or property
thereafter deliverable on the exercise of this Warrant shall be responsible for
all of the agreements and obligations of the Company hereunder. Notice of any
such reorganization, reclassification, consolidation, merger, statutory
exchange, sale or conveyance and of said 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.
(e) 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 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.
(f) Whenever the Per Share Exercise Price payable upon
exercise of each Warrant is adjusted pursuant to this Section 3, the number of
shares of Common Stock underlying a Warrant shall simultaneously be adjusted to
equal the number obtained by dividing the Aggregate Exercise Price by the
adjusted Per Share Exercise Price.
(g) No adjustment in the Per Share Exercise Price shall be
required unless such adjustment would require an increase or decrease of at
least $0.01 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
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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 Exercise 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 Exercise Price is adjusted as
provided in this Section 3 and upon any modification of the rights of a Holder
of Warrants in accordance with this Section 3, the Company shall promptly
obtain, at its expense, a certificate of a firm of independent public
accountants of recognized standing selected by the Board of Directors (who may
be the regular auditors of the Company) setting forth the Per Share Exercise
Price and the number of Warrant Shares after such adjustment or the effect of
such modification, 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 30 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 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 Exercise Price between
or among shares or such classes of capital stock or shares of Common Stock and
other capital stock.
(k) For the purpose of any computation under Section 3 above,
the then Current Market Price per share (the "CURRENT MARKET PRICE") shall be
deemed to be the last sale price of the Common Stock on the trading day prior to
such date 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 National Association of Securities Dealers, Inc. Automated
Quotations System ("NASDAQ"), or other similar organization if NASDAQ is no
longer reporting such information, or, if the Common Stock is not reported on
NASDAQ, the high per share bid price for the Common Stock in the
over-the-counter market as reported by the National Quotation Bureau or similar
organization, or if not so available, the fair market value of the Common Stock
as determined by agreement between the Company's Board of Directors, on the one
part, and the Holders of Warrants representing the right to purchase a majority
of the Warrant Shares subject to all outstanding Warrants, on the second part.
If the Board of
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Directors and such Holders fail to agree on the Current Market Price within 60
days of the date of the action giving rise to any adjustment pursuant to this
Section 3, such Holders shall be entitled to appoint a firm of independent
public accountants or appraisers of recognized national standing reasonably
acceptable to the Company, which shall give their opinion as to such Current
Market Price on a basis consistent with the essential intent and principles
established herein. 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
or appraisers shall be borne by the Company.
4. REGISTRATION UNDER SECURITIES ACT OF 1933. The resale of
the Warrant Shares shall be registered on the Shelf Registration Statement (as
defined in Article 8 of the Note and Warrant Purchase Agreement (the "Purchase
Agreement") dated as of January 28, 1997, by and among the Company, The Aries
Fund, a Cayman Island Trust, and The Aries Domestic Fund, L.P., a Delaware
limited partnership) and certain purchasers and the Holder of this Warrant shall
have the registration rights as provided in Article 8 of the Purchase Agreement.
If the Holder is not a party to the Purchase Agreement, by acceptance of this
Warrant the Holder agrees to comply with provisions of Article 8 of the Purchase
Agreement to the same extent as if it were a party thereto.
5. 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,
and is so transferable only upon the books of the Company which it shall cause
to be maintained for such purpose. 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.
6. 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.
7. STATUS OF HOLDER. 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.
8. NOTICES. No notice or other communication 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 mailed by first-class mail, postage prepaid, addressed to:
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(a) the Company at 3550 General Atomic Corporation, San Diego,
California 92121, Attention: Xxxxxx X. Xxxxx, or such other address as
the Company has designated in writing to the Holder; or
(b) the Holder at the address indicated in the notice
provisions to the Purchase Agreement, or other such address as the
Holder has designated in writing to the Company.
9. SPECIAL EXERCISE PRICE ADJUSTMENT. The Per Share Exercise
Price shall be adjusted at the time of the Final Closing Date (as that term is
defined in the Letter between Genta and Paramount Capital Inc., dated January
28, 1997) if the exercise price of the Offering Warrants (as defined below) is
less than the exercise price of the Warrants. In such event the Per Share
Exercise Price shall be reduced to equal 50% of the then current exercise price
of the Offering Warrants (as hereafter defined). "Offering Warrants" shall mean
the warrants described in paragraph 7 of the Letter between the Company and
Paramount Capital, Inc. dated January 28, 1997.
10. HEADINGS. The headings of this Warrant have been inserted
as a matter of convenience and shall not affect the construction hereof.
11. 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 principles of conflicts of law thereof.
IN WITNESS WHEREOF, Xx. Xxxxxx X. Xxxx, acting for and on
behalf of the Company, has executed this Warrant and caused the Company's
corporate seal to be hereunto affixed and attested by its Secretary or Assistant
Secretary as of June 23, 1997.
GENTA INCORPORATED
By: _____________________
Name: Xx. Xxxxxx X. Xxxx
Title: Vice President
ATTEST:
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Secretary or Assistant Secretary
[Corporate Seal]
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SUBSCRIPTION
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The undersigned, ____________________________, pursuant to the
provisions of the foregoing Warrant, hereby elects to exercise the within
Warrant to the extent of purchasing _____________________ shares of Common Stock
thereunder and hereby makes payment of $_______________ by certified or official
bank check in payment of the exercise price therefor.
Dated:_______________ Signature:_____________________________
Address:_______________________________
ASSIGNMENT
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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 Genta, Inc.
Dated:_______________ Signature:_____________________________
Address:______________________________
PARTIAL ASSIGNMENT
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FOR VALUE RECEIVED __________________________ hereby assigns
and transfers unto _________________________ the right to purchase __________
shares of the Common Stock, no par value per share, of Genta, 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 Genta, Inc.
Dated:_______________ Signature:___________________________
Address:_____________________________
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