PSIVIDA LIMITED WARRANT TO PURCHASE ADSs
PSIVIDA
LIMITED
Warrant
No.: [___]
Warrant
Exercisable for up to [________] ADSs:
Date
of
Issuance: July 5, 2007 (“Issuance
Date”)
PSIVIDA
LIMITED (the “Company”),
an
Australian company existing pursuant to the Australian Corporations Act 2001
(the “Corporations
Act”),
hereby
certifies that, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, [_________], the registered holder hereof
or
its permitted assigns (the “Holder”),
is
entitled, subject to the terms set forth below, to purchase from the Company,
at
the Exercise Price (as defined below) then in effect, upon surrender of this
Warrant to Purchase ADSs (as defined herein), at any time or times on or after
the Date of Issuance, but not after 5:00 p.m., New York Time, on the Expiration
Date (as defined below), up to [________] American
Depositary Shares (an “ADS”,
collectively the “ADSs”),
with
each ADS representing ten (10) ordinary shares of the Company (the “Ordinary
Shares”).
The
ADSs issuable upon the exercise of the Warrants are referred to herein as the
“Warrant
ADSs”
and,
together with the ADSs and the Warrants, are referred to herein as the
“Securities.”
Except
as
otherwise defined herein, capitalized terms in this Warrant shall have the
meanings set forth in Section
21.
This
Warrant is one of the Warrants to purchase Warrant ADSs (including any Warrants
to Purchase ADSs issued in exchange, transfer or replacement hereof, each a
“Warrant”,
and
collectively the “Warrants”)
issued
pursuant to that certain Subscription Agreement, dated June 29, 2007 by and
between the Company and the Holder, and as contemplated by that certain
Placement Agent Agreement, dated June 29, 2007 by and among the Company,
▇▇▇▇▇
and
Company, LLC (“Cowen”)
and
JMP Securities LLC (“JMP”,
and
together with Cowen, the “Placement
Agents”)
(the
“Placement
Agent Agreement”).
All
capitalized terms used and not otherwise defined herein shall have the
respective meanings given to them in the Placement Agent Agreement.
The
Holder shall not be required to deliver the original Warrant in order to effect
an exercise hereunder. Execution and delivery of the Exercise Notice with
respect to less than all of the Warrant ADSs shall have the same effect as
cancellation of the original Warrant and issuance of a new Warrant evidencing
the right to purchase the remaining number of Warrant ADSs. On or before the
second (2nd) Business Day following the date on which the Company has received
each of the Exercise Notice and the Aggregate Exercise Price (the “Exercise
Delivery Documents”),
the
Company shall transmit by facsimile an acknowledgment of confirmation of receipt
of the Exercise Delivery Documents to the Holder and the Company’s Depositary
(the “Depositary”).
Subject to Section
12(b)
herein,
on or before the fifth (5th) Business Day following the date on which the
Company has received all of the Exercise Delivery Documents (the “Share
Delivery Date”),
the
Company shall (X) provided that the Depositary is participating in The
Depository Trust Company (“DTC”)
Fast
Automated Securities Transfer Program, upon the request of the Holder, credit
such aggregate number of Warrant ADSs to which the Holder is entitled pursuant
to such exercise to the Holder’s or its designee’s balance account with DTC
through its Deposit/Withdrawal At Custodian system, or (Y) if the
Depositary is not participating in the DTC Fast Automated Securities Transfer
Program, issue and dispatch by overnight courier to the address as specified
in
the Exercise Notice, a certificate, registered in the Company’s share register
in the name of the Holder or its designee, for the number of Warrant ADSs to
which the Holder is entitled pursuant to such exercise. Upon delivery of the
Exercise Delivery Documents, the Holder shall be deemed for all corporate
purposes to have become the holder of record of the Ordinary Shares represented
by the ADSs with respect to which this Warrant has been exercised, irrespective
of the date of delivery of the certificates evidencing the ADSs. If this Warrant
is submitted in connection with any exercise pursuant to this Section
1(a)
and
the number of Warrant ADSs represented by this Warrant submitted for exercise
is
greater than the number of Warrant ADSs being acquired upon an exercise, then
the Company shall as soon as practicable and in no event later than three (3)
Business Days after any exercise and at its own expense, issue a new Warrant
(in
accordance with Section
5(d))
representing the right to purchase the number of Warrant ADSs purchasable
immediately prior to such exercise under this Warrant, less the number of
Warrant ADSs with respect to which this Warrant is exercised. No fractional
Warrant ADSs are to be issued upon the exercise of this Warrant. The number
of
Warrant ADSs to be issued shall be rounded down to the nearest whole number
and in lieu of any fractional Warrant ADSs to which the Holder would
otherwise be entitled, the Company shall make a cash payment to the Holder
equal
to the Closing Sale Price on the date of exercise multiplied by such fraction.
Upon exercise of this Warrant, the Company shall deposit the corresponding
number of Ordinary Shares underlying the ADSs and pay by wire transfer to the
Depositary’s account the ADS issuance fee of $0.04 per ADS to be issued,
together with all applicable taxes and expenses otherwise payable under the
terms of the Deposit Agreement for the deposit of Ordinary Shares and issuance
of ADSs (including, without limitation, confirmation that any Australian stock
transfer taxes in respect of such deposit (if any) have been paid by the
Company), and the Company shall otherwise comply with and cause any other
necessary party to comply with all the terms of the Deposit Agreement. The
Company shall pay any and all taxes (excluding any taxes on the income of the
Holder) which may be payable with respect to the issuance and delivery of
Warrant ADSs upon exercise of this Warrant. Appropriate and equitable adjustment
to the terms and provisions of this Warrant shall be made in the event of any
change to the ratio of Warrant ADSs to Ordinary Shares represented
thereby.
In
the
event that the Company’s Board of Directors should determine that the Company
shall transform itself (whether by re-incorporation in the United States or
otherwise) from a foreign private issuer (as defined under the Securities Act
of
1933, as amended) to a domestic U.S. issuer, then all references to ADRs or
ADSs
shall be deemed references to whatever shares are then issued by the
re-domiciled Company and all other provisions of this Agreement shall be
equitably adjusted by the parties hereto to the extent necessary or appropriate
to reflect such new country of incorporation.
2
(b) Exercise
Price.
For
purposes of this Warrant, “Exercise
Price”
means
US$[___] per ADS (which is equivalent to US$[0.__] per Ordinary Share), subject
to adjustment as provided herein.
(c) Company’s
Failure to Timely Deliver Securities.
If the
Company shall fail to issue and deliver the Ordinary Shares to the Depositary’s
custodian and instruct the Depositary to issue and deliver to the Holder the
number of Warrant ADSs to which the Holder is entitled upon the Holder’s
exercise of this Warrant for such number of Warrant ADSs to which the Holder
is
entitled upon the Holder’s exercise of this Warrant on or prior to the date
which is three (3) Business Days after receipt of the Exercise Delivery
Documents (an “Exercise
Failure”),
then
the Company shall pay damages in cash to the Holder for each date of such
Exercise Failure in an amount equal to an interest rate equal to 10% per annum
applied to the product of (X) the number of Warrant ADSs not issued to the
Holder on or prior to the Share Delivery Date and to which the Holder is
entitled and (Y) the Closing Sale Price of the Warrant ADSs on the Share
Delivery Date. In addition to the foregoing, if within three (3) Trading Days
after the Company’s receipt of the facsimile copy of an Exercise Notice the
Company shall fail to issue and deliver the Ordinary Shares to the Depositary’s
custodian and to instruct the Depositary to issue and deliver to the Holder
the
number of Warrant ADSs to which the Holder is entitled upon the Holder’s
exercise hereunder of this Warrant for such number of Warrant ADSs to which
the
Holder is entitled upon the Holder’s exercise of this Warrant, and if on or
after such Trading Day the Holder purchases (in an open market transaction
or
otherwise) ADSs to deliver in satisfaction of a sale by the Holder of ADSs
issuable upon such exercise that the Holder anticipated receiving from the
Company (a “Buy-In”),
then
the Company shall, within three (3) Business Days after the Holder’s request and
in the Holder’s discretion, either (i) pay cash to the Holder in an amount
equal to the Holder’s total purchase price (including brokerage commissions, if
any) for the ADSs so purchased (the “Buy-In
Price”),
at
which point the Company’s obligation to issue Ordinary Shares and cause such
ADSs to be delivered shall be deemed to have been satisfied and shall terminate,
or (ii) promptly honor its obligation to deliver to the Holder a
certificate or certificates representing such ADSs and pay cash to the Holder
in
an amount equal to the excess (if any) of the Buy-In Price over the product
of
(A) such number of ADSs, times (B) the Closing Bid Price on the date
of exercise.
(d) Disputes.
In the
case of a dispute as to the determination of the Exercise Price or the
arithmetic calculation of the Warrant ADSs, the Company shall issue to the
Depositary’s custodian the number of Ordinary Shares underlying the Warrant ADSs
and shall instruct the Depositary to issue to the account of the Holder the
number of Warrant ADSs that are not disputed and resolve such dispute in
accordance with Section
12.
3
(e) Limitations
on Exercises.
(i) Beneficial
Ownership.
The
Company shall not effect the exercise of this Warrant, and the Holder shall
not
have the right to exercise this Warrant, to the extent that after giving effect
to such exercise, the Holder (together with affiliates) would beneficially
own
(directly or indirectly through Warrant ADSs or otherwise) in excess of 4.99%
(the “Maximum
Percentage”)
of the
Ordinary Shares outstanding immediately after giving effect to such exercise.
For purposes of the foregoing sentence, the number of Ordinary Shares
beneficially owned (directly or indirectly through Warrant ADSs or otherwise)
by
the Holder and its affiliates shall include the number of Ordinary Shares
underlying the Warrant ADSs issuable upon exercise of this Warrant with respect
to which the determination of such sentence is being made, but shall exclude
the
number of Ordinary Shares underlying Warrant ADSs which would be issuable upon
(i) exercise of the remaining, unexercised portion of this Warrant
beneficially owned by the Holder and its affiliates and (ii) exercise or
conversion of the unexercised or unconverted portion of any other securities
of
the Company beneficially owned by such Person and its affiliates (including,
without limitation, any convertible notes or convertible preferred stock or
warrants) subject to a limitation on conversion or exercise analogous to the
limitation contained herein. Except as set forth in the preceding sentence,
for
purposes of this section, beneficial ownership shall be calculated in accordance
with Section 13(d) of the Securities Exchange Act of 1934, as amended. For
purposes of this Warrant, in determining the number of outstanding Ordinary
Shares, the Holder may rely on the number of outstanding Ordinary Shares as
reflected in (1) the Company’s most recent Form 20-F, Form 6-K or other
public filing with the Securities and Exchange Commission, as the case may
be,
(2) a more recent public announcement by the Company or (3) any other
notice by the Company or the Depositary setting forth the number of Ordinary
Shares outstanding. For any reason at any time, upon the written or oral request
of the Holder, the Company shall within two (2) Business Days confirm orally
and
in writing to the Holder the number of Ordinary Shares then outstanding. In
any
case, the number of outstanding Ordinary Shares shall be determined after giving
effect to the conversion or exercise of securities of the Company, including
the
Warrants, by the Holder and its affiliates since the date as of which such
number of outstanding Ordinary Shares was reported. By written notice to the
Company, the Holder may increase or decrease the Maximum Percentage to any
other
percentage not in excess of 9.99% specified in such notice; provided that
(i) any such increase will not be effective until the sixty-first (61st)
day after such notice is delivered to the Company, and (ii) any such
increase or decrease will apply only to the Holder and not to any other holder
of Warrants.
(f) If
at any
time following the date hereof, the Registration Statement (or any subsequent
registration statement registering the Warrant ADSs) is not effective or is
not
otherwise available for the sale or resale of the Warrant ADSs, the Company
shall immediately notify the holders of the Warrants in writing that such
registration statement is not then effective and thereafter shall promptly
notify such holders when the registration statement is effective again and
available for the sale or resale of the Warrant ADSs. The Company shall use
commercially reasonable efforts to keep a registration statement (including
the
Registration Statement) registering the issuance or resale of the Warrant ADSs
effective during the term of the Warrants.
4
(a) If
the Company issues or gives the holders of Ordinary Shares in the Company the
right, pro rata with existing holdings of Ordinary Shares, to subscribe for
additional securities (“Pro
Rata Issue”),
the
Exercise Price in respect of one underlying Ordinary Share shall be reduced
in
accordance with the following formula:
O’
=
O -
E[P-(S+D)]/[N+1]
Where:
|
|
O’
|
=
|
the
new Exercise Price in respect of an underlying Ordinary
Share.
|
|
|
|
|
|
|
|
O
|
=
|
the
original Exercise Price in respect of an underlying Ordinary
Share.
|
|
|
|
|
|
|
|
E
|
=
|
the
number of underlying Ordinary Shares to be issued on exercise of
each
Warrant.
|
|
|
|
|
|
|
|
P
|
=
|
the
average market price per Ordinary Share on the ASX (as adjusted to
US$, if
necessary) (weighted by reference to volume) of the Ordinary Shares
during
the 5 trading days ending before the ex rights date or ex entitlements
date.
|
|
|
|
|
|
|
|
S
|
=
|
the
subscription price for an Ordinary Share under the Pro Rata
Issue.
|
|
|
|
|
|
|
|
D
|
=
|
the
dividend due but not paid on the existing Ordinary Shares (excluding
those
to be issued under the Pro Rata Issue).
|
|
|
|
|
|
|
|
N
|
=
|
the
number of Ordinary Shares which must be held to receive one new Share
in
the Pro Rata Issue.
|
(b) Adjustment
upon pro rata bonus issue of Ordinary Shares.
If the
Company makes a pro rata bonus issue of Ordinary Shares to its shareholders
prior to the Warrant being exercised, and the Warrant is not exercised prior
to
the record date for the issue, the Warrant will, when exercised, entitle the
Holder to the number of Warrant ADSs that would ordinarily be received under
Section
1,
plus
the number of bonus Ordinary Shares which would have been issued to the Holder
if the Warrant had been exercised prior to the record date.
(c) Adjustment
upon Subdivision or Combination of Ordinary Shares.
If the
Company at any time on or after the Issuance Date subdivides (by any stock
split, stock dividend, recapitalization or otherwise) one or more classes of
its
outstanding Ordinary Shares underlying such Warrant ADSs into a greater number
of Ordinary Shares, then Exercise Price in effect immediately prior to such
subdivision will be proportionately reduced and the number of Ordinary Shares
underlying such Warrant ADSs will be proportionately increased. If the Company
at any time on or after the Issuance Date combines (by combination, reverse
stock split or otherwise) one or more classes of its outstanding Ordinary Shares
underlying such Warrant ADSs into a smaller number of Ordinary Shares, then
Exercise Price in effect immediately prior to such combination will be
proportionately increased and the number of Ordinary Shares underlying such
Warrant ADSs will be proportionately decreased. Any adjustment under this
Section
2(c)
shall be
subject to (and will be correspondingly reorganized in a manner which is
permissible under, or necessary to comply with) the Listing Rules of the
Australian Securities Exchange (the “ASX
Listing Rules”)
or the
rules of any Recognized Exchange in force at the relevant time and shall become
effective at the close of business on the date the subdivision or combination
becomes effective.
5
(d) Other
Events.
If any
event occurs of the type contemplated by the provisions of this Section
2
but not
expressly provided for by such provisions (including, without limitation, the
granting of stock appreciation rights, phantom stock rights or other rights
with
equity features), then the Company’s Board of Directors will make an appropriate
adjustment in the Exercise Price and the number of Warrant ADSs so as to protect
the rights of the Holder; provided that such adjustment is made in accordance
with the ASX Listing Rules. No such adjustment pursuant to this Section
2(d)
will
increase the Exercise Price or decrease the number of Warrant ADSs as otherwise
determined pursuant to this Section
2,
unless
in accordance with any ASX Listing Rule.
(e) Other
Capital Reorganizations.
Notwithstanding any other provision contained in this Warrant, the rights of
a
Holder will be changed to the extent necessary to comply with the listing rules
applying to a reorganization of capital at the time of reorganization. Subject
to the above, if there is a reorganization of the capital of the Company, the
number of Warrant ADSs applicable to the Warrant and/or Exercise Price of the
Warrant will be reorganized as follows: (i) if the Company returns capital
on its Ordinary Shares, the number of Warrant ADSs applicable to the Warrant
will remain the same, and the Exercise Price of each Warrant will be reduced
by
the same amount as the amount returned in relation to each Ordinary Share;
(ii) if the Company returns capital on its Ordinary Shares by a
cancellation of capital that is lost or not represented by available assets,
the
number of Warrant ADSs applicable to the Warrant and the Exercise Price is
unaltered; (iii) if the Company reduces its issued Ordinary Shares on a pro
rata basis, the number of Warrant ADSs applicable to the Warrant will be reduced
in the same ratio as the Ordinary Shares and the Exercise Price will be amended
in inverse proportion to that ratio; and (iv) if the Company reorganizes
its issued Ordinary Shares in any way not otherwise contemplated by the
preceding paragraphs, the number of Warrant ADSs applicable to the Warrant
or
the Exercise Price or both will be reorganized so that the Warrant Holder will
not receive a benefit that holders of Ordinary Shares do not receive. The
Company shall give notice to Warrant Holders of any adjustments to the number
of
Warrant ADSs applicable to the Warrant or the number of Ordinary Shares which
are to be issued on exercise of a Warrant or to the Exercise Price. Before
a
Warrant is exercised, all adjustment calculations are to be carried out
including all fractions (in relation to each of the number of Warrant ADSs
applicable to the Warrant, the number of Ordinary Shares and the Exercise
Price), but on exercise the number of Warrant ADSs or Ordinary Shares issued
is
rounded down to the next lower whole number and the Exercise Price rounded
up to
the next higher cent.
6
3. FUNDAMENTAL
TRANSACTIONS.
The
Company shall not enter into or be party to a Fundamental Transaction unless,
and shall use its best efforts to procure that, (i) the Successor Entity
(if other than the Company) assumes in writing all of the obligations of the
Company under this Warrant and the other Transaction Documents in accordance
with the provisions of this Section
3
pursuant
to written agreements in form and substance reasonably satisfactory to the
Required Holders and approved by the Required Holders prior to such Fundamental
Transaction, including agreements to deliver to each holder of Warrants in
exchange for such Warrants a security of such Successor Entity evidenced by
a
written instrument substantially similar in form and substance to this Warrant,
including, without limitation, an adjusted exercise price equal to the value
for
the Ordinary Shares reflected by the terms of such Fundamental Transaction,
and
exercisable for a corresponding number of shares of capital stock equivalent
to
the Ordinary Shares underlying the Warrant ADSs acquirable and receivable upon
exercise of this Warrant (without regard to any limitations on the exercise
of
this Warrant) prior to such Fundamental Transaction, and reasonably satisfactory
to the Required Holders and (ii) such Successor Entity is a publicly traded
corporation whose common shares (or whose American Depositary Shares) are quoted
on or listed for trading on an Eligible Market. Upon the occurrence of any
Fundamental Transaction, such Successor Entity shall succeed to, and be
substituted for (so that from and after the date of such Fundamental
Transaction, the provisions of this Warrant referring to the “Company” shall
refer instead to such Successor Entity), and may exercise every right and power
of the Company and shall assume all of the obligations of the Company under
this
Warrant with the same effect as if such Successor Entity had been named as
the
Company herein. Upon consummation of the Fundamental Transaction, such Successor
Entity shall deliver to the Holder confirmation that there shall be issued
upon
exercise of this Warrant at any time after the consummation of the Fundamental
Transaction, in lieu of the Warrant ADSs (or other securities, cash, assets
or
other property) purchasable upon the exercise of the Warrant prior to such
Fundamental Transaction, such shares of the publicly traded common stock (or
their equivalent) of the Successor Entity (including its Parent Entity), as
adjusted in accordance with the provisions of this Warrant. In addition to
and
not in substitution for any other rights hereunder, prior to the consummation
of
any Fundamental Transaction pursuant to which holders of Ordinary Shares
(directly or indirectly through Warrant ADSs or otherwise) are entitled to
receive securities or other assets with respect to or in exchange for Ordinary
Shares (a “Corporate
Event”),
the
Company shall make appropriate provision, to the extent not prohibited by
applicable law, to insure that the Holder will thereafter have the right to
receive upon an exercise of this Warrant at any time after the consummation
of
the Fundamental Transaction but prior to the Expiration Date, in lieu of the
Warrant ADSs purchasable upon the exercise of the Warrant prior to such
Fundamental Transaction, such, securities or other, assets which the Holder
would have been entitled to receive upon the happening of such Fundamental
Transaction had the Warrant been exercised immediately prior to such Fundamental
Transaction. The provisions of this Section shall apply similarly and equally
to
successive Fundamental Transactions and Corporate Events and shall be applied
without regard to any limitations on the exercise of this Warrant.
Notwithstanding
anything to the contrary, in the event of a Fundamental Transaction that is
(1)
an all cash transaction, (2) a "Rule 13e-3 transaction" as defined in Rule
13e-3
under the Securities Exchange Act of 1934, as amended, or (3) a Fundamental
Transaction involving a person or entity not traded on a national securities
exchange, the Nasdaq Global Select Market, the Nasdaq Global Market, or the
Nasdaq Capital Market, the Company or any successor entity shall pay at the
Holder's option, exercisable at any time concurrently with or within thirty
(30)
days after the consummation of the Fundamental Transaction, an amount of cash
equal to the value of this Warrant as determined in accordance with the Black
Scholes Option Pricing Model obtained from the "OV" function on Bloomberg L.P.
using (i) a price per ADS equal to the VWAP of the ADS for the Trading Day
immediately preceding the date of consummation of the applicable Fundamental
Transaction, (ii) a risk-free interest rate corresponding to the U.S. Treasury
rate for a period equal to the remaining term of this Warrant as of the date
of
consummation of the applicable Fundamental Transaction and (iii) an expected
volatility equal to the 100 day volatility obtained from the "HVT" function
on
Bloomberg L.P. determined as of the Trading Day immediately following the public
announcement of the applicable Fundamental Transaction.
7
4. WARRANT
HOLDER NOT DEEMED A STOCKHOLDER.
Except
as otherwise specifically provided herein, the Holder, solely in such Person’s
capacity as a holder of this Warrant, shall not be entitled to vote or receive
dividends or be deemed the holder of share capital of the Company for any
purpose, nor shall anything contained in this Warrant be construed to confer
upon the Holder, solely in such Person’s capacity as the Holder of this Warrant,
any of the rights of a shareholder of the Company or any right to vote, give
or
withhold consent to any corporate action (whether any reorganization, issue
of
stock, reclassification of stock, consolidation, merger, conveyance or
otherwise), receive notice of meetings, receive dividends or subscription
rights, or otherwise, prior to the issuance to the Holder of the Warrant ADSs
which such Person is then entitled to receive upon the due exercise of this
Warrant. In addition, nothing contained in this Warrant shall be construed
as
imposing any liabilities on the Holder to purchase any securities (upon exercise
of this Warrant or otherwise) or as a shareholder of the Company, whether such
liabilities are asserted by the Company or by creditors of the Company.
Notwithstanding this Section
4,
the
Company shall provide the Holder with copies of the same notices and other
information given to the shareholders of the Company generally,
contemporaneously with the giving thereof to the shareholders.
5. REISSUANCE
OF WARRANTS.
(a) Transfer
of Warrant.
If this
Warrant is to be transferred, the Holder shall surrender this Warrant to the
Company, whereupon the Company will forthwith issue and deliver upon the order
of the Holder a new Warrant (in accordance with Section
5(d)),
registered as the Holder may request, representing the right to purchase the
number of Warrant ADSs being transferred by the Holder and, if less then the
total number of Warrant ADSs then underlying this Warrant is being transferred,
a new Warrant (in accordance with Section
5(d))
to the
Holder representing the right to purchase the number of Warrant ADSs not being
transferred.
(b) Lost,
Stolen or Mutilated Warrant.
Upon
receipt by the Company of evidence reasonably satisfactory to the Company of
the
loss, theft, destruction or mutilation of this Warrant, and, in the case of
loss, theft or destruction, of any indemnification undertaking by the Holder
to
the Company in customary form and, in the case of mutilation, upon surrender
and
cancellation of this Warrant, the Company shall execute and deliver to the
Holder a new Warrant (in accordance with Section
5(d))
representing the right to purchase the Warrant ADSs then underlying this
Warrant.
(c) Exchangeable
for Multiple Warrants.
This
Warrant is exchangeable, upon the surrender hereof by the Holder at the
principal office of the Company, for a new Warrant or Warrants (in accordance
with Section
5(d))
representing in the aggregate the right to purchase the number of Warrant ADSs
then underlying this Warrant, and each such new Warrant will represent the
right
to purchase such portion of such Warrant ADSs as is designated by the Holder
at
the time of such surrender; provided, however, that no Warrants for fractional
Warrant ADSs shall be given.
8
6. NOTICES;
CURRENCY.
(a) Notices.
Whenever notice is required to be given under this Warrant, unless otherwise
provided herein, such notice shall be given in accordance with the notice
provisions of the Subscription Agreement. The Company shall provide the Holder
with prompt written notice of all actions taken pursuant to this Warrant,
including in reasonable detail a description of such action and the reason
therefore. Without limiting the generality of the foregoing, the Company will
give written notice to the Holder (i) immediately upon any adjustment of
the Exercise Price, setting forth in reasonable detail, and certifying, the
calculation of such adjustment and (ii) at least fifteen days prior to the
date on which the Company closes its books or takes a record (A) with
respect to any dividend or distribution upon the Ordinary Shares, (B) with
respect to any grants, issuances or sales of any Options, Convertible Securities
or rights to purchase stock, warrants, securities or other property to holders
of Ordinary Shares or (C) for determining rights to vote with respect to
any Fundamental Transaction, dissolution or liquidation, provided in each case
that such information shall be made known to the public prior to or in
conjunction with such notice being provided to the Holder.
(b) Currency.
Unless
otherwise indicated, all dollar amounts referred to in this Warrant are in
United States Dollars.
7. AMENDMENT
AND WAIVER.
The
provisions of this Warrant may be amended by the Company and the Company may
take any action herein prohibited, or omit to perform any act herein required
to
be performed by it, only if the Company has obtained the written consent of
the
Required Holders and such amendment would not breach the ASX Listing Rules.
Notwithstanding any provision of this Warrant, a term of this Warrant which
has
the effect of reducing the exercise price, increasing the period for exercise
or
increasing the number of Warrant ADSs or Ordinary Shares received on exercise
is
prohibited if it would result in a breach of the ASX Listing Rules.
Notwithstanding the above, no change may increase the exercise price of any
Warrant or decrease the number of Warrant ADSs or class of stock obtainable
upon
exercise of any Warrant without the written consent of the Holder. In addition,
subject to the ASX Listing Rules, no such amendment shall be effective to the
extent that it applies to less than all of the holders of the Warrants then
outstanding.
9
9. GOVERNING
LAW; JURISDICTION.
(a) All
questions concerning the construction, validity, enforcement and interpretation
of this Warrant shall be governed by the internal laws of the State of New
York,
without giving effect to any choice of law or conflict of law provision or
rule
(whether of the State of New York or any other jurisdictions) that would cause
the application of the laws of any jurisdictions other than the State of New
York. Each party hereby irrevocably submits to the non-exclusive jurisdiction
of
the state and federal courts sitting in the City of New York, Borough of
Manhattan, for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein, and
hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction
of
any such court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process
and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it
under
this Warrant and agrees that such service shall constitute good and sufficient
service of process and notice thereof. EACH PARTY HEREBY IRREVOCABLY WAIVES
ANY
RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION
OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS
WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY.
(a) Nonwaiver.
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 all rights hereunder
terminate on the Termination Date.
10. TITLE
TO WARRANT.
Prior to
the Termination Date and subject to compliance with applicable laws and to
the
conditions set forth herein, 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.
11. AUTHORIZATION
OF SECURITIES.
The
Company covenants that all Warrant ADSs and Ordinary Shares underlying such
Warrant ADSs which may be issued upon the exercise of the purchase rights
represented by this Warrant will (i) upon their issue following exercise of
the
purchase rights represented by this Warrant, be duly authorized, validly issued,
fully paid and non-assessable 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) and (ii) when issued, rank equally
with all outstanding Ordinary Shares of the Company listed for trading on the
ASX.
10
Except
and to the extent as waived or consented to by the Holder, the Company covenants
and agrees that it shall not by any action, including, without limitation,
amending its Constitution or by-laws, if any, or through any reorganization,
transfer of assets, scheme of arrangement, 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, and
will at all times in good faith carry out all the provisions of this Warrant,
and shall take 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 shall (a) take all
such action as may be necessary or appropriate in order that the Company may
validly and legally issue fully paid and non-assessable Warrant ADSs upon the
exercise of this Warrant, and (b) 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
ADSs 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.
(a) Cleansing
Notice and/or Disclosure Document.
(i) No
later
than two (2) Business Days after the issuance of any Warrant ADSs hereunder,
the
Company shall issue, if permitted by applicable law, a notice complying with
section 708A(6) of the Corporations Act with respect to the Ordinary Shares
underlying those Warrants ADSs (the “Cleansing
Notice”)
and
shall notify the Holder that it has issued such Cleansing Notice.
(ii) Notwithstanding
Section
12(a)(i),
if the
issue of any Cleansing Notice would require the Company to disclose information
in accordance with Section 708A(6)(e) of the Corporations Act, the
Company may delay the issue of such Cleansing Notice (and the issuance of any
Warrant ADSs, and the underlying Ordinary Shares, corresponding to such
Cleansing Notice) for a period (a “Delay
Period”)
not
exceeding fifteen (15) consecutive days after receipt by the Company of the
Exercise Notice for such Warrant ADSs, provided that during any 365 day period
such Delay Periods shall not exceed an aggregate of forty-five (45) days. The
Company shall issue a Cleansing Notice no later than two (2) Business Days
after
the Delay Period.
(iii) If
the
Company is required to issue a Cleansing Notice pursuant to Section 12(a)(ii)
but
either (x) the Company is not permitted to issue such Cleansing Notice
under applicable law or (y) the issuance of such Cleansing Notice would not
result in the Ordinary Shares covered by such Cleansing Notice being eligible
to
be traded on the ASX, the Company shall as soon as practicable, but in no event
later than twenty (20) Business Days after
receipt by the Company of the Exercise Notice for such Warrant ADSs, lodge
with
the Australian Securities and Investments Commission (the “ASIC”)
a
disclosure document for the purposes of Chapter 6D of the Corporations Act
(a “Disclosure
Document”)
covering the Ordinary Shares that would have been covered by such Cleansing
Notice. Notwithstanding the foregoing sentence, the Company (1) shall not
be required to issue any such Disclosure Document or any Warrant ADSs, and
underlying Ordinary Shares, corresponding to such Disclosure Document during
any
Delay Period, (2) shall not be required to issue the Warrant ADSs, and
underlying Ordinary Shares, corresponding to such Exercise Notice until the
Disclosure Document has been lodged with ASIC, and (3) shall not be required
to
lodge more than one Disclosure Document during any ninety (90) day period in
connection with any issued and outstanding Convertible Securities of the
Company.
11
(iv) Subject
to the provisions of Section
12(a)(v),
the
Company will (1) within two (2) Business Days following the issuance of any
Warrant ADSs, apply to the ASX for unconditional admission to trading for the
underlying Ordinary Shares, and (2) take all reasonable measures to ensure
that, from the time of issue of those Ordinary Shares, such securities are
eligible to be traded on the ASX.
(v) In
the
event that the Company elects to delay the issuance of any Warrant ADSs pursuant
to Sections
12(a)(ii)
or
12(a)(iii)
for any
Delay Period, the Company shall notify the Holder of such Delay Period and
the
length of the applicable Delay Period. The Holder may, at any time during the
Delay Period, notify the Company in writing that it requires the Company to
issue such Ordinary Shares to such Holder in accordance with Section
1
notwithstanding the Delay Period, it being understood that any Ordinary Shares
thus issued will not be covered by a Cleansing Notice or Disclosure Document
and
consequently may not, for a period of twelve (12) months from the date of their
issuance, be sold or transferred, or have any interest in, or option over,
them
granted, issued or transferred.
(vi) Anything
to the contrary notwithstanding, but without prejudice to any rights of the
Holder accrued prior to such time, all obligations of the Company under this
Section
12
shall
terminate, and this Section
12
shall
have no further force or effect, on the date that the Ordinary Shares cease
to
be listed for trading on the ASX in the event that the Company is redomiciled
(whether through merger or otherwise) into the United States or a successor
to
the Company replaces the Company as a foreign private issuer under United States
securities laws and, in either case, the securities of such successor are listed
on an Eligible Market.
13. CONSTRUCTION;
HEADINGS.
This
Warrant shall be deemed to be jointly drafted by the Company and all the Holders
and shall not be construed against any person as the drafter hereof. The
headings of this Warrant are for convenience of reference and shall not form
part of, or affect the interpretation of, this Warrant.
14. DISPUTE
RESOLUTION.
In the
case of a dispute as to the determination of the Exercise Price or the
calculation of the Warrant ADSs, the Company shall submit the disputed
determinations or arithmetic calculations via facsimile within two (2) Business
Days of receipt of the Exercise Notice giving rise to such dispute, as the
case
may be, to the Holder. If the Holder and the Company are unable to agree upon
such determination or calculation within three (3) Business Days of such
disputed determination or arithmetic calculation being submitted to the Holder,
then the Company shall, within two Business Days submit via facsimile
(a) the disputed determination of the Exercise Price to an independent,
reputable investment bank selected by the Company and approved by the Holder
or
(b) the disputed arithmetic calculation of the Warrant ADSs to the
Company’s independent, outside accountant. The Company at the Company’s expense,
shall cause the investment bank or the accountant, as the case may be, to
perform the determinations or calculations and notify the Company and the Holder
of the results no later than ten Business Days from the time it receives the
disputed determinations or calculations. Such investment bank’s or accountant’s
determination or calculation, as the case may be, shall be binding upon all
parties absent demonstrable error.
12
15. REMEDIES,
OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF.
The
remedies provided in this Warrant shall be cumulative and in addition to all
other remedies available under this Warrant and the other Transaction Documents,
at law or in equity (including a decree of specific performance and/or other
injunctive relief), and nothing herein shall limit the right of the Holder
right
to pursue actual damages for any failure by the Company to comply with the
terms
of this Warrant. The Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the Holder and that the remedy at
law
for any such breach may be inadequate. The Company therefore agrees that, in
the
event of any such breach or threatened breach, the holder of this Warrant shall
be entitled, in addition to all other available remedies, to an injunction
restraining any breach, without the necessity of showing economic loss and
without any bond or other security being required.
17. 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.
18. ACCEPTANCE.
Receipt
of this Warrant by the Holder shall constitute acceptance of and agreement
to
all of the terms and conditions contained herein.
19. CERTAIN
DEFINITIONS.
For
purposes of this Warrant, the following terms shall have the following
meanings:
(a) ”ADSs”
means
the American Depositary Shares of the Company, each of which represents ten
(10)
Ordinary Shares.
(b) ”ASX”
means
the Australian Securities Exchange.
(c) ”Bloomberg”
means
Bloomberg Financial Markets.
13
(d) ”Business
Day”
means
any day other than Saturday, Sunday or other day on which commercial banks
in
The City of New York or State of New York, U.S.A. or Perth, Australia are
authorized or required by law to remain closed.
(e) ”Closing
Bid Price”
and
“Closing
Sale Price”
means,
for any security as of any date, the last closing bid price and last closing
trade price, respectively, for such security on the Principal Market, as
reported by Bloomberg, or, if the Principal Market begins to operate on an
extended hours basis and does not designate the closing bid price or the closing
trade price, as the case may be, then the last bid price or last trade price,
respectively, of such security prior to 4:00 p.m., New York Time, as reported
by
Bloomberg, or, if the Principal Market is not the principal securities exchange
or trading market for such security, the last closing bid price or last trade
price, respectively, of such security on the principal securities exchange
or
trading market where such security is listed or traded as reported by Bloomberg,
or if the foregoing do not apply, the last closing bid price or last trade
price, respectively, of such security in the over-the-counter market on the
electronic bulletin board for such security as reported by Bloomberg, or, if
no
closing bid price or last trade price, respectively, is reported for such
security by Bloomberg, the average of the bid prices, or the ask prices,
respectively, of any market makers for such security as reported in the “pink
sheets” by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.). If
the Closing Bid Price or the Closing Sale Price cannot be calculated for a
security on a particular date on any of the foregoing bases, the Closing Bid
Price or the Closing Sale Price, as the case may be, of such security on such
date shall be the fair market value as mutually determined by the Company and
the Holder. If the Company and the Holder are unable to agree upon the fair
market value of such security, then such dispute shall be resolved pursuant
to
Section 12. All such determinations to be appropriately adjusted for any stock
dividend, stock split, stock combination or other similar transaction during
the
applicable calculation period.
(f) ”Convertible
Securities”
means
any stock or securities (other than Options) directly or indirectly convertible
into or exercisable or exchangeable for ADSs or Ordinary Shares.
(g) ”Deposit
Agreement”
means
that certain Deposit Agreement, dated as of January 24, 2005 by and among the
Company, the Depositary and the holders and beneficial owners from time to
time
of ADSs evidenced by ADSs issued pursuant to such agreement.
(i) ”Eligible
Market”
means
the Principal Market, The New York Stock Exchange, Inc., the American Stock
Exchange or The Nasdaq Global Market.
(j) “Expiration
Date”
means
the date that is [sixty (60)] months after the Issuance Date or, if such date
falls on a day other than a Business Day or on which trading does not take
place
on the Principal Market (a “Holiday”),
the
next date that is not a Holiday.
(k) ”Fundamental
Transaction”
means
that the Company shall, directly or indirectly, in one or more related
transactions, (i) consolidate or merge with or into (whether or not the
Company is the surviving corporation) another Person, or (ii) sell, assign,
transfer, convey or otherwise dispose of all or substantially all of the
properties or assets of the Company to another Person, or (iii) allow
another Person to make a purchase, tender or exchange offer that is accepted
by
the holders of more than the 50% of either the outstanding Ordinary Shares
(not
including any Ordinary Shares held by the Person or Persons making or party
to,
or associated or affiliated with the Persons making or party to, such purchase,
tender or exchange offer), or (iv) consummate a stock purchase agreement or
other business combination (including, without limitation, a reorganization,
recapitalization, spin-off or scheme of arrangement) with another Person whereby
such other Person acquires more than the 50% of the outstanding Ordinary Shares
(not including any Ordinary Shares held by the other Person or other Persons
making or party to, or associated or affiliated with the other Persons making
or
party to, such stock purchase agreement or other business combination), or
(v) reorganize, recapitalize or reclassify its Ordinary
Shares.
14
(l) ”Options”
means
any rights, warrants or options to subscribe for or purchase ADSs, Ordinary
Shares or Convertible Securities.
(m) ”Ordinary
Shares”
means
(i) the Company’s ordinary shares of common stock, and (ii) any share
capital into which such Ordinary Shares shall have been changed or any share
capital resulting from a reclassification of such Ordinary Shares.
(o) ”Parent
Entity”
of
a
Person means an entity that, directly or indirectly, controls the applicable
Person and whose common stock or equivalent equity security is quoted or listed
on an Eligible Market, or, if there is more than one such Person or Parent
Entity, the Person or Parent Entity with the largest public market
capitalization as of the date of consummation of the Fundamental
Transaction.
(q) ”Principal
Market”
means
the Nasdaq Global Market.
(r) ”Required
Holders”
means
the holders of the Warrants representing at least a majority of Warrant ADSs
underlying the Warrants then outstanding.
(s) ”Successor
Entity”
means
the Person, which may be the Company, formed by, resulting from or surviving
any
Fundamental Transaction or the Person with which such Fundamental Transaction
shall have been made, provided that if such Person is not a publicly traded
entity whose common stock or equivalent equity security is quoted or listed
for
trading on an Eligible Market, Successor Entity shall mean such Person’s Parent
Entity.
(t) ”Trading
Day”
means
any day on which the ADSs are traded on the Principal Market, or, if the
Principal Market is not the principal trading market for the ADSs, then on
the
principal securities exchange or securities market on which the ADSs are then
traded; provided that “Trading Day” shall not include any day on which the ADSs
are scheduled to trade on such exchange or market for less than 4.5 hours or
any
day that the ADSs are suspended from trading during the final hour of trading
on
such exchange or market (or if such exchange or market does not designate in
advance the closing time of trading on such exchange or market, then during
the
hour ending at 4:00:00 p.m., New York Time).
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(u) ”Transaction
Documents”
shall
mean the Placement Agent Agreement and the Subscription Agreement.
[Signature
Page Follows]
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IN
WITNESS WHEREOF,
the
Company has caused this Warrant to Purchase ADSs to be duly executed as of
the
Issuance Date set out above.
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