EXHIBIT 10.35
THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT FILED UNDER SUCH ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER SUCH ACT.
UNTIL THE COMMENCEMENT DATE (AS HEREINAFTER DEFINED) THIS WARRANT IS SUBJECT TO
CERTAIN RESTRICTIONS ON TRANSFER AS DESCRIBED IN SECTION 9 HEREOF.
May 8, 1996
WARRANT
TO SUBSCRIBE FOR AND PURCHASE COMMON STOCK OF
LIFE MEDICAL SCIENCES, INC.
VOID AFTER 5:00 P.M. LOS ANGELES TIME, ON MAY 8, 2001
OR IF NOT A BUSINESS DAY, AS DEFINED HEREIN, AT 5:00 P.M.,
LOS ANGELES TIME, ON THE IMMEDIATELY PRECEDING BUSINESS DAY
No. X-x
THIS CERTIFIES that, for and in consideration of $2,000, WEDBUSH XXXXXX
SECURITIES INC., or its registered assigns (Wedbush Xxxxxx Securities, Inc. or
any such registered assign being referred to herein as to the "Warrantholder),
is entitled to subscribe for and purchase from Life Medical Sciences, Inc., a
Delaware corporation (hereinafter called the "Company"), at the price of $7.95
per share (such price, as from time to time to be adjusted as hereinafter
provided, being hereinafter called the "Warrant Price"), at any time and from
time to time but not earlier than the Commencement Date (as defined below) or
later than the Expiration Date (as defined below), up to 200,000 fully paid,
nonassessable shares of Common Stock, par value $.001 per share, of the Company
("Common Stocks"), subject, however, to the provisions and upon the terms and
conditions hereinafter set forth, including without limitation the provisions of
Section 3 hereof."Commencement Date" shall mean the first anniversary of the
date hereof. "Expiration Date" shall mean 5:00 P.M, Los Angeles time, on the
fifth anniversary of the date hereof, or if not a Business Day, as defined
herein, at 5:00 P.M., Los Angeles time, on the immediately preceding business
day. "Business Day" shall mean a day other than a Saturday, Sunday or other day
on which banks in the State of California are authorized by law to remain
closed.
SECTION 1. EXERCISE OF WARRANT
(a) EXERCISE PROCEDURES
This Warrant may be exercised, at any time and from time to time but not
earlier than the Commencement Date or later than the Expiration Date, by the
Warrantholder, in whole or in part (but not as to a fractional share of Common
Stock and in no event for less than 100 shares (unless Less than an aggregate of
100 shares are then purchasable under all outstanding Warrants held by a
Warrantholder)), by the completion of the subscription form attached hereto and
by the surrender of this Warrant (properly endorsed) at the Company's principal
offices at 000 Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxxxx 00000 (or at such other
location in the United States as it may designate by notice in writing to the
Warrantholder at the address of the Warrantholder appearing
on the books of the Company). In the event of any exercise of the rights
represented by this Warrant, a certificate or certificates for the total number
of whole shares of Common Stock so purchased, registered in the name of the
Warrantholder, shall be delivered to the Warrantholder within a reasonable time,
not exceeding five Business Days, after the rights represented by this Warrant
shall have been so exercised; and, unless this Warrant has expired, a new
Warrant representing the number of shares (except a remaining fractional share),
if any, with respect to which this Warrant shall not then have been exercised
shall also be issued to the Warrantholder within such time. With respect to any
such exercise, the Warrantholder shall for all purposes be deemed to have become
the holder of record of the number of shares of Common Stock evidenced by such
certificate or certificates from the date on which this Warrant was surrendered
and if exercise is pursuant to a cash exercise, payment of the Warrant Price was
made, irrespective of the date of delivery of such certificate, except that, if
the date of such surrender and payment is a date on which the stock transfer
books of the Company are closed such person shall be deemed to have become the
holder of such shares at the close of business on the next succeeding date on
which the stock transfer books are open.
(b) CASH OR NET EXERCISE
The Warrantholder may elect to exercise this Warrant by cash exercise or a
net exercise as described below.
(i) In the case of a cash exercise, the subscription form delivered
under this Section l(a) shall be accompanied by payment to the Company of
the Warrant Price, in cash or by certified or official bank check, for each
share being purchased.
(ii) In the case of a net exercise, the Warrantholder may elect to
exercise this Warrant and receive shares on a "net exercise" basis in an
amount equal to the value of this Warrant by delivery of the subscription
form attached hereto and surrender of this Warrant at the principal office
of the Company, in which event the Company shall issue to Holder a number
of shares computed using the following formula:
X = (P)(Y)(A-B)
-----------
A
Where:
X = the number of shares of Common Stock to be issued to
Holder.
P = the percentage of the Warrant being exercised.
Y = the number of shares of Common Stock issuable upon exercise
of this Warrant.
A = the Current Market Price (as determined pursuant to
Section 3) of one share of Common Stock.
B = Warrant Price.
(c) CONTINGENT EXERCISE
At the election of the Warrantholder, an exercise may be made contingent
upon the closing of the sale of the shares issuable upon such exercise in a
public offering pursuant to a registration statement filed or to be filed by the
Company which registers such shares pursuant to the Securities Act of 1933, as
amended.
(d) STOCK TO BE RESERVED
The Company will at all times reserve and keep available out of its
authorized Common Stock solely for the purpose of issuance upon the exercise of
this Warrant as herein provided, such number of shares of Common Stock as shall
then be issuable upon the exercise of this Warrant. The Company covenants that
all shares of
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Common Stock which shall be so issued upon full payment of the Warrant Price
therefor as otherwise set forth herein, shall be duly and validly issued and
fully paid and nonassessable and free from all taxes, liens, charges and other
adverse interests. Without limiting the generality of the foregoing, the Company
covenants that it will from time to time take all such action as may be required
to ensure that the par value per share, if any, of the Common Stock is at all
times equal to or less than the effective Warrant Price. The Company will take
all such action as may be necessary to ensure that all such shares of Common
Stock may be so issued without violation of any applicable law or regulation, or
of any requirement of any national securities exchange or automated quotation
system upon which the Common Stock of the Company may be listed. The Company
will not take any action which results in any adjustment of the Warrant Price if
the total number of shares of Common Stock issued and issuable after such action
upon exercise of this Warrant would exceed the total number of shares of Common
Stock then authorized by the Company's Certificate of Incorporation. The Company
has not granted and will not grant any right of first refusal with respect to
shares issuable upon exercise of this Warrant, and there are no preemptive
rights associated with such shares.
(e) ISSUE TAX
The issuance of certificates for shares of Common Stock upon exercise of
any Warrant shall be made without a charge to the Warrantholder for any issuance
tax in respect thereof, provided that the Company shall not be required to pay
any tax which may be payable in respect of any transfer involved in the issuance
and delivery of any certificate in a name other than that of the Warrantholder.
(f) CLOSING OF BOOKS
The Company will at no time close its transfer books against the transfer
of the shares of Common Stock issued or issuable upon the exercise of this
Warrant in any manner which interferes with the timely exercise of this Warrant.
(g) DEFINITION OF COMMON STOCK
The shares purchasable pursuant to this Warrant shall include only
securities designated as Common Stock of the Company. As used herein the term
"Common Stock" shall mean and include the Common Stock par value $.001, of the
Company as authorized on the date hereof, or shares of any class or classes
resulting from any recapitalization or reclassification thereof which are not
limited to any fixed sum or percentage and are not subject to redemption by the
Company and in case at any time there shall be more than one such resulting
class, the shares of each class then so issuable shall be substantially in the
proportion which the total number of shares of such class resulting from all
such reclassification bears to the total number of shares of all such classes
resulting from all such reclassification.
(h) NO FRACTIONAL SHARES
No fractional shares shall be issued upon exercise of this Warrant and no
payment or adjustment shall be made upon any exercise on account of any cash
dividends on the Common Stock issued upon such exercise. If any fractional
interest in a share of Common Stock would, except, for the provisions of this
Section 1, be delivered upon any such exercise, the Company, in lieu of
delivering the fractional share thereof, shall pay to the Warrantholder an
amount in cash equal to the Current Market Price of such fractional interest, as
determined pursuant to Section 3.
(i) LISTING
Prior to the issuance of any shares of Common Stock upon exercise of this
Warrant, the Company shall secure the listing of such shares of Common Stock
upon each national securities exchange or automated quotation system, if any,
upon which shares of Common Stock are then listed (subject to official notice of
issuance upon exercise of this Warrant) and shall maintain, so long as any other
shares of Common Stock shall be so listed, such listing of all shares of Common
Stock from time to time issuable upon the exercise of this Warrant; and the
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Company shall so list on each national securities exchange or automated
quotation system, and shall maintain such listing of any other shares of
capital stock of the Company issuable upon the exercise of this Warrant if and
so long as any shares of the same class shall be listed on such national
securities exchange or automated quotation system.
SECTION 2. ADJUSTMENT OF NUMBER OF SHARES AND WARRANT PRICE
(a) ADJUSTMENTS
The Warrant Price and the number and kind of shares issuable hereunder
shall be subject to adjustment from time to time upon the happening of certain
events as provided in this Section 2. Upon each adjustment of the Warrant Price
for any stock dividend or distribution or any subdivision or combination of the
outstanding shares of the Common Stock as provided in this Section 2, the
Warrantholder shall thereafter be entitled to purchase, at the Warrant Price
resulting from such adjustment, the number of shares (calculated to the nearest
tenth of a share) obtained by multiplying the Warrant Price in effect
immediately prior to such adjustment by the number of shares purchasable
pursuant hereto immediately prior to such adjustment and dividing the product
thereof by the Warrant Price resulting from such adjustment.
(1) If at any time prior to the exercise of this Warrant in full, the
Company shall (A) declare a dividend or make a distribution on the Common Stock
payable in shares of its capital stock (whether shares of Common Stock or of
capital stock of any other class); (B) subdivide, reclassify or recapitalize its
outstanding Common Stock into a greater number of shares; (C) combine,
reclassify or recapitalize its outstanding Common Stock into a smaller number of
shares; or (D) issue any shares of its capital stock by reclassification of its
Common Stock (excluding any such reclassification in connection with a
consolidation or a merger), the Warrant Price in effect at the time of the
record date of such dividend, distribution, subdivision, combination,
reclassification or recapitalization shall be adjusted so that the Warrantholder
shall be entitled to receive the aggregate number and kind of shares which, if
this Warrant had been exercised in full immediately prior to such event, it
would have owned upon such exercise and been entitled to receive by virtue of
such dividend, distribution, subdivision, combination reclassification or
recapitalization. Any adjustment required by this Section 2 (a)( 1) shall be
made successively immediately after the record date, in the case of a dividend
or distribution, or the effective date, in the case of a subdivision,
combination, reclassification or recapitalization, to allow the purchase of such
aggregate number and kind of shares.
(2) If at any time prior to the exercise of this Warrant in full the
Company shall make a distribution to all holders of the Common Stock of stock of
a subsidiary or securities convertible into or exercisable for such stock, then
in lieu of an adjustment in the Warrant Price or the number of shares of Common
Stock purchasable upon the exercise of this Warrant, each Warrantholder, upon
the exercise hereof at any time after such distribution, shall be entitled to
receive from the Company, such subsidiary or both, as the Company shall
determine, the stock or other securities to which such Warrantholder would have
been entitled if such Warrantholder had exercised this Warrant immediately prior
thereto, all subject to further adjustment as provided in this Section 2, and
the Company shall reserve, for the life of the Warrant, such securities of such
subsidiary or other corporation; provided, however that no adjustment in respect
of dividends or interest on such stock or other securities shall be made during
the term of this Warrant or upon its exercise.
(3) If at any time prior to the expiration of this Warrant in full, the
Company shall issue rights or Warrants to all holders of Common Stock as such
entitling them (for a period expiring within sixty days after the record date of
the determination of stockholders entitled to receive the same), to subscribe
for or purchase Common Stock at a price per share less than the current market
price per share (as defined in Section 3) on such record date, then in each such
case the number of shares subject to this Warrant thereafter purchasable upon
the exercise of this Warrant shall be determined by multiplying the number of
shares of Common Stock theretofore purchasable upon exercise of each Warrant by
a fraction, of which the numerator shall be the number of shares of Common Stock
outstanding on the date of issuance of such rights or Warrants, plus the number
of additional shares of Common Stock offered for subscription or purchase, and
of which the denominator shall be the number of shares of Common Stock
outstanding on the date of issuance of such rights or Warrants plus the number
of
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shares that the aggregate offering price of the total number of shares of Common
Stock so offered would purchase at such current market price. For purposes of
this Section 2(a)(3), the issuance of rights or Warrants to subscribe for or
purchase securities convertible into Common Stock shall be deemed to be the
issuance of rights or Warrants to purchase the Common Stock into which such
securities are convertible at an aggregate offering price equal to the aggregate
offering price of such securities plus the minimum aggregate amount (if any)
payable upon conversion of such securities into Common Stock.
(4) If at any time prior to the exercise of this Warrant in full, the
Company shall distribute to all holders of its Common Stock evidence of
indebtedness of the Company or assets of the Company (excluding cash dividends
or distributions out of earned surplus) or rights or Warrants to subscribe for
securities of the Company (excluding those referred to in Sections 2(a)(2) or
(3) above), then in each case the Warrant Price shall be adjusted to a price
determined by multiplying the Warrant Price in effect immediately prior to such
distribution by a fraction, of which the numerator shall be the then Current
Market Price per share of Common Stock on the record date for determination of
stockholders entitled to receive such distribution, less the then fair value (as
determined by the Board of Directors of the Company in good faith) of the
portion of the assets or evidences of indebtedness so distributed or of such
subscription rights or Warrants which are applicable to one share of Common
Stock, and of which the denominator shall be the Market Price per share of
Common Stock; provided, however, that if the then Current Market Price per share
of Common Stock on the record date for determination of stockholders entitled to
receive such distribution is less than the then fair value of the portion of the
assets or evidence of indebtedness so distributed or of such subscription rights
or Warrants which are applicable to one share of Common Stock, the foregoing
adjustment of the Warrant Price shall not be made and in lieu thereof the number
of shares purchasable upon exercise of each Warrant immediately prior to such
distribution shall be adjusted so that the holder of such Warrant shall be
entitled to receive upon exercise of such Warrant the kind and number of assets,
evidence of indebtedness, subscription rights and Warrants (or, in the event of
the redemption of such evidence of indebtedness, subscription rights or
Warrants, any cash paid in respect of such redemption) that such Warrantholder
would have owned or have been entitled to receive after the happening in such
distribution had such Warrant been exercised immediately prior to the record
date of such distribution.
(5) No adjustment in the Warrant Price shall be required unless such
adjustment would require an increase or decrease of at least five cents ($.O5)
in such price; provided, however, that any adjustments which by reason of this
Section 2(a)(5) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Section
2(a) shall be made to the nearest cent or to the nearest one hundredth of a
share, as the case may be. Notwithstanding anything in this Section 2(a) to the
contrary, the Warrant Price shall not be reduced to less than the then existing
par value of the Common Stock as a result of any adjustment made hereunder.
(6) In the event that at any time, as the result of any adjustment made
pursuant to this Section 2(a), the Warrantholder thereafter shall become
entitled to receive any securities other than Common Stock thereafter the number
of such other securities so receivable upon exercise of any Warrant shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Common Stock
contained in Section 2(a).
(7) For purposes of any computation under this Section 2(a), the Current
Market Price and Market Price per share of Common Stock on any date shall be
deemed calculated as provided in Section 3.
(b) NO ADJUSTMENT FOR CASH DIVIDENDS
Except as provided in Section 2(a) of this Agreement, no adjustment in
respect of any cash dividends shall be made during the term of this Warrant or
upon the exercise of this Warrant.
(c) PRESERVATION OF PURCHASE RIGHTS IN CERTAIN TRANSACTIONS
In case of any reclassification, capital reorganization or other change of
outstanding shares of Common Stock (other than a subdivision or combination of
the outstanding Common Stock and other than a change in the
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par value of the Common Stock) or in case of any consolidation or merger of
the Company with or into another corporation or other entity (other than a
merger with a subsidiary in which the Company is the continuing corporation and
that does not result in any reclassification capital reorganization or other
change of outstanding shares of Common Stock of the class issuable upon exercise
of this Warrant) or in the case of any sale, lease, transfer or conveyance to
another corporation or entity of the property and assets of the Company as an
entirety or substantially as an entirety, the Company shall, as a condition
precedent to such transaction cause such successor or purchasing corporation or
other entity, as the case may be, to execute with the Warrantholder an agreement
granting the Warrantholder the right thereafter, upon payment of the Warrant
Price in effect immediately prior to such action, to receive upon exercise of
this Warrant the kind and amount of shares and other securities and property
which the Warrantholder would have owned or have been entitled to receive after
the happening of such reclassification, change, consolidation, merger, sale, or
conveyance had this Warrant been exercised immediately prior to such action. In
the event that in connection with any such reclassification, capital
reorganization, change, consolidation, merger, sale or conveyance, additional
shares of Common Stock shall be issued in exchange, conversion, substitution or
payment, in whole or in part, for, or of, a security of Company other than
Common Stock, any such issue shall be treated as an issue of Common Stock
covered by the provisions of this Section 2. The provisions of this Section 2(c)
shall similarly apply to successive reclassifications, capital reorganizations,
consolidations, mergers, sales or conveyances.
(d) FORM OF WARRANT AFTER ADJUSTMENTS
The form of this Warrant need not be changed because of any adjustments in
the Warrant Price of the number or kind of the shares purchasable pursuant to
this Warrant, and Warrants theretofore or thereafter issued may continue to
express the same price and number and kind of shares as are stated in this
Warrant, as initially issued; provided, however, that the Company may, at any
-------- -------
time in its reasonable discretion make any change in the form of Warrant
certificate that it may deem appropriate and that does not affect the substance
thereof. Any Warrant certificate thereafter issued, whether upon registration of
transfer of, or in exchange or substitution for, an outstanding Warrant
certificate may be in the form so changed.
(e) NOTICE OF ADJUSTMENT
Upon any adjustment of the Warrant Price, then and in each such case the
Company shall give written notice thereof, by first-class mail, postage prepaid,
addressed to each Warrantholder at the address of such holder as shown on the
books of the Company, which notice shall state the Warrant Price resulting from
such adjustment, setting forth in reasonable detail the method of calculation
and the facts upon which such calculation is based.
SECTION 3. CURRENT MARKET PRICE
For any computation of Current Market Price or Market Price under this
Warrant, the Current Market Price per share of Common Stock on any date shall be
deemed to be the average of the daily market price per share for the 30
consecutive Trading Days commencing 35 Trading Days before the date in question.
"Market Price" is defined as (i) the closing sale price (or, if no closing sale
price is reported the closing bid price) of the Common Stock in the
over-the-counter market, and reported by the National Association of Securities
Dealers Automated Quotation System ("Nasdaq"), or, if the Common Stock is not
quoted on Nasdaq, as reported by the National Quotation Bureau Incorporated;
(ii) in the event that the Common Stock is hereafter listed for trading on one
or more United States national or regional securities exchanges, market price
shall be the closing price on the exchange or system designated by the Board of
Directors of the Company as the principal United States market in which the
Common Stock is traded; (iii) if the Warrantholder elects a net exercise in
connection with and contingent upon a public offering of the shares issuable
upon exercise of this Warrant, and if the Company's registration statement
relating to such public offering has been declared effective by the Securities
and Exchange Commission, then market price shall be the initial "Price to
Public" specified in the final prospectus for such offering; or (iv) if market
price cannot be established as described above, market price shall be the fair
market value of the Common Stock as determined by mutual agreement of the
Warrantholder and the Company, and if the Warrantholder and the Company are
unable to agree, at the Company's sole expense, by an investment banker of
national reputation selected by the Company and reasonably acceptable to the
Warrantholder. The term "Trading
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Day" shall mean a day on which Nasdaq or the principal national securities
exchange on which the Common Stock is listed or admitted to trading is open for
the transaction of business.
SECTION 4. REGISTRATION RIGHTS
(a) DEFINITIONS
As used in this Section 4, the following capitalized terms shall have the
following respective meanings:
"Demand Registration" means a registration of Registrable Securities under
Section 4(b).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Included Registrable Securities" means Registrable Securities included in
a Registration Statement filed under this Section 4.
"Initiating Holders" means any Registration Rights Holder or Holders who
holds or has the right to acquire not less than 25% of the aggregate of (i) all
Warrant Securities issuable under all Warrants outstanding at the time a Demand
Registration is requested and (ii) all Warrant Securities outstanding at such
time.
"Participating Holders" means holders of Included Registrable Securities.
"Person" means any individual, partnership, joint venture, trust,
corporation, limited liability company or partnership, unincorporated
organization or government or any department or agency thereof.
"Piggyback Registration" means a registration of Registrable Securities
under Section 4(c).
"Prospectus" means any prospectus included in any Registration Statement,
as amended or supplemented by any prospectus supplement, with respect to the
terms of the offering of any portion of the Registrable Securities covered by
such Registration Statement and all other amendments and supplements to the
Prospectus, including post-effective amendments and all materials incorporated
by reference in such Prospectus.
"Registrable Securities" means any Warrant Securities; provided, however,
that as to any particular security contained in Registrable Securities, such
securities shall cease to be Registrable Securities when (1) a Registration
Statement with respect to the sale of such securities shall have become
effective under the Securities Act and such securities shall have been disposed
of in accordance with such Registration Statement; or (2) they shall have been
sold to the public pursuant to Rule 144 (or any successor provision) under the
Securities Act without any restrictions or limitation on such resale.
"Registration Expenses" means any and all expenses incurred in connection
with any registration or action incident to performance of or compliance by the
Company with Article 6, including, without limitation (1) all SEC, national
securities exchange and NASD registration and filing fees; all listing fees and
all transfer agent fees; (2) all fees and expenses of complying with state
securities or blue sky laws (including the fees and disbursements of counsel of
the underwriters in connection with blue sky qualification of the Registrable
Securities); (3) all printing, mailing, messenger and delivery expenses: (4) all
fees and disbursements of counsel for the Company and of its accountants,
including the expenses of any special audits and/or "cold comforts letters
required by or incident to such performance and compliance; and (5) any
disbursements of underwriters customarily paid by issuers or sellers of
securities including the reasonable fees and expenses of special experts
retained by the underwriters in connection with the requested registration.
"Registration Rights Holders" means the holders of any Warrant or Warrant
Securities.
"Registration Statement" means any Registration Statement of the Company
filed or to be filed with the SEC which covers any of the Registrable Securities
pursuant to the provisions of this Section 4, including all
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amendments (including post-effective amendments) and supplements thereto, all
exhibits thereto and all material incorporated therein by reference.
"Representative" means Wedbush Xxxxxx Securities, Inc.
"SEC" means the Securities and Exchange Commission or any other federal
agency at the time administering the Securities Act or the Exchange Act.
"Securities Act" means the Securities Act of 1933, as amended.
"Selling Expenses" means underwriting discounts and commissions, brokerage
fees and transfer taxes, if any, and fees of counsel or accountants retained by
the holders of Included Registrable Securities to advise them in their capacity
as holders of Included Registrable Securities.
"Underwriting Agreement" means that certain Underwriting Agreement dated as
of May 2, 1996 by and among the Company and the Representative, as
Representative of the several Underwriters named therein.
"Warrants" means this Warrant and all other Warrants issued to the
Representative pursuant to the Underwriting Agreement, including all Warrants
issued in substitution or exchange thereof.
"Warrant Securities" means any Common Stock or other securities issuable
upon exercise of Warrants.
(b) DEMAND REGISTRATION
(i) If, at any time prior to the Expiration Date, Initiating Holders
request that the Company file a Registration Statement covering Registrable
Securities, as soon as practicable thereafter the Company shall use its best
efforts to file a Registration Statement with respect to all Registrable
Securities that it has been requested to register by any Registration Rights
Holders and obtain the effectiveness of such Registration Statement. The Company
shall also take all other action necessary under federal or state law or
regulation to permit the sale or other disposition pursuant to such Registration
Statement of all Registrable Securities requested to be registered and the
Company shall maintain such compliance with each such federal and state law and
regulation for the period necessary for the Participating Holders to effect the
proposed sale or other disposition of Registrable Securities pursuant to such
Registration Statement. Notwithstanding the foregoing, the Company shall be
entitled to defer a Demand Registration for a period of up to 90 days if and to
the extent that the Company's Board of Directors determines, in good faith, that
such registration would substantially interfere with a pending corporate
transaction.
(ii) Upon receipt of a request for registration from Initiating Holders,
the Company shall promptly give written notice to all other Registration Rights
Holders of its intention to effect a Demand Registration and shall include in
such registration all Registrable Securities held by other Registration Rights
Holders who request such registration within 20 Business Days after such notice
has been given by the Company.
(iii) Any request for a Demand Registration shall specify the aggregate
number of Registrable Securities proposed to be sold by a Registration Rights
Holder and the intended method of disposition.
(iv) If any Demand Registration is requested to be in the form of an
underwritten offering, the managing underwriter shall be selected and obtained
by the holders of a majority of the Included Registrable Securities. Such
selection shall be subject to the Company's consent, which consent shall not be
unreasonably withheld.
(v) The Company shall be required to effect a only one registration
pursuant to this Section 4(b). If any Registration Statement fails to be
declared effective by the SEC by reason of a decision by Participating Holders
or the underwriters to withdraw said Registration Statement, or if the
Registration Statement fails to be declared effective or, after being declared
effective, is stop-ordered by the SEC, in either case, for reasons
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attributable to a Participating Holder, such Demand Registration shall count for
purposes of the limitation set forth in this Section 4(b)(v). If any Statement
(1) fails to be declared effective by the SEC for any reason (except (a) by
reason of a decision by Participating Holders or underwriters to withdraw said
Registration Statement, or (B) for reasons attributable to any Participating
Holder), or (2) is stop-ordered by the SEC after being declared effective (other
than for reasons attributable to any Participating Holder) such requested
registration shall not count for purposes of the limitation set forth in this
Section 4(b)(v).
(c) PIGGYBACK REGISTRATION
(i) If, at any time or from time to time prior to the second anniversary of
the Expiration Date, the Company proposes to register any of its securities
under the Securities Act on any form for the registration of securities under
the Securities Act, whether or not for its own account (other than a
Registration Statement filed pursuant to Section 4(b) or a registration
statement filed for registration of securities issuable under the Company's
employee benefit plans or in connection with any merger or acquisition), the
Company shall as expeditiously as possible give written notice to all
Registration Rights Holders of the Company's intention to do so and of such
Registration Rights Holders' rights under this Section 4(c). Upon the written
request of any Registration Rights Holder made within 20 Business Days after the
giving of any such notice (which request shall specify the amount of Registrable
Securities intended to be disposed of by such Registration Rights Holder in such
registration), the Company shall include in such Registration Statement the
Registrable Securities which the Company has been so requested to register and
obtain the effectiveness of such Registration Statement. The Company shall keep
such Registration Statement in effect and maintain compliance with each federal
and state law or regulation for the period necessary for Participating Holders
to effect the proposed sale or other disposition of the Included Registrable
Securities.
(ii) If a Piggyback Registration involves an offering by or through
underwriters, then (1) all Participating Holders must sell their Included
Registrable Securities to the underwriters selected by the Company on the same
terms and conditions as apply to other selling shareholders and (2) any
Participating Holder may elect in writing, not later than 3 Business Days prior
to the effectiveness of the Registration Statement filed in connection with such
registration, to withdraw such holder's Registrable Securities from such
registration.
(iii) If a Piggyback Registration involves an offering by or through
underwriters, the Company, except as otherwise provided herein, shall not be
required to include Registrable Shares therein if and to the extent the managing
underwriters the offering reasonably believes in good faith and advises each
Registration Rights Holder requesting to have Registrable Securities included in
the Company's Registration Statement that such inclusion would materially
adversely affect such offering; provided that (1) if other selling shareholders
without contractual registration rights or with contractual registration rights
subordinate to the rights of the Registration Rights Holders have requested
registration of securities in the proposed offering, the Company will reduce or
eliminate such securities held by such selling shareholders before any reduction
or elimination of Registrable Securities; and (2) any such reduction or
elimination (after taking into account the effect or clause (1)) shall be pro
rata (based on the number of securities sought to be registered) with all other
selling shareholders with contractual registration rights which are not
subordinate to the rights of Registration Rights Holders. After the date hereof,
the Company shall not grant any registration rights with respect to any Company
securities which are not subordinate to the rights of the Registration Rights
Holders without the prior written consent of the holders of a majority of the
Warrant Securities outstanding at the time.
(d) REGISTRATION PROCEDURES
If and whenever the Company is required to use its best efforts to take
action pursuant to any federal or state law or regulation to permit the sale or
other disposition of any Registrable Securities Warrants in order to effect or
cause the registration of any Registrable Securities under the Securities Act as
provided in this Section 4, the Company shall, as expeditiously as practicable:
(i) prepare and file with the SEC, as soon as practicable within 90 days
after the end of the period within which requests for registration may be given
to the Company (but subject to the provisions for deferral
9
contained in Section 4(b)(i) hereof) a Registration Statement or Registration
Statements relating to the registration on any appropriate form under the
Securities Act, which form shall be available for the sale of the Registrable
Securities in accordance with the intended method or Methods of distribution
thereof, and use its best efforts to cause such Registration Statements to
become effective; provided that before filing a Registration Statement or
Prospectus or any amendment or supplements thereto, including documents
incorporated by reference after the initial filing of any Registration
Statement, the Company will furnish to the Participating Holders and the
underwriters, if any, copies of all such documents proposed to be filed, which
documents will be subject to the review of the Participating Holders and the
underwriters.
(ii) Prepare and file with the SEC such amendments and post-effective
amendments to a Registration Statement as may be neccessary to keep such
Registration Statement effective for a reasonable period not to exceed 180 days;
cause the related Prospectus to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424 under the
Securities Act; and comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such Registration
Statement during such period in accordance with the intended methods of
disposition by the Participating Holders as set forth in such Registration
Statement or supplement to such Prospectus.
(iii) Notify the Participating Holders and the managing underwriters, if
any, promptly, and (if requested by any such person) confirm such advice in
writing, (1) when a Prospectus or any Prospectus supplement or post-effective
amendment has been filed, and, with respect to a Registration Statement or any
post-effective amendment, when the same has become effective; (2) of any request
by the SEC for amendments or supplements to a Registration Statement or related
Prospectus or for additional information; (3) of the issuance by the SEC of any
stop order suspending the effectiveness of a Registration Statement or the
initiation of any proceedings for that purpose; (4) if at any time the
representations and warranties of the Company contemplated by subsection (xiii)
below ceases to be true and correct in all material respects; (5) of the receipt
by the Company of any notification with respect to the suspension of the
qualification of any of the Registrable Securities for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose; and (6) of
the happening of any event that makes any statement of a material fact made in
the Registration Statement, the Prospectus or any document incorporated therein
by reference untrue or which requires the making of any changes in the
Registration Statement or Prospectus so that they will not contain any untrue
statement or a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading.
(iv) Use its best efforts to obtain the withdrawal of any order suspending
the effectiveness of a Registration Statement at the earliest possible moment.
(v) If reasonably requested by the managing underwriters, immediately
incorporate in a Prospectus supplement or post-effective amendment such
information as the managing underwriters believe (on advice of counsel) should
be included therein as required by applicable law relating to such sale of
Registrable Securities, including, without limitation, information with respect
to the purchase price being paid for the Registrable Securities by such
underwriters and with respect to any other terms of the underwritten (or "best
efforts" underwritten) offering; and make all required filings of such
Prospectus supplement or post-effective amendment as soon as notified of the
matters to be incorporated in such Prospectus supplement or post-effective
amendment.
(vi) Furnish to each Participating Holder and each managing underwriter,
without charge, at least one copy of the Registration Statement and any
post-effective amendment therein, including financial statements and schedules,
all documents incorporated therein by reference and all exhibits (including
those incorporated by reference), which copies, in the case of the managing
underwriters, shall be manually signed.
(vii) Deliver to each Participating Holder and the underwriters, if any,
without charge, as many copies of the Prospectus or Prospectuses (including each
preliminary Prospectus) any amendment or supplement thereto as such persons may
reasonably request, and the Company consents to the use of such Prospectus or
any amendment or supplement thereto by each of the Participating Holders and the
underwriters, if any, in connection with the offering and sale of the Included
Registrable Securities covered by such Prospectus or any amendment or supplement
thereto.
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(viii) Prior to any public offering of Registrable Securities, cooperate
with the Participating Holders, the underwriters, if any, and their respective
counsel in connection with the registration or qualification of such Registrable
Securities for offer and sale under the securities or Blue Sky laws of such
jurisdictions within the United States as any Participating Holder or
underwriter reasonably requests in writing, keep each such registration or
qualification effective during the period such Registration Statement is
required to be kept effective and do any and all other acts or things necessary
or advisable to enable the disposition in such jurisdictions of the Included
Registrable Securities, provided that the Company will not be required to
qualify to do business in any jurisdiction where it is not then so qualified or
to take any action which would subject the Company to general service of process
in any jurisdiction where it is not at the time so subject.
(ix) Cooperate with the holders of Included Registrable Securities and the
managing underwriters, if any, to facilitate the timely preparation and delivery
of certificates representing Registrable Securities to be sold and not bearing
any restrictive legends; and enable such Registrable Securities to be in such
denominations and registered in such names as the managing underwriters may
request at least two Business Days prior to any sale of Registrable Securities
to the underwriters.
(x) Use its best efforts to cause the Registrable Securities covered by the
applicable Registration Statement to be registered with or approved by such
other governmental agencies or authorities within the United States as may be
necessary to enable the seller or sellers thereof or the underwriters, if any,
to consummate the disposition of such Registrable Securities.
(xi) Upon the occurrence of any event contemplated by Section 4(c)(iii)(b)
above, prepare a supplement or post-effective amendment to the applicable
Registration Statement or related Prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Securities being sold thereunder,
such Prospectus will not contain an untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein not
misleading.
(xii) With respect to each issue or class of Registrable Securities, use
its best efforts to cause all Registrable Securities covered by the Registration
Statements to be listed on each securities exchange or automated quotation
system, if any, on which similar securities issued by the Company are then
listed.
(xiii) Enter into such agreements (including an underwriting agreement) and
take all such other action reasonably required in connection therewith in order
to expedite or facilitate the disposition of such Registrable Securities and in
such connection, if the registration is in connection with an underwritten
offering (1) make such representations and warranties to the underwriters, in
such form, substance and scope as are customarily made by issuers to
underwriters in underwritten offerings and confirm the same if and when
requested; (2) obtain opinions of counsel to the Company and updates thereof
(which counsel and opinions in form, scope and substance shall be reasonably
satisfactory to the underwriters) addressed to the underwriters covering the
matters customarily covered in opinions requested in underwritten offerings and
such other matters as may be reasonably requested by such underwriters; (3)
obtain "cold comfort" letters and updates thereof from the Company's accountants
addressed to the underwriters, such letters to be in customary form and covering
matters of the type customarily covered in "cold comfort" letters by
underwriters in connection with underwritten offerings; (4) set forth in full in
any underwriting agreement entered into the indemnification provisions and
procedures of Section 4(e) hereof with respect to all parties to be indemnified
pursuant to said section; and (5) deliver such documents and certificates as may
be reasonably requested by the underwriters to evidence compliance with clause
(1) above and with any customary conditions contained in the underwriting
agreement or other agreement entered into by the Company, the above shall be
done at each closing under such underwriting or similar agreement or as and to
the extent required hereunder.
(xiv) Make available for inspection by one or more representatives of the
Participating Holders, any underwriter participating in any disposition pursuant
to such registration, and any attorney or accountant retained by such
Participating Holders or underwriter, all financial and other record, pertinent
corporate documents and
11
properties of the Company, and cause the Company's officers, directors and
employees to supply all information reasonably requested by any such
representatives.
(xv) Otherwise use its best efforts to comply with all applicable federal
and state regulations; and take such other action as may be reasonably necessary
to or advisable to enable each Participating Holder and each underwriter to
consummate the sale or disposition in such jurisdiction or jurisdiction in which
any such Participating Holder or underwriter shall have requested that the
Included Registrable Securities be sold.
(xvi) The Company may require each Participating Holder to furnish to the
Company such information regarding the distribution of such securities and such
other information as may otherwise be required by the Securities Act to be
included in such Registration Statement.
(d) FEES AND EXPENSES
The Company shall pay all Registration Expenses and the Participating
Holders shall pay (severally and not jointly and pro rata based upon the number
of Included Registrable Securities held by each Participating Holder) all
Selling Expenses incurred in connection with any registration of Registrable
Securities under this Section 4.
(e) INDEMNIFICATION
(i) In connection with each Registration Statement relating to disposition
of Registrable Securities, the Company shall indemnify and hold harmless each
Participating Holder and each underwriter of Included Registrable Securities and
each Person, if any, who controls such Participating Holder or underwriter
(within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act) against any and all losses, claims, damages and liabilities, joint
or several (including any reasonable investigation, legal and other expenses
incurred in connection with, and any amount paid in settlement of any action,
suit or proceeding or any claim asserted), to which they, or any of them, may
become subject under the Securities Act, the Exchange Act or other federal or
state law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities arise out of or are based upon any untrue
statement or alleged untrue statement or alleged untrue statement of a material
fact contained in any Registration Statement, Prospectus or preliminary
prospectus or any amendment thereof or supplement thereto, or arise out of or
are based upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, provided, however, that such indemnity shall not inure to the
benefit of any Participating Holder or underwriter (or any person controlling
such Participating Holder or underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) on account of any losses,
claims, damages or liabilities arising from the sale of the Registrable
Securities if such untrue statement or omission or alleged untrue statement or
omission was made in such Registration Statement Prospectus or preliminary
prospectus, or such amendment or supplement, in reliance upon and in conformity
with information furnished in writing to the Company by such Participating
Holder or underwriter specifically for use therein. The Company shall also
indemnity selling brokers, dealer managers and similar securities industry
professionals participating in the distribution, their officers and directors
and each Person who controls such Persons (within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act) to the same extent as
provided above with respect to the indemnification of the Participating Holders.
This indemnify agreement shall be in addition to any liability which the Company
may otherwise have.
(ii) In connection with each Registration Statement, each Participating
Holder shall indemnify, to the same extent as the indemnification provided by
the Company in Section 4(e)(i), the Company, its directors and each officer who
signs the Registration Statement and each Person who controls the Company
(within the meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act) by only insofar as such losses, claims, damages and liabilities
arise out of or are based upon any untrue statement or omission or alleged
untrue statement or omission which was made in the Registration Statement, the
Prospectus or preliminary prospectus or any amendment thereof or supplement
thereto, in reliance upon and in conformity with information furnished in
writing by such Participating Holder to the Company specifically for use
therein. In no event shall the liability of any Participating Holder hereunder
be greater in amount than the dollar amount of the net proceeds received by
12
such Participating Holder upon the sale of such Participating Holder's Included
Registrable Securities giving rise to such indemnification obligation.
(iii) Any party that proposes to assert the right to be indemnified
hereunder will, promptly after receipt of notice of commencement of any action,
suit or proceeding against such party in respect of which a claim is to be made
against an indemnifying party or parties under this Section 4(e), notify each
such indemnifying party of the commencement of such action, suit or proceeding,
enclosing a copy of all papers served. No indemnification provided for in
Section 4(e)(i) or 4(e)(ii) shall be available to any party who shall fail to
give notice as provided in this Section 4(e)(iii) if the party to whom notice
was not given was unaware of the proceeding to which such notice related and was
prejudiced by the failure to receive such notice, but the omission so to notify
such indemnifying party of any such action, suit or proceeding shall not relieve
the indemnifying party from any liability that it may otherwise have to any
indemnified party. In case any such action, suit or proceeding shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
in, and to the extent that it shall wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense thereof
and the approval by the indemnified party of such counsel, the indemnifying
party shall not be liable to such indemnified party for any legal or other
expenses, except as provided below and except for the reasonable costs of
investigation subsequently incurred by such indemnified party in connection with
the defense thereof. The indemnified party shall have the right to employ its
counsel in any such action, but the fees and expenses of such counsel shall be
at the expense of such indemnified party unless (1) the employment of counsel by
such indemnified party has been authorized in writing by the indemnifying
parties, (2) the indemnified party shall have reasonably concluded that there
may be a conflict of interest between the indemnifying panics and the
indemnified party in the conduct of the defense of such action (in which case
the indemnifying parties shall not have the right to direct the defense of such
action on behalf of the indemnified party) or (3) the indemnifying parties shall
not have employed counsel to assume the defense of such action within a
reasonable time after notice of the commencement thereof, in each of which cases
the fees and expenses of counsel shall be at the expense of the indemnifying
parties. An indemnified party shall not be liable for any settlement of any
action, suit, proceeding or claim effected without its written consent.
(iv) In connection with each Registration Statement relating to the
disposition of Registrable Securities, if the indemnification provided for in
subsection 4(e)(i) or 4(e)(ii) hereof is unavailable to an indemnified party
thereunder in respect to any losses, claims, damages or liabilities referred to
therein, then the indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of losses, claims, damages or
liabilities referred to in subsection (i) or (ii) of this Section 4(e) in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party on the one hand and of the indemnified party on the other in connection
with the statements or omissions that resulted in such losses, claims, damages
or liabilities, or actions in respect thereof, as well as any other relevant
equitable considerations. Relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the indemnifying party or the indemnified party and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. No person guilty of a
fraudulent misrepresentation (within the meaning of Section 1l(f) of the
Securities Act) shall be entitled to contribution from any person who is not
guilty of such fraudulent misrepresentation. The foregoing contribution
agreement shall in no way affect the contribution liabilities of any person
having liability under Section 11 of the Securities Act other than the Company
and the Participating Holders. If the full amount of the contribution specified
in this paragraph is not permitted by law, then the Company and any
Participating Holder, as the case may be, shall be entitled to contribution from
the Company and/or the Participating Holders, as the case may be, to the full
extent permitted by law.
(v) The indemnity and contribution agreements contained in this Section
4(e) shall remain operative and in full force and effect regardless of (i) any
investigation made by or on behalf of the Participating Holders, (ii) sale of
any of Registrable Securities or (iii) any expiration of this Warrant
13
(vi) Notwithstanding the foregoing provisions of the Section 4(e), to the
extent that the provisions on indemnification and contribution contained in any
underwriting agreement entered into in connection with the underwritten public
offering of the Registrable Securities are in conflict with the foregoing
provisions, the provisions in such underwriting agreement shall control.
(f) REPORTS UNDER SECURITIES EXCHANGE ACT OF 1934
With a view to making available to the holders of Warrants or Warrant
Securities the benefits of Rule 144 promulgated under the Securities Act and any
other rule or regulation of the SEC that may at any time permit a Holder to sell
securities of the Company to the public without registration or pursuant to a
registration on Form S-3, the Company agrees to:
(i) Make and keep available adequate current public information with
respect to the Company.
(ii) File with the SEC in a timely manner all reports and other documents
required of the Company under the Securities Act and the Exchange Act.
(iii) Furnish to any holder of Registrable Securities, forthwith upon
request (i) a written statement by the Company that it has complied with the
reporting requirements of SEC Rule 144, the Securities Act and the Exchange Act,
or that it qualifies as a registrant whose securities may be resold pursuit to
Form S-3 (at any time after it so qualifies), and (ii) a copy of the most recent
annual or quarterly report of the Company and such other reports filed under any
rule or regulation of the SEC.
(g) COMPUTATIONS OF CONSENT
Whenever the consent or approval of Registration Rights Holders of a
specified percentage of Registrable Securities is required hereunder,
Registrable Securities held by the Company or its affiliates (other than any
Warrantholder deemed to be such affiliates solely by reason of their holdings of
such Registrable Securities) shad not be counted in determining whether such
consent or approval was given by the Registration Rights Holders of such
required percentage.
(h) ADJUSTMENTS AFFECTING REGISTRABLE SECURITIES
The Company will not take any action outside the ordinary course of
business, or permit any change within its control to occur outside the ordinary
course of business, with respect to the Registrable Securities which is without
a bona fide business purpose, and which is intended to interfere with the
ability of the Registration Rights Holders to include such Registrable
Securities in a registration undertaken pursuant to this Section 4.
SECTION 5. NOTICES OF RECORD DATES
In the event of:
(a) 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 or other distribution (other than
regular cash dividends paid out of earned surplus), or 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 right
to sell shares of stock of any class or any other right, or
(b) any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any transfer
of all or substantially all the assets of the Company to or
consolidation or merger of the Company with or into any other
corporation or entity, or
14
(c) any voluntary or involuntary dissolution, liquidation winding-up of
the Company,
then and in each such event the Company will give notice to the Warrantholder
specifying (1) the date on which any such record is to be taken for the purpose
of such dividend, distribution or right and stating the amount and character of
such dividend, distribution or right, and (2) the date on which any such
reorganization, reclassification, recapitalization, transfer, consolidation,
merger, dissolution, liquidation or winding-up is to take place, and the time,
if any is to be fixed, as of which the holders of record of Common Stock will be
entitled to exchange their shares of Common Stock for securities or other
property deliverable upon such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up. Such notice shall be given at least 20 days and not more than 90
days prior to the date therein specified, and such notice shall state that the
action in question or the record date is subject to the effectiveness of a
registration statement under the Securities Act or to a favorable vote of
stockholders, if either is required. Failure to mail or receive such notice or
any defect therein shall not affect the validity of any action with respect
thereto.
SECTION 6. NO STOCKHOLDERS RIGHTS OR LIABILITIES
This Warrant shall not entitle the Warrantholder to any voting rights or
other rights as a stockholder of the Company. No provision hereof, in the
absence of affirmative action by the Warrantholder to purchase shares of Common
Stock, and no mere enumeration herein of the rights or privileges of the
Warrantholder shall give rise to any liability of such Warrantholder for the
Warrant Price or as a stockholder of the Company, whether such liability is
asserted by the Company or by creditors of the Company.
SECTION 7. LOST, STOLEN, MUTILATED OR DESTROYED WARRANT
In case the certificate or certificates evidencing the Warrants shall be
mutilated, lost, stolen or destroyed, the Company shall, at the request of the
Warrantholder, issue and deliver in exchange and substitution for and upon
cancellation of the mutilated certificate or certificates, or in lieu of and
substitution for the certificate or certificates lost, stolen or destroyed, a
new Warrant certificate or certificates of like tenor and representing an
equivalent right or interest.
SECTION 8. NOTICES
All notices, requests and other communications required or permitted to be
given or delivered hereunder shall be in writing, and shall be delivered, or
shall be sent by certified or registered mail or overnight courier, postage
prepaid and addressed or by facsimile. Notices, requests and other
communications to the Warrantholder shall be sent to the Warrantholder at 0000
Xxxxxxxx Xxxxxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000, Attention: Investment
Banking, facsimile number (000) 000 0000 or to such other address or facsimile
number as shall have been furnished to the Company by notice from such
Warrantholder, and if to the Company, at 000 Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxx
Xxxxxx 00000; Attention: President, facsimile number (000) 000-0000, or at such
other address or facsimile number as shall have been furnished to the
Warrantholder by notice from the Company.
SECTION 9. TRANSFER, ASSIGNMENT AND EXCHANGE OF WARRANT AND RESTRICTIONS ON
TRANSFER
(a) RESTRICTIONS ON TRANSFER
(i) Until the Commencement Date, this Warrant and the underlying shares of
Common Stock which may be acquired upon exercise hereof may not be sold,
transferred, assigned, pledged or hypothecated to any other person or entity
except to any Underwriter that participated in the public offering of shares of
Common Stock of the Company pursuant to the Underwriting Agreement (as defined
in Section 4(a)), and the any bona fide officers or partners thereof. Until the
Commencement Date, any shares of Common Stock acquired upon exercise of this
Warrant shall bear a legend setting forth the foregoing restriction. After the
Commencement Date, this Warrant may be freely transferred or assigned by the
Warrantholder, provided that the Warrant is exercised immediately upon such
transfer, and if not so exercised upon such a transfer, this Warrant shall
lapse. Assignment of this
15
Warrant shall be effected by delivery of the assignment form attached hereto to
the Company at its principal offices.
(ii) Except as otherwise permitted by this Section 9(a)(ii), each
Warrant shall (and each Warrant issued upon transfer or in substitution for any
Warrant shall) be stamped or otherwise imprinted with a legend in substantially
the following form:
"THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT FILED UNDER SUCH ACT OR PURSUANT TO AN
EXEMPTION FROM REGISTRATION SUCH ACT."
Except as otherwise permitted by this Section 9(a)(ii), each certificate
for securities issued upon the exercise of any Warrant and each certificate
issued upon transfer of any such security shall be stamped or otherwise
imprinted with a legend in substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT FILED UNDER SUCH ACT OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER SUCH ACT."
Notwithstanding the foregoing, the Warrantholder may require the Company to
issue a Warrant or certificate for securities, without a legend, if (1) the
issuance of such securities has been registered under the Securities Act, (2)
such Warrant or such securities, as the case may be, have been registered for
resale under the Securities Act or sold pursuant to Rule 144 under the
Securities Act, or (3) the Warrantholder has received an opinion of counsel (who
may be house counsel for such Warrantholder) reasonably satisfactory to the
Company that such registration is not required with respect to such Warrant or
such securities, as the case may be.
(b) EXCHANGE OF WARRANT
This Warrant may be split-up, combined or exchanged for another Warrant or
Warrants containing the same terms to purchase a like aggregate number of
securities. If the Warrantholder desires to split-up, combine or exchange this
Warrant, the Warrantholder shall make such request in writing delivered to the
Company at its principal office and shall surrender to the Company this Warrant
and any other Warrants to be so split-up, combined or exchanged. Upon any such
surrender for a split-up, combination or exchange, the Company shall execute and
deliver to the person entitled thereto a Warrant or Warrants, as the case may
be, as so requested. The Company shall not be required to effect any split-up,
combination or exchange which will result in the issuance of a Warrant entitling
the Warrantholder to purchase upon exercise a fraction of a share of Common
Stock or a fractional Warrant.
(c) TREATMENT OF WARRANTHOLDER
Prior to due presentment for registration of transfer of this Warrant, the
Company may deem and treat the Warrantholder as the absolute owner of this
Warrant (notwithstanding any notation of ownership or other writing hereon) for
all purposes and shall not be affected by any notice to the contrary.
SECTION 10. AMENDMENTS AND WAIVERS
This Warrant and any term 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.
16
SECTION 11. SEVERABILITY
If one or more provisions of this Warrant are held to be unenforceable
under applicable law, such provisions shall be excluded from this Warrant, and
the balance of this Warrant shad be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms.
SECTION 12. GOVERNING LAW
This Warrant shall be governed by and construed under the laws of the State
of California without regard to conflict of law principles.
SECTION 13. HEADINGS
The headings in this Warrant are for purposes of reference only and shall
not limit or otherwise affect any of the terms hereof.
SECTION 14. BINDING EFFECT
This Warrant shall insure to the benefit of and shall be binding upon the
Company and the Warrantholder and their respective heirs, legal representatives,
successors and assigns.
SECTION 15. NO INCONSISTENT AGREEMENTS
The Company will not on or after the date of this Warrant enter into any
agreement with respect to its securities which is inconsistent with the rights
granted to the Warrantholder in this Warrant or otherwise conflicts with the
provisions hereof. The rights granted to the Warrantholder hereunder do not in
any way conflict with and are not inconsistent with the rights granted to
holders of the Company's securities under any other agreements.
SECTION 16. ENTIRE AGREEMENT
This Warrant is intended by the parties as a final expression of their
agreement and intended to be a complete and exclusive statement of the agreement
and understanding of the parties hereto in respect of the subject matter
contained herein. This Warrant supersedes all prior agreements and
understandings between the parties with respect to such subject matter (other
than warrants previously issued by the Company to the Warrantholder).
SECTION 17. ATTORNEYS' FEES
In any action or proceeding brought to enforce any provisions of this
Warrant, or where any provisions hereof is validly asserted as a defense, the
successful party shall be entitled to recover reasonable attorneys' fees and
disbursements in addition to its costs and expenses and any other available
remedy.
17
IN WITNESS WHEREOF, the Company and the Warrantholder have executed this
Warrant on and as of the day and year first above written.
Life Medical Sciences, Inc.,
a Delaware corporation
/s/ Xxxxxxx Xxxxxxxxx
By:____________________________________
Xx. Xxxxxxx Xxxxxxxxx
Chairman of the Board of Directors
Attest:
_____________________________
(Corporate Secretary)
Wedbush Xxxxxx Securities Inc.
By:/s/ Xxxxx X. Xxxxxxxx
------------------------------------
Xxxxx X. Xxxxxxxx
Managing Director
