AMERICAN DEPOSITARY SHARES PURCHASE WARRANT To Purchase __________ American Depositary Shares, each representing one share of Common Stock of GENTIUM S.p.A.
NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE
HAVE
BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION
FROM,
OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
LAWS.
To
Purchase __________ American Depositary Shares,
each
representing one share of Common Stock of
GENTIUM
S.p.A.
THIS
AMERICAN DEPOSITARY SHARE PURCHASE WARRANT (the “Warrant”)
certifies that, for value received, _____________ (the “Holder”),
is
entitled, upon the terms and subject to the limitations on exercise and the
conditions hereinafter set forth, at any time on or after March ___, 2006
(the
“Initial
Exercise Date”)
and on
or prior to the close of business on the five-year anniversary of the Initial
Exercise Date (the “Termination
Date”)
but
not thereafter, to subscribe for and purchase from Gentium S.p.A., an Italian
corporation (the “Company”),
up to
______ American Depositary Shares, (the “Warrant
Shares”)
each
representing one share of Common Stock, par value €1.00 per share, of the
Company (the “Common
Stock”),
which
American Depositary Shares (“ADSs”)
will
be issued pursuant to the Deposit Agreement, dated June 15, 2005, with Bank
of
New York, as Depositary. The Warrant Shares shall be evidenced by American
Depositary Receipts (“ADRs”).
Each
ADS shall represent one share of Common Stock, and such ratio shall be deemed
to
be maintained for all purposes hereunder, and to the extent such ratio is
not
maintained, the adjustments pursuant to Section 3 hereof shall be adjusted
to
take into account any such change to such ratio. The purchase price of one
ADS
under this Warrant shall be equal to the Exercise Price, as defined in Section
2(b). This Warrant shall only be effective upon the Shareholder Approval.
Not
withstanding the foregoing, all time periods measured hereunder shall begin
at
the Closing Date.
Section
1.
Definitions.
Capitalized terms used and not otherwise defined herein shall have the meanings
set forth in that certain Securities Subscription Agreement (the “Purchase
Agreement”),
dated
October 2, 2005, among the Company and the purchasers signatory
thereto.
Section
2.
Exercise.
a) Exercise
of Warrant.
Exercise of the purchase rights represented by this Warrant may be made,
in
whole or in part (provided that the exercise is for at least that number
of
shares of Common Stock represented by one ADS), at any time or times on or
after
the Initial Exercise Date and on or before the Termination Date by delivery
to
the Company’s agent in the United States, currently ____________________, of a
duly executed facsimile copy of the Notice of Exercise Form annexed hereto
(or
such other office or agency of the Company in the United States as it may
designate by notice in writing to the registered Holder at the address of
such
Holder appearing on the books of the Company); provided,
however,
within
5 Trading Days of the date said Notice of Exercise is delivered to the Company,
if this Warrant is exercised in full, the Holder shall have surrendered this
Warrant to the Company and the Company shall have received payment of the
aggregate Exercise Price of the shares thereby purchased by wire transfer
or
cashier’s check drawn on a United States bank. Notwithstanding anything herein
to the contrary, the Holder shall not be required to physically surrender
this
Warrant to the Company’s agent until the Holder has purchased all of the Warrant
Shares available hereunder and the Warrant has been exercised in full. Partial
exercises of this Warrant resulting in purchases of a portion of the total
number of Warrant Shares available hereunder shall have the effect of lowering
the outstanding number of Warrant Shares purchasable hereunder in an amount
equal to the applicable number of Warrant Shares purchased. The Holder and
the
Company shall maintain records showing the number of Warrant Shares purchased
and the date of such purchases. The Company shall deliver any objection to
any
Notice of Exercise Form within 1 Trading Day of receipt of such notice. In
the
event of any dispute or discrepancy, the records of the Holder shall be
controlling and determinative in the absence of manifest error. The Holder
and
any assignee, by acceptance of this Warrant, acknowledge and agree that,
by
reason of the provisions of this paragraph, following the purchase of a portion
of the Warrant Shares hereunder, the number of Warrant Shares available for
purchase hereunder at any given time may be less than the amount stated on
the
face hereof.
b) Exercise
Price.
The
exercise price under this Warrant shall be $9.69, subject to adjustment
hereunder (the “Exercise
Price”).
c) [▇▇▇▇▇▇’s
Restrictions.
The
Company shall not effect any exercise of this Warrant, and a
Holder
shall not have the right to exercise any portion of this Warrant, to the
extent
that after giving effect to such issuance after exercise, such Holder (together
with such Holder’s affiliates, and any other person or entity acting as a group
together with such Holder or any of such Holder’s affiliates), as set forth on
the applicable Notice of Exercise, would beneficially own in excess of 4.99%
of
the number of shares of the Common Stock outstanding immediately after giving
effect to such issuance. For purposes of the foregoing sentence, the
number of shares of Common Stock beneficially owned by such Holder and its
affiliates shall include the number of shares of Common Stock issuable upon
exercise of this Warrant with respect to which the determination of such
sentence is being made, but shall exclude the number of shares of Common
Stock
which would be issuable upon (A) exercise of the remaining, nonexercised
portion
of this Warrant beneficially owned by such Holder or any of its affiliates
and
(B) exercise or conversion of the unexercised or nonconverted portion of
any
other securities of the Company (including, without limitation, any other
Preferred Stock or Warrants) subject to a limitation on conversion or exercise
analogous to the limitation contained herein beneficially owned by such Holder
or any of its affiliates. Except as set forth in the preceding sentence,
for purposes of this Section 2(c)(i), beneficial ownership shall be calculated
in accordance with Section 13(d) of the Exchange Act and the rules and
regulations promulgated thereunder, it being acknowledged by a Holder that
the
Company is not representing to such Holder that such calculation is in
compliance with Section 13(d) of the Exchange Act and such Holder is solely
responsible for any schedules required to be filed in accordance therewith.
To
the extent that the limitation contained in this Section 2(c) applies, the
determination of whether this Warrant is exercisable (in relation to other
securities owned by such Holder) and of which a portion of this Warrant is
exercisable shall be in the sole discretion of a Holder, and the submission
of a
Notice of Exercise shall be deemed to be each Holder’s determination of whether
this Warrant is exercisable (in relation to other securities owned by such
Holder) and of which portion of this Warrant is exercisable, in each case
subject to such aggregate percentage limitation, and the Company shall have
no
obligation to verify or confirm the accuracy of such determination. In addition,
a determination as to any group status as contemplated above shall be determined
in accordance with Section 13(d) of the Exchange Act and the rules and
regulations promulgated thereunder. For purposes of this Section 2(c), in
determining the number of outstanding shares of Common Stock, a Holder may
rely
on the number of outstanding shares of Common Stock as reflected in (x) the
Company’s Form F-1, as amended, (y) a more recent public announcement by the
Company or (z) any other notice by the Company or the Company’s Transfer Agent
setting forth the number of shares of Common Stock outstanding. Upon the
written or oral request of a Holder, the Company shall within two Trading
Days
confirm orally and in writing to such Holder the number of shares of Common
Stock then outstanding. In any case, the number of outstanding shares of
Common Stock shall be determined after giving effect to the conversion or
exercise of securities of the Company, including this Warrant, by such Holder
or
its affiliates since the date as of which such number of outstanding shares
of
Common Stock was reported. The
provisions of this paragraph shall be implemented in a manner otherwise than
in
strict conformity with the terms of this Section 2(c) to correct this paragraph
(or any portion hereof) which may be defective or inconsistent with the intended
4.99% beneficial ownership limitation herein contained or to make changes
or
supplements necessary or desirable to properly give effect to such 4.99%
limitation. The limitations contained in this paragraph shall apply to a
successor holder of this Warrant. The holders of Common Stock of the Company
shall be third party beneficiaries of this Section 2(c) and the Company may
not
waive this Section 2(c) without the consent of holders of a majority of its
Common Stock.][NOTE:
This Section 2(c) may be excluded at the option of each
Purchaser]
d) Mechanics
of Exercise.
i. Authorization
of Warrant Shares.
The
Company covenants that all Warrant Shares (and all shares of Common Stock
represented by such Warrant Shares) that may be issued upon the exercise
of the
purchase rights represented by this Warrant will, upon exercise of the purchase
rights represented by this Warrant, be duly authorized, validly issued, fully
paid and nonassessable and free from all taxes, liens and charges in respect
of
the issue thereof (other than taxes in respect of any transfer occurring
contemporaneously with such issue).
ii. Delivery
of Certificates Upon Exercise.
ADSs
representing shares purchased hereunder shall be transmitted to the Holder
by
crediting the account of the Holder’s prime broker with the Depository Trust
Company through its Deposit Withdrawal Agent Commission (“DWAC”)
system, if available, and otherwise by physical delivery of the ADRs
representing such Warrant Shares to the address specified by the Holder in
the
Notice of Exercise within 3 Trading Days from the delivery to the Company
of the
Notice of Exercise Form, surrender of this Warrant (if required) and payment
of
the aggregate Exercise Price as set forth above (“Warrant
Share Delivery Date”).
This
Warrant shall be deemed to have been exercised on the date the Exercise Price
is
received by the Company. The Warrant Shares (represented by the ADRs) shall
be
deemed to have been issued, and Holder or any other person so designated
to be
named therein shall be deemed to have become a holder of record of such shares
for all purposes, as of the date the Warrant has been exercised by payment
to
the Company of the Exercise Price and all taxes required to be paid by the
Holder, if any, pursuant to Section 2(d)(vii) prior to the issuance of such
shares, have been paid.
iii. Delivery
of New Warrants Upon Exercise.
If this
Warrant shall have been exercised in part, the Company shall, at the request
of
a Holder and upon surrender of this Warrant certificate, at the time of delivery
of the certificate or certificates representing Warrant Shares, deliver to
Holder a new Warrant evidencing the rights of Holder to purchase the unpurchased
Warrant Shares called for by this Warrant, which new Warrant shall in all
other
respects be identical with this Warrant.
iv. Rescission
Rights.
If the
Company fails to cause its transfer agent to transmit to the Holder a
certificate or certificates representing the Warrant Shares pursuant to this
Section 2(d)(iv) by the Warrant Share Delivery Date, then the Holder will
have
the right to rescind such exercise.
v. Compensation
for Buy-In on Failure to Timely Deliver Certificates Upon
Exercise.
In
addition to any other rights available to the Holder, if the Company fails
to
cause its transfer agent to transmit to the Holder a certificate or certificates
representing the Warrant Shares pursuant to an exercise on or before the
Warrant
Share Delivery Date, and if after such date the Holder is required by its
broker
to purchase (in an open market transaction or otherwise) ADSs to deliver
in
satisfaction of a sale by the Holder of the Warrant Shares which the Holder
anticipated receiving upon such exercise (a “Buy-In”),
then
the Company shall (1) pay in cash to the Holder the amount by which (x) the
Holder’s total purchase price (including brokerage commissions, if any) for the
ADSs so purchased exceeds (y) the amount obtained by multiplying (A) the
number
of Warrant Shares that the Company was required to deliver to the Holder
in
connection with the exercise at issue times (B) the price at which the sell
order giving rise to such purchase obligation was executed, and (2) at the
option of the Holder, either reinstate the portion of the Warrant and equivalent
number of Warrant Shares for which such exercise was not honored or deliver
to
the Holder the number of ADSs that would have been issued had the Company
timely
complied with its exercise and delivery obligations hereunder. For example,
if
the Holder purchases ADSs having a total purchase price of $11,000 to cover
a
Buy-In with respect to an attempted exercise of ADSs with an aggregate sale
price giving rise to such purchase obligation of $10,000, under clause (1)
of
the immediately preceding sentence the Company shall be required to pay the
Holder $1,000. The Holder shall provide the Company written notice indicating
the amounts payable to the Holder in respect of the Buy-In, together with
applicable confirmations and other evidence reasonably requested by the Company.
Nothing herein shall limit a Holder’s right to pursue any other remedies
available to it hereunder, at law or in equity including, without limitation,
a
decree of specific performance and/or injunctive relief with respect to the
Company’s failure to timely deliver certificates representing shares of Common
Stock upon exercise of the Warrant as required pursuant to the terms
hereof.
vi. No
Fractional Shares or Scrip.
No
fractional shares or scrip representing fractional shares shall be issued
upon
the exercise of this Warrant. As to any fraction of a share which Holder
would
otherwise be entitled to purchase upon such exercise, the Company shall pay
a
cash adjustment in respect of such final fraction in an amount equal to such
fraction multiplied by the Exercise Price.
vii. Charges,
Taxes and Expenses.
Issuance of certificates for Warrant Shares (including the ADRs) shall be
made
without charge to the Holder for any issue or transfer tax, or fees or expenses
of Bank of New York (as depositary) for such issuance, or other incidental
expense in respect of the issuance of such certificate, all of which taxes,
fees
and expenses shall be paid by the Company, and such certificates shall be
issued
in the name of the Holder or in such name or names as may be directed by
the
Holder; provided,
however,
that in
the event certificates for Warrant Shares are to be issued in a name other
than
the name of the Holder, this Warrant when surrendered for exercise shall
be
accompanied by the Assignment Form attached hereto duly executed by the Holder;
and the Company may require, as a condition thereto, the payment of a sum
sufficient to reimburse it for any transfer tax incidental thereto.
viii. Closing
of Books.
The
Company will not close its stockholder books or records in any manner which
prevents the timely exercise of this Warrant, pursuant to the terms
hereof.
e) Call
Provision.
Subject
to the provisions of Section 2(c) and this Section 2(e), if, after the Effective
Date (i) the VWAP for each of 30 consecutive Trading Days (the “Measurement
Period”,
which
30 Trading Day period shall not have commenced until after the Effective
Date)
exceeds $21.00 (subject to adjustment for forward and reverse stock splits,
recapitalizations, stock dividends and the like after the Initial Exercise
Date)
(the “Threshold
Price”)
and
(ii) the average daily volume for any Threshold Period, which Threshold Period
shall have commenced only after the Effective Date, exceeds 50,000 ADSs per
Trading Day (subject to adjustment for forward and reverse stock splits,
recapitalizations, stock dividends and the like after the Initial Exercise
Date), then the Company may, within five Trading Days of the end of such
period,
elect to effect a mandatory exercise of all or any portion of this Warrant
for
which a Notice of Exercise has not yet been delivered (such right, a
“Call”).
To
exercise this right, the Company must deliver to the Holder an irrevocable
written notice (a “Call
Notice”),
indicating therein the portion of unexercised portion of this Warrant to
which
such notice applies. Upon delivery of such Call Notice, all or any unexercised
portion of this Warrant shall be deemed converted into Warrant Shares at
6:30
p.m. (New York City time) on the tenth Trading Day after the date the Call
Notice is received by the Holder (such date, the “Call
Date”).
Section
3.
Certain Adjustments.
a) Stock
Dividends and Splits.
If the
Company, at any time while this Warrant is outstanding: (A) pays a stock
dividend or otherwise make a distribution or distributions on shares of its
Common Stock or any other equity or equity equivalent securities payable
in
shares of Common Stock (which, for avoidance of doubt, shall not include
any
shares of Common Stock issued by the Company pursuant to this Warrant), (B)
subdivides outstanding shares of Common Stock into a larger number of shares,
(C) combines (including by way of reverse stock split) outstanding shares
of
Common Stock into a smaller number of shares, or (D) issues by reclassification
of shares of the Common Stock any shares of capital stock of the Company,
then
in each case the Exercise Price shall be multiplied by a fraction of which
the
numerator shall be the number of shares of Common Stock (excluding treasury
shares, if any) outstanding immediately before such event and of which the
denominator shall be the number of shares of Common Stock outstanding
immediately after such event and the number of Warrant Shares issuable upon
exercise of this Warrant shall be proportionately adjusted. Any adjustment
made
pursuant to this Section 3(a) shall become effective immediately after the
record date for the determination of stockholders entitled to receive such
dividend or distribution and shall become effective immediately after the
effective date in the case of a subdivision, combination or
re-classification.
b) Subsequent
Equity Sales.
If the
Company or any Subsidiary thereof, as applicable, at any time while this
Warrant
is outstanding, shall offer, sell, grant any option to purchase or offer,
sell
or grant any right to reprice its securities, or otherwise dispose of or
issue
(or announce any offer, sale, grant or any option to purchase or other
disposition) any Common Stock or Common Stock Equivalents entitling any Person
to acquire shares of Common Stock, at an effective price per share less than
the
then Exercise Price (such lower price, the “Base
Share Price”
and
such issuances collectively, a “Dilutive
Issuance”),
as
adjusted hereunder (if the holder of the Common Stock or Common Stock
Equivalents so issued shall at any time, whether by operation of purchase
price
adjustments, reset provisions, floating conversion, exercise or exchange
prices
or otherwise, or due to warrants, options or rights per share which is issued
in
connection with such issuance, be entitled to receive shares of Common Stock
at
an effective price per share which is less than the Exercise Price, such
issuance shall be deemed to have occurred for less than the Exercise Price
on
such date of the Dilutive Issuance), then the Exercise Price shall be reduced
and only reduced to equal the Base Share Price and the number of Warrant
Shares
issuable hereunder shall be increased such that the aggregate Exercise Price
payable hereunder, after taking into account the decrease in the Exercise
Price,
shall be equal to the aggregate Exercise Price prior to such adjustment;
provided,
however,
the
Exercise Price shall not be adjusted pursuant to this Section 3(b) to less
than
$____1,
subject
to adjustment for reverse and forward stock splits, stock dividends, stock
combinations and other similar transactions of the Common Stock that occur
after
the date of this Agreement. Such adjustment shall be made whenever such Common
Stock or Common Stock Equivalents are issued. Notwithstanding the foregoing,
no
adjustments shall be made, paid or issued under this Section 3(b) in respect
of
an Exempt Issuance. The Company shall notify the Holder in writing, no later
than the Trading Day following the issuance of any Common Stock or Common
Stock
Equivalents subject to this section, indicating therein the applicable issuance
price, or of applicable reset price, exchange price, conversion price and
other
pricing terms (such notice the “Dilutive
Issuance Notice”).
For
purposes of clarification, whether or not the Company provides a Dilutive
Issuance Notice pursuant to this Section 3(b), upon the occurrence of any
Dilutive Issuance, after the date of such Dilutive Issuance the Holder is
entitled to receive a number of Warrant Shares based upon the Base Share
Price
regardless of whether the Holder accurately refers to the Base Share Price
in
the Notice of Exercise.
c) Pro
Rata Distributions.
If the
Company, at any time prior to the Termination Date, shall distribute to all
holders of Common Stock and ADSs (and not to Holders of the Warrants) evidences
of its indebtedness or assets (including cash and cash dividends) or rights
or
warrants to subscribe for or purchase any security other than the Common
Stock
(which shall be subject to Section 3(b)), then in each such case the Exercise
Price shall be adjusted by multiplying the Exercise Price in effect immediately
prior to the record date fixed for determination of stockholders entitled
to
receive such distribution by a fraction of which the denominator shall be
the
VWAP determined as of the record date mentioned above, and of which the
numerator shall be such VWAP on such record date less the then per share
fair
market value at such record date of the portion of such assets or evidence
of
indebtedness so distributed applicable to one outstanding share of the Common
Stock as determined by the Board of Directors in good faith. In either case
the
adjustments shall be described in a statement provided to the Holder of the
portion of assets or evidences of indebtedness so distributed or such
subscription rights applicable to one share of Common Stock. Such adjustment
shall be made whenever any such distribution is made and shall become effective
immediately after the record date mentioned above.
1
One
percent above the closing bid price of the ADSs on AMEX immediately prior
to the
date of the Purchase Agreement.
d) Fundamental
Transaction.
If, at
any time while this Warrant is outstanding, (A) the Company effects any merger
or consolidation of the Company with or into another Person, (B) the Company
effects any sale of all or substantially all of its assets in one or a series
of
related transactions, (C) any tender offer or exchange offer (whether by
the
Company or another Person) is completed pursuant to which holders of Common
Stock are permitted to tender or exchange their shares for other securities,
cash or property, or (D) the Company effects any reclassification of the
Common
Stock or any compulsory share exchange pursuant to which the Common Stock
is
effectively converted into or exchanged for other securities, cash or property
(in any such case, a “Fundamental
Transaction”),
then,
upon any subsequent exercise of this Warrant, the Holder shall have the right
to
receive, for each Warrant Share that would have been issuable upon such exercise
immediately prior to the occurrence of such Fundamental Transaction, at the
option of the Holder, (a) upon exercise of this Warrant, the number of shares
of
common stock of the successor or acquiring corporation or of the Company,
if it
is the surviving corporation, and any additional consideration (the
“Alternate
Consideration”)
receivable upon or as a result of such reorganization, reclassification,
merger,
consolidation or disposition of assets by a Holder of the number of shares
of
Common Stock represented by the ADSs for which this Warrant is exercisable
immediately prior to such event or (b) if the Company is acquired in an all
cash
transaction, cash equal to the value of this Warrant as determined in accordance
with the Black-Scholes option pricing formula. For purposes of any such
exercise, the determination of the Exercise Price shall be appropriately
adjusted to apply to such Alternate Consideration based on the amount of
Alternate Consideration issuable in respect of one share of Common Stock
in such
Fundamental Transaction, and the Company shall apportion the Exercise Price
among the Alternate Consideration in a reasonable manner reflecting the relative
value of any different components of the Alternate Consideration. If holders
of
Common Stock are given any choice as to the securities, cash or property
to be
received in a Fundamental Transaction, then the Holder shall be given the
same
choice as to the Alternate Consideration it receives upon any exercise of
this
Warrant following such Fundamental Transaction. To the extent necessary to
effectuate the foregoing provisions, any successor to the Company or surviving
entity in such Fundamental Transaction shall issue to the Holder a new warrant
consistent with the foregoing provisions and evidencing the Holder’s right to
exercise such warrant into Alternate Consideration. The terms of any agreement
pursuant to which a Fundamental Transaction is effected shall include terms
requiring any such successor or surviving entity to comply with the provisions
of this Section 3(d) and insuring that this Warrant (or any such replacement
security) will be similarly adjusted upon any subsequent transaction analogous
to a Fundamental Transaction.
e) Calculations.
All
calculations under this Section 3 shall be made to the nearest cent or the
nearest 1/100th of a share, as the case may be. For purposes of this Section
3,
the number of shares of Common Stock deemed to be issued and outstanding
as of a
given date shall be the sum of the number of shares of Common Stock (excluding
treasury shares, if any) issued and outstanding.
f) Voluntary
Adjustment By Company.
The
Company may at any time during the term of this Warrant reduce the then current
Exercise Price to any amount and for any period of time deemed appropriate
by
the Board of Directors of the Company.
g) Notice
to Holders.
i. Adjustment
to Exercise Price.
Whenever the Exercise Price is adjusted pursuant to this Section 3, the Company
shall promptly mail to each Holder a notice setting forth the Exercise Price
after such adjustment and setting forth a brief statement of the facts requiring
such adjustment. If the Company issues a variable rate security, despite
the
prohibition thereon in the Purchase Agreement, the Company shall be deemed
to
have issued Common Stock or Common Stock Equivalents at the lowest possible
conversion or exercise price at which such securities may be converted or
exercised in the case of a Variable Rate Transaction.
ii. Notice
to Allow Exercise by ▇▇▇▇▇▇.
If (A)
the Company shall declare a dividend (or any other distribution) on the Common
Stock; (B) the Company shall declare a special nonrecurring cash dividend
on or
a redemption of the Common Stock; (C) the Company shall authorize the granting
to all holders of the Common Stock rights or warrants to subscribe for or
purchase any shares of capital stock of any class or of any rights; (D) the
approval of any stockholders of the Company shall be required in connection
with
any reclassification of the Common Stock, any consolidation or merger to
which
the Company is a party, any sale or transfer of all or substantially all
of the
assets of the Company, of any compulsory share exchange whereby the Common
Stock
is converted into other securities, cash or property; (E) the Company shall
authorize the voluntary or involuntary dissolution, liquidation or winding
up of
the affairs of the Company; then, in each case, the Company shall cause to
be
mailed to the Holder at its last address as it shall appear upon the Warrant
Register of the Company, at least 30 calendar days prior to the applicable
record or effective date hereinafter specified, a notice stating (x) the
date on
which a record is to be taken for the purpose of such dividend, distribution,
redemption, rights or warrants, or if a record is not to be taken, the date
as
of which the holders of the Common Stock of record to be entitled to such
dividend, distributions, redemption, rights or warrants are to be determined
or
(y) the date on which such reclassification, consolidation, merger, sale,
transfer or share exchange is expected to become effective or close, and
the
date as of which it is expected that holders of the Common Stock of record
shall
be entitled to exchange their shares of the Common Stock for securities,
cash or
other property deliverable upon such reclassification, consolidation, merger,
sale, transfer or share exchange; provided,
that
the failure to mail such notice or any defect therein or in the mailing thereof
shall not affect the validity of the corporate action required to be specified
in such notice. The Holder is entitled to exercise this Warrant during the
30
day period commencing on the date of such notice to the effective date of
the
event triggering such notice.
Section
4.
Transfer
of Warrant.
a) Transferability.
Subject
to compliance with any applicable securities laws and the conditions set
forth
in Sections 5(a) and 4(d) hereof and to the provisions of Section 4.1 of
the
Purchase Agreement, this Warrant and all rights hereunder are transferable,
in
whole or in part, upon surrender of this Warrant at the principal office
of the
Company, together with a written assignment of this Warrant substantially
in the
form attached hereto duly executed by the Holder or its agent or attorney
and
funds sufficient to pay any transfer taxes payable upon the making of such
transfer. Upon such surrender and, if required, such payment, the Company
shall
execute and deliver a new Warrant or Warrants in the name of the assignee
or
assignees and in the denomination or denominations specified in such instrument
of assignment, and shall issue to the assignor a new Warrant evidencing the
portion of this Warrant not so assigned, and this Warrant shall promptly
be
cancelled. A Warrant, if properly assigned, may be exercised by a new holder
for
the purchase of Warrant Shares without having a new Warrant issued.
b) New
Warrants.
This
Warrant may be divided or combined with other Warrants upon presentation
hereof
at the aforesaid office of the Company, together with a written notice
specifying the names and denominations in which new Warrants are to be issued,
signed by the Holder or its agent or attorney. Subject to compliance with
Section 4(a), as to any transfer which may be involved in such division or
combination, the Company shall execute and deliver a new Warrant or Warrants
in
exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice.
c) Warrant
Register.
The
Company shall register this Warrant, upon records to be maintained by the
Company for that purpose (the “Warrant
Register”),
in
the name of the record Holder hereof from time to time. The Company may deem
and
treat the registered Holder of this Warrant as the absolute owner hereof
for the
purpose of any exercise hereof or any distribution to the Holder, and for
all
other purposes, absent actual notice to the contrary.
d) Transfer
Restrictions.
If,
at the
time
of
the surrender of this Warrant in connection with any transfer of this Warrant,
the transfer of this Warrant shall not be permitted under Rule 144 or registered
pursuant to an effective registration
statement under the Securities Act
and
under
applicable state securities or blue sky laws, the Company may require, as
a
condition of allowing such transfer (i) that the Holder or transferee of
this
Warrant, as the case may be, furnish to the Company a written opinion of
counsel
(which opinion shall be in form, substance and scope customary for opinions
of
counsel in comparable transactions) to the effect that such transfer may
be made
without
registration under the
Securities Act and under applicable state securities or blue sky laws, (ii)
that
the holder or transferee execute and deliver to the Company an investment
letter
in form and substance acceptable to the Company and (iii) that the transferee
be
an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7),
or (a)(8) promulgated under the Securities Act or a qualified institutional
buyer as defined in Rule 144A(a) under the Securities Act.
Section
5.
Miscellaneous.
a) Title
to Warrant.
Prior
to the Termination Date and subject to compliance with applicable laws and
Section 4 of this Warrant, this Warrant and all rights hereunder are
transferable, in whole or in part, at the office or agency of the Company
by the
Holder in person or by duly authorized attorney, upon surrender of this Warrant
together with the Assignment Form annexed hereto properly endorsed. The
transferee shall sign an investment letter in form and substance reasonably
satisfactory to the Company.
b) No
Rights as Shareholder Until Exercise.
This
Warrant does not entitle the Holder to any voting rights or other rights
as a
shareholder of the Company prior to the exercise hereof. Upon the surrender
of
this Warrant and the payment of the aggregate Exercise Price (or by means
of a
cashless exercise), the Warrant Shares so purchased shall be and be deemed
to be
issued to such Holder as the record owner of such shares as of the close
of
business on the later of the date of such surrender or payment.
c) Loss,
Theft, Destruction or Mutilation of Warrant.
The
Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant
or any stock certificate relating to the Warrant Shares, and in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to
it
(which, in the case of the Warrant, shall not include the posting of any
bond),
and upon surrender and cancellation of such Warrant or stock certificate,
if
mutilated, the Company will make and deliver a new Warrant or stock certificate
of like tenor and dated as of such cancellation, in lieu of such Warrant
or
stock certificate.
d) Saturdays,
Sundays, Holidays, etc.
If the
last or appointed day for the taking of any action or the expiration of any
right required or granted herein shall be a Saturday, Sunday or a legal holiday,
then such action may be taken or such right may be exercised on the next
succeeding day not a Saturday, Sunday or legal holiday.
e) Authorized
Shares.
The
Company covenants that during the period the Warrant is outstanding, it will
reserve from its authorized and unissued Common Stock a sufficient number
of
shares (including the ADSs) to provide for the issuance of the Warrant Shares
upon the exercise of any purchase rights under this Warrant. The Company
further
covenants that its issuance of this Warrant shall constitute full authority
to
its officers who are charged with the duty of executing stock certificates
to
execute and issue the necessary certificates for the Warrant Shares upon
the
exercise of the purchase rights under this Warrant. The Company will take
all
such reasonable action as may be necessary to assure that such Warrant Shares
may be issued as provided herein without violation of any applicable law
or
regulation, or of any requirements of the Trading Market upon which the Common
Stock may be listed. For so long as the Warrant is outstanding, the Company
shall maintain the Deposit Agreement, and shall neither terminate the Deposit
Agreement nor allow it to lapse due to the Company's failure to appoint a
successor Depositary upon the resignation of the Depositary under Section
21 of
the Depositary Agreement.
Except
and to the extent as waived or consented to by the Holder, the Company shall
not
by any action, including, without limitation, amending its certificate of
incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms
of this
Warrant, but will at all times in good faith assist in the carrying out of
all
such terms and in the taking of all such actions as may be necessary or
appropriate to protect the rights of Holder as set forth in this Warrant
against
impairment. Without limiting the generality of the foregoing, the Company
will
(a) not increase the par value of any Warrant Shares above the amount payable
therefor upon such exercise immediately prior to such increase in par value,
(b)
take all such action as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable Warrant
Shares upon the exercise of this Warrant, and (c) use commercially reasonable
efforts to obtain all such authorizations, exemptions or consents from any
public regulatory body having jurisdiction thereof as may be necessary to
enable
the Company to perform its obligations under this Warrant.
Before
taking any action which would result in an adjustment in the number of Warrant
Shares for which this Warrant is exercisable or in the Exercise Price, the
Company shall obtain all such authorizations or exemptions thereof, or consents
thereto, as may be necessary from any public regulatory body or bodies having
jurisdiction thereof.
f) Jurisdiction.
All
questions concerning the construction, validity, enforcement and interpretation
of this Warrant shall be determined in accordance with the provisions of
the
Purchase Agreement.
g) Restrictions.
The
Holder acknowledges that the Warrant Shares acquired upon the exercise of
this
Warrant, if not registered, will have restrictions upon resale imposed by
state
and federal securities laws.
h) Nonwaiver
and Expenses.
No
course of dealing or any delay or failure to exercise any right hereunder
on the
part of Holder shall operate as a waiver of such right or otherwise prejudice
Holder’s rights, powers or remedies, notwithstanding the fact that all rights
hereunder terminate on the Termination Date. If the Company willfully and
knowingly fails to comply with any provision of this Warrant, which results
in
any material damages to the Holder, the Company shall pay to Holder such
amounts
as shall be sufficient to cover any costs and expenses including, but not
limited to, reasonable attorneys’ fees, including those of appellate
proceedings, incurred by Holder in collecting any amounts due pursuant hereto
or
in otherwise enforcing any of its rights, powers or remedies
hereunder.
i) Notices.
Any
notice, request or other document required or permitted to be given or delivered
to the Holder by the Company shall be delivered in accordance with the notice
provisions of the Purchase Agreement.
j) Limitation
of Liability.
No
provision hereof, in the absence of any affirmative action by Holder to exercise
this Warrant or purchase Warrant Shares, and no enumeration herein of the
rights
or privileges of Holder, shall give rise to any liability of Holder for the
purchase price of any Common Stock or as a stockholder of the Company, whether
such liability is asserted by the Company or by creditors of the
Company.
k) Remedies.
Holder,
in addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Warrant. The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of
the
provisions of this Warrant and hereby agrees to waive the defense in any
action
for specific performance that a remedy at law would be adequate.
l) Successors
and Assigns.
Subject
to applicable securities laws, this Warrant and the rights and obligations
evidenced hereby shall inure to the benefit of and be binding upon the
successors of the Company and the successors and permitted assigns of Holder.
The provisions of this Warrant are intended to be for the benefit of all
Holders
from time to time of this Warrant and shall be enforceable by any such Holder
or
holder of Warrant Shares.
m) Amendment.
This
Warrant may be modified or amended or the provisions hereof waived with the
written consent of the Company and the Holder.
n) Severability.
Wherever possible, each provision of this Warrant shall be interpreted in
such
manner as to be effective and valid under applicable law, but if any provision
of this Warrant shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provisions or the remaining
provisions of this Warrant.
o) Headings.
The
headings used in this Warrant are for the convenience of reference only and
shall not, for any purpose, be deemed a part of this Warrant.
p) Identity
of Transfer Agent.
The
Transfer Agent for the Common Stock as represented by the ADSs is
________________ and the contact information for the Transfer Agent
is ____________________________________,
Attention: ______________. Upon the appointment of any subsequent transfer
agent
or American depositary agent for the ADSs or other securities issuable upon
the
exercise of the rights of purchase represented by the Warrant, the Company
will
mail to the Holder a statement setting forth the name and address of such
transfer agent or American depositary agent.
********************
IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
officer thereunto duly authorized.
Dated:
October __, 2005
|
GENTIUM
S.p.A.
|
||
| |
|
|
| By: | ||
|
Name: |
||
| Title: | ||
NOTICE
OF EXERCISE
TO: _______________________
(1) The
undersigned hereby elects to purchase ________ Warrant Shares of the Company
pursuant to the terms of the attached Warrant (only if exercised in full),
and
tenders herewith payment of the exercise price in full, together with all
applicable transfer taxes, if any.
(2) Payment
shall take the form of in lawful money of the United States.
(3) Please
issue a certificate or certificates representing said Warrant Shares in the
name
of the undersigned or in such other name as is specified below:
_______________________________
The
Warrant Shares shall be delivered to the following:
_______________________________
_______________________________
_______________________________
(4) Accredited
Investor.
The
undersigned is an “accredited investor” as defined in Regulation D promulgated
under the Securities Act of 1933, as amended.
[SIGNATURE
OF HOLDER]
Name
of
Investing Entity:
________________________________________________________________________
Signature
of Authorized Signatory of Investing Entity:
_________________________________________________
Name
of
Authorized Signatory:
___________________________________________________________________
Title
of
Authorized Signatory:
____________________________________________________________________
Date:
________________________________________________________________________________________
ASSIGNMENT
FORM
(To
assign the foregoing warrant, execute
this
form
and supply required information.
Do
not
use this form to exercise the warrant.)
FOR
VALUE
RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby
assigned to
_______________________________________________
whose address is
_______________________________________________________________.
_______________________________________________________________
| Dated: ______________, _______ |
|
Holder’s
Signature:
|
|
|
|
|
||
|
|
Signature
Guaranteed: ___________________________________________
NOTE:
The
signature to this Assignment Form must correspond with the name as it appears
on
the face of the Warrant, without alteration or enlargement or any change
whatsoever, and must be guaranteed by a bank or trust company. Officers of
corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing
Warrant.