EXHIBIT 4.2
EXECUTION COPY
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July 13, 1993
HOUSTON BIOTECHNOLOGY
INCORPORATED
AND
MELLON SECURITIES TRUST COMPANY
AS WARRANT AGENT
_____________________________
WARRANT AGREEMENT
Dated as of May 24, 1993
_____________________________
WARRANT AGREEMENT
TABLE OF CONTENTS/*/
RECITALS................................................... 1
SECTION 1. Appointment of Warrant Agent............... 1
SECTION 2. Form and Execution of Warrant
Certificates............................... 2
SECTION 3. Registration; Countersignature............. 3
SECTION 4. Registration of Transfers; Exchanges
of Warrant Certificates.................... 3
SECTION 5. Term of Warrants; Exercise of
Warrants; Exercise Price................... 4
SECTION 6. Payment of Taxes........................... 6
SECTION 7. Mutilated or Missing Warrant
Certificates............................... 6
SECTION 8. Reservation of Warrant Shares.............. 7
SECTION 9. Obtaining Stock Exchange Listings.......... 8
SECTION 10. Adjustments................................ 8
SECTION 11. No Impairment.............................. 17
SECTION 12. Fractional Interests....................... 18
SECTION 13. Notices to Warrant Holders................. 18
SECTION 14. Reports to Warrant Holders................. 19
SECTION 15. Merger, Consolidation or Change of
Name of Warrant Agent...................... 20
SECTION 16. Concerning the Warrant Agent............... 20
SECTION 17. Change of Warrant Agent.................... 22
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/*/ This Table of Contents does not constitute a part of this Agreement or
have any bearing upon the interpretation of any of its terms or
provisions.
SECTION 18. Identity of Transfer Agent................. 23
SECTION 19. Notices to Company and Warrant Agent....... 23
SECTION 20. Supplements and Amendments................. 24
SECTION 21. Successors................................. 24
SECTION 22. Termination................................ 24
SECTION 23. Governing Law.............................. 24
SECTION 24. Benefits of this Agreement................. 24
SECTION 25. Counterparts............................... 25
SECTION 26. Attorneys' Fees............................ 25
SECTION 27. Severability of Provisions................. 25
Form of Warrant Certificate................................ 1
EXHIBIT 4.2
WARRANT AGREEMENT
WARRANT AGREEMENT dated as of May 24, 1993 (the "Agreement") between
HOUSTON BIOTECHNOLOGY INCORPORATED, a Delaware corporation (the "Company"), and
MELLON SECURITIES TRUST COMPANY, a New York trust company, as Warrant Agent (the
"Warrant Agent").
RECITALS:
WHEREAS, the Company proposes to issue Warrants, as hereinafter described
(the "Warrants"), to purchase up to 3,000,000 shares of common stock, par value
$.01 per share (the "Common Stock"), of the Company, subject to increase in the
number of shares sufficient to implement the Adjustment Feature described in the
Company's Registration Statement on Form S-1 (Registration No. 33-56236), and
further subject to increase in and further subject to adjustment as provided in
Section 10 hereof; the shares of Common Stock, or pursuant to Section 10 hereof,
other securities issuable upon the exercise of the Warrants, are referred to
herein as the "Warrant Shares"; each Warrant entitles the holder thereof to
purchase one share of Common Stock, subject to adjustment as provided in Section
10 hereof; and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing so to act, in connection with the
issuance, transfer, exchange and exercise of Warrants and other matters as
provided herein; and
WHEREAS, the Company and the Warrant Agent wish to define the terms and
provisions of the Warrants and the respective rights and obligations thereunder
of the Company and the registered holders of the Warrants (the "Holders");
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereto agree as follows:
SECTION 1. Appointment of Warrant Agent. The Company hereby appoints the
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Warrant Agent to act as agent for the Company in accordance with the
instructions set forth hereinafter in this Agreement, and the Warrant Agent
hereby accepts such appointment.
SECTION 2. Form and Execution of Warrant Certificates.
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2.1 Form of Warrant Certificates. The certificates evidencing the
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Warrants (the "Warrant Certificates") shall be in registered form only and shall
be substantially in the form set forth in Exhibit A attached hereto, shall be
dated the date on which countersigned by the Warrant Agent, and may have such
letters, numbers or other marks of identification or designation and such
legends, summaries or endorsements printed, lithographed, engraved or otherwise
affixed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
law or with any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange on which the Warrants may from time to time be
listed, or to conform to usage.
2.2 Execution of Warrant Certificates. Warrant Certificates shall
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be executed on behalf of the Company by its President or any Vice President and
signed by its Secretary and have affixed thereon a facsimile of the Company's
seal. Each such signature upon the Warrant Certificates may be manual or
facsimile.
In case any officer of the Company who shall have signed any of the
Warrant Certificates shall cease to be such officer before countersignature and
delivery by the Warrant Agent, such Warrant Certificates, nevertheless, may be
countersigned, issued and delivered with the same force and effect as though
such person had not ceased to be such officer of the Company; and any Warrant
Certificate may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Warrant Certificate, shall be a proper
officer of the Company to sign such Warrant Certificate, although at the date of
the execution of this Agreement any such person was not such officer. Upon
countersignature by the Warrant Agent and delivery, the Warrant Certificate
shall be valid and binding upon the Company and the Holder thereof shall be
entitled to all of the benefits of this Agreement.
2.3 Temporary Certificates. Until definitive Warrant Certificates
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are ready for delivery, the Company may prepare and the Warrant Agent may
countersign temporary Warrant Certificates. Temporary Warrant Certificates
shall be substantially in the form of the definitive Warrant Certificates but
may have variations that the Company considers appropriate for temporary Warrant
Certificates. Upon the listing of the Warrants as described in Section 9(a), the
Company shall prepare and the Warrant Agent shall countersign definitive Warrant
Certificates in exchange for
temporary Warrant Certificates. Until so exchanged the temporary Warrant
Certificates shall in all respects be entitled to the same benefits under this
Agreement as definitive Warrant Certificates.
SECTION 3. Registration; Countersignature.
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3.1 Registration. The Warrant Agent, on behalf of the Company,
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shall number and register the Warrant Certificates in a register (the "Warrant
Register") maintained at the corporate trust office or agency of the Warrant
Agent (the "Office") as they are issued by the Company. The Company and the
Warrant Agent may deem and treat the Holder of any Warrant as the absolute owner
thereof (notwithstanding any notation of ownership or other writing thereon made
by anyone), for all purposes, and neither the Company nor the Warrant Agent
shall be bound to recognize any equitable or other claim to or interest in such
Warrant on the part of any other person, notwithstanding any notice to the
Company or the Warrant Agent to the contrary.
The Warrant Agent shall keep copies of this Agreement and any notices
given or received hereunder available for inspection by the Holders during
normal business hours at the Office. The Company shall supply the Warrant
Agent from time to time with such number of copies of this Agreement as the
Warrant Agent may request.
3.2 Countersignature. The Warrant Certificates shall be manually
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countersigned by the Warrant Agent and shall not be valid for any purpose unless
so countersigned. The Warrant Agent shall, upon written instructions of the
President, a Vice President or the Treasurer of the Company, initially
countersign, issue and deliver Warrant Certificates entitling the Holders
thereof to purchase not more than the number of Warrant Shares referred to above
in the first recital hereof and shall countersign and deliver Warrant
Certificates as otherwise provided in this Agreement.
SECTION 4. Registration of Transfers; Exchanges of Warrant Certificates.
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4.1 Registration of Transfers. Subject to compliance with the
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restrictions on transfer in this Agreement and subject to Section 6 hereof, the
Warrant Agent shall from time to time register the transfer of any outstanding
Warrant Certificate on the Warrant Register maintained at the Office, upon
surrender thereof accompanied by a written instrument or instruments of transfer
in form satisfactory to the Warrant
Agent, duly endorsed by the Holder thereof or by such Holder's appointed legal
representative or attorney-in-fact, or accompanied by proper evidence of
succession, assignment or authority to transfer. The signature of such Holder,
legal representative or attorney-in-fact shall be guaranteed by a qualified
Medallion Guarantee member. In all cases of transfer by an attorney, the
original power of attorney, duly approved, or an official copy thereof, duly
certified, shall be deposited and remain with the Warrant Agent. In case of
transfer by executors, administrators, guardians or other legal representatives,
duly authenticated evidence of their authority shall be produced, and may be
required to be deposited and remain with the Warrant Agent in its discretion.
Upon any such registration of transfer in such name or names as may be directed
in writing by the Holder, the Warrant Agent shall countersign and deliver a new
Warrant Certificate(s) without charge to such Holder, except as set forth in
Section 7 hereof, to the person or persons entitled to receive the same and the
surrendered Warrant Certificate shall be cancelled by the Warrant Agent.
Cancelled Warrant Certificates shall thereafter be disposed of in a manner
satisfactory to the Company.
4.2 Exchanges of Warrant Certificates. Each Warrant Certificate
---------------------------------
may be exchanged at the option of the Holder without charge to such Holder
thereof when surrendered to the Warrant Agent at the Office properly endorsed in
the manner described in subsection 4.1 hereof for another Warrant Certificate(s)
of like tenor and representing in the aggregate a like number of Warrants.
Thereupon, the Warrant Agent shall countersign and deliver to the person(s)
entitled thereto a new Warrant Certificate(s) as so requested. Warrant
Certificates surrendered for exchange shall be cancelled by the Warrant Agent.
Such cancelled Warrant Certificates shall then be disposed of by such Warrant
Agent in a manner satisfactory to the Company.
SECTION 5. Term of Warrants; Exercise of Warrants; Exercise Price.
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5.1 Term of Warrants. Subject to the provisions of this Agreement,
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each Holder shall have the right, which may be exercised during the period (the
"Exercise Period") commencing at the time of original issuance of the Warrants
and ending at 5:00 p.m., New York City time, on June 30, 1998 (the "Expiration
Time"), to purchase from the Company the number of fully paid and nonassessable
Warrant Shares which the Holder may at the time be entitled to purchase on
exercise of such Warrants and payment of the Exercise Price (as defined below)
for such Warrant Shares. Each Warrant not exercised
prior to the Expiration Time shall automatically become void and no longer
outstanding.
5.2 Exercise of Warrants. During the Exercise Period (and provided
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that a current prospectus is on file with the Securities and Exchange
Commission, and an exemption is available therefor under applicable state
securities laws or, if required, the Warrant Shares have been registered or
qualified under applicable state securities laws), a Warrant may be exercised in
whole or in part upon surrender to the Warrant Agent at the Office of the
Warrant Certificate(s) evidencing the Warrants to be exercised, together with
the form of election to purchase on the reverse thereof (the "Purchase Form")
duly completed and signed, which signature shall be guaranteed by a qualified
Medallion Guarantee member, and upon payment to the Warrant Agent, for the
account of the Company, of the Exercise Price for the number of Warrant Shares
in respect of which such Warrants are then exercised. Payment of the aggregate
Exercise Price shall be made by certified check payable to the order of the
Company. The Company agrees to use its reasonable best efforts to maintain on
file (at any time when the Market Price of the Common Stock exceeds the Exercise
Price then in effect) a prospectus relating to the issuance and sale of Warrant
Shares pursuant to the exercise of the Warrants.
Subject to the provisions of Section 6 hereof, upon due exercise of
the Warrants and surrender of the Warrant Certificate with the Purchase Form and
payment of the Exercise Price as aforesaid, the Company shall cause to be issued
and delivered with all reasonable dispatch to or upon the written order of the
Holder and in such name or names as the Holder may designate a certificate(s)
for the number of full Warrant Shares so purchased, together with cash in
respect of any fractional Warrant Shares otherwise issuable upon exercise. Such
certificate(s) shall be deemed to have been issued, and any person so designated
to be named therein shall be deemed to have become a holder of record of such
Warrant Shares, as of the latest of the date of the surrender of such Warrant
Certificate, surrender of the Purchase Form and payment of the Exercise Price.
The Warrants shall be exercisable as provided herein during the
Exercise Period at the election of the Holder either in whole or from time to
time in part. Only whole numbers of Warrants may be exercised. In the event
that prior to the Expiration Time the Holder of the Warrant Certificate shall
exercise fewer than all of the Warrants evidenced thereby, a new Warrant
Certificate(s) evidencing the remaining unexercised Warrant(s) will be issued to
such
Holder, and the Warrant Agent is hereby irrevocably authorized to countersign
and to deliver the required new Warrant Certificate(s) pursuant to the
provisions of this Section 6 and of subsection 3.2 hereof, and the Company,
whenever required by the Warrant Agent, will supply the Warrant Agent with
Warrant Certificates duly executed on behalf of the Company for such purpose.
All Warrant Certificates surrendered upon exercise of Warrants shall
be cancelled by the Warrant Agent. Such cancelled Warrant Certificates shall
then be disposed of by the Warrant Agent in a manner satisfactory to the
Company. The Warrant Agent shall account promptly to the Company with respect to
Warrants exercised and concurrently pay to the Company all monies received by
the Warrant Agent for the purchase of the Warrant Shares through the exercise of
such Warrants.
5.3 Exercise Price. The price per share at which each Warrant Share
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shall be purchased upon exercise of each Warrant shall be (i) $5.00 during the
period commencing at the time of original issuance of the Warrants and ending at
5:00 p.m., New York City time on June 30, 1995 and (ii) $10.00 during the period
commencing July 1, 1995 and ending at the Expiration Time, in each case subject
to adjustment pursuant to Section 10 hereof (the "Exercise Price").
SECTION 6. Payment of Taxes. The Company covenants and agrees that it
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will pay when due and payable all documentary, stamp and other taxes
attributable to the issuance or delivery of the Warrant Certificates or of the
Warrant Shares purchasable upon the exercise of Warrants; provided, however,
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that the Company shall not be required to pay any tax or taxes which may be
payable in respect of any transfer involving the issue of any Warrant
Certificate(s) or any certificate(s) for Warrant Shares in a name other than
that of the Holder of such transferred Warrant Certificate(s) or of the
registered holder of such transferred certificate(s) for Warrant Shares and the
Company shall not be required to issue or deliver such Warrant Certificate(s) or
such certificate(s) for Warrant Shares unless or until the person or persons
requesting the issuance thereof shall have paid to the Company the amount of
such tax or shall have established to the reasonable satisfaction of the Company
that such tax has been paid.
SECTION 7. Mutilated or Missing Warrant Certificates. In the event that
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any Warrant Certificate shall be mutilated, lost, stolen or destroyed, the
Company may, in its discretion, issue and the Warrant Agent countersign and
deliver in exchange and substitution for and upon cancellation of the
mutilated Warrant Certificate, or in lieu of and substitution for the Warrant
Certificate lost, stolen or destroyed, a new Warrant Certificate of like tenor
and representing an equivalent number of Warrants, but only, in case of a lost,
stolen or destroyed certificate, upon receipt of evidence satisfactory to the
Company and the Warrant Agent of such loss, theft or destruction. A Holder
applying for such substitute Warrant Certificate shall also comply with such
other reasonable requests (including, without limitation, in the case of a lost,
stolen or destroyed Warrant Certificate, a request to provide a letter of
indemnification or an indemnity bond sufficient in the reasonable judgment of
the Company and the Warrant Agent to protect the Company and the Warrant Agent
from any loss that either of them may suffer if a Warrant Certificate is
replaced) and pay such other reasonable charges as the Company or the Warrant
Agent may reasonably prescribe.
SECTION 8. Reservation of Warrant Shares. (a) The Company shall at all
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times keep reserved, free from preemptive rights, out of its authorized Common
Stock or other securities of the Company issuable upon the exercise of the
Warrants, a number of shares of Common Stock or such other securities sufficient
to provide for the exercise of the right of purchase represented by the
outstanding Warrants.
A transfer agent, if appointed, for the Warrant Shares (the "Transfer
Agent") will be irrevocably authorized and directed at all times to reserve such
number of Warrant Shares as shall be required for such purpose. The Company
shall keep a copy of this Agreement on file with the Transfer Agent. The
Warrant Agent is hereby irrevocably authorized to requisition from time to time
from the Company or such Transfer Agent the certificates representing Warrant
Shares required to honor outstanding Warrants upon exercise thereof in
accordance with the terms of this Agreement. The Company shall supply such
Transfer Agent with such duly executed certificates for such purposes and shall
provide or otherwise make available any cash which would be payable as provided
in Section 12 hereof. Whenever the Warrant Agent countersigns and delivers
certificates representing Warrant Shares pursuant to this Agreement, the Warrant
Agent will promptly provide written notice thereof to the Transfer Agent. The
Company shall furnish such Transfer Agent a copy of all notices of adjustments
and certificates related thereto which are delivered to the Warrant Agent or
transmitted to each
Holder pursuant to subsection 10.2 and Section 13 hereof.
(b) Before taking any action which would cause an adjustment pursuant to
Section 10 hereof to reduce the Exercise Price below the then par value, if any,
of the Warrant Shares, the Company will take any and all corporate action in
compliance with all applicable laws which may, in the opinion of its counsel
(including in-house or special counsel), be necessary in order that the Company
may validly and legally issue fully paid and nonassessable Warrant Shares at the
Exercise Price as so adjusted.
(c) The Company covenants that all Warrant Shares will, upon issuance, be
fully paid, nonassessable, free of preemptive rights and free from all taxes
payable by the Company, liens, charges and security interests (except any liens,
charges or security interests created or suffered to be created by any of the
Holders) and will not be subject to any restrictions on voting or transfer
thereof that are created by the Company except for such restrictions on voting
or transfer provided in this Agreement, the Restated Certificate of
Incorporation or Bylaws of the Company, as they may be amended from time to time
or as otherwise provided by law.
SECTION 9. Obtaining Stock Exchange Listings. The Company will from time
---------------------------------
to time take all action which may be necessary so that the Warrant Shares,
immediately upon their issuance upon the exercise of Warrants, will be listed on
the principal securities exchanges and markets within the United States of
America, if any, on which other shares of Common Stock or other securities
issuable upon the exercise of the Warrants are then listed.
SECTION 10. Adjustments.
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10.1 The number and kind of Warrant Shares purchasable upon the
exercise of each Warrant and the Exercise Price shall be subject to adjustment
(provided, that in no event may the Exercise Price be less than the par value of
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a share of Common Stock) from time to time upon the happening of certain events
occurring on or after the date of original issue of the Warrants as follows:
(a) In case of any reclassification or change of outstanding securities
issuable upon exercise of the Warrants (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 case of any consolidation or
merger of the Company with or into another entity (other than a merger with
another entity in which the Company is the surviving entity and which does not
result in any reclassification or change -- 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 -- of outstanding securities issuable
upon exercise of the Warrants) or in the case of a sale or conveyance in a
single transaction or in a series of related transactions with the same
purchaser or affiliates thereof of all or substantially all the assets of the
Company as an entity, the Holders shall have, and the Company, or such successor
entity or purchaser, shall covenant in the constituent documents effecting any
of the foregoing transactions that the Holders do have, the right to obtain upon
the exercise of the Warrants, in lieu of each share of Common Stock theretofore
issuable upon exercise of the Warrants, the kind and amount of shares of stock,
other securities, money and property receivable, upon such reclassification,
change, consolidation or merger, or conveyance or sale of assets, by a holder of
one share of Common Stock issuable upon exercise of the Warrants as if they had
been exercised immediately prior to such reclassification, change, consolidation
or merger, or conveyance or sale of assets. The constituent documents effecting
any reclassification, change, consolidation or merger, or conveyance or sale of
assets shall provide for any adjustments which shall be as nearly equivalent as
may be practicable to the adjustments provided in this paragraph (a). The
provisions of this paragraph (a) shall similarly apply to successive
reclassifications, changes, consolidations or mergers, or conveyances or sales
of assets.
(b) If the Company at any time while any of the Warrants are outstanding
shall subdivide or combine its Common Stock, the Exercise Price shall be
proportionately reduced, in case of subdivision of shares, as at the effective
date of such subdivision, or if the Company shall take a record of holders of
its Common Stock for the purpose of so subdividing, as at such record date,
whichever is earlier, or shall be proportionately increased, in the case of
combination of shares, as at the effective date of such combination or, if the
Company shall take a record of holders of its
Common Stock for the purpose of so combining, as at such record date, whichever
is earlier.
(c) If the Company at any time while any of the Warrants are outstanding
shall pay to any holders of securities of the Company a dividend payable in, or
make any other distribution of, Common Stock, the Exercise Price shall be
adjusted, as at the date the Company shall take a record of the holders of its
Common Stock for the purpose of receiving such dividend or other distribution
(or if no such record is taken, as at the date of such payment or other
distribution), to that price determined by multiplying the Exercise Price in
effect immediately prior to such record date (or if no such record is taken,
then immediately prior to such payment or other distribution) by a fraction (1)
the numerator of which shall be the total number of shares of Common Stock
outstanding immediately prior to such dividend or distribution, and (2) the
denominator of which shall be the total number of shares of Common Stock
outstanding immediately after such dividend or distribution (plus in the event
that the Company paid cash for fractional shares, the number of additional
shares which would have been outstanding had the Company issued fractional
shares in connection with said dividend, except to the extent such payment of
cash is treated as a dividend payable out of profits or surplus legally
available for the payment of dividends under the laws of the State of Delaware).
(d) If the Company at any time while any of the Warrants are outstanding
shall issue any additional shares of Common Stock (otherwise than as provided in
paragraphs (a) through (c) of this subsection 10.1) at a price per share less
than the average Price per share of Common Stock for the 20 trading days
immediately preceding the date of the authorization of such issuance (the
"Market Price") by the Board of Directors of the Company (the "Board of
Directors"), then the Exercise Price upon each such issuance shall be adjusted
to that price determined by multiplying the Exercise Price by a fraction:
(i) the numerator of which shall be the sum of (1) the number of
shares of Common Stock outstanding immediately prior to the issuance of such
additional shares of Common Stock multiplied by the Market Price, and (2) the
consideration, if any, received and deemed received by the Company
upon the issuance of such additional shares of Common Stock, and
(ii) the denominator of which shall be the Market Price multiplied by
the total number of shares of Common Stock outstanding immediately after the
issuance of such additional shares of Common Stock.
No adjustment of the Exercise Price shall be made in an amount less than
1%, but any such lesser adjustment shall be carried forward and shall be made at
the time of the next subsequent adjustment which, together with any adjustments
so carried forward, shall amount to 1% or more. Further, no adjustments of the
Exercise Price shall be made under this paragraph (d) upon the issuance of any
additional shares of Common Stock that (x) are issued pursuant to thrift plans,
stock purchase plans, stock bonus plans, stock option plans, employee stock
ownership plans and other incentive or profit sharing arrangements for the
benefit of employees or scientific or business consultants (including directors)
("Employee Benefit Plans") that otherwise would cause an adjustment under this
paragraph (d); (y) are issued pursuant to any Common Stock Equivalent (i) which
was outstanding on the date of this Agreement or (ii) if upon the issuance of
any such Common Stock Equivalent, any such adjustments shall previously have
been made pursuant to paragraph (e) of this subsection 10.1 or (iii) if no
adjustment was required pursuant to paragraph (e) of this subsection 10.1; or
(z) are Warrant Shares.
The Price per share of Common Stock on any day means the average (mean) of
the reported "high" and "low" sales prices for such shares as reported in The
---
Wall Street Journal's American Stock Exchange-Composite Transactions listing for
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such day (corrected for obvious typographical errors), or if such shares are not
reported in such listing, then the average of the reported "high" and "low"
sales prices on the largest national securities exchange (based on the aggregate
dollar value of securities listed) on which such shares are listed or traded, or
if such shares are not listed or traded on any national securities exchange,
then the average of the reported "high" and "low" sales prices for such shares
in the over-the-counter market, as reported on the National Association of
Securities Dealers Automated Quotations System, or, if such prices shall not be
reported thereon, the average of the
closing bid and asked prices so reported, or, if such prices shall not be
reported, then the average of the closing bid and asked prices reported by the
National Quotation Bureau Incorporated, or, in all other cases, the value
established by the Board of Directors in good faith. The "average" Price per
share of the Common Stock for any period shall be determined by dividing the sum
of the Prices determined for the individual trading days in such period by the
number of trading days in such period.
(e) In case the Company shall issue any security or evidence of
indebtedness which is convertible into or exchangeable for Common Stock
("Convertible Security"), or any warrant, option or other right to subscribe for
or purchase Common Stock or any Convertible Security, other than pursuant to
Employee Benefit Plans (together with Convertible Securities, "Common Stock
Equivalent"), or if, after any such issuance, the price per share for which
additional shares of Common Stock may be issuable thereunder is amended, then
the Exercise Price upon each such issuance or amendment shall be adjusted as
provided in paragraph (d) of this subsection 10.1 hereof on the basis that (i)
the maximum number of additional shares of Common Stock issuable pursuant to all
such Common Stock Equivalents shall be deemed to have been issued as of the
earlier of (a) the date on which the Company shall enter into a firm contract
for the issuance of such Common Stock Equivalent, or (b) the date of actual
issuance of such Common Stock Equivalent; and (ii) the aggregate consideration
for such maximum number of additional shares of Common Stock shall be deemed to
be the minimum consideration received and receivable by the Company for the
issuance of such additional shares of Common Stock pursuant to such Common Stock
Equivalent; provided, however, that no adjustment shall be made pursuant to this
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paragraph (e) unless the consideration received and receivable by the Company
per share of Common Stock for the issuance of such additional shares of Common
Stock pursuant to such Common Stock Equivalent is less than the Market Price.
No adjustment of the Exercise Price shall be made under this paragraph (e) upon
the issuance of any Convertible Security which is issued pursuant to the
exercise of any warrants or other subscription or purchase rights therefor, if
any adjustment shall previously have been made in the Exercise Price then in
effect upon the issuance of such warrants or other rights pursuant to this
paragraph (e).
(f) The following provisions shall be applicable to the making of
adjustments in the Exercise Price hereinbefore provided in this subsection 10.1:
(i) The consideration received by the Company shall be deemed to be
the following: to the extent that any additional shares of Common Stock or any
Common Stock Equivalent shall be issued for cash consideration, the
consideration received by the Company therefor, or, if such additional shares of
Common Stock or Common Stock Equivalent are offered by the Company for
subscription, the subscription price, or, if such additional shares of Common
Stock or Common Stock Equivalent are sold to underwriters or dealers for public
offering without a subscription offering, the initial public offering price, in
any such case excluding any amounts paid or receivable for accrued interest or
accrued dividends and without deduction of any compensation, discounts,
commissions or expenses paid or incurred by the Company for and in the
underwriting of, or otherwise in connection with, the issue thereof; to the
extent that such issuance shall be for a consideration other than cash, then,
except as herein otherwise expressly provided, the fair value of such
consideration at the time of such issuance as determined in good faith by the
Board of Directors, as evidenced by a certified resolution of the Board of
Directors delivered to the Warrant Agent setting forth such determination. The
consideration for any additional shares of Common Stock issuable pursuant to any
Common Stock Equivalent shall be the consideration received by the Company for
issuing such Common Stock Equivalent, plus the additional consideration payable
to the Company upon the exercise, conversion or exchange of such Common Stock
Equivalent. In case of the issuance at any time of any additional shares of
Common Stock or Common Stock Equivalent in payment or satisfaction of any
dividend upon any class of stock other than Common Stock, the Company shall be
deemed to have received for such additional shares of Common Stock or Common
Stock Equivalent (which shall not be deemed to be a dividend payable in, or
other distribution of, Common Stock under Section (c)(i) above) a consideration
equal to the amount of such dividend so paid or satisfied.
(ii) Upon the expiration of the right to convert, exchange or exercise
any Common Stock Equivalent the issuance of which effected an adjustment in the
Exercise Price, if any such Common Stock Equivalent shall not have been
converted, exercised or exchanged, the number of shares of Common Stock deemed
to be issued and outstanding by reason of the fact that they were issuable upon
conversion, exchange or exercise of any such Common Stock Equivalent shall no
longer be computed as set forth above, and the Exercise Price shall forthwith be
readjusted and thereafter be the price which it would have been (but reflecting
any other adjustments in the Exercise Price made pursuant to the provisions of
paragraph (d) of this subsection 10.1 after the issuance of such Common Stock
Equivalent) had the adjustment of the Exercise Price made upon the issuance or
sale of such Common Stock Equivalent been made on the basis of the issuance only
of the number of additional shares of Common Stock actually issued upon
exercise, conversion or exchange of such Common Stock Equivalent and thereupon
only the number of additional shares of Common Stock actually so issued shall be
deemed to have been issued and only the consideration actually received by the
Company (computed as in subparagraph (i) of this paragraph (f)) shall be deemed
to have been received by the Company.
(iii) The number of shares of Common Stock at any time
outstanding shall not include any shares thereof then directly or indirectly
owned or held by or for the account of the Company or its subsidiaries.
(iv) For the purposes of this subsection 10.1, the term "shares of
Common Stock" shall mean shares of (i) the class of stock designated as the
Common Stock of the Company at the date hereof or (ii) any other class of stock
resulting from successive changes or reclassifications of such shares consisting
solely of changes in par value, or from par value to no par value, or from no
par value to par value. In the event that at any time, as a result of an
adjustment made pursuant to paragraph (a) of this subsection 10.1, the Warrants
shall entitle the Holders to purchase any securities other than shares of Common
Stock, thereafter the number of such other securities so
purchasable upon exercise of each Warrant and the Exercise Price of such
securities shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to the
Warrant Shares contained in this subsection 10.1, and the provisions of Section
6 and subsections 10.2 through 10.6, inclusive, with respect to the Warrant
Shares shall apply on like terms to any such other securities.
(g) The Exercise Price in effect from time to time shall be calculated to
four decimal places and rounded to the nearest thousandth.
10.2 Notice of Adjustment to Exercise Price. Whenever the Exercise
--------------------------------------
Price is required to be adjusted as provided in this Section 10, the Company
shall forthwith compute the adjusted Exercise Price and shall prepare a
certificate setting forth such adjusted Exercise Price and showing in reasonable
detail the facts upon which such adjustment is based. A copy of such certificate
shall forthwith be filed with the Warrant Agent and the Transfer Agent; and
thereafter, until further adjusted, the adjusted Exercise Price shall be as set
forth in such certificate, provided that the computation of such adjusted
Exercise Price shall be reviewed at least annually by the independent public
accountants regularly employed by the Company and said accountants shall file a
corrected certificate, if required, with the Warrant Agent and the Transfer
Agent. The Company shall mail or cause to be mailed to the Holders at least
semi-annually, a statement setting forth the adjustments, if any, made in the
applicable Exercise Price and not theretofore reported to the Holders, and the
reasons for such adjustment.
10.3 Voluntary Reduction. (a) The Company may at its option, but
-------------------
shall not be obligated to, at any time during the term of the Warrants provided
for in subsection 5.1 hereof, reduce the then current Exercise Price by any
amount selected by the Board of Directors; provided that if the Company elects
--------
so to reduce the then current Exercise Price, such reduction shall be
irrevocable during its effective period and remain in effect for a minimum of 20
days following the date of such election, after which time the Company may, at
its option, reinstate the Exercise Price in effect prior to such reduction.
Whenever the Exercise Price is reduced, the Company shall mail to the Holders a
notice of the reduction at least 15 days before the date the reduced Exercise
Price takes effect, stating the reduced Exercise Price and the period for which
such reduced Exercise Price will be in effect.
(b) The Company may make such decreases in the Exercise Price, in
addition to those required or allowed by this Section 10, as shall be determined
by it, as evidenced by a certified resolution of the Board of Directors
delivered to the Warrant Agent, to be advisable in order to avoid or diminish
any income tax to Holders resulting from any dividend or distribution of stock
or issuance of rights or warrants to purchase or subscribe for stock or from any
event treated as such for income tax purposes.
10.4 Deferral of Issuance or Payment. In any case in which
-------------------------------
subsection 10.1 hereof shall require that an adjustment in the Exercise Price be
made effective as of a record date for a specified event, the Company may elect
to defer until the occurrence of such event (i) issuing to the Holder of any
Warrant exercised after such record date the Warrant Shares and other capital
stock of the Company, if any, issuable upon such exercise over and above the
Warrant Shares and other capital stock of the Company, if any, issuable upon
such exercise on the basis of the Exercise Price prior to such adjustment and
(ii) paying to such Holder any amount in cash in lieu of a fractional share
pursuant to Section 12 hereof; provided, however, that the Company shall deliver
--------- -------
to such Holder a due xxxx or other appropriate instrument evidencing such
Holder's right to receive such additional Warrant Shares, other capital stock
and cash upon the occurrence of the event requiring such adjustment.
10.5 Form of Warrant Certificates. Irrespective of any adjustments
----------------------------
in the Exercise Price or the kind of Warrant Shares purchasable upon the
exercise of the Warrants, Warrant Certificates evidencing such Warrants
theretofore or thereafter issued may continue to express the same price and
number and kind of Warrant Shares as are stated in the Warrant Certificates
initially issuable pursuant to this Agreement.
10.6 Adjustment of Number of Shares. (a) Upon each adjustment of
------------------------------
the Exercise Price pursuant to paragraph (b), (c), (d) or (e) of subsection 10.1
hereof, each Warrant shall thereupon evidence the right to purchase that number
of shares of Common Stock (calculated to four decimal places and rounded to the
nearest thousandth of a share) obtained by multiplying the number of shares of
Common Stock purchasable immediately prior to such adjustment upon exercise of
the Warrant by the Exercise Price in effect immediately prior to such adjustment
and dividing the product so obtained by the Exercise Price in effect immediately
after such adjustment.
(b) The Company may elect on or after the date of any adjustment of
the Exercise Price, in lieu of making any
adjustment in the number of Warrant Shares purchasable upon the exercise of a
Warrant as provided in paragraph (a) above, to issue additional Warrants
representing the right to purchase the number of additional Warrant Shares
purchasable upon the exercise of a Warrant as provided in paragraph (a) above
resulting from such adjustment of the Exercise Price. Each of the Warrants
outstanding after such election shall be exercisable for the number of Warrant
Shares for which a Warrant was exercisable immediately prior to such adjustment.
The Company shall make a public announcement of its election to issue additional
Warrants, indicating the record date for such issuance of additional Warrants,
and, if known at the time, the number of additional Warrants to be issued. This
record date may be the date on which the Exercise Price is adjusted or any day
thereafter, but shall be at least ten days later than the date of the public
announcement. Upon each adjustment of the number of Warrants pursuant to this
paragraph (b), the Company shall, as promptly as practicable, cause to be
distributed to Holders of Warrant Certificates on such date, Warrant
Certificates evidencing, subject to paragraph (c) below, the additional Warrants
to which such Holders shall be entitled as a result of such adjustment or, at
the option of the Company, shall cause to be distributed to such Holders in
substitution and replacement for the Warrant Certificates held by such Holders
prior to the date of such adjustment, and upon surrender thereof, if required by
the Company, new Warrant Certificates evidencing all the Warrants to which such
Holders shall be entitled after such adjustment. Warrant Certificates to be so
distributed shall be issued, executed and countersigned in the manner provided
for herein (and may bear, at the option of the Company, the adjusted Exercise
Price) and shall be registered in the names of the Holders of Warrant
Certificates on the record date specified in the public announcement.
(c) The Company shall not be required to issue fractions of Warrants,
or to distribute Warrant Certificates or scrip evidencing fractional Warrants.
In lieu of such fractional Warrants, there shall be paid to the Holders of the
Warrant Certificates with regard to which such fractional Warrants would
otherwise be issuable, an amount in cash equal to the same fraction of the price
of one Warrant (determined in the manner analogous to that provided in Section
10.1(c) for a share of Common Stock), computed as of the trading day immediately
prior to the date on which such fractional Warrants would have been otherwise
issuable.
SECTION 11. No Impairment. Without limiting the generality of the
-------------
foregoing, the Company (i) will take all such action as may be necessary or
appropriate in order that
the Warrant Shares to be issued upon the exercise of the Warrants from time to
time outstanding will, when issued be fully paid and nonassessable, and (ii)
will not take any action which results in any adjustment if the total number of
shares of Common Stock issuable after the action upon the exercise of all of the
Warrants would exceed the total number of shares of Common Stock then authorized
by the Company's articles of incorporation and available for the purpose of
issuance upon such exercise.
SECTION 12. Fractional Interests. The Company shall not issue
--------------------
fractional Warrant Shares on the exercise of Warrants. If more than one Warrant
shall be presented for exercise at the same time by the same Holder, the number
of full Warrant Shares which shall be issuable upon the exercise thereof shall
be computed on the basis of the aggregate number of Warrant Shares purchasable
on exercise of the Warrants so presented. If any fraction of a Warrant Share
would be issuable on the exercise of any Warrants, the Company shall pay to the
Holder an amount in cash equal to the Price per share of Common Stock (or other
securities issuable upon the exercise of the Warrants) (as defined in paragraph
(d) of subsection 10.1 hereof) computed as of the trading day immediately
preceding the date the Warrant is presented for exercise, multiplied by such
fraction (but in no event less than an amount equal to such fraction multiplied
by the Exercise Price in effect at such time).
SECTION 13. Notices to Warrant Holders. In the event:
--------------------------
(i) of any consolidation or merger to which the Company is a party and
for which approval of any stockholders of the Company is required, or of the
conveyance or sale of all or substantially all of the assets of the Company, or
of any reclassification or change of the Common Stock or other securities
issuable upon exercise of the Warrants (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 a tender offer or exchange offer for shares
of Common Stock (or other securities issuable upon the exercise of the
Warrants); or
(ii) the Company shall declare any dividend (or any other
distribution), other than regular cash dividends, on the Common Stock; or
(iii) the Company shall authorize the granting to the holders
of Common Stock of rights or warrants to subscribe for or purchase any shares of
any class or series of capital stock; or
(iv) of the voluntary or involuntary dissolution, liquidation
or winding up of the Company;
then the Company shall cause to be filed with the Warrant Agent and shall cause
to be sent to each Holder at such Holder's address appearing on the Warrant
Register, at least 30 days prior to the applicable record date hereinafter
specified, or promptly in the case of events for which there is no record date,
by first-class mail, postage prepaid, a written notice stating (x) the date for
the determination of the holders of record of shares of Common Stock (or other
securities issuable upon the exercise of the Warrants) entitled to receive any
such dividends or other distribution, (y) the initial expiration date set forth
in any tender offer or exchange offer for shares of Common Stock (or other
securities issuable upon the exercise of the Warrants), or (z) the date on which
any such consolidation, merger, conveyance, transfer, dissolution, liquidation
or winding up is expected to become effective or consummated, and the date as of
which it is expected that holders of record of shares of Common Stock (or other
securities issuable upon the exercise of the Warrants) shall be entitled to
exchange such shares for securities or other property, if any, deliverable upon
such reclassification, consolidation, merger, conveyance, transfer, dissolution,
liquidation or winding up. Failure to give such notice or any defect therein
shall not affect the legality or validity of any distribution, right, option,
warrant, issuance, consolidation, merger, conveyance, transfer, dissolution,
liquidation or winding up, or the vote upon any action.
Nothing contained in this Agreement or in any of the Warrant Certificates
shall be construed as conferring upon the Holder thereof any rights of a
stockholder of the Company, including, without limitation, the right to vote, to
consent or to receive notice in respect of the meetings of stockholders or the
election of the Board of Directors or any other matter.
SECTION 14. Reports to Warrant Holders. The Company will cause to be
--------------------------
delivered, by first-class mail, postage prepaid, to each Holder at such Holder's
address appearing on the Warrant Register, a copy of any reports
delivered by the Company to the holders of Common Stock of the Company.
SECTION 15. Merger, Consolidation or Change of Name of Warrant Agent.
--------------------------------------------------------
Any entity into which the Warrant Agent may be merged or with which it may be
consolidated, or any entity resulting from any merger or consolidation to which
the Warrant Agent shall be a party, or any entity succeeding to the business of
the Warrant Agent shall be the successor to the Warrant Agent hereunder without
the execution or filing of any paper or any further act on the part of any of
the parties hereto; provided that such entity would be eligible for appointment
--------
as a successor to the Warrant Agent under the provisions of Section 17 hereof.
In case at the time such successor to the Warrant Agent shall succeed to the
agency created by this Agreement and any of the Warrant Certificates shall have
been countersigned but not delivered, any such successor to the Warrant Agent
may adopt the countersignature of the original Warrant Agent; and in case at
that time any of the Warrant Certificates shall not have been countersigned, any
successor to the Warrant Agent may countersign such Warrant Certificates either
in the name of the predecessor Warrant Agent or in the name of the successor to
the Warrant Agent; and in all such cases, such Warrant Certificates shall have
the full force and effect provided in the Warrant Certificates and in this
Agreement.
In case at any time the name of the Warrant Agent shall be changed and at
such time any of the Warrant Certificates shall have been countersigned but not
delivered, the Warrant Agent may adopt the countersignature under its prior
name; and in case at that time any of the Warrant Certificates shall not have
been countersigned, the Warrant Agent may countersign such Warrant Certificates
either in its prior name or in its changed name; and in all such cases, such
Warrant Certificates shall have the full force and effect provided in the
Warrant Certificates and in this Agreement.
SECTION 16. Concerning the Warrant Agent. The Warrant Agent
----------------------------
undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of which the Company and the Holders, by
their acceptance of the Warrants, shall be bound:
16.1 Correctness of Statements. The statements contained herein and
-------------------------
in the Warrant Certificates shall be taken as statements of the Company, and the
Warrant Agent assumes no responsibility for the correctness of any of the same
except such as describe the Warrant Agent or action taken or to be taken by it.
Unless otherwise provided in this
Agreement, the Warrant Agent assumes no responsibility with respect to the
distribution of the Warrant Certificates.
16.2 Breach of Covenants. The Warrant Agent shall not be
-------------------
responsible for any failure of the Company to comply with any of the covenants
contained in this Agreement or in the Warrant Certificates to be complied with
by the Company.
16.3 Reliance on Counsel. The Warrant Agent may consult at any time
-------------------
with counsel satisfactory to it (who may be counsel for the Company) and the
Warrant Agent shall incur no liability or responsibility to the Company or to
any Holder in respect of any action taken, suffered or omitted by it hereunder
in good faith and in accordance with the opinion or the advice of such counsel.
16.4 Reliance on Documents. The Warrant Agent shall incur no
---------------------
liability or responsibility to the Company or to any Holder for any action taken
in reliance on any Warrant Certificate, certificate representing shares of
capital stock of the Company, notice, resolution, waiver, consent, order,
certificate, or other paper, document or instrument believed by it to be genuine
and to have been signed, sent or presented by the proper party or parties.
16.5 Compensation. The Company agrees to pay to the Warrant Agent
------------
reasonable compensation for all services rendered by the Warrant Agent in the
execution of this Agreement, to reimburse the Warrant Agent for all expenses,
taxes and governmental charges and other charges of any kind and nature incurred
by the Warrant Agent in the execution of this Agreement, and to indemnify the
Warrant Agent and save it harmless against any and all liabilities, including
judgments, costs and counsel fees, for anything done or omitted by the Warrant
Agent in the execution of this Agreement except as a result of its negligence or
bad faith.
16.6 Other Transactions in Securities of the Company. Except as
-----------------------------------------------
prohibited by law, the Warrant Agent, and any stockholder, director, officer or
employee of it, may buy, sell or deal in any of the Warrants or other securities
of the Company or become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not the Warrant Agent under
this Agreement. Nothing herein shall preclude the Warrant Agent from acting in
any other capacity for the Company or for any other legal entity.
16.7 Liability of Warrant Agent. The Warrant Agent shall act
--------------------------
hereunder solely as agent for the Company, and its duties shall be determined
solely by the provisions hereof. The Warrant Agent shall not be liable for
anything which it may do or refrain from doing in connection with this Agreement
except for its own negligence or bad faith.
16.8 Adjustments to Exercise Price or Number of Warrant Shares. The
---------------------------------------------------------
Warrant Agent shall not at any time be under any duty or responsibility to any
Holder to make or cause to be made any adjustment of the Exercise Price or
number of the Warrant Shares deliverable as provided in this Agreement, or to
determine whether any facts exist which may require any of such adjustments, or
with respect to the nature or extent of any such adjustments, when made, or with
respect to the method employed in making the same. The Warrant Agent shall not
be accountable with respect to the validity or value or the kind or amount of
any Warrant Shares or of any securities or property which may at any time be
issued or delivered upon the exercise of any Warrant or with respect to whether
any such Warrant Shares or other securities will when issued be validly issued
and fully paid and nonassessable, and makes no representation with respect
thereto.
SECTION 17. Change of Warrant Agent. The Warrant Agent may
-----------------------
resign and be discharged from its duties under this Agreement by giving to the
Company notice in writing, specifying a date when such resignation shall take
effect, which notice shall be sent at least 30 days prior to the date so
specified, except that such shorter notice may be given as the Company shall, in
writing, accept as sufficient in the exercise of its sole discretion. Upon such
resignation, the Warrant Agent shall give notice in writing by first-class mail,
postage prepaid, to each Holder of a Warrant Certificate at his address
appearing in the Warrant Register. The Company may remove the Warrant Agent or
any successor warrant agent upon 30 days' notice in writing, mailed to the
Warrant Agent or any successor warrant agent and to the Transfer Agent by
registered or certified mail, and to the holders of Warrant Certificates by
first-class mail at their addresses appearing in the Warrant Register. If the
Warrant Agent shall resign, be removed or otherwise become incapable of acting
as Warrant Agent, the Company shall appoint a successor to such Warrant Agent.
If the Company shall fail to make such appointment within a period of 30 days
after it has been notified in writing of such incapacity by the Warrant Agent or
by a Holder, then any Holder may apply to any court of competent jurisdiction
for the appointment of a successor to the Warrant Agent. Pending appointment of
a successor to such Warrant Agent, either by the Company or by such a court,
the duties of the Warrant Agent shall be carried out by the Company. Not later
than the effective date of any appointment, the Company shall give notice
thereof to the predecessor Warrant Agent and the Transfer Agent, and shall
forthwith publish a copy of such notice once in a newspaper customarily
published on each business day, printed in the English language and of general
circulation in The City of New York. The Holders of a majority of the
unexercised Warrants shall be entitled at any time to remove the Warrant Agent;
thereafter the Company shall appoint a successor to such Warrant Agent. Any
successor to the Warrant Agent need not be approved by the former Warrant Agent.
After appointment, the successor to the Warrant Agent shall thereupon be the
Warrant Agent and shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Warrant Agent without
further act or deed; but the former Warrant Agent shall deliver and transfer to
the successor Warrant Agent any property at the time held by it hereunder and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Failure to give any notice provided for in this Section 17,
however, or any defect therein, shall not affect the legality or validity of the
resignation or removal of the Warrant Agent or the appointment of the successor
warrant agent, as the case may be.
SECTION 18. Identity of Transfer Agent. Forthwith upon the
--------------------------
appointment of any Transfer Agent for the Common Stock or any other securities
of the Company issuable upon the exercise of the Warrants or any successor
thereto, the Company shall file with the Warrant Agent a statement setting forth
the name and address of such Transfer Agent.
SECTION 19. Notices to Company and Warrant Agent. Any notice
------------------------------------
or demand authorized by this Agreement to be given or made by the Warrant Agent
or by any Holder to or on the Company shall be delivered in person or by
facsimile transmission, by courier guaranteeing overnight delivery or mailed by
first-class mail or registered mail, postage prepaid, (i) to the Company (until
another address is filed in writing by the Company with the Warrant Agent) as
follows:
Houston Biotechnology Incorporated
0000 Xxxxxxxx Xxxxxx Xxxxx
Xxx Xxxxxxxxx, Xxxxx 00000
Telecopy: (000) 000-0000
Attention: Chief Financial Officer
and (ii) to the Warrant Agent (until another address is filed in writing by the
Warrant Agent with the Company) as follows:
Mellon Securities Trust Company
000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Any notice pursuant to this Agreement by the Company or the Warrant Agent
to any Holder shall be in writing and shall be mailed by first-class mail,
postage prepaid, or otherwise delivered to such Holder at its address on the
Warrant Register.
Notices delivered personally shall be effective at the time delivered by
hand, notices sent by mail shall be effective four days after mailing, notices
sent by facsimile transmission shall be effective when receipt is acknowledged
and notices sent by courier guaranteeing next day delivery shall be effective on
the next business day after timely delivery to such courier.
SECTION 20. Supplements and Amendments. The Company and the Warrant
--------------------------
Agent may from time to time supplement or amend this Agreement without the
approval of any Holders in order to cure any ambiguity or to correct or
supplement any provision contained herein which may be defective or inconsistent
with any other provision herein, or to make any other provisions in regard to
matters in questions arising hereunder which the Company and the Warrant Agent
may deem necessary or desirable and which shall not in any way adversely affect
the interests of the Holders. Otherwise, the Company, when authorized by its
Board of Directors, and the Warrant Agent, together with the written consent of
the holders of at least 66-2/3% of the outstanding Warrants may amend or
supplement this Agreement.
SECTION 21. Successors. All the covenants and provisions of this
----------
Agreement by or for the benefit of the Company or the Warrant Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
SECTION 22. Termination. This Agreement shall terminate on the
-----------
fifteenth day following the later to occur of (i) the Expiration Time and (ii)
the date on which Warrant Shares have been issued upon the exercise of all
Warrants pursuant hereto.
SECTION 23. Governing Law. The laws of the State of Texas shall
-------------
govern this Agreement and the Warrant Certificates without regard to principles
of conflicts of law.
SECTION 24. Benefits of this Agreement. Nothing in this Agreement
--------------------------
shall be construed to give to any person or
entity other than the Company, the Warrant Agent and the Holders any legal or
equitable right, remedy or claim under this Agreement; this Agreement shall be
for the sole and exclusive benefit of the Company, the Warrant Agent and the
Holders.
SECTION 25. Counterparts. This Agreement may be executed in any
------------
number of counterparts, and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
SECTION 26. Attorneys' Fees. In any action or proceeding brought by
---------------
the Company, the Warrant Agent or the Holders to enforce any provision of this
Agreement or the Warrant Certificates, or where any provision hereof or thereof
is validly asserted as a defense, the successful party shall be entitled to
recover reasonable attorneys' fees in addition to any other available remedy.
SECTION 27. Severability of Provisions. Any provision of this
--------------------------
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
HOUSTON BIOTECHNOLOGY
INCORPORATED
By:_____________________________
J. Xxxxxxx Xxxxxx
President
MELLON SECURITIES TRUST
COMPANY
By:_____________________________
Name:___________________________
Title:__________________________
EXHIBIT A TO
WARRANT AGREEMENT
[ Form of Warrant Certificate]
[Face]
VOID AFTER 5:00 P.M.
NEW YORK CITY TIME ON June 30, 1998
No. __________ __________ Warrants
HOUSTON BIOTECHNOLOGY INCORPORATED
WARRANT CERTIFICATE
This Warrant Certificate ("Warrant Certificate") certifies that, for value
received, _____________________________________, or its registered assigns (the
"Holder"), is the registered owner of the number of Warrants ("Warrants") set
forth above, each expiring at 5:00 p.m. New York City time on June 30, 1998 (the
"Expiration Time") and entitling the owner hereof to purchase prior to the
Expiration Time, as set forth in the Warrant Agreement referred to on the
reverse hereof, the number of fully paid and nonassessable shares of common
stock, par value $.01 per share (the "Common Stock"), of Houston Biotechnology
Incorporated, a Delaware corporation (the "Company"), which is equal to the
number of Warrants set forth above, at the initial exercise price of $5.00 per
share, increasing to $10.00 per share after June 30, 1995 (the "Exercise
Price"). The Warrants evidenced hereby may be exercised in whole or in part by
surrender of this Warrant Certificate with the Purchase Form on the reverse
hereof duly completed and signed and the simultaneous payment of the Exercise
Price at the corporate trust office or agency of Mellon Securities Trust Company
or any successor thereto (the "Warrant Agent"), subject to the conditions set
forth herein and in the Warrant Agreement. The Exercise Price and number and
kind of Warrant Shares (as defined in the Warrant Agreement) issuable upon
exercise of the Warrants are subject to adjustment upon the occurrence of
certain events set forth in the Warrant Agreement.
No Warrant may be exercised after the Expiration Time, and each Warrant not
exercised prior to the Expiration Time shall automatically become void and no
longer outstanding.
Reference is hereby made to the further provisions of this Warrant
Certificate set forth on the reverse hereof, and
A-2
such further provisions shall for all purposes have the same effect as though
fully set forth herein.
This Warrant Certificate shall not be valid for any purpose unless
countersigned by the Warrant Agent, as such term is used in the Warrant
Agreement.
The laws of the State of Texas shall govern this Warrant Certificate
without regard to principles of conflicts of law.
IN WITNESS WHEREOF, Houston Biotechnology Incorporated has caused this
Warrant Certificate to be signed by its President and by its Secretary and has
caused its corporate seal to be affixed hereunto or imprinted hereon.
Houston Biotechnology Incorporated
[Corporate Seal]
By:_______________________
J. Xxxxxxx Xxxxxx
President
____________________________________
Secretary
Dated:
Countersigned: Mellon Securities Trust Company
(New York, New York)
__________________________________
as Warrant Agent
By: ________________________________
Authorized Officer
A-2
[Form of Warrant Certificate]
[Reverse]
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants exercisable prior to 5:00 p.m. New York City time
on June 30, 1998 (the "Expiration Time"), entitling the holder on exercise to
receive shares of common stock, par value $.01 per share (the "Common Stock"),
of Houston Biotechnology Incorporated (the "Company") and are issued pursuant to
the certain Warrant Agreement dated as of May 24, 1993 (the "Warrant
Agreement"), by and between the Company and Mellon Securities Trust Company, as
warrant agent (such warrant agent, or any successor thereto, hereinafter
referred to as the "Warrant Agent"), which Warrant Agreement is hereby
incorporated by reference in and made a part of this instrument and is hereby
referred to for a description of the rights, limitations of rights, obligations,
duties and immunities thereunder of the Warrant Agent, the Company and the
holders (the words "holders" or "holder" meaning the registered holders or
registered holder) of the Warrants. A copy of the Warrant Agreement may be
obtained without charge by the holder hereof upon written request to the Company
or the Warrant Agent.
Warrants may be exercised, as provided in the Warrant Agreement, at any
time in whole or in part from time to time prior to the Expiration Time at the
initial exercise price of $5.00 per share, increasing to $10.00 per share after
June 30, 1995 (the "Exercise Price"). The holder of Warrants evidenced by this
Warrant Certificate may exercise such Warrants by surrendering this Warrant
Certificate, with the Purchase Form set forth hereon properly completed and
signed, together with payment of the Exercise Price, at the corporate trust
office or agency of the Warrant Agent.
Payment of the Exercise Price shall be made by certified check payable to
the order of the Company.
In the event that upon any exercise of Warrants evidenced hereby the number
of Warrants exercised shall be less than the total number of Warrants evidenced
hereby, there shall be issued to the holder hereof a new Warrant Certificate
evidencing the number of Warrants not exercised. Only whole numbers of Warrants
may be exercised.
The Warrant Agreement provides that upon the occurrence of certain events
the Exercise Price and the number or kind of Warrant Shares purchasable upon the
exercise of a Warrant may, subject to certain conditions, be adjusted. The
Board of
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Directors of the Company, in its discretion, may reduce the Exercise Price. No
fractional shares of Common Stock may be issued upon the exercise of any
Warrant(s) evidenced hereby; in lieu thereof, a cash payment will be made as
provided in the Warrant Agreement.
Warrant Certificates, when surrendered at the corporate trust office or
agency of the Warrant Agent by the holder thereof in person or by legal
representative or attorney-in-fact duly authorized in writing, may be exchanged,
in the manner and subject to the limitations provided in the Warrant Agreement,
but without payment of any service charge, for new Warrant Certificate(s) of
like tenor evidencing in the aggregate a like number of Warrants.
Upon due presentation for registration of transfer of this Warrant
Certificate at the corporate trust office or agency of the Warrant Agent, a new
Warrant Certificate(s) of like tenor and evidencing in the aggregate a like
number of Warrants shall be issued to the transferee(s) in exchange for this
Warrant Certificate, subject to the limitations provided in the Warrant
Agreement, without charge except for any tax or other governmental charge
imposed in connection therewith.
The Company and the Warrant Agent may deem and treat the registered holder
hereof as the absolute owner of this Warrant Certificate (notwithstanding any
notation of ownership or other writing hereon made by anyone), for the purpose
of any exercise hereof, of any distribution to the holder hereof, and for all
other purposes, and neither the Company nor the Warrant Agent shall be affected
by any notice to the contrary. Neither the Warrant Agreement, the Warrants nor
this Warrant Certificate entitles any holder hereof to any rights of a
stockholder of the Company.
For residents of the State of Ohio, Warrants may not be exercised unless at
the time of exercise the underlying shares of Common Stock are exempt or are the
subject matter of an exempt transaction or are registered by description,
coordination or qualification, or, at the time of such exercise, are the subject
matter of a transaction which has been registered by description.
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PURCHASE FORM
(To be executed upon exercise of Warrant)
The undersigned hereby irrevocably elects to exercise _________
Warrants evidenced by this Warrant Certificate, and herewith tenders in payment
for such exercise payment of the Exercise Price in full, in the form of a
certified check payable to the order of Houston Biotechnology Incorporated in
the amount of $_______, all in accordance with the terms hereof. The
undersigned requests that the Warrant Shares or other securities receivable upon
exercise be in fully registered form and registered in such name and delivered,
together with any other property receivable upon exercise, as specified below.
If said number of Warrants exercised is less than all of the Warrants evidenced
hereby, the undersigned requests that a new Warrant Certificate representing the
remaining Warrants evidenced hereby be issued and delivered as set forth below.
Issue to:
______________________________________________
(Name)
______________________________________________
(Address, including zip code)
______________________________________________
(Social security or other identifying number)
Deliver to:
______________________________________________
(Name)
______________________________________________
(Address, including zip code)
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Dated: ___________________
____________________________________
(Insert social security or other
identifying number of Holder)
Signature: ____________________
NOTE: Signature must conform in all
respects to name of Holder as
specified on the face of this Warrant
Certificate in every particular,
without alteration or enlargement or
any change whatsoever, unless this
Warrant Certificate has been
assigned.
Signature Guarantee: ______________________
Signature(s) must be guaranteed by a
qualified Medallion Guarantee member
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ASSIGNMENT
(To be executed only upon assignment of the Warrant Certificate)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _________________________________ (name and address of assignee
must be printed or typewritten) the within Warrant Certificate, together with
all right, title and interest therein, and does hereby irrevocably constitute
and appoint ____________________________ Attorney-in-fact, to transfer said
Warrant Certificate on the books of the Company with full power of substitution
in the premises.
Dated: ________________________
______________________________
Signature of Registered Holder
NOTE: The above signature must correspond with
the name as written on the face of this
Warrant Certificate in every particular,
without alteration or enlargement or any
change whatever.
Signature Guarantee: _______________________
Signature(s) must be guaranteed by a
qualified Medallion Guarantee member
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