THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD OR OFFERED FOR SALE
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES
UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN APPLICABLE
EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS.
Right to Purchase Shares of Class A
Common Stock of American Biogenetic
Sciences, Inc.
No. WB[ ] May 20, 1998
------------------------
Common Stock Purchase Warrant
American Biogenetic Sciences, Inc., a Delaware corporation having an
address at 0000 Xxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx 00000 (the "Company"), hereby
certifies that for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, [______________________] having an address at
[_______________________________________] ("Purchaser") or any other Warrant
Holder (as defined herein) is entitled, on the terms and conditions set forth
below, to purchase from the Company at any time after November 19, 1998 and
ending at the Expiration Time up to [______________________________] ([_____])
(the "Designated Amount") fully paid and nonassessable shares of Class A Common
Stock, $.001 par value, of the Company together with any associated Common Stock
Purchase Rights (the "Common Stock") at the Purchase Price (hereinafter
defined), as such number of shares and Purchase Price may be adjusted as
provided below and pursuant to Section 5 herein.
The Designated Amount shall be reduced on the six month anniversary
of the date hereof by the product of (x) the Designated Amount and (y) a
fraction the numerator of which is the Initial Outstanding Principal Amount (as
such term is defined in the Debentures (the "Debentures") issued by the Company
to the Purchaser pursuant to the Securities Subscription Agreement dated as of
the date hereof (the "Agreement")) of Purchaser's Debentures minus the
Outstanding Principal Amount (as such term is defined in the Debentures) of the
Purchaser's Debentures on the six month anniversary of the date hereof and the
denominator of which is the Initial Outstanding Principal Amount of Purchaser's
Debentures.
1. Definitions.
(a) the term "Expiration Time" shall mean 5:00 p.m. New York
Time on November 19, 2002.
(b) the term "Fair Market Value" shall mean the closing
trading price of the Common Stock on the NASDAQ Stock Market,
the American Stock Exchange or the New York Stock Exchange,
whichever is the principal
trading exchange or market for the Common Stock (the
"Principal Market") on the date of determination (or if not
traded on such date, on the last trading date on which traded
prior to such date) or, if the Common Stock is not listed or
admitted to trading on any national securities exchange or
quoted in the NASDAQ Stock Market on a basis for which closing
price information is available, the average of the closing bid
and asked prices as furnished by any New York Stock Exchange
member firm reasonably selected from time to time by the
Company for that purpose, or, if the Common Stock is not
listed or admitted to trading on any national securities
exchange or quoted on the NASDAQ Stock market or traded
over-the-counter and the average price cannot be determined as
contemplated above, the fair market value of the Common Stock
shall be as reasonably determined in good faith by the
Company's Board of Directors.
(c) the term "Warrant Holder" shall mean the Purchaser or any
assignee of all or any portion of this Warrant at any given
time.
(d) the term "Warrant Shares" shall mean the shares of Common
Stock or other securities issuable upon exercise of this
Warrant.
(e) the term "Purchase Price" shall mean $1.9141.
(f) other terms used herein which are defined in the Agreement
or the Registration Rights Agreement dated as of the date
hereof (the "Registration Rights Agreement"), or in the
Debentures, shall have the same meanings herein as therein. In
the event of a conflict in any such definition, the
definitions shall be applied in the following order: first,
the Debentures; second, the Agreement; and third, the
Registration Rights Agreement.
-2-
2. Exercise of Warrant.
This Warrant may be exercised by Warrant Holder, in whole or
in part, at any time and from time to time, after November 19, 1998
until the Expiration Time by surrender of this Warrant, together
with the Purchase Price and form of subscription at the end hereof
duly executed by Warrant Holder, to the Company at its principal
office. In the event that the Warrant is not exercised in full, the
number of Warrant Shares shall be reduced by the number of Warrant
Shares for which this Warrant is exercised and the Company, at its
expense, shall forthwith issue and deliver to or upon the order of
Warrant Holder a new Warrant of like tenor in the name of Warrant
Holder or as Warrant Holder (upon payment by Warrant Holder of any
applicable transfer taxes) may request, reflecting the Warrant
Shares remaining subject to this Warrant. In the event of an
adjustment to the Warrant Shares or Purchase Price pursuant to
Section 5 hereof, this Warrant (including any replacement Warrants)
may still reflect on its face the Warrant Shares and Purchase Price
as if no such adjustments had been made (but such adjustments shall
nevertheless remain effective).
3. Delivery of Stock Certificates.
(a) Subject to the terms and conditions of this Warrant, as
soon as practicable after the exercise of this Warrant in full or in
part, and in any event within three (3) trading days thereafter, the
Company at its expense (including, without limitation, the payment
by it of any applicable issue taxes) will cause to be issued in the
name of and delivered to Warrant Holder, or as Warrant Holder (upon
payment by Warrant Holder of any applicable transfer taxes) may
lawfully direct, a certificate or certificates for the number of
fully paid and non-assessable shares of Common Stock to which
Warrant Holder shall be entitled on such exercise, together with any
other stock or other securities or property (including cash, where
applicable) to which Warrant Holder is entitled upon such exercise.
Any shares issued hereunder shall, at the request of Warrant Holder
and if available to the Company, be delivered by the Company to the
Warrant Holder in an electronic format (e.g. via DWAC).
(b) This Warrant may not be exercised as to fractional shares
of Common Stock. In the event that the exercise of this Warrant, in
full or in part, would result in the issuance of any fractional
share of Common Stock, then, in lieu of such fractional share,
Warrant Holder shall be entitled to cash equal to the Fair Market
Value of such fractional share on the date of the exercise of the
Warrant.
4. Covenants of the Company.
(a) The Company shall use its reasonable best efforts to
insure that a Registration Statement under the Act covering the
resale or other disposition of the Warrant Shares by Warrant Holder
is effective as provided in the Registration Rights Agreement.
-3-
(b) The Company shall take all necessary actions and
proceedings as may be required and permitted by applicable law, rule
and regulation, including, without limitation the notification of
NASDAQ, for the legal and valid issuance of this Warrant and the
Warrant Shares to the Warrant Holder under this Warrant.
(c) From the date hereof through the last date on which this
Warrant is exercisable, the Company shall take all steps reasonably
necessary and within its control to insure that the Common Stock
remains listed on a Principal Market and shall not amend its
Certificate of Incorporation or Bylaws so as to constitute a breach
of the Company's obligations hereunder.
(d) The Company shall at all times reserve and keep available,
solely for issuance and delivery of Warrant Shares hereunder, such
shares of Common Stock as shall from time to time be issuable as
Warrant Shares.
(e) The Warrant Shares, when issued in accordance with the
terms hereof, will be duly authorized and, when paid for and issued
in accordance with the terms hereof, shall be validly issued, fully
paid and non-assessable. The Company has authorized and reserved for
issuance to Warrant Holder the requisite number of shares of Common
Stock to be issued pursuant to this Warrant.
(f) With a view to making available to Warrant Holder the
benefits of Rule 144 promulgated under the Act ("Rule 144") and any
other rule or regulation of the SEC that may at any time permit
Warrant Holder to sell Warrant Shares of the Company to the public
without registration, the Company agrees to use its reasonable best
efforts to:
(i) make and keep public information available, as those
terms are understood and defined in Rule 144, at all times;
(ii) file with the SEC in a timely manner all reports
and other documents required of the Company under the Act and
the Exchange Act; and
(iii) furnish to any Warrant Holder, forthwith upon
request, a written statement by the Company (provided true at
the time) that it has complied with the applicable reporting
and filing requirements of the Act and the Exchange Act, a
copy of the most recent annual or quarterly report of the
Company, and such other reports and documents so filed by the
Company as may be reasonably requested to permit any such
Warrant Holder to take advantage of any rule or regulation of
the SEC permitting the selling of any such securities without
registration.
5. Adjustment of Exercise Price and Number of Shares.
The number of, and kind of, securities purchasable upon
exercise of this
-4-
Warrant and the Purchase Price shall be subject to adjustment from
time to time as follows:
(a) Subdivisions, Combinations and Other Issuances. If the
Company shall at any time after the date hereof but prior to the
expiration of this Warrant subdivide or otherwise increase its
outstanding securities as to which purchase rights under this
Warrant exist, by split-up, dividend, or similar subdivision, or
combine its outstanding securities as to which purchase rights under
this Warrant exist, the number of Warrant Shares as to which this
Warrant is exercisable as of the date of such subdivision or
combination shall, on the record date therefor, be proportionately
increased in the case of a subdivision, or proportionately decreased
in the case of a combination; however should this Warrant be
exercised prior to the distribution date related to such
subdivision, the additional Warrant Shares shall be delivered to the
Warrant Holder on such distribution date. Appropriate adjustments
shall also be made to the Purchase Price payable per share, but the
aggregate Purchase Price payable for the total number of Warrant
Shares purchasable under this Warrant as of such date shall remain
the same.
(b) Other Distributions. If at any time after the date hereof
the Company distributes to holders of its Common Stock, other than
as part of its dissolution, liquidation or the winding up of its
affairs, any shares of its capital stock, any securities or rights
convertible into Common Stock ("Common Stock Equivalents"), any
evidence of indebtedness or any of its assets (other than cash or
Common Stock) whether by spin-off or otherwise, then the number of
shares of Common Stock for which this Warrant may be exercised shall
be increased as of the record date (or the date of such dividend
distribution if no record date is set) for determining which holders
of Common Stock shall be entitled to receive such dividends, in
proportion to the increase in the number of outstanding shares (and
shares of Common Stock issuable upon conversion of all such Common
Stock Equivalents) of Common Stock as a result of such dividend, and
the Purchase Price shall be adjusted so that the aggregate amount
payable for the purchase of all the Warrant Shares issuable
hereunder immediately after the record date (or on the date of such
distribution, if applicable) for such dividend shall equal the
aggregate amount so payable immediately before such record date (or
on the date of such distribution, if applicable); however should
this Warrant be exercised prior to the distribution date related to
such subdivision, the additional Warrant Shares shall be delivered
to the Warrant Holder on such distribution date.
(c) Merger, etc. If at any time after the date hereof there
shall be a merger or consolidation of the Company with or into
another entity (with stockholders of the Company immediately prior
to such merger or consolidation owning in the aggregate less than
50% of the voting power of the ultimate parent corporation or other
entity surviving or resulting from such merger or consolidation) or
a transfer of all or substantially all of the assets of the Company
to another entity, then the Warrant
-5-
Holder shall be entitled to receive upon exercise of this Warrant
prior to such transfer, merger or consolidation becoming effective,
and upon payment of the aggregate Purchase Price then in effect, the
number of shares or other securities or property of the company or
of the successor corporation resulting from such merger or
consolidation, which would have been received by Warrant Holder for
the shares of stock subject to this Warrant had this Warrant been
exercised just prior to such transfer, merger or consolidation
becoming effective or to the applicable record date thereof, as the
case may be.
(d) Reclassification, Etc. If at any time after the date
hereof there shall be a reorganization or reclassification of the
securities as to which purchase rights under this Warrant exist into
the same or a different number of securities of any other class or
classes (other than pursuant to clauses (a) - (c) of this Section 5)
then the Warrant Holder shall thereafter be entitled to receive upon
exercise of this Warrant, during the period specified herein and
upon payment of the Purchase Price then in effect, the number of
shares or other securities or property resulting from such
reorganization or reclassification which would have been received by
the Warrant Holder for the shares of stock subject to this Warrant
had this Warrant been exercised just prior to such reorganization or
reclassification.
(e) Purchase Price Adjustment. In the event that the Company
issues or sells any (i) Common Stock or (ii) any warrants or other
rights to subscribe for or to purchase, or any options for the
purchase of, its Common Stock or any such Common Stock Equivalents
(other than (v) issuance of the Debentures or the Warrants or
Warrants of like tenor issued in connection with the issuance of the
Debentures or of shares of Common Stock upon conversion or exercise
thereof, (w) securities issued or which may be issued pursuant to
Company employee, officer, director or consultant stock or option or
similar equity-based compensation plans now or hereafter
established, (x) contingent shares which may be issued by the
Company pursuant to its agreement under which it acquired Stellar
Bio Systems, Inc., (y) securities issued in connection with business
acquisitions, joint ventures, licensing arrangements and other
non-capital raising purposes or (z) shares issued upon exercise of
Common Stock Equivalents, options, warrants or rights outstanding on
the date of the Agreement and reflected in the Exchange Act Reports)
at an effective purchase price per share which is less than the
Purchase Price then in effect, then in such case, the Purchase Price
in effect immediately prior to such issue or sale shall be reduced
effective concurrently with such issue or sale to an amount
determined by multiplying the Purchase Price then in effect by a
fraction, (x) the numerator of which shall be the sum of (1) the
number of shares of Common Stock outstanding immediately prior to
such issue or sale, including, without duplication, those shares
then issuable pursuant to any provision of the Debentures and the
Warrants plus (2) the number of shares of Common Stock which the
aggregate consideration received by the Company for such additional
shares would purchase at such Purchase Price and (y) the denominator
of which shall be the number of shares of Common Stock of the
-6-
Company outstanding immediately after such issue or sale including,
without duplication, those shares then issuable pursuant to any
provision of the Debentures and Warrants.
The number of shares which may be purchased hereunder shall be
increased proportionately to any reduction in Purchase Price
pursuant to this Section 5(e), so that after such adjustments the
aggregate Purchase Price payable hereunder for the increased number
of shares shall be the same as the aggregate Purchase Price in
effect just prior to such adjustments.
(g) If any Common Stock Equivalents, warrants, options or
other rights for which an adjustment of Purchase Price or Warrant
Shares or other consideration issuable upon exercise of this Warrant
shall expire unconverted or unexercised prior to the exercise of
this Warrant, the Purchase Price and number of Warrant Shares or
other consideration issuable upon exercise of this Warrant shall
immediately be re-adjusted as if such Common Stock Equivalents had
never been issued.
(h) No adjustment in the Purchase Price shall be required by
Section 5 unless such adjustment would require an increase of at
least one (1) cent; provided, however, that any adjustment which is
not, by reason of this Section 5(h), required to be made shall be
carried forward and taken into account in any subsequent adjustment.
All calculations under Section 5 shall be made to the nearest
one-hundredth of a cent or share.
6. No Impairment.
The Company will not, by amendment of its Certificate of
Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or
any other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant, but will at all
times in good faith assist in the carrying out of all such terms and
in the taking of all such action as may be reasonably necessary or
appropriate in order to protect the rights of the Warrant Holder
against impairment. Without limiting the generality of the
foregoing, the Company (a) will not increase the par value of any
Warrant Shares above the amount payable therefor on such exercise,
and (b) will take all such action as may be reasonably necessary or
appropriate in order that the Company may validly and legally issue
fully paid and nonassessable Warrant Shares on the exercise of this
Warrant.
-7-
7. Notice of Adjustments; Notices.
Whenever the Purchase Price or number of shares purchasable
hereunder shall be adjusted pursuant to Section 5 hereof, the
Company shall execute and deliver to the Warrant Holder a
certificate setting forth, in reasonable detail, the event requiring
the adjustment, the method by which such adjustment was calculated
and the Purchase Price and number of shares purchasable hereunder
after giving effect to such adjustment, and shall cause a copy of
such certificate to be mailed (by first class mail, postage prepaid)
to the Warrant Holder.
8. Rights As Stockholder.
Prior to exercise of this Warrant, the Warrant Holder shall
not be entitled to any rights as a stockholder of the Company with
respect to the Warrant Shares, including (without limitation) the
right to vote such shares, receive dividends or other distributions
thereon or be notified of stockholder meetings. However, in the
event of any taking by the Company of a record of the holders of any
class of securities for the purpose of determining the holders
thereof who are entitled to receive any dividend (other than a cash
dividend) or other distribution, any right to subscribe for,
purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right, the
Company shall mail to each Warrant Holder, at least 10 days prior to
the date specified therein for such record or distribution date, a
notice specifying the date on which any such record is to be taken
for (or, if no record date is to be taken therefor, the distribution
date thereof) the purpose of such dividend, distribution or right,
and the amount and character of such dividend, distribution or
right.
9. Replacement of Warrant.
On receipt of evidence reasonably satisfactory to the Company
of the loss, theft, destruction or mutilation of the Warrant and, in
the case of any such loss, theft or destruction of the Warrant, on
delivery of an indemnity agreement or security reasonably
satisfactory in form and amount to the Company or, in the case of
any such mutilation, on surrender and cancellation of such Warrant,
the Company at its expense will execute and deliver, in lieu
thereof, a new Warrant of like tenor.
10. Specific Enforcement; Consent to Jurisdiction; Waiver of Jury
Trial.
(a) The Company and the Warrant Holder acknowledge and agree
that irreparable damage would occur in the event that any of the
provisions of this Warrant were not performed in accordance with
their specific terms or were otherwise breached. It is accordingly
agreed that the parties shall be entitled to an injunction or
injunctions to prevent or cure breaches of the provisions of this
Warrant and to enforce specifically the terms and provisions hereof,
this being in addition to any other remedy to which either of them
may be entitled by law or equity.
-8-
(b) Each of the Company and the Warrant Holder hereby (i)
agree that all actions or proceedings arising directly or indirectly
from or in connection with this Warrant shall be litigated only in
the Supreme Court of the State of New York or the United States
District Court for the Southern District of New York located in New
York County, New York and (ii) consent to the jurisdiction and venue
of the foregoing courts and consent that any process or notice of
motion or other application to either of said courts or a judge
thereof may be served inside or outside the State of New York or the
Southern District of New York by registered mail, return receipt
requested, directed to the such party at its address set forth in
this Warrant (and service so made shall be deemed complete five (5)
days after the same has been posted as aforesaid) or by personal
service or in such other manner as may be permissible under the
rules of said courts. The parties hereto hereby waive any right to a
jury trial in connection with any litigation pursuant to this
Warrant.
11. Entire Agreement; Amendments.
This Warrant, the Agreement, the Registration Rights Agreement
or the Debentures contain the entire understanding of the parties
with respect to the matters covered hereby and thereby and except as
specifically set forth herein and therein, neither the Company nor
the Warrant Holder makes any representation, warranty, covenant or
undertaking with respect to such matters. No provision of this
Agreement may be waived or amended other than by a written
instrument signed by the party against whom enforcement of any such
amendment or waiver is sought.
12. Notices.
Unless otherwise provided herein, any notice or other
communication to a party hereunder shall be sufficiently given if in
writing and personally delivered or sent by facsimile with copy sent
in another manner herein provided or sent by courier (which for all
purposes of this Warrant shall include Federal Express, UPS or other
recognized overnight courier) or mailed to said party by certified
mail, return receipt requested, at its address provided for in the
Subscription Agreement or such other address as either may designate
for itself in such notice to the other and communications shall be
deemed to have been received when delivered personally on the
scheduled arrival date when sent by next day or 2-day courier
service or if sent by facsimile upon receipt of transmittal
confirmation or if sent by mail three days after deposit in the
mail.
13. Choice of Law and Venue; Waiver of Jury Trial.
THIS WARRANT SHALL BE CONSTRUED UNDER THE LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS OR CHOICE OF
LAW (EXCEPT SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
The parties hereby
-9-
agree that all actions or proceedings arising directly or indirectly
from or in connection with this Warrant shall be litigated only in
the Supreme Court of the State of New York or the United States
District Court for the Southern District of New York located in New
York County, New York. The parties consent to the jurisdiction and
venue of the foregoing courts and consent that any process or notice
of motion or other application to either of said courts or a judge
thereof may be served inside or outside the State of New York or the
Southern District of New York by registered mail, return receipt
requested, directed as provided in Section 13 (and service so made
shall be deemed complete five (5) days after the same has been
posted as aforesaid) or by personal service or in such other manner
as may be permissible under the rules of said courts. The parties
hereto hereby waive any right to jury trial in connection with any
litigation pursuant to this Warrant.
- 10 -
14. Miscellaneous.
Whenever the sense of this Warrant requires, words
in the singular shall be deemed to include the plural
and words in the plural shall be deemed to include the
singular. If more than one company is named herein, the
liability of each shall be joint and several. Paragraph
headings are for convenience only and shall not affect
the meaning of this document. The invalidity or
unenforceability shall in no way affect the validity or
enforceability of any other provisions.
Dated: May 20, 1998
AMERICAN BIOGENETIC
SCIENCES, INC.
By: /s/ Xxxxx X. Xxxxxxx
----------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
Finance - CFO
Attest:
By: /s/ Xxxxxxx X. Xxxxx
-----------------------
Name: Xxxxxxx X. Xxxxx
Title: Treasurer and Secretary
- 11 -
FORM OF WARRANT EXERCISE
(TO BE SIGNED ONLY ON EXERCISE OF WARRANT)
TO_____________________________
The undersigned, the holder of the within Warrant, hereby
irrevocably elects to exercise this Warrant for, and to purchase thereunder,
______ shares of Class A Common Stock of American Biogenetic Sciences, Inc., a
Delaware corporation (the "Company"), and herewith makes payment of
$______________ therefor, and requests that the certificates for such shares be
issued in the name of, and delivered to _____________________, whose address is
--------------------.
Dated: _______________________________________
(Signature must conform to name of
holder as specified on the face of the
Warrant)
_______________________________________
(Address)
- 12 -
FORM OF ASSIGNMENT
(TO BE SIGNED ONLY ON TRANSFER OF WARRANT)
For value received, the undersigned hereby sells, assigns, and transfers unto
_________________, whose address is ____________________________ and whose
social security or taxpayer identification number is ________________________,
the right represented by the within Warrant to purchase ______ shares of Class A
Common Stock of American Biogenetic Sciences, Inc., a Delaware corporation, to
which the within Warrant relates, and appoints _______________________ Attorney
to transfer such right on the books of American Biogenetic Sciences, Inc., a
Delaware corporation, with full power of substitution the premises.
Dated: _______________________________________
(Signature must conform to name of
holder as specified on the face of the
Warrant)
_______________________________________
(Address)
Signed in the presence of:
_______________________________
- 13 -
