EXHIBIT 10.105
NEITHER THIS WARRANT NOR ISSUANCE OF THE SECURITIES ISSUABLE UPON THE EXERCISE
HEREOF TO THE HOLDER HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
QUALIFIED OR REGISTERED UNDER STATE SECURITIES OR BLUE SKY LAWS. NEITHER THIS
WARRANT NOR SUCH SECURITIES MAY BE SOLD OR OTHERWISE TRANSFERRED EXCEPT IN
COMPLIANCE WITH THE SECURITIES ACT OF 1933, APPLICABLE STATE SECURITIES OR BLUE
SKY LAWS AND THE APPLICABLE RULES AND REGULATIONS THEREUNDER.
THIS WARRANT MAY NOT BE TRANSFERRED EXCEPT AS PROVIDED IN SECTION 25.
No. W-2004-__ Right to Purchase __________
Shares of Common Stock of
Viragen, Inc.
VIRAGEN, INC.
COMMON STOCK PURCHASE WARRANT
VIRAGEN, INC., a Delaware corporation, hereby certifies that, for
value received, __________________________________, or registered assigns (the
"Holder"), is entitled, subject to the terms set forth below, to purchase from
the Company at any time or from time to time before 5:00 p.m., New York City
time, on the Expiration Date (such capitalized term and all other capitalized
terms used herein having the respective meanings provided herein), __________
fully paid and nonassessable shares of Common Stock at a purchase price per
share equal to the Purchase Price. The number of such shares of Common Stock and
the Purchase Price are subject to adjustment as provided in this Warrant.
1. DEFINITIONS.
(a) As used in this Warrant, the term "Holder" shall have the
meaning assigned to such term in the first paragraph of this Warrant.
(b) All the agreements or instruments herein defined shall mean such
agreements or instruments as the same may from time to time be supplemented or
amended or the terms thereof waived or modified to the extent permitted by, and
in accordance with, the terms thereof and of this Warrant.
(c) The following terms shall have the following meanings (such
meanings to be equally applicable to both the singular and plural forms of the
terms defined):
"Affiliate" means, with respect to any Person, any other Person that
directly, or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with the subject Person. For
purposes of this definition, "control" (including, with correlative
meaning, the terms "controlled by" and "under common control with"), as
used with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of
voting securities or by contract or otherwise.
"Aggregate Purchase Price" means at any time an amount equal to the
product obtained by multiplying (x) the Purchase Price times (y) the
number of shares of Common Stock for which this Warrant may be exercised
at such time.
"Aggregation Parties" shall have the meaning provided in Section
2(c).
"AMEX" means the American Stock Exchange, Inc.
"Board of Directors" means the Board of Directors of the Company.
"Business Day" means any day other than a Saturday, Sunday or other
day on which commercial banks in The City of New York are authorized or
required by law or executive order to remain closed.
"Common Stock" includes the Company's Common Stock, par value $.01
per share, (and any purchase rights issued with respect to the Common
Stock in the future) as authorized on the date hereof, and any other
securities into which or for which the Common Stock (and any such rights
issued with respect to the Common Stock) may be converted or exchanged
pursuant to a plan of recapitalization, reorganization, merger, sale of
assets or otherwise and any stock (other than Common Stock) and other
securities of the Company or any other Person which the Holder at any time
shall be entitled to receive, or shall have received, on the exercise of
this Warrant, in lieu of or in addition to Common Stock.
"Common Stock Equivalents" means any warrant, option, subscription
or purchase right with respect to shares of Common Stock, any security
convertible into, exchangeable
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for, or otherwise entitling the holder thereof to acquire, shares of
Common Stock or any warrant, option, subscription or purchase right with
respect to any such convertible, exchangeable or other security.
"Company" shall include Viragen, Inc., a Delaware corporation, and
any corporation that shall succeed to or assume the obligations of
Viragen, Inc. hereunder in accordance with the terms hereof.
"Current Fair Market Value" means when used with respect to the
Common Stock as of a specified date with respect to each share of Common
Stock, the average of the closing prices of the Common Stock sold on all
securities exchanges (including the AMEX, the Nasdaq and the Nasdaq
SmallCap) on which the Common Stock may at the time be listed, or, if
there have been no sales on any such exchange on such day, the average of
the highest bid and lowest asked prices on all such exchanges at the end
of such day, or, if on such day the Common Stock is not so listed, the
average of the representative bid and asked prices quoted in the Nasdaq
System as of 4:00 p.m., New York City time, or, if on such day the Common
Stock is not quoted in the Nasdaq System, the average of the highest bid
and lowest asked price on such day in the domestic over-the-counter market
as reported by the National Quotation Bureau, Incorporated, or any similar
successor organization, in each such case averaged over a period of five
Trading Days consisting of the day as of which the Current Fair Market
Value of Common Stock is being determined (or if such day is not a Trading
Day, the Trading Day next preceding such day) and the four consecutive
Trading Days prior to such day. If on the date for which Current Fair
Market Value is to be determined the Common Stock is not listed on any
securities exchange or quoted in the Nasdaq System or the over-the-counter
market, the Current Fair Market Value of Common Stock shall be the highest
price per share which the Company could then obtain from a willing buyer
(not an employee or director of the Company at the time of determination)
in an arms'-length transaction for shares of Common Stock sold by the
Company, from authorized but unissued shares, as determined in good faith
by the Board of Directors.
"Current Market Price" shall mean the arithmetic average of the
daily Market Prices per share of Common Stock for the five consecutive
Trading Days immediately prior to the date in question; provided, however,
that (1) if the "ex" date (as hereinafter defined) for any event (other
than the issuance or distribution requiring such computation) that
requires an adjustment to the Purchase Price pursuant
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to Sections 4, 5, 6, 7 or 8 occurs during such ten consecutive Trading
Days, the Market Price for each Trading Day prior to the "ex" date for
such other event shall be adjusted by multiplying such Market Price by the
same fraction by which the Purchase Price is so required to be adjusted as
a result of such other event, (2) if the "ex" date for any event (other
than the issuance or distribution requiring such computation) that
requires an adjustment to the Purchase Price pursuant to Sections 4, 5, 6,
7 or 8 occurs on or after the "ex" date for the issuance or distribution
requiring such computation and prior to the day in question, the Market
Price for each Trading Day on and after the "ex" date for such other event
shall be adjusted by multiplying such Market Price by the reciprocal of
the fraction by which the Purchase Price is so required to be adjusted as
a result of such other event, and (3) if the "ex" date for the issuance or
distribution requiring such computation is prior to the day in question,
after taking into account any adjustment required pursuant to clause (1)
or (2) of this proviso, the Market Price for each Trading Day on or after
such "ex" date shall be adjusted by adding thereto the amount of any cash
and the fair market value (as determined in good faith by the Board of
Directors) of the evidences of indebtedness, shares of capital stock or
assets being distributed applicable to one share of Common Stock as of the
close of business on the day before such "ex" date. For purposes of this
paragraph, the term "ex" date, (1) when used with respect to any issuance
or distribution, means the first date on which the Common Stock trades,
regular way, on the relevant exchange or in the relevant market from which
the Market Price was obtained without the right to receive such issuance
or distribution, and (2) when used with respect to any subdivision or
combination of shares of Common Stock, means the first date on which the
Common Stock trades, regular way, on such exchange or in such market after
the time at which such subdivision or combination becomes effective.
Notwithstanding the foregoing, whenever successive adjustments to the
Purchase Price are called for pursuant to Sections 4, 5, 6, 7 or 8, such
adjustments shall be made to the Current Market Price as may be necessary
or appropriate to effectuate the intent of Sections 4, 5, 6, 7 and 8 and
to avoid unjust or inequitable results as determined in good faith by the
Board of Directors.
"Escrow Funding Date" shall have the meaning provided in the
Purchase Agreement.
"Excluded Shares" shall have the meaning provided in Section 2(c).
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"Expiration Date" means June 18, 2007.
"Issuance Date" means the date of original issuance of this Warrant
or its predecessor instrument.
"Market Price" means with respect to any security on any day the
closing bid price of such security on such day on the Nasdaq or the NYSE
or the AMEX, as applicable, or, if such security is not listed or admitted
to trading on the Nasdaq, the NYSE or the AMEX, on the principal national
securities exchange or quotation system on which such security is quoted
or listed or admitted to trading, in any such case as reported by
Bloomberg, L.P. or, if not quoted or listed or admitted to trading on any
national securities exchange or quotation system, the average of the
closing bid and asked prices of such security on the over-the-counter
market on the day in question, as reported by the National Quotation
Bureau Incorporated, or a similar generally accepted reporting service, or
if not so available, in such manner as furnished by any New York Stock
Exchange member firm selected from time to time by the Board of Directors
for that purpose, or a price determined in good faith by the Board of
Directors.
"Nasdaq" means the Nasdaq National Market.
"Nasdaq SmallCap" means the Nasdaq SmallCap Market.
"1934 Act" means the Securities Exchange Act of 1934, as amended.
"1933 Act" means the Securities Act of 1933, as amended.
"Note" means any of the 7% Convertible Notes due 2006 issued by the
Company pursuant to the Purchase Agreement and the Other Purchase
Agreements.
"NYSE" means the New York Stock Exchange, Inc.
"Other Purchase Agreements" means the several Purchase Agreements,
dated as of the date of the Purchase Agreement, by and between the Company
and the several buyers named therein.
"Other Securities" means any stock (other than Common Stock) and
other securities of the Company or any other Person which the Holder at
any time shall be entitled to receive, or shall have received, on the
exercise of this Warrant, in lieu of or in addition to Common Stock, or
which
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at any time shall be issuable or shall have been issued in exchange for or
in replacement of Common Stock or Other Securities pursuant to Section 5.
"Other Warrants" shall mean the Common Stock Purchase Warrants
(other than this Warrant) issued or issuable pursuant to the Other
Purchase Agreements and the Common Stock Purchase Warrants issued or
issuable pursuant to the Notes.
"Person" means an individual, corporation, partnership, limited
liability company, trust, business trust, association, joint stock
company, joint venture, pool, syndicate, sole proprietorship,
unincorporated organization, governmental authority or any other form of
entity not specifically listed herein.
"Purchase Agreement" means the Purchase Agreement, dated as of April
1, 2004, by and between the Company and the original Holder of this
Warrant.
"Purchase Price" means $2.40 (which gives effect to the reverse
stock split approved by the Company's stockholders on June 11, 2004 but
not any adjustment provided in Section 9), subject to adjustment as
provided in this Warrant.
"QIB" means a "qualified institutional buyer" as defined in Rule
144A.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of June 18, 2004, by and between the Company and the
original Holder of this Warrant.
"Registration Statement" shall have the meaning provided in the
Registration Rights Agreement.
"Reorganization Event" means the occurrence of any one or more of
the following events:
(i) any consolidation, merger or similar transaction of the
Company or any Subsidiary with or into another entity (other than a
merger or consolidation or similar transaction of a Subsidiary into
the Company or a wholly-owned Subsidiary); or the sale or transfer
of all or substantially all of the assets of the Company and the
Subsidiaries in a single transaction or a series of related
transactions; or
(ii) the occurrence of any transaction or event in connection
with which all or substantially all the
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Common Stock shall be exchanged for, converted into, acquired for or
constitute the right to receive securities of any other Person
(whether by means of a Tender Offer, liquidation, consolidation,
merger, share exchange, combination, reclassification,
recapitalization, or otherwise); or
(iii) the acquisition by a Person or group of Persons acting
in concert as a partnership, limited partnership, syndicate or
group, as a result of a tender or exchange offer, open market
purchases, privately negotiated purchases or otherwise, of
beneficial ownership of securities of the Company representing 50%
or more of the combined voting power of the outstanding voting
securities of the Company ordinarily (and apart from rights accruing
in special circumstances) having the right to vote in the election
of directors.
"Restricted Ownership Percentage" shall have the meaning provided in
Section 2(c).
"Restricted Securities" means securities that are not eligible for
resale pursuant to Rule 144(k) under the 1933 Act (or any successor
provision).
"Reverse Stock Split" shall have the meaning provided in the
Purchase Agreement.
"Rule 144A" means Rule 144A as promulgated under the 1933 Act.
"SEC" means the Securities and Exchange Commission.
"SEC Filings" shall have the meaning provided in the Purchase
Agreement.
"Subsidiary" means any corporation or other entity of which a
majority of the capital stock or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other
Persons performing similar functions are at the time directly or
indirectly owned by the Company.
"Tender Offer" means a tender offer, exchange offer or other offer
by the Company to repurchase outstanding shares of its capital stock.
"Trading Day" means a day on whichever of the national securities
exchange, the Nasdaq or the Nasdaq SmallCap which
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then constitutes the principal securities market for the Common Stock is
open for general trading.
2. EXERCISE OF WARRANT.
(a) EXERCISE. This Warrant may be exercised by the Holder in whole
at any time or in part from time to time on or before the Expiration Date by (x)
surrendering this Warrant to the Company, (y) giving a subscription form in the
form of EXHIBIT 1 to this Warrant (duly executed by the Holder) to the Company,
and (z) making payment, in cash or by certified or official bank check payable
to the order of the Company, or by wire transfer of funds to the account of the
Company, in any such case, in the amount obtained by multiplying (a) the number
of shares of Common Stock designated by the Holder in the subscription form by
(b) the Purchase Price then in effect. On any partial exercise the Company will
forthwith issue and deliver to or upon the order of the Holder a new Warrant or
Warrants of like tenor, in the name of the Holder or as the Holder (upon payment
by the Holder of any applicable transfer taxes) may request, providing in the
aggregate on the face or faces thereof for the purchase of the number of shares
of Common Stock for which such Warrant or Warrants may still be exercised. The
subscription form may be surrendered by telephone line facsimile transmission to
such telephone number for the Company as shall have been specified in writing to
the Holder by the Company; provided, however, that if the subscription form is
given to the Company by telephone line facsimile transmission the Holder shall
send an original of such subscription form to the Company within ten Business
Days after such subscription form is so given to the Company; provided further,
however, that any failure or delay on the part of the Holder in giving such
original of any subscription form shall not affect the validity or the date on
which such subscription form is so given by telephone line facsimile
transmission.
(b) NET EXERCISE. Notwithstanding anything to the contrary contained
in Section 2(a), the Holder may elect to exercise this Warrant, in whole at any
time or in part from time to time, by receiving shares of Common Stock equal to
the net issuance value (as determined below) of this Warrant, or any part
hereof, upon surrender of the subscription form annexed hereto (duly executed by
the Holder) to the Company (followed by surrender of this Warrant to the Company
within three Trading Days after surrender of such subscription form), in which
event the Company shall issue to the Holder a number of shares of Common Stock
computed using the following formula:
X = Y x (A - B)
-----------
A
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where,
X = the number of shares of Common Stock to be issued to the
Holder
Y = the number of shares of Common Stock as to which this Warrant
is to be exercised
A = the Current Fair Market Value of one share of Common Stock
calculated as of the last Trading Day immediately preceding
the exercise of this Warrant
B = the Purchase Price
(c) 9.9% LIMITATION.
(1) Notwithstanding anything to the contrary contained herein, the
number of shares of Common Stock that may be acquired by the Holder upon
exercise pursuant to the terms hereof at any time shall not exceed a number
that, when added to the total number of shares of Common Stock deemed
beneficially owned by the Holder (other than by virtue of the ownership of
securities or rights to acquire securities that have limitations on the Holder's
right to convert, exercise or purchase similar to the limitation set forth
herein (the "Excluded Shares"), together with all shares of Common Stock deemed
beneficially owned at such time (other than by virtue of the ownership of the
Excluded Shares) by Persons whose beneficial ownership of Common Stock would be
aggregated with the beneficial ownership by the Holder for purposes of
determining whether a group exists or for purposes of determining the Holder's
beneficial ownership (the "Aggregation Parties"), in either such case for
purposes of Section 13(d) of the 1934 Act and Regulation 13D-G thereunder
(including, without limitation, as the same is made applicable to Section 16 of
the 1934 Act and the rules promulgated thereunder), would result in beneficial
ownership by the Holder or such group of more than 9.9% of the shares of Common
Stock for purposes of Section 13(d) or Section 16 of the 1934 Act and the rules
promulgated thereunder (as the same may be modified by the Holder as provided
herein, the "Restricted Ownership Percentage"). The Holder shall have the right
at any time and from time to time to reduce its Restricted Ownership Percentage
immediately upon notice to the Company in the event and only to the extent that
Section 16 of the 1934 Act or the rules promulgated thereunder (or any successor
statute or rules) is changed to reduce the beneficial ownership percentage
threshold thereunder to a percentage less than 9.9%. If at any time the limits
in this Section 2(c) make this Warrant unexercisable in whole or in part, the
Company shall not by reason thereof be relieved of its
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obligation to issue shares of Common Stock at any time or from time to time
thereafter but prior to the Expiration Date upon exercise of this Warrant as and
when shares of Common Stock may be issued in compliance with such restrictions.
(2) For purposes of this Section 2(c), in determining the number of
outstanding shares of Common Stock at any time the Holder may rely on the number
of outstanding shares of Common Stock as reflected in (1) the Company's then
most recent Form 10-Q, Form 10-K or other public filing with the SEC, as the
case may be, (2) a public announcement by the Company that is later than any
such filing referred to in the preceding clause (1) or (3) any other notice by
the Company or its transfer agent setting forth the number shares of Common
Stock outstanding and knowledge the Holder may have about the number of shares
of Common Stock issued upon conversion or exercise of Common Stock Equivalents
by any Person, including the Holder, which are not reflected in the preceding
clauses (1) through (3). Upon the written request of the Holder, the Company
shall within three Business Days confirm in writing to the Holder the number of
shares of Common Stock then outstanding. In any case, the number of outstanding
shares of Common Stock shall be determined after giving effect to the conversion
or exercise of Common Stock Equivalents, including the Notes and the Warrants,
by the Holder or its Affiliates, in each such case subsequent to, the date as of
which such number of outstanding shares of Common Stock was reported.
3. DELIVERY OF STOCK CERTIFICATES, ETC., ON EXERCISE. (a) As soon as
practicable after the exercise of this Warrant and in any event within five
Trading Days thereafter, upon the terms and subject to the conditions of this
Warrant, the Company at its expense (including the payment by it of any
applicable issue or stamp taxes) will cause to be issued in the name of and
delivered to the Holder, or as the Holder (upon payment by the Holder of any
applicable transfer taxes) may direct, a certificate or certificates for the
number of fully paid and nonassessable shares of Common Stock (or Other
Securities) to which the Holder shall be entitled on such exercise, in such
denominations as may be requested by the Holder, which certificate or
certificates shall be free of restrictive and trading legends (except to the
extent permitted under Section 6.12 of the Purchase Agreement), plus, in lieu of
any fractional share to which the Holder would otherwise be entitled, cash equal
to such fraction multiplied by the then Current Fair Market Value of one full
share of Common Stock, together with any other stock or Other Securities or any
property (including cash, where applicable) to which the Holder is entitled upon
such exercise pursuant to Section 2 or otherwise. In lieu of delivering physical
certificates for the shares of Common Stock or (Other Securities) issuable upon
any exercise of this Warrant, provided the Company's transfer agent
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is participating in the Depository Trust Company ("DTC") Fast Automated
Securities Transfer ("FAST") program, upon request of the Holder, the Company
shall use commercially reasonable efforts to cause its transfer agent
electronically to transmit such shares of Common Stock (or Other Securities)
issuable upon conversion to the Holder (or its designee), by crediting the
account of the Holder's (or such designee's) broker with DTC through its Deposit
Withdrawal Agent Commission system (provided that the same time periods herein
as for stock certificates shall apply). The Company shall pay any taxes and
other governmental charges that may be imposed under the laws of the United
States of America or any political subdivision or taxing authority thereof or
therein in respect of the issue or delivery of shares of Common Stock (or Other
Securities) or payment of cash upon exercise of this Warrant (other than income
taxes imposed on the Holder). The Company shall not be required, however, to pay
any tax or other charge imposed in connection with any transfer involved in the
issue of any certificate for shares of Common Stock (or Other Securities)
issuable upon exercise of this Warrant or payment of cash to any Person other
than the Holder, and in case of such transfer or payment the Company shall not
be required to deliver any certificate for shares of Common Stock (or Other
Securities) upon such exercise or pay any cash until such tax or charge has been
paid or it has been established to the Company's reasonable satisfaction that no
such tax or charge is due. If the Company fails to deliver or cause to be
delivered to the Holder such shares of Common Stock (or Other Securities)
pursuant to this Section 3(a) (free of any restrictions on transfer or legends
except to the extent permitted under Section 6.12 of the Purchase Agreement) in
accordance herewith, within five Trading Days after a particular exercise of
this Warrant, then, in addition to any other liability the Company may have, the
Company shall pay to the Holder, in cash, an amount, computed at the rate of 2%
per month of the Current Fair Market Value of the shares of Common Stock (or
Other Securities) not timely delivered by the Company, for the period such
failure continues (the "Exercise Delay Payments"), with each change in the
Current Fair Market Value during such period being given effect. Upon exercise
of this Warrant as provided herein, the Company's obligation to issue and
deliver the certificates for Common Stock shall be absolute and unconditional,
irrespective of the absence of any action by the Holder to enforce the same, any
waiver or consent with respect to any provision hereof, the recovery of any
judgment against any Person or any action to enforce the same, any failure or
delay in the enforcement of any other obligation of the Company to the Holder,
or any setoff, counterclaim, recoupment, limitation or termination, or any
breach or alleged breach by the Holder or any other Person of any obligation to
the Company or any violation or alleged violation of law by the Holder or any
other Person, and irrespective of any other
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circumstance which might otherwise limit such obligation of the Company to the
Holder in connection with such exercise.
(b) If in any case the Company shall fail to issue and deliver or
cause to be delivered the shares of Common Stock to the Holder within five
Trading Days of a particular exercise of this Warrant, in addition to any other
liabilities the Company may have hereunder and under applicable law, (A) the
Company shall pay or reimburse the Holder on demand for all out-of-pocket
expenses, including, without limitation, reasonable fees and expenses of legal
counsel, incurred by the Holder as a result of such failure; (B) if as a result
of such failure the Holder shall suffer any direct damages or liabilities from
such failure (including, without limitation, margin interest and the cost of
purchasing securities to cover a sale (whether by the Holder or the Holder's
securities broker) or borrowing of shares of Common Stock by the Holder for
purposes of settling any trade involving a sale of shares of Common Stock made
by the Holder during the period beginning on the Issuance Date and ending on the
date the Company delivers or causes to be delivered to the Holder such shares of
Common Stock), then, in addition to any amounts payable pursuant to Section
3(a), the Company shall upon demand of the Holder pay to the Holder an amount
equal to the actual, direct, demonstrable out-of-pocket damages and liabilities
suffered by the Holder by reason thereof which the Holder documents to the
reasonable satisfaction of the Company, and (C) the Holder may by written notice
(which may be given by mail, courier, personal service or telephone line
facsimile transmission) or oral notice (promptly confirmed in writing), given at
any time prior to delivery to the Holder of the shares of Common Stock issuable
in connection with such exercise of the Holder's right, rescind such exercise
and the subscription form relating thereto, in which case the Holder shall
thereafter be entitled to exercise that portion of this Warrant as to which such
exercise is so rescinded and to exercise its other rights and remedies with
respect to such failure by the Company. Notwithstanding the foregoing the
Company shall not be liable to the Holder under clauses (A) or (B) of the
immediately preceding sentence to the extent the failure of the Company to
deliver or to cause to be delivered such shares of Common Stock results from
fire, flood, storm, earthquake, shipwreck, strike, war, acts of terrorism, crash
involving facilities of a common carrier, acts of God, or any similar event
outside the control of the Company (it being understood that the action or
failure to act of the Company's Transfer Agent shall not be deemed an event
outside the control of the Company except to the extent resulting from fire,
flood, storm, earthquake, shipwreck, strike, war, acts of terrorism, crash
involving facilities of a common carrier, acts of God, or any similar event
outside the control of such Transfer Agent or the bankruptcy, liquidation or
reorganization of such Transfer
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Agent under any bankruptcy, insolvency or other similar law). The Holder shall
notify the Company in writing (or by telephone conversation, confirmed in
writing) as promptly as practicable following the third Trading Day after the
Holder exercises this Warrant if the Holder becomes aware that such shares of
Common Stock so issuable have not been received as provided herein, but any
failure so to give such notice shall not affect the Holder's rights under this
Warrant or otherwise.
4. ADJUSTMENT FOR DIVIDENDS IN OTHER STOCK, PROPERTY, ETC.;
RECLASSIFICATION, ETC. In case at any time or from time to time on or after the
Escrow Funding Date, all holders of Common Stock (or Other Securities) shall
have received, or (on or after the record date fixed for the determination of
stockholders eligible to receive) shall have become entitled to receive, without
payment therefor,
(a) other or additional stock, rights, warrants or other securities
or property (other than cash) by way of dividend, or
(b) any cash (excluding cash dividends payable solely out of
earnings or earned surplus of the Company), or
(c) other or additional stock, rights, warrants or other securities
or property (including cash) by way of spin-off, split-up,
reclassification, recapitalization, combination of shares or similar
corporate rearrangement,
other than (i) additional shares of Common Stock (or Other Securities) issued as
a stock dividend or in a stock-split (adjustments in respect of which are
provided for in Section 6) and (ii) rights or warrants to subscribe for Common
Stock at less than the Current Fair Market Value (adjustments in respect of
which are provided in Section 7), then and in each such case the Holder, on the
exercise hereof as provided in Section 2, shall be entitled to receive the
amount of stock, rights, warrants and Other Securities and property (including
cash in the cases referred to in subdivisions (b) and (c) of this Section 4)
which the Holder would hold on the date of such exercise if on the date of such
action specified in the preceding clauses (a) through (c) (or the record date
therefor) the Holder had been the holder of record of the number of shares of
Common Stock called for on the face of this Warrant and had thereafter, during
the period from the date thereof to and including the date of such exercise,
retained such shares and all such other or additional stock, rights, warrants
and Other Securities and property (including cash in the case referred to in
subdivisions (b) and (c) of this Section 4) receivable by the Holder as
aforesaid during such
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period, giving effect to all adjustments called for during such period by
Section 5.
5. EXERCISE UPON A REORGANIZATION EVENT. In case of any
Reorganization Event the Company shall, as a condition precedent to the
consummation of the transactions constituting, or announced as, such
Reorganization Event, cause effective provisions to be made so that the Holder
shall have the right thereafter, by exercising this Warrant (in lieu of the
shares of Common Stock of the Company and Other Securities or property
purchasable and receivable upon exercise of the rights represented hereby
immediately prior to such Reorganization Event) to purchase the kind and amount
of shares of stock and Other Securities and property (including cash) receivable
upon such Reorganization Event by a holder of the number of shares of Common
Stock that might have been received upon exercise of this Warrant immediately
prior to such Reorganization Event. Any such provision shall include provisions
for adjustments in respect of such shares of stock and Other Securities and
property that shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Warrant. The provisions of this Section 5 shall
apply to successive Reorganization Events.
6. ADJUSTMENT FOR CERTAIN EXTRAORDINARY EVENTS. If on or after the
Escrow Funding Date the Company shall (i) issue additional shares of the Common
Stock as a dividend or other distribution on outstanding Common Stock, (ii)
subdivide or reclassify its outstanding shares of Common Stock, or (iii) combine
its outstanding shares of Common Stock into a smaller number of shares of Common
Stock, then, in each such event, the Purchase Price shall, simultaneously with
the happening of such event, be adjusted by multiplying the Purchase Price in
effect immediately prior to such event by a fraction, the numerator of which
shall be the number of shares of Common Stock outstanding immediately prior to
such event and the denominator of which shall be the number of shares of Common
Stock outstanding immediately after such event, and the product so obtained
shall thereafter be the Purchase Price then in effect. The Purchase Price, as so
adjusted, shall be readjusted in the same manner upon the happening of any
successive event or events described herein in this Section 6. The Holder shall
thereafter, on the exercise hereof as provided in Section 2, be entitled to
receive that number of shares of Common Stock determined by multiplying the
number of shares of Common Stock which would be issuable on such exercise
immediately prior to such issuance, subdivision or combination, as the case may
be, by a fraction of which (i) the numerator is the Purchase Price in effect
immediately prior to such issuance and (ii) the denominator is the Purchase
Price in effect on the date of such exercise.
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7. ISSUANCE OF RIGHTS OR WARRANTS TO COMMON STOCKHOLDERS AT LESS
THAN CURRENT FAIR MARKET VALUE. If the Company shall on or after the Escrow
Funding Date issue rights or warrants to all holders of its outstanding shares
of Common Stock entitling them to subscribe for or purchase shares of Common
Stock at a price per share less than the Current Fair Market Value on the record
date fixed for the determination of stockholders entitled to receive such rights
or warrants, then
(a) the Purchase Price shall be adjusted so that the same shall
equal the price determined by multiplying the Purchase Price in effect at
the opening of business on the day after such record date by a fraction of
which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on such record date plus the number
of shares which the aggregate offering price of the total number of shares
so offered would purchase at such Current Fair Market Value, and the
denominator shall be the number of shares of Common Stock outstanding on
the close of business on such record date plus the total number of
additional shares of Common Stock so offered for subscription or purchase;
and
(b) the number of shares of Common Stock which the Holder may
thereafter purchase upon exercise of this Warrant at the opening of
business on the day after such record date shall be increased to a number
equal to the quotient obtained by dividing (x) the Aggregate Purchase
Price in effect immediately prior to such adjustment in the Purchase Price
pursuant to clause (a) of this Section 7 by (y) the Purchase Price in
effect immediately after such adjustment in the Purchase Price pursuant to
clause (a) of this Section 7.
Such adjustment shall become effective immediately after the opening of business
on the day following the record date fixed for determination of stockholders
entitled to receive such rights or warrants. To the extent that shares of Common
Stock are not delivered pursuant to such rights or warrants, upon the expiration
or termination of such rights or warrants, the Purchase Price shall be
readjusted to the Purchase Price which would then be in effect had the
adjustments made upon the issuance of such rights or warrants been made on the
basis of delivery of only the number of shares
-15-
of Common Stock actually delivered and the number of shares of Common Stock for
which this Warrant may thereafter be exercised shall be readjusted (subject to
proportionate adjustment for any intervening exercises of this Warrant) to the
number which would then be in effect had the adjustments made upon the issuance
of such rights or warrants been made on the basis of delivery of only the number
of shares of Common Stock actually delivered. In the event that such rights or
warrants are not so issued, the Purchase Price shall again be adjusted to be the
Purchase Price which would then be in effect if such record date had not been
fixed and the number of shares of Common Stock for which this Warrant may
thereafter be exercised shall again be adjusted (subject to proportionate
adjustment for any intervening exercises of this Warrant) to be the number which
would then be in effect if such record date had not been fixed. In determining
whether any rights or warrants entitle the Holder to subscribe for or purchase
shares of Common Stock at less than such Current Fair Market Value, and in
determining the aggregate offering price of such shares of Common Stock, there
shall be taken into account any consideration received for such rights or
warrants, the value of such consideration, if other than cash, to be determined
by the Board of Directors.
8. ADJUSTMENTS FOR CERTAIN ISSUANCES OF NEWLY ISSUED SHARES.
(a) In case at any time on or after the Escrow Funding Date the
Company shall issue shares of its Common Stock or Common Stock Equivalents
(collectively, the "Newly Issued Shares"), other than an issuance pro rata
to all holders of its outstanding Common Stock, at a price below the
greater of (x) the Current Fair Market Value of the Common Stock at the
time of such issuance and (y) the Purchase Price in effect immediately
prior to such issuance, then following such issuance of Newly Issued
Shares the Purchase Price shall be reduced as provided in Section 8(b) and
the number of shares of Common Stock which may be issued upon exercise of
this Warrant shall be increased as Section 8(c).
(b) The reduction in the Purchase Price following any such
adjustment shall be determined by multiplying the Purchase Price
immediately prior to such adjustment by a fraction, of which the numerator
shall be the sum of (i) the number of shares of Common Stock outstanding
immediately prior to the issuance of the Newly Issued Shares (calculated
on a fully-diluted basis assuming the exercise or conversion of all
options, warrants, purchase rights or convertible securities which are
exercisable or convertible at the time of the issuance of the Newly Issued
Shares) plus (ii) the number of shares of Common Stock which the aggregate
consideration, if any, received by the Company for the number of Newly
Issued Shares would purchase at a price equal to the greater of (x) the
Current Fair Market Value of the Common Stock at the time of such issuance
and (y) the Purchase Price in effect immediately prior to such issuance,
and the denominator shall be the sum of (X) the number of
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shares of Common Stock outstanding immediately prior to the issuance of
the Newly Issued Shares (calculated on a fully-diluted basis assuming the
exercise or conversion of all options, warrants, purchase rights or
convertible securities which are exercisable or convertible at the time of
the issuance of the Newly Issued Shares) plus (Y) the number of Newly
Issued Shares. The adjustment provided for in this Section 8(b) may be
expressed as the following mathematical formula:
( O +(C / MP)) x PP
---------------
NPP ( O + N )
where,
C = aggregate consideration received by the Company for the Newly
Issued Shares
N = number of Newly Issued Shares
O = number of shares of Common Stock outstanding (on a fully
diluted basis, as described above) immediately prior to the
issuance of the Newly Issued Shares
MP = greater of (x) Current Fair Market Value of the Common Stock
at the time of issuance of the Newly Issued Shares and (y)
Purchase Price at the time of issuance of the Newly Issued
Shares
PP = Purchase Price immediately prior to the issuance of the Newly
Issued Shares
NPP = Purchase Price immediately after the issuance of the Newly
Issued Shares
(c) If the Purchase Price is reduced in connection with the issuance
of Newly Issued Shares as provided in Section 8(b), then the number of
shares of Common Stock for which this Warrant may thereafter be exercised
shall be increased at the time of such reduction in the Purchase Price to
a number equal to the quotient obtained by dividing (x) the Aggregate
Purchase Price in effect immediately prior to such issuance of Newly
Issued Shares by (y) the Purchase Price in effect immediately after such
issuance of Newly Issued Shares after such reduction in the Purchase Price
pursuant to Section 8(b).
(d) Notwithstanding the foregoing, no adjustment shall be made under
this Section 8 by reason of:
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(1) the issuance by the Company of shares of Common Stock pro
rata to all holders of the Common Stock so long as (i) any
adjustment required by Section 6 is made and (ii) the Company shall
have given notice thereof to the Holder pursuant to Section 15;
(2) the issuance by the Company of Newly Issued Shares in an
offering for cash for the account of the Company that is
underwritten on a firm commitment basis and is registered with the
SEC under the 1933 Act;
(3) the issuance by the Company of the Notes or the Other
Warrants or shares of Common Stock upon conversion of the Notes or
upon exercise of this Warrant or the Other Warrants in accordance
with the terms hereof and thereof;
(4) the issuance by the Company of shares of Common Stock in
lieu of payment of cash interest on the Notes in accordance with the
terms thereof;
(5) the issuance by the Company of Newly Issued Shares upon
grant or exercise of options for employees, directors and
consultants under the Company's 1995 Stock Option Plan and 1997
Stock Option Plan;
(6) the issuance by the Company of Newly Issued Shares to the
lessor or vendor in any equipment lease or similar equipment
financing transaction in which the Company or any Subsidiary obtains
the use of equipment for its business; and
(7) the issuance by the Company of Newly Issued Shares upon
conversion or exercise of Common Stock Equivalents outstanding on
the date of the Purchase Agreement and disclosed in the Purchase
Agreement or the SEC Filings.
9. ADJUSTMENT IN RESPECT OF REVERSE STOCK SPLIT. If the stockholder
approval of the Reverse Stock Split contemplated by Section 6.1(b) of the
Purchase Agreement is obtained and after giving effect to the adjustment
provided for in Section 6 in respect of the Reverse Stock Split, the Purchase
Price is greater than 120% of the Current Market Price for the 6th Trading Day
after the earlier of (x) the effective date of the Reverse Stock Split and (y)
the first Trading Day on which "ex" trading of the Common Stock begins in
respect of the Reverse Stock Split, the Purchase Price shall be reduced to the
greater of (A) 120% of such Current Market Price and (B) the product of $.15
times the
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number of shares of Common Stock outstanding immediately prior to the Reverse
Stock Split as shall have, by reason of the Reverse Stock Split, become one
share of Common Stock immediately after the Reverse Stock Split times 1.2. If
the Purchase Price is reduced in connection with the Reverse Stock Split
pursuant to this Section 9, then the number of shares of Common Stock for which
this Warrant may thereafter be exercised shall be increased at the time of such
reduction in the Purchase Price to a number equal to the quotient obtained by
dividing (x) the Aggregate Purchase Price in effect immediately prior to such
reduction in the Purchase Price by (y) the Purchase Price in effect immediately
after such reduction in the Purchase Price pursuant to this Section 9.
10. EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE.
(a) If any of the following events occur, namely:
(i) any reclassification or change of the outstanding shares of
Common Stock (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),
(ii) any consolidation, merger statutory exchange or combination of
the Company with another corporation as a result of which holders of
Common Stock shall be entitled to receive stock, securities or other
property or assets (including cash) with respect to or in exchange for
such Common Stock, or
(iii) any sale or conveyance of the properties and assets of the
Company as, or substantially as, an entirety to any other Person as a
result of which holders of Common Stock shall be entitled to receive
stock, securities or other property or assets (including cash) with
respect to or in exchange for such Common Stock,
then the Company or the successor or purchasing Person, as the case may be,
shall execute with the Holder a written agreement providing that:
(x) this Warrant shall thereafter entitle the Holder to purchase the
kind and amount of shares of stock and Other Securities or property or
assets (including cash) receivable upon such reclassification, change,
consolidation, merger, statutory exchange, combination, sale or conveyance
by the holder of a number of shares of Common Stock issuable upon exercise
of this Warrant (assuming, for such purposes, a sufficient number of
authorized shares of Common Stock available to exercise this Warrant)
immediately prior to such reclassification, change, consolidation, merger,
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statutory exchange, combination, sale or conveyance assuming such holder
of Common Stock did not exercise such holder's rights of election, if any,
as to the kind or amount of securities, cash or other property receivable
upon such consolidation, merger, statutory exchange, combination, sale or
conveyance (provided that, if the kind or amount of securities, cash or
other property receivable upon such consolidation, merger, statutory
exchange, sale or conveyance is not the same for each share of Common
Stock in respect of which such rights of election shall not have been
exercised ("non-electing share"), then for the purposes of this Section 10
the kind and amount of securities, cash or other property receivable upon
such consolidation, merger, statutory exchange, sale or conveyance for
each non-electing share shall be deemed to be the kind and amount so
receivable per share by a plurality of the non-electing shares),
(y) in the case of any such successor or purchasing Person, upon
such consolidation, merger, statutory exchange, combination, sale or
conveyance such successor or purchasing Person shall be jointly and
severally liable with the Company for the performance of all of the
Company's obligations under this Warrant, the Purchase Agreement and the
Registration Rights Agreement and
(z) if registration or qualification is required under the 1933 Act
or applicable state law for the public resale by the Holder of such shares
of stock and Other Securities so issuable upon exercise of this Warrant,
such registration or qualification shall be completed prior to such
reclassification, change, consolidation, merger, statutory exchange,
combination or sale.
Such written agreement shall provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this
Warrant. If, in the case of any such reclassification, change, consolidation,
merger, statutory exchange, combination, sale or conveyance, the stock or other
securities or other property or assets receivable thereupon by a holder of
shares of Common Stock includes shares of stock, other securities, other
property or assets of a Person other than the Company or any such successor or
purchasing Person, as the case may be, in such reclassification, change,
consolidation, merger, statutory exchange, combination, sale or conveyance, then
such written agreement shall also be executed by such other Person and shall
contain such additional provisions to protect the interests of the Holder as the
Board of Directors shall reasonably consider necessary by reason of the
foregoing.
-20-
(b) The above provisions of this Section 10 shall similarly apply to
successive reclassifications, changes, consolidations, mergers, combinations,
sales and conveyances.
(c) If this Section 10 applies to any event or occurrence, Section 5
shall not apply.
11. TAX ADJUSTMENTS. The Company may make such reductions in the
Purchase Price, in addition to those required by Sections 4, 5, 6, 7, 8 and 9as
the Board of Directors considers to be advisable to avoid or diminish any income
tax to holders of Common Stock or rights to purchase Common Stock resulting from
any dividend or distribution of stock (or rights to acquire stock) or from any
event treated as such for income tax purposes.
12. MINIMUM ADJUSTMENT. (a) No adjustment in the Purchase Price (and
no related adjustment in the number of shares of Common Stock which may
thereafter be purchased upon exercise of this Warrant) shall be required unless
such adjustment would require an increase or decrease of at least 1% in the
Purchase Price; provided, however, that any adjustments which by reason of this
Section 12 are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All such calculations under this Warrant
shall be made by the Company and shall be made to the nearest cent or to the
nearest one hundredth of a share, as the case may be.
(b) No adjustment need be made for a change in the par value of the
Common Stock or from par value to no par value or from no par value to par
value.
13. NOTICE OF ADJUSTMENTS. Whenever the Purchase Price is adjusted
as herein provided, the Company shall promptly, but in no event later than five
Trading Days thereafter, give a notice to the Holder setting forth the Purchase
Price and number of shares of Common Stock which may be purchased upon exercise
of this Warrant after such adjustment and setting forth a brief statement of the
facts requiring such adjustment but which such statement shall not include any
information which would be material non-public information for purposes of the
1934 Act. Failure to deliver such notice shall not affect the legality or
validity of any such adjustment.
14. FURTHER ASSURANCES. The Company will take all action that may be
necessary or appropriate in order that the Company may validly and legally issue
fully paid and nonassessable shares of stock, free from all taxes, liens and
charges with respect to the issue thereof, on the exercise of all or any portion
of this Warrant from time to time outstanding.
-21-
15. NOTICE TO HOLDER PRIOR TO CERTAIN ACTIONS. In case on or after
the Issuance Date:
(a) the Company shall declare a dividend (or any other distribution)
on its Common Stock (other than in cash out of retained earnings); or
(b) the Company shall authorize the granting to the holders of its
Common Stock of rights or warrants to subscribe for or purchase any share of any
class or any other rights or warrants; or
(c) the Board of Directors shall authorize any reclassification of
the Common Stock (other than a subdivision or combination of its outstanding
Common Stock, or a change in par value, or from par value to no par value, or
from no par value to par value), or any consolidation or merger or other
business combination transaction to which the Company is a party and for which
approval of any stockholders of the Company is required, or the sale or transfer
of all or substantially all of the assets of the Company; or
(d) there shall be pending the voluntary or involuntary dissolution,
liquidation or winding-up of the Company;
the Company shall give the Holder, as promptly as possible but in any event at
least ten Trading Days prior to the applicable date hereinafter specified, a
notice stating (x) the date on which a record is to be taken for the purpose of
such dividend, distribution or rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be entitled
to such dividend, distribution or rights are to be determined, or (y) the date
on which such reclassification, consolidation, merger, other business
combination transaction, sale, transfer, dissolution, liquidation or winding-up
is expected to become effective or occur, and the date as of which it is
expected that holders of Common Stock of record who shall be entitled to
exchange their Common Stock for securities or other property deliverable upon
such reclassification, consolidation, merger, other business combination
transaction, sale, transfer, dissolution, liquidation or winding-up shall be
determined. Such notice shall not include any information which would be
material non-public information for purposes of the 1934 Act. Failure to give
such notice, or any defect therein, shall not affect the legality or validity of
such dividend, distribution, reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding-up. In the case of any such action
of which the Company gives such notice to the
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Holder or is required to give such notice to the Holder, the Holder shall be
entitled to give a subscription form to exercise this Warrant in whole or in
part that is contingent on the completion of such action.
16. RESERVATION OF STOCK, ETC., ISSUABLE ON EXERCISE OF WARRANTS.
The Company will at all times reserve and keep available out of its authorized
but unissued shares of capital stock, solely for issuance and delivery on the
exercise of this Warrant, a sufficient number of shares of Common Stock (or
Other Securities) to effect the full exercise of this Warrant and the exercise,
conversion or exchange of all other Common Stock Equivalents from time to time
outstanding (or Other Securities), and if at any time the number of authorized
but unissued shares of Common Stock (or Other Securities) shall not be
sufficient to effect such exercise, conversion or exchange, the Company shall
take such action as may be necessary to increase its authorized but unissued
shares of Common Stock (or Other Securities) to such number as shall be
sufficient for such purposes.
17. TRANSFER OF WARRANT. This Warrant shall inure to the benefit of
the successors to and assigns of the Holder. This Warrant and all rights
hereunder, in whole or in part, are registrable at the office or agency of the
Company referred to below by the Holder in Person or by his duly authorized
attorney, upon surrender of this Warrant properly endorsed accompanied by an
assignment form in the form attached to this Warrant, or other customary form,
duly executed by the transferring Holder.
18. REGISTER OF WARRANTS. The Company shall maintain, at the
principal office of the Company (or such other office as it may designate by
notice to the Holder), a register in which the Company shall record the name and
address of the Person in whose name this Warrant has been issued, as well as the
name and address of each successor and prior owner of such Warrant. The Company
shall be entitled to treat the Person in whose name this Warrant is so
registered as the sole and absolute owner of this Warrant for all purposes.
19. EXCHANGE OF WARRANT. This Warrant is exchangeable, upon the
surrender hereof by the Holder at the office or agency of the Company referred
to in Section 17, for one or more new Warrants of like tenor representing in the
aggregate the right to subscribe for and purchase the number of shares of Common
Stock which may be subscribed for and purchased hereunder, each of such new
Warrants to represent the right to subscribe for and purchase such number of
shares as shall be designated by the Holder at the time of such surrender.
-23-
20. REPLACEMENT OF WARRANT. On receipt by the Company of evidence
reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of this Warrant and (a) in the case of loss, theft or
destruction, of indemnity from the Holder reasonably satisfactory in form to the
Company (and without the requirement to post any bond or other security), or (b)
in the case of mutilation, upon surrender and cancellation of this Warrant, the
Company will execute and deliver to the Holder a new Warrant of like tenor
without charge to the Holder.
21. WARRANT AGENT. The Company may, by written notice to the Holder,
appoint the transfer agent and registrar for the Common Stock as the Company's
agent for the purpose of issuing Common Stock (or Other Securities) on the
exercise of this Warrant pursuant to Section 2, and the Company may, by written
notice to the Holder, appoint an agent having an office in the United States of
America for the purpose of exchanging this Warrant pursuant to Section 18, and
replacing this Warrant pursuant to Section 20, or any of the foregoing, and
thereafter any such exchange or replacement, as the case may be, shall be made
at such office by such agent.
22. REMEDIES. The Company stipulates that the remedies at law of the
Holder in the event of any default or threatened default by the Company in the
performance of or compliance with any of the terms of this Warrant are not and
will not be adequate, and that such terms may be specifically enforced by a
decree for the specific performance of any agreement contained herein or by an
injunction against a violation of any of the terms hereof or otherwise.
23. NO RIGHTS OR LIABILITIES AS A STOCKHOLDER. This Warrant shall
not entitle the Holder to any voting rights or other rights as a stockholder of
the Company. Nothing contained in this Warrant shall be construed as conferring
upon the Holder the right to vote or to consent or to receive notice as a
stockholder of the Company on any matters or with respect to any rights
whatsoever as a stockholder of the Company. No dividends or interest shall be
payable or accrued in respect of this Warrant or the interest represented hereby
or the Common Stock (or Other Securities) purchasable hereunder until, and only
to the extent that, this Warrant shall have been exercised in accordance with
its terms.
24. NOTICES, ETC. All notices and other communications from the
Company to the Holder shall be in writing and delivered personally, by confirmed
facsimile, by a nationally recognized overnight courier service or mailed by
first class certified mail, postage prepaid, at such facsimile telephone number
or address as may have been furnished to the Company in
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writing by the Holder or at such facsimile telephone number or the address shown
for the Holder on the register of Warrants referred to in Section 18.
25. TRANSFER RESTRICTIONS. This Warrant has not been and is not
being registered under the provisions of the 1933 Act or any state securities
laws and this Warrant may not be transferred prior to the end of the holding
period applicable to sales hereof under Rule 144(k) unless (1) the transferee is
an "accredited investor" (as defined in Regulation D under the 0000 Xxx) or a
QIB in a transfer that meets the requirements of Rule 144A and (2) the Holder
shall have delivered to the Company an opinion of counsel, reasonably
satisfactory in form, scope and substance to the Company, to the effect that
this Warrant may be sold or transferred without registration under the 1933 Act.
Prior to any such transfer, such transferee shall have represented in writing to
the Company that such transferee has requested and received from the Company all
information relating to the business, properties, operations, condition
(financial or other), results of operations or prospects of the Company deemed
relevant by such transferee; that such transferee has been afforded the
opportunity to ask questions of the Company concerning the foregoing and has had
the opportunity to obtain and review the Registration Statement and the
prospectus related thereto, each as amended or supplemented to the date of
transfer to such transferee, and the reports and other information concerning
the Company which at the time of such transfer have been filed by the Company
with the SEC pursuant to the 1934 Act and which are incorporated by reference in
such prospectus as of the date of such transfer. If such transfer is intended to
assign the rights and obligations of the Holder under the Purchase Agreement and
the Registration Rights Agreement, such transfer shall otherwise be made in
compliance with the applicable provisions of the Purchase Agreement and the
Registration Rights Agreement.
26. RULE 144A INFORMATION REQUIREMENT. Within the period prior to
the expiration of the holding period applicable to sales hereof under Rule
144(k) under the 1933 Act (or any successor provision), the Company covenants
and agrees that it shall, during any period in which it is not subject to
Section 13 or 15(d) under the 1934 Act, make available to the Holder and the
holder of any shares of Common Stock issued upon exercise of this Warrant which
continue to be Restricted Securities in connection with any sale thereof and any
prospective purchaser of this Warrant from the Holder, the information required
pursuant to Rule 144A(d)(4) under the 1933 Act upon the request of the Holder
and it will take such further action as the Holder may reasonably request, all
to the extent required from time to time to enable the Holder to sell this
Warrant without registration under the
-25-
1933 Act within the limitation of the exemption provided by Rule 144A, as Rule
144A may be amended from time to time. Upon the request of the Holder, the
Company will deliver to the Holder a written statement as to whether it has
complied with such requirements.
27. LEGEND. The provisions of Section 6.12 of the Purchase Agreement
and the related definitions of capitalized terms used therein and defined in the
Purchase Agreement are by this reference incorporated herein as if set forth in
full at this place.
28. AMENDMENT; WAIVER. This Warrant and any terms hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of such change, waiver, discharge
or termination is sought. Notwithstanding anything to the contrary contained
herein, no amendment or waiver shall increase or eliminate the Restricted
Ownership Percentage, whether permanently or temporarily, unless, in addition to
complying with the other requirements of this Warrant, such amendment or waiver
shall have been approved in accordance with the General Corporation Law of the
State of Delaware and the Company's By-laws by holders of the outstanding shares
of Common Stock entitled to vote at a meeting or by written consent in lieu of
such meeting.
29. MISCELLANEOUS. This Warrant shall be construed and enforced in
accordance with and governed by the internal laws of the State of New York. The
headings, captions and footers in this Warrant are for purposes of reference
only, and shall not limit or otherwise affect any of the terms hereof. The
invalidity or unenforceability of any provision hereof shall in no way affect
the validity or enforceability of any other provision.
30. ATTORNEYS' FEES. In any litigation, arbitration or court
proceeding between the Company and Holder relating hereto, the prevailing party
shall be entitled to attorneys' fees and expenses and all costs of proceedings
incurred in enforcing this Warrant.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed on its behalf by one of its officers thereunto duly authorized.
Dated: June __, 2004 VIRAGEN, INC.
By:
-----------------------------------
Name:
Title:
-27-
ASSIGNMENT
For value hereby sell(s),
assign(s) and transfer(s) unto
(Please insert social security or other Taxpayer Identification Number of
assignee: )
the attached original, executed Warrant to purchase
share of Common Stock of Viragen, Inc., a Delaware corporation (the "Company"),
and hereby irrevocably constitutes and appoints
attorney to transfer the Warrant on the books of the Company, with full power of
substitution in the premises.
In connection with any transfer of the Warrant within the period prior to
the expiration of the holding period applicable to sales thereof under Rule
144(k) under the 1933 Act (or any successor provision) (other than any transfer
pursuant to a registration statement that has been declared effective under the
1933 Act), the undersigned confirms that such Warrant is being transferred:
[ ] To the Company or a Subsidiary; or
[ ] To a QIB pursuant to and in compliance with Rule 144A; or
[ ] To an "accredited investor" (as defined in Regulation D under the 0000
Xxx) pursuant to and in compliance with the 1933 Act; or
[ ] Pursuant to and in compliance with Rule 144 under the 1933 Act;
and unless the box below is checked, the undersigned confirms that, to the
knowledge of the undersigned, such Warrant is not being transferred to an
"affiliate" (as defined in Rule 144 under the 0000 Xxx) of the Company.
[ ] The transferee is an affiliate of the Company.
Capitalized terms used in this Assignment and not defined in this
Assignment shall have the respective meanings provided in the Warrant.
Dated: NAME:
--------------------------------- ---------------
--------------------------------------------
Signature(s)
EXHIBIT 1
FORM OF SUBSCRIPTION
VIRAGEN, INC.
(To be signed only on exercise of Warrant)
TO: Viragen, Inc.
000 XX 00xx Xxxxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Chief Financial Officer
1. The undersigned Holder of the attached original, executed Warrant
hereby elects to exercise its purchase right under such Warrant with respect to
shares (the "Exercise Shares") of Common Stock,
as defined in the Warrant, of Viragen, Inc., a Delaware corporation (the
"Company").
2. The undersigned Holder (check one):
[ ] (a) elects to pay the Aggregate Purchase Price for such shares of
Common Stock (i) in lawful money of the United States or by the
enclosed certified or official bank check payable in United States
dollars to the order of the Company in the amount of $ , or (ii)
by wire transfer of United States funds to the account of the
Company in the amount of $ , which transfer has been made before
or simultaneously with the delivery of this Form of Subscription
pursuant to the instructions of the Company;
or
[ ] (b) elects to receive shares of Common Stock having a value equal to
the value of the Warrant calculated in accordance with Section 2(b)
of the Warrant.
3. Please issue a stock certificate or certificates representing the
appropriate number of shares of Common Stock in the name of the undersigned or
in such other name(s) as is specified below:
I-1
Name:
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Address:
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Social Security or Tax Identification Number (if any):
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Dated:
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(Signature must conform to name of Holder
as specified on the face of the Warrant)
-----------------------------------------
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(Address)
I-2
