EXHIBIT 4.2
WARRANT AGREEMENT
CLASS H
This WARRANT AGREEMENT is dated and entered into as of December 10, 2001,
by and between DISCOVERY LABORATORIES, INC., a Delaware corporation (the
"Company"), and PHARMABIO DEVELOPMENT INC., a North Carolina corporation
("PharmaBio").
WHEREAS, the Company and PharmaBio have entered into a Common Stock and
Warrant Purchase Agreement dated as of the date hereof (the "Purchase
Agreement") and a Loan Agreement dated as of the date hereof (the "Loan
Agreement"); and
WHEREAS, pursuant to the Purchase Agreement, the Company desires to grant
to PharmaBio the rights set forth in this Warrant Agreement;
NOW, THEREFORE, in consideration of the mutual agreements, undertakings
and covenants set forth in this Warrant Agreement, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties, intending to be legally bound, agree as follows:
1. The Warrant. (a) The Company hereby agrees to issue and sell to
PharmaBio, its designee or assigns (the "Holder") up to Three Hundred Twenty
Thousand (320,000) shares (the "Warrant Shares") of the Company's common stock,
par value $.001 per share ("Common Stock"), at an exercise price of Three and
03/100 Dollars ($3.03) per share (the "Exercise Price") subject to the vesting
schedule in Section 1(b), and upon the terms and conditions herein set forth.
The Exercise Price and the number of Warrant Shares purchasable upon exercise of
this Warrant Agreement are subject to adjustment from time to time as provided
in Section 4 of this Warrant Agreement.
(b) The Holder's right to exercise this Warrant Agreement will vest
in three (3) equal installments of one-third (1/3) of the Warrant Shares each
(each an "Increment") as follows: the first Increment shall vest upon the
occurrence of Milestone One as defined in the Loan Agreement; the second
Increment shall vest upon the occurrence of Milestone Two as defined in the Loan
Agreement; and the third Increment shall vest upon the occurrence of Milestone
Three as defined in the Loan Agreement.
(c) In the event that the maximum Commitment (as defined in the Loan
Agreement) is increased to an amount in excess of $8,500,000, then the number of
Warrant Shares shall be increased (the "Warrant Increase") by a number of shares
of Common Stock equal to the number of Warrant Shares set forth in Section 1(a)
multiplied by a fraction, the numerator of which shall be the amount by which
the Commitment is increased over $8,500,000, and the denominator of which is
$8,500,000; provided, however, that if the Commitment is increased to an amount
over $15,000,000, then the amount in excess of $15,000,000 shall not result in
any Warrant Increase. The parties agree to negotiate in good faith to reach
mutually acceptable terms and conditions for any Commitment in excess of
$15,000,000. Upon any
increase in Warrant Shares pursuant to this Section 1(c), each Increment shall
be increased by one-third of the amount of such increase in Warrant Shares.
2. Expiration Date. This Warrant Agreement, and the Holder's right to
purchase any of the Warrant Shares, will expire at 5:00 p.m. Eastern Time on the
tenth anniversary of the date of this Warrant Agreement (the "Expiration Date").
3. Exercise of this Warrant Agreement. (a) The Holder may exercise this
Warrant Agreement at any time from and after the date hereof and prior to the
Expiration Date, in whole or in part, as adjusted from time to time as provided
in Section 4 of this Warrant Agreement, by: (a) the surrender of this Warrant
Agreement, with the Exercise Form in the form attached hereto as Annex A
properly completed and executed, at the principal office of the Company on a
Business Day, and (b) upon payment by the delivery on a Business Day of a
certified check or official bank check or wire transfer of immediately available
funds, payable to the order of the Company, in an amount equal to the aggregate
purchase price for the Warrant Shares being purchased upon such exercise. Upon
receipt thereof by the Company, the Holder will be deemed to be the holder of
record of the Warrant Shares issuable upon such exercise as of the close of
business on the date of such receipt by the Company, and the Company will
promptly execute or cause to be executed and delivered to the Holder, a
certificate or certificates representing the aggregate number of Warrant Shares
specified in the Exercise Form. If this Warrant Agreement is exercised only in
part, the Company will, at the time of delivery of said stock certificate or
certificates, deliver to the Holder a new Warrant Agreement of like tenor
evidencing the right of the Holder to purchase the remaining Warrant Shares then
covered by this Warrant Agreement. "Business Day" shall mean any day other than
a Saturday, Sunday or legal holiday on which banks in North Carolina and New
York are open for the conduct of their banking business.
(b) In lieu of exercising this Warrant Agreement, the Holder may
elect to receive shares equal to the value of this Warrant Agreement (or the
portion of the Warrant Shares thereunder being exercised) by sending written
notice of such election to the Company, in which event the Company shall deliver
to the Holder a stock certificate representing a number of shares of Common
Stock computed using the following formula:
X=Y(A-B)
------
A
Where:
X = the number of shares of Common Stock to be issued to the Holder
Y = the number of shares of Common Stock purchasable under this Warrant
Agreement as to which the Holder is then exercising this Warrant
Agreement
A = the fair market value of one share of Common Stock
B = the Exercise Price (as adjusted to the date of such calculations)
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(c) For purposes of this Section, "fair market value" of one share
of Common Stock shall mean the average of the closing sales price quoted on the
Nasdaq SmallCap Market, Nasdaq National Market or the principal exchange on
which the Common Stock is listed, (or the closing bid price thereon if there is
no such reported sales price for any trading day), or the closing bid and asked
prices of the Common Stock quoted in the Over-The-Counter Market Summary,
whichever is applicable, as published in the Eastern Edition of The Wall Street
Journal, for the thirty (30) trading days prior to the date of determination of
fair market value. If the Common Stock is not traded Over-The-Counter or on such
market or exchange, the fair market value of the Common Stock will be the price
per share which the Company could obtain from a willing buyer for shares sold by
the Company from authorized but unissued shares, as agreed upon by the Company
and the Holder in good faith or, absent such agreement, as shall be determined
by arbitration instituted by either party under the rules of the American
Arbitration Association. If this Warrant Agreement has not been exercised prior
to the Expiration Date, the Holder shall be deemed to have elected on the
Expiration Date to receive shares pursuant to Section 3(b).
(d) In the event that after the first anniversary of the date of
this Warrant Agreement, the average closing sales price of the Common Stock
quoted on the Nasdaq SmallCap Market for any twenty (20) trading days in any
thirty (30) consecutive trading-day period is at least Four Hundred percent
(400%) of the Exercise Price, then the Company may give written notice to the
Holder requesting that the Holder exercise this Warrant Agreement under Section
3(a) or that the Holder elect to receive shares pursuant to Section 3(b).
Promptly following receipt of such notice, the Holder shall effect such exercise
under Section 3(a) or make such election under Section 3(b). If the Holder shall
not have effected such exercise or made such election within ten (10) Business
Days following the Company's notice, the Holder shall have been deemed to have
made such election under Section 3(b) and this Warrant Agreement shall cease to
represent the right to acquire any shares of Common Stock except pursuant to
such deemed election.
4. Certain Adjustments. The Exercise Price at which Warrant Shares may be
purchased and the number of Warrant Shares to be purchased upon exercise of this
Warrant Agreement are subject to change or adjustment from time to time as
follows:
(a) Merger, Sale of Assets, etc. If at any time while this Warrant
Agreement, or any portion hereof, is outstanding and unexpired there shall be
(i) a reorganization (other than a combination, reclassification, exchange or
subdivision of shares otherwise provided for herein), (ii) a merger or
consolidation of the Company with or into another corporation or entity in which
the Company is not the surviving entity, or a share exchange or reverse
triangular merger in which the Company is the surviving entity but the shares of
the Company's capital stock outstanding immediately prior to the merger are
exchanged or converted by virtue of the merger into other property, whether in
the form of securities, cash, or otherwise, or (iii) a sale, transfer or lease
of all or substantially all of the Company's properties or assets to any other
person or entity, then, as a part of such reorganization, merger, consolidation,
sale or transfer, lawful provision shall be made so that the Holder shall
thereafter be entitled to receive upon exercise of this Warrant Agreement,
during the period specified herein and upon payment of the Exercise Price then
in effect, the number of shares of stock or other securities or property
resulting from such reorganization, merger, consolidation, sale or transfer that
a holder of the shares deliverable upon
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exercise of this Warrant Agreement would have been entitled to receive in such
reorganization, consolidation, merger, sale or transfer if this Warrant
Agreement had been exercised immediately before such reorganization, merger,
consolidation, sale or transfer, all subject to further adjustment as provided
in this Section 4. The foregoing provisions of this Section 4(a) shall similarly
apply to successive reorganizations, consolidations, mergers, sales and
transfers and to the stock or securities of any other corporation that are at
the time receivable upon the exercise of this Warrant Agreement. If the
per-share consideration payable to the Holder hereof for shares in connection
with any such transaction is in a form other than cash or marketable securities,
then the value of such consideration shall be reasonably determined in good
faith by the Company's Board of Directors. In all events, appropriate adjustment
(as reasonably determined in good faith by the Company's Board of Directors)
shall be made in the application of the provisions of this Warrant Agreement
with respect to the rights and interests of the Holder after the transaction, to
the end that the provisions of this Warrant Agreement shall be applicable after
that event, as near as reasonably may be, in relation to any shares or other
property deliverable after that event upon exercise of this Warrant Agreement.
(b) Reclassification, etc. If the Company, at any time while this
Warrant Agreement, or any portion hereof, remains outstanding and unexpired, by
reclassification of securities or otherwise, shall change any of the securities
as to which purchase rights under this Warrant Agreement exist into the same or
a different number of securities of any other class or classes, this Warrant
Agreement shall thereafter represent the right to acquire such number and kind
of securities as the Holder would have received if this Warrant Agreement had
been exercised in full immediately prior to such reclassification or other
change or immediately prior to the record date with respect thereto and the
Exercise Price therefor shall be appropriately adjusted, all subject to further
adjustment as provided in this Section 4. The foregoing provisions of this
Section 4(b) shall similarly apply to successive reclassifications or other
changes.
(c) Split, Subdivision or Combination of Shares. If the Company, at
any time while this Warrant Agreement, or any portion hereof, remains
outstanding and unexpired, shall split, subdivide or combine the securities as
to which purchase rights under this Warrant Agreement exist, into a different
number of securities of the same class, the Exercise Price for such securities
shall be proportionately decreased in the case of a split or subdivision or
proportionately increased in the case of a combination. Upon each adjustment in
the Exercise Price pursuant to this subsection, the number of shares of such
securities purchasable hereunder shall be adjusted, to the nearest whole share,
to the product obtained by multiplying the number of shares purchasable
immediately prior to such adjustment in the Exercise Price by a fraction, the
numerator of which shall be the Exercise Price immediately prior to such
adjustment and the denominator of which shall be the Exercise Price immediately
thereafter.
(d) Adjustments for Dividends in Stock or Other Securities or
Property. If while this Warrant Agreement, or any portion hereof, remains
outstanding and unexpired, the holders of the securities as to which purchase
rights under this Warrant Agreement exist at the time shall have received, or,
on or after the record date fixed for the determination of eligible
stockholders, shall have become entitled to receive, without payment therefor,
other or additional stock or other securities or property (other than cash) by
way of dividend, then and in each case,
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this Warrant Agreement shall represent the right to acquire, in addition to the
number of shares of the security receivable upon exercise of this Warrant
Agreement and, in addition, without payment of any additional consideration
therefor, the amount of such other or additional stock or other securities or
property (other than cash) that such holder would hold on the date of such
exercise had it been the holder of record of the security receivable upon
exercise of this Warrant Agreement on the date hereof and had thereafter, during
the period from the date hereof to and including the date of such exercise,
retained such shares and/or all other additional stock or other securities or
property (other than cash) available by or to it as aforesaid during such
period, giving effect to all adjustments called for during such period by the
provisions of this Section 5.
(e) Certificate as to Adjustments. Upon the occurrence of each
adjustment pursuant to this Section 4, the Company at its expense shall promptly
compute such adjustment in accordance with the terms hereof and furnish to each
Holder of this Warrant Agreement a certificate signed by its Chief Financial
Officer setting forth such adjustment and showing in detail the event requiring
the adjustment, the amount of such adjustment, the method by which such
adjustment was calculated, the Exercise Price at the time in effect, and the
number of shares and the amount, if any, of the property that at the time would
be received upon the exercise of this Warrant Agreement, together with the facts
upon which such adjustment is based. The Company shall, upon the reasonable
written request of any such Holder, furnish or cause to be furnished to such
Holder a like certificate setting forth: (i) all such previous adjustments; (ii)
the Exercise Price at the time in effect; and (iii) the number of shares and the
amount, if any, of other property that at the time would be received upon the
exercise of this Warrant Agreement.
(f) No Impairment. The Company will not, by amendment of its
certificate of incorporation or through any reorganization, recapitalization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the intent of
this Section 4 or the observance or performance of any of the terms to be
observed or performed hereunder by the Company, but will at all times in good
faith assist in the carrying out of all the provisions of this Section 4 and in
the taking of all such action as may be necessary or appropriate in order to
protect the rights of the holder of this Warrant Agreement against impairment.
In case any event shall occur as to which the other provisions of this Section 4
are not strictly applicable but as to which the failure to make any adjustment
would not fairly protect the purchase rights represented by this Warrant
Agreement in accordance with the essential intent and principles hereof, then,
in each such case, the Board of Directors of the Company shall in good faith
determine the adjustment, if any, on a basis consistent with the purchase rights
represented by this Warrant Agreement. Upon such determination, the Company will
promptly deliver a copy thereof to the Holder and shall make the adjustments
described therein.
(g) No Adjustment. No adjustment in the Exercise Price shall be
required unless such adjustment would require an increase or decrease of at
least $0.05 per share of Common Stock; provided, however, that any adjustments
which by reason of this subsection 4(g) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment. All
calculations under this Section 4 shall be made to the nearest cent or to the
nearest 1/100th of a share, as the case may be.
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5. Fractional Shares. Upon the exercise of this Warrant Agreement,
fractional shares may be issued by the Company, but the Company may, in lieu of
issuing such fractional shares, pay a sum in cash equal to the excess of the
fair market value of such fractional share (determined in such reasonable manner
as may be prescribed by the Board of Directors of the Company in its discretion)
over the proportional part of the per share purchase price represented by such
fractional share.
6. Intentionally Omitted
7. Notices of Certain Events.
In case:
(a) the Company shall take a record of the holders of its Common
Stock (or other stock or securities at the time receivable upon the exercise of
this Warrant Agreement) for the purpose of entitling them to receive any
dividend or other distribution, or stock subdivision or combination, or any
right to subscribe for or purchase any shares of stock of any class or any other
securities, or to receive any other right, or
(b) of any capital reorganization of the Company, any
reclassification of the capital stock of the Company, any consolidation or
merger of the Company with or into another corporation in which the Company is
not the surviving corporation, or any conveyance of all or substantially all of
the assets of the Company to another corporation, or
(c) of any voluntary dissolution, liquidation or winding-up of the
Company,
then, and in each such case, the Company will cause notice thereof to be
delivered to the Holder a notice specifying, as the case may be, (A) the date on
which a 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, or (B) the date on which such reorganization, reclassification,
consolidation, merger, conveyance, 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 (or such stock or securities at the time receivable upon
the exercise of this Warrant Agreement) shall be entitled to exchange their
shares of Common Stock (or such other stock or securities) for securities or
other property deliverable upon such reorganization, reclassification,
consolidation, merger, conveyance, dissolution, liquidation or winding-up. Such
notice shall be delivered at least fifteen (15) days prior to the date therein
specified.
8. Reservation of Shares. The Company will at all times until the date of
exercise of this Warrant Agreement in full (the "Exercise Date") reserve and
keep available out of its authorized but unissued stock, for the purpose of
effecting the exercise of this Warrant Agreement, such number of its duly
authorized shares of capital stock for which this Warrant Agreement is
exercisable, and the appropriate number of shares of any stock into which such
stock is convertible, if applicable, as will from time to time be sufficient to
effect the exercise of this Warrant Agreement. The Company will from time to
time take all steps necessary to amend its certificate of incorporation to
provide at all times prior to the Exercise Date sufficient reserves of shares of
common stock issuable upon exercise of this Warrant Agreement. If the number of
authorized but unissued shares of common stock shall not be sufficient to effect
the exercise the
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entire amount of this Warrant Agreement on the Exercise Date, in addition to
such other remedies as shall be available to the Holder, the Company shall take
all such corporate action as is necessary to increase its authorized but
unissued shares of Common Stock and such number of shares as shall be sufficient
for such purposes.
9. No Rights as Stockholder; Limitation of Liability. This Warrant
Agreement, as distinct from the shares for which this Warrant Agreement is
exercisable, will not entitle the Holder to any of the rights of a stockholder
of the Company, including without limitation any right to vote on or consent to
or receive notice as a stockholder of the Company, as such, in respect of any
matters whatsoever. No provision of this Warrant Agreement, prior to the
exercise of this Warrant Agreement, and no mere enumeration herein of the rights
or privileges of the Holder, will give rise to any liability of the Holder for
the purchase price or as a stockholder of the Company, whether such liability is
asserted by the Company or by creditors of the Company.
10. Transfer Restrictions.
(a) Securities Laws. Neither this Warrant Agreement nor the
securities issuable upon exercise hereof have been registered under the
Securities Act of 1933, as amended (the "Securities Act"), or the securities
laws of any state. Neither this Warrant Agreement nor the securities issuable
upon exercise hereof nor any interest or participation herein or therein may be
sold, assigned, pledged, hypothecated, encumbered or in any other manner
transferred or disposed of except in compliance with the Securities Act, the
securities laws of each relevant state, and the terms and conditions hereof.
(b) Stock Certificate Legend. Each certificate for shares issued
upon exercise of this Warrant Agreement will bear the following legend:
"The shares represented by this certificate have been acquired for
investment and have not been registered under the Securities Act of
1933, as amended, or the securities laws of any state. Neither the
shares nor any interest or participation in the shares may be sold,
assigned, pledged, hypothecated, encumbered or in any other manner
transferred or disposed of in the absence of such registration or
exemption therefrom under such Act or such laws."
(c) Purchase Agreement Restrictions. The provisions of Article VIII
of the Purchase Agreement shall be applicable to the Warrant Shares to the same
extent applicable to the shares referred to therein.
(d) Certain Representations and Warranties. The Holder hereby makes
the representations and warranties set forth in Article V of the Purchase
Agreement. Upon each exercise of this Warrant Agreement, the Holder shall be
deemed to make the representations and warranties set forth in Article V of the
Purchase Agreement to the extent necessary to afford the Company an exemption
from registration under applicable federal and state securities laws.
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11. Rule 144 Reporting. With a view to making available the benefits of
certain rules and regulations of the Securities and Exchange Commission ("SEC")
that may permit the sale of securities to the public without registration, the
Company agrees to use its reasonable best efforts to make and keep public
information regarding the Company available as contemplated by Rule 144 under
the Securities Act and file with the SEC in a timely manner all reports and
other documents required by the Company under the Securities Act and the
Securities Exchange Act of 1934, and furnish to the holder upon written request
as to the Company's compliance with the reporting requirements of Rule 144 and
of the Securities Act and the Securities Exchange Act of 1934.
12. Registration Rights. The Holder shall have the right to participate in
the registration rights granted to holders of Registrable Securities under the
Purchase Agreement.
13. Miscellaneous.
(a) Amendments and Waivers. This Warrant Agreement and any provision
hereof may be amended, changed, waived, discharged or terminated only by an
instrument in writing signed by the party against which enforcement of the same
is sought.
(b) Loss, Theft, Destruction or Mutilation. Upon receipt by the
Company of evidence reasonably satisfactory to it that this Warrant Agreement
has been lost, stolen, destroyed or mutilated, and in the case of any lost,
stolen or destroyed Warrant Agreement, an indemnity reasonably satisfactory to
the Company, or in the case of a mutilated Warrant Agreement, upon surrender and
cancellation hereof, the Company will execute and deliver in the name of the
registered holder of this Warrant Agreement, in exchange and substitution for
the Warrant Agreement so lost, stolen, destroyed or mutilated, a new Warrant
Agreement of like tenor and amount.
(c) Law Governing. This Warrant Agreement will be governed by, and
construed and enforced in accordance with, the internal laws of the State of
Delaware. Holder and the Company hereby irrevocably consent to the exclusive
personal jurisdiction of any state or federal courts located in Delaware, in any
action, claim or other proceeding arising out of any dispute in connection with
this Warrant Agreement, any rights or obligations hereunder or the performance
of such rights and obligations. The Holder and the Company waive their
respective rights to a jury trial with respect to any action, claim, or other
proceeding arising out of any dispute in connection with this Warrant Agreement,
any rights or obligations hereunder, or the performance of such rights and
obligations. The Holder and the Company agree that disputes relating to this
Warrant Agreement shall be subject to the provisions of the Purchase Agreement
entitled "Internal Review" and "Arbitration" set forth in Sections 9.13 and 9.14
thereof, respectively.
(d) Entire Agreement. This Warrant Agreement constitutes the full
and entire understanding and agreement among the parties with regard to the
subject matter of this Warrant Agreement, and supersedes all prior agreements,
understandings, inducements or conditions, express or implied, oral or written,
with respect to the subject matter of this Warrant Agreement.
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(e) Notices. Unless otherwise provided herein, all notices,
requests, demands and other communications required or permitted under this
Warrant Agreement shall be in writing and will be deemed to have been duly made
and received: (i) upon personal delivery; (ii) three (3) Business Days after
deposit with the United States Post Office, by registered or certified mail or
by first class mail, postage prepaid, addressed as set forth below; or (iii) one
(1) Business Day after deposit with a nationally recognized, overnight courier
(for next business day delivery), shipping prepaid, addressed as set forth
below:
(i) If to the Company, then to:
Discovery Laboratories, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: President
with a copy to:
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Kotel
The New York Practice of
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇'▇ Corporate & Finance Group
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇ ▇. ▇▇▇▇▇
(ii) If to PharmaBio, then to:
PharmaBio Development Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: President
with a copy to:
PharmaBio Development Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
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Either party may change the address to which communications are to be sent by
giving five (5) Business Days' advance notice of such change of address to the
other party in conformity with the provisions of this Section.
(f) Execution; Counterparts. This Warrant Agreement may be executed
in any number of counterparts, each of which will be deemed to be an original,
and all of which will together constitute one and the same instrument. This
Warrant Agreement may be executed and delivered by telecopy or facsimile and any
execution in such manner shall be deemed an original.
[Signature on Following Page]
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[Signature Page to Warrant Agreement]
IN WITNESS WHEREOF, the parties have caused this Warrant Agreement to be
duly executed and delivered as of the day and year first written above.
DISCOVERY LABORATORIES, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President and General Counsel
PHARMABIO DEVELOPMENT INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President and General Counsel
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ANNEX A
EXERCISE FORMS
TO BE EXECUTED BY THE REGISTERED HOLDER
TO EXERCISE THE ATTACHED WARRANT AGREEMENT OF
DISCOVERY LABORATORIES, INC.
SUBSCRIPTION
The undersigned, _____________________, pursuant to the provisions of the
foregoing Warrant Agreement, hereby elects to exercise such Warrant Agreement by
agreeing to subscribe for and purchase _______________ shares (the "Warrant
Shares") of Common Stock, par value $.001 per share, of Discovery Laboratories,
Inc. (the "Company"), and hereby makes payment of $___________ by certified or
official bank check or wire transfer of immediately available funds payable to
the order of the Company in payment of the exercise price therefor.
The undersigned acknowledges that the sale, transfer, assignment or
hypothecation of the Warrant Shares to be issued upon exercise of this Warrant
Agreement is subject to the terms and conditions of the Warrant Agreement. The
undersigned further acknowledges that the sale, transfer, assignment or
hypothecation of the Warrant Shares to be issued upon exercise of the Warrant
Agreement is subject to the terms and conditions continued in Section 10 of the
Warrant Agreement.
Dated: _____________ Signature:______________________________
Address:________________________________
________________________________
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ASSIGNMENT
FOR VALUE RECEIVED _____________________________ hereby sells, assigns and
transfers unto __________________________ the foregoing Warrant Agreement and
all rights evidenced thereby, and does irrevocably constitute and appoint
______________________, attorney, to transfer said Warrant Agreement on the
books of Discovery Laboratories, Inc. (the "Company").
Dated: _____________ Signature:______________________________
Address:________________________________
________________________________
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PARTIAL ASSIGNMENT
FOR VALUE RECEIVED ________________________ hereby assigns and transfers
unto __________________________ the right to purchase ____________ shares of the
Common Stock, par value $.001 per share, of Discovery Laboratories, Inc. (the
"Company"), as set forth in the foregoing Warrant Agreement, and a proportionate
part of said Warrant Agreement and the rights evidenced thereby, and does
irrevocably constitute and appoint ____________________, attorney to transfer
that part of said Warrant Agreement on the books of the Company.
Dated: _____________ Signature:______________________________
Address:________________________________
________________________________
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