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EXHIBIT 10.3
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND MAY NOT BE
TRANSFERRED, SOLD OR OFFERED FOR SALE EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AS TO THIS WARRANT AND THE SHARES OF COMMON
STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT UNDER SAID ACT AND ANY
APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
VOID AFTER 5:00 P.M., NEW YORK TIME, ON JUNE 1, 2005, OR IF NOT A
BUSINESS DAY, AS DEFINED HEREIN, AT 5:00 P.M., NEW YORK TIME, ON THE
NEXT FOLLOWING BUSINESS DAY.
WARRANT TO PURCHASE
_________ SHARES OF COMMON STOCK
WARRANT TO PURCHASE COMMON STOCK
OF
ASCENT PEDIATRICS, INC.
--------------------------
This certifies that, for value received, ____________ or registered
assigns ("Warrantholder"), is entitled to purchase from Ascent Pediatrics, Inc.,
a Delaware corporation (the "Company"), subject to the terms set forth below, at
any time prior to the Expiration Date, after which time this Warrant shall
become void, _________ Warrant Shares at the Warrant Price. The Warrant Price
and the number of Warrant Shares purchasable hereunder are subject to adjustment
from time to time as provided herein.
This Warrant is one of a series of warrants (the "Warrants")
evidencing the right to purchase shares of Common Stock of the Company issued
pursuant to a certain Securities Purchase Agreement (the "Agreement"), dated as
of May 13, 1998, by and between the Company and the persons named therein, a
copy of which agreement is on file at the principal office of the Company, and
the holder of this Warrant shall be entitled to all of the benefits of and be
bound by all of the applicable obligations of the Agreement, as provided
therein.
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ARTICLE I
DEFINED TERMS
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Section 1.1. DEFINITION OF TERMS. As used in this Warrant, the
following capitalized terms shall have the following respective meanings:
(a) "Business Day" shall mean a day other than a Saturday, Sunday or
other day on which banks in the State of New York are authorized by law to
remain closed.
(b) "Convertible Notes" shall mean the 8% Convertible Subordinated
Notes issuable upon exchange of the Preferred Stock.
(c) "Common Stock" shall mean the Common Stock, $.00004 par value per
share, of the Company.
(d) "Closing Price" shall mean, with respect to any day, the last
reported sales price of the Common Stock, regular way, or in case no sale takes
place on such day, the average of the reported closing bid and asked prices of
the Common Stock, regular way, in either case as reported on the principal
national securities exchange on which the Common Stock is listed or admitted to
trading or, if the Common Stock is not listed or admitted to trading on any
national securities exchange, but is traded in the over-the-counter market, the
closing sale price of the Common Stock or in case no sale is publicly reported,
the average of the representative closing bid and asked quotations for the
Common Stock on the Nasdaq National Market, or, if bid and asked prices for such
day shall not have been reported on The Nasdaq Stock Market, the average of the
bid and asked prices for the Common Stock as furnished by any New York Stock
Exchange, Inc. member firm regularly making a market in the Common Stock and
selected for such purpose by the Board of Directors of the Company.
(e) "Expiration Date" shall mean the earlier of (a) June 1, 2005, or
if such day is not a Business Day, the next succeeding day which is a Business
Day(1).
(f) "Fair Market Value" with respect to the date of any exercise by
the Warrantholder of all or a portion of this Warrant, shall mean the average
daily Closing Price of the Common Stock for thirty (30) consecutive trading days
commencing forty-five (45) days before the date of such exercise by the
Warrantholder of all or a portion of this Warrant, PROVIDED, HOWEVER, that where
no public market exists for the Common Stock at the time of the exercise of all
or a portion of this Warrant, the fair market value per share of Common Stock
shall be determined by the Company's Board of Directors in good faith.
(g) "Person" shall mean any individual, corporation, association,
company, business trust, partnership, limited liability company, joint venture,
joint-stock company, trust,
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(1) Seven years from Closing Date
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unincorporated organization, association or any other entity or government or
any agency or political subdivision thereof.
(h) "Preferred Stock" shall mean the Series G Convertible Exchangeable
Preferred Stock of the Company, $.01 par value per share.
(i) "Purchase Agreement" shall mean that certain Securities Purchase
Agreement, dated as of May 13, 1998, among the Company and the persons named
therein.
(j) "Related Person" of any Person means any other Person directly or
indirectly owning (A) twenty percent (20%) or more of the outstanding common
stock of such Person (or, in the case of a Person that is not a corporation,
twenty percent (20%) or more of the equity interest in such Person) or (B)
twenty percent (20%) or more of the combined voting power of the voting capital
stock of such Person.
(k) "Securities Act" shall mean the Securities Act of 1933, as
amended.
(l) "Subordinated Notes" shall mean the Company's 8% Subordinated
Notes due 2005.
(m) "Warrant Price" shall mean four dollars and seventy five cents
($4.75) per Warrant Share, as such price may be adjusted from time to time
pursuant to Article III hereof.
(n) "Warrant Shares" shall mean the shares of Common Stock purchasable
upon exercise of this Warrant.
ARTICLE II
DURATION AND EXERCISE OF WARRANT
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Section 2.1. EXERCISE OF WARRANT. The Warrantholder may exercise this
Warrant, in whole or in part, by presentation and surrender of this Warrant at
the address of the Company set forth in Section 4.6 hereof or at such other
address as the Company may designate by notice in writing to the Warrantholder
with the Subscription Form annexed hereto duly executed, accompanied by payment
of the Warrant Price for each Warrant Share purchased. Upon receipt thereof, the
Company shall cause to be issued certificates for the Warrant Shares so
purchased in such denominations as are requested for delivery to the
Warrantholder. Such certificates shall be delivered as promptly as practicable
to the Warrantholder. Upon any partial exercise of this Warrant, the Company
shall execute and deliver a new Warrant of like tenor and date for the balance
of the Warrant Shares purchasable hereunder. Upon exercise, the Warrantholder
shall be deemed to be the holder of record of shares of Common Stock issuable
upon such exercise, notwithstanding that the stock transfer books of the Company
shall then be closed or that certificates representing such shares of Common
Stock shall not then be actually
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delivered to the Warrantholder. If at the time this Warrant is exercised, a
registration statement is not in effect to register under the Securities Act the
Warrant Shares issuable upon exercise of this Warrant, the Company may require
the Warrantholder to make such representations, and may place such legends on
certificates representing the Warrant Shares, as may be reasonably required to
permit the Warrant Shares to be issued without such registration. The Company
shall pay any and all stock transfer and similar taxes which may be payable in
respect of the issue of the Warrant or in respect of the issue of any of the
Warrant Shares, except the Company shall not pay such transfer taxes if the
Warrant Shares are issued to a Person other than the Warrantholder.
Section 2.2. RESERVATION OF SHARES. The Company hereby agrees that at
all times there shall be reserved for issuance and delivery upon exercise of
this Warrant such number of shares of Common Stock or other shares of capital
stock of the Company as may be from time to time issuable upon exercise of this
Warrant. All such shares shall be duly authorized, and when issued upon such
exercise, shall be validly issued, fully paid and nonassessable, free and clear
of all liens, security interests, charges and other encumbrances or
restrictions, other than those restrictions imposed by the Securities Act of
1933, and free and clear of all preemptive and similar rights.
Section 2.3. FRACTIONAL SHARES. The Company shall not be required to
issue any fraction of a share of its capital stock in connection with the
exercise of this Warrant, and in any case where the Warrantholder would, except
for the provisions of this Section 2.3, be entitled under the terms of this
Warrant to receive a fraction of a share upon the exercise of this Warrant, the
Company shall, upon the exercise of this Warrant and receipt of the Warrant
Price (as adjusted to cover the balance of the share), issue the largest number
of whole shares purchasable upon exercise of this Warrant, but in no event shall
the Company issue more than such number of shares of Common Stock as are
issuable pursuant to the exercise of this Warrant. The Company shall not be
required to make any cash or other adjustment in respect of such fraction of a
share to which the Warrantholder would otherwise be entitled.
Section 2.4. PAYMENT FOR WARRANT SHARES.
(a) Payment of the aggregate Warrant Price for Warrant Shares to be
purchased upon exercise of all or a portion of this Warrant shall be made in
full by delivery to the Company, at its address set forth in Section 4.6 hereof
or at such other address as the Company may designate by notice in writing to
the Warrantholder, of a certified or bank cashier's check or by wire transfer to
an account in the United States designated by the Company.
(b) Payment of the aggregate Warrant Price may also be made in full by
(i) delivery to the Company of shares of Preferred Stock beneficially owned by
the Warrantholder, plus accumulated dividends thereon, in an aggregate principal
amount equal to the aggregate Warrant Price, (ii) delivery to the Company of
Convertible Notes plus accrued interest thereon, in an aggregate principal
amount equal to the aggregate Warrant Price, (iii) delivery to the Company of
Subordinated Notes plus accrued interest thereon, in an aggregate principal
amount
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equal to the aggregate Warrant Price or (iv) a combination of cash (payable by
wire transfer or certified or bank check), shares of Preferred Stock,
Convertible Notes or Subordinated Notes beneficially owned by such Warrantholder
and such accumulated dividends or accrued interest, as the case may be, in an
aggregate principal amount equal to the aggregate Warrant Price. Any shares of
Preferred Stock or Subordinated Notes surrendered for exchange hereunder shall
be, if so required by the Company, accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company duly delivered by
the Warrantholder.
(c) Notwithstanding any provisions herein to the contrary, if the Fair
Market Value of one share of Common Stock is greater than the Warrant Price (at
the date of calculation as set forth below), in lieu of exercising this Warrant
for cash, the Warrantholder may elect to receive shares equal to the value (as
determined below) of this Warrant (or the portion thereof, which portion shall
be canceled) by surrender of this Warrant at the principal office of the Company
together with the properly endorsed Subscription Form annexed hereto and notice
of such election in which event the Company shall issue to the Warrantholder a
number of shares of Common Stock computed using the following formula:
Y(A-B)
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X = A
Where X = the number of shares of Common Stock to be issued to the
Warrantholder
Y = the number of shares of Common Stock purchasable under the
Warrant or, if only a portion of the Warrant is being
exercised, the portion of the Warrant being canceled (at
the date of such calculation)
A = the Fair Market Value of one share of the Common Stock (at
the date of such calculation)
B = Warrant Price (as adjusted to the date of such calculation)
ARTICLE III
ADJUSTMENT OF WARRANT PRICE OR WARRANT SHARES
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Section 3.1. ADJUSTMENT OF WARRANT PRICE.
(a) Except as hereinafter provided, in case the Company shall at any
time after the date hereof issue or sell any obligations or shares of Common
Stock, for a consideration per share less than the Warrant Price in effect
immediately prior to the issuance or sale of such shares, or without
consideration, then, and thereafter successively upon each issuance or sale, the
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Warrant Price in effect immediately prior to each such issuance or sale shall
forthwith be reduced to a price determined by dividing (i) an amount equal to
(X) the total number of shares of Common Stock outstanding immediately prior to
such issuance or sale multiplied by the Warrant Price in effect immediately
prior to such issuance or sale, plus (Y) the consideration, if any, received by
the Company upon such issuance or sale, by (ii) the total number of shares of
Common Stock outstanding immediately after such issuance or sale.
For the purposes of any computation to be made in accordance with
the provisions of this paragraph (a), the following shall be applicable:
(i) In case of the issuance or sale of shares of Common Stock for
a consideration part or all of which shall be cash, the amount of the cash
consideration therefor shall be deemed to be the amount of cash received by
the Company for such shares (or, if such shares of Common Stock are offered
by the Company for subscription, the subscription price, or, if shares of
Common Stock shall be sold to underwriters or dealers for public offering
without a subscription offering, the public offering price) before
deducting therefrom any commissions or other expenses paid or incurred by
the Company for any underwriting of, or otherwise in connection with the
issuance of such shares;
(ii) In case of the issuance or sale of shares of Common Stock
for a consideration part or all of which shall be other than cash
(otherwise than as a dividend or other distribution on any shares of Common
Stock of the Company or on conversion, exercise or exchange of other
securities of the Company or upon acquisition of the assets or securities
of another company or upon merger or consolidation with another entity),
the amount of consideration therefor other than cash shall be the value of
such consideration as of the date of the issuance or sale of the shares of
Common Stock, irrespective of accounting treatment, but as determined by
the Board of Directors of the Company in good faith. The reclassification
of securities other than Common Stock into Common Stock shall be deemed to
involve the issuance for a consideration other than cash of such Common
Stock immediately prior to the close of business on the date fixed for the
determination of security holders entitled to receive such Common Stock;
(iii) In case of the issuance of shares of Common Stock upon
conversion or exchange of any obligations or of any securities of the
Company that shall be convertible into or exchangeable for shares of Common
Stock or upon the exercise of rights or options to subscribe for or to
purchase shares of Common Stock (other than upon exercise of this Warrant),
the amount of consideration received by the Company for such shares of
Common Stock shall be deemed to be the sum of (A) the amount of the
consideration received by the Company upon the original issuance of such
obligations, shares, rights or options, as the case may be, plus (B) the
consideration, if any, other than such obligations, shares, rights or
options, received by the Company upon such conversion, exchange, or
exercise except in adjustment of interest and dividends. The amount of the
consideration received by the Company upon the original issuance of the
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obligations, shares, rights or options so converted, exchanged or exercised
and the amount of the consideration, if any, other than such obligations,
shares, rights or options, received by the Company upon such conversion,
exchange or exercise shall be determined in the same manner provided in
subparagraphs (i) and (ii) above with respect to the consideration received
by the Company in case of the issuance of shares of Common Stock; if such
obligations, shares, rights or options shall have been issued as a dividend
upon any securities of the Company, the amount of the consideration
received by the Company upon the original issuance thereof shall be deemed
to be zero. In case of the issuance of Warrant Shares upon exercise of this
Warrant, the Company shall be deemed to have received the Warrant Price
then in effect as the consideration for each share of Common Stock so
issued;
(iv) Shares of Common Stock issuable by way of dividend or other
distribution on any securities of the Company shall be deemed to have been
issued and to be outstanding at the close of business on the record date
fixed for the determination of security holders entitled to receive such
dividend or other distribution and shall be deemed to have been issued
without consideration. Shares of Common Stock issued otherwise than as a
dividend, shall be deemed to have been issued and to be outstanding at the
close of business on the date of issue;
(v) The number of shares of Common Stock at any time outstanding
shall not include any shares then owned or held by or for the account of
the Company, but shall include the aggregate number of shares deliverable
in respect of options, rights and exercisable, convertible and exchangeable
securities at all times while such options, rights or securities remain
outstanding and unexercised, unconverted or unexchanged, as the case may
be; and
(vi) No adjustment shall be made to the Warrant Price in effect
upon conversion or exchange of (i) securities convertible or exercisable or
exchangeable for Common Stock or for other securities that are subsequently
exercisable for Common Stock that are outstanding as of the date of the
Agreement, or (ii) any obligations or any securities of the Company that
shall be convertible into or exercisable or exchangeable for shares of
Common Stock or upon the exercise of rights or options to subscribe for or
to purchase shares of Common Stock for which an adjustment in the Warrant
Price has previously been made in accordance with paragraph (b) of this
Section 3.1.
(vii) In the event that any payment is made to the holders of
warrants issued pursuant to the Securities Purchase Agreement dated as of
January 31, 1997 among the Company, Triumph-Connecticut Limited Partnership
and the other purchasers named therein pursuant to Section 8.3(b) (or
successor provision) of such Securities Purchase Agreement which does not
result in a modification pursuant to Section 3.4, the Company shall be
deemed to have issued without consideration as of the date of the event
giving rise to such payment a number of shares of Common Stock equal to the
amount of such payment divided by the Closing Price on the date of such
event.
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(b) In case the Company shall at any time after the date hereof issue
options or rights to subscribe for shares of Common Stock, or issue any
obligations or securities convertible into or exchangeable for shares of Common
Stock, otherwise than as contemplated by Section 3.1(a)(vi) or pursuant to
Section 3.3 hereof, for a consideration per share less than the Warrant Price in
effect immediately prior to the issuance of such options or rights or
convertible or exchangeable securities, or without consideration, the Warrant
Price in effect immediately prior to the issuance of such options or rights or
securities shall be reduced to a price determined by making a computation in
accordance with the provisions of paragraph (a) of this Section 3.1, provided
that:
(i) the aggregate maximum number of shares of Common Stock
deliverable under such options or rights shall be considered to have been
delivered at the time such options or rights were issued, and for a
consideration equal to the minimum purchase price per share of Common Stock
provided for in such options or rights, plus the consideration (determined
in the same manner as consideration received on the issue or sale of Common
Stock), if any, received by the Company for such options or rights;
(ii) the aggregate maximum number of shares of Common Stock
deliverable upon conversion of or exchange for any such obligations or
securities shall be considered to have been delivered at the time of
issuance of such securities, and for a consideration equal to the
consideration (determined in the same manner as consideration received on
the issue or sale of Common Stock) received by the Company for such
securities, plus the consideration, if any, to be received by the Company
upon the exchange or conversion thereof; and
(iii) on the expiration of such options or rights, or an increase
in the minimum exercise price thereof, or a decrease in the maximum number
of shares of Common Stock deliverable upon exercise or conversion of such
options, rights or convertible or exchangeable securities pursuant to the
terms thereof (and not as a result of exercise or conversion), or the
termination of such right to convert or exchange, the Warrant Price in
effect shall forthwith be readjusted to such Warrant Price as would have
obtained (A) in the case of the expiration or termination of options or
rights or the termination of the right to convert or exchange convertible
or exchangeable securities, had no adjustments been made upon the issuance
of such options, rights or convertible or exchangeable securities, or (B)
in the case of an increase in the minimum exercise price thereof, or a
decrease in the maximum number of shares deliverable thereunder, had the
adjustments made upon the issuance of such options, rights or convertible
or exchangeable securities been made upon the basis of the delivery of only
the number of shares of Common Stock (A) actually deliverable upon the
exercise of such options or rights or upon conversion or exchange of such
securities, or (B) deliverable by reason of such increase in price or
decrease in number of shares.
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(c) No adjustment to the Warrant Price shall be made in connection
with the issuance of:
(i) the Series G Preferred Stock, the Convertible Notes, the
Warrants and the New Warrants, as such term is defined in the Purchase
Agreement (together, the "Convertible Securities"), and the securities
issued or issuable upon conversion or exercise of the Convertible
Securities, or other currently outstanding securities that are convertible,
exercisable or exchangeable for shares of Common Stock; and
(ii) shares of Common Stock or rights, options or warrants to
acquire Common Stock issued to directors, employees or consultants of the
Company pursuant to a stock option plan or agreement (and, in the case of
rights, options, or warrants, the Common Stock issued or issuable upon
exercise thereof) and approved by the Board of Directors.
(d) In case the Company shall at any time after the date hereof
subdivide or combine the outstanding shares of Common Stock, the Warrant Price
in effect shall forthwith be proportionately decreased in the case of the
subdivision or proportionately increased in the case of combination to the
nearest one cent. Any such adjustment shall become effective at the close of
business on the date that such subdivision or combination shall become
effective.
Section 3.2. ADJUSTMENT OF WARRANT SHARES. In the event of an
adjustment of the Warrant Price, the number of shares of Common Stock (or
reclassified or recapitalized stock) issuable upon exercise of this Warrant
after such adjustment shall be equal to the number determined by multiplying the
number of shares of Common Stock issuable upon exercise of this Warrant
immediately prior to such adjustment by a fraction, of which the numerator is
the Warrant Price in effect immediately prior to such adjustments, and the
denominator is the Warrant Price in effect immediately after such adjustment.
Section 3.3. DIVIDENDS AND DISTRIBUTIONS. In the event that the
Company shall at any time after the date hereof pay any dividend (other than in
shares of Common Stock) on, or make any distribution of its assets upon or with
respect to, the Common Stock, or in the event that the Company shall offer
options or rights to subscribe for shares of Common Stock, or issue any
securities convertible into or exchangeable for shares of Common Stock, to all
of its holders of Common Stock, then on the record date for such payment,
distribution or offer or, in the absence of a record date, on the date of such
payment, distribution or offer, the Warrantholder shall receive what the
Warrantholder would have received had it exercised this Warrant in full
immediately prior to the record date of such payment, distribution or offer or,
in the absence of a record date, immediately prior to the date of such payment,
distribution or offer.
Section 3.4. MERGERS, CONSOLIDATIONS, RECLASSIFICATIONS. In the case
of any reorganization or reclassification of the outstanding shares of Common
Stock (other than a change in par value, or from par value to no par value, or
from no par value to par value, or as a result of a subdivision or combination)
or in the case of any consolidation of the Company into,
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or merger of the Company with another corporation in which it is not the
surviving entity (or it is the surviving entity, but its shares of Common Stock
become shares of another corporation), or in the case of any sale, lease or
conveyance of all, or substantially all, of the property, assets, business and
goodwill of the Company as an entirety, the Warrantholder shall thereafter have
the right upon exercise of this Warrant to receive the kind and amount of shares
of stock and other securities, cash and property receivable upon such
reorganization, reclassification, consolidation, merger or disposition by a
holder of the number of shares of Common Stock which the Warrantholder would
have received had it exercised this Warrant immediately prior to such
reorganization, reclassification, consolidation, merger or disposition, at a
price equal to the aggregate Warrant Price then in effect for exercising this
Warrant in full (the kind, amount and price of such stock and other securities
to be subject to adjustment as herein provided); provided, however, that the
kind and amount of such shares of stock and other securities, cash and other
property shall be determined as if any payment made to the holders of warrants
issued pursuant to the Securities Purchase Agreement dated as of January 31,
1997 among the Company, Triumph-Connecticut Limited Partnership and the other
purchasers named therein upon such reorganization, reclassification,
consolidation, merger or disposition in excess of the amount such holders would
otherwise have been entitled to receive under the terms of such warrants without
regard to Section 8.3(b) (or successor provision) of such Securities Purchase
Agreement had not been made. The foregoing provisions of this Section 3.4 shall
similarly apply to successive reorganizations, reclassifications,
consolidations, mergers and dispositions.
Section 3.5. NOTICE OF ADJUSTMENT. Whenever the Warrant Price or the
number of Warrant Shares shall be adjusted pursuant to the provisions of Article
III, the Company shall prepare and deliver forthwith to the Warrantholder a
certificate signed by the President of the Company and by its Chief Financial
Officer, setting forth the adjusted number of Warrant Shares purchasable upon
the exercise of this Warrant and the Warrant Price calculated to the nearest
cent and setting forth in reasonable detail the method of calculation and the
facts requiring such adjustment and upon which such calculation is based.
Section 3.6. NOTICE OF CERTAIN CORPORATE ACTION. In case at any time:
(A) the Company shall declare any dividend (or any other
distributions) on shares of Common Stock; or
(B) the Company shall authorize the granting to all holders
of its Common Stock of rights to subscribe for or
purchase any shares of stock of any class or of any
other rights; or
(C) there shall be any reclassification of the capital
stock of the Company; or
(D) there shall be any capital reorganization by the
Company; or
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(E) there shall be any (i) consolidation or merger
involving the Company or (ii) sale, transfer or other
disposition of all or substantially all of the
Company's property, assets or business (except a merger
or other reorganization in which the Company shall be
the surviving corporation and its shares of capital
stock shall continue to be outstanding and unchanged
and except a consolidation, merger, sale, transfer or
other disposition involving a wholly-owned subsidiary);
or
(F) there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Company or any partial
liquidation of the Company or distribution to holders
of Common Stock;
then, in each of such cases, the Company shall give written notice to the
Warrantholder of the date on which (i) the books of the Company shall close or a
record date shall be fixed for such dividend, distribution or subscription
rights or (ii) such reorganization, reclassification, consolidation, merger,
disposition, dissolution, liquidation or winding-up, as the case may be, shall
take place. Such notice also shall specify the date as of which the holders of
Common Stock of record shall participate in such dividend, distribution or
subscription rights, or shall be entitled to exchange their certificates for
Common Stock for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, disposition,
dissolution, liquidation or winding-up, as the case may be. Such notice shall be
given at least twenty (20) days prior to the action in question and not less
than twenty (20) days prior to the record date or the date on which the
Company's transfer books are closed in respect thereto.
Section 3.7. FORM OF WARRANT AFTER ADJUSTMENTS. The form of this
Warrant need not be changed because of any adjustments in the Warrant Price or
the number or kind of the Warrant Shares.
ARTICLE IV
MISCELLANEOUS
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Section 4.1. SUCCESSORS AND ASSIGNS; TRANSFERS.
(a) The terms of this Warrant shall be binding upon, inure to the
benefit of and be enforceable by and against any successors or assigns of the
Company and of the Warrantholder; PROVIDED, HOWEVER, that the Company may not
assign its rights or obligations hereunder.
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(b) Subject to the provisions of paragraph (f) below and Section 17.3
of the Agreement, this Warrant and all rights hereunder are transferable by the
Warrantholder, in whole or in party, upon surrender of this Warrant with a
properly executed assignment at the principal office of the Company.
(c) Any transferee to whom rights hereunder are transferred shall, as
a condition to such transfer, deliver to the Company a written instrument by
which such transferee agrees to be bound by the obligations imposed upon the
Warrantholder under this Warrant to the same extent as if such transferee was
the Warrantholder.
(d) The Company will maintain a register containing the names and
addresses of the Warrantholders of the Warrants. Any Warrantholder may change
its or his address as shown on the warrant register by written notice to the
Company requesting such change.
(e) Until any transfer of this Warrant is made in the warrant
register, the Company may treat the Warrantholder as the absolute owner hereof
for all purposes; provided, however, that if and when this Warrant is properly
assigned in blank, the Company may (but shall not be obligated to) treat the
bearer hereof as the absolute owner hereof for all purposes, notwithstanding any
notice to the contrary.
(f) This Warrant and the Warrant Shares shall not be sold or
transferred unless either (i) they first shall have been registered under the
Securities Act or (ii) the Company first shall have been furnished with an
opinion of legal counsel, reasonably satisfactory to the Company, to the effect
that such sale or transfer is exempt from the registration requirements of the
Securities Act.
(g) Each certificate representing Warrant Shares shall bear a legend
substantially in the following form:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and may
not be offered, sold or otherwise transferred, pledged or
hypothecated unless and until such securities are registered
under such Act or an opinion of counsel reasonably satisfactory
to the Company is obtained to the effect that such registration
is not required."
The foregoing legend shall be removed from the certificates
representing any Warrant Shares, at the request of the holder thereof, at such
time as they become eligible for resale pursuant to Rule 144(k) under the
Securities Act.
Section 4.2. RIGHTS AS STOCKHOLDER. Except as provided herein, the
Warrantholder, as such, shall not be entitled to vote or be deemed to be a
stockholder of the Company for any purpose, nor shall anything contained in this
Warrant be construed to confer
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upon the Warrantholder, as such, any rights of a stockholder of the Company or
any right to vote, give or withhold consent to any corporate action or receive
notice of meetings.
Section 4.3. ACCEPTANCE BY WARRANTHOLDER. Receipt of this Warrant by
the Warrantholder shall constitute acceptance of an agreement to the foregoing
terms and conditions.
Section 4.4. GOVERNING LAW. This Warrant and the rights of the parties
hereunder shall be governed in all respects by the laws of the State of New
York, without giving effect to the provisions thereof relating to conflicts of
law.
Section 4.5. SEVERABILITY. In case any provision of this Warrant shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
Section 4.6. NOTICES. Any notices or certificates by the Company to
the Warrantholder and by the Warrantholder to the Company shall be deemed
delivered if in writing and delivered in person or by registered mail (return
receipt requested) to the Warrantholder, at its address in the registry of
Warrantholders maintained by the Company, and if to the Company, at ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Principal
Financial Officer. The Company may change its address by written notice to the
Warrantholder.
Section 4.7. AMENDMENT. This Warrant may be amended or modified (or
any provision hereof waived) only if Warrantholders holding at least eighty
percent (80%) of the Warrant Shares (assuming exercise of all the Warrants)
shall approve such amendment, modification or waiver in writing; PROVIDED,
HOWEVER, that no amendment that adversely affects the rights of any
Warrantholder in a manner different from the rights of the other Warrantholders
shall be effective against such Warrantholder unless approved in writing by such
Warrantholder. After an amendment, modification or waiver of a provision the
Warrants becomes effective, the Company shall mail to the Warrantholders a
notice briefly describing the amendment, modification or waiver.
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IN WITNESS WHEREOF, this Warrant has been duly executed by the
Company under its corporate seal as of the 1st day of June, 1998.
ASCENT PEDIATRICS, INC.
By:
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Name:
Title:
ATTEST:
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Secretary
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