EXHIBIT 4(h)
Form of Warrant Agreement
_________________________
WARRANT AGREEMENT, dated as of May 1, 1995, between
PHARMOS CORPORATION, a Nevada corporation (the "Company"), and
▇▇▇▇▇▇▇/▇▇▇▇▇▇ ASSOCIATES, L.P. ("Holder").
W I T N E S S E T H:
_ _ _ _ _ _ _ _ _ _
WHEREAS, Holder, in consideration for its work as on
behalf of the Company as investment banker and financial
consultant shall be issued an aggregate of 150,000 four-year
warrants ("Warrants") to purchase shares of Common Stock of the
Company ("Common Stock") at exercise prices of $0.75, $1.00 and
$1.50 per share.
NOW, THEREFORE, in consideration of the premises
herein set forth and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. Issue. The Company hereby issues to Holder a
certificate (the "Warrant Certificate") dated as of the date
hereof providing Holder with the right to purchase, subject to
the vesting schedule set forth in Section 2 below, (i) at any
time after the first anniversary date of the date hereof until
5:30 p.m., New York time, on April 30, 2000, 112,500 shares of
Common Stock and (ii) at any time after the second anniversary
date of the date hereof until 5:30 p.m., New York time, on April
30, 2000, 37,500 shares of Common Stock (the "Warrant Shares")
(subject to adjustment as provided in Section 8 hereof). Of the
150,000 Warrants, 50,000 shall be exercisable at an initial
exercise price (subject to adjustment as provided in Section 8
hereof) equal to $0.75 per share (the "$.75 Warrants"), 50,000
shall be exercisable at an initial exercise price (subject to
adjustment as provided in Section 8 hereof) equal to $1.00 per
share (the "$1.00 Warrants"), and 50,000 shall be exercisable at
an initial exercise price (subject to adjustment as provided in
Section 8 hereof) equal to $1.50 per share (the "$1.50
Warrants").
2. Vesting. The Warrants shall vest as follows:
(A) 12,500 each of the $.75 Warrants, the $1.00
Warrants and the $1.50 Warrants (an aggregate of
37,500 Warrants) shall vest immediately (although
not exercisable until May 1, 1996);
(B) 12,500 each of the $.75 Warrants, the $1.00
Warrants and the $1.50 Warrants (an aggregate of
37,500 Warrants) shall vest on November 1, 1995
(although not exercisable until May 1, 1996);
(C) 12,500 each of the $.75 Warrants, the $1.00
Warrants and the $1.50 Warrants (an aggregate of
37,500 Warrants) shall vest on May 1, 1996 (and
shall be exercisable commencing as of such date);
and
(D) 12,500 each of the $.75 Warrants, the $1.00
Warrants and the $1.50 Warrants (an aggregate of
37,500 Warrants) shall also vest on May 1, 1996,
but shall only be exercisable commencing as of
May 1, 1997.
3. Warrant Certificate. The Warrant Certificate to
be delivered pursuant to this Agreement shall be in the form set
forth in Exhibit X, attached hereto and made a part hereof, with
such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Agreement.
4. Exercise of Warrants. The Warrants, when
initially exercisable, are exercisable at the aggregate initial
exercise prices per share set forth in Section 6 hereof payable
by certified check or official bank check in New York Clearing
House funds. Upon surrender of a Warrant Certificate with the
annexed Form of Election to Purchase duly executed, together with
payment of the Exercise Price (as hereinafter defined) for the
Warrant Shares purchased, at the Company's principal offices in
Florida (presently located at ▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇) Holder shall be entitled to receive a certificate
for the Warrant Shares so purchased. The purchase rights
represented by the Warrant Certificate are exercisable at the
option of the Holder thereof, in whole or in part (but not as to
fractional shares of the Common Stock underlying the Warrants).
In the case of the purchase of less than all the Warrant Shares
purchasable under the Warrant Certificate, the Company shall
cancel said Warrant Certificate upon the surrender thereof and
shall execute and deliver a new Warrant Certificate of like tenor
for the balance of the Warrant Shares purchasable thereunder.
5. Issuance of Certificate. Upon the exercise of
the Warrants, the issuance of a certificate for Warrant Shares or
other securities, properties or rights underlying such Warrants
shall be made forthwith (and in any event within five (5)
business days thereafter) without charge to the Holder thereof
including, without limitation, any tax which may be payable in
respect of the issuance thereof, and such certificate shall
(subject to the provisions of Sections 5 and 7 hereof) be issued
in the name of, or in such names as may be directed by, the
Holder thereof; provided, however, 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 such
certificate in a name other than that of the Holder and the
Company shall not be required to issue or deliver such
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certificate unless or until the person or persons requesting the
issuance thereof shall have paid to the Company the amount of
such tax or shall have established to the satisfaction of the
Company that such tax has been paid.
The Warrant Certificate and the certificate
representing the Warrant Shares (and/or other securities,
property or rights issuable upon exercise of the Warrants) shall
be executed on behalf of the Company by the manual or facsimile
signature of the then present Chairman or Vice Chairman of the
Board of Directors or President or any Vice President of the
Company under its corporate seal reproduced thereon, attested to
by the manual or facsimile signature of the then present
Secretary or any Assistant Secretary of the Company. The Warrant
Certificate shall be dated the date of execution by the Company
upon initial issuance, division, exchange, substitution or
transfer.
6. Transfer of Warrants. The Holder of the Warrant
Certificate, by its acceptance thereof, covenants and agrees that
the Warrants are being acquired as an investment and not with a
view to the distribution thereof. The Warrants may be sold,
transferred, assigned, hypothecated or otherwise disposed of, in
whole or in part, without restriction, subject to compliance with
applicable securities laws.
7. Exercise Prices.
7.1 Initial and Adjusted Exercise Prices. Except as
otherwise provided in Section 8 hereof, the initial exercise
price of each Warrant shall be the price set forth in Section 1
hereof per Warrant Share issued thereunder. The adjusted
exercise price shall be the price which shall result from time to
time from any and all adjustments of the initial exercise price
in accordance with the provisions of Section 8 hereof.
7.2 Exercise Price. The term "Exercise Price" (or
"Exercise Prices") herein shall mean the initial exercise price
or the adjusted exercise price, depending upon the context.
8. Registration Under the Securities Act of 1933.
The Warrants, the Warrant Shares and any of the other securities
issuable upon exercise of the Warrants have not been registered
under the Securities Act of 1933, as amended (the "Act"). Upon
exercise, in whole or in part, of the Warrants, a certificate
representing the Warrant Shares underlying the Warrants, and any
of the other securities issuable upon exercise of the Warrants
(collectively, the "Warrant Securities") shall bear the following
legend unless such Warrant Shares previously have been registered
under the Act in accordance with the terms hereof:
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THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED
("ACT"), AND MAY NOT BE OFFERED OR SOLD
EXCEPT PURSUANT TO (i) AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT, (ii)
TO THE EXTENT APPLICABLE, RULE 144 UNDER THE
ACT (OR ANY SIMILAR RULE UNDER THE ACT
RELATING TO THE DISPOSITION OF SECURITIES),
OR (iii) AN OPINION OF COUNSEL, IF SUCH
OPINION SHALL BE REASONABLY SATISFACTORY TO
COUNSEL TO THE ISSUER, THAT AN EXEMPTION
FROM REGISTRATION UNDER THE ACT IS
AVAILABLE.
9. Adjustments to Exercise Prices and Number of
Securities.
9.1 Subdivision and Combination. In case the Company
shall at any time subdivide or combine the outstanding shares of
Common Stock, the Exercise Prices shall forthwith be
proportionately decreased in the case of subdivision or increased
in the case of combination.
9.2 Adjustment in Number of Securities. Upon each
adjustment of the Exercise Prices pursuant to the provisions of
this Section 8, the number of Warrant Shares issuable upon the
exercise of each Warrant shall be adjusted to the nearest full
amount by multiplying a number equal to the Exercise Price in
effect immediately prior to such adjustment by the number of
Warrant Shares issuable upon exercise of the Warrants immediately
prior to such adjustment and dividing the product so obtained by
the adjusted Exercise Price.
9.3 Merger or Consolidation. In case of any
consolidation of the Company with, or merger of the Company with,
or merger of the Company into, another corporation (other than a
consolidation or merger which does not result in any
reclassification or change of the outstanding Common Stock), the
corporation formed by such consolidation or merger shall execute
and deliver to the Holder a supplemental warrant agreement
providing that the holder of each Warrant then outstanding or to
be outstanding shall have the right thereafter (until the
expiration of such Warrant) to receive, upon exercise of such
Warrant, the kind and amount of shares of stock and other
securities and property receivable upon such consolidation or
merger, by a holder of the number of shares of Common Stock of
the Company for which such Warrant might have been exercised
immediately prior to such consolidation, merger, sale or
transfer. Such supplemental warrant agreement shall provide for
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adjustments which shall be identical to the adjustments provided
in this Section 8. The above provision of this subsection shall
similarly apply to successive consolidations or mergers.
9.4 No Adjustment of Exercise Prices in Certain
Cases. No adjustment of the Exercise Prices shall be made:
(a) Upon the issuance or sale of the Warrants or
the shares of Common Stock issuable upon the exercise
of the Warrants.
(b) If the amount of said adjustment shall be
less than two cents (2 ) per Warrant Share, provided,
however, that in such case any adjustment that would
otherwise be required then to be made shall be carried
forward and shall be made at the time of and together
with the next subsequent adjustment which, together
with any adjustment so carried forward, shall amount
to at least two cents (2 ) per Warrant Share.
(c) Upon the issuance or sale of Common Stock or
warrants, options or convertible securities, to be
issued and/or sold to employees, advisors, directors
or officers of, or consultants to, the Company or any
of its subsidiaries pursuant to a stock grant, stock
option plan, stock purchase plan, pension or profit
sharing plan or other stock agreement or arrangement
currently existing or approved by the Company's Board
of Directors.
(d) Upon the issuance of shares of Common Stock,
warrants, options and convertible securities pursuant
to warrants, options and convertible securities
outstanding as of the date hereof.
(e) Upon the issuance of shares of Common Stock,
warrants, options and convertible securities in
connection with strategic partnerships or other
business and/or product consolidations or joint
ventures.
10. Exchange and Replacement of Warrant Certificate.
The Warrant Certificate is exchangeable without expense, upon the
surrender thereof by the registered Holder at the principal
executive office of the Company, for a new Warrant Certificate of
like tenor and date representing in the aggregate the right to
purchase the same number of Shares in such denominations as shall
be designated by the Holder thereof at the time of such
surrender.
Upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation
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of the Warrant Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to
it, and reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of the
Warrants, if mutilated, the Company will make and deliver a new
Warrant Certificate of like tenor, in lieu thereof.
11. Elimination of Fractional Interests. The Company
shall not be required to issue certificates representing
fractions of shares of Common Stock upon the exercise of the
Warrants, nor shall it be required to issue scrip or pay cash in
lieu of fractional interests, it being the intent of the parties
that all fractional interests shall be eliminated by rounding any
fraction up to the nearest whole number of shares of Common Stock
or other securities, properties or rights.
12. Reservation and Listing of Securities. The
Company shall at all times reserve and keep available out of its
authorized shares of Common Stock, solely for the purpose of
issuance upon the exercise of the Warrants, such number of shares
of Common Stock or other securities, properties or rights as
shall be issuable upon the exercise thereof. The Company
covenants and agrees that, upon exercise of the Warrants and
payment of the Exercise Price therefor, all shares of Common
Stock and other securities issuable upon such exercise shall be
duly and validly issued, fully paid, non-assessable and not
subject to the preemptive rights of any stockholder. As long as
the Warrants shall be outstanding, the Company shall use its best
efforts to cause all shares of Common Stock issuable upon the
exercise of the Warrants to be listed (subject to official notice
of issuance) on all securities exchanges on which the Common
Stock may then be listed and/or quoted on NASDAQ.
13. Notices to Warrant Holder. Nothing contained in
this Agreement shall be construed as conferring upon the Holder
by virtue of its holding the Warrant the right to vote or to
consent or to receive notice as a stockholder in respect of any
meetings of stockholders for the election of directors or any
other matter, or as having any rights whatsoever as a stockholder
of the Company. If, however, at any time prior to the expiration
of the Warrants and their exercise, any of the following events
shall occur:
(a) the Company shall take a record of the
holders of its shares of Common Stock for the purpose
of entitling them to receive a dividend or
distribution payable otherwise than in cash, or a cash
dividend or distribution payable otherwise than out of
current or retained earnings, as indicated by the
accounting treatment of such dividend or distribution
on the books of the Company; or
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(b) the Company shall offer to all the holders of
its Common Stock any additional shares of capital
stock of the Company or securities convertible into or
exchangeable for shares of capital stock of the
Company, or any option, right or warrant to subscribe
therefor; or
(c) a dissolution, liquidation or winding up of
the Company (other than in connection with a
consolidation or merger) or a sale of all or
substantially all of its property, assets and business
as an entirety shall be proposed;
then, in any one or more of said events, the Company shall give
written notice of such event at least fifteen (15) days prior to
the date fixed as a record date or the date of closing the
transfer books for the determination of the stockholders entitled
to such dividend, distribution, convertible or exchangeable
securities or subscription rights, or entitled to vote on such
proposed dissolution, liquidation, winding up or sale or any such
earlier date that notice of such event is given to stockholders
of the Company. Such notice shall specify such record date or
the date of closing the transfer books, as the case may be.
Failure to give such notice or any defect therein shall not
affect the validity of any action taken in connection with the
declaration or payment of any such dividend, or the issuance of
any convertible or exchangeable securities, or subscription
rights, options or warrants, or any proposed dissolution,
liquidation, winding up or sale.
14. Notices.
All notices, requests, consents and other
communications hereunder shall be in writing and shall be deemed
to have been duly made and sent when delivered, or mailed by
registered or certified mail, return receipt requested:
(a) If to the registered Holder of the Warrants,
to the address of such Holder as shown on the books of
the Company; or
(b) If to the Company, to the address set forth
in Section 3 hereof or to such other address as the
Company may designate by notice to the Holder.
15. Supplements and Amendments. The Company and
Holder may from time to time supplement or amend this Agreement
in order to cure any ambiguity, to correct or supplement any
provision contained herein which may be defective or inconsistent
with any provisions herein, or to make any other provisions in
regard to matters or questions arising hereunder which the
Company and Holder may deem necessary or desirable.
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16. Successors. All the covenants and provisions of
this Agreement shall be binding upon and inure to the benefit of
the Company, the Holder and their respective successors and
assigns hereunder.
17. Termination. This Agreement shall terminate at
the close of business on the fifth anniversary of the issuance of
the Warrants.
18. Governing Law. This Agreement and the Warrant
Certificate issued hereunder shall be deemed to be a contract
made under the laws of the State of New York and for all purposes
shall be construed in accordance with the laws of the State of
New York without giving effect to the rules of the State of New
York governing the conflicts of laws.
19. Entire Agreement; Modification. This Agreement
contains the entire understanding between the parties hereto with
respect to the subject matter hereof and may not be modified or
amended except by a writing duly signed by the party against whom
enforcement of the modification or amendment is sought.
20. Severability. If any provision of this Agreement
shall be held to be invalid or unenforceable, such invalidity or
unenforceability shall not affect any other provision of this
Agreement.
21. Captions. The caption headings of the Sections
of this Agreement are for convenience of reference only and are
not intended, nor should they be construed as, a part of this
Agreement and shall be given no substantive effect.
22. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any person or corporation
other than the Company and Holder any legal or equitable right,
remedy or claim under this Agreement; and this Agreement shall be
for the sole and exclusive benefit of the Company and Holder.
23. Counterparts. This Agreement may be executed in
any number of counterparts and each of such counterparts shall
for all purposes be deemed to be an original, and such
counterparts shall together constitute but one and the same
instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed, as of the day and year first above written.
PHARMOS CORPORATION
By:
___________________________________
Name:
Title:
▇▇▇▇▇▇▇/▇▇▇▇▇▇ ASSOCIATES, L.P.
By: ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Securities Corp.,
General Partner
By: _________________________________
Authorized Officer
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EXHIBIT X
TO
WARRANT AGREEMENT
[FORM OF WARRANT CERTIFICATE]
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER
SECURITIES ISSUABLE UPON EXERCISE THEREOF MAY NOT BE OFFERED OR
SOLD EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") (ii) TO
THE EXTENT APPLICABLE, RULE 144 UNDER THE ACT (OR ANY SIMILAR
RULE UNDER THE ACT RELATING TO THE DISPOSITION OF SECURITIES), OR
(iii) AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY
SATISFACTORY TO COUNSEL FOR THE ISSUER, THAT AN EXEMPTION FROM
REGISTRATION UNDER THE ACT IS AVAILABLE.
EXERCISABLE FROM MAY 1, 1996 UNTIL
5:30 P.M., NEW YORK TIME, APRIL 30, 2000
No. W-95Z-1 150,000 Warrants
WARRANT CERTIFICATE
This Warrant Certificate certifies that ▇▇▇▇▇▇▇/▇▇▇▇▇▇
Associates, L.P. or its registered assigns, is the registered
holder of 150,000 Warrants to purchase initially, (i) at any time
from May 1, 1996 until 5:30 p.m. New York time on April 30, 2000
("Expiration Date"), up to 112,500, and (ii) at any time from May
1, 1997 until 5:30 p.m. New York time on the Expiration Date up
to 37,500, fully-paid and non-assessable shares of common stock,
par value $.03 per share ("Common Stock") of PHARMOS CORPORATION,
a Nevada corporation (the "Company"), at initial exercise prices,
subject to adjustment in certain events (the "Exercise Prices"),
equal to $0.75 per share, $1.00 per share, and $1.50 per share
for 50,000 Warrant Shares each, respectively, upon surrender of
this Warrant Certificate and payment of the Exercise Prices at an
office or agency of the Company, but subject to the conditions
set forth herein and in the Warrant Agreement dated as of May 1,
1995 between the Company and ▇▇▇▇▇▇▇/▇▇▇▇▇▇ Associates, L.P. (the
"Warrant Agreement"). Payment of the Exercise Prices shall be
made by certified check or official bank check in New York
Clearing House funds payable to the order of the Company.
No Warrant may be exercised after 5:30 p.m., New York time,
on the Expiration Date, at which time all Warrants evidenced
hereby, unless exercised prior thereto, shall thereafter be void.
The Warrants evidenced by this Warrant Certificate are part
of a duly authorized issue of Warrants issued pursuant to the
Warrant Agreement, which Warrant Agreement is hereby incorporated
X-1
by reference in and made a part of this instrument and is hereby
referred to for a description of the rights, limitation of
rights, obligations, duties and immunities thereunder of the
Company and the holder (the word "holder" meaning the registered
holder) of the Warrants.
The Warrant Agreement provides that upon the occurrence of
certain events the Exercise Prices and the type and/or number of
the Company's securities issuable thereupon may, subject to
certain conditions, be adjusted. In such event, the Company
will, at the request of the holder, issue a new Warrant
Certificate evidencing the adjustment in the Exercise Prices and
the number and/or type of securities issuable upon the exercise
of the Warrants; provided, however, that the failure of the
Company to issue such new Warrant Certificate shall not in any
way change, alter, or otherwise impair, the rights of the holder
as set forth in the Warrant Agreement.
Upon due presentment for registration of transfer of this
Warrant Certificate at an office or agency of the Company, a new
Warrant Certificate or Warrant Certificates of like tenor and
evidencing in the aggregate a like number of Warrants shall be
issued to the transferee(s) in exchange for this Warrant
Certificate, subject to the limitations provided herein and in
the Warrant Agreement, without any charge except for any tax or
other governmental charge imposed in connection with such
transfer.
Upon the exercise of less than all of the Warrants evidenced
by this Certificate, the Company shall forthwith issue to the
holder hereof a new Warrant Certificate representing such number
of unexercised Warrants.
The Company may deem and treat the registered holder(s)
hereof as the absolute owner(s) of this Warrant Certificate
(notwithstanding any notation of ownership or other writing
hereon made by anyone), for the purpose of any exercise hereof,
and of any distribution to the holder(s) hereof, and for all
other purposes, and the Company shall not be affected by any
notice to the contrary.
All terms used in this Warrant Certificate which are defined
in the Warrant Agreement shall have the meanings assigned to them
in the Warrant Agreement.
X-2
IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be duly executed.
Dated as of May 1, 1995.
PHARMOS CORPORATION
By:_______________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Acting Secretary and Chief
Financial Officer
X-3
[FORM OF ELECTION TO PURCHASE]
The undersigned hereby irrevocably elects to exercise
the right, represented by this Warrant Certificate, to purchase
______________ shares of Common Stock and herewith tenders in
payment for such securities a certified check or official bank
check payable in New York Clearing House Funds to the order of
PHARMOS CORPORATION in the amount of $_______, all in accordance
with the terms of Section 3 of the Warrant Agreement dated as of
May 1, 1995 between Pharmos Corporation and ▇▇▇▇▇▇▇/▇▇▇▇▇▇
Associates, L.P. The undersigned requests that a certificate
for such securities be registered in the name of
____________ whose address is _________________ and that such
Certificate be delivered to ______________________ whose address
is ______________.
Dated: ________________ Signature ____________________
(Signature must conform in all
respects to name of holder as
specified on the face of the
Warrant Certificate.)
_______________________________
(Insert Social Security or Other
Identifying Number of Holder)
X-4
[FORM OF ASSIGNMENT]
(To be executed by the registered holder if such holder
desires to transfer the Warrant Certificate.)
FOR VALUE RECEIVED __________________ hereby
sells, assigns and transfers unto
________________________________________________________________
________________________________________________________________
(Please print name and address of transferee)
this Warrant Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and
appoint _______________ Attorney, to transfer the within Warrant
Certificate on the books of the within-named Company, with full
power of substitution.
Dated: _________________ Signature:____________________
(Signature must conform in all
respects to name of holder as
specified on the face of the
Warrant Certificate.)
_______________________________
(Insert Social Security or Other
Identifying Number of Assignee)
X-5